FAW JIEFANG GROUP CO., LTD.
Annual Report 2022
April 2023
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 contentsof the annual report are true, accurate and complete, there is no false record,misleading statement or major omission, and shall bear individual and jointlegal responsibilities.
Hu Hanjie, the person in charge of the Company, Ji Yizhi, 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 annual report.Except for the following directors, other directors attended the board meetingto review the 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 |
| Bi Wenquan | Director | Work | Liu Yanchang |
This annual report includes prospective statements, such as future plans,and does not constitute a substantial commitment of the Company to investors.Investors and relevant persons should maintain sufficient risk awareness ofthis and understand the differences between plans, forecasts, and commitments.
In the section of business review and analysis, the Company has provideda detailed description of the potential risks and corresponding measures that
may be faced in the future development of the Company. Investors are kindlyrequested to pay attention to the relevant content. China Securities Journal,Securities Times and CNINFO (http://www.cninfo.com.cn) are the informationdisclosure media selected by the Company. All information of the Company issubject to that published in the above selected media. Investors are kindlyrequested 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 ...... 15
Section IV?Corporate Governance ...... 47
Section V?Environmental and Social Responsibilities ...... 93
Section VI?Important Matters ...... 106
Section VII?Changes in Shares and Shareholders ...... 134
Section VIII?Preferred Shares ...... 149
Section IX?Bonds ...... 150
Section X?Financial Report ...... 151
List of Documents for Future Reference
1. Financial statements signed and sealed by the person in charge of theCompany, the person in charge of accounting and the person in charge of theaccounting organization (chief accountant).
2. The original Auditor’s Report sealed by Pan-China Certified PublicAccountants LLP and sealed and signed by Pan-China's CPAs
3. Originals of all company documents and announcements publicly disclosedon the website designated by China Securities Regulatory Commission in thereporting period.
Interpretation
| Item | Refers to | Definition |
| Company, the Company, FAW Jiefang | Refers to | FAW JIEFANG GROUP CO.,LTD. |
| Jiefang Limited | Refers to | FAW Jiefang Automotive Co., Ltd. |
| FAW, FAW Group | Refers to | China FAW Group Co., Ltd. |
| FAW Car Co., Ltd. | Refers to | China FAW Co., Ltd. |
| FAW Car | Refers to | FAW Car Co., Ltd. |
| FAW-Bestune | Refers to | FAW Bestune Car Co., Ltd. |
| Finance company | Refers to | First Automobile Finance 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 |
| Company Law | Refers to | Company Law of the Peoples Republic of China |
| Securities Law | Refers to | Securities Law of the People's Republic of China |
| Articles of Association | Refers to | Articles of Association of FAW JIEFANG GROUP CO.,LTD. |
| Reporting Period | Refers to | January 1, 2022-December 31, 2022 |
| CNY, CNY 10,000, CNY 100 million | Refers to | CNY, CNY 10,000, CNY 100 million |
Section II Company Profile and Main Financial IndicatorsI. Company Information
| 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 | ||
| Registered address | No. 2259, Dongfeng Street, Changchun Automobile Development Zone, Jilin Province | ||
| Zip code of registered address | 130011 | ||
| History of changes in registered address of the Company | In 2020, the Company carried out major asset restructuring, and the registered address was changed from No. 4888 Weishan Road, High-tech Industrial Development Zone, Changchun City, Jilin Province to No. 2259 Dongfeng Street, Automobile Development Zone, Changchun City, Jilin Province. | ||
| Office address | No. 2259, Dongfeng Street, Changchun Automobile Development Zone, Jilin Province | ||
| Postal code of office address of the Company | 130011 | ||
| Company Website | www.fawjiefang.com.cn | ||
| faw0800@fawjiefang.com.cn | |||
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 |
| Telephone | 0431-80918881 0431-80918882 | 0431-80918881 0431-80918882 |
| Fax | 0431-80918883 | 0431-80918883 |
| faw0800@fawjiefang.com.cn | faw0800@fawjiefang.com.cn |
III. Information Disclosure and Keeping Location
| Website of the stock exchange disclosing annual report of the Company | http://www.szse.cn |
| Name and website of the media disclosing annual report of the Company | Securities Times, China Securities Journal and CNINFO (http://www.cninfo.com.cn) |
| Keeping location of the Annual Report of the Company | FAW Capital Operation Department |
IV.?Changes in Registration
| Unified Social Credit Code | 91220101244976413E |
| Changes in main business since the company went public | In 2020, the Company completed major asset restructuring, and changed its main business from research, development, production, and sales of passenger cars to research, development, production, and sales of commercial vehicles. |
| Changes in controlling shareholders in the past | 1. In June 2011, FAW, the original controlling shareholder of the Company, carried out major business restructuring, and founded FAW Car Co., Ltd. as the main sponsor in order to improve the corporate governance structure and establish a modern enterprise system. FAW transferred all its shares from the Company into FAW Car Co., Ltd., and the two parties completed the equity registration and transfer procedures in April 2012. After the equity transfer, the total share capital of the Company did not change and remained at 1,627,500,000 shares. FAW Car Co., Ltd. |
holds 862,983,689 shares of the Company, accounting for
53.03% of the total shares, and is the controlling shareholder of
the Company. The actual controller does not change and is stillthe SASAC.
2. In March 2020, the China Securities Regulatory Commissionapproved major asset restructuring project of the Company. TheCompany issued 2,982,166,212 shares directly to FAW Car Co.,Ltd. to pay the price difference for the major asset restructuring.After the issuance, the total share capital of the Companyincreased to 4,609,666,212 shares. FAW Car Co., Ltd. holds3,845,149,901 shares of the Company, accounting for 83.41% ofthe total shares, and is the controlling shareholder of theCompany. The Company's actual controller is still SASAC.
V.?Other relevant dataAccounting firm hired by the Company
| Name of Accounting Firm | Grant Thornton Certified Public Accountants (Special General Partnership) |
| Office address of the accounting firm | Saite Plaza, No. 22 Jian'guomen Wai Avenue, Chaoyang District, Beijing |
| Name of the accountants | Xi Dawei and Yang Dongmin |
Sponsor institution employed by the Company to perform continuous supervision duties in thereporting period
□ Applicable ?Not applicable
Financial consultant employed by the Company to perform continuous supervision duties in thereporting period
□ Applicable ?Not applicable
VI. Main Accounting Data and Financial IndicatorsWhether the Company needs to retroactively adjust or restate the accounting data of previousyears
□ Yes? No
| 2022 | 2021 | Increase or decrease compared to that of last year | 2020 | |
| Operating income (CNY) | 38,331,747,083.88 | 98,751,242,669.55 | -61.18% | 113,681,085,047.92 |
| Net profit attributable to shareholders of the listed company (CNY) | 367,745,445.34 | 3,899,854,760.39 | -90.57% | 2,671,714,284.27 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profits and losses (CNY) | -1,714,242,885.11 | 3,581,266,777.71 | -147.87% | 1,616,754,125.48 |
| Net cash flows from operating activities (CNY) | -5,135,243,969.35 | 15,203,123,279.16 | -133.78% | -780,466,106.07 |
| Basic earnings per share (CNY/share) | 0.0735 | 0.8412 | -91.26% | 0.5796 |
| Diluted earnings per share (CNY/share) | 0.0735 | 0.8412 | -91.26% | 0.5796 |
| Weighted average return on equity | 1.50% | 15.37% | Reduced by 13.87% | 10.75% |
| End of 2022 | End of 2021 | Increase or decrease compared with that at the end of last year | End of 2020 | |
| Total assets (CNY) | 56,772,860,616.12 | 69,765,943,932.81 | -18.62% | 64,237,522,674.22 |
| Net assets attributable to shareholders of the listed company (CNY) | 23,719,427,082.48 | 26,242,240,723.26 | -9.61% | 24,560,505,430.40 |
The lower net profit of the Company before or after the deduction of non-recurring profits andlosses in the last three fiscal years is negative, and the audit report of the most recent year showsthat the going-concern ability of the Company is uncertain
□ Yes? No
The lower net profit before or after the deduction of non-recurring gains and losses is negative.?Yes □ No
| Item | 2022 | 2021 | Remarks |
| Operating income (CNY) | 38,331,747,083.88 | 98,751,242,669.55 | Sales revenue of complete vehicles, parts and components, materials, and purchased semi-finished products, etc. |
| Deducted amount of operating income (CNY) | 30,729,859.27 | 29,091,844.99 | Rental income and entrusted operating income |
| Amount after the deduction of operating income (CNY) | 38,301,017,224.61 | 98,722,150,824.56 | Deduct the rental income and entrusted operating income |
VII.?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 Chinaaccounting standards.
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 accountingstandards.
VIII. Seasonal Main Financial Indicators
Unit: CNY
| Q1 | Q2 | Q3 | Q4 | |
| Operating income | 15,156,239,359.47 | 7,715,295,902.09 | 7,583,447,502.59 | 7,876,764,319.73 |
| Net profit attributable to shareholders of the listed company | 452,160,338.37 | -282,006,451.05 | -822,585,061.27 | 1,020,176,619.29 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profits and losses | 387,674,220.34 | -493,921,024.52 | -963,409,131.93 | -644,586,949.00 |
| Net cash flows from operating activities | -2,359,016,036.31 | 3,802,153,762.94 | -1,943,215,192.33 | -4,635,166,503.65 |
Is there any significant difference between the above financial indicators or the sum and thefinancial indicators in the quarterly and semi-annual financial reports disclosed by the Company?
□ Yes? No
IX. Items and Amounts of Non-recurring Profit and Loss?Applicable □ Not Applicable
Unit: CNY
| Item | Amount in 2022 | Amount in 2021 | Amount in 2020 | Description |
| Profits or losses on disposal of non-current assets (including the write-off part of the provision for impairment of assets withdrawn) | 871,031,108.06 | 458,484.79 | 4,460,089.95 | It refers to the net gain on disposal of non-current assets. |
| Government subsidies | 1,635,846,930.83 | 336,044,406.64 | 297,470,522.64 |
| included in the current profit and loss (except those closely related to the Company normal operations, conforming to the State policies and regulations and enjoyed persistently in line with certain standard rating or ration) | ||||
| Profits or losses from debt restructuring | 684,628.03 | 100,401.80 | ||
| Net current profit and loss of the subsidiary acquired in business combination involving entities under common control from the beginning of the period to the combination date | 797,130,572.68 | |||
| Reversal of impairment provision for receivables subject to separate impairment test | 15,110,580.89 | 11,809,885.69 | 42,540,789.87 | It mainly refers to the reversal of impairment provision for receivables subject to separate impairment test. |
| Trustee fee earned from entrusted management | 864,779.87 | 471,698.11 | The trustee fee | |
| Non-operating income and expenses other than the above | 127,429,456.42 | 28,144,798.08 | 1,112,504.19 | They mainly refer to the net non-operating income and expenses |
| Other losses and profits conforming to the definition of non-recurring profit and loss | 117,055,384.99 | 219,970,000.00 | Other non-recurring profits and losses | |
| Less: amount affected by | 568,294,525.62 | 176,081,303.65 | 306,737,153.67 |
| income tax | ||||
| Amount affected by minority shareholder’s equity (after-tax) | 1,087,568.67 | |||
| Total | 2,081,988,330.45 | 318,587,982.68 | 1,054,960,158.79 | -- |
Specific conditions of other profit and loss items meeting the definition of non-recurring profitand loss:
□ Applicable ?Not applicable
There is no specific conditions of 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 Analysis
I. Industry of the Company in the Reporting PeriodThe Company shall meet the disclosure requirements for the automobile manufacturing industryspecified in the "No. 3 Guideline of Shenzhen Stock Exchange on Self-Regulatory Supervision ofListed Companies - Industry Information Disclosure."
In 2022, the commercial vehicle industry experienced a tough period due to the effect ofthree factors, i.e. macro economy, cyclical regulation, and overdraft. The domestic macroeconomy was seriously affected by economic downturn, and the annual GDP growth rate wasabout 3%, which did not reach the expected value. Investment support was reduced, domesticconsumption remained low, export growth rate was sharply declined, highway freight turnovershowed negative growth, and the macro economy slowed down unexpectedly, leading to asignificant decrease in demand in the commercial vehicle market. The commercial vehicle marketwas affected by factors such as the early elimination of National III vehicles and the earlyprocurement of National V vehicles in 2020 and the first half of 2021, there was a seriousphenomenon of more vehicles and less freight in the freight industry in 2022, the freight ratecontinued to be low, and the number of practitioners of the freight industry was reduced sharply.In addition to the reduction in demand for the industry, other industry environments also broughtadverse effects to enterprise development. The cost of raw materials and parts as well as the priceof new energy batteries were increased continuously due to the effect of global systemic inflation,therefore, the profits of automobile enterprises were squeezed continuously. The structuralshortage of chips still put huge pressure on the supply side of the automobile industry.In 2022, National VI emission standard was implemented. National VI products are greatlyexpensive than National V products, the product structure of the industry is generally morecomplex, and customers are unwilling to purchase National VI products, therefore, the overallmarket demand in 2022 is not as expected. The export sales of medium and heavy trucks wereincreased significantly in 2022 because the overseas layout of domestic heavy truck enterpriseswas improved gradually, the product competitiveness was increased continuously, and therecognization of overseas customers for medium and heavy trucks exported from China wasincreased as well.
FAW Jiefang is a commercial vehicle manufacturer, and its business performance mainlydepends on the growth of industry demand, its product competitiveness and its own cost controlability. In 2022, when facing the challenge of a huge decline in the commercial vehicle market,and other risks and challenges intertwined, the Company tried its best to change and survive in theupheaval, adjusted its business strategy in time, increased its terminal share, reduced inventoryand resolved channel risks, thus achieving stable development, progress and quality improvementat the same time. The Company sold 140,000 medium and heavy trucks throughout the year,accounting for 25.7% of the domestic market terminal share as indicated by Hebei Beidou DataTechnology Co. LTD., and always leading the high-quality development of commercial vehicleindustry.II. Main Businesses of the Company in the Reporting PeriodThe Company shall meet the disclosure requirements for the automobile manufacturing industryspecified in the "No. 3 Guideline of Shenzhen Stock Exchange on Self-Regulatory Supervision ofListed Companies - Industry Information Disclosure."The Company is a commercial vehicle manufacturer which produces heavy, medium andlight trucks, buses, as well as core components such as engines, transmissions and axles, and has acomplete manufacturing system covering raw materials, core components, key large assembliesand complete vehicles. The products of the Company are mainly used in market segments such astraction, cargo carrying, dumping, special purposes, highway passenger transport, bus passengertransport, etc., and the Company also provides standardized and customized commercial vehicleproducts. The Company is committed to becoming a "China's first and world-class" provider ofintelligent transportation solutions, focusing on the main production lines, insisting on innovation-driven and reform-driven, and creating a leading trend. Main business, products, and businessmodel of the Company were not changed significantly in the reporting period.The current production capacity of the Company's main factories is 393,000 completevehicles. In recent years, the Company has increased investment in technological transformationcontinuously, accelerated the adjustment of production capacity structure, and implementedcontinuous resource optimization and intelligent upgrading for high-end and new energy products.It has formed a number of advanced manufacturing bases with industry-leading levels, and hasobvious technical and capacity advantages in the commercial vehicle industry, laying a solid
foundation to continue to lead the market. Jiefang J7 Intelligent Factory was awarded the pilot anddemonstration of big data industry development by the Ministry of Industry and InformationTechnology, and Jimo Factory and Huishan Factory were awarded the benchmark intelligentfactories in the automobile industry. By adhering to the green factory strategy, and protecting the"blue sky", "clear water" and "pure land" according to high standards, the Company has won thetitle of national green factory and Jimo Factory has been included in the second batch ofintelligent photovoltaic pilot demonstration list of the Ministry of Industry and InformationTechnology.Manufacturing, production and operation of complete vehicle in the reporting period?Applicable □ Not ApplicableProduction and sales of complete vehicles
| Production | Sales Qty | |||||
| This Reporting Period | Same Period of Last Year | Year-on-year Increase and Decrease | This Reporting Period | Same Period of Last Year | Year-on-year Increase and Decrease | |
| By vehicle type | ||||||
| Medium/Heavy truck | 123,011 | 320,485 | -61.62% | 140,384 | 373,420 | -62.41% |
| Light-duty truck | 27,560 | 54,051 | -49.01% | 29,414 | 65,335 | -54.98% |
| Bus | 241 | 904 | -73.34% | 251 | 905 | -72.27% |
| Total | 150,812 | 375,440 | -59.83% | 170,049 | 439,660 | -61.32% |
Reasons for year-on-year change of more than 30%?Applicable □ Not ApplicableThe effect of economic downturn is great, which leads to poor logistics, shrinking marketdemand in the industry, and decline in the production and sales volume of various models.Construction of parts and components supporting system
In terms of the construction of parts and components resource platform, the Companycomplies with the "steady first-class resource network strategy", aims at the development of thenew four-modernization, strengthens the construction and control of supplier platform, and buildsa supporting system with high quality and low price continuously. In addition, the Companyfurther cooperates with excellent suppliers at home and abroad by means of strategic cooperationand joint venture cooperation in order to meet the market demand. At present, the three coreassemblies of the Company's main models, i.e. engine, transmission and axle, are produced
independently, and the core parts and components are resource-oriented in fields such as newenergy, intelligent vehicle software and hardware, after-market and intelligent connected services.The Company guarantees the vehicle quality and reputation by controlling the purchase byimplementing access evaluation, strengthening performance assessment and capability review,and supervising and controlling the supplier's process effectively while adhering to the principleof quality first.Production and operation of automobile parts and components in the reporting period
□ Applicable ?Not applicable
Automobile finance business performed by the Company
□ Applicable ?Not applicable
Business related to new energy vehicles performed by the Company?Applicable □ Not ApplicableProduction and operation of complete new energy vehicles and parts & components
Unit: CNY
| Product category | Production Capacity | Production | Sales volume | Sales revenue |
| Truck | 40,000 vehicles/year | 2,490 | 2,611 | 879,931,321.70 |
| Bus | 3,000 vehicles/year | 127 vehicles | 112 vehicles | 103,524,352.84 |
III.?Analysis of Core CompetitivenessThe Company shall meet the disclosure requirements for the automobile manufacturing industryspecified in the "No. 3 Guideline of Shenzhen Stock Exchange on Self-Regulatory Supervision ofListed Companies - Industry Information Disclosure."The Company adheres to the corporate vision of "being the most proud commercial vehicleenterprise and the most trustworthy commercial vehicle brand", the mission of "becoming theChina's first and world-class provider of intelligent transportation solutions and building a moreprosperous society", and the brand concept of "being trustworthy, intelligent and courageous, and
benefiting the world"; takes products and services as the main task, customers and employees asthe foundation, innovation and reform as the driving force; focuses on industry trends andcustomer needs, and improves product competitiveness and service level rapidly.
1. Product research and development: Four major fields: heavy, medium, light andpassenger vehicles, are covered. Heavy trucks include six products: FAW Jiefang J7, J6P, J6V,Yingtu, JH6 and Han V. Medium trucks include three products: FAW Jiefang J6L, JK6 and LongV. Light trucks include three products: LINKTOUR, J6F and Hu V. Passenger vehicles includeroad vehicles, new energy buses, etc. New energy products cover all mainstream scenarios of themarket segment. Guided by "leading technology, pioneering experience, integrated innovation,enhanced application, collaboration and efficiency", FAW Jiefang has built a strong and completeindependent R&D system in China from foresight technology, engine, transmission and axle tocomplete vehicle, and formed an efficient and collaborative R & D team of more than 2,000people. With the five core capabilities, including scientific and technological innovation, leandesign, performance development, trial production verification and experimental verification, theCompany has created five technical platforms with low carbonization, informatization,intelligence, electrification and high quality, become one of the commercial vehicle enterprisesmastering the core technologies of world-class complete vehicles and three power assemblies, andpassed ISO9001, IATF16949 and GB9001B quality system certifications. It is also a national-level independent automobile product R&D and test certification base. In recent years, byaccurately grasping the demands of market segment, FAW Jiefang has successfully built ten coreproduct technology advantages, including system fuel saving, long oil drain interval, light weight,independent assembly, independent electronic control, independent post processing, new energy,intelligent drive, long-term maintenance and maintenance free. Therefore, FAW Jiefang alwaysmaintains an industry-leading position in the fierce market competition.
2. Marketing and procurement: Adhering to the customer value orientation, the Companyhas taken the lead in establishing a marketing service system with complete functions. Themarketing service network composed of more than 900 dealers, more than 1,000 service providers,more than 50 spare parts centers and more than 100 spare parts dealers covers more than 200prefecture-level cities in China, with a coverage rate of 96% in cities with a capacity of more than1,000 vehicles. With a national average service radius of 47 kilometers, it is at the leading level inthe industry and provides users with 24-hour efficient and high-quality services. The Company is
committed to integrating global high-quality resources to provide a strong guarantee for the highreliability 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 and establish joint ventures withthem.
3. In terms of production and manufacturing, the Company has a complete manufacturingsystem from raw materials to core components, from key assemblies to complete vehicles, and itsprocessing and manufacturing depth ranks among the industry leaders. The Company has fivecomplete vehicle bases in Changchun, Qingdao, Chengdu/Guanghan, Liuzhou and Foshan, threeassembly bases in Changchun, Wuxi and Dalian, and five new business companies, includingFOR.J, SmartLink, Zhito, Jiefang Shidai, and Diyi Yuansu. In 2022, FAW Jiefang J7 IntelligentFactory was selected by the Ministry of Industry and Information Technology as a pilot anddemonstration project for the development of big data industry.
4. Overseas: The Company's products are exported to 80 countries and regions such asSoutheast Asia, the Middle East, Latin America, Africa and Eastern Europe, and the Company hasmore than 80 core dealers and nearly 300 distributors in nearly 40 countries and regions aroundthe world. The Company has set up three overseas subsidiaries in South Africa, Russia andTanzania, and export models such as J6, JH6, and Hu V.IV. Analysis of Main Business
1. Overview
In 2022, the Company improved its ability and seized opportunities in the new era, andforged ahead with vigor and enthusiasm while maintaining innovation and reform! When facingchanges and challenges in the internal and external environment, the Company identified anddealt with such changes, adjusted its business strategy in time, survived by reducing risks,improved its capability, and made unprecedented efforts to face the unprecedentedly severesituation. It focused on grabbing terminals, reducing inventory, costs, expenses and risks, andenhancing confidence. The staff of FAW Jiefang made great efforts and achieved extraordinarybusiness results: the sales volume of complete vehicles reached 170,000, and the terminal share ofmedium and heavy trucks in the domestic market indicated by Hebei Beidou Data Technology Co.LTD. was 25.7%; a great breakthrough was made in the export, with a sales volume of 28,000
vehicles and a year-on-year increase of 98%. The total inventory decreased significantlycompared with the beginning of the year, and the channel risk was cleared, which laid a goodfoundation for striking in 2023. In 2022, the Company was awarded the "State-owned EnterprisesGovernance Demonstration Enterprise" and the "China Machinery Industry Quality Award". TheJ7 Intelligent Factory was selected by the Ministry of Industry and Information Technology as the"Demonstration Factory of Intelligent Manufacturing", and its brand value led the commercialvehicle industry for 11 consecutive years.
(1) National VI products: Link with the research, production, supply, marketing and servicesystem efficiently, establish a closed-loop management mechanism for problems, implement end-to-end problem tackling, close the loop for all key problems, launch nearly 120 new products,with a market share of more than 12%, and improve the reputation of National VI productsgreatly; promote the planning of product packages for J100 and J7 2026 to achieve commercialsuccess; pay close attention to the assembly upgrading project, strengthen the collaborativedevelopment of assembly products, and promote the development of related series products insequence; upgrade and update light vehicles continuously, and launch 6.5t new platform productsand 22 LINKTOUR vehicles, so as to improve the competitiveness continuously.
(2) New energy products: Create a differentiated product portfolio, make the products coverall mainstream scenarios in the market segment, and achieve a sales volume of 2,723 vehicles.Develop nearly 70 new energy products and accelerate product upgrading continuously on thethree technical routes of battery/battery swap, hybrid power and fuel cell. Strengthen thecooperation with ecological partners and create a "circle of friends" in the power, finance,terminal cooperation and battery swap industries. Strengthen the cooperation with energysupplement enterprises, new energy ecological partners and refitting plants in typical new energyfields such as steel, electricity, coal and mining, so as to increase market sales, i.e. more than 500hydrogen fuel cell vehicles have been ordered, indicating that the products are widely recognizedby the market. Promote the complete vehicle leasing scheme on a pilot basis, and win the biddingof pilot leasing of 100 pure electric light trucks in Chengdu and the leasing of over 20 postalvehicles in Changchun.
(3) Intelligent vehicle products: Cooperate with leading logistics enterprises to conduct trialoperation of super trucks, start independent verification of J6V_L2+/L3 product, and acceleratethe reserve of redundant drive-by-wire chassis. Achieve IoV T-box 2.0 full-line switching; real-
name authentication of stock IoV cards; development of super APP map desktop theme function,which is adapted to J101 and J167 models for the first time. Digital key is equipped with J167model to build the basic service platform and verify the full vehicle control function. Lento EVJiefangxing APP is launched. The first full-scenario intelligent diagnosis and repair service forcommercial vehicles is realized.
(4) Technological innovation: Improve the three capabilities of innovation, achievementtransformation and innovation collaboration continuously, and make breakthroughs in nearly 70leading core technologies in the industry, with a year-on-year increase of 20%; prepare nearly 300standards, obtain more than 1,500 patents, and make major breakthroughs in key technologicalprojects of SASAC. In the field of traditional vehicles, the heavy-duty in-cylinder direct-injectionhydrogen engine was launched and ignited for the first time in China, reaching the internationalleading technical level. The 13L extreme lightweight heavy-duty tractor has reached the industryleading level, and major breakthroughs have been made in core technologies such as ultra-lowwind resistance cab. In the field of new energy vehicles, light-duty pure electric and heavy-dutyfuel-powered forward-looking vehicles are produced for the first time, and major breakthroughshave been made in core technologies such as 8-wire high-speed and high-power flat-wire oil-cooled motors. In the field of intelligent connected vehicles, major breakthroughs have been madein core technologies such as autonomous forward-looking vehicles, dual-system intelligent cabs,domain integration E/E architecture platforms, and digital keys.
(5) Business innovation: Accelerate the implementation of Columbus smart logistics openingplan, build a collaborative innovation mechanism inside and outside emerging industries, andimprove the ecosystem construction. Innovate the joint operation mode of intelligent vehicles,expand the actual commercial scale, and sell more than 300 intelligent vehicles. The connectedecology creates the first IoV brand in the industry, with more than 2.1 million registered users ofJiefangxing APP. The Company focuses on the after-market, expands the scope of "four value-added services" (i.e. ETC, refueling, fleet management and security officer), and serves more than130,000 vehicles in total; pays attention to accelerating the realization of new ecological productssuch as second-hand vehicles and online freight platforms, with the transaction volume of second-hand vehicle business exceeding CNY 100 million; promotes the implementation of fleetmanagement solutions in four fields, including refrigeration, mixing, muck and sanitation.Accelerate resource distribution and establish the "Jiefang Shidai" joint venture.
(6) Digital and intelligent transformation: Formulate and implement the "1143" digital andintelligent transformation framework of FAW Jiefang, complete the top-level 4A architecturedesign and transformation blueprint planning with the TOGAF method, accelerate the applicationof information and digital technologies such as big data, cloud computing and Internet of Things,deeply integrate with the business in the four major fields, build digital capabilities such as datamanagement system, and improve overall operational efficiency of the Company.
(7) Capital operation: There are 12 shareholding enterprises in total affiliated to theCompany, with a total investment income of CNY 347 million in 2022. The Company hasformulated management documents and built a long-term management mechanism. The Companyhas deployed in the fields of intelligent driving (Zhito), IoV (SmartLink) and after-marketoperation (FOR.J) since 2019. In 2022, the Company made a strategic investment in RefireTechnology and establishing Diyi Yuansu to improve the strategic layout of the fuel cell industry;promoted the implementation of Jiefang Shidai projects, and laid out the operation business of thenew energy after-market.
2. Revenues and costs
(1) Composition of Operating Income
Unit: CNY
| 2022 | 2021 | Year-on-year Increase and Decrease | ||||
| Amount | Proportion in Operating Income | Amount | Proportion in Operating Income | |||
| Total operating income | 38,331,747,083.88 | 100% | 98,751,242,669.55 | 100% | -61.18% | |
| By Industries | ||||||
| Automobile industry | 38,331,747,083.88 | 100.00% | 98,751,242,669.55 | 100.00% | -61.18% | |
| By products | ||||||
| Commercial vehicles | 33,483,232,308.59 | 87.35% | 91,119,202,713.23 | 92.27% | -63.25% | |
| Spare parts and others | 4,848,514,775.29 | 12.65% | 7,632,039,956.32 | 7.73% | -36.47% | |
| By areas | ||||||
| Northeast China, | 19,888,808,283.34 | 51.89% | 45,436,940,546.97 | 46.01% | -56.23% | |
| North China, Northwest China and Southwest China | |||||
| East China, South China and Central China | 18,442,938,800.54 | 48.11% | 53,314,302,122.58 | 53.99% | -65.41% |
(2) Information about industries, products, regions and sales model accounting for morethan 10% of the Company's operating income or operating profit?Applicable □ Not Applicable
Unit: CNY
| Operating income | Operating costs | Gross Profit Rate | Increase/Decrease of Operating Income over the Same Period of Last Year | Increase/Decrease of Operating Cost over the Same Period of Last Year | Increase/Decrease of Gross Profit Rate over the Same Period of Last Year | |
| By Industries | ||||||
| Automobile industry | 36,242,318,100.83 | 33,608,683,181.19 | 7.27% | -62.05% | -60.96% | Reduced by 2.60% |
| By products | ||||||
| Commercial vehicles | 33,483,232,308.59 | 31,214,534,982.58 | 6.78% | -63.25% | -62.14% | Reduced by 2.73% |
| Spare parts and others | 2,759,085,792.24 | 2,394,148,198.61 | 13.23% | -37.15% | -33.99% | Reduced by 4.14% |
| By areas | ||||||
| Northeast China, North China, Northwest China and Southwest China | 18,804,687,270.68 | 17,714,709,552.71 | 5.80% | -57.21% | -55.32% | Reduced by 3.97% |
| East China, South China and Central China | 17,437,630,830.15 | 15,893,973,628.48 | 8.85% | -66.18% | -65.77% | Reduced by 1.11% |
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 last year
□ Applicable ?Not applicable
(3) Whether physical sales revenue of the Company is greater than the labor servicerevenue?Yes □ No
| Industry Classification | Item | Unit | 2022 | 2021 | Year-on-year Increase and Decrease |
| Automobile industry | Sales Qty | Vehicle | 170,049 | 439,660 | -61.32% |
| Production output | Vehicle | 150,812 | 375,440 | -59.83% | |
| Storage amount | Vehicle | 13,235 | 31,397 | -57.85% |
Reasons for the year-on-year change of relevant data by more than 30%?Applicable □ Not Applicable
1) The production and sales volume is decreased compared with the same period of the previousyear, which is mainly due to the serious impact of economic downturn, resulting in poor logisticsand shrinking market demand in the industry.
2) Inventory is decreased compared with the same period of the previous year, which is mainlybecause that the inventory is consumed and less capital is occupied.
(4) Performance of major sales contracts and major procurement contracts signed by theCompany as of the reporting period
□ Applicable ?Not applicable
(5) Composition of operating cost
Industry and Product Classification
Unit: CNY
| Industry Classification | Item | 2022 | 2021 | Year-on-year Increase and Decrease | ||
| Amount | Proportion in Operating Cost | Amount | Proportion in Operating Cost | |||
| Automobile industry | Material cost | 31,126,255,860.34 | 88.30% | 78,454,527,843.72 | 88.34% | -60.33% |
| Others | 4,125,915,026.19 | 11.70% | 10,354,810,924.88 | 11.66% | -60.15% | |
Unit: CNY
| Product Classification | Item | 2022 | 2021 | Year-on-year Increase and Decrease | ||
| Amount | Proportion in Operating Cost | Amount | Proportion in Operating Cost | |||
| Commercial vehicles | Commercial vehicles | 31,214,534,982.58 | 88.55% | 82,453,077,973.29 | 92.84% | -62.14% |
| Spare parts and others | Spare parts and others | 4,037,635,903.95 | 11.45% | 6,356,260,795.31 | 7.16% | -36.48% |
Note: None
(6) Whether the consolidation scope is changed in the reporting period?Yes □ NoFAW Jiefang New Energy Automotive Sales Co., Ltd, a subsidiary of the Company, mergedFAW Jiefang Automotive Sales Co., Ltd., the former subsidiary of the Company, on the base dateof September 30, 2022.
(7) Significant changes or adjustments in business, products or services of the Company inthe reporting period
□ Applicable ?Not applicable
(8) Information about main customers and main suppliers
Information about main customers of the Company
| Total sales amount of the top five customers (CNY) | 8,697,732,382.08 |
| Proportion of total sales amount of the top five customers in total annual sales amount | 22.69% |
| Proportion of sales of related parties in total annual sales of the top five customers | 17.65% |
Information about top 5 customers of the Company
| S/N | Customer name | Sales (CNY) | Proportion in Total Annual Sales |
| 1 | China FAW Group Import & Export Co., Ltd. | 5,921,179,357.98 | 15.45% |
| 2 | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | 842,004,381.84 | 2.20% |
| 3 | Customer 1 | 841,177,182.46 | 2.19% |
| 4 | Customer 2 | 646,895,474.90 | 1.69% |
| 5 | Customer 3 | 446,475,984.90 | 1.16% |
| Total | -- | 8,697,732,382.08 | 22.69% |
Other information about main customers
□ Applicable ?Not applicable
Information about main suppliers of the Company
| Total purchase amount of the top five suppliers (CNY) | 5,315,280,198.91 |
| Proportion of total purchase amount of the top five suppliers in total annual purchase amount | 14.07% |
| Proportion of the purchase amount of related parties in the total annual purchase amount of the top five suppliers | 2.75% |
Information about the top 5 suppliers of the Company
| S/N | Name of Supplier | Purchase Amount (CNY) | Proportion in Total Annual Purchase Amount |
| 1 | Supplier 1 | 1,888,113,028.36 | 5.00% |
| 2 | Fawer Auto Parts Co., Ltd. | 1,040,303,880.14 | 2.75% |
| 3 | Supplier 2 | 973,607,675.50 | 2.58% |
| 4 | Supplier 3 | 751,844,490.95 | 1.99% |
| 5 | Supplier 4 | 661,411,123.96 | 1.75% |
| Total | -- | 5,315,280,198.91 | 14.07% |
Other information about main suppliers
□ Applicable ?Not applicable
3. Cost
Unit: CNY
| 2022 | 2021 | Year-on-year Increase and Decrease | Description of Major Changes | |
| Sales expenses | 1,255,882,221.64 | 1,754,344,114.38 | -28.41% | |
| Administrative expenses | 2,040,339,354.62 | 2,453,597,224.68 | -16.84% |
| Financial expenses | -1,052,600,813.17 | -1,220,634,963.43 | -13.77% | |
| R&D expenses | 2,895,655,097.73 | 3,328,946,673.10 | -13.02% |
4. R&D investment
?Applicable □ Not Applicable
| Name of Main R&D Projects | Project purpose | Project progress | Proposed Objectives | Expected Impact on the Company's Future Development |
| J7 series expanded models development project | Follow the "domestic first-class and world-class" enterprise development strategy, and develop domestic high-end benchmark heavy trucks independently to achieve a new level of domestic truck quality. | Development phase | Maintain the high-end positioning of products, pursue excellent quality, and improve product quality continuously in the efficient long-distance trunk express market, expand the market capacity of high-end vehicle products year by year, realize double sales volume, and lead the industry development. | Support the Company's strategy of developing a "domestic first-class and world-class" enterprise, and contribute hard-core products to the product layout during the 14th Five-Year Plan period. |
| JH6 series expanded models development project | Upgrade the products of JH6 platform to ensure leading competitiveness of Jiefang brand. | Planning stage | Maintain the mid-to-high-end positioning of products in the six core markets such as general freight, express freight, green transport and urban construction muck, strengthen the advantages of highway vehicles in the mid-to-high-end market and renew the brand image of engineering vehicles by optimizing the complete | Enhance the competitiveness of the Company's medium and heavy vehicle product line and major products, and contribute hard-core products to the product layout in the 14th Five-Year Plan period. |
| vehicle reliability, comfort and TCO. | ||||
| J6L upgraded product development project | Focus on customers' pain points, market and technology, face the high-end market of medium-sized vehicles in China, rank first in comprehensive competitiveness of medium-sized truck products in China, and achieve commercial success and customer satisfaction. | Closed | Meet the requirements of different series and different market segments for flat/raised floor and 6/7/9/11L engine combinations. | Build intelligent high-end medium-sized vehicles with the largest space, lowest fuel consumption and strong competitiveness in China, improve sales volume and profit margin of existing products, solve users' pain points, and support the Company's to achieve the share in medium-sized vehicle market. |
| Fuel Cell Product Development Project | Develop fuel cell products, cover all the three major technical routes, meet the requirements of demonstration operation subsidies, and support the increase of new energy products. | Development phase | Cover typical scenarios of the three demonstration city clusters of fuel cells, develop a whole series of products such as fuel-electric traction, fuel-electric dump, special fuel-electric and fuel-electric logistics, and apply for demonstration operation projects together with mainstream fuel-electric system partners to realize the batch sales and operation of fuel-electric products. | Complete the layout of three major technical routes, reserve the fuel cell products development technology, support the research and development of independent fuel cell products, build a benchmark image for the new energy industry, and support the Company to lead the new energy industry continuously. |
| Jiefang intelligent driving product development | Develop aided driving and restricted-region high-level | Development phase | Develop intelligent vehicle series products, realize aided driving in trunk logistics scenarios | With the commercial operation of emerging industries in multiple scenarios, the Company's |
| project | intelligent driving commercial vehicle products based on customer needs, so as to help the Company to realize the commercialization of intelligent vehicle industry in a short period. | and high-level intelligent driving in multiple restricted-region scenarios such as ports and sanitation, and develop full-stack intelligent driving software and hardware core technologies by itself to create independent core competitiveness. | R&D capability and competitiveness in the intelligent networking field are improving continuously, so that it can realize the strategic transformation to intelligent transportation solution provider in a short period. | |
| Jiefangxing APP IoV platform development project | The project is implemented to realize networking of the Company's off-line vehicles, so as to meet the regulatory requirements for monitoring and provide customers with remote functions or services such as remote vehicle control, intelligent diagnosis and repair, OTA upgrade, etc. In addition, IoV big data can be realized in the fields of research, production, marketing and service based on millions of | Iterative operation phase | The full-stack self-developed IoV platform series products cover three major sub-platforms, i.e. vehicle terminal, mobile terminal and cloud terminal, realize the digitalization of vehicle operation information at the vehicle terminal, and realize vehicle-cloud connection based on self-developed Tbox products. At the mobile terminal, the Company optimizes and iterates the mobile phone Jiefangxing APP continuously, and builds the exclusive in-vehicle OS for Jiefang commercial vehicles independently. At the cloud terminal, it optimizes the IoV cloud platform continuously to | With continuous product iteration and service optimization of the project, the achievements will improve digital, networking and intelligent experience of commercial vehicle users significantly, help the Company to lay out in the field of commercial vehicle ecology, promote the digital transformation of products and services, and enter the commercial cycle of data-driven iteration. |
connected vehicles,so as to support thelayout of theCompany inecological services.
improve stability, securityand concurrency. TheCompany creates the firstIoV brand in thecommercial vehicleindustry through theconstruction at vehicleterminal, mobile terminaland cloud terminal.
| Upgraded transmission product development project | Develop transmission products complying with noise regulations and fuel consumption regulations to improve the competitiveness of complete vehicles. | Development phase | Complete the development of drive axle and AMT products. Improve the comprehensive competitiveness of assembly products to make sure that the comprehensive index is higher than that of main competitive products at home and abroad. | Provide competitive drive axle and AMT transmission products for the Company's vehicle platform, improve the competitiveness of vehicle products, and support the Company to lead the industry continuously. |
| Research on 55% thermal efficiency power system technology of diesel engine | Break through 55% thermal efficiency technology of diesel engine. | Research phase | Break through high compression ratio fast dual-zone combustion system and other technologies to challenge the 55% thermal efficiency of commercial vehicle diesel engines. | Improve the effective thermal efficiency of diesel engines, achieve the goal of product low carbonization, and reserve technologies for complying with the fuel consumption regulations in the next stage. |
| Fuel cell system integration technology development | Break through the integration and control technology of commercial vehicle fuel cell system. | Research phase | Reach the system power of 100 kW. | Build the technical competitiveness of the Company's first-class fuel cell products and fill the technical gap of the Company's independent fuel cell system. |
Information about R&D personnel of the Company
| 2022 | 2021 | Change ratio | |
| Number of R&D personnel (person) | 2,904 | 2,419 | 20.05% |
| Proportion of R&D personnel | 14.27% | 11.70% | Increased by 2.57% |
| Educational background structure of R&D personnel | |||
| Bachelor's degree | 1,907 | 1,582 | 20.54% |
| Master's degree | 943 | 791 | 19.22% |
| Doctor's degree | 36 | 29 | 24.14% |
| Junior college degree | 18 | 17 | 5.88% |
| Age structure of R&D personnel | |||
| Under 30 years old | 1,065 | 802 | 32.79% |
| 30-40 years old | 1,159 | 1,094 | 5.94% |
| 41-50 years old | 465 | 348 | 33.62% |
| 51~60 years old | 215 | 175 | 22.86% |
Information about R&D investment of the Company
| 2022 | 2021 | Change ratio | |
| Amount of R&D Investment (CNY) | 2,895,655,097.73 | 3,328,946,673.10 | -13.02% |
| Proportion of R&D Investment in Operation Income | 7.55% | 3.37% | Increased by 4.18% |
| Capitalization amount of R&D investment (CNY) | 0.00 | 0.00 | 0.00% |
| Proportion of capitalized R&D investment in total R&D investment | 0.00% | 0.00% | 0.00% |
Reasons and influence of major changes in the composition of the R&D personnel
□ Applicable ?Not applicable
Reasons for significant changes in the proportion of total R&D investment in operating incomecompared with the previous year
□ Applicable ?Not applicable
Reasons for and the rationality of great change in the capitalization rate of R&D investment
□ Applicable ?Not applicable
5. Cash flow
Unit: CNY
| Item | 2022 | 2021 | Year-on-year Increase and Decrease |
| Sub-total of cash inflows from operating activities | 44,778,021,694.80 | 87,046,159,008.10 | -48.56% |
| Sub-total of cash outflows from operating activities | 49,913,265,664.15 | 71,843,035,728.94 | -30.52% |
| Net cash flows from operating activities | -5,135,243,969.35 | 15,203,123,279.16 | -133.78% |
| Sub-total of cash inflows from investing activities | 1,715,798,644.98 | 5,138,340,537.10 | -66.61% |
| Sub-total of cash outflows from investment activities | 3,345,556,203.30 | 2,535,852,081.71 | 31.93% |
| Net cash flows from investment activities | -1,629,757,558.32 | 2,602,488,455.39 | -162.62% |
| Sub-total of cash inflows from financing activities | 332,790,748.16 | -100.00% | |
| Sub-total of cash outflows from financing activities | 3,080,358,351.01 | 2,380,869,368.70 | 29.38% |
| Net cash flows from financing activities | -3,080,358,351.01 | -2,048,078,620.54 | -50.40% |
| Net increase in cash and cash equivalents | -9,845,007,165.71 | 15,755,996,673.07 | -162.48% |
Description on main factors influencing major changes in relevant data on a year-on-year basis?Applicable □ Not Applicable
(1) "Subtotal of cash inflows from operating activities" of this year is decreased by 48.56%compared with the previous year, which is mainly due to the impact of multiple factors such asshrinking industry demand, and decreasing sales volume and sales outstanding.
(2) "Subtotal of cash outflows from operating activities" of this year is decreased by 30.52%compared with the previous year, which is mainly due to the impact of multiple factors such asshrinking industry demand, and decreasing output and purchase expenditure.
(3) "Net cash flows from operating activities" of this year is decreased by 133.78% comparedwith the previous year, which is mainly due to the impact of multiple factors such as shrinkingindustry demand, and decreasing output, sales volume and payables.
(4) "Subtotal of cash inflows from investment activities" of this year is decreased by 66.61%compared with the previous year, which is mainly due to the non-recovery of fixed-term depositsthis year.
(5) "Subtotal of cash outflows from investment activities" of this year is increased by 31.93%compared with the previous year, which is mainly due to the increase in foreign investment thisyear.
(6) "Net cash flows from investment activities" of this year is decreased by 162.62% comparedwith the previous year, which is mainly due to the non-recovery of fixed-term deposits and theincrease in foreign investment this year.
(7) "Subtotal of cash inflows from financing activities" of this year is decreased by 100%compared with the previous year, which is mainly because that there is no business this year.
(8) "Subtotal of cash outflows from financing activities" of this year is increased by 29.38%compared with the previous year, which is mainly due to the increase in cash paid for dividenddistribution.
(9) "Net cash flows from financing activities" of this year is decreased by 50.40% compared withthe previous year, which is mainly due to the increase in cash paid for dividend distribution.
(10) "Net increase in cash and cash equivalents" of this year is decreased by 162.48% comparedwith the previous year, which is mainly due to the impact of multiple factors such as shrinkingindustry demand, and decreasing output, sales volume and payables.Description on reasons for the significant difference between the net cash flows generated fromthe operating activities in the reporting period and the net profit of this year?Applicable □ Not ApplicableRefer to Section X - "Financial Report VII", Notes to Items in Consolidated Financial Statementsand Section 60 "Supplementary Information to Cash Flow Statement" for details.V. Analysis of Non-main Business
□ Applicable ?Not applicable
VI. Analysis of Assets and Liabilities
1. Major changes in asset composition
Unit: CNY
| End of 2022 | Early 2022 | Increase/Decrease in Proportion | Description of Major Changes | |||
| Amount | Proportion in Total Assets | Amount | Proportion in Total Assets | |||
| Monetary capital | 21,041,473,417.71 | 37.06% | 30,761,262,721.40 | 44.09% | -7.03% | |
| Accounts receivable | 867,090,338.42 | 1.53% | 1,279,693,951.70 | 1.83% | -0.30% | |
| Contract assets | 11,129,624.75 | 0.02% | 53,047,687.72 | 0.08% | -0.06% | |
| Inventories | 6,382,739,897.83 | 11.24% | 9,268,120,531.25 | 13.28% | -2.04% | |
| Investment property | 80,647,597.48 | 0.14% | 80,202,825.09 | 0.11% | 0.03% | |
| Long-term equity investments | 4,692,648,635.84 | 8.27% | 4,766,734,671.74 | 6.83% | 1.44% | |
| Fixed assets | 9,612,922,810.28 | 16.93% | 9,236,789,322.03 | 13.24% | 3.69% | |
| Project under construction | 1,902,143,354.11 | 3.35% | 965,997,208.23 | 1.38% | 1.97% | |
| Right-of-use assets | 198,220,342.59 | 0.35% | 143,766,265.44 | 0.21% | 0.14% | |
| Contract liabilities | 1,629,524,704.35 | 2.87% | 2,700,642,475.91 | 3.87% | -1.00% | |
| Lease liabilities | 54,814,603.06 | 0.10% | 88,307,218.05 | 0.13% | -0.03% |
High proportion of overseas assets
□ Applicable ?Not applicable
2. Assets and liabilities measured at fair value
□ Applicable ?Not applicable
3. Restrictions on asset rights as of the end of the reporting periodFor details, please refer to Note 61 "Assets with restricted ownership or use right" in part VII"Notes to Items in Consolidated Financial Statements" of Section X - Financial Report.VII. Investment Analysis
1. Overall
?Applicable □ Not Applicable
| Investment Amount in the Reporting Period (CNY) | Investment Amount in the Same Period of Previous Year (CNY) | Variation range |
| 516,780,000.00 | 44,000,000.00 | 1,074.50% |
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.VIII. Sale of Major Assets and Equity
1. Sale of major assets
?Applicable □ Not Applicable
| Counterparty | Assets Sold | Date of Sale | Transaction Price (CNY 10,000) | Net Profit Contributed by the Asset to the Listed Company from the Beginning of the Current Period to the Date of Sale (CNY 10,000) | Effect of Sale on the Company | Proportion of Net Profit Contributed by Asset Sales to the Listed Company in the Total Net Profit | Pricing Principle of Asset Sale | Related Party Transaction or Not | Relationship with the Counterparty (Applicable to Related Party Transaction) | Whether All Property Rights of the Assets Involved Have been Transferred | Whether All Credits and Debts Involved Have been Transferred | Whether Implemented as Scheduled. If Not, Provide the Reasons and the Measures Taken by the Company | Date of Disclosure | Disclosure Index |
| Qingdao Land Reserve and Consolidation Center | FAW Jiefang Qingdao Automobile Plant is located in Plot 4, Licang District, Qingdao City, with a total area of 410,217.3 ㎡. | December 16, 2022 | 110,143.80 | 87,229.98 | This reserve and consolidation will not affect normal operation of the Company and FAW Jiefang Qingdao Automobile Plant, and will be conducive to optimizing the asset structure, revitalizing the stock assets, increasing the | 237.20% | Asset appraisal pricing | No | N/A | Yes | No | Implemented as planned | December 16, 2022 | http://www.cninfo.com.cn/new/disclosure/stock?stockCode=000800&orgId=gssz0000800#latestAnnouncement |
2. Sale of major equity
□ Applicable ?Not applicable
IX. 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 10,803,012,500 | 52,345,947,283.22 | 19,544,748,824.40 | 38,331,747,083.88 | -305,554,763.44 | 7,048,469.29 |
| 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 10,000,000,000 | 142,573,353,431.36 | 20,755,902,658.83 | 6,570,745,844.89 | 2,611,391,202.35 | 1,806,213,013.58 |
Acquisition and disposal of subsidiaries in the reporting period
?Applicable □ Not Applicable
| Company Name | Methods of acquisition and disposal of subsidiaries in the reporting period | Impact on overall production, operation and performance |
| FAW Jiefang Automotive Sales Co., Ltd. | Merger by absorption | No significant impact on current production and operation |
Description of main holding and joint-stock companies: none
X. Structured Entities Controlled by the Company
□ Applicable ?Not applicable
XI. Outlook for Future Development of the Company
1. Competition pattern and development trend of the Company's industryIn the next three years, the demand of residents will recover gradually with the economicrecovery, and the market demand of the commercial vehicle industry will increase graduallycompared with that in the tough period of 2022. The report of the 20th National Congress of theCommunist Party of China clearly states that "the great rejuvenation of Chinese nation shall bepromoted by realizing Chinese-type modernization", puts forward 17 goals in becoming a strongcountry, and proposes eight requirements for the commercial vehicle industry, including high-quality development, supply chain guarantee, digital upgrading, overseas breakthroughs andinnovative development. It is estimated that China's GDP growth rate will be about 5% from 2023to 2025, which is relatively stable. The pressure on logistics industry practitioners will be reduced,the profitability will be improved, and the domestic commercial vehicle market will recoversteadily. There will be more opportunities in the export market because the competitiveness ofdomestic products is improved and the acceptance of Chinese products by foreign countries isincreased. The credit policy for new energy commercial vehicles is planned to be implemented in2025, so that the penetration rate of new energy commercial vehicles will increase rapidly in thenext three years. The Company will have great opportunities in overseas market, new energy andsolutions in the future.The medium and heavy truck industry market is more and more mature, and the marketcompetition is more and more homogeneous, therefore, the industry will have higher requirementsfor product innovation and technological innovation, the report of the 20th National Congress ofthe Communist Party of China points out that innovation is the first driving force, and enterpriseswith strong innovation ability in the industry will have more advantages in the future competition.FAW Jiefang, as a "world-class professional, refined, distinctive and innovative demonstrationenterprise" certified by SASAC, has five core capabilities: scientific and technological innovation,lean design, performance development, trial production verification and experimental verification,and will have more development advantages in future competition.
2. Development strategy and business plan of the Company
In 2023, the Company will perform all production and operation tasks throughout the yearbased on the general idea of "aiming at one goal, focusing on the leading mainline, adhering toinnovation and reform drive and strengthening the overcoming of key problems in five majorfields", always rank first in the industry, improve the awareness of crisis, carry forward the spiritof struggle, and achieve all objectives and complete all tasks of 2023 with extraordinary actionand innovation. We are committed to making unremitting efforts to become a "world-classautomobile enterprise and a century-old national automobile brand", and contribute to theconstruction of a manufacturing power and a transportation power.
(1) Aiming at strategic objectives, adhering to strategic guidance, accelerating theimplementation of strategies and strengthening strategic management. Refresh the strategicplanning continuously, strengthen key special research on topics such as new models, and explorenew development paths constantly based on the development trend of traditional and emergingindustries. Accelerate the implementation process of solutions, build systematic solution systemcapability and market competitiveness, and create new growth points for the Company's profit.
(2) Focusing on the leading mainline of market and product, building first-class marketingpower and product power vigorously, and consolidating the first place of commercial vehicles.Keep the absolute first place of medium and heavy-duty trucks and expand their leadingadvantages in China. Make sure that the growth rate of light trucks is the first, and the export ofnew energy vehicles overseas will increase.
(3) Adhering to innovation and reform drive, building core advantages, and promotingtransformation and development. Keep up with cutting-edge technology and increase R&Dinvestment to ensure technological innovation. Promote the exploration of new models,incubation of new businesses and mining of new value points, expand the scope of ecosystem,and improve the revenue capacity of new business forms continuously to ensure business forminnovation. Promote IPD change and integrated change firmly, and improve the ability ofautonomous change continuously to achieve management change.
(4) Strengthening the overcoming of key problems in five major fields, accelerating theimprovement of capabilities, and promoting the business development to a new level. Strengthenthe improvement of profitability, and focus on the minimum profitability based on the generalidea of "increasing margin, reducing cost and increasing income"; strengthen the improvement of
digital and intelligent transformation capability, improve the 4A architecture on the basis of"1143" framework, enhance the digital system capacity building, and accelerate the deepintegration of business; strengthen the improvement of comprehensive quality capability andaccelerate the creation of world-class quality competitiveness; strengthen the improvement ofsupply chain security guarantee capability, focus on building world-class procurementcompetitiveness, improve the capability of procurement integration system, pay close attention tothe replacement of domestic resources, and improve the resilience and security level of the supplychain steadily; strengthen the improvement of manufacturing technology capacity, adjust theresource layout, and pay more attention to new energies.
(5) Aiming at the goals of various business sectors, cooperating with each other, improvingthe overall operation capability and level, and supporting the overall development of theCompany.
3. Possible risks to the Company's operation
(1) International market competition risk
Risk description:
The international situation in 2023 is still complex and severe, and there continues to beintense competition in the domestic commercial vehicle market, with many factors interactingwith each other. Amid the interweaving of both positive and negative factors in the market, it isexpected that the overseas demand will slow down moderately. As a result, the competition in theoverseas market will become more intense, accompanied by unfavorable situations such asforeign car companies accelerating their layout in Chinese market and the increasing cautiousattitude of commercial vehicle consumers. The company is facing significant competitivepressures.
Solutions:
In order to enhance the international competitiveness of the Company and stabilize its globalmarket position, the Company plans overseas exclusive products with internationalcompetitiveness, strives to meet the needs of the international market, and comprehensivelypromotes more high-quality products to key markets. Explore the potential for competition frommultiple dimensions, rely on overseas marketing network with a certain scale, leverage strengths,improve image, and expand international market influence. Increase brand publicity in keymarkets, coordinate with marketing strategies, and promote the achievement of international
market business goals.
(2) Risk of market environment change of new energy vehicles
Risk description:
The new energy vehicle market continues to grow rapidly, with both production and salesreaching new highs. Affected by the overall environment, the production and sales of new energycommercial vehicles continue to rise, and the penetration rate is steadily increasing. In the nextthree years, the production, sales and penetration rate of new energy commercial vehicles inChina will usher in rapid growth. In this environment, the new energy policy will be furtheradjusted, and the intense competition between the Company and its competitors will continue fora long time. At the same time, under the bargaining pressure of upstream and downstreamenterprises, the market position of new energy commercial vehicles will be challenged in acomplex environment.Solutions:
Based on the Company's strategy, carry out a value analysis of the entire industry chain,identify unfavorable factors in the new energy field, enhance the control ability of coretechnologies, and improve the new energy ecosystem. Lay out product platforms, targeting typicalareas of new energy, conducting in-depth research on promotional scenarios, and promoting theentry of competitive products into the market through partnerships with powerful enterprises andother ways.
(3) Domestic market risk
Risk description:
Due to the decline in economic growth, the domestic commercial vehicle market is over-saturated, and the competition for existing stocks will continue. Despite slight improvement in thelogistics industry, unfavorable factors such as energy price fluctuations caused by internationalturbulence continue to greatly suppress the demand for commercial vehicles in the domesticmarket. It is expected that the Company will face certain market competition pressuredomestically.
Solutions:
Adapt to market changes by formulating appropriate policies and promotion strategies, whileconsolidating current competitiveness, actively exploring underserved and untapped nichemarkets, and seeking growth. Continue to carry out activities in key regions and important
channels, look for opportunities, explore demand, enhance product competitiveness and supportmarket competition situation. Strengthen the collection of leads, with all employees approachingfor the end customers to seize their demands.XII. Reception, Investigation, Communication, Interview and Other Activities in theReporting Period?Applicable □ Not Applicable
| Reception Time | Reception Location | Reception Mode | Type of Reception Object | Reception Object | Main Contents of Discussion and Information Provided | Index of Basic Information of Investigation |
| March 31, 2022 | Meeting room of the company | Telephone communication | Organization | Yunjun AMC, Springs Capital, Tebon Fund, Fujian Danjin Hengxin Asset Management Co., Ltd., Fullgoal Fund, ICBC Ansheng Asset Management Co., Ltd., GF Securities, Guolian Securities, Guosen Securities, Huatai Securities, Huaxi Securities, China Everwin Asset, Horizon Asset, Shanghai Huili Asset Management Co., Ltd., Bocommlife Asset Management Co., Ltd., Minsheng Securities, Nanfang Tianchen (Beijing) Investment Management Co., Ltd., Nanshan Life Insurance Co., Ltd., Ping An Asset Management Co., Ltd., Credit Suisse, UBS, Three Gorges Capital Holding Co., Ltd., Shanghai Trust, Whitestream Fund, Shanghai Electric Group Finance Co., Ltd., Tianni Investment, Shangcheng Investment, Shengang Securities, Shenguotou Investment, Capital Securities, TF Securities, Tianhong Asset Management, Himalaya Capital, Yadoo Investment, Changjing Securities, China Merchants Fund, China Life, CICC, Sinowise Investment, China Securities, CITIC Securities, China Post Fund, Brighter Investment, CLOUDALPHA MASTER FUND, destination capital, Greencourt Capital, GREENWOODS, Polunin Capital | Operation and development planning of the Company, no relevant information is provided | http://www.cninfo.com.cn/new/disclosure/stock?stockCode=000800&orgId=gssz0000800#research |
| April 14, 2022 | Meeting room of the company | Others | Others | Investors participating in FAW Jiefang 2021 Annual Performance Presentation | Operation and development planning of the Company, no relevant information is provided |
| July 22, 2022 | Meeting room of the company | Field Research | Organization | Jilin Securities Regulatory Bureau, Northeast Securities, small and medium-sized investors | Operation and development planning of the Company, no relevant information is provided |
| October 31, 2022 | Meeting room of the company | Telephone communication | Organization | BRILLIANCE - BRILLIANT PARTNERS FUND LP, CICC, Essence Securities Asset Management, Fullgoal Fund Management Co Ltd, Headwater, Oasis, POLUNIN CAPITAL PARTNERS LTD, Stoneylake, Beijing Yunjun AMC, Truevalue Asset Management, Eastmoney Securities, Orient Fund, GF Securities, Guolian Securities, Haitong Asset Management, Hangzhou Xinghai Weilai Private Fund, Haojun Investment, Huaxi Securities, Credit Suisse, UBS, Shaanxi Xinghe Canyun Asset Management Co., Ltd., KS Fund, SAIC Finance, Tianni Investment, Shanghai Zhongyu Investment Co., Ltd., Shenzhen Hengyuan Asset Management Co., Ltd., Shenzhen Longgang District Yindao Fund Investment Co., Ltd., Capital Securities, Taikang Pension, Himalaya Capital, Yadoo Investment, Yingda Asset Management Co., Ltd., Changjing Securities, PICC, CITIC Securities | Operation and development planning of the Company, no relevant information is provided |
Section IV Corporate Governance
I. Basic Information about Corporate GovernanceIn 2022, the Company continued to improve its governance structure, established andimproved its internal management and control system, and improved the standard operation levelin strict accordance with relevant laws and regulations such as the Company Law, the SecuritiesLaw, the Code of Corporate Governance for Listed Companies, and the Rules Governing theListing of Stocks on the Shenzhen Stock Exchange, as well as relevant normative documents of theChina Securities Regulatory Commission and the Shenzhen Stock Exchange, and the Articles ofAssociation. At present, the actual governance situation of the Company meets requirements ofthe China Securities Regulatory Commission's normative documents for the governance of listedcompanies.The Company revised the Articles of Association and implemented the approval proceduresof the Board of Directors and the shareholders’ meeting strictly in the reporting period incombination with the actual situation according to relevant requirements of China SecuritiesRegulatory Commission and SASAC in order to further improve its governance structure since ithas repurchased and canceled the restricted shares that have been granted to some incentiveobjects but have not yet been released from sale according to the Restricted Share Incentive Plan(Draft), resulting in changes in registered capital and share capital. In addition, the Companyformulated the Working System of the Secretary of the Board of Directors, revised the InvestorRelations Management System, and implemented the approval procedures of the Board ofDirectors strictly in order to further improve its standardized operation ability and protect thelegitimate rights and interests of investors.
1. Shareholders and shareholders’ meeting
The Company standardizes the convening, holding and voting procedures of the shareholders’meeting in strict accordance with the Company Law, the Code of Corporate Governance of ListedCompanies, the Rules for Shareholders’ Meeting of Listed Companies, the Articles of Association,etc. The shareholders’ meeting combines on-site and online voting to facilitate shareholders tofully exercise their rights. There is a shareholder exchange link at the shareholders’ meeting, inwhich shareholders can fully express their opinions and suggestions to ensure the right of speech
of minority shareholders. The Company employs professional lawyers to witness and providelegal opinions on the convening of the meeting, the qualifications of attendees and the convener,voting procedures and voting results, etc., so as to ensure standardized operation of the meeting.
2. Directors and the Board of Directors
The Board of Directors of the Company consists of 9 directors, including 3 independentdirectors. The composition and qualifications of the members of Board of Directors comply withrelevant laws and regulations. In the reporting period, all directors of the Company were able todo their work according to relevant laws and regulations, attend the board meeting and theshareholders’ meeting, perform their duties faithfully and diligently, and protect the interests ofthe Company and shareholders. The Board of Directors of the Company has three specialcommittees, namely, the Strategy Committee, the Audit and Risk Control Committee and theRemuneration and Appraisal Committee, each of which operates in strict accordance with theArticles of Association, the Rules of Procedure of the Board of Directors and their working rules,studies various professional matters, and provides scientific and professional opinions andsuggestions for the decision-making of the Board of Directors.
3. Supervisors and the Board of Supervisors
The Board of Supervisors of the Company consists of 5 supervisors, including 4 employeerepresentative supervisors. The composition and qualifications of the members of Board ofSupervisors comply with relevant laws and regulations. In the reporting period, all supervisors ofthe Company can perform their duties conscientiously according to the Articles of Association andthe Rules of Procedure of the Board of Supervisors, supervise the regular reports, relatedtransactions, major matters, performance of directors and senior executives, etc., and protectlegitimate interests of the Company and shareholders.
4. Relationship between controlling shareholders and listed companies
Controlling shareholders of the Company can regularize their own behaviors according to theCode of Corporate Governance for Listed Companies, the No. 1 Guidelines for Self-disciplineSupervision of Listed Companies - Standardized Operation of Listed Companies on the MainBoard and the Articles of Association, and do not interfere with the operation and decision-making activities of the Company directly or indirectly without obtaining permission of theshareholders’ meeting, or occupy non-operational funds of the Company, or obtain guaranteefrom the Company. The Company has independent and complete business and independent
operation capabilities, and is independent of controlling shareholders in terms of business,personnel, assets, organizations and finance.
5. Information disclosure and transparency
The Company discloses relevant information truthfully, accurately, completely, timely andfairly in strict accordance with relevant laws and regulations as well as the Major InformationInternal Reporting System and the Information Disclosure Management System, and designatesnewspapers and websites such as Securities Times, China Securities Journal and CNINFO as themedia for information disclosure, so as to provide equal opportunities for all investors to obtaininformation of the Company. The Company attaches great importance to investor relationsmanagement, strengthens communication with investors through investigation, telephone, email,interactive platform, etc., and responds to investors' consultations carefully. It shall strengthen themanagement of internal information, register insiders earnestly, and safeguard the legitimaterights and interests of investors.
6. Stakeholders
The Company fully respects and safeguards the legitimate rights and interests of stakeholders,attaches importance to its social responsibility, communicates and exchanges actively withstakeholders, strives to coordinate and balance the interests of shareholders, employees, societyand other parties, coexists harmoniously with stakeholders, and promotes sustainable, stable andhealthy development of the Company together with them.Whether there is significant difference between the actual situation of corporate governance andlaws, administrative regulations and the regulations on the governance of listed companies issuedby the China Securities Regulatory Commission
□ Yes? No
There is no significant difference between the actual situation of corporate governance and laws,administrative regulations and the regulations on the governance of listed companies issued by theChina Securities Regulatory Commission.
II. Independence of the Company from Controlling Shareholders and Actual Controllers inTerms of Guaranteeing the Company's Assets, Personnel, Finance, Organizations andBusinessThe Company operates in strict accordance with relevant laws and regulations, hasindependent and complete operation capabilities, and is completely independent from controllingshareholders in terms of business, personnel, assets, organizations, finance, etc. Specific steps areas follows:
1. Business: The Company has independent business operation systems for production,procurement and sales, has complete legal person property rights, can organize and takeproduction and operation activities independently, and is independent of controlling shareholders.
2. Personnel: The Company has independent personnel management organization andsystem, and establishes an independent and complete salary management system. The seniorexecutives of the Company are full-time employees and receive salary from the Company.
3. Assets: The Company has independent procurement, production and sales systems andsupporting facilities, and has rights to own, control, dispose of and obtain earnings from its assets.No asset of the Company is occupied by controlling shareholders.
4. Organization: The Company has independent production, operation and officeorganizations, and has set up a perfect organizational structure. The Board of Directors, the Boardof Supervisors and other internal organizations operate independently, and do not work togetherwith controlling shareholders.
5. Finance: The Company has an independent and complete financial department which isequipped with full-time financial personnel, establishes an independent and standardizedaccounting system and financial management system, opens an independent bank account, andpays taxes independently according to law.
III. Horizontal Competition?Applicable □ Not Applicable
| Problem type | Type of Relationship with Listed Company | Company Name | Nature of company | Causes | Solutions | Work Progress and Follow-up Plan |
| Horizontal competition | Controlling shareholder | China FAW Group Co., Ltd. | Others | In 2020, the listed company completed major asset restructuring, and its main business was changed to the R&D, production and sales of commercial vehicles. FAW Harbin Light Automobile Co., Ltd. and FAW Hongta Yunnan Automobile Manufacturing Co., Ltd., which are members of FAW Light Commercial Vehicle Co., Ltd., a subsidiary of FAW, are engaged in some light truck businesses. There is horizontal competition or potential horizontal competition between them and the listed company. | FAW Harbin Light Automobile Co., Ltd. (hereinafter referred to as "Harbin Light Automobile") and FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. (hereinafter referred to as "FAW Hongta") are in a state of discontinuation or loss currently, with heavy burden and unstable profitability. FAW promises that it will entrust all shares of Harbin Light Automobile and FAW Hongta under its actual control to Jiefang Limited for management, and inject the equities of Harbin Light Automobile and FAW Hongta under its actual control to listed companies in batches or at one time in an appropriate way, or transfer them to other unrelated third parties at a reasonable price and in a reasonable | Perform as promised |
| way, or prevent the light truck company from engaging in light truck related businesses by exercising shareholders' rights, and perform relevant internal approval procedures as soon as possible after the above procedures are initiated within 12 months after meeting the requirements that the return on net assets of Harbin Light Automobile and FAW Hongta is not lower than that of listed companies in the same period and increasing the earnings per share of listed companies after restructuring. | ||||||
| Horizontal competition | Controlling shareholder | China FAW Co., Ltd. | Others | In 2020, the listed company completed major asset restructuring, and its main business was changed to the R&D, production and sales of commercial vehicles. FAW Harbin Light Automobile Co., Ltd. and FAW Hongta Yunnan Automobile Manufacturing Co., Ltd., which are members of FAW Light Commercial Vehicle Co., Ltd., a subsidiary of FAW Car Co., Ltd., | Harbin Light Automobile and FAW Hongta are in a state of discontinuation or loss currently, with heavy burden and unstable profitability. FAW Car Co., Ltd. promises that it will urge to entrust all shares of Harbin Light Automobile and FAW Hongta under its actual control to Jiefang Limited for management, and inject the equities of Harbin Light Automobile and FAW Hongta under its actual control to | Perform as promised |
| are engaged in some light truck businesses. There is horizontal competition or potential horizontal competition between them and the listed company. | listed companies in batches or at one time in an appropriate way, or transfer them to other unrelated third parties at a reasonable price and in a reasonable way, or prevent the light truck company from engaging in light truck related businesses by exercising shareholders' rights, and perform relevant internal approval procedures as soon as possible after the above procedures are initiated within 12 months after meeting the requirements that the return on net assets of Harbin Light Automobile and FAW Hongta is not lower than that of listed companies in the same period and increasing the earnings per share of listed companies after restructuring. |
IV. 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’ | Extraordinary shareholders’ | 84.94% | February 16, 2022 | February 17, 2022 | Reviewed and approved the Proposal on Estimated Amount of Daily Related Transactions |
| meeting of 2022 | meeting | 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. |
| Second Extraordinary Shareholders’ Meeting of 2022 | Extraordinary shareholders’ meeting | 84.14% | September 16, 2022 | September 17, 2022 | Reviewed and approved the Proposal on Electing Liu Yanchang as a Non-independent Director of the Company, the Proposal on Repurchase and Cancellation of Partial Restricted Shares in the Phase I Restricted Share Incentive Plan, the Proposal on Change of Registered Capital of the Company and the Proposal on Amending the Articles of Association |
| Third Extraordinary Shareholders’ Meeting of 2022 | Extraordinary shareholders’ meeting | 83.91% | November 18, 2022 | November 19, 2022 | Reviewed and approved the Proposal on Renewal of Employment of Financial Audit Institutions, the Proposal on Renewal of Employment of Internal Control Audit Institutions, the Proposal on Repurchase and Cancellation of Partial |
| Restricted Shares in the Phase I Restricted Share Incentive Plan, the Proposal on Change of Registered Capital of the Company and the Proposal on Amending the Articles of Association | |||||
| Fourth Extraordinary Shareholders’ Meeting of 2022 | Extraordinary shareholders’ meeting | 2.11% | December 14, 2022 | December 15, 2022 | Reviewed and approved the Proposal on Increasing the Estimate of Daily Related Party Transactions in 2022 |
2. Preferred shareholders with resumed voting rights request to convene an extraordinary shareholders' meeting
□ Applicable ?Not applicable
V. Directors, Supervisors and Senior Executives
1. Basic Information
| Name | Position | Employment Status | Gender | Age | Start Date of Tenure | Ending Date of Tenure | Number of Shares Held at the Beginning of the Period (share) | Number of Increased Shares in the Current Period (share) | Number of Reduced Shares in the Current Period (share) | Other Increase/Decrease (share) | Number of Shares Held at the End of the Period (share) | Reasons for the Increase or Decrease of Shares |
| Hu Hanjie | Chairman of the Board | In-service | Male | 58 | April 23, 2020 | April 21, 2023 | 334,331 | 334,331 | ||||
| Wu Bilei | Director | In-service | Male | 52 | October 14, 2021 | April 21, 2023 | 228,552 | 228,552 | ||||
| Zhang Guohua | Director | In-service | Male | 50 | June 23, 2020 | April 21, 2023 | 228,493 | 228,493 | ||||
| Bi Wenquan | Director | In-service | Male | 50 | September 15, 2021 | April 21, 2023 | ||||||
| Li Hongjian | Director | In-service | Male | 50 | April 29, 2022 | April 21, 2023 | ||||||
| Liu Yanchang | Director | In-service | Male | 59 | September 16, 2022 | April 21, 2023 | ||||||
| Han Fangming | Independent director | In-service | Male | 56 | April 22, 2020 | April 21, 2023 | ||||||
| Mao Zhihong | Independent director | In-service | Male | 61 | April 22, 2020 | April 21, 2023 | ||||||
| Dong Zhonglang | Independent director | In-service | Male | 58 | April 22, 2020 | April 21, 2023 | ||||||
| Yang Xiao | Director | Departure from office | Male | 49 | April 22, 2020 | August 29, 2022 | ||||||
| Liu | Director | Departure | Male | 51 | June 23, 2020 | March 29, 2022 |
| Changqing | from office | |||||||||||
| Wang Yanjun | Chairman of Board of Supervisors | In-service | Male | 59 | September 15, 2021 | April 21, 2023 | ||||||
| Xu Haigen | Employee Supervisor | In-service | Male | 58 | April 22, 2020 | April 21, 2023 | ||||||
| Wang Lijun | Employee Supervisor | In-service | Male | 54 | April 22, 2020 | April 21, 2023 | ||||||
| Duan Yinghui | Employee Supervisor | In-service | Male | 52 | April 22, 2020 | April 21, 2023 | ||||||
| Ren Ruijie | Employee Supervisor | In-service | Male | 39 | April 22, 2020 | April 21, 2023 | ||||||
| Wu Bilei | General Manager | In-service | Male | 52 | September 17, 2021 | April 21, 2023 | ||||||
| Yu Changxin | Executive Deputy General Manager | In-service | Male | 50 | November 28, 2022 | April 21, 2023 | ||||||
| Ji Yizhi | Deputy General Manager | In-service | Male | 53 | October 19, 2022 | April 21, 2023 | 192,778 | 192,778 | ||||
| Tian Haifeng | Deputy General Manager | In-service | Male | 50 | October 19, 2022 | April 21, 2023 | 192,778 | 192,778 | ||||
| Li Sheng | Deputy General Manager | In-service | Male | 46 | October 19, 2022 | April 21, 2023 | 192,778 | 192,778 | ||||
| Kong | Deputy | Departure | Male | 50 | March 26, 2020 | October 19, 2022 | 228,498 | 228,498 |
| Dejun | General Manager | from office | ||||||||||
| Wang Ruijian | Deputy General Manager | Departure from office | Male | 59 | March 26, 2020 | October 19, 2022 | 253,496 | 253,496 | ||||
| Shang Xingwu | Deputy General Manager | Departure from office | Male | 56 | March 26, 2020 | October 19, 2022 | 228,631 | 228,631 | ||||
| Ou Aimin | Deputy General Manager | Departure from office | Male | 56 | March 26, 2020 | October 19, 2022 | 229,010 | 229,010 | ||||
| Wang Jianxun | Secretary of the Board of Directors | In-service | Male | 39 | July 23, 2020 | April 21, 2023 | 192,778 | 192,778 | ||||
| Total | -- | -- | -- | -- | -- | -- | 2,502,123 | 0 | 0 | 0 | 2,502,123 | -- |
Whether any director or supervisor during term of office leaves office or any senior executive is dismissed in the reporting period?Yes □ No
(1) In the reporting period, Yang Xiao and Liu Changqing, directors of the Company, resigned from their posts as directors of the 9th Board ofDirectors and members of the Special Committee of the Board of Directors due to job transfer, and will hold no post in the Company any moreafter the resignation. Kong Dejun, Wang Ruijian, Shang Xingwu and Ou Aimin, the Deputy General Managers, resigned due to job-relatedreasons, in which Wang Ruijian continued to hold other posts in the Company, and Kong Dejun, Shang Xingwu and Ou Aimin did not holdother posts in the Company.
(2) The restricted shares held by Kong Dejun, Shang Xingwu and Ou Aimin were partially repurchased and canceled, and the cancellationcompletion announcement was issued on January 17, 2023 according to the Restricted Share Incentive Plan (Draft) of the Company. After
resigning from the post of Deputy General Manager of the Company, Kong Dejun, Wang Ruijian, Shang Xingwu and Ou Aimin will strictlyabide by the Several Provisions on Reduction of Shares Held by Shareholders, Directors, Supervisors and Senior Executives of ListedCompanies, the No. 1 Guidelines for Self-discipline Supervision of Listed Companies - Standardized Operation of Listed Companies on the MainBoard, and Detailed Rules for the Implementation of Reducing Shares Held by Shareholders, Directors, Supervisors and Senior Executives ofListed Companies on the Shenzhen Stock Exchange, etc.
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 Yanchang | Director | Elected | September 16, 2022 | |
| Liu Changqing | Director | Departure from office | March 29, 2022 | Job changes |
| Yang Xiao | Director | Departure from office | August 29, 2022 | Job changes |
| Yu Changxin | Executive Deputy General Manager | Appointed | November 28, 2022 | |
| Ji Yizhi | Deputy General Manager | Appointed | October 19, 2022 | |
| Tian Haifeng | Deputy General Manager | Appointed | October 19, 2022 | |
| Li Sheng | Deputy General Manager | Appointed | October 19, 2022 | |
| Kong Dejun | Deputy General Manager | Departure from office | October 19, 2022 | Work |
| Wang Ruijian | Deputy General Manager | Departure from office | October 19, 2022 | Work |
| Shang Xingwu | Deputy General Manager | Departure from office | October 19, 2022 | Work |
| Ou Aimin | Deputy General Manager | Departure from office | October 19, 2022 | Work |
2. Employment status
Professional background, main work experience and main responsibilities of current directors,supervisors and senior executives of the CompanyDirector:
Mr. Hu Hanjie is currently the General Manager Assistant of FAW, the Chairman andSecretary of the Party Committee of FAW JIEFANG GROUP CO., LTD., the Executive Directorand Secretary of the Party Committee of FAW Jiefang Automotive Co., Ltd., and a deputy to the15th Changchun Municipal People's Congress. He has served successively as the Deputy GeneralManager of FAW - Volkswagen Automobile Co., Ltd. and General Manager of Sales Company,
Secretary of the Party Committee and Executive Deputy General Manager of FAW JiefangAutomotive Co., Ltd., General Manager and Secretary of the Party Committee of FAW JiefangAutomotive Co., Ltd., Executive Deputy Director and Deputy Secretary of the Party Committeeof FAW Jiefang Business Headquarters (General Manager and Deputy Secretary of the PartyCommittee of FAW Jiefang Automotive Co., Ltd), General Manager Assistant of FAW Car Co.,Ltd., Deputy Director of Jiefang Business Headquarters, Deputy Secretary of the Party Committee(General Manager and Deputy Secretary of the Party Committee of FAW Jiefang Automotive Co.,Ltd.), General Manager Assistant of FAW Car Co., Ltd., Director of Jiefang BusinessHeadquarters, Secretary of the Party Committee (Chairman and Secretary of the Party Committeeof FAW Jiefang Automotive Co., Ltd.), etc.
Mr. Wu Bilei is currently the General Manager and Deputy Secretary of the Party Committeeof FAW JIEFANG GROUP CO., LTD., the General Manager and Deputy Secretary of the PartyCommittee of FAW Jiefang Automotive Co., Ltd., and the General Manager of the medium andheavy vehicle product line of the headquarters. He has served successively as the Deputy ChiefEngineer of Technical Center of China FAW Group Corporation and Deputy Director of ProductManagement Department of FAW Jiefang Automotive Co., Ltd., Vice President of CommercialVehicle R&D Institute of Technical Center of China FAW Group Corporation and DeputyDirector of Product Management Department of FAW Jiefang Automotive Co., Ltd., VicePresident of Commercial Vehicle Development Institute of Jiefang Business Headquarters, VicePresident of Commercial Vehicle Development Institute of Jiefang Business Headquarters andDeputy Director of Product Management Department of Jiefang Business Headquarters (JiefangCompany). President and Secretary of the Party Committee of Commercial Vehicle DevelopmentInstitute of Jiefang Business Headquarters, President and Secretary of the Party Committee ofCommercial Vehicle Development Institute of FAW Jiefang Automotive Co., Ltd., DeputyGeneral Manager of FAW JIEFANG GROUP CO., LTD., etc.Mr. Zhang Guohua is currently the Deputy Secretary of the Party Committee and Chairmanof the Labor Union of FAW JIEFANG GROUP CO., LTD. and the Deputy Secretary of the PartyCommittee and Chairman of the Labor Union of FAW Jiefang Automotive Co., Ltd He hasserved successively as the Senior Manager of Organization and Personnel Department andDirector of Senior Manager Management Office of China FAW Group Corporation, SeniorManager of Organization and Personnel Department and Senior Manager of Social Business
Management Department of China FAW Group Corporation, Deputy General Manager (DeputyDirector) of Human Resources Department (Party Committee Cadre Department) of China FAWGroup Corporation, etc.Mr. Bi Wenquan is currently the General Manager of Production Logistics Department ofFAW. He has served successively as the Secretary of the Party Committee, Secretary of theCommission for Discipline Inspection, Head of the Labor Union of Tianjin FAW XialiAutomobile Co., Ltd., Executive Deputy Secretary of the Party Committee, Secretary of theCommission for Discipline Inspection and Chairman of the Labor Union of FAW TianjinBusiness Division, Deputy General Manager of FAW Car Co., Ltd., Deputy General Manager ofFAW Bestune Car Co., Ltd., General Manager of FAW Engineering and Production LogisticsDepartment, etc.Mr. Li Hongjian is currently the leader of the preparatory team of the National AutomotiveIntelligent Technology Innovation Center. He has served successively as the Director ofIntelligent and Connected Vehicle R&D Department of FAW Technology Center, Vice Presidentof FAW R&D Institute and President of Innovation Technology Research Institute, and GeneralManager of FAW Strategy and Innovation Planning Department.Mr. Liu Yanchang is currently a full-time external director, convener/team leader of thesubsidiary of FAW Financial Management Department (Office of the Board of Directors). He hasserved successively as the Deputy Secretary of the Party Committee, Secretary of the Commissionfor Discipline Inspection and Chairman of the Labor Union of FAW Jiefang Automotive Co., Ltd.,Deputy Secretary of the Party Committee and Chairman of the Labor Union of FAW JIEFANGGROUP CO., LTD., Deputy Secretary of the Party Committee, Head of the Labor Union andChairman of the Labor Union of FAW-Volkswagen Automobile Co., Ltd.Mr. Han Fangming is currently the President of the Chahar Institute, a think tank on foreignaffairs and international relations, and a senior consultant to the Board of Directors of TCLTechnology Group. He is also the Vice Chairman of China Overseas-educated ScholarsDevelopment Foundation, the Deputy Editor-in-Chief of Public Diplomacy Quarterly of CICG,the Vice Chairman of China National Association For International Studies, the Vice Chairman ofChina Southeast Asian Research Association, the Director of the National Council of the ChinesePeople's Association for Friendship with Foreign Countries, and the Director of Chinese People'sInstitute of Foreign Affairs. He has served successively as a member of the 10th, 11th, 12th and
13th CPPCC, Deputy Director of the CPPCC Foreign Affairs Committee, and Director, ExecutiveDirector and Vice Chairman of TCL Group.
Mr. Mao Zhihong is currently the Director, Professor and Doctoral Supervisor of theDepartment of Accounting, School of Business and Management, Jilin University. He is also theVice President of Changchun Accounting Society. He has served as the Associate Professor ofJilin University of Finance and Trade (which was renamed Changchun University of Taxation, i.e.the current Jilin University of Finance and Economics).
Mr. Dong Zhonglang is currently the managing partner of Zhuhai Yinshan Capital EquityInvestment Management Co., Ltd. He has served successively as the Director of Linde (Xiamen)Forklift Co., Ltd., the General Manager of Shanghai Oulin Logistics Co., Ltd., the LogisticsDirector of Weichai Power Group, and the partner of Eastern Bell Capital (Shanghai).Supervisor:
Mr. Wang Yanjun is currently the General Counsel and Deputy General Manager of FAWAudit and Legal Department (who is responsible for presiding over the work). He has servedsuccessively as the General Manager and Secretary of the Party Committee of FAW-GM HongtaYunnan Automobile Manufacturing Co., Ltd., the Deputy General Manager of FAW AssetManagement Co., Ltd. (who is responsible for presiding over the work), and General Manager ofFAW Asset Management Co., Ltd., etc.
Mr. Xu Haigen is currently a Senior Executive Manager of the Powertrain Division of FAWJiefang Automotive Co., Ltd. He has served successively as the Deputy General Manager of WuxiDiesel Engine Branch of FAW Jiefang Automotive Co., Ltd., the Deputy Secretary of the PartyCommittee, Secretary of the Commission for Discipline Inspection and Chairman of the LaborUnion of Wuxi Diesel Engine Factory of FAW Jiefang Automotive Co., Ltd., the DeputySecretary of the Party Committee, Secretary of the Commission for Discipline Inspection andChairman of the Labor Union of Engine Division of Jiefang Business Headquarters, and theDeputy Secretary of the Party Committee, Secretary of the Commission for Discipline Inspectionand Chairman of the Labor Union of Engine Division of FAW Jiefang Automotive Co., Ltd.
Mr. Wang Lijun is currently the Deputy Secretary of the Party Committee, Secretary of theCommission for Discipline Inspection and Head of the Labor Union of Qingdao Vehicle BusinessDivision (FAW Jiefang Qingdao Automobile Plant) of FAW Jiefang Automotive Co., Ltd. He hasserved successively as the Deputy Secretary of the Party Committee (who is responsible for
presiding over the work), the Secretary of the Commission for Discipline Inspection and theChairman of the Labor Union of the Distribution Center of FAW Car Co., Ltd., the Manager ofthe Distribution Plant of FAW-Volkswagen Automobile Co., Ltd., the Director of the PowertrainDivision of FAW-Volkswagen Automobile Co., Ltd. and the Manager of the ChangchunDistribution Plant, the Director of the Distribution Center and Secretary of the Party Committeeof FAW Car Co., Ltd., and the Deputy Secretary of the Party Committee, Secretary of theDiscipline Inspection Commission and Chairman of the Labor Union of the TransmissionDivision of FAW Jiefang Automotive Co., Ltd.Mr. Duan Yinghui is currently the Director and Secretary of the Party Committee of theTruck Factory of FAW Jiefang Automotive Co., Ltd. He has served successively as the DeputyGeneral Manager of FAW Jiefang (Qingdao) Automotive Co., Ltd. and the Deputy Director ofFAW Jiefang Product Management Department, the Deputy Secretary of the Party Committee,Secretary of the Discipline Inspection Commission and Head of the Labor Union of QingdaoVehicle Division (FAW Jiefang (Qingdao) Automotive Co., Ltd.) of FAW Jiefang BusinessHeadquarters, and the Deputy Secretary of the Party Committee, Secretary of the DisciplineInspection Commission and Chairman of the Labor Union of FAW Jiefang Qingdao VehicleDivision (FAW Jiefang (Qingdao) Automotive Co., Ltd.).
Mr. Ren Ruijie is currently the Director of the Party-Masses Work Department of FAWJIEFANG GROUP CO., LTD. He has served successively as the Acting Director and Director ofthe Party Committee Organization Office of the Party Committee Work Department of FAWJiefang Automotive Co., Ltd., the Office Director of the Management Department of FAWJiefang Automotive Co., Ltd., the Office Director of the Management Department of FAWJiefang Business Headquarters (FAW Jiefang), the Director of Party Building Office of Party-Masses Work Department of FAW Jiefang Automotive Co., Ltd., and the Deputy Director ofParty-Masses Work Department of FAW Jiefang Automotive Co., Ltd. (who is responsible forpresiding over the work), etc.Senior executives other than directors and supervisors:
Mr. Yu Changxin is currently the Executive Deputy General Manager of FAW JIEFANGGROUP CO., LTD. and the Executive Deputy General Manager of FAW Jiefang Automotive Co.,Ltd. He has served successively as the Deputy General Manager of Marketing Headquarters(Sales Company) of FAW Jiefang Business Headquarters (Jiefang Company) and the Deputy
General Manager of Qingdao Business Division and Head of Marketing Service Department ofJiefang Company, the Deputy Director of Marketing Headquarters (Deputy General Manager ofFAW Jiefang Automobile Sales Company) of FAW Jiefang Automotive Co., Ltd. and the DeputyGeneral Manager of Qingdao Vehicle Division (Qingdao Company), the General Manager ofCommercial Vehicle Overseas Marketing Department of FAW Jiefang Automotive Co., Ltd. andDeputy General Manager of China FAW Group Import & Export Co., Ltd., the Deputy GeneralManager of China FAW Group Import & Export Co., Ltd., and the General Manager and DeputySecretary of the Party Committee of China FAW Group Import & Export Co., Ltd., etc.Mr. Ji Yizhi is currently the Deputy General Manager of FAW JIEFANG GROUP CO., LTD.and the Deputy General Manager and General Counsel of FAW Jiefang Automotive Co., Ltd. andthe General Manager of New Energy Business Division. He has served successively as theExecutive Deputy General Manager of the Engine Division of FAW Jiefang Automotive Co., Ltd.and the General Manager and Secretary of the Party Committee of FAW Jiefang Dalian DieselEngine Co., Ltd., the General Manager and Secretary of the Party Committee of the Bus Divisionof FAW Jiefang Automotive Co., Ltd. (the Manager and Secretary of the Party Committee of theBus Factory), the General Manager and Secretary of the Party Committee of the Bus Division ofFAW Jiefang Automotive Co., Ltd. (the Manager and Secretary of the Party Committee of theBus Factory) and the Deputy Director of the Marketing Headquarters (the Deputy GeneralManager of JFAW Jiefang Sales Company), and the General Manager of New Energy Divisionand the General Manager of Bus Division of FAW Jiefang Automotive Co., Ltd.Mr. Tian Haifeng is currently the Deputy General Manager of FAW Jiefang Group Co., Ltd.and the Deputy General Manager of FAW JIEFANG AUTOMOTIVE CO., LTD. He has servedsuccessively as the Director of Procurement Department of Jiefang Business Headquarters (FAWJiefang Automotive Co., Ltd.), the Director of Procurement Department of FAW JiefangAutomotive Co., Ltd., and the Deputy General Manager of Qingdao Vehicle Division (FAWJiefang Qingdao Automobile Plant) and the Manager of Qingdao Factory of FAW JiefangAutomotive Co., Ltd.
Mr. Li Sheng is currently the Deputy General Manager of FAW JIEFANG GROUP CO.,LTD., and the Deputy General Manager of FAW Jiefang Automotive Co., Ltd., and the GeneralManager and Secretary of the Party Committee of Qingdao Vehicle Division (FAW JiefangQingdao Automobile Plant), and the General Manager of Qingdao Medium and Heavy-duty
Vehicle Product Line and the General Manager of Light Vehicle Product Line of Qingdao VehicleDivision. He has served successively as the General Manager Assistant and Director of R&DDepartment of FAW Jiefang (Qingdao) Automotive Co., Ltd., the Senior Manager of QingdaoVehicle Division (Qingdao Company) of Jiefang Business Headquarters, the Assistant toPresident of Commercial Vehicle Development Institute of FAW Jiefang Automotive Co., Ltd.and the Senior Manager and Director of R&D Department of Qingdao Vehicle Division (QingdaoCompany), the Deputy General Manager of Qingdao Vehicle Division (Qingdao Company) ofFAW Jiefang Automotive Co., Ltd. and Assistant to President of Commercial VehicleDevelopment Institute, the Vice President of Commercial Vehicle Development Institute of FAWJiefang Automotive Co., Ltd. and the Deputy General Manager and Director of R&D Departmentof Qingdao Vehicle Division (FAW Jiefang Qingdao Automobile Plant), and the ExecutiveDeputy General Manager of Qingdao Vehicle Division (FAW Jiefang Qingdao Automobile Plant)of FAW Jiefang Automotive Co., Ltd., etc.Mr. Wang Jianxun is currently the Secretary of the Board of Directors and Director of theCapital Operation Department of FAW JIEFANG GROUP CO., LTD. He has served successivelyas the Deputy Office Director and Office Director of the Board of Directors of TCL Group Co.,Ltd., the Deputy General Manager of Shenzhen Create Century Machinery Co., Ltd., etc.Status of post held in the firm of shareholders?Applicable □ Not Applicable
| Name of Employees | Name of Shareholder | Position in the Shareholder | Start Date of Tenure | Ending Date of Tenure | Whether Remuneration and Allowance are Received from the Shareholder |
| Hu Hanjie | China FAW Group Co., Ltd. | General Manager Assistant | August 1, 2020 | No | |
| Bi Wenquan | China FAW Group Co., Ltd. | General Manager of Production Logistics Department | February 1, 2023 | Yes | |
| Li Hongjian | National Automotive Intelligent Technology Innovation Center | Leader of preparatory team | December 1, 2022 | Yes | |
| Liu Yanchang | China FAW Group Co., Ltd. | Full-time external director, convener/team leader of subsidiary of Financial Management Department (Office of the Board of Directors) | July 1, 2022 | Yes | |
| Wang Yanjun | China FAW Group Co., Ltd. | General Counsel and Deputy General Manager of the Audit and Legal Department (who is responsible for presiding | January 1, 2021 | Yes |
over the work)
Position in other organizations?Applicable □ Not Applicable
| Name of Employees | Name of Other Organizations | Position in Other Organizations | Start Date of Tenure | Ending Date of Tenure | Whether Remuneration and Allowance are Received from Other Organizations |
| Han Fangming | Chahar Institute, a think tank on foreign affairs and international relations | President | October 1, 2009 | Yes | |
| Mao Zhihong | Jilin University | Director, Professor and Doctoral Supervisor of the Department of Accounting, School of Business and Management | November 1, 2000 | Yes | |
| Dong Zhonglang | Zhuhai Yinshan Capital Equity Investment Management Co., Ltd. | Managing Partner | May 1, 2017 | Yes |
Penalties imposed by securities regulatory authorities in the past three years on directors, supervisors and senior executives currently in officeor leaving office in the reporting period
□ Applicable ?Not applicable
3. Remuneration of Company's Directors, Supervisors and Senior ManagementDecision-making procedure, determination basis and actual payment of remuneration for directors, supervisors and senior executives
| Decision-Making Process of Compensation of Directors, Supervisors and Senior Management | Only the remuneration for directors (excluding independent directors) and supervisors currently in office shall be paid, and the remuneration for directors and supervisors who have left the office shall be paid by their employers. The remuneration paid by the Company to relevant directors, supervisors and senior executives shall be determined by the Board of Directors. |
| Decision Basis of Compensation of Directors, Supervisors and Senior Management | For directors (except independent directors), supervisors and senior executives who receive remuneration from the Company, the annual salary system is implemented, mainly including annual base salary and annual performance salary. The annual performance salary is determined according to business performance, performance assessment and performance and other indicators of the Company in the reporting period. |
| Remuneration Paid to Directors, Supervisors and Senior Management | In the reporting period, a total of CNY 450,000 (tax inclusive) of allowances were paid to independent directors, and reasonable expenses (including travel expenses, office expenses, training expenses, etc.) required to attend the Company's board of directors, shareholders’ meeting and exercise their functions and powers in accordance with relevant regulations can be reimbursed by the Company on actual circumstances. The remuneration paid to other directors, supervisors and senior executives other than the above personnel is CNY 23,046,500 (tax inclusive). |
Compensations of Directors, Supervisors and Senior Executives of the Company in the Reporting Period
Unit: CNY 10,000
| Name | Position | Gender | Age | Employment Status | Total Pre-tax Compensation Received from the Company | Whether remuneration is obtained from related parties of the Company |
| Hu Hanjie | Chairman of the Board | Male | 58 | In-service | 248.20 | No |
| Wu Bilei | Director and General Manager | Male | 52 | In-service | 194.47 | No |
| Zhang Guohua | Director | Male | 50 | In-service | 166.02 | No |
| Bi Wenquan | Director | Male | 50 | In-service | Yes | |
| Li Hongjian | Director | Male | 50 | In-service | Yes | |
| Liu Yanchang | Director | Male | 59 | In-service | Yes | |
| Yang Xiao | Director | Male | 49 | Departure from office | Yes | |
| Liu Changqing | Director | Male | 51 | Departure from office | Yes | |
| Han Fangming | Independent director | Male | 56 | In-service | 15.00 | No |
| Mao Zhihong | Independent director | Male | 61 | In-service | 15.00 | No |
| Dong Zhonglang | Independent director | Male | 58 | In-service | 15.00 | No |
| Wang Yanjun | Chairman of Board of Supervisors | Male | 59 | In-service | Yes |
| Xu Haigen | Employee Supervisor | Male | 58 | In-service | 97.54 | No |
| Wang Lijun | Employee Supervisor | Male | 54 | In-service | 106.85 | No |
| Duan Yinghui | Employee Supervisor | Male | 52 | In-service | 153.37 | No |
| Ren Ruijie | Employee Supervisor | Male | 39 | In-service | 105.22 | No |
| Yu Changxin | Executive Deputy General Manager | Male | 50 | In-service | 5.02 | No |
| Ji Yizhi | Deputy General Manager | Male | 53 | In-service | 131.20 | No |
| Tian Haifeng | Deputy General Manager | Male | 50 | In-service | 119.23 | No |
| Li Sheng | Deputy General Manager | Male | 46 | In-service | 148.74 | No |
| Kong Dejun | Deputy General Manager | Male | 50 | Departure from office | 179.02 | No |
| Wang Ruijian | Deputy General Manager | Male | 59 | Departure from office | 170.22 | No |
| Shang Xingwu | Deputy General Manager | Male | 56 | Departure from office | 176.82 | No |
| Ou Aimin | Deputy General Manager | Male | 56 | Departure from office | 159.88 | No |
| Wang Jianxun | Secretary of the Board of Directors | Male | 39 | In-service | 142.85 | No |
| Total | -- | -- | -- | -- | 2,349.65 | -- |
Note: The annual performance salary included in the total remuneration in 2022 is settled based on the performance evaluation results in 2021.
VI. Performance of Duties by Directors in the Reporting Period
1. Information of the Board of Directors during the reporting period
| Session | Date | Date of Disclosure | Meeting Resolution |
| The 21st Meeting of the 9th Board of Directors | January 27, 2022 | January 28, 2022 | The Proposal on Estimated Amount of Daily Related Transactions in 2022, Proposal on Estimated Amount of Financial Business with First Automobile Finance Co., Ltd. in 2022, Proposal on Risk Assessment Report of First Automobile Finance Co., Ltd., Proposal on Change of Registered Capital of the Company, Proposal on Amending the Articles of Association, and Proposal on Convening the First Extraordinary Shareholders’ Meeting of 2022 were deliberated and adopted. |
| The 22nd Meeting of the 9th Board of Directors | January 28, 2022 | —— | The 2022 Fixed Assets Investment Plan and 2022 Equity Investment Plan were deliberated and adopted. |
| The 23rd Meeting of the 9th Board of Directors | March 29, 2022 | March 31, 2022 | The 2021 Annual Business Summary and 2022 Annual Business Plan, 2021 Annual Work Report of the Board of Directors, 2021 Annual Financial Statements and 2022 Annual Financial Budget, 2021 Annual Report and its Summary, 2021 Profit Distribution Plan, 2021 Social Responsibility Report, Proposal on Electing Li Hongjian as the Non-independent Director of the Company, 2021 Internal Control Evaluation Report, 2021 Annual Report on Rule of Law Construction and Compliance Management, 2021 Annual Internal Audit Report, 2021 Annual Internal Control System Work Report and Proposal on Convening 2021 Annual Shareholders' Meeting were deliberated and adopted. |
| The 24th Meeting of the 9th Board of Directors | April 29, 2022 | —— | The First Quarterly Report of 2022 was deliberated and adopted. |
| The 25th Meeting of the 9th Board of Directors | May 31, 2022 | —— | The 2021 Performance Evaluation Results of Senior Executives, 2021 Performance Assessment and Remuneration Encashment Plan for Senior Executives, 2022 Total Salary and Labor Cost Plan, 2022 Performance Appraisal Indicator Plan, 2022 Performance Assessment Indicator Plan for Senior Executives, 2022 Base Salary Plan for Senior Executives, and Proposal on Implementing the Construction of the Supporting System for the Functions and Powers of the Board of Directors were deliberated and adopted. |
| The 26th Meeting of the 9th Board of Directors | August 29, 2022 | August 31, 2022 | The Business Summary for the First Half of 2022 and Business Plan for the Second Half of 2022, 2022 Semi-annual Report and its Summary, the Proposal on Risk Assessment Report of First Automobile Finance Co., Ltd., 2022 Semi-annual Work Report of Internal Audit, 2022 Mid-year Adjustment Scheme of Equity Investment Plan, 2022 Mid-year Adjustment Scheme of Fixed Assets Investment Plan, Proposal on Formulating the Working System of the Secretary of the Board of Directors, Proposal on Amending the Investor Relations Management System, Proposal on By-election of Members of the Strategy Committee of the Board of Directors, Proposal on Adjusting the Repurchase Price of Restricted Shares in the Phase I Restricted Share Incentive Plan, Proposal on Repurchase and Cancellation of Partial Restricted Shares in the Phase I Restricted Share Incentive Plan, Proposal on Change of Registered Capital of the Company, Proposal on |
| Amending the Articles of Association, Proposal on Electing Liu Yanchang as the Non-independent Director of the Company, and Proposal on Convening the Second Extraordinary Shareholders’ Meeting of 2022 were deliberated and adopted. | |||
| The 27th Meeting of the 9th Board of Directors | October 19, 2022 | October 20, 2022 | The Proposal on Appointment of Deputy General Manager of the Company, Proposal on By-election of Members of the Audit and Risk Control Committee of the Board of Directors and Proposal on By-election of Members of the Remuneration and Appraisal Committee of the Board of Directors were deliberated and adopted. |
| The 28th Meeting of the 9th Board of Directors | October 28, 2022 | October 29, 2022 | The Third Quarterly Report of 2022, Proposal on Renewal of Employment of Financial Audit Institutions, Proposal on Renewal of Employment of Internal Control Audit Institutions, Third Quarterly Work Report of Internal Audit in 2022, Proposal on Repurchase and Cancellation of Partial Restricted Shares in the Phase I Restricted Share Incentive Plan, Proposal on Change of Registered Capital of the Company, Proposal on Amending the Articles of Association, and Proposal on Convening the Third Extraordinary Shareholders’ Meeting of 2022 were deliberated and adopted. |
| The 29th Meeting of the 9th Board of Directors | November 28, 2022 | November 29, 2022 | The Proposal on Increasing the Estimate of Daily Related Transactions in 2022, Proposal on Appointment of the Executive Deputy General Manager of the Company and Proposal on Convening the Fourth Extraordinary Shareholders’ Meeting of 2022 were deliberated and adopted. |
| The 30th Meeting of the 9th | December 15, 2022 | December 16, 2022 | The Medium- and Long-term Development Plan of the Company, |
| Board of Directors | 2023 Annual Equity Investment Plan, 2023 Annual Fixed Assets Investment Plan, Proposal on Land Purchase and Reserve of Subsidiaries, Proposal on Investment of Subsidiaries in Changchun Automobile Test Center Co., Ltd., Proposal on the Achievement of Unlocking Conditions in the First Release Period of the Restricted Shares Firstly Granted in the Phase I Restricted Incentive Plan, Proposal on Repurchase and Cancellation of Partial Restricted Shares in the Phase I Restricted Share Incentive Plan, Proposal on Change of Registered Capital of the Company, Proposal on Amending the Articles of Association, and Work Plan of the Board of Directors in 2023 were deliberated and adopted. |
2. Attendance of Directors at the Meeting of the Board of Directors and Shareholders’ Meeting
| Attendance of Directors at the Meeting of the Board of Directors and the Shareholders’ Meeting | |||||||
| Name of Director | Number of Meetings of the Board of Directors to be Attended in the Reporting Period | Number of Meetings of the Board of Directors Attended in Person | Number of Meetings of the Board of Directors Attended via Communication | Number of Meetings of the Board of Directors Attended by Entrustment | Number of Absences from the Meeting of the Board of Directors | Failure to Attend the Meeting of the Board of Directors in Person for Two Consecutive Times or Not | Number of Shareholders’ Meetings Attended |
| Hu Hanjie | 10 | 4 | 6 | No | 3 | ||
| Wu Bilei | 10 | 3 | 5 | 2 | No | 4 | |
| Zhang Guohua | 10 | 4 | 6 | No | 5 | ||
| Bi Wenquan | 10 | 1 | 5 | 4 | No | 0 | |
| Li Hongjian | 6 | 2 | 3 | 1 | No | 0 | |
| Liu Yanchang | 4 | 2 | 2 | No | 2 | ||
| Yang Xiao | 6 | 1 | 4 | 1 | No | 0 | |
| Liu Changqing | 3 | 0 | 3 | No | 0 | ||
| Han Fangming | 10 | 3 | 6 | 1 | No | 3 | |
| Mao Zhihong | 10 | 4 | 6 | No | 5 | ||
| Dong Zhonglang | 10 | 4 | 6 | No | 5 |
Explanation on two consecutive absences from the Meeting of the Board of Directors in person: none
3. Objections Raised by Directors on Relevant Matters of the CompanyWhether the directors raise objections to relevant matters of the Company
□ Yes? No
In the reporting period, the directors did not raise any objection to the relevant matters of the Company.
4. Additional Description of Performance of Duties by DirectorsWhether the directors' relevant suggestions to the Company have been adopted?Yes □ NoExplanation of Directors on Adoption or Failure to Adopt Relevant Suggestions to the Company
In the reporting period, all directors of the Company carried out their work in strict accordance with the Company Law, Securities Law,Rules Governing Listing of Stocks on Shenzhen Stock Exchange, Articles of Association and other relevant laws and regulations. They faithfullyand diligently performed their duties, paid attention to the standardized operation of the Company, actively attended the meeting of the board ofdirectors and the shareholders' meeting, carefully deliberated various proposals, and based on the actual situation of the Company, put forward
relevant opinions and suggestions from the aspects of the Company's development strategy, standardized operation, etc., thus ensuring scientific,timely and efficient decision-making and safeguarding the legitimate rights and interests of the Company and shareholders.VII. Conditions of Special Committees under the Board of Directors in the Reporting Period
| Name of Committee | Members | Number of Meetings Held | Date | Contents | Important Comments and Suggestions Put Forward | Other Performance of Duties | Details of Objections |
| Audit and Risk Control Committee | Mao Zhihong, Han Fangming, Yang Xiao. | 3 | March 15, 2022 | The 2021 Financial Audit Report of the Company, 2021 Internal Audit Report of the Company and 2021 Internal Control Evaluation Report are deliberated. | All proposals were agreed. | None | |
| April 29, 2022 | The First Quarterly Report of 2022 was deliberated | The proposal was approved. | None | ||||
| August 26, 2022 | The 2022 Semi-annual Report and Its Summary and 2022 Semi-annual Work Report of Internal Audit were deliberated. | All proposals were agreed. | None | ||||
| Audit and Risk Control Committee | Mao Zhihong, Han Fangming, Liu Yanchang. | 1 | October 26, 2022 | The Third Quarterly Report of 2022, Proposal on Renewal of Employment of Financial Audit Institutions, Proposal on Renewal of Employment of Internal Control Audit Institutions, and Third Quarterly Work Report of Internal Audit in 2022 were deliberated. | All proposals were agreed. | None |
| Remuneration and Appraisal Committee | Dong Zhonglang, Yang Xiao, Mao Zhihong. | 1 | May 31, 2022 | The performance evaluation results of senior executives, performance assessment indicators of senior executives and other topics were deliberated. | All proposals were agreed. | None | |
| Remuneration and Appraisal Committee | Dong Zhonglang, Mao Zhihong, Liu Yanchang. | 1 | December 15, 2022 | The Proposal on the Achievement of Unlocking Conditions in the First Release Period of the Restricted Shares Firstly Granted in the Phase I Restricted Incentive Plan was deliberated. | The proposal was approved. | None | |
| Strategy Committee | Hu Hanjie, Wu Bilei, Han Fangming, Dong Zhonglang. | 1 | August 26, 2022 | The 2022 Mid-year Adjustment Scheme of Equity Investment Plan and 2022 Mid-year Adjustment Scheme of Fixed Assets Investment Plan were deliberated. | All proposals were agreed. | None | |
| Strategy Committee | Hu Hanjie, Wu Bilei, Li Hongjian, Han Fangming, Dong Zhonglang. | 1 | December 15, 2022 | The Medium- and Long-term Development Plan of the Company, 2023 Annual Equity Investment Plan, 2023 Annual Fixed Assets Investment Plan, and Proposal on Investment of Subsidiaries in Changchun Automobile Test Center Co., Ltd. were deliberated. | All proposals were agreed. | None |
VIII. Working Condition of the Board of SupervisorsWhether the Board of Supervisors has found any risks in the Company's supervision activities inthe reporting period
□ Yes? No
The Board of Supervisors has no objection to the supervision matters in the reporting period.IX. Employees of the Company
1. Number, Specialty Composition and Education Level of Employees
| Number of on-the-job employees of the parent company at the end of the reporting period (person) | 155 |
| Number of on-the-job employees of main subsidiaries at the end of the reporting period (person) | 20,189 |
| Total number of on-the-job employees at the end of the reporting period (person) | 20,344 |
| Total number of employees receiving compensation in the current period (person) | 21,529 |
| Number of retired employees whose expenses shall be borne by the parent company and major subsidiaries (person) | 25 |
| Specialty composition | |
| Category | Number (person) |
| Production personnel | 12,220 |
| Sales personnel | 1,064 |
| Technicians | 5,886 |
| Financial personnel | 346 |
| Administrative personnel | 828 |
| Total | 20,344 |
| Education background | |
| Category | Number (person) |
| Doctor's degree | 50 |
| Master's degree | 1,536 |
| Bachelor's degree | 7,983 |
| Junior college degree | 4,426 |
| High school and below | 6,349 |
| Total | 20,344 |
2. Compensation Policy
According to the requirements of relevant national labor laws, regulations and policies, theCompany adheres to the principle of "fairness, impartiality and openness" and combines theactual situation of the Company to continuously improve and perfect the performance salarysystem of the Company. In order to fully mobilize the enthusiasm of employees and improve theirwork performance, based on the post contribution salary system and oriented by value creation,the Company controls the total salary by "salary package", links the salary distribution to theperformance and contribution of employees, and continuously implements special rewards andannual rewards, effectively giving play to the leverage role of salary incentives. In addition, theCompany has signed labor contracts with employees in accordance with laws and regulations,paid various social insurances such as basic endowment insurance, basic medical insurance, work-related injury insurance and unemployment insurance as well as housing provident funds, activelyimplemented supplementary endowment insurance and supplementary medical insurance systems,established and improved welfare systems, thus protecting the legitimate rights and interests ofemployees in all aspects. The company does not need to bear the expenses of retired personnelwhich have been included in the social security system, but needs to bear the expenses of retiredveterans.
3. Training plan
In 2022, the Company's talent training and cultivation were carried out targetedly andsystematically, focusing on solving business pain points and difficulties and meeting theCompany's and employees' development needs, with the orientation towards supporting theCompany's strategic development and the goal of achieving organizational performance.Leadership: Focus on the training of management cadres, the construction of grass-roots teams,the rapid transformation of new managers, the implementation of classified policies, and thecontinuous implementation of leadership standardization training and cultivation programs. Forsenior managers and reserve senior managers, implement the piloteer development plan,innovation leader development plan and peak climber cultivation plan; for secondary managers,carry out special plans such as "Sailing", "Peiyuan" and "Qingfeng"; and for reserve secondary
managers, carry out "Foundation Building" and "Longmen" plans, so as to solidly improve theleadership skills of managers at all levels and create excellent leadership. Professionalism: Focuson the Company's annual key work and employee post competency requirements, and carry outprofessional training in the fields of quality management, cost reduction and efficiencyimprovement, new energy, digital-intelligent transformation, intelligent networking, intelligentmanufacturing, IPD reform, etc. Carry out examinations on total quality management and digital-intelligent transformation, and effectively consolidate professional basic knowledge to steadilyimprove the professional ability of personnel at all levels. Skills: Carry out relevant skills trainingin the aspects of post operation skills improvement, on-site problem solving, new production lineempowerment, techniques and skills inheritance, etc.
4. Labor Outsourcing
□ Applicable ?Not applicable
X. Profit Distribution and Transfer from Capital Reserve to Share Capital of the CompanyProfit distribution policies in the reporting period, especially the formulation, implementation oradjustment of cash dividend policy?Applicable □ Not Applicable
The Company held the 23
rd Meeting of the 9
th
Board of Directors, the 21
st Meeting of the 9
th
Board of Supervisors, and the 2021 Annual Shareholders’ Meeting on March 29, 2022 and April29, 2022, respectively, to deliberate and adopt the 2021 annual profit distribution plan: Based on4,654,114,613 shares of the Company, a cash dividend of CNY 6.50 (tax inclusive) shall bedistributed to all shareholders for every 10 shares, and a cash dividend of CNY 3,025,174,498.45(tax inclusive) shall be distributed, and the remaining undistributed profits shall be carriedforward to the next accounting year. The Company does not convert reserves into share capital.
The profit distribution plan has been implemented on June 20, 2022.
| Special Description of Cash Dividend Policy | |
| Whether the provisions of the Articles of Association or the requirements of resolutions of the Shareholders’ Meeting are met: | Yes |
| Whether the dividend standard and proportion are definite and clear: | Yes |
| Whether the relevant decision-making procedures and mechanisms are | Yes |
| complete: | |
| Whether the independent directors have fulfilled their duties and played their due roles: | Yes |
| Whether the minority shareholders have the opportunity to fully express their opinions and demands, and whether their legitimate rights and interests are fully protected: | Yes |
| Whether the conditions and procedures are compliant and transparent when the cash dividend policy is adjusted or changed: | N/A |
The Company made profits in the reporting period and the parent company had a positive profitavailable for shareholders, but no cash dividend distribution plan was proposed?Applicable □ Not Applicable
| Reasons for profitability in the reporting period and positive profit available for shareholders of the parent company but no cash dividend distribution plan proposed | Purpose and Use Plan of Undistributed Profits of the Company |
| Based on the Company's operating conditions, cash flow level and investment, it is not proposed to distribute profits in 2022. | Retained and undistributed profits are mainly used to meet the needs of the Company's daily operation, which can relieve the Company's financial strain, thus benefiting the Company's production, operation and development, enhancing the ability to resist risks, realizing the sustainable, stable and healthy development of the Company, and better safeguarding the long-term interests of shareholders. |
Profit Distribution and Transfer from Capital Reserve to Share Capital in the Reporting Period
□ Applicable ?Not applicable
The Company plans not to distribute cash dividends, issue bonus shares or convert reserves intoshare capital in the year.XI. Implementation of the Company's Equity Incentive Plan, Employee Stock OwnershipPlan or Other Employee Incentive Measures?Applicable □ Not Applicable
1. Equity incentive
(1) On November 13, 2020, the Company held the 9
th
meeting of the 9th Board of Directorsand the 8th meeting of the 9
thBoard of Supervisors respectively to deliberate and adopt theRestricted Share Incentive Plan of FAW JIEFANG GROUP CO., LTD. (Draft) and Its Abstractand other proposals. The relevant proposals were deliberated and adopted at the FirstExtraordinary Shareholders’ Meeting of 2021 held by the Company on January 11, 2021.
(2) On January 15, 2021, the Company held the 12
th Session of the 9
thMeeting of the Boardof Directors and the 11
thSession of the 9th Meeting of the Board of Supervisors respectively, andreviewed and approved the Proposal on Adjusting the List of the First Batch of Incentive Objectsand the Number of Grants of the First Restricted Share Incentive Plan and the Proposal onGranting Restricted Shares to the Incentive Objects of the First Restricted Share Incentive Planfor the First Time. On February 1, 2021, the Company disclosed the Announcement on theCompletion of the First Grant Registration of Phase I Restricted Share Incentive Plan, in whichthe restricted shares in the incentive plan were first granted to 319 persons, totaling 40,987,700shares, with a grant price of CNY 7.54 per share. The restricted shares granted were listed onFebruary 5, 2021.
(3) On December 9, 2021, the Company held the 20
th
meeting of the 9th Board of Directorsand the 19
th meeting of the 9
thBoard of Supervisors respectively to deliberate and adopt theProposal on Granting Reserved Part of Restricted Shares in the Phase I Restricted ShareIncentive Plan to Incentive Objects, Proposal on Adjusting the Repurchase Price of RestrictedShares in the Phase I Restricted Share Incentive Plan, Proposal on Repurchase and Cancellationof Partial Restricted Shares in the Phase I Restricted Share Incentive Plan and other relevantproposals. On January 6, 2022, the Company disclosed the Announcement on Completion ofRegistration of Grant of Reserved Part of Restricted Shares in Phase I Restricted Share IncentivePlan, in which reserved part of restricted shares in the incentive plan were granted to 33 persons,totaling 3,721,600 shares, with a grant price of CNY 6.38 per share. The restricted shares grantedwere listed on January 10, 2022. On January 17, 2022, the Company disclosed the Announcementon Completion of Repurchase and Cancellation of Some Restricted Shares, in which all restrictedshares granted to 2 incentive objects but not yet released, totaling 260,857 shares, with arepurchase price of CNY 7.04 per share.
(4) On August 29, 2022, the Company held the 26
th meeting of the 9
th
Board of Directorsand the 23
rd meeting of the 9
thBoard of Supervisors respectively to deliberate and adopt theProposal on Adjusting the Repurchase Price of Restricted Shares in the Phase I Restricted ShareIncentive Plan and Proposal on Repurchase and Cancellation of Partial Restricted Shares in thePhase I Restricted Share Incentive Plan. On September 16, 2022, the relevant repurchase andcancellation proposals were deliberated and adopted at the Second Extraordinary Shareholders’Meeting of 2022 held by the Company. On November 14, 2022, the Company disclosed theAnnouncement on Completion of Repurchase and Cancellation of Some Restricted Shares, inwhich all or some restricted shares granted to 6 incentive objects but not yet released wererepurchased and canceled, totaling 789,711 shares, with a repurchase price of CNY 6.39/share.
(5) On October 28, 2022, the Company held the 28
th meeting of the 9
th
Board of Directorsand the 24
th
meeting of the 9
thBoard of Supervisors respectively to deliberate and adopt theProposal on Repurchase and Cancellation of Partial Restricted Shares in the Phase I RestrictedShare Incentive Plan. On November 18, 2022, the Proposal was deliberated and adopted at theThird Extraordinary Shareholders’ Meeting of 2022 held by the Company. On January 17, 2023,the Company disclosed the Announcement on Completion of Repurchase and Cancellation ofSome Restricted Shares, in which all or some restricted shares granted to 11 incentive objects butnot yet released were repurchased and canceled, totaling 1,359,247 shares, with a repurchase priceof CNY 6.39/share.
(6) On December 15, 2022, the Company held the 30
th meeting of the 9
th
Board of Directorsand the 26
th
meeting of the 9
th
Board of Supervisors respectively to deliberate and adopt theProposal on the Achievement of Unlocking Conditions in the First Release Period of theRestricted Shares Firstly Granted in the Phase I Restricted Incentive Plan and Proposal onRepurchase and Cancellation of Partial Restricted Shares in the Phase I Restricted ShareIncentive Plan were deliberated and adopted. On February 3, 2023, the Company disclosed theIndicative Announcement on Listing and Circulation of Unlocked Shares in the First ReleasePeriod of the Restricted Shares Firstly Granted in the Phase I Restricted Share Incentive Plan, inwhich there are 311 incentive objects that meet the unlocking conditions this time and 13,042,347restricted shares unlocked, and these shares are listed on February 6, 2023.
For details of the above proposals, please refer to the relevant announcements published bythe Company in Securities Times, China Securities Journal and CNINFO(http://www.cninfo.com.cn).
Equity Incentives Obtained by Directors and Senior Executives of the Company?Applicable □ Not Applicable
Unit: share
| Name | Position | Number of Stock Options Held at the Beginning of the Year | Number of Newly Granted Stock Options in the Reporting Period | Number of Exercisable Shares in the Reporting Period | Number of Exercised Shares in the Reporting Period | Exercise Price of Exercised Shares in the Reporting Period (CNY/share) | Number of Stock Options Held at the End of the Period | Market Price at the End of the Reporting Period (CNY/share) | Number of Restricted Shares Held at the Beginning of the Period | Number of Unlocked Shares in the Current Period | Number of Newly Granted Restricted Shares in the Reporting Period | Grant Price of Restricted Shares (CNY/share) | Number of Restricted Shares Held at the End of the Period |
| Hu Hanjie | Chairman of the Board | 7.73 | 334,331 | 7.54 | 334,331 | ||||||||
| Wu Bilei | Director | 7.73 | 228,552 | 7.54 | 228,552 | ||||||||
| Zhang Guohua | Director | 7.73 | 228,493 | 7.54 | 228,493 | ||||||||
| Ji Yizhi | Deputy General Manager | 7.73 | 192,778 | 7.54 | 192,778 | ||||||||
| Tian Haifeng | Deputy General Manager | 7.73 | 192,778 | 7.54 | 192,778 |
| Li Sheng | Deputy General Manager | 7.73 | 192,778 | 7.54 | 192,778 | ||||||||
| Wang Jianxun | Secretary of the Board of Directors | 7.73 | 192,778 | 7.54 | 192,778 | ||||||||
| Total | -- | 0 | 0 | 0 | 0 | -- | 0 | -- | 1,562,488 | 0 | 0 | -- | 1,562,488 |
| Remarks | The restricted shares granted to the above-mentioned persons were granted on January 15, 2021 and listed on February 5, 2021, with a restricted period of 2 years (24 months). In the first release period, the granted restricted shares were unlocked and listed for circulation on February 6, 2023. | ||||||||||||
Evaluation mechanism and incentives of senior executivesThe Company has formulated corresponding plans for the evaluation and incentive mechanism of senior executives, and implemented a fairand transparent performance management system. The remuneration of senior executives shall be combined with the Company's performanceand individual performance. The System and Reform Management Department of the Company shall be responsible for the daily evaluation, andthe Remuneration and Appraisal Committee of the Board of Directors shall conduct a comprehensive evaluation.
2. Implementation of employee stock ownership plan
□ Applicable ?Not applicable
3. Other employee incentives
□ Applicable ?Not applicable
XII. Establishment and Implementation of Internal Control System in the ReportingPeriod
1. Construction and Implementation of Internal Control
In the reporting period, the Company adhered to the structure guidance, andcomprehensively and systematically sorted out the capability panorama and business structure invarious fields of the Company against the excellent practices in the industry. At the same time,according to the Basic Specification for Enterprise Internal Control, supporting guidelines andother relevant regulations, the Company continuously improved the construction of hierarchicaland graded document system. Through process operation, the Company timely organized thereview, refresh and optimization of business processes and systems, and monitored theimplementation of processes and systems to ensure the suitability, adequacy and effectiveness ofinternal control system construction, and to promote the efficient operation and continuous cyclicimprovement of the management system.
2. Specific Conditions of Major Internal Control Deficiencies Found in the ReportingPeriod
□ Yes? No
XIII. Management and Control of Subsidiaries by the Company in the Reporting Period
| Company Name | Integration Plan | Integration Progress | Problems in Integration | Solutions Taken | Resolution Progress | Follow-up Resolution Plan |
| N/A | N/A | N/A | N/A | N/A | N/A | N/A |
XIV. Internal Control Self-evaluation Report or Internal Control Audit Report
1. Internal Control Self-evaluation Report
| Disclosure Date of Full Text of Internal Control Evaluation Report | April 1, 2023 | |
| Disclosure Index of Full Text of Internal Control Evaluation Report | http://www.cninfo.com.cn/new/disclosure/stock?stockCode=000800&orgId=gssz0000800#latestAnnouncement | |
| Proportion of the Total Assets of the Unit Included in the Evaluation Scope to the Total Assets in the Company's Consolidated Financial Statements | 100.00% | |
| Proportion of the Unit Operating Income Included in the Evaluation Scope to the Operating Income in the Company's Consolidated Financial Statements | 100.00% | |
| Deficiency Identification Standard | ||
| Category | Financial report | Non-financial Report |
| Qualitative Criteria | Major deficiencies: The accounting firm issues the audit report with a disclaimer of opinion or an adverse opinion to the Company. Significant deficiencies: The accounting firm issues the auditor report with a qualified opinion to the Company; and the accounting firm issues the auditor report with a disclaimer of opinion or an adverse opinion to the Company. General deficiencies: The | Major deficiencies: fraudulent behaviors of directors, supervisors or corporate leaders of the Company; serious violation of national laws, regulations or normative documents by the Company; violation of decision-making procedures by the Company, resulting in major decision-making errors. Significant deficiencies: fraudulent behaviors of the main |
| accounting firm issues the auditor report with a qualified opinion to the Company. | responsible persons of each unit of the Company; serious violation of national laws, regulations or normative documents by the company; violation of decision-making procedures by the company, resulting in decision-making errors. General deficiencies: fraudulent behaviors of other personnel of the Company; other control deficiencies that do not constitute major or significant deficiencies. | |
| Quantitative Criteria | Identification criteria for internal control deficiencies related to assets and liabilities Major deficiencies: misstated (including potential) amount ≥ 5‰ of the total assets at the end of the consolidated balance sheet of the previous year; Significant deficiencies: 3‰ of the total assets at the end of the consolidated balance sheet of the previous year ≤ misstated (including potential) amount < 5‰ of the total assets at the end of the consolidated balance sheet of the previous year; General deficiencies: other control deficiencies except for major and significant deficiencies. Identification criteria for internal control deficiencies related to profits Major deficiencies: misstated (including potential) amount ≥ 5‰ of the absolute value of the pre-tax | It is determined based on the amount of asset losses caused by internal control failure, and the standards are as follows: Major deficiencies: causing asset losses of CNY 10,000,000 and more; Significant deficiencies: causing asset losses of less than CNY 10,000,000 and greater than or equal to CNY 5,000,000; Minor deficiencies: causing asset losses of less than CNY 5,000,000. |
| profit in the consolidated income statement of the previous year of the Company; Significant deficiencies: 3‰ of the absolute value of the pre-tax profit in the consolidated income statement of the previous year of the Company ≤ misstated (including potential) amount < 5‰ of the absolute value of the pre-tax profit in the consolidated income statement of the previous year of the Company; General deficiencies: other control deficiencies except for major and significant deficiencies. | ||
| Number of Major Deficiencies in Financial Report (Nr.) | 0 | |
| Number of Major Deficiencies in Non-financial Report (Nr.) | 0 | |
| Number of Significant Deficiencies in Financial Report (Nr.) | 0 | |
| Number of Significant Deficiencies in Non-financial Report (Nr.) | 0 | |
2. Internal Control Audit Report
?Applicable □ Not Applicable
| Deliberations Paragraph in Internal Control Audit Report | |
| In our opinion, FAW Jiefang maintained effective internal control over financial reporting in all material aspects as of December 31, 2022 in accordance with the Basic Specification for Enterprise Internal Control and relevant regulations. | |
| Disclosure of Internal Control Auditor Report | Disclosure |
| Disclosure Date of Full Text of Internal Control Audit Report | April 1, 2023 |
| Disclosure Index of Full Text of Internal Control Audit Report | http://www.cninfo.com.cn/new/disclosure/stock?stockCode=000800&orgId=gssz0000800#latestAnnouncement |
| Opinion Type of Internal Control Audit Report | Standard unqualified opinion |
| Whether there are major deficiencies in the non-financial report | No |
Whether the accounting firm issues the internal control audit report with a non-standard opinion
□ Yes? No
Whether the internal control audit report issued by the accounting firm is consistent with the self-evaluation report of the Board of Directors?Yes □ NoXV. Rectification of Problems Found in the Self-inspection of the Special Action forGovernance of Listed Companies: none
Section V Environmental and Social Responsibilities
I. Major Environmental Protection IssuesWhether the listed company and its subsidiaries are key pollutant discharging entities announcedby the environmental protection authority?Yes □ NoEnvironmental protection related policies and industry standards
The Company strictly abides by the Environmental Protection Law of the People's Republicof China, the Law of the People's Republic of China on the Prevention and Control ofAtmospheric Pollution, the Law of the People's Republic of China on the Prevention and Controlof Noise Pollution, the Law of the People's Republic of China on the Prevention and Control ofSoil Pollution, the Law of the People's Republic of China on the Prevention and Control of WaterPollution, the Environmental Protection Tax Law of the People's Republic of China, the Measuresfor the Administration of the List of Key Units of Environmental Supervision, the Measures for theAdministration of Legal Disclosure of Environmental Information of Enterprises, the Measuresfor the Administration of Hazardous Waste Transfer and other relevant laws and regulations, aswell as national and industrial standards such as the Integrated Wastewater Discharge Standard(GB8978-1996), the Integrated Emission Standard of Air Pollutants (GB16297-1996), theStandard for Pollution Control on Hazardous Waste Storage (GB 18597-2001), TechnicalGuidelines for Environmental Impact Assessment - Acoustic Environment, the Technical Guidelinefor Deriving Hazardous Waste Management Plans and Records (HJ 1259-2022), the TechnicalSpecification for Pollution Control of Waste Plastics and the Technical Specifications forAcceptance of Environmental Protection Facilities for Completed Construction Projects -Automotive Industry (HJ 407-2021).Administrative licensing for environmental protection
The Company strictly implemented the "Environmental Impact Assessment" and "ThreeSimultaneities" systems for all projects. All key pollutant discharging entities shall apply forpollutant discharge permits according to legal provisions, and strictly implement the pollutantdischarge permit system.
| S/N | Name of Organization | Application (renewal) Date of Pollutant Discharge Permit | Pollutant Discharge Permit No. | Validity Period (Year) |
| 1 | Truck Factory of FAW Jiefang Automotive Co., Ltd | December 30, 2022 | 91220101743028725R | 5 |
| 2 | Chengdu Branch of FAW Jiefang Automotive Co., Ltd. | July 14, 2022 | 91510114746407720B001V | 5 |
| 3 | Transmission Branch (Transformation Factory) of FAW Jiefang Automotive Co., Ltd. | December 31, 2021 | 91220101571131661N001Q | 5 |
| 4 | Transmission Branch (Axle Factory) of FAW Jiefang Automotive Co., Ltd. | December 31, 2021 | 91220101571131661N002V | 5 |
| 5 | Changchun Intelligent Bus Branch of FAW Jiefang Automotive Co., Ltd. | January 8, 2023 | 91220108MA170MRB74001V | 5 |
| 6 | FAW Jiefang (Qingdao) Automotive Co., Ltd. | January 18, 2022 | 91370200163567343M | 5 |
| 7 | Engine Branch of FAW Jiefang Automotive Co., Ltd. | December 8, 2022 | 912201017561635719001Q | 5 |
| 8 | Wuxi Diesel Engine Works of FAW Jiefang Automotive Co., Ltd. | December 10, 2021 | 91320206330969017N001C | 5 |
| 9 | Wuxi Diesel Engine Huishan Factory of FAW Jiefang Automotive Co., Ltd. | October 5, 2021 | 91320200748159222H001Q | 5 |
| 10 | FAW Jiefang Dalian Diesel Engine Co., Ltd. | October 9, 2022 | 91210213717880308K001U | 5 |
Industry Emission Standards and Specific Conditions of Pollutant Discharge Involved in Production and Operation Activities
| Name of Company or Subsidiary | Types of Main Pollutants and Specific Pollutants | Names of Main Pollutants and Specific Pollutants | Discharge Mode | Number of Discharge Outlets | Distribution of Discharge Outlets | Discharge concentration/ intensity | 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 | 21mg/L | 800mg/L | 40.0669 t | 630.104 t | No excessive discharge |
| Exhaust gas | Non-methane hydrocarbon | Continuous discharge during waste gas production | 71 | Frame, cab, roof of non-metallic coating workshop | 2.69mg/m? | 120mg/m? | 11.2945 t | 335.4 t | No excessive discharge | |
| Chengdu Branch of FAW Jiefang Automotive Co., Ltd. | Sewage | COD | Intermittent discharge | 1 | Southeast of the Company | 64mg/L | 500mg/L | 0.3856 t | 21.3 t | No excessive discharge |
| Exhaust gas | Non-methane hydrocarbon | Continuous discharge during waste gas production | 1 | Roof of coating workshop | 3.89mg/m? | 60mg/m? | 16.34 t | 75.91 t | No excessive discharge | |
| Transmission Branch (Transformation | Sewage | COD | Intermittent discharge of | 2 | 1 in the northwest corner of substation 1 | 19mg/L | 500mg/L | 2.34 t | 10 t | No excessive discharge |
| Factory) of FAW Jiefang Automotive Co., Ltd. | wastewater | workshop and 1 in the southwest corner of substation 2 workshop | ||||||||
| Exhaust 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 | 2.43mg/m? | 120mg/m? | 1.0 t | - | 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 | 21mg/L | 500mg/L | 2.26 t | - | No excessive discharge |
| Exhaust 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 | 2.51mg/ m? | 120mg/m? | 13.45 t | - | No excessive discharge | |
| Changchun Intelligent Bus Branch of FAW Jiefang Automotive Co., Ltd. | Sewage | COD | Intermittent discharge of wastewater | 1 | South gate of sewage treatment station | 21.5mg/L | 500mg/L | 1.4807 t | 4.575 t | No excessive discharge |
| Exhaust gas | Non-methane hydrocarbon | Continuous discharge during waste gas production | 12 | Roof of painting and welding workshop of the Company | 1.33mg/m? | 120mg/m? | 6.2127 t | 49.5 t | No excessive discharge | |
| Engine Branch of FAW Jiefang Automotive | Exhaust gas | Non-methane hydrocarbon | Intermittent discharge of waste | 3 | Workshop roof | 1.44mg/m? | 120 mg/m? | 0.0486 t | - | No excessive discharge |
| Co., Ltd. | gas | |||||||||
| 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? | 30.78 t | ≤ 243 t | No excessive discharge |
| Exhaust 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 | Nitrogen oxides 90 mg/m3, non-methane hydrocarbon: 4.3 mg/m3 | 240 mg/m? for nitrogen oxide, 120 mg/m? for non-methane hydrocarbon | nitrogen oxide:19.82 t, VOCs: 0.88 t Ton (t) | Nitrogen oxide: 27.2 t, VOC: 1.77 t | 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? | 3.1 t | 53.58 t | No excessive discharge |
| Exhaust gas | Nitrogen oxide, non-methane hydrocarbon | Continuous discharge during production | 6 | Joint workshop | Nitrogen oxides 18mg/m3, non-methane hydrocarbon: 3.77mg/m3 | 240 mg/m? for nitrogen oxide, 120 mg/m? for non-methane hydrocarbon | Nitrogen oxide: 0.99 t, VOCs: 0.46Ton (t) | Nitrogen oxides 8.48 t for nitrogen oxide, 1.62 t for VOC | No excessive discharge | |
| FAW Jiefang (Qingdao) Automotive Co., Ltd. | Sewage | COD, ammonia nitrogen | Continuous or intermittent discharge of wastewater | 6 | Outside the sewage treatment station of the Company | COD: 49.1mg/L Ammonia nitrogen: 1.96mg/L | COD: 500 mg/L; ammonia nitrogen: 45 mg/L | COD: 8.33 t; Ammonia nitrogen: 0.394 t | COD: 88.79 t; Ammonia nitrogen: 5.11 t | No excessive discharge |
| Exhaust gas | Non-methane hydrocarbon | Continuous discharge during | 81 | Roof of each workshop of the Company | 1.63mg/m? | 30mg/m? | 30.4 t | 164.98 t | No excessive discharge |
| waste gas production | ||||||||||
| 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:41 mg/L Ammonia nitrogen: 4.8 mg/L | COD: 300 mg/L; ammonia nitrogen: 30 mg/L | COD: 1.968 t; ammonia nitrogen: 0.5674 t | COD: 88.79 t; Ammonia nitrogen: 5.11 t | No excessive discharge |
| Exhaust gas | Non-methane hydrocarbon and nitrogen oxide | Continuous discharge during waste gas production | 5 | Roof of the Company's workshop | Non-methane hydrocarbon: 0.33 mg/m?; nitrogen oxide: 88 mg/m? | Non-methane hydrocarbon: 120 mg/m?; nitrogen oxide: 240 mg/m? | Non-methane hydrocarbon: 5.2542 t, nitrogen oxide: 1.756 t | Non-methane hydrocarbon: 14.2 t; nitrogen oxide: 11.967 t | No excessive discharge |
Disposal of pollutants(I) Wastewater treatment:
(1) The Truck Factory of FAW Jiefang Automotive Co., Ltd. has three sewage treatmentstations currently, namely, frame workshop sewage treatment station, coating workshop sewagetreatment 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 beforeit enters the production line. The wastewater and domestic sewage pretreated by the above threesewage stations are discharged into the FAW Integrated Sewage Treatment Plant, and thendischarged into the Changchun Western Suburbs Sewage Treatment Plant after reaching the ClassIII standard in the Integrated 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. Thesewage treatment station can operate continuously and stably. The sewage is discharged to theurban sewage treatment plant through the municipal pipe network for further treatment afterreaching the standard.
(3) The Transmission Branch (Transformation Factory) of FAW Jiefang Automotive Co.,Ltd. uses the sewage treatment station in the Shaft Gear Park to treat the production wastewater ofthe Company. The total treatment capacity of the sewage treatment station is 80 tons/day. In thefirst half of the year, due to the failure of some facilities in the sewage treatment station, acontract is signed with FAW for the disposal of industrial sewage, and the sewage is transferredby the FAW tanks every day to the comprehensive sewage treatment workshop for compliantdisposal. On August 30, 2022, the facilities of the sewage treatment station were repaired, and thesewage station operated stably. After being treated by the sewage station and reaching thestandard, the industrial wastewater is discharged into the Changchun Western Suburbs SewageTreatment Plant for further treatment.
(4) There is an industrial sewage storage tank in each of the three workshops in theTransmission Branch (Axle Factory) of FAW Jiefang Automotive Co., Ltd., which signs adisposal contract with FAW to transfer the sewage by FAW tanks to the comprehensive treatmentworkshop for complaint disposal every day.
(5) The Changchun Intelligent Bus Branch of FAW Jiefang Automotive Co., Ltd. has aninternal 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 +biochemical treatment 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 plantthrough the municipal pipe network for further treatment after reaching the standard.
(6) The industrial wastewater generated by the Engine Branch of FAW Jiefang AutomotiveCo., Ltd. is entrusted to FAW with disposal qualification for disposal.
(7) The Wuxi Diesel Engine Works of FAW Jiefang Automotive Co., Ltd. has an internalsewage treatment station which is used to treat the company's production and domesticwastewater, has a total treatment capacity of 3000 tons/day, and runs 24 hours a day. The stationadopts the physicochemical + biochemical treatment process, and can operate continuously andstably and realize real-time up-to-standard discharge. The sewage enters the urban sewagetreatment plant through the municipal pipe network for further treatment after reaching thestandard.
(8) The Wuxi Diesel Engine Huishan Factory 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 1,000 tons/day, and runs 24 hours a day. The stationadopts the physicochemical + biochemical treatment process, and can operate continuously andstably and realize real-time up-to-standard discharge. The sewage enters the urban sewagetreatment plant through the municipal pipe network for further treatment after reaching thestandard.
(9) FAW Jiefang Qingdao Automotive Co., Ltd. has two internal sewage treatment stationswhich combine 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.The designed maximum daily treatment capacity of the station is 2160 tons/day. The treated
wastewater meets the index requirements of the Wastewater Quality Standards for Discharge toMunicipal Sewers (GB/T 31962-2015), and reaches the Water Quality Standard for DomesticMiscellaneous Water (GB/T18290-2002) after being further treated by the MBR improvementequipment, thus reducing the sewage concentration significantly, increasing the reuse amount ofrecycled water, and saving water. The wastewater is discharged to Jimo sewage treatment plantfor detailed treatment through 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 totaltreatment capacity of 816 tons/day, and runs 24 hours a day. The station adopts the distillationpretreatment process for production wastewater and biochemical treatment process forcomprehensive wastewater, and can operate continuously and stably and realize real-time up-to-standard discharge. The sewage enters the urban sewage treatment plant through the municipalpipe network for further treatment after reaching the standard.(II) Waste gas treatment:
(1) All waste gas treatment facilities in the Truck Factory of FAW Jiefang Automotive Co.,Ltd. can operate continuously and stably. The dust generated by the plasma cutting machine in thestamping workshop is collected and filtered and then discharged through a 15m exhaust pipe. TheCO
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. Thewaste gas generated by the treatment and drying process before entering the frame workshop isdischarged through a 15m exhaust pipe after being treated by a direct combustion device. VOCwaste gas from cab coating and non-metal coating is discharged after reaching the standardthrough hydrocyclone + dry filtration + zeolite runner adsorption and concentration + RTO(regenerative incineration).
(2) All waste gas treatment facilities of Chengdu Branch of FAW Jiefang Automotive Co.,Ltd. can operate continuously and stably. The painting waste gas of the coated body is dischargedafter reaching the standard through hydrocyclone + dry filtration + zeolite runner adsorption andconcentration + RTO (regenerative incineration). All welding fumes are discharged after reachingthe standard and being treated by centralized and mobile dust removal systems.
(3) All waste gas treatment facilities of the Transmission Branch (Transformation Factory)of FAW Jiefang Automotive Co., Ltd. can operate continuously and stably. The painting waste
gas 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 fumes aredischarged after reaching the standard and being treated by centralized and mobile dust removalsystems. On December 3, 2022, the VOC treatment facilities for the coating line have beeninstalled, realizing the networking operation with the Bureau of Ecology and Environment ofChangchu.
(5) All welding fumes of Changchun Intelligent Bus Branch of FAW Jiefang AutomotiveCo., Ltd. are discharged after being treated by the centralized dust removal system and reachingthe standard. This project is being carried out. The equipment of the VOC treatment project hasbeen installed, and the online testing and comparison of the equipment was completed inDecember 2022. It is currently in operation and commissioning.
(6) The Engine Branch of FAW Jiefang Automotive Co., Ltd. has three quenching machinesgenerating 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 generated fromcoating 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 FAWJiefang Automotive Co., Ltd. can operate continuously and stably. The painting waste gasgenerated from coating is discharged after reaching the standard and receiving activated carbonadsorption and desorption + catalysis, and the waste gas generated from test run is dischargedafter reaching the standard 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
reaching the standard and being purified by paint mist, adsorbed by zeolite concentration runnerand treated by RTO incineration device in the three workshops. The drying waste gas generatedby the general assembly workshop is burned with low nitrogen, and discharged after reaching thestandard and being treated by the quaternary combustion device. The drying waste gas generatedby the coating workshop is burned with low nitrogen and discharged after reaching the standardand receiving TNV thermal incineration. All welding fumes are discharged after reaching thestandard and being treated by filter cartridge 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 from coating is dischargedafter reaching the standard and being treated by water curtain paint mist treatment device +activated carbon adsorption, and the waste gas generated from test run is discharged afterreaching the standard and being treated by SCR post-treatment + alkali liquor washing exhaustgas treatment device.(III) Noise control:
All noise reduction and shock absorption measures of branches and subsidiaries of theCompany can meet the requirements of national laws and regulations, and the noise within theplant boundary meets the requirements of national emission regulations.(IV) Hazardous waste disposal:
All branches and subsidiaries of the Company deliver 100% of hazardous wastes toorganizations with hazardous waste transportation and disposal qualification for complianttransfer and disposal in strict accordance with the requirements of national laws, regulations andstandards.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 emergencyplans and further revise them, and have good emergency response capabilities for environmentalemergencies.Environmental self-monitoring plan
All branches and subsidiaries of the Company have prepared their own monitoring plansaccording to the requirements of pollutant discharge permits and regulations, and organizedqualified monitoring organizations to monitor wastewater, waste gas, noise and soil in accordancewith the requirements of the plans. The test report for 2022 shows that all monitoring indicatorsmeet the requirements of all national emission regulations and standards.Relevant conditions of investment in environmental governance and protection, and payment ofenvironmental protection taxesIn 2022, the Company paid a total of more than CNY 46,000,000 including variousenvironmental governance expenses and environmental protection facilities.Measures taken to reduce carbon emissions in the reporting period and their effects?Applicable □ Not Applicable
FAW Jiefang Automotive Co., Ltd. pays close attention to energy conservation and carbonreduction, actively docks with the government's preferential energy policies, and completes themarket-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 energyapplication planning, and implements 5 PV projects, achieving 9.4 MW of clean energy grid-connected power generation, further reducing carbon emissions.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 disclosed
All 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 strictlyabides by the national requirements, has been practicing the concept of scientific development,builds a clean and green enterprise, and is committed to becoming a socialist ecological
civilization benchmarking environment-friendly enterprise of "energy conservation, consumptionreduction, emission reduction and efficiency improvement".Other information about environmental protection: noneII. Social ResponsibilityFor details of social responsibility fulfillment, please refer to the 2022 Social Responsibilityand ESG Report published on CNINFO (http://www.cninfo.com.cn) on the same day.III. Consolidation and Expansion of Achievements in Poverty Alleviation and RuralRevitalizationThe Company actively responds to the call of the national rural revitalization strategy, insistson focusing on the key points, making up for weaknesses and strengthening the foundation,continues to promote the development of poverty-stricken areas and the overall revitalization ofrural areas, works hard and innovatively, explores to carry out industry, infrastructure,consumption, education and other assistance actions in Zhenlai County of Jilin Province,Fengshan County of Guangxi Province, etc., so as to promote rural development with heart andsoul. In order to contribute deeply to rural revitalization, the Company gives full play to itsindustrial advantages, advances into the northwest region to build Jiefang Village, continues toestablish a party building alliance, stimulates the endogenous power of mass development, drawsa unique assistance path with liberation characteristics, and writes a new chapter of ruralrevitalization with the momentum of leadership.
Section?VI Important MattersI. Performance of Commitments
1. Commitments Made by the Company's Actual Controllers, Shareholders, Related
Parties, Purchasers and the Company to Interested Parties that will be Fulfilled in theReporting Period, and Commitments not Fulfilled by the End of the Reporting Period?Applicable □ Not Applicable
| Reasons for Commitment | Committed by | Commitment Type | Commitments | Date: | Commitment Period | Performance |
| Commitments made in the acquisition report or equity change report | China FAW Co., Ltd. | Commitment on lock-up | April 8, 2020 | August 8, 2011 | Long-term validity | The commitment is being fulfilled normally. |
| Commitments made during asset restructuring | China FAW Co., Ltd. | Commitment on restricted shares | 1. The non-publicly issued shares of the listed company acquired by asset subscription in the restructuring will not be transferred in any way within 36 months from the date of issuance, including but not limited to public transfer through the securities market or transfer by agreement. However, the transfer permitted under applicable laws is exempt from the restrictions (including but not limited to share repurchase due to performance compensation). 2. If the closing price of the listed company's shares is lower than the issue price for 20 consecutive trading days within 6 months after the restructuring, or the closing price at the end of 6 months after the restructuring is lower than the issue price, the shares of the listed company acquired by FAW Car Co., Ltd. through asset subscription in this restructuring will be automatically extended for 6 months on the basis of the above lock-up period. 3. The shares | April 8, 2020 | The new shares in this restructuring will not be transferred in any way within 36 months from the date of issuance; the shares already held before the restructuring shall not be transferred within 18 months from the date of completion of the restructuring. | The 3rd commitment has expired on October 9, 2021, and the remaining commitments are being fulfilled normally. |
| of the listed company already held before the restructuring shall not be transferred within 18 months from the date of completion of the restructuring, but the transfer permitted under applicable laws is exempt from the restrictions. 4. After the restructuring, if the shares of the listed company enjoyed based on the restructuring are newly increased due to issuance of bonus shares, conversion to share capital, etc., the aforementioned agreement on the restricted period shall also be observed. If the commitment on the restricted period of the shares obtained based on the restructuring is inconsistent with the latest regulatory opinions of the securities regulatory authorities, FAW Car Co., Ltd. will make corresponding adjustments based on the regulatory opinions of the relevant securities regulatory authorities. 5. After the expiration of the above restricted period, the shares of the listed company obtained shall be transferred according to the relevant provisions of the China Securities Regulatory Commission and Shenzhen Stock Exchange. 6. FAW Car Co., Ltd. guarantees that it is willing to assume corresponding legal responsibilities in case of violation of the above commitments. | ||||||
| Commitments made during asset | China FAW Co., Ltd. | Commitment on regulating | 1. We will exercise shareholders' rights in strict accordance with the Company Law and other | April 8, 2020 | Long-term validity | In order to conform to the |
| restructuring | and reducing related transactions | laws, administrative regulations, rules and normative documents (hereinafter referred to as "laws and regulations") as well as the Articles of Association of FAW Car Co., Ltd. (hereinafter referred to as "Articles of Association"), and when the board of directors and the shareholders’ meeting vote on related transactions involving FAW Car Co., Ltd. matters, we will fulfill the obligation of avoiding voting. 2. We will commit to putting an end to all illegal occupation of the funds and assets of the listed company, and guarantee not to illegally transfer the funds and assets of the listed company or harm the interests of the listed company and other shareholders of the listed company by making use of relevant transactions. 3. We will try best to avoid or reduce related transactions with listed companies and enterprises controlled by them. For related transactions that cannot be avoided or exist with reasonable reasons, we will strictly follow the principles of fairness, impartiality and openness in the market, sign standardized related transaction agreements with listed companies according to law, and perform related transaction decision-making procedures in accordance with relevant laws and regulations and the Articles of Association. The price of related transactions shall be | actual situation of the Company after the major asset restructuring and fully protect the interests of the listed company and all shareholders, FAW Car Co., Ltd. has reissued relevant commitments on regulating related transactions. The commitment is being fulfilled normally. |
| determined based on the market-oriented pricing principle to ensure its fairness, and to perform the information disclosure obligation of related transactions in accordance with relevant laws and regulations and the Articles of Association, and to ensure that the legitimate rights and interests of the listed company and other shareholders of the listed company will not be harmed through related transactions. 4. The above commitments on regulating related transactions will also apply to enterprises actually controlled by FAW Car Co., Ltd., and within the scope of legal shareholders' rights, FAW Car Co., Ltd. will urge its actually controlled enterprises to fulfill the obligations of regulating existing or possible related transactions with listed companies. We will make every effort to urge joint ventures or associated enterprises other than those actually controlled by FAW Car Co., Ltd. to fulfill the obligations to regulate related transactions that have occurred or may occur with listed companies. | ||||||
| Commitments made during asset restructuring | China FAW Group Co., Ltd. | Commitment on avoiding horizontal competition | 1. Upon completion of the restructuring, the main business of the listed company will be changed to the R&D, production and sales of commercial vehicle. 2. Upon completion of the restructuring, FAW and its holding enterprises other than listed companies (hereinafter | April 8, 2020 | Long-term validity | The commitment is being fulfilled normally. |
| Commitments made during asset restructuring | China FAW Co., Ltd. | Commitment on avoiding horizontal competition | 1. Upon completion of the restructuring, the main business of the listed company will be changed to the R&D, production and sales of commercial vehicle. 2. Upon completion of the restructuring, FAW Car Co., Ltd. and its holding enterprises other than listed companies (hereinafter referred to as "holding enterprises") shall not directly or indirectly engage in any business or activity that constitutes or may constitute substantial competition with the main business engaged in by listed companies and their holding enterprises in any form. 3. Upon completion of the restructuring, if FAW Car Co., Ltd. or its holding enterprises find any new business opportunities that constitute or may constitute a direct or indirect competition with the main business of the listed company or its holding enterprises (hereinafter referred to as "such new business opportunities"), FAW or its holding enterprises will immediately notify the listed company in writing and try its best to first provide such business opportunities to the listed company or its holding enterprises according to reasonable and fair terms and conditions. If the listed company or its holding enterprises decide to give up such new business opportunities, FAW Car Co., Ltd. or its holding enterprises can engage in it. 4. If the listed | April 8, 2020 | Long-term validity | The commitment is being fulfilled normally. |
| or actual controller of the listed company. | ||||||
| Commitments made during asset restructuring | China FAW Co., Ltd. | Commitment on maintaining the independence of listed companies | (I) Ensure the personnel independence of the listed company: 1. Maintain personnel independence with the listed company, and ensure that the General Manager, Deputy General Manager, Financial Director, Secretary of the Board of Directors and other senior executives of the listed company do not hold positions other than directors and supervisors in FAW Car Co., Ltd. and its wholly-owned, holding or other enterprises and public institutions under actual control (hereinafter referred to as "subordinate units"), and do not receive salary from FAW Car Co., Ltd. and its subordinate units. 2. Ensure that the listed company has a complete and independent labor, human resources and salary management system, which is completely independent of FAW Car Co., Ltd. and its subordinate units. (II) Ensure the independence and integrity of the assets of the listed company: 1. Ensure that the listed company has independent and complete assets, all of which are under the control of the listed company, and are independently owned and operated by the listed company. 2. Ensure that FAW Car Co., Ltd. and its subordinate units currently do not and will not illegally occupy the funds and assets of the listed company. 3. FAW Car Co., Ltd. will not | April 8, 2020 | Long-term validity | The commitment is being fulfilled normally. |
| the listed company operate and exercise their functions and powers independently, without any affiliation or confusion with the functional departments of FAW Car Co., Ltd. (V) Ensure the business independence of the listed company: 1. Maintain business independence with the listed company after the restructuring, and ensure substantial horizontal competition or obviously unfair related transactions does not exist or occur. 2. Ensure that the listed company has the assets, personnel, qualifications and capabilities to independently carry out business activities, and has the ability to independently operate in the market. 3. Ensure that FAW Car Co., Ltd. does not interfere with the normal business activities of the listed company except for participating in the operation and management of the listed company by exercising shareholders' rights. | ||||||
| Commitments made during asset restructuring | China FAW Co., Ltd. | Commitment on pledging consideration shares | 1. We will make sure that the consideration shares obtained in the restructuring are given priority to fulfill the performance compensation commitment agreed in the Profit Forecast Compensation Agreement signed with the listed company, and we will not evade the compensation obligation by pledge of shares or other means. 2. When such consideration shares are pledged in the future, we will inform the pledgee in writing of the potential performance | April 8, 2020 | Long-term validity | The commitment is being fulfilled normally. |
| commitment compensation obligations of such shares according to the Profit Forecast Compensation Agreement, and make a clear agreement with the pledgee on the use of relevant shares for performance compensation in the Pledge Agreement. 3. In case of violation of the above commitments, we will compensate the listed company for any losses incurred thereby and bear the corresponding legal liabilities. | ||||||
| Commitments made during asset restructuring | China FAW Co., Ltd. | Commitment on measures to fill diluted spot returns | 1. We will not interfere with the operation and management activities of the listed company beyond our authority and will not encroach on the interests of the listed company; 2. In this major asset restructuring, the listed company issued shares to FAW Car Co., Ltd. to purchase assets, and signed the Profit Forecast Compensation Agreement attached with effective conditions with FAW Car Co., Ltd., providing legally binding safeguard measures to avoid diluted spot returns in this transaction. | April 8, 2020 | Long-term validity | The commitment is being fulfilled normally. |
| Commitments made during asset restructuring | China FAW Group Co., Ltd. | Description on vehicle production qualification | The production qualification and product announcement of Jiefang Limited will be under the group management of FAW, that is, Jiefang Limited will use the production qualification of FAW vehicles, and its production qualification and product announcement declaration will be under the unified management of FAW. Upon completion of the restructuring, FAW will | April 8, 2020 | Long-term validity | The commitment is being fulfilled normally. |
| continue to maintain group management based on the actual needs of Jiefang Limited. Jiefang Limited can continue to use relevant production qualifications and keep the announcement of existing models unchanged. FAW will not hinder the continuous use of relevant qualifications by Jiefang Limited, and will cooperate with Jiefang Limited to maintain the validity of relevant qualifications. | ||||||
| Commitments made during asset restructuring | China FAW Co., Ltd. | Performance commitment and compensation arrangement | For some patents and proprietary technologies (hereinafter referred to as "performance commitment assets") in the purchased assets evaluated by the income approach, the income commitments of the audited performance compensation assets in the three accounting years (i.e. 2020, 2021 and 2022) after the transaction are as follows: CNY 655,889,000 in 2020, CNY 688,155,200 in 2021 and CNY 109,386,400 in 2022. During the performance commitment period, if as of the end of the current year, the accumulated realized income of the performance commitment assets is lower than the accumulated committed income, FAW Car Co., Ltd. will compensate the listed company year by year by share-based payment. | April 8, 2020 | April 30, 2023 | The commitment is being fulfilled normally. |
| Commitments made during asset restructuring | China FAW Co., Ltd. | Commitment on defects of underlying assets | Jiefang Limited and its holding subsidiaries cannot obtain the house ownership certificate for some properties due to historical reasons such as government planning and adjustment, | November 27, 2019 | Long-term validity | The commitment is being fulfilled normally. |
| land expropriation, incomplete construction application procedures, and construction beyond the red line. The above properties account for 0.6% of the total area of house ownership of Jiefang Limited and its holding subsidiaries, which is relatively small and will not have a significant adverse impact on the normal production and operation of Jiefang Limited. As the counterparty of the restructuring, the Company promises that the failure to obtain the corresponding ownership certificate of the above properties will not adversely affect the normal production and operation of Jiefang Limited, and will not constitute a substantial obstacle to the restructuring. If the listed company or Jiefang Limited suffers any punishment or loss due to the failure to obtain the corresponding ownership certificate of the above properties, the Company promises to make full compensation to the listed company or Jiefang Limited in cash timely. | ||||||
| Commitment made upon initial public offering or refinancing | N/A | N/A | ||||
| Equity incentive commitment | N/A | N/A | ||||
| Other commitments | N/A | N/A |
| to minority shareholders of the Company | ||||||
| Other commitments | N/A | N/A | ||||
| Whether the commitment is fulfilled on time | Yes | |||||
| If the commitment is not fulfilled within the time limit, the specific reasons for the failure and the next work plan shall be explained in detail | None | |||||
2.?If there is a profit forecast for the Company's assets or projects, and the reporting period is still in the profit forecast period, theCompany shall explain that the assets or projects reaching the original profit forecast and the reasons?Applicable □ Not Applicable
| Name of Profit Forecast Asset or Project | Forecast Start Time | Forecast End Time | Forecast Performance in Current Period (CNY 10,000) | Actual Performance in Current Period (CNY 10,000) | Reasons for Failure to Reach the Forecast | Disclosure Date of Original Forecast | Disclosure Index of Original Forecast |
| Some patents and proprietary technologies in the purchased Jiefang Limited assets evaluated by income approach in the major asset restructuring | January 1, 2020 | December 31, 2022 | 145,343.06 | 194,914.96 | N/A | March 13, 2020 | http://www.cninfo.com.cn/new/disclosure/stock?stockCode=000800&orgId=gssz0000800#latestAnnouncement |
Commitments made by shareholders and counterparties of the Company in reporting annualbusiness performance?Applicable □ Not Applicable
FAW Car Co., Ltd., the controlling shareholder of the Company, promises that, for somepatents and proprietary technologies (hereinafter referred to as "performance commitment assets")in the purchased assets (Jiefang Limited) evaluated by the income approach in the major assetrestructuring, the income commitments of the audited performance compensation assets in the 3accounting years (i.e. 2020, 2021 and 2022) after the transaction are as follows: CNY655,889,000 in 2020, CNY 688,155,200 in 2021 and CNY 109,386,400 in 2022. During theperformance commitment period, if as of the end of the current year, the accumulated realizedincome of the performance commitment assets is lower than the accumulated committed income,FAW Car Co., Ltd. will compensate the listed company year by year by share-based payment.Completion of performance commitments and their impact on goodwill impairment testFrom 2020 to 2022, the share of the accumulative realized income of the Company'sperformance commitment assets was CNY 1,949,149,600, exceeding the commitment amount ofCNY 495,719,000, and the performance commitment was completed.
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 andother related parties to the listed company.III. Illegal External Guarantee
□ Applicable ?Not applicable
The Company has no illegal external guarantee in the reporting period.IV. Description of the Board of Directors on the latest "Non-standard Audit Report"
□ Applicable ?Not applicable
V. Description of the Board of Directors, the Board of Supervisors and IndependentDirectors (if any) on the "Non-standard Audit Report" of the Accounting Firm in theReporting Period
□ Applicable ?Not applicable
VI. Description of Changes in Accounting Policies and Accounting Estimates or Correctionof Significant Accounting Errors Compared with the Financial Report of the Previous Year
□ Applicable ?Not applicable
There is no change in accounting policies, accounting estimates or correction of significantaccounting errors in the reporting period of the Company.VII. Description of Changes in the Scope of Consolidated Statements Compared with theFinancial Report of the Previous Year?Applicable □ Not Applicable
FAW Jiefang New Energy Automotive Sales Co., Ltd, a subsidiary of the Company, mergedFAW Jiefang Automotive Sales Co., Ltd., the former subsidiary of the Company, on the base dateof September 30, 2022.
VIII. Appointment and Dismissal of Accounting FirmAccounting Firm Currently Hired
| Name of Domestic Accounting Firm | Grant Thornton Certified Public Accountants (Special General Partnership) |
| Remuneration of Domestic Accounting Firm (CNY 10,000) | 95 |
| Consecutive Years of Audit Service Provided by Domestic Accounting Firm | 6 years |
| Name of Certified Public Accountant of Domestic Accounting Firm | Xi Dawei and Yang Dongmin |
| Consecutive Years of Audit Service Provided by Certified Public Accountant of Domestic Accounting Firm | Xi Dawei (5 years), Yang Dongmin (1 year) |
Whether to change to hire a new accounting firm in the current period
□ Yes? No
Employment of accounting firm, financial consultant or sponsor for internal control audit?Applicable □ Not Applicable
After deliberation and adoption at the 28
th meeting of the 9
thBoard of Directors and theThird Extraordinary Shareholders’ Meeting of 2022, Grant Thornton Accounting Firm (specialgeneral partnership) was appointed as the internal control audit institution of the Company in2022, with an internal control audit fee of CNY 500,000.IX. Delisting after Disclosure of Annual Report
□ Applicable ?Not applicable
X. Matters Related to Bankruptcy Reorganization
□ Applicable ?Not applicable
The Company has no matter related to bankruptcy reorganization in the reporting period.XI. Major Litigation and Arbitration Matters?Applicable □ Not Applicable
| Basic Information about Litigation (Arbitration) | Amount Involved (CNY 10,000) | Whether Estimated Liabilities are | Progress of Litigation (Arbitration) | Litigation (Arbitration) Results and | Implementation of Litigation (Arbitration) | Date of Disclosure | Disclosure Index |
| Formed | Impact | Judgment | |||||
| Summary of other litigation not reaching the major disclosure standard | 10,317.01 | Including estimated liabilities of CNY 32,195,200 | 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 | 350.72 | No | Case closed | No significant impact | In progress |
XII. Punishment and Rectification
□ Applicable ?Not applicable
The company has no punishment or rectification in the reporting period.XIII. Integrity of the Company and Its Controlling Shareholders and Actual Controllers
□ Applicable ?Not applicable
XIV. Major Related Transactions
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) | Whether it Exceeds the Approved Amount | 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 price | 592,117.94 | 15.45% | 702,416 | No | Cash + bill settlement | 592,117.94 | November 29, 2022 | http://www.cninfo.com.cn/new/disclosure/stock?stockCode=000800&orgId=gssz0000800#latestAnnouncement |
| Total | -- | -- | 592,117.94 | -- | 702,416 | -- | -- | -- | -- | -- | |||
| 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 XII "Related Parties and Related Transactions" in Section X of this report. | ||||||||||||
| Reasons for large difference between transaction price and market reference price | N/A | ||||||||||||
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 equityin the reporting period.
3. Related transactions of joint foreign 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.
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 the 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 | 38,467,770.79 | 39,349,788.43 | 1,383,293.43 |
Credit Granting or Other Financial Businesses
| Related Parties | Correlation | Business Type | Total Price (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 | 138,527 |
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 financecompanies controlled by the Company and related parties.
7. Other major related transactions
?Applicable □ Not Applicable
(1) On January 27, 2022, the 21
st meeting of the 9
thBoard of Directors of the Companyreviewed and approved the Proposal on Estimated Amount of Daily Related Transactions in 2022and the Proposal on Estimated Amount of Financial Business with First Automobile Finance Co.,Ltd. in 2022, which were reviewed and approved by the first extraordinary shareholders' meetingof the Company in 2022.
(2) On November 28, 2022, the Proposal on Increasing the Estimate of Daily RelatedTransactions in 2022 was deliberated and adopted at the 29
th Meeting of the 9
th
Board ofDirectors of the Company, which was also deliberated and adopted at the Fourth ExtraordinaryShareholders’ Meeting of 2022 of the Company.
(3) On December 15, 2022, the Proposal on Investment of Subsidiaries in ChangchunAutomobile Test Center Co., Ltd. was adopted at the 30
th Meeting of the 9
th
Board of Directors ofthe Company.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) |
| Announcement on Increasing the Estimate of Daily Related Transactions in 2022 | November 29, 2022 | CNINFO (http://www.cninfo.com.cn) |
| Announcement on Foreign Investment and Related Transactions | December 16, 2022 | CNINFO (http://www.cninfo.com.cn) |
XV.?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 FAWLight Commercial Vehicle Co., Ltd. (hereinafter referred to as "FAW Light Vehicle Company"),shows that FAW will entrust Jiefang Limited to manage the FAW Harbin Light Automobile Co.,Ltd. and FAW Hongta Yunnan Automobile Manufacturing Co., Ltd., which are affiliated to FAWLight Vehicle Company. For main contents of relevant entrustment management agreement,please see the Report on Major Assets Replacement, Shares Issuance and Cash Payment forAssets Purchase and Related Transactions of FAW Car Co., Ltd.Projects that bring about profits and losses exceeding 10% of the total profit of the Company inthe reporting 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 14 "Investment real estate",Note 15 "Fixed assets", and Note 19 "Right-of-use assets" in Notes to Items in ConsolidatedFinancial Statements (VII) of Section X, and Note 5 "Related Parties and Related Transactions" inItem XI "Related parties and related transactions".Projects that bring about profits and losses exceeding 10% of the total profit of the Company inthe reporting period
□ Applicable ?Not applicable
The Company has no leasing project that brings about profits and losses exceeding 10% of thetotal profit of the Company in the reporting period.
2. Major guarantees
□ Applicable ?Not applicable
The Company has no major guarantee in the reporting period.
3. Cash Assets Management Entrusted to Others
(1) Entrusted Financial Management
□ Applicable ?Not applicable
The Company has no entrusted financial management in the reporting period.
(2) Entrusted Loans
□ Applicable ?Not applicable
The Company has no entrusted loans in the reporting period.
4. Other major contracts
□ Applicable ?Not applicable
The Company has no other major contracts in the reporting period.XVI. 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.XVII. Major Events of Subsidiaries
□ Applicable ?Not applicable
Section VII?Changes in Shares and Shareholders
I. 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 shares | Share Transferred from Accumulation Fund | Others | Subtotal | Quantity | Scale | |
| I. Restricted shares | 3,238,899,791 | 69.64% | 3,721,601 | -1,050,568 | 2,671,033 | 3,241,570,824 | 69.66% | ||
| 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 | 68.72% | |||||
| 3. Shares held by other domestic enterprises | 40,987,657 | 0.88% | 3,721,601 | -1,050,568 | 2,671,033 | 43,658,690 | 0.94% | ||
| Including: shares held by domestic legal person | |||||||||
| Shares held by domestic natural person | 40,987,657 | 0.88% | 3,721,601 | -1,050,568 | 2,671,033 | 43,658,690 | 0.94% | ||
| 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 | 30.34% | |||||
| 1. CNY ordinary shares | 1,411,754,078 | 30.36% | 1,411,754,078 | 30.34% | |||||
| 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 | -1,050,568 | 2,671,033 | 4,653,324,902 | 100.00% |
Reasons for changes in shares?Applicable □ Not ApplicableIn the reporting period, the Company granted 3,721,601 shares in total included in thereserved part of the phase I restricted share incentive plan. The new shares are listed on January10, 2022. Some original incentive objects firstly granted by the Company do not conform to theprovisions on incentive objects in the restricted share incentive plan due to job transfer,mandatory retirement, leaving the job for personal reasons or other reasons, and a total number of1,050,568 restricted shares held by them is repurchased and canceled by the Company. After thecompletion of granting, repurchase and cancellation of the above reserved part, the total sharecapital of the Company is changed to 4,653,324,902 shares.Approval of share changes?Applicable □ Not ApplicableThe Proposal on Granting Reserved Part of Restricted Shares in the Phase I Restricted ShareIncentive Plan to Incentive Objects and the Proposal on Repurchase and Cancellation of PartialRestricted Shares in the Phase I Restricted Share Incentive Plan were deliberated and adopted atthe 20th meeting of the 9th Board of Directors and the 19th meeting of the 9th Board ofSupervisors of the Company respectively on December 9, 2021. The Proposal on Repurchase andCancellation of Partial Restricted Shares in the Phase I Restricted Share Incentive Plan wasdeliberated and adopted at the 26th meeting of the 9th Board of Directors and the 23rd meeting ofthe 9th Board of Supervisors on August 29, 2022 and the Second Extraordinary Shareholders’Meeting of 2022 on September 16, 2022.Transfer of share changes?Applicable □ Not Applicable
(1) On January 5, 2022, the Company completed the registration procedures with CSDC for theadditional shares involved in the grant of the reserved part of this equity incentive plan. Newshares were listed on January 10, 2022, and the total share capital of the Company was increasedto 4,654,375,470 shares.
(2) On January 13, 2022, the Company completed the repurchase and cancellation procedures forthe shares involved in the repurchase and cancellation of relevant equity incentives in China
Securities Depository and Clearing Corporation Limited (CSDC), CSDC issued the Confirmationof Securities Transfer Registration to the Company, and the total share capital of the Companywas reduced to 4,654,114,613 shares.
(3) On November 10, 2022, the Company completed the repurchase and cancellation proceduresfor the shares involved in the repurchase and cancellation of relevant equity incentives in CSDC,CSDC issued the Confirmation of Securities Transfer Registration to the Company, and the totalshare capital of the Company was reduced to 4,653,324,902 shares.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 2,671,033 shares,which had little impact on the Company's financial indicators such as basic earnings per share,diluted earnings per share and net assets per share attributable to common shareholders of theCompany.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 Increased in the Current Period | Number of Restricted Shares Released 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 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. In the first release period, the firstly granted restricted shares were unlocked and listed for circulation on February 6, 2023. | ||
| Wu Bilei | 228,552 | 228,552 | Equity incentive | |||
| Zhang Guohua | 228,493 | 228,493 | Equity incentive | |||
| Ji Yizhi | 192,778 | 192,778 | Equity incentive | |||
| Tian Haifeng | 192,778 | 192,778 | Equity incentive | |||
| Li Sheng | 192,778 | 192,778 | Equity incentive | |||
| Wang Jianxun | 192,778 | 192,778 | Equity incentive | |||
| Other core employees of senior director and above | 39,425,169 | 2,671,033 | 42,096,202 | Equity incentive | ||
| Total | 3,238,899,791 | 2,671,033 | 0 | 3,241,570,824 | -- | -- |
II.?Issuance and Listing of Securities
1. Issuance of Securities (Excluding Preferred Share) in the Reporting Period?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 (excluding preferred shares) in the reporting period: In thereporting period, the Company issued 3,721,601 common A shares in total to the reserved grantobjects of the phase I restricted share incentive plan.
2. Changes in the Total Number of Shares and Shareholder Structure, as well as Changesin the Structure of the Company's Assets and Liabilities?Applicable □ Not ApplicableAccording to the Company's restricted share incentive plan, the Company issued 3,721,601A ordinary shares in total to the reserved grant objects of the phase I restricted share incentiveplan, and repurchased and canceled 1,050,568 granted shares of incentive objects that fail toconform to the restricted share incentive plan. To sum up, the total number of shares of theCompany was changed from 4,650,653,869 shares to 4,653,324,902 shares.
3. Existing Internal Employee Shares
□ Applicable ?Not applicable
III. Shareholders and Actual Controllers
1. Number of Shareholders and Shareholdings of the Company
Unit: share
| Total Number of Common Shareholders at the End of the Reporting Period | 88,229 | Total Number of Ordinary Shareholders at the End of the Last Month before the Disclosure Date of the Annual Report | 80,893 | Total Number of Preferred Shareholders with Restored Voting Rights at the End of the Reporting Period | 0 | Total Number of Preferred Shareholders with Resumed Voting Rights at the End of the Last Month before the Disclosure Date | 0 | |
| Shareholdings of Shareholders Holding More Than 5% of the Shares or Top 10 Shareholders | ||||||||
| Name of Shareholder | Nature of Shareholders | Shareholding Proportion | Number of Shares Held at the End of the Reporting Period | Increase and Decrease in the Reporting Period | Number of Restricted Shares Held | Number of Unrestricted Shares Held | Pledge, Marking or Freezing | |
| Status of Shares | Quantity | |||||||
| China FAW Co., Ltd. | State-owned legal person | 65.77% | 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 | 1.18% | 54,840,312 | -6,329,184 | 54,840,312 | |||
| Lu Min | Domestic natural person | 0.78% | 36,096,590 | 36,096,590 | 36,096,590 | |||
| Jilin Province | State-owned | 0.29% | 13,712,916 | 13,712,916 | ||||
| State-owned Capital | legal person | ||||||||
| Chao Guo | Domestic natural person | 0.17% | 7,859,358 | 3,807,429 | 7,859,358 | ||||
| Li Yan | Domestic natural person | 0.16% | 7,660,000 | 7,660,000 | |||||
| Zhong Ou AMC - Agricultural Bank of China - Zhong Ou & CITIC Securities Financial Asset Management Plan | Others | 0.12% | 5,549,500 | 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 | 5,549,500 | |||||
| China Construction Bank Corporation - GF China Securities Auto Index-based Securities Investment Fund | Others | 0.12% | 5,460,795 | 5,460,795 | 5,460,795 | ||||
| Strategic investors or general legal persons who become the top 10 shareholders due to the issuance of new shares | None | ||||||||
| 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 Shareholders with Unrestricted Ordinary Shares | |||
| Name of Shareholder | Number of Unrestricted 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. | 54,840,312 | CNY ordinary shares | 54,840,312 |
| Lu Min | 36,096,590 | CNY ordinary shares | 36,096,590 |
| Jilin Province State-owned Capital | 13,712,916 | CNY ordinary shares | 13,712,916 |
| Chao Guo | 7,859,358 | CNY ordinary shares | 7,859,358 |
| Li Yan | 7,660,000 | CNY ordinary shares | 7,660,000 |
| Zhong Ou AMC - Agricultural Bank of China - Zhong Ou & CITIC Securities Financial Asset Management Plan | 5,549,500 | CNY ordinary shares | 5,549,500 |
| 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 |
| China Construction Bank Corporation - GF China Securities Auto Index-based Securities Investment Fund | 5,460,795 | CNY ordinary shares | 5,460,795 |
| Li Songsen | 4,300,000 | CNY ordinary shares | 4,300,000 |
| Description of correlation or concerted action between the top 10 shareholders of unrestricted shares, and between the top 10 shareholders of unrestricted shares and the top 10 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 ordinary shareholders' participation in financing bonds business | Lu Min, a domestic natural person, holds 36,096,590 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 ordinary shareholders and the top 10 ordinary shareholders with unrestricted ordinary shares of the Company have agreedrepurchase transactions in the reporting period
□ Yes? No
The top 10 ordinary shareholders and the top 10 ordinary shareholders with unrestricted ordinary shares of the Company do not agreerepurchase transactions in the reporting period
2. Information of Controlling Shareholders of the CompanyNature of controlling shareholder: central state-owned holdingType of controlling shareholder: legal person
| Name of Controlling Shareholder | Legal Representative/Person in Charge | Date of Establishment | Organization code | Main Business |
| China FAW Co., Ltd. | Xu Liuping | June 28, 2011 | 91220101571145270J | Automobile manufacturing and remanufacturing, new energy vehicle manufacturing; design, development, manufacturing and sales of automobile parts and components such as engines and transmissions; metal casting and forging, mold processing; engineering technology research and test; professional technical services; computer and software services; thermal power generation and power supply; heat production and supply; water and gas supply; road freight transport; warehousing; sales of mechanical equipment, hardware and electrical equipment, electronic products and vehicle materials; lease of mechanical equipment; advertising design, production and release; business services; labor service; sales of vehicles and second-hand vehicles (prohibited by laws, regulations and decisions of the State Council. Items subject to approval according to law can be operated only after being approved by relevant authorities). |
| Equity of Other Domestic and Foreign Listed Companies | None | |||
Controlled andParticipated byControllingShareholders in theReporting Period
Changes 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.
3. Company's Actual Controllers and Persons Acting in ConcertNature of actual controller: central state-owned assets management organizationType of actual controller: legal person
| Name of Actual Controller | Legal Representative/Person in Charge | Date of Establishment | Organization code | Main Business |
| State-owned Assets Supervision and Administration Commission of the State Council | N/A | N/A | N/A | |
| Equity of Other Domestic and Foreign Listed Companies Controlled by Actual Controllers in the Reporting Period | N/A | |||
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.Block Diagram of Property Right and Control Relationship between the Company and the ActualControllers
The actual controllers control the Company by trust or other asset management methods
□ Applicable ?Not applicable
4. The cumulative number of pledged shares of the Company's controlling shareholder orthe largest shareholder and persons acting in concert accounts for 80% of the Company'sshares held by them.
□ Applicable ?Not applicable
5. Other Corporate Shareholders Holding More Than 10% of the Shares?Applicable □ Not Applicable
| Name of Corporate Shareholder | Legal Representative/Person in Charge | Date of Establishment | Registered Capital | Main Business or Management Activities |
| FAW Bestune Car Co., Ltd. | Yang Xiao | June 28, 2019 | CNY 1,627,500,000 | Development, manufacturing and sales of automobiles and parts (including new energy vehicles and their related batteries, motors, electronic controls, and excluding flammable and explosive hazardous chemicals), station wagons and their accessories, intelligent products and equipment; vehicle repair; processing of non-standard equipment; sales of mechanical accessories and mechanical and electrical products (excluding cars); sales of second-hand vehicles; lease of vehicles; lease of premises and plant; road general cargo transportation; modern trade logistics services; technical services and technical consultation in the automobile field; using the Internet to engage in automobile operation; import and export of goods and technology (excluding publication import and export business, as well as commodities and technologies that are restricted or prohibited for import and export by the state); second-hand vehicle brokerage; part-time insurance agency business; motor vehicle repair and maintenance; recycling of end-of-life motor vehicles; disassembly of end-of-life motor vehicles; business training (excluding education training, vocational skills training and other training requiring licenses); stationery retail, stationery wholesale; sales of automotive decoration products; sales of lubricating oil; IoT technology R&D and technical services; manufacturing of power transmission and distribution and control equipment; advertising design, agency; advertising production; |
advertisement release (non-radio stations, TV stations,newspapers and periodicals publishers); labor service(excluding labor dispatch); motor vehicle safetytechnology testing service; artificial intelligencepublic data platform; data processing and storagesupport services; Internet data service; inspection andtesting services; general cargo warehousing services(excluding hazardous chemicals and other itemsrequiring licensing and approval); marketing planning;lease of computer and communication equipment;conference and exhibition services; lease ofmechanical equipment; Category I value-addedtelecommunications services; Category II value-addedtelecommunications services; intellectual propertyservices (items subject to approval according to lawcan be operated only after being approved by relevantauthorities).
6. Restricted Reduction of Shares Held by Controlling Shareholders, Actual Controllers,Restructuring Parties and Other Commitment Subjects
□ Applicable ?Not applicable
IV. Specific Implementation of Share Repurchase in the Reporting PeriodImplementation progress of share repurchase
□ Applicable ?Not applicable
Implementation Progress of Reducing Shareholding in Repurchased Shares by CentralizedBidding
□ Applicable? Not applicable
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 Report
| Type of Audit Opinion | Standard unqualified opinion |
| Signing Date of Auditor Report | March 31, 2023 |
| Name of Audit Institution | Grant Thornton Certified Public Accountants (Special General Partnership) |
| Audit Report No. | ZTSZ (2023) No. 110A006250 |
| Name of Certified Public Accountant | Xi Dawei and Yang Dongmin |
Text of Auditor ReportAll shareholders of FAW JIEFANG GROUP CO., LTD.:
I. Auditor’s OpinionWe have audited the financial statements of FAW JIEFANG GROUP CO., LTD.(hereinafter referred to as"FAW Jiefang"), including the Consolidated and the Company's Balance Sheets on December 31, 2022, theConsolidated and the Company's Income Statements, the Consolidated and the Company's Cash FlowStatements, the Consolidated and the Company's Statements of Changes in Shareholders' Equity, and the Notesto Financial Statements for the year then ended.In our opinion, the attached financial statements were compiled as per the provisions of AccountingStandards for Business Enterprises (ASBE) in all major aspects and can fairly present the consolidated andFAW Jiefang's financial status as of December 31, 2022, as well as their business performance and cash flowsfor the year then ended.II. Basis for OpinionWe have conducted our audit in accordance with the Auditing Standards for Certified PublicAccountants of China. The section in the Auditor’s Report titled “CPAs’ Responsibilities for the Audit of theFinancial Statements” further describes our responsibilities under these standards. We are independent of FAWJiefang in accordance with the China Code of Ethics for Certified Public Accountants and we have fulfilled ourother ethical responsibilities in accordance with these requirements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit.III. Key Audit MattersKey audit matters are those matters that, in our professional judgment, we consider to be mostsignificant to the audit of the financial statements for the period. These matters were addressed in the context
of our audit for the entire financial statements and the formation of our opinions thereon. We do not declare aseparate opinion on these matters.(I) Income RecognitionFor details of relevant information disclosure, refer to 33 in V and 44 in VII of Section X - FinancialReport.
1. Description
The sales revenue of FAW Jiefang mainly comes from the vehicle sales business. In 2022, FAWJiefang realized an operating income of CNY 38,331,747,100, of which the vehicle sales revenue wasCNY 33,483,232,300, accounting for 87.35%. According to the specific method of income recognition ofFAW Jiefang, the income is recognized when the complete vehicle is shipped and the customer hasaccepted the goods. The vehicle sales revenue has a significant impact on the financial statements of FAWJiefang, so we identified the income recognition as a key audit matter.
2. Audit response
Our audit procedures mainly include:
(1) Understand the effectiveness of internal control design related to income recognition, and test theeffectiveness of key control implementation;
(2) Analyze the income and gross profit rate in combination with the product type, and comparethem with the data of the same industry to judge whether the income and gross profit rate in the currentperiod are abnormal;
(3) Interview with the management, check the terms of the sales contract, analyze and judge the timepoint of control right transfer of vehicle sales, and evaluate the rationality of the income recognition policy;
(4) Conduct the spot check on the supporting documents related to income recognition, includingsales contracts, orders, sales invoices, product transportation documents, customer receipts, etc.;
(5) Execute transaction and correspondence confirmation for the sales business of major and newcustomers;
(6) For the sales revenue recognized before and after the balance sheet date, check the basis forcustomer receipt confirmation, and evaluate whether the sales revenue is recorded in the appropriate period.
(II) Provision for Decline in Value of Inventories
For details of relevant information disclosure, refer to 15 in V and 7 in VII of Section X - FinancialReport.
1. Description
As of December 31, 2022, the book balance of inventory of FAW Jiefang was CNY 6,799,846,300,and the balance of decline in value of inventories was CNY 417,106,400, of which CNY 418,448,400 wasprovided in the current period. The provision amount for decline in value of inventories is significant andrequires significant judgment of the management, so we identified the provision for decline in value ofinventories as a key audit matter.
2. Audit response
Our audit procedures mainly include:
(1) Test and evaluate the design and operational effectiveness of key internal controls related to theprovision for decline in value of inventories by the management;
(2) Obtain the Calculation Sheet of Provision for Decline in Value of Inventories of FAW Jiefang,review the net realizable value of inventories and the amount of provision for decline in value of inventories,and check the key parameters such as estimated selling price and selling expenses when the managementdetermines the net realizable value with the historical amount to evaluate the rationality of the management'sestimation;
(3) Check the quantity and status of inventories in combination with the inventory supervisionprocedures, focus on checking long-aged inventories, and analyze the adequacy of provision for decline invalue of inventories with signs of impairment;
(4) Check the changes in the provision for decline in value of inventories made in previous years inthe current period, and analyze the rationality of the changes in the provision for decline in value ofinventories.
(III) Provision for Product Quality Guarantee Deposit
For details of relevant information disclosure, refer to 31 in V and 35 and 46 in VII of Section X -Financial Report.
1. Description
As of December 31, 2022, FAW Jiefang has provided product quality assurance deposit of CNY317,822,200 in the current year, and the balance of product quality guarantee deposit in the estimatedliabilities is CNY 826,046,700. Based on the vehicle sales contract and relevant national laws andregulations, customers can obtain free warranty services provided by FAW Jiefang within the warrantyperiod. The management of FAW Jiefang calculates the product quality guarantee deposit based on the relevantprovisions in the product type, warranty period and warranty obligation clauses. The provision amount ofproduct quality guarantee deposit is relatively large and involves significant estimation and judgment of themanagement, so we identified the provision for product quality guarantee deposit as a key audit matter.
2. Audit response
Our audit procedures mainly include:
??Test and evaluate the effectiveness of key internal control design and operation related to theprovision for product quality guarantee deposit;??Understand and evaluate whether the accounting policies related to the provision for productquality deposit are appropriate and consistently applied;??Understand and evaluate the rationality of the method and calculation model adopted by FAWJiefang for the provision for product quality deposit according to laws, regulations and contractterms;Perform recalculation procedures to verify the accuracy of the management's provision for productquality guarantee deposit.IV. Other InformationThe management of FAW Jiefang (hereinafter referred to as the management) is responsible for otherinformation. Other information comprises the information included in the Annual Report of Year 2022 of FAWJiefang, but does not include the financial statements and our auditor’s report thereon.Our audit opinion on the financial statements does not cover other information, and we do notexpress an assurance conclusion of any kind on other informationBased on our audit of the financial statements, our responsibility is to consider whether otherinformation has material inconsistency or seems to have material misstatement with the financialstatements or circumstances that we know during the audit while reading other information.Based on the work we have performed, if we determine that other information is materially misstated,we should report that fact. In this regard, we have nothing to report.
V. Responsibilities of Management and Governance for the Financial StatementsThe management of FAW Jiefang shall be responsible for preparing financial statements that presentfairly the data in accordance with the Accounting Standards for Business Enterprises, and for designing,implementing and maintaining the internal controls as the management deems necessary to enable thepreparation of financial statements free from material misstatement, whether due to fraud or error.
In preparation of the financial statement, the management is responsible for assessing FAW Jiefang’ssustainable operation ability, disclosing the sustainable operation related items (if applicable) and applying
sustainable operation assumptions, unless otherwise the management plans to liquidate FAW Jiefang, stopoperation or it has no other practical choice.The governance is responsible for supervising the financial reporting process of FAW Jiefang.VI. CPAs’ Responsibilities for the Audit of the Financial StatementsOur objective is to obtain reasonable assurance as to whether the financial statements as a whole arefree from material misstatement caused by fraud or error, and to issue an Auditor’s Report containing ouropinions. Reasonable assurance is a high level of assurance, but it does not guarantee that an audit conducted inaccordance with auditing standards can always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if, individually or in aggregate, they could reasonably beexpected to influence the economic decisions users would take on the basis of these financial statements.We exercise professional judgment and maintain professional skepticism in carrying out our audit inaccordance with the Auditing Standards. At the same time, we also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of failing to detect a materialmisstatement due to fraud is higher than that due to error, as fraud may involve collusion, forgery, intentionalomissions, misrepresentations, or overriding internal controls.
(2) Know the internal control relating to the audit in order to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the Management.
(4) Conclude on the appropriateness of the Management’s use of the going-concern assumption,based on the audit evidence obtained, whether a material uncertainty exists related to events or conditionsthat may cast significant doubt on FAW Jiefang's ability to continue as a going concern. If we conclude thata material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosuresin the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions arebased on information available as of the date of the Auditor's Report. However, future events or conditions maycause FAW Jiefang to cease to continue as a going concern.
(5) Evaluating the overall presentation, structure and contents of the financial statements andwhether the financial statements can fairly reflect the transactions and items.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within FAW Jiefang to express an opinion on the financial statements. We are
responsible for guiding, supervising, and performing the group audit, and assume all responsibilities forour opinion.We communicate with the Governance regarding, among other matters, the planned scope and timingof the audit and significant audit findings, including any significant deficiencies in internal control that weidentify during our audit.We also provide the governance with a statement regarding compliance with ethical requirementsrelated to independence and communicate with the governance about all relationships and other mattersthat could reasonably be considered to affect our independence, as well as related precautions (ifapplicable).From the matters communicated with the governance, we determine those matters that were of mostsignificance in the audit of the financial statements of the current period and are therefore the key auditmatters. We have described these matters in the Auditor’s Report, except that they are prohibited from beingpublicly disclosed as per the laws and regulations, or in the rare cases, if a negative result that may be caused bycommunicating some matter in the auditor’s report as reasonably expected exceeds the benefit generated by thepublic interest, we determine not to communicate such matter in the auditor’s report.II. Financial StatementsThe unit of statement in the financial notes is CNY
1. Consolidated balance sheet
Prepared by: FAW JIEFANG GROUP CO., LTD.
December 31, 2022
Unit: CNY
| Item | December 31, 2022 | January 1, 2022 |
| Current assets: | ||
| Monetary capital | 21,041,473,417.71 | 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 | 186,748,716.22 | 12,936,978.11 |
| Accounts receivable | 867,090,338.42 | 1,279,693,951.70 |
| Accounts receivable financing | 3,461,653,473.66 | 5,305,018,299.79 |
| Prepayments | 897,834,864.08 | 868,811,412.99 |
| Premiums receivable |
| Reinsurance accounts receivable | ||
| Reinsurance contract reserves receivable | ||
| Other accounts receivable | 1,068,454,162.91 | 249,088,090.95 |
| Including: interests receivable | ||
| Dividends receivable | 2,608,000.00 | 8,567,040.00 |
| Financial assets purchased under agreements to resell | ||
| Inventories | 6,382,739,897.83 | 9,268,120,531.25 |
| Contract assets | 11,129,624.75 | 53,047,687.72 |
| Held-for-sale assets | ||
| Current portion of non-current assets | 191,262,030.30 | 114,825,391.38 |
| Other current assets | 894,927,499.59 | 2,014,149,591.51 |
| Total current assets | 35,003,314,025.47 | 49,926,954,656.80 |
| Non-current assets: | ||
| Loans and advances | ||
| Debt investment | ||
| Other creditors' investment | ||
| Long-term receivables | 121,606,587.43 | 222,590,757.79 |
| Long-term equity investments | 4,692,648,635.84 | 4,766,734,671.74 |
| Investment in other equity instruments | 480,780,000.00 | |
| Other non-current financial assets | ||
| Investment property | 80,647,597.48 | 80,202,825.09 |
| Fixed assets | 9,612,922,810.28 | 9,236,789,322.03 |
| Project under construction | 1,902,143,354.11 | 965,997,208.23 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 198,220,342.59 | 143,766,265.44 |
| Intangible assets | 2,549,096,918.05 | 2,772,277,116.13 |
| Development expenditures | ||
| Goodwill | ||
| Long-term deferred expenses | 130,439.66 | 334,598.30 |
| Deferred income tax assets | 2,131,349,905.21 | 1,650,296,511.26 |
| Other non-current assets | ||
| Total non-current assets | 21,769,546,590.65 | 19,838,989,276.01 |
| Total assets | 56,772,860,616.12 | 69,765,943,932.81 |
| Current liabilities: | ||
| Short-term loans | ||
| Borrowing from the central bank | ||
| Placements from banks and other financial institutions | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | 9,198,593,038.03 | 13,062,704,192.54 |
| Accounts payable | 10,033,608,668.06 | 14,564,899,994.47 |
| Advance receipts | 1,861,865.37 | 1,712,917.27 |
| Contract liabilities | 1,629,524,704.35 | 2,700,642,475.91 |
| Financial assets sold for repurchase | ||
| Deposits taking and interbank deposits | ||
| Acting trading securities | ||
| Acting underwriting securities | ||
| Employee compensation payable | 436,648,178.76 | 364,450,425.37 |
| Taxes payable | 301,211,845.51 | 173,948,529.53 |
| Other payables | 6,095,452,748.17 | 7,383,223,172.30 |
| Including: interests payable | ||
| Dividends payable | 171,500.02 | 171,500.02 |
| Handling charges and commissions payable | ||
| Reinsurance accounts payable | ||
| Held-for-sale liabilities | ||
| Non-current liabilities due within one year | 32,998,374.87 | 47,060,544.71 |
| Other current liabilities | 133,584,259.07 | 267,479,444.78 |
| Total current liabilities | 27,863,483,682.19 | 38,566,121,696.88 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 54,814,603.06 | 88,307,218.05 |
| Long-term payables | ||
| Long-term employee pay payable | 707,310,890.43 | 764,529,046.36 |
| Estimated liabilities | 875,468,804.10 | 1,257,487,319.78 |
| Deferred incomes | 3,121,985,685.93 | 2,473,072,814.33 |
| Deferred income tax liabilities | 430,369,867.93 | 374,185,114.15 |
| Other non-current liabilities | ||
| Total non-current liabilities | 5,189,949,851.45 | 4,957,581,512.67 |
| Total liabilities | 33,053,433,533.64 | 43,523,703,209.55 |
| Owner's equities: | ||
| Share capital | 4,651,965,655.00 | 4,654,114,613.00 |
| Other equity instruments | ||
| Including: preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 10,451,088,236.74 | 10,439,365,093.18 |
| Less: treasury shares | 267,837,184.11 | 310,460,486.38 |
| Other comprehensive incomes | -5,399,120.81 | -32,794,902.20 |
| Special reserves | 370,420,291.86 | 315,398,148.75 |
| Surplus reserves | 3,058,249,602.44 | 2,742,214,904.83 |
| General risk provision | ||
| Undistributed profits | 5,460,939,601.36 | 8,434,403,352.08 |
| Total equity attributable to owners of the parent company | 23,719,427,082.48 | 26,242,240,723.26 |
| Minority equity | ||
| Total owners' equity | 23,719,427,082.48 | 26,242,240,723.26 |
| Total liabilities and owner's equities | 56,772,860,616.12 | 69,765,943,932.81 |
Legal representative: Hu Hanjie Person in charge of accounting: Ou Aimin Person in charge of theaccounting organization: Si Yuzhuo
2. Balance sheet of parent company
Unit: CNY
| Item | December 31, 2022 | January 1, 2022 |
| Current assets: | ||
| Monetary capital | 5,776,955.29 | 9,646,455.17 |
| Financial assets held for trading | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | ||
| Accounts receivable financing | ||
| Prepayments | ||
| Other accounts receivable | 224,132.76 | 432,429.80 |
| Including: interests receivable | ||
| Dividends receivable | ||
| Inventories | ||
| Contract assets | ||
| Held-for-sale assets | ||
| Current portion of non-current assets | ||
| Other current assets | 141,004.41 | 720,491.14 |
| Total current assets | 6,142,092.46 | 10,799,376.11 |
| Non-current assets: | ||
| Debt investment | ||
| Other creditors' investment | ||
| Long-term receivables | ||
| Long-term equity investments | 25,580,280,570.19 | 25,640,802,370.53 |
| Investment in other equity instruments | ||
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | ||
| Project under construction | ||
| Productive biological assets | ||
| Oil and gas assets |
| Right-of-use assets | ||
| Intangible assets | ||
| Development expenditures | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred income tax assets | ||
| Other non-current assets | ||
| Total non-current assets | 25,580,280,570.19 | 25,640,802,370.53 |
| Total assets | 25,586,422,662.65 | 25,651,601,746.64 |
| Current liabilities: | ||
| Short-term loans | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 964,364.48 | 200,000.00 |
| Advance receipts | ||
| Contract liabilities | ||
| Employee compensation payable | ||
| Taxes payable | 3,264,343.98 | 1,462,703.57 |
| Other payables | 298,294,257.75 | 552,502,809.86 |
| Including: interests payable | ||
| Dividends payable | 171,500.02 | 171,500.02 |
| Held-for-sale liabilities | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | ||
| Total current liabilities | 302,522,966.21 | 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 pay payable | ||
| Estimated liabilities | ||
| Deferred incomes | ||
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | ||
| Total liabilities | 302,522,966.21 | 554,165,513.43 |
| Owner's equities: | ||
| Share capital | 4,651,965,655.00 | 4,654,114,613.00 |
| Other equity instruments | ||
| Including: preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 12,278,939,213.88 | 12,267,337,664.44 |
| Less: treasury shares | 267,837,184.11 | 310,460,486.38 |
| Other comprehensive incomes | -480,794.77 | 304,113.31 |
| Special reserves | ||
| Surplus reserves | 1,827,531,841.54 | 1,511,497,143.93 |
| Undistributed profits | 6,793,780,964.90 | 6,974,643,184.91 |
| Total owners' equity | 25,283,899,696.44 | 25,097,436,233.21 |
| Total liabilities and owner's equities | 25,586,422,662.65 | 25,651,601,746.64 |
3. Consolidated profit statement
Unit: CNY
| Item | 2022 | Year 2021 |
| I. Total operating revenue | 38,331,747,083.88 | 98,751,242,669.55 |
| Including: operating income | 38,331,747,083.88 | 98,751,242,669.55 |
| Interest income | ||
| Premium earned | ||
| Handling charges and commission income | ||
| II. Total operating cost | 40,599,244,915.95 | 95,492,383,491.31 |
| Including: operating cost | 35,252,170,886.53 | 88,809,338,768.60 |
| 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 | 207,798,168.60 | 366,791,673.98 |
| Sales expenses | 1,255,882,221.64 | 1,754,344,114.38 |
| Administrative expenses | 2,040,339,354.62 | 2,453,597,224.68 |
| R&D expenses | 2,895,655,097.73 | 3,328,946,673.10 |
| Financial expenses | -1,052,600,813.17 | -1,220,634,963.43 |
| Including: interest expenses | 5,560,792.92 | 7,533,847.89 |
| Interest income | 944,342,610.79 | 931,991,300.64 |
| Add: Other incomes | 1,638,060,139.20 | 339,850,769.01 |
| Investment income (loss to be listed with “-”) | 236,918,218.51 | 735,914,141.27 |
| Including: income from investment in associates and joint ventures | 346,588,767.31 | 706,078,890.17 |
| 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 "-") | 919,157.09 | -24,268,589.20 |
| Asset impairment loss (loss to be listed with “-”) | -424,288,578.25 | -229,780,995.94 |
| Income from assets disposal (loss to be listed with “-”) | 871,031,108.06 | 458,484.79 |
| III. Operating profit (losses expressed with "-") | 55,142,212.54 | 4,081,032,988.17 |
| Add: non-operating income | 153,997,194.43 | 55,278,042.86 |
| Less: non-operating expenses | 26,567,738.01 | 27,133,244.78 |
| IV. Total profit (losses expressed with "-") | 182,571,668.96 | 4,109,177,786.25 |
| Less: Income tax expenses | -185,173,776.38 | 209,323,025.86 |
| V. Net profit (net losses expressed with "-") | 367,745,445.34 | 3,899,854,760.39 |
| (I) Classified according to business continuity | ||
| 1. Net profit from continuing operations (net losses expressed with "-") | 367,745,445.34 | 3,899,854,760.39 |
| 2. Net profit from discontinuing operations (net losses expressed with "-") | ||
| (II) Classified according to attribution of the ownership |
| 1. Net profit attributable to the parent company's shareholders | 367,745,445.34 | 3,899,854,760.39 |
| 2. Minority interests | ||
| VI. Net after-tax amount of other comprehensive income | 27,395,781.39 | -29,691,455.76 |
| Net after-tax amount of other comprehensive income attributable to the owners of the parent company | 27,395,781.39 | -29,691,455.76 |
| (I) Other comprehensive incomes that cannot be reclassified into profits or losses | 27,800,000.00 | -28,120,000.00 |
| 1. Changes arising from re-measurement of the defined benefit plan | 27,800,000.00 | -28,120,000.00 |
| 2. Other comprehensive incomes that cannot be transferred to profits or losses 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 incomes that will be reclassified into profits or losses | -404,218.61 | -1,571,455.76 |
| 1. Other comprehensive incomes that can be transferred to profits or losses under the equity method | -784,908.08 | -34,864.10 |
| 2. Changes in the fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive incomes | ||
| 4. Other creditors’ investment credit impairment provisions | ||
| 5. Cash flow hedging reserve | ||
| 6. Differences arising from foreign currency conversion under financial statements | 380,689.47 | -1,536,591.66 |
| 7. Others | ||
| Net after-tax amount of other comprehensive income attributable to minority shareholders | ||
| VII. Total comprehensive income | 395,141,226.73 | 3,870,163,304.63 |
| Total comprehensive income attributable to the owners of parent company | 395,141,226.73 | 3,870,163,304.63 |
| Total comprehensive income attributable to minority shareholders | ||
| VIII. Earnings per share: | ||
| (I) Basic income per share | 0.0735 | 0.8412 |
| (II) Diluted income per share | 0.0735 | 0.8412 |
In case of business combination under common control in the current period, the net profit realized by thecombined party before combination and that in the previous period are CNY 0.00.Legal representative: Hu Hanjie Person in charge of accounting: Ou AiminPerson in charge of the accounting organization: Si Yuzhuo
4. Profit statement of parent company
Unit: CNY
| Item | 2022 | Year 2021 |
| I. Operating revenue | ||
| Less: operating costs | ||
| Taxes and surcharges | 112,763.40 | 449.30 |
| Sales expenses | ||
| Administrative expenses | 3,603,463.88 | 3,666,639.35 |
| R&D expenses | ||
| Financial expenses | 88,801.55 | -1,526,376.09 |
| Including: interest expenses | 338,917.37 | 23,169.25 |
| Interest income | 250,875.82 | 1,553,654.55 |
| Add: Other incomes | 528,150.13 | 1,023,541.18 |
| Investment income (loss to be listed with “-”) | 3,163,832,151.72 | 3,478,121,966.42 |
| Including: income from investment in associates and joint ventures | 364,182,151.72 | 758,201,966.42 |
| 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 "-") | -208,297.04 | -26,576.46 |
| Asset impairment loss (loss to be listed with “-”) | ||
| Income from assets disposal (loss to be listed with “-”) | ||
| II. Operating profit (losses expressed with "-") | 3,160,346,975.98 | 3,476,978,218.58 |
| Add: non-operating income | 0.07 | 30.00 |
| Less: non-operating expenses | ||
| III. Total profit (total (losses expressed with "-") | 3,160,346,976.05 | 3,476,978,248.58 |
| Less: Income tax expenses | ||
| IV. Net profit (net losses expressed with "-") | 3,160,346,976.05 | 3,476,978,248.58 |
| (I) Net profit from continuing operations (net losses expressed with "-") | 3,160,346,976.05 | 3,476,978,248.58 |
| (II) Net profit from discontinuing operations (net losses expressed with "-") | ||
| V. Net after-tax amount of other comprehensive income | -784,908.08 | -34,864.10 |
| (I) Other comprehensive incomes that cannot be reclassified |
| into profits or losses | ||
| 1. Changes arising from re-measurement of the defined benefit plan | ||
| 2. Other comprehensive incomes that cannot be transferred to profits or losses 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 incomes that will be reclassified into profits or losses | -784,908.08 | -34,864.10 |
| 1. Other comprehensive incomes that can be transferred to profits or losses under the equity method | -784,908.08 | -34,864.10 |
| 2. Changes in the fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive incomes | ||
| 4. Other creditors’ investment credit impairment provisions | ||
| 5. Cash flow hedging reserve | ||
| 6. Differences arising from foreign currency conversion under financial statements | ||
| 7. Others | ||
| VI. Total comprehensive income | 3,159,562,067.97 | 3,476,943,384.48 |
| VII. Income per share: | ||
| (I) Basic income per share | ||
| (II) Diluted income per share |
5. Consolidated cash flow statement
Unit: CNY
| Item | 2022 | Year 2021 |
| I. Cash flows from operating activities: | ||
| Cash received from sales of goods and provision of services | 41,009,913,172.02 | 85,857,904,781.05 |
| 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 | ||
| 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 | 1,413,758,222.98 | |
| Other cash received relating to operating activities | 2,354,350,299.80 | 1,188,254,227.05 |
| Sub-total of cash inflows from operating activities | 44,778,021,694.80 | 87,046,159,008.10 |
| Cash paid for goods and services | 42,672,008,807.22 | 61,612,707,113.11 |
| 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 | 4,767,225,368.39 | 5,352,531,478.55 |
| Taxes paid | 979,329,590.98 | 2,729,240,802.70 |
| Other cash paid relating to operating activities | 1,494,701,897.56 | 2,148,556,334.58 |
| Sub-total of cash outflows from operating activities | 49,913,265,664.15 | 71,843,035,728.94 |
| Net cash flows from operating activities | -5,135,243,969.35 | 15,203,123,279.16 |
| II. Cash Flows from Investing Activities: | ||
| Cash received from the return of investment | ||
| Cash received from acquirement of investment income | 461,970,529.25 | 538,724,591.29 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 455,276,221.08 | 5,792,273.42 |
| Net cash received from the disposal of subsidiaries and other business entities | ||
| Cash received from other investing activities | 798,551,894.65 | 4,593,823,672.39 |
| Sub-total of cash inflows from investing activities | 1,715,798,644.98 | 5,138,340,537.10 |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | 2,828,776,203.30 | 2,491,852,081.71 |
| Cash paid to acquire investments | 516,780,000.00 | 44,000,000.00 |
| Net increase in impawn loans | ||
| Net cash paid to acquire subsidiaries and other business units | ||
| Other cash paid relating to investment activities | ||
| Sub-total of cash outflows from investment activities | 3,345,556,203.30 | 2,535,852,081.71 |
| Net cash flows from investment activities | -1,629,757,558.32 | 2,602,488,455.39 |
| III. Cash flows from financing activities: | ||
| Cash received from absorbing investment | 332,790,748.16 | |
| Including: Cash received by subsidiaries absorbing minority shareholders' investments |
| Cash received from borrowings | ||
| Cash received relating to other financing activities | ||
| Sub-total of cash inflows from financing activities | 332,790,748.16 | |
| Cash paid for repayment of debts | ||
| Cash paid for distribution of dividends, profits or interest repayment | 3,025,174,498.45 | 2,325,326,934.50 |
| Including: dividends and profits paid to minority shareholders by subsidiaries | ||
| Other cash paid relating to financing activities | 55,183,852.56 | 55,542,434.20 |
| Sub-total of cash outflows from financing activities | 3,080,358,351.01 | 2,380,869,368.70 |
| Net cash flows from financing activities | -3,080,358,351.01 | -2,048,078,620.54 |
| IV. Effects from the change of exchange rate on cash and cash equivalents | 352,712.97 | -1,536,440.94 |
| V. Net increase in cash and cash equivalents | -9,845,007,165.71 | 15,755,996,673.07 |
| Add: opening balance of cash and cash equivalents | 30,542,676,891.89 | 14,786,680,218.82 |
| VI. Ending balance of cash and cash equivalents | 20,697,669,726.18 | 30,542,676,891.89 |
6. Cash flow statement of the parent company
Unit: CNY
| Item | 2022 | Year 2021 |
| I. Cash flows from operating activities: | ||
| Cash received from sales of goods and provision of services | ||
| Tax refunds received | 735,000.75 | |
| Other cash received relating to operating activities | 3,050,893,952.65 | 13,223,474.72 |
| Sub-total of cash inflows from operating activities | 3,051,628,953.40 | 13,223,474.72 |
| Cash paid for goods and services | ||
| Cash paid to and for employees | 396,000.00 | 519,000.00 |
| Taxes paid | 96,728.40 | 8,939,110.30 |
| Other cash paid relating to operating activities | 3,276,840,147.92 | 1,259,995,405.34 |
| Sub-total of cash outflows from operating activities | 3,277,332,876.32 | 1,269,453,515.64 |
| Net cash flows from operating activities | -225,703,922.92 | -1,256,230,040.92 |
| II. Cash Flows from Investing Activities: | ||
| Cash received from the return of investment | ||
| Cash received from acquirement of investment income | 3,246,753,477.04 | 3,253,736,791.37 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | ||
| Net cash received from the disposal of subsidiaries and other business entities | ||
| Cash received from other investing activities | 250,875.82 | 1,553,654.55 |
| Sub-total of cash inflows from investing activities | 3,247,004,352.86 | 3,255,290,445.92 |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets |
| Cash paid to acquire investments | ||
| Net cash paid to acquire subsidiaries and other business units | ||
| Other cash paid relating to investment activities | ||
| Sub-total of cash outflows from investment activities | ||
| Net cash flows from investment activities | 3,247,004,352.86 | 3,255,290,445.92 |
| III. Cash flows from financing activities: | ||
| Cash received from absorbing investment | 332,790,748.16 | |
| Cash received from borrowings | ||
| Cash received relating to other financing activities | ||
| Sub-total of cash inflows from financing activities | 332,790,748.16 | |
| Cash paid for repayment of debts | ||
| Cash paid for distribution of dividends, profits or interest repayment | 3,025,174,498.45 | 2,325,326,934.50 |
| Other cash paid relating to financing activities | ||
| Sub-total of cash outflows from financing activities | 3,025,174,498.45 | 2,325,326,934.50 |
| Net cash flows from financing activities | -3,025,174,498.45 | -1,992,536,186.34 |
| IV. Effects from the change of exchange rate on cash and cash equivalents | ||
| V. Net increase in cash and cash equivalents | -3,874,068.51 | 6,524,218.66 |
| Add: opening balance of cash and cash equivalents | 8,109,077.01 | 1,584,858.35 |
| VI. Ending balance of cash and cash equivalents | 4,235,008.50 | 8,109,077.01 |
7. Consolidated statement of changes in owners' equity
Amount in the current period
Unit: CNY
| Item | 2022 | ||||||||||||||
| Owners' equity attributable to the parent company | Minority equity | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: treasury shares | Other comprehensive incomes | Special reserves | Surplus reserves | General risk provision | Undistributed profits | Others | Subtotal | |||||
| Preferred Shares | Perpetual bonds | Others | |||||||||||||
| I. Ending balance of the previous year | 4,654,114,613 | 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 | 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 period (decrease expressed with "-") | -2,148,958.00 | 11,723,143.56 | -42,623,302.27 | 27,395,781.39 | 55,022,143.11 | 316,034,697.61 | -2,973,463,750.72 | -2,522,813,640.78 | -2,522,813,640.78 | ||||||
| (I) Total | 27,395,781.39 | 367,745,445.3 | 395,141,226.73 | 395,141,226.73 | |||||||||||
| comprehensive income | 4 | ||||||||||||||
| (II) Invested and decreased capital of owners | -2,148,958.00 | 11,723,143.56 | -42,623,302.27 | 52,197,487.83 | 52,197,487.83 | ||||||||||
| 1. Ordinary shares invested by owners | -2,148,958.00 | -11,582,883.62 | -13,731,841.62 | -13,731,841.62 | |||||||||||
| 2. Capital contributed by holders of other equity instruments | |||||||||||||||
| 3. Amounts of share-based payments recorded in owner's equity | 23,184,433.06 | 23,184,433.06 | 23,184,433.06 | ||||||||||||
| 4. Others | 121,594.12 | -42,623,302.27 | 42,744,896.39 | 42,744,896.39 | |||||||||||
| (III) Profit distribution | 316,034,697.61 | -3,341,209,196.06 | -3,025,174,498.45 | -3,025,174,498.45 | |||||||||||
| 1. Appropriation to surplus reserves | 316,034,697.61 | -316,034,697.61 | |||||||||||||
| 2. General risk provision withdrawn | -3,025,174,498.45 | -3,025,174,498.45 | -3,025,174,498.45 | ||||||||||||
| 3. Distribution to owners (or shareholders) | |||||||||||||||
| 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 income | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserves | 55,022,143.11 | 55,022,143.11 | 55,022,143.11 | ||||||||||||
| 1. Appropriation in the current period | 93,946,199.30 | 93,946,199.30 | 93,946,199.30 | ||||||||||||
| 2. Use in the current period | -38,924,056.19 | -38,924,056.19 | -38,924,056.19 | ||||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of the current period | 4,651,965,655 | 10,451,088,236.74 | 267,837,184.11 | -5,399,120.81 | 370,420,291.86 | 3,058,249,602.44 | 5,460,939,601.36 | 23,719,427,082.48 | 23,719,427,082.48 |
Amount of the Previous Period
Unit: CNY
| Item | Year 2021 | ||||||||||||||
| Owners' equity attributable to the parent company | Minority equity | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: treasury shares | Other comprehensive incomes | Special reserves | Surplus reserves | General risk provision | Undistributed profits | Others | Subtotal | |||||
| Preferred Shares | Perpetual bonds | Others | |||||||||||||
| I. Ending balance of the previous year | 4,609,666,212 | 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 | |||||||||||||||
| Correction of errors in the previous period | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the current year | 4,609,666,212 | 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 | |||||||
| III. Increase/decrease in amount of the current period (decrease expressed with "-") | 44,448,401.00 | 341,084,325.84 | 310,460,486.38 | -29,691,455.76 | 61,826,682.27 | 347,697,824.86 | 1,226,830,001.03 | 1,681,735,292.86 | 1,681,735,292.86 | ||||||
| (I) Total comprehensive income | -29,691,455.76 | 3,899,854,760.39 | 3,870,163,304.63 | 3,870,163,304.63 | |||||||||||
| (II) Invested and decreased capital of owners | 44,448,401.00 | 341,084,325.84 | 310,460,486.38 | 75,072,240.46 | 75,072,240.46 | ||||||||||
| 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 | 44,448,401.00 | 286,505,913.88 | 330,954,314.88 | 330,954,314.88 | |||||||||||
| 4. Others | 54,578,411.96 | 310,460,486.38 | -255,882,074.42 | -255,882,074.42 | |||||||||||
| (III) Profit distribution | 347,697,824.86 | -2,673,024,759.36 | -2,325,326,934.50 | -2,325,326,934.50 | |||||||||||
| 1. Appropriation to surplus reserves | 347,697,824.86 | -347,697,824.86 | |||||||||||||
| 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 income | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserves | 61,826,682.27 | 61,826,682.27 | 61,826,682.27 | ||||||||||||
| 1. Appropriation in the current period | 119,861,553.93 | 119,861,553.93 | 119,861,553.93 | ||||||||||||
| 2. Use in the current period | -58,034,871.66 | -58,034,871.66 | -58,034,871.66 | ||||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of the current period | 4,654,114,613 | 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 |
8. Statement of changes in owners' equity of the parent company
Amount in the current period
Unit: CNY
| Item | 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: treasury shares | Other comprehensive incomes | Special reserves | Surplus reserves | Undistributed profits | Others | Total owners' equity | |||
| Preferred Shares | Perpetual bonds | Others | ||||||||||
| I. Ending balance of the previous year | 4,654,114,613 | 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 | 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 amount of the current period (decrease expressed with "-") | -2,148,958.00 | 11,601,549.44 | -42,623,302.27 | -784,908.08 | 316,034,697.61 | -180,862,220.01 | 186,463,463.23 | |||||
| (I) Total comprehensive income | -784,908.08 | 3,160,346,976.05 | 3,159,562,067.97 | |||||||||
| (II) Invested and decreased capital of | -2,148,958.00 | 11,601,549.44 | -42,623,302.27 | 52,075,893.71 | ||||||||
| owners | ||||||||||||
| 1. Ordinary shares invested by owners | -2,148,958.00 | -11,582,883.62 | -13,731,841.62 | |||||||||
| 2. Capital contributed by holders of other equity instruments | 23,184,433.06 | -28,891,460.65 | 52,075,893.71 | |||||||||
| 3. Amounts of share-based payments recorded in owner's equity | ||||||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | 316,034,697.61 | -3,341,209,196.06 | -3,025,174,498.45 | |||||||||
| 1. Appropriation to surplus reserves | 316,034,697.61 | -316,034,697.61 | ||||||||||
| 2. Distribution to owners (or shareholders) | -3,025,174,498.45 | -3,025,174,498.45 | ||||||||||
| 3. 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 income | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserves | ||||||||||||
| 1. Appropriation in the current period | ||||||||||||
| 2. Use in the current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Ending balance of the current period | 4,651,965,655 | 12,278,939,213.88 | 267,837,184.11 | -480,794.77 | 1,827,531,841.54 | 6,793,780,964.90 | 25,283,899,696.44 |
Amount of the Previous Period
Unit: CNY
| Item | Year 2021 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: treasury shares | Other comprehensive incomes | Special reserves | Surplus reserves | Undistributed profits | Others | Total owners' equity | |||
| Preferred Shares | Perpetual bonds | Others | ||||||||||
| I. Ending balance of the previous year | 4,609,666,212 | 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 | 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 "-") | 44,448,401.00 | 341,214,064.59 | 310,460,486.38 | -34,864.10 | 347,697,824.86 | 803,953,489.22 | 1,226,818,429.19 | |||||
| (I) Total comprehensive income | -34,864.10 | 3,476,978,248.58 | 3,476,943,384.48 | |||||||||
| (II) Invested and decreased capital of owners | 44,448,401.00 | 341,214,064.59 | 310,460,486.38 | 75,201,979.21 | ||||||||
| 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 | 44,448,401.00 | 286,505,913.88 | 330,954,314.88 | |||||||||
| 4. Others | 54,708,150.71 | 310,460,486. | -255,752,335.67 | |||||||||
| 38 | ||||||||||||
| (III) Profit distribution | 347,697,824.86 | -2,673,024,759.36 | -2,325,326,934.50 | |||||||||
| 1. Appropriation to surplus reserves | 347,697,824.86 | -347,697,824.86 | ||||||||||
| 2. Distribution to owners (or shareholders) | -2,325,326,934.50 | -2,325,326,934.50 | ||||||||||
| 3. 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 income | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserves | ||||||||||||
| 1. Appropriation in the current period | ||||||||||||
| 2. Use in the current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Ending balance of the current period | 4,654,114,613 | 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. Company Profile
1. 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 exclusively established by China FAW Group Corporation. On June 18,1997, FAW Car was approved by the China Securities Regulatory Commission to issue shares publicly andlisted 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,and received the Confirmation of Securities Transfer Registration issued by China Securities Depository &Clearing Co., 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 andapproved the adjustment plan for major asset reorganization. After the adjustment, FAW Car transferred all itsassets and liabilities except the equity and some reserved assets of First Automobile Finance Co., Ltd. andSanguard Automobile Insurance Co., Ltd. to FAW Bestune, and then replaced 100% equity of FAW BestuneCar Co., Ltd. with the equivalent part of 100% equity of FAW Jiefang Automotive Co., Ltd. held by FAW. Atthe same time, FAW Car purchased the difference between the purchased assets and the sold assets from FAWby 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 themajor asset replacement, share issuance and cash payment for assets purchase and related transactions of FAWCar.The Capital Verification Report (XYZH/2020BJA100417) issued by ShineWing Accounting Firm (specialgeneral partnership) indicates that, as of March 19, 2020, all proposed purchased assets, i.e. 100% equity ofJiefang Limited, to be replaced by FAW Car to FAW by issuing shares had been transferred to FAW Car. Theindustrial and commercial change registration procedures of Jiefang Limited had been completed, all proposedassets, i.e. 100% equity of FAW Bestune, had been transferred to FAW, and the industrial and commercialchange registration procedures of FAW Bestune had been completed. The registered capital of FAW Car isCNY 4,609,666,212.00 after 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)and Its Abstract, the Proposal on the Regulations for the Implementation Assessment of Restricted ShareIncentive Plan of FAW JIEFANG GROUP CO., LTD., the Proposal on the Regulations for Restricted ShareIncentive of FAW JIEFANG GROUP CO., LTD., and the Proposal on Requesting the Shareholders Meeting toAuthorize the Board of 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 andapproved the Proposal on Adjusting the List of the First Batch of Incentive Objects and the Number of Grants inthe Phase I Restricted Share Incentive Plan and the Proposal on Granting Restricted Shares to the IncentiveObjects of the Phase I Restricted Share 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, WuBilei and Wang Jianxun, and 310 other core employees with the title of senior director and above were grantedto subscribe for 40,987,657 new shares of the Company at an issue price of CNY 7.54 per share, and theregistered capital of the Company was changed to CNY 4,650,653,869.00. This change was verified by theCapital Verification Report (ZTYZ (2021) No. 110C000033) issued by Grant Thornton Accounting Firm(special general partnership). On February 1, 2021, the Company disclosed the Announcement on theCompletion of the First Grant Registration of Phase I Restricted Share Incentive Plan.On December 9, 2021, the Company held the 20th meeting of the 9th Board of Directors and the 19th meetingof the 9th Board of Supervisors, and reviewed and approved the Proposal on Granting Reserved Part ofRestricted Shares in the Phase I Restricted Share Incentive Plan to Incentive Objects and the Proposal onRepurchase and Cancellation of Partial Restricted Shares in the Phase I Restricted Share Incentive Planrespectively. 33 core technicians and management backbones, including Wang Manhong, Zhang Yu and Qu Yi,subscribed for 3,721,601 new shares at an issue price of CNY 6.38/share, and 260,857 shares were repurchasedfrom 2 employees who were no longer eligible for incentive objects at a price of CNY 7.04/share. Theregistered capital of the Company was changed to CNY 4,654,114,613.00. This change was verified by theCapital Verification Report (ZTYZ (2021) No. 110C000927) issued by Grant Thornton Accounting Firm(special general partnership). On January 6, 2022, the Company disclosed the Announcement on the Completionof Registration of the Grant of Reserved Part of Restricted Shares in the Phase I Restricted Share IncentivePlan. On January 17, 2022, the Company disclosed the Announcement on the Completion of Repurchase andCancellation of Some Restricted Shares.
On August 29, 2022, the Company held the 26th meeting of the 9th Board of Directors and the 23rd meeting ofthe 9th Board of Supervisors, and at the meetings, the?Proposal on Repurchase and Cancellation of PartialRestricted Shares in the Phase I Restricted Share Incentive Plan were deliberated and adopted. It was agreed torepurchase 789,711 shares from 6 employees who are no longer qualified as incentive objects at a price of CNY
6.39/share, and the registered capital of the Company was changed to CNY 4,653,324,902.00. This change wasverified according to the Capital Verification Report (XYZH/2022CCAA2B0016) issued by?ShineWingAccounting Firm (special general partnership). On November 14, 2022, the Company disclosed theAnnouncement on Completion of Repurchase and Cancellation of Some Restricted Shares.On December 15, 2022, the Company held the 30th meeting of the 9th Board of Directors and the 26th meetingof the 9th Board of Supervisors to deliberate and adopt the Proposal on Repurchase and Cancellation of PartialRestricted Shares in the Phase I Restricted Share Incentive Plan, and agreed to repurchase 1,359,247 sharesfrom 11 employees who are no longer qualified as incentive objects at a price of CNY 6.39 per share. Theregistered capital of the Company was changed to CNY 4,651,965,655.00. This change was verified accordingto the Capital Verification Report (XYZH/2023CCAA2B0001) issued by ShineWing Accounting Firm (specialgeneral partnership). On January 17, 2023, the Company disclosed the Announcement on Completion ofRepurchase and Cancellation of Some Restricted Shares.The Company establishes a corporate governance structure consisting of the Shareholders' Meeting, the Boardof Directors and the Board of Supervisors, and has one wholly-owned subsidiary, Jiefang Limited. JiefangLimited has five wholly-owned subsidiaries, including FAW Jiefang (Qingdao) Automotive Co., Ltd., WuxiDahao Power Co., Ltd., FAW Jiefang Dalian Diesel Engine Co., Ltd., FAW Jiefang Austria R&D Co., Ltd., andFAW Jiefang New Energy Automotive Sales Co., Ltd. It also has 9 associated companies, including FirstAutomobile Finance Co., Ltd., Sanguard Automobile Insurance Co., Ltd., FAW Changchun Baoyou SteelProcessing and Distribution Co., Ltd., FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd.,Changchun Wabco Automotive Control System Co., Ltd., Suzhou Zhito Technology Co., Ltd., FAW JiefangFujie (Tianjin) Technology Industry Co., Ltd., SmartLink and Foshan Diyiyuansu New Energy Technology Co.,LTD.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, dieselengines and accessories (non-vehicle), mechanical equipment and accessories, instruments, technical services,technical consultation, installation and maintenance of mechanical equipment, lease of mechanical equipmentand facilities, lease of houses and workshops, labor services (excluding foreign labor cooperation and domesticlabor dispatch), sales of steel, automobile trunks, hardware & electrical equipment and electronic products,
testing of internal combustion engine, engineering technology research and testing, advertising design,production and release, import and export of goods and technologies (excluding publication import business andcommodities and technologies that are restricted or prohibited for import and export by the state); (Thefollowing items are operated by the branch company) Chinese food production and sales, warehousing andlogistics (excluding flammable, explosive and precursor dangerous chemicals), automobile repair, tankmanufacturing of chemical liquid tanker, automobile trunk manufacturing (items subject to approval accordingto law can be operated only after being approved by relevant authorities).Registered address of the Company: No. 2259, Dongfeng Street, Changchun Automobile Development Zone,Jilin Province.The 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 ofDirectors of the Company on March 31, 2023.
2. Scope of consolidated financial statements
In 2022, the Company has 1 secondary subsidiary and 5 tertiary subsidiaries included in the scope ofconsolidation. For details, please refer to VIII "Changes in Consolidation Scope" and IX "Equity in OtherEntities" of 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 bythe Ministry of Finance and its application guidelines, interpretations and other relevant provisions (hereinaftercollectively referred to as "ASBE"). In addition, the Company also discloses relevant financial informationaccording to the Disclosure of Company Information Disclosure Rules No. 15. - General Provisions onFinancial Reporting (revised in 2014) issued by China Securities Regulatory Commission.
2. Going concern
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 ona historical cost basis except for certain financial instruments. If the assets are impaired, the correspondingprovision for impairment shall be made as specified.
V. Significant Accounting Policies and Accounting EstimatesTips 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" 22, 25 and 33 in Section X - Financial Report.
1.Declaration on Compliance with the Accounting Standard for Business EnterprisesThe financial statements prepared by the Company met the requirements of ASBE and truly and fully reflectedthe consolidated and company’s financial position as of December 31, 2022 of the Company and its informationsuch as consolidated and company’s financial performance and consolidated and company’s cash flow for theyear then ended.
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 ofthe Company determine EUR as the recording currency according to the currency in the main economicenvironment in which they operate. The Company uses CNY to prepare the financial statements.
5.Accounting Treatment Method for Business Combination under Common Control and DifferentControl
(1) Business combinations involving enterprises under common controlAs to the business combination under common control, the assets and liabilities of the combined party obtainedby the combining party are calculated in the book value in the consolidated financial statements of the ultimatecontroller by the combined party on the combination date. The capital reserve (stock premium) is adjustedbased on the difference between the book value of the combination consideration and the book value of the net
assets obtained in the combination. The retained earnings are adjusted if the capital reserve (stock premium) isinsufficient 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 theshareholding proportion on the combination date is taken as the initial cost of the investment. The capitalreserve (stock premium) is adjusted based on the difference between the initial investment cost and the sum ofthe book value of the pre-combination investment and the book value of the newly paid consideration on thecombination date, and the retained 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 thecombining party in the combination are measured based on the book value of the ultimate controlling party inthe consolidated financial statements on the combination date. The capital reserve (stock premium) is adjustedbased on the difference between the sum of the book value of the pre-combination investment and the bookvalue of the newly paid consideration on the combination date and the book value of the net assets obtained inthe combination. The retained earnings are adjusted if the capital reserve is insufficient for offset. The long-termequity investment held before the acquisition of the combined party’s control by the combining party and theprofit or loss, other comprehensive incomes and changes in other owners’ equities that have been recognizedduring the period from the date of acquisition of the original equity, or the date of common control of thecombining party and the combined entity (which is later) to the combination date shall offset against theretained opening earnings or current profit or loss respectively during the period of comparative statement.
(2) Business combinations not involving enterprises under common controlIn 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 overthe acquiree. The assets, liabilities and contingent liabilities of the acquiree obtained are recognized as per thefair value on the acquisition date.Where the combination cost is greater than the fair value of identifiable net assets obtained from the acquiree,the difference shall be recognized as goodwill and subsequently measured by deducting the accumulateddepreciation provision by cost; Where the combination cost is less than the fair value of identifiable net assetsobtained from the acquiree, the difference shall be included in current profits and losses after review.Business combination not under common control realized step-by-step through multiple transactions
In the separate financial statement, the sum of the book value of the equity investment of the acquiree heldbefore the acquisition date and the new investment cost on the acquisition date shall be recognized as the initialinvestment cost for this investment. For other comprehensive incomes from original equity investmentrecognized by the equity method before the purchase date, they are not disposed. This investment is disposed onthe same basis as the investee directly disposing related assets and liabilities. The owners’ equity recognizeddue to changes in other owners’ equities of the investee other than net profit or loss, other comprehensiveincomes and profit distribution, are transferred into the current profit or loss when this investment is disposed. Ifthe equity investment held before the acquisition date is measured at fair value, the accumulated changes in fairvalue originally included in other comprehensive income are transferred to retained earnings when cost methodis adopted for calculation.In the consolidated financial statements, the combination cost is the sum of the consideration paid on theacquisition date and the fair value of the acquiree's equity already held before the acquisition date on theacquisition date. The acquiree's equity held before the acquisition date shall be remeasured at fair value of theequity on the acquisition date. The difference between the fair value and its book value shall be included ininvestment income for the current period. If the acquiree's equity held before the acquisition date involves othercomprehensive income, changes in other owner's equities shall be transformed into the current profit on theacquisition date, except other comprehensive income generated due to remeasuring the change in net liabilitiesor new assets of defined benefit plan (DBP) by the investee.
(3) Disposal of transaction expenses in business combination
The overhead for the business combination of the combining party, including the expenses for audit, legalservices, assessment, and other administrative expenses, shall be recorded in profit or loss for the current periodwhen incurred. The transaction expenses of equity securities or debt securities issued as consolidatedconsideration are included in the initially recognized amount of equity securities or debt securities.
6. Preparation method of consolidated financial statements
(1) Scope of consolidation
The scope of consolidated financial statements is determined on the basis of control. Control refers to the powerof the Company over the investee, with which the Company enjoys variable returns through participating inrelated activities of the investee and is able to influence its amount of return with the power over the investee.Subsidiaries refer 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 with other relevant data. The major accounting policies and accountingperiods adopted by the subsidiaries are defined as the same as that of the Company during preparing theconsolidated financial statements. The significant transactions and balances between inter-companies should beeliminated.Where a subsidiary or business has been acquired through a business combination involving enterprises undercommon control in the reporting period, the subsidiary or business is deemed to be included in the consolidatedfinancial statements from the date they are controlled by the ultimate controlling party. Their operating resultsand cash flows are respectively included in the consolidated income statement and consolidated cash flowstatement from the date they are controlled by the ultimate controlling party.For the subsidiaries and businesses increased in the reporting period due to business combination underdifferent control, their earnings, expenses and profits from the acquisition date to the end of the reporting periodare included in the consolidated profit statement, and their cash flows are included in the consolidated cash flowstatement.The portion of shareholders’ equity of subsidiaries not belonging to the Company shall be listed separatelyunder the item “Shareholders’ Equity” in consolidated balance sheet as minority shareholders’ equity. Theportion of net profit or loss of subsidiaries in current period belonging to minority shareholders’ equity shall belisted separately under the item “Minority Shareholders’ Profit or Loss” in the consolidated income statement. Ifthe loss of a subsidiary borne by minority shareholders exceeds the amount of their shares of owners' equity inthe subsidiary at the beginning, 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 differencebetween the newly acquired long-term equity investment cost from the purchase of minority equity and theshare of net assets in the subsidiary calculated constantly from the purchase date or combination date as per thenewly increased shareholding proportion, and the difference between the disposal price obtained from thepartial disposal of equity investment in the subsidiary without losing the right of control and the share of netassets in the subsidiary calculated continuously from the purchase date or combination date corresponding tothe disposed long-term equity investment. The retained earnings are adjusted if the capital reserve is insufficientfor offset.
(4) Disposal with loss of control over subsidiaries
If the control power on the original subsidiaries is lost due to the disposal of part of equity investment or otherreason, the remaining equity shall be recalculated at fair value on the day when the control power is lost. Thebalance from the sum of consideration obtained from the disposal of equity and the fair value of the remainingequity minus the sum of the share of net assets book value and the goodwill of original subsidiaries calculatedcontinuously starting from the purchase date as per the original shareholding ratio shall be included in currentinvestment income at the loss of control.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 generatedfrom the 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 ofthe Company 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 itsshares.
(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 equitymethod accounting 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 tothe short-term and highly liquid investments held by the Company that are readily convertible into knownamounts of cash 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 amount in recording currency at theexchange rate determined by systematic and reasonable methods.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 sheetdate is included in current profits and losses. Foreign currency non-monetary items measured at historical costare still converted at the spot exchange rate on the transaction date. Foreign currency non-monetary itemsmeasured at fair value are converted at the spot exchange rate on the date when the fair value is determined. Thedifference between the converted recording currency amount and the original recording currency amount isincluded in current profits and losses or other comprehensive income according to the nature of the non-monetary items.
(2) Conversion of foreign currency statements
At the balance sheet date, when translating the foreign currency financial statements of overseas subsidiaries,the assets and liabilities of the balance sheet are translated to CNY using the spot exchange rate at the balancesheet date. Items of the shareholders’ equity, except for “undistributed profits”, are translated at the spotexchange rate at the dates on which such items arose.The income and expense items in the profit statement are converted at the exchange rate determined bysystematic and reasonable methods.All items in the cash flow statement are converted at the exchange rate determined by systematic and reasonablemethods. As adjustment item for influence amount of cash, exchange rate movement should be independentlypresented as "Influence of exchange rate movement to cash and cash equivalent" in cash flow statement.Differences arising from the translation of financial statements are separately presented as “othercomprehensive income” in the shareholders’ equity of the balance sheet.
During the disposal of overseas operation and when the right of control is lost, the conversion difference offoreign currency statements listed under the shareholders' equity items in the balance sheet and related to theoverseas operation is transferred to the current profits and losses of disposal in full or as per the disposalproportion of the overseas operation.
10. Financial instruments
Financial instruments refer to contracts that form the financial assets of a party, and form financial liabilities orequity 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.If one of the following conditions is met, the financial assets are terminated:
① The right of the contract to receive the cash flows of financial assets terminates;
② The financial asset has been transferred, and is in accordance with the following conditions forderecognition.If the obligations of financial liability have been discharged in total or in part, derecognize all or part of it. TheCompany (the Debtor) signs an agreement with the Creditor to replace the existing financial liabilities with newfinancial liabilities; the existing financial liabilities are derecognized and the new financial liabilities arerecognized when the contractual terms of the new financial liabilities and those of the existing financialliabilities are different in essence.Financial assets transacted in a conventional way are subject to accounting recognition and derecognition on thetransaction 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 whosechanges are included in other comprehensive income, and financial assets measured at fair value and whosechanges are included in the current profits or losses.Financial assets measured at amortized cost
The Company classifies the financial assets that meet the following conditions but are not designated to bemeasured at fair value and with the changes included in current profits or losses as the financial assets measuredat amortized cost:
??The Company manages the financial assets in order to collect contractual cash flows;??The contract terms of the financial assets stipulate that, the cash flow generated on a specific date is only
the payment of the principal and the interest based on the outstanding principal amount.After initial recognition, such financial assets are measured at amortized cost using the effective interest method.Any gains or losses on financial assets at amortized cost which are not part of the hedging relationship arecharged to the current profit or loss at derecognition, amortization using the effective interest method, orrecognition of impairment.Financial assets measured at fair value and whose changes are included in other comprehensive incomeThe Company classifies financial assets that meet the following conditions and are not designated to befinancial assets at fair value through profit or loss as financial assets at fair value through other comprehensiveincomes (debt instruments):
??The Company manages the financial assets in order not only to collect contractual cash flows and but also
to sell the financial assets;??The contract terms of the financial assets stipulate that, the cash flow generated on a specific date is only
the payment of the principal and the interest based on the outstanding principal amount.After initial recognition, such financial assets are subsequently measured at fair value. Interests, impairmentlosses or gains and exchange gains and losses calculated with the effective interest method are included in thecurrent profits and losses, and other gains or losses are included in other comprehensive income. Atderecognition, cumulative gains or losses previously charged to other comprehensive income are transferredfrom other comprehensive income and charged to the current profit or loss.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 whosechanges are included in other comprehensive income, the Company classifies all other financial assets into thatmeasured at fair value and whose changes are included in current profits or losses. At the time of initialrecognition, the Company irrevocably designates some financial assets that should have been measured at
amortized cost or that should be measured at fair value and whose changes are included in other comprehensiveincome as the financial assets measured at fair value and whose changes are included in current profits or lossesin order to eliminate or significantly 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 managefinancial assets to generate cash flows. The business model determines the cash flow source of the financialassets managed by the Company, which may be the collection of contract cash flow, the sale of financial assetsor both. The Company determines the business model for managing financial assets based on objective factsand the specific 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 andinterest based on the amount of outstanding principal. Principal refers to the fair value of financial assets at thetime of initial recognition; interest includes consideration for the time value of money, credit risk related to theamount of outstanding principal in a specific period, and other basic borrowing risks, costs and profits. Inaddition, the Company evaluates the contract terms that may cause changes in the time distribution or amount ofcontractual cash flow of financial assets to determine whether they meet the requirements of the abovecontractual cash flow characteristics.All affected financial assets are reclassified on the first day of the first reporting period after the business modeis changed only if the Company changes the business mode for managing financial assets, otherwise financialassets shall not be reclassified after initial recognition.Financial assets are measured at fair value at the time of initial recognition. The transaction expenses of thefinancial assets measured at fair value and whose changes are included into current profits or losses are directlyincluded in the current profits or losses; the transaction expenses of other financial assets are included in theinitially recognized amount. For accounts receivable arising from the sale of products or the provision ofservices that do not include or take into account significant financing components, the Company takes theconsideration amount entitled to receive in expectation 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 financial
liabilities measured at amortized cost. For financial liabilities not classified as at fair value through profit or lossfinancial liabilities, the transaction costs are recognized in the initially recognized amount.Financial liabilities at fair value through profit or lossFinancial liabilities at fair value through profit or loss include financial liabilities held for trading and thosedirectly designated at the time of initial recognition as financial liabilities at fair value through profit or loss.Such financial liabilities are subsequently measured at fair value, all realized and unrealized gains and losses arerecognized in profit or loss for the current period.Financial liabilities measured at amortized costOther financial liabilities shall be measured subsequently by the effective interest method at the amortized cost,and gains or losses arising from the derecognition or amortization shall be included in the current profit or loss.Distinction between financial liabilities and equity instrumentsA financial liability is recognized if one of the following conditions is satisfied:
① a contractual obligation to deliver cash or another financial asset to another entity;
② a contractual obligation to exchange financial assets or financial liabilities with another entity underconditions that are potentially unfavorable to the Company;
③ Non-derivative instrument contract that will or may be settled with the company's own equity instruments.The Company is obliged to deliver its own equity instruments in variable quantities according to the contract.
④ Derivative instrument contracts which must or may be settled with the enterprise's own equity instrumentsin the future, except for those with a fixed amount of equity instruments to exchange for a fixed amount of cashor other financial assets.Equity instrument refers to the contract which can prove the residual equity in the assets of an enterprise afterall liabilities 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 enterprise's own equity instrument, the enterprise's ownequity instrument used as a settled instrument need to be considered whether as the substitute of cash or otherfinancial assets or for the holder of the instrument enjoys the residual interest of assets after the issuer deducted
all liabilities. If meets the former condition, the financial instrument should be recognized as financial liabilities;If meets the later condition, the financial instrument is recognized as equity instruments.
(4) Fair value of financial instruments
For the determination methods for fair value of financial assets and liabilities, refer to 39 "Others" in V"Significant Accounting Policies and Accounting Estimates" of Section X - Financial Report.
(5) Impairment of financial assets
The Company carries out impairment accounting treatment and recognizes the loss provision for the followingitems based on the expected credit loss:
??Financial Assets Measured at Amortized Costs??Receivables and debt investment measured at fair value with changes included in other comprehensive
income;
??Contract assets as defined in ASBE 14 - Revenue;??Lease receivables;??Financial guarantee contracts (except those formed by measuring at fair value, with its changesincluded in current profits and losses, with the transfer of financial assets failing to meet the conditionsfor derecognition or those continue to be involved in the transferred financial assets).Measurement of Expected Credit LossThe expected credit loss refers to the weighted average of credit loss of financial instruments that are weightedby the risk of default. Credit loss refers to the difference between all contractual cash flows receivableaccording to the contract and discounted according to the original effective interest rate and all cash flowsreceivable of the Company, 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 presentvalue of the difference between the cash flow receivable from the contract and the cash flow expected to bereceived, and recognizes 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,and the Company measures the provision for loss based on the expected credit loss in the next 12 months. Thefinancial instrument with credit loss increased significantly since its initial recognition but without creditimpairment is in phase II, and the Company measures the provision for loss based on the expected credit loss ofthe instrument in the whole duration. The financial instrument with credit impairment since its initialrecognition is in phase III, and the Company measures the provision for loss based on the expected credit loss ofthe instrument in the whole duration.The Company assumes that the credit risk of the financial instruments with low credit risk on the balance sheetdate has not increased significantly since the initial recognition, and measures the provision for loss based onthe expected 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 thewhole expected duration of the financial instruments. The expected credit loss in the next 12 months refers tothat caused by the possible default events of the financial instruments within 12 months after the balance sheetdate (or the expected duration if the expected duration of financial instruments is less than 12 months), which isa part of the expected 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).For financial instruments in the first and second stages and with low credit risk, the Company calculates interestincome according to the book balance before deducting provision for impairment and the actual interest rate.For financial instruments in the third stage, the interest income is calculated according to their book balanceminus the amortized cost after accrual of impairment provision and the effective interest rate.Notes receivable, accounts receivable and contractual assetsFor notes receivable, accounts receivable and contractual assets, the Company always measures their lossprovision according to the amount equivalent to the expected credit loss in the whole duration no matterwhether there is any significant financing component.If the expected credit loss of a single financial asset cannot be evaluated at a reasonable cost, the Companydivides the notes receivable and accounts receivable into portfolios according to the credit risk characteristicsbased on the following, and calculates the expected credit loss on the basis of the portfolios:
A. Notes Receivable
??Notes receivable portfolio 1: bank acceptance bills??Notes receivable portfolio 2: commercial acceptance bills
B. Accounts Receivable??Aging portfolio
C. Contract assets??Aging portfolio
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 thewhole duration.The Company calculates the expected credit loss of the accounts receivable divided into portfolios by referringto the historical credit loss experience, combining the current situation and the forecast of the future economicsituation, and preparing a comparison table of accounts receivable aging/overdue days and the expected creditloss rate for the whole duration.Other accounts receivableThe Company divides other receivables into several portfolios according to the credit risk characteristics basedon the following, and calculates the expected credit loss according to the portfolios:
??Portfolio 1 of other receivables: portfolio of margin, deposit and reserve fund??Portfolio 2 of other receivables: aging portfolio
The Company calculates the expected credit loss of other receivables divided into portfolios according to thedefault risk 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 tothe credit risk characteristics based on the following, and calculates the expected credit loss on the basis of theportfolios:
??Long-term receivables portfolio 1: receivables from sales of goods by installments
??Long-term receivables portfolio 2: other receivablesThe Company calculates the expected credit loss of the receivables from sales of goods by installments byreferring to the historical credit loss experience, combining the current situation and the forecast of the futureeconomic situation, and based on the default risk exposure and the expected credit loss rate for the wholeduration.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 compares the risk of default of financial instruments on the balance sheet date with the risk ofdefault on the initial recognition date so as to determine the relative change in the default risk of financialinstruments in the expected duration, and evaluate whether the credit risk of financial instruments has increasedsignificantly since the initial recognition.When determining whether the credit risk has significantly increased since the initial recognition, the Companyconsiders the reasonable and well-founded information obtained by it without unnecessary additional cost oreffort, including the forward-looking information. The information to be considered by the Company is asfollows:
??The situation that the debtor fails to pay the principal and interest on the due date specified in thecontract;
??Serious deterioration of the external or internal credit ratings (if any) of financial instruments that hasoccurred or is expected;
??Serious deterioration of the debtor's operating results that has occurred or is expected;
??Changes occur in the existing or expected technical, market, economic or legal environment and will
have a material adverse effect on the repayment ability of the debtor to the Company.According to the nature of financial instruments, the Company evaluates whether the credit risk has increasedsignificantly on the basis of individual financial instruments or portfolios of financial instruments. The
Company may classify financial instruments based on common credit risk characteristics, such as overdueinformation and credit 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 measuredat fair value and with changes included in other comprehensive income for credit impairment on the balancesheet date. In case of one or more events adversely affecting the expected future cash flow of financial assets,the financial assets become the credit-impaired financial assets. Evidence of credit impairment of financialassets includes the following observable information:
??The issuer or debtor is caught in a serious financial difficulty;??The debtor breaches the agreement of contract, such as default or overdue payment of interest orprincipal;??The Company, for economic or contractual reasons relating to the debtor’s financial difficulty, grantsthe debtor concessions that would not have been made in any other circumstances.??There is a great possibility of bankruptcy or other financial restructuring of the debtor;??The financial difficulties of the issuer or debtor result in the disappearance of the active market of such
financial assets.Presentation of provision for expected credit lossIn order to reflect the changes in the credit risk of financial instruments since the initial recognition, theCompany remeasures the expected credit loss on each balance sheet date, and the increased or reversed amountof the loss provision arising therefrom shall be included in the current profits and losses as impairment losses orgains. The loss provision of the financial assets measured at amortized cost is used to offset their book valuepresented in the balance sheet. For the debt investment measured at fair value with its changes included in othercomprehensive income, the Company recognizes its loss provision in other comprehensive income, which willnot offset the book value of the financial assets.Cancel after verification
The Company writes down the book balance of the financial assets when it no longer reasonably expects thatthe contractual cash flow of the financial asset can be recovered in whole or in part. Such write-downconstitutes the derecognition of related financial assets. This usually occurs when the Company determines thatthe debtor has no assets or sources of income that can generate sufficient cash flows to repay the amount to bewritten down. However, the written-down financial assets may still be affected by the execution activitiesaccording to the Company's procedures for recovering due amounts.If the written-down financial assets are recovered later, the reverse of the impairment loss are included in thecurrent profits 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 hasretained substantially all the risks and rewards on ownership of a financial asset.The Company neither transfers nor retains substantially all the risks and rewards of ownership of financialassets, then accounting for the following circumstances: if control over the financial assets is surrendered,derecognize the financial assets and recognize any assets and liabilities arose; if the Company retains the controlof the financial assets, recognize the financial assets to the extent of the continuing involvement in thetransferred financial assets by the Company and recognize any relating liability.
(7) Offset of financial assets and financial liabilities
Financial assets and financial liabilities are presented in the balance sheet with the amount after offsetting eachother when the Company has a legal right to offset the recognized financial assets and financial liabilities andthe legal right can be exercised currently, and when the Company intends either to settle on a net basis, or torealize the financial assets and pay off the financial liabilities simultaneously. In other cases, financial assetsand financial liabilities 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" ofSection X - Financial Report.
12. Accounts receivable
Refer to 10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates" ofSection X - Financial Report.
13. Receivables financing
Refer to 10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates" ofSection X - Financial Report.
14. Other receivables
For determination methods and accounting methods of expected credit losses of other receivables,Refer to 10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates" ofSection 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 differencebetween the planned cost and the actual cost is accounted for based on the cost difference account, and theplanned cost is adjusted to the actual cost according to the cost difference which shall be borne for the inventorycarried forward and dispatched on schedule.
(3) Basis for determining the net realizable value of inventories and drawing methods for provision fordecline in the value of inventoriesNet realizable value is the estimated selling price less estimated costs to be incurred upon completion, estimatedselling expenses and related taxes. The net realizable value of inventories is determined based on theunambiguous evidence obtained and by considering the purpose of holding inventories and the effect of eventsafter the balance sheet date.
If the cost of closing inventory of the Company exceeds its net realizable value at balance sheet date, recognizeprovision for decline in value of inventories. The Company generally makes provision for decline in the valueof inventories according to a single inventory item. The provision for decline in the value of inventoriespreviously made is reversed if the influence of the write-down inventory value before the balance sheet datedisappears.
(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 methodwhen being acquired.
16. Contractual assets
The Company presents the contractual assets or contract liabilities in the balance sheet according to therelationship between the performance obligations and the customer's payment. The Company presents the netamount of contractual 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 thecontractual assets, please refer to 10 "Financial instruments" in V "Significant Accounting Policies andAccounting Estimates" of Section X - Financial Report.
17. Contract cost
Contract costs include incremental costs incurred to obtain contracts and contract performance costs.Incremental cost to obtain the contract refers to the cost (such as sales commissions) that would not haveoccurred if the Company had not obtained the contract. If the cost is expected to be recovered, the Companywill recognize it as a contract acquisition cost and an asset. Other expenses incurred by the Company forobtaining the contract, except the incremental cost that is expected to be recovered, are included in the currentprofit or loss when incurred.
If the cost incurred for the performance of the contract does not fall within the scope of other accountingstandards for business enterprises such as inventory and does not meet the following conditions at the same time,the Company will recognize it as an asset of the contract performance cost:
① The cost is directly related to a current or expected contract, including direct labor, direct materials,manufacturing costs (or similar costs), the costs clearly borne by the customer, and other costs incurred only bythe Contract;
② This cost increases the Company’s resources for performing the performance obligations in the future;
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 goodsor services related to the assets and are included in current profits and losses.When the book value of the assets related to the contract cost is higher than the difference between thefollowing two items, the Company will make provision for the impairment of the excess and recognize it as theasset impairment loss:
① Residual consideration expected to be obtained by companies in connection with the transfer of goods orservices related to the asset;
② The cost expected to be incurred for the transfer of the relevant goods or services.The contract performance cost recognized as an asset is presented in the item "Inventory" if the amortizationperiod at the time of initial recognition does not exceed one year or one normal business cycle, and is presentedin the item "Other non-current assets" if the amortization period at the time of initial recognition exceeds oneyear or one normal business cycle.The contract acquisition cost recognized as an asset is presented in the item "Other current assets" if theamortization period at the time of initial recognition does not exceed one year or one normal business cycle, andis presented in the item "Other non-current assets" if the amortization period at the time of initial recognitionexceeds one year or one normal business cycle.
18. Held-for-sale assets
(1) Classification and measurement of held-for-sale non-current assets or disposal groups
The 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 fairvalue, biological assets measured at the net amount obtained by deducting the selling expenses from the fairvalue, assets obtained from employee compensation, financial assets, deferred tax assets and rights arising frominsurance contracts.Disposal group refers to a group of assets which is sold or disposed of together as a whole in a transaction andthe liabilities directly related to these assets and transferred in the transaction. The disposal group includesgoodwill obtained from business combination under certain circumstances.Non-current assets or disposal groups that meet all the following conditions are classified as the held-for-saleassets: The non-current assets or disposal groups can be sold immediately under current conditions according tothe practice of selling such assets or disposal groups in similar transactions; they are extremely likely to be sold,i.e. a resolution has been made on a sales plan and a certain purchase commitment has been obtained, and thesales are expected to be completed within one year. The overall investment to subsidiaries is classified as held-for-sale assets in individual financial statements, and all assets and liabilities of subsidiaries are classified as theheld-for-sale assets in consolidated financial statements when the investment to subsidiaries meets theconditions for the held-for-sale assets if the Company loses control over its subsidiaries due to reasons such asthe sales of investment to subsidiaries, whether the Company reserves some of its equity investments after thesales or not.The difference between the book value and the net amount obtained by deducting the selling expenses from thefair value is recognized as the asset impairment loss when the held-for-sale non-current assets or disposalgroups are measured initially or re-measured on the balance sheet date. The asset impairment loss recognized bythe held-for-sale disposal group deducts the book value of the goodwill in the disposal group, and then deductsthe book value of 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 afterbeing classified as the held-for-sale assets, and the reversed amount is included in the current profits and lossesif the net amount obtained by deducting the selling expenses from the fair value of held-for-sale non-currentassets or disposal groups on the subsequent balance sheet date increases. The book value of goodwill deductedshall not be reversed.
Held-for-sale non-current assets and assets in the held-for-sale disposal group are not depreciated or amortized.The interest on liabilities and other expenses in the held-for-sale disposal group are recognized continuously.For all or part of the investments of held-for-sale associated enterprises or joint ventures, the held-for-sale partwill not be accounted for with equity method, and the retained part (not classified as the held-for-sale asset) willbe accounted for continuously with the equity method. The equity method will not be used any more when theCompany has no significant 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 meetsthe conditions for the held-for-sale asset, the Company will cease to classify it as the held-for-sale asset andmeasure it based 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 inthe balance sheet as the "held-for-sale assets", and presents the liabilities in the held-for-sale disposal group asthe "held-for-sale liabilities".The Company presents the profits and losses from continuing operations and discontinued operations separatelyin the profit statement. For the held-for-sale non-current assets or disposal groups failing to meet the definitionof discontinued operation, their impairment losses and reversed amounts as well as profits or losses of disposalare presented as profits or losses from continuing operations. Operating profits and losses such as impairmentlosses and reversed amounts of discontinued operations and profits and losses of disposal are presented asprofits and losses from discontinued operations.Disposal groups that are intended to be discontinued rather than sold and meet the conditions of relevantcomponents in the definition of discontinued operation are presented as discontinued operations from the dateof discontinuance.For discontinued operations presented in the current period, the information originally presented as profits orlosses from 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
from discontinued operations in the current financial statements is presented again as profits or losses fromcontinuing operations in comparable accounting period.
19. Long-term receivables
Refer to 10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates" ofSection X - Financial Report.
20. Long-term equity investments
Long-term equity investments include equity investments to subsidiaries, joint ventures and associatedenterprises. The investee which may be subject to significant influence of the Company is an associatedenterprise of the Company.
(1) Recognition of initial investment cost
Long-term equity investment acquired from business combination: For the long-term equity investmentacquired from the business combination under common control, the investment cost refers to the share of bookvalue of the owner's equity of the combined party in the consolidated financial statements of the ultimatecontrolling party on the combination date; for the long-term equity investment acquired from the businesscombination under different control, the investment cost refers to the combination cost.For long-term equity investments acquired by other means: For long-term equity investment acquired throughcash payment, the actual purchase price shall be regarded as the initial investment cost. For long-term equityinvestment acquired through issuing equity securities, the fair value of the issued equity securities shall bedeemed as the initial investment cost.
(2) Subsequent measurement and recognition of profit or loss
Investments to subsidiaries are accounted for with the cost method unless the investment meets the conditionsfor held-for-sale; investments to associated enterprises and joint ventures are accounted for with the equitymethod.For the long-term equity investment calculated with cost method, and except the declared but not released cashdividend or profit which is included in actual amount or consideration paid for acquiring investment, thedistributed cash dividend or profit declared by the investee shall be recognized as investment income andincluded in current profits and losses.
For the long-term equity investment accounted for with the equity method, the investment cost is not adjusted ifthe initial investment cost exceeds the share of the fair value of the investee's identifiable net assets at the timeof the investment; the book value of the long-term equity investment is adjusted and the difference is includedin the current profits and losses if the initial investment cost is less than the share of fair value of the investee'sidentifiable net assets at the time of the investment.For accounting with the equity method, the investment income and other comprehensive income shall berecognized respectively according to the share of the net profits and losses and other comprehensive incomerealized by the investee that shall be enjoyed or shared. Meanwhile, the book value of the long-term equityinvestment shall be adjusted. The part of due share shall be calculated according to the distributed profit or cashdividend declared by the investee, and the book value of the long-term equity investment shall be reducedaccordingly. For other changes of owners' equity of the investee except net profit and loss, other comprehensiveincome and profit distribution, the book value of long-term equity investment shall be adjusted and included incapital reserve (other capital reserve). The Company recognizes its share of the investee's net profits or lossesbased on the fair values of the investee's individual separately identifiable assets at the time of acquisition, aftermaking appropriate adjustments thereto in conformity with the accounting policies and accounting periods ofthe Company.The sum of the fair value of the original equity and the new investment cost is taken as the initial investmentcost calculated with the equity method on the date of conversion if it is possible to exert significant influence onor implement joint control but not constitute control over the investee due to additional investment or otherreasons. The cumulative changes in fair value originally included in other comprehensive income related to theoriginal equity are transferred to retained earnings when the equity method is adopted if the original equity isclassified as a non-trading equity instrument investment measured at fair value with its changes included inother comprehensive income.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 Instrumentson the date of losing the joint control or significant influence, and the difference between the fair value and thebook value is included in the current profits and losses. Other comprehensive income from original equityinvestment accounted and recognized with the equity method is subject to the accounting treatment on the samebasis for direct disposal of relevant assets or liabilities of the investee when the equity method is terminated foruse. Other owner’s equity variation related to the original equity investment shall be transferred in current profitand loss.
In case that the Company loses the right of control over the investee due to disposal of partial equity investmentor other reasons, the equity method is applied, and it is deemed that the residual equity is adjusted with equitymethod from the time of acquisition if the residual equity after disposal can exert joint control over orsignificant influence on the investee; the accounting is carried out according to the Accounting Standards forBusiness Enterprises No. 22 - Recognition and Measurement of Financial Instruments, and the differencebetween the fair value and the book value on the date of losing control is included in the current profits andlosses if the residual equity after disposal cannot exert joint control over or significant influence on the investee.If the control right is lost due to the decrease of the Company’s shareholding ratio for additional investment ofother investor hut can exert joint control over or significant influence on the investee, share of the increased netassets for additional investment and increasing share of the investee enjoyed by the Company shall berecognized as per new shareholding ratio. The balance between the increased share and the original book valueof long-term equity investment corresponding to the decreased part of the carry-over shareholding ratio shall beincluded in current profit or loss. Then the new shareholding ratio shall be adjusted as it is accounted withequity method upon the acquisition of investment.The unrealized profit or loss from internal transactions entered into between the Company and its associate orjoint venture is offset according to the shareholding percentage held by the Company and the remaining portionis recognized as investment income or loss. However, the internal transaction loss not realized between theCompany and its investees shall not be offset if it is not an impairment loss of the assets transferred.
(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 ofthe arrangement can only be determined with the unanimous consent of the parties sharing the control. Duringthe judgment of joint control, it is required to determine whether the arrangement is controlled collectively byall participants or a group of participants, and then determine whether the activities related to the arrangementmust be decided after being unanimously agreed by the participants who collectively control the arrangement. Itis deemed that all participants or a group of participants collectively control the arrangement if related activitiesof an arrangement can be decided only with concerted action of all participants or a group of participants. Itdoes not constitute joint control if an arrangement can be controlled collectively by two or more groups ofparticipants. The determination 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
that the potential voting rights executable for the current period held by the investor and other parties areconverted into the equity of the investee, including the influence of the warrants, stock options and corporatebonds which can be converted in the current period issued by the investee.It is generally considered that the Company has significant influence on the investee when the Companydirectly holds more than 20% (including 20%) but less than 50% of the voting shares of the investee or holdsindirectly through subsidiaries, unless there is clear evidence indicating that it cannot participate in theproduction and operation decisions of the investee under such circumstances, in which case it has no significantinfluence. It is generally not considered that the Company has significant influence on the investee when theCompany owns less than 20% (exclusive) of the voting shares of the investee, unless there is clear evidenceindicating that it can participate in the production and operation decisions of the investee under suchcircumstances, in which case it has significant influence.
(4) Impairment test method and drawing methods for impairment provisionFor investments to subsidiaries, associated enterprises and joint ventures, the method of provision for assetimpairment is described in 39 "Others" in V "Significant Accounting Policies and Accounting Estimates" ofSection X - Financial Report.
21. Investment real estates
Measurement mode of investment propertyMeasure by cost methodDepreciation or amortization methodInvestment real estates refer to the real estates held to earn rent or increase capital, or both. Investmentproperties of the Company include the land use rights which have already been rented, the land use rights heldfor transfer after appreciation and the buildings which have been rented.Investment properties of the Company shall be initially measured as per the price upon acquisition anddepreciated or amortized on schedule as per relevant provisions on 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 39 "Others" in V "Significant Accounting Policies and Accounting Estimates" ofSection X - Financial Report.The difference between the disposal income from the sale, transfer, scrapping or damage of investment realestate after deducting its book value and relevant taxes shall be included in the current profits and losses.
22. Fixed assets
(1) Recognition conditions
Fixed assets of the Company mean the tangible assets held for producing commodities, providing 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 toflow into the 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 relatedeconomic benefits are likely to flow into the Company and the costs can be measured reliably. The daily repaircosts of fixed assets that do not meet the conditions for subsequent expenditure of fixed assets capitalization areincluded in the current profits and losses or the costs of relevant assets according to the beneficiaries when thecosts incurred. The book 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 | 2020 | 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 |
The Company uses the straight line method for depreciation. The depreciation of fixed assets starts when theyreach the expected serviceable condition, and stops when they are derecognized or classified as non-currentassets held for sale. Without taking into account of the provision for impairment, the Company determines theannual depreciation rate of various fixed assets according to the category, estimated service life and estimated
residual value of fixed assets. Among them, for fixed assets with provision for impairment, the accumulatedamount of provision for impairment shall also be deducted to calculate and determine the depreciation rate.
① For the impairment test methods and impairment provision methods of fixed assets, please refer to 39"Others" in V "Significant Accounting Policies and Accounting Estimates" of Section X - Financial Report.
② The Company reviews the service life, expected net residual value and depreciation method of fixed assetsat the end of each year.If the expected service life is different from the original estimate, the service life of fixed assets shall beadjusted; If the estimated net salvage value is different from the original estimate, the estimated net salvagevalue shall be adjusted.
③ Disposal of fixed assets
If a fixed asset is disposed of or if no economic benefit will be obtained from the use or disposal, therecognition of such fixed asset is terminated. The disposal income from selling, transferring, discarding ordamaging of fixed assets shall be deducted by the book value thereof and relevant taxes and then included incurrent profits and losses.
23. Construction in progress
Construction in progress is recognized based on the actual construction cost, including all expenditures incurredfor construction projects, capitalized borrowing costs for the construction in progress before it has reached theworking condition for its intended use and other related expenses during the construction period.The project under construction is transferred to fixed assets when they are ready for their intended use.For the method of provision for asset impairment of construction in progress, refer to 39 "Others" in V"Significant Accounting Policies and Accounting Estimates" of Section X - Financial Report.
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 leaseterm.The right-to-use asset is initially measured at cost from the commencement of the lease term. This cost includesthe amount of lease liabilities measured initially; the rent paid on or before the commencement of the lease term,
which needs to deduct the amount of lease incentive enjoyed (if any); initial direct expenses incurred by theCompany as the lessee; cost expected to be incurred by the Company as the lessee for dismantling andremoving the leased assets, restoring the site where the leased assets are located or restoring the leased assets tothe state agreed in the lease terms. The Company, as the lessee, recognizes and measures the cost of demolitionand restoration in accordance with the Accounting Standards for Business Enterprises No. 13 - Contingencies.Subsequent adjustments are made for any remeasurement of the lease liabilities.
(2) Depreciation method of right-of-use assets
The Company adopts the straight-line method for depreciation. If the Company, as the lessee, can reasonablyconfirm that it obtains the ownership of the leasing assets at the expiration of the lease term, the depreciationshall be drawn within the remaining service life of the leasing assets. In case of a failure to determine theownership of the leased assets reasonably at the end of the lease period, the depreciation shall be drawn withinthe lease term or the remaining service life of leasing assets, whichever is shorter.
(3) The impairment test method and drawing method for impairment provision of right-of-use assetsare described in 39 "Others" 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 ofacquisition. Where the service life is limited, the intangible asset is amortized over its expected service life,from the time it is available, with an amortization method that reflects the expected realization of the economicbenefits associated with the asset. The straight-line method is adopted for amortization if the expectedrealization mode cannot be determined 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 atthe end of each year; adjusts the original estimate if it is different from the actual value, and handles based onchanges in accounting estimate.The book value of an intangible asset is transferred into the current profits and losses in full if it is expected thatthe asset cannot bring economic benefits to the enterprise in the future on the balance sheet date.For the method of provision for asset impairment of the intangible assets, refer to 39 "Others" in V "SignificantAccounting 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 inresearch stage and expenditures in development stage.The expenditures in research stage are included in current profits and losses when incurred.Expenditures at the development stage can be capitalized only when the following conditions are metsimultaneously, namely, it is technically feasible to complete the intangible assets so that they can be used orsold; Have the intention to complete the intangible assets and use or sell them; The ways for intangible assets togenerate economic benefits include being able to prove that there is a market for the products produced by usingthe intangible assets or the intangible assets themselves. If the intangible assets will be used internally, theirusefulness can be proved; There are sufficient technical, financial and other resources to support thedevelopment of the intangible assets and the ability to use or sell the intangible assets; The expenditureattributable to the development stage of the intangible assets can be measured reliably. The developmentexpenditures failing to meet above conditions are included in current profits and losses when occurred.After the R&D projects of the Company meet the above conditions, pass the technical feasibility and economicfeasibility study, and form the project establishment, they shall enter the development stage.The capitalized expenditures in the development stage are presented as development expenditures on thebalance sheet 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, associated enterprises and joint ventures,investment real estates subsequently measured by cost model, fixed assets, project under construction, right-of-use assets, intangible assets, etc. (except for inventories, deferred income tax assets and financial assets) isrecognized with the following methods:
The Company judges whether there is a sign of impairment to assets on the balance sheet date. If such signexists, the Company estimates the recoverable amount and conducts the impairment test. Impairment tests shallbe carried out every year on goodwill resulting from business combination, intangible assets with uncertainservice life 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 orthe present value of the expected future cash flow of the assets, whichever is higher. The recoverable amount isestimated of the individual asset. If it is not possible to estimate the recoverable amount of the individual asset,the Company determines the recoverable amount of the asset group to which the asset belongs. An asset groupis recognized based on the fact that whether the main cash inflows generated by the asset group are independentof the cash inflows of other assets or asset groups.When the asset or asset group’s recoverable amount is lower than its carrying amount, the Company reduces itscarrying amount to its recoverable amount, the reduced amount is recorded in profit or loss for the currentperiod and the provision for impairment of assets is recognized.For the impairment test of goodwill, the book value of goodwill resulting from business combination isamortized to relevant asset groups with reasonable methods from the acquisition date, or amortized to relevantasset group portfolio if it is difficult to amortize it to relevant asset groups. Asset group or portfolio of assetgroup is asset group or portfolio of asset group which can be benefit from synergies of a business combinationand is not greater than the reportable segment of 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 notincluding goodwill, and the recoverable amount shall be calculated to recognize the corresponding impairmentloss. Then, an impairment test is carried out to the asset group or portfolio of asset groups including goodwill tocompare its book value and recoverable amount, and recognize the impairment loss of goodwill if therecoverable amount is lower than 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 therelationship between the performance obligations and the customer's payment. The Company presents the netamount of contractual 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 transferof promised goods or services.
29. Employee compensation
(1) Accounting method of short-term compensation
Employee compensation refers to various forms of remuneration or compensation given by enterprises to obtainservices provided by employees or to terminate labor relations. Employee compensation includes short-termcompensation, post-employment benefits, dismissal benefits and other long-term employee benefits. Thebenefits provided by the enterprise to employees' spouses, children, dependents, survivors of deceasedemployees and other beneficiaries also belong to employee compensation.According to liquidity, employee compensation is listed in the "employee compensation payable" and "long-term employee compensation payable" items of the balance sheet.Short-term compensationIn the accounting period in which employees have rendered services, the Company recognized the employeewages, bonus, social security contributions according to regulations such as medical insurance, work injuryinsurance and maternity insurance as well as housing funds as liability, and charged to profit or loss for thecurrent period or cost of relevant assets.
(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. TheCompany recognizes the following components of employee benefits cost arising from defined benefit plans:
① Service costs include 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 tothe provision of services by employees in the current period; the past service cost refers to the increase ordecrease in the present value of the defined benefit plan obligations related to the employee services in theprevious period due to the modification of the defined benefit plan.
② Net interest on net liabilities or assets of defined benefit plans, including interest income of plan assets,interest expense of defined benefit plan obligations and interest affected by asset ceiling.
③ Changes arising from remeasurement of net liabilities or net assets of defined benefit plans.The Company includes the above items ① and ② in the current profits and losses, unless other accountingstandards require or allow the cost of employee benefits to be included in the cost of assets; item ③ is includedin other comprehensive income and will not be reversed back to profit or loss in subsequent accounting periods,and the part originally included in other comprehensive income within the equity scope is carried forward toundistributed profit when 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 employeecompensation arising from dismissal welfare at the earlier of the following two dates and includes them incurrent profits and losses: The Company cannot unilaterally withdraw the dismissal welfare provided due to thetermination of employment or adoption of staff reduction suggestion; the Company recognizes the costs orexpenses related to the restructuring involving the payment of dismissal welfare.If the early retirement plan is implemented, the economic compensation before the official retirement datebelongs to dismissal welfare. The wages proposed to be paid to the early retired employee and the socialinsurance premiums to be paid are included in the current profits and losses in a lump sum from the date when
the employee stops providing services to the normal retirement date. Economic compensation after the officialretirement date (such as normal 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 provisionsof above defined contribution plan if they meet the conditions of the plan. The benefits that meet therequirements of the defined benefit plan are treated in accordance with the provisions of the plan. However, the"changes caused by re-measurement of net liabilities or net assets of the defined benefit plan" in relevantemployee compensation cost are included in current profits and losses or relevant asset cost.
30. Lease liabilities
Refer to 24 "Right-of-use Assets" in V "Significant Accounting Policies and Accounting Estimates" of SectionX - Financial Report.
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.
Expected liabilities are initially measured at the optimal estimate required to perform the relevant currentobligation, in comprehensive consideration of the risks, uncertainty, time value of money, and other factorspertinent to the Contingencies. The best estimate is determined by discounting the relevant future cash outflowif the time value of money has a significant impact. At the balance sheet date, the carrying amount of theestimated liabilities is reviewed and adjusted by the Company to reflect the current best estimate.The amount of compensation is recognized as assets separately only if it is basically certain that the amount canbe obtained in case that all or part of expenditures necessary for clearing off the recognized estimated liabilitiesare expected to be compensated by a third party or other parties. The recognized compensation amount shall notexceed the 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 marketaccording to the quotation of the active market. For equity instruments such as granted options not in activemarket, the fair value is determined by the option pricing model. The selected option pricing model considersthe following factors: A. Exercise price of options; B. Validity period of options; C. Current price of underlyingshares; D. Expected fluctuation ratio of stock price; E. Expected dividends of shares; F. Risk-free interest ratewithin the validity period of 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 numberof vesting employees and corrects the expected number of exercisable equity instruments on each balance sheetdate within the waiting period. On the vesting date, the final estimated number of exercisable equity instrumentsshall be consistent with the number of actual exercisable equity instruments.
(4) Accounting treatment related to implementation, modification and termination of share-basedpayment planShare-based payments settled by equity are measured at the fair value of the equity instruments granted toemployees. Where the equity instrument can be vested immediately upon being granted, the share-basedpayment is included in relevant costs or expenses at the fair value of equity instrument on the granting date andthe capital surplus shall be increased accordingly. Where the equity instrument cannot be exercised until thevesting period comes to an end or until the specified performance conditions are met, at each balance sheet datewithin the vesting period, the services obtained in the current period are, based on the best estimate of thenumber of exercisable equity instruments, included in relevant costs or expenses and capital reserve at the fairvalue specified on the granting date of equity instruments. No adjustment shall be made to relevant costs orexpenses and the total amount of owner's equity that have been recognized after the vesting date.Cash-settled share-based payment shall be measured in accordance with the fair value of liabilities calculated,confirmed and undertaken by the Company based on the shares or other equity instruments. Where the equityinstrument can be vested immediately upon being granted, the payment shall be included in the relevant costs orexpenses at the fair value of the liabilities assumed by the Company on the grant date, and the liabilities shall be
increased accordingly. Where the share-based payment settled by cash cannot be vested until the vesting periodcomes to an end or until the specified performance conditions are met, on each balance sheet date within thevesting period, the services acquired in current period shall, based on the optimal estimation of the vesting right,be included into costs or expenses and corresponding liabilities at the fair value of the liabilities assumed by theCompany. On each balance sheet date and the settlement date prior to the settlement of the relevant liabilities,the fair value of the liabilities shall be re-measured, with its changes included into the current period profit orloss.When the Company modifies the share-based payment plan, the increase in services obtained shall berecognized based on the increase (if any) in the fair value of equity instruments; if the quantity of granted equityinstruments is increased, the fair value of the increased equity instruments shall be recognized accordingly asthe increase in the services obtained. The increase in fair values of equity instruments refers to the differencebetween equity instrument’s fair values before and after amendment. If the total fair value of share-basedpayment is reduced in the amendment or the terms and conditions of the share-based payment plan are modifiedin other ways unfavorable to employees, the accounting treatment on acquired services shall continue as if thechange has never occurred, unless the Company has canceled part or all of the granted equity instruments.If, during the vesting period, the granted instruments are canceled (except for those canceled because of failureto meet the non-market conditions of the vesting conditions), the Company shall accelerate the exercise of thegranted equity instruments, and immediately include the amount to be recognized in the remaining vestingperiod in the current profit and loss, and recognize the capital reserve in the meantime. In the event that theemployees or other parties can choose to meet the non-vesting conditions but fail to meet such conditionsduring the vesting period, the Company shall treat it as the cancellation of granted equity instruments.
33. Income
Accounting policies adopted for income recognition and measurement
(1) General principles
The Company has fulfilled its performance obligations of the contract, means it confirms the revenue when thecustomer has obtained the control rights of the relevant commodities or services.If the contract contains two or more performance obligations, the Company shall, at the beginning date of thecontract, apportion the transaction price to each performance obligation according to the relative proportion ofthe individual selling price of the commodities or services promised by each performance obligation, andmeasure the revenue according to the transaction price apportioned to each performance obligation.
In case one of the following conditions is met, the Company will perform the performance obligations within aperiod of time. Otherwise, it will perform the performance obligations at a time point:
① The customer obtains and consumes the economic benefits brought by the performance of the contract bythe Company at the same time.
② The customer can control the goods under construction during the Company's performance;
③ The goods generated during the performance of the Company are irreplaceable, and the Company isentitled to receive payment for the performance accumulated so far throughout the term of the contract.For the performance obligations performed within a certain period of time, the Company shall recognize therevenue within that period according to the performance progress. If the performance progress cannot bereasonably confirmed, and the costs incurred by the Company can be expected to be compensated, the incomesshall be recognized according to the amount of costs incurred until the performance progress can be reasonablyconfirmed.For performance obligations performed at a certain time point, the Company shall confirm the revenue at thetime point when the customer gains control rights of the relevant commodities or services. In determiningwhether a customer has obtained the control rights of the goods or services, the Company shall take thefollowing indications into consideration:
① The Company enjoys the right to the current collection, i.e., the customer has the obligation to payimmediately with respect to the goods;
② The Company has transferred the legal ownership of the goods to the customer, i.e., The customer ownsthe legal ownership of the goods;
③ The Company has transferred the goods to the customer in kind, i.e., The customer has possessed thegoods;
④ The Company has transferred the major risks and remuneration on the ownership of the goods to thecustomer, i.e., The customer has obtained the major risks and remuneration on the ownership of the goods.
⑤ The customer has accepted such goods or services.
⑥ Other signs indicate that the customer has obtained the right to control the goods.The right of the Company to receive the consideration due to the transfer of goods or services to the customer(and the right depends on other factors other than the passage of time) is taken as a contractual asset, and the
contractual assets are impaired based on the expected credit losses (please refer to 10 "Financial Instruments" inV "Significant Accounting Policies and Accounting Estimates" of Section X "Financial Report"). TheCompany’s unconditional (subject only to the passage of time) right to collect consideration from customersshall be presented as receivables. The Company's obligations to transfer goods or services to the customer dueto customer consideration received or receivable shall be defined as contract liabilities.Contract assets and contract liabilities under the same contract shall be presented in net amount. If the netamount is the debit balance, it shall be presented in the item of "contract assets" or "other non-current assets"according to its liquidity; if the net amount is the credit balance, it shall be presented in the item of "contractliabilities" or "other non-current liabilities" according to its liquidity.
(2) Specific method
The specific method for recognizing the sales income of the Company's complete vehicles and their accessoriesis as follows: When the complete vehicles and their accessories and other goods are transported to the customerand the 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 similarbusinesses: none
34. Government subsidies
The government subsidies shall be recognized when all the attached conditions can be satisfied and thegovernment subsidies can be received.The government subsidies considered monetary assets shall be measured at the amount received or receivable.The government subsidies considered non-monetary assets are measured based on the fair value, or the nominalamount of CNY 1 if the fair value cannot be acquired reliably.A government grant related to an asset is a grant obtained by the Company for purchase, construction orformation of long-term assets. The grant not related to an asset is classified as government grant related toincome.For the government subsidies with the grant objects not expressly stipulated in the government documents, ifthey can be used to form long-term assets, the government subsidies corresponding to the assets value aredeemed as the government subsidies related to assets while the rest is deemed as the ones related to revenue;For the government subsidies that are difficult to differentiate, the government subsidies as a whole are deemedas revenue-related government subsidies.
Asset-related government subsidies shall be recognized as deferred incomes, and it shall be distributed with areasonable and systematic method within the service life of related assets and included in profits and losses. Forthe income-related government subsidies, they shall be included in the current profit and loss if used tocompensate for the incurred related costs or losses; if used to compensate for the related costs or losses duringfuture periods, they shall be included in the deferred income, and included in the current profit and loss duringthe period when the related costs or losses are recognized. Government subsidies measured at the nominalamount shall be directly included in the current profit and loss. The Company adopts same treatment for thosetransactions of similar government grants.The government subsidies related to daily activities shall be included in other incomes based on the substanceof business transactions. Government subsidies irrelevant to daily activities are included in non-business income.If it is necessary to refund the government subsidies which have been recognized, the book value of the assetswhich has been offset at the time of initial recognition is adjusted; the book balance of the deferred incomeconcerned (if any) is offset, and the excess is included in the current profits and losses; others are directlyincluded in the current profits and losses.
35. Deferred income tax assets/deferred tax liabilities
Income tax includes current income tax and deferred income tax. The income tax shall be included in thecurrent profit and loss as income tax expenses, except that the deferred income taxes related to the adjustmentof goodwill due to business combination or the transactions or matters directly included in the owner's equityare included in the owner's equity.Temporary differences arising from the difference between the book value of an asset or liability and its taxbase are recognized as deferred tax using the balance sheet liability method.Relevant deferred tax liabilities shall be recognized for each taxable temporary difference, unless the taxabletemporary difference arises from the following transactions:
(1) The initial recognition of goodwill or the initial recognition of assets or liabilities incurred in a transactionwhich is neither a business combination nor affects the accounting profit or taxable income at the time of thetransaction;
(2) Concerning the taxable temporary difference related to the investment of subsidiaries, joint ventures andassociated enterprises, the time of reversal of the temporary difference can be controlled and the temporarydifference is unlikely to be reversed in the foreseeable future.
The Company recognizes a deferred tax asset for the carry forward of deductible temporary differences,deductible losses and tax credits to subsequent periods, to the extent that it is probable that future taxable profitswill be available against which the deductible temporary differences, deductible losses and tax credits can beutilized, except for those incurred in the following transactions:
(1) The transaction is neither a business combination nor affects the accounting profit or taxable income at thetime of the transaction;
(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 rateduring the expected period for recovering the assets or paying off the liabilities on the balance sheet date, andreflects the impact on income tax from assets recovery or liability settlement on the balance sheet date.At the balance sheet date, the Company reviews the book value of a deferred tax asset. If it is likely thatsufficient taxable profits will not be available in the future periods to deduct the benefit of the deferred taxassets, the book value of the deferred tax assets is reduced. Any such write-down shall be subsequently reversedwhere it becomes probable that sufficient taxable income will be available.
36. Lease
(1) Accounting method of operating leases
1) Identification of lease
On the commencement date of the contract, the Company, as the lessee or lessor, evaluates whether thecustomer in the contract is entitled to obtain almost all economic benefits arising from the use of the identifiedassets during the use period, and is entitled to dominate the use of the identified assets during the use period. Ifone party to the contract abalienates the right to control the use of one or more identified assets within a certainperiod of time in exchange for consideration, the Company determines that the contract is a lease or includes alease.
2) The Company acting as the lessee
At the commencement of the lease term, the Company recognizes right-of-use assets and lease liabilities for allleases, except for simplified short-term leases and low-value asset leases.
For the accounting policies of the right-of-use assets, see 24 "Right-of-use Assets" in V "Significant AccountingPolicies and Accounting Estimates" of Section X "Financial Report".Lease liabilities shall be initially measured at the present value calculated by the interest rate implicit in leaseaccording to the unpaid lease payment on the commencement date of the lease term. If the interest rate implicitin lease cannot be determined, the incremental borrowing rate shall be used as the discount rate. The leasepayment includes: fixed payment and substantial fixed payment. If there is a lease incentive, the amount relatedto the lease incentive shall be deducted; variable lease payments depending on index or ratio; the exercise priceof the purchase option, provided that the lessee reasonably determines that the option will be exercised;payments for exercising the option to terminate the lease, provided that the lease term reflects that the lesseewill exercise the option to terminate the lease; and the amount expected to be paid according to the guaranteedresidual value provided by the lessee. The interest expenses of the lease liabilities within each lease term shallbe calculated subsequently according to the fixed periodic rate, and included in the current profits and losses.Variable lease payments not included in the measurement of lease liabilities are included in the current profitsand losses when they actually occur.Short-term leaseShort-term lease refers to the lease with a lease term of not more than 12 months on the commencement date ofthe lease term, except for the lease containing the purchase option.The Company will include the lease payment for short-term lease into relevant asset costs or current profits andlosses by the straight-line method at each period within the lease term.For short-term lease, the Company selects the above simplified treatment method for the items meeting theshort-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 andlosses with 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 change
If the lease changes and meets the following conditions at the same time, the Company will take the leasechange as a separate lease for the accounting treatment: ① the lease change expands the lease scope byincreasing the right to use one or more leased assets; and ② the increased consideration is equivalent to theamount by adjusting the separate price of the expanded lease scope according to the contract.If the lease change is not taken as a separate lease for accounting treatment, the Company will, on the effectivedate of the lease change, reallocate the consideration of the changed contract, redetermine the lease term, andremeasure the lease liabilities according to the changed lease payment and the present value calculated by therevised discount rate.If the lease scope is reduced or the lease term is shortened due to the lease change, the Company willcorrespondingly reduce the book value of right-of-use assets, and include relevant profits or losses of partial orcomplete termination of leasing in current profits and losses.If the lease liabilities are remeasured due to the other lease changes, the Company shall adjust the book value ofthe right-of-use asset accordingly.
3) The Company acting as the lessor
When the Company is the lessor, the lease that substantially transfers all risks and rewards related to theownership of the assets is recognized as a finance lease, and other leases other than finance leases arerecognized as operating leases.Operating leaseLease income from operating leases is included in current profits or losses by the Company as per the straight-line method over the lease term. The occurred initial direct cost related to the operating lease shall becapitalized, amortized within the lease term according to the same base with the recognition of rental income,and included in the current profits and losses by stages. The variable lease receipts obtained by the Companyrelated to operating leases and not charged to the lease receipts shall be charged to the current profit and losswhen actually incurred.Lease changeIn case of any change in an operating lease, the Company carries out accounting treatment as it is a new leasesince the effective date of the change, and the advance receipts and receivables related to the lease before thechange are deemed as the receipts of the new lease.
If the financial lease changes and meets the following conditions, the Company will take the change as aseparate lease for accounting treatment: ① the change expands the lease scope by increasing the right to use oneor more leased assets; and ② the increased consideration is equivalent to the amount by adjusting the separateprice of the expanded lease scope according to the contract.If the change of finance lease is not taken as a separate lease for accounting treatment, the Company shall treatthe changed lease under the following circumstances respectively: ① If the change takes effect on thecommencement date of the lease and the lease will be classified as an operating lease, the Company will take itas a new lease for accounting treatment from the effective date of the lease change, and take the net investmentin the lease before the effective date of the lease change as the book value of the leased asset. ② If the changetakes effect on the commencement date of the lease and the lease will be classified as a finance lease, theCompany shall carry out accounting treatment in accordance with the provisions of the ASBE 22 Recognitionand Measurement of Financial Instruments on modifying or renegotiating the contract.
(2) Accounting method of finance leases
In financial lease, at the commencement of the lease term, the Company takes the net investment in a lease asthe entry value of the finance lease receivables, and the net investment in a lease is the sum of the unguaranteedresidual value and the present value of the lease receipts not yet received at the commencement of the leaseterm discounted at the interest rate implicit in lease. The Company, as the lessor, calculates and recognizesinterest income in each lease term at a fixed periodic rate. The variable lease payment obtained by the Companyas the lessor and not included in the measurement of net lease investment is included in the current profits andlosses when it actually occurs.Derecognition and impairment of finance lease receivables are accounted for according to the AccountingStandards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments and theAccounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets.
37. Other significant accounting policies and accounting estimates
(1) Change in significant accounting policies
① Interpretation No. 15 of Accounting Standards for Business EnterprisesIn December 2021, the Ministry of Finance issued the Interpretation No. 15 of Accounting Standards forBusiness Enterprises (CK [2021] No. 35) (hereinafter referred to as "Interpretation No. 15").
According to the Interpretation No. 15, if an enterprise sells the products or by-products produced before thefixed assets are in serviceable condition as expected or during the R&D process (hereinafter collectivelyreferred to as trial sales), in accordance with the provisions of Accounting Standards for Business EnterprisesNo. 14 - Revenue and Accounting Standards for Business Enterprises No. 1 - Inventory, the incomes and costsrelated to the trial sales shall be subjected to accounting treatment respectively, and included in the currentprofits and losses, and the net amount of trial sales revenue after offsetting relevant costs shall not be used tooffset the cost of fixed assets or R&D expenditures. Before external sales, relevant products or by-productsproduced in the trial run shall be recognized as inventories if they meet the provisions of the AccountingStandards for Business Enterprises No. 1 - Inventory, and shall be recognized as relevant assets if they meet therelevant asset recognition conditions in other relevant accounting standards for business enterprises.Since January 1, 2022, the Company has implemented the provisions of Interpretation No. 15 regarding"Accounting Treatment for External Sales of Products or By-products Produced by Enterprises before the FixedAssets is in Serviceable Condition as Expected or during the R&D Process", and has made retrospectiveadjustments.According to the Interpretation No. 15, the "unavoidable cost of performing contractual obligations" in onerouscontracts shall reflect the minimum net cost of withdrawing from the contract, that is, the lower of the cost ofperforming the contract and the compensation or penalty incurred for failure to perform the contract. Theenterprise's cost of performing the contract includes the incremental cost of performing the contract and theapportioned amount of other costs directly related to the performance of the contract. Among them, theincremental cost of performing the contract includes direct labor, direct materials, etc.; the apportioned amountof other costs directly related to the performance of the contract includes the apportioned amount ofdepreciation expenses of fixed assets used to perform the contract, etc.Since January 1, 2022, the Company has implemented the provisions of Interpretation No. 15 regarding"Judgment on Onerous Contracts", and has made retrospective adjustments to the retained earnings on January1, 2022, without adjusting the data in the previous comparative financial statements.The adoption of Interpretation No. 15 did not have a significant impact on the financial situation and operatingresults of the Company.
② Interpretation No. 16 of Accounting Standards for Business EnterprisesIn November 2022, the Ministry of Finance issued the Interpretation No. 16 of the Accounting Standards forBusiness Enterprises (CK [2022] No. 31) (hereinafter referred to as "Interpretation No. 16").
According to the Interpretation No. 16, for perpetual bond and other financial instruments classified as equityinstruments, enterprises shall recognize the income tax effect related to dividends when recognizing dividendspayable. For transactions or events in which the distributed profits are derived from previous profits or losses,the income tax effect of the dividends shall be included in the current profits and losses; for transactions orevents in which the distributed profits are derived from previously recognized owners' equity, the income taxeffect of the dividends shall be included in the owners' equity.If the dividends payable on recognition of financial instruments classified as equity instruments occurred in thecurrent year, the Company shall make accounting treatment for the income tax effect involved in accordancewith the Interpretation No. 16; and if the dividends payable occurred before January 1, 2022 and the relevantfinancial instruments have not been recognized on January 1, 2022, the income tax effect involved shall beretroactively adjusted.According to the Interpretation No. 16, if the enterprise amends the terms and conditions of the cash-settledshare-based payment agreement so that it becomes an equity-settled share-based payment, on the amendmentdate, the enterprise shall measure the equity-settled share-based payment at the fair value of the granted equityinstrument on that day, include the obtained services in the capital reserve, and derecognize the liabilitiesrecognized on the amendment date for the cash-settled share-based payment. The difference between the twoshall be included in the current profits and losses. If the vesting period is extended or shortened due toamendment, the enterprise shall carry out the above accounting treatment according to the modified vestingperiod (without considering the relevant accounting treatment provisions that are unfavorable to theamendment).The cash-settled share-based payment of the Company in the current year is changed to equity-settled share-based payment, which is subject to accounting treatment in accordance with the provisions of the InterpretationNo. 16. For such transactions that occurred before January 1, 2022, the retained earnings and other relevantfinancial statement items on January 1, 2022 are adjusted, but the information in comparable periods is notadjusted.The adoption of Interpretation No. 16 did not have a significant impact on the financial situation and operatingresults of the Company.
(2) Change in significant accounting estimates
None
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?
39. Others
(1) Fair value measurement
Fair value refers to the price to be received for sale of an asset or to be paid for transfer of a liability by marketparticipants in the orderly transaction on the measurement date.The Company measures related assets or liabilities at fair value, assuming that the sale of an asset or the transferof liability is conducted in major markets for relevant assets or liabilities in an orderly transaction. If the majormarket is not provided, the transaction shall be assumed to be performed in the most favorable market forrelevant assets or liabilities. Major markets (or most favorable markets) are the market where the Company canenter on the measurement date. The Company uses the assumptions used by market participants to maximizetheir economic benefits when pricing the asset or liability.Fair value of financial assets or financial liabilities existing in the active market will be recognized based onquotations in the active market by the Company. For a financial instrument without an active market, its fairvalue is determined through valuation techniques.When measuring non-financial assets at fair value, it is required to consider the ability of market participants touse the asset for optimal purpose and produce economic benefits, or to sell the asset to other market participantsthat can use such assets for optimal purposes to produce economic benefits.The Company shall adopt the estimation technique that is applicable in the current conditions and is supportedsufficiently by available data and other information while using the fair value to measure relevant assets orliabilities. The relevant observable input values shall be used in priority during the application of estimationtechnique. Only when relevant observable value cannot be obtained or can be obtained but is not feasible, theunobservable input value can be used.For assets and liabilities measured or disclosed at fair value in the financial statements, the level to which thefair value belongs is determined according to the lowest level input value that is of significance for the wholefair value measurement: The input value for the first level refers to the unadjusted quotation of the same assetsor liabilities in the active market that can be obtained on the measurement date; the input value for the second
level refers to the input value that can be directly or indirectly observed for relevant assets or liabilities otherthan that for the first level; and the input value for the third level refers to the input value that cannot beobserved for relevant assets or liabilities.The Company shall reassess the assets and liabilities successively measured at fair value recognized in financialstatements on each balance sheet date to determine the transition among fair value measurement levels.
(2) Contract cost
Contract costs include incremental costs incurred to obtain contracts and contract performance costs.Incremental cost to obtain the contract refers to the cost (such as sales commissions) that would not haveoccurred if the Company had not obtained the contract. If the cost is expected to be recovered, the Companywill recognize it as a contract acquisition cost and an asset. Other expenses incurred by the Company forobtaining the contract, except the incremental cost that is expected to be recovered, are included in the currentprofit or loss when incurred.If the cost incurred for the performance of the contract does not fall within the scope of other accountingstandards for business enterprises such as inventory and does not meet the following conditions at the same time,the Company will recognize it as an asset of the contract performance cost:
① The cost is directly related to a current or expected contract, including direct labor, direct materials,manufacturing costs (or similar costs), the costs clearly borne by the customer, and other costs incurred only bythe Contract;
② This cost increases the Company’s resources for performing the performance obligations in the future;
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 goodsor services related to the assets and are included in current profits and losses. If the amortization period does notexceed one year, it shall be included in the current profits and losses when it occurs.When the book value of the assets related to the contract cost is higher than the difference between thefollowing two items, the Company will make provision for the impairment of the excess and recognize it as theasset impairment loss:
① Residual consideration expected to be obtained by companies in connection with the transfer of goods orservices related to the asset;
② The cost expected to be incurred for the transfer of the relevant goods or services.
The contract performance cost recognized as an asset is presented in the item "Inventory" if the amortizationperiod at the time of initial recognition does not exceed one year or one normal business cycle, and is presentedin the item "Other non-current assets" if the amortization period at the time of initial recognition exceeds oneyear or one normal business cycle.The contract acquisition cost recognized as an asset is presented in the item "Other current assets" if theamortization period at the time of initial recognition does not exceed one year or one normal business cycle, andis presented in the item "Other non-current assets" if the amortization period at the time of initial recognitionexceeds one year or one normal business cycle.
(3) Work safety cost and maintenance & renovation cost
The Company withdraws the work safety cost month by month in an average manner by taking the method ofexcess regression based on the actual operating income of the previous year according to the provisions of CZ[2022] No. 136 document. The specific standards are as follows:
For the machinery manufacturing enterprises with an operating income of not exceeding CNY 10 million, 2.35%of work safety cost will be withdrawn; for the part of operating income between CNY 10 million and CNY 100million, 1.25% shall be withdrawn; for the part of the operating income between CNY 100 million and CNY 1billion, 0.25% will be withdrawn; for the part of the operating income between CNY 1 billion and CNY 5billion, 0.1% will be withdrawn; for the part of the operating income over CNY 5 billion, 0.05% will bewithdrawn.For transportation enterprises, the work safety cost is withdrawn month by month in an average manneraccording to the following standards based on the actual operating income in the previous year: 1% for ordinaryfreight business; 1.5% for passenger transportation business, and special freight business such as pipelinetransportation and dangerous goods transportation.Work safety cost and maintenance & renovation cost are included in the cost of relevant products or the currentprofit and loss when withdrawn, and are also included in the "special reserve" account.For the withdrawn work safety cost and maintenance & renovation cost, if used within the specified scope,those belong to expense expenditures are directly offset by specific reserves; those cost incurred via collectionunder the item of “construction in progress” is recognized when the safety project completes and is ready forintended use. At the same time, the Group will offset the specific reserves according to the cost that formedfixed assets and recognize the accumulated depreciation of the same amount. The fixed assets will no longer bedepreciated in subsequent periods.
(4) Repurchase of shares
Shares repurchased by the Company are managed as treasury shares before being canceled or transferred, andall expenditures on repurchased shares are transferred to treasury share costs. Considerations in the payment forshares repurchase and reduced owner’s equity in transaction expenses, during repurchase, assignment and writeoff of the Company's shares, are not recognized as profits or losses.The transferred treasury shares are included in the capital reserve based on the difference between the amountactually received and the book value of the treasury shares. The surplus reserve and undistributed profits shallbe offset if the capital reserve is insufficient to offset. The canceled treasury shares are used to offset the capitalreserve based on the difference between the book balance and the face value of the canceled treasury shares byreducing the share capital according to the face value of the shares and the number of canceled shares. Thesurplus reserve and undistributed profits shall be offset if the capital reserve is insufficient to offset.
(5) Restricted shares
The Company grants restricted shares to the incentive objects in the equity incentive plan, and the incentiveobjects subscribe for the shares preferentially. If the unlocking conditions stipulated in the equity incentive planare not met subsequently, the Company will repurchase the shares at the price agreed in advance. If therestricted shares issued to employees have completed capital increase procedures such as registration asspecified, the Company shall recognize the share capital and capital reserve (share premium) according to theshare subscription money received from employees on the grant date, and recognize the treasury shares andother payables in terms of the repurchase obligation.
(6) 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,intangible assets, etc. (except for inventories, deferred income tax assets and financial assets) is recognized withthe following methods:
The Company judges whether there is a sign of impairment to assets on the balance sheet date. If such signexists, the Company estimates the recoverable amount and conducts the impairment test. Impairment tests shallbe carried out every year on goodwill resulting from business combination, intangible assets with uncertainservice life 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 orthe present value of the expected future cash flow of the assets, whichever is higher. The recoverable amount isestimated of the individual asset. If it is not possible to estimate the recoverable amount of the individual asset,the Company determines the recoverable amount of the asset group to which the asset belongs. An asset groupis recognized based on the fact that whether the main cash inflows generated by the asset group are independentof the cash inflows of other assets or asset groups.
When the asset or asset group’s recoverable amount is lower than its carrying amount, the Company reduces itscarrying amount to its recoverable amount, the reduced amount is recorded in profit or loss for the currentperiod and the provision for impairment of assets is recognized.For the impairment test of goodwill, the book value of goodwill resulting from business combination isamortized to relevant asset groups with reasonable methods from the acquisition date, or amortized to relevantasset group portfolio if it is difficult to amortize it to relevant asset groups. Asset group or portfolio of assetgroup is asset group or portfolio of asset group which can be benefit from synergies of a business combinationand is not greater than the reportable segment of 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 notincluding goodwill, and the recoverable amount shall be calculated to recognize the corresponding impairmentloss. Then, an impairment test is carried out to the asset group or portfolio of asset groups including goodwill tocompare its book value and recoverable amount, and recognize the impairment loss of goodwill if therecoverable amount is lower than the book value.Once confirmed, the impairment loss of assets will not be reversed in subsequent accounting periods.
(7) Significant accounting judgments and estimates
The Company continuously evaluates the significant accounting estimates and key assumptions adopted basedon historical experience and other factors, including reasonable expectations for future events. Significantaccounting estimates and key assumptions which may lead to significant adjustment risk to the book value ofassets and liabilities in the next accounting year are presented as follows:
Classification of financial assetsMajor judgments involved in determining the classification of financial assets include the analysis of businessmodels and the contractual cash flow characteristics.The Company determines the business model of managing financial assets at the level of financial assetportfolio, considering the way of evaluating and reporting financial asset performance to key managementpersonnel, the risks affecting the financial asset performance and their management methods, and the way forthe relevant business management personnel to obtain the remuneration.When evaluating whether the contractual cash flow of financial assets is consistent with the basic loanarrangement, the Company has the following main judgments: whether the principal may change in the timedistribution or amount in the duration due to prepayment and other reasons; whether the interest includes onlythe time value of money, credit risk, other basic borrowing risks and consideration with costs and profits. For
example, whether the amount of prepayment only reflects the unpaid principal and interest based on theoutstanding principal, as well as reasonable 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 through default risk exposure andexpected credit loss rate of accounts receivable, and determines the expected credit loss rate based on defaultprobability and loss given default. In determining the expected credit loss rate, the Company uses the internalhistorical credit loss experience and other data, and adjusts the historical data according to the current situationand forward-looking information. When considering forward-looking information, the indicators used by theCompany include risks of economic downturn, changes in external market environment, technologicalenvironment and customer conditions. The Company regularly monitors and reviews the assumptions related tothe calculation of expected credit losses.Development expendituresIn determining the capitalization amounts, the management must make assumptions on the expected future cashflow generation of assets, discount rate to be adopted and expected benefit period.Deferred income tax assetsThe deferred tax assets shall be recognized concerning all unused tax losses to the extent that there is very likelyto be sufficient taxable profit to offset loss. This requires the management to estimate the timing and amount offuture taxable profit using large amounts of judgment and to determine the recognized amount of deferred taxassets by referring to the tax planning strategy.Estimated liabilitiesExpected liabilities are initially measured at the optimal estimate required to perform the relevant currentobligation, in comprehensive consideration of the risks, uncertainty, time value of money, and other factorspertinent to the Contingencies. The best estimate is determined by discounting the relevant future cash outflowif the time value of money has a significant impact. At the balance sheet date, the carrying amount of theestimated liabilities is reviewed and adjusted by the Company to reflect the current best estimate.The amount of compensation is recognized as assets separately only if it is basically certain that the amount canbe obtained in case that all or part of expenditures necessary for clearing off the recognized estimated liabilitiesare expected to be compensated by a third party or other parties. The recognized compensation amount shall notexceed the book value of the recognized liabilities.
VI. Taxes
1. Main taxes and tax rates
| Tax Category | Tax Basis | Tax Rate |
| VAT | Taxable value-added tax (the tax payable is calculated by multiplying taxable sales by applicable tax rate and then deducting input tax which is allowed to be deducted for the current period) | 13%, 9%, 6%, 5% |
| Urban maintenance and construction tax | Turnover tax actually paid | 7%, 5% |
| Corporate income tax | Taxable income | 25% |
| Local educational surcharges | Turnover tax actually paid | 2% |
| Education surcharges | Turnover tax actually paid | 3% |
| Land use tax | Land use area | CNY 9/m2, CNY 14/m2, etc. |
| 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 |
| The Company | 25% |
| Jiefang Limited | 15% |
| Wuxi Dahao Power Co., Ltd. | 25% |
| FAW Jiefang (Qingdao) Automotive Co., Ltd. | 25% |
| FAW Jiefang Dalian Diesel Engine Co., Ltd. | 15% |
| FAW Austria Automobile R&D GmbH | 25% |
| FAW Jiefang New Energy Vehicle 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 ofthree years and an income tax rate of 15% within the validity period according to the High-tech EnterpriseCertificate (issued on September 10, 2020, with a certificate number of GR202022000336) jointly issued by theScience and Technology Department of Jilin Province, the Department of Finance of Jilin Province and the JilinProvincial Tax Service of State Taxation Administration.
FAW Jiefang Dalian Diesel Engine Co., Ltd., a subsidiary of the Company, is recognized as a high-techenterprise, with a validity period of three years and an income tax rate of 15% within the validity periodaccording to the list of third batch of high-tech enterprises (with a certificate number of GR202121200892)recognized in 2021 and issued by Dalian on December 15, 2021.VII. Notes to Consolidated Financial Statements
1. Monetary capital
Unit: CNY
| Item | Ending balance | Opening balance |
| Cash at bank | 20,992,347,381.12 | 30,709,255,009.05 |
| Other monetary capital | 49,126,036.59 | 52,007,712.35 |
| Total | 21,041,473,417.71 | 30,761,262,721.40 |
| Including: total amount deposited abroad | 13,903,726.95 | 13,585,238.95 |
| Total amount with limited use due to mortgage, pledge or freezing | 50,667,983.38 | 56,005,226.87 |
Other notes:
Details of restricted monetary capital are as follows:
| Item | Ending balance | Ending balance of the previous year |
| Security deposit for three types of personnel | 27,077,797.58 | 26,244,528.16 |
| Housing maintenance fund | 22,048,239.01 | 21,993,684.19 |
| Court freezing | 1,541,946.79 | 3,997,514.52 |
| Security deposit for migrant workers' wages | 3,769,500.00 | |
| Total | 50,667,983.38 | 56,005,226.87 |
2.?Notes receivable
(1) Classification of notes receivable
Unit: CNY
| Item | Ending balance | Opening balance |
| Commercial acceptance notes | 186,748,716.22 | 12,936,978.11 |
| Total | 186,748,716.22 | 12,936,978.11 |
Unit: CNY
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Carrying amount | Book balance | Bad debt provision | Carrying amount | |||||
| Amount | Scale | Amount | Provision proportion | Amount | Scale | Amount | Provision proportion | |||
| Including: | ||||||||||
| Notes receivable with provision for bad debts made by portfolio | 187,550,142.00 | 100.00% | 801,425.78 | 0.43% | 186,748,716.22 | 13,008,525.00 | 100.00% | 71,546.89 | 0.55% | 12,936,978.11 |
| Including: | ||||||||||
| Commercial acceptance bill | 187,550,142.00 | 100.00% | 801,425.78 | 0.43% | 186,748,716.22 | 13,008,525.00 | 100.00% | 71,546.89 | 0.55% | 12,936,978.11 |
| Total | 187,550,142.00 | 100.00% | 801,425.78 | 0.43% | 186,748,716.22 | 13,008,525.00 | 100.00% | 71,546.89 | 0.55% | 12,936,978.11 |
Provision for bad debts made by portfolio: commercial acceptance bills
Unit: CNY
| Name | Ending balance | ||
| Book balance | Bad debt provision | Provision proportion | |
| Less than one year | 187,550,142.00 | 801,425.78 | 0.43% |
| Total | 187,550,142.00 | 801,425.78 | |
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 ifthe provision for bad debts of notes receivable is withdrawn based on the general model of expected creditlosses:
?Applicable □ Not ApplicableItem for which allowance was made on a collective basis: commercial acceptance bills
| Aging | Ending balance | Ending balance of the previous year | ||||
| Notes receivable | Bad debt provision | Expected credit loss rate (%) | Notes receivable | Bad debt provision | Expected credit loss rate (%) | |
| < 1 year | 187,550,142.00 | 801,425.78 | 0.43 | 13,008,525.00 | 71,546.89 | 0.55 |
(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 | 729,878.89 | 801,425.78 | |||
| Total | 71,546.89 | 729,878.89 | 801,425.78 | |||
Important provision for bad debts recovered or reversed in the current period:
□ Applicable Not applicable?
(3) Notes Receivable Endorsed or Discounted by the Company and Not Yet Expired on Date of BalanceSheet
Unit: CNY
| Item | Derecognized amount at the end of the period | Amount not derecognized at the end of the period |
| Bank acceptance bill | 8,565,691,296.05 | |
| Total | 8,565,691,296.05 |
3. Accounts receivable
(1) Disclosure of accounts receivable by category
Unit: CNY
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Carrying amount | Book balance | Bad debt provision | Carrying amount | |||||
| Amount | Scale | Amount | Provision proportion | Amount | Scale | Amount | Provision proportion | |||
| Accounts receivable with provision for bad debt made individually | 82,039,650.69 | 8.10% | 82,039,650.69 | 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 | 930,458,334.81 | 91.90% | 63,367,996.39 | 6.81% | 867,090,338.42 | 1,332,966,224.45 | 93.21% | 53,272,272.75 | 4.00% | 1,279,693,951.70 |
| Including: | ||||||||||
| Aging portfolio | 930,458,334.81 | 91.90% | 63,367,996.39 | 6.81% | 867,090,338.42 | 1,332,966,224.45 | 93.21% | 53,272,272.75 | 4.00% | 1,279,693,951.70 |
| Total | 1,012,497,985.50 | 100.00% | 145,407,647.08 | 14.36% | 867,090,338.42 | 1,430,112,615.14 | 100.00% | 150,418,663.44 | 10.52% | 1,279,693,951.70 |
Bad debt reserves on a single item:
Unit: CNY
| Name | Ending balance | |||
| Book balance | Bad debt provision | Provision proportion | Reasons for provision | |
| Jiangsu Xinrui New Energy Vehicle Technology Co., Ltd. | 37,612,001.70 | 37,612,001.70 | 100.00% | Highly unlikely to be recovered |
| Zhejiang Hanglun Ligang Trading Co., Ltd. | 8,581,536.83 | 8,581,536.83 | 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 |
| Beijing Hotan Automobile Modification Co., Ltd. | 7,436,520.00 | 7,436,520.00 | 100.00% | Highly unlikely to be recovered |
| Changchun Xiongtu New Energy Vehicle Co., Ltd. | 6,230,500.00 | 6,230,500.00 | 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 |
| 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 |
| FAW Jingye Engine Co., Ltd. | 1,820,957.23 | 1,820,957.23 | 100.00% | 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 |
| Shenyang Jinbei Vehicle | 889,279.05 | 889,279.05 | 100.00% | It has been prosecuted, but |
| Manufacturing Co., Ltd. | highly unlikely to be recovered | |||
| Jilin Zhuzhan Automobile Trading Co., Ltd. | 848,566.00 | 848,566.00 | 100.00% | Highly unlikely to be recovered |
| Dalian Baofeng Automobile Sales Co., Ltd. | 496,200.00 | 496,200.00 | 100.00% | Highly unlikely to be recovered |
| Liangshan Huatai Trading Co., Ltd. | 349,190.00 | 349,190.00 | 100.00% | Highly unlikely to be recovered |
| Zhejiang Baoding Automobile Sales Co., Ltd. | 80,035.12 | 80,035.12 | 100.00% | Highly unlikely to be recovered |
| Transportation Group (Qingdao) Sunshine Automobile Sales and Service Co., Ltd. | 20,835.47 | 20,835.47 | 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 |
| Total | 82,039,650.69 | 82,039,650.69 |
Provision for bad debts made by portfolio: aging portfolio
Unit: CNY
| Name | Ending balance | ||
| Book balance | Bad debt provision | Provision proportion | |
| Within 1 year | 786,514,528.13 | 1,677,403.73 | 0.21% |
| 1-2 years | 61,407,181.73 | 10,955,035.04 | 17.84% |
| 2-3 years | 71,238,950.11 | 39,437,882.78 | 55.36% |
| 3-4 years | 666,586.58 | 666,586.58 | 100.00% |
| Over 4 years | 10,631,088.26 | 10,631,088.26 | 100.00% |
| Total | 930,458,334.81 | 63,367,996.39 | |
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 ifthe provision for bad debts of accounts receivable is withdrawn based on the general model of expected creditlosses:
□ Applicable Not applicable?
Disclosure by aging
Unit: CNY
| Aging | Book balance |
| Within 1 year (including 1 year) | 786,514,528.13 |
| Including: 0-6 months | 702,938,136.01 |
| 7-12 months | 83,576,392.12 |
| 1-2 years | 61,407,181.73 |
| 2-3 years | 71,238,950.11 |
| Over 3 years | 93,337,325.53 |
| 3-4 years | 767,457.17 |
| 4-5 years | 58,697,500.75 |
| Over 5 years | 33,872,367.61 |
| Total | 1,012,497,985.50 |
(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 | 10,227,463.64 | -15,106,740.00 | -131,740.00 | 145,407,647.08 | |
| Total | 150,418,663.44 | 10,227,463.64 | -15,106,740.00 | -131,740.00 | 145,407,647.08 | |
Important provision for bad debts recovered or reversed in the current period:
Unit: CNY
| Name of Organization | Amount recovered or reversed | Recovery method |
| Transportation Group (Qingdao) Sunshine Automobile Sales and Service Co., Ltd. | 11,000,000.00 | Bank acceptance bill |
| Dalian Qingfeng Bus Co., Ltd. | 4,000,000.00 | Cash at bank |
| Beijing Institute of Radio Measurement | 71,740.00 | Cash at bank |
| Jilin Zhuzhan Automobile Trading Co., Ltd. | 35,000.00 | Cash at bank |
| Total | 15,106,740.00 |
(3)?Accounts Receivable Actually Written off in Current Period
Unit: CNY
| Item | Amount written off |
| Accounts receivable actually written off | 131,740.00 |
Verification of important accounts receivable is as follows:
Unit: CNY
| Name of Organization | Nature of accounts receivable | Amount written off | Reason for write-off | Write-off procedures performed | Whether generated by related party transactions |
| North Huade Vehicle Co., Ltd. | Payment for goods | 131,740.00 | Bad debts, long-term arrears that cannot be recovered | General manger's meeting for decisions | No |
| Total | 131,740.00 |
Description of write-off of accounts receivable:
(4) Accounts receivable from top five borrowers classified based on the ending balance
Unit: CNY
| Name of Organization | 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. | 320,294,820.43 | 31.63% | 410,938.54 |
| Customer 1 | 147,907,333.49 | 14.61% | 147,907.33 |
| Customer 2 | 69,454,500.00 | 6.86% | 14,329,977.70 |
| FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | 61,683,343.69 | 6.09% | 7,544,307.53 |
| Customer 3 | 39,197,356.00 | 3.87% | 215,585.46 |
| Total | 638,537,353.61 | 63.06% |
4.?Receivables financing
Unit: CNY
| Item | Ending balance | Opening balance |
| Notes receivable | 3,461,653,473.66 | 5,305,018,299.79 |
| Total | 3,461,653,473.66 | 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 expectedcredit losses:
□ Applicable Not applicable?
Other notes:
5. Prepayments
(1) Presentation of prepayment by aging
Unit: CNY
| Aging | Ending balance | Opening balance | ||
| Amount | Scale | Amount | Scale | |
| Within 1 year | 683,392,293.37 | 76.12% | 797,055,366.07 | 91.74% |
| 1-2 years | 179,765,899.07 | 20.02% | 44,227,099.84 | 5.09% |
| 2-3 years | 17,802,947.31 | 1.98% | 15,714,068.26 | 1.81% |
| Over 3 years | 16,873,724.33 | 1.88% | 11,814,878.82 | 1.36% |
| Total | 897,834,864.08 | 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. | 117,930,561.31 | 13.13 | Undue settlement period |
| Customer 1 | 24,390,033.00 | 2.72 | Undue settlement period |
| Name of Debtor | Book balance | Proportion in total prepayments (%) | Reasons for non-settlement |
| Qiming Information Technology Co., Ltd. | 6,354,000.00 | 0.71 | Undue settlement period |
| The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | 5,478,800.00 | 0.61 | Undue settlement period |
| Customer 2 | 4,916,803.42 | 0.55 | Undue settlement period |
| Customer 3 | 3,325,800.00 | 0.37 | Undue settlement period |
| Total | 162,395,997.73 | 18.09 | -- |
(2) Prepayments of the top five objects classified based on the ending balanceThe advance payments with top five closing balance classified by the prepaid parties in the current period isCNY 530,271,452.54, accounting for 59.06% of the total closing balance of advance payments.Other notes: none
6. Other receivables
Unit: CNY
| Item | Ending balance | Opening balance |
| Dividends receivable | 2,608,000.00 | 8,567,040.00 |
| Other accounts receivable | 1,065,846,162.91 | 240,521,050.95 |
| Total | 1,068,454,162.91 | 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. | 2,608,000.00 | 8,567,040.00 |
| Total | 2,608,000.00 | 8,567,040.00 |
2)?Provision for bad debts
□ Applicable Not applicable?
Other notes:
(2) Other receivables
1) Classification of other receivables by nature
Unit: CNY
| Nature | Ending book balance | Opening book balance |
| Current account | 915,518,158.63 | 99,570,166.66 |
| Claim payment | 197,953,339.79 | 196,444,173.02 |
| Margin, deposit | 38,988,831.99 | 34,872,256.53 |
| Reserve fund | 10,164,463.79 | 4,777,757.97 |
| Total | 1,162,624,794.20 | 335,664,354.18 |
2)?Provision for bad debts
Unit: CNY
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit loss for the next 12 months | Expected loss in the duration (credit impairment not occurred) | 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 | ||||
| 一 Transfer to stage II | -555,299.13 | 555,299.13 | ||
| 一 Transfer to stage III | -8,227,110.28 | 8,227,110.28 | ||
| Provision in the current period | -1,475,914.17 | 3,115,083.12 | 1,639,168.95 | |
| Reversal in the current period | -3,840.89 | -3,840.89 | ||
| Balance as at December 31, 2022 | 3,002,964.74 | 25,052,575.21 | 68,723,091.34 | 96,778,631.29 |
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 | Book balance |
| Within 1 year (including 1 year) | 1,063,615,196.21 |
| Including: 0-6 months | 1,062,285,764.54 |
| 7-12 months | 1,329,431.67 |
| 1-2 years | 1,441,092.04 |
| 2-3 years | 4,041,713.73 |
| Over 3 years | 93,526,792.22 |
| 3-4 years | 8,377,324.28 |
| 4-5 years | 39,525,093.62 |
| Over 5 years | 45,624,374.32 |
| Total | 1,162,624,794.20 |
3)?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 | |||
| Other accounts receivable | 95,143,303.23 | 1,639,168.95 | -3,840.89 | 96,778,631.29 | ||
| Total | 95,143,303.23 | 1,639,168.95 | -3,840.89 | 96,778,631.29 | ||
Important provision for bad debts recovered or reversed in the current period:
Unit: CNY
| Name of Organization | Amount reversed or recovered | Recovery method |
| Employee arrears | 3,840.89 | Cash at bank |
| Total | 3,840.89 | —— |
4)?Other receivables from top five borrowers classified based on the ending balance
Unit: CNY
| Name of Organization | Payment nature | Ending balance | Aging | Proportion in total ending balance of other receivables | Ending balance of bad debts provision |
| Customer 1 | Funds for land purchase and reserve | 660,862,800.00 | Within 1 year | 56.84% | 660,862.80 |
| Customer 2 | Current account | 50,230,038.50 | 0-6 months | 4.32% | 462,116.35 |
| Customer 3 | Current account | 49,557,522.13 | 0-6 months | 4.26% | 455,929.20 |
| Customer 4 | New energy vehicle sales subsidies | 48,155,960.00 | 4-5 years; over 5 years | 4.14% | 48,155,960.00 |
| Customer 5 | Current account | 38,332,743.36 | 0-6 months | 3.30% | 352,661.24 |
| Total | 847,139,063.99 | 72.86% | 50,087,529.59 |
7.?Inventories
Whether the Company is required to comply with the disclosure requirements of the real estate industry: No
(1) Classification of inventories
Unit: CNY
| Item | Ending balance | Opening balance | ||||
| Book balance | Provision for impairment of inventory or contract performance cost | Carrying amount | Book balance | Provision for impairment of inventory or contract performance cost | Carrying amount | |
| Raw materials | 351,801,254.38 | 34,595,186.53 | 317,206,067.85 | 379,195,753.25 | 35,363,287.47 | 343,832,465.78 |
| Goods in process | 564,240,295.08 | 3,741,307.32 | 560,498,987.76 | 676,093,365.06 | 4,732,672.33 | 671,360,692.73 |
| Goods in stocks | 3,281,304,875.32 | 183,152,615.52 | 3,098,152,259.80 | 5,864,661,527.18 | 143,363,374.55 | 5,721,298,152.63 |
| Revolving materials | 92,939,661.90 | 2,463,306.64 | 90,476,355.26 | 103,311,491.37 | 1,244,042.64 | 102,067,448.73 |
| Others | 2,509,560,166.91 | 193,153,939.75 | 2,316,406,227.16 | 2,618,917,617.54 | 189,355,846.16 | 2,429,561,771.38 |
| Total | 6,799,846,253.59 | 417,106,355.76 | 6,382,739,897.83 | 9,642,179,754.40 | 374,059,223.15 | 9,268,120,531.25 |
8. Contractual assets
Unit: CNY
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Carrying amount | Book balance | Impairment provision | Carrying amount | |
| Contract assets | 11,341,422.54 | 211,797.79 | 11,129,624.75 | 57,650,067.72 | 4,602,380.00 | 53,047,687.72 |
| Total | 11,341,422.54 | 211,797.79 | 11,129,624.75 | 57,650,067.72 | 4,602,380.00 | 53,047,687.72 |
Amount and reason of significant changes in the book value of contract assets in the current period: Unit: CNY
| Item | Change amount | Reason for change |
| Shandong Wuzheng Group Co., Ltd. | 3,163,711.67 | New quality guarantee deposit in the current period |
| Forland Pilot Truck Factory of Beiqi Foton Motor Co., Ltd. | -1,714,986.00 | Expiration of quality guarantee deposit |
| Changchun Public Transport (Group) Co., Ltd. | -43,838,920.00 | Expiration of quality guarantee deposit |
| Total | -42,390,194.33 | —— |
Information about the provision for bad debts shall be disclosed in the same way as that of other receivables ifthe provision for impairment of contractual assets is withdrawn based on the general model of expected creditlosses:
?Applicable □ Not ApplicableBad debt provision made as per portfolio:
Portfolio provision item: aging portfolio Unit: CNY
| Category | Ending balance | Ending balance of the previous year | ||||
| Contract assets | Bad debt provision | Expected credit loss rate (%) | Contract assets | Bad debt provision | Expected credit loss rate (%) | |
| Within 1 year | 10,153,037.67 | 34,255.92 | 0.34 | 31,421,323.96 | 86,311.95 | 0.27 |
| 1-2 years | 1,188,384.87 | 177,541.87 | 14.94 | 26,228,743.76 | 4,516,068.05 | 17.22 |
| Total | 11,341,422.54 | 211,797.79 | 1.87 | 57,650,067.72 | 4,602,380.00 | 7.98 |
Provision for impairment of contract 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 | -4,390,582.21 | Risks in payment collection | ||
| Total | -4,390,582.21 | —— |
9.?Long-term receivables due within 1 year
Unit: CNY
| Item | Ending balance | Opening balance |
| Long-term receivables due within 1 year | 191,262,030.30 | 114,825,391.38 |
| Total | 191,262,030.30 | 114,825,391.38 |
10. Other current assets
Unit: CNY
| Item | Ending balance | Opening balance |
| Input tax | 510,325,627.83 | 1,368,192,743.48 |
| Input tax to be verified | 384,601,871.76 | 19,065,353.23 |
| Prepaid income tax | 626,891,494.80 | |
| Total | 894,927,499.59 | 2,014,149,591.51 |
11. Long-term receivables
(1) Long-term receivables
Unit: CNY
| Item | Ending balance | Opening balance | Discount rate range | ||||
| Book balance | Bad debt provision | Carrying amount | Book balance | Bad debt provision | Carrying amount | ||
| Sales of goods by installments | 315,738,954.37 | 2,870,336.64 | 312,868,617.73 | 338,691,573.49 | 1,275,424.32 | 337,416,149.17 | |
| Long-term receivables due within 1 year | -193,577,418.87 | -2,315,388.57 | -191,262,030.30 | -115,267,222.47 | -441,831.09 | -114,825,391.38 | |
| Total | 122,161,535.50 | 554,948.07 | 121,606,587.43 | 223,424,351.02 | 833,593.23 | 222,590,757.79 | |
Impairment of provision for bad debts
Unit: CNY
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit loss for the next 12 months | Expected loss in the duration (credit impairment not occurred) | 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 | 1,594,912.32 | 1,594,912.32 | ||
| Balance as at December 31, 2022 | 2,870,336.64 | 2,870,336.64 |
Changes in the book balance of the loss provision with significant changes in the current period
□ Applicable Not applicable?
12. Long-term Equity Investment 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 decrease | Investment gains or losses recognized under the equity method | Adjustment to other comprehensive income | Changes in other equity | Cash dividends and profits declared to pay | Impairment provision | Others | ||||
| I. Joint ventures | |||||||||||
| II. Associated enterprises | |||||||||||
| First Automobile Finance Co., Ltd. | 4,341,181,324.38 | 358,137,304.38 | -98,154.88 | 429,182,504.29 | 4,270,037,969.59 | ||||||
| Sanguard Automobile Insurance Co., Ltd. | 213,584,040.85 | 6,044,847.34 | -686,753.20 | 17,920,972.75 | 201,021,162.24 | ||||||
| FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | 85,910,484.18 | 3,642,150.88 | 121,594.12 | 2,608,000.00 | 87,066,229.18 | ||||||
| Changchun Wabco Automotive Control System Co., Ltd. | 20,301,325.09 | -3,013,158.96 | 17,288,166.13 | ||||||||
| Suzhou Zhito Technology Co., Ltd. | |||||||||||
| FAW Changchun Baoyou Steel Processing and | 43,140,497.54 | 7,015,983.25 | 6,300,012.21 | 43,856,468.58 | |||||||
| Distribution Co., Ltd. | |||||||||||
| FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | 35,181,984.88 | 1,910,582.53 | 37,092,567.41 | ||||||||
| SmartLink | 27,435,014.82 | -27,148,942.11 | 286,072.71 | ||||||||
| Foshan Diyiyuan New Energy Technology Co., Ltd. | 36,000,000.00 | 36,000,000.00 | |||||||||
| Subtotal | 4,766,734,671.74 | 36,000,000.00 | 346,588,767.31 | -784,908.08 | 121,594.12 | 456,011,489.25 | 4,692,648,635.84 | ||||
| Total | 4,766,734,671.74 | 36,000,000.00 | 346,588,767.31 | -784,908.08 | 121,594.12 | 456,011,489.25 | 4,692,648,635.84 |
Other notes:
13. Other equity instrument investments
Unit: CNY
| Item | Ending balance | Opening balance |
| REFIRE | 480,780,000.00 | |
| Total | 480,780,000.00 |
Other notes: The equity of Shanghai Refire Group Limited is an investment that the Company plans to hold fora long time for strategic purposes, so the Company designates it as a financial asset measured at fair value andwhose changes are included in other comprehensive incomes.
14. 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 | 17,261,344.57 | 92,855,371.47 | 110,116,716.04 | |
| (1) Purchase | ||||
| (2) Transferred from inventories / fixed assets / construction in progress | 17,261,344.57 | 92,855,371.47 | 110,116,716.04 | |
| (3) Increase due to business combination | ||||
| 3. Decrease in the current period | 19,853,163.65 | 87,533,093.13 | 107,386,256.78 | |
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| (3) Reversal of intangible assets | 87,533,093.13 | 87,533,093.13 | ||
| (4) Transferred to fixed assets | 16,931,930.47 | 16,931,930.47 | ||
| (5) Transferred to construction in progress | 2,921,233.18 | 2,921,233.18 | ||
| 4. Ending balance | 145,745,882.84 | 7,364,400.94 | 153,110,283.78 | |
| 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 | 17,341,992.28 | 21,497,218.21 | 38,839,210.49 | |
| (1) Provision or amortization | 7,328,867.88 | 1,309,979.48 | 8,638,847.36 | |
| (2) Other increases | 10,013,124.40 | 20,187,238.73 | 30,200,363.13 | |
| 3. Decrease in the current period | 16,200,021.65 | 20,353,501.97 | 36,553,523.62 | |
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| (3) Reversal of intangible assets | 20,353,501.97 | 20,353,501.97 | ||
| (4) Transferred to fixed assets | 13,358,236.95 | 13,358,236.95 | ||
| (5) Transferred to construction in progress | 2,841,784.70 | 2,841,784.70 | ||
| 4. Ending balance | 71,218,610.71 | 1,244,075.59 | 72,462,686.30 | |
| 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 | ||||
| 4. Ending balance | ||||
| IV. Book value | ||||
| 1. Ending book value | 74,527,272.13 | 6,120,325.35 | 80,647,597.48 | |
| 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 | Carrying amount | Reasons for failure to obtain the certificate |
| Property, No. 949, Chongqing Middle Road, Licang District | 1,139,949.09 | This plot has been included in the government renovation project, and the property ownership certificate cannot be applied for at present |
Other notes:
15. Fixed assets
Unit: CNY
| Item | Ending balance | Opening balance |
| Fixed assets | 9,604,636,127.53 | 9,224,786,362.59 |
| Fixed assets liquidation | 8,286,682.75 | 12,002,959.44 |
| Total | 9,612,922,810.28 | 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 | 512,847,259.65 | 1,305,207,244.87 | 16,618,348.08 | 107,948,086.49 | 9,876,554.53 | 69,571,941.23 | 2,022,069,434.85 |
| (1) Purchase | 7,323,316.04 | 124,649,827.82 | 12,272,892.19 | 79,798,962.29 | 1,836,183.46 | 41,425,204.35 | 267,306,386.15 |
| (2) Transfer to construction in progress | 488,592,013.14 | 1,180,557,417.05 | 4,345,455.89 | 28,149,124.20 | 8,040,371.07 | 28,146,736.88 | 1,737,831,118.23 |
| (3) Increase due to business combination | |||||||
| (4) Other increases | 16,931,930.47 | 16,931,930.47 | |||||
| 3. Decrease in the current period | 152,520,446.16 | 507,434,433.27 | 6,938,046.83 | 18,503,944.47 | 1,257,616.55 | 11,000,868.67 | 697,655,355.95 |
| (1) Disposal or retirement | 118,838,331.39 | 394,660,332.13 | 4,769,006.41 | 18,503,944.47 | 1,257,616.55 | 11,000,868.67 | 549,030,099.62 |
| (2) Other decreases | 33,682,114.77 | 112,774,101.14 | 2,169,040.42 | 148,625,256.33 | |||
| 4. Ending balance | 5,725,009,716.16 | 15,656,156,281.82 | 163,214,691.23 | 662,116,184.02 | 60,661,288.33 | 1,331,905,071.36 | 23,599,063,232.92 |
| II. Accumulated depreciation | |||||||
| 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 | 278,585,879.88 | 1,046,296,805.59 | 18,578,581.99 | 86,065,747.31 | 5,724,655.51 | 99,198,577.63 | 1,534,450,247.91 |
| (1) Provision | 265,227,642.93 | 1,046,181,393.98 | 18,414,338.25 | 86,065,747.31 | 5,724,655.51 | 99,198,577.63 | 1,520,812,355.61 |
| (2) Transfer to construction in progress | 115,411.61 | 164,243.74 | 279,655.35 | ||||
| (3) Other increases | 13,358,236.95 | 13,358,236.95 | |||||
| 3. Decrease in the current period | 115,487,732.35 | 392,113,522.05 | 4,808,484.38 | 18,423,385.20 | 1,195,593.94 | 10,646,640.95 | 542,675,358.87 |
| (1) Disposal or retirement | 92,365,173.75 | 315,963,802.37 | 4,644,240.64 | 18,423,385.20 | 1,195,593.94 | 10,646,640.95 | 443,238,836.85 |
| (2) Other decreases | 23,122,558.60 | 76,149,719.68 | 164,243.74 | 99,436,522.02 | |||
| 4. Ending balance | 2,311,008,528.82 | 9,948,863,333.22 | 116,715,194.87 | 483,841,486.87 | 44,160,940.50 | 1,059,255,698.93 | 13,963,845,183.21 |
| III. Provision for impairment | |||||||
| 1. Opening balance | 12,344.37 | 75,572,210.09 | 2,207,942.80 | 77,792,497.26 | |||
| 2. Increase in the current | 10,230,753.57 | 10,230,753.57 |
| period | |||||||
| (1) Provision | 10,230,753.57 | 10,230,753.57 | |||||
| 3. Decrease in the current period | 57,441,328.65 | 57,441,328.65 | |||||
| (1) Disposal or retirement | 57,441,328.65 | 57,441,328.65 | |||||
| 4. Ending balance | 12,344.37 | 28,361,635.01 | 2,207,942.80 | 30,581,922.18 | |||
| IV. Book value | |||||||
| 1. Ending book value | 3,413,988,842.97 | 5,678,931,313.59 | 46,499,496.36 | 178,274,697.15 | 16,500,347.83 | 270,441,429.63 | 9,604,636,127.53 |
| 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 | Carrying amount | Remarks |
| Machinery equipment | 56,614,790.77 | 34,692,721.09 | 17,791,117.86 | 4,130,951.82 | |
| Others | 73,498,836.51 | 69,932,814.46 | 2,207,942.80 | 1,358,079.25 | |
| Total | 130,113,627.28 | 104,625,535.55 | 19,999,060.66 | 5,489,031.07 |
(3) Fixed assets without property ownership certificates
Unit: CNY
| Item | Carrying amount | Reasons for failure to obtain the certificate |
| Project of exiting the city and entering the industrial park | 245,701,254.96 | It is a new plant, and the information is incomplete and currently being processed. |
| Joint workshop and laboratory | 168,095,079.74 | Assets are newly added in 2022, with procedures not completed yet |
| FAW Jiefang south new energy base project | 119,485,690.05 | It is a new plant, and the information is incomplete and currently being processed. |
| Hazardous waste station in plant area I | 2,693,553.53 | Relevant certificates are incomplete |
| Equipment workshop works | 1,101,619.26 | Land applications are not submitted, so the property ownership certificate cannot be obtained |
Other notes:
(4) Fixed assets liquidation
Unit: CNY
| Item | Ending balance | Opening balance |
| Houses and buildings | 283,806.99 | 8,280.77 |
| Machinery equipment | 7,759,672.33 | 10,642,669.15 |
| Means of transportation | 113,084.68 | 219,822.98 |
| Electronic equipment | 77,126.05 | 8,298.69 |
| Office equipment | 45,702.70 | 18,904.69 |
| Others | 7,290.00 | 1,104,983.16 |
| Total | 8,286,682.75 | 12,002,959.44 |
Other notes:
16. Construction in progress
Unit: CNY
| Item | Ending balance | Opening balance |
| Project under construction | 1,902,143,354.11 | 965,997,208.23 |
| Total | 1,902,143,354.11 | 965,997,208.23 |
(1) Project under construction
Unit: CNY
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Carrying amount | Book balance | Impairment provision | Carrying amount | |
| New and reconstructed investment project | 230,889,214.48 | 1,945,416.12 | 228,943,798.36 | 235,582,222.31 | 1,945,416.12 | 233,636,806.19 |
| Technical transformation investment project | 1,673,255,052.94 | 55,497.19 | 1,673,199,555.75 | 732,415,899.23 | 55,497.19 | 732,360,402.04 |
| Total | 1,904,144,267.42 | 2,000,913.31 | 1,902,143,354.11 | 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 current period | Amount transferred to fixed assets in the current period | Other deductions in the current period | Ending balance | Proportion of accumulated investment in constructions to budget | Project progress | Cumulative amount of capitalized interest | Including: Capitalized interest amount during the current period | Capitalization rate of interest in current period | Sources of funds |
| FAW Jiefang commercial vehicle Guanghan base project | 999,970,000.00 | 138,759,113.95 | 481,729,983.01 | 620,489,096.96 | 62.05% | 62.05% | Others | |||||
| Axle base construction project and heavy replacement axle technology upgrade (phase I) | 989,859,950.93 | 79,972,863.66 | 341,454,665.18 | 421,427,528.84 | 46.00% | 65.00% | Others | |||||
| Engine construction and natural gas | 1,227,429,000.00 | 112,386,329.25 | 529,188,167.59 | 339,046,251.50 | 302,528,245.34 | 55.00% | 63.40% | Others |
| test capacity improvement project (16L) | ||||||||||||
| Collinear project of 50,000 sets of new 13L and M series engines | 667,780,000.00 | 102,315,208.39 | 102,315,208.39 | 15.32% | 15.00% | Others | ||||||
| Thin plate stamping capacity expansion project of Jimo factory | 198,000,000.00 | 85,791,504.96 | 85,791,504.96 | 43.33% | 44.04% | Others | ||||||
| R&D capacity improvement project of FAW Jiefang Qingdao Base | 636,619,900.00 | 49,273,323.85 | 49,273,323.85 | 7.74% | 5.63% | Others | ||||||
| FAW Jiefang south new energy base project | 413,800,000.00 | 82,263,770.61 | 114,239,821.86 | 154,826,435.39 | 41,677,157.08 | 69.63% | 76.60% | Others | ||||
| Project for introducin | 79,820,000.00 | 20,357,026.83 | 20,357,026.83 | 25.50% | 26.00% | Others |
| g new energy and other products as well as upgrading intelligent logistics | ||||||||||||
| M engine crankshaft capacity improvement project (W31000000111) | 30,500,000.00 | 2,106,866.39 | 17,661,339.47 | 19,768,205.86 | 64.81% | 64.81% | Others | |||||
| Project of exiting the city and entering the industrial park | 936,068,800.00 | 19,204,724.39 | 1,830,680.07 | 1,830,680.07 | 19,204,724.39 | 94.21% | 99.80% | Others | ||||
| Motor assembly line | 22,300,000.00 | 15,221,238.88 | 15,221,238.88 | 68.26% | 68.26% | Others | ||||||
| Qingqi New Energy Light Truck Base Project | 998,000,000.00 | 280,930,246.91 | 3,341,363.58 | 284,271,610.49 | 100% | 100% | Others | |||||
| capacity expansion project of light truck | 169,960,000.00 | 144,594,242.99 | 142,563,900.01 | 2,030,342.98 | 85.08% | 85.08% | Others |
| welding line in welding workshop of Jimo factory | ||||||||||||
| Intelligent transformation of welding workshop automation | 59,130,000.00 | 25,718,230.08 | 17,145,486.72 | 42,863,716.80 | 100% | 100% | Others | |||||
| Total | 7,429,237,650.93 | 741,342,145.24 | 1,924,144,053.38 | 965,402,594.26 | 1,700,083,604.36 |
17. Productive biological assets
(1) Bearer biological assets measured at cost
□ Applicable Not applicable?
(2) Bearer biological assets measured at fair value
□ Applicable Not applicable?
18. Oil and gas assets
□ Applicable Not applicable?
19. 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 | 55,635,089.59 | 54,778,761.05 | 110,413,850.64 | |
| Including: rent | 55,635,089.59 | 54,778,761.05 | 110,413,850.64 | |
| 3. Decrease in the current period | 4,748,858.75 | 17,495,179.83 | 22,244,038.58 | |
| 4. Ending balance | 203,880,616.59 | 54,778,761.06 | 23,719,044.14 | 282,378,421.79 |
| 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 | 38,218,557.10 | 8,112,052.32 | 6,511,130.39 | 52,841,739.81 |
| (1) Provision | 38,218,557.10 | 8,112,052.32 | 6,511,130.39 | 52,841,739.81 |
| 3. Decrease in the current period | 2,725,362.04 | 16,400,642.86 | 19,126,004.90 | |
| (1) Disposal | ||||
| 4. Ending balance | 71,135,818.41 | 13,022,260.79 | 84,158,079.20 | |
| III. Provision for impairment | ||||
| 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 | 132,744,798.18 | 54,778,761.06 | 10,696,783.35 | 198,220,342.59 |
| 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, refer to 2 "Others" in V "Significant Accounting Policies and Accounting Estimates" of Section X -Financial Report.
20. 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 | 209,886,782.30 | 102,989,627.64 | 312,876,409.94 | ||
| (1) Purchase | 122,353,689.17 | 82,658,365.18 | 205,012,054.35 | ||
| (2) Internal R&D | |||||
| (3) Increase due to business combination | |||||
| (4) Other increases | 87,533,093.13 | 20,331,262.46 | 107,864,355.59 | ||
| 3. Decrease in the current period | 443,801,317.32 | 309,877,041.02 | 7,508,036.81 | 761,186,395.15 | |
| (1) Disposal | 350,945,945.85 | 7,508,036.81 | 358,453,982.66 | ||
| (2) Invalid and derecognized portion | 309,877,041.02 | 309,877,041.02 | |||
| (3) Other decreases | 92,855,371.47 | 92,855,371.47 | |||
| 4. Ending balance | 2,638,198,126.04 | 367,511,725.92 | 607,046,360.09 | 3,612,756,212.05 | |
| 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 | 81,162,265.36 | 50,951,211.18 | 61,142,635.11 | 193,256,111.65 | |
| (1) Provision | 60,808,763.39 | 50,951,211.18 | 61,142,635.11 | 172,902,609.68 | |
| (2) Other increases | 20,353,501.97 | 20,353,501.97 | |||
| 3. Decrease in the current period | 101,003,328.09 | 309,877,041.02 | 7,505,529.67 | 418,385,898.78 | |
| (1) Disposal | 80,816,089.36 | 7,505,529.67 | 88,321,619.03 | ||
| (2) Invalid and derecognized portion | 309,877,041.02 | 309,877,041.02 | |||
| (3) Other decreases | 20,187,238.73 | 20,187,238.73 | |||
| 4. Ending balance | 553,533,325.53 | 303,361,007.48 | 206,764,960.99 | 1,063,659,294.00 | |
| III. Provision for impairment | |||||
| 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 | 2,084,664,800.51 | 64,150,718.44 | 400,281,399.10 | 2,549,096,918.05 | |
| 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 0.00%of the balance of intangible assets at the end of the current period.
(2) Conditions of land use right whose property certificates are not settled
Unit: CNY
| Item | Carrying amount | Reasons for failure to obtain the certificate |
| Parcels 2# and 3# of Guanghan Base | 117,629,829.11 | After the land ownership certificates of the 2 plots were returned to the government for destruction, the procedures for consolidating the certificates have not been handled. |
Other notes:
21. Development expenditures
Unit: CNY
| Item | Opening balance | Increase in current period | Decrease in current period | Ending balance | ||
| Internal development expenditures | Others | Recognized as intangible assets | Transferred to current profits and losses | |||
| Cost-based expenditure | 2,895,655,097.73 | 2,895,655,097.73 | ||||
| Total | 2,895,655,097.73 | 2,895,655,097.73 | ||||
Other notes:
22. Long-term unamortized expenses
Unit: CNY
| Item | Opening balance | Increase in current period | Amortization amount in the current period | Other decreases | Ending balance |
| Maintenance, fire protection transformation and supporting expenses | 334,598.30 | 204,158.64 | 130,439.66 | ||
| Total | 334,598.30 | 204,158.64 | 130,439.66 |
Other notes:
23. Deferred tax assets/deferred tax liabilities
(1) Deferred tax assets not offset
Unit: CNY
| Item | Ending balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Provision for impairment of assets | 633,651,664.00 | 111,898,550.65 | 644,896,017.71 | 108,060,894.94 |
| Unrealized profits of internal transactions | 11,827,733.38 | 2,956,933.35 | 433,668,860.00 | 108,417,215.00 |
| Deductible losses | 5,145,166,718.01 | 927,446,279.03 | 1,337,622,355.67 | 275,224,988.92 |
| Estimated liabilities | 794,067,908.68 | 132,797,620.71 | 1,133,139,410.76 | 189,238,389.56 |
| Employee compensation payable | 118,991,183.21 | 20,016,363.56 | 95,057,719.68 | 16,232,178.23 |
| Accrued expenses | 3,175,125,774.27 | 742,710,859.21 | 3,203,797,740.11 | 738,848,418.90 |
| Deferred incomes | 538,046,593.82 | 108,889,119.49 | 586,360,167.55 | 114,073,451.58 |
| Contract liabilities | 539,407,507.24 | 84,634,179.21 | 575,584,804.51 | 100,200,974.13 |
| Total | 10,956,285,082.61 | 2,131,349,905.21 | 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 | 2,206,140,811.13 | 386,257,051.99 | 2,056,171,246.16 | 349,311,074.60 |
| Interest income accrued | 293,135,708.15 | 44,112,815.94 | 162,580,602.64 | 24,874,039.55 |
| Total | 2,499,276,519.28 | 430,369,867.93 | 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 income tax assets | 2,131,349,905.21 | 1,650,296,511.26 | ||
| Deferred income tax liabilities | 430,369,867.93 | 374,185,114.15 |
(4) Details of unrecognized deferred tax assets
Unit: CNY
| Item | Ending balance | Opening balance |
| Deductible temporary difference | 619,818,965.27 | 664,263,202.95 |
| Deductible losses | 499,742,487.05 | 276,845,879.98 |
| Total | 1,119,561,452.32 | 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 |
| 2022 | |||
| 2023 | |||
| 2024 | |||
| 2025 | |||
| Year 2026 | 1,441,940.00 | 1,441,940.00 | |
| 2027 | 3,524,136.57 | ||
| 2028 | 259,853,735.45 | 231,853,580.86 | |
| 2029 | 41,881,736.88 | 43,550,359.12 | |
| 2030 | |||
| 2031 | |||
| 2032 | 193,040,938.15 | ||
| Total | 499,742,487.05 | 276,845,879.98 |
Other notes:
24. Notes payable
Unit: CNY
| Type | Ending balance | Opening balance |
| Bank acceptance bill | 9,198,593,038.03 | 13,062,704,192.54 |
| Total | 9,198,593,038.03 | 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.
25. Accounts payable
(1) Presentation of accounts payable
Unit: CNY
| Item | Ending balance | Opening balance |
| Payment for goods | 9,297,168,020.86 | 12,959,963,131.32 |
| Project and equipment payment | 11,953,792.66 | 21,713,517.52 |
| Fees and others | 724,486,854.54 | 1,583,223,345.63 |
| Total | 10,033,608,668.06 | 14,564,899,994.47 |
(2) Significant accounts payable with the aging over 1 year
Unit: CNY
| Item | Ending balance | Reasons for not repaying or carrying forward |
| Supplier 1 | 5,243,361.11 | At the stage of legal adjudication, the account is frozen and the payment is stopped. |
| Supplier 2 | 4,244,960.23 | Both parties have not reached an agreement on the content of the contract, and will not make payment temporarily. |
| Total | 9,488,321.34 |
Other notes:
26. Advance receipts
(1) Presentation of advances receipts
Unit: CNY
| Item | Ending balance | Opening balance |
| Rental fee | 1,861,865.37 | 1,712,917.27 |
| Total | 1,861,865.37 | 1,712,917.27 |
27. Contract liabilities
Unit: CNY
| Item | Ending balance | Opening balance |
| Payment for goods | 1,155,321,169.46 | 2,324,758,318.77 |
| Others | 607,787,793.96 | 643,363,601.92 |
| Contract liabilities included in other current liabilities | -133,584,259.07 | -267,479,444.78 |
| Total | 1,629,524,704.35 | 2,700,642,475.91 |
28. Employee pay payable
(1) Presentation of employee compensation payable
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance |
| I. Short-term compensation | 248,475,175.17 | 4,512,254,689.28 | 4,487,055,551.45 | 273,674,313.00 |
| II. Post-employment benefits-defined contribution plan | 20,760,130.28 | 673,411,917.06 | 631,342,706.16 | 62,829,341.18 |
| III. Dismissal welfare | 40,525,119.92 | 75,164,048.19 | 69,504,643.53 | 46,184,524.58 |
| IV. Current portion of other welfare | 54,690,000.00 | 67,374,059.37 | 68,104,059.37 | 53,960,000.00 |
| Total | 364,450,425.37 | 5,328,204,713.90 | 5,256,006,960.51 | 436,648,178.76 |
(2) Presentation of short-term compensation
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance |
| 1. Wages, bonuses, allowances and subsidies | 3,089,898,058.03 | 3,089,898,058.03 | ||
| 2. Employee welfare | 237,865,196.05 | 237,865,196.05 | ||
| 3. Social insurance premium | 4,091,540.25 | 344,992,625.87 | 343,869,231.52 | 5,214,934.60 |
| Including: medical insurance premium | 4,091,540.25 | 323,969,253.15 | 324,099,638.54 | 3,961,154.86 |
| Work-related injury insurance premium | 15,529,747.23 | 14,275,967.49 | 1,253,779.74 | |
| Maternity insurance premium | 5,493,625.49 | 5,493,625.49 | ||
| 4. Housing fund | 492,904,401.23 | 492,903,517.23 | 884.00 | |
| 5. Labor union funds and employee education funds | 244,383,634.92 | 108,478,915.09 | 84,404,055.61 | 268,458,494.40 |
| Other short-term compensations | 238,115,493.01 | 238,115,493.01 | ||
| Total | 248,475,175.17 | 4,512,254,689.28 | 4,487,055,551.45 | 273,674,313.00 |
(3) Presentation of defined contribution plan
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance |
| 1. Basic endowment insurance | 16,032,537.24 | 459,206,806.73 | 425,765,165.93 | 49,474,178.04 |
| 2. Unemployment insurance premium | 2,374,937.21 | 18,739,687.59 | 17,276,613.86 | 3,838,010.94 |
| 3. Enterprise annuity | 2,352,655.83 | 195,465,422.74 | 188,300,926.37 | 9,517,152.20 |
| Total | 20,760,130.28 | 673,411,917.06 | 631,342,706.16 | 62,829,341.18 |
Other notes:
29. Taxes payable
Unit: CNY
| Item | Ending balance | Opening balance |
| VAT | 142,544,438.56 | 11,331,447.35 |
| Corporate income tax | 73,697,911.27 | 21,659.10 |
| Individual income tax | 45,190,640.96 | 40,089,512.39 |
| Urban maintenance and construction tax | 8,789,299.91 | 1,789,459.45 |
| Resource tax | 7,143.40 | |
| Property tax | 7,910,979.72 | 7,611,594.27 |
| Land use tax | 4,512,474.49 | 4,508,520.75 |
| Education surcharges | 8,830,240.70 | 3,751,315.40 |
| Other taxes | 9,735,859.90 | 104,837,877.42 |
| Total | 301,211,845.51 | 173,948,529.53 |
Other notes:
30. Other payables
Unit: CNY
| Item | Ending balance | Opening balance |
| Dividends payable | 171,500.02 | 171,500.02 |
| Other payables | 6,095,281,248.15 | 7,383,051,672.28 |
| Total | 6,095,452,748.17 | 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 morethan 1 year:
(2) Other payables
1) Presentation of other payables by nature
Unit: CNY
| Item | Ending balance | Opening balance |
| Expenses payable | 3,371,722,694.19 | 4,656,353,118.05 |
| Margin, deposit | 311,219,645.69 | 377,161,619.49 |
| Project funds payable | 1,524,956,021.50 | 1,381,458,524.66 |
| Current accounts payable and others | 619,545,702.66 | 657,617,923.70 |
| Repurchase obligations of restricted shares | 267,837,184.11 | 310,460,486.38 |
| Total | 6,095,281,248.15 | 7,383,051,672.28 |
2) Other significant payables with the aging over 1 year
Unit: CNY
| Item | Ending balance | Reasons for not repaying or carrying forward |
| The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | 70,336,468.54 | Project not completed |
| Supplier 1 | 28,123,255.19 | Project not completed |
| Fujie Henglu (Shenzhen) Non-financing Guarantee Co., Ltd. | 20,000,000.00 | Margin, deposit |
| Supplier 2 | 5,920,000.00 | Project not completed |
| Supplier 3 | 5,000,000.00 | New energy subsidy will be paid after the national standard is met and the application is successful. |
| Total | 129,379,723.73 |
Other notes:
31. Current portion of non-current liabilities
Unit: CNY
| Item | Ending balance | Opening balance |
| Current portion of lease liabilities | 32,998,374.87 | 47,060,544.71 |
| Total | 32,998,374.87 | 47,060,544.71 |
Other notes:
32. Other current liabilities
Unit: CNY
| Item | Ending balance | Opening balance |
| Taxes to be written off | 133,584,259.07 | 267,479,444.78 |
| Total | 133,584,259.07 | 267,479,444.78 |
33. Lease liabilities
Unit: CNY
| Item | Ending balance | Opening balance |
| Lease payment | 94,353,447.57 | 146,978,150.99 |
| Unrecognized financing charges | -6,540,469.64 | -11,610,388.23 |
| Current portion of lease liabilities | -32,998,374.87 | -47,060,544.71 |
| Total | 54,814,603.06 | 88,307,218.05 |
Other notes: The interest of lease liabilities accrued in 2022 is CNY 5,263,200, which is included in financialexpenses - interest expenses.
34. Long-term employee benefits 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 | 694,320,000.00 | 756,440,000.00 |
| II. Termination benefits | 112,469,743.86 | 103,304,166.28 |
| Current portion of long-term employee remuneration payable | -99,478,853.43 | -95,215,119.92 |
| Total | 707,310,890.43 | 764,529,046.36 |
35. Provisions
Unit: CNY
| Item | Ending balance | Opening balance | Cause |
| Pending litigation | 32,195,157.32 | 27,454,443.34 | Cases responding to action |
| Product quality assurance | 826,046,651.49 | 1,212,805,881.15 | Expenses for return, replacement and repair |
| Others | 17,226,995.29 | 17,226,995.29 | Labor social security |
| Total | 875,468,804.10 | 1,257,487,319.78 |
Other notes, including important assumptions and estimation descriptions related to important estimated
liabilities:
36. Deferred incomes
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance | Cause |
| Government subsidies | 2,473,072,814.33 | 1,281,203,031.25 | 632,290,159.65 | 3,121,985,685.93 | |
| Total | 2,473,072,814.33 | 1,281,203,031.25 | 632,290,159.65 | 3,121,985,685.93 | -- |
Other notes: For details of government subsidies included in deferred incomes, please refer to 63 "GovernmentSubsidies" in VII of Section X - Financial Report.
37. Share capital
Unit: CNY
| Opening balance | Increase/Decrease (+/-) | Ending balance | |||||
| Issue of New Shares | Bonus shares | Share Transferred from Accumulation Fund | Others | Subtotal | |||
| Total shares | 4,654,114,613.00 | -2,148,958.00 | -2,148,958.00 | 4,651,965,655.00 | |||
Other notes: The share capital is decreased by CNY 2,148,958.00 in the current period, which is caused by therepurchase and cancellation of restricted shares of the Company. For details, refer to III "Company Profile" ofSection X - Financial Report.
38. Capital reserves
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance |
| Capital premium (stock premium) | 9,384,981,147.23 | 11,582,883.62 | 9,373,398,263.61 | |
| Other capital reserves | 1,054,383,945.95 | 23,306,027.18 | 1,077,689,973.13 | |
| Total | 10,439,365,093.18 | 23,306,027.18 | 11,582,883.62 | 10,451,088,236.74 |
Other notes, including descriptions of changes and reasons for changes in the current period:
(1) The capital reserve (share premium) is decreased by CNY 11,582,883.62 in the current period, which iscaused by the repurchase and cancellation of the Company's equity incentive plan.
(2) The capital reserve (other capital reserves) is increased by CNY 23,184,433.06 in the current period, whichis caused by the recognition of share payment expenses in the waiting period of the Company's equity incentiveplan;
(3) The capital reserve (other capital reserves) is increased by CNY 121,594.12 in the current period, which iscaused by the Company's recognition of changes in other owner's equity of the investee in proportion to itsequity, other than net profit or loss, other comprehensive income and profit distribution.
39. Treasury shares
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance |
| Treasury shares | 310,460,486.38 | 42,623,302.27 | 267,837,184.11 | |
| Total | 310,460,486.38 | 42,623,302.27 | 267,837,184.11 |
Other notes, including descriptions of changes and reasons for changes in the current period:
(1) The treasury share is decreased by CNY 28,891,460.65 in the current period, which is caused by thecash dividends recognized by the Company in the equity incentive plan.
(2) The treasury share is decreased by CNY 13,731,841.62 in the current period, which is caused by therepurchase and cancellation recognized by the Company in the equity incentive plan.
40. Other comprehensive incomes
Unit: CNY
| Item | Opening balance | Amount incurred in the current period | Ending balance | |||||
| Amount incurred before income tax in the current period | Less: Amount charged to other comprehensive income in the previous period but transferred to the current profit or loss | 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 parent company | After-tax amount attributable to minority shareholders | |||
| I. Other comprehensive incomes that cannot be reclassified into profits or losses | -31,824,777.80 | 27,800,000.00 | -4,024,777.80 | |||||
| Including: changes arising from re-measurement of the defined benefit plan | -31,840,000.00 | 27,800,000.00 | -4,040,000.00 | |||||
| Other comprehensive incomes that cannot be reclassified into profit or loss under the equity method | 15,222.20 | 15,222.20 | ||||||
| II. Other comprehensive incomes that will be reclassified into profits or losses | -970,124.40 | -404,218.61 | -1,374,343.01 | |||||
| Including: other comprehensive incomes that can be reclassified into profits or losses under the equity method | 288,891.11 | -784,908.08 | -496,016.97 | |||||
| Translation difference in foreign currency financial statements | -1,259,015.51 | 380,689.47 | -878,326.04 | |||||
| Total other comprehensive incomes | -32,794,902.20 | 27,395,781.39 | -5,399,120.81 |
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:
41. Special reserve
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance |
| Work safety cost | 315,398,148.75 | 93,946,199.30 | 38,924,056.19 | 370,420,291.86 |
| Total | 315,398,148.75 | 93,946,199.30 | 38,924,056.19 | 370,420,291.86 |
Other notes, including descriptions of changes and reasons for changes in the current period:
42. Surplus reserves
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance |
| Statutory surplus reserve | 2,444,688,413.12 | 316,034,697.61 | 2,760,723,110.73 | |
| Discretionary surplus reserves | 297,526,491.71 | 297,526,491.71 | ||
| Total | 2,742,214,904.83 | 316,034,697.61 | 3,058,249,602.44 |
Explanation of surplus reserve, including changes in increase and decrease in the current period, and reasons forchanges: According to the provisions of the Company Law and the Articles of Association, the Companywithdraws the statutory surplus reserve at 10% of the net profit. If the accumulated amount of statutory surplusreserve is more than 50% of the registered capital of the Company, it may not be withdrawn any more.
43. Undistributed profits
Unit: CNY
| Item | Current period | Previous period |
| Undistributed profits at the end of the previous period before adjustment | 8,434,403,352.08 | 7,207,573,351.05 |
| Undistributed profits at the beginning of the current period after adjustment | 8,434,403,352.08 | 7,207,573,351.05 |
| Add: net profit attributable to owners of parent company in the current period | 367,745,445.34 | 3,899,854,760.39 |
| Less: withdrawal of statutory surplus reserve | 316,034,697.61 | 347,697,824.86 |
| Common stock dividends payable | 3,025,174,498.45 | 2,325,326,934.50 |
| Undistributed profits at the end of the period | 5,460,939,601.36 | 8,434,403,352.08 |
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.
44. Operating revenues and operating costs
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Main business | 36,242,318,100.83 | 33,608,683,181.19 | 95,508,850,305.68 | 86,080,229,818.39 |
| Other business | 2,089,428,983.05 | 1,643,487,705.34 | 3,242,392,363.87 | 2,729,108,950.21 |
| Total | 38,331,747,083.88 | 35,252,170,886.53 | 98,751,242,669.55 | 88,809,338,768.60 |
Whether the audited lower net profit before and after the deduction of non-recurring profit or loss is negative?Yes □ No
Unit: CNY
| Item | Current Year | Specific Deductions | Previous Year | Specific Deductions |
| Amount of operating income | 38,331,747,083.88 | Sales revenue of complete vehicles, parts and components, materials, and purchased semi-finished products, etc. | 98,751,242,669.55 | Sales revenue of complete vehicles, parts and components, materials, and purchased semi-finished products, etc. |
| Total amount of operating income deduction items | 30,729,859.27 | Rental income and entrusted operating income | 29,091,844.99 | Rental income and entrusted operating income |
| Proportion of total amount of operating income deduction items in operating income | 0.08% | 0.03% | ||
| I. Business income irrelevant to main business |
| 1. Other business income other than normal operation. Income from leasing of fixed assets, intangible assets, packaging materials, sales of materials, exchange of non-monetary assets with materials, operation of trusteeship management business, etc., and income that is included in the main business income but belongs to income other than the normal operation of listed companies. | 30,729,859.27 | Rental income and entrusted operating income | 29,091,844.99 | Rental income and entrusted operating income |
| Subtotal of business income irrelevant to main business | 30,729,859.27 | Rental income and entrusted operating income | 29,091,844.99 | Rental income and entrusted operating income |
| II. Income without commercial substance | ||||
| Subtotal of income without commercial substance | 0.00 | None | 0.00 | None |
| Amount of operating income after deduction | 38,301,017,224.61 | Deduct the rental income and entrusted operating income | 98,722,150,824.56 | Deduct the rental income and entrusted operating income |
Information related to performance obligations: noneInformation related to the transaction price apportioned to the remaining performance obligation: At the end ofthe reporting period, the income corresponding to the performance obligations that have been signed but havenot been performed or fulfilled is CNY 607,787,793.96, of which CNY 607,787,793.96 is expected to berecognized in 2023.Other notes: none
45. Taxes and surcharges
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Urban maintenance and construction tax | 47,145,522.88 | 110,645,134.98 |
| Education surcharges | 33,829,961.36 | 79,035,392.16 |
| Resource tax | 92,652.48 | |
| Property tax | 46,965,136.96 | 54,557,465.91 |
| Land use tax | 36,781,212.64 | 41,555,710.05 |
| Vehicle and vessel use tax | 142,115.38 | 102,390.96 |
| Stamp duty | 40,861,476.54 | 78,300,752.42 |
| Environmental protection tax | 624,447.37 | 961,096.44 |
| Others | 1,448,295.47 | 1,541,078.58 |
| Total | 207,798,168.60 | 366,791,673.98 |
Other notes: For the calculation and payment standards of various taxes and surcharges, please see VI "Taxes"of Section X - Financial Report.
46. Selling expenses
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Employee compensation | 484,204,274.83 | 502,005,215.46 |
| Product quality assurance fee | 317,822,200.89 | 518,616,737.53 |
| Storage fee | 115,093,555.63 | 167,238,948.61 |
| Travel expense | 74,320,500.71 | 65,581,584.66 |
| Packing cost | 72,593,424.84 | 84,029,093.44 |
| Rental fee | 50,722,637.92 | 50,780,292.91 |
| Business promotion expense | 44,003,511.80 | 109,557,946.14 |
| Sales service fee | 35,005,162.00 | 39,527,177.88 |
| Advertising expenses | 19,878,977.32 | 39,915,332.60 |
| Promotion fee | 19,429,048.84 | 90,656,984.22 |
| Depreciation cost | 5,710,292.12 | 5,975,879.13 |
| Consultation expenses | 5,241,472.53 | 8,817,739.27 |
| Insurance premium | 4,668,488.93 | 16,953,334.46 |
| Customer training fee | 1,938,138.40 | 14,855,042.33 |
| Office expenses | 1,886,628.35 | 3,629,477.00 |
| Business entertainment expenses | 1,442,401.26 | 5,516,587.19 |
| Exhibition fees | 542,242.96 | 11,078,455.80 |
| Others | 1,379,262.31 | 19,608,285.75 |
| Total | 1,255,882,221.64 | 1,754,344,114.38 |
Other notes:
47. General and administrative expenses
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Employee compensation | 1,301,448,789.79 | 1,385,420,212.25 |
| Fixed assets repair cost | 211,593,916.90 | 421,297,219.90 |
| Depreciation cost | 121,826,644.98 | 102,725,933.94 |
| Amortization of intangible assets | 89,587,242.31 | 90,318,079.84 |
| Labor outsourcing fee | 59,607,050.45 | 75,520,054.33 |
| Information system service fee | 57,041,277.43 | 60,044,909.94 |
| Kinetic energy and workshop heating cost | 27,302,410.38 | 24,096,211.31 |
| Amortization of low value consumables | 25,465,015.78 | 17,067,816.61 |
| Sewage charge | 19,168,854.12 | 31,836,258.71 |
| Rental fee | 18,459,511.78 | 15,138,430.90 |
| Publicity fees | 17,836,870.27 | 31,202,402.82 |
| Test and inspection fees | 15,517,955.33 | 27,912,479.52 |
| Environmental improvement fee | 11,838,305.85 | 15,891,635.97 |
| Travel expense | 9,765,368.99 | 20,173,373.67 |
| Security deposit for the disabled | 8,575,779.84 | 8,915,852.56 |
| Office expenses | 7,352,183.57 | 11,016,851.19 |
| Property insurance | 6,560,789.79 | 7,895,007.50 |
| Authentication fee | 6,494,147.27 | 4,139,178.32 |
| Others | 24,897,239.79 | 102,985,315.40 |
| Total | 2,040,339,354.62 | 2,453,597,224.68 |
Other notes:
48. R&D expenses
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Labor cost | 1,583,140,010.50 | 1,443,608,345.68 |
| Test fee | 451,352,248.63 | 893,311,833.33 |
| Depreciation cost | 229,336,754.97 | 174,667,164.17 |
| Joint R&D expenses | 219,738,026.91 | 105,746,687.20 |
| Trial production cost | 219,503,250.85 | 394,149,497.69 |
| Design fee | 43,312,926.32 | 68,961,706.46 |
| Others | 149,271,879.55 | 248,501,438.57 |
| Total | 2,895,655,097.73 | 3,328,946,673.10 |
Other notes:
49. Financial expenses
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Interest expense | 5,602,156.49 | 7,533,847.89 |
| Less: interest income | 949,854,588.85 | 931,991,300.64 |
| Exchange gain or loss | -245,058.21 | -56,468.14 |
| Cash discount | -131,070,726.61 | -321,711,694.34 |
| Net actuarial interest | 22,530,846.13 | 25,185,862.44 |
| Fees and other charges | 436,557.88 | 404,789.36 |
| Total | -1,052,600,813.17 | -1,220,634,963.43 |
Other notes:
50. Other incomes
Unit: CNY
| Sources of other incomes | Amount incurred in the current period | Amount in the previous period |
| Subsidy | 1,630,283,090.82 | 334,743,067.21 |
| Others | 7,777,048.38 | 5,107,701.80 |
| Total | 1,638,060,139.20 | 339,850,769.01 |
51. Investment income
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Long-term equity investment income calculated with equity method | 346,588,767.31 | 706,078,890.17 |
| Gains from debt transfer | 117,055,384.99 | |
| Others | -109,670,548.80 | -87,220,133.89 |
| Total | 236,918,218.51 | 735,914,141.27 |
Other notes: Others are mainly discounts on bank acceptance bills.
52. Credit impairment loss
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Bad debt loss of other receivables | -1,635,328.06 | 8,849,364.51 |
| Loss on bad debts of long-term receivables | -1,594,912.32 | -1,275,424.32 |
| Loss on bad debts of notes receivable | -729,878.89 | 185,747.47 |
| Loss on bad debts of accounts receivable | 4,879,276.36 | -32,028,276.86 |
| Total | 919,157.09 | -24,268,589.20 |
Other notes:
53. Asset impairment loss
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| I. Inventory depreciation provision and contract performance cost impairment provision | -418,448,406.89 | -221,420,995.50 |
| II. Loss from fixed assets impairment | -10,230,753.57 | -1,806,400.04 |
| III. Impairment Loss of Construction in Progress | -2,000,913.31 | |
| IV. Loss from contractual asset impairment | 4,390,582.21 | -4,552,687.09 |
| Total | -424,288,578.25 | -229,780,995.94 |
Other notes:
54. Income from assets disposal
Unit: CNY
| Sources of income from assets disposal | Amount incurred in the current period | Amount in the previous period |
| Gains from disposal of fixed assets ("-" for loss) | 118,681,219.23 | 458,484.79 |
| Gains from disposal of intangible assets ("-" for loss) | 752,349,888.83 | |
| Total | 871,031,108.06 | 458,484.79 |
55. Non-operating revenues
Unit: CNY
| Item | Amount incurred in the | Amount in the previous | Amount included in |
| current period | period | current non-recurring profits and losses | |
| Unpayable amount recognized | 135,470,008.26 | 27,812,439.97 | 135,470,008.26 |
| Income from compensation, liquidated damages and penalties | 14,867,839.76 | 18,894,668.64 | 14,867,839.76 |
| Gains from damage and scrapping of non-current assets | 1,172,055.53 | 1,775,143.41 | 1,172,055.53 |
| Others | 2,487,290.88 | 6,795,790.84 | 2,487,290.88 |
| Total | 153,997,194.43 | 55,278,042.86 | 153,997,194.43 |
56.?Non-operating expenses
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period | Amount included in current non-recurring profits and losses |
| Donation | 19,050,000.00 | 10,749,529.16 | 19,050,000.00 |
| Losses from damage and scrapping of non-current assets | 3,340,608.37 | 14,479,728.92 | 3,340,608.37 |
| Expenditure of liquidated damages and penalties | 4,057,445.84 | 1,889,696.78 | 4,057,445.84 |
| Others | 119,683.80 | 14,289.92 | 119,683.80 |
| Total | 26,567,738.01 | 27,133,244.78 | 26,567,738.01 |
Other notes:
57. Income tax expenses
(1) Statement of income tax expenses
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Current income tax expenses | 239,694,863.79 | -31,685,154.45 |
| Deferred tax expenses | -424,868,640.17 | 241,008,180.31 |
| Total | -185,173,776.38 | 209,323,025.86 |
(2) Adjustment process of accounting profits and income tax expenses
Unit: CNY
| Item | Amount incurred in the current period |
| Total profits | 182,571,668.96 |
| Income tax expense calculated at statutory/applicable tax rate | 45,642,917.24 |
| Effect of applying different tax rates by subsidiaries | 136,991,139.70 |
| Effect of adjustment to income tax of previous periods | 44,017,955.96 |
| Effect of non-deductible costs, expenses and losses | 26,950,283.58 |
| Effects of deductible temporary differences or deductible losses of deferred income tax assets unrecognized in the current period | 15,252,429.30 |
| Profit or loss of joint ventures and associated enterprises calculated by equity method | -88,406,530.27 |
| Income exempted from taxation (to be listed with “-”) | -1,050,039.60 |
| Effect of change in tax rate on the balance of deferred tax at the beginning of the period | -567,588.33 |
| Tax effect of R&D expenses plus deduction (to be listed with "-") | -362,782,459.71 |
| Others | -1,221,884.25 |
| Income tax expenses | -185,173,776.38 |
Other notes:
58. Other comprehensive incomes
For details, refer to 40 in VII "Notes to Consolidated Financial Statements" of Section X - Financial Report.
59. Items of cash flow statement
(1) Other cash received related to operating activities
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Government subsidies received | 1,869,848,621.04 | 507,552,396.89 |
| Withholding costs | 399,036,119.74 | 574,890,927.05 |
| Lease expenses received | 36,296,614.49 | 39,922,901.11 |
| Penalties and indemnities received | 7,810,168.36 | 9,928,728.23 |
| Refund of handling fees | 1,523,773.84 | 3,806,362.37 |
| Recovery of reserve fund | 2,240,229.10 | 2,785,287.71 |
| Other current accounts | 37,594,773.23 | 49,367,623.69 |
| Total | 2,354,350,299.80 | 1,188,254,227.05 |
Description of other cash received related to operating activities:
(2) Other cash paid related to operating activities
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Out-of-pocket expenses | 992,021,968.62 | 1,699,820,112.20 |
| Current account | 483,929,928.94 | 448,736,222.38 |
| Donations | 18,750,000.00 | |
| Total | 1,494,701,897.56 | 2,148,556,334.58 |
Description of other cash paid related to operating activities:
(3) Other cash received related to investing activities
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Interest received | 798,551,894.65 | 986,062,742.99 |
| Fixed deposits | 3,607,760,929.40 | |
| Total | 798,551,894.65 | 4,593,823,672.39 |
Description of other cash received related to investing activities:
(4) Other cash paid related to financing activities
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Donations | 10,350,000.00 | |
| Principal and interest on lease liabilities | 55,183,852.56 | 45,192,434.20 |
| Total | 55,183,852.56 | 55,542,434.20 |
Description of other cash paid related to financing activities:
60. Supplementary information of cash flow statement
(1) Supplementary information of cash flow statement
Unit: CNY
| Supplementary Information | Amount in the current period | Amount of the Previous Period |
| 1. Reconciliation of net profit to cash flows from operating activities | ||
| Net Profit | 367,745,445.34 | 3,899,854,760.39 |
| Add: provision for impairment of assets | 423,369,421.16 | 254,049,585.14 |
| Depreciation/consumption of fixed assets, oil and gas assets and bearer biological assets | 1,529,451,202.97 | 1,377,847,606.20 |
| Depreciation of right-of-use asset | 52,841,739.81 | 50,442,344.29 |
| Amortization of intangible assets | 172,902,609.68 | 152,490,048.41 |
| Amortization of long-term deferred expenses | 204,158.64 | 204,158.64 |
| Losses from disposal of fixed assets, intangible assets and other long-term assets (incomes to be listed with "-") | -871,031,108.06 | -458,484.79 |
| Loss from retirement of fixed assets (incomes to be listed with “-”) | 2,168,552.84 | 12,704,585.51 |
| Loss from changes in fair value (incomes to be listed with “-”) | ||
| Financial expenses (incomes to be listed with “-”) | -944,252,432.36 | -924,457,452.75 |
| Investment loss (incomes to be listed with “-”) | -346,588,767.31 | -823,904,762.50 |
| Decreases of deferred income tax assets (increases to be listed with “-”) | -481,053,393.95 | 117,351,274.94 |
| Increases of deferred income tax liabilities (decrease to be listed with “-”) | 56,184,753.78 | 123,656,905.37 |
| Decrease of inventory (increase to be listed with “-”) | 2,466,932,226.53 | 10,473,313,309.65 |
| Decreases of operating receivables (increase to be listed with “-”) | 2,956,699,661.76 | 8,260,467,764.57 |
| Increase in operating payables (decrease to be listed with “-”) | -11,224,753,054.89 | -7,945,279,292.25 |
| Others | 703,935,014.71 | 174,840,928.34 |
| Net cash flows from operating activities | -5,135,243,969.35 | 15,203,123,279.16 |
| 2. Major investment and financing activities not related to cash deposit and withdrawal: | ||
| Conversion of debt into capital | ||
| Convertible corporate bonds within one year | ||
| Fixed assets under financial lease | ||
| 3. Net changes in cash and cash equivalents: |
| Ending balance of cash | 20,697,669,726.18 | 30,542,676,891.89 |
| 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 | -9,845,007,165.71 | 15,755,996,673.07 |
(2) Composition of cash and cash equivalents
Unit: CNY
| Item | Ending balance | Opening balance |
| I. Cash | 20,697,669,726.18 | 30,542,676,891.89 |
| Cash at bank available for payments at any time | 20,697,669,726.18 | 30,542,676,891.89 |
| II. Ending balance of cash and cash equivalents | 20,697,669,726.18 | 30,542,676,891.89 |
Other notes:
61. Assets with restricted ownership or use right
Unit: CNY
| Item | Closing book value | Restriction reasons |
| Monetary capital | 50,667,983.38 | Housing maintenance fund, security deposit for three types of personnel, frozen funds |
| Total | 50,667,983.38 |
Other notes:
62. Foreign currency monetary items
(1) Monetary items for foreign currency
Unit: CNY
| Item | Closing balance of foreign currency | Exchange rate | Closing balance of CNY converted |
| Monetary capital | |||
| Including: U.S. dollar | |||
| Euro | 1,873,085.58 | 7.4229 | 13,903,726.95 |
| HK dollar | |||
| Accounts receivable |
| Including: U.S. dollar | |||
| Euro | |||
| HK dollar | |||
| Long-term borrowings | |||
| Including: U.S. dollar | |||
| Euro | |||
| HK dollar |
Other notes:
Other notes: The main business place of FAW Jiefang Austria R&D Co., Ltd., a subsidiary of the Company, isSteyr, 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 importantoverseas operating entities.
□ Applicable Not applicable?
63. Government subsidy
(1) Basic information of government subsidies
Unit: CNY
| Type | Amount | Presented Items | Amount Included in the Current Profit and Loss |
| Government subsidies | 3,121,985,685.93 | Other income | 632,290,159.65 |
(2) Refund of government subsidies
□ Applicable Not applicable?
VIII. Changes in Consolidation ScopeFAW Jiefang New Energy Automotive Sales Co., Ltd, a subsidiary of the Company, merged FAW JiefangAutomotive Sales Co., Ltd., the former subsidiary of the Company, on the base date of September 30, 2022.
IX. Equity in Other Entities
1. Interests in subsidiaries
(1) Composition of enterprise group
| Name of Subsidiary | Main Business Place | Registered address | 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 (Qingdao) Automotive Co., Ltd. | Qingdao | Qingdao | Vehicle manufacturing and sales | 100.00% | Business combination under common control | |
| FAW Jiefang Dalian Diesel Engine Co., Ltd. | Dalian | Dalian | Automotive engine manufacturing | 100.00% | Business combination under common control | |
| Wuxi Dahao Power Co., Ltd. | Wuxi | Wuxi | Manufacturing of automotive components and accessories | 100.00% | Business combination under common control | |
| FAW Austria Automobile R&D GmbH | Austria | Austria | Technology research and development | 100.00% | Business combination under common control | |
| FAW Jiefang New Energy Vehicle Sales Co., Ltd. | Changchun | Changchun | Vehicle sales | 100.00% | Investment and establishment | |
Explanation of the fact that the shareholding proportion in subsidiaries is different from the proportion of votingrights: noneBasis for holding half or less of the voting rights but still controlling the investee, and the basis for holdingmore than half of the voting rights but not controlling the investee: noneBasis for control of important structured entities included in the consolidation scope: none
Basis for determining whether the Company is an agent or a principal: noneOther notes: none
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 | Registered address | 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 research and test development | 26.92% | 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 | |
| Foshan Diyiyuan New Energy | Foshan | Foshan | Manufacturing | 45.00% | Equity | |
| Technology Co., Ltd. | and technical services | method |
Explanation of the fact that the shareholding proportion in joint ventures or associated enterprises is differentfrom the proportion of voting rights: there is no difference between the shareholding proportion and theproportion of voting rights.Basis for holding less than 20% of voting rights but with significant influence, or holding 20% or more ofvoting rights but without significant influence: The Company holds 17.50% of the shares of SanguardAutomobile Insurance Co., Ltd., but it sends one director to the later according to the Articles of Association ofthe later, so the Company can exert significant influence on Sanguard Automobile Insurance Co., Ltd. TheCompany holds 10.00% of the shares of FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd., but it sendsthree directors to the later according to the Articles of Association of the later, so the Company can exertsignificant influence on FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd.
(2) Main financial information of important associated enterprises
Unit: CNY
| Ending Balance / Amount Incurred in Current Period | |||||||||
| First Automobile Finance Co., Ltd. | Sanguard Automobile Insurance Co., Ltd. | FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | Changchun Wabco Automotive Control System Co., Ltd. | FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | Suzhou Zhito Technology Co., Ltd. | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | SmartLink | ||
| Current assets | 34,615,907,095.53 | 2,172,822,754.87 | 231,520,871.50 | 19,053,367.45 | 427,768,781.91 | 638,977,641.34 | 931,332,176.60 | 157,591,221.86 | |
| Non-current assets | 107,957,446,335.83 | 732,633,048.50 | 66,900,185.87 | 27,097,843.55 | 62,831,909.92 | 64,737,895.14 | 293,708,044.88 | 7,744,508.63 | |
| Total assets | 142,573,353,431.36 | 2,905,455,803.37 | 298,421,057.37 | 46,151,211.00 | 490,600,691.83 | 703,715,536.48 | 1,225,040,221.48 | 165,335,730.49 | |
| Current liabilities | 120,256,125,824.02 | 510,326,378.57 | 80,755,484.41 | 2,930,795.76 | 286,304,062.71 | 346,619,144.05 | 672,380,337.39 | 164,518,379.90 | |
| Non-current liabilities | 1,561,324,948.51 | 1,246,437,069.12 | 3,175,522.27 | 633,398,618.35 | 181,734,209.97 | ||||
| Total liabilities | 121,817,450,772.53 | 1,756,763,447.69 | 80,755,484.41 | 2,930,795.76 | 289,479,584.98 | 980,017,762.40 | 854,114,547.36 | 164,518,379.90 | |
| Net Assets | 20,755,902,658.83 | 1,148,692,355.68 | 217,665,572.96 | 43,220,415.24 | 201,121,106.85 | -276,302,225.92 | 370,925,674.12 | 817,350.59 | |
| Minority equity | 1,182,641,203.70 | ||||||||
| Equity attributable to shareholders of the parent | 19,573,261,455.13 | 1,148,692,355.68 | 217,665,572.96 | 43,220,415.24 | 201,121,106.85 | -276,302,225.92 | 370,925,674.12 | 817,350.59 | |
| company | ||||||||
| Shares of net assets calculated by shareholding proportion | 4,274,663,288.97 | 201,021,162.24 | 87,066,229.18 | 17,288,166.13 | 43,856,468.58 | -74,380,559.22 | 37,092,567.41 | 286,072.71 |
| Adjustments | -4,625,319.38 | 74,380,559.22 | ||||||
| -Goodwill | ||||||||
| -Unrealized profits of internal transactions | ||||||||
| -Others | ||||||||
| Book value of equity investment in associated enterprises | 4,270,037,969.59 | 201,021,162.24 | 87,066,229.18 | 17,288,166.13 | 43,856,468.58 | 37,092,567.41 | 286,072.71 | |
| Fair value of equity investment in associated enterprises with public offer | ||||||||
| Operating income | 6,570,745,844.89 | 705,195,878.73 | 386,986,775.78 | 2,799,151.03 | 1,393,101,224.13 | 110,953,140.73 | 1,272,122,747.15 | 183,253,178.35 |
| Net Profit | 1,806,213,013.58 | 34,541,984.81 | 9,105,377.20 | -7,532,897.41 | 32,174,554.00 | -233,424,185.08 | 11,260,966.79 | -80,823,617.88 |
| Net profit from discontinued operations | ||||||||
| Other comprehensive incomes | -448,924.02 | -3,924,304.00 | ||||||
| Total comprehensive income | 1,805,764,089.56 | 30,617,680.81 | 9,105,377.20 | -7,532,897.41 | 32,174,554.00 | -233,424,185.08 | 11,260,966.79 | -80,823,617.88 |
| Dividends received from associated enterprises in the current year | 429,182,504.29 | 17,920,972.75 | 8,567,040.00 | 6,300,012.21 |
| Opening Balance / Amount Incurred in Previous Period | |||||||||
| First Automobile Finance Co., Ltd. | Sanguard Automobile Insurance Co., Ltd. | FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | Changchun Wabco Automotive Control System Co., Ltd. | FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | Suzhou Zhito Technology Co., Ltd. | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | SmartLink | ||
| Current assets | 40,131,178,525.09 | 1,969,614,739.80 | 244,723,023.42 | 23,309,549.83 | 372,141,757.88 | 148,696,572.21 | 462,222,981.21 | 169,220,705.74 | |
| Non-current assets | 102,242,717,942.06 | 963,760,754.36 | 72,149,193.36 | 30,290,681.55 | 75,445,516.96 | 50,229,659.04 | 48,836,246.18 | 7,677,314.57 | |
| Total assets | 142,373,896,467.15 | 2,933,375,494.16 | 316,872,216.78 | 53,600,231.38 | 447,587,274.84 | 198,926,231.25 | 511,059,227.39 | 176,898,020.31 | |
| Current | 115,901,925,957.98 | 351,776,062.47 | 80,678,406.33 | 2,846,918.73 | 245,495,948.34 | 122,890,098.03 | 159,239,378.61 | 106,172,619.73 | |
| liabilities | ||||||||
| Non-current liabilities | 5,338,477,309.41 | 1,361,119,198.26 | 4,253,586.77 | 124,728,570.49 | ||||
| Total liabilities | 121,240,403,267.39 | 1,712,895,260.73 | 80,678,406.33 | 2,846,918.73 | 249,749,535.11 | 247,618,668.52 | 159,239,378.61 | 106,172,619.73 |
| Net Assets | 21,133,493,199.76 | 1,220,480,233.43 | 236,193,810.45 | 50,753,312.65 | 197,837,739.73 | -48,692,437.27 | 351,819,848.78 | 70,725,400.58 |
| Minority equity | 1,234,473,342.18 | 178,219.62 | ||||||
| Equity attributable to shareholders of the parent company | 19,899,019,857.58 | 1,220,480,233.43 | 236,193,810.45 | 50,753,312.65 | 197,837,739.73 | -48,692,437.27 | 351,819,848.78 | 70,547,180.96 |
| Shares of net assets calculated by shareholding proportion | 4,345,806,643.76 | 213,584,040.85 | 94,477,524.18 | 20,301,325.09 | 43,140,497.54 | -14,896,347.92 | 35,181,984.88 | 24,691,513.34 |
| Adjustments | -4,625,319.38 | -8,567,040.00 | 14,896,347.92 | 2,743,501.48 | ||||
| -Goodwill | ||||||||
| -Unrealized profits of internal transactions | ||||||||
| -Others | ||||||||
| Book value of equity investment in associated | 4,341,181,324.38 | 213,584,040.85 | 85,910,484.18 | 20,301,325.09 | 43,140,497.54 | 35,181,984.88 | 27,435,014.82 |
| enterprises | ||||||||
| Fair value of equity investment in associated enterprises with public offer | ||||||||
| Operating income | 9,178,061,752.35 | 663,554,176.26 | 705,248,229.08 | 14,825.50 | 1,628,707,611.52 | 105,820,137.09 | 1,697,371,170.74 | 163,906,034.86 |
| Net Profit | 3,641,249,394.63 | 128,006,948.20 | 14,499,015.62 | -6,734,775.40 | 32,101,318.76 | -134,493,134.39 | 4,326,298.56 | -23,864,699.82 |
| Net profit from discontinued operations | ||||||||
| Other comprehensive incomes | -159,639.28 | |||||||
| Total comprehensive income | 3,641,089,755.35 | 128,006,948.20 | 14,499,015.62 | -6,734,775.40 | 32,101,318.76 | -134,493,134.39 | 4,326,298.56 | -23,864,699.82 |
| Dividends received from associated enterprises in the current year | 516,053,003.83 | 17,763,787.54 | 4,907,799.92 |
Other notes:
(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 | -74,380,559.22 | -89,276,907.14 |
Other notes:
X. 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, and leaseliabilities. Details of each financial instrument have been disclosed in relevant notes. The risks related to thesefinancial instruments and the risk management policies adopted by the Company to reduce these risks aredescribed below. The management of the Company ensures to control above risks within a limited range bymanaging 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 in atimely 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 book value of each financial asset in thebalance sheet. The Company does not provide any other guarantee that may expose the Company to credit risk.For the accounts receivable of the Company, the accounts receivable of the top five clients account for 63.06%of the Company's total accounts receivable (61.26% in 2021); for other accounts receivable of the Company, theamounts owed by the five biggest debtors account for 72.86% of the total other accounts receivable (25.59% in2021).
(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. As of December 31, 2022, the unused bank credit line of the Company was CNY 20.75billion (which was CNY 18.1 billion as of December 31, 2021).
(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 December 31, 2022.Exchange rate riskExchange rate risk refers to the risk of fluctuation in fair value or future cash flow of financial instruments dueto change in foreign exchange rate. The exchange rate risk may arise from financial instruments valued in aforeign 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 December 31, 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). As at December 31, 2022, the asset-liability ratio of the Group is 58.22% (62.39% as at December 31,2021).
XI. Disclosure of Fair ValueAccording to the lowest level input that is significant to the fair value measurement as a whole, the fair valuelevel can be divided into:
Level I: Quotations for the same assets or liabilities in active markets (unadjusted).Level II: Observable input values other than market quotations for assets or liabilities in the first level are useddirectly (i.e. price) or indirectly (i.e. derived from price).Level III: Any input value (non-observable input value) not based on observable market data is used for assetsor liabilities.The Company's financial assets and financial liabilities measured at amortized cost mainly include monetarycapital, notes receivable, accounts receivable, other receivables, notes payable, accounts payable, other payables,etc.XII. Related Parties and Related Party Transactions
1. Information about parent company of the Company
| Name of Parent Company | Registered address | 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 Car Co., Ltd. | Changchun | Production and sales of automobiles and parts | CNY 78,000,000,000.00 | 65.77% | 65.77% |
Description of the parent company of the Company: The ultimate controlling party of the Company is ChinaFAW Group 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 Article 1 in IX "Equity in Other Entities" of SectionX "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 Article 2 in IX"Equity in Other Entities" of Section X "Financial Report".Other joint ventures or associated enterprises that have related party transactions with the Company in thecurrent period 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 |
| Foshan Diyiyuan New Energy Technology Co., Ltd. | 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 |
| FAW Harbin Light Automobile Co., Ltd. | The same ultimate controlling party |
| China FAW Group Import & Export Co., Ltd. | The same ultimate controlling party |
| Hainan Tropical Automobile Test Co., Ltd. | The same ultimate controlling party |
| FAW Foundry Co., Ltd. | The same ultimate controlling party |
| FAW Forging (Jilin) 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 (Dalian) International Logistics Co., Ltd. | The same ultimate controlling party |
| FAW Mold Manufacturing 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 |
| FAW Asset Management Co., Ltd. | The same ultimate controlling party |
| Changchun FAW International Tendering Co., Ltd. | The same ultimate controlling party |
| Wuxi Sawane Spring Co., Ltd. | The same ultimate controlling party |
| Changchun Faw Service Trade Co., Ltd. | The same ultimate controlling party |
| FAW Changchun Automobile Trading Service Co., Ltd. | The same ultimate controlling party |
| Qiming Information Technology Co., Ltd. | The same ultimate controlling party |
| Dalian Qiming Haitong Information Technology Co., Ltd. | The same ultimate controlling party |
| Chengdu Qiming Chunrong Information Technology Co., Ltd. | The same ultimate controlling party |
| Changchun Automotive Test Center Co., Ltd. | The same ultimate controlling party |
| Changchun FAW Automobile Culture Communication Co., Ltd. | The same ultimate controlling party |
| FAW Bestune Car Co., Ltd. | The same ultimate controlling party |
| FAW-Volkswagen Automotive Co., Ltd. | The same ultimate controlling party |
| Changchun Chengxin Second-hand Vehicles Distribution Co., Ltd. | The same ultimate controlling party |
| FAW New Energy Vehicle Sales (Shenzhen) Co., Ltd. | The same ultimate controlling party |
| Cinda FAW Commercial Factoring Co., Ltd. | Other related parties |
| FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | Other related parties |
| Changchun FAWSN Group Co., Ltd. | Other related parties |
| Changchun FAWAY Automobile Components Co., Ltd. | Other related parties |
| FAW Changchun Communication Technology Co., Ltd. | Other related parties |
| FAW Jilin Automobile Co., Ltd. | Other related parties |
| The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | Other related parties |
| Changchun FAW United Casting Company | Other related parties |
| Jilin CNPC Hongrun Energy Development Co., Ltd. | Other related parties |
| Changchun Yidong Clutch Co., Ltd. | Other related parties |
| Fawer Auto Parts Co., Ltd. | Other related parties |
| China Unicom Intelligent Network Technology Co., Ltd. | Other related parties |
| Jilin Checheng Garden Hotel Co., Ltd. | Other related parties |
| Changchun Automotive Economic and Technological Development Zone Environmental Sanitation and Cleaning Co., Ltd. | Other related parties |
| Wuxi CRRC New Energy Automobile Co., Ltd. | Other related parties |
| FAW Changchun Comprehensive Utilization Co., Ltd. | Other related parties |
| FAW Changchun Industrial Shuixing Rubber and Plastic Products Co., Ltd. | Other related parties |
| FAW Changchun Yanfeng Visteon Electronics Co., Ltd. | Other related parties |
| FAW Changchun Industrial Sodis Management Service Co., Ltd. | Other related parties |
| Shandong Pengxiang Automobile Co., Ltd. | Other related parties |
| FAW Changchun Tianqi Process Equipment Engineering Co., Ltd. | Other related parties |
| Hongqi Intelligent Mobility Technology (Beijing) Co., Ltd. | Other related parties |
| Grammer Vehicle Parts (Harbin) Co., Ltd. | Other related parties |
| Grammer Vehicle Parts (Qingdao) Co., Ltd. | Other related parties |
| United Fuel Cell System R&D (Beijing) Co., Ltd. | Other related parties |
| Volkswagen FAW Engine (Dalian) Co., Ltd. | Other related parties |
| Harbin FAW Transmission Co., Ltd. | Other related parties |
| FAW Jingye Engine Co., Ltd. | Other related parties |
| Changchun FAW Pratt Technology Co., Ltd. | 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 the current period | Approved Transaction Amount | Is the Transaction Amount Exceeded | Amount in the previous period |
| Fawer Auto Parts Co., Ltd. | Goods purchase and reception of labor services | 1,040,303,880.14 | 2,737,930,000.00 | No | 2,741,284,105.26 |
| FAW Foundry Co., Ltd. | Goods purchase and reception of labor services | 520,403,729.13 | 1,452,440,000.00 | No | 1,572,069,294.37 |
| Shandong Pengxiang Automobile Co., Ltd. | Goods purchase and reception of labor services | 333,494,286.96 | 922,870,000.00 | No | 821,724,503.38 |
| Changchun FAWAY Automobile Components Co., Ltd. | Goods purchase and reception of labor services | 320,827,961.46 | 526,170,000.00 | No | 738,034,626.36 |
| FAW Forging (Jilin) Co., Ltd. | Goods purchase and reception of labor services | 296,850,949.41 | 917,570,000.00 | No | 867,388,771.15 |
| Changchun | Goods purchase | 285,115,158.83 | 963,850,000.00 | No | 995,936,136.26 |
| FAWSN Group Co., Ltd. | and reception of labor services | ||||
| The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | Goods purchase and reception of labor services | 280,744,044.56 | 825,150,000.00 | No | 494,147,083.09 |
| FAW Car Co., Ltd. | Goods purchase and reception of labor services | 248,344,825.51 | 551,300,000.00 | No | 450,060,804.31 |
| FAW Logistics (Qingdao) Co., Ltd. | Goods purchase and reception of labor services | 247,090,559.60 | 422,000,000.00 | No | 538,585,077.33 |
| FAW Logistics Co., Ltd. | Goods purchase and reception of labor services | 242,651,156.76 | 560,080,000.00 | No | 474,978,528.38 |
| FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | Goods purchase and reception of labor services | 191,014,909.94 | 418,270,000.00 | No | 464,748,462.43 |
| Changchun Yidong Clutch Co., Ltd. | Goods purchase and reception of labor services | 165,424,937.00 | 570,710,000.00 | No | 565,851,422.77 |
| Qiming Information Technology Co., Ltd. | Goods purchase and reception of labor services | 150,551,880.46 | 334,260,000.00 | No | 263,624,372.93 |
| FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | Goods purchase and reception of labor services | 118,225,857.01 | 266,470,000.00 | No | 295,908,077.92 |
| SmartLink | Goods purchase and reception of labor services | 113,917,493.08 | 271,710,000.00 | No | 113,865,430.99 |
| Changchun | Goods purchase | 68,056,015.91 | 123,190,000.00 | No | 120,039,323.56 |
| Automotive Test Center Co., Ltd. | and reception of labor services | ||||
| FAW Logistics (Changchun Lushun) Storage and Transportation Co., Ltd. | Goods purchase and reception of labor services | 57,890,606.84 | 145,350,000.00 | No | 154,565,452.22 |
| FAW Mold Manufacturing Co., Ltd. | Goods purchase and reception of labor services | 56,026,450.00 | 148,050,000.00 | No | 83,970,079.47 |
| Grammer Vehicle Parts (Qingdao) Co., Ltd. | Goods purchase and reception of labor services | 53,513,930.54 | 54,000,000.00 | No | |
| FAW Harbin Light Automobile Co., Ltd. | Goods purchase and reception of labor services | 30,836,252.96 | 30,920,000.00 | No | 44,199,691.95 |
| FAW (Dalian) International Logistics Co., Ltd. | Goods purchase and reception of labor services | 20,212,557.25 | 32,910,000.00 | No | 28,299,238.86 |
| Sanguard Automobile Insurance Co., Ltd. | Goods purchase and reception of labor services | 16,947,602.02 | 26,900,000.00 | No | 24,825,377.17 |
| FAW Jilin Automobile Co., Ltd. | Goods purchase and reception of labor services | 12,574,740.22 | 13,000,000.00 | No | |
| Grammer Vehicle Parts (Harbin) Co., Ltd. | Goods purchase and reception of labor services | 12,230,604.49 | 13,000,000.00 | No | |
| FAW Changchun Communication Technology Co., Ltd. | Goods purchase and reception of labor services | 10,715,872.47 | 12,920,000.00 | No | 8,083,875.01 |
| Hainan Tropical Automobile Test Co., Ltd. | Goods purchase and reception of labor services | 9,359,403.67 | 16,000,000.00 | No | 7,857,116.57 |
| FAW Changchun Automobile Trading Service Co., Ltd. | Goods purchase and reception of labor services | 4,426,582.97 | 10,820,000.00 | No | 7,972,453.00 |
| FAW Changchun Comprehensive Utilization Co., Ltd. | Goods purchase and reception of labor services | 8,500,177.30 | 16,490,000.00 | No | 12,064,523.67 |
| FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | Goods purchase and reception of labor services | 6,792,968.69 | 17,400,000.00 | No | 32,130,092.57 |
| FAW Changchun Industrial Sodis Management Service Co., Ltd. | Goods purchase and reception of labor services | 6,643,236.02 | 17,540,000.00 | No | 17,838,447.66 |
| China FAW Group Import & Export Co., Ltd. | Goods purchase and reception of labor services | 175,338,956.45 | 959,820,000.00 | No | 101,087,586.03 |
| Changchun Faw Service Trade Co., Ltd. | Goods purchase and reception of labor services | 5,847,490.52 | 16,600,000.00 | No | 8,409,593.47 |
| Changchun Automotive Economic and Technological Development Zone Environmental Sanitation and Cleaning Co., Ltd. | Goods purchase and reception of labor services | 4,221,956.56 | 6,460,000.00 | No | 5,593,707.88 |
| FAW Changchun Tianqi Process Equipment Engineering Co., Ltd. | Goods purchase and reception of labor services | 3,997,546.96 | 4,160,000.00 | No | 1,102,874.97 |
| Wuxi Sawane Spring Co., Ltd. | Goods purchase and reception of labor services | 3,885,303.33 | 4,600,000.00 | No | 11,976,685.30 |
| Wuxi CRRC New Energy Automobile Co., Ltd. | Goods purchase and reception of labor services | 3,652,485.85 | 3,800,000.00 | No | |
| Changchun Wabco Automotive Control System Co., Ltd. | Goods purchase and reception of labor services | 2,474,003.64 | 2,600,000.00 | No | 14,825.50 |
| Changchun FAW United Casting Company | Goods purchase and reception of labor services | 2,061,592.32 | 5,730,000.00 | No | 6,371,330.43 |
| Suzhou Zhito Technology Co., Ltd. | Goods purchase and reception of labor services | 1,488,321.73 | 64,040,000.00 | No | 9,343,623.35 |
| FAW Changchun Yanfeng Visteon Electronics Co., Ltd. | Goods purchase and reception of labor services | 1,407,288.17 | 5,940,000.00 | No | 5,162,703.69 |
| FAW Group | Goods purchase and reception of labor services | 1,014,319.61 | 5,750,000.00 | No | 5,493,546.17 |
| Dalian Qiming Haitong Information Technology Co., Ltd. | Goods purchase and reception of labor services | 986,233.96 | 1,040,000.00 | No | 1,065,866.08 |
| FAW Asset Management Co., Ltd. | Goods purchase and reception of labor services | 919,804.06 | 1,700,000.00 | No | 1,213,431.45 |
| FAW Changchun Industrial Shuixing Rubber and Plastic Products Co., Ltd. | Goods purchase and reception of labor services | 552,191.07 | 4,980,000.00 | No | 5,559,604.54 |
| Hongqi Intelligent Mobility Technology (Beijing) Co., Ltd. | Goods purchase and reception of labor services | 504,696.88 | 1,790,000.00 | No | 532,339.04 |
| Chengdu Qiming Chunrong Information Technology Co., Ltd. | Goods purchase and reception of labor services | 264,150.96 | 430,000.00 | No | 430,722.87 |
| Changchun FAW Automobile Culture Communication Co., Ltd. | Goods purchase and reception of labor services | 145,434.85 | 150,000.00 | No | |
| China Unicom Intelligent Network Technology Co., Ltd. | Goods purchase and reception of labor services | 95,449.06 | 200,000.00 | No | 6,344,440.69 |
| Jilin CNPC Hongrun Energy Development Co., Ltd. | Goods purchase and reception of labor services | 58,203.77 | 60,000.00 | No | |
| Changchun FAW International Tendering Co., Ltd. | Goods purchase and reception of labor services | 28,766.98 | 30,000.00 | No | 262,875.00 |
| Jilin Checheng Garden Hotel Co., Ltd. | Goods purchase and reception of labor services | 15,300.00 | 20,000.00 | No | 11,537.53 |
| FAW-Volkswagen Automotive Co., Ltd. | Goods purchase and reception of labor services | No | 464,030.00 |
Statement of Goods Sales/Rendering of Services
Unit: CNY
| Related Parties | Content of Related Transaction | Amount incurred in the current period | Amount in the previous period |
| China FAW Group Import & Export Co., Ltd. | Sales of goods | 5,921,179,357.98 | 2,417,369,133.62 |
| FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | Sales of goods | 842,004,381.84 | 1,424,674,632.64 |
| FAW Car Co., Ltd. | Sales of goods | 223,777,186.60 | 29,330,561.46 |
| Changchun Faw Service Trade Co., Ltd. | Sales of goods | 190,597,521.42 | 3,023,114,609.80 |
| FAW Changchun Comprehensive Utilization Co., Ltd. | Sales of goods | 139,052,616.83 | 284,372,779.64 |
| Suzhou Zhito Technology Co., Ltd. | Sales of goods | 47,059,399.63 | 52,517,885.83 |
| FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | Sales of goods | 19,099,950.39 | 56,039,962.85 |
| FAW Changchun Automobile Trading Service Co., Ltd. | Sales of goods | 12,035,398.26 | |
| FAW Asset Management Co., Ltd. | Sales of goods | 11,266,794.44 | 11,472,242.42 |
| FAW Logistics (Qingdao) Co., Ltd. | Sales of goods | 10,787,369.81 | 11,519,887.68 |
| FAW Harbin Light Automobile Co., Ltd. | Sales of goods | 8,285,242.45 | 101,203,249.25 |
| Changchun Automotive Test Center Co., Ltd. | Sales of goods | 5,364,922.47 | 8,242,906.12 |
| FAW Foundry Co., Ltd. | Sales of goods | 4,843,899.93 | 62,343,810.34 |
| Shandong Pengxiang Automobile Co., Ltd. | Sales of goods | 1,179,878.53 | 100,358.49 |
| Fawer Auto Parts Co., Ltd. | Sales of goods | 925,014.61 | 176,423.69 |
| FAW Logistics (Changchun Lushun) Storage and Transportation Co., Ltd. | Sales of goods | 868,938.00 | 6,997,806.39 |
| United Fuel Cell System R&D (Beijing) Co., Ltd. | Sales of goods | 817,250.62 | 658,369.30 |
| FAW Logistics Co., Ltd. | Sales of goods | 492,920.35 | |
| Changchun Yidong Clutch Co., Ltd. | Sales of goods | 315,024.68 | 1,573,438.90 |
| FAW Bestune Car Co., Ltd. | Sales of goods | 176,415.09 | 404,149.88 |
| Cinda FAW Commercial Factoring Co., Ltd. | Sales of goods | 155,115.86 | 278,942.07 |
| FAW Jilin Automobile Co., Ltd. | Sales of goods | 132,278.36 | 250,787.55 |
| FAW-Volkswagen Automotive Co., Ltd. | Sales of goods | 104,603.78 | 433,358.49 |
| Changchun Chengxin Second-hand Vehicles Distribution Co., Ltd. | Sales of goods | 52,256.64 | 533,677.07 |
| FAW Changchun Yanfeng Visteon Electronics Co., Ltd. | Sales of goods | 39,774.12 | 59,629.64 |
| Wuxi Sawane Spring Co., Ltd. | Sales of goods | 10,377.36 | 10,000.00 |
| FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | Sales of goods | 1,056,155.96 | |
| FAW Group | Sales of goods | 379,633.02 | |
| FAW Forging (Jilin) Co., Ltd. | Sales of goods | 4,357,708.18 | |
| Volkswagen FAW Engine (Dalian) Co., Ltd. | Sales of goods | 755,320.50 | |
| Changchun Wabco Automotive Control System | Sales of goods | 593,966.70 |
| Co., Ltd. | |||
| FAW (Dalian) International Logistics Co., Ltd. | Sales of goods | 225,222.44 | |
| FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | Sales of goods | 212,212.88 | |
| China Unicom Intelligent Network Technology Co., Ltd. | Sales of goods | 106,654.90 | |
| Changchun FAWSN Group Co., Ltd. | Sales of goods | 98,936.81 | |
| Qiming Information Technology Co., Ltd. | Sales of goods | 20,500.00 | |
| FAW Changchun Industrial Shuixing Rubber and Plastic Products Co., Ltd. | Sales of goods | 11,320.75 | |
| FAW Changchun Communication Technology Co., Ltd. | Sales of goods | 15,596.36 |
Description of related transactions of purchasing or selling goods and providing or receiving labor services:
(2) 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, buildings and land | 5,356,513.01 | 5,350,602.28 |
| FAW Car Co., Ltd. | Houses and buildings | 3,437,949.10 | 774,875.76 |
| FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | Houses and buildings | 1,056,155.96 | 1,056,155.96 |
| Shandong Pengxiang Automobile Co., Ltd. | Houses and buildings | 754,700.92 | |
| Fawer Auto Parts Co., Ltd. | Houses and buildings | 395,405.52 | 190,704.42 |
| FAW Group | Houses and buildings | 173,884.11 | 379,633.02 |
| FAW Changchun Communication Technology Co., Ltd. | Land use right | 99,999.97 |
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 (if applicable) | Variable lease payments not included in lease liabilities measurement (if applicable) | Rent Paid | Interest Expense on Lease Liabilities Assumed | Increased Right-of-use Assets | |||||
| Amount incurred in the current period | Amount in the previous period | Amount incurred in the current period | Amount in the previous period | Amount incurred in the current period | Amount in the previous period | Amount incurred in the current period | Amount in the previous period | Amount incurred in the current period | Amount in the previous period | ||
| FAW Car Co., Ltd. | Houses and buildings | 11,426,735.79 | 13,314,933.73 | 1,319,118.67 | 812,331.91 | 1,712,201.81 | |||||
| FAW Changchun Automobile Trading Service Co., Ltd. | Vehicle | 4,509,955.99 | 2,893,792.46 | ||||||||
| FAW Group | Land | 3,913,647.70 | 3,548,244.71 | 482,040.75 | 652,438.90 | ||||||
| Hongqi Intelligent Mobility Technology (Beijing) Co., Ltd. | Vehicle | 1,122.88 | 33,409.66 | ||||||||
| FAW Asset Management Co., Ltd. | Houses and buildings | 157,096.00 | 157,096.00 | 7,123.68 | 307,068.32 | ||||||
Description of related lease: The rent paid by the Company as the lessee is the lease expense recognized.
(3) Remuneration of key management personnel
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Remuneration of key management personnel | 23,496,500.00 | 22,252,500.00 |
(4)?Other related transactions
Interest income and interest expense Unit: CNY
| Related Parties | Content of Related Transaction | Amount incurred in the current period | Amount in the previous period |
| First Automobile Finance Co., Ltd. | Interest income | 305,093,442.72 | 522,833,172.84 |
6.?Receivables and payables of related parties
(1) Receivables
Unit: CNY
| Project name | Related Parties | Ending balance | Opening balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Accounts receivable | China FAW Group Import & Export Co., Ltd. | 320,294,820.43 | 410,938.55 | 133,665,249.08 | 133,665.25 |
| Accounts receivable | FAW Logistics (Qingdao) Co., Ltd. | 3,233,572.00 | 13,581.00 | ||
| Accounts receivable | Changchun Automotive Test Center Co., Ltd. | 2,919,274.52 | 12,260.95 | 3,953,858.47 | 13,443.11 |
| Accounts receivable | FAW Jingye Engine Co., Ltd. | 1,820,957.23 | 1,820,957.23 | 1,820,957.23 | 1,820,957.23 |
| Accounts receivable | FAW Car Co., Ltd. | 880,188.52 | 3,696.78 | 148,038.86 | 503.33 |
| Accounts receivable | FAW Asset Management Co., Ltd. | 469,957.39 | 455,062.76 | 1,051,901.58 | 2,484.47 |
| Accounts receivable | United Fuel Cell System R&D (Beijing) Co., Ltd. | 200,233.26 | 840.98 | ||
| Accounts | FAW-Volkswagen | 110,880.00 | 465.70 | 343,200.00 | 1,166.88 |
| receivable | Automotive Co., Ltd. | ||||
| Accounts receivable | FAW Changchun Yanfeng Visteon Electronics Co., Ltd. | 105,367.99 | 11,453.28 | 63,207.42 | 214.91 |
| Accounts receivable | FAW Harbin Light Automobile Co., Ltd. | 3,787.60 | 15.91 | 157,790.76 | 536.49 |
| Accounts receivable | FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | 61,683,343.69 | 7,544,307.53 | 43,738,644.78 | 168,532.52 |
| Accounts receivable | Fawer Auto Parts Co., Ltd. | 58,079.00 | 197.47 | ||
| Prepayments | China FAW Group Import & Export Co., Ltd. | 287,527,616.69 | 299,415,808.16 | ||
| Prepayments | FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | 20,604,798.36 | 23,451,243.21 | ||
| Prepayments | FAW Mold Manufacturing Co., Ltd. | 13,751,495.26 | 11,355,895.26 | ||
| Prepayments | The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | 12,786,400.00 | 31,280,800.00 | ||
| Prepayments | FAW Car Co., Ltd. | 9,862,836.98 | |||
| Prepayments | Qiming Information Technology Co., Ltd. | 6,853,106.60 | 7,041,353.80 | ||
| Prepayments | SmartLink | 2,283,555.30 | 2,364,055.79 | ||
| Prepayments | FAW Jilin Automobile Co., Ltd. | 646,730.48 | |||
| Prepayments | FAW Changchun Communication Technology Co., Ltd. | 639,459.98 | |||
| Prepayments | FAW Changchun Tianqi Process Equipment Engineering Co., Ltd. | 537,315.00 | 537,315.00 | ||
| Other accounts receivable | FAW Car Co., Ltd. | 8,453,593.02 | 8,229,193.92 | 8,227,110.28 | 5,675,883.38 |
| Other accounts receivable | FAW Group | 189,533.68 | 1,743.71 | ||
| Other | FAW Logistics Co., | 146,367.32 | 1,346.58 | 59,402.96 | 3,439.43 |
| accounts receivable | Ltd. | ||||
| Other accounts receivable | FAW Asset Management Co., Ltd. | 135,550.51 | 787.06 | 241,717.46 | 10,431.31 |
| Other accounts receivable | FAW Forging (Jilin) Co., Ltd. | 55,563.56 | 511.19 | 37,596.07 | 2,176.81 |
| Other accounts receivable | China FAW Group Import & Export Co., Ltd. | 50,623.62 | 172.12 | ||
| Other accounts receivable | FAW Mold Manufacturing Co., Ltd. | 49,165.85 | 452.33 | 79,212.46 | 4,586.40 |
| Other accounts receivable | Changchun FAWAY Automobile Components Co., Ltd. | 16,388.62 | 68.83 | ||
| Other accounts receivable | FAW Logistics (Changchun Lushun) Storage and Transportation Co., Ltd. | 5,086.11 | 46.79 | 5,801.51 | 335.91 |
| Other accounts receivable | Changchun Automotive Test Center Co., Ltd. | 231.00 | 0.23 |
(2)?Payables
Unit: CNY
| Project name | Related Parties | Ending book balance | Opening book balance |
| Accounts payable | Fawer Auto Parts Co., Ltd. | 144,154,473.17 | 169,640,260.34 |
| Accounts payable | FAW Logistics (Qingdao) Co., Ltd. | 91,101,620.88 | 68,025,114.39 |
| Accounts payable | Changchun FAWAY Automobile Components Co., Ltd. | 79,486,373.63 | 152,148,699.11 |
| Accounts payable | FAW Foundry Co., Ltd. | 51,984,437.61 | 183,830,708.06 |
| Accounts payable | Shandong Pengxiang Automobile Co., Ltd. | 34,193,762.56 | 73,531,515.19 |
| Accounts payable | FAW Logistics Co., Ltd. | 32,265,403.36 | 57,571,100.02 |
| Accounts payable | Changchun Yidong Clutch Co., Ltd. | 21,092,492.24 | 67,047,152.21 |
| Accounts payable | FAW Car Co., Ltd. | 34,214,102.32 | 38,452,564.39 |
| Accounts payable | Qiming Information Technology Co., Ltd. | 20,174,791.43 | 41,883,498.37 |
| Accounts payable | FAW Forging (Jilin) Co., Ltd. | 18,898,210.68 | 220,555,696.82 |
| Accounts payable | FAW Harbin Light Automobile Co., Ltd. | 16,170,855.51 | 4,172,366.61 |
| Accounts payable | FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | 15,646,652.24 | 14,533,080.61 |
| Accounts payable | SmartLink | 14,489,906.15 | 99,415,297.12 |
| Accounts payable | Changchun FAWSN Group Co., Ltd. | 14,386,006.95 | 129,367,496.49 |
| Accounts payable | FAW Logistics (Changchun Lushun) Storage and Transportation Co., Ltd. | 11,426,277.60 | 17,089,430.56 |
| Accounts payable | FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | 4,937,649.97 | 9,272,615.36 |
| Accounts payable | FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | 4,551,929.99 | 175,200.00 |
| Accounts payable | FAW (Dalian) International Logistics Co., Ltd. | 3,851,730.60 | 6,106,590.35 |
| Accounts payable | Grammer Vehicle Parts (Qingdao) Co., Ltd. | 3,402,836.35 | |
| Accounts payable | FAW Changchun Comprehensive Utilization Co., Ltd. | 2,905,411.90 | 3,294,031.20 |
| Accounts payable | FAW Changchun Industrial Sodis Management Service Co., Ltd. | 2,149,473.72 | 2,790,797.22 |
| Accounts payable | The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | 1,751,774.48 | 735,721.78 |
| Accounts payable | FAW Changchun Automobile Trading Service Co., Ltd. | 1,479,550.69 | 5,721,646.90 |
| Accounts payable | FAW Mold Manufacturing Co., Ltd. | 1,121,206.34 | 2,434,279.91 |
| Accounts payable | Sanguard Automobile Insurance Co., Ltd. | 1,074,463.94 | 1,283,140.98 |
| Accounts payable | Suzhou Zhito Technology Co., Ltd. | 1,011,118.95 | 4,487,478.33 |
| Accounts payable | Changchun Faw Service Trade Co., Ltd. | 849,829.54 | 2,375,954.69 |
| Accounts payable | Wuxi CRRC New Energy Automobile Co., Ltd. | 757,023.75 | |
| Accounts | FAW Changchun Yanfeng Visteon Electronics | 715,521.31 | 478,759.95 |
| payable | Co., Ltd. | ||
| Accounts payable | Grammer Vehicle Parts (Harbin) Co., Ltd. | 701,342.31 | |
| Accounts payable | Changchun Automotive Economic and Technological Development Zone Environmental Sanitation and Cleaning Co., Ltd. | 630,751.44 | 961,433.87 |
| Accounts payable | Changchun FAW United Casting Company | 521,726.80 | 667,354.32 |
| Accounts payable | Changchun Automotive Test Center Co., Ltd. | 316,400.00 | 35,547,810.00 |
| Accounts payable | Changchun Wabco Automotive Control System Co., Ltd. | 272,712.00 | |
| Accounts payable | Dalian Qiming Haitong Information Technology Co., Ltd. | 248,852.00 | |
| Accounts payable | Wuxi Sawane Spring Co., Ltd. | 233,647.89 | 1,555,556.34 |
| Accounts payable | FAW Changchun Communication Technology Co., Ltd. | 233,570.95 | 843,342.80 |
| Accounts payable | FAW Changchun Industrial Shuixing Rubber and Plastic Products Co., Ltd. | 184,682.20 | 676,420.56 |
| Accounts payable | Hongqi Intelligent Mobility Technology (Beijing) Co., Ltd. | 121,039.88 | 16,448.28 |
| Accounts payable | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | 111,795.54 | 156,685.65 |
| Accounts payable | Changchun FAW Automobile Culture Communication Co., Ltd. | 82,778.99 | |
| Accounts payable | China Unicom Intelligent Network Technology Co., Ltd. | 54,880.00 | 12,984.00 |
| Accounts payable | Hainan Tropical Automobile Test Co., Ltd. | 31,977.00 | 437,094.00 |
| Accounts payable | Changchun FAW Pratt Technology Co., Ltd. | 17,236.96 | |
| Accounts payable | FAW Group | 14,133.00 | 367,385.00 |
| Accounts payable | FAW Changchun Tianqi Process Equipment Engineering Co., Ltd. | 8,891.97 | |
| Accounts payable | FAW Bestune Car Co., Ltd. | 5,100.00 | |
| Accounts payable | FAW Jilin Automobile Co., Ltd. | 13.33 | 126,000.00 |
| Accounts payable | China FAW Group Import & Export Co., Ltd. | 642,326.53 |
| Accounts payable | Harbin FAW Transmission Co., Ltd. | 93,627.49 | |
| Accounts payable | Chengdu Qiming Chunrong Information Technology Co., Ltd. | 159,215.21 | |
| Accounts received in advance | Changchun Automotive Test Center Co., Ltd. | 1,530,824.16 | 1,288,392.99 |
| Accounts received in advance | Fawer Auto Parts Co., Ltd. | 107,748.00 | |
| Accounts received in advance | FAW Changchun Comprehensive Utilization Co., Ltd. | 38,791.52 | |
| Accounts received in advance | FAW Changchun Communication Technology Co., Ltd. | 17,431.19 | |
| Accounts received in advance | Shandong Pengxiang Automobile Co., Ltd. | 205,656.00 | |
| Contract liabilities | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | 68,040,782.38 | 79,085,729.95 |
| Contract liabilities | Changchun Faw Service Trade Co., Ltd. | 15,663,935.13 | 36,893,039.11 |
| Contract liabilities | China FAW Group Import & Export Co., Ltd. | 2,676,797.47 | 632,188.13 |
| Contract liabilities | Suzhou Zhito Technology Co., Ltd. | 1,181,411.98 | 12,317,158.00 |
| Contract liabilities | FAW Changchun Comprehensive Utilization Co., Ltd. | 547,549.31 | 4,364,564.62 |
| Contract liabilities | Shandong Pengxiang Automobile Co., Ltd. | 436,111.40 | 492,805.88 |
| Contract liabilities | FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | 36,704.04 | |
| Contract liabilities | FAW Asset Management Co., Ltd. | 20,698.19 | 23,388.96 |
| Contract liabilities | FAW New Energy Vehicle Sales (Shenzhen) Co., Ltd. | 7,132.74 | 8,060.00 |
| Contract liabilities | Harbin FAW Transmission Co., Ltd. | 119.16 | 134.65 |
| Contract liabilities | FAW Logistics Co., Ltd. | 9.88 | 11.16 |
| Other payables | The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | 170,438,828.71 | 178,013,170.48 |
| Other payables | FAW Mold Manufacturing Co., Ltd. | 32,192,507.66 | 42,797,927.25 |
| Other payables | Qiming Information Technology Co., Ltd. | 31,377,721.05 | 37,234,276.05 |
| Other payables | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | 20,050,000.00 | 20,700,000.00 |
| Other payables | FAW Changchun Tianqi Process Equipment Engineering Co., Ltd. | 4,361,315.10 | |
| Other payables | FAW Changchun Communication Technology Co., Ltd. | 3,483,543.17 | 207,971.15 |
| Other payables | FAW Car Co., Ltd. | 2,792,527.37 | 216,522,779.89 |
| Other payables | China FAW Group Import & Export Co., Ltd. | 2,264,521.88 | 2,782,645.30 |
| Other payables | Shandong Pengxiang Automobile Co., Ltd. | 1,040,000.00 | 1,050,000.00 |
| Other payables | FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | 831,560.00 | |
| Other payables | Changchun Faw Service Trade Co., Ltd. | 629,405.00 | 1,397,786.21 |
| Other payables | Fawer Auto Parts Co., Ltd. | 429,040.30 | |
| Other payables | FAW Group | 371,435.96 | 233,303,791.17 |
| Other payables | SmartLink | 182,000.00 | |
| Other payables | Hainan Tropical Automobile Test Co., Ltd. | 97,185.18 | |
| Other payables | Changchun Automotive Test Center Co., Ltd. | 42,616.35 | |
| Other payables | Suzhou Zhito Technology Co., Ltd. | 10,000.00 | |
| Other payables | FAW Asset Management Co., Ltd. | 3,925.62 | 3,925.62 |
| Other payables | Sanguard Automobile Insurance Co., Ltd. | 274,539.31 |
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, theaudited revenue shares of mainstream product-related patents and proprietary technologies assessed with
income method and realized in 2020, 2021 and 2022 were not less than CNY 655.889 million, CNY 688.1552million and CNY 109.3864 million respectively.
8. Others
Deposits and interests of finance company Unit: CNY
| Project name | Related Parties | Content | Ending balance | Ending balance of the previous year |
| Monetary capital | First Automobile Finance Co., Ltd. | Deposits and interests of finance company included in bank deposits | 13,832,934,255.95 | 22,653,110,736.33 |
XIII.?Share-based Payment
1. General Conditions of Share-based Payment
?Applicable □ Not Applicable
Unit: CNY
| Total number of various equity instruments of the Company granted in the current period | |
| Total number of various equity instruments of the Company exercised in the current period | |
| Total number of various equity instruments of the Company lapsed in the current period | 2,148,958.00 |
| Scope of the exercise price of outstanding stock options of the Company at the end of the period and the remaining contract period | The validity period of the incentive plan shall not exceed 72 months from the date of the first grant of restricted shares to the date when all restricted shares granted to the incentive objects are released or repurchased and canceled. In the incentive plan, 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 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 the incentive object respectively. The release period of the reserved part shall be determined with reference to the above principles. |
| Scope of the exercise price of other equity instruments outstanding at the end of the period and the remaining contract period | None |
Other notes:
2. Equity-settled share-based payment
?Applicable □ Not Applicable
Unit: CNY
| Measures for determining the fair value of equity instruments on the grant date | Restricted shares are determined according to the closing price on the grant date, and stock options are determined according to the B-S option pricing model. |
| Basis for determining the number of exercisable equity instruments | The Company determines according to the Proposal on the Restricted Share Incentive Plan of FAW JIEFANG GROUP CO., LTD. (Draft) and Its Abstract, the Proposal on the Regulations for the Implementation Assessment of Restricted Share Incentive Plan of FAW JIEFANG GROUP CO., LTD., the Proposal on the Regulations for Restricted Share Incentive of FAW JIEFANG GROUP CO., LTD., and the Proposal on Requesting the Shareholders' Meeting to Authorize the Board of Directors to Handle Matters Related to the Company's Restricted Share Incentive Plan. |
| Reasons for significant differences between current estimates and previous estimates | None |
| Aggregate amount of equity-settled share-based payment charged to the capital reserve | 77,892,583.77 |
| Total expenses recognized by equity-settled share-based payment in the current period | 23,184,433.06 |
Other notes:
3. Cash-settled share-based payment
□ Applicable Not applicable?
XIV. Commitments and Contingencies
1.Important commitments
Important commitments existing on the balance sheet date: The Company had no other commitments thatshould be disclosed as of December 31, 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 | Subject Amount | Case Progress |
| Farasis Energy Technology (Ganzhou) Co., Ltd. | The Company, FAW Bestune Car Co., Ltd., Shanghai Ruimei New Energy Technology Co., Ltd. | Contract disputes | Changchun Intermediate People's Court | 45,702,880.00 | First instance |
| Bai Haitao | FAW Jiefang Automotive Sales Co., Ltd. | Product liability cases | Dalateqi People's Court of Inner Mongolia | 19,899,350.00 | Second instance of retrial |
| Jilin Branch of Sanguard Automobile Insurance Co., Ltd. | Chengdu Baojinyang Vehicle Parts Co., Ltd., third party: FAW Jiefang Automotive Sales Co., Ltd. | Insurer's subrogation disputes | Xindu District People's Court of Chengdu | 18,543,550.66 | Second instance |
| Beijing Vegetable Basket Distribution Co., Ltd. | Beijing Hotan Automobile Modification Co., Ltd., FAW Jiefang (Qingdao) Automotive Co., Ltd. | Product quality disputes | Beijing Second Intermediate People's Court | 12,000,000.00 | Second instance |
| Zhejiang Hanglun Ligang Trading Co., Ltd., Dali Changhang Real Estate Development Co., Ltd., Lu Jianping, Zhao Li | FAW Jiefang Automotive Co., Ltd. | Sales contract disputes | Yufeng District People's Court of Liuzhou | 10,780,000.00 | Execution |
| Wang Defeng, Zhao Jianbao, Cheng Zhizhuang, Cheng Zhixuan | Puyang Tianrong Automobile Sales Co., Ltd., third party: FAW Jiefang (Qingdao) Automotive Co., Ltd. | Product quality disputes | Puyang County People's Court of Henan Province | 8,000,000.00 | First instance |
| Shengkai Building Materials Co., Ltd. | Liaocheng Mingfeng Automobile Sales and Service Co., Ltd., Shandong Shengrun Automobile Co., Ltd., China FAW Group Corporation, FAW Jiefang (Qingdao) Automotive Co., Ltd. | Product quality disputes | Liaocheng Chiping District People's Court of Shandong Province | 4,370,000.00 | First instance |
| Dongguan ALI System Co., Ltd. | FAW Jiefang Automotive Co., Ltd. | Sales contract disputes | People's Court of Changchun Automobile Economic and Technological Development Zone | 2,959,213.61 | Second instance |
| Plaintiff | Defendant | Cause of Action | Court of Acceptance | Subject Amount | Case Progress |
| Liu Jiting | Gansu Longyuntong Automobile Service Co., Ltd. | Product quality disputes | Qingyang Intermediate People's Court of Gansu Province | 2,560,000.00 | Second instance |
| Chen Jie | FAW Jiefang Automotive Co., Ltd. (third party: Qingdao TKS Sealing Industry Co., Ltd.) | Sales contract disputes | People's Court of Changchun Automobile Economic and Technological Development Zone | 2,360,057.35 | Second instance |
| Dong Guosheng | Zhaoyuan Shanling Automobile Sales Co., Ltd., FAW Jiefang (Qingdao) Automotive Co., Ltd. | Product quality disputes | Zhaoyuan People's Court of Shandong Province | 1,890,000.00 | First instance of retrial |
| Zhao Shirong, Shi Jinghua, Wang Hewu, Wang Xinru | Tianjin Yili Baicheng Automobile Sales Co., Ltd., FAW Jiefang (Qingdao) Automotive Co., Ltd. | Product quality disputes | Wuqing District People's Court of Tianjin | 1,500,000.00 | First instance |
| Zheng Siyou, Wang Yanqin | FAW Jiefang Automotive Co., Ltd., Jilin Huaang Construction Engineering Co., Ltd., Li Jie | Construction project construction contract disputes | People's Court of Changchun Automobile Economic and Technological Development Zone | 1,494,402.70 | First instance |
| Wang Peng | Xingtai Tengrui Automobile Trading Co., Ltd., Xingtai Tuwei Cargo Transportation Co., Ltd.; third party: China FAW Group Corporation | Product liability cases | Nanhe District People's Court of Xingtai | 1,362,429.81 | First instance |
| Shao Yuhai | Dezhou Zhenxingda Automobile Sales Co., Ltd., China FAW Group Corporation | Product liability cases | Lingcheng District People's Court of Dezhou | 1,200,000.00 | First instance |
| Other 33 items | 9,370,556.35 |
As of December 31, 2022, the Company has no contingencies other than those mentioned above that should bedisclosed.
(2) Explanation is also required when the Company has no important contingencies to be disclosedThe Company has no important contingencies to be disclosed.
(3) Other information required by the industry information disclosure guidelinesThe Company shall meet the disclosure requirements for the automobile manufacturing industry specified in the"No. 3 Guideline of Shenzhen Stock Exchange on Self-Regulatory Supervision of Listed Companies - IndustryInformation Disclosure."The sales amount of mortgage sales, financial lease and other modes accounts for more than 10% of the
operating income
□ Applicable Not applicable?
The Company's guarantee to dealer
□ Applicable Not applicable?
XV. Events after the Balance Sheet Date
FAW Jiefang Automotive Co., Ltd., a subsidiary of the Company, plans to invest in ChangchunAutomobile Test Center Co., Ltd. in order to realize the Company's strategic planning, promote the healthyand long-term development of the Company, further control the Company's product consistency, and carry outR&D, testing and certification inspection of new energy, intelligent network and other products, which hasbeen eliberated and adopted at the 30th meeting of the 9th Board of Directors of the Company. The investmentamount is CNY 670,872,800, with a shareholding ratio of 14.63%, including CNY 475,000,000 in cash andCNY 195,872,800 in related business assets. The appraisal benchmark date is February 28, 2022. The asset-based approach is adopted for appraisal this time. The book value of net assets is CNY 94,876,500, theappraisal value is CNY 195,872,800, and the delivery date is February 28, 2023.The Company had no events after the balance sheet date to be disclosed as of March 31, 2023.
XVI. Other Significant 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 Lawof the People's Republic of China, the Trust Law of the People's Republic of China, the Trial Measures forEnterprise Annuity (Order No. 20 of the Ministry of Labor and Social Security) and other laws and regulations,and in combination 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 regulationson the basis of purchasing the basic endowment insurance and fulfilling the payment obligation according tolaw, and is an integral part of the enterprise employee compensation and welfare system.
(2) Organization, management and supervision: Enterprise representatives and employee representativesestablish the FAW Enterprise Annuity Council (hereinafter referred to as the Annuity Council) throughcollective negotiation. The Annuity Council is composed of enterprise and employee representatives, of which
not less than one third are employee representatives. As the trustee of the Plan, the Annuity Council isresponsible for operating and managing the 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 managedby personal accounts. At the same time, enterprise accounts are established to collect unvested rights andinterests.
(5) Fund management: The enterprise annuity fund consists of the following items: ① Enterprise's payment;
② Employees' payment; ③ Investment and operation income. The enterprise annuity fund is entrusted to theAnnuity Council for management. The enterprise and employee representatives entrust the Company to sign theenterprise annuity fund entrusted management contract with the Annuity Council through collective negotiation,and entrust the Annuity Council for management and market-oriented operation of the enterprise annuity fundcollected by this plan.
(6) Benefit planning and distribution: The employee's payment and its investment income belong to theemployee; the part of enterprise's payment distributed to the individual account and its investment incomebelong to the employee as specified, and the part not belonging to the individual is transferred to the enterpriseaccount.
(7) Payment method of enterprise annuity: ① For the retired employee and the employee completing theretirement procedures, the balance of the annuity personal account can be received at one time (or monthly, inseveral times or at 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 legalsuccessor at one time; ③ For the overseas residents, the balance of the personal account of the enterpriseannuity may be paid to him/her at 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 inthe lease liabilities measurement are included in the expenses in the current period as follows:
| Item | Amount incurred in the current period |
| Short-term lease | 37,568,291.05 |
| Low-value lease | |
| Variable Lease Payments not Included in Lease Liabilities Measurement | |
| Total | 37,568,291.05 |
XVII. Notes to Major Items of Parent Company’s Financial Statements
1. Other receivables
Unit: CNY
| Item | Ending balance | Opening balance |
| Other accounts receivable | 224,132.76 | 432,429.80 |
| Total | 224,132.76 | 432,429.80 |
(1) Other receivables
1) Classification of other receivables by nature
Unit: CNY
| 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
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit loss for the next 12 months | Expected loss in the duration (credit impairment not occurred) | 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 | ||||
| - Transfer to phase II | -26,576.46 | 26,576.46 | ||
| Provision in the current period | 208,297.04 | 208,297.04 | ||
| Balance as at December 31, 2022 | 234,873.50 | 234,873.50 |
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 | Book balance |
| 1-2 years | 459,006.26 |
| Total | 459,006.26 |
3) 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 | |||
| Current account | 26,576.46 | 208,297.04 | 234,873.50 | |||
| Total | 26,576.46 | 208,297.04 | 234,873.50 | |||
4) Other receivables from top five borrowers classified based on the ending balance
Unit: CNY
| Name of Organization | 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 | 1-2 years | 100.00% | 234,873.50 |
| Total | 459,006.26 | 100.00% | 234,873.50 |
2. Long-term equity investment
Unit: CNY
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Carrying amount | Book balance | Impairment provision | Carrying amount | |
| Investment in subsidiaries | 21,109,221,438.36 | 21,109,221,438.36 | 21,086,037,005.30 | 21,086,037,005.30 | ||
| Investment to associated enterprises and joint ventures | 4,471,059,131.83 | 4,471,059,131.83 | 4,554,765,365.23 | 4,554,765,365.23 | ||
| Total | 25,580,280,570.19 | 25,580,280,570.19 | 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 decrease | Impairment provision | Others | ||||
| FAW Jiefang Automotive | 21,086,037,005.30 | 23,184,433.06 | 21,109,221,438.36 | ||||
| Co., Ltd. | |||||||
| Total | 21,086,037,005.30 | 23,184,433.06 | 21,109,221,438.36 |
(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 decrease | Investment gains or losses recognized under the equity method | Adjustment to other comprehensive income | Changes in other equity | Cash dividends and profits declared to pay | Impairment provision | Others | ||||
| I. Joint ventures | |||||||||||
| II. Associated enterprises | |||||||||||
| First Automobile Finance Co., Ltd. | 4,341,181,324.38 | 358,137,304.38 | -98,154.88 | 429,182,504.29 | 4,270,037,969.59 | ||||||
| Sanguard Automobile Insurance Co., Ltd. | 213,584,040.85 | 6,044,847.34 | -686,753.20 | 17,920,972.75 | 201,021,162.24 | ||||||
| Subtotal | 4,554,765,365.23 | 364,182,151.72 | -784,908.08 | 447,103,477.04 | 4,471,059,131.83 | ||||||
| Total | 4,554,765,365.23 | 364,182,151.72 | -784,908.08 | 447,103,477.04 | 4,471,059,131.83 | ||||||
3. Investment income
Unit: CNY
| Item | Amount incurred in the current period | Amount in the previous period |
| Long-term equity investment income calculated with cost method | 2,799,650,000.00 | 2,719,920,000.00 |
| Long-term equity investment income calculated with equity method | 364,182,151.72 | 758,201,966.42 |
| Total | 3,163,832,151.72 | 3,478,121,966.42 |
XVIII.?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 | 871,031,108.06 | It refers to the net gain on disposal of non-current assets. |
| Government subsidies included in the current profit and loss (except those closely related to the Company normal operations, conforming to the State policies and regulations and enjoyed persistently in line with certain standard rating or ration) | 1,635,846,930.83 | |
| Reversal of impairment provision for receivables subject to separate impairment test | 15,110,580.89 | It mainly refers to the reversal of impairment provision for receivables subject to separate impairment test. |
| Trustee fee earned from entrusted management | 864,779.87 | The trustee fee |
| Non-operating income and expenses other than the above | 127,429,456.42 | They mainly refer to the net non-operating income and expenses |
| Other losses and profits conforming to the definition of non-recurring profit and loss | Other non-recurring profits and losses | |
| Less: amount affected by income tax | 568,294,525.62 | |
| Total | 2,081,988,330.45 | -- |
Specific conditions of other profit and loss items meeting the definition of non-recurring profit and loss:
□ Applicable Not applicable?
There is no specific conditions of profit and loss items meeting definition of non-recurring profit and loss forthe Company.Explanation on defining the non-recurring profit and loss items listed in the Explanatory Announcement No. 1on Information Disclosure by Companies Issuing Securities Publicly - Non-recurring Profit and Loss asrecurring profit and 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 | 1.50% | 0.0735 | 0.0735 |
| Net profit attributable to common shareholders of the Company after deducting non-recurring profit and loss | -7.01% | -0.3781 | -0.3781 |
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 tothe international 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?