Auditor’s Report
Su Gong W【2023】No. A853
To the Shareholders of Weifu High-Technology Group Co., Ltd.:
I. Auditing opinionsWe have audited the financial statement under the name of Weifu High-Technology Group Co., Ltd.(hereinafter referred to as WFHT), including the consolidated and parent Company’s balance sheetof 31 December 2022 and profit statement, and cash flow statement, and statement on changes ofshareholders’ equity for the year ended, and notes to the financial statements for the year ended.
In our opinion, the Company’s financial statements have been prepared in accordance with theEnterprises Accounting Standards and Enterprises Accounting System, and they fairly present thefinancial status of the Company and of its parent company as of 31 December 2022 and its operationresults and cash flows for the year ended.II. Basis of opinionWe conducted our audit in accordance with the Auditing Standards for Certified Public Accountantsof China. Our responsibilities under those standards are further described in the “Auditor’sResponsibilities for the Audit of the Financial Statements” section of the auditor’s report. We areindependent of the Company in accordance with the Certified Public Accountants of China’s Codeof Ethics for Professional Accountants, and we have fulfilled our other ethical responsibilities inaccordance with the Code. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinionIII. Highlighted paragraphsWe remind users of financial statements to pay attention: As described in Note XIV-6 "Otherimportant transactions and matters affecting investors' decisions", the security organs have launcheda criminal investigation on the case that WFTR was defrauded by contracts in its "platform trade"business. At present, the case is in the investigation stage, and the outcome of the case is uncertainin the future.This paragraph does not affect the published audit opinion.IV. Key audit matters
公证天业会计师事务所(特殊普通合伙)
Gongzheng Tianye Certified Public Accountants, SGP
中国 . 江苏 . 无锡 Wuxi . Jiangsu . China总机:86(510)68798988 Tel:86(510)68798988传真:86(510)68567788 Fax:86(510)68567788电子信箱:mail@gztycpa.cn E-mail:mail@gztycpa.cn
Key audit matters are those matters that, in our professional judgment, were of most significance inour audit of the financial statements of the current period. These matters were addressed in thecontext of our audit of the financial statements as a whole, and in forming our opinion thereon, andwe do not provide a separate opinion on these matters.The key audit issues identified in our audit are as follows:
(i) Accounting treatment of "platform trading" business and the related provision forexpected credit losses
1. Matter description
As described in Note XVI-7 "Other important transactions and matters affecting investors'decisions", the security organs have launched a criminal investigation on the case that WFTR wasdefrauded by contracts in its "platform trade" business. Based on the "platform trade" business’sbackground, transaction chain, sales and purchase contract signing, transaction process, physicalflow and so on, the Company carefully analyzed and made comprehensive judgment, finds that theprobability of this business not belonging to normal trade business is extremely high. In terms ofaccounting treatment, the Company follows the principle of substance over form and does not treatit as normal trade business, but according to the receipt and payment of funds,prudently recognizeas claims and liabilities, respectively, purchases actually paid to "Suppliers" and sales collectedfrom "Customers". In the financial statements, the "platform trade" business is net reported to otherreceivables in the form of the "platform trade" business portfolio, the amount is 2,741,499,100 yuan,for which an expected credit loss of 1,644,068,300 yuan has been charged. The "platform trade"business involved significant amounts of money and was at the stage of criminal investigation, thejudgment of the nature of the business, accounting treatment and the provision of expected creditlosses are related to management's use of significant accounting estimates and judgments and havea significant impact on the financial statements. Therefore, we identified the accounting treatmentof the "platform trading" business and the provision of expected credit losses of portfolio claims of"platform trading" business as key audit matters.
2. The solution to the matter in auditing
(1) Interview the management and relevant business personnel of WFTR to understand the businessbackground, operation mode, contract signing method, pricing method, transaction and settlementprocess of its "platform trade" business;
(2) Evaluate and test the internal controls of the "platform trade" business, evaluate the design ofthese controls, determine whether they are implemented, and test the operational effectiveness ofthe relevant internal controls;
(3) Obtain the standing book of purchase and sales contract, inspect the purchase and sales contract,and verify the key terms of the subject matter, counterparty, contract price, delivery mode and soon involved in the purchase and sales contract, combine the contract signing time, pricing method,and interview records to further judge whether the relevant transaction has commercial substance;
(4) Obtain the industrial and commercial information of "customers" and "suppliers" involved in
the transaction process, check the business scope, registered address, equity structure, registeredcapital, personnel size, telephone number and other information of the counterparty to judge whetherthe business scope of the counterparty and its own scale match the transaction scale, check whetherthere is correlation or suspected correlation between the upstream "supplier" and the downstream"customer", and evaluate the business logic and rationality of the existence of the upstream"supplier" and the downstream "customer" in the transaction chain at the same time;
(5) Obtain detailed accounts and accounting documents involved in the "platform trade" business,check the original documents related to accounting processing, including but not limited to purchaseand sales contracts (orders, framework agreements), invoices, logistics documents, payment andpayment bank documents, and ask relevant personnel about logistics documents, check their sourcesand ways of obtaining. Further judge whether there is real physical circulation in the transactionprocess;
(6) Send letters to the "customer" and "supplier", confirm the "transaction amount" and "settlementbalance" to the "customer" and "supplier", check the return letter, check the address of the returnletter, the seal, the amount of the return letter and other information, and take further verificationprocedures for the return letter with doubts;
(7) Visit the main "customers" and "suppliers", interview the transaction background, transactioncontent, contract signing, transaction mode, cargo logistics operation, capital settlement flow,whether there is a correlation between WFTR and the "customers" and "suppliers", verify theinformation formed in the transaction process with the "customers" and "suppliers". Verify theauthenticity of the reply of "customer" and "supplier", and observe the business premises of"customer" and "supplier" to further judge whether the relevant transaction has commercialsubstance and commercial logic;
(8) Evaluate the reasonableness of that the management considers that the business has a highprobability of not having commercial substance and business logic and does not conduct accountingtreatment and presentation as normal trade business according to the principle of substance overform based on the information obtained in the audit process;
(9) In combination with related transaction audit procedures, check whether there are relatedrelationships, related transactions and funds occupied by related parties in the "platform trade"business;
(10) Obtain and check the supporting credentials for the actual collection of the "platform trade"business debt portfolio after the balance sheet date, visit the competent departments according tothe sources from which the management makes estimates, and verify the authenticity and reliabilityof the sources;
(11) Check the information related to the "platform trade" business has been properly reported anddisclosed in the financial statements.(ii) Revenue recognition
1. Matter description
As described in Note V-32 “Revenue” and Note VII-44 “Operation revenue and operation cost”carried in the financial statement, WFHT achieved an operation revenue of 12.730 billion yuan foryear of 2022. As one of the biggest source of profits for WFHT, operating revenue has a significanteffect on the general financial statement, in which there are certain of inherent risks existed for thereason that the management manipulate the timing of recognition so as to achieve specific objectivesor anticipations. Therefore, we will take the Revenue recognition as the key auditing matter.
2. The solution to the matter in auditing
(1) Understand the key internal controls related to revenue recognition, evaluate the design of thesecontrols, determine whether they are implemented, and test the operational effectiveness of therelevant internal controls;
(2) Review sales contracts to understand main contract terms or conditions and evaluate theappropriateness of revenue recognition methods;
(3) Combining with status and data of the industry where WFHT is located, the Company shouldmake a judgment on the rationality of fluctuation of the revenue composition;
(4) The Company should carry out the procedure of account receivable and revenue letter ofconfirmation, and make a judgment on the rationality of the timing of revenue recognition;
(5) Combining with the procedure of letter of confirmation, the Company should make a randominspection on sales contracts or orders, delivery lists, logistics bills, customs declaration, salesinvoices, signing-off sheet and other documents related to revenue to verify the authenticity ofrevenue;
(6) Referring to the recorded revenue before and after the Balance Sheet Date, the Company shouldselect some samples and check out the supportive documents such as delivery lists, customsdeclaration and receipt forms to make a judgment on whether the income has been recorded at theappropriate accounting period.IV. Other informationThe management of WFHT is responsible for other information which includes the informationcovered in the Company’s 2021 annual report excluding the financial statement and our audit report.Our audit opinions on the financial statements do not cover other information, and we do not issueany form of authentication conclusions on other information.In combination with our audit of the financial statements, it is our responsibility to read otherinformation and, in the process, consider whether there is material inconsistency or materialmisstatement between the other information and the financial statements or what we learned duringthe audit.Based on the work we have carried out, if we determine that there is a material misstatement ofother information, we should report that fact and this regard we have noting to report.
V. Responsibilities of management and those charged with governance for the financialstatementsThe management is responsible for the preparation of the financial statements in accordance withthe Accounting Standards for Enterprise to secure a fair presentation, and for the design,establishment and maintenance of the internal control necessary to enable the preparation offinancial statements that are free from material misstatement, whether due to fraud or error.In preparing the financial statements, the management is responsible for assessing the Company’sability to continue as a going concern, disclosing matters related to going concern (if applicable)and using the going concern assumption unless the management either intends to liquidate theCompany or to cease operations, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reportingprocess.
VI. Responsibilities of the auditor for the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an audit report thatincludes our audit opinion. Reasonable assurance is a high level of assurance, but is not a guaranteethat an audit conducted in accordance with the CAS will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if,individually or in the aggregate, they could reasonably be expected to influence the economicdecisions of users taken on the basis of the financial statements.As part of an audit in accordance with the CAS, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether dueto fraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for audit opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the overrideof internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances.
(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 and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern.If we conclude that a material uncertainty exists, we are required by the CAS to draw users’ attentionin audit report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify audit opinion. Our conclusions are based on the information obtained up tothe date of audit report. However, future events or conditions may cause the Company to cease tocontinue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whetherthe financial statements represent the underlying transactions and events in a manner that achievesfair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entitiesor business activities within the Company to express audit opinion on the financial statements. Weare responsible for the direction, supervision and performance of the group audit. We remain solelyresponsible for audit opinion.We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficienciesin internal control that we identify during our audit.We also provide the governance with a statement of our compliance with the ethical requirementsrelating to our independence and communicate with the governance on all relationships and othermatters that may reasonably be considered to affect our independence, as well we the relevantprecautions (if applicable).From the matters communicated with those charged with governance, we determine those mattersthat were of most significance in the audit of the financial statements of the current period and aretherefore the key audit matters. We describe these matters in the auditor’s report unless law orregulation precludes public disclosure about the matter or when, in extremely rare circumstances,we determine that a matter should not be communicated in the auditor’s report because of theadverse consequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.Jiangsu Gongzheng Tianye CPA Chinese CPA: Gu Zhi(Special General Partnership) (Engagement partner)Wuxi China Chinese CPA: Zhang Qianqian
26 April, 2023
II. Financial StatementStatement in Financial Notes are carried Unit: RMB/CNY
1. Consolidated Balance Sheet
Prepared by Weifu High-Technology Group Co., Ltd.
December 31, 2022
In RMB
Item | December 31, 2022 | January 1, 2022 |
Current assets: | ||
Monetary funds | 2,389,551,930.76 | 1,896,063,265.69 |
Settlement provisions | ||
Capital lent | ||
Trading financial assets | 2,718,820,654.87 | 6,076,436,069.42 |
Derivative financial assets | ||
Note receivable | 135,559,024.27 | 1,116,550,186.21 |
Account receivable | 3,127,490,177.25 | 2,053,800,293.77 |
Receivable financing | 1,918,368,845.21 | 713,017,014.50 |
Accounts paid in advance | 94,323,853.87 | 178,059,249.99 |
Insurance receivable | ||
Reinsurance receivables | ||
Contract reserve of reinsurance receivable | ||
Other account receivable | 1,264,507,456.47 | 17,908,078.54 |
Including: Interest receivable | ||
Dividend receivable | 147,000,000.00 | |
Buying back the sale of financial assets | ||
Inventories | 2,283,119,656.27 | 3,445,396,375.09 |
Contract assets | ||
Assets held for sale | ||
Non-current asset due within one year | ||
Other current assets | 430,547,201.24 | 220,320,922.50 |
Total current assets | 14,362,288,800.21 | 15,717,551,455.71 |
Non-current assets: | ||
Loans and payments on behalf |
Debt investment | ||
Other debt investment | ||
Long-term account receivable | ||
Long-term equity investment | 6,282,818,108.96 | 5,717,944,788.12 |
Investment in other equity instrument | 677,790,690.00 | 285,048,000.00 |
Other non-current financial assets | 1,326,608,914.00 | 1,690,795,178.00 |
Investment real estate | 49,296,869.73 | 19,387,746.56 |
Fixed assets | 3,769,984,185.94 | 2,932,210,452.51 |
Construction in progress | 509,105,587.49 | 387,429,933.08 |
Productive biological asset | ||
Oil and gas asset | ||
Right-of-use assets | 41,865,100.38 | 23,148,405.58 |
Intangible assets | 487,627,987.92 | 440,593,119.82 |
Expense on Research and Development | ||
Goodwill | 237,682,375.72 | 231,255,015.75 |
Long-term expenses to be apportioned | 28,586,235.84 | 15,304,783.57 |
Deferred income tax asset | 275,627,772.45 | 242,248,194.57 |
Other non-current asset | 479,630,436.37 | 267,941,354.57 |
Total non-current asset | 14,166,624,264.80 | 12,253,306,972.13 |
Total assets | 28,528,913,065.01 | 27,970,858,427.84 |
Current liabilities: | ||
Short-term loans | 3,604,376,527.82 | 1,437,958,206.55 |
Loan from central bank | ||
Capital borrowed | ||
Trading financial liability | ||
Derivative financial liability | 747,115.75 | |
Note payable | 1,411,089,606.00 | 1,760,032,216.30 |
Account payable | 3,454,601,023.60 | 3,206,653,702.59 |
Accounts received in advance | 3,633,878.33 | 2,854,518.96 |
Contractual liability | 94,850,083.23 | 136,427,636.39 |
Selling financial asset of repurchase | ||
Absorbing deposit and interbank deposit | ||
Security trading of agency | ||
Security sales of agency |
Wage payable | 317,434,386.24 | 339,888,502.70 |
Taxes payable | 54,586,315.53 | 40,105,648.88 |
Other account payable | 198,990,948.23 | 359,905,317.46 |
Including: Interest payable | 6,184.14 | |
Dividend payable | 25,671,100.00 | |
Commission charge and commission payable | ||
Reinsurance payable | ||
Liability held for sale | ||
Non-current liabilities due within one year | 14,285,348.90 | 34,088,773.68 |
Other current liabilities | 211,763,779.77 | 212,969,271.55 |
Total current liabilities | 9,366,359,013.40 | 7,530,883,795.06 |
Non-current liabilities: | ||
Insurance contract reserve | ||
Long-term loans | 238,000,000.00 | |
Bonds payable | ||
Including: Preferred stock | ||
Perpetual capital securities | ||
Lease liability | 31,589,277.20 | 15,795,469.25 |
Long-term account payable | 30,785,082.11 | 32,015,082.11 |
Long-term wages payable | 154,093,044.28 | 108,311,923.19 |
Accrued liability | 10,106,268.87 | |
Deferred income | 223,123,978.78 | 298,052,867.56 |
Deferred income tax liabilities | 40,149,550.99 | 23,097,535.20 |
Other non-current liabilities | ||
Total non-current liabilities | 727,847,202.23 | 477,272,877.31 |
Total liabilities | 10,094,206,215.63 | 8,008,156,672.37 |
Owner’s equity: | ||
Share capital | 1,008,603,293.00 | 1,008,659,570.00 |
Other equity instrument | ||
Including: Preferred stock | ||
Perpetual capital securities | ||
Capital public reserve | 3,398,368,567.63 | 3,371,344,172.82 |
Less: Inventory shares | 541,623,002.63 | 270,249,797.74 |
Other comprehensive income | -911,310.13 | -36,746,344.60 |
Reasonable reserve | 2,119,800.95 | 712,215.31 |
Surplus public reserve | 510,100,496.00 | 510,100,496.00 |
Provision of general risk | ||
Retained profit | 13,320,021,325.90 | 14,814,787,377.86 |
Total owner’ s equity attributable to parent company | 17,696,679,170.72 | 19,398,607,689.65 |
Minority interests | 738,027,678.66 | 564,094,065.82 |
Total owner’ s equity | 18,434,706,849.38 | 19,962,701,755.47 |
Total liabilities and owner’ s equity | 28,528,913,065.01 | 27,970,858,427.84 |
Legal Representative: Wang XiaodongPerson in charge of accounting works: Ou JianbinPerson in charge of accounting institute: Ou Jianbin
2. Balance Sheet of Parent Company
In RMB
Item | December 31, 2022 | January 1, 2022 |
Current assets: | ||
Monetary funds | 823,574,329.53 | 1,002,808,546.46 |
Trading financial assets | 2,693,150,975.20 | 5,493,703,374.82 |
Derivative financial assets | ||
Note receivable | 29,575,852.04 | 303,726,372.69 |
Account receivable | 906,808,283.22 | 536,957,890.22 |
Receivable financing | 216,462,262.44 | |
Accounts paid in advance | 56,037,892.68 | 93,419,268.82 |
Other account receivable | 1,472,102,439.27 | 204,125,517.63 |
Including: Interest receivable | 206,325.34 | 113,055.56 |
Dividend receivable | 26,718,900.00 | |
Inventories | 571,571,431.95 | 1,076,094,722.15 |
Contract assets | ||
Assets held for sale | ||
Non-current assets maturing within one year | ||
Other current assets | 107,462,112.82 | 149,352,872.77 |
Total current assets | 6,876,745,579.15 | 8,860,188,565.56 |
Non-current assets: | ||
Debt investment |
Other debt investment | ||
Long-term receivables | ||
Long-term equity investments | 8,369,843,351.10 | 6,867,282,228.56 |
Investment in other equity instrument | 601,850,690.00 | 209,108,000.00 |
Other non-current financial assets | 1,326,608,914.00 | 1,690,795,178.00 |
Investment real estate | 35,584,279.11 | |
Fixed assets | 2,251,495,050.80 | 1,786,089,596.76 |
Construction in progress | 251,304,655.41 | 239,183,999.25 |
Productive biological assets | ||
Oil and natural gas assets | ||
Right-of-use assets | 6,061,693.75 | 1,240,879.96 |
Intangible assets | 209,246,490.17 | 209,952,168.75 |
Research and development costs | ||
Goodwill | ||
Long-term deferred expenses | 6,895,352.43 | 348,970.34 |
Deferred income tax assets | 109,624,761.50 | 85,012,991.24 |
Other non-current assets | 168,744,695.04 | 185,646,711.53 |
Total non-current assets | 13,337,259,933.31 | 11,274,660,724.39 |
Total assets | 20,214,005,512.46 | 20,134,849,289.95 |
Current liabilities | ||
Short-term borrowings | 2,121,354,415.53 | 272,578,883.63 |
Trading financial liability | ||
Derivative financial liability | 737,424.50 | |
Notes payable | 251,867,652.05 | 569,405,391.94 |
Account payable | 1,048,268,519.52 | 1,012,390,712.80 |
Accounts received in advance | ||
Contract liability | 6,564,332.93 | 7,879,319.15 |
Wage payable | 166,314,985.33 | 220,719,432.58 |
Taxes payable | 6,048,505.30 | 12,427,327.61 |
Other accounts payable | 926,276,130.15 | 392,455,373.80 |
Including: Interest payable | 835,069.83 | 117,777.78 |
Dividend payable | ||
Liability held for sale | ||
Non-current liabilities due within one year | 4,306,935.71 | 462,484.41 |
Other current liabilities | 102,322,311.03 | 143,935,332.78 |
Total current liabilities | 4,634,061,212.05 | 2,632,254,258.70 |
Non-current liabilities: | ||
Long-term loans | ||
Bonds payable | ||
Including: preferred stock | ||
Perpetual capital securities | ||
Lease liability | 2,690,812.43 | 1,003,106.55 |
Long-term account payable | ||
Long term employee compensation payable | 121,683,760.89 | 103,482,333.50 |
Accrued liabilities | 13,750.00 | |
Deferred income | 198,149,511.20 | 265,509,545.34 |
Deferred income tax liabilities | ||
Other non-current liabilities | ||
Total non-current liabilities | 322,537,834.52 | 369,994,985.39 |
Total liabilities | 4,956,599,046.57 | 3,002,249,244.09 |
Owners’ equity: | ||
Share capital | 1,008,603,293.00 | 1,008,659,570.00 |
Other equity instrument | ||
Including: preferred stock | ||
Perpetual capital securities | ||
Capital public reserve | 3,515,005,861.23 | 3,487,154,855.59 |
Less: Inventory shares | 541,623,002.63 | 270,249,797.74 |
Other comprehensive income | ||
Special reserve | ||
Surplus reserve | 510,100,496.00 | 510,100,496.00 |
Retained profit | 10,765,319,818.29 | 12,396,934,922.01 |
Total owner’s equity | 15,257,406,465.89 | 17,132,600,045.86 |
Total liabilities and owner’s equity | 20,214,005,512.46 | 20,134,849,289.95 |
3. Consolidated Profit Statement
In RMB
Item | 2022 | 2021 |
I. Total operating income | 12,729,634,917.03 | 13,682,426,710.95 |
Including: Operating income | 12,729,634,917.03 | 13,682,426,710.95 |
Interest income | ||
Insurance gained | ||
Commission charge and commission income | ||
II. Total operating cost | 12,526,691,966.36 | 12,772,618,230.58 |
Including: Operating cost | 11,016,385,488.80 | 11,220,367,713.57 |
Interest expense | ||
Commission charge and commission expense | ||
Cash surrender value | ||
Net amount of expense of compensation | ||
Net amount of withdrawal of insurance contract reserve | ||
Bonus expense of guarantee slip | ||
Reinsurance expense | ||
Tax and extras | 70,575,584.89 | 60,256,733.73 |
Sales expense | 189,528,090.71 | 264,651,432.56 |
Administrative expense | 586,386,474.32 | 611,872,150.24 |
R&D expense | 581,488,711.88 | 595,406,951.64 |
Financial expense | 82,327,615.76 | 20,063,248.84 |
Including: Interest expenses | 107,737,432.78 | 38,698,621.09 |
Interest income | 41,020,724.48 | 41,478,845.32 |
Add: other income | 112,665,397.27 | 71,276,971.68 |
Investment income (Loss is listed with “-”) | 1,849,145,500.50 | 1,954,523,836.59 |
Including: Investment income on affiliated company and joint venture | 1,636,986,684.96 | 1,632,117,748.78 |
The termination of income recognition for financial assets measured by amortized cost(Loss is listed with “-”) | -959,296.18 | |
Exchange income (Loss is listed with “-”) | ||
Net exposure hedging income (Loss is listed with “-”) | ||
Income from change of fair value (Loss is listed with “-”) | -157,622,752.09 | -40,270,333.81 |
Loss of credit impairment (Loss is listed with “-”) | -1,645,881,142.40 | 4,059,750.80 |
Losses of devaluation of asset (Loss is listed with “-”) | -181,610,433.12 | -138,117,315.80 |
Income from assets disposal (Loss is listed with “-”) | 1,986,804.53 | 3,932,344.07 |
III. Operating profit (Loss is listed with “-”) | 181,626,325.36 | 2,765,213,733.90 |
Add: Non-operating income | 5,699,768.04 | 656,202.07 |
Less: Non-operating expense | 7,711,660.06 | 25,509,569.87 |
IV. Total profit (Loss is listed with “-”) | 179,614,433.34 | 2,740,360,366.10 |
Less: Income tax expense | -11,331,574.91 | 90,995,689.95 |
V. Net profit (Net loss is listed with “-”) | 190,946,008.25 | 2,649,364,676.15 |
(i) Classify by business continuity | ||
1.continuous operating net profit (net loss listed with ‘-”) | 190,946,008.25 | 2,649,364,676.15 |
2.termination of net profit (net loss listed with ‘-”) | ||
(ii) Classify by ownership | ||
1.Net profit attributable to owner’s of parent company | 118,819,836.30 | 2,575,371,419.80 |
2.Minority shareholders’ gains and losses | 72,126,171.95 | 73,993,256.35 |
VI. Net after-tax of other comprehensive income | 35,835,034.47 | -50,662,087.73 |
Net after-tax of other comprehensive income attributable to owners of parent company | 35,835,034.47 | -50,662,964.07 |
(I) Other comprehensive income items which will not be reclassified subsequently to profit of loss | -399,165.06 | 16,008.80 |
1.Changes of the defined benefit plans that re-measured | -399,165.06 | |
2.Other comprehensive income under equity method that cannot be transfer to gain/loss | 16,008.80 | |
3.Change of fair value of investment in other equity instrument | ||
4.Fair value change of enterprise's credit risk | ||
5. Other | ||
(ii) Other comprehensive income items which will be reclassified subsequently to profit or loss | 36,234,199.53 | -50,678,972.87 |
1.Other comprehensive income under equity method that can transfer to gain/loss | ||
2.Change of fair value of other debt investment | ||
3.Amount of financial assets re-classify to other comprehensive income | ||
4.Credit impairment provision for other debt investment | ||
5.Cash flow hedging reserve | ||
6.Translation differences arising on translation of foreign currency financial statements | 36,234,199.53 | -50,678,972.87 |
7.Other | ||
Net after-tax of other comprehensive income attributable to minority | 876.34 |
shareholders | ||
VII. Total comprehensive income | 226,781,042.72 | 2,598,702,588.42 |
Total comprehensive income attributable to owners of parent Company | 154,654,870.77 | 2,524,708,455.73 |
Total comprehensive income attributable to minority shareholders | 72,126,171.95 | 73,994,132.69 |
VIII. Earnings per share: | ||
(i) Basic earnings per share | 0.09 | 2.57 |
(ii) Diluted earnings per share | 0.09 | 2.57 |
As for the enterprise combined under the same control, net profit of 0 yuan achieved by the merged party beforecombination while 0 yuan achieved last periodLegal Representative: Wang XiaodongPerson in charge of accounting works: Ou JianbinPerson in charge of accounting institute: Ou Jianbin
4. Profit Statement of Parent Company
In RMB
Item | 2022 | 2021 |
I. Operating income | 3,864,504,995.80 | 4,832,340,790.45 |
Less: Operating cost | 3,263,994,952.63 | 3,605,342,507.48 |
Taxes and surcharge | 21,016,396.56 | 29,689,175.82 |
Sales expenses | 24,032,764.17 | 44,807,972.25 |
Administration expenses | 312,390,634.03 | 324,244,883.74 |
R&D expenses | 215,942,706.30 | 225,949,431.82 |
Financial expenses | -47,492,346.99 | -15,417,294.04 |
Including: interest expenses | 75,002,506.86 | 7,427,980.88 |
Interest income | 123,450,262.42 | 26,881,455.19 |
Add: other income | 78,660,020.95 | 41,029,454.01 |
Investment income (Loss is listed with “-”) | 1,698,892,386.70 | 1,758,393,772.54 |
Including: Investment income on affiliated Company and joint venture | 1,427,651,731.23 | 1,366,704,678.23 |
The termination of income recognition for financial assets measured by amortized cost (Loss is listed with “-”) | ||
Net exposure hedging income (Loss is listed with “-”) | ||
Changing income of fair value (Loss is listed with “-”) | -157,794,622.92 | -40,747,662.86 |
Loss of credit impairment (Loss is listed with “-”) | -1,645,695,111.31 | -654,218.49 |
Losses of devaluation of asset (Loss is listed with “-”) | -94,397,143.24 | -40,950,682.53 |
Income on disposal of assets (Loss is listed with “-”) | 208,706.65 | 850,642.47 |
II. Operating profit (Loss is listed with “-”) | -45,505,874.07 | 2,335,645,418.52 |
Add: Non-operating income | 236,560.76 | 527,726.36 |
Less: Non-operating expense | 1,624,603.88 | 24,178,368.73 |
III. Total Profit (Loss is listed with “-”) | -46,893,917.19 | 2,311,994,776.15 |
Less: Income tax | -24,338,482.27 | 101,437,713.12 |
IV. Net profit (Net loss is listed with “-”) | -22,555,434.92 | 2,210,557,063.03 |
(i)continuous operating net profit (net loss listed with ‘-”) | -22,555,434.92 | 2,210,557,063.03 |
(ii) termination of net profit (net loss listed with ‘-”) | ||
V. Net after-tax of other comprehensive income | ||
(I) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
1.Changes of the defined benefit plans that re-measured | ||
2.Other comprehensive income under equity method that cannot be transfer to gain/loss | ||
3.Change of fair value of investment in other equity instrument | ||
4.Fair value change of enterprise's credit risk | ||
5. Other | ||
(II) Other comprehensive income items which will be reclassified subsequently to profit or loss | ||
1.Other comprehensive income under equity method that can transfer to gain/loss | ||
2.Change of fair value of other debt investment | ||
3.Amount of financial assets re-classify to other comprehensive income | ||
4.Credit impairment provision for other debt investment | ||
5.Cash flow hedging reserve | ||
6.Translation differences arising on translation of foreign currency financial statements | ||
7.Other | ||
VI. Total comprehensive income | -22,555,434.92 | 2,210,557,063.03 |
VII. Earnings per share: | ||
(i) Basic earnings per share | ||
(ii) Diluted earnings per share |
5. Consolidated Cash Flow Statement
In RMB
Item | 2022 | 2021 |
I. Cash flows arising from operating activities: | ||
Cash received from selling commodities and providing labor services | 12,431,900,362.84 | 15,555,511,937.16 |
Net increase of customer deposit and interbank deposit | ||
Net increase of loan from central bank | ||
Net increase of capital borrowed from other financial institution | ||
Cash received from original insurance contract fee | ||
Net cash received from reinsurance business | ||
Net increase of insured savings and investment | ||
Cash received from interest, commission charge and commission | ||
Net increase of capital borrowed | ||
Net increase of returned business capital | ||
Net cash received by agents in sale and purchase of securities | ||
Write-back of tax received | 306,395,040.32 | 50,070,441.00 |
Other cash received concerning operating activities | 3,682,848,864.34 | 86,168,562.99 |
Subtotal of cash inflow arising from operating activities | 16,421,144,267.50 | 15,691,750,941.15 |
Cash paid for purchasing commodities and receiving labor service | 10,077,477,240.02 | 12,479,791,466.70 |
Net increase of customer loans and advances | ||
Net increase of deposits in central bank and interbank | ||
Cash paid for original insurance contract compensation | ||
Net increase of capital lent | ||
Cash paid for interest, commission charge and commission | ||
Cash paid for bonus of guarantee slip | ||
Cash paid to/for staff and workers | 1,384,027,081.31 | 1,436,357,958.29 |
Taxes paid | 580,286,995.87 | 499,681,099.37 |
Other cash paid concerning operating activities | 6,955,095,599.73 | 648,207,823.38 |
Subtotal of cash outflow arising from operating activities | 18,996,886,916.93 | 15,064,038,347.74 |
Net cash flows arising from operating activities | -2,575,742,649.43 | 627,712,593.41 |
II. Cash flows arising from investing activities: | ||
Cash received from recovering investment | 10,740,023,339.08 | 18,129,191,548.43 |
Cash received from investment income | 1,183,837,077.82 | 1,238,803,864.71 |
Net cash received from disposal of fixed, intangible and other long-term | 20,576,391.79 | 15,303,195.04 |
assets | ||
Net cash received from disposal of subsidiaries and other units | 136,787,298.86 | 9,000,000.00 |
Other cash received concerning investing activities | 1,680,766.91 | |
Subtotal of cash inflow from investing activities | 12,081,224,107.55 | 19,393,979,375.09 |
Cash paid for purchasing fixed, intangible and other long-term assets | 1,152,415,535.85 | 753,581,993.49 |
Cash paid for investment | 7,116,445,479.00 | 18,668,448,932.90 |
Net increase of mortgaged loans | ||
Net cash received from subsidiaries and other units obtained | 70,190,329.71 | |
Other cash paid concerning investing activities | 146,232,114.50 | |
Subtotal of cash outflow from investing activities | 8,485,283,459.06 | 19,422,030,926.39 |
Net cash flows arising from investing activities | 3,595,940,648.49 | -28,051,551.30 |
III. Cash flows arising from financing activities | ||
Cash received from absorbing investment | 125,000,000.00 | |
Including: Cash received from absorbing minority shareholders’ investment by subsidiaries | 125,000,000.00 | |
Cash received from loans | 4,692,002,243.34 | 1,711,808,897.47 |
Other cash received concerning financing activities | 5,470,000.00 | |
Subtotal of cash inflow from financing activities | 4,817,002,243.34 | 1,717,278,897.47 |
Cash paid for settling debts | 2,328,551,163.70 | 575,619,575.18 |
Cash paid for dividend and profit distributing or interest paying | 1,761,911,157.57 | 1,561,591,089.99 |
Including: Dividend and profit of minority shareholder paid by subsidiaries | 54,977,987.52 | 13,970,282.31 |
Other cash paid concerning financing activities | 591,370,195.57 | 17,596,686.60 |
Subtotal of cash outflow from financing activities | 4,681,832,516.84 | 2,154,807,351.77 |
Net cash flows arising from financing activities | 135,169,726.50 | -437,528,454.30 |
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 27,730,942.53 | -13,059,669.78 |
V. Net increase of cash and cash equivalents | 1,183,098,668.09 | 149,072,918.03 |
Add: Balance of cash and cash equivalents at the period -begin | 1,094,018,936.73 | 944,946,018.70 |
VI. Balance of cash and cash equivalents at the period -end | 2,277,117,604.82 | 1,094,018,936.73 |
6. Cash Flow Statement of Parent Company
In RMB
Item | 2022 | 2021 |
I. Cash flows arising from operating activities: | ||
Cash received from selling commodities and providing labor services | 3,542,749,700.01 | 5,563,589,299.47 |
Write-back of tax received | 184,495,154.77 |
Other cash received concerning operating activities | 47,404,163.66 | 42,028,025.86 |
Subtotal of cash inflow arising from operating activities | 3,774,649,018.44 | 5,605,617,325.33 |
Cash paid for purchasing commodities and receiving labor service | 2,601,006,413.32 | 3,605,626,128.99 |
Cash paid to/for staff and workers | 707,858,677.98 | 788,560,324.22 |
Taxes paid | 209,864,912.81 | 283,285,319.76 |
Other cash paid concerning operating activities | 186,707,374.55 | 172,424,308.24 |
Subtotal of cash outflow arising from operating activities | 3,705,437,378.66 | 4,849,896,081.21 |
Net cash flows arising from operating activities | 69,211,639.78 | 755,721,244.12 |
II. Cash flows arising from investing activities: | ||
Cash received from recovering investment | 7,606,003,001.77 | 14,660,350,548.43 |
Cash received from investment income | 1,230,308,621.08 | 1,117,355,887.53 |
Net cash received from disposal of fixed, intangible and other long-term assets | 7,573,333.23 | 675,341.73 |
Net cash received from disposal of subsidiaries and other units | ||
Other cash received concerning investing activities | 1,345,164,876.69 | 32,072,638.81 |
Subtotal of cash inflow from investing activities | 10,189,049,832.77 | 15,810,454,416.50 |
Cash paid for purchasing fixed, intangible and other long-term assets | 676,750,590.56 | 466,841,006.41 |
Cash paid for investment | 5,495,846,939.59 | 15,006,974,321.57 |
Net cash received from subsidiaries and other units obtained | ||
Other cash paid concerning investing activities | 4,200,652,968.77 | |
Subtotal of cash outflow from investing activities | 10,373,250,498.92 | 15,473,815,327.98 |
Net cash flows arising from investing activities | -184,200,666.15 | 336,639,088.52 |
III. Cash flows arising from financing activities | ||
Cash received from absorbing investment | ||
Cash received from loans | 2,765,016,400.00 | 376,524,000.00 |
Other cash received concerning financing activities | 668,810,047.94 | 100,000,000.00 |
Subtotal of cash inflow from financing activities | 3,433,826,447.94 | 476,524,000.00 |
Cash paid for settling debts | 926,483,000.00 | 202,000,000.00 |
Cash paid for dividend and profit distributing or interest paying | 1,660,892,442.17 | 1,520,286,898.73 |
Other cash paid concerning financing activities | 426,203,919.97 | 4,385,823.06 |
Subtotal of cash outflow from financing activities | 3,013,579,362.14 | 1,726,672,721.79 |
Net cash flows arising from financing activities | 420,247,085.80 | -1,250,148,721.79 |
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 9,734,626.92 | -4,982,656.55 |
V. Net increase of cash and cash equivalents | 314,992,686.35 | -162,771,045.70 |
Add: Balance of cash and cash equivalents at the period -begin | 488,417,498.83 | 651,188,544.53 |
VI. Balance of cash and cash equivalents at the period -end | 803,410,185.18 | 488,417,498.83 |
7. Statement of Changes in Owners’ Equity (Consolidated)
Current Period
In RMB
Item | 2022 | ||||||||||||||
Owners’ equity attributable to the parent Company | Minority interests | Total owners’ equity | |||||||||||||
Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
Preferred stock | Perpetual capital securities | Other | |||||||||||||
I. Balance at the end of the last year | 1,008,659,570.00 | 3,371,344,172.82 | 270,249,797.74 | -36,746,344.60 | 712,215.31 | 510,100,496.00 | 14,814,787,377.86 | 19,398,607,689.65 | 564,094,065.82 | 19,962,701,755.47 | |||||
Add: Changes of accounting policy | |||||||||||||||
Error correction of the last period | |||||||||||||||
Enterprise combine under the same control | |||||||||||||||
Other | |||||||||||||||
II. Balance at the beginning of this year | 1,008,659,570.00 | 3,371,344,172.82 | 270,249,797.74 | -36,746,344.60 | 712,215.31 | 510,100,496.00 | 14,814,787,377.86 | 19,398,607,689.65 | 564,094,065.82 | 19,962,701,755.47 | |||||
III. Increase/ Decrease in this year (Decrease is listed with “-”) | -56,277.00 | 27,024,394.81 | 271,373,204.89 | 35,835,034.47 | 1,407,585.64 | -1,494,766,051.96 | -1,701,928,518.93 | 173,933,612.84 | -1,527,994,906.09 | ||||||
(i) Total comprehensive income | 35,835,034.47 | 118,819,836.30 | 154,654,870.77 | 72,126,171.95 | 226,781,042.72 | ||||||||||
(ii) Owners’ devoted and decreased capital | -56,277.00 | 27,024,394.81 | 271,373,204.89 | -244,405,087.08 | 130,826,610.83 | -113,578,476.25 | |||||||||
1.Common shares invested by shareholders | 397,804,542.63 | -397,804,542.63 | 130,000,000.00 | -267,804,542.63 |
2. Capital invested by holders of other equity instruments | |||||||||||||||
3. Amount reckoned into owners equity with share-based payment | 28,116,895.55 | 28,116,895.55 | 826,610.83 | 28,943,506.38 | |||||||||||
4. Other | -56,277.00 | -1,092,500.74 | -126,431,337.74 | 125,282,560.00 | 125,282,560.00 | ||||||||||
(III) Profit distribution | -1,613,585,888.26 | -1,613,585,888.26 | -29,306,887.52 | -1,642,892,775.78 | |||||||||||
1. Withdrawal of surplus reserves | |||||||||||||||
2. Withdrawal of general risk provisions | |||||||||||||||
3. Distribution for owners (or shareholders) | -1,609,059,668.80 | -1,609,059,668.80 | -29,306,887.52 | -1,638,366,556.32 | |||||||||||
4. Other | -4,526,219.46 | -4,526,219.46 | -4,526,219.46 | ||||||||||||
(IV) Carrying forward internal owners’ equity | |||||||||||||||
1. Capital reserves conversed to capital (share capital) | |||||||||||||||
2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
3. Remedying loss with surplus reserve | |||||||||||||||
4.Carry-over retained earnings from the defined benefit plans | |||||||||||||||
5.Carry-over retained earnings from other comprehensive |
income | |||||||||||||||
6. Other | |||||||||||||||
(V) Reasonable reserve | 1,407,585.64 | 1,407,585.64 | 287,717.58 | 1,695,303.22 | |||||||||||
1. Withdrawal in the report period | 26,087,086.34 | 26,087,086.34 | 2,700,074.03 | 28,787,160.37 | |||||||||||
2. Usage in the report period | 24,679,500.70 | 24,679,500.70 | 2,412,356.45 | 27,091,857.15 | |||||||||||
(VI)Others | |||||||||||||||
IV. Balance at the end of the report period | 1,008,603,293.00 | 3,398,368,567.63 | 541,623,002.63 | -911,310.13 | 2,119,800.95 | 510,100,496.00 | 13,320,021,325.90 | 17,696,679,170.72 | 738,027,678.66 | 18,434,706,849.38 |
Last Period
In RMB
Item | 2021 | ||||||||||||||
Owners’ equity attributable to the parent Company | Minority interests | Total owners’ equity | |||||||||||||
Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
Preferred stock | Perpetual capital securities | Other | |||||||||||||
I. Balance at the end of the last year | 1,008,950,570.00 | 3,294,242,368.28 | 303,627,977.74 | 13,916,619.47 | 2,333,490.03 | 510,100,496.00 | 13,756,102,424.62 | 18,282,017,990.66 | 512,447,908.36 | 18,794,465,899.02 | |||||
Add: Changes of accounting policy | |||||||||||||||
Error correction of the last period | |||||||||||||||
Enterprise combine under the same control | |||||||||||||||
Other | |||||||||||||||
II. Balance at the beginning of this year | 1,008,950,570.00 | 3,294,242,368.28 | 303,627,977.74 | 13,916,619.47 | 2,333,490.03 | 510,100,496.00 | 13,756,102,424.62 | 18,282,017,990.66 | 512,447,908.36 | 18,794,465,899.02 | |||||
III. Increase/ Decrease in this year (Decrease is listed with “-”) | -291,000.00 | 77,101,804.54 | -33,378,180.0 | -50,662,964.0 | -1,621,274.72 | 1,058,684,953.24 | 1,116,589,698.99 | 51,646,157.46 | 1,168,235,856.45 |
0 | 7 | ||||||||||||||
(i) Total comprehensive income | -50,662,964.07 | 2,575,371,419.80 | 2,524,708,455.73 | 73,994,132.69 | 2,598,702,588.42 | ||||||||||
(ii) Owners’ devoted and decreased capital | -291,000.00 | 70,463,804.54 | -33,378,180.00 | 103,550,984.54 | 17,321,034.44 | 120,872,018.98 | |||||||||
1.Common shares invested by shareholders | -291,000.00 | -291,000.00 | 15,000,000.00 | 14,709,000.00 | |||||||||||
2. Capital invested by holders of other equity instruments | |||||||||||||||
3. Amount reckoned into owners equity with share-based payment | 74,241,533.60 | 74,241,533.60 | 2,321,034.44 | 76,562,568.04 | |||||||||||
4. Other | -3,777,729.06 | -33,378,180.00 | 29,600,450.94 | 29,600,450.94 | |||||||||||
(III) Profit distribution | -1,517,422,799.42 | -1,517,422,799.42 | -39,641,382.31 | -1,557,064,181.73 | |||||||||||
1. Withdrawal of surplus reserves | |||||||||||||||
2. Withdrawal of general risk provisions | |||||||||||||||
3. Distribution for owners (or shareholders) | -1,513,341,439.50 | -1,513,341,439.50 | -39,641,382.31 | -1,552,982,821.81 | |||||||||||
4. Other | -4,081,359.92 | -4,081,359.92 | -4,081,359.92 | ||||||||||||
(IV) Carrying forward internal owners’ equity | |||||||||||||||
1. Capital reserves conversed to capital (share capital) |
2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
3. Remedying loss with surplus reserve | |||||||||||||||
4.Carry-over retained earnings from the defined benefit plans | |||||||||||||||
5.Carry-over retained earnings from other comprehensive income | |||||||||||||||
6. Other | |||||||||||||||
(V) Reasonable reserve | -1,621,274.72 | -1,621,274.72 | -27,627.36 | -1,648,902.08 | |||||||||||
1. Withdrawal in the report period | 22,714,778.27 | 22,714,778.27 | 2,284,337.85 | 24,999,116.12 | |||||||||||
2. Usage in the report period | 24,336,052.99 | 24,336,052.99 | 2,311,965.21 | 26,648,018.20 | |||||||||||
(VI)Others | 6,638,000.00 | 736,332.86 | 7,374,332.86 | 7,374,332.86 | |||||||||||
IV. Balance at the end of the report period | 1,008,659,570.00 | 3,371,344,172.82 | 270,249,797.74 | -36,746,344.60 | 712,215.31 | 510,100,496.00 | 14,814,787,377.86 | 19,398,607,689.65 | 564,094,065.82 | 19,962,701,755.47 |
8. Statement of Changes in Owners’ Equity (Parent Company)
Current Period
In RMB
Item | 2022 | |||||||||||
Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
Preferred stock | Perpetual capital securities | Other | ||||||||||
I. Balance at the end of the last year | 1,008,659,570.00 | 3,487,154,855.59 | 270,249,797.74 | 510,100,496.00 | 12,396,934,922.01 | 17,132,600,045.86 | ||||||
Add: Changes of accounting policy | ||||||||||||
Error correction of the last period | ||||||||||||
Other | ||||||||||||
II. Balance at the beginning of this year | 1,008,659,570.00 | 3,487,154,855.59 | 270,249,797.74 | 510,100,496.00 | 12,396,934,922.01 | 17,132,600,045.86 | ||||||
III. Increase/ Decrease in this year (Decrease is listed with “-”) | -56,277.00 | 27,851,005.64 | 271,373,204.89 | -1,631,615,103.72 | -1,875,193,579.97 | |||||||
(i) Total comprehensive income | -22,555,434.92 | -22,555,434.92 | ||||||||||
(ii) Owners’ devoted and decreased capital | -56,277.00 | 27,851,005.64 | 271,373,204.89 | -243,578,476.25 | ||||||||
1.Common shares invested by shareholders | 397,804,542.63 | -397,804,542.63 | ||||||||||
2. Capital invested by holders of other equity instruments | ||||||||||||
3. Amount reckoned into owner equity with share-based payment | 28,943,506.38 | 28,943,506.38 | ||||||||||
4. Other | -56,277.00 | -1,092,500.74 | -126,431,337.74 | 125,282,560.00 | ||||||||
(III) Profit distribution | -1,609,059,668. | -1,609,059,668.80 |
80 | ||||||||||||
1. Withdrawal of surplus reserves | ||||||||||||
2. Distribution for owners (or shareholders) | -1,609,059,668.80 | -1,609,059,668.80 | ||||||||||
3. Other | ||||||||||||
(IV) Carrying forward internal owners’ equity | ||||||||||||
1. Capital reserves conversed to capital (share capital) | ||||||||||||
2. Surplus reserves conversed to capital (share capital) | ||||||||||||
3. Remedying loss with surplus reserve | ||||||||||||
4.Carry-over retained earnings from the defined benefit plans | ||||||||||||
5.Carry-over retained earnings from other comprehensive income | ||||||||||||
6. Other | ||||||||||||
(V) Reasonable reserve | ||||||||||||
1. Withdrawal in the report period | 6,791,507.46 | 6,791,507.46 | ||||||||||
2. Usage in the report period | 6,791,507.46 | 6,791,507.46 | ||||||||||
(VI)Others | ||||||||||||
IV. Balance at the end of the report period | 1,008,603,293.00 | 3,515,005,861.23 | 541,623,002.63 | 510,100,496.00 | 10,765,319,818.29 | 15,257,406,465.89 |
Last period
In RMB
Item | 2021 | |||||||||||
Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
Preferred stock | Perpetual capital securities | Other |
I. Balance at the end of the last year | 1,008,950,570.00 | 3,407,732,016.61 | 303,627,977.74 | 510,100,496.00 | 11,698,982,965.62 | 16,322,138,070.49 | ||||||
Add: Changes of accounting policy | ||||||||||||
Error correction of the last period | ||||||||||||
Other | ||||||||||||
II. Balance at the beginning of this year | 1,008,950,570.00 | 3,407,732,016.61 | 303,627,977.74 | 510,100,496.00 | 11,698,982,965.62 | 16,322,138,070.49 | ||||||
III. Increase/ Decrease in this year (Decrease is listed with “-”) | -291,000.00 | 79,422,838.98 | -33,378,180.00 | 697,951,956.39 | 810,461,975.37 | |||||||
(i) Total comprehensive income | 2,210,557,063.03 | 2,210,557,063.03 | ||||||||||
(ii) Owners’ devoted and decreased capital | -291,000.00 | 72,784,838.98 | -33,378,180.00 | 105,872,018.98 | ||||||||
1.Common shares invested by shareholders | ||||||||||||
2. Capital invested by holders of other equity instruments | ||||||||||||
3. Amount reckoned into owners equity with share-based payment | 76,562,568.04 | 76,562,568.04 | ||||||||||
4. Other | -291,000.00 | -3,777,729.06 | -33,378,180.00 | 29,309,450.94 | ||||||||
(III) Profit distribution | -1,513,341,439.50 | -1,513,341,439.50 | ||||||||||
1. Withdrawal of surplus reserves | ||||||||||||
2. Distribution for owners (or shareholders) | -1,513,341,439.50 | -1,513,341,439.50 | ||||||||||
3. Other | ||||||||||||
(IV) Carrying forward internal owners’ equity | ||||||||||||
1. Capital reserves conversed to capital (share capital) | ||||||||||||
2. Surplus reserves conversed to capital (share capital) |
3. Remedying loss with surplus reserve | ||||||||||||
4.Carry-over retained earnings from the defined benefit plans | ||||||||||||
5.Carry-over retained earnings from other comprehensive income | ||||||||||||
6. Other | ||||||||||||
(V) Reasonable reserve | ||||||||||||
1. Withdrawal in the report period | 6,436,417.80 | 6,436,417.80 | ||||||||||
2. Usage in the report period | 6,436,417.80 | 6,436,417.80 | ||||||||||
(VI)Others | 6,638,000.00 | 736,332.86 | 7,374,332.86 | |||||||||
IV. Balance at the end of the report period | 1,008,659,570.00 | 3,487,154,855.59 | 270,249,797.74 | 510,100,496.00 | 12,396,934,922.01 | 17,132,600,045.86 |
Notes to Financial StatementI. Basic information of the Company
1. Historical origin of the Company
By the approval of STGS (1992) No. 130 issued by Jiangsu Economic Restructuring Committee,Weifu High-Technology Group Co., Ltd. (hereinafter referred to “the Company” or “Company”)was established as a company of limited liability with funds raised from targeted sources, andregistered at Wuxi Administration for Industry & Commerce in October 1992. The original sharecapital of the Company totaled 115.4355 million yuan, including state-owned share capitalamounting to 92.4355 million yuan, public corporate share capital amounting to 8 million yuan andinner employee share capital amounting to 15 million yuan.Between year of 1994 and 1995, the Company was restructured and became a holding subsidiary ofWuxi Weifu Group Co., Ltd (hereinafter referred to as “Weifu Group”).By the approval of Jiangsu ERC and Shenzhen Securities Administration Office in August 1995, theCompany issued 68 million special ordinary shares (B-share) with value of 1.00 yuan for each, andthe total value of those shares amounted to 68 million yuan. After the issuance, the Company’s totalshare capital increased to 183.4355 million yuan.By the approval of CSRC in June 1998, the Company issued 120 million RMB ordinary shares (A-share) at Shenzhen Stock Exchange through on-line pricing and issuing. After the issuance, the totalshare capital of the Company amounted to 303.4355 million yuan.In the middle of 1999, deliberated and approved by the Board and Shareholders’ General Meeting,the Company implemented the plan of granting 3 bonus shares for each 10 shares. After that, thetotal share capital of the Company amounted to 394.46615 million yuan, of which state-ownedshares amounted to 120.16615 million yuan, public corporate shares 10.4 million yuan, foreign-funded shares (B-share) 88.40 million yuan, RMB ordinary shares (A-share) 156 million yuan andinner employee shares 19.5 million yuan.In the year 2000, by the approval of the CSRC and based upon the total share capital of 303.4355million shares after the issuance of A-share in June 1998, the Company allotted 3 shares for each10 shares, with a price of 10 yuan for each allotted share. Actually 41.9 million shares was allotted,and the total share capital after the allotment increased to 436.36615 million yuan, of which state-owned corporate shares amounted to 121.56615 million yuan, public corporate shares 10.4 millionyuan, foreign-funded shares (B-share) 88.4 million yuan and RMB ordinary shares (A-share) 216million yuan.In April 2005, Board of Directors of the Company has examined and approved 2004 Profit Pre-distribution Plan, and examined and approved by 2004 Shareholders’ General Meeting, theCompany distributed 3 shares for each 10 shares to the whole shareholders totaling to 130,909,845shares in 2005.
According to the Share Merger Reform Scheme of the Company that passed by related shareholders’meeting of Share Merger Reform and SGZF [2006] No.61 Reply on Questions about State-ownedEquity Management in Share Merger Reform of Weifu High-Technology Co., Ltd. issued by State-owned Assets Supervision & Administration Commission of Jiangsu Province, the Weifu Group etc.8 non-circulating shareholders arranged pricing with granting 1.7 shares for each 10 shares tocirculating A-share shareholders (totally granted 47,736,000 shares), so as to realize the originallynon-circulating shares can be traded on market when satisfied certain conditions, the scheme hasbeen implemented on April 5, 2006.On May 27, 2009, Weifu Group satisfied the consideration arrangement by dispatching 0.5 sharesfor each 10 shares based on the number of circulating A share as prior to Share Merger Reform,according to the aforesaid Share Merger Reform, with an aggregate of 14,039,979 shares dispatched.Subsequent to implementation of dispatch of consideration shares, Weifu Group then held100,021,999 shares of the Company, representing 17.63% of the total share capital of the Company.Pursuant to the document (XGZQ(2009)No.46) about Approval for Merger of Wuxi Weifu GroupCo., Ltd. by Wuxi Industry Development Group Co., Ltd. issued by the State-owned AssetsSupervision and Administration Commission of Wuxi City Government, Wuxi IndustryDevelopment Group Co., Ltd. (hereinafter referred to as Wuxi Industry Group) acquired WeifuGroup. After the merger, Weifu Group was then revoked, and its assets and credits & debts weretransferred to be under the name of Wuxi Industry Group. Accordingly, Wuxi Industry Groupbecame the first largest shareholder of the Company since then.In accordance with the resolutions of shareholders' meeting and provisions of amended constitution,and approved by [2012] No. 109 document of China Securities Regulatory Commission, in February2012, the Company issued RMB ordinary shares (A-share) of 112,858,000 shares to Wuxi IndustryGroups and overseas strategic investor privately, Robert Bosch Co., Ltd. (ROBERT BOSCHGMBH)(hereinafter referred to as Robert Bosch Company), face value was ONE yuan per share, addedregistered capital of 112,858,000 yuan, and the registered capital after change was 680,133,995yuan. Wuxi Industry Group is the first majority shareholder of the Company, and Robert BoschCompany is the second majority shareholder of the Company.In March 2013, the profit distribution pre-plan for year of 2012 was deliberated and approved bythe Board, and also passed in Annual General Meeting 2012 of the Company in May 2013. On basisof total share capital 680,133,995 shares, distribute 5-share for every 10 shares held by wholeshareholders, 340,066,997 shares in total are distributed. Total share capital of the Companyamounting 1,020,200,992 yuan up to December 31, 2013.Deliberated and approved by the company’s first extraordinary general meeting in 2015, thecompany has repurchased 11,250,422 shares of A shares from August 26, 2015 to September 8,2015, and has finished the cancellation procedures for above repurchase shares in China SecuritiesDepository and Clearing Corporation Limited Shenzhen Branch on September 16, 2015; after thecancellation of repurchase shares, the company’s paid-up capital (share capital) becomes
1,008,950,570 yuan after the change.After deliberation and approved by the 5
th meeting of 10
thsession of the BOD for year of 2021, the291,000 restricted shares are buy-back and cancelled by the Company initially granted under the2020 Restricted Share Incentive Plan. The cancellation of the above mentioned buy-back shares arecompleted at the Shenzhen Branch of CSDC on December 20, 2021; the paid-in capital (equity) ofthe Company comes to 1,008,659,570.00 yuan after changed.After deliberation and approved by the 8
th meeting of 10
th
session of the BOD for year of 2022, the56,277 restricted shares are buy-back and cancelled by the Company initially granted under the2020 Restricted Share Incentive Plan. The cancellation of the above mentioned buy-back shares arecompleted at the Shenzhen Branch of CSDC on July 8, 2022; the paid-in capital (equity) of theCompany comes to 1,008,603,293.00 yuan after changed.
2. Registered place, organization structure and head office of the Company
Registered place and head office of the Company: No.5 Huashan Road, Xinwu District, WuxiUnified social credit code: 91320200250456967NThe Company sets up Shareholders’ General Meeting, the Board of Directors (BOD) and the Boardof Supervisors (BOS)The Company sets up Administration Department, Technology Centre, organization & personneldepartment, Office of the Board, compliance department, IT department, Strategy & new businessDepartment, market development department, Party-masses Department, Finance Department,Purchase Department, Manufacturing Quality Department, MS (Mechanical System) division,AC(Automotive Components) division and DS (Diesel System ) division, etc. and subsidiaries suchas WUXI WEIFU LIDA CATALYTIC CONVERTER CO., LTD, NANJING WFJN CO., LTD,IRD Fuel Cells A/S and Borit NV, etc.
3. Business nature and major operation activities of the Company
Operation scope of parent company: Technology development and consulting service in themachinery industry; manufacture of engine fuel oil system products, fuel oil system testers andequipment, manufacturing of auto electronic parts, automotive electrical components, non-standardequipment, non-standard knife tool and exhaust after-treatment system; sales of the generalmachinery, hardware & electrical equipment, chemical products & raw materials (excludinghazardous chemicals), automotive components and vehicles (excluding nine-seat passenger car);internal combustion engine maintenance; leasing of the own houses; import and export business inrespect of diversified commodities and technologies (other than those commodities and technologieslimited or forbidden by the State for import and export) by self-operation and works as agent forsuch business. Research and test development of engineering and technical; R&D of the energyrecovery system; manufacture of auto components and accessories; general equipmentmanufacturing (excluding special equipment manufacturing), (any projects that needs to be
approved by laws can only be carried out after getting approval by relevant authorities) Generalitems: engage in investment activities with self-owned funds (except for items subject to approvalaccording to the law, independently carry out business activities according to laws with businesslicenses )Major subsidiaries respectively activate in production and sales of engine accessories, automotivecomponents, mufflers, purifiers and fuel cell components etc.
4. Authorized reporting parties and reporting dates for the financial reportFinancial report of the Company were approved by the Board of Directors for reporting dated April26, 2023.
5. Scope of consolidate financial statement
Name of subsidiary | Short name of subsidiary | Shareholding ratio (%) | Proportion of votes (%) | Registered capital (in 10 thousand yuan) | Business scope | Statement consolidated (Y/N) | |
Directly | Indirectly | ||||||
NANJING WFJN CO., LTD. | WFJN | 80.00 | -- | 80.00 | 34,628.70 | Internal-combustion engine accessories | Y |
WUXI WEIFU LIDA CATALYTIC CONVERTER CO., LTD. | WFLD | 94.81 | -- | 94.81 | 50,259.63 | Purifier and muffler | Y |
WUXI WEIFU MASHAN FUEL INJECTION EQUIPMENT CO., LTD. | WFMA | 100.00 | -- | 100.00 | 16,500 | Internal-combustion engine accessories | Y |
WUXI WEIFU CHANG?AN CO.,LTD. | WFCA | 100.00 | -- | 100.00 | 21,000 | Internal-combustion engine accessories | Y |
WUXI WEIFUINTERNATIONALTRADE CO.,LTD.
WUXI WEIFU INTERNATIONAL TRADE CO.,LTD. | WFTR | 100.00 | -- | 100.00 | 3,000 | Trade | Y |
WUXI WEIFU SCHMITTER POWERTRAIN COMPONENTS CO.,LTD. | WFSC | 66.00 | -- | 66.00 | 7,600 | Internal-combustion engine accessories | Y |
NINGBO WFTT TURBOCHARGING TECHNOLOGY CO.,LTD. | WFTT | 98.83 | 1.17 | 100.00 | 11,136 | Internal-combustion engine accessories | Y |
WUXI WFAM PRECISION MACHINERY CO.,LTD. | WFAM | 51.00 | -- | 51.00 | USD2,110 | Automotive components | Y |
WUXI WEIFU LIDA CATALYTIC CONVERTER (WUHAN) CO., LTD. | WFLD (WUHAN) | -- | 60.00 | 60.00 | 1,000 | Purifier and muffler | Y |
WEIFU LIDA (Chongqing) Automotive components Co., Ltd. | WFLD (Chongqing) | -- | 100.00 | 100.00 | 5,000 | Purifier and muffler | Y |
Nanchang WEIFU LIDA Automotive Components Co., Ltd. | WFLD (Nanchang) | -- | 100.00 | 100.00 | 5,000 | Purifier and muffler | Y |
WUXI WEIFU AUTOSMART SEATING SYSTEM CO., LTD. | WFAS | -- | 66.00 | 66.00 | 10,000 | Smart car device | Y |
WUXI WEIFU E-DRIVE TECHNOLOGIES CO., LTD. | WFDT | 80.00 | -- | 80.00 | USD2,000 | Wheel motor | Y |
Wuxi Weifu QinglongPower Technology Co.,Ltd.
Wuxi Weifu Qinglong Power Technology Co., Ltd. | WFQL | 45.00 | 30.00 | 75.00 | 50,000 | Fuel cell components | Y |
VHIT Automotive Systems(Wuxi) Co., Ltd | VHCN | 100.00 | -- | 100.00 | 13,400 | Vacuum and hydraulic pump | Y |
Weifu Holding ApS | SPV | 100.00 | -- | 100.00 | DKK8,638 | Investment | Y |
IRD Fuel Cells A/S
IRD Fuel Cells A/S | IRD | -- | 100.00 | 100.00 | DKK10,108 | Fuel cell components | Y |
IRD FUEL CELLS LLC | IRD America | -- | 100.00 | 100.00 | USD651.91 | Fuel cell components | Y |
Borit NV | Borit | -- | 100.00 | 100.00 | EUR1035.32 | Fuel cell components | Y |
Borit Inc. | Borit America | -- | 100.00 | 100.00 | USD0.1 | Fuel cell components | Y |
VHIT S.p.A | VHIT | -- | 100.00 | 100.00 | EUR500 | Vacuum and hydraulic pump | Y |
II. Basis of preparation of financial statements
1. Preparation base
The financial statement were stated in compliance with Accounting Standard for BusinessEnterprises –Basic Norms issued by Ministry of Finance, the specific 42 accounting rules revisedand issued dated 15 February 2006 and later, the Application Instruments of Accounting Standardsand interpretation on Accounting standards and other relevant regulations (together as “AccountingStandards for Business Enterprise”), as well as the Compilation Rules for Information Disclosureby Companies Offering Securities to the Public No.15 – General Provision of Financial Report(Amended in 2014) issued by CSRC in respect of the actual transactions and proceedings, on a basisof ongoing operation.In line with relevant regulations of Accounting Standards of Business Enterprise, accounting of theCompany is on accrued basis. Except for certain financial instruments, the financial statementmeasured on historical cost. Assets have impairment been found, corresponding depreciationreserves shall accrued according to relevant rules.
2. Going concern
The Company comprehensively assessed the available information, and there are no obvious factorsthat impact sustainable operation ability of the Company within 12 months since end of the reportingperiod.
III. Major Accounting Policies and EstimationSpecific accounting policies and estimation attention:
The Company and its subsidiaries are mainly engaged in the manufacture and sales of engine fueloil system products, automotive components, mufflers, purifiers and fuel cell components etc., inline with the actual operational characteristics and relevant accounting standards, many specificaccounting policies and estimation have been formulated for the transactions and events withrevenue recognized concerned. As for the explanation on major accounting judgment and estimation,found more in Note V- 36. Other major accounting policy and estimation
1. Statement on observation of Accounting Standard for Business EnterprisesFinancial statements prepared by the Company were in accordance with requirements of AccountingStandard for Business Enterprises, which truly and completely reflected the financial informationof the Company dated 31 December 2022, such as financial status, operation achievements and cashflow for the year of 2022.
2. Accounting period
Accounting period of the Company consist of annual and mid-term, mid-term refers to the reportingperiod shorter than one annual accounting year. The company adopts Gregorian calendar asaccounting period, namely form each 1 January to 31 December.
3. Business cycles
Normal business cycle is the period from purchasing assets used for process by the Company to thecash and cash equivalent achieved. The Company’s normal business cycle was one-year (12months).
4. Recording currency
The Company’s reporting currency is the RMB yuan.
5. Accounting Treatment Method for Business Combinations under the same/different controlBusiness combination is the transaction or events that two or two above independent enterprisescombined as a reporting entity. Business combination including enterprise combined under the samecontrol and business combined under different control.
(1) The business combination under the same control
Enterprise combination under the same control is the enterprise who take part in the combination
are have the same ultimate controller or under the same controller, the control is not temporary. Theassets and liability acquired by combining party are measured by book value of the combined partyon combination date. Balance of net asset’s book value acquired by combining party and combineconsideration paid (or total book value of the shares issued), shall adjusted capital reserve (sharepremium); if the capital reserves (share premium) is not enough for deducted, adjusted for retainedearnings. Vary directly expenses occurred for enterprise combination, the combining party shallreckon into current gains/losses while occurring. Combination day is the date when combining partyobtained controlling rights from the combined party.
(2) Combine not under the same control
A business combination not involving entities under common control is a business combination inwhich all of the combining entities are not ultimately controlled by the same party or parties bothbefore and after the combination. As a purchaser, fair value of the assets (equity of purchaser heldbefore the date of purchasing included) for purchasing controlling right from the purchaser, theliability occurred or undertake on purchasing date less the fair value of identifiable net assets of thepurchaser obtained in combination, recognized as goodwill if the results is positive; if the numberis negative, the acquirer shall firstly review the measurement of the fair value of the identifiableassets obtained, liabilities incurred and contingent liabilities incurred, as well as the combinationcosts. After that, if the combination costs are still lower than the fair value of the identifiable netassets obtained, the acquirer shall recognize the difference as the profit or loss in the current period.Other directly expenses cost for combination shall be reckoned into current gains/losses. Differenceof the fair value of assets paid and its book values, reckoned into current gains/losses. On purchasingdate, the identifiable assets, liability or contingency of the purchaser obtained by the Companyrecognized by fair value, that required identification conditions; Acquisition date refers to the dateon which the acquirer effectively obtains control of the purchaser.
6. Preparation method for consolidated financial statement
(1) Recognition principle of consolidated scope
On basis of the financial statement of the parent company and owned subsidiaries, preparedconsolidated statement in line with relevant information. The scope of consolidation of consolidatedfinancial statements is ascertained on the basis of effective control. Once certain elements involvedin the above definition of control change due to changes of relevant facts or circumstances, theCompany will make separate assessment.
(2) Basis of control
Control is the right to govern an invested party so as to obtain variable return through participatingin the invested party’s relevant activities and the ability to affect such return by use of the aforesaidright over the invested party. Relevant activates refers to activates have major influence on returnof the invested party’s.
(3) Consolidation process
Subsidiaries are consolidated from the date on which the company obtains their actual control, andare de-consolidated from the date that such control ceases. All significant inter-group balances,investment, transactions and unrealized profits are eliminated in the consolidated financialstatements. For subsidiaries being disposed, the operating results and cash flows prior to the date ofdisposal are included in the consolidated income statement and consolidated cash flow statement;for subsidiaries disposed during the period, the opening balances of the consolidated balance sheetwould not be restated. For subsidiaries acquired from a business combination not under commoncontrol, their operating results and cash flows subsequent to the acquisition date are included in theconsolidated income statement and consolidated cash flow statement, and the opening balances andcomparative figures of the consolidated balance sheet would not be restated. For subsidiariesacquired from a business combination under common control, their operating results and cash flowsfrom the date of commencement of the accounting period in which the combination occurred to thedate of combination are included in the consolidated income statement and consolidated cash flowstatement, and the comparative figures of the consolidated balance sheet would be restated.In preparing the consolidated financial statements, where the accounting policies or the accountingperiods are inconsistent between the company and subsidiaries, the financial statements ofsubsidiaries are adjusted in accordance with the accounting policies and accounting period of thecompany.Concerning the subsidiary obtained under combination with different control, adjusted severalfinancial statement of the subsidiary based on the fair value of recognizable net assets on purchasedday while financial statement consolidation; concerning the subsidiary obtained under combinationwith same control, considered current status of being control by ultimate controller for consolidationwhile financial statement consolidation.The unrealized gains and losses from the internal transactions occurred in the assets the Companysold to the subsidiaries fully offset "the net profit attributable to the owners of the parent company".The unrealized gains and losses from the internal transactions occurred in the assets the subsidiariessold to the Company are distributed and offset between "the net profit attributable to the owners ofthe parent company" and "minority interest" according to the distribution ratio of the Company tothe subsidiary. The unrealized gains and losses from the internal transactions occurred in the assetssold among the subsidiaries are distributed and offset between "the net profit attributable to theowners of the parent company" and "minority interest" according to the distribution ratio of theCompany to the subsidiary of the seller.The share of the subsidiary’s ownership interest not attributable to the Company is listed as“minority interest” item under the ownership interest in the consolidated balance sheet. The shareof the subsidiary’s current profit or loss attributable to the minority interests is listed as "minorityinterest" item under the net profit item in the consolidated income statement. The share of thesubsidiary’s current consolidated income attributable to the minority interests is listed as the “total
consolidated income attributable to the minority shareholders” item under the total consolidatedincome item in the consolidated income statement. If there are minority shareholders, add the"minority interests" item in the consolidated statement of change in equity to reflect the changes ofthe minority interests. If the losses of the current period shared by a subsidiary’s minorityshareholders exceed the share that the minority shareholders hold in the subsidiary ownershipinterest in the beginning of the period, the balance still charges against the minority interests.When the control over a subsidiary is ceased due to disposal of a portion of an interest in a subsidiary,the fair value of the remaining equity interest is re-measured on the date when the control ceased.The difference between the sum of the consideration received from disposal of equity interest andthe fair value of the remaining equity interest, less the net assets attributable to the company sincethe acquisition date, is recognized as the investment income from the loss of control. Othercomprehensive income relating to original equity investment in subsidiaries shall be treated on thesame basis as if the relevant assets or liabilities were disposed of by the purchaser directly when thecontrol is lost, namely be transferred to current investment income other than the relevant part ofthe movement arising from re-measuring net liabilities or net assets under defined benefit schemeby the original subsidiary. Subsequent measurement of the remaining equity interests shall be inaccordance with relevant accounting standards such as Accounting Standards for businessEnterprises 2 – Long-term Equity Investments or Accounting Standards for business Enterprises 22– Financial Instruments Recognition and Measurement.The company shall determine whether loss of control arising from disposal in a series of transactionsshould be regarded as a bundle of transactions. When the economic effects and terms and conditionsof the disposal transactions met one or more of the following situations, the transactions shallnormally be accounted for as a bundle of transactions: ①The transactions are entered into afterconsidering the mutual consequences of each individual transaction; ②he transactions need to beconsidered as a whole in order to achieve a deal in commercial sense;③The occurrence of anindividual transaction depends on the occurrence of one or more individual transactions in the series;
④The result of an individual transaction is not economical, but it would be economical after takinginto account of other transactions in the series. When the transactions are not regarded as a bundleof transactions, the individual transactions shall be accounted as “disposal of a portion of an interestin a subsidiary which does not lead to loss of control” and “disposal of a portion of an interest in asubsidiary which lead to loss of control”. When the transactions are regarded as a bundle oftransactions, the transactions shall be accounted as a single disposal transaction; however, thedifference between the consideration received from disposal and the share of net assets disposed ineach individual transaction before loss of control shall be recognized as other comprehensiveincome, and reclassified as profit or loss arising from the loss of control when control is lost.
7. Joint arrangement classification and accounting treatment for joint operationsIn accordance with the Company’s rights and obligation under a joint arrangement, the Companyclassifies joint arrangements into: joint ventures and joint operations.The Company confirms the following items related to the share of interests in its joint operations,and in accordance with the provisions of the relevant accounting standards for accounting treatment:
(1) Recognize the assets held solely by the Company, and recognize assets held jointly by theCompany in appropriation to the share of the Company;
(2) Recognize the obligations assumed solely by the Company, and recognize obligations assumedjointly by the Company in appropriation to the share of the Company;
(3) Recognize revenue from disposal of the share of joint operations of the Company;
(4) Recognize fees solely occurred by Company;
(5) Recognize fees from joint operations in appropriation to the share of the Company.
8. Recognition standards for cash and cash equivalent
Cash refers to stock cash, savings available for paid at any time; cash and cash equivalent refers tothe cash held by the Company with short terms (expired within 3 months since purchased), andliquid and easy to transfer as known amount and investment with minor variation in risks.
9. Foreign currency business and conversion
The occurred foreign currency transactions are converted into the recording currency in accordancewith the middle rate of the market exchange rate published by the People's Bank of China on thetransaction date. There into, the occurred foreign currency exchange or transactions involved in theforeign currency exchange are converted in accordance with the actual exchange rate in thetransactions.At the balance sheet date, the account balance of the foreign currency monetary assets and liabilitiesis converted into the recording currency amount in accordance with the middle rate of the marketexchange rate published by the People's Bank of China on the transaction date. The balance betweenthe recording currency amount converted according to exchange rate at the balance sheet date andthe original recording currency amount is disposed as the exchange gains or losses. There into, theexchange gains or losses occurred in the foreign currency loans related to the purchase andconstruction of fixed assets are disposed according to the principle of capitalization of borrowingcosts; the exchange gains and losses occurred during the start-up are included in the start-up costs;the rest is included in the current financial expenses.At the balance sheet date, the foreign currency non-monetary items measured with the historicalcosts are converted in accordance with the middle rate of the market exchange rate published by the
People's Bank of China on the transaction date without changing its original recording currencyamount; the foreign currency non-monetary items measured with the fair value are converted inaccordance with the middle rate of the market exchange rate published by the People's Bank ofChina on the fair value date, and the generated exchange gains and losses are included in the currentprofits and losses as the gains and losses from changes in fair value.The following displays the methods for translating financial statements involving foreign operationsinto the statements in RMB: The asset and liability items in the balance sheets for overseasoperations are translated at the spot exchange rates on the balance sheet date. Among the owners’equity items, the items other than “undistributed profits” are translated at the spot exchange rates ofthe transaction dates. The income and expense items in the income statements of overseas operationsare translated at the average exchange rates of the transaction dates. The exchange difference arisingfrom the above mentioned translation are recognized in other comprehensive income and is shownseparately under owner’ equity in the balance sheet; such exchange difference will be reclassifiedto profit or loss in current year when the foreign operation is disposed according to the proportionof disposal.The cash flows of overseas operations are translated at the average exchange rates on the dates ofthe cash flows. The effect of exchange rate changes on cash is presented separately in the cash flowstatement.
10. Financial instrument
Financial instrument is the contract that taken shape of the financial asses for an enterprise and ofthe financial liability or equity instrument for other units.
(1) Recognition and termination of financial instrument
A financial asset or liability is recognized when the group becomes a party to a financial instrumentcontract.The recognition of a financial assets shall be terminated if it meets one of the following conditions:
①the contractual right to receive the cash flow of the financial assets terminates;
②the financial assets is transferred and the company transfers substantially all the risks and rewardsof ownership of the financial asset to the transferring party;
③the financial asset was transferred and control, although the company has neither transferred norretained almost all the risks and rewards of the ownership of a financial asset, it relinquishes controlover the financial asset.If all or part of the current obligations of a financial liability has been discharged, the financialliability or part of it is terminated for recognition. When the Company (debtor) and the creditor signan agreement to replace the existing financial liabilities with new financial liabilities, and the newfinancial liabilities and the existing financial liabilities are substantially different from the contract
terms, terminated the recognition of the existing financial liabilities and recognize the new financialliabilities at the same time.Financial assets are traded in the normal way and their accounting recognition and terminated therecognition of proceed on a trade date basis.
(2) Classification and measurement of financial assets
At the initial recognition, according to the business model of managing financial assets and thecontractual cash flow characteristics of financial assets, the Company classifies the financial assetsinto the financial assets measured at amortized cost, the financial assets measured at fair value andwhose changes are included in other comprehensive income, and the financial assets measured atfair value and whose changes are included in current profit or loss. Financial assets are measured atfair value at initial recognition, but if the receivables or receivables financing arising from the saleof goods or the provision of services do not include a significant financing component or do notconsider a financing component that does not exceed one year, it shall be initially measured inaccordance with the transaction value. For financial assets measured at fair value and whose changesare included in the current profit or loss, related transaction costs are directly included in the currentprofit and loss; for other types of financial assets, related transaction costs are included in theinitially recognized amount.The business model for managing financial assets refers to how the Company manages financialassets to generate cash flows. The business model determines whether the cash flow of financialassets managed by the Company is based on contract cash flow, selling financial assets or both. TheCompany determines the business model for managing financial assets based on objective facts andbased on the specific business objectives of financial assets management determined by keymanagement personnel.The Company evaluates the contractual cash flow characteristics of financial assets to determinewhether the contractual cash flows generated by the relevant financial assets on a specific date areonly payments for the principal and the interest based on the outstanding principal amount. Theprincipal is the fair value of the financial assets at initial recognition; the interest includes the timevalue of money, the credit risk associated with the outstanding principal amount for a specific period,and other basic borrowing risks, costs and consideration of profit. In addition, the Companyevaluates the contractual terms that may result in changes in the time distribution or the amount ofcontractual cash flows of the financial assets to determine whether they meet the requirements ofthe above contractual cash flow characteristics.Only when the Company changes its business model of managing financial assets, all affectedfinancial assets are reclassified on the first day of the first reporting period after the business modelchanges, otherwise the financial assets are not allowed to be reclassified after initial recognition.
①Financial assets measured at amortized cost
The Company classifies the financial assets that meet the following conditions and haven’t been
designated as financial assets measured at fair value and whose changes are included in currentprofit or loss as financial assets measured at amortized cost:
A. the group's business model for managing the financial assets is to collect contractual cash flows;andB. the contractual terms of the financial assets stipulate that cash flow generated on a specific dateis only paid for the principal and interest based on the outstanding principal amount.After initial recognition, such financial assets are measured at amortized cost by using the effectiveinterest method. Gains or losses arising from financial assets which are measured at amortized costand are not a component of any hedging relationship are included in current profit or loss whenbeing terminated for recognition, amortized by effective interest method, or impaired.
②Financial assets measured at fair value and whose changes are included in other comprehensiveincomeThe Company classifies the financial assets that meet the following conditions and haven’t beendesignated as financial assets measured at fair value and whose changes are included in currentprofit or loss as financial assets measured at fair value and whose changes are included in othercomprehensive income:
A. the Group's business model for managing the financial assets is targeted at both the collection ofcontractual cash flows and the sale of financial assets;B. the contractual terms of the financial asset stipulate that the cash flow generated on a specificdate 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,impairment losses or gains and exchange gains and losses calculated by using the effective interestmethod are included in profit or loss for the period, and other gains or losses are included in othercomprehensive income. When being terminate for recognition, the accumulated gains or lossespreviously included in other comprehensive income are transferred from other comprehensiveincome and included in current profit or loss.
③Financial assets measured at fair value and whose changes are included in current profit or lossExcept for the above financial assets measured at amortized cost and measured at fair value andwhose changes are included in other comprehensive income, the Company classifies all otherfinancial assets as financial assets measured at fair value and whose changes are included in currentprofit or loss. In the initial recognition, in order to eliminate or significantly reduce accountingmismatch, the Company irreversibly designates part of the financial assets that should be measuredat amortized cost or measured at fair value and whose changes are included in the othercomprehensive income as the financial assets measured at fair value and whose changes are includedin current profit or loss.After the initial recognition, such financial assets are subsequently measured at fair value, and thegains or losses (including interests and dividend income) are included in the current profit and loss,
unless the financial assets are part of the hedging relationship.However, for non-trading equity instrument investments, the Company irreversibly designates themas the financial assets that are measured at fair value and whose changes are included in othercomprehensive income in the initial recognition. The designation is made based on a singleinvestment and the relevant investment is in line with the definition of equity instruments from theissuer's perspective. After initial recognition, such financial assets are subsequently measured at fairvalue. Dividend income that meets the conditions is included in profit or loss, and other gains orlosses and changes in fair value are included in other comprehensive income. When it is terminatedfor recognition, the accumulated gains or losses previously included in other comprehensive incomeare transferred from other comprehensive income and included in retained earnings.
(3) Classification and measurement of financial liabilities
The financial liabilities of the Company are classified as financial liabilities measured at fair valueand whose changes are included in current profit or loss and financial liabilities measured atamortized cost at the initial recognition. For financial liabilities that are not classified as financialliabilities measured at fair value and whose changes are included in current profit or loss, the relatedtransaction expenses are included in the initial recognition amount.
①Financial liability measured by fair value and with variation reckoned into current gains/lossesFinancial liability measured by fair value and with variation reckoned into current gains/lossesincluding tradable financial liability and the financial liabilities that are designated as fair value inthe initial recognition and whose changes are included in current profit or loss. For such financialliabilities, the subsequent measurement is based on fair value, and the gains or losses arising fromchanges in fair value and the dividends and interest expenses related to these financial liabilities areincluded in current profit or loss.
②Financial liability measured by amortized cost
Other financial liabilities are subsequently measured at amortized cost by using the effective interestmethod. The gain or loss arising from recognition termination or amortization is included in currentprofit or loss.
③Distinctions between financial liabilities and equity instruments
Financial liabilities are liabilities that meet one of the following conditions:
A. Contractual obligations to deliver cash or other financial assets to other parties.B. Contractual obligations to exchange financial assets or financial liabilities with other partiesunder potentially adverse conditions.C. Non-derivative contracts that must be settled or that can be settled by the company's own equityinstruments in the future, and the enterprise will deliver a variable amount of its own equityinstruments according to the contract.D. Derivative contracts that must be settled or that can be settled by the company's own equityinstruments in the future, except for derivatives contracts that exchange a fixed amount of cash or
other financial assets with a fixed amount of their own equity instruments.An equity instrument is a contract that proves it has a residual equity in the assets of an enterpriseafter deducting all liabilities.If the Company cannot unconditionally avoid performing a contractual obligation by delivering cashor other financial assets, the contractual obligation is consistent with the definition of financialliability.If a financial instrument is required to be settled or can be settled by the Company's own equityinstruments, it is necessary to consider whether the Company's own equity instruments used to settlethe instrument are a substitute for cash or other financial assets, or to make the instrument holderenjoy the residual equity in the assets of the issuer after deducting all liabilities. In the former case,the instrument is the Company's financial liability; if it is the latter, the instrument is the Company'sequity instrument.
(4) Fair value of financial instruments
The company uses valuation techniques that are applicable under current circumstances and thathave sufficient available data and other information support to determine the fair value of relatedfinancial assets and financial liabilities. The company divides the input values used by valuationtechniques into the following levels and uses them in sequence:
①The first-level input value is the unadjusted quotation of the same assets or liabilities that can beobtained on the measurement date in the active market;
②The second-level input value is the direct or indirect observable input value of the relevant assetsor liabilities other than the first-level input value, including quotations of similar assets or liabilitiesin an active market; quotations of same or similar assets or liabilities in an active market; otherobservable input value other than quotations, such as interest rate and yield curves that areobservable during the normal quote interval; market-validated input value, etc.;
③The third-level input value is the unobservable input value of the relevant assets or liabilities,including the interest rate that cannot be directly observed or cannot be verified by observablemarket data, stock volatility, future cash flow of the retirement obligation assumed in the businesscombination, and financial forecasting made by its own data, etc.
(5) Impairment of financial assets
On the basis of expected credit losses, the Company performs impairment treatment on financialassets measured at amortized cost and creditors’ investment etc. measured at fair value and whosechanges are included in other comprehensive income and recognize the provisions for loss.
①Measurement of expected credit losses
Expected credit loss refers to the weighted average of credit losses of financial instruments weightedby the risk of default. Credit loss refers to the difference between all contractual cash flows that theCompany discounts at the original actual interest rate and are receivable in accordance with contractand all cash flows expected to be received, that is, the present value of all cash shortages. Among
them, for the purchase or source of financial assets that have suffered credit impairment, theCompany discounts the financial assets at the actual interest rate adjusted by credit.When measuring expected credit losses, the Company individually evaluates credit risk for financialassets with significantly different credit risks, such as receivables involving litigation and arbitrationwith the other party, or receivables having obvious indications that the debtor is likely to be unableto fulfill its repayment obligations, and so on.Except for the financial assets that separately assess the credit risks, the Company classified theaccount receivable according to their characteristic of risks, calculated the expected credit losses onbasis of portfolio. Basis for determining the portfolio as follow:
A - Note receivableNote receivable 1: bank acceptanceNote receivable 2: trade acceptanceB - Account receivableAccount receivable 1: receivable from clientsAccount receivable 2: receivable from internal related partyC – Receivable financingReceivable financing 1: bank acceptanceReceivable financing 2: trade acceptanceD – Other account receivablesOther account receivables 1: receivable from internal related partyOther account receivables 2: receivable from othersAs for the note receivable, account receivable, receivable financing and other account receivableclassified in portfolio, by referring to the experience of historical credit loss, the expected credit lossis calculated by combining the current situation and the forecast of future economic conditions.Except for the financial assets adopting simplified metering method, the Company assesses at eachbalance sheet date whether its credit risk has increased significantly since initial recognition. Ifcredit risk has not increased significantly since initial recognition, it is in the first stage, theCompany measures the loss provisions based on the amount equivalent to the expected credit lossin the next 12 months; if the credit risk has increased significantly since initial recognition but nocredit impairment has occurred, it is in the second stage, the Company measures the loss provisionsbased on the amount equivalent to the expected credit loss for the entire duration; if creditimpairment occurs after initial recognition, it is in the third stage, the Company measures the lossprovisions based on the amount equivalent to the expected credit loss for the entire duration. Forfinancial instruments with low credit risks at the balance sheet date, the Company assumes that theircredit risks have not increased significantly since initial recognition.The Company evaluates the expected credit losses of financial instruments based on individual itemsand portfolios. When assessing expected credit losses, the Company considers reasonable and
evidence-based information about past events, current conditions, and forecasts of future economicconditions.When the Company no longer reasonably expects to be able to fully or partially recover thecontractual cash flow of a financial asset, the Company directly writes down the book balance ofthe financial asset.
②Assessment of a significant increase in credit risk:
The Company determines the relative changes in default risk of the financial instrument occurredin the expected duration and assess whether the credit risks of financial instrument has increasedsignificantly since the initial recognition by comparing the risk of default of the financial instrumenton the balance sheet date with the risk of default of financial instrument on the initial recognitiondate. When determining whether the credit risk has increased significantly since the initialrecognition, the Company considers reasonable and evidence-based information that can beobtained without unnecessary additional costs or effort, including forward-looking information. Theinformation considered by the Company includes:
A. The debtor fails to pay the principal and interest according to the contractual maturity date;B. Serious worsening of external or internal credit rating (if any) of the financial instruments thathave occurred or are expected;C. Serious deterioration of the debtor’s operating results that have occurred or are expected;D. Changes in existing or anticipated technical, market, economic or legal circumstances that willhave a material adverse effect on the debtor’s ability to repay the company.Based on the nature of financial instruments, the Company assesses whether credit risk has increasedsignificantly on the basis of a single financial instrument or combination of financial instruments.When conducting an assessment based on a combination of financial instruments, the Company canclassify financial instruments based on common credit risk characteristics, such as overdueinformation and credit risk ratings.The Company believes that financial assets are subject to default in the following circumstances:
The debtor is unlikely to pay the full amount to the Company, and the assessment does not considerthe Company to take recourse actions such as realizing collateral (if held).
③Financial assets with credit impairment
On the balance sheet date, the Company assesses whether the credit of financial assets measured atamortized cost and the credit of debt investments measured at fair value and whose changes areincluded in other comprehensive income has been impaired. When one or more events that adverselyaffect the expected future cash flows of a financial asset occur, the financial asset becomes afinancial asset that has suffered credit impairment. Evidence that credit impairment has occurred infinancial assets includes the following observable information:
A. The issuer or the debtor has significant financial difficulties;B. The debtor breaches the contract, such as default or overdue repayment of interest or principal;
C. The Company gives concessions to the debtor that will not be made in any other circumstancesfor economic or contractual considerations relating to the financial difficulties of the debtor;D. The debtor is likely to go bankrupt or carry out other financial restructurings;E. The financial difficulties of the issuer or the debtor have caused the active market of the financialasset to disappear.
④Presentation of expected credit loss provisions
In order to reflect the changes in the credit risk of financial instruments since the initial recognition,the Company re-measures the expected credit losses on each balance sheet date, and the resultingincrease or reversal of the loss provisions shall be included in current profit and loss as impairmentlosses or gains. For financial assets measured at amortized cost, the loss provisions are written offagainst the book value of the financial assets listed in the balance sheet; for debt investmentsmeasured at fair value and whose changes are included in other comprehensive income, theCompany recognizes the loss provisions in other comprehensive income and does not deduct thebook value of the financial asset.
⑤Write-off
If the Company no longer reasonably expects that the financial asset contract cash flow can be fullyor partially recovered, directly write down the book balance of the financial asset. Such write-downsconstitute the termination of recognition for related financial assets. This usually occurs when theCompany determines that the debtor has no assets or sources of income to generate sufficient cashflow to repay the amount that will be written down. However, according to the Company'sprocedures for recovering the due amount, the financial assets that have been written down may stillbe affected by the execution activities.If the financial assets that have been written down are recovered afterwards, they shall be includedin the profit or loss of the period being recovered as the reversal of the impairment loss
(6) Transfer of financial assets
The transfer of financial assets refers to the transfer or delivery of financial assets to the other party(the transferee) other than the issuer of the financial assets.For financial assets that the Company has transferred almost all risks and rewards of ownership offinancial assets to the transferee, terminate the recognition of the financial assets; if almost all therisks and rewards of ownership of financial assets have been retained, do not terminate therecognition of the financial assets.If the Company has neither transferred nor retained almost all the risks and rewards of ownershipof financial assets, dispose as following situations: If the control of the financial assets is abandoned,terminate the recognition of the financial assets and determine the resulting assets and liabilities. Ifthe control of the financial assets is not abandoned, determine the relevant financial assets accordingto the extent to which they continue to be involved in the transferred financial assets, and determinethe related liabilities accordingly.
(7) Balance-out between the financial assets and liabilities
As the Group has the legal right to balance out the financial liabilities by the net or liquidation ofthe financial assets, the balance-out sum between the financial assets and liabilities is listed in thebalance sheet. In addition, the financial assets and liabilities are listed in the balance sheet withoutbeing balanced out.
11. Receivable financing
The note receivable and account receivable which are measured at fair value and whose changes areincluded in other comprehensive income are classified as receivables financing within one year(including one year) from the date of acquisition. Relevant accounting policy found more in NoteIII-10 “Financial Instrument”.
12.Inventory
(1) Classification of inventories
The Company’s inventories are categorized into stock materials, product in process and stock goodsetc.
(2) Pricing for delivered inventories
The cost of inventory at the time of acquisition and delivery is calculated according to the standardcost method, and the difference in cost that it should bear is carried forward at the end of the period,and the standard cost is adjusted to the actual cost.
(3) Recognition evidence for net realizable value of inventories and withdrawal method forinventory impairment provisionInventories as at period-end are priced at the lower of costs and net realizable values; at period end,on the basis of overall clearance about inventories, inventory impairment provision is withdrawnfor uncollectible part of costs of inventories which result from destroy of inventories, out-of-timeof all and part inventories, or sales price lowering than cost. Inventory impairment provision forstock goods and quantity of raw materials is subject to the difference between costs of singleinventory item over its net realizable value. As for other raw materials with large quantity andcomparatively low unit prices, inventory impairment provision is withdrawn pursuant to categories.As for finished goods, commodities and materials available for direct sales, their net realizablevalues are determined by their estimated selling prices less estimated sales expenses and relevanttaxes. For material inventories held for purpose of production, their net realizable values aredetermined by the estimated selling prices of finished products less estimated costs, estimated salesexpenses and relevant taxes accumulated till completion of production. As for inventories held forimplementation of sales contracts or service contracts, their net realizable values are calculated onthe basis of contract prices. In the event that inventories held by a company exceed order amount as
agreed in sales contracts, net realizable values of the surplus part are calculated on the basis ofnormal sale price.
(4) Inventory system
Perpetual Inventory System is adopted by the Company and takes a physical inventory.
(5) Amortization of low-value consumables and wrappage
①Low-value consumables
The Company adopts one-off amortization method to amortize the low-value consumables.
②Wrappage
The Company adopts one-off amortization method to amortize the wrappage at the time of receipt.
13.Assets held for sale
The Company classifies non-current assets or disposal groups that meet all of the followingconditions as held-for-sale: according to the practice of selling this type of assets or disposal groupsin a similar transaction, the non-current assets or disposal group can be sold immediately at itscurrent condition; The sale is likely to occur, that is, the Company has made resolution on the sellingplan and obtained definite purchase commitment, the selling is estimated to be completed withinone year. Those assets whose disposal is subject to approval from relevant authority or supervisorydepartment under relevant requirements are subject to that approval.Where the Company loses control over its subsidiary due to disposal of investment in the subsidiary,whether or not the Company retains part equity investment after such disposal, investment in thesubsidiary shall be classified in its entirety as held for sale in the separate financial statement of theparent company subject to that the investment in the subsidiary proposed to be disposed satisfiesthe conditions for being classified as held for sale, and all the assets and liabilities of the subsidiaryshall be classified as held for sale in consolidated financial statement.The purchase commitment identified refers to the legally binding purchase agreement entered intobetween the Company and other parties, which sets out certain major terms relating to transactionprice, time and adequately stringent punishment for default, which render an extremely minorpossibility for material adjustment or revocation of the agreement.Assets held for sale are measured at the lower of heir carrying value and fair value less sellingexpense. If the carrying value is higher than fair value less selling expense, the excess shall berecognized as impairment loss and recorded in profit or loss for the period, and allowance forimpairment shall be provided for in respect of the assets. In respect of impairment loss recognizedfor disposal group held for sale, carrying value of the goodwill in the disposal group shall bededucted first, and then deduct the carrying value of the non-current assets within the disposal groupapplicable to this measurement standard on a pro rata basis according to the proportion taken bytheir carrying value.
If the net amount of fair value of non-current assets held for sale less sales expense on subsequentbalance sheet date increases, the amount previously reduced for accounting shall be recovered andreverted from the impairment loss recognized after the asset is classified under the category of heldfor sale, with the amount reverted recorded in profit or loss for the period. Impairment lossrecognized before the asset is classified under the category of held for sale shall not be reverted. Ifthe net amount of fair value of the disposal group held for sale on the subsequent balance sheet dateless sales expenses increases, the amount reduced for accounting in previous periods shall berestored, and shall be reverted in the impairment loss recognized in respect of the non-current assetswhich are applicable to relevant measurement provisions after classification into the category ofheld for sale, with the reverted amount charged in profit or loss for the current period. The written-off carrying value of goodwill shall not be reverted.The non-current assets in the non-current assets or disposal group held for sale is not depreciated oramortized, and the debt interests and other fees in the disposal group held for sale continue to berecognized.If the non-current assets or disposal group are no longer classified as held for sale since they nolonger meet the condition of being classified as held for sale or the non-current assets are removedfrom the disposal group held for sale, they will be measured at the lower of the following:
(i)The amount after their book value before they are classified as held for sale is adjusted based onthe depreciation, amortization or impairment that should have been recognized given they are notclassified as held for sale;(ii) The recoverable amount.
14. Long-term equity investment
Long-term equity investments refer to long-term equity investments in which the Company hascontrol, joint control or significant influence over the invested party. Long-term equity investmentwithout control or joint control or significant influence of the Group is accounted for as available-for-sale financial assets or financial assets measured by fair value and with variation reckoned intocurrent gains/losses. As for other accounting policies found more in Note-V 10. “Financialinstrument”.
(1) Determination of initial investment cost
Investment costs of the long-term equity investment are recognized by the follow according todifferent way of acquirement:
①For a long-term equity investment acquired through a business combination involving enterprisesunder common control, the initial investment cost of the long-term equity investment shall be theabsorbing party’s share of the carrying amount of the owner’s equity under the consolidatedfinancial statements of the ultimate controlling party on the date of combination. The differencebetween the initial cost of the long-term equity investment and the cash paid, non-cash assets
transferred as well as the book value of the debts borne by the absorbing party shall offset againstthe capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall beadjusted. If the consideration of the merger is satisfied by issue of equity securities, the initialinvestment cost of the long-term equity investment shall be the absorbing party’s share of thecarrying amount of the owner’s equity under the consolidated financial statements of the ultimatecontrolling party on the date of combination. With the total face value of the shares issued as sharecapital, the difference between the initial cost of the long-term equity investment and total face valueof the shares issued shall be used to offset against the capital reserve. If the capital reserve isinsufficient to offset, the retained earnings shall be adjusted. For business combination resulted inan enterprise under common control by acquiring equity of the absorbing party under commoncontrol through a stage-up approach with several transactions, these transactions will be judgedwhether they shall be treat as “transactions in a basket”. If they belong to “transactions in a basket”,these transactions will be accounted for a transaction in obtaining control. If they are not belong to“transactions in a basket”, the initial investment cost of the long-term equity investment shall be theabsorbing party’s share of the carrying amount of the owner’s equity under the consolidatedfinancial statements of the ultimate controlling party on the date of combination. The differencebetween the initial cost of the long-term equity investment and the aggregate of the carrying amountof the long-term equity investment before merging and the carrying amount the additionalconsideration paid for further share acquisition on the date of combination shall offset against thecapital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted.Other comprehensive income recognized as a result of the previously held equity investmentaccounted for using equity method on the date of combination or recognized for available-for-salefinancial assets will not be accounted for.
②For the long-term equity investment obtained by business combination not under the same control,the fair value of the assets involved, the equity instruments issued and the liabilities incurred orassumed on the transaction date, plus the combined cost directly related to the acquisition is used asthe initial investment cost of the long-term equity investment. The identifiable assets of thecombined party and the liabilities (including contingent liabilities) assumed by the combined partyon the combining date are all measured at fair value, regardless of the amount of minorityshareholders’ equity. The amount of the combined cost exceeding the fair value of the identifiablenet assets of the combined party obtained by the Company is recorded as goodwill, and the amountbelow the fair value of the identifiable net assets of the combining party is directly recognized inthe consolidated income statement.(For business combination resulted in an enterprise not undercommon control by acquiring equity of the acquire under common control through a stage-upapproach with several transactions, these transactions will be judged whether they shall be treat as“transactions in a basket”. If they belong to “transactions in a basket”, these transactions will beaccounted for a transaction in obtaining control. If they are not belonging to “transactions in abasket”, the initial investment cost of the long-term equity investment accounted for using cost
method shall be the aggregate of the carrying amount of equity investment previously held by theacquire and the additional investment cost. For previously held equity accounted for using equitymethod, relevant other comprehensive income will not be accounted for. For previously held equityinvestment classified as available-for-sale financial asset, the difference between its fair value andcarrying amount, as well as the accumulated movement in fair value previously included in the othercomprehensive income shall be transferred to profit or loss for the current period.)
③Long-term investments obtained through other ways:
A. Initial investment cost of long-term equity investment obtained through cash payment isdetermined according to actual payment for purchase;B. Initial investment cost of long-term equity investment obtained through issuance of equitysecurities is determined at fair value of such securities;C. Initial investment cost of long-term equity investment (exchanged-in) obtained through exchangewith non-monetary assets, which is of commercial nature, is determined at fair value of the assetsexchanged-out; otherwise determined at carrying value of the assets exchanged-out if it is not ofcommercial nature;D. Initial investment cost of long-term equity investment obtained through debt reorganization isdetermined at fair value of such investment.
(2) Subsequent measurement on long-term equity investment
①Presented controlling ability on invested party, the investment shall use cost method formeasurement.
②Long-term equity investments with joint control (excluding those constitute joint ventures) orsignificant influence on the invested party are accounted for using equity method.Under the equity method, where the initial investment cost of a long-term equity investment exceedsthe investor’s interest in the fair value of the invested party’s identifiable net assets at the acquisitiondate, no adjustment shall be made to the initial investment cost. Where the initial investment cost isless than the investor’s interest in the fair value of the invested party’s identifiable net assets at theacquisition date, the difference shall be charged to profit or loss for the current period, and the costof the long term equity investment shall be adjusted accordingly.Under the equity method, investment gain and other comprehensive income shall be recognizedbased on the Group’s share of the net profits or losses and other comprehensive income made bythe invested party, respectively. Meanwhile, the carrying amount of long-term equity investmentshall be adjusted. The carrying amount of long-term equity investment shall be reduced based onthe Group’s share of profit or cash dividend distributed by the invested party. In respect of the othermovement of net profit or loss, other comprehensive income and profit distribution of invested party,the carrying value of long-term equity investment shall be adjusted and included in the capitalreserves. The Group shall recognize its share of the invested party’s net profits or losses based onthe fair values of the invested party’s individual separately identifiable assets at the time of
acquisition, after making appropriate adjustments thereto. In the event of in-conformity between theaccounting policies and accounting periods of the invested party and the Company, the financialstatements of the invested party shall be adjusted in conformity with the accounting policies andaccounting periods of the Company. Investment gain and other comprehensive income shall berecognized accordingly. In respect of the transactions between the Group and its associates and jointventures in which the assets disposed of or sold are not classified as operation, the share ofunrealized gain or loss arising from inter-group transactions shall be eliminated by the portionattributable to the Company. Investment gain shall be recognized accordingly. However, anyunrealized loss arising from inter-group transactions between the Group and an invested party is noteliminated to the extent that the loss is impairment loss of the transferred assets. In the event thatthe Group disposed of an asset classified as operation to its joint ventures or associates, whichresulted in acquisition of long-term equity investment by the investor without obtaining control, theinitial investment cost of additional long-term equity investment shall be the fair value of disposedoperation. The difference between initial investment cost and the carrying value of disposedoperation will be fully included in profit or loss for the current period. In the event that the Groupsold an asset classified as operation to its associates or joint ventures, the difference between thecarrying value of consideration received and operation shall be fully included in profit or loss forthe current period. In the event that the Company acquired an asset which formed an operation fromits associates or joint ventures, relevant transaction shall be accounted for in accordance with“Accounting Standards for Business Enterprises No. 20 “Business combination”. All profit or lossrelated to the transaction shall be accounted for.The Group’s share of net losses of the invested party shall be recognized to the extent that thecarrying amount of the long-term equity investment together with any long-term interests that insubstance form part of the investor’s net investment in the invested party are reduced to zero. If theGroup has to assume additional obligations, the estimated obligation assumed shall be provided forand charged to the profit or loss as investment loss for the period. Where the invested party is makingprofits in subsequent periods, the Group shall resume recognizing its share of profits after settingoff against the share of unrecognized losses.
③Acquisition of minority interest
Upon the preparation of the consolidated financial statements, since acquisition of minority interestincreased of long-term equity investment which was compared to fair value of identifiable net assetsrecognized which are measured based on the continuous measurement since the acquisition date (orcombination date) of subsidiaries attributable to the Group calculated according to the proportionof newly acquired shares, the difference of which recognized as adjusted capital surplus, capitalsurplus insufficient to set off impairment and adjusted retained earnings.
④Disposal of long-term equity investments
In these consolidated financial statements, for disposal of a portion of the long-term equityinvestments in a subsidiary without loss of control, the difference between disposal cost and disposal
of long-term equity investments relative to the net assets of the subsidiary is charged to the owners’equity. If disposal of a portion of the long-term equity investments in a subsidiary by the parentcompany results in a change in control, it shall be accounted for in accordance with the relevantaccounting policies as described in Note V-6 “Preparation Method of the Consolidated FinancialStatements”.On disposal of a long-term equity investment otherwise, the difference between the carrying amountof the investment and the actual consideration paid is recognized through profit or loss in the currentperiod.In respect of long-term equity investment accounted for using equity method with the remainingequity interest after disposal also accounted for using equity method, other comprehensive incomepreviously under owners’ equity shall be accounted for in accordance with the same accountingtreatment for direct disposal of relevant asset or liability by invested party on pro rata basis at thetime of disposal. The owners’ equity recognized for the movement of other owners’ equity(excluding net profit or loss, other comprehensive income and profit distribution of invested party)shall be transferred to profit or loss for the current period on pro rata basis.In respect of long-term equity investment accounted for using cost method with the remaining equityinterest after disposal also accounted for cost equity method, other comprehensive income measuredand reckoned under equity method or financial instrument before control of the invested party unitacquired shall be accounted for in accordance with the same accounting treatment for direct disposalof relevant asset or liability by invested party on pro rata basis at the time of disposal and shall betransferred to profit or loss for the current period on pro rata basis; among the net assets of investedparty unit recognized by equity method (excluding net profit or loss, other comprehensive incomeand profit distribution of invested party) shall be transferred to profit or loss for the current periodon pro rata basis.In the event of loss of control over invested party due to partial disposal of equity investment by theGroup, in preparing separate financial statements, the remaining equity interest which can applycommon control or impose significant influence over the invested party after disposal shall beaccounted for using equity method. Such remaining equity interest shall be treated as accountingfor using equity method since it is obtained and adjustment was made accordingly. For remainingequity interest which cannot apply common control or impose significant influence over the investedparty after disposal, it shall be accounted for using the recognition and measurement standard offinancial instruments. The difference between its fair value and carrying amount as at the date oflosing control shall be included in profit or loss for the current period. In respect of othercomprehensive income recognized using equity method or the recognition and measurementstandard of financial instruments before the Group obtained control over the invested party, it shallbe accounted for in accordance with the same accounting treatment for direct disposal of relevantasset or liability by invested party at the time when the control over invested party is lost. Movementof other owners’ equity (excluding net profit or loss, other comprehensive income and profit
distribution under net asset of invested party accounted for and recognized using equity method)shall be transferred to profit or loss for the current period at the time when the control over investedparty is lost. Of which, for the remaining equity interest after disposal accounted for using equitymethod, other comprehensive income and other owners’ equity shall be transferred on pro rata basis.For the remaining equity interest after disposal accounted for using the recognition andmeasurement standard of financial instruments, other comprehensive income and other owners’equity shall be fully transferred.In the event of loss of common control or significant influence over invested party due to partialdisposal of equity investment by the Group, the remaining equity interest after disposal shall beaccounted for using the recognition and measurement standard of financial instruments. Thedifference between its fair value and carrying amount as at the date of losing common control orsignificant influence shall be included in profit or loss for the current period. In respect of othercomprehensive income recognized under previous equity investment using equity method, it shallbe accounted for in accordance with the same accounting treatment for direct disposal of relevantasset or liability by invested party at the time when equity method was ceased to be used. Movementof other owners’ equity (excluding net profit or loss, other comprehensive income and profitdistribution under net asset of invested party accounted for and recognized using equity method)shall be transferred to profit or loss for the current period at the time when equity method was ceasedto be used.The Group disposes its equity investment in subsidiary by a stage-up approach with severaltransactions until the control over the subsidiary is lost. If the said transactions belong to“transactions in a basket”, each transaction shall be accounted for as a single transaction of disposingequity investment of subsidiary and loss of control. The difference between the disposalconsideration for each transaction and the carrying amount of the corresponding long-term equityinvestment of disposed equity interest before loss of control shall initially recognized as othercomprehensive income, and subsequently transferred to profit or loss arising from loss of controlfor the current period upon loss of control.
(3) Impairment test method and withdrawal method for impairment provisionFound more in Note V-25 “impairment of long-term assets”.
(4) Criteria of joint control and significant influence
Joint control is the Company’s contractually agreed sharing of control over an arrangement, whichrelevant activities of such arrangement must be decided by unanimously agreement from partieswho share control. All the participants or participant group whether have controlling over sucharrangement as a group or not shall be judge firstly, then judge that whether the decision-makingfor such arrangement are agreed unanimity by the participants or not.Significant influence is the power of the Company to participate in the financial and operating policydecisions of an invested party, but to fail to control or joint control the formulation of such policiestogether with other parties. While recognizing whether have significant influence by invested party,
the potential factors of voting power as current convertible bonds and current executable warrant ofthe invested party held by investors and other parties shall be thank over.
15.Investment real estate
Investment real estate is stated at cost. During which, the cost of externally purchased propertiesheld-for-investment includes purchasing price, relevant taxes and surcharges and other expenseswhich are directly attributable to the asset. Cost of self construction of properties held for investmentis composed of necessary expenses occurred for constructing those assets to a state expected to beavailable for use. Properties held for investment by investors are stated at the value agreed in aninvestment contract or agreement, but those under contract or agreement without fair value are statedat fair value.The Company adopts cost methodology amid subsequent measurement of properties held forinvestment, while depreciation and amortization is calculated using the straight-line methodaccording to their estimated useful lives.The basis of provision for impairment of properties held for investment is referred to Note V- 25“Impairment of long-term assets”.
16. Fixed assets
(1) Recognition conditions
Fixed assets refer to the tangible assets for production of products, provision of labor, lease oroperation, with a service life excess one year and has more unit value.
(2) Depreciation methods
Category | Years of depreciation(year) | Scrap value rate(%) | Yearly depreciation rate(%) |
House and Building | 20~35 | 5 | 2.71~4.75 |
Machinery equipment | 10 | 5 | 9.50 |
Transportation equipment | 4~5 | 5 | 19.00~23.75 |
Electronic and other equipment | 3~10 | 5 | 9.50~31.67 |
For the fixed assets with impairment provision, the depreciation amount shall be calculated afterdeducting the accumulated amount of impairment provision for fixed assets
(3) The impairment test method and provision for impairment of fixed assetsThe impairment test method and provision for impairment of fixed assets found more in Note III-25 “Impairment of long-term assets”.
17.Construction in progress
From the date on which the fixed assets built by the Company come into an expected usable state,the construction in progress are converted into fixed assets on the basis of the estimated value ofproject estimates or pricing or project actual costs, etc. Depreciation is calculated from the nextmonth. Further adjustments are made to the difference of the original value of fixed assets after finalaccounting is completed upon completion of projects.The basis of provision for impairment of properties held for construction in process is referred toNote III-22 “Impairment of long-term assets”.
18.Contract assets and contract liability
The Company presents the contract assets or contract liabilities in the balance sheet based on therelationship between the performance obligation and the customer’s payment.
(1) Contract assets
Recognition method and standard of contract assets: contract assets refer to the right of a companyto receive consideration after transferring goods or providing services to customers, and this rightdepends on other factors besides the passage of time. The company's unconditional (that is, onlydepending on the passage of time) right to collect consideration from customers are separately listedas receivables.Method for determining expected credit losses of contract assets: the method for determiningexpected credit losses of contract assets is consistent with the method for determining expectedcredit losses of accounts receivable.Accounting treatment method of expected credit losses of contract assets: if the contract assets areimpaired, the company shall debit the "asset impairment loss" subject and credit the "contract assetimpairment provision" subject according to the amount that should be written down. When reversingthe provision for asset impairment that has already been withdrawn, make opposite accountingentries.
(2) Contract liability
The Company lists the obligation to transfer goods or provide labor services to customers for theconsideration received or receivable from customers as contractual liabilities, such as the amountthat the company has received before the transfer of the promissory goods.
19. Borrowing costs
(1) Recognition of capitalization of borrowing costs
Borrowing costs comprise interest occurred, amortization of discounts or premiums, ancillary costsand exchange differences in connection with foreign currency borrowings. The borrowing costs ofthe Company, which incur from the special borrowings occupied by the fixed assets that need more
than one year (including one year) for construction, development of investment properties orinventories or from general borrowings, are capitalized and recorded in relevant assets costs; otherborrowing costs are recognized as expenses and recorded in the profit or loss in the period whenthey are occurred. Relevant borrowing costs start to be capitalized when all of the following threeconditions are met:
① Capital expenditure has been occurred;
② Borrowing costs have been occurred;
③ Acquisition or construction necessary for the assets to come into an expected usable state hasbeen carried out.
(2) Period of capitalization of borrowing costs
Borrowing costs arising from purchasing fixed asset, investment real estate and inventory, andoccurred after such assets reached to its intended use of status or sales, than reckoned into assetscosts while satisfy the above mentioned capitalization condition; capitalization of borrowing costsshall be suspended and recognized as current expenditure during periods in which construction offixed assets, investment real estate and inventory are interrupted abnormally, when the interruptionis for a continuous period of more than 3 months, until the acquisition, construction or productionof the qualifying asset is resumed; capitalization shall discontinue when the qualifying asset is readyfor its intended use or sale, the borrowing costs occurred subsequently shall reckoned into financialexpenses while occurring for the current period.
(3) Measure of capitalization for borrowing cost
In respect of the special borrowings borrowed for acquisition, construction or production anddevelopment of the assets qualified for capitalization, the amount of interests expenses of the specialborrowings actually occurred in the period less interest income derived from unused borrowingsdeposited in banks or less investment income derived from provisional investment, are recognized.With respect to the general borrowings occupied for acquisition, construction or production anddevelopment of the assets qualified for capitalization, the capitalized interest amount for generalborrowings is calculated and recognized by multiplying a weighted average of the accumulatedexpenditure on the assets in excess of the expenditure on the assets of the special borrowings, by acapitalization rate for general borrowings. The capitalization rate is determined by calculation ofthe weighted average interest rate of the general borrowings.
20. Right-of-use assets
The right-of-use asset refers to the right of the Company, as the lessee, to use the leased asset duringthe lease term.On the commencement date of the lease term, the Company recognizes the right-of-use assets forleases other than short-term leases and leases of low-value assets. Right-of-use assets are initiallymeasured at cost. The cost includes the initial measurement amount of the lease liability; the lease
payments made on or before the commencement date of the lease term, deduct the relevant amountof the lease incentive already enjoyed if there is a lease incentive; the initial direct expenses incurredby the lessee; the cost expected to be incurred by the lessee to dismantle and remove the leasedassets, restore the site where the leased assets locate, or restore the leased assets to the conditionagreed upon in the lease terms, but this does not include the cost attributable to the production ofinventory.The Company subsequently uses the straight-line method to depreciate the right-of-use assets. If itcan be reasonably determined that the ownership of the leased asset can be obtained at the expirationof the lease term, the Company shall accrue depreciation over the remaining useful life of the leasedasset. If it cannot be reasonably determined that the ownership of the leased asset can be obtainedat the expiration of the lease term, the Company shall accrue depreciation within the shorter of thelease term and the remaining useful life of the leased asset. When the recoverable amount is lowerthan the book value of the right-of-use asset, the Company shall write down its book value to therecoverable amount.
21. Intangible assets
(1) Measurement, use of life and impairment testing
① Measurement of intangible assets
The intangible assets of the Company including land use rights, patented technology and non-patents technology etc.The cost of a purchased intangible asset shall be determined by the expenditure actually occurredand other related costs.The cost of an intangible asset contributed by an investor shall be determined in accordance withthe value stipulated in the investment contract or agreement, except where the value stipulated inthe contract or agreement is not fair.The intangible assets acquired through exchange of non-monetary assets, which is commercial insubstance, is carried at the fair value of the assets exchanged out; for those not commercial insubstance, they are carried at the carrying amount of the assets exchanged out.The intangible assets acquired through debt reorganization, are recognized at the fair value.
② Amortization methods and time limit for intangible assets:
Land use right of the company had average amortization by the transfer years from the beginningdate of transfer (date of getting land use light); Patented technology, non-patented technology andother intangible assets of the Company are amortized by straight-line method with the shortest termsamong expected useful life, benefit years regulated in the contract and effective age regulated bythe laws. The amortization amount shall count in relevant assets costs and current gains/lossesaccording to the benefit object.As for the intangible assets as trademark, with uncertain benefit terms, amortization shall not be
carried.Impairment testing methods and accrued for depreciation reserves for the intangible assets foundmore in Note III-22 “Impairment of long-term assets”.
(2) Internal accounting policies relating to research and development expendituresExpenses incurred during the research phase are recognized as profit or loss in the current period;expenses incurred during the development phase that satisfy the following conditions are recognizedas intangible assets (patented technology and non-patents technology):
① It is technically feasible that the intangible asset can be used or sold upon completion;
② There is intention to complete the intangible asset for use or sale;
③ The products produced using the intangible asset has a market or the intangible asset itself hasa market;
④ There is sufficient support in terms of technology, financial resources and other resources inorder to complete the development of the intangible asset, and there is capability to use or sell theintangible asset;
⑤ The expenses attributable to the development phase of the intangible asset can be measuredreliably.If the expenses incurred during the development phase did not qualify the above mentionedconditions, such expenses incurred are accounted for in the profit or loss for the current period. Thedevelopment expenditure reckoned in gains/losses previously shall not be recognized as assets inlater period. The capitalized expenses in development stage listed as development expenditure inbalance sheet, and shall be transfer as intangible assets since such item reached its expectedconditions for service.
22. Impairment of long-term assets
The Company will judge if there is any indication of impairment as at the balance sheet date inrespect of non-current non-financial assets such as fixed assets, construction in progress, intangibleassets with a finite useful life, investment properties measured at cost, and long-term equityinvestments in subsidiaries, joint controlled entities and associates. If there is any evidenceindicating that an asset may be impaired, recoverable amount shall be estimated for impairment test.Goodwill, intangible assets with an indefinite useful life and intangible assets beyond workingconditions will be tested for impairment annually, regardless of whether there is any indication ofimpairment.If the impairment test result shows that the recoverable amount of an asset is less than its carryingamount, the impairment provision will be made according to the difference and recognized as animpairment loss. The recoverable amount of an asset is the higher of its fair value less costs ofdisposal and the present value of the future cash flows expected to be derived from the asset. An
asset’s fair value is the price in a sale agreement in an arm’s length transaction. If there is no saleagreement but the asset is traded in an active market, fair value shall be determined based on the bidprice. If there is neither sale agreement nor active market for an asset, fair value shall be based onthe best available information. Costs of disposal are expenses attributable to disposal of the asset,including legal fee, relevant tax and surcharges, transportation fee and direct expenses incurred toprepare the asset for its intended sale. The present value of the future cash flows expected to bederived from the asset over the course of continued use and final disposal is determined as theamount discounted using an appropriately selected discount rate. Provisions for assets impairmentshall be made and recognized for the individual asset. If it is not possible to estimate the recoverableamount of the individual asset, the Group shall determine the recoverable amount of the asset groupto which the asset belongs. The asset group is the smallest group of assets capable of generatingcash flows independently.For the purpose of impairment testing, the carrying amount of goodwill presented separately in thefinancial statements shall be allocated to the asset groups or group of assets benefiting from synergyof business combination. If the recoverable amount is less than the carrying amount, the Group shallrecognize an impairment loss. The amount of impairment loss shall first reduce the carrying amountof any goodwill allocated to the asset group or set of asset groups, and then reduce the carryingamount of other assets (other than goodwill) within the asset group or set of asset groups, pro rataon the basis of the carrying amount of each asset.An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent periodin respect of the part whose value can be recovered.
23. Long-term deferred expenses
Long-term expenses to be amortized of the Company the expenses that are already charged and withthe beneficial term of more than one year are evenly amortized over the beneficial term. For thelong-term deferred expense items cannot benefit the subsequent accounting periods, the amortizedvalue of such items is all recorded in the profit or loss during recognition.
24. Employee compensation
(1) Accounting treatment for short-term compensation
During the accounting period when the staff providing service to the Company, the short-termremuneration actual occurred shall recognized as liability and reckoned into current gains/losses.During the accounting period when staff providing service to the Company, the actual short-termcompensation occurred shall recognized as liabilities and reckoned into current gains/losses, exceptfor those in line with accounting standards or allow to reckoned into capital costs; the welfareoccurred shall reckoned into current gains/losses or relevant asses costs while actually occurred.The employee compensation shall recognize as liabilities and reckoned into current gains/losses or
relevant assets costs while actually occurred. The employee benefits that belong to non-monetarybenefits are measured in accordance with the fair value; the social insurances including the medicalinsurance, work-injury insurance and maternity insurance and the housing fund that the enterprisepays for the employees as well as the labor union expenditure and employee education fundswithdrawn by rule should be calculated and determined as the corresponding compensation amountand determined the corresponding liabilities in accordance with the specified withdrawing basis andproportion, and reckoned in the current profits and losses or relevant asset costs in the accountingperiod that the employees provide services.
(2) Accounting treatment for post-employment benefit
The post-employment benefit included the defined contribution plans and defined benefit plans.Post-employment benefits plan refers to the agreement about the post-employment benefits betweenthe enterprise and employees, or the regulations or measures the enterprise established for providingpost-employment benefits to employees. Among them, the defined contribution plan refers to thepost-employment benefits plan that the enterprise doesn’t undertake the obligation of payment afterdepositing the fixed charges to the independent fund; the defined benefit plans refers to post-employment benefits plans except the defined contribution plan.
(3) Accounting treatment for retirement benefits
When the Company terminates the employment relationship with employees before the end of theemployment contracts or provides compensation as an offer to encourage employees to acceptvoluntary redundancy, the Company shall recognize employee compensation liabilities arising fromcompensation for staff dismissal and included in profit or loss for the current period, when theCompany cannot revoke unilaterally compensation for dismissal due to the cancellation of laborrelationship plans and employee redundant proposals; and the Company recognize cost andexpenses related to payment of compensation for dismissal and restructuring, whichever is earlier.The early retirement plan shall be accounted for in accordance with the accounting principles forcompensation for termination of employment. The salaries or wages and the social contributions tobe paid for the employees who retire before schedule from the date on which the employees stoprendering services to the scheduled retirement date, shall be recognized (as compensation fortermination of employment) in the current profit or loss by the Group if the recognition principlesfor provisions are satisfied.
(4) Accounting treatment for other long-term employee benefits
Except for the compulsory insurance, the Company provides the supplementary retirement benefitsto the employees satisfying some conditions, the supplementary retirement benefits belong to thedefined benefit plans, and the defined benefit liability confirmed on the balance sheet is the valueby subtracting the fair value of plan assets from the present value of defined benefit obligation. Thedefined benefit obligation is annually calculated in accordance with the expected accumulatedwelfare unit method by the independent actuary by adopting the treasury bond rate with similarobligation term and currency. The service charges related to the supplementary retirement benefits
(including the service costs of the current period, the previous service costs, and the settlement gainsor losses) and the net interest are reckoned in the current profits and losses or other asset costs, thechanges generated by recalculating the net liabilities of defined benefit plans or net assets should bereckoned in other consolidated income.
25. Share-based payment
The Company’s share-based payment is a transaction that grants equity instruments or assumesliabilities determined on the basis of equity instruments in order to obtain services provided byemployees or other parties. The Company’s share-based payment is classified as equity-settledshare-based payment and cash-settled share-based payment.
(1) Equity-settled share-based payment and equity instruments
Equity-settled share-based payment in exchange for services provided by employees shall bemeasured at the fair value of the equity instruments granted to employees. If the Company usesrestricted stocks for share-based payment, employees contribute capital to subscribe for stocks, andthe stocks shall not be listed for circulation or transfer until the unlocking conditions are met andunlocked; if the unlocking conditions specified in the final equity incentive plan are not met, theCompany shall repurchase the stocks at the pre-agreed price. When the Company obtains thepayment for the employees to subscribe for restricted stocks, it shall confirm the share capital andcapital reserve (share capital premium) according to the obtained subscription money, and at thesame time recognize a liability in full for the repurchase obligation and recognize treasury shares.On each balance sheet date during the waiting period, the Company makes the best estimate of thenumber of vesting equity instruments based on the changes in the latest obtained number of vestedemployees, whether they meet the specified performance conditions, and other follow-upinformation. On this basis, the services obtained in the current period are included in related costsor expenses based on the fair value on the grant date, and the capital reserve shall be increasedaccordingly.For share-based payments that cannot be vested in the end, costs or expenses shall not be recognized,unless the vesting conditions are market conditions or non-vesting conditions. At this time,regardless of whether the market conditions or the non-vesting conditions are met, as long as allnon-market conditions in the vesting conditions are met, it is deemed as vesting.If the terms of equity-settled share-based payment are modified, at least the services obtained shouldbe confirmed in accordance with the unmodified terms. In addition, any modification that increasesthe fair value of the equity instruments granted, or a change that is beneficial to employees on themodification date, is recognized as an increase in services received.If the equity-settled share payment is canceled, it will be treated as an accelerated vesting on thecancellation day, and the unconfirmed amount will be confirmed immediately. If an employee orother party can choose to meet the non-vesting conditions but fails to meet within the waiting period,it shall be treated as cancellation of equity-settled share-based payment. However, if a new equity
instrument is granted and it is determined on the date of grant of the new equity instrument that thenew equity instrument granted is used to replace the cancelled equity instrument, the grantedsubstitute equity instruments shall be treated in the same way as the modification of the originalequity instrument terms and conditions.
(2) Cash-settled share-based payment and equity instruments
Cash-settled share-based payments are measured at the fair value of the liabilities calculated anddetermined on the basis of shares or other equity instruments undertaken by the Company. If it’svested immediately after the grant, the fair value of the liabilities assumed on the date of the grantis included in the cost or expense, and the liability is increased accordingly. If the service within thewaiting period is completed or the specified performance conditions are met, the service obtainedin the current period shall be included in the relevant costs or expenses based on the best estimateof the vesting situation within the waiting periodand the fair value of the liabilities assumed toincrease the corresponding liabilities. On each balance sheet date and settlement date before thesettlement of the relevant liabilities, the fair value of the liabilities is remeasured, and the changesare included in the current profit and loss.
26. Lease liability
Substantial On the commencement date of the lease term, the Company recognizes the present valueof the unpaid lease payments as lease liabilities. Lease payments include the following five items:
fixed payments and in-substance fixed payments, if there is a lease incentive, deduct the amountrelated to the lease incentive; variable lease payments that depend on an index or ratio, which aredetermined at the initial measurement according to the index or ratio determination on thecommencement date of lease term; exercise price for a purchase option provided that the lessee isreasonably certain that the option shall be exercised; payments for exercising the option to terminatethe lease provided that the lease term reflects that the lessee shall exercise the option to terminatethe lease option; estimated payments due based on guaranteed residual value provided by the lessee.When calculating the present value of lease payments, the interest rate implicit in the lease is usedas the discount rate. If the interest rate implicit in the lease cannot be determined, the company’sincremental borrowing rate is used as the discount rate. The Company calculates the interest expenseof the lease liability in each period of the lease term according to the fixed periodic interest rate, andincludes it in the current profit and loss, unless it is otherwise stipulated to be included in the costof the relevant assets. Variable lease payments that are not included in the measurement of leaseliabilities are included in the current profit and loss when they are actually incurred, unless otherwisestipulated to be included in the cost of the relevant assets. After the commencement date of the leaseterm, when there is a change in the in-substance fixed payment, or a change in the estimated amountpayable for the guaranteed residual value, or a change in the index or ratio used to determine thelease payment, or a change in the evaluation results of the purchase option, renewal option or
termination option or when the actual exercise situation changes, the Company shall re-measure thelease liability according to the present value of the changed lease payments.
27. Accrued liability
(1) Recognition principle
An obligation related to a contingency, such as guarantees provided to outsiders, pending litigationor arbitration, product warranties, redundancy plans, onerous contracts, reconstructing, expecteddisposal of fixed assets, etc. shall be recognized as an estimated liability when all of the followingconditions are satisfied:
①the obligation is a present obligation of the Company;
②it is Contingent that an outflow of economic benefits will be required to settle the obligation;
③the amount of the obligation can be measured reliably.
(2) Measurement method: Measure on the basis of the best estimates of the expenses necessaryfor paying off the contingencies
28. Revenue
(1) Accounting policies used in revenue recognition and measurement
1)Revenue recognition principle
On the starting date of the contract, the company evaluates the contract, identifies each individualperformance obligation contained in the contract, and determines whether each individualperformance obligation is performed within a certain period of time or at a certain point in time.When one of the following conditions is met, it belongs to the performance obligation within acertain period of time, otherwise, it belongs to the performance obligation at a certain point in time:
①The customer obtains and consumes the economic benefits brought by the company'sperformance while the company performs the contract; ②The customer can control the goods orservices in progress during the company’s performance; ③The goods or services produced duringthe company’s performance have irreplaceable uses, and the company has the right to collectpayment for the performance part that has been completed so far during the entire contract period.For performance obligations performed within a certain period of time, the company recognizesrevenue in accordance with the performance progress during that period. When the performanceprogress cannot be reasonably determined, if the cost incurred is expected to be compensated, therevenue shall be recognized according to the amount of the cost incurred until the performanceprogress can be reasonably determined. For performance obligations performed at a certain point intime, revenue is recognized at the point when the customer obtains control of the relevant goods orservices. When judging whether the customer has obtained control of the goods, the companyconsiders the following signs: ①The company has the current right to receive payment for the
goods, that is, the customer has the current payment obligation for the goods; ②The company hastransferred the legal ownership of the goods to the customer, that is, the customer has the legalownership of the goods; ③The company has transferred the goods to the customer in kind, that is,the customer has physically taken possession of the goods; ④The company has transferred themain risks and rewards of the ownership of the goods to the customer, that is, the customer hasobtained the main risks and rewards of the ownership of the goods; ⑤The customer has acceptedthe goods; ⑥Other signs that the customer has obtained control of the goods.
2)Revenue measurement principle
①The company measures revenue based on the transaction price allocated to each individualperformance obligation. The transaction price is the amount of consideration that the companyexpects to be entitled to receive due to the transfer of goods or services to customers, and does notinclude payments collected on behalf of third parties and payments expected to be returned tocustomers.
②If there is variable consideration in the contract, the company shall determine the best estimateof the variable consideration according to the expected value or the most likely amount, but thetransaction price including the variable consideration shall not exceed the amount of cumulativelyrecognized revenue that is unlikely to be significantly turned back when the relevant uncertainty iseliminated.
③If there is a significant financing component in the contract, the company shall determine thetransaction price based on the amount payable that the customer is assumed to pay in cash whenobtaining the control of the goods or services. The difference between the transaction price and thecontract consideration shall be amortized by the effective interest method during the contract period.On the starting date of the contract, if the company expects that the customer pays the price withinone year after obtaining control of the goods or services, the significant financing components inthe contract shall not be considered.
④If the contract contains two or more performance obligations, the company will allocate thetransaction price to each individual performance obligation based on the relative proportion of thestand-alone selling price of the goods promised by each individual performance obligation on thestarting date of the contract.
(2) The Company's criteria for the recognition of commodity income and specific criteria forthe recognition timeThe company's domestic sales revenue recognition time: The company shall deliver the goodsaccording to the agreement of the order, and check with the buyer the goods received and inspectedby the buyer from the previous reconciliation date to the current reconciliation date. After the checkby both parties, the risks and rewards shall be transferred to the buyer. The Company shall issueinvoices to the buyer according to the varieties, quantities and amounts confirmed by thereconciliation and confirm the realization of sales income on the reconciliation date.
The Company's foreign sales revenue recognition time: after the completion of the customs audit,the company in accordance with the export date specified in the customs declaration, to confirm therealization of sales revenue.
29. Government grants
(1) Types
Government grants are transfer of monetary assets or non-monetary assets from the government tothe Group at no consideration. Government grants are classified into government grants related toassets and government grants related to income.As for the assistance object not well-defined in government’s documents, the classification criteriafor assets-related or income-related grants are as: whether the grants turn to long-term assets due topurchasing for construction or other means.
(2) Recognition and measure
The government grants shall be recognized while meet the additional conditions of the grants andamount is actually can be obtained.If a government grant is in the form of a transfer of monetary asset, the item shall be measured atthe amount received or receivable. If a government grant is in the form of a transfer of non-monetaryasset, the item shall be measured at fair value. If the fair value could not be reliably acquired, thenmeasured by nominal amount.
(3) Accounting treatment
A government grant related to an asset shall be recognized as deferred income, and reckoned intocurrent gains/losses according to the depreciation process in use life of such assets.A government grant related to income, if they making up relevant expenses and losses for laterperiod, than recognized deferred income, and should reckoned into current gain/loss during theperiod while relevant expenses are recognized; if they making up relevant expenses and losses thatoccurred, than reckoned into current gains/losses.A government grant related to daily operation activity of the Company should reckoned into otherincome; those without related to daily operation activity should reckoned into non-operation incomeand expenses.The financial discount funds received by the Company shall write down relevant borrowing costs.
30. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets or deferred income tax liabilities are realized based on the differencebetween the carrying values of assets and liabilities and their taxation bases (as for the ones did notrecognized as assets and liability and with taxation basis recognized in line with tax regulations,different between tax base and its book value) at the tax rates applicable in the periods when theCompany recovers such assets or settles such liabilities.
(2) Deferred income tax assets are realized to the extent that it is probable to obtain such taxableincome which is used to set off the deductible temporary difference. As at the balance sheet date, ifthere is obvious evidence showing that it is probable to obtain sufficient taxable income to set offthe deductible temporary difference in future periods, deferred income tax assets not realized inprevious accounting periods shall be realized.
(3) On balance sheet date, re-review shall be made in respect of the carrying value of deferredincome tax assets. If it is impossible to obtain sufficient taxable income to set off the benefits ofdeferred income tax assets in future periods, then the carrying value of deferred income tax assetsshall be reduced accordingly. If it is probable to obtain sufficient taxable income, then the amountreduced shall be switched back.
(4) Current income tax and deferred income tax considered as income tax expenses or incomesreckoned into current gains/losses, excluding the follow income tax:
① Enterprise combination;
② Transactions or events recognized in owner’s equity directly.
31. Lease
Lease refers to a contract in which the lessor transfers the right to use assets to the lessee forconsideration within a certain period of time. On the commencement date of the contract, thecompany evaluates whether the contract is a lease or includes a lease. If one party in the contracttransfers the right to control the use of one or more identified assets within a certain period inexchange for consideration, the contract is a lease or includes a lease. If the contract includesmultiple separate leases at the same time, the company will split the contract and conduct accountingtreatment for each separate lease. If the contract includes both the leased and non-leased parts, thelessee and the lessor shall separate the leased and non-leased parts.
(1) The company as lessee
For the general accounting treatment of the company as the lessee, see note-III, 20 “Right-of-useassets” and note-III-26 “Lease liability”.For short-term leases with a lease term of no more than 12 months and low value asset leases witha lower value when a single asset is new, the company chooses not to recognize the right to useassets and lease liabilities, and the relevant rental expenses are included in the current profit andloss or the cost of relevant assets according to the straight-line method in each period of the leaseterm.If the lease changes and meets the following conditions at the same time, the company will treat thelease change as a separate lease for Accounting: the lease change expands the lease scope by addingthe right to use one or more leased assets; The increased consideration is equivalent to the amountadjusted according to the conditions of the contract at the separate price for most of the expansionof the lease scope. If the lease change is not accounted for as a separate lease, on the effective date
of the lease change, the company will re allocate the consideration of the contract after the change,re determine the lease term, and re measure the lease liability according to the present valuecalculated by the lease payment after the change and the revised discount rate.
(2) The company as lessor
On the lease commencement date, the company classifies leases that have substantially transferredalmost all the risks and rewards related to the ownership of the leased assets as financial leases, andall other leases are operating leases.
1) Operating lease
During each period of the lease term, the company recognizes the lease receipts as rental incomeaccording to the straight-line method, and the initial direct expenses incurred are capitalized,amortized on the same basis as the recognition of rental income, and included in the current profitand loss by stages. The variable lease payments obtained by the company related to operating leasesthat are not included in the lease receipts are included in the current profits and losses when actuallyincurred.
2) Finance lease
On the beginning date of the lease term, the company recognizes the financial lease receivablesaccording to the net amount of the lease investment (the sum of the unsecured residual value andthe present value of the lease collection not received on the beginning date of the lease termdiscounted according to the embedded interest rate of the lease), and terminates the recognition ofthe financial lease assets. During each period of the lease term, the company calculates andrecognizes the interest income according to the interest rate embedded in the lease. The amount ofvariable lease payments obtained by the company that are not included in the measurement of netlease investment shall be included in the current profit and loss when actually incurred.
(3) Sale leaseback
The company evaluates and determines whether the asset transfer in the sale and leasebacktransaction is a sale in accordance with the Accounting standards for Business Enterprises No. 14-Revenue.
1) The company as lessee
If the asset transfer in the sale and leaseback transaction is sales, the company measures the right touse assets formed by the sale and leaseback according to the part of the book value of the originalassets related to the right to use obtained by the leaseback, and only recognizes the relevant gainsor losses on the rights transferred to the lessor.If the asset transfer in the sale and leaseback transaction does not belong to sales, the company willcontinue to recognize the transferred asset, recognize a financial liability equal to the transferincome, and carry out accounting treatment for the financial liability in accordance with theaccounting standards for Business Enterprises No. 22 - Recognition and measurement of financialinstruments.
2) The company as lessor
If the asset transfer in the sale and leaseback transaction belongs to sales, the company will conductaccounting treatment for asset purchase in accordance with other applicable accounting standardsfor business enterprises, and accounting treatment for asset lease in accordance with Accountingstandards for Business Enterprises No. 21 - Leasing.If the asset transfer in the sale and leaseback transaction does not belong to sales, the company doesnot recognize the transferred asset, but recognizes a financial asset equal to the transfer income, andcarries out accounting treatment for the financial asset in accordance with the Accounting standardsfor Business Enterprises No. 22 - Recognition and measurement of financial instruments.
32.Changes of important accounting policies and estimation
(1) Significant changes in accounting policy
1) On Dec. 30, 2021, the Ministry of Finance issued Interpretation No. 15 of the AccountingStandards for Business Enterprises (Cai Kuai [2021] No. 35, hereinafter referred to as“Interpretation No. 15”).
①Accounting treatment for trial operation sales
Interpretation No. 15 stipulates the accounting treatment and presentation of products or by-productsgenerated during the development process or before fixed assets reach their intended usable statefor external sales by enterprises. It also stipulates that the net amount of trial operation sales revenueafter offsetting costs should not be offset against fixed asset costs or research and developmentexpenses. This regulation came into effect from January 1, 2022, and retrospective adjustments shallbe made to trial sales that occurred between the beginning of the earliest period for financialstatement presentation and January 1, 2022. The implementation of this regulation has not had asignificant impact on the company’s financial condition and operating results.
② Judgment on loss contracts
Interpretation No. 15 clarifies that the “cost of performing the contract” considered by enterprisesin determining whether the contract constitutes a loss contract should include both the incrementalcost of performing the contract and the allocation amount of other costs directly related toperforming the contract. This regulation came into effect on January 1, 2022, and the Company shallimplement such provision for contracts whose obligation hasn’t been fulfilled by January 1, 2022.The cumulative impact shall be adjusted to the retained earnings and other related financialstatement accounts at the beginning of the year on the implementation date, without adjusting thecomparative financial statement data in the previous period. The implementation of this regulationhas not had a significant impact on the company’s financial condition and operating results.
2) On Nov. 30, 2022, the Ministry of Finance issued Interpretation No. 16 of the AccountingStandards for Business Enterprises (Cai Kuai [2022] No. 31, hereinafter referred to as“Interpretation No. 16”).
①Accounting treatment for the income tax impact of dividends related to financial instrumentsclassified as equity instruments by the issuerInterpretation No. 16 stipulates that for financial instruments classified as equity instruments byenterprises, if the relevant dividend expenses are deducted before corporate income tax inaccordance with relevant tax policies, the income tax impact related to the dividends should berecognized when determining the payable dividends, and the accounting treatment should beconsistent with the accounting treatment used in past transactions or events that generatedistributable profits. The impact of dividend income tax shall be booked into the current period’sprofit or loss or owner’s equity (including other comprehensive income items). This regulation cameinto effect from the date of promulgation. The relevant dividends payable, in case of occurringbetween January 1, 2022 and the implementation date, shall be adjusted in accordance with thisregulation; If the relevant dividends were paid before January 1, 2022 and the relevant financialinstruments have not been derecognized on January 1, 2022, retrospective adjustments should bemade. The implementation of this regulation has not had a significant impact on the company'sfinancial condition and operating results.
②Accounting treatment for enterprises to modify cash settled share-based payments to equitysettled share-based paymentsInterpretation No. 16 clarifies that if an enterprise modifies the terms and conditions of a cash settledshare-based payment agreement to become an equity settled share-based payment, on themodification date (whether occurring during the waiting period or after the end), the equity settledshare-based payment shall be measured at the fair value of the granted equity instrument on the dateof modification, and the services obtained shall be included in the capital reserve and meanwhile,the recognition of cash settled share-based payments that have been recognized as liabilities on themodification date shall be terminated, and the difference between the two is recorded in the currentprofit and loss. This regulation shall come into effect from the date of promulgation, and any newtransactions occurring from January 1, 2022 to the implementation date shall be adjusted inaccordance with such regulation; If the relevant transactions that occurred before January 1, 2022were not processed in accordance with this regulation, retrospective adjustments should be made,and the cumulative impact should be adjusted to the retained earnings and other related items as ofJanuary 1, 2022, without adjusting the comparative financial statement data in the previous period.The implementation of this regulation has not had a significant impact on the company’s financialcondition and operating results.
(2) Changes of important accounting estimations
Nil
33. Significant accounting judgments and estimates
In the process of applying the Company's accounting policies, due to the inherent uncertainty ofbusiness activities, the Company needs to judge, estimate and assume the book value of the reportitems cannot be accurately measured. These judgments, estimates and assumptions are made on thebasis of the historical experience of the Company’s management and by considering other relevantfactors, which shall impact the reported amounts of income, expenses, assets and liabilities and thedisclosure of contingent liabilities on the balance sheet date. However, the actual results caused bythe estimated uncertainties may differ from the management's current estimates of the Company soas to carry out the significant adjustments to the book value of the assets or liabilities to be affected.The Company regularly reviews the aforementioned judgments, estimates and assumptions on thebasis of continuing operations, the changes in accounting estimates only affect the current period,of which the impacts are recognized in the current period; the changes in accounting estimates notonly affect the current period but also the future periods, of which the impacts are recognized in thecurrent and future periods.On the balance sheet date, the important areas of the financial statements that the Company needsto judge, estimate and assume are as follows:
(1) Provision for bad debts
The Company has used the expected credit loss model to assess the impairment of financialinstruments. The application of the expected credit loss model requires significant judgement andestimates, and must consider all reasonable and evidence-based information, including forward-looking information. In making such judgments and estimates, the Company infers the expectedchanges in debtors’ credit risks based on historical repayment data combined with economic policies,macroeconomic indicators, industry risks and other factors.
(2) Inventory falling price reserves
According to the inventory accounting policies, the Company measures by the comparison betweenthe cost and the net realizable value, if the cost is higher than the net realizable value and the oldand unsalable inventories, the Company calculates and withdraws the inventory impairment. Theinventory devalues to the net realizable value by evaluating the inventory’s vendibility and netrealizable value. To identify the inventory impairment, the management needs to obtain theunambiguous evidences, and consider the purpose to hold the inventory, and judge and estimate theimpacts of events after the balance sheet date. The actual results and the differences between thepreviously estimated results shall affect the book value of inventory and the provision or return ofthe inventory impairment during the period estimated to be changed.
(3) Preparation for the impairment of non-financial and non-current assetsThe Company checks whether the non-current assets except for the financial assets may decrease invalue at the balance sheet date. For the intangible assets with indefinite service life, in addition tothe annual impairment test, the impairment test is also needed when there is a sign of impairment.
For the other non-current assets except for the financial assets, the impairment test is needed whenit indicates that the book amounts may not be recoverable.When the book value of the asset or group of assets exceeds its recoverable amount, i.e. the higherbetween the net amount by subtracting the disposal costs from the fair value and the present valueof expected future cash flows, it indicates the impairment.As for the net amount by subtracting the disposal costs from the fair value, refer to the salesagreement price similar to the assets in the fair trade or the observable market price, and subtractthe incremental costs determination directly attributable to the disposal of the asset.When estimating the present value of the future cash flow, the Company needs to make significantjudgments to the output, price, and related operating expenses of the asset (or asset group) and thediscount rate used for calculating the present value. When estimating the recoverable amount, theCompany shall adopt all the relevant information can be obtained, including the prediction relatedto the output, price, and related operating expenses based on the reasonable and supportableassumptions.The Company tests whether its business reputation decreases in value every year, which requires toestimating the present value of the asset group allocated with goodwill or the future cash flowcombined by the asset group. When estimating the present value of the future cash flow, theCompany needs to estimate the future cash flows generated by the asset group or the combinationof asset group, and select the proper discount rate to determine the present value of the future cashflows.
(4) Depreciation and amortization
The Company depreciates and amortizes the investment property, fixed assets and intangible assetsaccording to the straight-line method in the service life after considering the residual value. TheCompany regularly reviews the service life to determine the depreciation and amortization expenseamount to be reckoned in each reporting period. The service life is determined by the Companybased on the past experience of similar assets and the expected technological updating. If theprevious estimates have significant changes, the depreciation and amortization expense shall beadjusted in future periods.
(5) Fair value of financial instrument
Financial instruments that do not have active markets to provide quotes need to use valuationtechniques to determine fair value. Valuation techniques include the latest transaction information,discounted cash flow methods, and option pricing models. The Company has established a set ofwork processes to ensure that qualified personnel are responsible for the calculation, verificationand review of fair value. The valuation model used by the Company uses the market information asmuch as possible and uses the Company-specific information as little as possible. It should be notedthat part of the information used in the valuation model requires management’s estimation (such asdiscount rate, target exchange rate volatility, etc.). The Company regularly reviews the above
estimates and assumptions and makes adjustments if necessary.
(6) Income tax
In the Company’s normal business activities, the final tax treatment and calculation of sometransactions have some uncertainties. Whether some projects can be disbursed from the cost andexpenses before taxes requires needs to get approval from the tax authorities. If the final affirmationof these tax matters differs from the initially estimated amount, the difference shall have an impacton its current and deferred income taxes during the final identification period.
IV. Taxation
1.Major taxes and tax rates
Tax | Basis | Tax rate |
VAT | The output tax is calculated based on the taxable income, and VAT is calculated based on the difference after deducting the input tax available for deduction for the current period | 25%(IRD, Denmark), 22%(VHIT,Italy), 21%(Borit, Belgium), 13%, 9%, 6%, Collection rate 5% |
City maintaining & construction tax | Turnover tax payable | 7%, 5% |
Educational surtax | Turnover tax payable | 5% |
Corporation income tax | Taxable income | 15%, 20%, 21% (IRD America, Borit, America), 22% (IRD, Denmark), 24%(VHIT,Italy), 25%(Borit, Belgium) |
2.Tax incentives
The Company, WFJN, WFLD, WFTT and WFMA are recognized as high-tech enterprises in 2020and enjoy a preferential income tax rate of 15% from January 1, 2020 to December 31, 2022.WFAM is recognized as a high-tech enterprise in 2021 and will enjoy a preferential income tax rateof 15% from January 1, 2021 to December 31, 2023. WFSC is recognized as a high-tech enterprisein 2022 and will enjoy a preferential income tax rate of 15% from January 1, 2022 to December 31,2024.According to the “Continuation of the Enterprise Income Tax Policies for Western Development ”No.23 (Year of 2020) issued together by Ministry of Finance, SAT and NDRC, from January 1,2011 to December 31, 2030, the enterprises located in the west region and mainly engaged in theindustrial projects stipulated in the Catalogue of Encouragement Industries in Western China, andwhose main business income accounting for more than 60% of the total income of the enterprise in
the current year can pay the corporate income tax at the tax rate of 15%. In the first half year of2022, WFLD (Chongqing) paid its corporate income tax at the tax rate of 15%.In 2022, WFLD (Wuhan) was a qualified small and low-profit enterprises, and the part of taxableincome that did not exceed 1 million Yuan was included in the taxable income at a reduced rate of
12.5%, and the corporate income tax was paid at the tax rate of 20%; while the part of the taxableincome exceeding 1 million Yuan but not exceeding 3 million Yuan was included in the taxableincome at a reduced rate of 25%, and the corporate income tax was paid at the tax rate of 20%.V. Notes to major items in consolidated financial statements(There is no special explanation for the following items. The unit of amount isRMB. The ending period refers to December 31, 2022, the beginning period refersto January 1, 2022, the current period refers to the year 2022, and the previousperiod refers to the year 2021.)
1.Monetary funds
In RMB
Item | Ending balance | Opening balance |
Cash on hand | 51,818.51 | 150,438.79 |
Cash in bank | 2,304,848,889.90 | 1,864,868,497.94 |
Other Monetary funds | 84,651,222.35 | 31,044,328.96 |
Total | 2,389,551,930.76 | 1,896,063,265.69 |
Including: Total amount of funds deposited overseas | 324,409,336.06 | 69,969,414.25 |
The total amount of funds restricted on use due to mortgage, pledge, or freezing | 51,080,295.65 | 31,044,328.96 |
Other explanationThe ending balance of other monetary fund includes RMB 32,216,896.41 deposited in the stockrepurchase account and RMB 24,368,385.65 deposited in the bank acceptance deposit,cash depositfor Mastercard RMB 199,660.00, in-transit dividends RMB 1,262,280.00, IRD performance bondRMB 7,487,250.00, the foreign exchange contract margin RMB 18,840,000.00, in-transit foreignexchange fund RMB 91,750.29, judicial frozen fund RMB 180,000.00, and ETC freezing RMB5,000.00. The in-transit dividends RMB 1,262,280.00 was a portion of the dividend distributed byMiracle Automation (002009), a trading financial asset held by the company, from 2017 to 2022,which was not transferred to the company’s current account due to account issues.
2.Trading financial asset
In RMB
Item | Ending balance | Opening balance |
Financial assets measured at fair value and whose changes are included | 2,718,820,654.87 | 6,076,436,069.42 |
in current profit or loss | ||
Including: SNAT | 78,834,732.00 | 153,643,308.00 |
Miracle Automation | 66,693,600.00 | 113,793,600.00 |
Lifan Technology | 48,516.34 | 77,802.11 |
Toyze Auto | 462,414.48 | -- |
Foreign exchange contracts | -- | 74,734,940.30 |
Other debt and equity instrument investments | 2,572,781,392.05 | 5,734,186,419.01 |
Total | 2,718,820,654.87 | 6,076,436,069.42 |
3. Note receivable
(1) Classification of notes receivable
In RMB
Item | Ending balance | Opening balance |
Bank acceptance bill | -- | 968,022,652.08 |
Trade acceptance bill | 135,559,024.27 | 148,527,534.13 |
Total | 135,559,024.27 | 1,116,550,186.21 |
In RMB
Category | Ending balance | ||||
Book balance | Bad debts reserve | Book value | |||
Amount | Ratio(%) | Amount | Accrued ratio(%) | ||
Note receivable with bad debt provision accrued on portfolio | 135,559,024.27 | 100.00 | -- | -- | 135,559,024.27 |
Portfolio 1: bank acceptance bill | -- | -- | -- | -- | -- |
Portfolio 2: trade acceptance bill | 135,559,024.27 | 100.00 | -- | -- | 135,559,024.27 |
Total | 135,559,024.27 | 100.00 | -- | -- | 135,559,024.27 |
On December 31, 2022, the Company measured the bad debt reserve based on the expected creditloss for the whole duration, and no bad debt reserve was required for bank acceptance andcommercial acceptance. The Company believes that there is no significant credit risk in the bankacceptance bill held by the company and it will not cause significant losses due to bank default.
(2) Notes receivable already pledged by the Company at the end of the period
In RMB
Item | Amount pledge at period-end |
Bank acceptance bill | -- |
Trade acceptance bill | 82,908,186.94 |
Total | 82,908,186.94 |
(3) Notes endorsement or discount and undue on balance sheet date
In RMB
Item | Amount derecognized at period-end | Amount not derecognized at period-end |
Bank acceptance bill | -- | -- |
Trade acceptance bill | -- | 1,214,398.69 |
Total | -- | 1,214,398.69 |
(4) Notes transfer to account receivable due for failure implementation by drawer at period-end
In RMB
Item | Amount transfer to account receivable at period-end |
Trade acceptance bill | 7,201,691.00 |
Other explanationThe trade acceptance bill that the company transferred to the accounts receivable due to in 2018 the failure of thedrawer to perform the agreement at the end of the period were the bills of the subsidiaries controlled by BaotaPetrochemical Group Co., Ltd. and the bills accepted by Baota Petrochemical Group Finance Co., Ltd. (hereinafterreferred to as “BD bills”); In 2018, the amount transferred to account receivable was 7 million yuan, receivables of
1.7 million yuan were recovered in 2019, receivables of 2 million yuan increased in 2020 and enforced money 98,309yuan was received in the reporting period.
4. Account receivable
(1) Classification of account receivable
In RMB
Category | Ending balance | ||||
Book balance | Bad debt reserve | Book value | |||
Amount | Ratio (%) | Amount | Accrued ratio (%) | ||
Account receivable with bad debt provision accrued on a single basis | 57,806,705.14 | 1.80 | 57,806,705.14 | 100.00 | -- |
Account receivable with bad debt provision accrued on portfolio | 3,149,157,700.73 | 98.20 | 21,667,523.48 | 0.69 | 3,127,490,177.25 |
Total | 3,206,964,405.87 | 100.00 | 79,474,228.62 | 2.48 | 3,127,490,177.25 |
In RMB
Category | Opening balance | ||||
Book balance | Bad debt reserve | Book value | |||
Amount | Ratio (%) | Amount | Accrued ratio (%) |
Account receivable with bad debt provision accrued on a single basis | 61,361,142.44 | 2.87 | 61,361,142.44 | 100.00 | -- |
Account receivable with bad debt provision accrued on portfolio | 2,076,986,857.82 | 97.13 | 23,186,564.05 | 1.12 | 2,053,800,293.77 |
Total | 2,138,348,000.26 | 100.00 | 84,547,706.49 | 3.95 | 2,053,800,293.77 |
①Bad debt provision accrued on single basis
In RMB
Name | Ending balance | |||
Book balance | Bad debt reserve | Accrued ratio(%) | Accrued causes | |
Hubei Meiyang Auto Industry Co., Ltd. | 20,139,669.45 | 20,139,669.45 | 100.00 | Have difficulty in collection |
Hunan Leopaard Auto Co., Ltd. | 8,367,245.47 | 8,367,245.47 | 100.00 | Have difficulty in collection |
BD bills | 7,201,691.00 | 7,201,691.00 | 100.00 | Have difficulty in collection |
Linyi Zotye Automobile Components Manufacturing Co., Ltd. | 6,193,466.77 | 6,193,466.77 | 100.00 | Have difficulty in collection |
Tongling Ruineng Purchasing Co., Ltd. | 4,320,454.34 | 4,320,454.34 | 100.00 | Have difficulty in collection |
Brilliance Automotive Group Holdings Co., Ltd. | 3,469,091.33 | 3,469,091.33 | 100.00 | Have difficulty in collection |
Dongfeng Chaoyang Diesel Co., Ltd. | 1,823,262.64 | 1,823,262.64 | 100.00 | Have difficulty in collection |
Jiangsu Kawei Auto Industrial Group Co., Ltd. | 1,932,476.26 | 1,932,476.26 | 100.00 | Have difficulty in collection |
Jiangsu Jintan Automobile Industry Co., Ltd. | 1,059,798.43 | 1,059,798.43 | 100.00 | Have difficulty in collection |
Tianjin Levol Engine Co., Ltd. | 1,018,054.89 | 1,018,054.89 | 100.00 | Have difficulty in collection |
Other clients | 2,281,494.56 | 2,281,494.56 | 100.00 | Have difficulty in collection |
Total | 57,806,705.14 | 57,806,705.14 | 100.00 |
②Bad debt provision accrued on portfolio
In RMB
Name | Ending balance |
③In the portfolio, there is no account receivable which adopts other methods to set aside for baddebts.
④Age-based disclosure (including single withdrawal and combination withdrawal) :
In RMB
Account age | Book balance |
Within one year | 3,118,871,487.62 |
Including: within 6 months | 3,025,753,558.24 |
6 months to one year | 93,117,929.38 |
1-2 years | 19,350,208.92 |
2-3 years | 8,919,358.15 |
Over 3 years | 59,823,351.18 |
Total | 3,206,964,405.87 |
(2) Bad debt provision accrued collected or reversal
In RMB
Category | Opening balance | Amount changed in the period | Ending balance | ||||
Accrued | Collected or reversal | Charged off | Translation of foreign currency statements | Consolidation increase | |||
Bad debt provision | 84,547,706.49 | 2,904,080.14 | 2,676,427.23 | 5,608,467.36 | 76,823.85 | 230,512.73 | 79,474,228.62 |
Important bad debt provision collected or reversal: Nil
(3) Account receivable actually charged off in the Period
In RMB
Book balance | Bad debt reserve | Accrued ratio(%) | |
Within 6 months | 3,024,862,168.01 | -- | -- |
6 months to one year | 92,819,798.57 | 9,281,979.84 | 10.00 |
1-2 years | 18,948,517.89 | 3,789,703.59 | 20.00 |
2-3 years | 6,552,293.67 | 2,620,917.46 | 40.00 |
Over 3 years | 5,974,922.59 | 5,974,922.59 | 100.00 |
Total | 3,149,157,700.73 | 21,667,523.48 | 0.69 |
Item
Item | Amount charged off | Whether the payment is generated by related party transactions |
Zhejiang Zotye Automobile Co., Ltd. | 3,059,115.67 | N |
Ruili Jifeng Import and Export Co., Ltd | 1,091,409.60 | N |
Chonqqing Branch of Hunan | 935,638.55 | N |
(4) Top 5 receivables at ending balance by arrears party
In RMB
Name | Ending balance of account receivable | Ratio in total ending balance of account receivables(%) | Ending balance of bad debt reserve |
RBCD | 461,493,652.46 | 14.39 | 174,766.71 |
Client 2 | 376,840,900.77 | 11.75 | 70,035.30 |
Robert Bosch Company | 363,021,724.83 | 11.32 | 882,016.11 |
Client 4 | 142,812,092.97 | 4.45 | 60,548.15 |
Client 5 | 130,978,870.40 | 4.09 | 2,955,417.69 |
Total | 1,475,147,241.43 | 46.00 | 4,142,783.96 |
(5) Account receivable derecognized due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvementNil
5. Receivable financing
(1) Receivable financing
In RMB
Item | Ending balance | Opening balance |
Notes receivable | 1,918,368,845.21 | 713,017,014.50 |
Including: Bank acceptance bill | 1,918,368,845.21 | 713,017,014.50 |
Trade acceptance bill | -- | -- |
Total | 1,918,368,845.21 | 713,017,014.50 |
Other explanation:
During the management of enterprise liquidity, the company will discount or endorse transfersbefore the maturity of some bills, the business model for managing bills receivable is to collectcontractual cash flows and sell the financial asset, so it is classified as financial assets measured atfair value and whose changes are included in other comprehensive income, which is listed inreceivables financing.
(2) The Company's pledged receivables financing at the end of the period
Jiangnan Auto Co., Ltd | ||
Sporadic clients | 522,303.54 | N |
Total | 5,608,467.36 |
In RMB
Item | Amount pledge at period-end |
Bank acceptance bill | 530,337,600.45 |
Trade acceptance bill | -- |
Total | 530,337,600.45 |
(3) Receivables financing endorsed or discounted by the Company at the end of the periodand not due at the end of the period
In RMB
Item | Amount derecognized at period-end | Amount not derecognized at period-end |
Bank acceptance bill | 269,050,791.15 | -- |
Trade acceptance bill | -- | -- |
Total | 269,050,791.15 | -- |
6. Account paid in advance
(1) Account age of account paid in advance
In RMB
Account age | Ending balance | Opening balance | ||
Amount | Ratio(%) | Amount | Ratio(%) | |
Within one year | 88,207,782.70 | 93.51 | 172,019,278.72 | 96.61 |
1-2 years | 5,066,837.28 | 5.37 | 3,318,636.20 | 1.86 |
2-3 years | 778,819.68 | 0.83 | 1,140,843.34 | 0.64 |
Over 3 years | 270,414.21 | 0.29 | 1,580,491.73 | 0.89 |
Total | 94,323,853.87 | 100.00 | 178,059,249.99 | 100.00 |
Explanation of the reasons why prepayments with an aging of over 1 year and significant amountswere not settled in a timely mannerNil
(2) Top 5 accounts paid in advance at ending balance by prepayment object
Total year-end balance of top five account paid in advance by prepayment object amounted to 45,793,646.66 yuan,takes 48.55 percent of the total advance payment at year-end.
7. Other account receivables
In RMB
Item | Ending balance | Opening balance |
Interest receivable | -- | -- |
Dividend receivable | 147,000,000.00 | -- |
Other account receivables | 1,117,507,456.47 | 17,908,078.54 |
Total | 1,264,507,456.47 | 17,908,078.54 |
(1) Interest receivable
Nil
(2) Dividend receivable
1) Category of dividend receivable
In RMB
Item (or invested enterprise) | Ending balance | Opening balance |
Wuxi WFEC Catalyst Co., Ltd. | 147,000,000.00 | -- |
Total | 147,000,000.00 | -- |
2) Important dividend receivable with account age over one yearNil
(3) Other accounts receivable
1) Classify other accounts receivable by nature
In RMB
Nature | Ending book balance | Opening book balance |
Intercourse funds from units | 1,894,818.08 | 1,991,247.85 |
Cash deposit | 9,087,881.41 | 6,212,842.61 |
Staff loans and petty cash | 1,823,842.27 | 555,076.61 |
Social security and provident fund paid | 11,341,820.83 | 10,547,050.70 |
WFTR “platform trade” business portfolio | 2,741,499,131.95 | -- |
Other | 66,663.56 | 1,952,403.17 |
Total | 2,765,714,158.10 | 21,258,620.94 |
2)Accrued of bad debt provision
In RMB
Bad debt reserve | Phase I | Phase II | Phase III | Total |
Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
Balance on Jan. 1, 2022 | 3,318,719.00 | -- | 31,823.40 | 3,350,542.40 |
Balance of Jan. 1, 2022 in the period | -- | -- | -- | -- |
--Transfer into the second period | -- | -- | -- | -- |
--Transfer into the third period | -- | -- | -- | -- |
--Transfer back to the second period | -- | -- | -- | -- |
--Transfer back to the first period | -- | -- | -- | -- |
Current accrued | 1,785,811.16 | -- | 1,644,068,327.93 | 1,645,854,139.09 |
Current reversal | 200,553.00 | -- | 96.60 | 200,649.60 |
Current charge off | 1,774,500.00 | -- | -- | 1,774,500.00 |
Other changes | 977,169.74 | -- | -- | 977,169.74 |
Balance on Dec. 31, 2022 | 4,106,646.90 | -- | 1,644,100,054.73 | 1,648,206,701.63 |
By account age (including single withdrawal and combination withdrawal):
In RMB
Account age | Book balance |
Within one year | 2,758,812,664.93 |
Including: Within 6 months | 1,919,096,046.09 |
6 months to one year | 839,716,618.84 |
1-2 years | 1,358,405.20 |
2-3 years | 2,962,710.00 |
Over 3 years | 2,580,377.97 |
Total | 2,765,714,158.10 |
3) Bad debt provision accrued, collected or reversal
In RMB
Category | Opening balance | Change in current period | Ending balance | ||||
Accrued | Collected or reversal | Charge off | Increase in business consolidation | Translation of foreign currency statements | |||
Bad debt provision | 3,350,542.40 | 1,645,854,139.09 | 200,649.60 | 1,774,500.00 | 928,478.37 | 48,691.37 | 1,648,206,701.63 |
4) Other accounts actually charged off during the reporting period
In RMB
Item | Amount charged off |
Ningbo Jiangbei High-Tech Industry Park Development Construction Co., Ltd. | 1,767,000.00 |
Other sporadic | 7,500.00 |
Total | 1,774,500.00 |
5) Top 5 other accounts receivable at ending balance by arrears party
In RMB
Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other accounts receivables(%) | Ending balance of bad debt reserve |
WFTR “platform trade” business portfolio | See “Other explanations” | 2,741,499,131.95 | Within one year | 99.12 | 1,644,068,327.93 |
Wuxi China Resources Gas Co. LTD | Deposit margin | 1,364,750.00 | Within 3 years | 0.05 | 492,910.00 |
Zhenkunxing Industrial Supermarket (Shanghai) Co., LTD | Deposit margin | 1,000,000.00 | 2-3 years | 0.04 | 400,000.00 |
Wuxi Xingzhou Energy Development Co. LTD | Deposit margin | 887,227.72 | Within one year | 0.03 | 28,176.35 |
Wuxi Youlian Thermoelectric Co. LTD | Deposit margin | 750,000.00 | Over 3 years | 0.03 | 750,000.00 |
Total | 2,745,501,109.67 | 99.27 | 1,645,739,414.28 |
Other explanations: For details of WFTR “platform trade” business portfolio, please refer to thedescription in Note-XIV-6 "Other Significant Transactions and Matters Affecting Investors'Decisions". The ending balance of the "platform trade" business portfolio of WFTR includes thebalance of other receivables shown below NoteX-6, (5).
6) Other account receivables related to government grants: Nil
7) Other accounts receivable derecognized due to the transfer of financial assets: Nil
8) The amount of assets and liabilities formed by transferring other receivables and continuing tobe involved: Nil
8. Inventory
(1) Category of inventory
In RMB
Item | Ending balance | Opening balance | ||||
Book balance | Inventory depreciation reserve | Book value | Book balance | Inventory depreciation reserve | Book value | |
Stock materials | 796,941,337.63 | 160,326,360.21 | 636,614,977.42 | 693,636,748.61 | 84,791,307.00 | 608,845,441.61 |
Goods in process | 437,653,321.23 | 31,641,606.69 | 406,011,714.54 | 406,224,039.14 | 18,593,866.28 | 387,630,172.86 |
Finished | 1,382,835,104.89 | 142,342,140.58 | 1,240,492,964.31 | 2,578,635,721.74 | 129,714,961.12 | 2,448,920,760.62 |
goods | ||||||
Total | 2,617,429,763.75 | 334,310,107.48 | 2,283,119,656.27 | 3,678,496,509.49 | 233,100,134.40 | 3,445,396,375.09 |
(2) Inventory depreciation reserve
In RMB
Item | Opening balance | Current increased | Ending balance | |||
Accrued | Resale | Increase in business consolidation | Translation of foreign currency statements | |||
Stock materials | 84,791,307.00 | 84,615,829.62 | 22,186,378.18 | 12,735,816.59 | 369,785.18 | 160,326,360.21 |
Goods in process | 18,593,866.28 | 20,325,267.14 | 10,293,454.92 | 2,588,210.23 | 427,717.96 | 31,641,606.69 |
Finished goods | 129,714,961.12 | 76,669,336.36 | 66,441,441.34 | 2,262,899.99 | 136,384.45 | 142,342,140.58 |
Total | 233,100,134.40 | 181,610,433.12 | 98,921,274.44 | 17,586,926.81 | 933,887.59 | 334,310,107.48 |
① Net realizable value of inventory is equal to during the daily activities, the estimated sale price
of inventory less costs which are going to happen by estimation till works completed, salesprice estimated and relevant taxes.
②Accrued basis for inventory depreciation reserve:
Item | Accrued basis for inventory impairment provision | The specific basis for determining net realizable value |
Stock materials
Stock materials | The net realizable value of materials used to produce finished goods for sale is less than its carrying value | Results from the estimated sale price of such inventory less the cost what will happen, estimated sales expenses and relevant taxes till the goods completed |
Goods in process | The net realizable value of products in process used to produce finished products for sale is lower than its book value | Results from the estimated sale price of such inventory less the cost what will happen, estimated sales expenses and relevant taxes till the goods completed |
Finished goods | Net realizable value is less than its carrying value | Based on the estimated selling price minus the amount of taxes to be borne in the process of sales |
③ Reasons of inventory falling price reserves written off in current period:
Item | Reasons of written off |
Stock materials | Used for production and the finished goods are realized sales |
Goods in process | Goods in process completed in the Period and corresponding finished goods are realized sales in the reporting period |
Finished goods | Sold in the reporting period |
(3) Explanation on capitalization of borrowing costs at ending balance of inventoryNil
9. Other current assets
In RMB
Item | Ending balance | Opening balance |
Receivable export tax rebates | 14,325,020.52 | 6,457,803.72 |
VAT refund receivable | 25,444,657.63 | 3,985,115.26 |
Prepaid taxes and VAT retained | 364,556,192.43 | 204,700,549.12 |
Input tax to be deducted and certification | 1,192,752.68 | 6,274.43 |
Other | 25,028,577.98 | 5,171,179.97 |
Total | 430,547,201.24 | 220,320,922.50 |
10.Long-term equity investment
In RMB
The invested entity | Opening balance | Current changes (+/ -) | Ending balance | Ending balance of depreciation reserves | |||||||
Additional investment | Capital reduction | Investment gain/loss recognized under equity method | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Impairment accrued | Translation of foreign currency statements | ||||
Joint venture | |||||||||||
Wuxi WFEC Catalyst Co., Ltd. | 794,489,840.10 | --- | --- | 177,038,969.79 | -- | --- | 147,000,000.00 | -- | --- | 824,528,809.89 | -- |
Robert Bosch Powertrain Ltd. | 3,340,114,235.45 | -- | -- | 1,085,484,785.75 | -- | --- | 765,837,710.23 | -- | --- | 3,659,761,310.97 | -- |
Zhonglian Automobile Electronic Co., Ltd. | 1,378,575,785.77 | -- | -- | 375,237,528.28 | -- | --- | 194,400,000.00 | -- | --- | 1,559,413,314.05 | -- |
Wuxi | 46,014,272.27 | -- | -- | 18,815,540.24 | -- | -- | 10,000,000.00 | -- | --- | 54,829,812.51 | -- |
Weifu Precision Machinery Manufacturing Co., Ltd. | |||||||||||
Changchun Xuyang Weifu Automobile components Technology Co., Ltd. | 10,348,819.93 | -- | -- | -727,085.10 | -- | --- | -- | -- | --- | 9,621,734.83 | -- |
Precors GmbH | 5,345,878.98 | -- | 20,698.24 | --- | --- | --- | --- | 151,347.34 | 5,517,924.56 | ||
Wuxi Chelian Tianxia Information Technology Co., Ltd. | 143,055,955.62 | 37,000,000.00 | -- | -10,910,753.47 | -- | --- | -- | -- | --- | 169,145,202.15 | |
Total | 5,717,944,788.12 | 37,000,000.00 | -- | 1,644,959,683.73 | -- | -- | 1,117,237,710.23 | -- | 151,347.34 | 6,282,818,108.96 | -- |
Explanation on those holding less than 20% of the voting rights but with significant influence:
(1) Precors GmbH:
The wholly-owned subsidiary of the Company, Borit, holds 8.11% equity of Precors GmbH. Boritappointed a director to Precors GmbH. Though the representative, Borit can participate in theoperation policies formulation of Precors GmbH, and thus exercise a significant influence overPrecors GmbH.
(2) Wuxi Chelian Tianxia Information Technology Co., Ltd. (Hereinafter referred to as "ChelianTianxia"):
The Company holds 9.8452% equity of Chelian Tianxia, and appointed a director to Chelian Tianxia.Though the representative, the Company can participate in the operation policies formulation ofChelian Tianxi, and thus exercise a significant influence over Chelian Tianxi.
11.Other equity instrument investment
In RMB
Item | Ending balance | Opening balance |
Wuxi Xidong Science & Technology Industrial Park | 5,000,000.00 | 5,000,000.00 |
Beijing Zhike Industry Investment Holding Group Co., Ltd. | 75,940,000.00 | 75,940,000.00 |
Rare earth Catalysis Innovation Research Institute (Dongying) Co., Ltd. | 4,108,000.00 | 4,108,000.00 |
Wuxi Xichang Microchip Semi-Conductor | 592,742,690.00 | 200,000,000.00 |
Total | 677,790,690.00 | 285,048,000.00 |
12.Other non-current financial assets
In RMB
Item | Ending balance | Opening balance |
Guolian Securities | 186,608,914.00 | 208,795,178.00 |
Investments in other debt instruments and equity instruments held for more than one year | 1,140,000,000.00 | 1,482,000,000.00 |
Total | 1,326,608,914.00 | 1,690,795,178.00 |
13. Investment real estate
(1) Investment real estate measured by cost
In RMB
Item | House and Building | Land use right | Construction in progress | Total |
I. Original book value | ||||
1.Opening balance | 65,524,052.61 | -- | -- | 65,524,052.61 |
2.Current increased | 41,662,196.86 | -- | -- | 41,662,196.86 |
(1) Outsourcing | -- | -- | -- | -- |
(2) Inventory\fixed assets\construction in process transfer-in | 41,662,196.86 | -- | -- | 41,662,196.86 |
(3) Increased by combination | -- | -- | -- | -- |
3.Current decreased | 9,494,473.20 | -- | -- | 9,494,473.20 |
(1) Disposal | -- | -- | -- | -- |
(2)Transfer from rental to self use | 9,494,473.20 | -- | -- | 9,494,473.20 |
4.Ending balance | 97,691,776.27 | -- | -- | 97,691,776.27 |
II. Accumulated depreciation and accumulated amortization | ||||
1.Opening balance | 46,136,306.05 | -- | -- | 46,136,306.05 |
2.Current increased | 7,278,108.90 | -- | -- | 7,278,108.90 |
(1) Accrued or amortization | 2,331,022.21 | -- | -- | 2,331,022.21 |
(2)Transferred from inventory, fixed assets, and construction in progress | 4,947,086.69 | -- | -- | 4,947,086.69 |
3.Current decreased | 5,019,508.41 | -- | -- | 5,019,508.41 |
(1) Disposal | -- | -- | -- | -- |
(2)Transfer from rental to self use | 5,019,508.41 | -- | -- | 5,019,508.41 |
4.Ending balance | 48,394,906.54 | -- | -- | 48,394,906.54 |
III. Depreciation reserves | ||||
1.Opening balance | -- | -- | -- | -- |
2.Current increased | -- | -- | -- | -- |
(1) accrued | -- | -- | -- | -- |
3. Current decreased | -- | -- | -- | -- |
(1) Disposal | -- | -- | -- | -- |
(2) Other transfer-out | -- | -- | -- | -- |
4.Ending balance | -- | -- | -- | -- |
IV. Book value | ||||
1.Ending Book value | 49,296,869.73 | -- | -- | 49,296,869.73 |
2.Opening Book value | 19,387,746.56 | -- | -- | 19,387,746.56 |
(2) Investment real estate measured at fair value
Nil
14. Fixed assets
(1) Fixed assets
In RMB
Item | House and Building | Machinery equipment | Transportation equipment | Electronic and other equipment | Land | Total |
I. Original book value: | ||||||
1.Opening balance | 1,570,238,484.44 | 3,540,288,690.19 | 32,772,506.07 | 714,328,321.31 | -- | 5,857,628,002.01 |
2.Current increased | 414,184,200.80 | 1,105,926,860.71 | 7,106,091.81 | 385,478,644.98 | 29,446,173.31 | 1,942,141,971.61 |
(1) Purchase | 244,898.40 | 7,530,517.28 | 367,371.68 | 713,097.76 | -- | 8,855,885.12 |
(2)Construction in progress transfer-in | 282,682,532.87 | 743,087,427.45 | 6,738,720.13 | 91,270,299.75 | -- | 1,123,778,980.20 |
(3)Investment real estate transfer-in | 8,639,863.02 | -- | -- | -- | -- | 8,639,863.02 |
(4)Financial lease transfer in | -- | 12,268,137.32 | -- | -- | -- | 12,268,137.32 |
(5)Increased by combination | 122,616,906.51 | 343,040,778.66 | -- | 293,495,247.47 | 29,446,173.31 | 788,599,105.95 |
3.Current decreased | 54,225,619.75 | 48,213,762.73 | 1,332,428.09 | 64,336,862.53 | -- | 168,108,673.10 |
(1)Disposal or scrapping | 12,563,422.89 | 48,213,762.73 | 1,332,428.09 | 64,336,862.53 | -- | 126,446,476.24 |
(2)Transfer to investment real | 41,662,196.86 | -- | -- | -- | -- | 41,662,196.86 |
estate | ||||||
4.Conversion of foreign currency financial statement | 4,328,995.47 | 15,503,048.12 | 66,093.39 | 10,831,183.40 | 1,037,118.74 | 31,766,439.12 |
5.Ending balance | 1,934,526,060.96 | 4,613,504,836.29 | 38,612,263.18 | 1,046,301,287.16 | 30,483,292.05 | 7,663,427,739.64 |
II. Accumulated depreciation | ||||||
1.Opening balance | 439,825,229.29 | 1,952,082,761.65 | 20,404,183.79 | 422,378,184.50 | -- | 2,834,690,359.23 |
2.Current increased | 110,150,684.48 | 535,453,321.58 | 2,253,579.24 | 283,736,296.65 | -- | 931,593,881.95 |
(1) accrued | 52,819,069.57 | 255,295,980.54 | 2,253,579.24 | 110,681,921.66 | -- | 421,050,551.01 |
(2)Investment real estate transfer-in | 4,699,630.83 | -- | -- | -- | -- | 4,699,630.83 |
(3)Financial lease transfer in | -- | 10,448,678.64 | -- | -- | -- | 10,448,678.64 |
(4)increased by combination | 52,631,984.08 | 269,708,662.40 | -- | 173,054,374.99 | -- | 495,395,021.47 |
3.Current decreased | 15,056,913.30 | 27,569,646.38 | 1,038,351.23 | 49,907,798.40 | -- | 93,572,709.31 |
(1) Disposal or scrapping | 10,109,826.61 | 27,569,646.38 | 1,038,351.23 | 49,907,798.40 | -- | 88,625,622.62 |
(2) Transfer to investment real estate | 4,947,086.69 | -- | -- | -- | -- | 4,947,086.69 |
4.Conversion of foreign currency financial statement | 1,891,138.02 | 11,005,788.81 | 1,956.45 | 7,892,977.17 | -- | 20,791,860.45 |
5.Ending balance | 536,810,138.49 | 2,470,972,225.66 | 21,621,368.25 | 664,099,659.92 | -- | 3,693,503,392.32 |
III. Depreciation reserves | ||||||
1.Opening balance | -- | 84,541,933.61 | 73,319.90 | 6,111,936.76 | -- | 90,727,190.27 |
2.Current increased | 13,624,811.05 | 76,592,762.00 | -- | 17,270,992.75 | 14,639,472.46 | 122,128,038.26 |
(1) Accrued | -- | -- | -- | -- | -- | -- |
(2)Increased by combination | 13,624,811.05 | 76,592,762.00 | -- | 17,270,992.75 | 14,639,472.46 | 122,128,038.26 |
3.Current decreased | 7,045.42 | 14,338,942.29 | -- | 2,101,139.20 | -- | 16,447,126.91 |
(1) Disposal or scrapping | 7,045.42 | 14,338,942.29 | -- | 2,101,139.20 | -- | 16,447,126.91 |
(2)Other | -- | -- | -- | -- | -- | -- |
4.Conversion of foreign currency financial statement | 479,554.86 | 2,107,885.69 | -- | 429,004.80 | 515,614.41 | 3,532,059.76 |
5.Ending balance | 14,097,320.49 | 148,903,639.01 | 73,319.90 | 21,710,795.11 | 15,155,086.87 | 199,940,161.38 |
IV. Book value | ||||||
1.Ending Book value | 1,383,618,601.98 | 1,993,628,971.62 | 16,917,575.03 | 360,490,832.13 | 15,328,205.18 | 3,769,984,185.94 |
2.Opening Book value | 1,130,413,255.15 | 1,503,663,994.93 | 12,295,002.38 | 285,838,200.05 | -- | 2,932,210,452.51 |
(2) Temporarily idle fixed assets: Nil
(3) Fixed assets acquired by operating lease: Nil
(4) Fixed assets without property certification held
In RMB
Item | Book value | Reasons for without the property certification |
Plant and office building of WFCA | 32,165,954.92 | Still in process of relevant property procedures |
15. Construction in progress
In RMB
Item | Ending balance | Opening balance |
Construction in progress | 509,105,587.49 | 387,429,933.08 |
Engineering materials | -- | -- |
Total | 509,105,587.49 | 387,429,933.08 |
(1) Construction in progress
In RMB
Item | Ending balance | Opening balance | ||||
Book balance | Depreciation reserves | Book value | Book balance | Depreciation reserves | Book value | |
Technical transformation of parent company | 132,814,463.95 | -- | 132,814,463.95 | 88,688,772.85 | -- | 88,688,772.85 |
Lot 103 phase V of the parent company | -- | -- | -- | 89,599,174.42 | -- | 89,599,174.42 |
WFMS rebuilding of the parent company | 20,562,758.75 | -- | 20,562,758.75 | 12,185,858.74 | -- | 12,185,858.74 |
Renovation of Xinan Branch, No. 6 Huashan Road of Parent Company | 41,493,029.41 | -- | 41,493,029.41 | -- | -- | -- |
Technical transformation of WFAM | 69,450,019.06 | -- | 69,450,019.06 | 72,318,870.79 | -- | 72,318,870.79 |
Technical transformation of WFLD | 16,739,199.84 | -- | 16,739,199.84 | 13,368,288.81 | -- | 13,368,288.81 |
Technical transformation of Denmark IRD | 82,081,060.63 | -- | 82,081,060.63 | 23,293,601.39 | -- | 23,293,601.39 |
Technical transformation of Italy VHIT | 47,822,275.01 | -- | 47,822,275.01 | -- | -- | -- |
Other projects | 98,142,780.84 | -- | 98,142,780.84 | 87,975,366.08 | -- | 87,975,366.08 |
Total | 509,105,587.49 | -- | 509,105,587.49 | 387,429,933.08 | -- | 387,429,933.08 |
(2) Changes of major construction in progress
In RMB
Item | Opening balance | Current increased | Fixed assets transfer-in in the Period | Other decreased in the Period | Ending balance |
Technical transformation of parent company | 88,688,772.85 | 530,483,541.73 | 484,206,373.45 | 2,151,477.18 | 132,814,463.95 |
Lot 103 phase V of the parent company | 89,599,174.42 | 25,082,992.38 | 114,682,166.80 | -- | -- |
WFMS rebuilding of the parent company | 12,185,858.74 | 8,376,900.01 | -- | -- | 20,562,758.75 |
Renovation of Xinan Branch, No. 6 Huashan Road of Parent Company | -- | 41,493,029.41 | -- | -- | 41,493,029.41 |
Technical transformation of WFAM | 72,318,870.79 | 142,114,233.06 | 144,334,625.25 | 648,459.54 | 69,450,019.06 |
Technical transformation of WFLD | 13,368,288.81 | 74,672,106.28 | 71,074,193.84 | 227,001.41 | 16,739,199.84 |
Technical transformation of Denmark IRD | 23,293,601.39 | 60,594,550.01 | 1,807,090.77 | -- | 82,081,060.63 |
Technical transformation of Italy VHIT | -- | 59,336,857.04 | 11,514,582.03 | -- | 47,822,275.01 |
Total | 299,454,567.00 | 942,154,209.92 | 827,619,032.14 | 3,026,938.13 | 410,962,806.65 |
Following table:
In RMB
Item | Proportion of accumulated project input to budget (%) | Project progress (%) | Accumulated amount of capitalized interest | Wherein: the capitalized amount of interest in the current period | Current interest capitalization rate (%) | Source of funds |
Technical transformation of parent company | -- | -- | -- | -- | -- | Company accumulation funds |
Lot 103 phase V of the parent company | -- | -- | -- | -- | -- | Company accumulation funds |
WFMS rebuilding of the parent company | -- | -- | -- | -- | -- | Company accumulation funds |
Renovation of Xinan Branch, No. 6 Huashan Road of Parent Company | -- | -- | -- | -- | -- | Company accumulation funds |
Technical transformation of WFAM | -- | -- | -- | -- | -- | Company accumulation funds |
Technical transformation of WFLD | -- | -- | -- | -- | -- | Company accumulation funds |
Technical transformation of Denmark IRD | -- | -- | -- | -- | -- | Company accumulation funds |
Technical transformation of Italy VHIT | -- | -- | -- | -- | -- | Company accumulation funds |
Total |
(3) The provision for impairment of construction projects
Nil
16. Right-of-use assets
In RMB
Item | Building | Mechanical equipment | Total |
I. Original book value: | |||
1.Opening balance | 17,604,684.01 | 21,763,912.85 | 39,368,596.86 |
2.Current increased | 15,589,326.89 | 15,206,270.58 | 30,795,597.47 |
(1)Increased lease | 13,711,753.69 | 15,206,270.58 | 28,918,024.27 |
(2)Increased by combination | 1,877,573.20 | 1,877,573.20 | |
3.Current decreased | -- | 12,268,137.32 | 12,268,137.32 |
(1) Transfer to own assets | -- | 12,268,137.32 | 12,268,137.32 |
4. Conversion of foreign currency financial statement | 1,222,038.96 | 319,399.52 | 1,541,438.48 |
5.Ending balance | 34,416,049.86 | 25,021,445.63 | 59,437,495.49 |
II. Accumulated depreciation |
1.Opening balance | 4,140,756.41 | 12,079,434.87 | 16,220,191.28 |
2.Current increased | 6,596,209.61 | 4,961,207.02 | 11,557,416.63 |
(1) Accrued | 5,526,140.33 | 4,961,207.02 | 10,487,347.35 |
(2)increased by combination | 1,070,069.28 | 1,070,069.28 | |
3.Current decreased | -- | 10,448,678.64 | 10,448,678.64 |
(1) Transfer to own assets | -- | 10,448,678.64 | 10,448,678.64 |
4. Conversion of foreign currency financial statement | 298,972.97 | -55,507.13 | 243,465.84 |
5.Ending balance | 11,035,938.99 | 6,536,456.12 | 17,572,395.11 |
III. Depreciation reserves | |||
1.Opening balance | -- | -- | -- |
2.Current increased | -- | -- | -- |
(1) Accrued | -- | -- | -- |
3.Current decreased | -- | -- | -- |
(1) Disposal | -- | -- | -- |
4. Translation of foreign currency statements | -- | -- | -- |
5.Ending balance | -- | -- | -- |
IV. Book value | |||
1.Ending Book value | 23,380,110.87 | 18,484,989.51 | 41,865,100.38 |
2.Opening Book value | 13,463,927.60 | 9,684,477.98 | 23,148,405.58 |
17. Intangible assets
(1) Intangible assets
In RMB
Item | Land use right | Computer software | Trademark and trademark license | Patent and non-patent technology | Total |
I. Original book value | |||||
1.Opening balance | 381,012,520.44 | 123,152,207.22 | 41,597,126.47 | 181,889,330.47 | 727,651,184.60 |
2.Current increased | 854,610.18 | 35,211,964.82 | 59,548,754.53 | 95,615,329.53 | |
(1) Purchase | -- | 1,689,742.12 | 3,804,434.00 | 5,494,176.12 | |
(2)Construction in progress | -- | 25,168,225.22 | 25,168,225.22 | ||
(3)Increased by combination | -- | 8,353,997.48 | 50,744,320.53 | 59,098,318.01 | |
(4)Shareholders' capital contribution | 5,000,000.00 | 5,000,000.00 | |||
(5)Transfer from rental to self use | 854,610.18 | 854,610.18 | |||
3.Current decreased | -- | 2,578,043.96 | 2,578,043.96 | ||
(1)Disposal or scrapping | -- | 2,578,043.96 | 2,578,043.96 | ||
(2) Other | -- |
4.Conversion of foreign currency financial statement | 545,533.29 | 6,297,657.07 | 6,843,190.36 | ||
5.Ending balance | 381,867,130.62 | 156,331,661.37 | 41,597,126.47 | 247,735,742.07 | 827,531,660.53 |
II. accumulated amortization | |||||
1.Opening balance | 103,617,738.03 | 92,880,072.81 | 9,709,000.00 | 64,204,353.94 | 270,411,164.78 |
2.Current increased | 8,701,768.78 | 28,089,883.82 | 15,612,492.50 | 52,404,145.10 | |
(1)Amortization | 8,381,891.20 | 23,420,202.87 | 15,612,492.50 | 47,414,586.57 | |
(2)Transfer from rental to self use | 319,877.58 | 319,877.58 | |||
(3)increased by combination | 4,669,680.95 | 4,669,680.95 | |||
3.Current decreased | 2,578,043.96 | 2,578,043.96 | |||
(1)Disposal or scrapping | 2,578,043.96 | 2,578,043.96 | |||
(2)Other | |||||
4.Conversion of foreign currency financial statement | 251,033.39 | 2,326,306.00 | 2,577,339.39 | ||
5.Ending balance | 112,319,506.81 | 118,642,946.06 | 9,709,000.00 | 82,143,152.44 | 322,814,605.31 |
III. Depreciation reserves | |||||
1.Opening balance | -- | -- | 16,646,900.00 | -- | 16,646,900.00 |
2.Current increased | -- | 427,123.63 | -- | -- | 427,123.63 |
(1)Accrued | -- | -- | -- | -- | -- |
(2)Increased by combination | 427,123.63 | 427,123.63 | |||
3.Current decreased | -- | -- | -- | -- | -- |
(1)Disposal or scrapping | -- | -- | -- | -- | -- |
(2)Other | -- | -- | -- | -- | -- |
4.Conversion of foreign currency financial statement | -- | 15,043.67 | -- | -- | 15,043.67 |
5.Ending balance | -- | 442,167.30 | 16,646,900.00 | -- | 17,089,067.30 |
IV. Book value | |||||
1.Ending Book value | 269,547,623.81 | 37,246,548.01 | 15,241,226.47 | 165,592,589.63 | 487,627,987.92 |
2.Opening Book value | 277,394,782.41 | 30,272,134.41 | 15,241,226.47 | 117,684,976.53 | 440,593,119.82 |
(2) Land use right without property certification held: Nil
18. Goodwill
(1) Original book value of goodwill
In RMB
Item | Opening balance | Current increased | Translation of foreign currency statements | Ending balance |
The purchase price recovered in the current period | ||||
Merged with WFTT | 1,784,086.79 | -- | -- | 1,784,086.79 |
Merged with Borit | 229,470,928.96 | -- | 6,427,359.97 | 235,898,288.93 |
Total | 231,255,015.75 | -- | 6,427,359.97 | 237,682,375.72 |
(2) Reserve for goodwill impairment
1) Goodwill generated by merging Weifu TT:
In 2010, the company consolidated Weifu Tianli through a cash capital increase, and the goodwillis the part of the merger cost greater than the fair value share of Weifu Tianli's identifiable net assets.At the end of the period, the Company conducted an impairment test on goodwill to estimate therecoverable amount of the asset group related to goodwill based on the present value of future cashflows, that is, estimating the present value of future cash flows base on the financial budget for thenext 5 years set by management and 12.39% discount rate, cash flows remain stable for years beyondthe five-year budget. The asset group identified at the time of goodwill impairment test did notchange.The key parameters determined by goodwill impairment test are as follows: 18%-19% gross profitrate and 8%-11% growth rate of operating revenue in the forecast period are used as key parametersto calculate the present value of expected future cash flows of the asset group related to goodwill.Management determines these parameters based on historical conditions prior to the forecast periodand its forecast of market development. After the test above, the Company's goodwill does not needto draw impairment reserves.
2) Goodwill generated by merging Borit:
In 2020, the Company acquired 100.00% of Borit's equity by cash purchase, and goodwill is theamount of merger cost greater than the fair value share of Borit's identifiable net assets. Accordingto the Asset Appraisal Report issued by Wanlong (Shanghai) Asset Appraisal Co., LTD. (WanlongAppraisal Word (2023) No. 40032). The recoverable value of the company's goodwill combinedwith Borit in the asset group is RMB 324.22 million, which is higher than the book value of RMB
311.24 million, so there is no impairment loss of goodwill.
19.Long-term deferred expense
In RMB
Item | Opening balance | Current increased | Amortized in the Period | Other decrease | Ending balance |
Decoration costs etc. | 15,304,783.57 | 18,381,792.34 | 5,676,279.94 | 575,939.87 | 28,586,235.84 |
20. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets that are not offset
In RMB
Item | Ending balance | Opening balance | ||
Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
Bad debt provision | 79,078,766.93 | 11,972,961.27 | 87,681,266.17 | 13,383,420.21 |
Inventory depreciation reserve | 299,752,548.93 | 46,412,618.47 | 224,955,223.94 | 37,688,819.01 |
Depreciation reserves of fixed assets | 70,008,612.21 | 12,701,929.36 | 57,218,038.14 | 8,677,481.50 |
Depreciation reserves of intangible assets | 16,646,900.00 | 2,497,035.00 | 16,646,900.00 | 2,497,035.00 |
Deferred income | 222,850,907.79 | 33,668,167.75 | 295,502,674.12 | 44,620,545.44 |
Unrealized profit from insider transactions | 43,939,348.59 | 8,056,161.37 | 65,251,129.55 | 10,531,677.19 |
Payable salary, accrued expenses etc. | 849,436,667.00 | 139,593,056.66 | 1,236,037,621.62 | 188,472,847.67 |
Depreciation assets, amortization difference | 25,570,352.82 | 4,153,581.52 | 54,047,597.49 | 8,868,412.34 |
Deductible loss | 942,706,826.57 | 142,138,790.82 | 53,658,338.05 | 11,465,129.69 |
Equity incentive | 3,066,582.11 | 459,987.32 | 80,742,533.73 | 12,498,678.30 |
Fiscal and tax differences for leasing business | 1,345,462.74 | 234,721.68 | 378,997.84 | 72,554.36 |
Total | 2,554,402,975.69 | 401,889,011.22 | 2,172,120,320.65 | 338,776,600.71 |
(2) Deferred income tax liabilities that are not offset
In RMB
Item | Ending balance | Opening balance | ||
Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
The difference between the fair value and taxation basis of WFTT assets in a merger not under the same control | 10,192,264.15 | 1,528,839.60 | 10,660,027.75 | 1,599,004.14 |
The difference between the fair value | 61,131,061.24 | 13,448,833.47 | 68,854,748.78 | 15,148,044.73 |
and taxation basis of IRD assets in a merger not under the same control | ||||
The difference between the fair value and taxation basis of Borit assets in a merger not under the same control | 21,378,918.49 | 5,344,729.59 | 25,246,551.70 | 6,311,637.91 |
The difference between the fair value and taxation basis of VH business in a merger not under the same control | 59,291,649.88 | 14,229,995.98 | -- | -- |
Change of fair value of transaction financial asset | 161,415,403.78 | 24,226,534.89 | 318,337,329.74 | 47,794,985.96 |
Accelerated depreciation of fixed assets | 700,548,497.31 | 107,631,856.23 | 294,934,456.08 | 48,772,268.60 |
Total | 1,013,957,794.85 | 166,410,789.76 | 718,033,114.05 | 119,625,941.34 |
(3) Deferred income tax assets and deferred income tax liabilities listed after off-set
In RMB
Item | Trade-off between the deferred income tax assets and liabilities | Ending balance of deferred income tax assets or liabilities after off-set | Trade-off between the deferred income tax assets and liabilities at period-begin | Opening balance of deferred income tax assets or liabilities after off-set |
Deferred income tax assets | -126,261,238.77 | 275,627,772.45 | -96,528,406.14 | 242,248,194.57 |
Deferred income tax liabilities | -126,261,238.77 | 40,149,550.99 | -96,528,406.14 | 23,097,535.20 |
(4) Details of unrecognized deferred income tax assets
In RMB
Item | Ending balance | Opening balance | Note |
Bad debt reserve | 1,648,602,163.32 | 216,982.72 | It is uncertain whether enough taxable income can be obtained in the future |
Inventory depreciation reserve | 34,557,558.55 | 8,144,910.46 | It is uncertain whether enough taxable income can be obtained in the future |
Loss from subsidiary | 529,884,134.82 | 279,247,744.04 | It is uncertain whether enough taxable income can be obtained in the future |
Depreciation reserves of fixed assets | 129,931,549.17 | 33,509,152.13 | It is uncertain whether enough taxable income can be obtained in the future |
Depreciation reserves of intangible assets | 442,167.30 | -- | It is uncertain whether enough taxable income can be obtained in the future |
Other equity instrument investment | 13,600,000.00 | 13,600,000.00 | Due to the uncertainty of obtaining evidence required by tax authorities |
Equity incentive | -- | 2,304,871.81 | It is uncertain whether enough taxable income can be obtained in the future |
Total | 2,357,017,573.16 | 337,023,661.16 |
(5) Deductible losses of unrecognized deferred income tax assets expired in following years
In RMB
Maturity year | Ending amount | Opening amount | Note |
2022 | -- | 3,781,066.93 | Operating loss occurs in domestic subsidiaries |
2023 | 2,380,501.89 | 1,171,973.53 | Operating loss occurs in domestic subsidiaries |
2024 | 12,087,441.12 | 18,520,699.71 | Operating loss occurs in domestic subsidiaries |
2025 | 12,140,693.54 | 12,151,503.80 | Operating loss occurs in domestic subsidiaries |
2026 | 46,418,486.83 | 22,596,818.84 | Operating loss occurs in domestic subsidiaries |
2027 and the following years | 160,833,781.13 | -- | Operating loss occurs in domestic subsidiaries |
No expiration period | 296,023,230.31 | 221,025,681.23 | Operating loss occurs in overseas subsidiaries |
Total | 529,884,134.82 | 279,247,744.04 |
21.Other non-current assets
In RMB
Item | Ending balance | Opening balance |
Engineering equipment paid in advance | 239,775,014.10 | 267,941,354.57 |
Contract acquisition cost | 19,855,422.27 | -- |
Large deposit certificates with a maturity of more than one year | 220,000,000.00 | -- |
Total | 479,630,436.37 | 267,941,354.57 |
22. Short-term borrowings
(1) Category of short-term borrowings
In RMB
Item | Ending balance | Opening balance |
Credit loan | 3,511,504,373.65 | 1,264,241,086.57 |
Guaranteed Loan | 89,074,800.00 | 72,197,000.00 |
Bill financing | -- | 100,000,000.00 |
Interest payable | 3,797,354.17 | 1,520,119.98 |
Total | 3,604,376,527.82 | 1,437,958,206.55 |
(2) Overdue short-term loans without payment
The total amount of overdue short-term loans at the end of the period is RMB 0.
23.Derivative financial liabilities
In RMB
Item | Ending balance | Opening balance |
Forward settlement and sales of foreign exchange | 747,115.75 | -- |
24.Note payable
(1) Notes payable are listed by category
In RMB
Category | Ending balance | Opening balance |
Bank acceptance bill | 1,411,089,606.00 | 1,760,032,216.30 |
Other explanation:
A deposit of 24,368,385.65 yuan and pledge notes receivable of 613,245,787.39 yuan have beenpaid for the issuance of the banker's acceptance above.
(2) At the end of the current period, the total amount of matured but unpaid notes payable is 0 yuan.
25. Account payable
In RMB
Item | Ending balance | Opening balance |
Within one year | 3,165,855,712.48 | 3,066,299,727.36 |
1-2 years | 207,702,168.86 | 64,962,570.18 |
2-3 years | 31,919,163.40 | 52,067,026.49 |
Over three years | 49,123,978.86 | 23,324,378.56 |
Total | 3,454,601,023.60 | 3,206,653,702.59 |
26. Accounts received in advance
(1) Accounts received in advance:
In RMB
Item | Ending balance | Opening balance |
Within one year | 3,633,878.33 | 2,854,518.96 |
Total | 3,633,878.33 | 2,854,518.96 |
(2) Important advances over 1 year:
Nil
27.Contract liabilities
(1) Contract liabilities
In RMB
Item | Ending balance | Opening balance |
Within one year | 60,916,157.84 | 132,406,102.56 |
1-2 years | 31,275,903.90 | 2,681,086.39 |
2-3 years | 1,518,759.78 | 132,196.85 |
Over three years | 1,139,261.71 | 1,208,250.59 |
Total | 94,850,083.23 | 136,427,636.39 |
(2) Important contract liabilities over 1 year:
Nil
28.Wage payable
(1) Wage payable
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance |
I. Short-term compensation | 207,822,331.67 | 1,204,097,708.74 | 1,170,045,281.42 | 241,874,758.99 |
II. Post-employment welfare- defined contribution plans | 20,279,307.31 | 185,708,871.69 | 178,310,062.19 | 27,678,116.81 |
III. Dismissed welfare | 1,245,327.09 | 1,396,110.65 | 1,668,237.41 | 973,200.33 |
IV. Incentive funds paid within a year | 93,880,000.00 | 63,140,000.00 | 30,740,000.00 | |
V. Other short-term welfare-Housing subsidies, employee benefits and welfare funds | 16,661,536.63 | 4,526,219.46 | 5,019,445.98 | 16,168,310.11 |
Total | 339,888,502.70 | 1,395,728,910.54 | 1,418,183,027.00 | 317,434,386.24 |
①Explanation to decrease in incentive funds paid within 1 year:
The decrease of incentive funds paid within a year in the current period of RMB 63.14 millionincludes a reclassification of employee compensation payable to long-term employee compensationpayable of RMB 34,501,427.39, which is determined based on the company's future payment plan.
②Dismiss welfare:
The wages payable results from the implementation of inner retirement plan, and the amount paidin the next year is booked into such item.
(2) Short-term compensation
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance |
1. Wages, bonuses, allowances and subsidies | 197,176,934.90 | 956,189,963.48 | 925,104,100.52 | 228,262,797.86 |
2. Welfare for workers and staff | 72,058.92 | 71,285,245.35 | 71,357,304.27 | |
3. Social insurance | 192,691.73 | 70,075,762.32 | 69,988,910.42 | 279,543.63 |
Including: Medical insurance | 172,605.50 | 57,511,916.86 | 57,441,697.79 | 242,824.57 |
Work injury insurance | 16,653.30 | 6,718,325.13 | 6,707,580.23 | 27,398.20 |
Maternity insurance | 3,432.93 | 5,845,520.33 | 5,839,632.40 | 9,320.86 |
4. Housing accumulation fund | 656,874.00 | 83,027,391.00 | 82,898,538.00 | 785,727.00 |
5. Labor union expenditure and personnel education expense | 9,611,229.93 | 16,982,993.17 | 16,634,110.11 | 9,960,112.99 |
6. Other short-term compensation - social security | 112,542.19 | 6,536,353.42 | 4,062,318.10 | 2,586,577.51 |
Total | 207,822,331.67 | 1,204,097,708.74 | 1,170,045,281.42 | 241,874,758.99 |
(3) Post-employment welfare- defined contribution plans
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance |
1. Basic endowment premium | 416,445.06 | 133,875,890.13 | 127,462,957.24 | 6,829,377.95 |
2. Unemployment insurance | 25,533.44 | 4,031,116.95 | 4,020,171.98 | 36,478.41 |
3. Enterprise annuity | 19,837,328.81 | 47,801,864.61 | 46,826,932.97 | 20,812,260.45 |
Total | 20,279,307.31 | 185,708,871.69 | 178,310,062.19 | 27,678,116.81 |
Explanations on the Post-employment welfare- defined contribution plans:
The Company participates in the pension insurance and unemployment insurance plans establishedby government authorities by laws, a certain percentage of the social security fee regulated by thegovernment will pay by the Company monthly for the plans. Other than the aforesaid monthlycontribution, the Company takes no further payment obligation. The relevant expenditure isincluded in current profit or loss or cost of relevant assets when occurs. Found more of enterpriseannuity in Note XIV-4 “Annuity plan”.
29.Tax payable
In RMB
Item | Ending balance | Opening balance |
Value-added tax | 27,961,474.84 | 24,533,584.80 |
Corporation income tax | 7,847,731.79 | 2,317,331.81 |
City maintaining & construction tax | 1,546,043.92 | 1,750,188.23 |
Educational surtax | 1,105,937.33 | 1,250,134.44 |
Individual income tax | 6,846,289.60 | 3,528,037.22 |
Other (including stamp tax and local funds) | 9,278,838.05 | 6,726,372.38 |
Total | 54,586,315.53 | 40,105,648.88 |
30.Other account payable
In RMB
Item | Ending balance | Opening balance |
Interest payable | -- | 6,184.14 |
Dividends payable | -- | 25,671,100.00 |
Other accounts payable | 198,990,948.23 | 334,228,033.32 |
Total | 198,990,948.23 | 359,905,317.46 |
(1) Interest payable
In RMB
Item | Ending balance | Opening balance |
Other | -- | 6,184.14 |
Total | -- | 6,184.14 |
Major overdue interest: Nil
(2) Dividend payable
In RMB
Item | Ending balance | Opening balance |
Common stock dividend | -- | 25,671,100.00 |
Total | -- | 25,671,100.00 |
(3) Other account payable
1) Classification of other accounts payable according to nature of account:
In RMB
Item | Ending balance | Opening balance |
Deposit and margin | 15,452,400.65 | 24,601,774.89 |
Social insurance and reserves funds that withholding | 1,967,741.92 | 1,695,074.09 |
Intercourse funds of unit | 25,512,145.98 | 33,562,145.98 |
Restricted stock repurchase obligations | 138,495,060.00 | 269,101,020.00 |
Payable unpaid investment funds | 13,308,176.65 | -- |
Other | 4,255,423.03 | 5,268,018.36 |
Total | 198,990,948.23 | 334,228,033.32 |
2) Significant other payable with over one year:
In RMB
Item | Ending balance | Notes |
Nanjing Jidian Industrial Group Co., Ltd. | 4,500,000.00 | Intercourse funds |
Restricted stock repurchase business | 138,495,060.00 | Restricted stock repurchase business |
31.Non-current liabilities due within one year
In RMB
Item | Ending balance | Opening balance |
Long-term borrowings due within one year | 2,000,000.00 | 27,744,527.80 |
Lease payments due within one year | 12,044,793.34 | 6,318,273.66 |
Interest payable | 240,555.56 | 25,972.22 |
Total | 14,285,348.90 | 34,088,773.68 |
32.Other current liabilities
In RMB
Item | Ending balance | Opening balance |
Rebate payable | 201,734,082.52 | 198,936,922.68 |
Pending sales tax | 8,815,298.56 | 14,032,348.87 |
undue bill endorsed/discounted | 1,214,398.69 | |
Total | 211,763,779.77 | 212,969,271.55 |
33. Long-term borrowings
In RMB
Item | Ending balance | Opening balance |
Guaranteed loan | 238,000,000.00 | -- |
Total | 238,000,000.00 | -- |
34.Lease liability
In RMB
Item | Ending balance | Opening balance |
Lease Payments | 31,589,277.20 | 15,795,469.25 |
Total | 31,589,277.20 | 15,795,469.25 |
35.Long-term account payable
In RMB
Item | Ending balance | Opening balance |
Long-term account payable | 12,520,000.00 | 13,750,000.00 |
Special accounts payable | 18,265,082.11 | 18,265,082.11 |
Total | 30,785,082.11 | 32,015,082.11 |
(1) Long-term account payable listed by nature
In RMB
Item | Item | Ending balance | Opening balance |
Hi-tech Branch of Nanjing Finance Bureau (note ①) | Financial support funds (2007) | -- | 1,230,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ②) | Financial support funds (2008) | 2,750,000.00 | 2,750,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ③) | Financial support funds (2009) | 1,030,000.00 | 1,030,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ④) | Financial support funds (2010) | 960,000.00 | 960,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ⑤) | Financial support funds (2011) | 5,040,000.00 | 5,040,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ⑥) | Financial support funds (2013) | 2,740,000.00 | 2,740,000.00 |
Total | 12,520,000.00 | 13,750,000.00 |
Long-term account payable explanation:
Note ①: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financialsupporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term isfrom 17 September 2007 to 17 September 2022. Provided that the operation period in the zone is less than 15years, financial supporting capital will be reimbursed. This support capital has been in use for 15 years in thisperiod, so it has been transferred to other income.Note ②: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financialsupporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from10 November 2008 to 10 November 2023. Provided that the operation period in the zone is less than 15 years,financial supporting capital will be reimbursed.Note ③: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financialsupporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from27 October 2009 to 27 October 2024. Provided that the operation period in the zone is less than 15 years, financialsupporting capital will be reimbursed.Note ④: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financialsupporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from27 December 2010 to 27 December 2025. Provided that the operation period in the zone is less than 15 years,financial supporting capital will be reimbursed.Note ⑤ To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financialsupporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from28 December 2011 to 28 December 2026. Provided that the operation period in the zone is less than 15 years,financial supporting capital will be reimbursed.Note ⑥: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financialsupporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from18 December 2013 to 18 December 2028. Provided that the operation period in the zone is less than 15 years,financial supporting capital will be reimbursed.
(2) Special accounts payable
In RMB
Item | Opening balance | Ending balance |
Removal compensation of subsidiary WFJN | 18,265,082.11 | 18,265,082.11 |
Other explanation: In line with regulation of the house acquisition decision of People’s governmentof Xuanwu District, Nanjing City, Ning Xuan Fu Zheng Zi (2012) No.001, part of the lands andproperty of WFJN needs expropriation in order to carry out the comprehensively improvement ofMing Great Wall. According to the house expropriation and compensation agreement in state-ownedlands signed between WFJN and House Expropriation Management Office of Xuanwu District,Nanjing City, 19.71 million yuan in total are compensate, including operation losses from lessee
1.44 million yuan in total. The above compensation was received in last period and is making upfor the losses from lessee, and the above lands and property have not been collected up to 31December 2022.
35. Long-term wages payable
(1) Long-term wages payable
In RMB
Item | Ending balance | Opening balance |
I. Post-employment benefits - Defined benefit plan net liabilities | 20,380,744.73 | -- |
II. Dismiss welfare | 12,028,538.66 | 4,829,589.69 |
III. Other long-term welfare | 169,323,760.89 | 215,252,333.50 |
Less:An incentive fund paid within one year | 47,640,000.00 | 111,770,000.00 |
Other long term benefits - Incentive Fund balance | 121,683,760.89 | 103,482,333.50 |
Total | 154,093,044.28 | 108,311,923.19 |
(2) Defined benefit plan
Present value of defined benefit plan:
In RMB
Item | Current Amount |
I. Opening balance | 19,594,011.39 |
II. Cost of defined benefit plan booked into current profit and loss | 38,706.27 |
1.Current service cost | 38,706.27 |
III. Cost of defined benefit plan booked into other comprehensive income | 399,165.06 |
1.Actuarial gains (losses are represented by “-”) | 399,165.06 |
IV. Other changes | 348,862.01 |
1.Welfare paid | -345,481.69 |
2.Translation difference of foreign currency statements | 694,343.70 |
V. Ending balance | 20,380,744.73 |
Planned assets: NilOther explanation: According to relevant regulations in Italy, the Trattamento di Fine Rapporto(TFR) system is established. VHIT shall calculate and offer severance to employees in accordancewith employees’ employment period and taxable base salary when they leave or are dismissed. Theplan predicts future cash outflows at the inflation rate and determines its present value at the discountrate. The above-mentioned benefit plan poses actuarial risks to VHIT, mainly including interest raterisk and inflation risk. The decrease in interest rates will lead to an increase in the present value ofthe defined benefit plan obligations. In addition, the present value of benefit plan obligations isrelated to the future payment standards of the plan, which are determined based on inflation rates.Therefore, an increase in inflation rate will also lead to an increase in planned liabilities.
37.Anticipated liability
In RMB
Item | Ending balance | Opening balance |
Product quality assurance | 8,695,322.61 | -- |
Investment losses in joint ventures | 13,750.00 | -- |
Environmental Protection Commitment | 1,150,543.24 | -- |
Pending litigation total | 246,653.02 | -- |
Total | 10,106,268.87 | -- |
38.Deferred income
In RMB
Item | Opening balance | Current increased | Current decreased | Translation of foreign currency statements | Ending balance |
Government grant | 298,052,867.56 | 3,109,983.11 | 78,013,068.71 | -25,803.18 | 223,123,978.78 |
Item with government grants involved:
In RMB
Items | Opening balance | New grants in the Period | Amount reckoned into other income in the period | Translation of foreign currency statements | Ending balance | Assets related/Income related |
Industrialization project for injection VE pump system with electronically controlled high pressure for less-emission diesel used | 721,000.26 | -- | 721,000.26 | -- | -- | Asset/Income related |
Appropriation on reforming of production line technology and R&D ability of common rail system for diesel by distributive high-voltage | 6,318,348.62 | 781,651.38 | -- | 5,536,697.24 | Assets related | |
Fund of industry upgrade (2013) | 60,520,000.00 | 41,809,808.31 | -- | 18,710,191.69 | Income related | |
R&D and industrialization of the high-pressure variable pump of the common rail system of diesel engine for automobile | 3,817,474.67 | 1,117,613.70 | -- | 2,699,860.97 | Assets related | |
Research institute of motor vehicle exhaust after-treatment technology | 648,660.17 | 530,870.24 | -- | 117,789.93 | Assets related | |
Fund of industry upgrade (2014) | 36,831,000.00 | -- | 36,831,000.00 | Income related | ||
New-built assets compensation after the removal of parent company | 83,134,428.94 | 19,691,341.21 | -- | 63,443,087.73 | Assets related | |
Fund of industry upgrade (2016) | 40,000,000.00 | -- | 40,000,000.00 | Income related | ||
Guiding capital for the technical reform from State Hi-Tech Technical Commission | 5,057,667.33 | 1,270,553.36 | -- | 3,787,113.97 | Assets related | |
Implementation of the variable cross-section turbocharger for diesel engine | 5,882,788.71 | 1,628,355.53 | -- | 4,254,433.18 | Assets related | |
Demonstration project for intelligent manufacturing | 652,381.50 | 220,493.70 | -- | 431,887.80 | Assets related | |
The 2nd batch of provincial special funds for industry transformation of industrial and information in 2019 | 3,446,350.12 | 1,596,505.99 | -- | 1,849,844.13 | Assets related | |
Municipal technological reform fund allocation in 2020 | 4,143,406.07 | 616,309.46 | -- | 3,527,096.61 | Assets related | |
Strategic cooperation agreement funding for key enterprise of smart manufacturing in high-tech zone | 4,450,869.59 | 1,076,250.73 | -- | 3,374,618.86 | Assets related | |
The 3rd batch of | 13,500,00 | -- | 13,500,000.00 | Assets related |
provincial special funds for industry transformation of industrial and information in 2021 | 0.00 | |||||
Other | 28,928,491.58 | 3,109,983.11 | 6,952,314.84 | -25,803.18 | 25,060,356.67 | Assets related/Income related |
Total | 298,052,867.56 | 3,109,983.11 | 78,013,068.71 | -25,803.18 | 223,123,978.78 |
Other explanation:
(1) Appropriation on industrialization project of electrical control and high voltage jet VE systemof low emissions diesel: in September 2009, WFJN signed “Project Contract of TechnologyOutcome Transferring Special Capital in Jiangsu Province” with Nanjing Technical Bureau,according to which WFJN received appropriation 6.35 million yuan in 2009, 4.775 million yuanreceived in 2010 and 0.875 million yuan received in 2011. According to the contract, the attendancedate of this project was: from October of 2009 to March of 2012. This contract agreed 62% of newlyincreased investment in project would be spent in fixed assets investment which are belongs to thegovernment grand with assets/income concerned. In 2013, accepted by the science & technologyagency of Jiangsu Province, and 4,789,997.04 yuan with income related was reckoned into currentoperation revenue directly; the 7,210,002.96 yuan with assets related was amortized during thepredicted service period of the assets, and 721,000.26 yuan was written off in the Period.
(2) The appropriation for research and development ability of distributive high-pressure commonrail system for diesel engine use and production line technological transformation project: accordingto XCJ No. [2010] 59, the Company has received special funds of 7.1 million yuan appropriated byFinance Bureau of Wuxi New District in 2011 and used for the Company’s research anddevelopment ability of distributive high-pressure common rail system for diesel engine use andproduction line technological transformation project; this appropriation belongs to governmentgrants related to assets, amount of 781,651.38 yuan was written off based on the depreciationschedule of the related assets during the period.
(3) Industry upgrading funds (2013): In accordance with the document Xi Xin Guan Jing Fa [2013]No.379, Xi Xin Guan Jing Fa [2013] No.455, Xi Xin Guan Cai Fa [2013] No.128 and Xi Xin GuanCai Fa [2013] No.153, the Company received funds of 60.52 million yuan appropriated for industryupgrading in 2013 and amount of 41,809,808.31 yuan was written off in the year.
(4) R&D and industrialization of the high pressure variable pump of the common rail system ofdiesel engine for automobile: the Company received appropriated for the project in 2013 with 8.05million yuan in line with documents of Xi Ke Ji [2013] No.186, Xi Ke Ji [2013] No.208, Xi CaiGong Mao [2013] No.104, Xi Cai Gong Mao [2013] No.138, Xi Ke Ji [2014] No.125, Xi Cai GongMao [2014] No.58, Xi Ke Ji [2014] No. 246 and Xi Cai Gong Mao [2014] No.162. the companyreceived 8.05 million yuan, 3 million yuan and 0.45 million yuan respectively in 2013, 2014 and2015; such funds belong to government grant with assets concerned, and shall be written offaccording to the depreciation process, amount of 1,117,613.70 yuan was written off in the year.
(5) Vehicle exhaust after-treatment technology research institute project: in 2012, the subsidiaryWFLD has applied for equipment purchase assisting funds to Wuxi Huishan Science andTechnology Bureau and Wuxi Science and Technology Bureau for the vehicle exhaust after-treatment technology research institute project. This declaration has been approved by WuxiHuishan Science and Technology Bureau and Wuxi Science and Technology Bureau in 2012, andthe company has received appropriation of 2.4 million yuan in 2012, and received appropriation of
1.6 million yuan in 2013. This appropriation belongs to government grants related to assets and willbe written off according to the depreciation process, amount of 530,870.24 yuan was written off inthe year.
(6) Industry upgrading funds (2014): In accordance with the document Xi Xin Guan Jing Fa [2014]No.427 and Xi Xin Guan Cai Fa [2014] No.143, the Company received funds of 36.831 millionyuan appropriated for industry upgrading in 2014.
(7) New-built assets compensation after the removal of parent company: policy relocationcompensation received by the Company, and will be written off according to the depreciation ofnew-built assets, amount of 19,691,341.21 yuan was written off in the year.
(8) Fund of industry upgrade (2016): In accordance with the document Xi Xin Guan Jing Fa [2016]No.585 and Xi Xin Fa [2016] No.70, the Company received funds of 40 million yuan appropriatedfor industry upgrading in 2016.
(9) Guiding capital for the technical reform from State Hi-Tech Technical Commission: Inaccordance with the document Xi Jing Xin ZH [2016] No.9 and Xi Cai GM [2016] No.56, theCompany received a 9.74 million yuan for the guiding capital of technical reform (1st batch) fromWuxi for year of 2016, and belongs to government grant with assets concerned, and shall be writtenoff according to the depreciation process, amount of 1,270,553.36 yuan was written off in the year.
(10) Implementation of the variable cross-section turbocharger for diesel engine: In accordancewith the document YCZ Fa[2016] No.623 and “Strong Industrial Base Project Contract for year of2017”, subsidiary WFTT received a specific subsidy of 16.97 million yuan in 2016 and of760,000 yuan in 2018, the fund supporting strong industrial base project (made-in-China 2025) ofcentral industrial transformation and upgrading 2016 from Ministry of Industry and InformationTechnology; It belongs to government grant with assets concerned, and shall be written offaccording to the depreciation process. Amount of 1,628,355.53 yuan was written off in the year.
(11) Demonstration project for intelligent manufacturing: under the Notice Relating to Selection ofthe Intelligent Manufacturing Model Project in Huishan District in 2016 (HJXF[2016]No.36), afiscal subsidy of 3,000,000 yuan was granted by relevant government authority in Huishan districtto our subsidiary WFLD in 2017 to be utilized for transformation and upgrade of WFLD’s intelligentmanufacturing facilities. This subsidy belongs to government grant related to assets which shall bewritten off based on the depreciation progress of the assets. Amount of 220,493.70 yuan was writtenoff in the year.
(12) The 2
nd
batch of provincial special funds for industry transformation of industrial andinformation in 2019: according to XCGM [2019] No. 121, the Company received a special fund of5 million yuan in 2020. This subsidy was related to the “Weifu High-Technology New FactoryInternet Construction” projects, and belonged to government grants related to assets. and shall bewritten off according to the depreciation process, amount of 1,596,505.99 yuan was written off inthe year.
(13) Municipal technological reform fund allocation in 2020: according to XGXZH [2020] No. 16,the Company received 4.77 million yuan of municipal technological transformation fund projectallocation in 2020, which was related to key technological transformation projects and belonged togovernment grants related to assets. and shall be written off according to the depreciation process.Amount of 616,309.46 yuan was written off in the year.
(14) Strategic cooperation agreement funding for key enterprise of smart manufacturing in high-tech zone: according to XXGXF [2020] No. 61, the Company received a related grant of 4.06million yuan in 2020 and 0.7 million yuan received in the year, this grant was related to theintelligent transformation project and belonged to the government grants related to assets. and shallbe written off according to the depreciation process, amount of 1,076,250.73 yuan was written offin the year.
(15) The 3rd batch of provincial special funds for industry transformation of industrial andinformation in 2021: according to the SCGM [2021] No.92, the government grant 13.5 million yuanreceived in 2021 was for the research, development and industrialization of membrane electrodesfor high-performance automotive proton exchange membrane fuel cells, which was an assets relatedgovernment grants.
39.Share
In RMB
Item | Opening balance | Change during the year (+/-) | Ending balance | ||||
New shares issued | Bonus share | Shares transferred from capital reserve | Other- cancellation | Subtotal | |||
Total shares | 1,008,659,570 | -- | -- | -- | -56,277 | -56,277 | 1,008,603,293 |
Other explanation:
Decreased in share capital was due to the buy-back and cancellation of 56,277 restricted sharesinitially granted under the Restricted Shares Incentive Plan for year of 2020.
40.Capital reserve
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance |
Capital premium | 3,238,990,188.72 | 81,051,840.00 | 1,092,500.74 | 3,318,949,527.98 |
Other Capital reserve | 132,353,984.10 | 28,116,895.55 | 81,051,840.00 | 79,419,039.65 |
Total | 3,371,344,172.82 | 109,168,735.55 | 82,144,340.74 | 3,398,368,567.63 |
Other explanation:
(1) Share capital premium has increased RMB 81,051,840.00 in the Period, mainly because thecapital reserves (other capital reserves) of the restricted stock unlocked during the waiting periodare transferred into the capital premium;Share capital premium has decreased RMB 1,092,500.74in the Period, mainly because the 56,277.00 shares for restricted stock incentive plan wererepurchased and cancellation by the Company.
(2) Other capital reserve has increased RMB 28,116,895.55 in the reporting period, which is a netamount after deducting RMB 826,610.83 attributable to minority from RMB 28,943,506.38, theexpenses of share-based payment settled by equity; Other capital reserve has decreased RMB81,051,840.00 in the reporting period, which is because the amount of capital reserves (other capitalreserves) recognized during the waiting period of the restricted stock unlocked in this period istransferred to the equity premium.
41.Treasury stock
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance |
Stock repurchases | 1,148,777.74 | 397,804,542.63 | 1,148,777.74 | 397,804,542.63 |
Repurchase obligation of restricted stock incentive plan | 269,101,020.00 | -- | 125,282,560.00 | 143,818,460.00 |
Total | 270,249,797.74 | 397,804,542.63 | 126,431,337.74 | 541,623,002.63 |
Other explanations, including changes in the current period and explanations of the reasons for thechanges:
Share buy-back: the increase of RMB 397,804,542.63 due to share buy-back by way of centralizedbidding in 2022; The decrease of RMB 1,148,777.74 in the current period was caused by thecancellation of 56,277.00 shares remaining in the special securities account repurchased by thecompany’s Restricted Stock Incentive Plan.Repurchase obligation of restricted stock incentive plan: has decreased RMB 125,282,560.00 in thePeriod, mainly including two parts: ① the RMB 30,798,400.00 cash dividends received byrestricted stock incentive recipients during the period; and ② RMB 94,484,160.00 is therepurchase and cancellation of 7,632,000.00 restricted shares, the first batch of unlocked in thecompany’s restricted stock incentive plan by the Company as treasury stock.
42.Other comprehensive income
In RMB
Item | Opening balance | Current amount | Ending balance | |||
Account before income tax in the year | Less: income tax expense | Belong to parent company after tax | Belong to minority shareholders after tax | |||
I. Other comprehensive income that cannot be reclassified to profit or loss | 16,008.80 | -399,165.06 | -- | -399,165.06 | -- | -383,156.26 |
Including: Other comprehensive income that cannot be transferred to profit or loss under the equity method | 16,008.80 | -- | -- | -- | -- | 16,008.80 |
Remeasure changes in defined benefit plans | -- | -399,165.06 | -399,165.06 | -- | -399,165.06 | |
II. Other comprehensive income items which will be reclassified subsequently to profit or loss | -36,762,353.40 | 36,234,199.53 | -- | 36,234,199.53 | -- | -528,153.87 |
Including: Conversion difference of foreign currency financial statement | -36,762,353.40 | 36,234,199.53 | -- | 36,234,199.53 | -- | -528,153.87 |
Total | -36,746,344.60 | 35,835,034.47 | -- | 35,835,034.47 | -- | -911,310.13 |
43.Reasonable reserve
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance |
Safety production costs | 712,215.31 | 26,087,086.34 | 24,679,500.70 | 2,119,800.95 |
Other explanation:
(1) Instructions for the withdrawing of special reserves (safe production cost): According to the CZ[2022] No.136- Administrative Measures on the Withdrawing and Use of Enterprise SafetyProduction Expenses jointly issued by the Ministry of Finance and the State Administration of WorkSafety, in the current period, the Company adopted excess retreat method for quarterly withdrawalby taking the actual operating income of the previous period as the withdrawing basis.
(2) Among the above safety production costs, including the safety production costs accrued by theCompany in line with regulations and the parts enjoy by shareholders of the Company in safety
production costs accrued by subsidiary in line with regulations.
44.Surplus reserve
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance |
Statutory surplus reserves | 510,100,496.00 | -- | -- | 510,100,496.00 |
Other explanation:
Withdrawal of the statutory surplus reserves: Pursuit to the Company Law and Article ofAssociation, the Company withdraws statutory surplus reserve on 10% of the net profit. No moreamounts shall be withdrawal if the accumulated statutory surplus reserve takes over 50% of theregistered capital.
45.Retailed profit
In RMB
Item | Current period | Last period | Extract or assign proportions |
Retained profits at the end of last year before adjustment | 14,814,787,377.86 | 13,756,102,424.62 | -- |
Adjust the total undistributed profit at the beginning of the period (increase +, decrease -) | -- | -- | -- |
Retained profits at the beginning of the year after adjustment | 14,814,787,377.86 | 13,756,102,424.62 | -- |
Add: The net profits belong to owners of patent company of this period | 118,819,836.30 | 2,575,371,419.80 | -- |
Less:Draw legal surplus reserve | -- | -- | -- |
Less: Withdraw employee rewards and welfare funds | 4,526,219.46 | 4,081,359.92 | -- |
Cash dividends payable | 1,609,059,668.80 | 1,513,341,439.50 | This year 16 yuan /10 shares, last year 15 yuan /10 shares |
Common stock dividends converted into capital | -- | -- | -- |
Add: Net effect of disposal other equity instrument investment | -- | 736,332.86 | |
Retained profit at period- | 13,320,021,325.90 | 14,814,787,377.86 |
end
46.Operating income and cost
In RMB
Item | Current period | Last Period | ||
Income | Cost | Income | Cost | |
Main operating | 12,333,099,421.87 | 10,658,281,929.91 | 13,184,138,129.88 | 10,822,600,520.90 |
Other business | 396,535,495.16 | 358,103,558.89 | 498,288,581.07 | 397,767,192.67 |
Total | 12,729,634,917.03 | 11,016,385,488.80 | 13,682,426,710.95 | 11,220,367,713.57 |
47.Operating tax and extra
In RMB
Item | Current period | Last Period |
City maintaining & construction tax | 22,771,182.73 | 19,681,944.17 |
Educational surtax | 16,273,199.41 | 14,058,531.57 |
Property tax | 18,009,579.96 | 17,669,096.06 |
Land use tax | 4,517,681.71 | 4,507,402.14 |
Vehicle use tax | 19,195.41 | 27,218.52 |
Stamp duty | 8,187,585.86 | 3,834,974.65 |
Other taxes | 797,159.81 | 477,566.62 |
Total | 70,575,584.89 | 60,256,733.73 |
48.Sales expenses
In RMB
Item | Current period | Last Period |
Salary and wage related expense | 59,134,720.55 | 56,098,840.97 |
Consumption of office materials and business travel charge | 7,978,020.25 | 9,301,927.42 |
Warehouse charge | 12,489,955.81 | 17,101,049.13 |
Three guarantees and quality cost | 73,394,539.28 | 138,960,972.56 |
Business entertainment fee | 16,300,099.96 | 28,210,881.07 |
Other | 20,230,754.86 | 14,977,761.41 |
Total | 189,528,090.71 | 264,651,432.56 |
49.Administration expenses
In RMB
Item | Current period | Last Period |
Salary and wage related expense | 312,885,696.17 | 322,167,980.30 |
Depreciation charger and long-term assets amortization | 80,103,136.06 | 71,899,617.49 |
Consumption of office materials and | 20,460,578.25 | 24,870,963.21 |
business travel charge | ||
Share-based payment | 18,889,058.87 | 48,352,297.07 |
Other | 154,048,004.97 | 144,581,292.17 |
Total | 586,386,474.32 | 611,872,150.24 |
50.R&D expenses
In RMB
Item | Current period | Last Period |
Technological development expenses | 581,488,711.88 | 595,406,951.64 |
Total | 581,488,711.88 | 595,406,951.64 |
51.Financial expenses
In RMB
Item | Current period | Last Period |
Interest expenses | 107,737,432.78 | 38,698,621.09 |
Note discount interest expenses | -- | 19,837,754.67 |
Less: interest income | 41,020,724.48 | 41,478,845.32 |
Gains/losses from exchange | 10,099,986.41 | -1,982,034.19 |
Handling charges | 5,510,921.05 | 4,987,752.59 |
Total | 82,327,615.76 | 20,063,248.84 |
52.Other income
In RMB
Item | Current period | Last Period | Amount booked into non-recurring profit or loss for the period |
Government grants with routine operation activity concerned | 111,670,734.77 | 69,734,194.44 | 111,670,734.77 |
VAT instant refund | -- | 2,460.01 | -- |
Refund of individual income tax handling fee | 994,662.50 | 1,540,317.23 | 994,662.50 |
Total | 112,665,397.27 | 71,276,971.68 | 112,665,397.27 |
Details of government subsidies included in other income:
Subsidy project | Current amount | The amount of the previous period | Related to assets/income |
Low - row diesel engine with electronic control high - pressure injection VE pump system industrialization project | 721,000.26 | 721,000.30 | Related to assets/income |
Jiangsu Provincial Key Laboratory of Vehicle Exhaust Pollution Control (Engineering Center) | 170,000.00 | 170,000.00 | Related to assets/income |
Wuxi Key Laboratory subsidy | 70,000.00 | 70,000.00 | Related to assets/income |
Support Fund for Packaging Line Technology Improvement Project of Catalytic reduction System for Commercial Vehicles with an annual output of 140,000 | 259,000.00 | 259,000.00 | Asset-related |
Subsidy project | Current amount | The amount of the previous period | Related to assets/income |
pieces (2014) | |||
Annual output of 300,000 units of four-cylinder engine supercharger technology renovation project | 96,266.37 | 116,363.32 | Asset-related |
Annual output of 150,000 units of gasoline turbocharger project | 24,239.76 | 58,175.42 | Asset-related |
Depreciation/amortization compensation for newly built assets after parent relocation | 19,691,341.21 | 20,950,845.46 | Asset-related |
Wuxi Finance Bureau Central Infrastructure Investment Allocation (R&D Center) | -- | 714,285.73 | Asset-related |
Provincial science and technology innovation and achievements transformation guide fund | -- | 328,571.41 | Asset-related |
Annual 180000 pieces of commercial vehicle catalytic reduction system technical transformation | 233,555.56 | 233,555.56 | Asset-related |
Automotive diesel engine high pressure common rail system of variable pump research and development and industrialization projects | 1,117,613.70 | 1,510,144.21 | Asset-related |
Intelligent manufacturing demonstration project | 220,493.70 | 196,718.10 | Asset-related |
Motor vehicle exhaust after-treatment technology research institute | 530,870.24 | 565,067.04 | Asset-related |
Diesel engine is a variable cross-section implementation plan of the turbocharger | 1,628,355.53 | 1,480,000.04 | Asset-related |
The technical reconstruction special funds | -- | 46,838.76 | Related to assets/income |
Annual 200000 gasoline engine units turbocharger technology renovation project | 130,825.45 | 322,210.40 | Asset-related |
Annual 150000 gasoline engine units turbocharger | 282,056.24 | 416,105.36 | Asset-related |
National high and new technology the ac technical transformation to guide capital | 1,270,553.36 | 1,537,652.50 | Asset-related |
Industrial upgrading fund | 47,459,608.31 | 642,169.73 | Income related |
2015 wuxi science and technology research and development institutions fund | 140,000.00 | 420,000.00 | Related to assets/income |
Distribution of diesel engine with high pressure common rail system research and development ability and production line technological transformation projects | 781,651.38 | 781,651.38 | Asset-related |
SCR and DPF aftertreatment system development grants | -- | 880,000.00 | Income related |
Standard of the VI alternative fuel cars and motorcycle emission control catalyst pollution emission control catalyst industry project | -- | 880,000.00 | Income related |
Anione | 264,812.57 | 897,126.79 | Income related |
FIT-4-AMANDA | -- | 723,598.73 | Income related |
Neptune | 357,572.17 | 772,048.44 | Income related |
2020 municipal technical renovation fund project appropriation | 616,309.46 | 626,593.93 | Asset-related |
Particle Capture and Regeneration Technology Development Fund (Shandong University) | -- | 600,000.00 | Asset-related |
Parent company intelligent transformation project | -- | 3,780,000.00 | Related to assets/income |
International scientific and technological research and development cooperation projects | -- | 1,000,000.00 | Related to assets/income |
The second batch of provincial-level funds for industrial and information industry transformation in 2019 | 1,596,505.99 | 1,553,649.88 | Asset-related |
Financial support funds for enterprises attracting | -- | 3,740,400.00 | Income related |
Subsidy project | Current amount | The amount of the previous period | Related to assets/income |
investment in 2020 | |||
Borit research and development grant | 35,419.76 | 1,411,156.80 | Income related |
ECOethylene | 1,250,899.19 | 1,322,854.33 | Income related |
2021 provincial special subsidies for business development | -- | 2,551,200.00 | Income related |
People's Government of Jiangbei District on the recognition of 2020 Annual Economic Innovation Development Award | -- | 1,450,000.00 | Income related |
Project money (Weichai Power Co., LTD.) | -- | 1,590,000.00 | Income related |
Borit withholding return | 1,400,901.38 | 991,481.10 | Income related |
Intelligent transformation and technology transformation guide funds | -- | 1,500,000.00 | Income related |
Steady work post subsidies | 3,820,755.20 | 1,297,349.42 | Income related |
WFJN government assistance fund | 1,230,000.00 | 1,250,000.00 | Income related |
Electronically controlled diesel engine fuel system intelligent management key technology research and development projects | 680,983.13 | -- | Income related |
The SPV tax credits | 3,338,966.48 | -- | Income related |
Selection of Top 50 Enterprises in Ningbo Jiangbei District | 1,030,000.00 | -- | Income related |
Sme development funds | 2,000,000.00 | -- | Income related |
Special funds for high-quality development | 1,000,000.00 | -- | Income related |
Strategic cooperation Agreement for key enterprises of intelligent manufacturing in High-tech Zone | 1,076,250.73 | -- | Income related |
Tongliang District investment enterprises 2021 annual industrial development funds | 6,913,300.00 | -- | Income related |
Training subsidy | 432,575.00 | 785,880.00 | Income related |
Talent policy subsidy | 1,135,000.00 | -- | |
Other | 8,663,052.64 | 8,590,500.30 | Related to assets/income |
Total | 111,670,734.77 | 69,734,194.44 |
53.Investment income
In RMB
Item | Current period | Last period |
Income of long-term equity investment calculated based on equity method | 1,636,986,684.96 | 1,632,117,748.78 |
Investment income from disposal of long-term equity investments | -- | 8,701,134.99 |
Investment income from holding financial assets available for sales | 216,491,612.58 | 314,664,249.00 |
Dividend income obtained from other equity instrument investments during the holding period | 683,455.00 | -- |
Investment income from the disposal of trading financial assets | 137,682.59 | -- |
Recognition of profit and loss from financing discount of receivables | -5,153,934.63 | -- |
Interest payments on discounted bills | -- | -959,296.18 |
Total | 1,849,145,500.50 | 1,954,523,836.59 |
54.Income from change of fair value
In RMB
Sources | Current period | Last period |
Changes in the fair value of wealth management products | -12,803,609.57 | -380,318.88 |
Changes in the fair value of the stocks of listed companies held-excluding the stocks of listed companies that are included in other equity instrument investments | -144,072,026.77 | -38,709,334.89 |
Changes in fair value of foreign exchange contracts | -747,115.75 | -1,180,680.04 |
Total | -157,622,752.09 | -40,270,333.81 |
55.Credit impairment loss
In RMB
Item | Current period | Last period |
Bad debt loss | -1,645,881,142.40 | 4,059,750.80 |
Total | -1,645,881,142.40 | 4,059,750.80 |
56.Asset impairment loss
In RMB
Item | Current period | Last period |
Loss of inventory falling price | -181,610,433.12 | -134,434,667.54 |
Impairment loss of fixed assets | -- | -3,682,648.26 |
Total | -181,610,433.12 | -138,117,315.80 |
57.Income form assets disposal
In RMB
Item | Current period | Last period | Amount reckoned into current non-recurring gains/losses |
Income from disposal of non-current assets | 3,687,970.49 | 6,580,346.41 | 3,687,970.49 |
Losses from disposal of non-current assets | -1,701,165.96 | -2,648,002.34 | -1,701,165.96 |
Total | 1,986,804.53 | 3,932,344.07 | 1,986,804.53 |
58.Non-operating income
In RMB
Item | Current period | Last Period | Amount reckoned into current non-recurring gains/losses |
Payables that do not require payment | 2,048,698.72 | -- | 2,048,698.72 |
Price difference for business combinations not under the same control | 3,181,563.57 | -- | 3,181,563.57 |
Liquidated damages and compensation income | 281,760.53 | 397,361.84 | 281,760.53 |
Other | 187,745.22 | 258,840.23 | 187,745.22 |
Total | 5,699,768.04 | 656,202.07 | 5,699,768.04 |
59.Non-operating expense
In RMB
Item | Current period | Last Period | Amount reckoned into current non-recurring gains/losses |
Non-current assets disposal losses | 2,135,371.43 | 24,984,204.92 | 2,135,371.43 |
Including: loss on scrapping of fixed assets | 2,135,371.43 | 24,615,193.78 | 2,135,371.43 |
Loss on scrapping of intangible assets | -- | 369,011.14 | -- |
Donation | 5,013,500.00 | 237,041.06 | 5,013,500.00 |
Other | 562,788.63 | 288,323.89 | 562,788.63 |
Total | 7,711,660.06 | 25,509,569.87 | 7,711,660.06 |
60.Income tax expense
(1) Income tax expense
In RMB
Item | Current period | Last period |
Payable tax in current period | 11,061,046.36 | 140,397,942.05 |
Adjusted the previous income tax | 2,032,113.63 | 941,390.84 |
Increase/decrease of deferred income tax assets | -56,032,739.30 | -54,019,435.84 |
Increase/decrease of deferred income tax liability | 31,608,004.40 | 3,675,792.90 |
Income tax expense | -11,331,574.91 | 90,995,689.95 |
(2) Adjustment on accounting profit and income tax expenses
In RMB
Item | Current period |
Total profit | 179,614,433.34 |
Income tax measured by statutory/applicable tax rate | 26,942,165.00 |
Impact by different tax rate applied by subsidies | -178,056,001.37 |
Adjusted the previous income tax | 2,032,113.63 |
Impact by non-taxable revenue | -249,319,108.30 |
Impact on cost, expenses and losses that unable to deducted | 11,515,020.27 |
Impact on the use of deductible losses or deductible differences on deferred tax assets not recognized in the prior period | -3,778,371.61 |
Impact on the deductible temporary differences or deductible losses of the un-recognized deferred income tax assets in the Period | 455,617,403.14 |
Impact on additional deduction | -104,482,259.45 |
Other | 28,197,463.78 |
Total | -11,331,574.91 |
61.Other comprehensive income
See Note V-42. “Other comprehensive income”.
62.Items of cash flow statement
(1) Other cash received in relation to operation activities:
In RMB
Item | Current period | Last period |
Interest income | 41,020,724.48 | 41,478,845.32 |
Government grants | 32,507,707.23 | 38,578,031.24 |
Margin on operation bill | 170,000.00 | 3,237,920.90 |
Capital inflow of WFTR “platform trade” business portfolio | 3,604,252,294.46 | -- |
Other | 4,898,138.17 | 2,873,765.53 |
Total | 3,682,848,864.34 | 86,168,562.99 |
(2) Other cash paid in relation to operation activities:
In RMB
Item | Current period | Last period |
Cash cost | 571,583,226.93 | 628,017,019.32 |
Capital outflow of WFTR “platform trade” business portfolio | 6,345,751,426.41 | -- |
Other | 37,760,946.39 | 20,190,804.06 |
Total | 6,955,095,599.73 | 648,207,823.38 |
(3) Cash received from other investment activities:
In RMB
Item | Current period | Last period |
The contingent consideration received for the purchase of Borit’s equity | -- | 1,136,214.91 |
Other | -- | 544,552.00 |
Total | -- | 1,680,766.91 |
(4) Cash paid related with investment activities:
In RMB
Item | Current period | Last period |
Deposit paid for the purchase of VHCN | 136,739,145.73 | -- |
Payment of foreign exchange contract deposit | 9,492,968.77 | -- |
Total | 146,232,114.50 | -- |
(5) Other cash received in relation to financing activities:
In RMB
Item | Current period | Last period |
Borrowings received by WFLD | -- | 5,470,000.00 |
Total | -- | 5,470,000.00 |
(6) Cash paid related with financing activities:
In RMB
Item | Current period | Last period |
Repayment of loans to non-financial enterprises | 163,470,112.06 | -- |
National debt paid transfer to loans | -- | 339,090.00 |
Borrowing return by WFLD | 5,470,000.00 | 5,470,000.00 |
Lease payments | 19,302,140.88 | 7,718,867.54 |
Repurchase of A shares | 397,804,542.63 | -- |
Shares repurchase and cancellation for restricted stock incentive plan and handling charge | 5,323,400.00 | 4,068,729.06 |
Total | 591,370,195.57 | 17,596,686.60 |
63.Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow:
In RMB
Supplementary information | Current period | Last Period |
1. Net profit adjusted to cash flow of operation activities: | ||
Net profit | 190,946,008.25 | 2,649,364,676.15 |
Add: Assets impairment provision | 1,827,491,575.52 | 134,057,565.00 |
Depreciation of fixed assets, consumption of oil assets and depreciation of productive biology assets | 423,381,573.22 | 399,184,362.08 |
Depreciation of right-of-use assets | 10,487,347.35 | 8,672,462.76 |
Amortization of intangible assets | 47,414,586.57 | 42,460,206.35 |
Amortization of long-term deferred expenses | 5,676,279.94 | 4,800,457.79 |
Loss from disposal of fixed assets, intangible assets and other long-term assets | -1,986,804.53 | -3,932,344.07 |
Losses on scrapping of fixed assets | 2,135,371.43 | 24,984,204.92 |
Gain/loss of fair value changes | 157,622,752.09 | 40,270,333.81 |
Financial expenses | 106,707,239.68 | 31,368,748.20 |
Investment loss | -1,874,322,320.27 | -1,944,475,801.41 |
Decrease of deferred income tax asset | -56,032,739.30 | -54,019,435.84 |
Increase of deferred income tax liability | 31,608,004.40 | 3,675,792.90 |
Decrease of inventory | 1,073,359,311.32 | -723,297,146.60 |
Decrease of operating receivable accounts | -3,936,816,340.90 | 1,615,814,968.48 |
Increase of operating payable accounts | -608,366,974.35 | -1,676,121,153.69 |
Other | 24,952,480.15 | 74,904,696.58 |
Net cash flows arising from operating activities | -2,575,742,649.43 | 627,712,593.41 |
2. Net change of cash and cash equivalents: | ||
Balance of cash at period end | 2,277,117,604.82 | 1,094,018,936.73 |
Less: Balance of cash equivalent at year-begin | 1,094,018,936.73 | 944,946,018.70 |
Add: Balance at year-end of cash equivalents | -- | -- |
Less: Balance at year-begin of cash equivalents | -- | -- |
Net increase of cash and cash equivalents | 1,183,098,668.09 | 149,072,918.03 |
(2) Net cash payment for the acquisition of a subsidiary in the period:
In RMB
Item | Amount |
Cash or cash equivalents paid in the current period for business mergers occurring in the current period | 182,950,038.25 |
Less:Cash and cash equivalents held by the Company on the date of purchase | 112,759,708.54 |
Total | 70,190,329.71 |
(3) Net cash received from the disposal of subsidiaries:
In RMB
Item | Amount |
Cash or cash equivalents received during the period due to the disposition of subsidiaries in current periods | -- |
Less: Cash and cash equivalents held by the Company at the date of loss of control | -- |
Add:Cash or cash equivalents received during the period due to the disposition of subsidiaries in previous periods | 136,787,298.86 |
Total | 136,787,298.86 |
Other explanation:
Net cash received for disposal of subsidiaries during the period is that VHIT disposed itssubsidiary before October 31, 2022 and received the equity disposal payment in December 2022.
(4) Constitution of cash and cash equivalent
In RMB
Item | Ending balance | Opening balance |
I .Cash | 2,277,117,604.82 | 1,094,018,936.73 |
Including: Monetary funds | 51,818.51 | 150,438.79 |
Bank deposit that is readily available for payment | 2,277,065,786.31 | 1,093,868,497.94 |
Funds in other currencies that are readily available for payment | -- | -- |
II. Cash equivalents | -- | -- |
Including: Bond investment that matures within 3 months | -- | -- |
III. Ending cash and cash equivalents balance | 2,277,117,604.82 | 1,094,018,936.73 |
Including: Use of restricted cash and cash equivalents by the parent company or subsidiaries within the Group | -- | -- |
Other explanation:
The difference between bank deposits available for payment at any time and the bank deposits in Note V. 1“Monetary Funds” is the Company's fixed deposits in the bank.
64.Assets with ownership or use right restricted
In RMB
Item | Ending book value | Restriction reason |
Monetary funds | 18,840,000.00 | Forex Contracts USD Margin |
Monetary funds | 24,368,385.65 | Security deposit for drawing banker's acceptance |
Monetary funds | 7,487,250.00 | IRD performance bond |
Monetary funds | 199,660.00 | Cash deposit for Mastercard |
Monetary funds | 180,000.00 | Court freezing |
Monetary funds | 5,000.00 | ETC freezing |
Note receivable | 82,908,186.94 | Notes pledge for bank acceptance |
Receivables financing | 530,337,600.45 | Notes pledge for bank acceptance |
Total | 664,326,083.04 |
65.Item of foreign currency
(1) Item of foreign currency
In RMB
Item | Closing balance of foreign currency | Rate of conversion | Ending RMB balance converted |
Monetary funds | |||
Including: USD | 21,346,973.12 | 6.9646 | 148,673,128.99 |
EUR | 48,296,719.62 | 7.4229 | 358,501,720.07 |
HKD | 17,293,992.68 | 0.89327 | 15,448,204.84 |
JPY | 46,929,606.00 | 0.052358 | 2,457,140.31 |
DKK | 111,164,111.86 | 0.9983 | 110,975,132.87 |
Account receivable | |||
Including: USD | 4,732,628.22 | 6.9646 | 32,960,862.50 |
EUR | 27,066,494.35 | 7.4229 | 200,911,880.92 |
JPY | 13,084,572.00 | 0.052358 | 685,082.02 |
DKK | 6,966,207.98 | 0.9983 | 6,954,365.43 |
Other account receivables | |||
Including: DKK | 2,035,772.98 | 0.9983 | 2,032,312.17 |
Short-term borrowings | |||
Including: USD | 457,403.05 | 6.9646 | 3,185,629.28 |
EUR | 18,989,418.64 | 7.4229 | 140,956,555.62 |
Account payable | |||
Including: USD | 885,151.79 | 6.9646 | 6,164,728.16 |
EUR | 36,055,545.43 | 7.4229 | 267,636,708.17 |
JPY | 50,362,512.00 | 0.052358 | 2,636,880.41 |
DKK | 6,081,507.53 | 0.9983 | 6,071,168.97 |
GBP | 2,450.00 | 8.3941 | 20,565.55 |
Other account payable | |||
Including: EUR | 5,172.58 | 7.4229 | 38,395.54 |
DKK | 151,513.30 | 0.9983 | 151,255.73 |
Non-current liabilities due within one year | |||
Including: USD | 156,513.08 | 6.9646 | 1,090,051.00 |
EUR | 496,988.78 | 7.4229 | 3,689,098.02 |
DKK | 575,121.48 | 0.9983 | 574,143.77 |
Leasing liabilities | |||
Including: USD | 386,008.72 | 6.9646 | 2,688,396.33 |
EUR | 1,285,051.24 | 7.4229 | 9,538,806.85 |
DKK | 11,525,669.67 | 0.9983 | 11,506,076.03 |
(2) Explanation on foreign operational entities:
Subsidiary of the Company, IRD, was established in Denmark in 1996. The 66% equity of IRD were acquiredby the Company in cash in April 2019. In October 2020, the company acquired the remaining 34.00% equity of IRDin cash, thus the Company holds 100% equity of IRD. IRD is denominated in Danish krone, and IRD is mainlyengaged in R&D, production and sales of fuel cell components.Subsidiary Borit was established in Belgium in 2010. The Company acquired 100% equity of Borit in cash inNovember 2020. Borit is denominated in Euro and engaged in R&D, production and sales of fuel cell components.Subsidiary VHIT was established in Italy in 2000. The Company acquired 100.00% equity of VHIT in cash inOctober 2022. The company is denominated in Euro and engaged in R&D, production, and sales of vacuum andhydraulic pumps.
66.Government grants
(1) Government grants
In RMB
Category | Amount | Item | Amount reckoned in current gain/loss |
Development of variable nozzle turbochargers that meet the requirements of National VI B | 950,000.00 | Deferred income, other income | 424,674.33 |
2022 Technical Transformation Fund Allocation | 990,000.00 | Deferred income | -- |
Development of Turbochargers for Automotive Hybrid Engines | 120,000.00 | Deferred income | -- |
Subsidy funds for water-saving enterprises in the construction of water-saving carriers in Nanjing | 110,000.00 | Deferred income | -- |
Borit R&D subsidy | -22,124.54 | Deferred income, other income | 35,419.76 |
Annual output of 150,000 gasoline engine turbochargers | -40,300.00 | Deferred income, other income | 282,056.24 |
Neptune | 250,509.22 | Deferred income, other income | 357,572.17 |
3 R | 751,898.43 | Other income | 751,898.43 |
Job stabilization and expanding subsidy | 3,820,755.20 | Other income | 3,820,755.20 |
Training subsidy | 432,575.00 | Other income | 432,575.00 |
Talent policy subsidy | 1,135,000.00 | Other income | 1,135,000.00 |
2021 Industrial Development Fund for Investment Attracting Enterprises in Tongliang District | 6,913,300.00 | Other income | 6,913,300.00 |
BORIT withholding refund | 1,400,901.38 | Other income | 1,400,901.38 |
Industrial upgrading fund | 5,649,800.00 | Other income | 5,649,800.00 |
Special funds for high-quality development | 1,000,000.00 | Other income | 1,000,000.00 |
Development funds for small and medium-sized enterprises | 2,000,000.00 | Other income | 2,000,000.00 |
Selection of Top 50 Enterprises in Jiangbei District, Ningbo | 1,030,000.00 | Other income | 1,030,000.00 |
Other | 5,706,368.00 | Other income | 5,706,368.00 |
Financial discount | 246,600.00 | Financial expense | 246,600.00 |
Total | 32,445,282.69 |
(2) Government grants rebate
In RMB
Item | Amount | Reason |
Borit R&D subsidy | 22,124.54 | The company transferred out government subsidies expected to be refunded |
Annual output of 150,000 gasoline engine turbochargers | 40,300.00 | Government recovery of duplicate subsidy funds |
Total | 62,424.54 |
VI. Changes of consolidation scope (In RMB)
1. Enterprise combine not under the same control
(1) Enterprise combines not under the same control occurred in the period
In RMB
Name of the purchased party | Date of equity acquisition | Cost of equity acquisition | Equity acquisition ratio | Method of acquiring equity | Purchase date | Basis for determining the purchase date | Income of the purchased party from the purchase date to the end of the period | Net profit of the purchased party from the purchase date to the end of the period |
VHIT/VHCN(Collectively known as vacuum and hydraulic pump business) | Oct. 31, 2022 | 182,950,038.25 | 100% | Cash acquisition | Oct. 31, 2022 | Transfer of control right | 177,911,433.07 | 1,516,124.59 |
(2) Consolidation cost
In RMB
Consolidation cost | Amount |
--Cash | 196,258,214.90 |
--Other | -- |
Total consolidated costs | 196,258,214.90 |
Less: Fair value share of identifiable net assets obtained | 199,439,778.47 |
The amount of goodwill/merger cost less than the fair value share of identifiable net assets obtained | 3,181,563.57 |
--Other | -- |
(3) Book value of assets and liabilities of the merged party on the merger date
In RMB
vacuum and hydraulic pump | ||
Fair value on merge date | Book value on merge date | |
Assets: | ||
Monetary funds | 112,759,708.54 | 112,759,708.54 |
Accounts receivable | 176,472,824.41 | 176,472,824.41 |
Inventory | 75,714,864.30 | 75,193,955.32 |
Fixed assets | 171,076,046.21 | 163,063,849.08 |
Intangible assets | 37,443,264.05 | 3,227,177.74 |
Prepayments | 30,000.00 | 30,000.00 |
Other receivables | 139,400,701.37 | 139,400,701.37 |
Other current assets | 24,621,113.87 | 24,017,677.49 |
Construction in progress | 64,268,995.00 | 64,268,995.00 |
Right-of-use assets | 810,420.49 | 810,420.49 |
Deferred tax assets | 7,079,671.21 | 7,079,671.21 |
Other non-current assets | 19,478,954.99 | 19,478,954.99 |
Liabilities: | ||
Loan | ||
Payables | 234,320,004.21 | 234,320,004.21 |
Deferred Tax Liability | 10,415,727.84 | |
Contractual liabilities | 3,921,267.48 | 3,921,267.48 |
Payable employee compensation | 33,153,750.99 | 33,153,750.99 |
Taxes and fees payable | 2,552,462.68 | 2,552,462.68 |
Other payables | 304,829,051.67 | 304,829,051.67 |
Non-current liabilities due within one year | 324,718.81 | 324,718.81 |
Other current liabilities | 12,987,488.80 | 12,987,488.80 |
Lease liabilities | 539,932.04 | 539,932.04 |
Long term employee compensation payable | 27,863,535.89 | 27,863,535.89 |
Anticipated liabilities | 10,940,385.19 | 10,940,385.19 |
Deferred income tax liabilities | 14,239,001.21 | |
Net assets | 199,439,778.47 | 154,371,337.88 |
Less: Minority shareholders' equity | -- | -- |
Net assets acquired | 199,439,778.47 | 154,371,337.88 |
(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing dateNot available.
2. Enterprise combines under the same control
Nil
3. Reverse purchase
Nil
4. Disposal of subsidiaries
Nil
5.Changes in the scope of consolidation due to other reasons
In the Period, WFQL was jointly funded by the Company with IRD, BORIT, BOSCH and Wuxi High-TechZone New Dynamic Industrial Development Fund (Limited Partnership). The Company holds 45% equity directlyand 30% equity indirectly via IRD and Borit. The Company is the actual controller of WFQL.
VII. Equity in other entity (In RMB)
1.Equity in subsidiary
(1) Constitute of enterprise group:
In RMB
Subsidiary | Main operation place | Registered place | Business nature | Directly share-holding ratio(%) | Indirectly share-holding ratio(%) | Voting proportion(%) | Acquired way |
WFJN | Nanjing | Nanjing | Spare parts of internal-combustion engine | 80.00 | -- | 80.00 | Enterprise combines under the same control |
WFLD | Wuxi | Wuxi | Automobile exhaust purifier, muffler | 94.81 | -- | 94.81 | Enterprise combines under the same control |
WFMA | Wuxi | Wuxi | Spare parts of internal-combustion engine | 100.00 | -- | 100.00 | Investment |
WFCA | Wuxi | Wuxi | Spare parts of internal-combustion | 100.00 | -- | 100.00 | Investment |
engine | |||||||
WFTR | Wuxi | Wuxi | Trading | 100.00 | -- | 100.00 | Enterprise combines under the same control |
WFSC | Wuxi | Wuxi | Spare parts of internal-combustion engine | 66.00 | -- | 66.00 | Investment |
WFTT | Ningbo | Ningbo | Spare parts of internal-combustion engine | 98.83 | 1.17 | 100.00 | Enterprise combines not under the same control |
WFAM | Wuxi | Wuxi | Spare parts of internal-combustion engine | 51.00 | -- | 51.00 | Enterprise combines not under the same control |
WFLD (Wuhan) | Wuhan | Wuhan | Automobile exhaust purifier, muffler | -- | 60.00 | 60.00 | Investment |
WFLD (Chongqing) | Chongqing | Chongqing | Automobile exhaust purifier, muffler | -- | 100.00 | 100.00 | Investment |
WFLD (Nanchang) | Nanchang | Nanchang | Automobile exhaust purifier, muffler | -- | 100.00 | 100.00 | Investment |
WFAS | Wuxi | Wuxi | Smart car equipment | -- | 66.00 | 66.00 | Investment |
WFDT | Wuxi | Wuxi | Hub Motor | 80.00 | -- | 80.00 | Enterprise combines not under the same control |
WFQL | Wuxi | Wuxi | Fuel cell components | 45.00 | 30.00 | 75.00 | Investment |
VHCN | Wuxi | Wuxi | Vacuum and hydraulic pump | 100.00 | -- | 100.00 | Enterprise combines not under |
the same control | |||||||
SPV | Denmark | Denmark | Investment | 100.00 | -- | 100.00 | Investment |
IRD | Denmark | Denmark | Fuel cell components | -- | 100.00 | 100.00 | Enterprise combines not under the same control |
IRD America | America | America | Fuel cell components | -- | 100.00 | 100.00 | Enterprise combines not under the same control |
Borit | Belgium | Belgium | Fuel cell components | -- | 100.00 | 100.00 | Enterprise combines not under the same control |
Borit America | America | America | Fuel cell components | -- | 100.00 | 100.00 | Enterprise combines not under the same control |
VHIT | Italy | Italy | Vacuum and hydraulic pump | -- | 100.00 | 100.00 | Investment |
(2) Important non-wholly-owned subsidiary:
In RMB
Subsidiary | Share-holding ratio of minority(%) | Gains/losses attributable to minority in the Period | Dividend announced to distribute for minority in the Period | Ending equity of minority |
WFJN | 20.00 | 17,248,806.27 | 66,468,437.62 | 210,600,503.32 |
WFSC | 34.00 | 5,564,553.15 | -- | 26,591,139.14 |
WFLD | 5.19 | 7,744,005.93 | -- | 147,668,021.86 |
WFAM | 49.00 | 42,540,064.71 | 32,680,000.00 | 216,555,779.48 |
Total | 73,097,430.06 | 99,148,437.62 | 601,415,443.80 |
(3) Main finance of the important non-wholly-owned subsidiary:
In RMB
Subsidia | Ending balance |
ry | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities |
WFJN | 858,419,058.16 | 577,359,266.26 | 1,435,778,324.42 | 346,383,138.63 | 35,181,853.60 | 381,564,992.23 |
WFSC | 204,138,588.74 | 48,627,033.79 | 252,765,622.53 | 174,162,086.64 | -- | 174,162,086.64 |
WFLD | 4,869,373,661.60 | 1,412,237,671.12 | 6,281,611,332.72 | 3,512,116,686.68 | 218,075,518.79 | 3,730,192,205.47 |
WFAM | 434,472,654.85 | 554,774,642.02 | 989,247,296.87 | 449,094,531.03 | 99,748,081.81 | 548,842,612.84 |
Total | 6,366,403,963.35 | 2,592,998,613.19 | 8,959,402,576.54 | 4,481,756,442.98 | 353,005,454.20 | 4,834,761,897.18 |
Subsidiary | Opening balance | |||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
WFJN | 1,163,244,507.43 | 312,639,160.97 | 1,475,883,668.40 | 403,140,636.22 | 39,065,672.06 | 442,206,308.28 |
WFSC | 216,066,879.24 | 46,302,741.60 | 262,369,620.84 | 200,467,446.49 | 200,467,446.49 | |
WFLD | 4,503,223,903.30 | 1,354,614,615.10 | 5,857,838,518.40 | 3,558,321,743.41 | 21,480,042.25 | 3,579,801,785.66 |
WFAM | 413,380,063.83 | 483,832,825.41 | 897,212,889.24 | 450,194,211.90 | 59,932,162.99 | 510,126,374.89 |
Total | 6,295,915,353.80 | 2,197,389,343.08 | 8,493,304,696.88 | 4,612,124,038.02 | 120,477,877.30 | 4,732,601,915.32 |
In RMB
Subsidiary | Current period | |||
Operation Income | Net profit | Total comprehensive income | Cash flow from operation activity | |
WFJN | 732,361,563.72 | 83,150,768.43 | 83,150,768.43 | 62,087,338.85 |
WFSC | 387,505,622.39 | 16,361,964.13 | 16,361,964.13 | -23,846,712.63 |
WFLD | 5,937,549,034.42 | 265,352,997.31 | 265,352,997.31 | 87,740,237.63 |
WFAM | 704,346,941.59 | 90,524,389.14 | 90,524,389.14 | 145,137,886.56 |
Total | 7,761,763,162.12 | 455,390,119.01 | 455,390,119.01 | 271,118,750.41 |
Subsidiary | Last Period | |||
Operation Income | Net profit | Total comprehensive income | Cash flow from operation activity | |
WFJN | 825,822,469.06 | 96,549,390.54 | 96,549,390.54 | 79,645,579.97 |
WFSC | 350,165,714.10 | 12,839,649.76 | 12,839,649.76 | 38,135,056.28 |
WFLD | 6,527,268,564.43 | 337,097,184.96 | 337,114,070.10 | -323,189,683.23 |
WFAM | 641,120,626.61 | 81,627,198.42 | 81,627,198.42 | 53,533,412.73 |
Total | 8,344,377,374.20 | 528,113,423.68 | 528,130,308.82 | -151,875,634.25 |
(4) Significant restrictions on the use of enterprise group assets and pay off debts of theenterprise group
Nil
2. Transaction that has owners’ equity shares changed in subsidiary but still with controllingrightsNil
3. Equity in joint venture and associated enterprise
(1) Associated enterprise:
Joint venture or associated enterprise | Enterprise abbreviation | Main operation place | Registered place | Business nature | Share-holding ratio(%) | Accounting treatment on investment for joint venture and associated enterprise | |
Directly | Indirectly | ||||||
Wuxi Weifu Environmental Catalysts. Co., Ltd. | WFEC | Wuxi | Wuxi | Catalyst | -- | 49.00 | Equity method |
RBCD | RBCD | Wuxi | Wuxi | Internal-combustion engine accessories | 32.50 | 1.50 | Equity method |
Zhonglian Automobile Electronics Co., Ltd. | Zhonglian Automobile | Shanghai | Shanghai | Internal-combustion engine accessories | 20.00 | -- | Equity method |
Wuxi Weifu Precision Machinery Manufacturing Co., Ltd. | WFPM | Wuxi | Wuxi | Internal-combustion engine accessories | 20.00 | -- | Equity method |
Changchun Xuyang Weifu Automobile Components Technology Co., Ltd. | Changchun Xuyang | Changchun | Changchun | Automobile components | -- | 34.00 | Equity method |
PrecorsGmbH | Precors | Germany | Germany | Fuel cell components | -- | 8.11 | Equity method |
Wuxi ChelianTianxia Information Technology Co., Ltd. | ChelianTianxia | Wuxi | Wuxi | Telematics services | 8.83 | -- | Equity method |
Lezhuo Bowei Hydraulic Technology (Shanghai) Co., Ltd | Lezhuo Bowei | Shanghai | Shanghai | Automobile components | 50.00 | -- | Equity method |
Holding shares ratio different from the voting right ratio: nilHas major influence with less 20% voting rights hold, or has minor influence with over 20% (20% included) votingrights hold:
(1) Precors:
Wholly-owned subsidiary of the Company - Borit, holds 8.11% equity of Precors, Borit appointed a director toPrecors. Though the representative, Borit can participate in the operation policies formulation of Precors, and thusexercise a significant influence over Precors.
(2) ChelianTianxia:
The Company holds 9.8452% equity of Chelian Tianxia, and appointed a director to Chelian Tianxia. Though therepresentative, the Company can participate in the operation policies formulation of Chelian Tianxia, and thusexercise a significant influence over Chelian Tianxi.
(2) Main financial information of the important associated enterprise:
In RMB
Item | Ending balance/Current amount | ||
WFEC | RBCD | Zhonglian Automobile | |
Current assets | 3,507,976,754.16 | 15,426,523,373.99 | 241,595,079.15 |
Including: cash and cash equivalents | 813,874,175.27 | 10,773,921.81 | 225,052,854.96 |
Non-current assets | 333,764,427.43 | 3,421,035,986.82 | 7,557,124,612.32 |
Total assets | 3,841,741,181.59 | 18,847,559,360.81 | 7,798,719,691.47 |
Current liabilities | 1,665,411,123.81 | 8,810,309,639.09 | 6,171,780.23 |
Non-current liabilities | 493,618,200.85 | -- | 2,517,670.77 |
Total liabilities | 2,159,029,324.66 | 8,810,309,639.09 | 8,689,451.00 |
Minority shareholders' interests | -- | -- | -- |
Equity attributable to shareholders of the parent company | 1,682,711,856.93 | 10,037,249,721.72 | 7,790,030,240.47 |
Share of net assets based on shareholding ratio | 824,528,809.90 | 3,412,664,905.38 | 1,558,006,048.09 |
Adjustment item | -- | -- | -- |
-- Goodwill | -- | 267,788,761.35 | 1,407,265.96 |
-- Unrealized profit from internal trading | -- | -20,692,355.48 | -- |
--Other | -- | -0.28 | -- |
Book value of equity investment in associated enterprises | 824,528,809.90 | 3,659,761,310.97 | 1,559,413,314.05 |
Fair value of equity investment for the affiliates with consideration publicly | -- | -- | -- |
Operating income | 4,983,370,807.15 | 13,443,929,728.58 | 26,913,563.07 |
Financial expense | 37,298,423.01 | -12,919,599.29 | -3,814,000.75 |
Income tax expense | 43,882,305.71 | 494,166,513.51 | 4,465,983.95 |
Net profit | 354,097,545.31 | 3,059,444,530.82 | 1,876,187,641.39 |
Net profit from discontinued operations | -- | -- | -- |
Other comprehensive income | -- | -- | -- |
Total comprehensive income | 354,097,545.31 | 3,059,444,530.82 | 1,876,187,641.39 |
Dividends received from associated enterprise in the year | 147,000,000.00 | 765,837,710.23 | 194,400,000.00 |
Other explanationAdjustment item for other “-0.28”: the differential tail;
In RMB
Item | Opening balance/Last amount | ||
WFEC | RBCD | Zhonglian Automobile | |
Current assets | 4,359,756,878.88 | 14,697,384,325.87 | 71,871,241.06 |
Including: cash and cash equivalents | 158,561,233.69 | 10,186,961.74 | 68,250,913.00 |
Non-current assets | 344,385,727.94 | 3,080,929,311.51 | 6,819,520,183.89 |
Total assets | 4,704,142,606.82 | 17,778,313,637.38 | 6,891,391,424.95 |
Current liabilities | 2,858,118,635.51 | 8,623,318,592.84 | 2,970,685.68 |
Non-current liabilities | 224,616,134.38 | -- | 2,578,140.19 |
Total liabilities | 3,082,734,769.89 | 8,623,318,592.84 | 5,548,825.87 |
Minority shareholders' interests | -- | -- | -- |
Equity attributable to shareholders of the parent company | 1,621,407,836.93 | 9,154,995,044.54 | 6,885,842,599.08 |
Share of net assets based on shareholding ratio | 794,489,840.10 | 3,112,698,315.15 | 1,377,168,519.82 |
Adjustment item | -- | -- | -- |
-- Goodwill | -- | 267,788,761.35 | 1,407,265.96 |
-- Unrealized profit from internal trading | -- | -40,372,840.77 | -- |
--Other | -- | -0.28 | -0.01 |
Book value of equity investment in associated enterprises | 794,489,840.10 | 3,340,114,235.45 | 1,378,575,785.77 |
Fair value of equity investment for the affiliates with consideration publicly | -- | -- | -- |
Operating income | 7,595,559,889.80 | 15,712,821,656.32 | 24,479,957.39 |
Financial expense | 108,452,297.18 | -56,513,383.09 | -3,139,306.82 |
Income tax expense | 51,379,165.70 | 674,071,693.78 | 3,579,421.41 |
Net profit | 432,505,306.32 | 3,237,912,797.87 | 1,699,134,647.28 |
Net profit from discontinued operations | -- | -- | -- |
Other comprehensive income | 34,459.46 | -- | -- |
Total comprehensive income | 432,539,765.78 | 3,237,912,797.87 | 1,699,134,647.28 |
Dividends received from associated enterprise in the year | 98,000,000.00 | 558,125,544.30 | 198,800,000.00 |
(3) Excess loss occurred in joint venture or associated enterprise:
Nil
(4) Unconfirmed commitment with joint venture investment concerned:
Nil
(5) Intangible liability with joint venture or associated enterprise investment concerned:
Nil
4. Financial summary for non-important Joint venture and associated enterprise
In RMB
Item | Ending balance/Current amount | Opening balance/Last amount |
Joint venture: | ||
Total book value of investment | -- | -- |
Amount based on share-holding ratio | ||
--Net profit | -- | -- |
-- Other comprehensive income | -- | -- |
--Total comprehensive income | -- | -- |
Associated enterprise: | ||
Total book value of investment | 239,114,674.05 | 204,764,926.80 |
Amount based on share-holding ratio | ||
--Net profit | 7,198,399.91 | -13,039,885.78 |
-- Other comprehensive income | -- | -- |
--Total comprehensive income | 7,198,399.91 | -13,039,885.78 |
5. Major conduct joint operation
Nil
6. Structured body excluding in consolidate financial statement
Nil
VIII. Risk related with financial instrumentMain financial instrument of the Company including monetary funds, structured deposits, accountreceivable, equity instrument investment, financial products, loans, and account payable etc., moredetails of the financial instrument can be found in relevant items of Note VII. Risks concerned withthe above-mentioned financial instrument, and the risk management policy takes for lower the risksare as follow:
Aims of engaging in the risk management is to achieve equilibrium between the risk and benefit,lower the adverse impact on performance of the Company to minimum standards, and maximizedthe benefit for shareholders and other investors. Base on the risk management targets, the basictactics of the risk management is to recognized and analyzed the vary risks that the Companycounted, established an appropriate risk exposure baseline and caring risk management, supervisethe vary risks timely and reliably in order to control the risk in a limited range.In business process, the risks with financial instrument concerned happen in front of the Companymainly including credit exposure, market risk and liquidity risk. BOD of the Company takes fullcharge of the risk management target and policy-making, and takes ultimate responsibility for thetarget of risk management and policy. Compliance department and financial control departmentmanager and monitor those risk exposures to ensuring the risks are control in a limited range.
1. Credit Risk
Credit risk refers to the risk that one party of a financial instrument fails to perform its obligations,and resulting in the financial loss of other party. The company's credit risk mainly comes frommonetary funds, structured deposits, note receivable, account receivable, other account receivables.The management has established an appropriate credit policy and continuously monitors theexposure to these credit risks.The monetary funds and structured deposits held by the Company are mainly deposited in financialinstitutions such as commercial banks, the management believes that these commercial banks havehigher credit and asset status, and have lower credit risks. The Company adopts quota policies toavoid credit risks to any financial institutions.For accounts receivable, other receivables and bills receivable, the Company sets relevant policiesto control the credit risk exposure. To prevent the risks, the company has formulated a new customercredit evaluation system and an existing customer credit sales balance analysis system. The newcustomer credit evaluation system aims at new customers, the company will investigate a customer’sbackground according to the established process to determine whether to give the customer a creditline and the credit line size and credit period. Accordingly, the company has set a credit limit and acredit period for each customer, which is the maximum amount that does not require additionalapproval. The analysis system for credit sales balance of existing customers means that afterreceiving a purchase order from an existing customer, the company will check the order amount andthe balance of the accounts owed by the customer so far,if the total of the two exceeds the creditlimit of the customer, the company can only sell to the customer on the premise of additionalapproval, otherwise the customer must be required to pay the corresponding amount in advance. In
addition, for the credit sales that have occurred, the company analyzes and audits the monthlystatements for risk warning of accounts receivable to ensure that the company’s overall credit riskis within a controllable range.The maximum credit risk exposure of the Company is the carrying amount of each financial asseton the balance sheet.
2.Market risk
Market risk of the financial instrument refers to the fair value of financial instrument or future cashflow due to fluctuations in the market price changes and produce, mainly includes the IRR, FX riskand other price risk.
(1) Interest rate risk (IRR)
IRR refers to the fluctuate risks on Company’s financial status and cash flow arising from rateschanges in market. IRR of the Company mainly related with the bank loans. In order to lower thefluctuate of IRR, the Company, in line with the anticipative change orientation, choose floating rateor fixed rate, that is the rate in future period will goes up prospectively, than choose fixed rate; ifthe rate in future period will decline prospectively, than choose the floating rate. In order to minorthe bad impact from difference between the expectation and real condition, loans for liquid funds ofthe Company are choose the short-term period, and agreed the terms of prepayment in particular.
(2) Foreign exchange (FX) risk
FX risks refer to the losses arising from exchange rate movement. The FX risk sustain by theCompany mainly related with the USD, EUR, SF, JPY, HKD, DKK except for the USD, EUR, SF,JPY, HKD and DKK carried out for the equipment purchasing of parent company and Autocam,material purchasing of parent company, technical service and trademark usage costs of parentcompany, the import and export of Weifu International Trade, operation of IRD, operation of Borit,and operation of VHIT and other main business of the Company are pricing and settle with RMB(yuan). In consequence of the foreign financial assets and liabilities takes minor ratio in total assets,the Company has small FX risk of the financial instrument, considered by management of theCompany.End as 31st December 2022, except for the follow assets or liabilities listed with foreign currency,assets and liabilities of the Company are carried with RMB
① Foreign currency assets of the Company till end of 31st December 2022:
In RMB
Item | Ending foreign currency balance | Convert rate | Ending RMB balance converted | Ratio in assets (%) |
Monetary funds | ||||
Including: USD | 21,346,973.12 | 6.9646 | 148,673,128.99 | 0.52 |
EUR | 48,296,719.62 | 7.4229 | 358,501,720.07 | 1.26 |
HKD | 17,293,992.68 | 0.89327 | 15,448,204.84 | 0.05 |
JPY | 46,929,606.00 | 0.052358 | 2,457,140.31 | 0.01 |
DKK | 111,164,111.86 | 0.9983 | 110,975,132.87 | 0.39 |
Item | Ending foreign currency balance | Convert rate | Ending RMB balance converted | Ratio in assets (%) |
Account receivable | ||||
Including: USD | 4,732,628.22 | 6.9646 | 32,960,862.50 | 0.12 |
EUR | 27,066,494.35 | 7.4229 | 200,911,880.92 | 0.70 |
JPY | 13,084,572.00 | 0.052358 | 685,082.02 | -- |
DKK | 6,966,207.98 | 0.9983 | 6,954,365.43 | 0.02 |
Other account receivables | ||||
Including: DKK | 2,035,772.98 | 0.9983 | 2,032,312.17 | 0.01 |
Total ratio in assets | 3.08 |
② Foreign currency liability of the Company till end of 31st December 2022:
In RMB
Item | Ending foreign currency balance | Convert rate | Ending RMB balance converted | Ratio in assets(%) |
Short-term borrowings | ||||
Including: USD | 457,403.05 | 6.9646 | 3,185,629.28 | 0.03 |
EUR | 18,989,418.64 | 7.4229 | 140,956,555.62 | 1.40 |
Account payable | ||||
Including: USD | 885,151.79 | 6.9646 | 6,164,728.16 | 0.06 |
EUR | 36,055,545.43 | 7.4229 | 267,636,708.17 | 2.65 |
JPY | 50,362,512.00 | 0.052358 | 2,636,880.41 | 0.03 |
DKK | 6,081,507.53 | 0.9983 | 6,071,168.97 | 0.06 |
GBP | 2,450.00 | 8.3941 | 20,565.55 | -- |
Other account payable | ||||
Including: EUR | 5,172.58 | 7.4229 | 38,395.54 | -- |
DKK | 151,513.30 | 0.9983 | 151,255.73 | -- |
Non-current liabilities due within one year | ||||
Including: USD | 156,513.08 | 6.9646 | 1,090,051.00 | 0.01 |
EUR | 496,988.78 | 7.4229 | 3,689,098.02 | 0.04 |
DKK | 575,121.48 | 0.9983 | 574,143.77 | 0.01 |
Leasing liabilities | ||||
Including USD | 386,008.72 | 6.9646 | 2,688,396.33 | 0.03 |
EUR | 1,285,051.24 | 7.4229 | 9,538,806.85 | 0.09 |
DKK | 11,525,669.67 | 0.9983 | 11,506,076.03 | 0.11 |
Total ratio in liabilities | 4.52 |
③ Other pricing risk
The equity instrument investment held by the Company with classification as transaction financialasset and other non-current financial assets are measured on fair value of the balance sheet date. Thefluctuation of expected price for these investments will affect the gains/losses of fair value changesfor the Company.
Furthermore, on the premise of deliberated and approved in 10
th meeting of 8
thsession of theBOD, the Company exercise entrust financing with the self-owned idle capital; therefore, theCompany has the risks of collecting no principal due to entrust financial products default. Aims atsuch risk, the Company formulated a “Management Mechanism of Capital Financing”, and well-defined the authority to entrust financial management, audit process, reporting system, Choice oftrustee, daily monitoring and verification and investigation of responsibility, etc. In order to lowerthe adverse impact from unpredictable factors, the Company choose short-term and medium periodfor investment and investment product’s term is up to 5 years in principle; The variety of investmentincludes bank financial products, trust plans of trust companies, asset management plans of assetmanagement companies, various products issued by securities companies, fund companies andinsurance companies, etc.
3. Liquidity risk
Liquidity risk refers to the capital shortage risk occurred during the clearing obligation implementedby the enterprise in way of cash paid or other financial assets. The Company aims at guarantee theCompany has rich capital to pay the due debts, therefore, a financial control department isestablished for collectively controlling such risks. On the one hand, the financial control departmentmonitoring the cash balance, the marketable securities which can be converted into cash at any timeand the rolling forecast on cash flow in future 12 months, ensuring the Company, on condition ofreasonable prediction, owes rich capital to paid the debts; on the other hand, building a favorablerelationship with the banks, rationally design the line of credit, credit products and credit terms,guarantee a sufficient limit for bank credits in order to satisfy vary short-term financingrequirements.IX. Disclosure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
In RMB
Item | Ending fair value | |||
First level | Second level | Third level | Total | |
I. Sustaining measured by fair value | ||||
(I) Financial assets measured at fair value and whose changes are included in current profit or loss | 146,039,262.82 | 186,608,914.00 | 3,712,781,392.05 | 4,045,429,568.87 |
1.Trading financial assets | 146,039,262.82 | -- | 2,572,781,392.05 | 2,718,820,654.87 |
(1)Investment in equity instrument | 146,039,262.82 | -- | -- | 146,039,262.82 |
(2)Investment in other liability instruments and equity instrument | -- | -- | 2,572,781,392.05 | 2,572,781,392.05 |
2. Other non-current financial assets | -- | 186,608,914.00 | 1,140,000,000.00 | 1,326,608,914.00 |
(1)Equity instrument investment | -- | 186,608,914.00 | 515,000,000.00 | 701,608,914.0 |
0 | ||||
(2)Investment in other liability instruments and equity instrument | -- | -- | 625,000,000.00 | 625,000,000.00 |
(II) Financial assets measured at fair value and whose changes are included in current profit or loss | -- | -- | 2,596,159,535.21 | 2,596,159,535.21 |
1. Receivable financing | -- | -- | 1,918,368,845.21 | 1,918,368,845.21 |
2. Other equity instrument investment | -- | -- | 677,790,690.00 | 677,790,690.00 |
Total asset sustaining measured by fair value | 146,039,262.82 | 186,608,914.00 | 6,308,618,136.15 | 6,641,266,312.97 |
(I) Financial liabilities measured at fair value and whose changes are included in current profit or loss | -- | 747,115.75 | -- | 747,115.75 |
Derivative financial liability- foreign exchange contract | -- | 747,115.75 | -- | 747,115.75 |
Total liability sustaining measured by fair value | -- | 747,115.75 | -- | 747,115.75 |
II. Non-persistent measure | ||||
Total assets not consistently measured at fair value | -- | -- | -- | -- |
Total liabilities not continuously measured at fair value | -- | -- | -- | -- |
2. Recognized basis for the market price sustaining and non-persistent measured by fairvalue on first level
On 31 December 2022, the financial assets available for sale, equity instrument investments held by the Companyinclude SNAT (stock code: 600841), Miracle Automation (Stock code: 002009), ifan Technology (Stock Code:
601777) and Zoyte Auto(000980). The fair value at the end of the period is determined at the closing price as ofDecember 30, 2022
3. Recognized basis for the market price sustaining and non-persistent measured by fairvalue on second levelOn 31 December 2022, other non-current financial assets, equity instrument investments held by the Companyinclude Guolian Securities (stock code: 601456). The fair value at the end of the period is determined at the closingprice and liquidity discount as of December 30, 2022.The derivative financial liabilities that continue to be measured at the second level of fair value are forward foreignexchange settlement and sales contracts, and the fair value is measured at the fair value of the forward foreignexchange settlement and sales contracts provided by the contracting bank.
4. The market price sustaining and non-persistent measured by fair value on third level
(1) Accounts receivable financing
For this part of financial assets, the Company uses discounted cash flow valuation techniques to determine its fairvalue. Among them, important unobservable input values mainly include discount rate and contractual cash flowmaturity period. The cash flow with a contract expiration period of 12 months (inclusive) shall not be discounted,and the cost shall be regarded as its fair value.
(2) Fair value of other equity instrument investments - changes in fair value are included in other comprehensiveincomeFor this part of financial assets, due to the lack of market liquidity, the Company adopts replacement cost method todetermine their fair value. Among them, the important unobservable input values mainly include the financial dataof the invested company.
(3) Fair value of investment in other debt instruments and equity instruments
For this part of financial assets, the company uses discounted cash flow valuation technology to determine. Amongthem, the important unobtainable input values mainly include expected annual return rate and risk coefficient.X. Related party and related party transactions
1. Parent company of the enterprise
In RMB
Parent company | Association relation | Type of enterprise | Registration place | Legal representative | Business nature | Registered capital |
Wuxi Industry Group | Parent company | Wholly state-owned | Wuxi | Yao Zhiyong | Operation of state-owned assets | 5,496,785,600 |
Parent company | Shareholding ratio of the parent company in the enterprise (%) | Proportion of voting rights of the parent company in the enterprise (%) | The final control party of the enterprise | Unified social credit code |
Wuxi Industry Group | 20.23 | 20.23 | Wuxi State-owned Assets Supervision and Administration Commission | 913202001360026543 |
Explanation on parent company of the enterprise | ||||
Wuxi Industry Group is an enterprise controlled by the State-owned Assets Management Committee of Wuxi Municipal People’s Government. Its business scope includes foreign investment by using its own assets, house leasing services, self-operating and acting as an agent for the import and export business of various commodities and technologies (Except for goods and technologies that are restricted by the state or prohibited for import and export), domestic trade (excluding national restricted and prohibited items). (Projects that are subject to approval in accordance with the law can be operated only after being approved by relevant departments). |
2. Subsidiary of the Company
For more details of the Company’s subsidiaries, please refer to Note IX-1. “Equity in subsidiary”.
3. Joint venture and associated enterprise
For more details, please refer to Note IX-3. “Equity in joint venture and associated enterprise”.Other associated enterprise or joint ventures which has related transaction with the Company in the period oroccurred previous:
Nil
4. Other related party
Other related party | Relationship with the Company |
Robert Bosch Company | Second largest shareholder of the Company |
Guokai Metals | Enterprises controlled by the parent company |
Urban Public Distribution | Enterprises controlled by the parent company |
Company A | Enterprises controlled by relatives of directors of the Company |
Key executive | Director, supervisor and senior executive of the Company |
Note: Because it is still in the investigation stage of the public security organs, Company A istemporarily used to indicate Company A itself along with four companies that may be controlled byit for the sake of case confidentiality. In January 2022, WFTR developed the "platform trade"business which was defrauded by the contract, the public security organ placed on criminalinvestigation on April 12, 2023. The four companies in this business are not related to the Companyfrom the perspective of the ownership structure and other information in the industrial andcommercial registration, but according to the investigation information feedbacks of the competentdepartments, the four companies may be materially controlled by Company A, The Company hasidentified the four companies as related parties base on the principle of caution.
5. Related transaction
(1) Goods purchasing, labor service providing and receiving
①Goods purchasing/labor service receiving
In RMB
Related party | Content of related transaction | Current period | Last Period |
WFPM | Goods and labor | 52,775,709.71 | 49,839,916.90 |
RBCD | Goods and labor | 301,077,307.73 | 359,903,131.37 |
WFEC | Goods | 575,378,265.05 | 823,962,918.45 |
Robert Bosch Company | Goods and labor | 232,163,763.73 | 216,576,637.98 |
Changchun Xuyang | Goods | 342,520.00 | 1,712,596.87 |
Guokai Metals | Goods | 14,516,381.84 | 57,991,174.20 |
②Goods sold/labor service providing
In RMB
Related party | Content of related transaction | Current period | Last Period |
WFPM | Goods and labor | 980,889.25 | 29,501,561.74 |
RBCD | Goods and labor | 2,220,345,511.60 | 3,137,245,415.70 |
WFEC | Goods and labor | 944,537.87 | 7,630,155.96 |
Robert Bosch Company | Goods and labor | 1,475,458,231.00 | 1,224,350,229.77 |
Shinwell Automobile | Goods | -- | 29,250.79 |
Changchun Xuyang | Goods and labor | 286,036.62 | 21,436,170.70 |
Other explanation: Xingwei Automotive Technology (Wuxi) Co., LTD was originally anassociate company of WFTR, which was sold in 2021.
(2) Related trusteeship management/contract & entrust management/ outsourcing
Nil
(3) Related lease
①As a lessor for the Company:
In RMB
Lessee | Assets type | Lease income recognized in the Period | Lease income recognized at last Period |
WFEC | Workshop | 2,380,758.09 | 1,683,130.70 |
Explanation on related lease:
②WFLD entered into a house leasing contract with WFEC. The plant locating at No.9 Linjiang Road, Wuxi Xinwudistrict, owed by WFLD, was rented out to WFEC. It is agreed that the rental from 1 January 2022 to 31 December2022 was RMB 2,380,758.09.
(4) Related guarantee
Nil
(5) Related party’s borrowed/lending funds
During the current period, WFLD repaid Wuxi Industry Group RMB 5.47 million of borrowed fundsand paid interest of RMB 119,185.22.
(6) Related party’s assets transfer and debt reorganization
Nil
(7) Remuneration of key manager
In RMB
Item | Current period | Last Period |
Remuneration of key executives | 679.00 | 2,617.00 |
(8) Equity related transactions
① In this period, the Company and its wholly-owned subsidiary SPV acquired vacuum and hydraulic pumpbusiness from Robert Bosch Company and its subsidiary Robert Bosch S.p.A. Society à Unipersonale at a
consideration of RMB 182,950,038.25. The net assets acquired are detailed in Note VI-1. “Merger of EnterprisesNot Under Common Control”.
② In this period, the Company entered into a joint venture contract with Robert Bosch InternationalBeteiligungen AG, a subsidiary of Robert Bosch Company, and Bosch (China) Investment Ltd., in which the threeparties jointly invested to establish Lezhuo Bowei Hydraulic Technology (Shanghai) Co., Ltd. (hereinafter referredto as “Lezhuo Bowei”). Robert Bosch International Beteiligungen AG and Bosch (China) Investment Ltd. subscribedRMB 220 million, accounting for 50% of the registered capital of Lezhuo Bowei.
③ In the Period, Wuxi Weifu Qinglong Power Technology Co., Ltd was jointly funded by the Company withIRD FUEL CELLS A/S, BORIT NV, ROBERT BOSCH INTERNATIONALE BETEILIGUNGEN AG(asubsidiary of Robert Bosch Company) and Wuxi High-Tech Zone New Dynamic Industrial Development Fund(Limited Partnership). ROBERT BOSCH INTERNATIONALE BETEILIGUNGEN AG, a subsidiary of RobertBosch Company, subscribed RMB 75.00 million, accounting for 15% of the registered capital of Wuxi WeifuQinglong Power Technology Co., Ltd.
(9) Other related transactions:
Related party | Contents of item | Current period | Last Period |
WFPM | Purchase of fixed assets | 50,000.00 | -- |
RBCD | Payable for technical services | -- | 455,591.30 |
RBCD | Purchase of fixed assets | 4,503,484.90 | 528,378.37 |
RBCD | Technology royalties paid etc. | 1,147,294.75 | 2,332,313.62 |
RBCD | Providing of technical services, etc. | 2,053,000.00 | -- |
Robert Bosch Company | Technology royalties paid etc. | 2,316,825.65 | 5,577,508.74 |
Robert Bosch Company | Purchase of fixed assets | 49,061,191.70 | 927,851.05 |
WFEC | Purchase of fixed assets | -- | 20,353.98 |
WFEC | Payable for technical services | 102,075.47 | 450,000.00 |
WFEC | Utilities payable | 1,187,817.04 | -- |
WFEC | Providing of technology service, etc. | 42,169.81 | 873,420.02 |
Urban public distribution | Purchase canteen ingredients, etc | 1,392,464.33 | -- |
6. Receivable/payable items of related parties
(1) Receivable item:
In RMB
Item | Related party | Ending balance | Opening balance | ||
Book balance | Bad debt reserve | Book balance | Bad debt reserve |
Account receivable | WFPM | 299,389.13 | 10,925.29 | 1,233,084.39 | -- |
Account receivable | RBCD | 461,493,652.46 | 174,766.71 | 48,954,455.60 | 56,805.74 |
Account receivable | Robert Bosch Company | 363,021,724.83 | 882,016.11 | 236,685,486.17 | 426,203.85 |
Other account receivables | Robert Bosch Company | -- | -- | 692,995.30 | -- |
Account receivable | Changchun Xuyang | 5,464.91 | -- | 995,215.93 | -- |
Account receivable | WFEC | 514,638.29 | -- | 6,212,780.39 | -- |
Other account receivables | WFEC | 147,000,000.00 | -- | -- | -- |
(2) Prepaid items:
Item | Related party | Ending balance | Opening balance |
Prepayments | Robert Bosch Company | 5,249,715.46 | 539,263.12 |
Other non-current assets | Robert Bosch Company | 1,470,000.00 | 9,932,547.00 |
Other non-current assets | Wuxi Industry Group | 5,452,800.00 | -- |
(3) Payable item:
In RMB
Item | Related party | Ending balance | Opening balance |
Account payable | WFPM | 17,783,464.23 | 11,634,159.55 |
Other account payable | WFPM | 29,000.00 | 29,000.00 |
Account payable | WFEC | 274,115,921.53 | 299,939,408.63 |
Account payable | RBCD | 37,603,958.72 | 33,418,536.50 |
Account payable | Robert Bosch Company | 49,500,046.68 | 16,412,385.58 |
Account payable | Guokai Metals | 3.12 | 2.86 |
Other current liabilities | RBCD | 0.05 | 120,466,375.78 |
Other current liabilities | WFPM | 76,030.18 | -- |
Other current liabilities | Robert Bosch Company | 63,572.08 | 39,165.98 |
Other account payable | Wuxi Industry Group | -- | 5,476,184.14 |
Other account payable | Guokai Metals | -- | 2,717,849.00 |
Other account payable | Robert Bosch Company | 13,308,176.65 | -- |
(4) Advances received and contractual liabilities:
Item | Related party | Ending balance | Opening balance |
Contract liability | RBCD | 0.36 | 0.36 |
Contract liability | Robert Bosch Company | 510,212.12 | 796,325.77 |
Contract liability | WFEC | 584,847.43 | -- |
(5) Related claim in “platform trade” business:
Item | Ending balance | Opening balance |
Company A | 2,415,151,888.80 | -- |
Note: Because it is still in the investigation stage of the public security organs, Company A istemporarily used to indicate the company above. Based on the principle of caution, the balance ofthe 4 companies that may be controlled by Company A is combined under the name of Company A.The balance is the difference between the "purchase fund" paid by WFTR based on the "platformtrade" business and the "sales fund" received by WFTR. According to the principle of substanceover form, the "platform trade" business of WFTR is not treated as normal trade business but asfund receipt and payment, so it is listed as other receivables.
7. Undertakings of related party
NilXI. Share-based payment
1. Overall situation of share-based payment
In RMB
Total amount of various equity instruments granted by the Company in the current period | -- |
Total amount of various equity instruments exercised by the Company in the current period | 199,195,200.00 |
Total amount of various equity instruments invalidated by the company in the current period | 157,213,350.00 |
The scope of the exercise price of the stock options issued by the company at the end of the period and the remaining period of the contract | The grant price is 15.48 yuan per share; the exercise time is from the first trading day 24 months after the completion of the registration of the restricted stocks granted in the first tranche to the last trading day within 60 months from the date of completion of the registration of the restricted stock granted in the first tranche, so the remaining period of the contract is 3 years and 11 months. |
The scope of the exercise price of other equity instruments issued by the company at the end of the period and the remaining period of the contract | N/A |
.2. Share-based payment settled by equity
In RMB
Method for determining the fair value of equity instruments on the grant date | Determine based on the closing price of the restricted stock on the grant date |
Basis for determining the number of vesting equity instruments | Unlocking conditions |
Reasons for the significant difference between estimate in the current period and estimate in the prior period | Not Applicable |
Cumulative amount of equity-settled share-based payments included in the capital reserve | 111,990,911.92 |
Total amount of expenses confirmed by equity-settled share-based payments in the current period | 28,943,506.38 |
Other explanationsThis restricted stock incentive plan has been reviewed and approved by the company’s second extraordinary generalmeeting of shareholders in 2020. The overview of this restricted stock incentive plan is as follows:
(1) Stock source: the company’s A-share common stock repurchased from the secondary market.
(2) Grant date: November 12, 2020.
(3) Grant objects and number of grants: 19,540,000 restricted stocks were granted to 601 incentive recipients of thecompany and its subsidiaries.
(4) Grant price: 15.48 yuan/share.
(5) Grant registration completion date: December 4, 2020.
(6) Lifting the restrictions on sales:
Unlock period | Unlock time | Ratio of unlocked quantity to granted quantity |
Phase Iunlocked
Phase I unlocked | Starting from the first trading day 24 months after the completion of the registration of the first grant and ending on the last trading day within 36 months | 4/10 |
Phase II unlocked | Starting from the first trading day 36 months after the completion of the registration of the first grant and ending on the last trading day within 48 months | 3/10 |
Phase III unlocked | Starting from the first trading day 48 months after the completion of the registration of the first grant and ending on the last trading day within 60 months | 3/10 |
(7) Performance appraisal requirements at the company level:
Unlock conditions | Performance appraisal requirements |
The first batch of unlock conditions | 1. the weighted average ROE for year of 2021 is not less than 10%; 2. the growth rate of self-operating profit in 2021 will not be less than 6% compared with the year of 2019, the absolute amount will not be less than RMB 845 million; 3. the cash dividends for year of 2021 shall be no less than 50% of the profit available for distribution of the current year. |
The second batch of unlocking conditions | 1. the weighted average ROE for year of 2022 is not less than 10%; 2. the growth rate of self-operating profit in 2022 will not be less than 12% compared with the year of 2019, the absolute amount will not be less than RMB 892 million; 3. the cash dividends for year of 2022 shall be no less than 50% of the profit available for distribution of the current year. |
The third batch of unlocking conditions | 1. the weighted average ROE for year of 2023 is not less than 10%; 2. the growth rate of self-operating profit in 2023 will not be less than 20% compared with the year |
of 2019, the absolute amount will not be less than RMB 958 million;
3. the cash dividends for year of 2023 shall be no less than 50% of the profit available fordistribution of the current year.
Other explanation: self-operating profit refers to the net profit attributable to the owners of the parent company afterdeducting non-recurring gains and losses, and deducting the investment income from RBCD and ZhonglianElectronics.XII. Undertakings or contingency
1. Important undertakings
Important undertakings on balance sheet date:
Nil
2. Contingency
Nil
XIII. Events after balance sheet date
1. Important non-adjustment matters
Nil
2. Profit distribution
The profit or dividend to be distributed | Based on the 983,173,293 shares which exclude the buy-back shares on buy-back account (25,000,000 A-stock) from total share capital 1,008,950,570 shares (According to the provisions of the Company Law of the People's Republic of China, the listed company does not have the right to participate in the profit distribution and the conversion of the capital reserve into the share capital by repurchasing the shares held by the company through the special securities account), distributing 1.00 yuan (tax included) cash dividend for every 10 shares held, no bonus shares, without capitalization from capital reserves. The remaining undistributed profit is carried forward to the next year. The total amount of cash dividend to be paid is RMB 98,317,329.3 (tax included). If the total share capital of the Company changes before the implementation of the distribution plan, the Company will be allocated according to the principle of unchanged distribution proportion and adjustment of the total amount of distribution |
Profits or dividends declared after deliberation and approval | The profit distribution plan will be submitted for consideration at the 2022 Annual General Meeting |
3. Return of sales
Important return of sales: Nil
4. Other events after balance sheet date
The Company's wholly-owned subsidiary WFTR received the "case notice" issued by the WuxiPublic Security Bureau Xinwu branch in April 12, 2023 evening. It was informed: Weifu TRcontract fraud case, in line with the conditions for filing criminal cases, has decided to file.
XIV. Other important events
1. Previous accounting errors collection
Nil
2. Debt restructuring
Nil
3. Assets replacement
Nil
4. Pension plan
The Enterprise Annuity Plan under the name of WFHT has deliberated and approved by 8
th
meetingof 7
thsession of the BOD: in order to mobilize the initiative and creativity of the employees,established a talent long-term incentive mechanism, enhance the cohesive force and competitivenessin enterprise, the Company carried out the above mentioned annuity plan since the date of reply ofplans reporting received from labor security administration department. Annuity plans are: theannuity fund are paid by the enterprise and employees together; the enterprise’s contribution shallnot exceed 8% of the gross salary of the employees of the enterprise per year, the combinedcontribution of the enterprise and the individual employee shall not exceed 12% of the total salaryof the employees of the enterprise. In accordance with the State’s annuity policy, the Company willadjusted the economic benefits in due time, in principle of responding to the economic strength ofthe enterprise, the amount paid by the enterprise at current period control in the 8 percent of the totalsalary of last year, the maximum annual allocation to employees shall not exceed five times theaverage allocation to employees and the excess shall not be counted towards the allocation. Theindividual contribution is limited to 1% of one’s total salary for the previous year. Specific payingratio later shall be adjusted correspondingly in line with the operation condition of the Company.
In December 2012, the Company received the Reply on annuity plans reporting under the name ofWFHT from labor security administration department, later, the Company entered into the EntrustedManagement Contract of the Annuity Plan of WFHT with PICC.
5. Segment
(1) Recognition basis and accounting policy for reportable segment
Determine the operating segments in line with the internal organization structure, managementrequirement and internal reporting system. Operating segment of the Company refers to thefollowed components that have been satisfied at the same time:
① The component is able to generate revenues and expenses in routine activities;
② Management of the Company is able to assess the operation results regularly, and determineresources allocation and performance evaluation for the component;
③ Being analyzed, financial status, operation results and cash flow of the components are able torequire by the CompanyThe Company is mainly engaged in the manufacture automotive internal combustion engine fuelsystem and fuel cell components, automotive components, mufflers, purifiers etc., based on theproduct segment, the Company determines four reporting segments: automotive fuel injectionsystems and fuel cell components, automotive reprocessing systems, intake systems and vacuumand hydraulic pumps; Also, according to Note XIV-6, WFTR developed “platform trade” businesswhich was defrauded by contracts in it, the police have launched a criminal investigation. Theaccounting policies for each reporting segment are consistent with those described in Note III.Segment assets do not include trading financial assets, other receivables - dividends receivable,other non-current financial assets, investments in other equity instruments, long-term equityinvestments and other undistributed assets. The reason is that these assets have nothing to do witheach product.
(2) Financial information for reportable segment
In RMB
Item | Auto fuel injection system and fuel cell component segment | Automotive post processing system segment | Air management system segment | Vacuum pump and hydraulic pump segment |
Revenue | 6,234,413,040.37 | 5,977,419,455.46 | 612,416,043.11 | 177,911,433.07 |
Cost | 5,149,497,567.61 | 5,468,414,735.16 | 487,027,797.49 | 158,596,347.31 |
Total Profit | 127,367,101.76 | 46,173,852.85 | -651,918.79 | -52,436,497.65 |
Net profit | 129,708,365.32 | 58,011,659.04 | 3,946,252.07 | -51,714,919.01 |
Asset | 10,783,021,465.98 | 5,302,347,622.37 | 941,428,806.01 | 914,361,224.61 |
Liability | 5,889,731,119.01 | 3,784,419,888.22 | 501,890,891.17 | 709,572,116.76 |
(to be continued)
Item | “platform trade” business segment | Less: The divisions offset each other | Add: Undistributed assets and gains and losses, such as investments or income accounted for by the equity method, debt instruments and investment in equity instruments or income from their holding and disposal | Total |
Revenue | -- | 272,525,054.98 | -- | 12,729,634,917.03 |
Cost | -- | 247,150,958.77 | -- | 11,016,385,488.80 |
Total Profit | -1,644,068,327.93 | -- | 1,703,230,223.10 | 179,614,433.34 |
Net profit | -1,644,068,327.93 | -- | 1,695,062,978.76 | 190,946,008.25 |
Asset | 1,097,430,804.02 | 1,642,903,864.22 | 11,133,227,006.24 | 28,528,913,065.01 |
Liability | -- | 791,446,647.95 | 38,848.42 | 10,094,206,215.63 |
6. Major transaction and events influencing investor’s decision
(1) The security organs have launched a criminal investigation on the case that WFTR wasdefrauded by contracts in its "platform trade" business. (For details, see Notice No. 2023-007disclosed on Juchao Information Website and other information disclosure websites on April 13,2023). At present, the case is in the investigation stage, and the outcome of the case is uncertain inthe future.
(2) Based on the "platform trade" business’s background, transaction chain, sales and purchasecontract signing, transaction process, physical flow and so on, the Company carefully analyzed andmade comprehensive judgment, finds that the probability of this business not belonging to normaltrade business is extremely high. In terms of accounting treatment, the Company follows theprinciple of substance over form and does not treat it as normal trade business, but according to thereceipt and payment of funds,prudently recognize as claims and liabilities, respectively, purchasesactually paid to "Suppliers" and sales collected from "Customers". In the financial statements, the"platform trade" business is net reported to other receivables in the form of the "platform trade"business portfolio. In 2022, The outflow amount of the "platform trade" business was 6345,751,400yuan, and the inflow amount was 360,4.252,300 yuan the amount is 2,741,499,100 yuan, for whichan expected credit loss of 1,644,068,300 yuan has been charged.XV. Principal notes of financial statements of parent company
(There is no special explanation for the following items, and the amount unit is RMB Yuan.The ending period refers to December 31, 2022, the beginning period refers to January 1, 2022,the current period refers to the year 2022, and the previous period refers to the year 2021.)
1. Account receivable
(1) Classification of account receivable:
In RMB
Category | Ending balance | ||||
Book balance | Bad debt reserve | Book value | |||
Amount | Ratio(%) | Amount | Accrued ratio(%) | ||
Account receivable with bad debt provision accrued on a single basis | 7,705,636.24 | 0.84 | 7,705,636.24 | 100.00 | -- |
Account receivable with bad debt provision accrued on portfolio | 910,831,491.61 | 99.16 | 4,023,208.39 | 0.44 | 906,808,283.22 |
Including: receivables from customers | 768,218,575.70 | 83.63 | 4,023,208.39 | 0.52 | 764,195,367.31 |
Receivables from internal related parties | 142,612,915.91 | 15.53 | -- | -- | 142,612,915.91 |
Total | 918,537,127.85 | 100.00 | 11,728,844.63 | 1.28 | 906,808,283.22 |
Category | Opening balance | ||||
Book balance | Bad debt reserve | Book value | |||
Amount | Ratio(%) | Amount | Accrued ratio(%) | ||
Account receivable with bad debt provision accrued on a single basis | 7,803,945.24 | 1.42 | 7,803,945.24 | 100.00 | -- |
Account receivable with bad debt provision accrued on portfolio | 540,453,844.97 | 98.58 | 3,495,954.75 | 0.65 | 536,957,890.22 |
Including: receivables from customers | 324,001,494.50 | 59.10 | 3,495,954.75 | 1.08 | 320,505,539.75 |
Receivables from internal related parties | 216,452,350.47 | 39.48 | -- | -- | 216,452,350.47 |
Total | 548,257,790.21 | 100.00 | 11,299,899.99 | 2.06 | 536,957,890.22 |
①Bad debt provision accrued on single basis:
In RMB
Name | Ending balance | |||
Book balance | Bad debt reserve | Accrued ratio(%) | Accrued causes | |
BD bills | 7,201,691.00 | 7,201,691.00 | 100.00 | Have difficulty in collection |
Tianjin Leiwo Engine Co., Ltd. | 503,945.24 | 503,945.24 | 100.00 | Have difficulty in collection |
Total | 7,705,636.24 | 7,705,636.24 | 100.00 |
②Bad debt provision accrued on portfolio:
Name | Ending balance | ||
Book balance | Bad debt reserve | Accurual ratio(%) | |
Within 6 months | 746,778,955.46 | -- | -- |
6 months to 1 year | 17,383,318.92 | 1,738,331.87 | 10.00 |
1-2 years | 1,042,800.24 | 208,560.05 | 20.00 |
2-3 years | 1,561,974.35 | 624,789.74 | 40.00 |
Over 3 years | 1,451,526.73 | 1,451,526.73 | 100.00 |
Total | 768,218,575.7 | 4,023,208.39 |
③In the portfolio, receivables from internal related parties:
Name of related party | Amount | Accrued ratio of Bad debt reserve(%) |
WFLD | 20,600,442.61 | -- |
WFTR | 57,565,163.84 | -- |
WFTT | 5,204,904.97 | -- |
WFSC | 38,994,998.99 | -- |
VHCN | 15,795,329.64 | |
WFLD(NANCHANG) | 3,840,129.85 | |
WFQL | 611,946.01 | |
Total | 142,612,915.91 | -- |
④By account age(Including single withdrawal and combination withdrawal):
In RMB
Account age | Book balance |
Within one year | 906,775,190.29 |
Including: within 6 months | 889,181,770.09 |
6 months to 1 year | 17,593,420.20 |
1-2 years | 1,173,006.18 |
2-3 years | 1,935,713.65 |
Over 3 years | 8,653,217.73 |
Total | 918,537,127.85 |
(2) Bad debt provision accrued collected or reversal:
In RMB
Category | Opening balance | Amount changed in the period | Ending balance | ||
Accrued | Collected or reversal | Written-off | |||
Bad debt provision | 11,299,899.99 | 428,948.14 | -- | 3.50 | 11,728,844.63 |
Total | 11,299,899.99 | 428,948.14 | -- | 3.50 | 11,728,844.63 |
Important bad debt provision collected or reversal: nil
(3) Account receivable actual charged off in the Period:
In RMB
Item | Amount charged off | Whether the payment is generated by related party transactions |
Sporadic difference | 3.50 | N |
Total | 3.50 |
(4) Top 5 receivables at ending balance by arrears party:
In RMB
Name | Ending balance of account receivable | Ratio in total ending balance of account receivables(%) | Ending balance of bad debt reserve |
RBCD | 461,437,152.46 | 50.24 | 174,766.71 |
Robert Bosch Company | 78,085,229.03 | 8.50 | 0.01 |
Client 3 | 60,026,741.00 | 6.53 | 737,492.51 |
WFTR | 57,565,163.84 | 6.27 | -- |
WFSC | 38,994,998.99 | 4.24 | -- |
Total | 696,109,285.32 | 75.78 | 912,259.23 |
2.Other account receivable
In RMB
Item | Ending balance | Opening balance |
Interest receivable | 206,325.34 | 113,055.56 |
Dividend receivable | -- | 26,718,900.00 |
Other account receivables | 1,471,896,113.93 | 177,293,562.07 |
Total | 1,472,102,439.27 | 204,125,517.63 |
(1) Interest receivable
1) Category of interest receivable
In RMB
Item | Ending balance | Opening balance |
Interest receivable of subsidiary | 206,325.34 | 113,055.56 |
Total | 206,325.34 | 113,055.56 |
2) Significant overdue interest
Nil
(2) Dividend receivable
1) Category of dividend receivable:
In RMB
Item (or invested enterprise) | Ending balance | Opening balance |
WFAM | -- | 26,718,900.00 |
2) Important dividend receivable with account age over 1 year
Nil
(3) Other account receivables
1)Other account receivables classification by nature:
In RMB
Nature | Ending book balance | Opening book balance |
Staff loans and petty cash | 1,279,080.00 | 400,080.00 |
Balance of related party in the consolidate scope | 3,106,006,521.72 | 169,746,521.72 |
Margin | 3,738,299.33 | 1,518,640.00 |
Social security and provident fund paid | 6,429,166.22 | 5,926,527.66 |
Other | 16,781.83 | 9,364.69 |
Total | 3,117,469,849.10 | 177,601,134.07 |
3) Accrued of bad debt provision
In RMB
Bad debt reserve | Phase I | Phase II | Phase III | Total |
Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
Balance of Jan. 1, 2022 | 307,572.00 | -- | -- | 307,572.00 |
Balance of Jan. 1, 2022 in the period | -- | -- | -- | -- |
--Transfer into the second stage | -- | -- | -- | -- |
--Transfer into the third stage | -- | -- | -- | -- |
--Transfer back to the second stage | -- | -- | -- | -- |
-- Transfer back to the first stage | -- | -- | -- | -- |
Current accrued | 1,228,175.24 | -- | 1,644,068,327.93 | 1,645,296,503.17 |
Current reversal | 30,340.00 | -- | -- | 30,340.00 |
Current write-off | -- | -- | -- | -- |
Other changes | -- | -- | -- | -- |
Balance on Dec. 31, 2022 | 1,505,407.24 | -- | 1,644,068,327.93 | 1,645,573,735.17 |
By account age (including single withdrawal and combination withdrawal):
In RMB
Account age | Book balance |
Within one year | 3,114,813,019.10 |
Including: within 6 months | 768,880,846.69 |
6 months to one year | 2,345,932,172.41 |
1-2 years | 588,300.00 |
2-3 years | 1,300,000.00 |
Over 3 years | 768,530.00 |
Total | 3,117,469,849.10 |
3) Bad debt provision accrued, collected or reversal
In RMB
Category | Opening | Amount changed in the period | Ending |
balance | Accrued | Collected or reversal | Written-off | Difference in translation of foreign currency statements | balance | |
Bad debt provision | 307,572.00 | 1,645,296,503.17 | 30,340.00 | -- | -- | 1,645,573,735.17 |
Total | 307,572.00 | 1,645,296,503.17 | 30,340.00 | -- | -- | 1,645,573,735.17 |
4) Other receivables actually charged off during the reporting period
Nil
5) Top 5 other receivables at ending balance by arrears party
In RMB
Name of enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other receivables(%) | Ending balance of bad debt reserve |
WFTR | Balance of related party in the consolidate scope | 3,077,260,000.00 | Within one year | 98.71 | 1,644,068,327.93 |
WFCA | Balance of related party in the consolidate scope | 28,193,906.00 | With six months | 0.91 | -- |
Zhenkunxing Industrial Supermarket (Shanghai) Co., Ltd. | Margin | 1,000,000.00 | 2-3 years | 0.03 | 400,000.00 |
Wuxi Youlian Thermal Power Co., Ltd | Margin | 750,000.00 | Over three years | 0.02 | 750,000.00 |
Wuxi Xingzhou Energy Development Co., Ltd | Margin | 676,232.43 | Within 1 year | 0.02 | 28,176.35 |
Total | 3,107,880,138.43 | 99.69 | 1,645,246,504.28 |
6) Other account receivables related to government grants: Nil
7) Other receivables derecognized due to the transfer of financial asset: Nil
8) The amount of assets and liabilities formed by transferring other receivables and continuing tobe involved: Nil
3. Long-term equity investments
In RMB
Item | Ending balance | Opening balance | ||||
Book balance | Depreciation reserves | Book value | Book balance | Depreciation reserves | Book value | |
Investment for subsidiary | 3,080,762,302.11 | -- | 3,080,762,302.11 | 2,106,415,908.37 | -- | 2,106,415,908.37 |
Investment for associates and joint venture | 5,289,081,048.99 | -- | 5,289,081,048.99 | 4,760,866,320.19 | -- | 4,760,866,320.19 |
Total | 8,369,843,351.10 | -- | 8,369,843,351.10 | 6,867,282,228.56 | -- | 6,867,282,228.56 |
(1) Investment for subsidiary
In RMB
The invested entity | Opening balance (book value) | Changes in Current Period | Ending balance (book value) | Ending balance of depreciation reserves | |||
Additional Investment | Negative Investment | Provision for impairment loss | Share payment | ||||
WFJN | 185,974,031.01 | -- | -- | -- | 2,415,053.33 | 188,389,084.34 | -- |
WFLD | 468,968,346.39 | -- | -- | -- | 1,884,760.13 | 470,853,106.52 | -- |
WFMA | 170,998,252.32 | -- | -- | -- | 809,332.39 | 171,807,584.71 | -- |
WFCA | 222,778,790.43 | -- | -- | -- | 572,926.60 | 223,351,717.03 | -- |
WFTR | 33,924,529.85 | -- | -- | -- | 142,484.85 | 34,067,014.70 | -- |
WFSC | 51,150,646.86 | -- | -- | -- | 339,397.41 | 51,490,044.27 | -- |
WFTT | 238,112,165.62 | -- | -- | -- | 1,170,856.38 | 239,283,022.00 | -- |
WFAM | 82,454,467.99 | -- | -- | -- | -- | 82,454,467.99 | -- |
WFDT | 54,116,034.53 | -- | -- | -- | -34,515.01 | 54,081,519.52 | -- |
SPV | 597,938,643.37 | 597,341,580.60 | -- | -- | -- | 1,195,280,223.97 | -- |
WFLD(Chongqing) | -- | -- | -- | -- | 265,832.07 | 265,832.07 | -- |
WFAS | -- | -- | -- | -- | 878,805.00 | 878,805.00 | -- |
WFQL | -- | 225,000,000.00 | -- | -- | -- | 225,000,000.00 | -- |
VHCN | -- | 143,559,879.99 | -- | -- | -- | 143,559,879.99 | -- |
Total | 2,106,415,908.37 | 965,901,460.59 | -- | -- | 8,444,933.15 | 3,080,762,302.11 | -- |
(2) Investment for associates and joint venture
In RMB
Enterprise | Opening balance (book value) | Current changes (+/ -) | Ending balance (book value) | Ending balance of depreciation reserves | ||||||||||||||
Additional investment | Capital reduction | Investment gain/loss recognized under equity | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Impairment accrued | Difference in translation of foreign currency statements | |||||||||||
Associated enterprise | ||||||||||||||||||
RBCD | 3,193,389,537.44 | -- | -- | 1,019,943,798.76 | -- | -- | 732,050,752.43 | -- | -- | 3,505,746,633.77 | -- | |||||||
Zhonglian Automobile | 1,378,575,785.77 | -- | -- | 375,237,528.28 | -- | -- | 194,400,000.00 | -- | -- | 1,559,413,314.05 | -- | |||||||
WFPM | 45,845,041.36 | -- | -- | 18,930,857.66 | -- | -- | 10,000,000.00 | -- | -- | 54,775,899.02 | -- | |||||||
Chelian Tianxia | 143,055,955.62 | 37,000,000.000 | -- | -10,910,753.47 | -- | -- | -- | -- | -- | 169,145,202.15 | -- | |||||||
Total | 4,760,866,320.19 | 37,000,000.000 | -- | 1,403,201,431.23 | -- | -- | 936,450,752.43 | -- | -- | 5,289,081,048.99 | -- |
4. Operating income and cost
In RMB
Item | Current period | Last Period | ||
Income | Cost | Income | Cost | |
Main business | 3,524,971,219.66 | 2,995,507,161.73 | 4,392,019,155.83 | 3,267,569,244.02 |
Other business | 339,533,776.14 | 268,487,790.90 | 440,321,634.62 | 337,773,263.46 |
Total | 3,864,504,995.80 | 3,263,994,952.63 | 4,832,340,790.45 | 3,605,342,507.48 |
5.Investment income
In RMB
Item | Current period | Last Period |
Investment income in subsidiaries | 69,841,550.10 | 82,600,029.25 |
Investment income in joint ventures and associated enterprises | 1,427,651,731.23 | 1,366,704,678.23 |
Investment income from holding transaction financial asset | 201,399,105.37 | 309,089,065.06 |
Total | 1,698,892,386.70 | 1,758,393,772.54 |
XVI. Supplementary Information
1.Current non-recurring gains/losses
In RMB
Item | Amount | Note |
Gains/losses from the disposal of non-current asset | -148,566.90 | |
Governmental grants reckoned into current gains/losses (except for those with normal operation business concerned, and conform to the national policies & regulations and are continuously enjoyed at a fixed or quantitative basis according to certain standards) | 111,917,334.77 | |
Profit and loss of assets delegation on others’ investment or management | 1,236,142.58 | |
Except for the effective hedging operations related to normal business operation of the Company, the gains/losses of fair value changes from holding the trading financial assets and trading financial liabilities, and the investment earnings obtained from disposing the trading financial asset, trading financial liability and financial assets available for sale | -145,070,562.29 | |
Reserve for impairment of receivables separately tested for impairment transfer back | 1,265,113.45 | |
Other non-operating income and expenditure except for the aforementioned items | 39,799,099.77 | |
Less: Impact on income tax | 1,952,583.99 | |
Impact on minority shareholders’ equity | 8,192,690.71 | |
Total | -1,146,713.32 |
Specific information on other items of profits/losses that qualified the definition of non-recurring profit(gain)/loss
2. ROE and earnings per share
In RMB
Profits during report period | Weighted average | Earnings per share |
ROE(%) | Basic earnings per share (RMB/Share) | Diluted earnings per share (RMB/Share) | |
Net profits belong to common stock stockholders of the Company | 0.64 | 0.09 | 0.09 |
Net profits belong to common stock stockholders of the Company after deducting nonrecurring gains and losses | 0.65 | 0.09 | 0.09 |
3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report, under both IAS(International Accounting Standards) and Chinese GAAP (Generally Accepted AccountingPrinciples)
Not applicable
(2) Explanation on data differences under the accounting standards in and out of China; as for thedifferences adjustment audited by foreign auditing institute, listed name of the institute
Not applicable
4. Supplementary information related to changes in accounting policies
For details, see Note III-32. “Changes in Material Accounting Policies and Estimates”.