WEIFU HIGH-TECHNOLOGY GROUP CO., LTD.
Semi-Annual Financial Reprot 2023
(Unaudited)
August 2023
I. Audit reportWhether the semi annual report is audited or not
□Yes ?No
The company's semi annual financial report has not been audited
II. Financial StatementStatement in Financial Notes are carried in RMB/CNY
1. Consolidated Balance Sheet
Prepared by Weifu High-Technology Group Co., Ltd.
June 30, 2023
In RMB
Item | June 30, 2023 | January 1, 2023 |
Current assets: | ||
Monetary funds | 2,487,786,142.04 | 2,389,551,930.76 |
Settlement provisions | ||
Capital lent | ||
Trading financial assets | 2,250,198,464.28 | 2,718,820,654.87 |
Derivative financial assets | ||
Note receivable | 104,980,712.30 | 135,559,024.27 |
Account receivable | 3,317,387,077.56 | 3,127,490,177.25 |
Receivable financing | 1,920,348,206.04 | 1,918,368,845.21 |
Prepayments | 67,710,664.23 | 94,323,853.87 |
Insurance receivable | ||
Reinsurance receivables | ||
Contract reserve of reinsurance receivable | ||
Other account receivable | 2,874,547,071.97 | 1,264,507,456.47 |
Including: Interest receivable | ||
Dividend receivable | 1,955,605,474.71 | 147,000,000.00 |
Buying back the sale of financial assets | ||
Inventory | 1,921,084,065.82 | 2,283,119,656.27 |
Contract assets | ||
Assets held for sale | ||
Non-current asset due within 1 year | ||
Other current assets | 240,962,367.80 | 430,547,201.24 |
Total current assets | 15,185,004,772.04 | 14,362,288,800.21 |
Non-current assets: |
Loans and payments on behalf
Loans and payments on behalf | ||
Debt investment | ||
Other debt investment | ||
Long-term account receivable | ||
Long-term equity investment | 5,187,995,234.43 | 6,282,818,108.96 |
Other equity instrument investment | 677,790,690.00 | 677,790,690.00 |
Other non-current financial assets | 1,166,342,387.00 | 1,326,608,914.00 |
Investment real estate | 56,185,135.36 | 49,296,869.73 |
Fixed assets | 3,745,590,665.96 | 3,769,984,185.94 |
Construction in progress | 639,963,756.99 | 509,105,587.49 |
Productive biological assets | ||
Oil and gas assets | ||
Right-of-use assets | 39,364,840.80 | 41,865,100.38 |
Intangible assets | 489,758,310.65 | 487,627,987.92 |
Expense on research and development | ||
Goodwill | 251,813,115.66 | 237,682,375.72 |
Long-term expenses to be apportioned | 27,143,337.26 | 28,586,235.84 |
Deferred income tax assets | 273,908,331.15 | 275,627,772.45 |
Other non-current assets | 611,808,088.23 | 479,630,436.37 |
Total non-current assets | 13,167,663,893.49 | 14,166,624,264.80 |
Total assets | 28,352,668,665.53 | 28,528,913,065.01 |
Current liabilities: | ||
Short-term loans | 2,256,900,925.45 | 3,604,376,527.82 |
Loans from central bank | ||
Capital borrowed | ||
Trading financial liabilities | ||
Derivative financial liabilities | 737,424.50 | 747,115.75 |
Note payable | 1,584,124,651.19 | 1,411,089,606.00 |
Account payable | 3,271,926,231.00 | 3,454,601,023.60 |
Advance payment | 462,221.88 | 3,633,878.33 |
Contractual liabilities | 104,491,724.54 | 94,850,083.23 |
Selling financial asset of repurchase | ||
Absorbing deposit and interbank deposit | ||
Security trading of agency | ||
Security sales of agency | ||
Wage payable | 225,684,651.78 | 317,434,386.24 |
Taxe payable | 64,158,658.16 | 54,586,315.53 |
Other account payable | 156,729,445.68 | 198,990,948.23 |
Including: Interest payable | ||
Dividend payable | 10,373,454.00 |
Commission charge and commission payable
Commission charge and commission payable | ||
Reinsurance payable | ||
Liabilities held for sale | ||
Non-current liabilities due within 1 year | 36,959,064.67 | 14,285,348.90 |
Other current liabilities | 262,650,217.54 | 211,763,779.77 |
Total current liabilities | 7,964,825,216.39 | 9,366,359,013.40 |
Non-current liabilities: | ||
Insurance contract reserve | ||
Long-term loans | 600,000,000.00 | 238,000,000.00 |
Bond payable | ||
Including: Preferred stock | ||
Perpetual capital securities | ||
Lease liabilities | 30,799,799.49 | 31,589,277.20 |
Long-term account payable | 30,785,082.11 | 30,785,082.11 |
Long-term wage payable | 155,985,385.60 | 154,093,044.28 |
Accrual liabilities | 9,980,678.92 | 10,106,268.87 |
Deferred income | 199,209,771.05 | 223,123,978.78 |
Deferred income tax liabilities | 39,772,528.51 | 40,149,550.99 |
Other non-current liabilities | ||
Total non-current liabilities | 1,066,533,245.68 | 727,847,202.23 |
Total liabilities | 9,031,358,462.07 | 10,094,206,215.63 |
Owner’s equity: | ||
Share capital | 1,002,579,793.00 | 1,008,603,293.00 |
Other equity instrument | ||
Including: Preferred stock | ||
Perpetual capital securities | ||
Capital reserve | 3,335,177,095.84 | 3,398,368,567.63 |
Less: Inventory shares | 538,410,272.24 | 541,623,002.63 |
Other comprehensive income | 60,328,251.06 | -911,310.13 |
Reasonable reserve | 3,583,407.75 | 2,119,800.95 |
Surplus reserve | 510,100,496.00 | 510,100,496.00 |
Provision of general risk | ||
Retained profit | 14,171,024,206.15 | 13,320,021,325.90 |
Total owner’ s equity attributable to parent company | 18,544,382,977.56 | 17,696,679,170.72 |
Minority interests | 776,927,225.90 | 738,027,678.66 |
Total owner’ s equity | 19,321,310,203.46 | 18,434,706,849.38 |
Total liabilities and owner’ s equity | 28,352,668,665.53 | 28,528,913,065.01 |
Legal Representative: Wang XiaodongPerson in charge of accounting works: Rong BinPerson in charge of accounting institute: Wu Junfei
2. Balance sheet of parent company
In RMB
Item | June 30, 2023 | January 1, 2023 |
Current assets: | ||
Monetary funds | 658,847,374.34 | 823,574,329.53 |
Trading financial assets | 2,134,459,399.76 | 2,693,150,975.20 |
Derivative financial assets | ||
Note receivable | 38,585,991.52 | 29,575,852.04 |
Account receivable | 1,106,215,964.34 | 906,808,283.22 |
Receivable financing | 231,837,502.28 | 216,462,262.44 |
Prepayments | 38,880,788.18 | 56,037,892.68 |
Other account receivable | 3,206,692,791.69 | 1,472,102,439.27 |
Including: Interest receivable | 32,195,758.91 | 206,325.34 |
Dividend receivable | 1,881,769,939.06 | |
Inventories | 554,131,949.66 | 571,571,431.95 |
Contract assets | ||
Assets held for sale | ||
Non-current assets maturing within 1 year | ||
Other current assets | 1,755,265.16 | 107,462,112.82 |
Total current assets | 7,971,407,026.93 | 6,876,745,579.15 |
Non-current assets: | ||
Debt investment | ||
Other debt investment | ||
Long-term account receivable | ||
Long-term equity investment | 7,290,721,357.80 | 8,369,843,351.10 |
Other equity instrument investment | 601,850,690.00 | 601,850,690.00 |
Other non-current financial assets | 1,166,342,387.00 | 1,326,608,914.00 |
Investment real estate | 35,018,863.59 | 35,584,279.11 |
Fixed assets | 2,232,822,699.74 | 2,251,495,050.80 |
Construction in progress | 344,391,742.48 | 251,304,655.41 |
Productive biological assets | ||
Oil and natural gas assets | ||
Right-of-use assets | 4,321,883.64 | 6,061,693.75 |
Intangible assets | 211,423,280.19 | 209,246,490.17 |
Research and development costs | ||
Goodwill | ||
Long-term deferred expenses | 6,417,238.81 | 6,895,352.43 |
Deferred income tax assets | 88,907,446.28 | 109,624,761.50 |
Other non-current assets | 222,124,598.31 | 168,744,695.04 |
Total non-current assets | 12,204,342,187.84 | 13,337,259,933.31 |
Total assets
Total assets | 20,175,749,214.77 | 20,214,005,512.46 |
Current liabilities | ||
Short-term loans | 1,461,515,277.78 | 2,121,354,415.53 |
Trading financial liabilities | ||
Derivative financial liabilities | 737,424.50 | 737,424.50 |
Note payable | 332,041,918.11 | 251,867,652.05 |
Account payable | 1,103,757,868.99 | 1,048,268,519.52 |
Advance payment | ||
Contract liabilities | 8,032,872.19 | 6,564,332.93 |
Wage payable | 106,415,365.78 | 166,314,985.33 |
Taxe payable | 16,561,316.90 | 6,048,505.30 |
Other account payable | 431,093,918.61 | 926,276,130.15 |
Including: Interest payable | 1,369,121.16 | 835,069.83 |
Dividend payable | 10,373,454.00 | |
Liabilities held for sale | ||
Non-current liabilities due within 1 year | 28,238,743.21 | 4,306,935.71 |
Other current liabilities | 85,179,531.11 | 102,322,311.03 |
Total current liabilities | 3,573,574,237.18 | 4,634,061,212.05 |
Non-current liabilities: | ||
Long-term loans | 400,000,000.00 | |
Bond payable | ||
Including: preferred stock | ||
Perpetual capital securities | ||
Lease liabilities | 3,044,575.55 | 2,690,812.43 |
Long-term account payable | ||
Long term employee compensation payable | 121,683,760.89 | 121,683,760.89 |
Accrued liabilities | 13,750.00 | |
Deferred income | 169,822,415.83 | 198,149,511.20 |
Deferred income tax liabilities | ||
Other non-current liabilities | ||
Total non-current liabilities | 694,550,752.27 | 322,537,834.52 |
Total liabilities | 4,268,124,989.45 | 4,956,599,046.57 |
Owners’ equity: | ||
Share capital | 1,002,579,793.00 | 1,008,603,293.00 |
Other equity instrument | ||
Including: preferred stock | ||
Perpetual capital securities | ||
Capital reserve | 3,451,969,145.81 | 3,515,005,861.23 |
Less: Inventory shares | 538,410,272.24 | 541,623,002.63 |
Other comprehensive income |
Special reserve
Special reserve | ||
Surplus reserve | 510,100,496.00 | 510,100,496.00 |
Retained profit | 11,481,385,062.75 | 10,765,319,818.29 |
Total owner’s equity | 15,907,624,225.32 | 15,257,406,465.89 |
Total liabilities and owner’s equity | 20,175,749,214.77 | 20,214,005,512.46 |
1. Consolidated profit statement
In RMB
Item | 2023 semi-annual | 2022 semi-annual |
I. Total operating income | 6,129,649,047.40 | 7,137,172,857.97 |
Including: Operating income | 6,129,649,047.40 | 7,137,172,857.97 |
Interest income | ||
Insurance gained | ||
Commission charge and commission income | ||
II. Total operating cost | 5,988,688,585.81 | 6,730,969,892.10 |
Including: Operating cost | 5,163,871,731.26 | 6,026,454,182.03 |
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 extra | 32,240,422.99 | 28,877,421.78 |
Sales expense | 103,031,481.40 | 79,020,592.43 |
Administrative expense | 299,195,729.59 | 277,212,254.79 |
R&D expense | 351,887,038.12 | 289,631,376.50 |
Financial expense | 38,462,182.45 | 29,774,064.57 |
Including: Interest expenses | 65,616,425.64 | 34,275,262.65 |
Interest income | 15,706,416.56 | 13,927,929.36 |
Add: other income | 40,979,593.51 | 26,095,621.93 |
Investment income (Loss is listed with “-”) | 811,406,633.49 | 928,792,343.97 |
Including: Investment income on affiliated company and joint venture | 742,783,514.37 | 823,400,731.10 |
The termination of income recognition for financial assets measured by amortized cost | -680,357.44 | |
Exchange income (Loss is listed with “-”) | ||
Net exposure hedging income (Loss is listed with “-”) | ||
Income from change of fair value (Loss is listed with “-”) | -18,069,553.29 | -74,432,928.14 |
Loss of credit impairment (Loss is listed with “-”) | -846,725.76 | 2,083,427.81 |
Loss of devaluation of asset (Loss is listed with “-”) | -90,263,537.00 | -104,219,783.98 |
Income from assets disposal (Loss is listed with “-”) | 125,530,905.04 | 1,890,279.95 |
III. Operating profit (Loss is listed with “-”)
III. Operating profit (Loss is listed with “-”) | 1,009,697,777.58 | 1,186,411,927.41 |
Add: Non-operating income | 2,707,696.00 | 218,285.29 |
Less: Non-operating expense | 758,381.69 | 2,196,565.87 |
IV. Total profit (Loss is listed with “-”) | 1,011,647,091.89 | 1,184,433,646.83 |
Less: Income tax expense | 29,332,279.74 | 55,645,075.75 |
V. Net profit (Net loss is listed with “-”) | 982,314,812.15 | 1,128,788,571.08 |
(i) Classify by business continuity | ||
1. Continuous operating net profit (net loss listed with “-”) | 982,314,812.15 | 1,128,788,571.08 |
2. Termination of net profit (net loss listed with “-”) | ||
(ii) Classify by ownership | ||
1. Net profit attributable to owner’s of parent company | 948,760,859.55 | 1,091,126,480.08 |
2. Minority shareholders’ gains and losses | 33,553,952.60 | 37,662,091.00 |
VI. Net after-tax of other comprehensive income | 61,239,561.19 | -12,679,652.16 |
Net after-tax of other comprehensive income attributable to owners of parent company | 61,239,561.19 | -12,679,652.16 |
(i) Other comprehensive income items which will not be reclassified subsequently to profit of loss | -305,484.37 | |
1. Changes of the defined benefit plans that re-measured | -305,484.37 | |
2. Other comprehensive income under equity method that cannot be transfer to gain/loss | ||
3. Change of fair value of other equity instrument investment | ||
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 | 61,545,045.56 | -12,679,652.16 |
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 | 61,545,045.56 | -12,679,652.16 |
7. Other | ||
Net after-tax of other comprehensive income attributable to minority shareholders | ||
VII. Total comprehensive income | 1,043,554,373.34 | 1,116,108,918.92 |
Total comprehensive income attributable to owners of parent Company | 1,010,000,420.74 | 1,078,446,827.92 |
Total comprehensive income attributable to minority shareholders | 33,553,952.60 | 37,662,091.00 |
VIII. Earnings per share: | ||
(i) Basic earnings per share | 0.98 | 1.10 |
(ii) Diluted earnings per share | 0.98 | 1.10 |
Legal Representative: Wang XiaodongPerson in charge of accounting works: Rong BinPerson in charge of accounting institute: Wu Junfei
2. Profit statement of parent company
In RMB
Item | 2023 semi-annual | 2022 semi-annual |
I. Operating income | 1,999,983,446.71 | 2,411,189,208.04 |
Less: Operating cost | 1,582,800,180.15 | 1,919,986,159.54 |
Taxes and surcharge | 12,898,023.37 | 13,501,778.32 |
Sales expenses | 14,804,263.68 | 14,392,542.42 |
Administration expenses | 151,432,225.43 | 144,366,869.06 |
R&D expenses | 121,018,486.34 | 115,694,064.37 |
Financial expenses | -30,173,931.83 | -8,310,144.29 |
Including: interest expenses | 46,417,119.10 | 18,380,946.47 |
Interest income | 71,778,851.32 | 31,657,392.66 |
Add: other income | 29,302,719.53 | 15,713,320.73 |
Investment income (Loss is listed with “-”) | 711,673,709.71 | 835,209,662.03 |
Including: Investment income on affiliated Company and joint venture | 644,975,916.19 | 734,429,287.99 |
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 “-”) | -18,284,414.84 | -74,417,034.85 |
Loss of credit impairment (Loss is listed with “-”) | -782,758.06 | 477,241.11 |
Losses of devaluation of asset (Loss is listed with “-”) | -37,325,504.75 | -45,999,971.02 |
Income on disposal of assets (Loss is listed with “-”) | 3,183,872.63 | 146,113.46 |
II. Operating profit (Loss is listed with “-”) | 834,971,823.79 | 942,687,270.08 |
Add: Non-operating income | 20,798.16 | 138,467.56 |
Less: Non-operating expense | 452,082.96 | 613,619.53 |
III. Total Profit (Loss is listed with “-”) | 834,540,538.99 | 942,212,118.11 |
Less: Income tax | 20,717,315.23 | 33,033,489.65 |
IV. Net profit (Net loss is listed with “-”) | 813,823,223.76 | 909,178,628.46 |
(i) continuous operating net profit (net loss listed with ‘-”) | 813,823,223.76 | 909,178,628.46 |
(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 other equity instrument investment | ||
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 |
3. Consolidated cash flow statement
In RMB
Item | 2023 semi-annual | 2022 semi-annual |
I. Cash flows arising from operating activities: | ||
Cash received from selling commodities and providing labor services | 7,220,274,822.77 | 7,278,359,413.36 |
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 | 290,682,518.69 | 232,035,625.20 |
Other cash received concerning operating activities | 350,434,811.67 | 1,276,954,478.94 |
Subtotal of cash inflow arising from operating activities | 7,861,392,153.13 | 8,787,349,517.50 |
Cash paid for purchasing commodities and receiving labor service | 5,293,150,104.57 | 5,605,274,974.42 |
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 | 845,487,116.19 | 736,897,874.74 |
Taxe paid | 223,362,710.57 | 223,299,890.76 |
Other cash paid concerning operating activities | 409,430,984.38 | 4,715,858,822.47 |
2. Change of fair value of other debt investment
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 | 813,823,223.76 | 909,178,628.46 |
VII. Earnings per share: | ||
(i) Basic earnings per share | ||
(ii) Diluted earnings per share |
Subtotal of cash outflow arising from operating activities
Subtotal of cash outflow arising from operating activities | 6,771,430,915.71 | 11,281,331,562.39 |
Net cash flows arising from operating activities | 1,089,961,237.42 | -2,493,982,044.89 |
II. Cash flows arising from investing activities: | ||
Cash received from recovering investment | 1,792,373,483.22 | 6,783,202,982.62 |
Cash received from investment income | 227,184,527.61 | 510,529,403.51 |
Net cash received from disposal of fixed, intangible and other long-term assets | 130,808,256.39 | 7,007,242.74 |
Net cash received from disposal of subsidiaries and other units | ||
Other cash received concerning investing activities | ||
Subtotal of cash inflow from investing activities | 2,150,366,267.22 | 7,300,739,628.87 |
Cash paid for purchasing fixed, intangible and other long-term assets | 521,593,700.42 | 622,264,336.12 |
Cash paid for investment | 1,384,532,499.32 | 5,121,895,293.87 |
Net increase of mortgaged loans | ||
Net cash received from subsidiaries and other units obtained | ||
Other cash paid concerning investing activities | ||
Subtotal of cash outflow from investing activities | 1,906,126,199.74 | 5,744,159,629.99 |
Net cash flows arising from investing activities | 244,240,067.48 | 1,556,579,998.88 |
III. Cash flows arising from financing activities | ||
Cash received from absorbing investment | ||
Including: Cash received from absorbing minority shareholders’ investment by subsidiaries | ||
Cash received from loans | 2,472,142,881.63 | 4,061,893,674.46 |
Other cash received concerning financing activities | ||
Subtotal of cash inflow from financing activities | 2,472,142,881.63 | 4,061,893,674.46 |
Cash paid for settling debts | 3,430,505,040.97 | 1,122,521,453.43 |
Cash paid for dividend and profit distributing or interest paying | 150,449,335.07 | 1,499,815,013.36 |
Including: Dividend and profit of minority shareholder paid by subsidiaries | 25,671,100.00 | |
Other cash paid concerning financing activities | 144,576,715.88 | 100,866,543.83 |
Subtotal of cash outflow from financing activities | 3,725,531,091.92 | 2,723,203,010.62 |
Net cash flows arising from financing activities | -1,253,388,210.29 | 1,338,690,663.84 |
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 29,533,974.54 | -4,522,251.76 |
V. Net increase of cash and cash equivalents | 110,347,069.15 | 396,766,366.07 |
Add: Balance of cash and cash equivalents at the period -begin | 2,277,117,604.82 | 1,094,018,936.73 |
VI. Balance of cash and cash equivalents at the period -end | 2,387,464,673.97 | 1,490,785,302.80 |
4. Cash flow statement of parent company
In RMB
Item | 2023 semi-annual | 2022 semi-annual |
I. Cash flows arising from operating activities: | ||
Cash received from selling commodities and providing labor services | 1,931,059,388.32 | 2,206,683,069.38 |
Write-back of tax received | 125,050,063.31 | 186,226,813.27 |
Other cash received concerning operating activities
Other cash received concerning operating activities | 28,151,813.75 | 13,662,628.42 |
Subtotal of cash inflow arising from operating activities | 2,084,261,265.38 | 2,406,572,511.07 |
Cash paid for purchasing commodities and receiving labor service | 1,283,789,999.36 | 1,469,241,728.46 |
Cash paid to/for staff and workers | 371,210,630.31 | 389,448,409.74 |
Taxes paid | 76,834,144.17 | 138,600,504.19 |
Other cash paid concerning operating activities | 85,355,061.82 | 94,078,994.56 |
Subtotal of cash outflow arising from operating activities | 1,817,189,835.66 | 2,091,369,636.95 |
Net cash flows arising from operating activities | 267,071,429.72 | 315,202,874.12 |
II. Cash flows arising from investing activities: | ||
Cash received from recovering investment | 1,285,673,483.22 | 4,401,242,982.62 |
Cash received from investment income | 76,692,639.68 | 515,008,090.22 |
Net cash received from disposal of fixed, intangible and other long-term assets | 5,120,859.04 | 2,092,031.77 |
Net cash received from disposal of subsidiaries and other units | ||
Other cash received concerning investing activities | 266,890,277.63 | 333,677,757.87 |
Subtotal of cash inflow from investing activities | 1,634,377,259.57 | 5,252,020,862.48 |
Cash paid for purchasing fixed, intangible and other long-term assets | 312,219,496.56 | 427,352,475.87 |
Cash paid for investment | 740,630,287.05 | 3,082,493,337.87 |
Net cash received from subsidiaries and other units obtained | ||
Other cash paid concerning investing activities | 54,000,000.00 | 3,408,840,000.00 |
Subtotal of cash outflow from investing activities | 1,106,849,783.61 | 6,918,685,813.74 |
Net cash flows arising from investing activities | 527,527,475.96 | -1,666,664,951.26 |
III. Cash flows arising from financing activities | ||
Cash received from absorbing investment | ||
Cash received from loans | 1,795,000,000.00 | 2,618,386,800.00 |
Other cash received concerning financing activities | 15,000,000.00 | 783,729,243.68 |
Subtotal of cash inflow from financing activities | 1,810,000,000.00 | 3,402,116,043.68 |
Cash paid for settling debts | 2,026,644,800.00 | 326,483,000.00 |
Cash paid for dividend and profit distributing or interest paying | 133,911,606.16 | 1,459,828,775.80 |
Other cash paid concerning financing activities | 611,812,390.04 | 100,720,981.37 |
Subtotal of cash outflow from financing activities | 2,772,368,796.20 | 1,887,032,757.17 |
Net cash flows arising from financing activities | -962,368,796.20 | 1,515,083,286.51 |
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 3,103,799.68 | -3,140,478.44 |
V. Net increase of cash and cash equivalents | -164,666,090.84 | 160,480,730.93 |
Add: Balance of cash and cash equivalents at the period-begin | 803,410,185.18 | 488,417,498.83 |
VI. Balance of cash and cash equivalents at the period-end | 638,744,094.34 | 648,898,229.76 |
5. Consolidated statement of change in owners’ equity
Current Period
In RMB
Item | 2023 semi-annual | ||||||||||||||
Owners’ equity attributable to the parent company | Minority interests | Total owners’ equity | |||||||||||||
Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
Preferred stock | Perpetual capital securities | Other | |||||||||||||
I. Balance at the end of the last year | 1,008,603,293.00 | 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 | |||||
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 | 1,008,603,293.00 | 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 | |||||
III. Increase/ Decrease in reporting period (Decrease is listed with “-”) | -6,023,500.00 | -63,191,471.79 | -3,212,730.39 | 61,239,561.19 | 1,463,606.80 | 851,002,880.25 | 847,703,806.84 | 38,899,547.24 | 886,603,354.08 | ||||||
(i) Total comprehensive income | 61,239,561.19 | 948,760,859.55 | 1,010,000,420.74 | 33,553,952.60 | 1,043,554,373.34 | ||||||||||
(ii) Owners’ devoted and decreased capital | -6,023,500.00 | -63,191,471.79 | -3,212,730.39 | -66,002,241.40 | 5,161,978.57 | -60,840,262.83 | |||||||||
1. Common shares invested by shareholders | 5,000,000.00 | 5,000,000.00 |
2. Capital
invested byholders of otherequityinstruments
2. Capital invested by holders of other equity instruments | |||||||||||||||
3. Amount reckoned into owners equity with share-based payment | 5,361,906.64 | 5,361,906.64 | 160,173.01 | 5,522,079.65 | |||||||||||
4. Other | -6,023,500.00 | -68,553,378.43 | -3,212,730.39 | -71,364,148.04 | 1,805.56 | -71,362,342.48 | |||||||||
(III) Profit distribution | -97,757,979.30 | -97,757,979.30 | -97,757,979.30 | ||||||||||||
1. Withdrawal of surplus reserves | |||||||||||||||
2. Withdrawal of general risk provisions | |||||||||||||||
3. Distribution for owners (or shareholders) | -97,757,979.30 | -97,757,979.30 | -97,757,979.30 | ||||||||||||
4. Other | |||||||||||||||
(IV) Carrying forward internal owners’ equity | |||||||||||||||
1. Capital reserves converted to capital (share capital) | |||||||||||||||
2. Surplus reserves converted to capital (share capital) | |||||||||||||||
3. Remedying loss with surplus reserve |
4. Carry-over
retainedearnings fromthe definedbenefit plans
4. Carry-over retained earnings from the defined benefit plans | |||||||||||||||
5. Carry-over retained earnings from other comprehensive income | |||||||||||||||
6. Other | |||||||||||||||
(V) Reasonable reserve | 1,463,606.80 | 1,463,606.80 | 183,616.07 | 1,647,222.87 | |||||||||||
1. Withdrawal in the reporting period | 14,709,266.91 | 14,709,266.91 | 1,646,999.84 | 16,356,266.75 | |||||||||||
2. Usage in the reporting period | 13,245,660.11 | 13,245,660.11 | 1,463,383.77 | 14,709,043.88 | |||||||||||
(VI) Others | |||||||||||||||
IV. Balance at the end of the reporting period | 1,002,579,793.00 | 3,335,177,095.84 | 538,410,272.24 | 60,328,251.06 | 3,583,407.75 | 510,100,496.00 | 14,171,024,206.15 | 18,544,382,977.56 | 776,927,225.90 | 19,321,310,203.46 |
Last Period
In RMB
Item | 2022 semi-annual | ||||||||||||||
Owners’ equity attributable to the parent company | Minority interests | Total owners’ equity | |||||||||||||
Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
Preferred stock | Perpetual capital securities | Other | |||||||||||||
I. Balance at the end of the last year | 1,008,659,570.00 | 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 reporting period (Decrease is listed with “-”) | 34,733,141.01 | 69,202,657.07 | -12,679,652.16 | 1,003,249.94 | -517,933,188.72 | -564,079,107.00 | 38,843,918.21 | -525,235,188.79 | |||||||
(i) Total comprehensive income | -12,679,652.16 | 1,091,126,480.08 | 1,078,446,827.92 | 37,662,091.00 | 1,116,108,918.92 | ||||||||||
(ii) Owners’ devoted and decreased capital | 34,733,141.01 | 69,202,657.07 | -34,469,516.06 | 1,086,139.92 | -33,383,376.14 |
1.Common
shares investedbyshareholders
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 | 34,733,141.01 | 34,733,141.01 | 1,086,139.92 | 35,819,280.93 | |||||||||||
4. Other | 69,202,657.07 | -69,202,657.07 | -69,202,657.07 | ||||||||||||
(III) Profit distribution | -1,609,059,668.80 | -1,609,059,668.80 | -1,609,059,668.80 | ||||||||||||
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 | -1,609,059,668.80 | ||||||||||||
4. Other | |||||||||||||||
(IV) Carrying forward internal owners’ equity | |||||||||||||||
1. Capital reserves converted to capital (share capital) | |||||||||||||||
2. Surplus reserves converted to capital (share capital) | |||||||||||||||
3. Remedying loss with surplus reserve |
4. Carry-over
retainedearnings fromthe definedbenefit plans
4. Carry-over retained earnings from the defined benefit plans | |||||||||||||||
5. Carry-over retained earnings from other comprehensive income | |||||||||||||||
6. Other | |||||||||||||||
(V) Reasonable reserve | 1,003,249.94 | 1,003,249.94 | 95,687.29 | 1,098,937.23 | |||||||||||
1. Withdrawal in the reporting period | 13,239,465.25 | 13,239,465.25 | 1,346,071.86 | 14,585,537.11 | |||||||||||
2. Usage in the reporting period | 12,236,215.31 | 12,236,215.31 | 1,250,384.57 | 13,486,599.88 | |||||||||||
(VI)Others | |||||||||||||||
IV. Balance at the end of the reporting period | 1,008,659,570.00 | 3,406,077,313.83 | 339,452,454.81 | -49,425,996.76 | 1,715,465.25 | 510,100,496.00 | 14,296,854,189.14 | 18,834,528,582.65 | 602,937,984.03 | 19,437,466,566.68 |
6. Statement of changes in owners’ equity of parent company
Current Period
In RMB
Item | 2023 semi-annual | |||||||||||
Share capital | Other equity instrument | Capital 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 | 1,008,603,293.00 | 3,515,005,861.23 | 541,623,002.63 | 510,100,496.00 | 10,765,319,818.29 | 15,257,406,465.89 | ||||||
Add: Changes of accounting policy | ||||||||||||
Error correction of the last period | ||||||||||||
Other | ||||||||||||
II. Balance at the beginning of this year | 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 | ||||||
III. Increase/ Decrease in reporting period (Decrease is listed with “-”) | -6,023,500.00 | -63,036,715.42 | -3,212,730.39 | 716,065,244.46 | 650,217,759.43 | |||||||
(i) Total comprehensive income | 813,823,223.76 | 813,823,223.76 | ||||||||||
(ii) Owners’ devoted and decreased capital | -6,023,500.00 | -63,036,715.42 | -3,212,730.39 | -65,847,485.03 |
1.Common
shares investedby shareholders
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 | 5,522,079.67 | 5,522,079.67 | ||||||||||
4. Other | -6,023,500.00 | -68,558,795.09 | -3,212,730.39 | -71,369,564.70 | ||||||||
(III) Profit distribution | -97,757,979.30 | -97,757,979.30 | ||||||||||
1. Withdrawal of surplus reserves | ||||||||||||
2. Distribution for owners (or shareholders) | -97,757,979.30 | -97,757,979.30 | ||||||||||
3. Other | ||||||||||||
(IV) Carrying forward internal owners’ equity | ||||||||||||
1. Capital reserves converted to capital (share capital) | ||||||||||||
2. Surplus reserves converted to capital (share capital) | ||||||||||||
3. Remedying loss with surplus reserve | ||||||||||||
4. Carry-over retained earnings from the defined benefit plans |
5. Carry-over
retainedearnings fromothercomprehensiveincome
5. Carry-over retained earnings from other comprehensive income | ||||||||||||
6. Other | ||||||||||||
(V) Reasonable reserve | ||||||||||||
1. Withdrawal in the reporting period | 3,237,252.50 | 3,237,252.50 | ||||||||||
2. Usage in the reporting period | 3,237,252.50 | 3,237,252.50 | ||||||||||
(VI)Others | ||||||||||||
IV. Balance at the end of the reporting period | 1,002,579,793.00 | 3,451,969,145.81 | 538,410,272.24 | 510,100,496.00 | 11,481,385,062.75 | 15,907,624,225.32 |
Last Period
In RMB
Item | 2022 semi-annual | |||||||||||
Share capital | Other equity instrument | Capital 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 | 0.00 | 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 | 0.00 | 510,100,496.00 | 12,396,934,922.01 | 17,132,600,045.86 |
III. Increase/Decrease inreportingperiod(Decrease islisted with “-”)
III. Increase/ Decrease in reporting period (Decrease is listed with “-”) | 35,819,280.96 | 69,202,657.07 | -699,881,040.34 | -733,264,416.45 | ||||||||
(i) Total comprehensive income | 909,178,628.46 | 909,178,628.46 | ||||||||||
(ii) Owners’ devoted and decreased capital | 35,819,280.96 | 69,202,657.07 | -33,383,376.11 | |||||||||
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 | 35,819,280.96 | 35,819,280.96 | ||||||||||
4. Other | 69,202,657.07 | -69,202,657.07 | ||||||||||
(III) Profit distribution | -1,609,059,668.80 | -1,609,059,668.80 | ||||||||||
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
reservesconverted tocapital (sharecapital)
1. Capital reserves converted to capital (share capital) | ||||||||||||
2. Surplus reserves converted 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 reporting period | 3,366,170.40 | 3,366,170.40 | ||||||||||
2. Usage in the reporting period | 3,366,170.40 | 3,366,170.40 | ||||||||||
(VI) Others | ||||||||||||
IV. Balance at the end of the reporting period | 1,008,659,570.00 | 3,522,974,136.55 | 339,452,454.81 | 0.00 | 510,100,496.00 | 11,697,053,881.67 | 16,399,335,629.41 |
III. Basic information of the Company
1. Historical origin of the Company
By the approval of STGS (1992) No. 130 issued by Jiangsu Economic Restructuring Committee, Weifu High-Technology Group Co., Ltd. (hereinafter referred to “the Company” or “Company”) was established as a companyof limited liability with funds raised from targeted sources, and registered at Wuxi Administration for Industry &Commerce in October 1992. The original share capital of the Company totaled 115.4355 million yuan, includingstate-owned share capital amounting to 92.4355 million yuan, public corporate share capital amounting to 8million yuan and inner employee share capital amounting to 15 million yuan.Between year of 1994 and 1995, the Company was restructured and became a holding subsidiary of Wuxi WeifuGroup Co., Ltd (hereinafter referred to as “Weifu Group”).By the approval of Jiangsu ERC and Shenzhen Securities Administration Office in August 1995, the Companyissued 68 million special ordinary shares (B-share) with value of 1.00 yuan for each, and the total value of thoseshares amounted to 68 million yuan. After the issuance, the Company’s total share capital increased to 183.4355million yuan.By the approval of CSRC in June 1998, the Company issued 120 million RMB ordinary shares (A-share) atShenzhen Stock Exchange through on-line pricing and issuing. After the issuance, the total share capital of theCompany amounted to 303.4355 million yuan.In the middle of 1999, deliberated and approved by the Board and Shareholders’ General Meeting, the Companyimplemented the plan of granting 3 bonus shares for each 10 shares. After that, the total share capital of theCompany amounted to 394.46615 million yuan, of which state-owned shares amounted to 120.16615 million yuan,public corporate shares 10.4 million yuan, foreign-funded shares (B-share) 88.40 million yuan, RMB ordinaryshares (A-share) 156 million yuan and inner employee shares 19.5 million yuan.In the year 2000, by the approval of the CSRC and based upon the total share capital of 303.4355 million sharesafter the issuance of A-share in June 1998, the Company allotted 3 shares for each 10 shares, with a price of 10yuan for each allotted share. Actually 41.9 million shares was allotted, and the total share capital after theallotment increased to 436.36615 million yuan, of which state-owned corporate shares amounted to 121.56615million yuan, public corporate shares 10.4 million yuan, foreign-funded shares (B-share) 88.4 million yuan andRMB ordinary shares (A-share) 216 million yuan.In April 2005, Board of Directors of the Company has examined and approved 2004 Profit Pre-distribution Plan,and examined and approved by 2004 Shareholders’ General Meeting, the Company distributed 3 shares for each10 shares to the whole shareholders totaling to 130,909,845 shares in 2005.According to the Share Merger Reform Scheme of the Company that passed by related shareholders’ meeting ofShare Merger Reform and SGZF [2006] No.61 Reply on Questions about State-owned Equity Management inShare Merger Reform of Weifu High-Technology Co., Ltd. issued by State-owned Assets Supervision &Administration Commission of Jiangsu Province, the Weifu Group etc. 8 non-circulating shareholders arrangedpricing with granting 1.7 shares for each 10 shares to circulating A-share shareholders (totally granted 47,736,000shares), so as to realize the originally non-circulating shares can be traded on market when satisfied certainconditions, the scheme has been implemented on April 5, 2006.
On May 27, 2009, Weifu Group satisfied the consideration arrangement by dispatching 0.5 shares for each 10shares based on the number of circulating A share as prior to Share Merger Reform, according to the aforesaidShare Merger Reform, with an aggregate of 14,039,979 shares dispatched. Subsequent to implementation ofdispatch of consideration shares, Weifu Group then held 100,021,999 shares of the Company, representing 17.63%of the total share capital of the Company.Pursuant to the document (XGZQ(2009)No.46) about Approval for Merger of Wuxi Weifu Group Co., Ltd. byWuxi Industry Development Group Co., Ltd. issued by the State-owned Assets Supervision and AdministrationCommission of Wuxi City Government, Wuxi Industry Development Group Co., Ltd. (hereinafter referred to asWuxi Industry Group) acquired Weifu Group. After the merger, Weifu Group was then revoked, and its assets andcredits & debts were transferred to be under the name of Wuxi Industry Group. Accordingly, Wuxi IndustryGroup became the first largest shareholder of the Company since then.In accordance with the resolutions of shareholders' meeting and provisions of amended constitution, and approvedby [2012] No. 109 document of China Securities Regulatory Commission, in February 2012, the Company issuedRMB ordinary shares (A-share) of 112,858,000 shares to Wuxi Industry Groups and overseas strategic investorprivately, Robert Bosch Co., Ltd. (ROBERT BOSCHGMBH) (hereinafter referred to as Robert Bosch Company),face value was 1.00 yuan per share, added registered capital of 112,858,000 yuan, and the registered capital afterchange was 680,133,995 yuan. Wuxi Industry Group is the first majority shareholder of the Company, and RobertBosch Company is the second majority shareholder of the Company.In March 2013, the profit distribution pre-plan for year of 2012 was deliberated and approved by the Board, andalso passed in Annual General Meeting 2012 of the Company in May 2013. On basis of total share capital680,133,995 shares, distribute 5-share for every 10 shares held by whole shareholders, 340,066,997 shares in totalare distributed. Total share capital of the Company amounting 1,020,200,992 yuan up to December 31, 2013.Deliberated and approved by the company’s first extraordinary general meeting in 2015, the company hasrepurchased 11,250,422 shares of A shares from August 26, 2015 to September 8, 2015, and has finished thecancellation procedures for above repurchase shares in China Securities Depository and Clearing CorporationLimited Shenzhen Branch on September 16, 2015; after the cancellation of repurchase shares, the company’spaid-up capital (share capital) becomes 1,008,950,570 yuan after the change.After deliberation and approved by the 5
th meeting of 10
thsession of the BOD for year of 2021, the 291,000restricted shares are buy-back and canceled by the Company initially granted under the 2020 Restricted ShareIncentive Plan. The cancellation of the above mentioned buy-back shares are completed at the Shenzhen Branchof CSDC on December 20, 2021; the paid-in capital (equity) of the Company comes to 1,008,659,570.00 yuanafter changed.After deliberated and approved by the 8
th meeting of 10
th
session of the BOD for year of 2022, the 56,277restricted shares are buy-back and canceled by the Company initially granted under the 2020 Restricted ShareIncentive Plan. The cancellation of the above mentioned buy-back shares are completed at the Shenzhen Branchof CSDC on July 8, 2022; the paid-in capital (equity) of the Company came to 1,008,603,293.00 yuan afterchanged.After deliberated and approved by the 14
th
meeting of 10
thsession of the BOD in 2022, the company repurchased
and canceled 430,000 restricted stock granted for the first time under Restricted Share Incentive Plan 2020, andcompleted the cancellation procedures of the repurchased shares in China Securities Depository and ClearingCorporation Co., Ltd., Shenzhen Branch on February 16, 2023; The Paid-in capital (share capital) of the Companyafter the change is 1,008,603,293.00 yuan.Deliberated and approved by the 16
th meeting of 10
thsession of the BOD in 2023, the company repurchased andcanceled 5,593,500 restricted stock granted for the first time under Restricted Share Incentive Plan 2020, andcompleted the cancellation procedures of the repurchased shares in China Securities Depository and ClearingCorporation Co., Ltd., Shenzhen Branch on June 16, 2023; The Paid-in capital (share capital) of the Companyafter the change is 1,002,579,793.00 yuan.
2. Registered place, organization structure and head office of the Company
Registered place and head office of the Company: No.5 Huashan Road, Xinwu District, WuxiUnified social credit code: 91320200250456967NThe Company sets up Shareholders’ General Meeting, the Board of Directors (BOD) and the Board of SupervisorsThe Company sets up Administration Department, Technology Centre, organization & personnel department,Office of the Board, Compliance Department, IT department, Strategy & New Business Department, MarketDevelopment Department, Party-masses Department, Finance Department, Purchase Department,ManufacturingQuality Department, MS (Mechanical System) Division, AC(Automotive Components) Division and DS (DieselSystem ) Division, etc. and subsidiaries such as WUXI WEIFU LIDA CATALYTIC CONVERTER CO., LTD,NANJING WEIFU JINNING CO., LTD, IRD Fuel Cells A/S and Borit NV.
3. Business nature and major operation activities of the Company
Operation scope of parent company: Technology development and consulting service in the machinery industry;manufacture of engine fuel oil system products, fuel oil system testers and equipment, manufacturing of autoelectronic parts, automotive electrical components, non-standard equipment, non-standard knife tool and exhaustpost-processing system; sales of the general machinery, hardware & electrical equipment, chemical products &raw materials (excluding hazardous chemicals), automotive components and vehicles (excluding nine-seatpassenger 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 technologies limited orforbidden by the State for import and export) by self-operation and works as agent for such business. Researchand test development of engineering and technical; R&D of the energy recovery system; manufacture of autocomponents and accessories; general equipment manufacturing (excluding special equipment manufacturing),(any projects that needs to be approved by laws can only be carried out after getting approval by relevantauthorities) General items: engage in investment activities with self-owned funds (except for items subject toapproval according to the law, independently carry out business activities according to laws with businesslicenses )Major subsidiaries respectively activate in production and sales of engine accessories, automotive components,mufflers, purifiers and fuel cell components etc.
4. Authorized reporting parties and reporting dates for the financial report
The financial report of the Company was approved by the Board of Directors for reporting dated August 22, 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 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 | USD3,310 | 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 Qinglong Power Technology Co., Ltd. | WFQL | 45.00 | 30.00 | 75.00 | 50,000 | Fuel cell components | Y |
VHIT Automotive Systems(Wuxi) Co.Ltd | VHWX | 100.00 | -- | 100.00 | 13,400 | Vacuum and hydraulic pump | Y |
Weifu Holding ApS | SPV | 100.00 | -- | 100.00 | DKK9,257 | Investment | Y |
IRD Fuel Cells A/S | IRD | -- | 100.00 | 100.00 | DKK10,579 | Fuel cell components | Y |
IRD FUEL CELLS LLC | IRD America | -- | 100.00 | 100.00 | USD1,201.83 | Fuel cell components | Y |
Borit NV | Borit | -- | 100.00 | 100.00 | EUR1,183.21 | Fuel cell components | Y |
Borit Inc. | Borit America | -- | 100.00 | 100.00 | USD0.1 | Fuel cell components | Y |
VHIT S.p.A. Società Unipersonale | VHIO | -- | 100.00 | 100.00 | EUR500 | Vacuum and hydraulic pump | Y |
IV. Basis of preparation of financial statements
1. Preparation base
The financial statement were stated in compliance with Accounting Standard for Business Enterprises –Basic Norms issued byMinistry of Finance, the specific 42 accounting rules revised and issued dated February 15, 2006 and later, the ApplicationInstruments of Accounting Standards and interpretation on Accounting standards and other relevant regulations (together as“Accounting Standards for Business Enterprise”), as well as the Compilation Rules for Information Disclosure by CompaniesOffering Securities to the Public No.15 – General Provision of Financial Report (Amended in 2014) issued by CSRC in respect ofthe actual transactions and proceedings, on a basis of ongoing operation.In line with relevant regulations of Accounting Standards of Business Enterprise, accounting of the Company is on accrual basis.Except for certain financial instruments, the financial statement measured on historical cost. Assets have impairment been found,corresponding depreciation reserves shall accrual according to relevant rules.
2. Going concern
The Company comprehensively assessed the available information, and there are no obvious factors that impact sustainable operationability of the Company within 12 months since end of the reporting period.V. Major accounting policies and estimationSpecific accounting policies and estimation attention:
The Company and its subsidiaries are mainly engaged in the manufacture and sales of engine fuel oil system products, automotivecomponents, mufflers, purifiers and fuel cell components etc., in line with the actual operational characteristics and relevantaccounting standards, many specific accounting 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 Enterprises
Financial statements prepared by the Company were in accordance with requirements of Accounting Standard for BusinessEnterprises, which truly and completely reflected the financial information of the Company in the reporting period, such as financialstatus, operation achievements and cash flow.
2. Accounting period
Accounting period of the Company consist of annual and mid-term, mid-term refers to the reporting period shorter than one annualaccounting year. The company adopts Gregorian calendar as accounting 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 the cash and cash equivalentachieved. The Company’s normal business cycle was one-year (12 months).
4. Recording currency
The Company’s reporting currency is the RMB yuan.
5. Accounting treatment method for business combinations under the same/different controlBusiness combination is the transaction or events that two or two above independent enterprises combined as a reporting entity.Business combination including enterprise combined under the same control 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 ultimatecontroller or under the same controller, the control is not temporary. The assets and liability acquired by combining party aremeasured by book value of the combined party on combination date. Balance of net asset’s book value acquired by combining partyand combine consideration paid (or total book value of the shares issued), shall adjusted capital reserve (share premium); if thecapital reserves (share premium) is not enough for deducted, adjusted for retained earnings. Vary directly expenses occurred forenterprise combination, the combining party shall reckon into current gains/losses while occurring. Combination day is the date whencombining party obtained controlling rights from the combined party.
(2) Combine not under the same control
A business combination not involving entities under common control is a business combination in which all of the combining entitiesare not ultimately controlled by the same party or parties both before and after the combination.As a purchaser, fair value of theassets (equity of purchaser held before 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 the purchaser obtained incombination, recognized as goodwill if the results is positive; if the number is negative, the acquirer shall firstly review themeasurement of the fair value of the identifiable assets obtained, liabilities incurred and contingent liabilities incurred, as well as thecombination costs.After that, if the combination costs are still lower than the fair value of the identifiable net assets obtained, theacquirer shall recognize the difference as the profit or loss in the current period.Other directly expenses cost for combination shall bereckoned into current gains/losses. Difference of the fair value of assets paid and its book values, reckoned into current gains/losses.On purchasing date, the identifiable assets, liability or contingency of the purchaser obtained by the Company recognized by fairvalue, that required identification conditions; Acquisition date refers to the date on which the acquirer effectively obtains control ofthe purchaser.
6. Preparation method for consolidated financial statement
(1) Recognition principle of consolidated scope
On basis of the financial statement of the parent company and owned subsidiaries, prepared consolidated statement in line withrelevant information. The scope of consolidation of consolidated financial statements is ascertained on the basis of effective control.Once certain elements involved in 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 participating in the invested party’s relevantactivities and the ability to affect such return by use of the aforesaid right over the invested party. Relevant activates refers toactivates have major influence on return of the invested party’s.
(3) Consolidation process
Subsidiaries are consolidated from the date on which the company obtains their actual control, and are de-consolidated from the date
that such control ceases.All significant inter-group balances, investment, transactions and unrealized profits are eliminated in theconsolidated financial statements.For subsidiaries being disposed, the operating results and cash flows prior to the date of disposalare included in the consolidated income statement and consolidated cash flow statement; for subsidiaries disposed during the period,the opening balances of the consolidated balance sheet would not be restated. For subsidiaries acquired from a business combinationnot under common control, their operating results and cash flows subsequent to the acquisition date are included in the consolidatedincome statement and consolidated cash flow statement, and the opening balances and comparative figures of the consolidatedbalance sheet would not be restated. For subsidiaries acquired from a business combination under common control, their operatingresults and cash flows from the date of commencement of the accounting period in which the combination occurred to the date ofcombination are included in the consolidated income statement and consolidated cash flow statement, and the comparative figures ofthe consolidated balance sheet would be restated.In preparing the consolidated financial statements, where the accounting policies or the accounting periods are inconsistent betweenthe company and subsidiaries, the financial statements of subsidiaries are adjusted in accordance with the accounting policies andaccounting period of the company.Concerning the subsidiary obtained under combination with different control, adjusted several financial statement of the subsidiarybased on the fair value of recognizable net assets on purchased day while financial statement consolidation; concerning the subsidiaryobtained under combination with 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 Company sold to the subsidiaries fully offset"the net profit attributable to the owners of the parent company". The unrealized gains and losses from the internal transactionsoccurred in the assets the subsidiaries sold to the Company are distributed and offset between "the net profit attributable to theowners of the parent company" and "minority interest" according to the distribution ratio of the Company to the subsidiary. Theunrealized gains and losses from the internal transactions occurred in the assets sold among the subsidiaries are distributed and offsetbetween "the net profit attributable to the owners of the parent company" and "minority interest" according to the distribution ratio ofthe Company 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 theownership interest in the consolidated balance sheet. The share of the subsidiary’s current profit or loss attributable to the minorityinterests is listed as "minority interest" 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 attributableto the minority shareholders” item under the total consolidated income item in the consolidated income statement. If there areminority shareholders, add the "minority interests" item in the consolidated statement of change in equity to reflect the changes of theminority interests. If the losses of the current period shared by a subsidiary’s minority shareholders exceed the share that the minorityshareholders hold in the subsidiary ownership interest in the beginning of the period, the balance still charges against the minorityinterests.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 remainingequity interest is re-measured on the date when the control ceased. The difference between the sum of the consideration receivedfrom disposal of equity interest and the fair value of the remaining equity interest, less the net assets attributable to the companysince the acquisition date, is recognized as the investment income from the loss of control. Other comprehensive income relating tooriginal equity investment in subsidiaries shall be treated on the same basis as if the relevant assets or liabilities were disposed of bythe purchaser directly when the control is lost, namely be transferred to current investment income other than the relevant part of themovement arising from re-measuring net liabilities or net assets under defined benefit scheme by the original subsidiary. Subsequentmeasurement of the remaining equity interests shall be in accordance with relevant accounting standards such as AccountingStandards for business Enterprises 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 transactions should be regarded as a bundle
of transactions. When the economic effects and terms and conditions of the disposal transactions met one or more of the followingsituations, the transactions shall normally be accounted for as a bundle of transactions: ① The transactions are entered into afterconsidering the mutual consequences of each individual transaction; ② The transactions need to be considered as a whole in order toachieve a deal in commercial sense;③ The occurrence of an individual transaction depends on the occurrence of one or moreindividual transactions in the series; ④ The result of an individual transaction is not economical, but it would be economical aftertaking into account of other transactions in the series. When the transactions are not regarded as a bundle of transactions, theindividual transactions shall be accounted as “disposal of a portion of an interest in a subsidiary which does not lead to loss of control”and “disposal of a portion of an interest in a subsidiary which lead to loss of control”. When the transactions are regarded as a bundleof transactions, the transactions shall be accounted as a single disposal transaction; however, the difference between the considerationreceived from disposal and the share of net assets disposed in each individual transaction before loss of control shall be recognized asother comprehensive income, 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 Company classifies 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 theprovisions of the relevant accounting standards for accounting treatment:
(1) Recognize the assets held solely by the Company, and recognize assets held jointly by the Company in appropriation to the shareof the Company;
(2) Recognize the obligations assumed solely by the Company, and recognize obligations assumed jointly by the Company inappropriation to the share of the Company;
(3) Recognize revenue from disposal of the share of joint operations of the Company;
(4) Recognize fees solely occurred by Company;
(5) Recognize fees from joint operations in appropriation to the share of the Company.
8. Recognition standards for cash and cash equivalent
Cash refers to stock cash, savings available for paid at any time; cash and cash equivalent refers to the cash held by the Companywith short terms (expired within 3 months since purchased), and liquid and easy to transfer as known amount and investment withminor variation in risks.
9. Foreign currency business and conversion
The occurred foreign currency transactions are converted into the recording currency in accordance with the middle rate of themarket exchange rate published by the People's Bank of China on the transaction date. There into, the occurred foreign currencyexchange or transactions involved in the foreign 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 liabilities is converted into the recordingcurrency amount in accordance with the middle rate of the market exchange rate published by the People's Bank of China on thetransaction date. The balance between the recording currency amount converted according to exchange rate at the balance sheet dateand the original recording currency amount is disposed as the exchange gains or losses. There into, the exchange gains or lossesoccurred in the foreign currency loans related to the purchase and construction of fixed assets are disposed according to the principleof capitalization of borrowing costs; 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 historical costs are converted in accordancewith the middle rate of the market exchange rate published by the People's Bank of China on the transaction date without changingits original recording currency amount; 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 of China on the fair value date,and thegenerated exchange gains and losses are included in the current profits and losses as the gains and losses from changes in fair value.The following displays the methods for translating financial statements involving foreign operations into the statements in RMB: Theasset and liability items in the balance sheets for overseas operations are translated at the spot exchange rates on the balance sheetdate. Among the owners’ equity items, the items other than “undistributed profits” are translated at the spot exchange rates of thetransaction dates. The income and expense items in the income statements of overseas operations are translated at the averageexchange rates of the transaction dates. The exchange difference arising from the above mentioned translation are recognized in othercomprehensive income and is shown separately under owner’ equity in the balance sheet; such exchange difference will bereclassified to profit or loss in current year when the foreign operation is disposed according to the proportion of disposal.The cash flows of overseas operations are translated at the average exchange rates on the dates of the cash flows. The effect ofexchange rate changes on cash is presented separately in the cash flow statement.
10. Financial instrument
Financial instrument is the contract that taken shape of the financial asses for an enterprise and of the financial liability or equityinstrument for other units.
(1) Recognition and termination of financial instrument
A financial asset or liability is recognized when the group becomes a party to a financial instrument contract.The recognition of a financial assets shall be terminated if it meets one of the following conditions:
① The contractual right to receive the cash flow of the financial assets terminates; and
② The financial assets are transferred and the company transfers substantially all the risks and rewards of ownership of the financialasset to the transferring party;
③ The financial asset was transferred and control, although the company has neither transferred nor retained almost all the risks andrewards of the ownership of a financial asset, it relinquishes control over the financial asset.If all or part of the current obligations of a financial liability has been discharged, the financial liability or part of it is terminated forrecognition. When the Company (debtor) and the creditor sign an agreement to replace the existing financial liabilities with newfinancial liabilities, and the new financial liabilities and the existing financial liabilities are substantially different from the contractterms, terminated the recognition of the existing financial liabilities and recognize the new financial liabilities at the same time.Financial assets are traded in the normal way and their accounting recognition and terminated the recognition of proceed on a tradedate basis.
(2) Classification and measurement of financial assets
At the initial recognition, according to the business model of managing financial assets and the contractual cash flow characteristicsof financial assets, the Company classifies the financial assets into the financial assets measured at amortized cost, the financialassets measured at fair value and whose 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 at fair value at initial recognition,but if the receivables or receivables financing arising from the sale of goods or the provision of services do not include a significantfinancing component or do not consider 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 changes are included in the currentprofit or loss, related transaction costs are directly included in the current profit and loss; for other types of financial assets, related
transaction costs are included in the initially recognized amount.The business model for managing financial assets refers to how the Company manages financial assets to generate cash flows. Thebusiness model determines whether the cash flow of financial assets managed by the Company is based on contract cash flow, sellingfinancial assets or both. The Company determines the business model for managing financial assets based on objective facts andbased on the specific business objectives of financial assets management determined by key management personnel.The Company evaluates the contractual cash flow characteristics of financial assets to determine whether the contractual cash flowsgenerated by the relevant financial assets on a specific date are only payments for the principal and the interest based on theoutstanding principal amount. The principal 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 Company evaluates the contractual terms that may result in changes in the timedistribution or the amount of contractual cash flows of the financial assets to determine whether they meet the requirements of theabove contractual cash flow characteristics.Only when the Company changes its business model of managing financial assets, all affected financial assets are reclassified on thefirst day of the first reporting period after the business model changes, otherwise the financial assets are not allowed to be reclassifiedafter initial recognition.
① Financial assets measured at amortized cost
The Company classifies the financial assets that meet the following conditions and haven’t been designated as financial assetsmeasured at fair value and whose changes are included in current profit 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 date is only paid for the principal andinterest based on the outstanding principal amount.After initial recognition, such financial assets are measured at amortized cost by using the effective interest method. Gains or lossesarising from financial assets which are measured at amortized cost and are not a component of any hedging relationship are includedin current profit or loss when being terminated for recognition, amortized by effective interest method, or impaired.
② Financial assets measured at fair value and whose changes are included in other comprehensive incomeThe Company classifies the financial assets that meet the following conditions and haven’t been designated as financial assetsmeasured at fair value and whose changes are included in current profit or loss as financial assets measured at fair value and whosechanges are included in other comprehensive income:
A. the Group's business model for managing the financial assets is targeted at both the collection of contractual cash flows and thesale of financial assets; andB. the contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only the payment of theprincipal 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 andexchange gains and losses calculated by using the effective interest method are included in profit or loss for the period, and othergains or losses are included in other comprehensive income. When being terminate for recognition, the accumulated gains or lossespreviously included in other comprehensive income are transferred from other comprehensive income and included in current profitor loss.
③ Financial assets measured at fair value and whose changes are included in current profit or lossExcept for the above financial assets measured at amortized cost and measured at fair value and whose changes are included in othercomprehensive income, the Company classifies all other financial assets as financial assets measured at fair value and whose changesare included in current profit or loss. In the initial recognition, in order to eliminate or significantly reduce accounting mismatch, theCompany irreversibly designates part of the financial assets that should be measured at amortized cost or measured at fair value andwhose changes are included in the other comprehensive income as the financial assets measured at fair value and whose changes are
included in current profit or loss.After the initial recognition, such financial assets are subsequently measured at fair value, and the gains or losses (including interestsand 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 them as the financial assets that aremeasured at fair value and whose changes are included in other comprehensive income in the initial recognition. The designation ismade based on a single investment and the relevant investment is in line with the definition of equity instruments from the issuer'sperspective. After initial recognition, such financial assets are subsequently measured at fair value. Dividend income that meets theconditions is included in profit or loss, and other gains or losses and changes in fair value are included in other comprehensiveincome. When it is terminated for 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 value and whose changes are included incurrent profit or loss and financial liabilities measured at amortized cost at the initial recognition. For financial liabilities that are notclassified as financial liabilities measured at fair value and whose changes are included in current profit or loss, the relatedtransaction expenses are included in the initial recognition amount.
① Financial liability measured by fair value and with variation reckoned into current gains/lossesFinancial liability measured by fair value and with variation reckoned into current gains/losses including tradable financial liabilityand the financial liabilities that are designated as fair value in the initial recognition and whose changes are included in current profitor loss. For such financial liabilities, the subsequent measurement is based on fair value, and the gains or losses arising from changesin fair value and the dividends and interest expenses related to these financial liabilities are included in current profit or loss.
② Financial liability measured by amortized cost
Other financial liabilities are subsequently measured at amortized cost by using the effective interest method. The gain or loss arisingfrom recognition termination or amortization is included in current profit or loss.
③ Distinctions between financial liabilities and equity instruments
Financial liabilities are liabilities that meet one of the following conditions:
A. Contractual obligations to deliver cash or other financial assets to other parties.B. Contractual obligations to exchange financial assets or financial liabilities with other parties under potentially adverse conditions.C. Non-derivative contracts that must be settled or that can be settled by the company's own equity instruments in the future, and theenterprise will deliver a variable amount of its own equity instruments according to the contract.D. Derivative contracts that must be settled or that can be settled by the company's own equity instruments in the future, except forderivatives contracts that exchange a fixed amount of cash or other financial assets with a fixed amount of their own equityinstruments.An equity instrument is a contract that proves it has a residual equity in the assets of an enterprise after deducting all liabilities.If the Company cannot unconditionally avoid performing a contractual obligation by delivering cash or other financial assets, thecontractual obligation is consistent with the definition of financial liability.If a financial instrument is required to be settled or can be settled by the Company's own equity instruments, it is necessary toconsider whether the Company's own equity instruments used to settle the instrument are a substitute for cash or other financialassets, or to make the instrument holder enjoy the residual equity in the assets of the issuer after deducting all liabilities. In the formercase, the instrument is the Company's financial liability; if it is the latter, the instrument is the Company's equity instrument.
(4) Fair value of financial instruments
The company uses valuation techniques that are applicable under current circumstances and that have sufficient available data andother information support to determine the fair value of related financial assets and financial liabilities. The company divides the
input values used by valuation techniques into the following levels and uses them in sequence:
① The first-level input value is the unadjusted quotation of the same assets or liabilities that can be obtained on the measurementdate in the active market;
② The second-level input value is the direct or indirect observable input value of the relevant assets or liabilities other than the first-level input value, including quotations of similar assets or liabilities in an active market; quotations of same or similar assets orliabilities in an active market; other observable input value other than quotations, such as interest rate and yield curves that areobservable during the normal quote interval; market-validated input value, etc.;
③ The third-level input value is the unobservable input value of the relevant assets or liabilities, including the interest rate thatcannot be directly observed or cannot be verified by observable market data, stock volatility, future cash flow of the retirementobligation assumed in the business combination, 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 financial assets measured at amortized costand creditors’ investment etc. measured at fair value and whose changes are included in other comprehensive income and recognizethe provisions for loss.
① Measurement of expected credit losses
Expected credit loss refers to the weighted average of credit losses of financial instruments weighted by the risk of default. Creditloss refers to the difference between all contractual cash flows that the Company discounts at the original actual interest rate and arereceivable in accordance with contract and 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, the Company discounts the financialassets at the actual interest rate adjusted by credit.When measuring expected credit losses, the Company individually evaluates credit risk for financial assets with significantlydifferent credit risks, such as receivables involving litigation and arbitration with the other party, or receivables having obviousindications that the debtor is likely to be unable to fulfill its repayment obligations, and so on.Except for the financial assets that separately assess the credit risks, the Company classified the account receivable according to theircharacteristic of risks, calculated the expected credit losses on basis of portfolio. Basis for determining the portfolio as follow:
A - Note receivableNote receivable 1: bank acceptanceNote receivable 2: trade acceptanceB - Account receivableAccount receivable 1: receivable from clientsAccount receivable 2: receivable from internal related partyC- Receivable financingReceivable financing 1: bank acceptanceReceivable financing 2: trade acceptanceD - Other accounts receivableOther accounts receivable 1: receivable from internal related partyOther accounts receivable 2: receivable from othersAs for the note receivable, account receivable, receivable financing and other account receivable classified in portfolio, by referringto the experience of historical credit loss, the expected credit loss is calculated by combining the current situation and the forecast offuture economic conditions.Except for the financial assets adopting simplified metering method, the Company assesses at each balance sheet date whether itscredit risk has increased significantly since initial recognition. If credit risk has not increased significantly since initial recognition, it
is in the first stage, the Company measures the loss provisions based on the amount equivalent to the expected credit loss in the next12 months; if the credit risk has increased significantly since initial recognition but no credit impairment has occurred, it is in thesecond stage, the Company measures the loss provisions based on the amount equivalent to the expected credit loss for the entireduration; if credit impairment occurs after initial recognition, it is in the third stage, the Company measures the loss provisions basedon the amount equivalent to the expected credit loss for the entire duration.For financial instruments with low credit risks at thebalance sheet date, the Company assumes that their credit risks have not increased significantly since initial recognition.The Company evaluates the expected credit losses of financial instruments based on individual items and portfolios. When assessingexpected credit losses, the Company considers reasonable and evidence-based information about past events, current conditions, andforecasts of future economic conditions.When the Company no longer reasonably expects to be able to fully or partially recover the contractual cash flow of a financial asset,the Company directly writes down the book balance of the financial asset.
② Assessment of a significant increase in credit risk:
The Company determines the relative changes in default risk of the financial instrument occurred in the expected duration and assesswhether the credit risks of financial instrument has increased significantly since the initial recognition by comparing the risk ofdefault of the financial instrument on 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 initial recognition, the Company considersreasonable and evidence-based information that can be obtained without unnecessary additional costs or effort, including forward-looking information. The information considered by the Company includes:
A. The debtor fails to pay the principal and interest according to the contractual maturity date;B. Serious worsening of external or internal credit rating (if any) of the financial instruments that have occurred 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 will have a material adverse effect onthe debtor's ability to repay the company.Based on the nature of financial instruments, the Company assesses whether credit risk has increased significantly on the basis of asingle financial instrument or combination of financial instruments. When conducting an assessment based on a combination offinancial instruments, the Company can classify 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 consider the Company to take recourseactions such as realizing collateral (if held).
③ Financial assets with credit impairment
On the balance sheet date, the Company assesses whether the credit of financial assets measured at amortized cost and the credit ofdebt investments measured at fair value and whose changes are included in other comprehensive income has been impaired. Whenone or more events that adversely affect 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 in financial assets includes thefollowing observable information:
A. The issuer or the debtor has significant financial difficulties;B. The debtor breaches the contract such as default or overdue repayment of interest or principal;C. The Company gives concessions to the debtor that will not be made in any other circumstances for economic or contractualconsiderations relating to the financial difficulties of the debtor;D. The debtor is likely to go bankrupt or carry out other financial restructurings;E. The financial difficulties of the issuer or the debtor have caused the active market of the financial asset to disappear.
④ Presentation of expected credit loss provisions
In order to reflect the changes in the credit risk of financial instruments since the initial recognition, the Company re-measures theexpected credit losses on each balance sheet date, and the resulting increase or reversal of the loss provisions shall be included incurrent profit and loss as impairment losses or gains. For financial assets measured at amortized cost, the loss provisions are writtenoff against the book value of the financial assets listed in the balance sheet; for debt investments measured at fair value and whosechanges are included in other comprehensive income, the Company recognizes the loss provisions in other comprehensive incomeand does not deduct the book value of the financial asset.
⑤ Write-off
If the Company no longer reasonably expects that the financial asset contract cash flow can be fully or partially recovered, directlywrite down the book balance of the financial asset. Such write-downs constitute the termination of recognition for related financialassets. This usually occurs when the Company determines that the debtor has no assets or sources of income to generate sufficientcash flow to repay the amount that will be written down. However, according to the Company's procedures for recovering the dueamount, the financial assets that have been written down may still be affected by the execution activities.If the financial assets that have been written down are recovered afterwards, they shall be included in the profit or loss of the periodbeing 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 theissuer of the financial assets.For financial assets that the Company has transferred almost all risks and rewards of ownership of financial assets to the transferee,terminate the recognition of the financial assets; if almost all the risks and rewards of ownership of financial assets have beenretained, do not terminate the recognition of the financial assets.If the Company has neither transferred nor retained almost all the risks and rewards of ownership of financial assets, dispose asfollowing situations: If the control of the financial assets is abandoned, terminate the recognition of the financial assets and determinethe resulting assets and liabilities. If the control of the financial assets is not abandoned, determine the relevant financial assetsaccording to the extent to which they continue to be involved in the transferred financial assets, and determine the related liabilitiesaccordingly.
(7) Balance-out between the financial assets and liabilities
As the Group has the legal right to balance out the financial liabilities by the net or liquidation of the financial assets, the balance-outsum between the financial assets and liabilities is listed in the balance sheet. In addition, the financial assets and liabilities are listedin the balance sheet without being balanced out.
11. Note receivable
Note receivable 1: bank acceptanceNote receivable 2: trade acceptanceThe Company calculates expected credit losses by referring to historical credit loss experience, taking into account current conditionsand forecasts of the future economic situation.
12. Account receivable
Account receivable 1: receivable from clientsAccount receivable 2: receivable from internal related partyThe Company calculates expected credit losses by referring to historical credit loss experience, taking into account current conditions
and forecasts of the future economic situation.
13. Receivable financing
The note receivable and account receivable which are measured at fair value and whose changes are included in other comprehensiveincome are classified as receivables financing within one year (including one year) from the date of acquisition. Relevant accountingpolicy found more in Note V. 10. “Financial Instrument” .
14. Other accounts receivable
Determination method of expected credit loss and accounting treatmentOther accounts receivable 1: receivable from internal related partyOther accounts receivable 2: receivable from othersThe Company calculates expected credit losses by referring to historical credit loss experience, taking into account current conditionsand forecasts of the future economic situation.
15. Inventory
(1) Classification of inventories
The Company’s inventories are categorized into stock materials, product in process and stock goods etc.
(2) Pricing for delivered inventories
The cost of inventory at the time of acquisition and delivery is calculated according to the standard cost method, and the difference incost 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 for inventory 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 clearanceabout inventories, inventory impairment provision is withdrawn for uncollectible part of costs of inventories which result fromdestroy of inventories, out-of-time of 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 single inventory item over its net realizablevalue. As for other raw materials with large quantity and comparatively low unit prices, inventory impairment provision is withdrawnpursuant to categories.As for finished goods, commodities and materials available for direct sales, their net realizable values are determined by theirestimated selling prices less estimated sales expenses and relevant taxes. For material inventories held for purpose of production,their net realizable values are determined 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 for implementation of sales contractsor service contracts, their net realizable values are calculated on the basis of contract prices. In the event that inventories held by acompany 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
① Low-value consumables
The Company adopts one-off amortization method to amortize the low-value consumables.
② Wrappage
The Company adopts one-off amortization method to amortize the wrappage at the time of receipt.
16. Contract assets
The Company presents the contract assets or contract liabilities in the balance sheet based on the relationship between theperformance obligation and the customer’s payment.Recognition method and standard of contract assets: contract assets refer to the right of a company to receive consideration aftertransferring goods or providing services to customers, and this right depends on other factors besides the passage of time. Thecompany's unconditional (that is, only depending on the passage of time) right to collect consideration from customers are separatelylisted as receivables.Method for determining expected credit losses of contract assets: the method for determining expected credit losses of contract assetsis consistent with the method for determining expected credit losses of accounts receivable.Accounting treatment method of expected credit losses of contract assets: if the contract assets are impaired, the company shall debitthe "asset impairment loss" subject and credit the "contract asset impairment provision" subject according to the amount that shouldbe written down. When reversing the provision for asset impairment that has already been withdrawn, make opposite accountingentries.
17. Assets held for sale
The Company classifies non-current assets or disposal groups that meet all of the following conditions as held-for-sale: according tothe practice of selling this type of assets or disposal groups in a similar transaction, the non-current assets or disposal group can besold immediately at its current condition; The sale is likely to occur, that is, the Company has made resolution on the selling plan andobtained definite purchase commitment, the selling is estimated to be completed within one year. Those assets whose disposal issubject to approval from relevant authority or supervisory department under relevant requirements are subject to that approval.Where the Company loses control over its subsidiary due to disposal of investment in subsidiary, whether or not the Company retainspart equity investment after such disposal, investment in subsidiary shall be classified in its entirety as held for sale in the separatefinancial statement of the parent company subject to that the investment in subsidiary proposed to be disposed satisfies the conditionsfor being classified as held for sale, and all the assets and liabilities of the subsidiary shall be classified as held for sale inconsolidated financial statement.The purchase commitment identified refers to the legally binding purchase agreement entered into between the Company and otherparties, which sets out certain major terms relating to transaction price, time and adequately stringent punishment for default, whichrender an extremely minor possibility 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 selling expense. If the carrying value is higherthan fair value less selling expense, the excess shall be recognized as impairment loss and recorded in profit or loss for the period,and allowance for impairment shall be provided for in respect of the assets. In respect of impairment loss recognized for disposalgroup held for sale, carrying value of the goodwill in the disposal group shall be deducted first, and then deduct the carrying value ofthe non-current assets within the disposal group applicable to this measurement standard on a pro rata basis according to theproportion taken by their carrying value.If the net amount of fair value of non-current assets held for sale less sales expense on subsequent balance sheet date increases, theamount previously reduced for accounting shall be recovered and reverted from the impairment loss recognized after the asset isclassified under the category of held for 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.If the net amount of fair value of thedisposal group held for sale on the subsequent balance sheet date less sales expenses increases, the amount reduced for accounting inprevious periods shall be restored, and shall be reverted in the impairment loss recognized in respect of the non-current assets which
are applicable to relevant measurement provisions after classification into the category of held for sale, with the reverted amountcharged in profit or loss for the current period. The written-off carrying value of goodwill shall not be reverted.The non-current assets in the non-current assets or disposal group held for sale is not depreciated or amortized, and the debt interestsand other fees in the disposal group held for sale continue to be recognized.If the non-current assets or disposal group are no longer classified as held for sale since they no longer meet the condition of beingclassified as held for sale or the non-current assets are removed from the disposal group held for sale, they will be measured at thelower of the following:
(i)The amount after their book value before they are classified as held for sale is adjusted based on the depreciation, amortization orimpairment that should have been recognized given they are not classified as held for sale;(ii) The recoverable amount.
18. Long-term equity investment
Long-term equity investments refer to long-term equity investments in which the Company has control, joint control or significantinfluence over the invested party. Long-term equity investment without control or joint control or significant influence of the Groupis 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. “Financial instrument” .
(1) Determination of initial investment cost
Investment costs of the long-term equity investment are recognized by the follow according to different way of acquirement:
① For a long-term equity investment acquired through a business combination involving enterprises under common control, theinitial investment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount of the owner’sequity under the consolidated financial 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 ofthe debts borne by the absorbing party shall offset against the capital reserve. If the capital reserve is insufficient to offset, theretained earnings shall be adjusted. If the consideration of the merger is satisfied by issue of equity securities, the initial investmentcost of the long-term equity investment shall be the absorbing party’s share of the carrying amount of the owner’s equity under theconsolidated financial statements of the ultimate controlling party on the date of combination. With the total face value of the sharesissued as share capital, the difference between the initial cost of the long-term equity investment and total face value of the sharesissued shall be used to offset against the capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall beadjusted. For business combination resulted in an enterprise under common control by acquiring equity of the absorbing party undercommon control through a stage-up approach with several transactions, these transactions will be judged whether they shall be treatas “transactions in a basket”. If they belong to “transactions in a basket”, these transactions will be accounted for a transaction inobtaining control. If they do not belong to “transactions in a basket”, the initial investment cost of the long-term equity investmentshall be the absorbing party’s share of the carrying amount of the owner’s equity under the consolidated financial statements of theultimate controlling party on the date of combination. The difference between the initial cost of the long-term equity investment andthe aggregate of the carrying amount of the long-term equity investment before merging and the carrying amount the additionalconsideration paid for further share acquisition on the date of combination shall offset against the capital reserve. If the capitalreserve is insufficient to offset, the retained earnings shall be adjusted. Other comprehensive income recognized as a result of thepreviously held equity investment accounted for using equity method on the date of combination or recognized for available-for-salefinancial assets will not be accounted for.
② For the long-term equity investment obtained by business combination not under the same control, the fair value of the assetsinvolved, the equity instruments issued and the liabilities incurred or assumed on the transaction date, plus the combined cost directlyrelated to the acquisition is used as the 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 party on the combining date are all
measured at fair value, regardless of the amount of minority shareholders’ equity. The amount of the combined cost exceeding thefair value of the identifiable net 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 in the consolidated incomestatement.(For business combination resulted in an enterprise not under common control by acquiring equity of the acquire undercommon control through a stage-up approach with several transactions, these transactions will be judged whether they shall be treatas “transactions in a basket”. If they belong to “transactions in a basket”, these transactions will be accounted for a transaction inobtaining control. If they do not belong to “transactions in a basket”, the initial investment cost of the long-term equity investmentaccounted for using cost method shall be the aggregate of the carrying amount of equity investment previously held by the acquireand the additional investment cost. For previously held equity accounted for using equity method, relevant other comprehensiveincome will not be accounted for. For previously held equity investment classified as available-for-sale financial asset, the differencebetween its fair value and carrying 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.)
③ Long-term investments obtained through other ways:
A. Initial investment cost of long-term equity investment obtained through cash payment is determined according to actual paymentfor purchase;B. Initial investment cost of long-term equity investment obtained through issuance of equity securities is determined at fair value ofsuch securities;C. Initial investment cost of long-term equity investment (exchanged-in) obtained through exchange with non-monetary assets, whichis of commercial nature, is determined at fair value of the assets exchanged-out; otherwise determined at carrying value of the assetsexchanged-out if it is not of commercial nature;D. Initial investment cost of long-term equity investment obtained through debt reorganization is determined at fair value of suchinvestment.
(2) Subsequent measurement on long-term equity investment
① Presented controlling ability on invested party, the investment shall use cost method for measurement.
② Long-term equity investments with joint control (excluding those constitute joint ventures) or significant influence on the investedparty are accounted for using equity method.Under the equity method, where the initial investment cost of a long-term equity investment exceeds the investor’s interest in the fairvalue of the invested party’s identifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost.Where the initial investment cost is less than the investor’s interest in the fair value of the invested party’s identifiable net assets atthe acquisition date, the difference shall be charged to profit or loss for the current period, and the cost of the long term equityinvestment shall be adjusted accordingly.Under the equity method, investment gain and other comprehensive income shall be recognized based on the Group’s share of the netprofits or losses and other comprehensive income made by the invested party, respectively. Meanwhile, the carrying amount of long-term equity investment shall be adjusted. The carrying amount of long-term equity investment shall be reduced based on the Group’sshare of profit or cash dividend distributed by the invested party. In respect of the other movement of net profit or loss, othercomprehensive income and profit distribution of invested party, the carrying value of long-term equity investment shall be adjustedand included in the capital reserves. The Group shall recognize its share of the invested party’s net profits or losses based on the fairvalues of the invested party’s individual separately identifiable assets at the time of acquisition, after making appropriate adjustmentsthereto. In the event of in-conformity between the accounting policies and accounting periods of the invested party and the Company,the financial statements of the invested party shall be adjusted in conformity with the accounting policies and accounting periods ofthe Company. Investment gain and other comprehensive income shall be recognized accordingly. In respect of the transactionsbetween the Group and its associates and joint ventures in which the assets disposed of or sold are not classified as operation, theshare of unrealized gain or loss arising from inter-group transactions shall be eliminated by the portion attributable to the Company.Investment gain shall be recognized accordingly. However, any unrealized loss arising from inter-group transactions between the
Group and an invested party is not eliminated 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, which resulted in acquisition of long-termequity investment by the investor without obtaining control, the initial investment cost of additional long-term equity investmentshall be the fair value of disposed operation. 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 Group sold an asset classified as operationto its associates or joint ventures, the difference between the carrying value of consideration received and operation shall be fullyincluded in profit or loss for the current period. In the event that the Company acquired an asset which formed an operation from itsassociates or joint ventures, relevant transaction shall be accounted for in accordance with “Accounting Standards for BusinessEnterprises No. 20 “Business combination”. All profit or loss related to the transaction shall be accounted for.The Group’s share of net losses of the invested party shall be recognized to the extent that the carrying amount of the long-termequity investment together with any long-term interests that in substance form part of the investor’s net investment in the investedparty are reduced to zero. If the Group 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 making profits in subsequent periods,the Group shall resume recognizing its share of profits after setting off against the share of unrecognized losses.
③ Acquisition of minority interest
Upon the preparation of the consolidated financial statements, since acquisition of minority interest increased of long-term equityinvestment which was compared to fair value of identifiable net assets recognized which are measured based on the continuousmeasurement since the acquisition date (or combination date) of subsidiaries attributable to the Group calculated according to theproportion of newly acquired shares, the difference of which recognized as adjusted capital surplus, capital surplus insufficient to setoff impairment and adjusted retained earnings.
④ Disposal of long-term equity investments
In these consolidated financial statements, for disposal of a portion of the long-term equity investments in a subsidiary without lossof control, the difference between disposal cost and disposal of long-term equity investments relative to the net assets of thesubsidiary 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 relevant accounting policies as described inNote V-6 “Preparation Method of the Consolidated Financial Statements”.On disposal of a long-term equity investment otherwise, the difference between the carrying amount of the investment and the actualconsideration paid is recognized through profit or loss in the current period.In respect of long-term equity investment accounted for using equity method with the remaining equity interest after disposal alsoaccounted for using equity method, other comprehensive income previously under owners’ equity shall be accounted for inaccordance with the same accounting treatment for direct disposal of relevant asset or liability by invested party on pro rata basis atthe time of disposal. The owners’ equity recognized for the movement of other owners’ equity (excluding net profit or loss, othercomprehensive income and profit distribution of invested party) shall be transferred to profit or loss for the current period on pro ratabasis.In respect of long-term equity investment accounted for using cost method with the remaining equity interest after disposal alsoaccounted for cost equity method, other comprehensive income measured and reckoned under equity method or financial instrumentbefore control of the invested party unit acquired shall be accounted for in accordance with the same accounting treatment for directdisposal of relevant asset or liability by invested party on pro rata basis at the time of disposal and shall be transferred to profit or lossfor the current period on pro rata basis; among the net assets of invested party unit recognized by equity method (excluding net profitor loss, other comprehensive income and profit distribution of invested party) shall be transferred to profit or loss for the currentperiod on pro rata basis.In the event of loss of control over invested party due to partial disposal of equity investment by the Group, in preparing separatefinancial statements, the remaining equity interest which can apply common control or impose significant influence over the investedparty after disposal shall be accounted for using equity method. Such remaining equity interest shall be treated as accounting for
using equity method since it is obtained and adjustment was made accordingly. For remaining equity interest which cannot applycommon control or impose significant influence over the invested party after disposal, it shall be accounted for using the recognitionand measurement standard of financial instruments. The difference between its fair value and carrying amount as at the date of losingcontrol shall be included in profit or loss for the current period. In respect of other comprehensive income recognized using equitymethod or the recognition and measurement standard of financial instruments before the Group obtained control over the investedparty, it shall be accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability byinvested party at the time when the control over invested party is lost. Movement of 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 equitymethod) shall be transferred to profit or loss for the current period at the time when the control over invested party is lost. Of which,for the remaining equity interest after disposal accounted for using equity method, other comprehensive income and other owners’equity shall be transferred on pro rata basis. For the 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 partial disposal of equity investment by theGroup, the remaining equity interest after disposal 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 of losing common control orsignificant influence shall be included in profit or loss for the current period. In respect of other comprehensive income recognizedunder previous equity investment using equity method, it shall be accounted for in accordance with the same accounting treatmentfor direct disposal of relevant asset or liability by invested party at the time when equity method was ceased to be used. Movement ofother owners’ equity (excluding net profit or loss, other comprehensive income and profit distribution under net asset of investedparty accounted for and recognized using equity method) shall be transferred to profit or loss for the current period at the time whenequity method was ceased to be used.The Group disposes its equity investment in subsidiary by a stage-up approach with several transactions until the control over thesubsidiary is lost. If the said transactions belong to “transactions in a basket”, each transaction shall be accounted for as a singletransaction of disposing equity investment of subsidiary and loss of control. The difference between the disposal consideration foreach transaction and the carrying amount of the corresponding long-term equity investment of disposed equity interest before loss ofcontrol shall initially recognized as other comprehensive income, and subsequently transferred to profit or loss arising from loss ofcontrol for the current period upon loss of control.
(3) Impairment test method and withdrawal method for impairment provision
Found 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, which relevant activities of sucharrangement must be decided by unanimously agreement from parties who share control. All the participants or participant groupwhether have controlling over such arrangement as a group or not shall be judge firstly, than 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 policy decisions of an invested party,but to fail to control or joint control the formulation of such policies together with other parties. While recognizing whether havesignificant influence by invested party, the potential factors of voting power as current convertible bonds and current executablewarrant of the invested party held by investors and other parties shall be thank over.
19. Investment real estate
Measurement model of investment real estateCost measurementDepreciation or amortization
Investment real estate is stated at cost. During which, the cost of externally purchased properties held-for-investment includespurchasing price, relevant taxes and surcharges and other expenses which are directly attributable to the asset. Cost of selfconstruction of properties held for investment is composed of necessary expenses occurred for constructing those assets to a stateexpected to be available for use. Properties held for investment by investors are stated at the value agreed in an investment contractor agreement, but those under contract or agreement without fair value are stated at fair value.The Company adopts cost methodology amid subsequent measurement of properties held for investment, while depreciation andamortization is calculated using the straight-line method according to their estimated useful lives.The basis of provision for impairment of properties held for investment is referred to Note V. 25. “Impairment of long-term assets”
20. Fixed assets
(1) Recognition conditions
Fixed assets refer to the tangible assets for production of products, provision of labor, lease or operation, with a service life excessone year and has more unit value.
(2) Depreciation methods
Category | Depreciation method | Years of depreciation | Scrap value rate | Yearly depreciation rate |
House and Building | Straight-line depreciation | 20~35 | 5 | 2.71~4.75 |
Machinery equipment | Straight-line depreciation | 10 | 5 | 9.50 |
Transportation equipment | Straight-line depreciation | 4~5 | 5 | 19.00~23.75 |
Electronic and other equipment | Straight-line depreciation | 3~10 | 5 | 9.50~31.67 |
For the fixed assets with impairment provision, the depreciation amount shall be calculated after deducting the accumulated amountof impairment provision for fixed assets
(3) Recognition basis, valuation and depreciation method for financial lease assetsThe Company affirms those that conform to below one or several criteria as the finance lease fixed assets:
① Agreed in the lease contract (or made a reasonable judgment according to the correlated conditions on the lease commencementdate), the ownership of lease fixed assets can be transferred to the Company after the expiry of the lease period;
② The Company has the option to purchase or lease the fixed assets, and the purchase price is estimated to be much less than the fairvalue of the lease of fixed assets when exercises the options, so whether the Company will exercise the option can be reasonablydetermined on the lease commencement date;
③ Even though the fixed asset ownership is not transferred, the lease term accounts for 75% of the service life of the lease fixedassets;
④ The present value of the Company’s of minimum lease payment on the lease commencement date is equivalent to 90% or more ofthe fair value of the lease fixed assets on the lease commencement date; the present value of the leaser’s of minimum lease paymenton the lease commencement date is equivalent to 90% or more of the fair value of the lease fixed assets on the lease commencementdate;
⑤ The leased assets with special properties can only be used by the Company without major modifications. The fixed assets rentedby finance leases is calculated as the book value according to the lower one between the fair value of leased assets on the lease
commencement date and the present value of the minimum lease payments.
(4) The impairment test method and provision for impairment of fixed assets
The impairment test method and provision for impairment of fixed assets found more in Note V. 25. “Impairment of long-termassets”.
21. 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 areconverted into fixed assets on the basis of the estimated value of project estimates or pricing or project actual costs, etc. Depreciationis calculated from the next month. 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 to Note V-“25. Impairment of long-term assets”
22. Borrowing costs
(1) Recognition of capitalization of borrowing costs
Borrowing costs comprise interest occurred, amortization of discounts or premiums, ancillary costs and exchange differences inconnection with foreign currency borrowings. The borrowing costs of the Company, which incur from the special borrowingsoccupied by the fixed assets that need more than one year (inclusive) for construction, development of investment properties orinventories or from general borrowings, are capitalized and recorded in relevant assets costs; other borrowing costs are recognized asexpenses and recorded in the profit or loss in the period when they are occurred. Relevant borrowing costs start to be capitalizedwhen all of the following three conditions are met:
① Capital expenditure has been occurred;
② Borrowing costs have been occurred;
③ Acquisition or construction necessary for the assets to come into an expected usable state has been carried out.
(2) Period of capitalization of borrowing costs
Borrowing costs arising from purchasing fixed asset, investment real estate and inventory, and occurred after such assets reached toits intended use of status or sales, than reckoned into assets costs while satisfy the above mentioned capitalization condition;capitalization of borrowing costs shall be suspended and recognized as current expenditure during periods in which construction offixed assets, investment real estate and inventory are interrupted abnormally, when the interruption is for a continuous period of morethan 3 months, until the acquisition, construction or production of the qualifying asset is resumed; capitalization shall discontinuewhen the qualifying asset is ready for its intended use or sale, the borrowing costs occurred subsequently shall reckoned intofinancial expenses while occurring for the current period.
(3) Measure of capitalization for borrowing cost
In respect of the special borrowings borrowed for acquisition, construction or production and development of the assets qualified forcapitalization, the amount of interests expenses of the special borrowings actually occurred in the period less interest income derivedfrom unused borrowings deposited in banks or less investment income derived from provisional investment, are recognized.With respect to the general borrowings occupied for acquisition, construction or production and development of the assets qualifiedfor capitalization, the capitalized interest amount for general borrowings is calculated and recognized by multiplying a weightedaverage of the accumulated expenditure on the assets in excess of the expenditure on some assets of the special borrowings, by acapitalization rate for general borrowings. The capitalization rate is determined by calculation of the weighted average interest rate ofthe general borrowings.
23. Right-of-use assets
The right-of-use asset refers to the right of the Company, as the lessee, to use the leased asset during the lease term.On the commencement date of the lease term, the Company recognizes the right-of-use assets for leases other than short-term leasesand leases of low-value assets. Right-of-use assets are initially measured at cost. The cost includes the initial measurement amount ofthe lease liability; the lease payments made on or before the commencement date of the lease term, deduct the relevant amount of thelease incentive already enjoyed if there is a lease incentive; the initial direct expenses incurred by the lessee; the cost expected to beincurred by the lessee to dismantle and remove the leased assets, restore the site where the leased assets locate, or restore the leasedassets to the condition agreed upon in the lease terms, but this does not include the cost attributable to the production of inventory.The Company subsequently uses the straight-line method to depreciate the right-of-use assets. If it can be reasonably determined thatthe ownership of the leased asset can be obtained at the expiration of the lease term, the Company shall accrue depreciation over theremaining useful life of the leased asset. 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 the lease term and the remaininguseful life of the leased asset. When the recoverable amount is lower than the book value of the right-of-use asset, the Company shallwrite down its book value to the recoverable amount.
24. Intangible assets
(1) Measurement, use of life and impairment testing
① Measurement of intangible assets
The intangible assets of the Company include land use rights, patented technology and non-patents technology etc.The cost of a purchased intangible asset shall be determined by the expenditure actually occurred and other related costs.The cost of an intangible asset contributed by an investor shall be determined in accordance with the value stipulated in theinvestment contract or agreement, except where the value stipulated in the contract or agreement is not fair.The intangible assets acquired through exchange of non-monetary assets, which is commercial in substance, is carried at the fairvalue of the assets exchanged out; for those not commercial in substance, they are carried at the carrying amount of the assetsexchanged out.The intangible assets acquired through debt reorganization are recognized at the fair value.
② Amortization methods and time limit for intangible assets:
Land use right of the company had average amortization by the transfer years from the beginning date of transfer (date of getting landuse light); Patented technology, non-patented technology and other intangible assets of the Company are amortized by straight-linemethod with the shortest terms among expected useful life, benefit years regulated in the contract and effective age regulated by thelaws. The amortization amount shall count in relevant assets costs and current gains/losses according to the benefit object.As for the intangible assets such as trademark, with uncertain benefit terms, amortization shall not be carried.Impairment testing methods and accrual for depreciation reserves for the intangible assets found more in Note V. 25. “Impairment oflong-term assets”.
(2) Internal accounting policies relating to research and development expenditures
Expenses incurred during the research phase are recognized as profit or loss in the current period; expenses incurred during thedevelopment phase that satisfy the following conditions are recognized as intangible assets (patented technology and non-patentstechnology):
① It is technically feasible that the intangible asset can be used or sold upon completion;
② There is intention to complete the intangible asset for use or sale;
③ The products produced using the intangible asset has a market or the intangible asset itself has a market;
④ There is sufficient support in terms of technology, financial resources and other resources in order to complete the development ofthe intangible asset, and there is capability to use or sell the intangible asset;
⑤ The expenses attributable to the development phase of the intangible asset can be measured reliably.If the expenses incurred during the development phase did not qualify the above mentioned conditions, such expenses incurred areaccounted for in the profit or loss for the current period. The development expenditure reckoned in gains/losses previously shall notbe recognized as assets in later period. The capitalized expenses in development stage listed as development expenditure in balancesheet, and shall be transfer as intangible assets since such item reached its expected conditions for service.
25. Impairment of long-term assets
The Company will judge if there is any indication of impairment as at the balance sheet date in respect of non-current non-financialassets such as fixed assets, construction in progress, intangible assets with a finite useful life, investment properties measured at cost,and long-term equity investments in subsidiaries, joint controlled entities and associates. If there is any evidence indicating that anasset may be impaired, recoverable amount shall be estimated for impairment test. Goodwill, intangible assets with an indefiniteuseful life and intangible assets beyond working conditions will be tested for impairment annually, regardless of whether there is anyindication of impairment.If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount, the impairment provisionwill be made according to the difference and recognized as an impairment loss. The recoverable amount of an asset is the higher ofits fair value less costs of disposal and the present value of the future cash flows expected to be derived from the asset. An asset’s fairvalue is the price in a sale agreement in an arm’s length transaction. If there is no sale agreement but the asset is traded in an activemarket, fair value shall be determined based on the bid price. If there is neither sale agreement nor active market for an asset, fairvalue shall be based on the best available information. Costs of disposal are expenses attributable to disposal of the asset, includinglegal fee, relevant tax and surcharges, transportation fee and direct expenses incurred to prepare the asset for its intended sale. Thepresent value of the future cash flows expected to be derived from the asset over the course of continued use and final disposal isdetermined as the amount discounted using an appropriately selected discount rate. Provisions for assets impairment shall be madeand recognized for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Group shalldetermine the recoverable amount of the asset group to which the asset belongs. The asset group is the smallest group of assetscapable of generating cash flows independently.For the purpose of impairment testing, the carrying amount of goodwill presented separately in the financial statements shall beallocated to the asset groups or group of assets benefiting from synergy of business combination. If the recoverable amount is lessthan the carrying amount, the Group shall recognize an impairment loss. The amount of impairment loss shall first reduce thecarrying amount of any goodwill allocated to the asset group or set of asset groups, and then reduce the carrying amount of otherassets (other than goodwill) within the asset group or set of asset groups, pro rata on the basis of the carrying amount of each asset.An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period in respect of the part whose valuecan be recovered.
26. Long-term deferred expenses
Long-term expenses to be amortized of the Company which are the expenses that are already charged and with the beneficial term ofmore than one year shall be evenly amortized over the beneficial term. For the long-term deferred expense items cannot benefit thesubsequent accounting periods, the amortized value of such items is all recorded in the profit or loss during recognition.
27. Contract liability
The Company lists the obligation to transfer goods or provide labor services to customers for the consideration received or receivablefrom customers as contractual liabilities, such as the amount that the company has received before the transfer of the promissorygoods.
28. Employee compensation
(1) Accounting treatment for short-term compensation
During the accounting period when the staff providing service to the Company, the short-term remuneration actual occurred shallrecognized as liability and reckoned into current gains/losses. During the accounting period when staff providing service to theCompany, the actual short-term compensation 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 welfare occurred shall reckoned into currentgains/losses or relevant asset costs while actually occurred. The employee compensation shall recognize as liabilities and reckonedinto current gains/losses or relevant assets costs while actually occurred. The employee benefits that belong to non-monetary benefitsare measured in accordance with the fair value; the social insurances including the medical insurance, work-injury insurance andmaternity insurance and the housing fund that the enterprise pays for the employees as well as the labor union expenditure andemployee education funds withdrawn by rule should be calculated and determined as the corresponding compensation amount anddetermined the corresponding liabilities in accordance with the specified withdrawing basis and proportion, and reckoned in thecurrent profits and losses or relevant asset costs in the accounting period that the employees provide services.
(2) Accounting treatment for post-employment benefit
The post-employment benefit included the defined contribution plans and defined benefit plans. Post-employment benefits planrefers to the agreement about the post-employment benefits between the enterprise and employees, or the regulations or measures theenterprise established for providing post-employment benefits to employees. Thereinto, the defined contribution plan refers to thepost-employment benefits plan that the enterprise doesn’t undertake the obligation of payment after depositing the fixed charges tothe 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 the employment contracts or providescompensation as an offer to encourage employees to accept voluntary redundancy, the Company shall recognize employeecompensation liabilities arising from compensation 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 labor relationship plans and employeeredundant proposals; and the Company recognize cost and expenses related to payment of compensation for dismissal andrestructuring, 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 to be paid for the employees whoretire before schedule from the date on which the employees stop rendering services to the scheduled retirement date, shall berecognized (as compensation for termination 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 benefits to the employees satisfying someconditions, the supplementary retirement benefits belong to the defined benefit plans, and the defined benefitliability confirmed onthe balance sheet is the value by 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 accumulated welfare unit method by theindependent actuary by adopting the treasury bond rate with similar obligation term and currency. The service charges related to thesupplementary retirement benefits (including the service costs of the current period, the previous service costs, and the settlementgains or losses) and the net interest are reckoned in the current profits and losses or other asset costs, the changes generated byrecalculating the net liabilities of defined benefit plans or net assets should be reckoned in other consolidated income.
29. Lease liability
On the commencement date of the lease term, the Company recognizes the present value of the unpaid lease payments as leaseliabilities. Lease payments include the following five items: fixed payments and in-substance fixed payments, if there is a leaseincentive, deduct the amount related 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 the commencement date of lease term;exercise price for a purchase option provided that the lessee is reasonably certain that the option shall be exercised; payments forexercising the option to terminate the 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 used as the discount rate. If the interestrate implicit in the lease cannot be determined, the company’s incremental borrowing rate is used as the discount rate. The Companycalculates the interest expense of 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 cost of the relevant assets. Variablelease payments that are not included in the measurement of lease liabilities are included in the current profit and loss when they areactually incurred, unless otherwise stipulated to be included in the cost of the relevant assets. After the commencement date of thelease term, when there is a change in the in-substance fixed payment, or a change in the estimated amount payable for the guaranteedresidual value, or a change in the index or ratio used to determine the lease payment, or a change in the evaluation results of thepurchase option, renewal option or termination option or when the actual exercise situation changes, the Company shall re-measurethe lease liability according to the present value of the changed lease payments.
30. Accrual liability
(1) Recognition principle
An obligation related to a contingency, such as guarantees provided to outsiders, pending litigation or arbitration, product warranties,redundancy plans, onerous contracts, reconstructing, expected disposal of fixed assets, etc. shall be recognized as an estimatedliability when all of the following conditions are satisfied:
① The obligation is a present obligation of the Company;
② To settle the obligation may be likely to result in an outflow of economic benefits;
③ The amount of the obligation can be measured reliably.
(2) Measurement method: Measure on the basis of the best estimates of the expenses necessary for paying off the contingencies
31. Share-based payment
The Company’s share-based payment is a transaction that grants equity instruments or assumes liabilities determined on the basis ofequity instruments in order to obtain services provided by employees or other parties. The Company’s share-based payment isclassified as equity-settled share-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 be measured at the fair value of the equityinstruments granted to employees. If the Company uses restricted stocks for share-based payment, employees contribute capital tosubscribe for stocks, and the stocks shall not be listed for circulation or transfer until the unlocking conditions are met and unlocked;if the unlocking conditions specified in the final equity incentive plan are not met, the Company shall repurchase the stocks at thepre-agreed price. When the Company obtains the payment for the employees to subscribe for restricted stocks, it shall confirm theshare capital and capital reserve (share capital premium) according to the obtained subscription money, and at the same timerecognize a liability in full for the repurchase obligation and recognize treasury shares. On each balance sheet date during the waitingperiod, the Company makes the best estimate of the number of vesting equity instruments based on the changes in the latest obtainednumber of vested employees, whether they meet the specified performance conditions, and other follow-up information. On this basis,the services obtained in the current period are included in related costs or expenses based on the fair value on the grant date, and thecapital reserve shall be increased accordingly.For share-based payments that cannot be vested in the end, costs or expenses shall not be recognized, unless the vesting conditionsare market conditions or non-vesting conditions. At this time, regardless of whether the market conditions or the non-vestingconditions are met, as long as all non-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 should be confirmed in accordancewith the unmodified terms. In addition, any modification that increases the fair value of the equity instruments granted, or a changethat is beneficial to employees on the modification 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 the cancellation day, and theunconfirmed amount will be confirmed immediately. If an employee or other party can choose to meet the non-vesting conditions butfails to meet within the waiting period, it shall be treated as cancellation of equity-settled share-based payment. However, if a newequity instrument is granted and it is determined on the date of grant of the new equity instrument that the new equity instrumentgranted is used to replace the canceled equity instrument, the granted substitute equity instruments shall be treated in the same way asthe modification of the original equity 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 and determined on the basis of shares orother equity instruments undertaken by the Company. If it’s vested immediately after the grant, the fair value of the liabilitiesassumed on the date of the grant is 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 obtained in the current period shall beincluded in the relevant costs or expenses based on the best estimate of the vesting situation within the waiting period and the fairvalue of the liabilities assumed to increase 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 changes are included in the current profitand loss.
32. Revenue
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 individual performance obligation contained
in the contract, and determines whether each individual performance obligation is performed within a certain period of time or at acertain point in time.When one of the following conditions is met, it belongs to the performance obligation within a certain period of time, otherwise, itbelongs to the performance obligation at a certain point in time: ① The customer obtains and consumes the economic benefitsbrought by the company's performance while the company performs the contract; ② The customer can control the goods or servicesin progress during the company’s performance; ③The goods or services produced during the company’s performance haveirreplaceable uses, and the company has the right to collect payment for the performance part that has been completed so far duringthe entire contract period.For performance obligations performed within a certain period of time, the company recognizes revenue in accordance with theperformance progress during that period. When the performance progress cannot be reasonably determined, if the cost incurred isexpected to be compensated, the revenue 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 in time, revenue is recognized at thepoint when the customer obtains control of the relevant goods or services. When judging whether the customer has obtained controlof the goods, the company considers the following signs:① The company has the current right to receive payment for the goods, thatis, the customer has the current payment obligation for the goods; ② The company has transferred the legal ownership of the goodsto the customer, that is, the customer has the legal ownership of the goods; ③ The company has transferred the goods to the customerin kind, that is, the customer has physically taken possession of the goods; ④ The company has transferred the main risks andrewards of the ownership of the goods to the customer, that is, the customer has obtained the main risks and rewards of the ownershipof the goods; ⑤ The customer has accepted the goods; ⑥ Other signs that the customer has obtained control of the goods.
2)Revenue measurement principle
① The company measures revenue based on the transaction price allocated to each individual performance obligation. Thetransaction price is the amount of consideration that the company expects to be entitled to receive due to the transfer of goods orservices to customers, and does not include payments collected on behalf of third parties and payments expected to be returned tocustomers.
② If there is variable consideration in the contract, the company shall determine the best estimate of the variable considerationaccording to the expected value or the most likely amount, but the transaction price including the variable consideration shall notexceed the amount of cumulatively recognized revenue that is unlikely to be significantly turned back when the relevant uncertaintyis eliminated.
③ If there is a significant financing component in the contract, the company shall determine the transaction price based on theamount payable that the customer is assumed to pay in cash when obtaining the control of the goods or services. The differencebetween the transaction price and the contract consideration shall be amortized by the effective interest method during the contractperiod. On the starting date of the contract, if the company expects that the customer pays the price within one year after obtainingcontrol of the goods or services, the significant financing components in the contract shall not be considered.
④ If the contract contains two or more performance obligations, the company will allocate the transaction price to each individualperformance obligation based on the relative proportion of the stand-alone selling price of the goods promised by each individualperformance obligation on the starting date of the contract.
(2) The criteria for the recognition of revenue recognition from sales of goods and the specific criteria for the recognition time:
Time point for recognition of the company’s domestic sales revenue: the company delivers goods as agreed in the order, checks thegoods received and inspected by the buyer during the period from the previous reconciliation date to this reconciliation date with thebuyer on the reconciliation date agreed with the buyer, after which the risks and rewards are transferred to the buyer. The companyissues invoices to the buyer according to the types, quantities and amounts confirmed in the reconciliation, and recognizes therealization of sales revenue on the reconciliation date.Time point for recognition of the Company’s foreign sales Revenue recognition: after the customs review is completed, the Companywill recognize the realization of sales revenue according to the export date specified in the Customs declaration.Differences in accounting policies for revenue recognition due to different operating models for the same type of business
N/A
33. Government grants
(1) Types
Government grants are transfer of monetary assets or non-monetary assets from the government to the Group at no consideration.Government grants are classified into government grants related to assets and government grants related to income.As for the assistance object not well-defined in government’s documents, the classification criteria for assets-related or income-related grants are as: whether the grants turn to long-term assets due to purchasing for construction or other means.
(2) Recognition and measurement
The government grants shall be recognized while the additional conditions of the grants are satisfied and amount is actually can beobtained.If a government grant is in the form of a transfer of monetary asset, the item shall be measured at the amount received or receivable.If a government grant is in the form of a transfer of non-monetary asset, the item shall be measured at fair value. If the fair value cannot be reliably acquired, then measured by nominal amount.
(3) Accounting treatment
Asset-related government grant shall be recognized as deferred income, and reckoned into current gains/losses according to thedepreciation process in use life of such assets.The income-related government grant which is used to make up relevant expenses and losses for later period will be recognized asdeferred income, and should reckoned into current gain/loss during the period while relevant expenses are recognized; The income-related government grant which is used to make up relevant expenses and losses that have occurred should be reckoned into currentgains/losses.The government grant related to daily operation activity of the Company should be reckoned into other income; The governmentgrant not related to daily operation activity should be reckoned into non-operation income and expenses.The financial discount funds received by the Company shall write down relevant borrowing costs.
34. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets or deferred income tax liabilities are realized based on the difference between the carrying values ofassets and liabilities and their taxation bases (as for the ones did not recognized as assets and liability and with taxation basisrecognized in line with tax regulations, different between tax base and its book value) at the tax rates applicable in the periods whenthe Company recovers such assets or settles such liabilities.
(2) Deferred income tax assets are realized to the extent that it is probable to obtain such taxable income which is used to set off thedeductible temporary difference. As at the balance sheet date, if there is obvious evidence showing that it is probable to obtainsufficient taxable income to set off the deductible temporary difference in future periods, deferred income tax assets not realized inprevious accounting periods shall be realized.
(3) The carrying value of deferred income tax assets shall be reviewed on the balance sheet date. If it is impossible to obtainsufficient taxable income to set off the benefits of deferred income tax assets in future periods, the carrying value of deferred incometax assets shall be reduced accordingly. If it is probable to obtain sufficient taxable income, the amount reduced shall be switchedback.
(4) The current income tax and deferred income tax shall be reckoned into current gains/losses as income tax expenses or incomes,excluding the income tax arises from the following:
① Enterprise combination;
② Transactions or events recognized in owner’s equity directly
35. Lease
(1) Accounting for operating lease
Lease refers to a contract in which the lessor transfers the right-of-use assets to the lessee for consideration within a certain period oftime. On the commencement date of the contract, the company evaluates whether the contract is a lease or includes a lease. If oneparty in the contract transfers the right to control the use of one or more identified assets within a certain period in exchange forconsideration, the contract is a lease or includes a lease. If the contract includes multiple separate leases at the same time, thecompany will split the contract and conduct accounting treatment for each separate lease. If the contract includes both the leased andnon leased parts, the lessee 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 V 23 “right-to-use assets” and Note V 29 “leaseliabilities”.For short-term leases with a lease term of no more than 12 months and low value asset leases with a lower value when a single assetis new, the company chooses not to recognize the right-to-use assets and lease liabilities, and the relevant rental expenses areincluded in the current profit and loss 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 the lease change as a separate leasefor Accounting: the lease change expands the lease scope by adding the right to use one or more leased assets; The increasedconsideration is equivalent to the amount adjusted according to the conditions of the contract at the separate price for most of theexpansion of the lease scope. If the lease change is not accounted for as a separate lease, on the effective date of the lease change, thecompany will reallocate the consideration of the contract after the change, redetermine the lease term, and remeasure the leaseliability according to the present value calculated in terms of 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 transferred almost all the risks and rewardsrelated to the ownership of the leased assets as financial leases, and all other leases are classified as operating leases.
1) Operating lease
During each period of the lease term, the company recognizes the lease receipts as rental income with the straight-line method. Theinitial direct expenses incurred shall be capitalized, amortized on the same basis as the recognition of rental income, and included inthe current profit and loss by stages. The variable lease payments obtained by the company, which are related to operating leases butnot included in the lease receipts, will be booked into the current profits and losses at the time of occurrence.
2) Finance lease
On the beginning date of the lease term, the company recognizes the financial lease receipts in terms of the net amount of the leaseinvestment (the sum of the unsecured residual value and the present value of the lease receipts not received on the beginning date ofthe lease term discounted according to the embedded interest rate of the lease), and terminates the recognition of financial leaseassets. During each period of the lease term, the company calculates and recognizes the interest income according to the embeddedinterest rate of the lease. The amount of variable lease receipts obtained by the company that are not included in the measurement ofnet lease investment shall be included in the current profit and loss at the time of occurrence.
(3) Sale leaseback
The company evaluates and determines whether the asset transfer in the sale leaseback transaction is a sale in accordance with theaccounting standards for Business Enterprises No. 14 - revenue.
1) The company as lessee
If the asset transfer in the sale leaseback transaction is a sale, the company measures the right-of-use assets formed by the sale
leaseback in terms of the part of the book value of the original assets related to the right of use obtained by the leaseback, and onlyrecognizes the relevant gains or losses on the rights transferred to the lessor.If the asset transfer in the sale leaseback transaction is not a sale, the company will continue to recognize the transferred asset, andmeanwhile recognize a financial liability equal to the transfer income, and carry out accounting treatment for such financial liabilityin accordance with the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of FinancialInstruments.
2) The company as lessor
If the asset transfer in the sale leaseback transaction is a sale, the company will conduct accounting treatment for asset purchase inaccordance with other applicable accounting standards for business enterprises, and perform accounting treatment for asset lease inaccordance with Accounting Standards for Business Enterprises No. 21 - Leasing.If the asset transfer in the sale leaseback transaction does not belong to sales, the company will not recognize the transferred asset,but recognizes a financial asset equal to the transfer income, and carries out accounting treatment for such financial asset inaccordance with the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments.
(2) Accounting treatment for financing lease
Not applicable
36. Other major accounting policy and estimation
In the process of applying the Company's accounting policies, due to the inherent uncertainty of business activities, the Companyneeds to judge, estimate and assume the book value of the report items which cannot be accurately measured. These judgments,estimates and assumptions are made on the basis of the historical experience of the Company’s management and in consideration ofother relevant factors, which shall impact the reported amounts of income, expenses, assets and liabilities and the disclosure ofcontingent liabilities on the balance sheet date. However, the actual results caused by the estimated uncertainties may differ from thecurrent estimates of the company’s management and consequently, the significant adjustments shall be made against the book valueof the involved assets or liabilities.The Company regularly reviews the aforementioned judgments, estimates and assumptions on the basis of continuing operations. Incase changes in accounting estimates only affect the current period, the impact shall be recognized in the current period; In casechanges in accounting estimates not only affect the current period but also the future periods, the impacts shall be recognized in bothcurrent and future periods.On the balance sheet date, the important areas of the financial statements that the Company needs to judge, estimate and assume areas follows:
(1) Provision for bad debts
The Company has used the expected credit loss model to assess the impairment of financial instruments, which requires significantjudgement and estimates, and must consider all reasonable and evidence-based information, including forward-looking information.In making such judgments and estimates, the Company infers the expected changes in debtors’ credit risks based on historicalrepayment data combined with economic policies, macroeconomic indicators, industry risks and other factors.
(2) inventory depreciation reserve
According to the inventory accounting policies, the Company measures the inventory at the lower between the cost and the netrealizable value. For inventory whose cost is higher than net realizable value and old and unsalable inventories, the Companycalculates and withdraws the inventory depreciation reserve. The inventory devalues to the net realizable value by evaluating theinventory’s vendibility and net realizable 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 the impacts of events after thebalance sheet date. The actual results and the differences between the previously estimated results shall affect the book value of
inventory and the provision or return of the inventory impairment during the period estimated to be changed.
(3) Preparation for the impairment of non-financial and non-current assets
The Company checks whether the non-current assets except for the financial assets may decrease in value at the balance sheet date.For the intangible assets with indefinite service life, in addition to the annual impairment test, the impairment test is also neededwhen there is a sign of impairment. For the other non-current assets except for the financial assets, the impairment test is neededwhen it indicates that the book amounts may not be recoverable.When the book value of the asset or group of assets exceeds its recoverable amount, i.e. the higher between the net amount bysubtracting the disposal costs from the fair value and the present value of 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 sales agreement price similar to the assets inthe fair trade or the observable market price, and subtract the incremental costs determination directly attributable to the disposal ofthe asset.When estimating the present value of the future cash flow, the Company needs to make significant judgments to the output, price,and related operating expenses of the asset (or asset group) and the discount rate used for calculating the present value. Whenestimating the recoverable amount, the Company shall adopt all the relevant information can be obtained, including the predictionrelated to the output, price, and related operating expenses based on the reasonable and supportable assumptions.The Company tests whether its business reputation decreases in value every year, which requires to estimating the present value ofthe asset group allocated with goodwill or the future cash flow combined by the asset group. When estimating the present value ofthe future cash flow, the Company needs to estimate the future cash flows generated by the asset group or the combination of assetgroup, and select the proper discount rate to determine the present value of the future cash flows.
(4) Depreciation and amortization
The Company depreciates and amortizes the investment property, fixed assets and intangible assets according to the straight-linemethod in the service life after considering the residual value. The Company regularly reviews the service life to determine thedepreciation and amortization expense amount to be reckoned in each reporting period. The service life is determined by theCompany based on the past experience of similar assets and the expected technological updating. If the previous estimates havesignificant changes, the depreciation and amortization expense shall be adjusted in future periods.
(5) Fair value of financial instrument
Financial instruments that do not have active markets to provide quotes need to use valuation techniques to determine fair value.Valuation techniques include the latest transaction information, discounted cash flow methods, and option pricing models. TheCompany has established a set of work 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 as much as possible and uses theCompany-specific information as little as possible.It should be noted that part of the information used in the valuation model requiresmanagement’s estimation (such as discount rate, target exchange rate volatility, etc.).The Company regularly reviews the aboveestimates and assumptions and makes adjustments if necessary.
(6) Income tax
In the Company’s normal business activities, there are some uncertainties in the final tax treatment and calculation of sometransactions. The tax authorities shall review and approve whether some items can be disbursed from the cost and expenses beforetaxes. If the final affirmation of these tax matters differs from the initially estimated amount, the difference shall have an impact onits current and deferred income taxes during the final recognition period.
37. Changes of important accounting policies and estimation
(1) Changes of important accounting policies
?Applicable □Not applicable
Content and reasons for changes in accounting policies | Approval process | Note |
On Nov. 30, 2021, the Ministry of Finance issued Interpretation No. 16 of the Accounting Standards for Business Enterprises | Not applicable |
On November 30, 2022, the Ministry of Finance issued Interpretation of Accounting Standards for Business Enterprises No. 16(CK [2022] No.31, hereinafter referred to as “Interpretation No. 16”).The deferred income tax related to assets and liabilities from individual transaction is inapplicable to the accounting treatmentexempted from initial recognition (effective from January 1, 2023)According to the Interpretation No.16, an individual transaction other than an enterprise merger, not affecting accounting profits oraffecting the taxable income amount (or deductible loss) at the occurrence of transaction, with equivalent taxable temporarydifference and deductible temporary difference caused by initially recognized assets and liabilities (including a lease transaction inwhich the lessee initially recognizes the lease liability on the commencement date of the lease term and includes into the use rightassets, as well as individual transactions recognized as estimated liabilities and included into relevant asset costs due to thepresence of disposal obligations for fixed assets) is inapplicable to the provisions of exempting deferred income tax liabilities anddeferred income tax assets from initial recognition, and the enterprise shall respectively recognize the corresponding deferredincome tax liabilities and deferred income tax assets in accordance with the Accounting Standards for Business Enterprises No. 18- Income Tax at the occurrence of the transaction.For individual transactions that occurred between the beginning of the earliest period for which the provision is first applied andthe date of implementation of the provision to which the provision applies, as well as the lease liabilities and use right assetsrecognized as a result of the individual transactions to which the provision applies at the beginning of the earliest period for whichthe provision is presented in the financial statements, and the recognized estimated liabilities related to the disposal obligation andcorresponding assets, where there is a taxable temporary difference or a deductible temporary difference, the enterprise shall makeadjustments in accordance with this provision. The implementation of this provision has not had a material impact on the financialposition and operating results of the Company.
(2) Changes of important accounting estimations
□Applicable ?Not applicable
(3) Related items of financial statements at the beginning of the first year to implement the newaccounting standards adjustment for the first time starting from 2023
□Applicable ?Not applicable
38. Others
NilVI. Taxation
1. Major taxes and tax rates
Tax
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%(VHIO,Italy),21%(Borit,Belgium), 13%, 9%, 6%, Collection rate 5% |
City maintaining & construction tax | Turnover tax payable | 7%,5% |
Corporation income tax | Taxable income | 15%, 20%,21% (IRD America, Borit America), 22% (IRD,Denmark), 24%(VHIO,Italy), 25%(Borit,Belgium) |
Educational surtax | Turnover tax payable | 5% |
Disclose reasons for different taxpaying body
Taxpaying body | Income tax rate |
WFCA, WFTR, WFAS, WFDT, Borit, VHWX | 25% |
The Company, WFJN, WFLD, WFTT, WFLD(Chongqing), WFAM,WFMA,WFSC | 15% |
WFLD(Wuhan), WFLD(Nanchang) | 20% |
IRD America, Borit America | 21% |
SPV, IRD | 22% |
VHIO | 24% |
2. Tax incentives
The Company, WFJN, WFLD, WFTT and WFMA were accredited as high-tech enterprises in 2020, and enjoy a preferential incometax rate of 15% in the period from January 1, 2020 to December 31, 2022. WFAM was accredited as high-tech enterprise in 2021,and enjoy a preferential income tax rate of 15% in the period from January 1, 2021 to December 31, 2023. WFSC was accredited ashigh-tech enterprise in 2022, and enjoy a preferential income tax rate of 15% in the period 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) issuedtogether by Ministry of Finance, SAT and NDRC, from January 1, 2011 to December 31, 2030, the enterprises located in the westregion and mainly engaged in the industrial 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 thecorporate income tax at the tax rate of 15%. In the first half year of 2023, WFLD (Chongqing) paid its corporate income tax at the taxrate of 15%.In the first half year of 2023, WFLD (Wuhan) and WFLD(Nanchang) were qualified small and low-profit enterprises, and the part oftaxable income that did not exceed 3 million yuan was included in the taxable income at a reduced rate of 25%, and the corporateincome tax was paid at the tax rate of 20%.
3. Other
NilVII. Notes to major items in consolidated financial statements
1. Monetary funds
In RMB
Item
Item | Ending balance | Opening balance |
Cash on hand | 76,329.51 | 51,818.51 |
Cash in bank | 2,447,388,349.63 | 2,304,848,889.90 |
Other monetary funds | 40,321,462.90 | 84,651,222.35 |
Total | 2,487,786,142.04 | 2,389,551,930.76 |
Including: total amount of funds deposited overseas | 228,685,960.81 | 324,409,336.06 |
The total amount of funds restricted on use due to mortgage, pledge, or freezing | 39,059,182.90 | 51,080,295.65 |
Other explanationThe ending balance of other monetary funds includes bank acceptance bill deposit 12,066,812.90 yuan, cash deposit for Mastercard211,620.00 yuan, in-transit dividends 1,262,280.00, IRD performance bond 7,935,750.00 yuan, the foreign exchange contract margin188,400,000.00 yuan, and ETC freezing 5,000.00 yuan. The in-transit dividends 1,262,280.00 yuan was a portion of the dividenddistributed by Miracle Automation (002009), a trading financial asset held by the company, from 2017 to 2022, which was nottransferred 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 in current profit or loss | 2,250,198,464.28 | 2,718,820,654.87 |
Including: | ||
SNAT | 79,224,360.00 | 78,834,732.00 |
Miracle Automation | 71,026,800.00 | 66,693,600.00 |
Lifan Technology | 44,871.33 | 48,516.34 |
Toyze Auto | 267,028.08 | 462,414.48 |
Other debt and equity instrument investments | 2,099,635,404.87 | 2,572,781,392.05 |
Including: | ||
Total | 2,250,198,464.28 | 2,718,820,654.87 |
3. Note receivable
(1) Classification of notes receivable
In RMB
Item | Ending balance | Opening balance |
Trade acceptance bill | 104,980,712.30 | 135,559,024.27 |
Total | 104,980,712.30 | 135,559,024.27 |
In RMB
Category | Ending balance | Opening balance | ||||||||
Book balance | Provision for bad debts | Book value | Book value | Provision for bad debts | Book value | |||||
Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
Including: |
Notereceivablewithprovisionfor baddebtsaccrual onportfolio
Note receivable with provision for bad debts accrual on portfolio | 104,980,712.30 | 100.00% | 104,980,712.30 | 135,559,024.27 | 100.00% | 135,559,024.27 | ||||
Including: | ||||||||||
Portfolio 1: bank acceptance bill | ||||||||||
Portfolio 2: trade acceptance bill | 104,980,712.30 | 100.00% | 104,980,712.30 | 135,559,024.27 | 100.00% | 135,559,024.27 | ||||
Total | 104,980,712.30 | 100.00% | 104,980,712.30 | 135,559,024.27 | 100.00% | 135,559,024.27 |
If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses, pleaserefer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□Applicable ?Not applicable
(2) Provision for bad debts accrual, collected or reversal
Provision for bad debts in the current period:
□ Applicable ? Not applicable
(3) Notes receivable already pledged by the Company at the end of the period
In RMB
Item | Amount pledge at period-end |
Trade acceptance bill | 37,607,161.90 |
Total | 37,607,161.90 |
(4) Notes endorsement or discount and undue on balance sheet date
Nil
(5) 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 | 7,006,453.02 |
Total | 7,006,453.02 |
Other explanationThe trade acceptance bill that the company transferred to the accounts receivable due to in 2018 the failure of the drawer to performthe agreement at the end of the period were the bills of the subsidiaries controlled by Baota Petrochemical Group Co., Ltd. and thebills accepted by Baota Petrochemical Group Finance Co., Ltd. (hereinafter referred to as “BD bills”); In 2018, the amounttransferred to account receivable was 7 million yuan, and 1.7 million yuan was recovered in 2019, the amount transferred to account
receivable rose by 2.00 million yuan in 2022, and enforced money 98,309 yuan and 195,237.98 yuan were received respectively inthe year of 2022 and 2023.
(6) Note receivable actually written-off in the period
Nil
4. Account receivable
(1) Classification of account receivable
In RMB
Category | Ending balance | Opening balance | ||||||||
Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
Account receivable with provision for bad debts accrual on a single basis | 54,533,829.30 | 1.61% | 54,533,829.30 | 100.00% | 57,806,705.14 | 1.80% | 57,806,705.14 | 100.00% | ||
Including: | ||||||||||
Account receivable with provision for bad debts accrual on portfolio | 3,342,278,424.11 | 98.39% | 24,891,346.55 | 0.74% | 3,317,387,077.56 | 3,149,157,700.73 | 98.20% | 21,667,523.48 | 0.69% | 3,127,490,177.25 |
Including: | ||||||||||
Total | 3,396,812,253.41 | 100.00% | 79,425,175.85 | 2.34% | 3,317,387,077.56 | 3,206,964,405.87 | 100.00% | 79,474,228.62 | 2.48% | 3,127,490,177.25 |
Provision for bad debts accrual on single basis: 54,533,829.30 yuan
In RMB
Name | Ending balance | |||
Book balance | Provisions for bad debts | Accrual ratio | Accrual causes | |
Hubei Meiyang Auto Industry Co., Ltd. | 17,610,371.91 | 17,610,371.91 | 100.00% | Have difficulty in collection |
Hunan Leopaard Auto Co., Ltd. | 8,077,361.13 | 8,077,361.13 | 100.00% | Have difficulty in collection |
BD bills | 7,006,453.02 | 7,006,453.02 | 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 |
Jiangsu Kawei Auto Industrial Group Co., Ltd. | 1,932,476.26 | 1,932,476.26 | 100.00% | Have difficulty in collection |
Dongfeng Chaoyang Diesel Co., Ltd.
Dongfeng Chaoyang Diesel Co., Ltd. | 1,823,262.64 | 1,823,262.64 | 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 | 2,023,038.58 | 2,023,038.58 | 100.00% | Have difficulty in collection |
Total | 54,533,829.30 | 54,533,829.30 |
Provisions for bad debts accrual on portfolio: 24,891,346.55 yuan
In RMB
Explanation on determining the basis for this combination:
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, pleaserefer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable ? Not applicable
By account age
In RMB
Account age | Book balance |
Within 1 year (1 year included) | 3,304,455,538.89 |
Including: within 6 months | 3,206,178,894.62 |
6 months to 1 year | 98,276,644.27 |
1-2 years | 21,457,907.25 |
2-3 years | 14,031,287.79 |
Over 3 years | 56,867,519.48 |
3-4 years | 56,867,519.48 |
Total | 3,396,812,253.41 |
(2) Provisions for bad debts accrual, collected or reversal
Provisions for bad debts accrual in the period:
In RMB
Category | Opening balance | Amount changed in the period | Ending balance | |||
Accrual | Collected or reversal | Charged off | Other |
Name
Name | Ending balance | ||
Book balance | Provision for bad debts | Accrual ratio | |
Within 6 months | 3,206,178,893.81 | ||
6 months to 1 year | 97,331,858.14 | 9,733,185.83 | 10.00% |
1-2 years | 21,212,969.31 | 4,242,593.82 | 20.00% |
2-3 years | 11,065,226.59 | 4,426,090.64 | 40.00% |
Over 3 years | 6,489,476.26 | 6,489,476.26 | 100.00% |
Total | 3,342,278,424.11 | 24,891,346.55 |
Provision forbad debts
Provision for bad debts | 79,474,228.62 | 5,996,407.94 | 6,142,952.15 | 20,150.61 | 117,642.05 | 79,425,175.85 |
Total | 79,474,228.62 | 5,996,407.94 | 6,142,952.15 | 20,150.61 | 117,642.05 | 79,425,175.85 |
Important provision for bad debts collected or reversal: Nil
(3) Account receivable actually charged off in the Period
In RMB
Item | Amount charged off |
Jiangdong Zhizao Technology Co., Ltd | 20,150.61 |
Total | 20,150.61 |
Important accounts receivable charged off: NilExplanation of accounts receivable charged off: Nil
(4) Top 5 receivables at ending balance by arrears party
In RMB
Name | Ending balance of account receivable | Ratio in total ending balance of accounts receivable | Ending balance of provision for bad debts |
RBCD | 511,897,553.12 | 15.07% | 619,942.02 |
Robert Bosch Company | 423,176,007.79 | 12.46% | 754,342.26 |
Client 1 | 176,089,133.91 | 5.18% | 189,464.96 |
Client 2 | 167,531,932.86 | 4.93% | 1,488,908.66 |
Client 3 | 143,584,376.04 | 4.23% | |
Total | 1,422,279,003.72 | 41.87% | 3,052,657.90 |
(5) Account receivable derecognition due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvement
Nil
5. Receivable financing
In RMB
Item | Ending balance | Opening balance |
Bill receivable- bank acceptance bill | 1,920,348,206.04 | 1,918,368,845.21 |
Total | 1,920,348,206.04 | 1,918,368,845.21 |
Increase and decrease in current period and changes in fair value of receivables financing
□ Applicable ? Not applicable
If the provision for bad debts of account receivable is calculated and withdrawn according to the general model of expected creditloss, please refer to the disclosure method of other accounts receivable in aspect of impairment provision:
□ Applicable ? Not applicable
Other explanation:
During the management of liquidity, the company will discount some bills or endorse some bills for transference before the maturityof such bills, the business model for managing bills receivable is to collect contractual cash flows and sell the financial asset, so it isclassified as financial assets measured at fair value and whose changes are included in other comprehensive income, which is listedin receivables financing.At the end of the period, the company has pledged notes receivable of 825,831,044.39 yuan, and notes receivable that have beenendorsed or discounted and have not yet matured on the balance sheet date are 178,018,855.56 yuan.
6. Prepayments
(1) Account age of Prepayments
In RMB
Account age | Ending balance | Opening balance | ||
Amount | Ratio | Amount | Ratio | |
Within 1 year | 59,364,895.05 | 87.67% | 88,207,782.70 | 93.51% |
1-2 years | 6,674,170.61 | 9.86% | 5,066,837.28 | 5.37% |
2-3 years | 1,489,110.74 | 2.20% | 778,819.68 | 0.83% |
Over 3 years | 182,487.83 | 0.27% | 270,414.21 | 0.29% |
Total | 67,710,664.23 | 94,323,853.87 |
Explanation of the reasons why prepayments with an aging of over 1 year and significant amounts were not settled in a timelymanner: Nil
(2) Top 5 prepayments at ending balance by prepayment object
Total ending balance of top 5 prepayments by prepayment object amounted to 23,271,002.96 yuan, 34.37% of the total prepaymentsat the period-end.Other explanation: Nil
7. Other accounts receivable
In RMB
Item | Ending balance | Opening balance |
Dividend receivable | 1,955,605,474.71 | 147,000,000.00 |
Other accounts receivable | 918,941,597.26 | 1,117,507,456.47 |
Total | 2,874,547,071.97 | 1,264,507,456.47 |
(1) Interest receivable
1) Category of interest receivable
Nil
2) Significant overdue interest
Nil
3) Accrual of provision for bad debts
□ Applicable ?Not applicable
(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 | |
RBCD | 1,673,605,474.71 | |
Zhonglian Automobile Electronics Co., Ltd. | 282,000,000.00 | |
Total | 1,955,605,474.71 | 147,000,000.00 |
2) Important dividend receivable with account age over one year
Nil
3) Accrual of provision for bad debts
□Applicable ?Not applicable
(3) Other accounts receivable
1) By nature
In RMB
Nature | Ending book balance | Opening book balance |
Intercourse funds from units | 1,407,955.77 | 1,894,818.08 |
Cash deposit | 8,978,638.40 | 9,087,881.41 |
Staff loans and petty cash | 2,020,922.82 | 1,823,842.27 |
Social security and provident fund paid | 10,521,493.38 | 11,341,820.83 |
WFTR “platform trade” business portfolio | 2,542,263,370.70 | 2,741,499,131.95 |
Other | 3,031,937.89 | 66,663.56 |
Total | 2,568,224,318.96 | 2,765,714,158.10 |
2) Accrual of provision for bad debts
In RMB
Provision of bad debts
Provision of bad debts | 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, 2023 | 4,106,646.90 | 1,644,100,054.73 | 1,648,206,701.63 | |
Balance of Jan. 1, 2023 in the period | ||||
Current accrual | 1,175,781.30 | 1,175,781.30 | ||
Current reversal | 182,511.33 | 182,511.33 | ||
Other changes | 82,750.10 | 82,750.10 | ||
Balance on June 30, 2023 | 5,182,666.97 | 1,644,100,054.73 | 1,649,282,721.70 |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable ? Not applicable
By account age
In RMB
Account age | Book balance |
Within 1 year (1 year included) | 2,560,675,182.39 |
Including: within 6 months | 1,919,640,482.87 |
6 months to 1 year | 641,034,699.52 |
1-2 years | 1,010,751.05 |
2-3 years | 2,804,594.75 |
Over 3 years | 3,733,790.77 |
3-4 years | 3,733,790.77 |
Total | 2,568,224,318.96 |
3) Provision for bad debts accrual, collected or reversal
Provision for bad debts accrual in the period:
In RMB
Category | Opening balance | Change in current period | Ending balance | |||
Accrual | Collected or reversal | Charge off | Other | |||
Provision for bad debts | 1,648,206,701.63 | 1,175,781.30 | 182,511.33 | 82,750.10 | 1,649,282,721.70 | |
Total | 1,648,206,701.63 | 1,175,781.30 | 182,511.33 | 82,750.10 | 1,649,282,721.70 |
Including the important provision for bad debts reversal or collected in the period: Nil
4) Other accounts actually charged off during the reporting period
Nil
5) Top 5 other accounts receivable at ending balance by arrears party
In RMB
Enterprise
Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other accounts receivables | Ending balance of provision for bad debts |
WFTR “platform trade” business portfolio | Refer to other notes | 2,542,263,370.70 | Within 1 year | 98.99% | 1,644,068,327.93 |
Wuxi China Resources Gas Co., Ltd. | Deposit margin | 1,364,750.00 | Within 3 years | 0.05% | 749,150.00 |
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 | 882,319.65 | Within 2 years | 0.03% | 89,031.78 |
Wuxi Youlian Thermal Power Co., Ltd | Deposit margin | 750,000.00 | Over 3 years | 0.03% | 750,000.00 |
Total | 2,546,260,440.35 | 99.14% | 1,646,056,509.71 |
Other explanations: For details on the “platform trade” business portfolio of WFTR, please refer to the descriptions in Note XVI. 7.“Major transaction and events influencing investor’s decision”.
6) Other accounts receivable related to government grants
Nil
7) Other accounts receivable derecognized due to the transfer of financial assetsNil
8) The amount of assets and liabilities formed by transferring other receivables and continuing to beinvolvedNil
8. Inventory
Whether the Company need to comply with disclosure requirements in the real estate industry or notNil
(1) Category of inventory
In RMB
Item | Ending balance | Opening balance | ||||
Book balance | Inventory depreciation reserve or provision for impairment of contract performance costs | Book value | Book balance | Inventory depreciation reserve or provision for impairment of contract performance costs | Book value | |
Stock materials | 674,113,552.27 | 169,224,572.51 | 504,888,979.76 | 796,941,337.63 | 160,326,360.21 | 636,614,977.42 |
Goods in process | 421,261,059.47 | 34,297,563.35 | 386,963,496.12 | 437,653,321.23 | 31,641,606.69 | 406,011,714.54 |
Finished goods | 1,149,136,067.70 | 119,904,477.76 | 1,029,231,589.94 | 1,382,835,104.89 | 142,342,140.58 | 1,240,492,964.31 |
Total | 2,244,510,679.44 | 323,426,613.62 | 1,921,084,065.82 | 2,617,429,763.75 | 334,310,107.48 | 2,283,119,656.27 |
(2) Inventory depreciation reserve or provision for impairment of contract performance costs
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance | ||
Accrual | Other | Reversal or write-off | Other | |||
Stock materials | 160,326,360.21 | 43,364,778.05 | 846,631.35 | 35,313,197.10 | 169,224,572.51 | |
Goods in process | 31,641,606.69 | 9,893,111.73 | 626,433.36 | 7,863,588.43 | 34,297,563.35 | |
Finished goods | 142,342,140.58 | 36,730,651.32 | 280,633.75 | 59,448,947.89 | 119,904,477.76 | |
Total | 334,310,107.48 | 89,988,541.10 | 1,753,698.46 | 102,625,733.42 | 323,426,613.62 |
① Net realizable value of inventory is equal to, during the day-to-day activities, the estimated sale price of inventory minusestimated cost to be incurred till works completed, estimated sales expense and relevant taxes.
② Accrual basis for inventory depreciation reserve:
Item | Accrual basis for inventory impairment provision | Specific basis for recognition |
Materials in stock | The materials sold to manufacture finished goods, its net realizable value is lower than its book value | The estimated sale price of finished products minus estimated cost to be incurred till works completed, estimated sales expense and relevant taxes |
Goods in process | The goods in process sold to manufacture finished goods, its net realizable value is lower than the book value | The estimated sale price of finished products minus estimated cost to be incurred till works completed, estimated sales expense and relevant taxes |
Finished goods | Its net realizable value is lower than the book value | The estimated sale price minus relevant taxes and expenses |
③ Reasons of inventory depreciation reserve written off in current period:
Item | Reasons of written off |
Materials in stock | Used for production in reporting period and the finished goods have been sold |
Goods in process | Goods in process completed in the reporting period and corresponding finished goods have been sold in the reporting period |
Finished goods | Have been sold in current period |
(3) Explanation on capitalization of borrowing costs at ending balance of inventoryNil
(4) Explanation on the current amortization amount of contract performance costNil
9. Other current assets
In RMB
Item | Ending balance | Opening balance |
Export tax rebates receivable | 7,479,670.43 | 14,325,020.52 |
VAT refund receivable | 55,946,713.17 | 25,444,657.63 |
Prepaid taxes and VAT retained | 165,724,432.78 | 364,556,192.43 |
Input tax to be deducted and certification | 11,806.79 | 1,192,752.68 |
Other | 11,799,744.63 | 25,028,577.98 |
Total | 240,962,367.80 | 430,547,201.24 |
Other explanation:
10. Long-term equity investment
In RMB
The invested entity | Opening balance (book value) | Current changes (+/ -) | Ending balance (book value) | Ending balance of depreciation reserves | |||||||
Additional investment | Capital reduction | Investment gain/loss recognized under equity | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Impairment accrual | Other | ||||
I. Joint venture | |||||||||||
II. Associated enterprise | |||||||||||
WFEC | 824,528,809.89 | 82,219,484.77 | 906,748,294.66 | ||||||||
RBCD | 3,659,761,310.97 | 487,327,962.11 | 1,673,605,474.71 | 2,473,483,798.37 | |||||||
Zhonglian Electronic | 1,559,413,314.05 | 179,345,688.18 | 282,000,000.00 | 1,456,759,002.23 | |||||||
WFPM | 54,829,812.51 | 2,157,950.41 | 56,987,762.92 | ||||||||
Changchun Xuyang | 9,621,734.83 | -302,244.09 | 9,319,490.74 | ||||||||
Precors GmbH | 5,517,924.56 | 2,791,725.00 | -200,110.59 | 491,312.08 | 8,600,851.05 | ||||||
Chelian Tianxia | 169,145,202.15 | 430,317.51 | 169,575,519.66 | ||||||||
Lezhuo Bowei | 110,000,000.00 | -3,479,485.20 | 106,520,514.80 | ||||||||
Subtotal | 6,282,818,108.96 | 112,791,725.00 | 747,499,563.10 | 1,955,605,474.71 | 491,312.08 | 5,187,995,234.43 | |||||
Total | 6,282,818,108.96 | 112,791,725.00 | 747,499,563.10 | 1,955,605,474.71 | 491,312.08 | 5,187,995,234.43 |
Other explanationExplanation on those holding less than 20% of the voting rights but with significant influence:
The Company holds 9.6372% equity of Chelian Tianxia, and appointed a director to Chelian Tianxia. Though such representative,the Company can participate in the operation policies formulation of Chelian Tianxi, and thus exercise a significant influence overChelian 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 Xichan Microchip Semi-Conductor | 592,742,690.00 | 592,742,690.00 |
Total | 677,790,690.00 | 677,790,690.00 |
12. Other non-current financial assets
In RMB
Item | Ending balance | Opening balance |
Guolian Securities | 161,342,387.00 | 186,608,914.00 |
Investments in other debt instruments and equity instruments held for more than one year | 1,005,000,000.00 | 1,140,000,000.00 |
Total | 1,166,342,387.00 | 1,326,608,914.00 |
13. Investment real estate
(1) Investment real estate measured by cost
? Applicable □ Not applicable
In RMB
Item | House and Building | Land use right | Construction in progress | Total |
I. Original book value | ||||
1.Opening balance | 97,691,776.27 | 97,691,776.27 | ||
2.Current increased | 15,143,746.66 | 15,143,746.66 | ||
(1) Outsourcing | ||||
(2) Inventory\fixed assets\construction in process transfer-in | 15,143,746.66 | 15,143,746.66 | ||
(3) Increased by combination | ||||
3.Current decreased | 2,364,090.24 | 2,364,090.24 | ||
(1) Disposal | 2,364,090.24 | 2,364,090.24 | ||
(2) Other transfer-out | ||||
4.Ending balance | 110,471,432.69 | 110,471,432.69 | ||
II. Accumulated depreciation and accumulated amortization | ||||
1.Opening balance | 48,394,906.54 | 48,394,906.54 | ||
2.Current increased | 8,184,558.32 | 8,184,558.32 | ||
(1) Accrual or amortization | 1,578,413.90 | 1,578,413.90 | ||
(2)Transferred from inventory, fixed assets, and construction in progress | 6,606,144.42 | 6,606,144.42 | ||
3.Current decreased | 2,293,167.53 | 2,293,167.53 | ||
(1) Disposal | 2,293,167.53 | 2,293,167.53 | ||
(2) Other transfer-out | ||||
4.Ending balance | 54,286,297.33 | 54,286,297.33 | ||
III. Depreciation reserves | ||||
1.Opening balance | ||||
2.Current increased | ||||
(1) Accrual | ||||
3. Current decreased | ||||
(1) Disposal | ||||
(2) Other transfer-out | ||||
4.Ending balance | ||||
IV. Book value | ||||
1.Ending Book value | 56,185,135.36 | 56,185,135.36 | ||
2.Opening Book value | 49,296,869.73 | 49,296,869.73 |
(2) Investment real estate measured at fair value
□ Applicable ? Not applicable
(3) Investment real estate without property certification held
Nil
14. Fixed assets
In RMB
Item | Ending balance | Opening balance |
Fixed assets | 3,745,590,665.96 | 3,769,984,185.94 |
Total | 3,745,590,665.96 | 3,769,984,185.94 |
(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 | 1,934,526,060.96 | 4,613,504,836.29 | 38,612,263.18 | 1,046,301,287.16 | 30,483,292.05 | 7,663,427,739.64 |
2.Current increased | 6,008,444.26 | 113,360,889.00 | 16,401,981.30 | 106,730,315.10 | 242,501,629.66 | |
(1) Purchase | 92,603.75 | 4,642,398.44 | 5,122,002.64 | 1,476,883.90 | 11,333,888.73 | |
(2) Construction in progress transfer-in | 5,915,840.51 | 108,718,490.56 | 11,279,978.66 | 105,253,431.20 | 231,167,740.93 | |
(3)Investment real estate transfer-in | ||||||
3.Current decreased | 20,711,919.83 | 25,929,597.53 | 1,726,864.06 | 18,507,266.49 | 66,875,647.91 | |
(1) Disposal or scrapping | 20,711,919.83 | 25,929,597.53 | 1,726,864.06 | 18,507,266.49 | 66,875,647.91 | |
4.Conversion of foreign currency financial statement | 7,786,172.25 | 26,874,425.09 | 726,445.15 | 18,660,373.17 | 1,865,547.08 | 55,912,962.74 |
5.Ending balance | 1,927,608,757.64 | 4,727,810,552.85 | 54,013,825.57 | 1,153,184,708.94 | 32,348,839.13 | 7,894,966,684.13 |
II. Accumulated depreciation | ||||||
1.Opening balance | 536,810,138.49 | 2,470,972,225.66 | 21,621,368.25 | 664,099,659.92 | 3,693,503,392.32 | |
2.Current increased | 32,496,132.87 | 113,728,096.55 | 1,235,792.50 | 110,584,663.57 | 258,044,685.49 | |
(1) Accrual | 32,496,132.87 | 113,728,096.55 | 1,235,792.50 | 110,584,663.57 | 258,044,685.49 | |
3.Current decreased | 7,633,458.71 | 22,066,910.45 | 1,194,186.78 | 14,707,800.49 | 45,602,356.43 | |
(1) Disposal or scrapping | 7,633,458.71 | 22,066,910.45 | 1,194,186.78 | 14,707,800.49 | 45,602,356.43 | |
4.Conversion of foreign currency financial statement | 3,458,756.64 | 18,928,181.63 | 661.56 | 14,682,619.54 | 37,070,219.37 | |
5.Ending balance | 565,131,569.29 | 2,581,561,593.39 | 21,663,635.53 | 774,659,142.54 | 3,943,015,940.75 | |
III. Depreciation reserves | ||||||
1.Opening balance | 14,097,320.49 | 148,903,639.01 | 73,319.90 | 21,710,795.11 | 15,155,086.87 | 199,940,161.38 |
2.Current increased | 274,995.90 | 274,995.90 | ||||
(1) Accrual | 274,995.90 | 274,995.90 | ||||
3.Current decreased | 124,646.67 | 98,219.18 | 222,865.85 |
(1) Disposal or
scrapping
(1) Disposal or scrapping | 124,646.67 | 98,219.18 | 222,865.85 | |||
4.Conversion of foreign currency financial statement | 862,515.42 | 3,805,736.91 | 772,057.45 | 927,476.21 | 6,367,785.99 | |
5.Ending balance | 14,959,835.91 | 152,859,725.15 | 73,319.90 | 22,384,633.38 | 16,082,563.08 | 206,360,077.42 |
IV. Book value | ||||||
1.Ending book value | 1,347,517,352.44 | 1,993,389,234.31 | 32,276,870.14 | 356,140,933.02 | 16,266,276.05 | 3,745,590,665.96 |
2.Opening 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) Temporarily idle fixed assets
Nil
(3) Fixed assets acquired by operating lease
Nil
(4) Fixed assets without property certification held
Nil
In RMB
Item | Book value | Reasons for without the property certification |
Plant and office building of WFCA | 31,301,783.70 | The relevant property rights procedures are still being processed |
(5) Disposal of fixed assets
Nil
15. Construction in progress
In RMB
Item | Ending balance | Opening balance |
Construction in progress | 639,963,756.99 | 509,105,587.49 |
Total | 639,963,756.99 | 509,105,587.49 |
(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 | 111,929,396.69 | 111,929,396.69 | 132,814,463.95 | 132,814,463.95 | ||
WFMS rebuilding of the parent company | 23,300,153.61 | 23,300,153.61 | 20,562,758.75 | 20,562,758.75 | ||
Renovation of Xinan Branch, No. 6 Huashan Road of Parent Company | 62,697,798.04 | 62,697,798.04 | 41,493,029.41 | 41,493,029.41 | ||
Technical transformation of WFAM | 89,518,742.76 | 89,518,742.76 | 69,450,019.06 | 69,450,019.06 | ||
Technical transformation of WFLD | 11,955,259.21 | 11,955,259.21 | 16,739,199.84 | 16,739,199.84 | ||
Technical transformation of Denmark RID | 130,799,625.17 | 130,799,625.17 | 82,081,060.63 | 82,081,060.63 | ||
Technical transformation of Italy VHIO | 41,376,242.80 | 41,376,242.80 | 47,822,275.01 | 47,822,275.01 | ||
Other projects | 168,386,538.71 | 168,386,538.71 | 98,142,780.84 | 98,142,780.84 | ||
Total | 639,963,756.99 | 639,963,756.99 | 509,105,587.49 | 509,105,587.49 |
(2) Changes of major construction in progress
In RMB
Item | Budget | Opening balance | Current increased | Fixed assets transfer-in in the Period | Other decreased in the Period | Ending balance | Proportion of project investment in budget | Progress | Accumulated amount of interest capitalization | Including: interest capitalized amount of the year | Interest capitalization rate of the year | Source of funds |
Technical transformation of parent company | 132,814,463.95 | 90,155,496.59 | 109,634,054.55 | 1,406,509.30 | 111,929,396.69 | Accumulated funds by the Company | ||||||
WFMS rebuilding of the parent company | 20,562,758.75 | 2,737,394.86 | 23,300,153.61 | Accumulated funds by the Company | ||||||||
Renovation of Xinan Branch, No. 6 Huashan Road of Parent Company | 41,493,029.41 | 21,204,768.63 | 62,697,798.04 | Accumulated funds by the Company | ||||||||
Technical transformation of WFAM | 69,450,019.06 | 30,011,849.10 | 9,943,125.40 | 89,518,742.76 | Accumulated funds by the Company | |||||||
Technical transformation of WFLD | 16,739,199.84 | 33,141,808.42 | 37,925,749.05 | 11,955,259.21 | Accumulated funds by the Company | |||||||
Technical transformation of Denmark IRD | 82,081,060.63 | 48,718,564.54 | 130,799,625.17 | Accumulated funds by the Company | ||||||||
Technical transformation of Italy VHIO | 47,822,275.01 | 2,541,389.03 | 8,987,421.24 | 41,376,242.80 | Accumulated funds by the Company | |||||||
Total | 410,962,806.65 | 228,511,271.17 | 166,490,350.24 | 1,406,509.30 | 471,577,218.28 |
(3) The provision for impairment of construction in progress
Nil
(4) Engineering materials
Nil
16. Right-of-use assets
In RMB
Item | Building | Mechanical equipment | Total |
I. Original book value: | |||
1.Opening balance | 34,416,049.86 | 25,021,445.63 | 59,437,495.49 |
2.Current increased | 2,362,331.76 | 2,362,331.76 | |
(1)Increased lease | 2,362,331.76 | 2,362,331.76 | |
3.Current decreased | |||
4. Conversion of foreign currency financial statement | 1,315,146.09 | 884,504.09 | 2,199,650.18 |
5.Ending balance | 38,093,527.71 | 25,905,949.72 | 63,999,477.43 |
II. Accumulated depreciation | |||
1.Opening balance | 11,035,938.99 | 6,536,456.12 | 17,572,395.11 |
2.Current increased | 3,113,424.70 | 3,267,093.16 | 6,380,517.86 |
(1) Accrual | 3,113,424.70 | 3,267,093.16 | 6,380,517.86 |
3.Current decreased | |||
(1) Disposal | |||
4. Conversion of foreign currency financial statement | 427,621.05 | 254,102.61 | 681,723.66 |
5.Ending balance | 14,576,984.74 | 10,057,651.89 | 24,634,636.63 |
III. Depreciation reserves | |||
1.Opening balance | |||
2.Current increased | |||
(1) Accrual | |||
3.Current decreased | |||
(1) Disposal | |||
4.Ending balance | |||
IV. Book value | |||
1.Ending book value | 23,516,542.97 | 15,848,297.83 | 39,364,840.80 |
2.Opening book value | 23,380,110.87 | 18,484,989.51 | 41,865,100.38 |
17. Intangible assets
(1) Intangible assets
In RMB
Item | Land use right | Patent | Non-patent technology | Computer software | Trademark and trademark license | Total |
I. Original book value | ||||||
1. Opening balance | 381,867,130.62 | 247,735,742.07 | 156,331,661.37 | 41,597,126.47 | 827,531,660.53 | |
2. Current increased | 5,000,000.00 | 22,416,196.26 | 27,416,196.26 | |||
(1) Purchase | 3,801,880.28 | 3,801,880.28 | ||||
(2) Internal R&D | ||||||
(3) Increased by combination | ||||||
(4) Transfer from construction in progress | 5,000,000.00 | 18,614,315.98 | 23,614,315.98 | |||
3. Current decreased | 8,922,112.00 | 8,922,112.00 | ||||
(1) Disposal | 8,922,112.00 | 8,922,112.00 | ||||
4. Conversion of foreign currency financial statement | 13,186,892.90 | 1,064,798.27 | 14,251,691.17 |
5. Ending balance
5. Ending balance | 372,945,018.62 | 265,922,634.97 | 179,812,655.90 | 41,597,126.47 | 860,277,435.96 | |
II. Accumulated amortization | ||||||
1. Opening balance | 112,319,506.81 | 82,143,152.44 | 118,642,946.06 | 9,709,000.00 | 322,814,605.31 | |
2. Current increased | 1,798,082.72 | 12,400,528.93 | 4,075,392.72 | 14,152,357.93 | 32,426,362.30 | |
(1) Amortization | 1,798,082.72 | 12,400,528.93 | 4,075,392.72 | 14,152,357.93 | 32,426,362.30 | |
3. Current decreased | 7,410,097.90 | 7,410,097.90 | ||||
(1) Disposal | 7,410,097.90 | 7,410,097.90 | ||||
4. Conversion of foreign currency financial statement | 5,068,852.73 | 503,275.39 | 5,572,128.12 | |||
5. Ending balance | 106,707,491.63 | 99,612,534.10 | 123,221,614.17 | 23,861,357.93 | 353,402,997.83 | |
III. Depreciation reserves | ||||||
1. Opening balance | 442,167.30 | 16,646,900.00 | 17,089,067.30 | |||
2. Current increased | ||||||
(1) Accrual | ||||||
3. Current decreased | ||||||
(1) Disposal | ||||||
4. Conversion of foreign currency financial statement | 27,060.18 | 27,060.18 | ||||
5. Ending balance | 469,227.48 | 16,646,900.00 | 17,116,127.48 | |||
IV. Book value | ||||||
1. Ending book value | 266,237,526.99 | 166,310,100.87 | 56,121,814.25 | 1,088,868.54 | 489,758,310.65 | |
2. Opening book value | 269,547,623.81 | 165,592,589.63 | 37,246,548.01 | 15,241,226.47 | 487,627,987.92 |
(2) Land use right without property certification held
Nil
18. Goodwill
(1) Original book value of goodwill
In RMB
The invested entity or matters forming goodwill | Opening balance | Current increased | Current decreased | Ending balance | ||
Formed by business combination | Translation of foreign currency statements | Disposal | ||||
Merged with WFTT | 1,784,086.79 | 1,784,086.79 | ||||
Merged with Borit | 235,898,288.93 | 14,130,739.94 | 250,029,028.87 | |||
Total | 237,682,375.72 | 14,130,739.94 | 251,813,115.66 |
(2) Goodwill depreciation reserves
Other explanation:
1) Goodwill formed by the merger of WFTT:
In 2010, the Company merged WFTT and became its controlling shareholders by increasing cash capital, and goodwill was the partof merge cost greater than the fair value of identifiable net assets of WFTT.
2) Goodwill formed by the merger of Borit:
In 2020, the Company acquired 100.00% equity of Borit in the form of cash purchase, the goodwill was the part of the merge cost
greater than the fair value share of the identifiable net assets of Borit.
19. Long-term deferred expense
In RMB
Item | Opening balance | Current increased | Amortized in the Period | Other decrease | Ending balance |
Remodeling costs etc. | 28,586,235.84 | 648,309.32 | 2,091,207.90 | 27,143,337.26 | |
Total | 28,586,235.84 | 648,309.32 | 2,091,207.90 | 27,143,337.26 |
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 | |
Unrealized profit from insider transactions | 45,296,516.40 | 8,088,715.43 | 43,939,348.59 | 8,056,161.37 |
Deductible loss | 933,763,077.77 | 140,064,461.66 | 942,706,826.57 | 142,138,790.82 |
Provision for bad debts | 79,963,291.96 | 12,080,980.69 | 79,078,766.93 | 11,972,961.27 |
Inventory depreciation reserve | 289,774,907.65 | 44,812,137.50 | 299,752,548.93 | 46,412,618.47 |
Depreciation reserves of fixed assets | 69,791,042.37 | 12,669,293.88 | 70,008,612.21 | 12,701,929.36 |
Depreciation reserves of intangible assets | 16,646,900.00 | 2,497,035.00 | 16,646,900.00 | 2,497,035.00 |
Deferred income | 192,321,983.67 | 29,071,265.00 | 222,850,907.79 | 33,668,167.75 |
Payable salary, accrued expenses etc. | 815,381,382.95 | 145,505,140.26 | 849,436,667.00 | 139,593,056.66 |
Differences in asset depreciation and amortization | 22,846,772.82 | 3,716,162.25 | 25,570,352.82 | 4,153,581.52 |
Equity incentive | 36,048,963.14 | 5,527,217.76 | 3,066,582.11 | 459,987.32 |
Fiscal and tax differences for leasing business | 1,634,506.39 | 284,789.34 | 1,345,462.74 | 234,721.68 |
Total | 2,503,469,345.12 | 404,317,198.77 | 2,554,402,975.69 | 401,889,011.22 |
(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 merger not under the same control | 9,958,382.35 | 1,493,757.33 | 10,192,264.15 | 1,528,839.60 |
The difference between the fair value and taxation basis of IRD assets in merger not under the same control | 59,677,693.03 | 13,129,092.46 | 61,131,061.24 | 13,448,833.47 |
The difference between the fair value and taxation basis of Borit assets in merger not under the same control | 18,072,610.25 | 4,518,152.58 | 21,378,918.49 | 5,344,729.59 |
The difference between the fair value and taxation basis of VH business in merger not under the same control | 57,938,669.62 | 13,905,280.76 | 59,291,649.88 | 14,229,995.98 |
Change of fair value of transaction financial asset | 136,564,271.14 | 20,484,640.67 | 161,415,403.78 | 24,226,534.89 |
Accelerated depreciation of fixed assets | 760,672,604.44 | 116,650,472.33 | 700,548,497.31 | 107,631,856.23 |
Total | 1,042,884,230.83 | 170,181,396.13 | 1,013,957,794.85 | 166,410,789.76 |
(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 | -130,408,867.62 | 273,908,331.15 | -126,261,238.77 | 275,627,772.45 |
Deferred income tax liabilities | -130,408,867.62 | 39,772,528.51 | -126,261,238.77 | 40,149,550.99 |
(4) Details of unrecognized deferred income tax assets
In RMB
Item | Ending balance | Opening balance |
Provision for bad debts | 1,648,744,605.59 | 1,648,602,163.32 |
Inventory depreciation reserve | 33,651,705.97 | 34,557,558.55 |
Loss from subsidiary | 650,732,385.24 | 529,884,134.82 |
Depreciation reserves of fixed assets | 136,569,035.05 | 129,931,549.17 |
Depreciation reserves of intangible assets | 469,227.48 | 442,167.30 |
Other equity instrument investment | 13,600,000.00 | 13,600,000.00 |
Equity incentive | 412,188.43 | |
Total | 2,484,179,147.76 | 2,357,017,573.16 |
(5) Deductible losses of unrecognized deferred income tax assets expired in following years
In RMB
Maturity year | Ending amount | Opening amount | Note |
2023 | 2,380,501.89 | 2,380,501.89 | Domestic subsidiaries have operating losses |
2024 | 7,241,959.80 | 12,087,441.12 | Domestic subsidiaries have operating losses |
2025 | 12,140,693.54 | 12,140,693.54 | Domestic subsidiaries have operating losses |
2026 | 46,263,839.94 | 46,418,486.83 | Domestic subsidiaries have operating losses |
2027 | 160,833,781.13 | 160,833,781.13 | Domestic subsidiaries have operating losses |
2028 and the following years | 84,832,478.65 | Domestic subsidiaries have operating losses | |
No expiration period | 337,039,130.29 | 296,023,230.31 | Overseas subsidiaries have operating losses |
Total | 650,732,385.24 | 529,884,134.82 |
21. Other non-current assets
In RMB
Item | Ending balance | Opening balance | ||||
Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
Contract acquisition cost | 17,527,137.42 | 17,527,137.42 | 19,855,422.27 | 19,855,422.27 | ||
Engineering equipment paid in advance | 284,280,950.81 | 284,280,950.81 | 239,775,014.10 | 239,775,014.10 |
Large depositcertificates with amaturity of morethan one year
Large deposit certificates with a maturity of more than one year | 310,000,000.00 | 310,000,000.00 | 220,000,000.00 | 220,000,000.00 | ||
Total | 611,808,088.23 | 611,808,088.23 | 479,630,436.37 | 479,630,436.37 |
22. Short-term borrowings
(1) Category of short-term borrowings
In RMB
Item | Ending balance | Opening balance |
Guaranteed Loan | 89,074,800.00 | |
Credit loan | 2,054,773,697.36 | 3,511,504,373.65 |
Pledged loan | 200,000,000.00 | |
Accrued interest | 2,127,228.09 | 3,797,354.17 |
Total | 2,256,900,925.45 | 3,604,376,527.82 |
Other explanation:
To obtain the pledged notes receivable of 200,000,000.00 yuan for the above-mentioned bank loan.
(2) Overdue short-term loans without payment
Nil
23. Derivative financial liabilities
In RMB
Item | Ending balance | Opening balance |
Forward settlement and sales of foreign exchange | 737,424.50 | 747,115.75 |
Total | 737,424.50 | 747,115.75 |
24. Note payable
In RMB
Category | Ending balance | Opening balance |
Bank acceptance bill | 1,584,124,651.19 | 1,411,089,606.00 |
Total | 1,584,124,651.19 | 1,411,089,606.00 |
At the end of the current period, the total amount of matured but unpaid notes payable is 0.00 yuan.Other explanation:
To issue the above-mentioned bank acceptance bill, a deposit of 12,066,812.90 yuan was paid, and the pledged notes receivablewere 663,438,206.29 yuan.
25. Account payable
(1) Account payable
In RMB
Item | Ending balance | Opening balance |
Within 1 year | 2,983,935,371.31 | 3,165,855,712.48 |
1-2 years | 191,485,742.18 | 207,702,168.86 |
2-3 years | 39,761,626.79 | 31,919,163.40 |
Over 3 years | 56,743,490.72 | 49,123,978.86 |
Total | 3,271,926,231.00 | 3,454,601,023.60 |
(2) Important account payable with account age over one year
Nil
26. Advance payment
(1) Advance payment
In RMB
Item | Ending balance | Opening balance |
Within 1 year | 462,221.88 | 3,633,878.33 |
Total | 462,221.88 | 3,633,878.33 |
(2) Important advance payment with account age over one year
Nil
27. Contract liabilities
In RMB
Item | Ending balance | Opening balance |
Within 1 year | 72,243,802.82 | 60,916,157.84 |
1-2 years | 26,134,497.08 | 31,275,903.90 |
2-3 years | 4,222,503.89 | 1,518,759.78 |
Over 3 years | 1,890,920.75 | 1,139,261.71 |
Total | 104,491,724.54 | 94,850,083.23 |
28. Wage payable
(1) Wage payable
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance |
1. Short-term compensation | 241,874,758.99 | 654,939,146.08 | 728,406,774.16 | 168,407,130.91 |
2. Post-employment welfare- defined contribution plans | 27,678,116.81 | 98,215,720.30 | 110,550,601.42 | 15,343,235.69 |
3. Dismissed welfare
3. Dismissed welfare | 973,200.33 | 318,149.00 | 318,149.00 | 973,200.33 |
4. Incentive funds paid within a year | 30,740,000.00 | 5,404,350.26 | 25,335,649.74 | |
5. Other short-term welfare-Housing subsidies, employee benefits and welfare funds | 16,168,310.11 | 542,875.00 | 15,625,435.11 | |
Total | 317,434,386.24 | 753,473,015.38 | 845,222,749.84 | 225,684,651.78 |
(2) Short-term compensation
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance |
1. Wages, bonuses, allowances and subsidies | 228,262,797.86 | 529,286,322.08 | 603,220,806.67 | 154,328,313.27 |
2. Welfare for workers and staff | 36,075,847.78 | 35,585,722.75 | 490,125.03 | |
3. Social insurance | 279,543.63 | 32,083,598.82 | 31,216,372.33 | 1,146,770.12 |
Including: Medical insurance | 242,824.57 | 25,901,593.15 | 25,090,210.55 | 1,054,207.17 |
Work injury insurance | 27,398.20 | 3,325,804.39 | 3,303,611.91 | 49,590.68 |
Maternity insurance | 9,320.86 | 2,856,201.28 | 2,822,549.87 | 42,972.27 |
4. Housing accumulation fund | 785,727.00 | 42,865,346.16 | 42,397,860.00 | 1,253,213.16 |
5. Labor union expenditure and personnel education expense | 9,960,112.99 | 7,341,838.52 | 7,496,411.82 | 9,805,539.69 |
6. Other short-term compensation - social security | 2,586,577.51 | 7,286,192.72 | 8,489,600.59 | 1,383,169.64 |
Total | 241,874,758.99 | 654,939,146.08 | 728,406,774.16 | 168,407,130.91 |
(3) Define contribution plans
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance |
1. Basic endowment premium | 6,829,377.95 | 77,731,981.00 | 80,384,478.75 | 4,176,880.20 |
2. Unemployment insurance | 36,478.41 | 2,106,036.83 | 2,097,337.90 | 45,177.34 |
3. Enterprise annuity | 20,812,260.45 | 18,377,702.47 | 28,068,784.77 | 11,121,178.15 |
Total | 27,678,116.81 | 98,215,720.30 | 110,550,601.42 | 15,343,235.69 |
29. Tax payable
In RMB
Item | Ending balance | Opening balance |
Value-added tax | 27,283,192.13 | 27,961,474.84 |
Corporation income tax | 21,442,470.99 | 7,847,731.79 |
Individual income tax | 436,400.85 | 6,846,289.60 |
City maintaining & construction tax | 1,910,545.77 | 1,546,043.92 |
Educational surtax | 1,366,061.64 | 1,105,937.33 |
Other (including stamp tax and local funds) | 11,719,986.78 | 9,278,838.05 |
Total | 64,158,658.16 | 54,586,315.53 |
30. Other account payable
In RMB
Item
Item | Ending balance | Opening balance |
Dividends payable | 10,373,454.00 | |
Other accounts payable | 146,355,991.68 | 198,990,948.23 |
Total | 156,729,445.68 | 198,990,948.23 |
(1) Interest payable
Nil
(2) Dividends payable
In RMB
Item | Ending balance | Opening balance |
Common stock dividends | 10,373,454.00 | |
Total | 10,373,454.00 |
Other explanations, including important dividends payable that have not been paid for more than one year, disclose the reason fornot paying such dividends: Nil
(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 | 34,168,117.02 | 15,452,400.65 |
Withholding social insurance and reserves funds | 1,609,945.43 | 1,967,741.92 |
Intercourse funds of unit | 25,512,145.98 | 25,512,145.98 |
Restricted stock repurchase obligations | 68,688,180.00 | 138,495,060.00 |
Payable unpaid investment funds | 14,105,360.83 | 13,308,176.65 |
Other | 2,272,242.42 | 4,255,423.03 |
Total | 146,355,991.68 | 198,990,948.23 |
2) Significant other payable with over one year
In RMB
Item | Ending balance | Reasons for non-repayment or carry-over |
Nanjing Jidian Industrial Group Co., Ltd. | 4,500,000.00 | Intercourse funds |
Restricted stock repurchase obligation | 68,688,180.00 | Restricted stock repurchase business |
Total | 73,188,180.00 |
31. Non-current liabilities due within one year
In RMB
Item | Ending balance | Opening balance |
Long-term borrowings due within one year | 25,000,000.00 | 2,000,000.00 |
Lease payments due within one year | 11,778,509.11 | 12,044,793.34 |
Interest payable | 180,555.56 | 240,555.56 |
Total | 36,959,064.67 | 14,285,348.90 |
32. Other current liabilities
In RMB
Item | Ending balance | Opening balance |
Rebate payable | 252,281,512.29 | 201,734,082.52 |
Pending sales tax | 10,368,705.25 | 8,815,298.56 |
Endorsed/discounted undue bills | 1,214,398.69 | |
Total | 262,650,217.54 | 211,763,779.77 |
Changes in short-term bonds payable: Nil
33. Long-term borrowings
(1) Category of long-term borrowings
In RMB
Item | Ending balance | Opening balance |
Guaranteed loan | 600,000,000.00 | 238,000,000.00 |
Total | 600,000,000.00 | 238,000,000.00 |
34. Lease liability
In RMB
Item | Ending balance | Opening balance |
Lease payments | 30,799,799.49 | 31,589,277.20 |
Total | 30,799,799.49 | 31,589,277.20 |
35. Long-term account payable
In RMB
Item | Ending balance | Opening balance |
Long-term account payable | 12,520,000.00 | 12,520,000.00 |
Special accounts payable | 18,265,082.11 | 18,265,082.11 |
Total | 30,785,082.11 | 30,785,082.11 |
(1) Long-term account payable listed by nature
In RMB
Item | Ending balance | Opening balance |
Hi-tech Branch of Nanjing Finance Bureau (note ①) Financial support funds (2008) | 2,750,000.00 | 2,750,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ②) Financial support funds (2009) | 1,030,000.00 | 1,030,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ③) Financial support funds (2010) | 960,000.00 | 960,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ④) Financial support funds (2011) | 5,040,000.00 | 5,040,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ⑤) Financial support funds (2013) | 2,740,000.00 | 2,740,000.00 |
Total | 12,520,000.00 | 12,520,000.00 |
Other explanation:
Note ①: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from November 10, 2008 to November 10,2023. Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.Note②: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from October 27, 2009 to October 27,
2024. Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.Note③: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from December 27, 2010 to December 27,2025. Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.Note④: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from December 28, 2011 to December 28,2026. Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.Note⑤: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from December 18, 2013 to December 18,2028. 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 | Current increased | Current decreased | Ending balance | Cause of formation |
Removal compensation of subsidiary WFJN | 18,265,082.11 | 18,265,082.11 | |||
Total | 18,265,082.11 | 18,265,082.11 |
Other explanationIn line with regulation of the house acquisition decision of People’s government of Xuanwu District, Nanjing City, Ning Xuan FuZheng Zi (2012) No.001, part of the lands and property of WFJN needs expropriation in order to carry out the comprehensivelyimprovement of Ming Great Wall. According to the house expropriation and compensation agreement in state-owned lands signedbetween WFJN and House Expropriation Management Office of Xuanwu District, Nanjing City, 19,706,700.00 yuan in total arecompensate, including operation losses from lessee 1,441,600.00 yuan in total. The above compensation was received in lastperiod and is making up for the losses from lessee, and the above lands and property have not been collected up to June 30, 2023.
36. Long-term wages payable
(1) Long-term wages payable
In RMB
Item | Ending balance | Opening balance |
1. Post-employment benefits - Defined benefit plan net liabilities | 21,989,427.11 | 20,380,744.73 |
2. Dismiss welfare | 12,312,197.60 | 12,028,538.66 |
3. Other long-term welfare | 121,683,760.89 | 121,683,760.89 |
Total | 155,985,385.60 | 154,093,044.28 |
(2) Defined benefit plan
Present value of defined benefit plan:
In RMB
Item | Amount in current period | Amount in last period |
1. Opening balance | 20,380,744.73 | 19,594,011.39 |
2. Cost of defined benefit plan booked into current profit and loss | 385,952.19 | 38,706.27 |
(1) Current service cost
(1) Current service cost | 385,952.19 | 38,706.27 |
3. Cost of defined benefit plan booked into other comprehensive income | 704,649.43 | 399,165.06 |
(1) Actuarial gains (losses are represented by “-”) | 704,649.43 | 399,165.06 |
4. Other changes | 518,080.76 | 348,862.01 |
(1) Welfare paid | -99,925.69 | -345,481.69 |
(2) Translation difference of foreign currency statements | 618,006.45 | 694,343.70 |
5. Ending balance | 21,989,427.11 | 20,380,744.73 |
Other explanation:
According to relevant regulations in Italy, the Trattamento di Fine Rapporto (TFR) system is established. VHIO shall withdrawseverance to employees in accordance with employees’ employment period and taxable base salary when they leave or aredismissed. The plan predicts future cash outflows at the inflation rate and determines its present value at the discount rate. Theabove-mentioned benefit plan poses actuarial risks to VHIO, mainly including interest rate risk and inflation risk. In case interestrate is cut down, the present value of the defined benefit plan obligations will rise. In addition, the present value of benefit planobligations is related to the future payment standards of the plan, which are determined based on inflation rates. Therefore, theupward inflation rate will also lead to rising planned liabilities.
37. Anticipated liability
In RMB
Item | Ending balance | Opening balance | Formation cause |
Pending litigation | 246,653.02 | ||
Product quality assurance | 9,980,678.92 | 8,695,322.61 | |
Investment losses in joint ventures | 13,750.00 | ||
Environmental protection commitment | 1,150,543.24 | ||
Total | 9,980,678.92 | 10,106,268.87 |
Other explanations, including important assumptions and estimation explanations related to significant estimated liabilities: Nil
38. Deferred income
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance | Cause of formation |
Government grant | 223,123,978.78 | 14,325,532.64 | 38,239,740.37 | 199,209,771.05 | |
Total | 223,123,978.78 | 14,325,532.64 | 38,239,740.37 | 199,209,771.05 | -- |
Item with government grants involved:
In RMB
Items of liabilities | Opening balance | New grants in the Period | Amount reckoned in non-operation revenue | Amount reckoned into other income in the period | Cost reduction in the period | Other changes | Ending balance | Assets related/Income related |
Industrialization project for injection VE pump system with electronically controlled high pressure for less-emission diesel used | 5,536,697.24 | 390,825.70 | 5,145,871.54 | Asset related | ||||
Fund of industry upgrade (2013) | 18,710,191.69 | 16,399,408.54 | 2,310,783.15 | Income related |
R&D andindustrialization of thehigh-pressure variablepump of the common railsystem of diesel enginefor automotive
R&D and industrialization of the high-pressure variable pump of the common rail system of diesel engine for automotive | 2,699,860.97 | 506,584.28 | 2,193,276.69 | Assets related | ||||
Research institute of motor vehicle exhaust post-processing technology | 117,789.93 | 44,915.68 | 72,874.25 | 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 | 63,443,087.73 | 8,961,973.65 | 54,481,114.08 | 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 | 3,787,113.97 | 607,212.50 | 3,179,901.47 | Assets related | ||||
Implementation of the variable cross-section turbocharger for diesel engine | 4,254,433.18 | 774,340.08 | 3,480,093.10 | Assets related | ||||
Demonstration project funds for intelligent manufacturing | 431,887.80 | 90,019.10 | 341,868.70 | Assets related | ||||
The 2nd batch of provincial special funds for industry transformation of industrial and information in 2019 | 1,849,844.13 | 611,563.78 | 1,238,280.35 | Assets related | ||||
Municipal technological reform fund allocation in 2020 | 3,527,096.61 | 307,948.54 | 3,219,148.07 | Assets related | ||||
Strategic cooperation agreement funding for key enterprise of smart manufacturing in high-tech zone | 3,374,618.86 | 416,578.38 | 2,958,040.48 | Assets related | ||||
The 3rd batch of provincial special funds for industry transformation of industrial and information in 2021 | 13,500,000.00 | 13,500,000.00 | Assets related | |||||
Other | 25,060,356.67 | 14,121,035.85 | 9,128,370.14 | 204,496.79 | 30,257,519.17 | Assets related/Income related | ||
Total | 223,123,978.78 | 14,121,035.85 | 38,239,740.37 | 204,496.79 | 199,209,771.05 | Assets related/Income related |
Other explanation:
(1) The appropriation for research and development ability of distributive high-pressure common rail system for diesel engine useand production line technological transformation project: according to the document (XCJNo. [2010]59), the Company has receivedspecial funds of 7.1 million yuan appropriated by Finance Bureau of Wuxi New District in 2011 and used for the Company’sresearch and development ability of distributive high-pressure common rail system for diesel engine use and production linetechnological transformation project; this appropriation belongs to government grants related to assets, amount of 390,825.70 yuanwas written off based on the depreciation schedule of the related assets during the period.
(2) Industry upgrading funds (2013): In accordance with the documents XXGJF [2013] No.379, XXGJF [2013] No.455, XXGCF[2013] No.128 and XXGCF[2013] No.153, the Company received funds of 60.52 million yuan appropriated for industry upgradingin 2013 and amount of 16,399,408.54 yuan was written off in the year.
(3) R&D and industrialization of the high pressure variable pump of the common rail system of diesel engine for automotive: theCompany received appropriated for the project in 2013 with 8.05 million yuan in line with documents XKJ[2013] No.186, XKJ[2013] No.208, XCGM[2013] No.104, XCGM [2013] No.138, XKJ [2014] No.125, XCGM[2014] No.58, XKJ[2014] No. 246 andXCGM[2014] No.162. The company received 8.05 million yuan, 3 million yuan and 0.45 million yuan respectively in 2013, 2014and 2015; such funds belong to government grant with assets concerned, and shall be written off according to the depreciationprocess, amount of 506,584.28 yuan was written off in reporting period.
(4) Automotive exhaust post-processing technology research institute project: in 2012, the subsidiary WFLD has applied forequipment purchase assisting funds to Wuxi Huishan Science and Technology Bureau and Wuxi Science and Technology Bureau forthe automobile vehicle exhaust post-processing technology research institute project. This declaration has been approved by WuxiHuishan Science and Technology Bureau and Wuxi Science and Technology Bureau in 2012, and the company has receivedappropriation of 2.4 million yuan in 2012, and received appropriation of 1.6 million yuan in 2013. This appropriation belongs togovernment grants related to assets and will be written off according to the depreciation process, amount of 44,915.68 yuan waswritten off in the year.
(5) Industry upgrading funds (2014): In accordance with the document XXGJF [2014] No.427 and XXGCF[2014] No.143, theCompany received funds of 36.831 million yuan appropriated for industry upgrading in 2014.
(6) New-built assets compensation after the removal of parent company: policy relocation compensation received by the Company,and will be written off according to the depreciation of new-built assets, amount of 8,961,973.65 yuan was written off in reportingperiod.
(7) Fund of industry upgrade (2016): In accordance with the document XXGJF [2016] No.585 and XXF[2016] No.70, the Companyreceived funds of 40.00 million yuan appropriated for industry upgrading in 2016.
(8) Guiding capital for the technical reform from State Hi-Tech Technical Commission: In accordance with the document XJXZH[2016] No.9 and XCGM [2016] No.56, the Company received a 9.74 million yuan for the guiding capital of technical reform (1
st
batch) from Wuxi for year of 2016, and belongs to government grant with assets concerned, and shall be written off according to thedepreciation process, amount of 607,212.50 yuan was written off in reporting period.
(9) Implementation of the variable cross-section turbocharger for diesel engine: In accordance with the document YCZF[2016]No.623 and “Strong Industrial Base Project Contract for year of 2017”, subsidiary WFTT received a specific subsidy of 16.97million yuan in 2016 and of 760,000 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 Information Technology; It belongs togovernment grant with assets concerned, and shall be written off according to the depreciation process. Amount of 774,340.08 yuanwas written off in reporting period.
(10) Demonstration project for intelligent manufacturing: under the Notice Relating to Selection of the Intelligent ManufacturingModel Project in Huishan District in 2016 (HJXF[2016]No.36), a fiscal subsidy of 3,000,000 yuan was granted by relevantgovernment authority in Huishan district to our subsidiary WFLD in 2017 to be utilized for transformation and upgrade of WFLD’sintelligent manufacturing facilities. This subsidy belongs to government grant related to assets which shall be written off based on thedepreciation progress of the assets. Amount of 90,019.10 yuan was written off in reporting period..
(11) The 2
ndbatch of provincial special funds for industry transformation of industrial and information in 2019: according to XCGM[2019] No.121, the Company received a special fund of 5.00 million yuan in 2020..This subsidy was related to the “Weifu High-Technology New Factory Internet Construction” projects, and belonged to government grants related to assets. and shall be writtenoff according to the depreciation process, amount of 611,563.78 yuan was written off in the reporting period.
(12) Municipal technological reform fund allocation in 2020: according to XGXZH [2020]No.16, the Company received 4.77 millionyuan of municipal technological transformation fund project allocation in 2020, which was related to key technological
transformation projects and belonged to government grants related to assets. and shall be written off according to the depreciationprocess. Amount of 307,948.54 yuan was written off in reporting period.
(13) 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 4.06 million yuan in 2020 and 0.7 million yuan received in reporting period.This grant was related to the intelligent transformation project and belonged to the government grants related to assets. and shall bewritten off according to the depreciation process, amount of 416,578.38 yuan was written off in reporting period.
(14) The 3rd batch of provincial special funds for industry transformation of industrial and information in 2021: according to theSCGM[2021]No.92, the government grant 13.5 million yuan received in 2021 was for the research, development andindustrialization of membrane electrodes for high-performance automotive proton exchange membrane fuel cells, which was anassets related government grants.
39. Share
In RMB
Opening balance | Change during the year (+/-) | Ending balance | |||||
New shares issued | Bonus share | Shares transferred from capital reserve | Other | Subtotal | |||
Total shares | 1,008,603,293.00 | -6,023,500.00 | -6,023,500.00 | 1,002,579,793.00 |
Other explanation:
Decreased in share capital was due to the buy-back and cancellation of 430,000 restricted shares initially granted under the RestrictedShares Incentive Plan for year of 2020 and 5,593,500 restricted stocks that did not meet the unlocking conditions.
40. Capital reserve
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance |
Capital premium (Share capital premium) | 3,318,949,527.98 | 5,416.66 | 68,558,795.09 | 3,250,396,149.55 |
Other Capital reserve | 79,419,039.65 | 5,361,906.64 | 84,780,946.29 | |
Total | 3,398,368,567.63 | 5,367,323.30 | 68,558,795.09 | 3,335,177,095.84 |
Other explanation, including changes in the period and reasons for changes;
(1) Share capital premium rose by 5,416.66 yuan in the reporting period, mainly due to excessive investment funds paid by IRD toWFQL; Share capital premium reduced by 68,558,795.09 yuan, due to the share capital premium transferred-in, 68,547,430.00 yuan,arising from for 6,023,500 restricted stock which were canceled by the Company. The difference, 11,365.09 yuan, is the handle feeof repurchase and cancellation.
(2) Other capital reserve rose by 5,361,906.64 yuan in the reporting period, which is a net amount after deducting 160,173.01 yuan ofattributable to minority from 5,522,079.65 yuan of the expenses of equity-settled share-based payment.
41. Treasury stock
In RMB
Item | Opening balance | Current increased | Current decreased | Ending balance |
Share repurchase | 397,804,542.63 | 71,917,549.61 | 469,722,092.24 |
Repurchase obligation of restricted stockincentive plan
Repurchase obligation of restricted stock incentive plan | 143,818,460.00 | 75,130,280.00 | 68,688,180.00 | |
Total | 541,623,002.63 | 71,917,549.61 | 75,130,280.00 | 538,410,272.24 |
Other explanations, including changes in the current period and explanations of the reasons for the changes:
Share repurchase: rose by 71,917,549.61 yuan in the reporting period due to share repurchase by way of centralized bidding;Repurchase obligation of restricted stock incentive plan: The decrease of 75130280.00 yuan in this period is composed of two parts:
①reduced by 74,570,930.00 yuan in the reporting period due to the treasury stock as the company repurchased and canceled6,023,500.00 restricted shares; ②559,350.00 yuan is the cash dividend received by the restricted stock incentive object in thereporting period.
42. Other comprehensive income
In RMB
Item | Opening balance | Current period | Ending balance | |||||
Account before income tax in the year | Less: written in other comprehensive income in previous period and carried forward to gains and losses in current period | Less: written in other comprehensive income in previous period and carried forward to retained earnings in current period | Less: income tax expense | Belong to parent company after tax | Belong to minority shareholders after tax | |||
1. Other comprehensive income that cannot be reclassified to profit or loss | -383,156.26 | -305,484.37 | -305,484.37 | -688,640.63 | ||||
Including:Remeasure changes in defined benefit plans | -399,165.06 | -305,484.37 | -305,484.37 | -704,649.43 | ||||
Other comprehensive income that cannot be transferred to profit or loss under the equity method | 16,008.80 | 16,008.80 | ||||||
2. Other comprehensive income items which will be reclassified subsequently to profit or loss | -528,153.87 | 61,545,045.56 | 61,545,045.56 | 61,016,891.69 | ||||
Conversion difference of foreign currency financial statement | -528,153.87 | 61,545,045.56 | 61,545,045.56 | 61,016,891.69 | ||||
Total other comprehensive income | -911,310.13 | 61,239,561.19 | 61,239,561.19 | 60,328,251.06 |
43. Reasonable reserve
In RMB
Item
Item | Opening balance | Current increased | Current decreased | Ending balance |
Work safety expense | 2,119,800.95 | 14,709,266.91 | 13,245,660.11 | 3,583,407.75 |
Total | 2,119,800.95 | 14,709,266.91 | 13,245,660.11 | 3,583,407.75 |
Other explanation, including changes and reasons for changes:
(1) Description on withdrawing reasonable reserves (work safety expense): According to the Administrative Measures on theWithdrawing and Use of Enterprise Work Safety Expense(CZ[2022]No.136) jointly issued by the Ministry of Finance and the StateAdministration of Work Safety, in the reporting period, based on the actual operating income of the previous period, the companyadopted excess retreat method to define the amount of reasonable reserve of the year and withdraw reasonable reserve averagely ineach month..
(2) The above work safety expenses included those withdrawn by the Company in line with regulations and the parts enjoyed byshareholders of the Company in work safety expenses withdrawn 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 | ||
Total | 510,100,496.00 | 510,100,496.00 |
Other explanation, including changes and reasons for changes:
Withdrawal of the statutory surplus reserves: Pursuit to the Company Law and Article of Association, the Company withdrawsstatutory surplus reserve in terms of 10% of the net profit. No more amounts shall be withdrawn if the accumulated statutory surplusreserve is over 50% of the registered capital.
45. Retained profit
In RMB
Item | Amount in current period | Amount in last period |
Retained profits at the end of last period before adjustment | 13,320,021,325.90 | 14,814,787,377.86 |
Retained profits at the beginning of the period after adjustment | 13,320,021,325.90 | 14,814,787,377.86 |
Add: The net profits belong to owners of patent company of the reporting period | 948,760,859.55 | 118,819,836.30 |
Less: Cash dividends payable | 97,757,979.30 | 1,609,059,668.80 |
Less: Withdraw employee rewards and welfare funds | 4,526,219.46 | |
Retained profit at period-end | 14,171,024,206.15 | 13,320,021,325.90 |
Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments due to the Accounting Standards for Business Enterprises and its relevant new regulations affect theretained profits at the beginning of the period amounting to 0 yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 yuan.
5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 yuan
46. Operating income and cost
In RMB
Item | Amount in current period | Amount in last period |
Income
Income | Cost | Income | Cost | |
Main operating | 6,052,163,689.76 | 5,137,115,309.66 | 6,928,141,770.13 | 5,860,429,899.49 |
Other business | 77,485,357.64 | 26,756,421.60 | 209,031,087.84 | 166,024,282.54 |
Total | 6,129,649,047.40 | 5,163,871,731.26 | 7,137,172,857.97 | 6,026,454,182.03 |
Other explanationTop 5 revenue confirmed during the reporting period:
In RMB
Serial No. | Name | Revenue |
1 | RBCD | 1,090,789,696.99 |
2 | Robert Bosch Company | 848,768,368.36 |
3 | Client 1 | 370,384,276.77 |
4 | Client 4 | 252,642,028.88 |
5 | Client 2 | 178,558,893.41 |
47. Operating tax and extra
In RMB
Item | Amount in current period | Amount in last period |
City maintaining & construction tax | 8,517,861.49 | 8,634,987.02 |
Educational surtax | 6,087,805.08 | 6,170,777.25 |
Property tax | 11,115,997.34 | 8,897,091.90 |
Land use tax | 2,013,933.93 | 2,253,305.65 |
Vehicle use tax | 19,170.06 | 3,985.52 |
Stamp duty | 4,119,912.74 | 2,394,141.59 |
Other taxes | 365,742.35 | 523,132.85 |
Total | 32,240,422.99 | 28,877,421.78 |
48. Sales expenses
In RMB
Item | Amount in current period | Amount in last period |
Salary and wage related expense | 33,589,826.19 | 24,952,862.28 |
Consumption of office materials and business travel charge | 5,356,063.20 | 3,302,587.07 |
Warehouse charge | 3,818,351.46 | 1,044,900.83 |
Three guarantees and quality cost | 38,356,321.13 | 30,734,960.85 |
Business entertainment fee | 5,701,496.43 | 9,087,067.46 |
Other | 16,209,422.99 | 9,898,213.94 |
Total | 103,031,481.40 | 79,020,592.43 |
49. Administration expenses
In RMB
Item | Amount in current period | Amount in last period |
Salary and wage related expense | 157,699,092.98 | 151,774,582.74 |
Depreciation charger and long-term assets amortization | 53,460,774.32 | 37,588,034.10 |
Consumption of office materials and | 9,690,794.26 | 6,085,675.94 |
business travel charge
business travel charge | ||
Share-based payment | 3,351,570.96 | 22,799,516.92 |
Other | 74,993,497.07 | 58,964,445.09 |
Total | 299,195,729.59 | 277,212,254.79 |
50. R&D expenses
In RMB
Item | Amount in current period | Amount in last period |
Technological development expenses | 351,887,038.12 | 289,631,376.50 |
Total | 351,887,038.12 | 289,631,376.50 |
51. Financial expenses
In RMB
Item | Amount in current period | Amount in last period |
Interest expenses | 65,616,425.64 | 34,275,262.65 |
Note discount interest expenses | 3,052,594.14 | |
Less: Deposit interest income | 15,706,416.56 | 13,927,929.36 |
Gains/losses from exchange | -14,651,449.58 | 4,316,196.05 |
Handling charges | 3,203,622.95 | 2,057,941.09 |
Total | 38,462,182.45 | 29,774,064.57 |
52. Other income
In RMB
Sources of income generated | Amount in current period | Amount in last period |
Government grants with routine operation activity concerned | 40,157,408.73 | 25,101,731.50 |
Refund of individual income tax handling fee | 822,184.78 | 993,890.43 |
Total | 40,979,593.51 | 26,095,621.93 |
53. Investment income
In RMB
Item | Amount in current period | Amount in last period |
Income of long-term equity investment calculated based on equity | 742,783,514.37 | 823,400,731.10 |
Investment income from disposal of long-term equity investments | 964,645.90 | |
Investment income from wealth management products | 69,978,714.96 | 105,107,324.41 |
Other | -1,355,595.84 | -680,357.44 |
Total | 811,406,633.49 | 928,792,343.97 |
54. Income from change of fair value
In RMB
Sources | Amount in current period | Amount in last period |
Changes in the fair value of wealth management products | 2,673,177.12 | 3,290,951.54 |
Changes in the fair value of the stocks of listed companies held-excluding the stocks of listed companies that are included in other | -20,742,730.41 | -77,723,879.68 |
equity instrument investments
equity instrument investments | ||
Total | -18,069,553.29 | -74,432,928.14 |
55. Credit impairment loss
In RMB
Item | Amount in current period | Amount in last period |
Bad debt loss | -846,725.76 | 2,083,427.81 |
Total | -846,725.76 | 2,083,427.81 |
56. Asset impairment loss
In RMB
Item | Amount in current period | Amount in last period |
Loss of inventory falling price and loss of contract performance cost impairment | -89,988,541.10 | -104,219,783.98 |
Impairment loss of fixed assets | -274,995.90 | |
Total | -90,263,537.00 | -104,219,783.98 |
57. Income form assets disposal
In RMB
Sources | Amount in current period | Amount in last period |
Income from disposal of non-current assets | 126,476,687.75 | 3,597,231.29 |
Losses from disposal of non-current assets | -945,782.71 | -1,706,951.34 |
Total | 125,530,905.04 | 1,890,279.95 |
58. Non-operating income
In RMB
Item | Amount in current period | Amount in last period | Amount reckoned into current extraordinary gains and losses |
Other | 2,707,696.00 | 218,285.29 | 2,707,696.00 |
Total | 2,707,696.00 | 218,285.29 | 2,707,696.00 |
Government grants included in the current profit and loss: Nil
59. Non-operating expense
In RMB
Item | Amount in current period | Amount in last period | Amount reckoned into current extraordinary gains and losses |
Donation | 20,000.00 | 20,000.00 | |
Total of loss on scrapping of fixed assets | 661,923.94 | 2,175,378.87 | 661,923.94 |
Including: loss on scrapping of fixed assets | 661,923.94 | 2,175,378.87 | 661,923.94 |
Other | 76,457.75 | 21,187.00 | 76,457.75 |
Total | 758,381.69 | 2,196,565.87 | 758,381.69 |
60. Income tax expense
(1) Income tax expense
In RMB
Item | Amount in current period | Amount in last period |
Payable tax in current period | 29,859,646.45 | 62,009,331.28 |
Adjusted the previous income tax | -11,522.40 | 281,934.62 |
Increase/decrease of deferred income tax assets | -3,637,244.56 | 6,279,057.80 |
Increase/decrease of deferred income tax liability | 3,121,400.25 | -12,925,247.95 |
Total | 29,332,279.74 | 55,645,075.75 |
(2) Adjustment on accounting profit and income tax expenses
In RMB
Item | Amount in current period |
Total profit | 1,011,647,091.89 |
Income tax measured by statutory/applicable tax rate | 151,747,063.78 |
Impact by different tax rate applied by subsidies | -8,162,395.90 |
Adjusted the previous income tax | -11,522.40 |
Impact by non-taxable revenue | -104,839,090.93 |
Impact by cost, expenses and losses that unable to deducted | -712,332.26 |
Impact by the deductible losses of the un-recognized previous deferred income tax | 31,658,172.36 |
The deductible temporary differences or deductible losses of the un-recognized deferred income tax assets in the Period | -36,789,640.73 |
Impact on additional deduction | -4,057,984.09 |
Other | 500,009.91 |
Income tax expense | 29,332,279.74 |
61. Other comprehensive income
See Note VII. 42. “Other comprehensive income”
62. Items of cash flow statement
(1) Other cash received in relation to operation activities
In RMB
Item | Amount in current period | Amount in last period |
Interest income | 15,706,416.56 | 13,927,929.36 |
Government grants | 16,848,073.14 | 8,106,249.87 |
Fund inflow from WFTR “platform trade” business | 299,235,761.25 | 1,254,515,797.22 |
Other | 18,644,560.72 | 404,502.49 |
Total | 350,434,811.67 | 1,276,954,478.94 |
Explanation on other cash received in relation to operation activities: Nil
(2) Other cash paid in relation to operation activities
In RMB
Item
Item | Amount in current period | Amount in last period |
Cash cost | 301,149,590.30 | 254,434,197.77 |
Fund outflow from WFTR “platform trade” business | 100,000,000.00 | 4,442,956,606.35 |
Other | 8,281,394.08 | 18,468,018.35 |
Total | 409,430,984.38 | 4,715,858,822.47 |
Explanation to other cash paid in relation to operation activities:
The amount of fund outflow from WFTR “platform trade” business in current period is the final payment of the business beforethe Company discovered the contract fraud.
(3) Cash received from other investment activities
Nil
(4) Cash paid related with investment activities
Nil
(5) Other cash received in relation to financing activities
Nil
(6) Cash paid related with financing activities
In RMB
Item | Amount in current period | Amount in last period |
Lease payments | 3,411,636.27 | 865,486.76 |
Payment for stock repurchase | 71,917,549.61 | 100,001,057.07 |
Payment for restricted stock repurchase | 69,247,530.00 | |
Total | 144,576,715.88 | 100,866,543.83 |
Explanation to other cash paid related with financing activities: Nil
63. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
In RMB
Supplementary information | Amount in current period | Amount in last period |
1. Net profit adjusted to cash flow of operation activities: | ||
Net profit | 982,314,812.15 | 1,128,788,571.08 |
Add: Assets impairment provision | 91,110,262.76 | 102,136,356.17 |
Depreciation of fixed assets, consumption of oil assets and depreciation of productive biology assets | 259,623,099.39 | 203,750,978.31 |
Depreciation of right-of-use assets | 6,380,517.86 | 2,124,980.42 |
Amortization of intangible assets | 32,426,362.30 | 21,643,638.80 |
Amortization of long-term deferred expenses | 2,091,207.90 | 4,160,293.14 |
Loss from disposal of fixed assets, intangible assets and other long-term assets (gain is listed with “-”) | -125,530,905.04 | -1,890,279.95 |
Loss on scrapping of fixed assets (gain is listed with “-”)
Loss on scrapping of fixed assets (gain is listed with “-”) | 661,923.94 | 2,175,378.87 |
Gain/loss of fair value changes (gain is listed with “-”) | 18,069,553.29 | 74,432,928.14 |
Financial expenses (gain is listed with “-”) | -11,447,977.73 | 36,972,909.58 |
Investment loss (gain is listed with “-”) | -812,762,229.33 | -929,472,701.41 |
Decrease of deferred income tax asset ((increase is listed with “-”) | 1,793,420.95 | 6,279,057.80 |
Increase of deferred income tax liability (decrease is listed with “-”) | 3,135,839.77 | -12,925,247.95 |
Decrease of inventory (increase is listed with “-”) | 372,883,000.74 | 1,265,262,274.11 |
Decrease of operating receivable accounts (increase is listed with “-”) | 370,183,379.30 | -3,855,816,972.58 |
Increase of operating payable accounts (decrease is listed with “-”) | -108,140,333.37 | -578,522,427.61 |
Other | 7,169,302.54 | 36,918,218.19 |
Net cash flows arising from operating activities | 1,089,961,237.42 | -2,493,982,044.89 |
2. Material investment and financing not involved in cash flow | ||
Conversion of debt into capital | ||
Switching Company bonds due within one year | ||
financing lease of fixed assets | ||
3. Net change of cash and cash equivalents: | ||
Balance of cash at period end | 2,387,464,673.97 | 1,490,785,302.80 |
Less: Balance of cash equivalent at year-begin | 2,277,117,604.82 | 1,094,018,936.73 |
Add: Balance at year-end of cash equivalents | ||
Less: Balance at year-begin of cash equivalents | ||
Net increase of cash and cash equivalents | 110,347,069.15 | 396,766,366.07 |
(2) Net cash payment for the acquisition of a subsidiary in the period
Nil
(3) Net cash received from the disposal of subsidiaries
Nil
(4) Constitution of cash and cash equivalent
In RMB
Item | Ending balance | Opening balance |
I. Cash | 2,387,464,673.97 | 2,277,117,604.82 |
Including: Cash on hand | 76,329.51 | 51,818.51 |
Bank deposit available for payment at any time | 2,387,388,344.46 | 2,277,065,786.31 |
II. Balance of cash and cash equivalents at the period-end | 2,387,464,673.97 | 2,277,117,604.82 |
Other explanation:
The difference between bank deposits available for payment at any time and the bank deposits in Note VII. 1 “Monetary Funds” isthe company's fixed deposits in the bank.
64. Note of the changes of owners’ equity
Explain the items and amount at period-end adjusted for “Other” at end of the last year: Nil
65. 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 | 12,066,812.90 | Margin paid for issuing bank acceptance bills |
Monetary funds | 7,935,750.00 | IRD performance bond |
Monetary funds | 211,620.00 | Cash deposit for Mastercard |
Monetary funds | 5,000.00 | ETC freezing |
Receivables financing | 825,831,044.39 | Notes pledge for bank acceptance |
Note receivable | 37,607,161.90 | Notes pledge for bank acceptance |
Total | 902,497,389.19 |
66. 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 | 20,252,686.24 | 7.22580 | 146,341,845.38 |
EUR | 31,025,258.27 | 7.8771 | 244,389,392.00 |
HKD | 966.00 | 0.92198 | 890.63 |
JPY | 7,975,654.00 | 0.050094 | 399,532.41 |
DKK | 134,704,837.49 | 1.0581 | 142,531,188.55 |
Account receivable | |||
Including: USD | 3,492,232.71 | 7.22580 | 25,234,175.12 |
EUR | 32,573,879.77 | 7.8771 | 256,587,708.34 |
HKD | |||
JPY | 12,920,875.00 | 0.050094 | 647,258.31 |
DKK | 12,157,993.84 | 1.0581 | 12,864,373.28 |
Long-term borrowings | |||
Including: USD | |||
EUR | |||
HKD | |||
Other accounts receivable | |||
Including: USD | 100.00 | 7.22580 | 722.58 |
EUR | 248,803.02 | 7.8771 | 1,959,846.27 |
DKK | 1,715,115.29 | 1.0581 | 1,814,763.49 |
Short-term borrowings | |||
Including: USD | |||
EUR | |||
Account payable | |||
Including: USD | 709,559.53 | 7.22580 | 5,127,135.25 |
EUR
EUR | 29,753,425.46 | 7.8771 | 234,370,707.71 |
JPY | 24,899,918.00 | 0.050094 | 1,247,336.49 |
CHF | 261,904.94 | 8.0614 | 2,111,320.48 |
DKK | 12,769,122.98 | 1.0581 | 13,511,009.03 |
GBP | |||
Other account payable | |||
Including: USD | 1,087.90 | 7.22580 | 7,860.95 |
EUR | 3,707.88 | 7.8771 | 29,207.38 |
DKK | 149,968.60 | 1.0581 | 158,681.78 |
Non-current liabilities due within one year | |||
Including: USD | 156,513.08 | 7.22580 | 1,130,932.21 |
EUR | 490,296.74 | 7.8771 | 3,862,116.45 |
DKK | 645,753.26 | 1.0581 | 683,271.52 |
Leasing liabilities | |||
Including: USD | 386,008.72 | 7.22580 | 2,789,221.81 |
EUR | 1,042,742.31 | 7.8771 | 8,213,785.45 |
DKK | 11,015,070.07 | 1.0581 | 11,655,045.64 |
(2) Explanation on foreign operational entities, for the major foreign operational entity, disclose mainoperation place, book-keeping currency and basis for selection, reasons for changes of book-keepingcurrency if any?Applicable □Not applicableSubsidiary IRD was established in Denmark in 1996. The 66% equity of IRD were acquired by the Company in cash in April 2019.In October 2020, the Company acquired the remaining 34.00% equity of IRD in cash, thus the Company holds 100% equity of IRD.IRD is denominated in Danish krone, and IRD is mainly engaged 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 in November 2020. Boritis denominated in Euro and engaged in R&D, production and sales of fuel cell components.Subsidiary VHIO was established in Italy in 2000. The Company acquired 100.00% equity of VHIT in cash in October 2022. TheCompany is denominated in Euro and engaged in R&D, production, and sales of vacuum and hydraulic pumps.
67. Government grants
(1) Government grants
In RMB
Category | Amount | Item | Amount reckoned in current gain/loss |
VHIO tax credit | 4,565,105.73 | Other income | 4,565,105.73 |
Job stabilization and expanding subsidy | 135,524.51 | Other income | 135,524.51 |
Training subsidy | 95,550.00 | Other income | 95,550.00 |
3R | 642,615.43 | Other income | 642,615.43 |
Loter.CO2M | 1,187,678.39 | Other income | 1,187,678.39 |
Neptune | 145,399.97 | Other income | 145,399.97 |
AdvancePEM | 1,844,744.94 | Other income | 1,844,744.94 |
Pemtastic | 2,994,265.06 | Other income | 2,994,265.06 |
BORIT intellectual property tax exemption | 416,434.43 | Other income | 416,434.43 |
CAMEDO
CAMEDO | 324,791.90 | Other income | 324,791.90 |
Subsidy for specialized, new and small giant enterprises | 200,000.00 | Other income | 200,000.00 |
Talent policy subsidies | 557,028.00 | Other income | 557,028.00 |
Third generation handling fee | 822,184.78 | Other income | 822,184.78 |
The second batch of technical transformation in 2023; | 2,000,000.00 | Deferred income | |
Other | 916,750.00 | Other income | 916,750.00 |
Total | 16,848,073.14 |
(2) Government grants rebate
□Applicable ?Not applicable
68. Others
NilVIII. Changes of consolidation scope
1. Enterprise combinations not under the same control
(1) Enterprise combination not under the same control that occurred in the current period
Nil
(2) Consolidation cost and goodwill
Nil
(3) Identifiable assets and liabilities of the merged party on the merger date
(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing dateWhether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control rightsin the Period or not
□Yes ?No
(5) Explanation on the merger consideration or the fair value of the merged party’s identifiable assetsand liabilities which cannot be reasonable determined on the merge date or the end of the period
Nil
(6) Other explanation
Nil
2. Enterprise combination under the same control
(1) Enterprise combinations under the same control that occurred in the current period
Nil
(2) Merge cost
Nil
(3) Book value of assets and liabilities of the merged party on the merger dateNil
3. Reverse purchase
Basic information of transaction, basis for reverse purchase of transaction, whether the assets and liabilities retained by the listedcompany constitute a business and its basis, determination of merger costs, amount and calculation of adjusting equity whendealing with equity transactions: Nil
4. Disposal of subsidiaries
Whether there is a single disposal of an investment in a subsidiary that resulted in a loss of control
□Yes ?No
Whether there is a step-by-step disposal of investment in a subsidiary through multiple transactions and loss of control during theperiod
□Yes ?No
5. Changes in the scope of consolidation due to other reasons
Explanation on changes in the scope of consolidation due to other reasons (e.g. new establishment of a subsidiary, subsidiaryliquidation, etc.) and related information: Nil
6. Others
Nil
IX. Equity in other entities
1. Equity in subsidiaries
(1) Constitute of enterprise group
Subsidiary | Main operation place | Registered place | Business nature | Share-holding ratio | Acquired way | |
Directly | Indirectly | |||||
WFJN | Nanjing | Nanjing | Spare parts of internal-combustion engine | 80.00% | Enterprise combination under the same control | |
WFLD | Wuxi | Wuxi | Automobile exhaust purifier, muffler | 94.81% | Enterprise combination under the same control | |
WFMA | Wuxi | Wuxi | Spare parts of internal-combustion engine | 100.00% | Investment | |
WFCA | Wuxi | Wuxi | Spare parts of internal-combustion engine | 100.00% | Investment |
WFTR
WFTR | Wuxi | Wuxi | Trade | 100.00% | Enterprise combination under the same control | |
WFSC | Wuxi | Wuxi | Spare parts of internal-combustion engine | 66.00% | Investment | |
WFTT | Ningbo | Ningbo | Spare parts of internal-combustion engine | 98.83% | 1.17% | Enterprise combination not under the same control |
WFAM | Wuxi | Wuxi | Spare parts of internal-combustion engine | 51.00% | Enterprise combination not under the same control | |
WFLD (Wuhan) | Wuhan | Wuhan | Automobile exhaust purifier, muffler | 60.00% | Investment | |
WFLD (Chongqing) | Chongqing | Chongqing | Automobile exhaust purifier, muffler | 100.00% | Investment | |
WFLD (Nanchang) | Nanchang | Nanchang | Automobile exhaust purifier, muffler | 100.00% | Investment | |
WFAS | Wuxi | Wuxi | Car seats products | 66.00% | Investment | |
WFDT | Wuxi | Wuxi | Hub motor | 80.00% | Enterprise combination not under the same control | |
WFQL | Wuxi | Wuxi | Fuel cell components | 45.00% | 30.00% | Investment |
VHWX | Wuxi | Wuxi | Automobile components | 100.00% | Enterprise combination not under the same control | |
SPV | Denmark | Denmark | Investment | 100.00% | Investment | |
IRD | Denmark | Denmark | Fuel cell components | 100.00% | Enterprise combination not under the same control | |
IRD America | America | America | Fuel cell components | 100.00% | Enterprise combination not under the same control | |
Borit | Belgium | Belgium | Fuel cell components | 100.00% | Enterprise combination not under the same control | |
Borit America | America | America | Fuel cell components | 100.00% | Enterprise combination not under the same control | |
VHIO | Italy | Italy | Automobile components | 100.00% | Enterprise combination not under the same control |
Explanation on share-holding ratio in subsidiary different from ratio of voting rightNilBasis for holding half or less of the voting rights but still controlling the investee, and holding more than half of the voting rightsbut not controlling the investeeNilBasis for inclusion in the scope of consolidation of significant structured entities, controlNilBasis for determining whether a company is an agent or a principalNilOther explanationNil
(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% | 28,182,096.53 | 239,063,843.11 | |
WFSC | 34.00% | 1,707,747.13 | 28,306,333.61 | |
WFLD | 5.19% | 495,669.34 | 153,206,542.03 | |
WFAM | 49.00% | 7,567,993.25 | 224,123,772.73 |
Total
Total | 37,953,506.25 | 644,700,491.48 |
Explanation on holding ratio different from the voting right ratio for minority shareholdersNil
(3) Main finance information of the important non-wholly-owned subsidiary
In RMB
Subsidiary | Ending balance | |||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
WFJN | 1,009,156,897.77 | 601,789,177.52 | 1,610,946,075.29 | 379,549,026.48 | 35,071,853.60 | 414,620,880.08 |
WFSC | 188,303,633.86 | 51,357,714.40 | 239,661,348.26 | 156,013,188.66 | 156,013,188.66 | |
WFLD | 4,237,251,690.05 | 1,503,092,492.26 | 5,740,344,182.31 | 2,895,508,104.73 | 216,474,283.38 | 3,111,982,388.11 |
WFAM | 402,467,434.49 | 548,655,242.74 | 951,122,677.23 | 428,082,203.22 | 67,275,692.56 | 495,357,895.78 |
Total | 5,837,179,656.17 | 2,704,894,626.92 | 8,542,074,283.09 | 3,859,152,523.09 | 318,821,829.54 | 4,177,974,352.63 |
In RMB
Subsidiary | Opening balance | |||||
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 |
In RMB
Subsidiary | Amount in reporting period | |||
Operation Income | Net profit | Total comprehensive income | Cash flow from operation activity | |
WFJN | 362,347,975.32 | 140,705,646.86 | 140,705,646.86 | -860,079.84 |
WFSC | 212,765,150.03 | 5,022,719.78 | 5,022,719.78 | 12,852,744.75 |
WFLD | 2,175,323,269.69 | 71,083,391.94 | 71,083,391.94 | 455,043,631.50 |
WFAM | 323,869,868.52 | 15,360,097.42 | 15,360,097.42 | 77,957,350.25 |
Total | 3,074,306,263.56 | 232,171,856.00 | 232,171,856.00 | 544,993,646.66 |
In RMB
Subsidiary | Amount in last period | |||
Operation Income | Net profit | Total comprehensive income | Cash flow from operation activity | |
WFJN | 447,804,363.41 | 65,145,897.60 | 65,145,897.60 | -51,110,746.71 |
WFSC | 226,170,484.98 | 10,460,851.26 | 10,460,851.26 | -33,350,047.74 |
WFLD | 3,287,233,284.58 | 138,297,551.67 | 138,297,551.67 | 397,683,438.88 |
WFAM | 330,358,273.12 | 32,245,277.07 | 32,245,277.07 | 92,627,392.88 |
Total | 4,291,566,406.09 | 246,149,577.60 | 246,149,577.60 | 405,850,037.31 |
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise groupNil
(5) Financial or other support offered to the structured entities included in the scope of consolidatedfinancial statementsNil
2. Transaction that has owners’ equity shares changed in subsidiary but still with controlling rights
(1) Owners’ equity shares changed in subsidiary
Nil
(2) Impact on minority’s interests and owners’ equity attributable to parent companyNil
3. Equity in joint venture and associated enterprise
(1) Important joint venture and associated enterprise
Joint venture or associated enterprise | Main operation place | Registered place | Business nature | Share-holding ratio | Accounting treatment on investment for joint venture and associated enterprise | |
Directly | Indirectly | |||||
WFEC | Wuxi | Wuxi | Catalyst | 49.00% | Equity method | |
RBCD | Wuxi | Wuxi | Internal-combustion engine accessories | 32.50% | 1.50% | Equity method |
Zhonglian Automobile Electronics Co., Ltd. | Shanghai | Shanghai | Internal-combustion engine accessories | 20.00% | Equity method | |
Wuxi Weifu Precision Machinery Manufacturing Co., Ltd. | Wuxi | Wuxi | Internal-combustion engine accessories | 20.00% | Equity method | |
Changchun Xuyang Weifu Automobile Components Technology Co., Ltd. | Changchun | Changchun | Automobile components | 34.00% | Equity method | |
Precors GmbH | Germany | Germany | Fuel cell components | 43.39% | Equity method | |
Wuxi ChelianTianxia Information Technology Co., Ltd. | Wuxi | Wuxi | Telematics services | 9.6372% | Equity method | |
Lezhuo Bowei Hydraulic Technology (Shanghai) Co., Ltd | Shanghai | Shanghai | Automobile components | 50.00% | Equity method |
Holding shares ratio different from the voting right ratio: NilBasis for holding less than 20% of voting rights but with significant impact, or holding 20% or more of voting rights but withoutsignificant impact:
The Company holds 9.6372% equity of Chelian Tianxia, and appointed a director to Chelian Tianxia. Though such representative,the Company can participate in the operation policies formulation of Chelian Tianxia, and thus exercise a significant influence overChelian Tianxi.
(2) Main financial information of the important joint venture
Nil
(3) Main financial information of the important associated enterprise
In RMB
Ending balance/Amount in reporting period | Opening balance/Amount in last period | |||||
WFEC | RBCD | Zhonglian Electronics | WFEC | RBCD | Zhonglian Electronics | |
Current assets | 3,197,806,721.94 | 16,755,294,611.32 | 1,558,880,363.29 | 3,507,976,754.16 | 15,426,523,373.99 | 241,595,079.15 |
Non -current assets | 322,109,820.91 | 3,352,676,291.64 | 7,132,120,000.92 | 333,764,427.43 | 3,421,035,986.82 | 7,557,124,612.32 |
Total assets | 3,519,916,542.85 | 20,107,970,902.96 | 8,691,000,364.21 | 3,841,741,181.59 | 18,847,559,360.81 | 7,798,719,691.47 |
Current liabilities | 1,199,741,188.01 | 13,574,648,492.61 | 1,411,754,246.77 | 1,665,411,123.81 | 8,810,309,639.09 | 6,171,780.23 |
Non-current liabilities | 469,668,631.03 | 2,487,436.06 | 493,618,200.85 | 2,517,670.77 | ||
Total liabilities | 1,669,409,819.04 | 13,574,648,492.61 | 1,414,241,682.83 | 2,159,029,324.66 | 8,810,309,639.09 | 8,689,451.00 |
Including: cash and cash equivalent | 1,067,629,913.47 | 8,733,327.18 | 128,530,289.29 | 813,874,175.27 | 10,773,921.81 | 225,052,854.96 |
Minority interests | ||||||
Equity attributable to shareholders of the parent company | 1,850,506,723.81 | 6,533,322,410.35 | 7,276,758,681.38 | 1,682,711,856.93 | 10,037,249,721.72 | 7,790,030,240.47 |
Share of net assets calculated by shareholding ratio | 906,748,294.66 | 2,221,329,619.51 | 1,455,351,736.27 | 824,528,809.90 | 3,412,664,905.38 | 1,558,006,048.09 |
Adjustment matters | ||||||
--Goodwill | 267,788,761.35 | 1,407,265.96 | 267,788,761.35 | 1,407,265.96 | ||
--Unrealized profit of internal trading | -15,634,582.21 | -20,692,355.48 | ||||
--Other | -0.28 | -0.28 | ||||
Book value of equity investment in associated enterprise | 906,748,294.66 | 2,473,483,798.37 | 1,456,759,002.23 | 824,528,809.90 | 3,659,761,310.97 | 1,559,413,314.05 |
Fair value of equity investments in joint ventures with publicly quoted prices | ||||||
Operation income | 1,767,599,633.82 | 6,130,896,971.82 | 12,971,075.74 | 2,448,287,999.54 | 8,322,989,203.32 | 9,460,906.82 |
Net profit | 166,314,657.54 | 1,418,441,731.89 | 896,728,440.91 | 142,874,508.54 | 1,687,151,931.01 | 841,207,709.66 |
Net profit from discontinued operations | ||||||
Other comprehensive income | ||||||
Total comprehensive income | 166,314,657.54 | 1,418,441,731.89 | 896,728,440.91 | 142,874,508.54 | 1,687,151,931.01 | 841,207,709.66 |
Dividends received from associated enterprise in the year | 382,918,855.12 |
Other explanation:
Adjustment item: "Other: -0.28" indicates that it is caused by tail difference.
(4) Financial summary for non-important joint venture and associated enterprise
In RMB
Ending balance/Amount in reporting period | Opening balance/Amount in last period | |
Joint venture: | ||
The total amount of the following items calculated based on shareholding ratio | ||
Associated enterprise: | ||
Total book value of investment | 351,004,139.17 | 239,114,674.05 |
The total amount of the following items calculated based on shareholding ratio | ||
--Net profit | -1,393,571.96 | 639,624.55 |
--Total comprehensive income | -1,393,571.96 | 639,624.55 |
(5) Major limitation on capital transfer ability to the Company from joint venture or associatedenterpriseNil
(6) Excess loss occurred in joint venture or associated enterprise
Nil
(7) Unconfirmed commitment with joint venture investment concerned
Nil
(8) Intangible liability with joint venture or associated enterprise investment concernedNil
4. Major joint operation
Nil
5. Equity in structured entities not included in the scope of consolidated financial statements
Relevant explanations on structured entities not included in the scope of the consolidated financial statements: Nil
6. Other
NilX. Risk related with financial instrumentsMain financial instruments of the Company include monetary funds, structured deposits, account receivable, equity instrument
investment, financial products, loans, and account payable. For more details of the financial instruments, refer to relevant items ofNote VII. Risks concerned with the above-mentioned financial instruments, and measures taken by the company to prevent such risksare as follow:
The risk management by the company is targeted to balance risk and benefit, minimize the adverse impact on performance of theCompany and maximize the benefits of shareholders and other investors. On such basis, the basic tactics of the risk management is torecognize and analyze risks faced by the company, establish appropriate risk exposure baseline for risk management, and superviserisks timely and reliably in order to control risks in a limited range.During the operation process, risks faced by the company related to financial instruments mainly include credit risk, market risk, andliquidity risk. BOD of the Company takes full charge of defining risk management target and polices, and takes ultimateresponsibilities for the target of risk management and policies. The compliance department and financial control department manageand supervise risk exposures to control risks in a limited range.
1. Credit Risk
Credit risk arises in case one party of a financial instrument fails to perform its obligations, resulting in the financial loss of otherparty. The company’s credit risk mainly comes from monetary funds, structured deposits, note receivable, account receivable andother accounts receivable. The management has established appropriate credit policies and kept monitoring the exposure to thesecredit risks.The monetary funds and structured deposits held by the Company are mainly deposited in financial institutions such as commercialbanks. The management believes that these commercial banks have higher credit and asset status and lower credit risks. TheCompany adopts quota policies to avoid credit risks from any financial institutions.For accounts receivable, other receivables and bills receivable, the Company sets relevant policies to control the credit risk exposure.To prevent risks, the company has formulated a new customer credit evaluation system and an existing customer credit sales balanceanalysis system. For new customers, the company performs background investigation according to the established process todetermine whether to offer such customer a credit line, the scale of credit line as well as credit period. Accordingly, the company hasset a credit limit and a credit period for each customer, which is the maximum amount that does not require additional approval. Forthe analysis system for credit sales balance of existing customers, after receiving a purchase order from an existing customer, thecompany will check the order amount and the balance of the accounts owed by such customer. If the total of the two exceeds thecredit limit of the customer, the company can only sell to the customer on the premise of additional approval of credit line andotherwise the customer will be required to pay the corresponding amount in advance. In addition, for the credit sales that haveoccurred, the company analyzes and audits the monthly statements for risk warning of accounts receivable to ensure that thecompany’s overall credit risk is within a controllable range.The maximum credit risk exposure of the Company is the carrying amount of each financial asset on the balance sheet.
2. Market risk
Market risk of the financial instrument refers to the fair value of financial instrument or future cash flow fluctuates with the changingmarket price, mainly including interest rate risk, foreign exchange risk and other price risk.
(1) Interest rate risk
Interest rate risk indicates that the company’s financial status and cash flow fluctuate with the changing market interest rate. Theinterest rate risk of the Company is mainly related with the bank loans. In order to lower the impact of risks of fluctuating interestrate, the Company, in consideration of the expected change orientation of interest rate, chooses floating rate or fixed rate. Thecompany will choose fixed interest rate if the interest rate is expected to go up in the future period, and alternatively choose floatinginterest rate if the interest rate is expected to go up in the future period. In order to minimize the adverse impact if the change trend ofinterest rate is out of expectation, the company selects short-term borrowings to satisfy its demands for liquidity and there are special
provisions for early repayment.
(2) Foreign exchange risk
Foreign exchange risk refers to the losses arising from fluctuation of exchange rate. The foreign exchange risk posed to the Companyis mainly related to USD, EUR, CHF, JPY, HKD and DKK. The procurement of equipment by the parent company and WFAM, thematerial purchasing of the parent company, the payment of technical service expense and trademark royalty of the parent company,the import and export of WFTR, as well as the operation of IRD, Borit, and VHIO are settled in USD, EUR, CHF, JPY, HKD andDKK. Other main businesses of the Company are priced and settled in RMB (yuan). As the foreign financial assets and liabilitiestakes minor ratio in total assets, the company’s management believes that the foreign exchange rate of is lower.As of June 30, 2023, except for the following assets or liabilities listed with foreign currency, assets and liabilities of the Companyare carried with RMB.
① Details of foreign currency assets of the Company as of June 30, 2022
Item | Ending balance in foreign currency | Conversion exchange rate | Ending balance converted to RMB yuan | Ratio in assets (%) |
Monetary funds | ||||
Including: USD | 20,252,686.24 | 7.22580 | 146,341,845.38 | 0.52 |
EUR | 31,025,258.27 | 7.8771 | 244,389,392.00 | 0.86 |
HKD | 966.00 | 0.92198 | 890.63 | - |
JPY | 7,975,654.00 | 0.050094 | 399,532.41 | - |
DKK | 134,704,837.49 | 1.0581 | 142,531,188.55 | 0.50 |
Account receivable | ||||
Including: USD | 3,492,232.71 | 7.22580 | 25,234,175.12 | 0.09 |
EUR | 32,573,879.77 | 7.8771 | 256,587,708.34 | 0.90 |
JPY | 12,920,875.00 | 0.050094 | 647,258.31 | - |
DKK | 12,157,993.84 | 1.0581 | 12,864,373.28 | 0.05 |
Other accounts receivable | ||||
Including: USD | 100.00 | 7.22580 | 722.58 | - |
EUR | 248,803.02 | 7.8771 | 1,959,846.27 | 0.01 |
DKK | 1,715,115.29 | 1.0581 | 1,814,763.49 | 0.01 |
Total ratio in assets | 2.94 |
②Foreign currency liability of the Company as of the June 30, 2023
Item | Ending balance in foreign currency | Conversion exchange rate | Ending balance converted to RMB yuan | Ratio in liabilities (%) |
Account payable | ||||
Including: USD | 709,559.53 | 7.22580 | 5,127,135.25 | 0.06 |
EUR | 29,753,425.46 | 7.8771 | 234,370,707.71 | 2.59 |
JPY | 24,899,918.00 | 0.050094 | 1,247,336.49 | 0.01 |
CHF | 261,904.94 | 8.0614 | 2,111,320.48 | 0.02 |
DKK | 12,769,122.98 | 1.0581 | 13,511,009.03 | 0.15 |
Other account payable | ||||
Including: USD | 1,087.90 | 7.22580 | 7,860.95 | |
EUR | 3,707.88 | 7.8771 | 29,207.38 | |
DKK | 149,968.60 | 1.0581 | 158,681.78 | |
Non-current liabilities maturing within one year | ||||
Including: USD | 156,513.08 | 7.22580 | 1,130,932.21 | 0.01 |
EUR | 490,296.74 | 7.8771 | 3,862,116.45 | 0.04 |
DKK | 645,753.26 | 1.0581 | 683,271.52 | 0.01 |
Leasing liabilities |
Item
Item | Ending balance in foreign currency | Conversion exchange rate | Ending balance converted to RMB yuan | Ratio in liabilities (%) |
Including USD | 386,008.72 | 7.22580 | 2,789,221.81 | 0.03 |
EUR | 1,042,742.31 | 7.8771 | 8,213,785.45 | 0.09 |
DKK | 11,015,070.07 | 1.0581 | 11,655,045.64 | 0.13 |
Total ratio in liabilities | 3.14 |
③ Other price risk
The equity instrument investments held by the Company with classification as transaction financial asset and other non-currentfinancial assets are measured at fair value on the balance sheet date. The expected price fluctuation of such these investments willaffect the gains/losses of fair value changes of the Company.Furthermore, deliberated and approved in 10
th
meeting of 8
thsession of the BOD, the Company exercise entrust financing with itsown idle capital; therefore, the Company is subject to the risk of failing to collect the principal of entrust financial products due todefault. Aimed at such risk, the Company formulated the “Management Mechanism of Capital Financing”, and well-defined theauthority approval, investment decision-making, calculation management and risk controls for the entrust financing in order to ensurefund security and prevent investment risk efficiently. In order to lower the adverse impact from unpredictable factors, the Companyallocates investments with short term and medium term and the term of investment is up to five years in principle; The companyselects investment products such as bank wealth management products, trust plans of trust company, the asset management plans ofasset management company, as well as products issued by securities companies, fund companies, and insurance companies.
3. Liquidity risk
Liquidity risk refers to the capital shortage risk occurs when enterprise implements obligations settled by delivering cash or otherfinancial assets. The company’s goal is to guarantee rich capital to pay the due debts. Therefore, it establishes the financial controldepartment for centralized risk control. The financial control department keeps monitoring the cash balance, the marketable securitiesready to be converted into cash at any time and the rolling forecast on cash flow in future 12 months, ensuring the Company, oncondition of reasonable prediction, owes rich capital to pay debts; Besides, the financial control department builds favorablerelationship with banks, rationally design the line of credit, credit products and credit terms, guarantee a sufficient line of credit frombanks in order to satisfy short-term financing requirements of the company.XI. 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)Trading financial assets | 150,563,059.41 | 2,469,635,404.87 | 2,620,198,464.28 | |
1. Financial assets measured at fair value and whose changes are included in current profit or loss | 150,563,059.41 | 2,469,635,404.87 | 2,620,198,464.28 | |
(1) Liability instrument investment | 2,469,635,404.87 | 2,469,635,404.87 | ||
(2) Equity instrument investment | 150,563,059.41 | 150,563,059.41 | ||
(II) Other equity instrument investment | 677,790,690.00 | 677,790,690.00 | ||
(III) Receivable financing | 1,920,348,206.04 | 1,920,348,206.04 | ||
(IV) Other non-current financial assets- | 161,342,387.00 | 161,342,387.00 |
equity instrument investment
equity instrument investment | ||||
(V) Other non-current financial assets-other liability instrument and equity instrument investment | 635,000,000.00 | 635,000,000.00 | ||
Total assets sustaining measured by fair value | 150,563,059.41 | 161,342,387.00 | 5,702,774,300.91 | 6,014,679,747.32 |
(I) Financial liabilities measured at fair value through profit or loss | 737,424.50 | 737,424.50 | ||
Derivative financial liabilities - foreign exchange contracts | 737,424.50 | 737,424.50 | ||
Total liabilities sustaining measured at fair value | 737,424.50 | 737,424.50 | ||
II. Non-persistent measured by fair value | -- | -- | -- | -- |
2. Basis for recognizing the market price of items sustaining and non-persistent measured by fair valueon first levelOn June 30, 2023, the financial assets available for sale, equity instrument investments held by the Company include SNAT (stockcode: 600841), Miracle Automation (Stock code: 002009), ifan Technology (Stock Code: 601777) and Zoyte Auto(000980). Thefair value at the end of the period is determined at the closing price as of June 30, 2022.
3. The qualitative and quantitative information for the valuation technique and critical parameter ofitems sustaining and non-persistent measured by fair value on second levelOn June 30, 2023, other non-current financial assets, equity instrument investments held by the Company include GuolianSecurities (stock code: 601456). The fair value at the end of the period is determined at the closing price and liquidity discount asof June 30, 2023.The derivative financial liabilities that continue to be measured at the second level of fair value are forward foreign exchangesettlement and sales contracts, and they are measured at the fair value of the forward foreign exchange settlement and sales contractsprovided by the contracting bank.
4. The qualitative and quantitative information for the valuation technique and critical parameter ofitems sustaining and non-persistent measured by fair value on third level
(1) Accounts receivable financing
The Company uses discounted cash flow valuation techniques to determine the fair value of this part of financial assets. Theimportant unobservable input values mainly include discount rate and contractual cash flow maturity period. The cash flow with acontract expiration period of 12 months (inclusive) shall not be discounted, and the cost shall be regarded as its fair value.
(2) Other equity instrument investment
As such financial assets are poorly circulated in market, the Company adopts replacement cost method to determine their fair value.The important unobservable input values mainly include the financial data of the invested company.
(3) Other liability instrument and equity instrument investment
The company applies discounted cash flow valuation technology to determine such financial assets. The important unobtainable inputvalues mainly include expected annual return rate and risk coefficient.
5. For items sustaining measured by fair value on second level, adjustment information between theopening and closing book value and sensitivity analysis of unobservable parametersNil
6. For items sustaining measured by fair value, describe the reasons for the conversion and the policy fordetermining the timing of the conversion if there is a conversion between levels in the current period
Nil
7. Changes in valuation technology during the current period and reasons for such changes
Nil
8. The fair value of financial assets and financial liabilities not measured by fair valueNil
9. Other
Nil
XII. Related party and related party transactions
1. Parent company of the company
Parent company | Registration place | Business nature | Registered capital | Share-holding ratio on the enterprise for parent company | Voting right ratio on the enterprise |
Wuxi Industry Group | Wuxi | Operation of state-owned assets | 5,496,785,600 | 20.35% | 20.35% |
Explanation on the parent company of the companyWuxi Industry Group is an enterprise controlled by the State-owned Assets Management Committee of Wuxi Municipal People’sGovernment. Its business scope includes foreign investment by using its own assets, house leasing services, self-operating and actingas an agent for the import and export business of various commodities and technologies (Except for goods and technologies that arerestricted 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).The ultimate controller of the Company is the State-owned Assets Supervision & Administration Commission of WuxiMunicipality of Jiangsu Province.Other explanation:
Nil
2. Subsidiary of the Company
For more details of the Company’s subsidiaries, please refer to IX. 1. “Equity in subsidiary”
3. Joint venture and associated enterprise
For more details, please refer to Note IX.3. “Equity in joint arrangement and associated enterprise”
4. Other related party
Other related party | Relationship with the Company |
Robert Bosch Company | The second largest shareholder of the Company |
Wuxi Guokai Metal Resources Co., Ltd.(hereinafter referred to as “Guokai Metals”) | Enterprises controlled by the parent company |
Wuxi Sunan Urban Public Delivery Co., Ltd. (hereinafter referred to as “Urban Public Delivery”) | Enterprises controlled by the parent company |
Company A (temporarily referred to as Company A due to confidentiality requirements of the case as it is still in the stage of investigation by the public security organs) | Enterprises controlled by related parties of the company’s directors/senior management |
Key executive | Director, supervisor and senior executive of the Company |
5. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
In RMB
Related party | Content of related transaction | Amount in current period | Approved transaction limit | Whether more than the transaction limit (Y/N) | Last Period |
WFPM | Goods and labor | 19,815,457.88 | 56,000,000.00 | N | 16,947,881.11 |
RBCD | Goods and labor | 131,039,396.29 | 380,000,000.00 | N | 174,508,017.89 |
WFEC | Goods | 379,816,654.91 | 601,000,000.00 | N | 246,646,895.23 |
Robert Bosch Company | Goods and labor | 111,692,343.27 | 300,000,000.00 | N | 93,906,096.78 |
Changchun Xuyang | Goods | 0.00 | 1,500,000.00 | N | 342,520.00 |
Guolai Metals | Goods | 15,867,033.58 | 0.00 | Y | |
Lezhuo Bowei | Goods | 0.00 | 1,000,000.00 | N |
Goods sold/labor service providing
In RMB
Related party | Content of related transaction | Amount in current period | Amount in last period |
WFPM | Goods and labor | 506,017.52 | 522,692.40 |
RBCD | Goods and labor | 1,090,789,696.99 | 1,633,269,280.49 |
WFEC | Goods and labor | 4,677,697.81 | 158,613.70 |
Robert Bosch Company | Goods and labor | 846,273,667.53 | 724,668,201.55 |
Changchun Xuyang | Goods and labor | 678,183.20 | 181,484.70 |
Lezhuo Bowei | Goods and labor | 222,373.51 |
Explanation on related transactions in the purchase and sale of goods, provision and acceptance of labor services: Nil
(2) Related trusteeship management/contract & entrust management/ outsourcing
Nil
(3) Related lease
The Company is a lessor:
In RMB
Lessee | Assets type | Lease income recognized in the reporting period | Lease income recognized at last period |
WFEC | Workshop | 1,003,317.02 | 1,190,379.04 |
Explanation on related leaseWFLD entered into a house leasing contract with WFEC. WFLD rented its plant located at No.9 Linjiang Road, Xinwu District,Wuxi to WFEC. It is agreed that the rent income in the period from January 1, 2023 to June 30, 2023 is 1,003,317.02 yuan.
(4) Related guarantee
Nil
(5) Borrowing and lending of related party
Nil
(6) Assets transfer and debt reorganization of related party
Nil
(7) Remuneration of key manager
In RMB
Item | Amount in current period | Amount in current period |
Remuneration of key executives | 2,300,000.00 | 4,400,000.00 |
(8) Other related transactions
Related party | Contents of item | Amount in current period | Amount in last period |
WFPM | Purchase fixed assets | 106,000.00 | -- |
RBCD | Pay technical loyalty, etc. | -- | 312,038.48 |
RBCD | Purchase fixed assets | -- | 1,314,941.34 |
Robert Bosch Company | Pay technical loyalty, etc. | -- | 130,459.36 |
Robert Bosch Company | Purchase fixed assets | 1,052,964.60 | 54,716.98 |
Robert Bosch Company | Rent receivable | 110,200.00 | -- |
Robert Bosch Company | Utilities receivable | 393,590.45 | -- |
Robert Bosch Company | Provide technology service,etc | 1,990,910.38 | -- |
WFEC | Utilities payable | 528,099.08 | 614,493.68 |
Lezhuo Bowei | Rent receivable | 1,057,234.32 | -- |
Lezhuo Bowei | Utilities receivable | 304,658.93 | -- |
Urban Public Delivery | Procurement of food ingredients | 709,227.44 | -- |
6. Receivable/payable items of related parties
(1) Receivable item
In RMB
Item | Related party | Ending balance | Opening balance | ||
Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
Account receivable | WFPM | 185,059.90 | 299,389.13 | 10,925.29 | |
Account receivable | RBCD | 511,897,553.12 | 619,942.02 | 461,493,652.46 | 174,766.71 |
Account receivable | Robert Bosch Company | 423,176,007.79 | 754,342.26 | 363,021,724.83 | 882,016.11 |
Other accounts receivable | WFEC | 147,000,000.00 | |||
Other accounts receivable | RBCD | 1,673,605,474.71 | |||
Other accounts receivable | Zhonglian Electronics | 282,000,000.00 | |||
Other non-current assets | Robert Bosch Company | 1,470,000.00 | |||
Other non-current assets | Wuxi Industry Group | 5,452,800.00 | |||
Other non-current assets | RBCD | 0.01 | |||
Account receivable | WFEC | 2,302,063.68 | 514,638.29 | ||
Account receivable | Changchun Xuyang | 771,811.93 | 546.49 | 5,464.91 | |
Account receivable | Lezhuo Bowei | 67,447.62 | |||
Accounts paid in advance | Robert Bosch Company | 5,249,715.46 |
(2) Payable item
In RMB
Item | Related party | Ending book balance | Opening book balance |
Account payable | WFPM | 12,262,621.48 | 17,783,464.23 |
Other account payable | WFPM | 29,000.00 | |
Account payable | WFEC | 308,141,233.56 | 274,115,921.53 |
Account payable | RBCD | 41,762,235.95 | 37,603,958.72 |
Account payable | Robert Bosch Company | 24,349,831.15 | 49,500,046.68 |
Account payable | Guokai Metals | 3.12 | |
Other current liabilities | RBCD | 0.05 | 0.05 |
Other current liabilities | Robert Bosch Company | 18,094.83 | 63,572.08 |
Other current liabilities | WFEC | 76,030.18 | |
Other account payable | Robert Bosch Company | 14,105,360.83 | 13,308,176.65 |
Contract liability | RBCD | 0.36 | 0.36 |
Contract liability | Robert Bosch Company | 139,191.01 | 510,212.12 |
Contract liability | WFEC | 584,847.43 |
(3) Related creditor's rights of “platform trade”
In RMB
Item | Related party | Ending balance | Opening balance |
Other receivables
Other receivables | Company A | 2,358,398,084.78 | 2,415,151,888.80 |
Note: Based on the principle of caution, the Company combines the balance of 4 companies that may be controlled by Company Ainto the following list. The balance is the difference between the "purchase fund" paid by WFTR based on the "platform trade"business and the "sales fund" received by WFTR. In accordance with the principle of substance over form, the company does nottreat the "platform trade" business of WFTR as normal trade business but as fund collection and payment business for accountingtreatment, so it is listed as other receivables.
7. Undertakings of related party
Nil
8. Other
NilXIII. Share-based payment
1. Overall situation of share-based payment
?Applicable □Not applicable
In RMB
Total amount of equity instruments granted by the Company in reporting period | 0.00 |
Total amount of equity instruments exercised by the Company in reporting period | 0.00 |
Total amount of equity instruments invalidated by the company in reporting period | 0.00 |
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 two years and five 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 | Nil |
2. Equity-settled share-based payment
?Applicable □Not applicable
In RMB
Method for determining the fair value of equity instruments on the grant date | Determine the fair value 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 last period | Not Applicable |
Cumulative amount of equity-settled share-based payments included in the capital reserve | 117,512,991.57 |
Total amount of expenses confirmed by equity-settled share-based payments in the current period | 5,522,079.65 |
This restricted stock incentive plan was deliberated and approved by the company’s second extraordinary general meeting ofshareholders in 2020, which is summarized 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 the company and itssubsidiaries.
(4) Grant price: 15.48 yuan/share.
(5) Grant registration completion date: December 4, 2020.
(6) Release the restrictions on sales:
Unlock period | Unlock time | Ratio of unlocked quantity to granted quantity |
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 845 million yuan; 3. The cash dividends for year of 2021 shall be no less than 50% of the profit available for distribution of the 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 892 million yuan; 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 958 million yuan; 3. the cash dividends for year of 2023 shall be no less than 50% of the profit available for distribution of the current year. |
The self-operating profit refers to the net profit attributable to the owners of the parent company after deducting extraordinary gainsand losses, and deducting the investment income from RBCD and Zhonglian Electronics.
3. Cash-settled share-based payment
□ Applicable ?Not applicable
4. Modification and termination of share-based payment
Nil
5. Other
Nil
XIV. Undertakings or contingency
1. Important undertakings
Important undertakings on balance sheet dateNil
2. Contingency
(1) Contingency on balance sheet date
Nil
(2) For the important contingency not necessary to disclosed by the Company, explained reasons
The Company has no important contingency that need to disclosed
3. Other
NilXV. Events after balance sheet date
1. Important non-adjustment matters
Nil
2. Profit distribution
Nil
3. Return of sales
Nil
4. Other events after balance sheet date
NilXVI. Other important events
1. Previous accounting errors correction
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
meeting of 7
thsession of the BOD: inorder to mobilize the initiative and creativity of employees, established a long-term talent incentive mechanism, and enhance thecohesive force and competitiveness, the Company carried out the above mentioned annuity plan since the day when the companyreceives the recording reply from labor security administration department. The annuity plan is as follows: the annuity fund are paidby the company and employees together; the company’s contribution shall not exceed 8% of the gross salary of the employees of thecompany per year, the combined contribution of the enterprise and the individual employee shall not exceed 12% of the total salaryof the employees of the company. The annuity fund will be adjusted in accordance with the State’s annuity policies, the company’seconomic benefits and is adaptable to the economic strength of the company. The company’s contribution at current period shall benot higher than 8% of the total salary of last period, the maximum annual allocation to employees shall not exceed five times theaverage allocation to employees and the excess amount will not be available for allocation. The individual contribution is limited to 1%of the total salary for the previous year. Specific contribution ratio shall be adjusted correspondingly in line with the operationcondition of the Company.In December 2012, the Company received the Reply on annuity plans recording under the name of WFHT from labor securityadministration department, and then the Company entered into the Entrusted Management Contract of the Annuity Plan of WFHTwith PICC.
5. Termination of operation
Not applicable
6. Segment
(1) Recognition basis and accounting policy for reportable segment
The company determines the operating segments in line with the internal organization structure, management requirement andinternal reporting system. Operating segment of the Company refers to the followed components that have been satisfied at the sametime:
① The component is able to generate revenues and expenses in routine activities;
② Management of the Company is able to assess the operation results regularly, and determine resources allocation and performanceevaluation for the component;
③ The company can analyze and acquire the financial status, operation results and cash flow of the components of the component.The Company is mainly engaged in the manufacture of fuel system of internal combustion engine and fuel cell components, autocomponents, muffler and purifier. Based on product segments, the Company determines four reportable segments, automotive fuelinjection system and core parts of hydrogen fuel cell, automotive post-process system, air intake system, as well as muffler andpurifier. As mentioned in item 7 of Note XVI. WFTR launched “platform trade” business in 2022. During the process of carrying outthe “platform trade” business, WFTR was criminally investigated for contract fraud. The company’s management analyzed that itwas highly possible that this business was normal. To accurately present the company’s normal business situation, the “platformtrade” business is listed as a separate segment. The accounting policies for each reporting segment are consistent with those stated inNote V.Segment assets exclude transaction financial asset, other accounts receivable-dividends receivable, other non-current financial assets,other equity instrument investment, long-term equity investment and other undistributed assets, since these assets are not related toproducts operation.
(2) Financial information for reportable segment
In RMB
Item
Item | Automotive fuel injection system and core parts of hydrogen fuel cell segment | Automotive post-processing system product segment | Automotive air intake system segment | Other automotive air intake system segment | “platform trade” business segment | Add: Undistributed assets and gains/losses such as investments or gains accounted for by the equity method, liability instrument and equity instrument investments, or their holding and disposal gains/losses from holding and disposal of such investments | Inter-segment offset | Total |
Operation income | 3,139,771,837.92 | 2,212,439,005.16 | 287,746,815.37 | 610,489,114.75 | 120,797,725.80 | 6,129,649,047.40 | ||
Operation cost | 2,492,982,099.69 | 2,018,142,665.23 | 210,998,525.09 | 534,299,678.23 | 92,551,236.98 | 5,163,871,731.26 | ||
Total profit | 241,151,742.15 | -32,902,142.04 | 25,891,569.09 | -33,592,952.58 | 793,337,080.20 | -17,761,795.07 | 1,011,647,091.89 | |
Net profits | 171,732,485.03 | -15,033,626.51 | 24,210,488.24 | 15,987,031.22 | 785,413,051.36 | -5,382.81 | 982,314,812.15 | |
Total of assets | 10,841,712,214.19 | 4,723,669,537.07 | 943,676,062.47 | 927,165,265.20 | 898,195,042.77 | 11,245,974,877.97 | 1,227,724,334.14 | 28,352,668,665.53 |
Total of liabilities | 4,906,947,638.38 | 3,152,256,841.76 | 475,124,396.75 | 518,501,561.17 | 21,471,975.99 | 9,031,358,462.07 |
(3) If the company has no reportable segments or is unable to disclose the total assets and liabilities ofeach reportable segment, it should state the reasonsNot applicable
(4) Other explanations
Nil
7. Major transaction and events influencing investor’s decision
(1) The public security organ has launched a criminal investigation on the contract fraud in which WFTR was cheated in theprocess of carrying out “platform trade” business (see announcement No. 2023-007 disclosed by the Company on April 13, 2023on CNINFO website and other information disclosure websites). At present, the case is in the investigation stage, and the outcomeis uncertain in the future.
(2) Based on the background of “platform trade” business, transaction chain, sales and purchase contract signing, transactionprocess, and physical circulation, the Company makes a prudent analysis and comprehensive judgment that it is highly probablythat the business is not a normal trade business. In terms of accounting treatment, the Company follows the principle of substanceover form, and does not treat it as a normal trade business, but treating according to the receipt and payment of funds. TheCompany recognizes the purchases actually paid to "the supplier" and sales received from "the customer" as creditor’s rights andliabilities respectively, and lists in other receivables in net amount in the form of “platform trade” business combination in thefinancial statements. In 2022, the outflow amount of the "platform trade" business was 6,345,751,400 yuan, the inflow amount was3,604,252,300 yuan. As of June 30, 2023, the net outflow amount of 2,542,263,400 yuan was listed in other receivables. Anexpected credit loss of 1,644,068,300 yuan has been accrued for this other receivables.
8. Other
NilXVII. Principal notes of financial statements of parent company
1. Account receivable
(1) Classification of account receivable
In RMB
Category | Ending balance | ||||
Book balance | Provision for bad debts | Book value | |||
Amount | Ratio | Amount | Accrual ratio | ||
Account receivable with provision for bad debts accrual on a single basis | 7,510,398.26 | 0.67% | 7,510,398.26 | 100.00% | |
Including: | |||||
Account receivable with provision for bad debts accrual on portfolio | 1,110,640,148.84 | 99.33% | 4,424,184.50 | 0.40% | 1,106,215,964.34 |
Including: | |||||
Receivables from customers | 961,471,851.93 | 85.99% | 4,424,184.50 | 0.46% | 957,047,667.43 |
Receivables from internal related parties | 149,168,296.91 | 13.34% | 149,168,296.91 | ||
Total | 1,118,150,547.10 | 100.00% | 11,934,582.76 | 1.07% | 1,106,215,964.34 |
In RMB
Category | Opening balance | ||||
Book balance | Provision for bad debts | Book value | |||
Amount | Ratio | Amount | Accrual ratio | ||
Account receivable with provision for bad debts accrual on a single basis | 7,705,636.24 | 0.84% | 7,705,636.24 | 100.00% | |
Including: | |||||
Account receivable with provision for bad debts accrual 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 |
Provision for bad debts accrual on single basis: 7,510,398.26 yuan
In RMB
Name | Ending balance | |||
Book balance | Provision for bad debts | Accrual ratio | Accrual causes | |
BD bills | 7,006,453.02 | 7,006,453.02 | 100.00% | Have difficulty in collection |
Tianjin Lovel Engine Co., Ltd. | 503,945.24 | 503,945.24 | 100.00% | Have difficulty in collection |
Total | 7,510,398.26 | 7,510,398.26 |
Provision for bad debts accrual on portfolio: 4,424,184.50 yuan
In RMB
Name
Name | Ending balance | ||
Book balance | Provision for bad debts | Accrual ratio | |
Within 6 months | 942,962,791.80 | ||
6 months to 1 year | 10,647,805.16 | 1,064,780.52 | 10.00% |
1-2 years | 4,685,756.00 | 937,151.20 | 20.00% |
2-3 years | 1,255,410.32 | 502,164.13 | 40.00% |
Over 3 years | 1,920,088.65 | 1,920,088.65 | 100.00% |
Total | 961,471,851.93 | 4,424,184.50 |
Explanation on defining the portfolioIf the provision for bad debts of accounts receivable is withdrawn in accordance with the general model of expected credit losses,please refer to the disclosure of other receivables to disclose related information about provision for bad debts:
□ Applicable ? Not applicable
By account age
In RMB
Account age | Book balance |
Within 1 year (inclusive) | 1,102,778,893.87 |
Including: within 6 months | 1,092,131,088.71 |
6 months to 1 year | 10,647,805.16 |
1-2 years | 4,685,756.00 |
2-3 years | 1,759,355.56 |
Over 3 years | 8,926,541.67 |
3-4 years | 8,926,541.67 |
Total | 1,118,150,547.10 |
(2) Provision for bad debts accrual, collected or reversal
Provision for bad debts accrual in the period:
In RMB
Category | Opening balance | Changes in reporting period | Ending balance | |||
Accrual | Collected or reversal | Written-off | Other | |||
Provision for bad debts | 11,728,844.63 | 1,312,598.71 | 1,106,860.58 | 11,934,582.76 | ||
Total | 11,728,844.63 | 1,312,598.71 | 1,106,860.58 | 0.00 | 0.00 | 11,934,582.76 |
Important provision for bad debts collected or reversal in reporting period
In RMB
Name | Amount collected o reversal | Connection manner |
BD bills | 195,237.98 | Cash |
Total | 195,237.98 |
(3) Account receivable actual charged off in the Period
Nil
(4) Top 5 receivables at ending balance by arrears party
In RMB
Name
Name | Ending balance of account receivable | Ratio in total ending balance of accounts receivable | Ending balance of provision for bad debts |
RBCD | 511,841,053.12 | 45.78% | 614,292.02 |
Client 2 | 116,795,562.99 | 10.45% | 1,091,831.41 |
Robert Bosch Company | 129,512,038.81 | 11.58% | 37,896.99 |
WFTR | 82,306,474.97 | 7.36% | |
WFSC | 45,400,733.55 | 4.06% | |
Total | 885,855,863.44 | 79.23% |
(5) Account receivable derecognition due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvementNil
2. Other accounts receivable
In RMB
Item | Ending balance | Opening balance |
Interest receivable | 32,195,758.91 | 206,325.34 |
Dividend receivable | 1,881,769,939.06 | |
Other accounts receivable | 1,292,727,093.72 | 1,471,896,113.93 |
Total | 3,206,692,791.69 | 1,472,102,439.27 |
(1) Interest receivable
1) Category of interest receivable
In RMB
Item | Ending balance | Opening balance |
Interest receivable of subsidiary | 32,195,758.91 | 206,325.34 |
Total | 32,195,758.91 | 206,325.34 |
2) Significant overdue interest
Nil
3) Accrual of provision for bad debts
□Applicable ?Not applicable
(2) Dividends receivable
1) Category of dividends receivable
In RMB
Item (or invested enterprise) | Ending balance | Opening balance |
Zhonglian Electronics | 282,000,000.00 | |
RBCD | 1,599,769,939.06 | |
Total | 1,881,769,939.06 |
2) Important dividends receivable with account age over one year
Nil
3)Accrual of provision for bad debt
□Applicable ?Not applicable
(3) Other accounts receivable
1)Other accounts receivable classified by nature
In RMB
Nature | Ending book balance | Opening book balance |
Staff loans and petty cash | 909,837.00 | 1,279,080.00 |
Balance of related party in the consolidation scope | 2,928,006,521.72 | 3,106,006,521.72 |
Margin | 3,684,799.33 | 3,738,299.33 |
Social security and provident fund paid | 6,210,020.64 | 6,429,166.22 |
Other | 66,670.13 | 16,781.83 |
Total | 2,938,877,848.82 | 3,117,469,849.10 |
2) Accrual of provision for bad debts
In RMB
Provision for bad debts | 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, 2023 | 1,505,407.24 | 1,644,068,327.93 | 1,645,573,735.17 | |
Balance of Jan. 1, 2023 in the period | ||||
Current accrual | 577,019.93 | 577,019.93 | ||
Balance on June 30, 2023 | 2,082,427.17 | 1,644,068,327.93 | 1,646,150,755.10 |
Change of book balance of loss provision with amount has major changes in the period
□Applicable ?Not applicable
By account age
In RMB
Account age
Account age | Ending balance |
Within 1 year (1 year included) | 2,935,464,096.41 |
Including: within 6 months | 2,934,677,969.49 |
6 months to 1 year | 786,126.92 |
1-2 years | 974,922.41 |
2-3 years | 1,050,000.00 |
Over 3 years | 1,388,830.00 |
3-4 years | 1,388,830.00 |
Total | 2,938,877,848.82 |
3) Provision for bad debts accrual, collected or reversal
Provisions for bad debts accrual in the period:
In RMB
Category | Opening balance | Amount changed in the period | Ending balance | |||
Accrual | Collected or reversal | Written-off | Other | |||
Provision for bad debts | 1,645,573,735.17 | 577,019.93 | 1,646,150,755.10 | |||
Total | 1,645,573,735.17 | 577,019.93 | 1,646,150,755.10 |
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 provision for bad debts |
WFTR | Balance of related party in the consolidate scope | 2,853,260,000.00 | Within 1 year | 97.09% | 1,644,068,327.93 |
WFCA | Balance of related party in the consolidate scope | 54,193,906.00 | Within 6 months | 1.84% | |
WFMA | Balance of related party in the consolidate scope | 20,552,615.72 | Within 6 months | 0.70% | |
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 3 years | 0.03% | 750,000.00 |
Total | 2,929,756,521.72 | 99.69% | 1,645,218,327.93 |
6) Other accounts receivable related to government grants
Nil
7) Other receivables derecognized due to the transfer of financial assets
Nil
8) The amount of assets and liabilities formed by transferring other receivables and continuing to beinvolvedNil
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 in subsidiary | 3,128,448,081.68 | 3,128,448,081.68 | 3,080,762,302.11 | 3,080,762,302.11 | ||
Investment in associated enterprise and joint venture | 4,162,273,276.12 | 4,162,273,276.12 | 5,289,081,048.99 | 5,289,081,048.99 | ||
Total | 7,290,721,357.80 | 7,290,721,357.80 | 8,369,843,351.10 | 8,369,843,351.10 |
(1) Investment in subsidiary
In RMB
Invested entity | Opening balance (book value) | Changes in current period | Ending balance (book value) | Ending balance of depreciation reserves | |||
Additional Investment | Negative Investment | Provision for impairment loss | Other | ||||
WFJN | 188,389,084.34 | 517,726.08 | 188,906,810.42 | ||||
WFLD | 470,853,106.52 | 698,452.44 | 471,551,558.96 | ||||
WFMA | 171,807,584.71 | 238,950.48 | 172,046,535.19 | ||||
WFCA | 223,351,717.03 | 161,291.58 | 223,513,008.61 | ||||
WFTR | 34,067,014.70 | 71,685.24 | 34,138,699.94 | ||||
WFSC | 51,490,044.27 | 21,903.93 | 51,511,948.20 | ||||
WFTT | 239,283,022.00 | 292,714.44 | 239,575,736.44 | ||||
WFAM | 82,454,467.99 | 82,454,467.99 | |||||
WFDT | 54,081,519.52 | 5,973.78 | 54,087,493.30 | ||||
SPV | 1,195,280,223.97 | 45,630,287.05 | 1,240,910,511.02 | ||||
WFLD(Chongqing) | 265,832.07 | 17,921.34 | 283,753.41 | ||||
WFAS | 878,805.00 | 28,873.21 | 907,678.21 | ||||
WFQL | 225,000,000.00 | 225,000,000.00 | |||||
VHWX | 143,559,879.99 | 143,559,879.99 | |||||
Total | 3,080,762,302.11 | 47,685,779.57 | 3,128,448,081.68 |
(2) Investment in associated enterprise and joint venture
In RMB
Enterprise
Enterprise | Opening balance (book value) | Current changes (+/ -) | Ending balance (book value) | Ending balance of depreciation reserves | |||||||
Additional investment | Capital reduction | Investment gain/loss recognized under equity | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Impairment accrual | Other | ||||
I. Joint venture | |||||||||||
II. Associated enterprise | |||||||||||
RBCD | 3,505,746,633.77 | 466,508,821.06 | 1,599,769,939.06 | 2,372,485,515.77 | |||||||
Zhonglian Automobile | 1,559,413,314.05 | 179,345,688.18 | 282,000,000.00 | 1,456,759,002.23 | |||||||
WFPM | 54,775,899.02 | 2,156,824.64 | 56,932,723.66 | ||||||||
Chelian Tianxia | 169,145,202.15 | 430,317.51 | 169,575,519.66 | ||||||||
Lezhuo Bowei | 110,000,000.00 | -3,479,485.20 | 106,520,514.80 | ||||||||
Subtotal | 5,289,081,048.99 | 110,000,000.00 | 644,962,166.19 | 1,881,769,939.06 | 4,162,273,276.12 | ||||||
Total | 5,289,081,048.99 | 110,000,000.00 | 644,962,166.19 | 1,881,769,939.06 | 4,162,273,276.12 |
(3) Other explanations
Nil
4. Operating income and cost
In RMB
Item | Amount in current period | Amount in last period | ||
Income | Cost | Income | Cost | |
Main business | 1,939,140,764.98 | 1,537,898,648.30 | 2,262,029,970.36 | 1,784,089,964.47 |
Other business | 60,842,681.73 | 44,901,531.85 | 149,159,237.68 | 135,896,195.07 |
Total | 1,999,983,446.71 | 1,582,800,180.15 | 2,411,189,208.04 | 1,919,986,159.54 |
5. Investment income
In RMB
Item | Amount in current period | Amount in last period |
Investment income from holding trading financial asset | 66,697,793.52 | 100,780,374.04 |
Investment income in joint ventures and associated enterprises | 644,975,916.19 | 734,429,287.99 |
Total | 711,673,709.71 | 835,209,662.03 |
6. Others
Nil
XVIII. Supplementary information
1. Extraordinary gains and losses in the reporting period
?Applicable □Not applicable
In RMB
Item | Amount | Note |
Gains/losses from the disposal of non-current asset (Including the offsetting portion of the provision for impairment of assets that has been withdrawn) | 124,868,984.10 | WFJN demolition compensation |
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) | 40,157,408.73 | |
Except for effective hedging business related to the normal operation of the company, fair value gains and losses from holding trading financial assets and trading financial liabilities, as well as investment income from disposing of trading financial assets, trading financial liabilities, and available for sale financial assets | -14,788,631.85 | |
Reversal of impairment provision for accounts receivable subject to separate impairment testing | 3,127,091.67 | |
Other non-operating income and expenditure except for the aforementioned items | 3,433,420.03 | |
Less: Impact on income tax | 18,140,350.17 | |
Impact on minority shareholders’ equity | 20,775,314.33 | |
Total | 117,882,608.18 | -- |
Specific information on other items of profits/losses qualified the definition of extraordinary gains and losses
□Applicable ?Not applicable
The Company has no other items of profits/losses qualified the definition of extraordinary gains and lossesInformation on the definition of extraordinary gains and losses that listed in the Q&A Announcement No.1 on InformationDisclosure for Companies Offering Their Securities to the Public --- Extraordinary Gains and Losses as the recurring profit/loss
□Applicable ?Not applicable
2. ROE and earnings per share
Profits during reporting period | Weighted average ROE | Earnings per share | |
Basic earnings per share (RMB/Share) | Diluted earnings per share (RMB/Share) | ||
Net profit attributable to common shareholders of the company | 5.24% | 0.98 | 0.98 |
Net profit attributable to common shareholders of the company after deducting nonrecurring gains and losses | 4.59% | 0.85 | 0.85 |
3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable ? Not applicable
(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable ? Not applicable
(3) Explanation on data differences under the accounting standards in and out of China; as for thedifferences adjustment audited by foreign auditing institute, listed name of the instituteNil
4. Other
Nil