Weifu High-Technology Group Co., Ltd.
Semi-Annual Report 2019
August 2019
Section I. Important Notice, Contents and ParaphraseBoard of Directors, Supervisory Committee, all directors, supervisors and seniorexecutives of Weifu High-Technology Group Co., Ltd. (hereinafter referred to asthe Company) hereby confirm that there are no any fictitious statements,misleading statements, or important omissions carried in this report, and shalltake all responsibilities, individual and/or joint, for the reality, accuracy andcompletion of the whole contents.
Chen Xuejun, Principal of the Company, Ou Jianbin, person in charger ofaccounting works and Ou Jianbin, person in charge of accounting organ(accounting principal) hereby confirm that the Financial Report of 2019Semi-Annual Report is authentic, accurate and complete.
All directors are attended the Board Meeting for report deliberation.
In this report, details of relevant risks and countermeasures in operation havedescribed, found more in relevant content in the Report. Concerning theforward-looking statements with future planning involved in the Report, they donot constitute a substantial commitment for investors. The China SecuritiesJournal, Securities Times, Hong Kong Commercial Daily and Juchao Website（www.cninfo.com.cn）are the information disclosure media appointed by theCompany, all information should be prevail on the above mentioned media,investors are advice to pay attention on investment risks.
The Company has no plan of cash dividend distributed, no cash bonus andcapitalizing of common reserves either carried out.
Contents
Section I Important Notice, Contents and Paraphrase ...... 2
Section II Company Profile and Main Financial Indexes ...... 5
Section III Summary of Company Business ...... 8
Section IV Discussion and Analysis of Operation ...... 11
Section V Important Events ...... 19
Section VI Changes in shares and particular about shareholders ...... 30Section VII Preferred Stock……………………………………………………………………….34Section VIII Particulars about Directors, Supervisors and Senior Executives…. ..................... 35
Section IX Corporate Bonds ...... 36
Section X Financial Report ...... 37
Section XI Documents Available for Reference ...... 185
Paraphrase
| Items | Refers to | Contents |
| Company, The Company, Weifu High-technology | Refers to | Weifu High-Technology Group Co., Ltd. |
| Weifu Group | Refers to | Wuxi Weifu Group Co., Ltd. |
| Industry Group | Refers to | Wuxi Industry Development Group Co., Ltd. |
| Robert Bosch, Robert Bosch Company | Refers to | Robert Bosch Co., Ltd, ROBERT BOSCH GMBH |
| Bosch Automobile Diesel, Bosch Diesel System | Refers to | Bosch Automobile Diesel System Co., Ltd. |
| Weifu Leader | Refers to | Wuxi Weifu Leader Catalytic Converter Co., Ltd. |
| Weifu Jinning | Refers to | Nanjing Nanjing Weifu Jinning Co., Ltd. Co., Ltd. |
| Weifu Environment | Refers to | Wuxi Weifu Environment Catalyst Co., Ltd. |
| Weifu Precision Machinery | Refers to | Weifu Precision Machinery Manufacturing Co., Ltd. |
| SPV | Refers to | Weifu Holding Aps |
| IRD | Refers to | IRD Fuel Cells A/S |
| Zhonglian Electronic | Refers to | Zhonglian Automobile Electronic Co., Ltd. |
| CSRC | Refers to | China Securities Regulatory Commission |
| SZ Stock Exchange | Refers to | Shenzhen Stock Exchange |
| Reporting period | Refers to | 1 January 2019 to 30 June 2019 |
Section II. Company Profile and Main Financial IndexesI. Company information
| Short form of the stock | Weifu High- Tech, Su Weifu-B | Stock code | 000581, 200581 |
| Stock exchange for listing | Shenzhen Stock Exchange | ||
| Chinese name of the Company | 无锡威孚高科技集团股份有限公司 | ||
| Short form of the Company in Chinese (if applicable) | 威孚高科 | ||
| Foreign name of the Company (if applicable) | WEIFU HIGH-TECHNOLOGY GROUP CO.,LTD. | ||
| Short form of foreign name of the Company (if applicable) | WFHT | ||
| Legal representative | Chen Xuejun | ||
II. Person/Way to contact
| Secretary of the Board | Rep. of security affairs | |
| Name | Zhou Weixing | Yan Guohong |
| Contact add. | No.5, Huashan Road, Xin Wu District, Wuxi City | No.5, Huashan Road, Xin Wu District, Wuxi City |
| Tel. | 0510-80505999 | 0510-80505999 |
| Fax. | 0510-80505199 | 0510-80505199 |
| wfjt@public1.wx.js.cn | wfjt@public1.wx.js.cn |
III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period ornot
□ Applicable √ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,found more details in Annual Report 2018.
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable √ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparationplace for semi-annual report have no change in reporting period, found more details in Annual Report 2018.IV. Main accounting data and financial indexesWhether it has retroactive adjustment or re-statement on previous accounting data
□ Yes √ No
| Current period | Same period of last year | Changes over last year | |
| Operating income (RMB) | 4,403,444,346.05 | 4,960,801,890.99 | -11.24% |
| Net profit attributable to shareholders of the listed company (RMB) | 1,256,661,577.09 | 1,545,242,704.92 | -18.68% |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB) | 1,114,094,824.74 | 1,378,865,501.57 | -19.20% |
| Net cash flow arising from operating activities (RMB) | 690,323,908.25 | 378,923,690.48 | 82.18% |
| Basic earnings per share (RMB/Share) | 1.25 | 1.53 | -18.30% |
| Diluted earnings per share (RMB/Share) | 1.25 | 1.53 | -18.30% |
| Weighted average ROE | 7.60% | 9.92% | -2.32% |
| Period-end | Period-end of last year | Changes over period-end of last year | |
| Total assets (RMB) | 22,334,489,303.82 | 20,892,041,460.30 | 6.90% |
| Net assets attributable to shareholder of listed company (RMB) | 15,997,076,128.08 | 15,913,828,778.82 | 0.52% |
V. 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
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (InternationalAccounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
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
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules orChinese GAAP (Generally Accepted Accounting Principles) in the period.
VI. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
| Item | Amount | Note |
| Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | 4,927,677.70 | |
| Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are closely relevant to enterprise’s business) | 44,179,326.95 | Including the house land expropriation and disposal incentives of Weifu Jingning |
| Profit and loss of assets delegation on others’ investment or management | 95,464,240.84 | |
| Held transaction financial asset, gains/losses of changes of fair values from transaction financial liabilities, and investment gains from disposal of transaction financial asset, transaction financial liabilities and financial asset available for sales, exclude the effective hedging business relevant with normal operations of the Company | 30,686,277.13 | |
| Switch back of provision for depreciation of account receivable which was singly taken depreciation test | 200,000.00 | |
| Other non-operating income and expenditure except for the aforementioned items | 838,232.57 | |
| Less: Impact on income tax | 26,626,210.20 | |
| Impact on minority shareholders’ equity (post-tax) | 7,102,792.64 | |
| Total | 142,566,752.35 | -- |
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists ofextraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities tothe Public --- Extraordinary Profit/loss
Section III. Summary of Company Business
I. Main businesses of the company in the reporting period
1. The Company belongs to auto parts industry, and its main business products include diesel fuel injection systemproducts, exhaust after-treatment system products and air management system products.
2. Main uses of the Company's products
(1) The diesel fuel injection system products are widely used in different power diesel engines supporting all typesof trucks, passenger cars, buses, construction machinery, marine, and generator sets. The company not only makesproducts matching with the main engines used at home but also exports some products to the Americas, SoutheastAsia, and the Middle East. The products meet the needs of national emission standards.
(2) The auto exhaust after-treatment system products: mainly support the major manufacturers of automobile,motorcycle and general machinery at home which meet the national emission standards.
(3) The intake system products (supercharger): matches with most of the domestic small-bore diesel engine plantsand some six-cylinder diesel engine manufacturers, and meet the needs of the light and heavy commercialvehicles and some passenger cars, and meets the national emission standards.
3. Business model of the Company
The Company follows the operating philosophy of making competitive products, creating famous brands, strivingfor first choices, and creating value for the users, implements the business model that parent company unifies themanagement and subsidiaries decentralize the production. Namely, the group company is responsible for makingstrategic development planning and operation targets, and making the unified management, instruction andassessment for the finance, significant personnel management, core raw materials, quality control, and technologyof the subsidiaries. The subsidiaries arrange production based on the order management model of market, whichmakes the subsidiaries keep the consistent quality with the company, helps keep abreast of customer needs andsaving logistics costs, maintain the timeliness of products production and supply, and improve the company’seconomic benefits.
During the reporting period, the Company’s main business and business model have no significant changes.II. Major changes in main assets
1. Major changes in main assets
| Major assets | Note of major changes |
| Equity assets | No major change |
| Fixed assets | No major change |
| Intangible assets | No major change |
| Construction in progress | The increase of investment in equipment for technology reformation |
2. Main overseas assets
√Applicable □ Not applicable
| Specific content of the asset | Cause of formation | Asset size | Location | Operation model | Control measures to guarantee asset security | Income status | The proportion of overseas assets to the company’s net assets | Whether there are significant risks of impairment? |
| The Company established SPV (a wholly-owned subsidiary) in Denmark to acquire a 66% stake in Danish IRD Fuel Cells A/S (hereinafter referred to as “IRD”) with 7.26 million euros (IRD's valuation of 11 million euros). | In order to accelerate the cultivation of the company's new business growth point and accelerate the transformation and upgrading of the company, the 4th meeting of the Ninth Board of Directors reviewed and approved the “Proposal on the Company's Foreign Investment”. The company established SPV (a wholly-owned subsidiary) in Denmark to acquire a 66% stake in the Danish IRD with 7.26 million euros | The company invested �7.26 million and gained control of IRD Fuel Cells A/S. | Denmark | Holding subsidiary | The Company will pay full attention to changes in the industry and the market, give play to its own advantages, and actively prevent and resolve various risks. | N/A | 0.57% | No |
III. Core Competitiveness Analysis
The Company is a high technology enterprise with a number of patented technologies. For years, based on thescientific research as National Enterprise Technical Center, Post-doctor Scientific Research Station, Jiangsu
Provincial Engineering and Technology Research Center and Industrialization Base of National Hi-Tech Researchand Development Achievement, we have become the backbone enterprise of the core parts of domesticautomobile (power engineering) after 60 years of cultivation. 80% of the current core business of auto parts arematching with electronic control system and with electronic control realized, which owes a leading position inself-owned brand.
The company lays emphasis on the manufacturing quality management, relies on WPS (Weifu production system)and manufacturing information platform with Weifu characteristics to continuously improve the productionsystem structure, personnel organization, operation mode and market supply and demand relationship, andcontinues to carry out the process quality indicator quantitative management and process management, andimprove production efficiency, product quality and product delivery capabilities, and the company’smanufacturing quality control capabilities are further improved.
The company pays attention to the business operation quality of and lays emphasis on the resource integration. Atpresent, the company has established a high-speed, stable and reliable network environment and an efficient datacenter, successfully built the ERP platform, opened up the value chain, and realized the integration of financialservices, which made the information resources fully shared, and the company’s comprehensive operationalmanagement level has been further improved.
The company pays attention to the construction of core talent system. At present, it has built a relatively completehuman resource management platform to strive to build a high-quality core talent team, which provides a stronghuman resource guarantee for the long-term development of the company.
Core competitiveness of the Company has no major changes in the Period.
Section IV. Discussion and Analysis of Operation
I. OverviewIn the first half of 2019, the auto market was generally running at a low level, with a double-digit decline in thefirst half of the year. In the face of severe market conditions, the company faced difficulties and strived to seizemarket opportunities, took advantage of the trend, strengthened internal management, paid attention to riskmanagement and control, and strive to ensure the stability of the company's overall economic operation. Duringthe period, the Company achieved an operation revenue of 4.4 billion Yuan with a y-o-y decrease of 11.24%;profit amounted to 1.356 billion Yuan, a decrease of 19.3% from a year earlier; the net profit attributable toowners of parent company amounted as 1.257 billion Yuan, a decrease of 18.68% over same period of last year.Main work in the first half of the year
1. Figure out the situation, face difficulties, seek opportunities, strive to open up markets, focus on production anddelivery, strive to maintain market share of key products, and ensure the continuous stability of related productmarkets. In the first half of the year, the production and sales volume of common rail pumps exceeded 900,000units;
2. Focus on management quality, make full use of interconnection technologies, strengthen data interconnection andinteroperability, and further enhance the abilities of data collection, analysis and prediction. Continuously improvemanufacturing process management, strengthen flexible and agile production, and realize intelligent deploymentcapability of manufacturing process; continuously promote internal management of the company, sort outmanagement duties, upgrade and optimize standardization of system processes, and optimize organization;strengthen the group information system security construction, continuously promote the construction of businessproject information management platform, and promote the financial sharing center construction, the procurementsharing platform project construction and the human resources management system platform construction.Constantly enhance the foundation of the company's development.
3. In order to accelerate the cultivation of the company's new business growth point and accelerate thetransformation and upgrading of the company, the company established SPV (a wholly-owned subsidiary) inDenmark to acquire a 66% stake in Danish IRD Fuel Cells A/S held by FCCT ApS, equivalent to 7.26 millioneuros. By acquiring the equity of IRD, the company achieved the control of IRD, which is conducive to enhancingthe company's competitiveness in the new energy business market and in line with the company's developmentstrategy, and lays a good foundation for the company's sustainable, rapid and healthy development andtransformation and upgrading.II. Main business analysisSee the “I-Introduction” in “Discussion and Analysis of the Operation”
Change of main financial data on a y-o-y basis
In RMB
| Current period | Same period of last year | y-o-y changes (+,-) | Reasons | |
| Operation income | 4,403,444,346.05 | 4,960,801,890.99 | -11.24% | |
| Operation cost | 3,405,386,504.44 | 3,889,590,289.69 | -12.45% | |
| Sales expenses | 104,270,647.40 | 106,347,559.85 | -1.95% | |
| Administrative expenses | 310,909,980.43 | 236,539,410.63 | 31.44% | Salary and wage expenses have increased over that of last year |
| Financial cost | -29,492,795.58 | -1,776,908.37 | ||
| Income tax expense | 81,382,654.54 | 102,927,297.96 | -20.93% | |
| R&D investment | 180,167,642.16 | 177,443,968.15 | 1.53% | |
| Net cash flow arising from operation activities | 690,323,908.25 | 378,923,690.48 | 82.18% | Cash paid by purchasing goods and accepting labor service declined |
| Net cash flow arising from investment activities | 314,744,349.46 | -592,455,421.53 | Cash paid for investment declined | |
| Net cash flow arising from financing activities | -813,830,454.63 | 106,793,020.26 | -862.06% | Dividend distribution |
| Net increase of cash and cash equivalent | 191,652,992.77 | -105,928,538.96 |
Major changes on profit composition or profit resources in reporting period
□ Applicable √ Not applicable
No major changes on profit composition or profit resources occurred in reporting periodConstitution of main business
In RMB
| Operating revenue | Operating cost | Gross profit ratio | Increase or decrease of operating revenue over same period of last year | Increase or decrease of operating cost over same period of last year | Increase or decrease of gross profit ratio over same period of last year | |
| According to industries | ||||||
| Auto parts | 4,133,178,892.36 | 3,179,484,258.13 | 23.07% | -12.54% | -13.65% | 4.46% |
| According to products | ||||||
| Auto fuel injection system | 2,538,597,772.47 | 1,806,427,276.08 | 28.84% | -11.70% | -12.70% | 2.90% |
| Post-processing system | 1,354,791,563.22 | 1,192,914,112.31 | 11.95% | -15.80% | -17.12% | 13.36% |
| Induction system | 239,789,556.67 | 180,142,869.74 | 24.87% | -0.84% | 3.89% | -12.10% |
| According to region | ||||||
| Domestic | 3,966,974,100.14 | 3,023,685,102.13 | 23.78% | -12.60% | -13.57% | 3.75% |
| Overseas | 166,204,792.22 | 155,799,156.00 | 6.26% | -11.17% | -15.06% | 217.80% |
III. Analysis of non-main business
√Applicable □Not applicable
In RMB
| Amount | Ratio in total profit | Note | Whether be sustainable | |
| Investment income | 888,216,680.48 | 65.48% | Income mainly from the two joint ventures the Company (Bosch Automobile Diesel and Zhonglian Electronic) | Yes (The Company’s joint ventures Bosch Automobile Diesel and Zhonglian Electronics’ joint venture- Lianhe Electronic have stable production and operation both on a sustained basis) |
| Gain/loss of fair value changes | 30,686,277.13 | 2.26% | Income from the change of shares of SDEC and Miracle Automation that held by the Company | No |
| Asset impairment | -1,500,885.27 | -0.11% | No | |
| Non-operating income | 27,544,757.26 | 2.03% | No | |
| Non-operating expense | 2,631,453.02 | 0.19% | No |
IV. Assets and liability
1. Major changes of assets composition
In RMB
| Period-end | Period-end of last year | Ratio changes | Notes of major changes | |||
| Amount | Ratio in total assets | Amount | Ratio in total assets | |||
| Monetary fund | 2,689,698,577.33 | 12.04% | 3,042,709,775.25 | 13.88% | -1.84% | |
| Account receivable | 2,319,307,654.58 | 10.38% | 2,374,955,337.33 | 10.83% | -0.45% | |
| Inventory | 1,427,136,271.99 | 6.39% | 1,241,695,545.38 | 5.66% | 0.73% | |
| Investment property | 21,131,775.19 | 0.09% | 22,761,528.91 | 0.10% | -0.01% | |
| Long-term equity investment | 4,792,747,311.47 | 21.46% | 4,261,256,191.08 | 19.44% | 2.02% | |
| Fix assets | 2,680,884,221.89 | 12.00% | 2,625,557,400.23 | 11.98% | 0.02% | |
| Construction in process | 259,557,105.61 | 1.16% | 195,609,102.08 | 0.89% | 0.27% | Investment of equipment for technology capacity expansion |
| Short-term loans | 321,055,399.28 | 1.44% | 359,000,000.00 | 1.64% | -0.20% | |
| Long-term loans | 22,500,000.00 | 0.10% | 45,000,000.00 | 0.21% | -0.11% | Loans of subsidiary decreased |
2. Assets and liability measured by fair value
√Applicable □Not applicable
In RMB
| Items | Amount at the beginning period | Changes of fair value gains/losses in this period | Accumulative changes of fair value reckoned into equity | Devaluation of withdrawing in the period | Amount of purchase in the period | Amount of sale in the period | Amount at period-end |
| Financial assets | |||||||
| 1. Transactional financial assets (excluding derivative financial assets) | 121,066,008.00 | 30,195,948.00 | 151,261,956.00 | ||||
| Subtotal of financial assets | 121,066,008.00 | 30,195,948.00 | 151,261,956.00 | ||||
| Above total | 121,066,008.00 | 30,195,948.00 | 151,261,956.00 | ||||
| Financial liabilities | 490,329.13 | 490,329.13 | 0.00 | ||||
Whether there have major changes on measurement attributes for main assets of the Company in report period or not
□ Yes √No
3. The assets rights restricted till end of the period
| Item | Book value at period-end | Restriction reasons |
| Monetary fund | 158,280.00 | Margin paid for the issuance of letter of guarantee |
| Monetary fund | 52,783,679.85 | Cash deposit for bank acceptance |
| Monetary fund | 38,774,365.26 | Selling equity of Protean Holdings Corp. |
| Monetary fund | 1,655,119.95 | Court freeze |
| Notes receivable | 762,571,527.45 | Notes pledge for bank acceptance |
| Transactional financial assets | 141,199,062.12 | In accordance with the civil ruling No. (2016) Y03MC2490 and No.(2016) Y03MC2492 of Guangdong Shenzhen Intermediate People's Court（hereinafter referred to as " Shenzhen Intermediate Court"）, the property with the value of 217 million Yuan under the name of the Company and other seven respondents and the third party Shenzhen Hejun Chuangye Holdings Co., Ltd. （hereinafter referred to as " Hejun Company"） was frozen. As of the end of the reporting period, 4.71 million shares of Miracle Logistics and 11,739,102 shares of SDEC held by the Company were frozen |
| Total | 997,142,034.63 | -- |
V. Investment
1. Overall situation
□ Applicable √ Not applicable
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
√Applicable □Not applicable
| Variety of securities | Code of securities | Short form of securities | Initial investment cost | Accounting measurement model | Book value at the beginning of the period | Changes in fair value of the current profit and loss | Cumulative fair value changes in equity | Current purchase amount | Current sales amount | Profit and loss in the Reporting Period | Book value at the end of the period | Accounting subject | Capital Source |
| Domestic and foreign stocks | 600841 | SDEC | 199,208,000.00 | Measured by fair value | 85,458,408.00 | 19,221,648.00 | 19,221,648.00 | 104,680,056.00 | Transactional financial assets | Own funds | |||
| Domestic and foreign stocks | 002009 | Miracle Automation | 69,331,500.00 | Measured by fair value | 35,607,600.00 | 10,974,300.00 | 10,974,300.00 | 46,581,900.00 | Transactional financial assets | Own funds |
| Total | 268,539,500.00 | -- | 121,066,008.00 | 30,195,948.00 | 0.00 | 0.00 | 0.00 | 30,195,948.00 | 151,261,956.00 | -- | -- |
| Disclosure date of securities investment approval of the Board | 2012-03-24 | ||||||||||
| 2013-06-04 | |||||||||||
(2) Derivative investment
□ Applicable √ Not applicable
The Company has no derivatives investment in the PeriodVI. Significant asset and equity sales
1. Significant asset sales
□ Applicable √ Not applicable
No significant assets being sold in the Period
2. Significant equity sales
□ Applicable √ Not applicable
VII. Analysis of the main stock-jointly and controlling subsidiary
√ Applicable □ Not applicable
Main subsidiary and stock-jointly enterprise with over 10% influence on net profit of the Company
In RMB
| Company name | Type | Main business | Register capital | Total assets | Net Assets | Operating revenue | Operating profit | Net profit |
| Weifu Leader | Subsidiary | Post processing system products | 502,596,300.00 | 3,861,458,694.93 | 1,662,618,884.15 | 1,338,975,875.93 | 38,801,279.23 | 32,780,686.77 |
| Weifu Jinning | Subsidiary | Fuel injection system | 346,286,825.80 | 1,396,248,740.28 | 1,049,513,354.38 | 328,481,669.39 | 48,557,515.93 | 75,516,399.57 |
| Bosch Automobile Diesel | Joint-stock company | Fuel injection system | USD241,000,000.00 | 13,175,089,849.44 | 7,999,369,712.26 | 7,690,808,970.61 | 2,084,188,035.10 | 1,827,071,096.33 |
| Zhong | Joint-s | Gasoline | 600,620,0 | 6,167,579,853.07 | 5,637,005,486.65 | 11,298,817.88 | 739,595,992.63 | 737,662,037.83 |
| lian Electronic | tock company | system | 00.00 |
Subsidiary obtained and disposed in the Period
√ Applicable □ Not applicable
| Company Name | The method of obtaining and handling subsidiaries during the report period | The influence to the whole production and performance |
| SPV | Establishment | No change |
| IRD Fuel Cells A/S | Acquisition | No change |
Explanation on holding equity participation enterpriseIn the first half of this year, the auto market was generally running at a low level with a double-digit decline. The main business incomeand profit of the company, its holding subsidiaries and its shareholding subsidiaries were affected to varying degrees.VIII. The structured subject controlled by the Company
□ Applicable √ Not applicable
IX. Prediction of business performance from January – September 2019Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or thewarning of its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable √ Not applicable
X. Risks and countermeasures
(1) Macro economy and market risks
The macro-economy and market environment are still complex and severe, and many factors such as theautomobile industry cycle and the automobile industry policy remain uncertain. The company will change itsdeterministic model thinking to cope with future uncertainties, rely on existing businesses, actively expand newfields, consolidate the existing business market position, and position in new business potential markets, and striveto improve the company's core competitiveness and overall risk resistance.
(2) The risks of operation management and control
With the rapid growth of the Company's assets and the continuous expansion of business scope, but there are stillpotential risks of operation management and control because of the large span and multiple links in personnel,business, finance, and capital management. The company will continue to promote the optimization andimprovement of internal management, focus on strengthening compliance management, further improve thesystems and processes, promote the institutionalization and standardization of company management, and controloperational risks.
(3) The risks of fluctuations in raw material prices
The company's main raw materials include various grades of steel, aluminum, precious metals, etc., the continuousrise in prices will bring the risks of rising costs to the company. The company will pay close attention to the pricetrend of major raw materials, choose appropriate procurement opportunities, and make reasonable strategicreserves to resolve the risk of raw material price fluctuations.
(4) Risks associated with financial instruments
The major financial tools of the company includes equity investments, loans, account receivables & payables, etc..The basic strategy of company risk management is to confirm and analyze various potential risks that may occur,strictly control the risks, so as to narrow the negative impact down to the minimum and make the shareholders’ andother investors’ interests to the maximum.
Section V. Important Events
I. AGM and extraordinary general meeting
1. AGM held in the period
| Meeting | Type | Participation ratio for investors | Holding date | Disclosure date | Index |
| Annual General Meeting of 2018 | AGM | 44.56% | 2019-05-28 | 2019-05-29 | Notice No.: 2019-015 released on Juchao Website (www.cninfo.com.cn) |
2. Request for extraordinary general meeting by preferred stockholders with rights to vote
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves in the period
□ Applicable √ Not applicable
There are no cash dividend, bonus and capitalizing of common reserves carried out in the semi-annual
III. Commitments that actual controller, shareholder, related parties, buyer and committedparty as the Company etc. have fulfilled during the reporting period and have not yet fulfilledby the end of reporting period
□ Applicable √ Not applicable
There are no commitments that the actual controller, shareholder, related parties, buyer and committed party as the Company etc.have fulfilled during the reporting period and have not yet fulfilled by the end of reporting periodIV. Appointment and non-reappointment (dismissal) of CPA
Whether the semi-annual financial report had been audited
□Yes √ No
The semi-annual report was not auditedV. Explanation on “Qualified Opinion” from CPA by the Board and Supervisory Committee
□ Applicable √ Not applicable
VI. Explanation from the Board for “Qualified Opinion” of last year’s
□ Applicable √ Not applicable
VII. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization in Period.VIII. LawsuitsMaterial lawsuits and arbitration
□ Applicable √ Not applicable
No material lawsuits and arbitration in the reportingOther lawsuits
√Applicable □ Not applicable
| Basic Situation of Litigation (Arbitration) | Amount Related to the Case (10 thousand Yuan) | Whether Formed Accrued Liabilities | Progress of Litigation (Arbitration) | Trial Results and Effects of Litigation (Arbitration) | Judgment Implementation of Litigation (Arbitration) | Disclosure Date | Disclosure Index |
| On March 6, 2017, the company received the civil ruling No.(2016)Y03MC2490 and No.(2016) Y03MC2492 from Shenzhen Intermediate People's Court about the dispute case that the plaintiff applicant China Cinda Asset Management Co., Ltd. Shenzhen Branch (hereinafter referred to as “Cinda Company”) appealed the respondent Weifu High Technology | 21,703 | N | By the Company’s application for reconsideration, Shenzhen Intermediate People's Court deemed the total assets that Cinda Company applied for preservation to be RMB 217,027,697.23. The total value of 15.3 million shares of SDEC Stock and 4.71 million shares of Miracle Automation held by the Company has exceeded the total assets that Cinda Company applied for preservation, therefore, 3,560,898 shares of SDEC Stock held by the Company was unfrozen. Up to the end | This litigation will not affect the company’s daily operating activities for the time being | Not yet implemented | 2017-03-08 | (Announcement No.: 2017-002) published on www.cninfo.com.cn |
| and other seven respondents and the shareholders of the third party Hejun Company damaged the interests of corporate creditors, which adopted the mandatory measures to freeze the assets with value of RMB 217 million under the name of the Company and other seven respondents and Hejun Company. Freeze 4.71 million shares of Miracle Automation and 15.3 million shares of SDEC Stock held by the company. | of the reporting period, the Company’s frozen assets were as follows: 4.71 million shares of Miracles Logistics held by the Company and its fruits, and 11,739,102 shares of SDEC Stock held by the company and its fruits. At present, this litigation is in the first instance (First trail on 24 September 2017 and follow-up session will held until further notice) | ||||||
| The Company applied to the Futian Court for compulsory liquidation of Hejun Company. | 3,300 | N | The Company has applied to the Futian Court for compulsory liquidation of Hejun Company. Futian Court has made a civil ruling ((2017) Yue 0304 QS No. 5) which ruled to execute compulsory liquidation to Hejun Company. The Company will actively cooperate with the court to do the relevant liquidation work and safeguard the legitimate rights and interests of the Company. | This event will not affect the Company’s daily operating activities | Relevant works still in process | 2017-12-06 | (Announcement No.: 2017-023) published on www.cninfo.com.cn |
IX. Penalty and rectification
□ Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.X. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XI. Implementation of the company’s stock incentive plan, employee stock ownership plan orother employee incentives
√ Applicable □ Not applicable
On 20 June 2014, the Company held the 2013 AGM which deliberated "the Company’s incentive fundimplementation methods", the Company has implemented the medium and long term special incentive allocationfor core talents during the reporting periodXII. Major related transaction
1. Related transaction with routine operation concerned
√ Applicable □ Not applicable
| Related party | Relationship | Type of related transaction | Content of related transaction | Pricing principle | Related transaction price | Related transaction amount (in 10 thousand Yuan) | Proportion in similar transactions (%) | Trading limit approved (in 10 thousand Yuan) | Whether over the approved limited or not (Y/N) | Clearing form for related transaction | Available similar market price | Date of disclosure | Index of disclosure |
| Weifu Precision Machinery | Associated company | Procurement | Goods | Based on fair value of the market price | Market price | 1,282.81 | 0.44% | 4,000 | N | Based on the contract terms | Market price | 2019-04-23 | Notice No.:2019-009 |
| Bosch Diesel System | Associated company, Controlling subsidiary of German Bosch Company | Procurement | Goods | Based on fair value of the market price | Market price | 833.27 | 0.29% | 6,000 | N | Based on the contract terms | Market price | 2019-04-23 | Notice No.:2019-009 |
| Weifu Environment | Joint venture of Weifu Leader | Procurement | Goods | Based on fair value of the market price | Market price | 67,565.73 | 23.20% | 200,000 | N | Based on the contract terms | Market price | 2019-04-23 | Notice No.:2019-009 |
| Robert Bosch Compan | Second largest shareholder | Procurement | Goods | Based on fair value | Market price | 6,680.14 | 2.29% | 13,000 | N | Based on the contract | Market price | 2019-04-23 | Notice No.:2019-009 |
| y | of the Company | of the market price | terms | ||||||||||
| Weifu Precision Machinery | Associated company | Sales | Goods and labors | Based on fair value of the market price | Market price | 66.19 | 0.02% | 300 | N | Based on the contract terms | Market price | 2019-04-23 | Notice No.:2019-009 |
| Bosch Diesel System | Associated company、Controlling subsidiary of German Bosch Company | Sales | Goods and labors | Based on fair value of the market price | Market price | 148,782.26 | 33.79% | 260,000 | N | Based on the contract terms | Market price | 2019-04-23 | Notice No.:2019-009 |
| Weifu Environment | Joint venture of Weifu Leader | Sales | Goods and labors | Based on fair value of the market price | Market price | 1,023.14 | 0.23% | 5,000 | N | Based on the contract terms | Market price | 2019-04-23 | Notice No.:2019-009 |
| Robert Bosch Company | Second largest shareholder of the Company | Sales | Goods and labors | Based on fair value of the market price | Market price | 30,979.1 | 7.04% | 90,000 | N | Based on the contract terms | Market price | 2019-04-23 | Notice No.:2019-009 |
| Bosch Diesel System | Associated company、Controlling subsidiary of German Bosch Company | Other | Payment of technical royalties, etc. | Based on fair value of the market price | Market price | 100.27 | 100 | N | Based on the contract terms | Market price | 2019-04-23 | Notice No.:2019-009 | |
| Robert Bosch | Second largest shareholder of the Company | Other | Payment of technical royalties, etc. | Based on fair value of the market price | Market price | 112.23 | 300 | N | Based on the contract terms | Market price | 2019-04-23 | Notice No.:2019-009 |
| Weifu Environment | Joint venture of Weifu Leader | Other | Rent receivable | Based on fair value of the market price | Market price | 125.4 | 300 | N | Based on the contract terms | Market price | 2019-04-23 | Notice No.:2019-009 | |
| Bosch Diesel System | Associated company、Controlling subsidiary of German Bosch Company | Other | Procurement of fixed assets | Based on fair value of the market price | Market price | 572.09 | 1,000 | N | Based on the contract terms | Market price | 2019-04-23 | Notice No.:2019-009 | |
| Weifu Environment | Joint venture of Weifu Leader | Other | Sales of fixed assets | Based on fair value of the market price | Market price | 1,048.52 | Y | Based on the contract terms | Market price | ||||
| Total | -- | -- | 259,171.15 | -- | 580,000 | -- | -- | -- | -- | -- | |||
| Detail of sales return with major amount involved | Not applicable | ||||||||||||
| Report the actual implementation of the normal related transactions which were projected about their total amount by types during the reporting period (if applicable) | After deliberated and approved by AGM of 2018, it is estimated that the routine related transaction for year of 2019 amounting to 5800 million Yuan, actually 2591.7115 million Yuan in total occurred in reporting period, including: 1. It is estimated that purchasing goods and labors from related parties amounted as 2230 million Yuan at most for year of 2019, actually 763.6196 million Yuan occurred in reporting period; 2. It is estimated that sales of goods and labors to related parties amounted as 3553 million Yuan at most for year of 2019, actually 1808.5069 million Yuan occurred in reporting period; 3. It is estimated that other related transactions with related parties amounted as 17 million Yuan at most for year of 2019, actually 19.585 million Yuan occurred in reporting period; | ||||||||||||
| Reasons for major differences between trading price and market reference price (if applicable) | Not applicable | ||||||||||||
2. Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period
3. Main related transactions of mutual investment outside
□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period
4. Contact of related credit and debt
□ Applicable √ Not applicable
The Company had no contact of related credit and debt in the reporting period.
5. Other related transactions
√ Applicable □ Not applicable
On June 4, 2019, the 7
thmeeting of the Ninth Board of Directors held by the company reviewed and approved the“Proposal on Joint Investment and Establishment of Companies and Related Transactions between the Companyand Related Parties”. In the important period of innovation and upgrading of the technology industry in the autoindustry, in order to conform to the new development trends (i.e. electromotion, intelligentization, network, andsharing) of the auto industry. The company and its major shareholders, Wuxi Industry Development Group Co.,Ltd. (hereinafter referred to as "Industry Group"), Wuxi Taiji Industry Corporation limited (hereinafter referred toas "Taiji Industry"), Chuxin Semiconductor Technology Co., Ltd. (hereinafter referred to as "ChuxinSemiconductor"), Wuxi Spark Microelectronics Partnership (Limited Partnership) (hereinafter referred to as"Spark") jointly invested and established a company engaged in the design, development and sales ofsemiconductor devices and integrated circuits and the use of its own assets for external investment. (Wuxi XichanMicrochip Semiconductor Co., Ltd.). Wuxi Xichan Microchip Semiconductor Co., Ltd. (hereinafter referred to as“Xichan Microchip”) has been established and completed the industrial and commercial registration procedures,and obtained the “Business License” issued by Wuxi Xinwu District Market Supervision Administration. Theregistered capital of Xichan Microchip is RMB 2.11 billion. The shareholding structure is: the related partyIndustry Group invested RMB 910 million (accounting for 43.13%), and Spark invested RMB 600 million(accounting for 28.43%), Weifu High Tech invested RMB 200 million (accounting for 9.48%), related party TaijiIndustry invested RMB 200 million (accounting for 9.48%), and Chuxin Semiconductor invested RMB 200million (accounting for 9.48%).
Related searches for disclosure website of interim report with major related transaction concerned
| Interim report | Disclosure date | Website for disclosure |
| Proposal on Joint Investment and Establishment of Companies and Related Transactions between the Company and Related Parties | 2019-06-05 | More details were published on Juchao Website (http://www.cninfo.com.cn) (Notice No.: 2019-018) |
| Progress of the Joint Investment and Establishment of Companies and Related Transactions between the Company and Related Parties | 2019-06-13 | More details were published on Juchao Website (http://www.cninfo.com.cn) (Notice No.: 2019-019) |
XIII. Non-business capital occupying by controlling shareholders and its related parties
□ Applicable √ Not applicable
No non-business capital occupied by controlling shareholders and its related parties in Period
XIV. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable √ Not applicable
No leasing for the Company in reporting period
2. Major guarantees
√ Applicable □ Not applicable
(1) Guarantees
In 10 thousand Yuan
| Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries) | ||||||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) | ||||
| Guarantee of the Company and the subsidiaries | ||||||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) | ||||
| Ningbo Tianli Turbo charging Technology Co., Ltd. | 2016-10-27 | 6,000 | 2016-11-11 | 3,750 | Joint liability guaranty | 5 | N | N | |
| Total amount of approving guarantee for subsidiaries in report period (B1) | 0 | Total amount of actual occurred guarantee for subsidiaries in report period (B2) | 3,750 | ||||||
| Total amount of approved guarantee for subsidiaries at the end of reporting period (B3) | 6,000 | Total balance of actual guarantee for subsidiaries at the end of reporting period (B4) | 3,750 | ||||||
| Guarantee of the subsidiaries for the subsidiaries | |||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) | |
| Total amount of guarantee of the Company( total of three abovementioned guarantee) | |||||||||
| Total amount of approving guarantee in report period (A1+B1+C1) | 0 | Total amount of actual occurred guarantee in report period (A2+B2+C2) | 3,750 | ||||||
| Total amount of approved guarantee at the end of report period (A3+B3+C3) | 6,000 | Total balance of actual guarantee at the end of report period (A4+B4+C4) | 3,750 | ||||||
| The proportion of the total amount of actually guarantee in the net assets of the Company (that is A4+ B4+C4) | 0.23% | ||||||||
| Including: | |||||||||
| Amount of guarantee for shareholders, actual controller and its related parties (D) | 0 | ||||||||
| The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly (E) | 0 | ||||||||
| Proportion of total amount of guarantee in net assets of the Company exceed 50% (F) | 0 | ||||||||
| Total amount of the aforesaid three guarantees (D+E+F) | 0 | ||||||||
| Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees (if applicable) | N/A | ||||||||
| Explanations on external guarantee against regulated procedures (if applicable) | N/A | ||||||||
Explanation on guarantee with composite wayNil
(2) Guarantee outside against the regulation
□ Applicable √ Not applicable
No guarantee outside against the regulation in Period.
3. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting periodXV. Social responsibility
1. Major environmental issues
The company and its subsidiaries don’t belong to the key pollutant discharging units published by theenvironmental protection department.Protecting the environment is the corporate mission of Weifu High Technology. The company’s main business isexpanded around the energy saving and emission reduction of automobiles. At present, the company’s mainproducts have all met the emission regulations required by the state, and the company is actively preparingproducts that can meet the requirements of more stringent emission regulations. Saving resources and reducingconsumption are part of the core value of Weifu High Technology. On the one hand, it is conducive to theimprovement of enterprise efficiency, and at the same time, it is conducive to improving the resource utilizationrate of the whole society. Therefore, the company will continue to improve the resource utilization throughtechnological innovation.The company resolutely implements the “three simultaneous” system of construction projects and strictlyperforms the procedures for environmental impact assessment, approval, and acceptance of construction projects.In the process of new project and technical transformation, the new and old pollution can be solved togetheraccording to the principle of technical feasibility and economic rationality, and the “three wastes” managementproject must be designed, constructed and accepted at the same time as the main project.
2. Precise poverty alleviation social responsibility
There is no precise poverty alleviation carried out in the period and no follow plan eitherXVI. Explanation on other significant events
√ Applicable □ Not applicable
Matters relating to the sale of the equity interest in the joint-stock company Protean Holdings Corp.
In view of the fact that the majority shareholder of Protean Holdings Corp. exercised the “Drag-along right”, thatis, the vast majority of Protean Holdings Corp.’s shareholders were in favor of the shareholding, and the ProteanHoldings Corp. board of directors mostly agreed, which met the drag-along conditions, so Weifu High Tech mustagree to sell its 9.61% stake in Protean Holdings Corp., and there were dozens of other shareholders who held theremaining 16.04% of the issued shares were dragged to sell their shares. After the sale, Weifu High Tech nolonger holds a stake in Protean Holdings Corp. (This acquisition invoked 5.1“Drag-along right” in the fifthrevision and the restatement of the shareholder agreement of Protean Holdings Corp., i.e. 5.1 (a) i. The mostmajority of shareholders agree with the shareholding ratio; ii. Oak Investment Partners XII LP ("Oak") withprivilege and holding 64.77% of the issued shares agrees; iii. GSR Ventures ("GSR") with privilege and holding
9.58% of the issued shares agrees; iv. The majority of the board of directors of Protean Holdings Corp. agrees.)Since Protean Holdings Corp., which was invested by the company, was 100% acquired by Virtue Surge Limited,Virtue Surge Limited continues to exist after the merger, and Protean Holdings Corp. no longer exists. Moredetails about “Notice of the sale of equity interest in the joint-stock company Protean Holdings Corp.” (No.:
2019-018) were published on Juchao Information Website (http://www.cninfo.com.cn).XVII. Significant event of subsidiary of the Company
□ Applicable √ Not applicable
Section VI. Changes in Shares and Particulars about ShareholdersI. Changes in Shares
1. Changes in Shares
In Share
| Before the Change | Increase/Decrease in the Change (+, -) | After the Change | |||||||
| Amount | Proportion | New shares issued | Bonus shares | Capitalization of public reserve | Others | Subtotal | Amount | Proportion | |
| I. Restricted shares | 80,079 | 0.01% | 80,079 | 0.01% | |||||
| 3. Other domestic shares | 80,079 | 0.01% | 80,079 | 0.01% | |||||
| Domestic nature person shares | 80,079 | 0.01% | 80,079 | 0.01% | |||||
| II. Unrestricted shares | 1,008,870,491 | 99.99% | 1,008,870,491 | 99.99% | |||||
| 1. RMB Ordinary shares | 836,490,491 | 82.90% | 836,490,491 | 82.90% | |||||
| 2. Domestically listed foreign shares | 172,380,000 | 17.09% | 172,380,000 | 17.09% | |||||
| III. Total shares | 1,008,950,570 | 100.00% | 1,008,950,570 | 100.00% | |||||
Reasons for share changed
□Applicable √ Not applicable
Approval of share changed
□Applicable √ Not applicable
Ownership transfer of share changed
□Applicable √Not applicable
Progress of shares buy-back
□ Applicable √ Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in latest year and period
□Applicable √Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□Applicable √Not applicable
2. Changes of restricted shares
□ Applicable √ Not applicable
II. Securities issuance and listing
□ Applicable √ Not applicable
III. Amount of shareholders of the Company and particulars about shares holding
In share
| Total common shareholders at period-end | 60,037 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (see note 8) | 0 | |||||
| Particulars about shares held above 5% by common shareholders or top ten common shareholders | ||||||||
| Full name of Shareholders | Nature of shareholder | Proportion of shares held | Total common shareholders at the end of report period | Changes in report period | Amount of restrict common shares held | Amount of un-restrict common shares held | Number of share pledged/frozen | |
| State of share | Amount | |||||||
| Wuxi Industry Development Group Co., Ltd. | State-owned corporate | 20.22% | 204,059,398 | 0 | 204,059,398 | |||
| ROBERT BOSCH GMBH | Foreign corporate | 14.16% | 142,841,400 | 0 | 142,841,400 | |||
| Hong Kong Securities Clearing Company Ltd. (HKSCC) | Foreign corporate | 5.73% | 57,857,357 | 17,375,313 | 57,857,357 | |||
| BBH BOS S/A FIDELITY FD - CHINA FOCUS FD | Foreign corporate | 1.84% | 18,530,315 | 527,518 | 18,530,315 | |||
| Bank of Communication – HSBC Jixin Double Core Strategy Mixed Securities Investment Fund | Other | 1.82% | 18,331,307 | -8,281,266 | 18,331,307 | |||
| Central Huijin Assets Management Co., Ltd. | State-owned corporate | 1.27% | 12,811,200 | 0 | 12,811,200 | |||
| China Life Insurance - traditional - general insurance products - 005L-CT001 Shen | Other | 1.21% | 12,238,898 | 12,238,898 | 12,238,898 | |||
| China Life Insurance- Bonus -Individual bonus - | Other | 1.14% | 11,459,033 | 9,673,133 | 11,459,033 | |||
| -005L-FH002 Shen | |||||||||
| Tianda Assets Management Co., Ltd. - Tianda Global Strategy Fund - All China equity fund (Exchange) | Foreign corporate | 0.97% | 9,802,559 | 9,802,559 | 9,802,559 | ||||
| Agricultural Bank of China - CS 500 ETF | Other | 0.69% | 7,007,675 | 796,607 | 7,007,675 | ||||
| Strategy investors or general corporation comes top 10 shareholders due to rights issue (if applicable) (see note 3) | Not applicable | ||||||||
| Explanation on associated relationship among the aforesaid shareholders | Among the top ten shareholders, there has no associated relationship between Wuxi Industry Development Croup Co., Ltd. and other shareholders, the first largest shareholder of the Company; and they do not belong to the consistent actionist regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Company. | ||||||||
| Particular about top ten shareholders with un-restrict common shares held | |||||||||
| Shareholders’ name | Amount of un-restrict common shares held at Period-end | Type of shares | |||||||
| Type | Amount | ||||||||
| Wuxi Industry Development Group Co., Ltd. | 204,059,398 | RMB common shares | 204,059,398 | ||||||
| ROBERT BOSCH GMBH | 142,841,400 | RMB common shares | 115,260,600 | ||||||
| Domestically listed foreign shares | 27,580,800 | ||||||||
| ROBERT BOSCH GMBH | 57,857,357 | RMB common shares | 57,857,357 | ||||||
| BBH BOS S/A FIDELITY FD - CHINA FOCUS FD | 18,530,315 | Domestically listed foreign shares | 18,530,315 | ||||||
| Bank of Communication – HSBC Jixin Double Core Strategy Mixed Securities Investment Fund | 18,331,307 | RMB common shares | 18,331,307 | ||||||
| Central Huijin Assets Management Co., Ltd. | 12,811,200 | RMB common shares | 12,811,200 | ||||||
| China Life Insurance - traditional - general insurance products - 005L-CT001 Shen | 12,238,898 | RMB common shares | 12,238,898 | ||||||
| China Life Insurance- Bonus -Individual bonus - -005L-FH002 Shen | 11,459,033 | RMB common shares | 11,459,033 | ||||||
| Tianda Assets Management Co., Ltd. - Tianda Global Strategy Fund - All China equity fund (Exchange) | 9,802,559 | RMB common shares | 9,802,559 | ||||||
| Agricultural Bank of China - CS 500 ETF | 7,007,675 | RMB common shares | 7,007,675 | ||||||
| Expiation on associated relationship or consistent actors within the top 10 un-restrict common shareholders and between top 10 un-restrict common shareholders and top 10 common shareholders | Among the top ten shareholders, there has no associated relationship between Wuxi Industry Development Croup Co., Ltd. and other shareholders, the first largest shareholder of the Company; and they do not belong to the consistent | ||||||||
| actionist regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Company. | |
| Explanation on top 10 shareholders involving margin business (if applicable) (see note 4) | Not applicable |
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreementdealing in reporting period
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy-backagreement dealing in reporting period.IV. Changes of controlling shareholders or actual controller
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
Changes of controlling shareholders had no change in reporting period.Changes of actual controller in reporting period
□ Applicable √ Not applicable
Changes of actual controller in reporting period had no change in reporting period.
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the reporting.
Section VIII. Directors, Supervisors and Senior ExecutivesI. Changes of shares held by directors, supervisors and senior executives
□ Applicable √ Not applicable
No change of shares held by directors, supervisors and senior executives, found more details in Annual Report 2018.II. Resignation and dismissal of directors, supervisors and senior executives
□ Applicable √ Not applicable
No changes of directors, supervisors and senior executives, found more details in Annual Report 2018.
Section IX. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date whensemi-annual report approved for released or fail to cash in full on dueNo
Section X. Financial ReportI. Audit reportWhether the semi annual report is audited
□ Yes √ No
The company's semi annual financial report has not been audited.II. Financial statementUnit in note of financial statement refers to CNY: RMB (Yuan)
1. Consolidated balance sheet
Prepared by Weifu High-Technology Group Co., Ltd
2019-6-30
In RMB
| Item | 2019-6-30 | 2018-12-31 |
| Current assets: | ||
| Monetary funds | 2,689,698,577.33 | 2,616,321,740.73 |
| Settlement provisions | ||
| Capital lent | ||
| Tradable financial assets | 4,409,469,555.43 | |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | ||
| Derivative financial assets | ||
| Note receivable | 1,492,394,221.35 | 1,148,107,603.68 |
| Account receivable | 2,319,307,654.58 | 1,919,793,266.91 |
| Receivable financing | ||
| Accounts paid in advance | 130,898,819.37 | 94,651,431.31 |
| Insurance receivable | ||
| Reinsurance receivables | ||
| Contract reserve of reinsurance receivable | ||
| Other account receivable | 597,269,619.06 | 84,582,246.16 |
| Including: Interest receivable | 674,104.16 | 1,842,437.50 |
| Dividend receivable | 536,162,445.67 |
| Buying back the sale of financial assets | ||
| Inventories | 1,427,136,271.99 | 1,438,528,714.59 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current asset due within one year | ||
| Other current assets | 59,554,852.86 | 4,632,137,600.26 |
| Total current assets | 13,125,729,571.97 | 11,934,122,603.64 |
| Non-current assets: | ||
| Loans and payments on behalf | ||
| Debt investment | ||
| Finance asset available for sales | 255,975,176.91 | |
| Other debt investment | ||
| Held-to-maturity investment | ||
| Long-term account receivable | ||
| Long-term equity investment | 4,792,747,311.47 | 4,976,773,946.74 |
| Investment in other equity instrument | 180,940,000.00 | |
| Other non-current financial assets | 368,800,000.00 | |
| Investment real estate | 21,131,775.19 | 21,906,134.52 |
| Fixed assets | 2,680,884,221.89 | 2,707,374,678.61 |
| Construction in progress | 259,557,105.61 | 166,414,542.18 |
| Productive biological asset | ||
| Oil and gas asset | ||
| Right-of-use assets | ||
| Intangible assets | 320,409,700.92 | 324,892,822.75 |
| Expense on Research and Development | ||
| Goodwill | 55,591,347.00 | 1,784,086.79 |
| Long-term expenses to be apportioned | 18,905,250.00 | 16,637,652.31 |
| Deferred income tax asset | 214,153,685.24 | 234,697,139.58 |
| Other non-current asset | 295,639,334.53 | 251,462,676.27 |
| Total non-current asset | 9,208,759,731.85 | 8,957,918,856.66 |
| Total assets | 22,334,489,303.82 | 20,892,041,460.30 |
| Current liabilities: | ||
| Short-term loans | 321,055,399.28 | 298,928,213.94 |
| Loan from central bank |
| Capital borrowed | ||
| Transactional financial liability | ||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | ||
| Derivative financial liability | 490,329.13 | |
| Note payable | 1,591,019,357.36 | 1,018,367,533.74 |
| Account payable | 2,492,584,058.39 | 2,047,336,834.66 |
| Accounts received in advance | 53,037,864.67 | 41,329,857.80 |
| Selling financial asset of repurchase | ||
| Absorbing deposit and interbank deposit | ||
| Security trading of agency | ||
| Security sales of agency | ||
| Wage payable | 235,601,920.23 | 312,113,178.24 |
| Taxes payable | 73,450,696.65 | 74,271,613.92 |
| Other account payable | 430,239,321.47 | 64,448,723.52 |
| Including: Interest payable | 752,404.25 | 517,469.08 |
| Dividend payable | 369,352,725.60 | |
| Commission charge and commission payable | ||
| Reinsurance payable | ||
| Contractual liability | ||
| Liability held for sale | ||
| Non-current liabilities due within one year | 15,000,000.00 | 15,000,000.00 |
| Other current liabilities | ||
| Total current liabilities | 5,211,988,618.05 | 3,872,286,284.95 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term loans | 22,500,000.00 | 30,000,000.00 |
| Bonds payable | ||
| Including: Preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | ||
| Long-term account payable | 35,083,263.11 | 35,422,354.11 |
| Long-term wages payable | 74,679,175.36 | 74,679,175.36 |
| Accrual liability |
| Deferred income | 415,418,074.89 | 425,769,854.13 |
| Deferred income tax liabilities | 6,386,620.12 | 1,912,744.40 |
| Other non-current liabilities | ||
| Total non-current liabilities | 554,067,133.48 | 567,784,128.00 |
| Total liabilities | 5,766,055,751.53 | 4,440,070,412.95 |
| Owner’s equity: | ||
| Share capital | 1,008,950,570.00 | 1,008,950,570.00 |
| Other equity instrument | ||
| Including: Preferred stock | ||
| Perpetual capital securities | ||
| Capital public reserve | 3,416,022,795.14 | 3,416,022,795.14 |
| Less: Inventory shares | ||
| Other comprehensive income | 261,591.54 | -19,809,442.95 |
| Reasonable reserve | 2,535,660.69 | 1,618,490.50 |
| Surplus public reserve | 510,100,496.00 | 510,100,496.00 |
| Provision of general risk | ||
| Retained profit | 11,059,205,014.71 | 10,996,945,870.13 |
| Total owner’ s equity attributable to parent company | 15,997,076,128.08 | 15,913,828,778.82 |
| Minority interests | 571,357,424.21 | 538,142,268.53 |
| Total owner’ s equity | 16,568,433,552.29 | 16,451,971,047.35 |
| Total liabilities and owner’ s equity | 22,334,489,303.82 | 20,892,041,460.30 |
Legal Representative: Chen XuejunPerson in charge of accounting works: Ou JianbinPerson in charge of accounting institute: Ou Jianbin
2. Balance Sheet of Parent Company
In RMB
| Item | 2019-6-30 | 2018-12-31 |
| Current assets: | ||
| Monetary funds | 2,110,649,144.04 | 1,922,408,227.00 |
| Transactional financial assets | 4,109,469,555.43 | |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | ||
| Derivative financial assets |
| Note receivable | 202,038,803.99 | 264,264,207.30 |
| Account receivable | 766,756,661.80 | 742,246,990.99 |
| Receivable financing | ||
| Accounts paid in advance | 84,477,497.47 | 59,028,927.25 |
| Other account receivable | 712,698,500.83 | 196,849,092.13 |
| Including: Interest receivable | 30,570.83 | 188,682.78 |
| Dividend receivable | 517,216,193.24 | |
| Inventories | 436,366,950.75 | 492,054,274.67 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current assets maturing within one year | ||
| Other current assets | 26,252,619.45 | 4,576,688,553.49 |
| Total current assets | 8,448,709,733.76 | 8,253,540,272.83 |
| Non-current assets: | ||
| Debt investment | ||
| Available-for-sale financial assets | 180,035,176.91 | |
| Other debt investment | ||
| Held-to-maturity investments | ||
| Long-term receivables | ||
| Long-term equity investments | 5,637,526,395.41 | 5,739,110,426.55 |
| Investment in other equity instrument | 105,000,000.00 | |
| Other non-current financial assets | 368,800,000.00 | |
| Investment real estate | ||
| Fixed assets | 1,497,920,785.67 | 1,534,109,106.80 |
| Construction in progress | 163,098,662.24 | 78,673,300.59 |
| Productive biological assets | ||
| Oil and natural gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 186,309,565.33 | 188,101,655.94 |
| Research and development costs | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred income tax assets | 119,906,203.71 | 140,286,756.70 |
| Other non-current assets | 224,004,875.34 | 184,208,090.40 |
| Total non-current assets | 8,302,566,487.70 | 8,044,524,513.89 |
| Total assets | 16,751,276,221.46 | 16,298,064,786.72 |
| Current liabilities | ||
| Short-term borrowings | 92,000,000.00 | 112,000,000.00 |
| Transactional financial liability | ||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | ||
| Derivative financial liability | ||
| Notes payable | 332,383,071.60 | 330,545,052.37 |
| Account payable | 953,466,419.74 | 823,693,469.51 |
| Accounts received in advance | 3,446,051.71 | 6,639,554.63 |
| Contractual liability | ||
| Wage payable | 159,004,259.87 | 200,205,508.25 |
| Taxes payable | 58,256,869.09 | 39,193,425.15 |
| Other accounts payable | 411,692,830.03 | 12,142,596.68 |
| Including: Interest payable | 283,127.78 | 149,966.66 |
| Dividend payable | 369,352,725.60 | |
| Liability held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | ||
| Total current liabilities | 2,010,249,502.04 | 1,524,419,606.59 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | ||
| Long-term account payable | ||
| Long term employee compensation payable | 63,962,762.93 | 63,962,762.93 |
| Accrued liabilities | ||
| Deferred income | 370,269,926.04 | 381,609,056.40 |
| Deferred income tax liabilities | 4,529,392.20 | |
| Other non-current liabilities | ||
| Total non-current liabilities | 438,762,081.17 | 445,571,819.33 |
| Total liabilities | 2,449,011,583.21 | 1,969,991,425.92 |
| Owners’ equity: | ||
| Share capital | 1,008,950,570.00 | 1,008,950,570.00 |
| Other equity instrument | ||
| Including: preferred stock | ||
| Perpetual capital securities | ||
| Capital public reserve | 3,488,221,286.39 | 3,488,221,286.39 |
| Less: Inventory shares | ||
| Other comprehensive income | -19,809,442.95 | |
| Special reserve | ||
| Surplus reserve | 510,100,496.00 | 510,100,496.00 |
| Retained profit | 9,294,992,285.86 | 9,340,610,451.36 |
| Total owner’s equity | 14,302,264,638.25 | 14,328,073,360.80 |
| Total liabilities and owner’s equity | 16,751,276,221.46 | 16,298,064,786.72 |
3. Consolidated Profit Statement
In RMB
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Total operating income | 4,403,444,346.05 | 4,960,801,890.99 |
| Including: Operating income | 4,403,444,346.05 | 4,960,801,890.99 |
| Interest income | ||
| Insurance gained | ||
| Commission charge and commission income | ||
| II. Total operating cost | 4,005,776,550.51 | 4,446,144,672.35 |
| Including: Operating cost | 3,405,386,504.44 | 3,889,590,289.69 |
| Interest expense | ||
| Commission charge and commission expense | ||
| Cash surrender value | ||
| Net amount of expense of compensation | ||
| Net amount of withdrawal of insurance contract reserve | ||
| Bonus expense of guarantee slip | ||
| Reinsurance expense | ||
| Tax and extras | 34,534,571.66 | 38,000,352.40 |
| Sales expense | 104,270,647.40 | 106,347,559.85 |
| Administrative expense | 310,909,980.43 | 236,539,410.63 |
| R&D expense | 180,167,642.16 | 177,443,968.15 |
| Financial expense | -29,492,795.58 | -1,776,908.37 |
| Including: Interest expenses | 9,264,648.42 | 9,075,955.05 |
| Interest income | 48,416,919.83 | 11,684,097.62 |
| Add: other income | 17,632,117.95 | 14,032,459.71 |
| Investment income (Loss is listed with “-”) | 888,216,680.48 | 1,149,033,168.39 |
| Including: Investment income on affiliated company and joint venture | 790,465,131.05 | 968,640,145.91 |
| The termination of income recognition for financial assets measured by amortized cost(Loss is listed with “-”) | ||
| Exchange income (Loss is listed with “-”) | ||
| Net exposure hedging income (Loss is listed with “-”) | ||
| Income from change of fair value (Loss is listed with “-”) | 30,686,277.13 | |
| Loss of credit impairment (Loss is listed with “-”) | -6,237,790.75 | |
| Losses of devaluation of asset (Loss is listed with “-”) | -1,500,885.27 | 10,087.38 |
| Income from assets disposal (Loss is listed with “-”) | 5,107,848.45 | 1,588,185.36 |
| III. Operating profit (Loss is listed with “-”) | 1,331,572,043.53 | 1,679,321,119.48 |
| Add: Non-operating income | 27,544,757.26 | 3,881,128.87 |
| Less: Non-operating expense | 2,631,453.02 | 2,327,872.38 |
| IV. Total profit (Loss is listed with “-”) | 1,356,485,347.77 | 1,680,874,375.97 |
| Less: Income tax expense | 81,382,654.54 | 102,927,297.96 |
| V. Net profit (Net loss is listed with “-”) | 1,275,102,693.23 | 1,577,947,078.01 |
| (i) Classify by business continuity | ||
| 1.continuous operating net profit (net loss listed with ‘-”) | 1,275,102,693.23 | 1,577,947,078.01 |
| 2.termination of net profit (net loss listed with ‘-”) | ||
| (ii) Classify by ownership | ||
| 1.Net profit attributable to owner’s of parent company | 1,256,661,577.09 | 1,545,242,704.92 |
| 2.Minority shareholders’ gains and losses | 18,441,116.14 | 32,704,373.09 |
| VI. Net after-tax of other comprehensive income | 271,537.20 | -58,302,580.35 |
| Net after-tax of other comprehensive income attributable to owners of parent company | 261,591.54 | -58,302,580.35 |
| (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
| 1.Changes of the defined benefit plans that re-measured |
| 2.Other comprehensive income under equity method that cannot be transfer to gain/loss | ||
| 3.Change of fair value of investment in other equity instrument | ||
| 4.Fair value change of enterprise's credit risk | ||
| 5. Other | ||
| (ii) Other comprehensive income items which will be reclassified subsequently to profit or loss | 261,591.54 | -58,302,580.35 |
| 1.Other comprehensive income under equity method that can transfer to gain/loss | ||
| 2.Change of fair value of other debt investment | ||
| 3.gain/loss of fair value changes for available-for-sale financial assets | -58,302,580.35 | |
| 4.Amount of financial assets re-classify to other comprehensive income | ||
| 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset | ||
| 6.Credit impairment provision for other debt investment | ||
| 7.Cash flow hedging reserve | ||
| 8.Translation differences arising on translation of foreign currency financial statements | 261,591.54 | |
| 9.Other | ||
| Net after-tax of other comprehensive income attributable to minority shareholders | 9,945.66 | |
| VII. Total comprehensive income | 1,275,374,230.43 | 1,519,644,497.66 |
| Total comprehensive income attributable to owners of parent Company | 1,256,923,168.63 | 1,486,940,124.57 |
| Total comprehensive income attributable to minority shareholders | 18,451,061.80 | 32,704,373.09 |
| VIII. Earnings per share: | ||
| (i) Basic earnings per share | 1.25 | 1.53 |
| (ii) Diluted earnings per share | 1.25 | 1.53 |
Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, andrealized 0 Yuan at last period for combined partyLegal Representative: Chen XuejunPerson in charge of accounting works: Ou JianbinPerson in charge of accounting institute: Ou Jianbin
4. Profit Statement of Parent Company
In RMB
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Operating income | 2,092,474,460.24 | 2,315,142,655.13 |
| Less: Operating cost | 1,471,971,514.70 | 1,698,516,522.90 |
| Taxes and surcharge | 17,510,903.97 | 20,760,852.64 |
| Sales expenses | 15,320,342.43 | 17,030,807.96 |
| Administration expenses | 211,000,027.34 | 145,983,978.35 |
| R&D expenses | 75,873,810.90 | 70,275,784.76 |
| Financial expenses | -41,092,188.59 | -5,330,079.95 |
| Including: interest expenses | 3,597,363.92 | 3,589,658.32 |
| Interest income | 44,742,417.24 | 9,047,393.86 |
| Add: other income | 11,683,224.30 | 11,813,783.39 |
| Investment income (Loss is listed with “-”) | 840,215,361.66 | 1,137,350,229.02 |
| Including: Investment income on affiliated Company and joint venture | 742,463,812.23 | 894,788,126.54 |
| 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 “-”) | 30,195,948.00 | |
| Loss of credit impairment (Loss is listed with “-”) | -1,901,377.70 | |
| Losses of devaluation of asset (Loss is listed with “-”) | -24,294.39 | -468,622.39 |
| Income on disposal of assets (Loss is listed with “-”) | 1,844,051.48 | 698,843.73 |
| II. Operating profit (Loss is listed with “-”) | 1,223,902,962.84 | 1,517,299,022.22 |
| Add: Non-operating income | 15,034.36 | 26,550.35 |
| Less: Non-operating expense | 1,196,252.91 | 989,892.95 |
| III. Total Profit (Loss is listed with “-”) | 1,222,721,744.29 | 1,516,335,679.62 |
| Less: Income tax | 73,937,477.28 | 82,844,629.16 |
| IV. Net profit (Net loss is listed with “-”) | 1,148,784,267.01 | 1,433,491,050.46 |
| (i)continuous operating net profit (net loss listed with ‘-”) | 1,148,784,267.01 | 1,433,491,050.46 |
| (ii) termination of net profit (net loss listed with ‘-”) | ||
| V. Net after-tax of other comprehensive income | -58,302,580.35 | |
| (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
| 1.Changes of the defined benefit plans that re-measured |
| 2.Other comprehensive income under equity method that cannot be transfer to gain/loss | ||
| 3.Change of fair value of investment in other equity instrument | ||
| 4.Fair value change of enterprise's credit risk | ||
| 5. Other | ||
| (II) Other comprehensive income items which will be reclassified subsequently to profit or loss | -58,302,580.35 | |
| 1.Other comprehensive income under equity method that can transfer to gain/loss | ||
| 2.Change of fair value of other debt investment | ||
| 3.gain/loss of fair value changes for available-for-sale financial assets | -58,302,580.35 | |
| 4.Amount of financial assets re-classify to other comprehensive income | ||
| 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset | ||
| 6.Credit impairment provision for other debt investment | ||
| 7.Cash flow hedging reserve | ||
| 8.Translation differences arising on translation of foreign currency financial statements | ||
| 9.Other | ||
| VI. Total comprehensive income | 1,148,784,267.01 | 1,375,188,470.11 |
| VII. Earnings per share: | ||
| (i) Basic earnings per share | ||
| (ii) Diluted earnings per share |
5. Consolidated Cash Flow Statement
In RMB
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor services | 4,275,001,010.93 | 4,321,753,642.57 |
| 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 | 25,327,532.10 | 28,784,608.45 |
| Other cash received concerning operating activities | 85,775,494.76 | 20,879,944.10 |
| Subtotal of cash inflow arising from operating activities | 4,386,104,037.79 | 4,371,418,195.12 |
| Cash paid for purchasing commodities and receiving labor service | 2,534,137,461.67 | 2,812,244,020.34 |
| 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 financial assets held for transaction purposes | ||
| 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 | 681,756,769.56 | 683,701,600.44 |
| Taxes paid | 310,797,279.61 | 342,578,412.02 |
| Other cash paid concerning operating activities | 169,088,618.70 | 153,970,471.84 |
| Subtotal of cash outflow arising from operating activities | 3,695,780,129.54 | 3,992,494,504.64 |
| Net cash flows arising from operating activities | 690,323,908.25 | 378,923,690.48 |
| II. Cash flows arising from investing activities: | ||
| Cash received from recovering investment | 3,686,500,000.00 | 5,361,095,457.96 |
| Cash received from investment income | 525,843,992.65 | 463,686,171.47 |
| Net cash received from disposal of fixed, intangible and other long-term assets | 72,457,256.41 | 39,773,802.87 |
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | ||
| Subtotal of cash inflow from investing activities | 4,284,801,249.06 | 5,864,555,432.30 |
| Cash paid for purchasing fixed, intangible and other long-term assets | 237,326,162.98 | 362,947,568.87 |
| Cash paid for investment | 3,658,800,000.00 | 6,084,063,284.96 |
| Net increase of mortgaged loans | ||
| Net cash received from subsidiaries and other units obtained | 49,930,736.62 |
| Other cash paid concerning investing activities | 24,000,000.00 | 10,000,000.00 |
| Subtotal of cash outflow from investing activities | 3,970,056,899.60 | 6,457,010,853.83 |
| Net cash flows arising from investing activities | 314,744,349.46 | -592,455,421.53 |
| III. Cash flows arising from financing activities | ||
| Cash received from absorbing investment | 13,880,037.60 | |
| Including: Cash received from absorbing minority shareholders’ investment by subsidiaries | 13,880,037.60 | |
| Cash received from loans | 393,249,222.11 | 330,000,000.00 |
| Cash received from issuing bonds | ||
| Other cash received concerning financing activities | 5,470,000.00 | |
| Subtotal of cash inflow from financing activities | 407,129,259.71 | 335,470,000.00 |
| Cash paid for settling debts | 378,622,036.77 | 219,000,000.00 |
| Cash paid for dividend and profit distributing or interest paying | 836,528,586.57 | 9,337,888.74 |
| Including: Dividend and profit of minority shareholder paid by subsidiaries | 174,600.00 | |
| Other cash paid concerning financing activities | 5,809,091.00 | 339,091.00 |
| Subtotal of cash outflow from financing activities | 1,220,959,714.34 | 228,676,979.74 |
| Net cash flows arising from financing activities | -813,830,454.63 | 106,793,020.26 |
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 415,189.69 | 810,171.83 |
| V. Net increase of cash and cash equivalents | 191,652,992.77 | -105,928,538.96 |
| Add: Balance of cash and cash equivalents at the period -begin | 2,404,674,139.49 | 2,948,439,354.22 |
| VI. Balance of cash and cash equivalents at the period -end | 2,596,327,132.26 | 2,842,510,815.26 |
6. Cash Flow Statement of Parent Company
In RMB
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor services | 2,342,213,493.89 | 2,707,966,926.41 |
| Write-back of tax received | ||
| Other cash received concerning operating activities | 48,525,763.15 | 9,047,393.86 |
| Subtotal of cash inflow arising from operating activities | 2,390,739,257.04 | 2,717,014,320.27 |
| Cash paid for purchasing commodities and receiving labor service | 1,218,981,667.53 | 1,572,426,004.69 |
| Cash paid to/for staff and workers | 369,225,756.08 | 361,672,047.87 |
| Taxes paid | 186,084,989.75 | 242,573,191.33 |
| Other cash paid concerning operating activities | 107,664,076.68 | 142,557,335.52 |
| Subtotal of cash outflow arising from operating activities | 1,881,956,490.04 | 2,319,228,579.41 |
| Net cash flows arising from operating activities | 508,782,767.00 | 397,785,740.86 |
| II. Cash flows arising from investing activities: | ||
| Cash received from recovering investment | 3,521,500,000.00 | 5,174,745,373.00 |
| Cash received from investment income | 506,897,740.22 | 450,095,688.15 |
| Net cash received from disposal of fixed, intangible and other long-term assets | 4,034,532.29 | 38,214,564.65 |
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | 215,512,158.54 | |
| Subtotal of cash inflow from investing activities | 4,247,944,431.05 | 5,663,055,625.80 |
| Cash paid for purchasing fixed, intangible and other long-term assets | 158,044,430.36 | 187,935,182.03 |
| Cash paid for investment | 3,328,800,000.00 | 5,687,713,200.00 |
| Net cash received from subsidiaries and other units obtained | 82,156,428.71 | |
| Other cash paid concerning investing activities | 187,880,372.33 | 173,000,000.00 |
| Subtotal of cash outflow from investing activities | 3,756,881,231.40 | 6,048,648,382.03 |
| Net cash flows arising from investing activities | 491,063,199.65 | -385,592,756.23 |
| III. Cash flows arising from financing activities | ||
| Cash received from absorbing investment | ||
| Cash received from loans | 160,000,000.00 | 180,000,000.00 |
| Cash received from issuing bonds | ||
| Other cash received concerning financing activities | ||
| Subtotal of cash inflow from financing activities | 160,000,000.00 | 180,000,000.00 |
| Cash paid for settling debts | 180,000,000.00 | 78,000,000.00 |
| Cash paid for dividend and profit distributing or interest paying | 831,020,889.20 | 3,391,380.55 |
| Other cash paid concerning financing activities | ||
| Subtotal of cash outflow from financing activities | 1,011,020,889.20 | 81,391,380.55 |
| Net cash flows arising from financing activities | -851,020,889.20 | 98,608,619.45 |
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 593,522.94 | 761,175.27 |
| V. Net increase of cash and cash equivalents | 149,418,600.39 | 111,562,779.35 |
| Add: Balance of cash and cash equivalents at the period -begin | 1,920,076,358.43 | 2,454,696,969.20 |
| VI. Balance of cash and cash equivalents at the period -end | 2,069,494,958.82 | 2,566,259,748.55 |
7. Statement of Changes in Owners’ Equity (Consolidated)
Amount for current period
In RMB
| Item | Semi-annual of 2019 | ||||||||||||||
| Owners’ equity attributable to the parent Company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||||
| I. Balance at the end of the last year | 1,008,950,570.00 | 3,416,022,795.14 | -19,809,442.95 | 1,618,490.50 | 510,100,496.00 | 10,996,945,870.13 | 15,913,828,778.82 | 538,142,268.53 | 16,451,971,047.35 | ||||||
| Add: Changes of accounting policy | 19,809,442.95 | -19,809,442.95 | |||||||||||||
| Error correction of the last period | |||||||||||||||
| Enterprise combine under the same control | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at the beginning of this year | 1,008,950,570.00 | 3,416,022,795.14 | 0.00 | 1,618,490.50 | 510,100,496.00 | 10,977,136,427.18 | 15,913,828,778.82 | 538,142,268.53 | 16,451,971,047.35 | ||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 261,591.54 | 917,170.19 | 82,068,587.53 | 83,247,349.26 | 33,215,155.68 | 116,462,504.94 | |||||||||
| (i) Total comprehensive income | 1,256,661,577.09 | 1,256,661,577.09 | 18,451,061.80 | 1,275,112,638.89 | |||||||||||
| (ii) Owners’ devoted and decreased capital | 14,461,725.98 | 14,461,725.98 | |||||||||||||
| 1.Common shares invested by shareholders | |||||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | |||||||||||||||
| 4. Other | 14,461,725.98 | 14,461,725.98 | |||||||||||||
| (III) Profit distribution | -1,174,592,989.56 | -1,174,592,989.56 | -1,174,592,989.56 | ||||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or | -1,210,740,684.00 | -1,210,740,684.00 | -1,210,740,684.00 |
| shareholders) | |||||||||||||||
| 4. Other | 36,147,694.44 | 36,147,694.44 | 36,147,694.44 | ||||||||||||
| (IV) Carrying forward internal owners’ equity | |||||||||||||||
| 1. Capital reserves conversed to capital (share capital) | |||||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
| 3. Remedying loss with surplus reserve | |||||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | |||||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | |||||||||||||||
| 6. Other | |||||||||||||||
| (V) Reasonable reserve | 917,170.19 | 917,170.19 | 302,367.90 | 1,219,538.09 | |||||||||||
| 1. Withdrawal in the report period | 10,101,863.74 | 10,101,863.74 | 892,049.10 | 10,993,912.84 | |||||||||||
| 2. Usage in the report period | 9,184,693.55 | 9,184,693.55 | 589,681.20 | 9,774,374.75 |
| (VI)Others | 261,591.54 | 261,591.54 | 261,591.54 | ||||||||||||
| IV. Balance at the end of the report period | 1,008,950,570.00 | 3,416,022,795.14 | 261,591.54 | 2,535,660.69 | 510,100,496.00 | 11,059,205,014.71 | 15,997,076,128.08 | 571,357,424.21 | 16,568,433,552.29 |
Amount for last year
In RMB
| Item | Semi-annual of 2018 | ||||||||||||||
| Owners’ equity attributable to the parent Company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||||
| I. Balance at the end of the last year | 1,008,950,570.00 | 3,417,841,402.89 | 87,169,455.01 | 2,606.93 | 510,100,496.00 | 9,811,609,138.92 | 14,835,673,669.75 | 515,693,194.48 | 15,351,366,864.23 | ||||||
| Add: Changes of accounting policy | |||||||||||||||
| Error correction of the last period | |||||||||||||||
| Enterprise combine under the same control | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at the beginning of this year | 1,008,950,570.00 | 3,417,841,402.89 | 87,169,455.01 | 2,606.93 | 510,100,496.00 | 9,811,609,138.92 | 14,835,673,669.75 | 515,693,194.48 | 15,351,366,864.23 | ||||||
| III. Increase/ | -1,824,597. | -58,302,580.3 | 1,116,994.8 | 334,502,004.92 | 275,491,821.99 | 4,374,207.74 | 279,866,029.73 | ||||||||
| Decrease in this year (Decrease is listed with “-”) | 47 | 5 | 9 | ||||||||||||
| (i) Total comprehensive income | -58,302,580.35 | 1,545,242,704.92 | 1,486,940,124.57 | 32,704,373.09 | 1,519,644,497.66 | ||||||||||
| (ii) Owners’ devoted and decreased capital | -1,824,597.47 | -1,824,597.47 | -12,945,402.53 | -14,770,000.00 | |||||||||||
| 1.Common shares invested by shareholders | -12,945,402.53 | -12,945,402.53 | |||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | |||||||||||||||
| 4. Other | -1,824,597.47 | -1,824,597.47 | -1,824,597.47 | ||||||||||||
| (III) Profit distribution | -1,210,740,700.00 | -1,210,740,700.00 | -15,604,600.00 | -1,226,345,300.00 | |||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or shareholders) | -1,210,740,700.00 | -1,210,740,700.00 | -15,604,600.00 | -1,226,345,300.00 | |||||||||||
| 4. Other | |||||||||||||||
| (IV) Carrying forward internal owners’ equity |
| 1. Capital reserves conversed to capital (share capital) | |||||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
| 3. Remedying loss with surplus reserve | |||||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | |||||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | |||||||||||||||
| 6. Other | |||||||||||||||
| (V) Reasonable reserve | 1,116,994.89 | 1,116,994.89 | 219,837.18 | 1,336,832.07 | |||||||||||
| 1. Withdrawal in the report period | 10,050,468.85 | 10,050,468.85 | 1,395,689.84 | 11,446,158.69 | |||||||||||
| 2. Usage in the report period | 8,933,473.96 | 8,933,473.96 | 1,175,852.66 | 10,109,326.62 | |||||||||||
| (VI)Others | |||||||||||||||
| IV. Balance at the end of the report period | 1,008,950,570.00 | 3,416,016,805.42 | 28,866,874.66 | 1,119,601.82 | 510,100,496.00 | 10,146,111,143.84 | 15,111,165,491.74 | 520,067,402.22 | 15,631,232,893.96 |
8. Statement of Changes in Owners’ Equity (Parent Company)
Amount for current period
In RMB
| Item | Semi-annual of 2019 | |||||||||||
| Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. Balance at the end of the last year | 1,008,950,570.00 | 3,488,221,286.39 | -19,809,442.95 | 510,100,496.00 | 9,340,610,451.36 | 14,328,073,360.80 | ||||||
| Add: Changes of accounting policy | 19,809,442.95 | -19,809,442.95 | ||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning of this year | 1,008,950,570.00 | 3,488,221,286.39 | 0.00 | 510,100,496.00 | 9,320,801,008.41 | 14,328,073,360.80 | ||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | -25,808,722.55 | -25,808,722.55 | ||||||||||
| (i) Total comprehensive income | 1,148,784,267.01 | 1,148,784,267.01 | ||||||||||
| (ii) Owners’ devoted and decreased capital | ||||||||||||
| 1.Common shares invested by shareholders | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | ||||||||||||
| 4. Other | ||||||||||||
| (III) Profit distribution | -1,174,592,989.56 | -1,174,592,989.56 | ||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution for owners (or shareholders) | -1,210,740,684.00 | -1,210,740,684.00 | ||||||||||
| 3. Other | 36,147,694.44 | 36,147,694.44 | ||||||||||
| (IV) Carrying forward internal owners’ equity | ||||||||||||
| 1. Capital reserves conversed to capital (share capital) | ||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | ||||||||||||
| 3. Remedying loss with surplus reserve | ||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | ||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | ||||||||||||
| 6. Other | ||||||||||||
| (V) Reasonable reserve | ||||||||||||
| 1. Withdrawal in the report period | 1,474,547.80 | 1,474,547.80 | ||||||||||
| 2. Usage in the report period | 1,474,547.80 | 1,474,547.80 | ||||||||||
| (VI)Others | ||||||||||||
| IV. Balance at the end of the report period | 1,008,950,570.00 | 3,488,221,286.39 | 0.00 | 510,100,496.00 | 9,294,992,285.86 | 14,302,264,638.25 |
Amount for last year
In RMB
| Item | Semi-annual of 2018 | |||||||||||
| Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. Balance at the end of the last year | 1,008,950,570.00 | 3,488,221,286.39 | 87,169,455.01 | 510,100,496.00 | 8,360,801,089.38 | 13,455,242,896.78 | ||||||
| Add: Changes of accounting policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning of this year | 1,008,950,570.00 | 3,488,221,286.39 | 87,169,455.01 | 510,100,496.00 | 8,360,801,089.38 | 13,455,242,896.78 | ||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | -58,302,580.35 | 222,750,350.46 | 164,447,770.11 | |||||||||
| (i) Total comprehensive income | -58,302,580.35 | 1,433,491,050.46 | 1,375,188,470.11 | |||||||||
| (ii) Owners’ devoted and decreased capital | ||||||||||||
| 1.Common shares invested by shareholders | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | ||||||||||||
| 4. Other | ||||||||||||
| (III) Profit distribution | -1,210,740,700.00 | -1,210,740,700.00 | ||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution for owners (or shareholders) | -1,210,740,700.00 | -1,210,740,700.00 | ||||||||||
| 3. Other | ||||||||||||
| (IV) Carrying forward internal owners’ equity | ||||||||||||
| 1. Capital reserves conversed to capital (share capital) | ||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | ||||||||||||
| 3. Remedying loss with surplus reserve | ||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | ||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | ||||||||||||
| 6. Other | ||||||||||||
| (V) Reasonable reserve | ||||||||||||
| 1. Withdrawal in the report period | 3,751,960.66 | 3,751,960.66 | ||||||||||
| 2. Usage in the report period | 3,751,960.66 | 3,751,960.66 | ||||||||||
| (VI)Others | ||||||||||||
| IV. Balance at the end of the report period | 1,008,950,570.00 | 3,488,221,286.39 | 28,866,874.66 | 510,100,496.00 | 8,583,551,439.84 | 13,619,690,666.89 |
III. Basic information of the Company
1. Historical origin of the Company
By the approval of STGS (1992) No. 130 issued by Jiangsu Economic Restructuring Committee, WeifuHigh-Technology Group Co., Ltd. (hereinafter referred to “the Company” or “Company”) was established as acompany of limited liability with funds raised from targeted sources, and registered at Wuxi Administration forIndustry & Commerce in October 1992. The original share capital of the Company totaled RMB 115.4355 million,including state-owned share capital amounting to RMB 92.4355 million, public corporate share capital amountingto RMB 8 million and inner employee share capital amounting to RMB 15 million.
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 RMB 1.00 for each, and the total value of thoseshares amounted to RMB 68 million. After the issuance, the Company’s total share capital increased to RMB
183.4355 million.
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 RMB 303.4355 million.
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 RMB 394.46615 million, of which state-owned shares amounted to RMB 120.16615million, public corporate shares RMB 10.4 million, foreign-funded shares (B-share) RMB 88.40 million, RMBordinary shares (A-share) RMB 156 million and inner employee shares RMB 19.5 million.
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 RMB10 for each allotted share. Actually 41.9 million shares was allotted, and the total share capital after the allotmentincreased to RMB 436.36615 million, of which state-owned corporate shares amounted to RMB 121.56615million, public corporate shares RMB 10.4 million, foreign-funded shares (B-share) RMB 88.4 million and RMBordinary shares (A-share) RMB 216 million.
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 27 May 2009, Weifu Group satisfied the consideration arrangement by dispatching 0.5 shares for each 10shares based on the number of circulating A share as prior to Share Merger Reform, according to the aforesaidShare Merger Reform, with an aggregate of 14,039,979 shares dispatched. Subsequent to implementation ofdispatch of consideration shares, Weifu Group then held 100,021,999 shares of the Company, representing
17.63% of the total share capital of the Company.
Pursuant to the document (XGZQ(2009)No.46) about Approval for Merger of Wuxi Weifu Group Co., Ltd. byWuxi Industry Development Group Co., Ltd. issued by the State-owned Assets Supervision and AdministrationCommission of Wuxi City Government, Wuxi Industry Development Group Co., Ltd. (hereinafter referred to asWuxi Industry Group) acquired Weifu Group. After the merger, Weifu Group was then revoked, and its assets andcredits & debts were transferred to be under the name of Wuxi Industry Group. Accordingly, Wuxi IndustryGroup became the first largest shareholder of the Company since then.
In accordance with the resolutions of shareholders' meeting and provisions of amended constitution, and approvedby [2012] No. 109 document of China Securities Regulatory Commission, in Feb., the Company issued RMBordinary shares (A-share) of 112,858,000 shares to Wuxi Industry Groups and overseas strategic investor, RobertBosch Co., Ltd. (ROBERT BOSCHGMBH) (hereinafter referred to as Robert Bosch Company), face value wasONE Yuan per share, added registered capital of RMB 112,858,000, and the registered capital after change wasRMB 680,133,995. Wuxi Industry Group is the first majority shareholder of the Company, and Robert BoschCompany is the second majority shareholder of the Company.
In March 2013, the profit distribution pre-plan for year of 2012 was deliberated and approved 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 RMB 1,020,200,992 up to 31 December 2013.
Deliberated and approved by the company’s first extraordinary general meeting in 2015, the company hasrepurchased 11,250,422 shares of A shares from August 26, 2015 to September 8, 2015, and has finished thecancellation procedures for above repurchase shares in China Securities Depository and Clearing Corporation
Limited Shenzhen Branch on September 16, 2015; after the cancellation of repurchase shares, the company’spaid-up capital (share capital) becomes 1,008,950,570 Yuan after the change.
2. Registered place, organization structure and head office of the Company
Registered place and head office of the Company: No. 5 Huashan Road, New District, WuxiUnified social credit code: 91320200250456967NThe Company sets up Shareholders’ General Meeting, the Board of Directors and the Supervisory Committee.
The Company sets up Administration Department, Technology Centre, organization & personnel department,Office of the Board, compliance department, IT department, Market & Strategy Department, Party-massesDepartment, Finance Department, Purchase Department, Manufacturing Quality Department, MS (MechanicalSystem) division, AC(Automobile Components) division and DS (Diesel System ) division etc. and subsidiariessuch as Wuxi Weifu Leader Catalytic Converter Co., Ltd., Nanjing Weifu Jinning Co., Ltd. Etc
3. Business nature and major operation activities of the Company
Operation scope of parent company: Technology development and consulting service in the machinery industry;manufacture of engine fuel oil system products, fuel oil system testers and equipment, manufacturing of autoelectronic parts, automotive electrical components, non-standard equipment, non-standard knife tool and exhaustafter-treatment system; sales of the general machinery, hardware & electrical equipment, chemical products & rawmaterials (excluding hazardous chemicals), automobile components and vehicles (excluding nine-seat passengercar); internal combustion engine maintenance; leasing of the own houses; import and export business in respect ofdiversified commodities and technologies (other than those commodities and technologies limited or forbidden bythe State for import and export) by self-operation and works as agent for such business. (any projects that needs tobe approved by laws can only be carried out after getting approval by relevant authorities)Major subsidiaries respectively activate in production and sales of engine accessories, automobile components,mufflers, and purifiers.
4. Relevant party offering approval reporting of financial statements and date thereofFinancial statements of the Company were approved by the Board of Directors for reporting dated 27 August2019
5. Scope of consolidate financial statement
| Name of subsidiary | Short name of subsidiary | Shareholding ratio (%) | Proportion of votes (%) | Registered capital (in 10 thousand Yuan) | Business scope | Statement consolidate (Y/N) | |
| Directly | Indirectly | ||||||
| Nanjing Weifu Jinning Co., Ltd. Co., Ltd. | Weifu Jinning | 80.00 | -- | 80.00 | 34,628.70 | Internal-combustion engine accessories | Y |
| Wuxi Weifu Leader Catalytic Converter Co., Ltd. | Weifu Leader | 94.81 | -- | 94.81 | 50,259.63 | Purifier and muffler | Y |
| Weifu Mashan Pump Glib Co., Ltd. | Weifu Mashan | 100.00 | -- | 100.00 | 16,500 | Internal-combustion engine accessories | Y |
| Wuxi Weifu Chang’an Co., Ltd. | Weifu Chang’an | 100.00 | -- | 100.00 | 21,000 | Internal-combustion engine accessories | Y |
| Wuxi Weifu International Trade Co. Ltd. | Weifu International Trade | 100.00 | -- | 100.00 | 3,000 | Trade | Y |
| Wuxi Weifu ITM Supercharging Technique Co., Ltd. | Weifu ITM | 100.00 | -- | 100.00 | 16,000 | Internal-combustion engine accessories | Y |
| Wuxi Weifu Schmidt Power System Spare Parts Co., Ltd. | Weifu Schmidt | 66.00 | -- | 66.00 | 7,600 | Internal-combustion engine accessories | Y |
| Ningbo Weifu Tianli Supercharging Technique Co., Ltd. | Weifu Tianli | 54.2295 | -- | 54.2295 | 11,136 | Internal-combustion engine accessories | Y |
| Wuxi Weifu-Autocam Fine Machinery Co. Ltd. | Weifu Autocam | 51.00 | -- | 51.00 | US$ 2,110 | Automobile components | Y |
| Wuxi Weifu Leader Catalytic Converter (Wuhan) Co., Ltd. | Weifu Leader (Wuhan) | -- | 60.00 | 60.00 | 1,000 | Purifier and muffler | Y |
| Weifu Leader (Chongqing) Automobile components Co., Ltd | Weifu Leader (Chongqing) | -- | 100.00 | 100.00 | 5,000 | Purifier and muffler | Y |
| Nanchang Weifu Leader Auto Parts & Components Co., Ltd. | Weifu Leader (Nanchang) | -- | 100.00 | 100.00 | 5,000 | Purifier and muffler | Y |
| Weifu Holding Aps | SPV | 100.00 | 100.00 | DKK 2620.60 | Y |
| IRD Fuel Cells A/S | IRD | 66.00 | 66.00 | DKK 4,160 | Fuel cell components | Y |
IV. Basis of preparation of financial statements
1. Preparation base
The financial statement were stated in compliance with Accounting Standard for Business Enterprises –BasicNorms issued by Ministry of Finance, the specific 42 accounting rules revised and issued dated 15 February 2006and later, the Application Instruments of Accounting Standards and interpretation on Accounting standards andother relevant regulations (together as “Accounting Standards for Business Enterprise”), as well as theCompilation Rules for Information Disclosure by Companies Offering Securities to the Public No.15 – GeneralProvision of Financial Report (Amended in 2014) issued by CSRC in respect of the actual transactions andproceedings, on a basis of ongoing operation.
In line with relevant regulations of Accounting Standards of Business Enterprise, accounting of the Company ison accrual basis. Except for certain financial instruments, the financial statement measured on historical cost.Assets have impairment been found, corresponding depreciation reserves shall accrual according to relevant rules.
2. Going concern
The Company comprehensively assessed the available information, and there are no obvious factors that impactsustainable operation ability of the Company within 12 months since end of the reporting period.V. Major Accounting Policies and EstimationSpecific accounting policies and estimation attention:
The Company and its subsidiaries are mainly engaged in the manufacture and sales of engine fuel oil systemproducts, automobile components, mufflers and purifiers etc., in line with the real operational characteristics andrelevant accounting standards, many specific accounting policies and estimation have been formulated for thetransactions and events with revenue recognized concerned. As for the explanation on major accounting judgmentand estimation, found more in Note V- Other major accounting policy and accounting estimation.
1. Statement on observation of Accounting Standard for Business EnterprisesFinancial statements prepared by the Company were in accordance with requirements of Accounting Standard forBusiness Enterprises, which truly and completely reflected the financial information of the Company during thereporting period such as financial position, operation achievements and cash flow.
2. Accounting period
Accounting period of the Company consist of annual and mid-term, mid-term refers to the reporting period shorterthan one annual accounting year. The company adopts Gregorian calendar as accounting period, namely form each1 January to 31 December.
3. Business cycles
Normal business cycle is the period from purchasing assets used for process by the Company to the cash and cashequivalent achieved. The Company’s normal business cycle was one-year (12 months).
4. Recording currency
The Company’s reporting currency is the RMB Yuan.
5. Accounting Treatment Method for Business Combinations under the same/different controlBusiness combination is the transaction or events that two or two above independent enterprises combined as areporting entity. Business combination including enterprise combined under the same control and businesscombined under different control.
(1) The business combination under the same control
Enterprise combination under the same control is the enterprise who take part in the combination are have thesame ultimate controller or under the same controller, the control is not temporary. The assets and liabilityacquired by combining party are measured by book value of the combined party on combination date. Balance ofnet asset’s book value acquired by combining party and combine consideration paid (or total book value of theshares issued), shall adjusted capital reserve (share premium); if the capital reserves (share premium) is notenough for deducted, adjusted for retained earnings. Vary directly expenses occurred for enterprise combination,the combining party shall reckoned into current gains/losses while occurring. Combination day is the date whencombining party obtained controlling rights from the combined party.
(2) Combine not under the same control
A business combination not involving entities under common control is a business combination in which all of thecombining entities are not ultimately controlled by the same party or parties both before and after the combination.As a purchaser, fair value of the assets (equity of purchaser held before the date of purchasing included) forpurchasing controlling right from the purchaser, the liability occurred or undertake on purchasing date less the fairvalue of identifiable net assets of the purchaser obtained in combination, recognized as goodwill if the results ispositive; if the number is negative, the acquirer shall firstly review the measurement of the fair value of theidentifiable assets obtained, liabilities incurred and contingent liabilities incurred, as well as the combination 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 forcombination shall be reckoned into current gains/losses. Difference of the fair value of assets paid and its bookvalues, reckoned into current gains/losses. On purchasing date, the identifiable assets, liability or contingency ofthe purchaser obtained by the Company recognized by fair value, that required identification conditions;Acquisition date refers to the date on which the acquirer effectively obtains control of the purchaser.
6. Preparation method for consolidated financial statement
(1) Recognition principle of consolidated scope
On basis of the financial statement of the parent company and owned subsidiaries, prepared consolidatedstatement in line with relevant information. The scope of consolidation of consolidated financial statements isascertained on the basis of effective control. Once certain elements involved in the above definition of controlchange due to changes of relevant facts or circumstances, the Company will make separate assessment.
(2) Basis of control
Control is the right to govern an invested party so as to obtain variable return through participating in the investedparty’s relevant activities and the ability to affect such return by use of the aforesaid right over the invested party.Relevant activates refers to activates have major influence on return of the invested party’s.
(3) Consolidation process
Subsidiaries are consolidated from the date on which the company obtains their actual control, and arede-consolidated from the date that such control ceases. All significant inter-group balances, investment,transactions and unrealized profits are eliminated in the consolidated financial statements. For subsidiaries being
disposed, the operating results and cash flows prior to the date of disposal are included in the consolidated incomestatement and consolidated cash flow statement; for subsidiaries disposed during the period, the opening balancesof the consolidated balance sheet would not be restated. For subsidiaries acquired from a business combinationnot under common control, their operating results and cash flows subsequent to the acquisition date are includedin the consolidated income statement and consolidated cash flow statement, and the opening balances andcomparative figures of the consolidated balance sheet would not be restated. For subsidiaries acquired from abusiness combination under common control, their operating results and cash flows from the date ofcommencement of the accounting period in which the combination occurred to the date of combination areincluded in the consolidated income statement and consolidated cash flow statement, and the comparative figuresof the consolidated balance sheet would be restated.In preparing the consolidated financial statements, where the accounting policies or the accounting periods areinconsistent between the company and subsidiaries, the financial statements of subsidiaries are adjusted inaccordance with the accounting policies and accounting period of the company.Concerning the subsidiary obtained under combination with different control, adjusted several financial statementof the subsidiary based on the fair value of recognizable net assets on purchased day while financial statementconsolidation; concerning the subsidiary obtained under combination with same control, considered current statusof being control by ultimate controller for consolidation while financial statement consolidation.The unrealized gains and losses from the internal transactions occurred in the assets the Company sold to thesubsidiaries fully offset "the net profit attributable to the owners of the parent company". The unrealized gains andlosses from the internal transactions occurred in the assets the subsidiaries sold to the Company are distributed andoffset between "the net profit attributable to the owners of the parent company" and "minority interest" accordingto the distribution ratio of the Company to the subsidiary. The unrealized gains and losses from the internaltransactions occurred in the assets sold among the subsidiaries are distributed and offset between "the net profitattributable to the owners of the parent company" and "minority interest" according to the distribution ratio of theCompany to the subsidiary of the seller.The share of the subsidiary’s ownership interest not attributable to the Company is listed as “minority interest”item under the ownership interest in the consolidated balance sheet. The share of the subsidiary’s current profit orloss attributable to the minority interests is listed as "minority interest" item under the net profit item in theconsolidated income statement. The share of the subsidiary’s current consolidated income attributable to theminority interests is listed as the “total consolidated income attributable to the minority shareholders” item underthe total consolidated income item in the consolidated income statement. If there are minority shareholders, addthe "minority interests" item in the consolidated statement of change in equity to reflect the changes of theminority interests. If the losses of the current period shared by a subsidiary’s minority shareholders exceed theshare that the minority shareholders hold in the subsidiary ownership interest in the beginning of the period, thebalance still charges against the minority interests.When the control over a subsidiary is ceased due to disposal of a portion of an interest in a subsidiary, the fairvalue of the remaining equity interest is re-measured on the date when the control ceased. The difference betweenthe sum of the consideration received from disposal of equity interest and the fair value of the remaining equity
interest, less the net assets attributable to the company since the acquisition date, is recognized as the investmentincome from the loss of control. Other comprehensive income relating to original equity investment insubsidiaries shall be treated on the same basis as if the relevant assets or liabilities were disposed of by thepurchaser directly when the control is lost, namely be transferred to current investment income other than therelevant part of the movement arising from re-measuring net liabilities or net assets under defined benefit schemeby the original subsidiary. Subsequent measurement of the remaining equity interests shall be in accordance withrelevant accounting standards such as Accounting Standards for business Enterprises 2 – Long-term EquityInvestments or Accounting Standards for business Enterprises 22 – Financial Instruments Recognition andMeasurement.The company shall determine whether loss of control arising from disposal in a series of transactions should beregarded as a bundle of transactions. When the economic effects and terms and conditions of the disposaltransactions met one or more of the following situations, the transactions shall normally be accounted for as abundle of transactions: ①The transactions are entered into after considering the mutual consequences of eachindividual transaction; ② The transactions need to be considered as a whole in order to achieve a deal incommercial sense; ③The occurrence of an individual transaction depends on the occurrence of one or moreindividual transactions in the series; ④ The result of an individual transaction is not economical, but it would beeconomical after taking into account of other transactions in the series. When the transactions are not regarded asa bundle of transactions, the individual transactions shall be accounted as “disposal of a portion of an interest in asubsidiary which does not lead to loss of control” and “disposal of a portion of an interest in a subsidiary whichlead to loss of control”. When the transactions are regarded as a bundle of transactions, the transactions shall beaccounted as a single disposal transaction; however, the difference between the consideration received fromdisposal and the share of net assets disposed in each individual transactions before loss of control shall berecognized as other comprehensive income, and reclassified as profit or loss arising from the loss of control whencontrol is lost.
7. Joint arrangement classification and accounting treatment for joint operationsIn accordance with the Company’s rights and obligation under a joint arrangement, the Company classifies jointarrangements into: joint ventures and joint operations.The company confirms the following items related to the share of interests in its joint operations, and inaccordance with the provisions of the relevant accounting standards for accounting treatment:
(1) Recognize the assets held solely by the Company, and recognize assets held jointly by the Company inappropriation to the share of the Company;
(2) Recognize the obligations assumed solely by the Company, and recognize obligations assumed jointly by theCompany in appropriation to the share of the Company;
(3) Recognize revenue from disposal of the share of joint operations of the Company;
(4) Recognize fees solely occurred by Company;
(5) Recognize fees from joint operations in appropriation to the share of the Company.
8. Determining standards for cash and cash equivalent
Cash refers to stock cash, savings available for paid at any time; cash and cash equivalent refers to the cash heldby the Company with short terms(expired within 3 months since purchased), and liquid and easy to transfer asknown amount and investment with minor variation in risks.
9. Foreign currency business and conversion
The occurred foreign currency transactions are converted into the recording currency in accordance with themiddle rate of the market exchange rate published by the People's Bank of China on the transaction date. Thereinto,the occurred foreign currency exchange or transactions involved in the foreign currency exchange are converted inaccordance with the actual exchange rate in the transactions.
At the balance sheet date, the account balance of the foreign currency monetary assets and liabilities is convertedinto the recording currency amount in accordance with the middle rate of the market exchange rate published bythe People's Bank of China on the transaction date. The balance between the recording currency amount convertedaccording to exchange rate at the balance sheet date and the original recording currency amount is disposed as theexchange gains or losses. Thereinto, the exchange gains or losses occurred in the foreign currency loans related tothe purchase and construction of fixed assets are disposed according to the principle of capitalization of borrowingcosts; the exchange gains and losses occurred during the start-up are included in the start-up costs; the rest isincluded in the current financial expenses.
At the balance sheet date, the foreign currency non-monetary items measured with the historical costs are convertedin accordance with the middle rate of the market exchange rate published by the People's Bank of China on thetransaction date without changing its original recording currency amount; the foreign currency non-monetary itemsmeasured with the fair value are converted in accordance with the middle rate of the market exchange ratepublished by the People's Bank of China on the fair value date, and the generated exchange gains and losses areincluded in the current profits and losses as the gains and losses from changes in fair value.
The following displays the methods for translating financial statements involving foreign operations into thestatements in RMB: The asset and liability items in the balance sheets for overseas operations are translated at thespot exchange rates on the balance sheet date. Among the owners’ equity items, the items other than“undistributed profits” are translated at the spot exchange rates of the transaction dates. The income and expenseitems in the income statements of overseas operations are translated at the average exchange rates of thetransaction dates. The exchange difference arising from the above mentioned translation are recognized in othercomprehensive income and is shown separately under owner’ equity in the balance sheet; such exchangedifference will be reclassified to profit or loss in current year when the foreign operation is disposed according tothe proportion of disposal.
The cash flows of overseas operations are translated at the average exchange rates on the dates of the cash flows.The effect of exchange rate changes on cash is presented separately in the cash flow statement.
10. Financial instrument
Financial instrument is the contract that taken shape of the financial asses for an enterprise and of the financialliability or equity instrument for other units.
(1) Determination 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 have been transferred and meets the following termination recognition conditions for thetransfer of financial assetsIf all or part of the current obligations of a financial liability has been discharged, the financial liability or part of itis derecognized. When the Company (debtor) and the creditor sign an agreement to replace the existing financialliabilities with new financial liabilities, and the new financial liabilities and the existing financial liabilities aresubstantially different from the contract terms, derecognize the existing financial liabilities and recognize the newfinancial liabilities at the same time.Financial assets are traded in the normal way and their accounting recognition and derecognition 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 cashflow characteristics of financial assets, the Company classifies the financial assets into the financial assetsmeasured at amortized cost, the financial assets measured at fair value and whose changes are included in othercomprehensive income, and the financial assets measured at fair value and whose changes are included in currentprofit or loss.
① Financial assets measured at amortized cost
The Company classifies the financial assets that meet the following conditions and haven’t been designated asfinancial assets measured at fair value and whose changes are included in current profit or loss as financial assetsmeasured at amortized cost:
A. the group's business model for managing the financial assets is to collect contractual cash flows; andB. the contractual terms of the financial assets stipulate that cash flow generated on a specific date is only
paid for the principal and interest based on the outstanding principal amount.After initial recognition, such financial assets are measured at amortized cost by using the effective interest method.Gains or losses arising from financial assets which are measured at amortized cost and are not a component of anyhedging relationship are included in current profit or loss when being derecognized, amortized by effective interestmethod, or impaired.
② Financial assets measured at fair value and whose changes are included in other comprehensive incomeThe Company classifies the financial assets that meet the following conditions and haven’t been designated asfinancial assets measured at fair value and whose changes are included in current profit or loss as financial assetsmeasured at fair value and whose changes are included in other comprehensive income:
A. the Group's business model for managing the financial assets is targeted at both the collection ofcontractual cash flows and the sale of financial assets; andB. the contractual terms of the financial asset stipulate that the cash flow generated on a specific date is onlythe payment of the principal and the interest based on the outstanding principal amount.After initial recognition, such financial assets are subsequently measured at fair value. Interests, impairment lossesor gains and exchange gains and losses calculated by using the effective interest method are included in profit or lossfor the period, and other gains or losses are included in other comprehensive income. When being derecognized, theaccumulated gains or losses previously included in other comprehensive income are transferred from othercomprehensive income and included in current profit or 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 areincluded in other comprehensive income, the Company classifies all other financial assets as financial assetsmeasured at fair value and whose changes are included in current profit or loss. In the initial recognition, in order toeliminate or significantly reduce accounting mismatch, the Company irreversibly designates part of the financialassets that should be measured at amortized cost or measured at fair value and whose changes are included in theother comprehensive income as the financial assets measured at fair value and whose changes are included incurrent profit or loss.After the initial recognition, such financial assets are subsequently measured at fair value, and the gains or losses(including interests and dividend income) are included in the current profit and loss, unless the financial assets arepart of the hedging relationship.However, for non-trading equity instrument investments, the Company irreversibly designates them as the financialassets that are measured at fair value and whose changes are included in other comprehensive income in the initialrecognition. The designation is made based on a single investment and the relevant investment is in line with thedefinition of equity instruments from the issuer's perspective.After initial recognition, such financial assets are subsequently measured at fair value. Dividend income that meetsthe conditions is included in profit or loss, and other gains or losses and changes in fair value are included in othercomprehensive income. When it is derecognized, the accumulated gains or losses previously included in othercomprehensive income are transferred from other comprehensive income and included in retained earnings.The business model for managing financial assets refers to how the Company manages financial assets to generatecash flows. The business model determines whether the cash flow of financial assets managed by the Company isbased on contract cash flow, selling financial assets or both. The Company determines the business model formanaging financial assets based on objective facts and based on the specific business objectives of financial assetsmanagement determined by key management personnel.
The Company evaluates the contractual cash flow characteristics of financial assets to determine whether thecontractual cash flows generated by the relevant financial assets on a specific date are only payments for theprincipal and the interest based on the outstanding principal amount. The principal is the fair value of the financialassets at initial recognition; the interest includes the time value of money, the credit risk associated with theoutstanding principal amount for a specific period, and other basic borrowing risks, costs and consideration of profit.In addition, the Company evaluates the contractual terms that may result in changes in the time distribution or theamount of contractual cash flows of the financial assets to determine whether they meet the requirements of theabove contractual cash flow characteristics.Only when the Company changes its business model of managing financial assets, all affected financial assets arereclassified on the first day of the first reporting period after the business model changes, otherwise the financialassets are not allowed to be reclassified after initial recognition. .Financial assets are measured at fair value on initial recognition. For financial assets measured at fair value andwhose changes are included in current profit or loss, the related transaction expenses are directly included incurrent profit or loss. For other types of financial assets, the related transaction costs are included in the initialrecognition amount. For the accounts receivable or notes receivable arising from the sale of products or theprovision of labor services that do not contain or consider the significant financing components, the Companyuses the consideration amount that is expected to be received as the initial recognition amount.
(3) Classification and measurement of financial liabilities
The financial liabilities of the Company are classified as financial liabilities measured at fair value and whosechanges are included in current profit or loss and financial liabilities measured at amortized cost at the initialrecognition. For financial liabilities that are not classified as financial liabilities measured at fair value and whosechanges are included in current profit or loss, the related transaction expenses are included in the initial recognitionamount.
①Financial liability measured by fair value and with variation reckoned into current gains/lossesFinancial liability measured by fair value and with variation reckoned into current gains/losses including tradablefinancial liability and the financial liabilities that are designated as fair value in the initial recognition and whosechanges are included in current profit or loss. For such financial liabilities, the subsequent measurement is based onfair value, and the gains or losses arising from changes in fair value and the dividends and interest expenses relatedto these financial liabilities are included in current profit or loss.
②Financial liability measured by amortized cost
Other financial liabilities are subsequently measured at amortized cost by using the effective interest method. Thegain or loss arising from derecognition or amortization is included in current profit or loss.
③Distinctions between financial liabilities and equity instruments
Financial liabilities are liabilities that meet one of the following conditions:
A. Contractual obligations to deliver cash or other financial assets to other parties.
B. Contractual obligations to exchange financial assets or financial liabilities with other parties underpotentially adverse conditions.
C. Non-derivative contracts that must be settled or that can be settled by the company's own equity instrumentsin the future, and the enterprise will deliver a variable amount of its own equity instruments according to thecontract.
D. Derivative contracts that must be settled or that can be settled by the company's own equity instruments inthe future, except for derivatives contracts that exchange a fixed amount of cash or other financial assets with a fixedamount of their own equity instruments.An equity instrument is a contract that proves it has a residual equity in the assets of an enterprise after deducting allliabilities.If the Company cannot unconditionally avoid performing a contractual obligation by delivering cash or otherfinancial assets, the contractual obligation is consistent with the definition of financial liability.If a financial instrument is required to be settled or can be settled by the Company's own equity instruments, it isnecessary to consider whether the Company's own equity instruments used to settle the instrument are a substitutefor cash or other financial assets, or to make the instrument holder enjoy the residual equity in the assets of the issuerafter deducting all liabilities. In the former case, the instrument is the Company's financial liability; if it is the latter,the instrument is the Company's equity instrument.
(4) Fair value of financial instruments
The company uses valuation techniques that are applicable under current circumstances and that have sufficientavailable data and other information support to determine the fair value of related financial assets and financialliabilities. The company divides the input values used by valuation techniques into the following levels and usesthem in sequence:
① The first-level input value is the unadjusted quotation of the same assets or liabilities that can be obtained on themeasurement date in the active market;
② The second-level input value is the direct or indirect observable input value of the relevant assets or liabilitiesother than the first-level input value, including quotations of similar assets or liabilities in an active market;quotations of same or similar assets or liabilities in an active market; other observable input value other thanquotations, such as interest rate and yield curves that are observable during the normal quote interval; market-validated input value, etc.;
③ The third-level input value is the unobservable input value of the relevant assets or liabilities, including theinterest rate that cannot be directly observed or cannot be verified by observable market data, stock volatility, futurecash flow of the retirement obligation assumed in the business combination, and financial forecasting made by itsown data, etc.
(5) Impairment of financial assets
On the basis of expected credit losses, the Company performs impairment treatment on financial assets measuredat amortized cost and creditors’ investment measured at fair value and whose changes are included in othercomprehensive income and recognize the provisions for loss.
①Measurement of expected credit losses
Expected credit loss refers to the weighted average of credit losses of financial instruments weighted by the risk ofdefault. Credit loss refers to the difference between all contractual cash flows that the Company discounts at theoriginal actual interest rate and are receivable in accordance with contract and all cash flows expected to bereceived, that is, the present value of all cash shortages. Among them, for the purchase or source of financialassets that have suffered credit impairment, the Company discounts the financial assets at the actual interest rateadjusted by credit.The Company measures the expected credit losses of financial instruments at different stages. If the credit risk of afinancial instrument has not increased significantly since the initial recognition, the financial instrument is in thefirst stage, and the Company measures the loss provisions according to the expected credit losses in the next 12months. If the credit risk of a financial instrument has increased significantly but the credit impairment has not yetoccurred since the initial recognition, the financial instrument is in the second stage, and the Company measures theloss provisions according to the expected credit losses of the instrument for the entire duration. If the financialinstrument has suffered credit impairment since the initial confirmation, it is in the third stage, the Companymeasures the loss provisions according to the expected credit losses of the instrument for the entire duration.For the financial instrument with lower credit risk on the balance sheet date, the Company assumes that its creditrisk has not increased significantly since the initial recognition, and measures the loss provisions according to theexpected credit losses in the next 12 months.The expected credit losses for the entire duration refer to the expected credit losses due to all possible credit eventsduring the entire expected duration of the financial instrument. Expected credit losses in the next 12 months refer tothe expected credit losses caused by the possible credit events of financial instrument that may occur within 12months after the balance sheet date (if the expected duration of financial instrument is less than 12 months, it shallbe the expected duration), which are part of the expected credit loss for the entire duration.When measuring expected credit losses, the maximum period that the Company needs to consider is the longestcontract period for which the company is exposed to credit risk (including options for consideration of renewal).For notes receivable and accounts receivable, regardless of whether there is a major financing, the Company alwaysmeasures its loss provisions according to the amount of expected credit losses for the entire duration.The Company divides the combination of the notes receivable and accounts receivable according to the credit riskcharacteristics, and calculates the expected credit losses on the basis of combinations, the basis for determining thecombination is as follows:
A. Note receivableNote receivable 1：Bank acceptance billNote receivable 2：Trade acceptanceB. Account receivableAccount receivable 1：Receivables from internal related party
Account receivable 2：Receivable from other clientsFor the notes receivable divided into combinations, the Company calculates the expected credit losses by referringto the historical credit loss experience, combing with the current situation and the forecast of future economicconditions, and through the default risk exposure and the expected credit loss rate for the entire duration.For the accounts receivable divided into combinations, the Company calculates the expected credit losses byreferring to the historical credit loss experience, combing with the current situation and the forecast of futureeconomic conditions, and compiling a comparison table of accounts receivable aging and the expected credit lossrate for the entire duration.C. Other receivablesWhen a single other receivables cannot be used to estimate the expected credit loss at a reasonable cost, theCompany divides other receivables into several combinations based on the credit risk characteristics, and calculatesthe expected credit losses based on a combination, the basis for determining the combination is as follows:
Other account receivable 1：Receivables from internal related partyOther account receivable 2：Receivable from other clientsFor other receivables classified as a combination, the Company calculates the expected credit loss through thedefault risk exposure and the expected credit loss rate over the next 12 months or the entire duration.D. Debt investment, other debt investmentFor debt investment and other debt investment, the Company calculates the expected credit losses according to thenature of the investment, according to various types of counter parties and risk exposures, and through default riskexposure and expected credit loss rate in the next 12 months or the entire duration.
②Assessment of a significant increase in credit risk:
The Company determines the relative changes in default risk of the financial instrument occurred in the expectedduration and assess whether the credit risks of financial instrument has increased significantly since the initialrecognition by comparing the risk of default of the financial instrument on the balance sheet date with the risk ofdefault of financial instrument on the initial recognition date. When determining whether the credit risk hasincreased significantly since the initial recognition, the Company considers reasonable and evidence-basedinformation that can be obtained without unnecessary additional costs or effort, including forward-lookinginformation. The information considered by the Company includes:
A. The debtor fails to pay the principal and interest according to the contractual maturity date;
B. Serious worsening of external or internal credit rating (if any) of the financial instruments that have occurredor 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 amaterial adverse effect on the debtor's ability to repay the company.Based on the nature of financial instruments, the Company assesses whether credit risk has increased significantlyon the basis of a single financial instrument or combination of financial instruments. When conducting an
assessment based on a combination of financial instruments, the Company can classify financial instruments basedon common credit risk characteristics, such as overdue information and credit risk ratings.The Company believes that financial assets are subject to default in the following circumstances:
The debtor is unlikely to pay the full amount to the Company, and the assessment does not consider the Company totake recourse actions such as realizing collateral (if held).
③Financial assets with credit impairment
On the balance sheet date, the Company assesses whether the credit of financial assets measured at amortized costand the credit of debt investments measured at fair value and whose changes are included in other comprehensiveincome has been impaired. When one or more events that adversely affect the expected future cash flows of afinancial asset occur, the financial asset becomes a financial asset that has suffered credit impairment. Evidence thatcredit impairment has occurred in financial assets includes the following observable information:
A. The issuer or the debtor has significant financial difficulties;B. The debtor breaches the contract, such as default or overdue repayment of interest or principal;C. The Company gives concessions to the debtor that will not be made in any other circumstances for economicor contractual considerations relating to the financial difficulties of the debtor;D. The debtor is likely to go bankrupt or carry out other financial restructurings;E. The financial difficulties of the issuer or the debtor have caused the active market of the financial asset todisappear.
④ Presentation of expected credit loss provisions
In order to reflect the changes in the credit risk of financial instruments since the initial recognition, the Companyre-measures the expected credit losses on each balance sheet date, and the resulting increase or reversal of the lossprovisions shall be included in current profit and loss as impairment losses or gains. For financial assets measured atamortized cost, the loss provisions are written off against the book value of the financial assets listed in the balancesheet; for debt investments measured at fair value and whose changes are included in other comprehensive income,the Company recognizes the loss provisions in other comprehensive income and does not deduct the book value ofthe financial asset.
⑤Write-off
If the Company no longer reasonably expects that the financial asset contract cash flow can be fully or partiallyrecovered, directly write down the book balance of the financial asset. Such write-downs constitute thederecognition of related financial assets. This usually occurs when the Company determines that the debtor has noassets or sources of income to generate sufficient cash flow to repay the amount that will be written down. However,according to the Company's procedures for recovering the due amount, the financial assets that have been writtendown may still be affected by the execution activities.If the financial assets that have been written down are recovered afterwards, they shall be included in the profit orloss of the period being recovered as the reversal of the impairment loss
(6) Transfer of financial assets
The transfer of financial assets refers to the transfer or delivery of financial assets to the other party (the transferee)
other than the issuer of the financial assets.For financial assets that the Company has transferred almost all risks and rewards of ownership of financial assets tothe transferee, derecognize the financial assets; if almost all the risks and rewards of ownership of financial assetshave been retained, do not derecognize the financial assets.If the Company has neither transferred nor retained almost all the risks and rewards of ownership of financial assets,dispose as following situations: If the control of the financial assets is abandoned, derecognize the financial assetsand determine the resulting assets and liabilities. If the control of the financial assets is not abandoned, determine therelevant financial assets according to the extent to which they continue to be involved in the transferred financialassets, and determine the related liabilities accordingly.
(7) Balance-out between the financial assets and liabilities
As the Group has the legal right to balance out the financial liabilities by the net or liquidation of the financialassets, the balance-out sum between the financial assets and liabilities is listed in the balance sheet. In addition,the financial assets and liabilities are listed in the balance sheet without being balanced out.
11. Note receivable
Found more in the impairment of financial instrument carried in Financial Instrument
12. Account receivable
Found more in the impairment of financial instrument carried in Financial Instrument
13. Other account receivable
Found more in the impairment of financial instrument carried in Financial Instrument
11. Note receivable
The notes receivable settled by the Company are all bank acceptance and letters of credit, based on the credit riskcharacteristics of notes receivable, the credit risk of notes receivable is comprehensively evaluated, the Companydoes not make credit impairment losses for notes receivable.
12. Account receivable
(1) Account Receivable withdrawal on single significant amount and with bad debt provision accrued forsingle item
| Determine basis or amount standards for single significant amount | The Company’s account receivables with above RMB 1 million in single item is defined as account receivables with significant amount in single item. |
| Withdrawal method for account with single significant amount and withdrawal single item bad debt provision | In line with the difference of present value of future cash flow lower its book value, carried out impairment test independently and withdrawal the bad debt reserves |
(2) Receivables with bad debt provision accrual by credit portfolio
| Portfolio | Bad debt provision accrual |
| Classify to many combination based on credit portfolio for those receivables with minor account singly and those with major amount but has no impairment been found after testing independently; base on the actual loss ratio of the receivables of previous years, with same or similar credit portfolio, and combining actual condition accrual bad debt reserves. | Age analysis method |
In portfolio, accounts whose bad debts provision was accrued by age analysis:
√ Applicable □ Not applicable
| Account age | Accrual ratio for account receivable | Accrual ratio for other receivables |
| Within 6 months |
| 6 months to one year | 10.00% | 10.00% |
| 1－2 years | 20.00% | 20.00% |
| 2－3 years | 40.00% | 40.00% |
| Over 3 years | 100.00% | 100.00% |
| 3－4 years | 100.00% | 100.00% |
| 4－5 years | 100.00% | 100.00% |
| Over 5 years | 100.00% | 100.00% |
In portfolio, withdrawal proportion of bad debt provision based on balance proportion
□ Applicable √ Not applicable
In portfolio, withdrawal proportion of bad debt provision based on other methods:
□ Applicable √ Not applicable
(3) Account receivable with minor single amount but with withdrawal bad debt provision for single item
| Reasons for withdrawal single item bad debt provision | The present value of future cash flow has major difference with the receivable group’s present value of future cash flow |
| Withdrawal method for bad debt provision | Carried out impairment test independently, accrual bad debt reserves according to the difference of present value of future cash flow lower its book value |
13. Other account receivable
Method for determining expected credit losses of other receivables and accounting treatment methods
For other receivables, whether or not it contains significant financing components, the company always measures itsloss provisions according to the amount of expected credit losses during the entire renewal period, and the resultingincrease or reversal amount of loss provisions is included in the current profit and loss as an impairment loss.
The company classifies other receivables into several combinations based on similar credit risk characteristics, andcalculates the expected credit losses based on all reasonable and evidenced information (including forward-lookinginformation) on the basis of combination, the basis for determining the combination is as follows:
| Item | Basis for determining portfolio | Method of measuring expected credit loss |
| Other account receivable | Account age | Refer to the historical credit loss experience, combine with the current situation and the forecast of future economic conditions, compile a comparison table of the age of other receivables and the expected credit loss rate of the entire renewal period, and calculate the expected credit losses. |
14. Inventory
Whether the Company needs to comply with the disclosure requirement of special industryN
(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
A. Generally, stock materials are calculated at planned cost. Material cost difference is individually set accordingto classification of grant types. Pursuant to the difference between the planned cost of the received or deliveredraw materials and the material cost the aforesaid cost should share after carrying forward at period-end, theCompany adjusts the planned cost to effective cost; finished products are priced at effective costs, and carriedforward to operating cost by weighted average method when being delivered;B. Products in process are priced at effective costs, and carried forward to finished products at actually occurredcost;C. Finished self-produced products are priced at effective costs, and carried forward to operating cost by weightedaverage method; external purchase goods (from import and export trades) are carried forward to sales cost byindividual pricing method.
(3) Recognition evidence for net realizable value of inventories and withdrawal method for inventory impairmentprovisionInventories as at period-end are priced at the lower of costs and net realizable values; at period end, on the basis ofoverall clearance about inventories, inventory impairment provision is withdrew for uncollectible part of costs ofinventories which result from destroy of inventories, out-of-time of all and part inventories, or sales pricelowering than cost. Inventory impairment provision for stock goods and quantity of raw materials is subject to thedifference between costs of single inventory item over its net realizable value. As for other raw materials withlarge quantity and comparatively low unit prices, inventory impairment provision is withdrawn pursuant tocategories.As for finished goods, commodities and materials available for direct sales, their net realizable values aredetermined by their estimated selling prices less estimated sales expenses and relevant taxes. For materialinventories held for purpose of production, their net realizable values are determined by the estimated selling
prices of finished products less estimated costs, estimated sales expenses and relevant taxes accumulated tillcompletion of production. As for inventories held for implementation of sales contracts or service contracts, theirnet realizable values are calculated on the basis of contract prices. In the event that inventories held by a companyexceed order amount as agreed in sales contracts, net realizable values of the surplus part are calculated on thebasis of normal sale price.
(4) Inventory system
Perpetual Inventory System is adopted by the Company and takes a physical inventory.
(5) Amortization of low-value consumables and wrappage
①Low-value consumables
The Company adopts one-off amortization method to amortize the low-value consumables.
②Wrappage
The Company adopts one-off amortization method to amortize the wrappage at the time of receipt.
15. Assets held for sale
The Company classifies non-current assets or disposal groups that meet all of the following conditions asheld-for-sale: according to the practice of selling this type of assets or disposal groups in a similar transaction, thenon-current assets or disposal group can be sold immediately at its current condition; The sale is likely to occur,that is, the Company has made resolution on the selling plan and obtained definite purchase commitment, theselling is estimated to be completed within one year. Those assets whose disposal is subject to approval fromrelevant authority or supervisory department under relevant requirements are subject to that approval.
Where the Company loses control over its subsidiary due to disposal of investment in the subsidiary, whether ornot the Company retains part equity investment after such disposal, investment in the subsidiary shall be classifiedin its entirety as held for sale in the separate financial statement of the parent company subject to that theinvestment in the subsidiary proposed to be disposed satisfies the conditions for being classified as held for sale,and all the assets and liabilities of the subsidiary shall be classified as held for sale in consolidated financialstatement.The purchase commitment identified refers to the legally binding purchase agreement entered into between theCompany and other parties, which sets out certain major terms relating to transaction price, time and adequatelystringent punishment for default, which render an extremely minor possibility for material adjustment orrevocation of the agreement.Assets held for sale are measured at the lower of heir carrying value and fair value less selling expense. If thecarrying value is higher than fair value less selling expense, the excess shall be recognized as impairment loss andrecorded in profit or loss for the period, and allowance for impairment shall be provided for in respect of theassets. In respect of impairment loss recognized for disposal group held for sale, carrying value of the goodwill in
the disposal group shall be deducted first, and then deduct the carrying value of the non-current assets within thedisposal group applicable to this measurement standard on a pro rata basis according to the proportion taken bytheir carrying value.If the net amount of fair value of non-current assets held for sale less sales expense on subsequent balance sheetdate increases, the amount previously reduced for accounting shall be recovered and reverted from the impairmentloss recognized after the asset is classified under the category of held for sale, with the amount reverted recordedin profit or loss for the period. Impairment loss recognized before the asset is classified under the category of heldfor sale shall not be reverted. If the net amount of fair value of the disposal group held for sale on the subsequentbalance sheet date less sales expenses increases, the amount reduced for accounting in previous periods shall berestored, and shall be reverted in the impairment loss recognized in respect of the non-current assets which areapplicable to relevant measurement provisions after classification into the category of held for sale, with thereverted amount charged in profit or loss for the current period. The written-off carrying value of goodwill shallnot be reverted.The non-current assets in the non-current assets or disposal group held for sale is not depreciated or amortized,and the debt interests and other fees in the disposal group held for sale continue to be recognized.If the non-current assets or disposal group are no longer classified as held for sale since they no longer meet thecondition of being classified as held for sale or the non-current assets are removed from the disposal group heldfor sale, they will be measured at the lower of the following:
(i) The amount after their book value before they are classified as held for sale is adjusted based on thedepreciation, amortization or impairment that should have been recognized given they are not classified as heldfor sale;(ii) The recoverable amount.
16.Long-term equity investment
Long-term equity investments refer to long-term equity investments in which the Company has control, jointcontrol or significant influence over the invested party. Long-term equity investment without control or jointcontrol or significant influence of the Group is accounted for as available-for-sale financial assets or financialassets measured at fair value with any change in fair value charged to profit or loss.
(1) Determination of initial investment cost
Investment costs of the long-term equity investment are recognized by the follow according to different way ofacquirement:
①For a long-term equity investment acquired through a business combination involving enterprises undercommon control, the initial investment cost of the long-term equity investment shall be the absorbing party’sshare of the carrying amount of the owner’s equity under the consolidated financial statements of the ultimatecontrolling party on the date of combination. The difference between the initial cost of the long-term equityinvestment and the cash paid, non-cash assets transferred as well as the book value of the debts borne by theabsorbing party shall offset against the capital reserve. If the capital reserve is insufficient to offset, the retainedearnings shall be adjusted. If the consideration of the merger is satisfied by issue of equity securities, the initial
investment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount ofthe owner’s equity under the consolidated financial statements of the ultimate controlling party on the date ofcombination. With the total face value of the shares issued as share capital, the difference between the initial costof the long-term equity investment and total face value of the shares issued shall be used to offset against thecapital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. (For businesscombination 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 whetherthey shall be treat as “transactions in a basket”. If they belong to “transactions in a basket”, these transactions willbe accounted for a transaction in obtaining control. If they are not belong to “transactions in a basket”, the initialinvestment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount ofthe owner’s equity under the consolidated financial statements of the ultimate controlling party on the date ofcombination. The difference between the initial cost of the long-term equity investment and the aggregate of thecarrying 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 capital reserve is insufficient to offset, the retained earnings shall be adjusted. Other comprehensive incomerecognized as a result of the previously held equity investment accounted for using equity method on the date ofcombination or recognized for available-for-sale financial assets will not be accounted for.)
②For a long-term equity investment acquired through a business combination involving enterprises not undercommon control, the initial investment cost of the long-term equity investment shall be the cost of combination onthe date of acquisition. Cost of combination includes the aggregate fair value of assets paid by the acquirer,liabilities incurred or borne and equity securities issued. (For business combination resulted in an enterprise notunder common control by acquiring equity of the acquire under common control through a stage-up approach withseveral transactions, these transactions will be judged whether they shall be treat as “transactions in a basket”. Ifthey belong to “transactions in a basket”, these transactions will be accounted for a transaction in obtainingcontrol. If they are not belong to “transactions in a basket”, the initial investment cost of the long-term equityinvestment accounted for using cost method shall be the aggregate of the carrying amount of equity investmentpreviously held by the acquire and the additional investment cost. For previously held equity accounted for usingequity method, relevant other comprehensive income will not be accounted for. For previously held equityinvestment classified as available-for-sale financial asset, the difference between its fair value and carryingamount, as well as the accumulated movement in fair value previously included in the other comprehensiveincome shall be transferred to profit or loss for the current period.) plus the combination cost measured by costswhich have directly connection with acquisition are considered as initial investment cost of such long-term equityinvestment. Realizable assets and liabilities undertaken by such assets (including contingent liabilities) of theparty being combined as at the combination date are all measured at fair values, without consideration toamount of minority interests. The surplus of combination cost less fair value net realizable assets of theparty being combined is recorded as goodwill, and the deficit is directly recognized in the consolidatedstatement of gains and losses.
③Long-term investments obtained through other ways:
A. Initial investment cost of long-term equity investment obtained through cash payment is determined accordingto actual payment for purchase;B. Initial investment cost of long-term equity investment obtained through issuance of equity securities isdetermined at fair value of such securities;C. Initial investment cost of long-term equity investment (exchanged-in) obtained through exchange withnon-monetary assets, which is of commercial nature, is determined at fair value of the assets exchanged-out;otherwise determined at carrying value of the assets exchanged-out if it is not of commercial nature;D. Initial investment cost of long-term equity investment obtained through debt reorganization is determined atfair value of such investment.
(2) Subsequent measurement on long-term equity investment
①Presented controlling ability on invested party, the investment shall use cost method for measurement.
②Long-term equity investments with joint control (excluding those constitute joint ventures) or significantinfluence on the invested party are accounted for using equity method.
Under the equity method, where the initial investment cost of a long-term equity investment exceeds theinvestor’s interest in the fair value of the invested party’s identifiable net assets at the acquisition date, noadjustment shall be made to the initial investment cost. Where the initial investment cost is less than the investor’sinterest in the fair value of the invested party’s identifiable net assets at the acquisition date, the difference shall becharged to profit or loss for the current period, and the cost of the long term equity investment shall be adjustedaccordingly.
Under the equity method, investment gain and other comprehensive income shall be recognized based on theGroup’s share of the net profits or losses and other comprehensive income made by the invested party,respectively. Meanwhile, the carrying amount of long-term equity investment shall be adjusted. The carryingamount of long-term equity investment shall be reduced based on the Group’s share of profit or cash dividenddistributed by the invested party. In respect of the other movement of net profit or loss, other comprehensiveincome and profit distribution of invested party, the carrying value of long-term equity investment shall beadjusted and included in the capital reserves. The Group shall recognize its share of the invested party’s net profitsor losses based on the fair values of the invested party’s individual separately identifiable assets at the time ofacquisition, after making appropriate adjustments thereto. In the event of inconformity between the accountingpolicies and accounting periods of the invested party and the Company, the financial statements of the investedparty shall be adjusted in conformity with the accounting policies and accounting periods of the Company.Investment gain and other comprehensive income shall be recognized accordingly. In respect of the transactionsbetween the Group and its associates and joint ventures in which the assets disposed of or sold are not classified asoperation, the share of unrealized gain or loss arising from inter-group transactions shall be eliminated by the
portion attributable to the Company. Investment gain shall be recognized accordingly. However, any unrealizedloss arising from inter-group transactions between the Group and an invested party is not eliminated to the extentthat the loss is impairment loss of the transferred assets. In the event that the Group disposed of an asset classifiedas operation to its joint ventures or associates, which resulted in acquisition of long-term equity investment by theinvestor without obtaining control, the initial investment cost of additional long-term equity investment shall bethe fair value of disposed operation. The difference between initial investment cost and the carrying value ofdisposed operation will be fully included in profit or loss for the current period. In the event that the Group sold anasset classified as operation to its associates or joint ventures, the difference between the carrying value ofconsideration received and operation shall be fully included in profit or loss for the current period. In the eventthat the Company acquired an asset which formed an operation from its associates or joint ventures, relevanttransaction shall be accounted for in accordance with “Accounting Standards for Business Enterprises No. 20“Business combination”. All profit or loss related to the transaction shall be accounted for.
The Group’s share of net losses of the invested party shall be recognized to the extent that the carrying amount ofthe long-term equity investment together with any long-term interests that in substance form part of the investor’snet investment in the invested party are reduced to zero. If the Group has to assume additional obligations, theestimated obligation assumed shall be provided for and charged to the profit or loss as investment loss for theperiod. Where the invested party is making profits in subsequent periods, the Group shall resume recognizing itsshare of profits after setting off against the share of unrecognized losses.
③Acquisition of minority interest
Upon the preparation of the consolidated financial statements, since acquisition of minority interest increased oflong-term equity investment which was compared to fair value of identifiable net assets recognized which aremeasured based on the continuous measurement since the acquisition date (or combination date) of subsidiariesattributable to the Group calculated according to the proportion of newly acquired shares, the difference of whichrecognized as adjusted capital surplus, capital surplus insufficient to set off impairment and adjusted retainedearnings.
④Disposal of long-term equity investments
In these consolidated financial statements, for disposal of a portion of the long-term equity investments in asubsidiary without loss of control, the difference between disposal cost and disposal of long-term equityinvestments relative to the net assets of the subsidiary is charged to the owners’ equity. If disposal of a portion ofthe long-term equity investments in a subsidiary by the parent company results in a change in control, it shall beaccounted for in accordance with the relevant accounting policies as described in Note V.- 6 “Preparation Methodof the Consolidated Financial Statements”.
On disposal of a long-term equity investment otherwise, the difference between the carrying amount of theinvestment and the actual consideration paid is recognized through profit or loss in the current period.
In respect of long-term equity investment accounted for using equity method with the remaining equity interest
after disposal also accounted for using equity method, other comprehensive income previously under owners’equity shall be accounted for in accordance with the same accounting treatment for direct disposal of relevantasset or liability by invested party on pro rata basis at the time of disposal. The owners’ equity recognized for themovement of other owners’ equity (excluding net profit or loss, other comprehensive income and profitdistribution of invested party) shall be transferred to profit or loss for the current period on pro rata basis.
In respect of long-term equity investment accounted for using cost method with the remaining equity interest afterdisposal also accounted for cost equity method, other comprehensive income measured and reckoned under equitymethod or financial instrument before control of the invested party unit acquired shall be accounted for inaccordance with the same accounting treatment for direct disposal of relevant asset or liability by invested partyon pro rata basis at the time of disposal and shall be transferred to profit or loss for the current period on pro ratabasis; among the net assets of invested party unit recognized by equity method (excluding net profit or loss, othercomprehensive income and profit distribution of invested party) shall be transferred to profit or loss for the currentperiod on pro rata basis.In the event of loss of control over invested party due to partial disposal of equity investment by the Group, inpreparing separate financial statements, the remaining equity interest which can apply common control or imposesignificant influence over the invested party after disposal shall be accounted for using equity method. Suchremaining equity interest shall be treated as accounting for using equity method since it is obtained andadjustment was made accordingly. For remaining equity interest which cannot apply common control or imposesignificant influence over the invested party after disposal, it shall be accounted for using the recognition andmeasurement standard of financial instruments. The difference between its fair value and carrying amount as atthe date of losing control shall be included in profit or loss for the current period. In respect of othercomprehensive income recognized using equity method or the recognition and measurement standard of financialinstruments before the Group obtained control over the invested party, it shall be accounted for in accordance withthe same accounting treatment for direct disposal of relevant asset or liability by invested party at the time whenthe control over invested party is lost. Movement of other owners’ equity (excluding net profit or loss, othercomprehensive income and profit distribution under net asset of invested party accounted for and recognizedusing equity method) shall be transferred to profit or loss for the current period at the time when the control overinvested party is lost. Of which, for the remaining equity interest after disposal accounted for using equity method,other comprehensive income and other owners’ equity shall be transferred on pro rata basis. For the remainingequity interest after disposal accounted for using the recognition and measurement standard of financialinstruments, other comprehensive income and other owners’ equity shall be fully transferred.
In the event of loss of common control or significant influence over invested party due to partial disposal of equityinvestment by the Group, the remaining equity interest after disposal shall be accounted for using the recognitionand measurement standard of financial instruments. The difference between its fair value and carrying amount asat the date of losing common control or significant influence shall be included in profit or loss for the currentperiod. In respect of other comprehensive income recognized under previous equity investment using equity
method, it shall be accounted for in accordance with the same accounting treatment for direct disposal of relevantasset or liability by invested party at the time when equity method was ceased to be used. Movement of otherowners’ equity (excluding net profit or loss, other comprehensive income and profit distribution under net asset ofinvested party accounted for and recognized using equity method) shall be transferred to profit or loss for thecurrent period at the time when equity method was ceased to be used.
The Group disposes its equity investment in subsidiary by a stage-up approach with several transactions until thecontrol over the subsidiary is lost. If the said transactions belong to “transactions in a basket”, each transactionshall be accounted for as a single transaction of disposing equity investment of subsidiary and loss of control. Thedifference between the disposal consideration for each transaction and the carrying amount of the correspondinglong-term equity investment of disposed equity interest before loss of control shall initially recognized as othercomprehensive income, and subsequently transferred to profit or loss arising from loss of control for the currentperiod upon loss of control.
(3) Impairment test method and withdrawal method for impairment provision
Found more in Note V-”impairment of long-term investment”
(4) Criteria of Joint control and significant influence
Joint control is the Company’s contractually agreed sharing of control over an arrangement, which relevantactivities of such arrangement must be decided by unanimously agreement from parties who share control. All theparticipants or participant group whether have controlling over such arrangement as a group or not shall be judgefirstly, than judge that whether the decision-making for such arrangement are agreed unanimity by the participantsor not.
Significant influence is the power of the Company to participate in the financial and operating policy decisions ofan invested party, but to fail to control or joint control the formulation of such policies together with other parties.While recognizing whether have significant influence by invested party, the potential factors of voting power ascurrent convertible bonds and current executable warrant of the invested party held by investors and other partiesshall be thank over.
17. Investment real estate
Measurement modeMeasured by cost methodDepreciation or amortization method
Investment real estate is stated at cost. During which, the cost of externally purchased propertiesheld-for-investment includes purchasing price, relevant taxes and surcharges and other expenses which aredirectly attributable to the asset. Cost of self construction of properties held for investment is composed ofnecessary expenses occurred for constructing those assets to a state expected to be available for use. Properties
held for investment by investors are stated at the value agreed in an investment contract or agreement, but thoseunder contract or agreement without fair value are stated at fair value.
The Company adopts cost methodology amid subsequent measurement of properties held for investment, whiledepreciation and amortization is calculated using the straight-line method according to their estimated useful lives.
The basis of provision for impairment of properties held for investment is referred to Note V-“Impairment oflong-term assets”
18. Fixed assets
(1) Confirmation 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 |
(3) Recognition basis, valuation and depreciation method for financial lease assetsThe Company affirms those that conform to below one or several criteria as the finance lease fixed assets:
① Agreed in the lease contract (or made a reasonable judgment according to the correlated conditions on the leasecommencement date), the ownership of lease fixed assets can be transferred to the Company after the expiry ofthe lease period;
② The Company has the option to purchase or lease the fixed assets, and the purchase price is estimated to bemuch less than the fair value of the lease of fixed assets when exercises the options, so whether the Company willexercise the option can be reasonably determined on the lease commencement date;
③ Even though the fixed asset ownership is not transferred, the lease term accounts for 75% of the service life ofthe lease fixed assets;
④ The present value of the Company’s of minimum lease payment on the lease commencement date is equivalentto 90% or more of the fair value of the lease fixed assets on the lease commencement date; the present value of the
leaser’s of minimum lease payment on the lease commencement date is equivalent to 90% or more of the fairvalue of the lease fixed assets on the lease commencement date;
⑤ The leased assets with special properties can only be used by the Company without major modifications. Thefixed assets rented by finance leases is calculated as the book value according to the lower one between the fairvalue of leased assets on the lease commencement date and the present value of the minimum lease payments.
(4) The impairment test method of fixed assets and the method of provision for impairment see Note V-20-“Longterm asset impairment”.
19. Construction in progress
From the date on which the fixed assets built by the Company come into an expected usable state, the projectsunder construction are converted into fixed assets on the basis of the estimated value of project estimates orpricing or project actual costs, etc. Depreciation is calculated from the next month. Further adjustments are madeto the difference of the original value of fixed assets after final accounting is completed upon completion ofprojects.
The basis of provision for impairment of properties held for construction in process is referred to NoteV-“Impairment of long-term assets”
20. Borrowing costs
(1) Recognition of capitalization of borrowing costs
Borrowing costs comprise interest occurred, amortization of discounts or premiums, ancillary costs and exchangedifferences in connection with foreign currency borrowings. The borrowing costs of the Company, which incurfrom the special borrowings occupied by the fixed assets that need more than one year (including one year) forconstruction, development of investment properties or inventories or from general borrowings, are capitalized andrecorded in relevant assets costs; other borrowing costs are recognized as expenses and recorded in the profit orloss in the period when they are occurred. Relevant borrowing costs start to be capitalized when all of thefollowing three conditions are met:
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 suchassets reached to its intended use of status or sales, than reckoned into assets costs while satisfy the abovementioned capitalization condition; capitalization of borrowing costs shall be suspended and recognized as currentexpenditure during periods in which construction of fixed assets, investment real estate and inventory areinterrupted abnormally, when the interruption is for a continuous period of more than 3 months, until the
acquisition, construction or production of the qualifying asset is resumed; capitalization shall discontinue whenthe qualifying asset is ready for its intended use or sale, the borrowing costs occurred subsequently shall reckonedinto financial expenses while occurring for the current period.
(3) Measure of capitalization for borrowing cost
In respect of the special borrowings borrowed for acquisition, construction or production and development of theassets qualified for capitalization, the amount of interests expenses of the special borrowings actually occurred inthe period less interest income derived from unused borrowings deposited in banks or less investment incomederived from provisional investment, are recognized.
With respect to the general borrowings occupied for acquisition, construction or production and development ofthe assets qualified for capitalization, the capitalized interest amount for general borrowings is calculated andrecognized by multiplying a weighted average of the accumulated expenditure on the assets in excess of theexpenditure on the some assets of the special borrowings, by a capitalization rate for general borrowings. Thecapitalization rate is determined by calculation of the weighted average interest rate of the general borrowings.
21. Intangible assets
(1) Measurement, use of life and impairment testing
① Measurement of intangible assets
The intangible assets of the Company including land use rights, patented technology and non-patents technologyetc.The cost of a purchased intangible asset shall be determined by the expenditure actually occurred and other relatedcosts.The cost of an intangible asset contributed by an investor shall be determined in accordance with the valuestipulated in the investment contract or agreement, except where the value stipulated in the contract or agreementis not fair.The intangible assets acquired through exchange of non-monetary assets, which is commercial in substance, iscarried at the fair value of the assets exchanged out; for those not commercial in substance, they are carried at thecarrying amount of the assets exchanged out.The intangible assets acquired through debt reorganization, are recognized at the fair value.
② Amortization methods and time limit for intangible assets:
Land use right of the company had average amortization by the transfer years from the beginning date of transfer(date of getting land use light); Patented technology, non-patented technology and other intangible assets of theCompany are amortized evenly with the shortest terms among expected useful life, benefit years regulated in thecontract and effective age regulated by the laws. The amortization amount shall count in relevant assets costs andcurrent gains/losses according to the benefit object.As for the intangible assets as trademark, with uncertain benefit terms, amortization shall not be carried.
Impairment testing methods and accrual for depreciation reserves for the intangible assets found more in NoteV-20-“Long-term assets impairment”.
(2) Internal accounting policies relating to research and development expendituresExpenses incurred during the research phase are recognized as profit or loss in the current period; expensesincurred during the development phase that satisfy the following conditions are recognized as intangible assets(patented technology and non-patents technology):
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 completethe development of the intangible asset, and there is capability to use or sell the intangible asset;
⑤ the expenses attributable to the development phase of the intangible asset can be measured reliably.If the expenses incurred during the development phase did not qualify the above mentioned conditions, suchexpenses incurred are accounted for in the profit or loss for the current period. The development expenditurereckoned in gains/losses previously shall not be recognized as assets in later period. The capitalized expenses indevelopment stage listed as development expenditure in balance sheet, and shall be transfer as intangible assetssince such item reached its expected conditions for service.
22. Impairment of long-term assets
The Company will judge if there is any indication of impairment as at the balance sheet date in respect ofnon-current non-financial assets such as fixed assets, construction in progress, intangible assets with a finite usefullife, investment properties measured at cost, and long-term equity investments in subsidiaries, joint controlledentities and associates. If there is any evidence indicating that an asset may be impaired, recoverable amount shallbe estimated for impairment test. Goodwill, intangible assets with an indefinite useful life and intangible assetsbeyond working conditions will be tested for impairment annually, regardless of whether there is any indication ofimpairment.
If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount, theimpairment provision will be made according to the difference and recognized as an impairment loss. Therecoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of thefuture cash flows expected to be derived from the asset. An asset’s fair value is the price in a sale agreement in anarm’s length transaction. If there is no sale agreement but the asset is traded in an active market, fair value shall bedetermined based on the bid price. If there is neither sale agreement nor active market for an asset, fair value shallbe based on the best available information. Costs of disposal are expenses attributable to disposal of the asset,including legal fee, relevant tax and surcharges, transportation fee and direct expenses incurred to prepare theasset for its intended sale. The present value of the future cash flows expected to be derived from the asset over
the course of continued use and final disposal is determined as the amount discounted using an appropriatelyselected discount rate. Provisions for assets impairment shall be made and recognized for the individual asset. If itis not possible to estimate the recoverable amount of the individual asset, the Group shall determine therecoverable amount of the asset group to which the asset belongs. The asset group is the smallest group of assetscapable of generating cash flows independently.
For the purpose of impairment testing, the carrying amount of goodwill presented separately in the financialstatements shall be allocated to the asset groups or group of assets benefiting from synergy of businesscombination. If the recoverable amount is less than the carrying amount, the Group shall recognize an impairmentloss. The amount of impairment loss shall first reduce the carrying amount of any goodwill allocated to the assetgroup or set of asset groups, and then reduce the carrying amount of other assets (other than goodwill) within theasset group or set of asset groups, pro rata on the basis of the carrying amount of each asset.
An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period in respect ofthe part whose value can be recovered.
23. Long-term deferred expenses
Long-term expenses to be amortized of the Company the expenses that are already charged and with the beneficialterm of more than one year are evenly amortized over the beneficial term. For the long-term deferred expenseitems cannot benefit the subsequent accounting periods, the amortized value of such items is all recorded in theprofit or loss during recognition.
24. Employee compensation
(1) Accounting treatment for short-term compensation
During the accounting period when the staff providing service to the Company, the short-term remuneration actualoccurred shall recognized as liability and reckoned into current gains/losses. During the accounting period whenstaff providing service to the Company, the actual short-term compensation occurred shall recognized as liabilitiesand reckoned into current gains/losses, except for those in line with accounting standards or allow to reckonedinto capital costs; the welfare occurred shall reckoned into current gains/losses or relevant asses costs whileactually occurred. The employee compensation shall recognize as liabilities and reckoned into current gains/lossesor relevant assets costs while actually occurred. The employee benefits that belong to non-monetary benefits aremeasured in accordance with the fair value; the social insurances including the medical insurance, work-injuryinsurance and maternity insurance and the housing fund that the enterprise pays for the employees as well as thelabor union expenditure and employee education funds withdrawn by rule should be calculated and determined asthe corresponding compensation amount and determined the corresponding liabilities in accordance with thespecified withdrawing basis and proportion, and reckoned in the current profits and losses or relevant asset 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-employmentbenefits plan refers to the agreement about the post-employment benefits between the enterprise and employees,or the regulations or measures the enterprise established for providing post-employment benefits to employees.Thereinto, the defined contribution plan refers to the post-employment benefits plan that the enterprise doesn’tundertake the obligation of payment after depositing the fixed charges to the independent fund; the defined benefitplans refers to post-employment benefits plans except the defined contribution plan.
(3) Accounting for retirement benefits
When the Company terminates the employment relationship with employees before the end of the employmentcontracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, theCompany shall recognize employee compensation liabilities arising from compensation for staff dismissal andincluded in profit or loss for the current period, when the Company cannot revoke unilaterally compensation fordismissal due to the cancellation of labor relationship plans and employee redundant proposals; and the Companyrecognize cost and expenses related to payment of compensation for dismissal and restructuring, whichever isearlier. The early retirement plan shall be accounted for in accordance with the accounting principles forcompensation for termination of employment. The salaries or wages and the social contributions to be paid for theemployees who retire before schedule from the date on which the employees stop rendering services to thescheduled retirement date, shall be recognized (as compensation for termination of employment) in the currentprofit or loss by the Group if the recognition principles for provisions are satisfied.
(4)Accounting for other long-term employee benefits
Except for the compulsory insurance, the Company provides the supplementary retirement benefits to theemployees satisfying some conditions, the supplementary retirement benefits belong to the defined benefit plans,and the defined benefit liability confirmed on the balance sheet is the value by subtracting the fair value of planassets from the present value of defined benefit obligation. The defined benefit obligation is annually calculated inaccordance with the expected accumulated welfare unit method by the independent actuary by adopting thetreasury bond rate with similar obligation term and currency. The service charges related to the supplementaryretirement benefits (including the service costs of the current period, the previous service costs, and the settlementgains or losses) and the net interest are reckoned in the current profits and losses or other asset costs, the changesgenerated by recalculating the net liabilities of defined benefit plans or net assets should be reckoned in otherconsolidated income.
25. Accrual liabilities
(1) Recognition principle
An obligation related to a contingency, such as guarantees provided to outsiders, pending litigation or arbitration,product warranties, redundancy plans, onerous contracts, reconstructing, expected disposal of fixed assets, etc.shall be recognized as an estimated liability when all of the following conditions are satisfied:
① the obligation is a present obligation of the Company;
② it is Contingent that an outflow of economic benefits will be required to settle the obligation;
③ the amount of the obligation can be measured reliably.
(2) Measurement method: Measure on the basis of the best estimates of the expenses necessary for paying off thecontingencies
26. Revenue
Whether the Company needs to comply with the disclosure requirement of special industryNoWhether implemented the new revenue standards
□ Yes √ No
(1) Concrete judging criteria for time of recognized
The major risks and remuneration entitled to the ownership of goods are transferred to buyer; neither retain thecontinued management right generally related to ownership, nor exercise effective control over the sold products;the relevant economic benefits are probable to flow into the Company; the relevant income and costs can bemeasured reliably.Concrete judging criteria for time of recognized the income from goods sales:
The Company's domestic sales revenue recognition time: The company delivers goods as agreed, checks the goodsthat the buyers have received and inspected during the period of the last reconciliation date and this reconciliationdate with the buyers on the reconciliation date as agreed, and transfers the risks and remunerations to the buyersafter checking, the Company issues the invoices to the buyers in accordance with the recognized varieties,quantities and amounts and affirms the sales revenue realization on the reconciliation date.
The Company's overseas sales revenue recognition time: After checking by the customs, the Company affirms thesales revenue realization according to the date of departure on the customs declaration.
(2) Recognition of revenue of assets using right alienation
Revenue from use by others of enterprise assets shall be recognized only when the associated economic benefitcan flow into the Company, and the amount of revenue can be measured reliably, revenue measured by the follow:
① Interest income amount: calculated and determined in accordance with the time that others use the enterprisescash and the actual interest rate.
② Royalty revenue amount: calculated and determined in accordance with the charging time and method of the
relevant contract or agreement as agreed.
The basis that the Company confirms the revenue from transferring the right to use assets.Rental income: the revenue realization is confirmed after collecting the rent on the date as agreed in the rentalcontract (or agreement). For the rent not received on the date as agreed in the contract or agreement but can bereceived, and of which the amount of revenue can be measured reliably can also be recognized as revenue.
(3) When confirming the incomes of labor services and construction contracts according to the percentage ofcompletion method, determine the basis and method of the contract completion plan.For the service transaction results can be estimated reliably on the balance sheet date, the service revenue isdetermined and recognized by adopting the percentage of completion method. The completion progress of servicetransaction is determined by the proportion of incurred costs in the estimated total cost.
The total service revenue is determined by the received or receivable contract or agreement costs, except that thereceived or receivable contract or agreement costs are not fair. On the balance sheet date, the service revenue of thecurrent period is determined by multiplying the total service revenue by the completion progress and deductingthe amount accumulated in the previous accounting period and confirmed to render the service revenue.Meanwhile, the labor costs of the current period are carried forward by multiplying the total estimated costs oflabor services by the completion progress and deducting the amount accumulated in the previous accountingperiod with confirmed service costs.
For the service transaction results cannot be estimated reliably on the balance sheet date, respectively dispose asfollowing circumstances:
①The incurred labor costs estimated to be compensated are confirmed to render the service revenue according tothe incurred labor costs, and are carried forward by the equivalent amount.
②The incurred labor costs estimated not to be compensated are reckoned in the current profits or losses, and arenot confirmed to render the service revenue.
27. Government grants
(1) Types
Government grants are transfer of monetary assets or non-monetary assets from the government to the Group atno consideration. Government grants are classified into government grants related to assets and government grantsrelated to income.As for the assistance object not well-defined in government’s documents, the classification criteria forassets-related or income-related grants are as: whether the grants turn to long-term assets due to purchasing forconstruction or other means.
(2) Recognition and measure
The government grants shall be recognized while meet the additional conditions of the grants and amount is
actually can be obtained.
If a government grant is in the form of a transfer of monetary asset, the item shall be measured at the amountreceived or receivable. If a government grant is in the form of a transfer of non-monetary asset, the item shall bemeasured at fair value. If the fair value can not be reliably acquired, than measured by nominal amount.
(3) Accounting treatment
A government grant related to an asset shall be recognized as deferred income, and reckoned into currentgains/losses according to the depreciation process in use life of such assets.
A government grant related to income, if they making up relevant expenses and losses for later period, thanrecognized deferred income, and should reckoned into current gain/loss during the period while relevant expensesare recognized; if they making up relevant expenses and losses that occurred, than reckoned into currentgains/losses.A government grant related to daily operation activity of the Company should reckoned into other income; thosewithout related to daily operation activity should reckoned into non-operation income and expenses.The financial discount funds received by the Company shall write down relevant borrowing costs.
28. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets or deferred income tax liabilities are realized based on the difference between thecarrying values of assets and liabilities and their taxation bases (as for the ones did not recognized as assets andliability and with taxation basis recognized in line with tax regulations, different between tax base and its bookvalue) at the tax rates applicable in the periods when the Company recovers such assets or settles such liabilities.
(2) Deferred income tax assets are realized to the extent that it is probable to obtain such taxable income which isused to set off the deductible temporary difference. As at the balance sheet date, if there is obvious evidenceshowing that it is probable to obtain sufficient taxable income to set off the deductible temporary difference infuture periods, deferred income tax assets not realized in previous accounting periods shall be realized.
(3) On balance sheet date, re-review shall be made in respect of the carrying value of deferred income tax assets.If it is impossible to obtain sufficient taxable income to set off the benefits of deferred income tax assets in futureperiods, then the carrying value of deferred income tax assets shall be reduced accordingly. If it is probable toobtain sufficient taxable income, then the amount reduced shall be switched back.
(4) Current income tax and deferred income tax considered as income tax expenses or incomes reckoned intocurrent gains/losses, excluding the follow income tax:
①Enterprise combination;
②Transactions or events recognized in owner’s equity directly
29. Lease
(1) Accounting for operating lease
The rental fee paid for renting the properties by the company are amortized by the straight-line method andreckoned in the current expenses throughout the lease term without deducting rent-free period. The initial directcosts related to the lease transactions paid by the company are reckoned in the current expenses.
When the lessor undertakes the expenses related to the lease that should be undertaken by the company, thecompany shall deduct the expenses from the total rental costs, share by the deducted rental costs during the leaseterm, and reckon in the current expenses.
Rental obtained from assets leasing, during the whole leasing period without rent-free period excluded, shall beamortized by straight-line method and recognized as leasing revenue. The initial direct costs paid with leasingtransaction concerned are reckoned into current expenditure; the amount is larger is capitalized when incurred,and accounted for as profit or loss for the current period on the same basis as recognition of rental income over theentire lease period.
When the company undertakes the expenses related to the lease that should be undertaken by the lessor, thecompany shall deduct the expenses from the total rental income, and distribute by the deducted rental costs duringthe lease term.
(2) Accounting for financing lease
Assets lease-in by financing: On the beginning date of the lease, the entry value of leased asset shall be at thelower of the fair value of the leased asset and the present value of minimum lease payment at the beginning dateof the lease. Minimum lease payment shall be the entry value of long-term accounts payable, with differencerecognized as unrecognized financing expenses. Unrecognized financing expenses shall be reckoned in financialexpenses and amortized and using effective interest method during the leasing period. The initial direct costsincurred by the Company shall be reckoned into value of assets lease-in.Finance leased assets: on the lease commencement date, the company affirms the balance among the finance leasereceivables, the sum of unguaranteed residual value and its present value as the unrealized financing income, andrecognizes it as the rental income during the period of receiving the rent. For the initial direct costs related to therental transaction, the company reckons in the initial measurement of the finance lease receivables, and reducesthe amount of income confirmed in the lease term.
30. Other important accounting policy and accounting estimation
In the process of applying the Company's accounting policies, due to the inherent uncertainty of business activities,
the Company needs to judge, estimate and assume the book value of the report items cannot be accuratelymeasured. These judgments, estimates and assumptions are made on the basis of the historical experience of theCompany’s management and by considering other relevant factors, which shall impact the reported amounts ofincome, expenses, assets and liabilities and the disclosure of contingent liabilities on the balance sheet date.However, the actual results caused by the estimated uncertainties may differ from the management's currentestimates of the Company so as to carry out the significant adjustments to the book value of the assets or liabilitiesto be affected.
The Company regularly reviews the aforementioned judgments, estimates and assumptions on the basis ofcontinuing operations, the changes in accounting estimates only affect the current period, of which the impacts arerecognized in the current period; the changes in accounting estimates not only affect the current period but also thefuture periods, of which the impacts are recognized in the current and future periods.
On the balance sheet date, the important areas of the financial statements that the Company needs to judge, estimateand assume are as follows:
(1) Provision for bad debts
According to the accounting policies of the accounts receivable, the Company adopts the allowance method tocalculate the bad debt losses. The impairment of receivables is based on the assessment to the collectability of theaccounts receivable. The impairment of accounts receivable requires the management’s judgments and estimates.The actual results and the differences between the previously estimated results shall affect the book value ofaccounts receivable and the provision or return of the receivables’ bad debt reserves during the period estimated tobe changed.
(2) Inventory impairment
According to the inventory accounting policies, the Company measures by the comparison between the cost andthe net realizable value, if the cost is higher than the net realizable value and the old and unsalable inventories, theCompany calculates and withdraws the inventory impairment. The inventory devalues to the net realizable valueby evaluating the inventory’s vendibility and net realizable value. To identify the inventory impairment, themanagement needs to obtain the unambiguous evidences, and consider the purpose to hold the inventory, andjudge and estimate the impacts of events after the balance sheet date. The actual results and the differencesbetween the previously estimated results shall affect the book value of inventory and the provision or return of theinventory impairment during the period estimated to be changed.
(3) Held-to-maturity investments
The Company classifies the non-derivative financial assets that meet the requirements, have the fixed orascertainable repayment amount and fixed due date, and that the Company has the positive intention and ability tohold to maturity as the held-to-maturity investment. This classification involves a lot of judgments. In the processof making the judgments, the Company will evaluate its willingness and ability to this held-to-maturity investment.
Except in certain cases (such as the investments with insignificant sales amount when the maturity date comes), ifthe Company fails to hold these investments till the maturity date, then all the investments shall be reclassified tothe available-for-sale financial assets which cannot be classified as the held-to-maturity investments in this fiscalyear and the next two fiscal years. This kind of case may have a significant impact on the relevant financial assetsvalue listed on the financial statements, and may affect the Company's financial instruments risk managementstrategy.
(4) Impairment of held-to-maturity investments
The Company determines that the impairment of held-to-maturity investments largely relies on management'sjudgments. The objective evidences of impairment include that the issuer has serious financial difficulties so thatthe financial assets cannot continue to be traded in an active market, or cannot be able to fulfill the contract terms(for example, breach the contract of paying the interests or principal), etc. In the process of making the judgments,the Company needs to evaluate the impact of the objective evidence of impairment to the expected future cashflows of the investment.
(5) Impairment of financial assets available for sale
The Company determines that the impairment of held-to-maturity investments largely relies on management'sjudgments and assumptions so as to determine whether it is needed to affirm its impairment loss in the profitstatement. In the process of making the judgments and assumptions, the Company needs to evaluate the extent andduration when the fair value of the investment is less than the cost, as well as the financial situation and short-termbusiness prospects of the invested party, including the industry conditions, technological change, credit rating,default rates, and risks of the counter party.
(6) Preparation for the impairment of non-financial & non-current assets
The Company checks whether the non-current assets except for the financial assets may decrease in value at thebalance sheet date. For the intangible assets with indefinite service life, in addition to the annual impairment test,the impairment test is also needed when there is a sign of impairment. For the other non-current assets except forthe financial assets, the impairment test is needed when it indicates that the book amounts may not be recoverable.
When the book value of the asset or group of assets exceeds its recoverable amount, i.e. the higher between the netamount by subtracting the disposal costs from the fair value and the present value of expected future cash flows, itindicates the impairment.
As for the net amount by subtracting the disposal costs from the fair value, refer to the sales agreement pricesimilar to the assets in the fair trade or the observable market price, and subtract the incremental costsdetermination directly attributable to the disposal of the asset.
When estimating the present value of the future cash flow, the Company needs to make significant judgments to
the output, price, and related operating expenses of the asset (or asset group) and the discount rate used forcalculating the present value. When estimating the recoverable amount, the Company shall adopt all the relevantinformation can be obtained, including the prediction related to the output, price, and related operating expensesbased on the reasonable and supportable assumptions.
The Company tests whether its business reputation decreases in value every year, which requires to estimating thepresent value of the asset group allocated with goodwill or the future cash flow combined by the asset group.When estimating the present value of the future cash flow, the Company needs to estimate the future cash flowsgenerated by the asset group or the combination of asset group, and select the proper discount rate to determine thepresent value of the future cash flows.
(7) Depreciation and amortization
The Company depreciates and amortizes the investment property, fixed assets and intangible assets according tothe straight-line method in the service life after considering the residual value. The Company regularly reviews theservice life to determine the depreciation and amortization expense amount to be reckoned in each reporting period.The service life is determined by the Company based on the past experience of similar assets and the expectedtechnological updating. If the previous estimates have significant changes, the depreciation and amortizationexpense shall be adjusted in future periods.
(8) Income tax
In the Company’s normal business activities, the final tax treatment and calculation of some transactions have someuncertainties. Whether some projects can be disbursed from the cost and expenses before taxes requires needs toget approval from the tax authorities. If the final affirmation of these tax matters differs from the initially estimatedamount, the difference shall have an impact on its current and deferred income taxes during the final identificationperiod.
(9) Early retirement benefits and supplementary retirement benefits
The expenses of the Company's early retirement benefits and supplementary retirement benefits and the amount ofliabilities are determined in accordance with various assumptions. These assumptions include the discount rate,the average growth rate of health care costs, the subsidy growth rate of the early retired personnel and retirees andthe other factors. The differences between the actual results and assumptions will be immediately identified andincluded in the costs of the current year. Although the management thought the reasonable assumptions have beenadopted, the changes in the actual experience and assumed conditions will impact the costs and liability balancesof the Company's internal early retirement benefits and supplementary retirement benefits.
31. Changes of important accounting policy and estimation
(1) Changes of major accounting policies
√ Applicable □ Not applicable
| Content and causes for changes of accounting policy | Approval procedures | Note |
| In 2017, the Ministry of Finance revised and issued the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments and Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets , Accounting Standards for Business Enterprises No. 24 - Hedge Accounting, and the Accounting Standards for Business Enterprises No. 37 – Financial Instruments Presentation, and the domestic listed companies are required to put the relevant accounting standards of new financial instruments into force from January 1, 2019. The Company implement the above mentioned four accounting standards since 1 Jan. 2019 | Approved and deliberated by 5th session of 9th BOD | Notice No.: 2019-006 |
| On April 2019, the Ministry of Finance issued No. 6 Document 2019-“Notice on Amending the 2019 Annual Financial Statements of General Enterprises”, which revised the financial statement format of general enterprises in light of the relevant situation in the implementation of enterprise accounting standards. | Ministry of Finance No. 6 Document 2019 |
(2) Changes of important accounting estimate
□ Applicable √ Not applicable
(3) Adjustment the financial statements at the beginning of the first year of implementation of new financialinstrument standards, new revenue standards and new leasing standards
√ Applicable □ Not applicable
Consolidate balance sheet
In RMB/CNY
| Item | 2018-12-31 | 2019-01-01 | Adjustments |
| Current assets: | |||
| Monetary funds | 2,616,321,740.73 | 2,616,321,740.73 | |
| Settlement provisions | |||
| Capital lent | |||
| Tradable financial assets | 4,740,773,607.43 | 4,740,773,607.43 | |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | |||
| Derivative financial assets |
| Note receivable | 1,148,107,603.68 | 1,148,107,603.68 | |
| Note receivable | 1,919,793,266.91 | 1,919,793,266.91 | |
| Account receivable financing | |||
| Account paid in advance | 94,651,431.31 | 94,651,431.31 | |
| Insurance receivable | |||
| Reinsurance receivables | |||
| Contract reserve of reinsurance receivable | |||
| Other account receivable | 84,582,246.16 | 84,582,246.16 | |
| Including: Interest receivable | 1,842,437.50 | 1,842,437.50 | |
| Dividend receivable | |||
| Buying back the sale of financial assets | |||
| Inventory | 1,438,528,714.59 | 1,438,528,714.59 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current asset due within one year | |||
| Other current assets | 4,632,137,600.26 | 60,250,896.83 | -4,571,886,703.43 |
| Total current assets | 11,934,122,603.64 | 12,103,009,507.64 | 168,886,904.00 |
| Non-current assets: | |||
| Loans and payments on behalf | |||
| Creditors’ investment | |||
| Available-for-sale financial assets | 255,975,176.91 | -255,975,176.91 | |
| Other creditors’ investment | |||
| Held-to-maturity investments | |||
| Long-term receivables | |||
| Long-term equity investment | 4,976,773,946.74 | 4,976,773,946.74 | |
| Other equity instrument investment | 87,088,272.91 | 87,088,272.91 | |
| Other non-current financial assets | |||
| Investment real estate | 21,906,134.52 | 21,906,134.52 | |
| Fixed assets | 2,707,374,678.61 | 2,707,374,678.61 | |
| Construction in progress | 166,414,542.18 | 166,414,542.18 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use asset | |||
| Intangible assets | 324,892,822.75 | 324,892,822.75 |
| Research and development costs | |||
| Goodwill | 1,784,086.79 | 1,784,086.79 | |
| Long-term deferred expenses | 16,637,652.31 | 16,637,652.31 | |
| Deferred income tax assets | 234,697,139.58 | 234,697,139.58 | |
| Other non-current assets | 251,462,676.27 | 251,462,676.27 | |
| Total non-current assets | 8,957,918,856.66 | 8,789,031,952.66 | -168,886,904.00 |
| Total assets | 20,892,041,460.30 | 20,892,041,460.30 | |
| Current liabilities: | |||
| Short-term borrowings | 298,928,213.94 | 298,928,213.94 | |
| Loan from central bank | |||
| Capital borrowed | |||
| Tradable financial liability | |||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | |||
| Derivative financial liability | 490,329.13 | 490,329.13 | |
| Note payable | 1,018,367,533.74 | 1,018,367,533.74 | |
| Account payable | 2,047,336,834.66 | 2,047,336,834.66 | |
| Accounts received in advance | 41,329,857.80 | 41,329,857.80 | |
| Selling financial asset of repurchase | |||
| Absorbing deposit and interbank deposit | |||
| Security trading of agency | |||
| Security sales of agency | |||
| Employee compensation payable | 312,113,178.24 | 312,113,178.24 | |
| Taxes payable | 74,271,613.92 | 74,271,613.92 | |
| Other accounts payable | 64,448,723.52 | 64,448,723.52 | |
| Including: Interest payable | 517,469.08 | 517,469.08 | |
| Dividend payable | |||
| Commission charge and commission payable | |||
| Reinsurance payable | |||
| Contract liability | |||
| Liability held for sale | |||
| Non-current liabilities due within one year | 15,000,000.00 | 15,000,000.00 | |
| Other current liabilities | |||
| Total current liabilities | 3,872,286,284.95 | 3,872,286,284.95 | |
| Non-current liabilities: |
| Insurance contract reserve | |||
| Long-term loans | 30,000,000.00 | 30,000,000.00 | |
| Bonds payable | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Lease liability | |||
| Long-term account payable | 35,422,354.11 | 35,422,354.11 | |
| Long-term employee compensation payable | 74,679,175.36 | 74,679,175.36 | |
| Accrual liabilities | |||
| Deferred income | 425,769,854.13 | 425,769,854.13 | |
| Deferred income tax liabilities | 1,912,744.40 | 1,912,744.40 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 567,784,128.00 | 567,784,128.00 | |
| Total liabilities | 4,440,070,412.95 | 4,440,070,412.95 | |
| Owners’ equity: | |||
| Share capital | 1,008,950,570.00 | 1,008,950,570.00 | |
| Other equity instrument | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Capital reserve | 3,416,022,795.14 | 3,416,022,795.14 | |
| Less: Inventory shares | |||
| Other comprehensive income | -19,809,442.95 | 19,809,442.95 | |
| Reasonable reserve | 1,618,490.50 | 1,618,490.50 | |
| Surplus reserve | 510,100,496.00 | 510,100,496.00 | |
| Provision of general risk | |||
| Retained profit | 10,996,945,870.13 | 10,996,945,870.13 | -19,809,442.95 |
| Total owners’ equity attributable to parent company | 15,913,828,778.82 | 15,913,828,778.82 | |
| Minority interests | 538,142,268.53 | 538,142,268.53 | |
| Total owners’ equity | 16,451,971,047.35 | 16,451,971,047.35 | |
| Total liabilities and owner’s equity | 20,892,041,460.30 | 20,892,041,460.30 |
ExplanationIn 2017, the Ministry of Finance revised and issued the Accounting Standards for Business Enterprises No. 22 -Recognition and Measurement of Financial Instruments and Accounting Standards for Business Enterprises No.23 - Transfer of Financial Assets , Accounting Standards for Business Enterprises No. 24 - Hedge Accounting, andthe Accounting Standards for Business Enterprises No. 37 – Financial Instruments Presentation, and the domestic
listed companies are required to put the relevant accounting standards of new financial instruments into force fromJanuary 1, 2019. The Company implement the above mentioned four accounting standards since 1 Jan. 2019
(1) Add new item of “Tradable financial assets”, parts of the former “Other current assets” and“Available-for-sale financial assets” are re-classified for listing
(2) Add new item of “Other equity instrument investment”, parts of the former “Available-for-sale financialassets” is re-classified for listing
(3) Re-classify “Other comprehensive income” to “Retained profit”
Balance sheet of parent company
In RMB/CNY
| Item | 2018-12-31 | 2019-01-01 | Adjustments |
| Current assets: | |||
| Monetary funds | 1,922,408,227.00 | 1,922,408,227.00 | |
| Tradable financial assets | 4,740,773,607.43 | 4,740,773,607.43 | |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | |||
| Derivative financial assets | |||
| Note receivable | 264,264,207.30 | 264,264,207.30 | |
| Note receivable | 742,246,990.99 | 742,246,990.99 | |
| Account receivable financing | |||
| Account paid in advance | 59,028,927.25 | 59,028,927.25 | |
| Other account receivable | 196,849,092.13 | 196,849,092.13 | |
| Including: Interest receivable | 188,682.78 | 188,682.78 | |
| Dividend receivable | |||
| Inventory | 492,054,274.67 | 492,054,274.67 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current asset due within one year | |||
| Other current assets | 4,576,688,553.49 | 4,801,850.06 | -4,571,886,703.43 |
| Total current assets | 8,253,540,272.83 | 8,422,427,176.83 | 168,886,904.00 |
| Non-current assets: | |||
| Creditors’ investment | |||
| Available-for-sale financial assets | 180,035,176.91 | -180,035,176.91 | |
| Other creditors’ investment | |||
| Held-to-maturity investments |
| Long-term receivables | |||
| Long-term equity investment | 5,739,110,426.55 | 5,739,110,426.55 | |
| Other equity instrument investment | 11,148,272.91 | 11,148,272.91 | |
| Other non-current financial assets | |||
| Investment real estate | |||
| Fixed assets | 1,534,109,106.80 | 1,534,109,106.80 | |
| Construction in progress | 78,673,300.59 | 78,673,300.59 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use asset | |||
| Intangible assets | 188,101,655.94 | 188,101,655.94 | |
| Research and development costs | |||
| Goodwill | |||
| Long-term deferred expenses | |||
| Deferred income tax assets | 140,286,756.70 | 140,286,756.70 | |
| Other non-current assets | 184,208,090.40 | 184,208,090.40 | |
| Total non-current assets | 8,044,524,513.89 | 7,875,637,609.89 | -168,886,904.00 |
| Total assets | 16,298,064,786.72 | 16,298,064,786.72 | |
| Current liabilities: | |||
| Short-term borrowings | 112,000,000.00 | 112,000,000.00 | |
| Tradable financial liability | |||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | |||
| Derivative financial liability | |||
| Note payable | 330,545,052.37 | 330,545,052.37 | |
| Account payable | 823,693,469.51 | 823,693,469.51 | |
| Accounts received in advance | 6,639,554.63 | 6,639,554.63 | |
| Contract liability | |||
| Employee compensation payable | 200,205,508.25 | 200,205,508.25 | |
| Taxes payable | 39,193,425.15 | 39,193,425.15 | |
| Other accounts payable | 12,142,596.68 | 12,142,596.68 | |
| Including: Interest payable | 149,966.66 | 149,966.66 | |
| Dividend payable | |||
| Liability held for sale | |||
| Non-current liabilities due within one year |
| Other current liabilities | |||
| Total current liabilities | 1,524,419,606.59 | 1,524,419,606.59 | |
| Non-current liabilities: | |||
| Long-term loans | |||
| Bonds payable | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Lease liability | |||
| Long-term account payable | |||
| Long-term employee compensation payable | 63,962,762.93 | 63,962,762.93 | |
| Accrual liabilities | |||
| Deferred income | 381,609,056.40 | 381,609,056.40 | |
| Deferred income tax liabilities | |||
| Other non-current liabilities | |||
| Total non-current liabilities | 445,571,819.33 | 445,571,819.33 | |
| Total liabilities | 1,969,991,425.92 | 1,969,991,425.92 | |
| Owners’ equity: | |||
| Share capital | 1,008,950,570.00 | 1,008,950,570.00 | |
| Other equity instrument | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Capital reserve | 3,488,221,286.39 | 3,488,221,286.39 | |
| Less: Inventory shares | |||
| Other comprehensive income | -19,809,442.95 | 19,809,442.95 | |
| Reasonable reserve | |||
| Surplus reserve | 510,100,496.00 | 510,100,496.00 | |
| Retained profit | 9,340,610,451.36 | 9,320,801,008.41 | -19,809,442.95 |
| Total owners’ equity | 14,328,073,360.80 | 14,328,073,360.80 | |
| Total liabilities and owner’s equity | 16,298,064,786.72 | 16,298,064,786.72 |
ExplanationIn 2017, the Ministry of Finance revised and issued the Accounting Standards for Business Enterprises No. 22 -Recognition and Measurement of Financial Instruments and Accounting Standards for Business Enterprises No.23 - Transfer of Financial Assets , Accounting Standards for Business Enterprises No. 24 - Hedge Accounting, andthe Accounting Standards for Business Enterprises No. 37 – Financial Instruments Presentation, and the domesticlisted companies are required to put the relevant accounting standards of new financial instruments into force from
January 1, 2019. The Company implement the above mentioned four accounting standards since 1 Jan. 2019
(1) Add new item of “Tradable financial assets”, parts of the former “Other current assets” and“Available-for-sale financial assets” are re-classified for listing
(2) Add new item of “Other equity instrument investment”, parts of the former “Available-for-sale financialassets” is re-classified for listing
(3) Re-classify “Other comprehensive income” to “Retained profit”
(4) Retrospective adjustment of early comparison data description when initially implemented the newfinancial instrument standards and new leasing standards
□ Applicable √ Not applicable
32. Other
NilVI. Taxation
1. Major taxes and tax rates
| Tax | Basis | Tax rate |
| VAT | Taxable income | Tax rate of 17%, 16%, 13%, 11%, 10%, 9%, 6% and 5%, rate for exported commodities is stipulated by the state with declaration of export tax rebate, rate of tax may be “exempted, credited and refunded” |
| City maintaining & construction tax | Turnover tax payable | 7% |
| Corporation income tax | Taxable income | 25%, 22%, 15% |
| Educational surtax | Turnover tax payable | 5%, 4.5% |
Disclose reasons for different taxpaying body
| Taxpaying body | Income tax rate |
| Weifu Mashan, Weifu Chang’an, Weifu International Trade, Weifu ITM, Weifu Schmidt, Weifu Leader (Wuhan), Weifu Leader(Nanchang) | 25% |
| The Company, Weifu Jinning, Weifu Leader, Weifu Tianli, Weifu Autocam, Weifu Leader(Chongqing) | 15% |
| SPV, IRD Fuel Cells A/S | 22% |
2. Tax preference
On 17 November 2017, the Company got a “High-Tech Enterprise Certificate” issued jointly by Science &Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu ProvincialOffice, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201732000007. Corporate income tax of the
Company shall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
On 27 December 2017, Weifu Jinning got a “High-Tech Enterprise Certificate” issued jointly by Science &Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu ProvincialOffice, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201732004010. Corporate income tax of theWeifu Jinning shall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
On 17 November 2017, Weifu Leader got a “High-Tech Enterprise Certificate” issued jointly by Science &Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu ProvincialOffice, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201732001828. Corporate income tax of theWeifu Leader shall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
On 29 November 2017, Weifu Tianli got a “High-Tech Enterprise Certificate” issued jointly by Science &Technology Bureau of Ningbo, Department of Finance of Ningbo, Ningbo Office, SAT and Ningbo, ZhejiangProvincial Local Taxation Bureau, certificate No.: GR201733100363. Corporate income tax of the Weifu Tianlishall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
On 17 November 2017, Weifu Autocam got a “High-Tech Enterprise Certificate” issued jointly by Science &Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu ProvincialOffice, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201732001043. Corporate income tax of theWeifu Autocam shall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
The State Administration of Taxation announced the first item of Announcement of the State Administration ofTaxation on the Enterprise Income Tax Issues Concerning the Implementation of the Western DevelopmentStrategy No. 12 of 2012 that from January 1, 2011 to December 31, 2020, the enterprises located in the westregion and mainly engaged in the industrial projects stipulated in the Catalogue of Encouragement Industries inthe Western Region, and whose main business income accounting for more than 70% of the total income of theenterprise in the current year can pay the corporate income tax at the tax rate of 15%. In 2018, Weifu Leader(Chongqing) paid its corporate income tax at the tax rate of 15%.
VII. Notes to major items in consolidated financial statements
1.Monetary funds
In RMB/CNY
Other explanation
| Item | 2019-06-30 | 2018-12-31 |
| Bank acceptance bill, L/C and other collateral | 52,783,679.85 | 80,765,732.67 |
| Deposit for Letter of Guarantee | 158,280.00 | |
| Frozen dividend | 1,655,119.95 | 881,868.57 |
| The currency funds in transit for selling the equity of Protean Holdings Corp. | 38,774,365.26 | |
| Total | 93,371,445.06 | 81,647,601.24 |
The frozen dividend of 1,655,119.95 Yuan represents the part of dividends distributed by SDEC (stockcode:600841) and Miracle Automation (stock code:002009) for 2017, 2018 and 2019 held by the Company astradable financial assets. According to the notices numbered Yue 03MC[2016]2490 and Yue 03MC[2016]2492served by Guangdong Shenzhen Intermediate People’s Court, these dividends were frozen.
The currency funds in transit for selling the equity of Protean Holdings Corp. is the equity selling money that soldby the Company, it is not available for relevant procedures are in process
2. Tradable financial assets
In RMB/CNY
| Item | Ending balance | Opening balance |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | 151,261,956.00 | 121,066,008.00 |
| Including: | ||
| SDEC | 104,680,056.00 | 85,458,408.00 |
| Item | Ending balance | Opening balance |
| Cash on hand | 71,791.03 | 194,161.03 |
| Cash in bank | 2,596,255,341.24 | 2,534,479,978.46 |
| Other monetary funds | 93,371,445.06 | 81,647,601.24 |
| Total | 2,689,698,577.33 | 2,616,321,740.73 |
| Including: Total amount saving aboard | 32,827,414.62 |
| Miracle Automation | 46,581,900.00 | 35,607,600.00 |
| Financial assets designated to be measured by fair value and with variation reckoned into current gains/losses | 4,258,207,599.43 | 4,619,707,599.43 |
| Including: | ||
| Guolian Securities Shares | 12,000,000.00 | 12,000,000.00 |
| Shanghai Chengding Detong Equity Investment | 35,820,896.00 | 35,820,896.00 |
| Other: financial products | 4,210,386,703.43 | 4,571,886,703.43 |
| Total | 4,409,469,555.43 | 4,740,773,607.43 |
Other explanationImplemented new financial instrument standards in 2019, the tradable financial assets was re-classified from formeravailable-for-sale financial assets
3. Note receivable
(1) Classification of notes receivable
In RMB/CNY
| Item | Ending balance | Opening balance |
| Bank acceptance bill | 1,402,441,411.19 | 1,082,574,482.88 |
| Trade acceptance bill | 89,952,810.16 | 65,533,120.80 |
| Total | 1,492,394,221.35 | 1,148,107,603.68 |
(2) Bad debt provision accrual, collected or reversal in the period
□ Applicable √ Not applicable
(3) Note receivable that pledged at period-end
In RMB/CNY
| Item | Amount pledged at period-end |
| Bank acceptance bill | 762,571,527.45 |
| Total | 762,571,527.45 |
(4) Notes endorsement or discount and undue on balance sheet date
In RMB/CNY
| Item | Amount derecognition at period-end | Amount not derecognition at period-end |
| Bank acceptance bill | 359,389,642.56 |
| Trade acceptance bill | 4,190,000.00 | |
| Total | 363,579,642.56 |
(5) Notes transfer to account receivable due for failure implementation by drawer at period-end
In RMB/CNY
| Item | Amount transfer to account receivable at period-end |
| Trade acceptance bill | 6,800,000.00 |
| Total | 6,800,000.00 |
Other explanation
The Trade acceptance bills that the company transferred to the accounts receivable due to the failure of the drawerto perform the agreement at the end of the period were the bills of the subsidiaries controlled by BaotaPetrochemical Group Co., Ltd. and the bills accepted by Baota Petrochemical Group Finance Co., Ltd. (hereinafterreferred to as “BD bills”); as of June 30, 2019, these bills had expired.
(6) Note receivable actually written-off in the period
Nil
4. Account receivable
(1) Classification of account receivable
In RMB/CNY
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
| Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
| Account receivable with bad debt provision accrual on a single basis | 8,552,242.26 | 0.36% | 8,552,242.26 | 100.00% | 8,685,110.25 | 0.44% | 8,685,110.25 | 100.00% | ||
| Including: | ||||||||||
| Account receivable with single significant amount and withdrawal bad debt provision on | 6,800,000.00 | 0.29% | 6,800,000.00 | 100.00% | 7,000,000.00 | 0.36% | 7,000,000.00 | 100.00% | ||
| single basis | ||||||||||
| Account receivable with single minor amount but with bad debts provision accrued on a single basis | 1,752,242.26 | 0.07% | 1,752,242.26 | 100.00% | 1,685,110.25 | 0.08% | 1,685,110.25 | 100.00% | ||
| Account receivable with bad debt provision accrual on portfolio | 2,356,860,269.31 | 99.64% | 37,552,614.73 | 1.59% | 2,319,307,654.58 | 1,951,016,221.14 | 99.56% | 31,222,954.23 | 1.60% | 1,919,793,266.91 |
| Including: | ||||||||||
| Account receivable with bad debt provision accrual on age analysis | 2,356,860,269.31 | 99.64% | 37,552,614.73 | 1.59% | 2,319,307,654.58 | 1,951,016,221.14 | 99.56% | 31,222,954.23 | 1.60% | 1,919,793,266.91 |
| Total | 2,365,412,511.57 | 100.00% | 46,104,856.99 | 1.95% | 2,319,307,654.58 | 1,959,701,331.39 | 100.00% | 39,908,064.48 | 2.04% | 1,919,793,266.91 |
Bad debt provision accrual on single basis: RMB 6,800,000.00.
In RMB/CNY
| Name | Ending balance | |||
| Book balance | Bad debt reserve | Accrual ratio | Accrual causes | |
| BD bills | 6,800,000.00 | 6,800,000.00 | 100.00% | Have difficulty in collection |
| Total | 6,800,000.00 | 6,800,000.00 | -- | -- |
Bad debt provision accrual on single basis: RMB 1,752,242.26
In RMB/CNY
| Name | Ending balance | |||
| Book balance | Bad debt reserve | Accrual ratio | Accrual causes | |
| Account receivable with single minor amount but with bad debts provision accrued on a single basis | 1,752,242.26 | 1,752,242.26 | 100.00% | Have difficulty in collection |
| Total | 1,752,242.26 | 1,752,242.26 | -- | -- |
Bad debt provision accrual on portfolio: RMB 37,552,614.73.
In RMB/CNY
| Name | Ending balance | ||
| Book balance | Bad debt reserve | Accrual ratio | |
| Account receivable with bad debt provision accrual on age analysis | 2,356,860,269.31 | 37,552,614.73 | 1.59% |
| Total | 2,356,860,269.31 | 37,552,614.73 | -- |
Explanation on portfolio determines:
Excluding the account receivable accrual impairment provision separately; based on actual loss ratio of thereceivable groups that owes same or similar risk features, which has classify by age in previous years, determineaccrual ratio for bad debt provision combine with real condition
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please referto the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √ Not applicable
By account age
In RMB/CNY
| Account age | Ending balance |
| Within one year(One year included) | 2,277,983,177.64 |
| Within 6 months | 2,116,062,868.00 |
| 6 months to one year | 161,920,309.64 |
| 1-2 years | 69,703,171.66 |
| 2-3 years | 2,923,284.26 |
| Over 3 years | 6,250,635.75 |
| 3-4 years | 6,250,635.75 |
| Total | 2,356,860,269.31 |
(2) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB/CNY
| Category | Opening balance | Amount changed in the period | Ending balance | ||
| Accrual | Collected or reversal | Written-off | |||
| Bad debt provision accrual on credit risk portfolio | 39,908,064.48 | 6,607,638.33 | 403,280.82 | 7,565.00 | 46,104,856.99 |
| Total | 39,908,064.48 | 6,607,638.33 | 403,280.82 | 7,565.00 | 46,104,856.99 |
Including major amount bad debt provision that collected or reversal in the period:
In RMB/CNY
| Enterprise | Amount collected or reversal | Collection by |
| BD bills | 200,000.00 | Collection |
| Total | 200,000.00 | -- |
(3) Account receivable actually written-off in the period
In RMB/CNY
| Item | Amount written-off |
| Retail enterprise | 7,565.00 |
Including major account receivable written-off : nil
(4) Top 5 account receivables at ending balance by arrears party
Total period-end balance of top five receivables by arrears party amounting to 1,245,808,296.79 Yuan, takes
52.67 percent of the total account receivable at period-end, bad debt provision accrual correspondingly at year-endamounting as 7,579,746.83 Yuan.
(5) Account receivable derecognition due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvementNil
5. Account paid in advance
(1) By account age
In RMB/CNY
| Account age | Ending balance | Opening balance | ||
| Amount | Ratio | Amount | Ratio | |
| Within one year | 123,926,769.78 | 94.67% | 89,076,980.53 | 94.11% |
| 1-2 years | 5,312,592.60 | 4.06% | 4,536,408.47 | 4.79% |
| 2-3 years | 1,569,872.98 | 1.20% | 980,958.32 | 1.04% |
| Over 3 years | 89,584.01 | 0.07% | 57,083.99 | 0.06% |
| Total | 130,898,819.37 | -- | 94,651,431.31 | -- |
Explanation on reasons of failure to settle on important account paid in advance with age over one year: Nil
(2) Top 5 account paid in advance at ending balance by prepayment objectTotal period-end balance of top five account paid in advance by prepayment object amounted to42,001,171.79Yuan, takes 32.09 percent of the total advance payment at period-end.
6. Other account receivable
In RMB/CNY
| Item | Ending balance | Opening balance |
| Interest receivable | 674,104.16 | 1,842,437.50 |
| Dividend receivable | 536,162,445.67 | |
| Other account receivable | 60,433,069.23 | 82,739,808.66 |
| Total | 597,269,619.06 | 84,582,246.16 |
(1) Interest receivable
1) Category of interest receivable
In RMB/CNY
| Item | Ending balance | Opening balance |
| Time deposit | 674,104.16 | 1,842,437.50 |
| Total | 674,104.16 | 1,842,437.50 |
2) Significant overdue interest: nil
3) Accrual of bad debt provision
□ Applicable √ Not applicable
(2) Dividend receivable
1) Category of dividend receivable
In RMB/CNY
| Item (or invested enterprise ) | Ending balance | Opening balance |
| SDEC | 610,417.20 | |
| Guolian Securities Co., Ltd. | 903,640.00 | |
| Zhonglian Electronic | 105,200,000.00 | |
| Bosch Automobile Diesel | 429,448,388.47 | |
| Total | 536,162,445.67 |
2) Important dividend receivable with account age over one year: nil
3) Accrual of bad debt provision
□ Applicable √ Not applicable
(3) Other account receivable
1) By nature
In RMB/CNY
| Nature | Ending book balance | Opening book balance |
| Intercourse funds receivable from units | 46,492,901.74 | 15,328,121.55 |
| Compensation for assets disposal receivable | 67,981,726.00 | |
| Receivable from the tax refund for withholding the B-share | 11,515,433.66 | |
| Cash deposit | 3,076,126.84 | 3,206,825.88 |
| Staff loans and petty cash | 4,656,003.60 | 1,172,017.93 |
| Other | 184,793.26 | 509,873.93 |
| Total | 65,925,259.10 | 88,198,565.29 |
2) Accrual of bad debt provision
In RMB/CNY
| Bad debt reserve | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance on Jan. 1, 2019 | 2,683,204.00 | 2,775,552.63 | 5,458,756.63 | |
| Balance of Jan. 1, 2019 in the period | —— | —— | —— | —— |
| Current accrual | 34,961.84 | 34,961.84 | ||
| Current reversal | 1,528.60 | 1,528.60 | ||
| Balance on Jun. 30, 2019 | 2,716,637.24 | 2,775,552.63 | 5,492,189.87 |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √ Not applicable
By account age
In RMB/CNY
| Account age | Ending balance |
| Within one year(One year included) | 60,446,202.47 |
| Within 6 months | 60,122,838.05 |
| 6 months to one year | 323,364.42 |
| 1-2 years | 21,454.00 |
| 2-3 years | 3,400.00 |
| Over 3 years | 2,678,650.00 |
| 3-4 years | 2,678,650.00 |
| Total | 63,149,706.47 |
3) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB/CNY
| Category | Opening balance | Amount changed in the period | Ending balance | |
| Accrual | Collected or reversal | |||
| Account receivable with single significant amount and withdrawal bad debt provision on single basis | 2,775,552.63 | 2,775,552.63 | ||
| Account receivable with bad debt provision accrual on portfolio | 2,683,204.00 | 34,961.84 | 1,528.60 | 2,716,637.24 |
| Total | 5,458,756.63 | 34,961.84 | 1,528.60 | 5,492,189.87 |
Including major amount with bad debt provision reverse or collected in the period: nil
4) Other account receivable actually written-off in the period: nil
5) Top 5 other receivables at ending balance by arrears party
In RMB/CNY
| Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other receivables | Ending balance of bad debt reserve |
| Troowin Power System Technology Co., Ltd. | Intercourse funds of unit | 24,000,000.00 | Within 6 months | 36.40% | |
| Protean Holdings Corp. （Note） | Amount from equity sales | 10,499,081.51 | Within 6 months | 15.93% | |
| Robert Bosch Company | Intercourse funds of unit | 7,600,000.00 | Within 6 months | 11.53% | |
| Ningbo Jiangbei High-Tech Industry Park Development Construction Co., Ltd. | Performance bond | 1,767,000.00 | Over three years | 2.68% | 1,767,000.00 |
| American HESS Company | Intercourse funds of unit | 1,514,671.20 | 个别认定 | 2.30% | 1,514,671.20 |
| Total | -- | 45,380,752.71 | -- | 68.84% | 3,281,671.20 |
6) Account receivables related to Government grants: nil
7) Other receivable for termination of confirmation due to the transfer of financial assets: nil
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved: nilOther explanationNote: In June 2019, Protean Holdings Corp. which was invested by the company was 100% acquired by VirtueSurge Limited, Virtue Surge Limited continues to exist after the merger, and Protean Holdings Corp. no longerexists. This acquisition invoked 5.1 “Drag-along right” in the fifth revision and the restatement of the shareholderagreement of Protean Holdings Corp., i.e. 5.1 (a) i. The most majority of shareholders agree with the shareholdingratio; ii. Oak Investment Partners XII LP ("Oak") with privilege and holding 64.77% of the issued shares agrees;iii. GSR Ventures ("GSR") with privilege and holding 9.58% of the issued shares agrees; iv. The majority of theboard of directors of Protean Holdings Corp. agrees.In view of the fact that the majority shareholder of Protean Holdings Corp. exercised the “Drag-along right”, thatis, the vast majority of Protean Holdings Corp.’s shareholders were in favor of the shareholding, and the ProteanHoldings Corp. board of directors mostly agreed, which met the drag-along conditions, so Weifu High Tech mustagree to sell its 9.61% stake in Protean Holdings Corp., and there were dozens of other shareholders who held theremaining 16.04% of the issued shares were dragged to sell their shares. After the sale, the company no longerholds a stake in Protean Holdings Corp.In this M&A and sale of equity transactions, the company is expected to obtain US$7.17 million in revenue, ofwhich the expected down payment of US$5,640,153.79 has been received at the end of June, and the remainingUS$1.53 million will be used as a reserve guarantee for the M&A and is expected to be received in 12 months.
7. Inventory
Whether implemented the new revenue standards
□Yes √No
(1) Category
In RMB/CNY
| Item | Ending balance | Opening balance | ||||
| Book balance | Depreciation reserve | Book value | Book balance | Depreciation reserve | Book value | |
| Raw materials | 383,335,648.45 | 64,071,932.72 | 319,263,715.73 | 405,113,183.37 | 71,085,820.65 | 334,027,362.72 |
| Goods in process | 177,818,860.49 | 13,699,553.98 | 164,119,306.51 | 182,564,277.52 | 13,682,081.67 | 168,882,195.85 |
| Finished goods | 1,077,721,703.57 | 133,968,453.82 | 943,753,249.75 | 1,080,800,727.38 | 145,181,571.36 | 935,619,156.02 |
| Total | 1,638,876,212.51 | 211,739,940.52 | 1,427,136,271.99 | 1,668,478,188.27 | 229,949,473.68 | 1,438,528,714.59 |
(2) Inventory depreciation reserve
In RMB/CNY
| Item | Opening balance | Current increased | Current decreased | Ending balance | ||
| Accrual | Other | Reversal or write-off | Other | |||
| Raw materials | 71,085,820.65 | 1,422,322.52 | 8,436,210.45 | 64,071,932.72 | ||
| Goods in process | 13,682,081.67 | 17,472.31 | 13,699,553.98 | |||
| Finished goods | 145,181,571.36 | 61,090.44 | 11,274,207.98 | 133,968,453.82 | ||
| Total | 229,949,473.68 | 1,500,885.27 | 19,710,418.43 | 211,739,940.52 | ||
(3) Explanation on capitalization of borrowing costs at ending balance of inventoryNil
(4) Assets completed without settlement from construction contract at period-endNil
8. Other current assets
Whether implemented the new revenue standards
□Yes √No
In RMB/CNY
| Item | Ending balance | Opening balance |
| Entrusted financial product | ||
| Export tax refund receivable | 5,764,074.36 | 7,848,937.72 |
| Prepaid tax fees and VAT retained | 52,783,100.03 | 47,808,273.37 |
| Input tax to be deducted and certified | 420,338.49 | 3,420,317.46 |
| Other | 587,339.98 | 1,173,368.28 |
| Total | 59,554,852.86 | 60,250,896.83 |
9. Long-term equity investment
In RMB/CNY
| The invested entity | Opening balance | Current changes (+,-) | Ending balance | Ending balance of | |||||||
| Addit | Capital | Investment gain/loss | Other compr | Other | Cash dividend or profit | Provision for | Other | ||||
| ional investment | reduction | recognized under equity | ehensive income adjustment | equity change | announced to issued | impairment | impairment provision | |||||
| I. Joint venture | ||||||||||||
| Wuxi Weifu Environment Catalyst Co.,Ltd. | 565,646,086.93 | 11,583,772.04 | 577,229,858.97 | |||||||||
| Wuxi Weifu Electric Drive Tech. Co., Ltd. | 54,742,375.02 | -1,176,749.59 | 53,565,625.43 | |||||||||
| Subtotal | 620,388,461.95 | 10,407,022.45 | 630,795,484.40 | |||||||||
| II. Associated enterprise | ||||||||||||
| Bosch Automobile Diesel System Co., Ltd. | 3,207,122,893.40 | 618,719,531.29 | 858,896,776.94 | 2,966,945,647.75 | ||||||||
| Zhonglian Automobile Electronic Co., Ltd. | 1,086,475,955.72 | 147,532,407.57 | 105,200,000.00 | 1,128,808,363.29 | ||||||||
| Weifu Precision Machinery Manufacturing Co., Ltd. | 55,310,157.90 | 4,661,420.22 | 59,971,578.12 | |||||||||
| Shinwell Automobile Tech. (Wuxi) Co., Ltd. | 7,476,477.77 | -1,250,239.86 | 6,226,237.91 | |||||||||
| Subtotal | 4,356,385,484.79 | 769,663,119.22 | 964,096,776.94 | 4,161,951,827.07 | ||||||||
| Total | 4,976,773,946.74 | 780,070,141.67 | 964,096,776.94 | 4,792,747,311.47 | ||||||||
10. Other equity instrument investment
In RMB/CNY
| Item | Ending balance | Opening balance |
| Beijing Zhike Industry Investment Holding Group Co., Ltd. | 75,940,000.00 | 75,940,000.00 |
| Wuxi Xidong Science & Technology Industrial Park Co., Ltd | 5,000,000.00 | 5,000,000.00 |
| Wuxi Xichang Microchip Semi-Conductor | 100,000,000.00 | |
| Protean Holdings Corp. | 6,148,272.91 | |
| Total | 180,940,000.00 | 87,088,272.91 |
11. Other non-current financial assets
In RMB/CNY
| Item | Ending balance | Opening balance |
| Tradable financial assets holding for over one year | 368,800,000.00 | |
| Total | 368,800,000.00 |
12. Investment real estate
(1) Investment real estate measured by cost
√ Applicable □ Not applicable
In RMB/CNY
| Item | House and Building | Land use right | Construction in progress | Total |
| I. Original book value | ||||
| 1.Opening balance | 61,677,335.83 | 61,677,335.83 | ||
| 2.Current increased | ||||
| (1) Outsourcing | ||||
| (2) Inventory\fixed assets\construction in process transfer-in | ||||
| (3) Increased by combination | ||||
| 3.Current decreased | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4.Ending balance | 61,677,335.83 | 61,677,335.83 | ||
| II. Accumulated depreciation and accumulated amortization | ||||
| 1.Opening balance | 39,771,201.31 | 39,771,201.31 | ||
| 2.Current increased | 774,359.33 | 774,359.33 | ||
| (1) Accrual or amortization | 774,359.33 | 774,359.33 |
| 3.Current decreased | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4.Ending balance | 40,545,560.64 | 40,545,560.64 | ||
| III. Depreciation reserves | ||||
| 1.Opening balance | ||||
| 2.Current increased | ||||
| (1) Accrual | ||||
| 3. Current decreased | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4.Ending balance | ||||
| IV. Book value | ||||
| 1. Ending book value | 21,131,775.19 | 21,131,775.19 | ||
| 2. Opening book value | 21,906,134.52 | 21,906,134.52 |
(2) Investment real estate measured at fair value
□ Applicable √ Not applicable
(3) Investment real estate without property certification held
Nil
13. Fixed assets
In RMB/CNY
| Item | Ending balance | Opening balance |
| Fixed assets | 2,680,884,221.89 | 2,707,374,678.61 |
| Total | 2,680,884,221.89 | 2,707,374,678.61 |
(1) Fixed assets
In RMB/CNY
| Item | House and Building | Machinery equipment | Transportation equipment | Electronic and other equipment | Total |
| I. Original book value: |
| 1.Opening balance | 1,552,720,830.68 | 2,491,008,841.08 | 35,760,995.37 | 506,932,413.54 | 4,586,423,080.67 |
| 2.Current increased | 50,785,697.90 | 67,996,785.02 | 27,287,346.56 | 146,069,829.48 | |
| (1) Purchase | 27,350.00 | 2,194,645.89 | 1,218,137.82 | 3,440,133.71 | |
| (2) Construction in progress transfer-in | 50,758,347.90 | 38,117,012.08 | 25,682,906.08 | 114,558,266.06 | |
| (3) Increased by combination | 27,685,127.05 | 386,302.66 | 28,071,429.71 | ||
| 3.Current decreased | 105,775.86 | 6,974,597.84 | 573,529.92 | 4,326,432.35 | 11,980,335.97 |
| (1) Disposal or scrapping | 6,974,597.84 | 573,529.92 | 4,326,432.35 | 11,874,560.11 | |
| (2) Construction in progress transfer to fixed assets | 105,775.86 | 105,775.86 | |||
| 4.Ending balance | 1,603,400,752.72 | 2,552,031,028.26 | 35,187,465.45 | 529,893,327.75 | 4,720,512,574.18 |
| II. Accumulated depreciation | |||||
| 1.Opening balance | 329,964,732.08 | 1,229,552,990.27 | 24,745,652.33 | 240,562,371.27 | 1,824,825,745.95 |
| 2.Current increased | 22,965,941.24 | 107,544,181.46 | 1,368,053.76 | 38,029,254.26 | 169,907,430.72 |
| (1) Accrual | 22,965,941.24 | 87,891,862.13 | 1,368,053.76 | 37,680,059.40 | 149,905,916.53 |
| (2) Increased by combination | 19,652,319.33 | 349,194.86 | 20,001,514.19 | ||
| 3.Current decreased | 83,749.27 | 5,091,489.41 | 475,772.49 | 2,802,789.50 | 8,453,800.67 |
| (1) Disposal or scrapping | 83,749.27 | 5,091,489.41 | 475,772.49 | 2,802,789.50 | 8,453,800.67 |
| 4.Ending balance | 352,846,924.05 | 1,332,005,682.32 | 25,637,933.60 | 275,788,836.03 | 1,986,279,376.00 |
| III. Depreciation reserves | |||||
| 1.Opening balance | 46,869,092.62 | 73,319.90 | 7,280,243.59 | 54,222,656.11 | |
| 2.Current increased | |||||
| (1) Accrual | |||||
| 3.Current decreased | 859,429.88 | 14,249.94 | 873,679.82 | ||
| (1) Disposal or | 859,429.88 | 14,249.94 | 873,679.82 |
| scrapping | |||||
| 4.Ending balance | 46,009,662.74 | 73,319.90 | 7,265,993.65 | 53,348,976.29 | |
| IV. Book value | |||||
| 1. Ending book value | 1,250,553,828.67 | 1,174,015,683.20 | 9,476,211.95 | 246,838,498.07 | 2,680,884,221.89 |
| 2. Opening book value | 1,222,756,098.60 | 1,214,586,758.19 | 10,942,023.14 | 259,089,798.68 | 2,707,374,678.61 |
(2) Temporarily idle fixed assets
Nil
(3) Fixed assets acquired by financing lease
Nil
(4) Fixed assets acquired by operating lease
Nil
(5) Fixed assets without property certification held
In RMB/CNY
| Item | Book value | Reasons for without the property certification |
| Boiler room and guard house of Weifu Jinning | 2,640,467.55 | Still in process of relevant property procedures |
| Plant and office building of Weifu Chang’an | 42,607,819.23 | Still in process of relevant property procedures |
(6) Disposal of fixed assets
Nil
14. Construction in progress
In RMB/CNY
| Item | Ending balance | Opening balance |
| Construction in progress | 259,557,105.61 | 166,414,542.18 |
| Total | 259,557,105.61 | 166,414,542.18 |
(1) Construction in progress
In RMB/CNY
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Weifu Tianli Technical Transformation Project | 4,285,789.25 | 4,285,789.25 | 3,214,458.65 | 3,214,458.65 | ||
| echnical Transformation Project of parent company | 125,369,185.24 | 1,470,033.00 | 123,899,152.24 | 62,131,476.77 | 1,470,033.00 | 60,661,443.77 |
| Technical transformation of Weifu Autocam | 33,251,718.48 | 33,251,718.48 | 64,861,621.60 | 64,861,621.60 | ||
| Other | 100,216,788.26 | 2,096,342.62 | 98,120,445.64 | 39,773,360.78 | 2,096,342.62 | 37,677,018.16 |
| Total | 263,123,481.23 | 3,566,375.62 | 259,557,105.61 | 169,980,917.80 | 3,566,375.62 | 166,414,542.18 |
(2) Changes of major construction in progress in the period
In RMB/CNY
| Item | Budget | Opening balance | Current increased | Amount transfer-in fixed assets | 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 |
| Weifu Tianli Technical Transformation Project | 3,214,458.65 | 3,132,210.40 | 1,909,155.66 | 151,724.14 | 4,285,789.25 | Other | ||||||
| Technical Transformation Project of parent company | 62,131,476.77 | 106,018,046.19 | 42,780,337.72 | 125,369,185.24 | Other | |||||||
| Technical transfor | 64,861,621.60 | 23,970,066.59 | 54,952,720.46 | 627,249.25 | 33,251,718.48 | Other |
| mation of Weifu Autocam | ||||||||||||
| Total | 130,207,557.02 | 133,120,323.18 | 99,642,213.84 | 778,973.39 | 162,906,692.97 | -- | -- | -- |
(3) The provision for impairment of construction in progress
Nil
(4) Engineering material
Nil
15. Intangible assets
(1) Intangible assets
In RMB/CNY
| Item | Land use right | Patent | Non-patent technology | Trademark and trademark license | Computer software | Total |
| I. Original book value | ||||||
| 1.Opening balance | 381,203,520.00 | 3,539,793.05 | 41,597,126.47 | 52,996,879.28 | 479,337,318.80 | |
| 2.Current increased | 317,685.92 | 3,394,263.76 | 3,711,949.68 | |||
| (1) Purchase | 2,756,543.81 | 2,756,543.81 | ||||
| (2) Internal R&D | ||||||
| (3) Increased by combination | 317,685.92 | 637,719.95 | 955,405.87 | |||
| 3.Current decreased | ||||||
| (1) Disposal | ||||||
| 4.Ending balance | 381,203,520.00 | 3,857,478.97 | 41,597,126.47 | 56,391,143.04 | 483,049,268.48 | |
| II. Accumulated amortization | ||||||
| 1.Opening balance | 78,623,510.56 | 2,625,346.70 | 9,709,000.00 | 46,839,738.79 | 137,797,596.05 | |
| 2.Current increased | 4,176,430.34 | 178,718.30 | 3,839,922.87 | 8,195,071.51 | ||
| (1) Accrual | 4,176,430.34 | 176,988.96 | 3,416,558.52 | 7,769,977.82 | ||
| (2) Increased by combination | 1,729.34 | 423,364.35 | 425,093.69 | |||
| 3.Current decreased |
| (1) Disposal | ||||||
| 4.Ending balance | 82,799,940.90 | 2,804,065.00 | 9,709,000.00 | 50,679,661.66 | 145,992,667.56 | |
| III. Depreciation reserves | ||||||
| 1.Opening balance | 16,646,900.00 | 16,646,900.00 | ||||
| 2.Current increased | ||||||
| (1) Accrual | ||||||
| 3.Current decreased | ||||||
| (1) Disposal | ||||||
| 4.Ending balance | 16,646,900.00 | 16,646,900.00 | ||||
| IV. Book value | ||||||
| 1. Ending book value | 298,403,579.10 | 1,053,413.97 | 15,241,226.47 | 5,711,481.38 | 320,409,700.92 | |
| 2. Opening book value | 302,580,009.44 | 914,446.35 | 15,241,226.47 | 6,157,140.49 | 324,892,822.75 |
(2) Land use right without property certification held
Nil
16. Goodwill
(1) Original book value of goodwill
In RMB/CNY
| The invested entity or matters forming goodwill | Opening balance | Current increased | Current decreased | Ending balance |
| Weifu Tianli | 1,784,086.79 | 1,784,086.79 | ||
| IRD Fuel Cells A/S | 53,807,260.21 | 53,807,260.21 | ||
| Total | 1,784,086.79 | 53,807,260.21 | 55,591,347.00 |
(2) Impairment provision for goodwill
Nil
Relevant information about the assets group or portfolio goodwill included
①Goodwill of the Weifu Tianli: the Company controlling and combine Weifu Tianli by increasing the capital, thegoodwill is the number that combination cost greater than the fair value of identical net assets of Weifu Tianli.At the end of the period, the company conducted an impairment test on goodwill to estimate the present value offuture cash flows and the recoverable amount of the goodwill-related asset group, that is to estimate the presentvalue of future cash flow based on the management's financial budget for the next five years and the discount rate of
12.21%, the cash flow of the year after the five years of financial budget has remained stable. The asset groupidentified during the goodwill impairment test did not change.The key parameters determined by the goodwill impairment test are as follows: The current value of the expectedfuture cash flow of the asset group related to goodwill is measured by using 20%~23% of gross profit margin and9%~15% of the operating income growth rate in the forecast period as key parameters. The management determinesthese parameters based on historical conditions prior to the forecast period and forecasts of market development.After the above tests, the company's goodwill does not need to make provisions for impairment.
②IRD Fuel Cells A/S Goodwill: In 2019, the company established SPV (a wholly-owned subsidiary) in Denmarkto acquire a 66% stake in Danish IRD Fuel Cells A/S (hereinafter referred to as "IRD") held by FCCTApS., whichis equivalent to a total of 7.26 million euros, and CIRO's valuation is 11 million euros; goodwill is the part of theacquisition cost greater than the fair value of the IRD net identifiable assets.
Instructions for goodwill impairments test process and key parameters (such as the forecast period growth rate, stable period growthrate, profit rate, discount rate, and forecast period when estimating the present value of the future cash flow), and the method ofconfirming the impairment loss of goodwill:
Nil
17. Long-term deferred expenses
In RMB/CNY
| Item | Opening balance | Current increased | Amortized in the Period | Other decrease | Ending balance |
| Remodeling costs etc. | 16,637,652.31 | 3,766,419.71 | 1,498,822.02 | 18,905,250.00 | |
| Total | 16,637,652.31 | 3,766,419.71 | 1,498,822.02 | 18,905,250.00 |
18. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets that are not offset
In RMB/CNY
| Item | Ending balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Bad debt reserve | 50,810,260.67 | 7,783,655.00 | 44,576,998.51 | 6,770,470.23 |
| Inventory depreciation reserve | 191,893,925.45 | 30,139,509.60 | 210,088,809.57 | 32,942,217.43 |
| Impairment provision for fixed assets | 19,801,699.55 | 3,186,449.03 | 20,661,129.43 | 3,315,363.51 |
| Impairment provision for construction in progress | 3,566,375.62 | 534,956.34 | 3,566,375.62 | 534,956.34 |
| Impairment provision for intangible assets | 16,646,900.00 | 2,497,035.00 | 16,646,900.00 | 2,497,035.00 |
| Change of fair value of available-for-sale financial assets | 23,305,227.00 | 3,495,784.05 | ||
| Impairment provision for other equity instrument investment | 10,000,000.00 | 1,500,000.00 | ||
| Depreciation reserves of available-for-sale financial asset | 155,994,927.09 | 23,399,239.06 | ||
| Deferred income | 410,876,651.99 | 61,631,497.80 | 422,215,782.35 | 63,332,367.36 |
| Internal un-realized profit | 61,587,106.96 | 9,238,066.05 | 33,204,053.14 | 6,439,903.29 |
| Payable salary, accrued expenses etc. | 602,725,422.49 | 95,239,575.84 | 539,804,494.87 | 85,801,436.71 |
| Depreciation assets, amortization difference | 29,138,524.33 | 4,748,000.87 | 53,624,344.54 | 8,439,877.52 |
| Deductible loss of subsidiary | 9,677,975.44 | 2,419,493.86 | 9,677,975.44 | 2,419,493.86 |
| Change of fair value of derivative financial liability | 490,329.13 | 73,549.37 | ||
| Total | 1,406,724,842.50 | 218,918,239.39 | 1,533,857,346.69 | 239,461,693.73 |
(2) Deferred income tax liabilities that are not offset
In RMB/CNY
| Item | Ending balance | Opening balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Asset evaluation increment for combination not under the same control | 12,381,519.47 | 1,857,227.92 | 12,751,629.44 | 1,912,744.40 |
| Change of fair value of other creditors’ investment | 30,195,948.00 | 4,529,392.20 | ||
| Change of fair value of other equity instrument investment | 31,763,694.33 | 4,764,554.15 | 31,763,694.33 | 4,764,554.15 |
| Total | 74,341,161.80 | 11,151,174.27 | 44,515,323.77 | 6,677,298.55 |
(3) Deferred income tax assets and deferred income tax liabilities listed after off-set
In RMB/CNY
| Item | Trade-off between the deferred income tax assets and liabilities | Ending balance of deferred income tax assets or liabilities after off-set | Trade-off between the deferred income tax assets and liabilities at period-begin | Opening balance of deferred income tax assets or liabilities after off-set |
| Deferred income tax | -4,764,554.15 | 214,153,685.24 | -4,764,554.15 | 234,697,139.58 |
| assets | ||||
| Deferred income tax liabilities | -4,764,554.15 | 6,386,620.12 | -4,764,554.15 | 1,912,744.40 |
(4) Details of unrecognized deferred income tax assets
In RMB/CNY
| Item | Ending balance | Opening balance |
| Bad debt reserve | 786,786.19 | 789,822.60 |
| Inventory depreciation reserve | 19,846,015.07 | 19,860,664.11 |
| Loss from subsidiary | 134,492,349.34 | 139,281,223.32 |
| Impairment provision for fixed assets | 33,547,276.74 | 33,561,526.68 |
| Impairment provision for other equity instrument investment | 48,633,106.95 | 48,633,106.95 |
| Total | 237,305,534.29 | 242,126,343.66 |
(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
In RMB/CNY
| Maturity year | Ending amount | Opening amount | Note |
| 2019 | 13,864,159.93 | 25,671,694.55 | Subsidiaries have operating losses |
| 2020 | 44,795,747.87 | 44,795,747.87 | Subsidiaries have operating losses |
| 2021 | 46,080,956.48 | 46,080,956.48 | Subsidiaries have operating losses |
| 2022 | 10,503,882.86 | 10,503,882.86 | Subsidiaries have operating losses |
| 2023 | 4,188,264.45 | 12,228,941.56 | Subsidiaries have operating losses |
| 2024 | 3,249,606.38 | Subsidiaries have operating losses | |
| Total | 122,682,617.97 | 139,281,223.32 | -- |
19. Other non-current assets
Whether implemented the new revenue standards
□Yes √No
In RMB/CNY
| Item | Ending balance | Opening balance |
| Engineering equipment paid in advance | 295,639,334.53 | 251,462,676.27 |
| Total | 295,639,334.53 | 251,462,676.27 |
20. Short-term borrowings
(1) Category of short-term borrowings
In RMB/CNY
| Item | Ending balance | Opening balance |
| Debt of honor | 321,055,399.28 | 298,928,213.94 |
| Total | 321,055,399.28 | 298,928,213.94 |
Explanation on category of short-term borrowings: nil
(2) Overdue short-term loans without payment
Nil
21. Derivative financial liability
In RMB/CNY
| Item | Ending balance | Opening balance |
| Derivative financial liability | 490,329.13 | |
| Total | 490,329.13 |
22. Note payable
In RMB/CNY
| Category | Ending balance | Opening balance |
| Bank acceptance bill | 1,591,019,357.36 | 1,018,367,533.74 |
| Total | 1,591,019,357.36 | 1,018,367,533.74 |
Notes expired at year-end without paid was 0.00 Yuan.
23. Account payable
(1) Account payable
In RMB/CNY
| Item | Ending balance | Opening balance |
| Within one year | 2,349,278,569.14 | 1,957,672,043.76 |
| 1-2 years | 96,290,673.62 | 10,208,129.49 |
| 2-3 years | 10,696,107.46 | 7,830,950.08 |
| Over three years | 36,318,708.17 | 71,625,711.33 |
| Total | 2,492,584,058.39 | 2,047,336,834.66 |
(2) Important account payable with account age over one year
Nil
24. Accounts received in advance
Whether implemented the new revenue standards
□Yes √No
(1) Accounts received in advance
In RMB/CNY
| Item | Ending balance | Opening balance |
| Within one year | 51,239,061.80 | 33,337,169.03 |
| 1-2 years | 935,180.49 | 6,544,805.44 |
| 2-3 years | 64,130.40 | 425,759.63 |
| Over three years | 799,491.98 | 1,022,123.70 |
| Total | 53,037,864.67 | 41,329,857.80 |
(2) Important account received in advance with account age over one year
Nil
(3) Projects that settle without completed from construction contract at period-endNil
25. Employee compensation payable
(1) Employee compensation payable
In RMB/CNY
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| I. Short-term compensation | 167,414,050.82 | 531,926,552.27 | 549,654,450.68 | 149,686,152.41 |
| II. Post-employment welfare- defined contribution plans | 32,505,677.48 | 72,803,533.28 | 84,157,402.12 | 21,151,808.64 |
| III. Dismissed welfare | 2,601,561.75 | 515,426.00 | 1,863,263.01 | 1,253,724.74 |
| IV. Other welfare due within one year | 90,050,000.00 | 44,085,521.00 | 45,964,479.00 | |
| V. Other short-term welfare-Housing subsidies, employee benefits and welfare funds | 19,541,888.19 | 1,996,132.75 | 17,545,755.44 | |
| Total | 312,113,178.24 | 605,245,511.55 | 681,756,769.56 | 235,601,920.23 |
(2) Short-term compensation
In RMB/CNY
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| 1. Wages , bonuses, allowances and subsidies | 148,435,979.41 | 428,283,206.11 | 444,745,192.60 | 131,973,992.92 |
| 2. Welfare for workers and staff | 32,428,482.17 | 32,428,482.17 | ||
| 3. Social insurance | 9,451,627.58 | 30,400,781.73 | 33,141,499.65 | 6,710,909.66 |
| Including: Medical insurance | 7,681,163.73 | 25,519,780.88 | 27,920,811.47 | 5,280,133.14 |
| Work injury insurance | 997,896.55 | 2,276,917.80 | 2,373,914.26 | 900,900.09 |
| Maternity insurance | 772,567.30 | 2,604,083.05 | 2,846,773.92 | 529,876.43 |
| 4. Housing accumulation fund | 658,798.00 | 33,775,081.00 | 33,808,788.00 | 625,091.00 |
| 5. Labor union expenditure and personnel education expense | 8,867,645.83 | 7,039,001.26 | 5,530,488.26 | 10,376,158.83 |
| Total | 167,414,050.82 | 531,926,552.27 | 549,654,450.68 | 149,686,152.41 |
(3) Defined contribution plans
In RMB/CNY
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| 1. Basic endowment insurance | 17,945,666.32 | 59,741,208.52 | 65,508,569.43 | 12,178,305.41 |
| 2. Unemployment insurance | 581,515.16 | 1,649,534.04 | 1,792,887.85 | 438,161.35 |
| 3. Enterprise annuity | 13,978,496.00 | 11,412,790.72 | 16,855,944.84 | 8,535,341.88 |
| Total | 32,505,677.48 | 72,803,533.28 | 84,157,402.12 | 21,151,808.64 |
26. Taxes payable
In RMB/CNY
| Item | Ending balance | Opening balance |
| VAT | 11,847,039.81 | 15,332,751.18 |
| Corporation income tax | 53,460,184.87 | 48,855,330.99 |
| Individual income tax | 413,036.74 | 1,861,196.92 |
| City maintaining & construction tax | 1,053,237.23 | 884,819.63 |
| Educational surtax | 752,312.33 | 543,438.10 |
| Other (including stamp tax and local funds) | 5,924,885.67 | 6,794,077.10 |
| Total | 73,450,696.65 | 74,271,613.92 |
27. Other accounts payable
In RMB/CNY
| Item | Ending balance | Opening balance |
| Interest payable | 752,404.25 | 517,469.08 |
| Dividend payable | 369,352,725.60 | |
| Other accounts payable | 60,134,191.62 | 63,931,254.44 |
| Total | 430,239,321.47 | 64,448,723.52 |
(1) Interest payable
In RMB/CNY
| Item | Ending balance | Opening balance |
| Long-term borrowing interest for installment | 90,312.50 | 90,312.50 |
| Interest payable for short-term loans | 662,091.75 | 420,478.58 |
| Other | 6,678.00 | |
| Total | 752,404.25 | 517,469.08 |
Major overdue interest: nil
(2) Dividend payable
In RMB/CNY
| Item | Ending balance | Opening balance |
| Ordinary stock dividends | 369,352,725.60 | |
| Total | 369,352,725.60 |
Other explanation, including important dividend payable over one year without payment, disclose reasons for un-paid: Nil
(3) Other accounts payable
1) Other accounts payable by nature
In RMB/CNY
| Item | Ending balance | Opening balance |
| Deposit and margin | 23,589,117.50 | 18,680,843.00 |
| Social insurance and reserves funds that withholding | 7,786,440.63 | 7,682,496.48 |
| Intercourse funds of unit | 25,512,145.98 | 30,982,145.98 |
| Other | 3,246,487.51 | 6,585,768.98 |
| Total | 60,134,191.62 | 63,931,254.44 |
2) Significant other payable with over one year age
In RMB/CNY
| Item | Ending balance | Reasons for non-repayment or carry-over |
| Nanjing Jidian Industrial Group Co., Ltd. | 4,500,000.00 | Intercourse funds |
| Total | 4,500,000.00 | -- |
28. Non-current liabilities due within one year
In RMB/CNY
| Item | Ending balance | Opening balance |
| Long-term loans due within one year | 15,000,000.00 | 15,000,000.00 |
| Total | 15,000,000.00 | 15,000,000.00 |
29. Long-term loans
(1) Category of long-term loans
In RMB/CNY
| Item | Ending balance | Opening balance |
| Guaranteed loan | 22,500,000.00 | 30,000,000.00 |
| Total | 22,500,000.00 | 30,000,000.00 |
30. Long-term account payable
In RMB/CNY
| Item | Ending balance | Opening balance |
| Long-term account payable | 16,818,181.00 | 17,157,272.00 |
| Special accounts payable | 18,265,082.11 | 18,265,082.11 |
| Total | 35,083,263.11 | 35,422,354.11 |
(1) Long-term account payable by nature
In RMB/CNY
| Item | Ending balance | Opening balance |
| Hi-tech Branch of Nanjing Finance Bureau(note①) | 1,140,000.00 | 1,140,000.00 |
| Hi-tech Branch of Nanjing Finance Bureau(note②) | 1,250,000.00 | 1,250,000.00 |
| Hi-tech Branch of Nanjing Finance Bureau(note③) | 1,230,000.00 | 1,230,000.00 |
| Loan transferred from treasury bond (note④) | 678,181.00 | 1,017,272.00 |
| Hi-tech Branch of Nanjing Finance Bureau(note⑤) | 2,750,000.00 | 2,750,000.00 |
| Hi-tech Branch of Nanjing Finance Bureau(note⑥) | 1,030,000.00 | 1,030,000.00 |
| Hi-tech Branch of Nanjing Finance Bureau(note⑦) | 960,000.00 | 960,000.00 |
| Hi-tech Branch of Nanjing Finance Bureau(note⑧) | 5,040,000.00 | 5,040,000.00 |
| Hi-tech Branch of Nanjing Finance Bureau(note⑨) | 2,740,000.00 | 2,740,000.00 |
| Total | 16,818,181.00 | 17,157,272.00 |
Other explanation
note①:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, theterm is from 20 October 2005 to 20 October 2020. Provided that the operation period in the zone is less than 15years, financial supporting capital will be reimbursed.note②:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, theterm is from 20 July 2006 to 20 July 2021. Provided that the operation period in the zone is less than 15 years,financial supporting capital will be reimbursed.
note③:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,the term is from 17 September 2007 to 17 September 2022. Provided that the operation period in the zone isless than 15 years, financial supporting capital will be reimbursed.
note④:Loan transferred from treasury bond: Weifu Jinning received RMB1.87 million Yuan of special fundsfrom budget of the central government, and RMB1.73 million Yuan of special funds from budget of the localgovernment. The non-operating income transferred in was 1.87 million Yuan in 2011 which was confirmed not toreturn, if the Company pays back special funds of 3.73 million Yuan to the local government in 11 years since2012, then the Company needs to repay the principal of 339,091.00 Yuan each year.
note⑤:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,
the term is from 10 November 2008 to 10 November 2023. Provided that the operation period in the zone isless than 15 years, financial supporting capital will be reimbursed.
note⑥:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, theterm is from 27 October 2009 to 27 October 2024. Provided that the operation period in the zone is less than 15years, financial supporting capital will be reimbursed.note⑦:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,the term is from 27 December 2010 to 27 December 2025. Provided that the operation period in the zone is lessthan 15 years, financial supporting capital will be reimbursed.
note⑧:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, theterm is from 28 December 2011 to 28 December 2026. Provided that the operation period in the zone is less than15 years, financial supporting capital will be reimbursed.
note⑨:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, theterm is from 18 December 2013 to 18 December 2028. Provided that the operation period in the zone is less than15 years, financial supporting capital will be reimbursed.
(2) Special accounts payable
In RMB/CNY
| Item | Opening balance | Current increased | Current decreased | Ending balance | Cause |
| Removal compensation of subsidiary Weifu Jinning | 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 Weifu Jingning needs expropriation in order to carry out thecomprehensively improvement of Ming Great Wall. According to the house expropriation and compensation agreement instate-owned lands signed between Weifu Jinning and House Expropriation Management Office of Xuanwu District, Nanjing City,RMB 19.7067 million in total are compensate, including operation losses from lessee RMB 1.4416 million in total. The abovecompensation was received in last period and is making up for the losses from lessee, and the above lands and property have not beencollected up to 30 June 2019.
31. Long-term employee compensation payable
(1) Long-term employee compensation payable
In RMB/CNY
| Item | Ending balance | Opening balance |
| II. Dismiss welfare | 10,716,412.43 | 10,716,412.43 |
| III. Other long-term welfare | 63,962,762.93 | 63,962,762.93 |
| Total | 74,679,175.36 | 74,679,175.36 |
(2) Change of defined benefit plans
Nil
32. Deferred income
In RMB/CNY
| Item | Opening balance | Current increased | Current decreased | Ending balance | Cause |
| Government grants | 425,769,854.13 | 2,428,000.00 | 12,779,779.24 | 415,418,074.89 | Financial allocation received |
| Total | 425,769,854.13 | 2,428,000.00 | 12,779,779.24 | 415,418,074.89 | -- |
Item with government grants involved:
In RMB/CNY
| Liability | Opening balance | New grants in the Period | Amount reckoned in non-operation revenue | Amount reckoned into other income in the period | Cost reduction in the period | Other changes | Ending balance | Assets related/Income related |
| Industrialization project for injection VE pump system with electronically controlled high pressure for less-emission diesel used | 2,884,001.16 | 2,884,001.16 | Assets related | |||||
| Appropriation on reforming of production line technology and R&D ability of common rail system for diesel by distributive high-voltage | 7,100,000.00 | 7,100,000.00 | Assets related | |||||
| Fund of industry | 60,400,000.00 | 60,400,000.00 | Income |
| upgrade(2012) | related | |||||||
| Fund of industry upgrade(2013) | 60,520,000.00 | 60,520,000.00 | Income related | |||||
| Appropriation on central basic construction investment | 2,142,857.16 | 2,142,857.16 | Assets related | |||||
| R&D and industrialization of the high pressure variable pump of the common rail system of diesel engine for automobile | 8,413,809.44 | 8,413,809.44 | Assets related | |||||
| Research institute of motor vehicle exhaust aftertreatment technology | 2,472,471.21 | 2,472,471.21 | 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 | 147,575,675.52 | 11,339,130.36 | 136,236,545.16 | 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 | 9,740,000.00 | 9,740,000.00 | Assets related | |||||
| Implementation of the variable cross-section turbocharger for diesel engine | 10,908,721.03 | 10,908,721.03 | Assets related | |||||
| Demonstration project for | 1,450,030.10 | 1,450,030.10 | Assets related |
| intelligent manufacturing | ||||||||
| Other | 35,331,288.51 | 2,428,000.00 | 1,440,648.88 | 36,318,639.63 | Assets related | |||
| Total | 425,769,854.13 | 2,428,000.00 | 12,779,779.24 | 415,418,074.89 |
Other explanation
(1) Appropriation on industrialization project of electrical control and high voltage jet VE system of lowemissions diesel: in September 2009, Weifu Jinning signed “Project Contract of Technology OutcomeTransferring Special Capital in Jiangsu Province” with Nanjing Technical Bureau, according to which WeifuJinning received appropriation RMB 6.35 million in 2009, RMB 4.775 million received in 2010 and RMB 0.875million received in 2011. According to the contract, the attendance date of this project was: from October of 2009to March of 2012. This contract agreed 62% of newly increased investment in project would be spent in fixedassets investment which are belongs to the government grand with assets/income concerned. In 2013, accepted bythe science & technology agency of Jiangsu Province, and RMB 4,789,997.04 with income related was reckonedinto current operation revenue directly; the RMB 7,210,002.96 with assets related was amortized during thepredicted service period of the assets, and RMB 721,000.30 amortized in the Period.
(2) The appropriation for research and development ability of distributive high-pressure common rail system fordiesel engine use and production line technological transformation project: according to XCJ No. [2010] 59, theCompany has received special funds of 7.1 million Yuan appropriated by Finance Bureau of Wuxi New District in2011 and used for the Company’s research and development ability of distributive high-pressure common railsystem for diesel engine use and production line technological transformation project; this appropriation belongsto government subsidies related to assets, and will be amortized according to the depreciation process of theunderlying assets when the project is completed.
(3) Industry upgrading funds (2012): In accordance with the document Xi Xin Guanjing Fa [2012] No.216 andDocument Xi Xin Guancai Fa [2012] No. 85, the Company received funds of 60.4 million Yuan appropriated forindustry upgrading this year.
(4) Industry upgrading funds (2013): In accordance with the document Xi Xin Guan Jing Fa [2013] No.379, XiXin Guan Jing Fa [2013] No.455, Xi Xin Guan Cai Fa [2013] No.128 and Xi Xin Guan Cai Fa [2013] No.153, theCompany received funds of 60.52 million Yuan appropriated for industry upgrading in 2013.
(5) Appropriation for investment of capital construction from the central government: In accordance with thedocument Xi Caijian [2012] No.43, the Company received appropriation of 5 million Yuan for investment ofcapital construction from the central government in 2012. The appropriation belongs to the government grantswith assets related and will amortized according to relevant assets depreciation.
(6) R&D and industrialization of the high pressure variable pump of the common rail system of diesel engine forautomobile: the Company received appropriated for the project in 2013 with 8.05 million Yuan in line withdocuments of Xi Ke Ji [2013] No.186, Xi Ke Ji [2013] No.208, Xi Cai Gong Mao [2013] No.104, Xi Cai GongMao [2013] No.138, Xi Ke Ji [2014] No.125, Xi Cai Gong Mao [2014] No.58, Xi Ke Ji [2014] No. 246 and XiCai Gong Mao [2014] No.162. Received RMB 3 million in 2014 and RMB 0.45 million in 2015; and belongs togovernment grant with assets concerned, and shall be amortized according to the depreciation process.
(7) Research institute of motor vehicle exhaust after-treatment technology: in 2012, the subsidiary Weifu Leaderhas applied for equipment purchase assisting funds to Wuxi Huishan Science and Technology Bureau and WuxiScience and Technology Bureau for the vehicle exhaust after-treatment technology research institute project. Thisdeclaration has been approved by Wuxi Huishan Science and Technology Bureau and Wuxi Science andTechnology Bureau in 2012, and the company has received appropriation of 2.4 million Yuan in 2012, andreceived appropriation of 1.6 million Yuan in 2013. This appropriation belongs to government subsidies related toassets and will be amortized according to the depreciation process.
(8) Fund of industry upgrade(2014) : In accordance with the document Xi Xin Guan Jing Fa [2014] No.427 andXi Xin Guan Cai Fa [2014] No.143, the Company received funds of 36.831 million Yuan appropriated forindustry upgrading in 2014.
(9) New-built assets compensation after the removal of parent company: policy relocation compensation receivedby the Company, and will be amortized according to the depreciation of new-built assets, amount of11,339,130.36 Yuan amortize in the year.
(10) Fund of industry upgrade(2016): In accordance with the document Xi Xin Guan Jing Fa [2016] No.585 andXi Xin Fa [2016] No.70, the Company received funds of 40 million Yuan appropriated for industry upgrading in2016.
(11) Guiding capital for the technical reform from State Hi-Tech Technical Commission: In accordance with thedocument Xi Jing Xin ZH [2016] No.9 and Xi Cai GM [2016] No.56, the Company received a 9.74 million Yuanfor the guiding capital of technical reform (1st batch) from Wuxi for year of 2016, which included in thegovernment subsidy with assets-concerned, and will amortized according to the depreciation process afteracceptance
(12) Implementation of the variable cross-section turbocharger for diesel engine: In accordance with the documentYCZ Fa[2016] NO.623 and “Strong Industrial Base Project Contract for year of 2016”, subsidiary Weifu Tianlireceived a specific subsidy of 16.97 million Yuan (760,000 Yuan received in the period), the fund supportingstrong industrial base project (made-in-China 2025) of central industrial transformation and upgrading 2016 fromMinistry of Industry and Information Technology; and belongs to government grant with assets concerned, andshall be amortized according to the depreciation process.
(13) Demonstration project for intelligent manufacturing: under the Notice Relating to Selection of the IntelligentManufacturing Model Project in Huishan District in 2016 (HJXF[2016]No.36), a fiscal subsidy of 3,000,000 Yuanwas granted by relevant government authority in Huishan district to our subsidiary Weifu Leader in 2017 to beutilized for transformation and upgrade of Weifu Leader’s intelligent manufacturing facilities. This subsidybelongs to government grant related to assets which shall be amortized based on the depreciation progress of theassets.
33. Share capital
In RMB/CNY
| Opening balance | Change during the year(+,-) | Ending balance | |||||
| New shares issued | Bonus share | Shares transferred from capital reserve | Other | Subtotal | |||
| Total shares | 1,008,950,570.00 | 1,008,950,570.00 | |||||
34. Capital reserve
In RMB/CNY
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Capital premium(Share capital premium) | 3,370,828,806.22 | 3,370,828,806.22 | ||
| Other capital reserve | 45,193,988.92 | 45,193,988.92 | ||
| Total | 3,416,022,795.14 | 3,416,022,795.14 |
Other explanation, including changes in the period and reasons for changes: nil
35. Other comprehensive income
In RMB/CNY
| Item | Opening balance | Current period | Ending balance | |||||
| Account before income tax in the year | Less: written in other comprehensive income in previous period and carried forward to gains and | Less: written in other comprehensive income in previous period and carried forward to retained | Less : income tax expense | Belong to parent company after tax | Belong to minority shareholders after tax | |||
| losses in current period | earnings in current period | |||||||
| II. Other comprehensive income items which will be reclassified subsequently to profit or loss | 271,537.20 | 261,591.54 | 9,945.66 | 261,591.54 | ||||
| Translation reserve | 271,537.20 | 261,591.54 | 9,945.66 | 261,591.54 | ||||
| Total other comprehensive income | 271,537.20 | 261,591.54 | 9,945.66 | 261,591.54 |
36. Reasonable reserve
In RMB/CNY
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Safety production costs | 1,618,490.50 | 9,658,567.54 | 8,741,397.35 | 2,535,660.69 |
| Total | 1,618,490.50 | 9,658,567.54 | 8,741,397.35 | 2,535,660.69 |
37. Surplus reserve
In RMB/CNY
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Statutory surplus reserves | 510,100,496.00 | 510,100,496.00 | ||
| Total | 510,100,496.00 | 510,100,496.00 |
38. Retained profit
In RMB/CNY
| Item | Current period | Last period |
| Retained profits at the end of last period before adjustment | 10,996,945,870.13 | 9,811,609,138.92 |
| Total retained profit at beginning of the adjustment (+ for increased, -for decreased) | -19,809,442.95 | |
| Retained profits at the beginning of the period after adjustment | 10,977,136,427.18 | 9,811,609,138.92 |
| Add: The net profits belong to owners of patent company of this period | 1,256,661,577.09 | 2,396,077,415.21 |
| Common dividend payable | 1,210,740,684.00 | 1,210,740,684.00 |
| Impact earnings from other equity instrument investment disposal | 36,147,694.44 | |
| Retained profit at period-end | 11,059,205,014.71 | 10,996,945,870.13 |
Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retainedprofits at the beginning of the period amounting to 0 Yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 19,809,442.95 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
39.Operating income and cost
In RMB/CNY
| Item | Current period | Last Period | ||
| Income | Cost | Income | Cost | |
| Main operating | 4,133,178,892.36 | 3,179,484,258.13 | 4,725,759,054.05 | 3,682,028,566.53 |
| Other business | 270,265,453.69 | 225,902,246.31 | 235,042,836.94 | 207,561,723.16 |
| Total | 4,403,444,346.05 | 3,405,386,504.44 | 4,960,801,890.99 | 3,889,590,289.69 |
Whether implemented the new revenue standards
□Yes √No
40. Operating tax and extras
In RMB/CNY
| Item | Current period | Last Period |
| City maintaining & construction tax | 12,840,319.07 | 15,131,214.76 |
| Educational surtax | 9,260,002.10 | 10,807,786.47 |
| Property tax | 7,976,886.64 | 7,130,285.13 |
| Land use tax | 3,000,765.60 | 3,243,530.28 |
| Vehicle use tax | 5,540.64 | 24,297.00 |
| Stamp duty | 1,349,389.57 | 1,578,877.86 |
| Other taxes | 101,668.04 | 84,360.90 |
| Total | 34,534,571.66 | 38,000,352.40 |
41. Sales expenses
In RMB/CNY
| Item | Current period | Last Period |
| Salary and fringe benefit | 26,545,495.48 | 23,852,704.11 |
| Consumption of office materials and business travel charge | 5,902,212.14 | 5,767,944.92 |
| Transportation charge | 13,044,708.75 | 19,146,343.03 |
| Warehouse charge | 2,516,917.39 | 3,241,966.63 |
| Three-guarantee fee | 39,932,538.62 | 40,015,843.08 |
| Business entertainment fee | 9,328,770.85 | 8,251,206.32 |
| Other | 7,000,004.17 | 6,071,551.76 |
| Total | 104,270,647.40 | 106,347,559.85 |
42. Administration expenses
In RMB/CNY
| Item | Current period | Last Period |
| Salary and fringe benefit | 134,821,395.41 | 94,992,042.41 |
| Depreciation charger and long-term assets amortization | 17,239,939.30 | 24,091,878.82 |
| Consumption of office materials and business travel charge | 5,392,838.23 | 7,840,515.40 |
| Incentive fund | 35,940,000.00 | 64,279,800.00 |
| Other | 117,515,807.49 | 45,335,174.00 |
| Total | 310,909,980.43 | 236,539,410.63 |
43. R&D expenses
In RMB/CNY
| Item | Current period | Last Period |
| Technological development expenses | 180,167,642.16 | 177,443,968.15 |
| Total | 180,167,642.16 | 177,443,968.15 |
44. Financial expenses
In RMB/CNY
| Item | Current period | Last Period |
| Interest expenses | 9,264,648.42 | 9,075,955.05 |
| Note discount interest expenses | 6,867,326.37 | 409,282.24 |
| Saving interest income | -48,416,919.83 | -11,684,097.62 |
| Gains/losses from exchange | 583,881.77 | -491,644.75 |
| Handling charges | 2,208,267.69 | 913,596.71 |
| Total | -29,492,795.58 | -1,776,908.37 |
45. Other income
In RMB/CNY
| Source | Current period | Last Period |
| Government grants with routine activities concerned | 17,632,117.95 | 14,032,459.71 |
| Total | 17,632,117.95 | 14,032,459.71 |
46. Investment income
In RMB/CNY
| Item | Current period | Last Period |
| Income of long-term equity investment calculated based on equity | 790,465,131.05 | 968,640,145.91 |
| Investment income from holding tradable financial assets | 2,287,308.59 | |
| Investment income from period of holding the financial assets available for sale | 3,220,575.00 | |
| Investment income obtained from disposal of financial assets available for sales | 17,370,816.75 | |
| Entrust financial income | 95,464,240.84 | 159,801,630.73 |
| Total | 888,216,680.48 | 1,149,033,168.39 |
47. Income from change of fair value
In RMB/CNY
| Sources | Current period | Last Period |
| Tradable financial assets | 30,195,948.00 | |
| Investment income from disposal of tradable financial assets | 490,329.13 | |
| Total | 30,686,277.13 |
48. Credit impairment loss
In RMB/CNY
| Item | Current period | Last Period |
| Bad debt loss of other account receivable | -33,433.24 | |
| Bad debt loss of account receivable | -6,204,357.51 | |
| Total | -6,237,790.75 |
49. Assets impairment loss
Whether implemented the new revenue standards
□Yes √No
In RMB/CNY
| Item | Current period | Last Period |
| I. Bad debt losses | -2,192,563.70 | |
| II. Loss on inventory valuation | -1,500,885.27 | 2,202,651.08 |
| Total | -1,500,885.27 | 10,087.38 |
50. Income from assets disposal
In RMB/CNY
| Sources | Current period | Last Period |
| Income from disposal of non-current assets | 5,542,556.91 | 1,820,229.59 |
| Losses from disposal of non-current assets | -434,708.46 | -232,044.23 |
| Total | 5,107,848.45 | 1,588,185.36 |
51. Non-operating income
In RMB/CNY
| Item | Current period | Last Period | Amount reckoned into current non-recurring gains/losses |
| Government grants | 26,547,209.00 | 3,667,570.46 | 26,547,209.00 |
| Other | 997,548.26 | 213,558.41 | 997,548.26 |
| Total | 27,544,757.26 | 3,881,128.87 | 27,544,757.26 |
Government grants reckoned into current gains/losses:
In RMB/CNY
| Government grants | Granting subject | Cause of distribution | Nature type | Whether the impact of subsidies on the current profit and loss | Whether special subsidies | Current period | Last period | Assets related/Income related |
| House land expropriation and disposal incentives of Weifu Jinning | N | N | 26,547,209.00 | Income related | ||||
| Stabilization subsidy in Wuxi | N | N | 967,170.46 | Income related | ||||
| Patent funding | N | N | 621,500.00 | Income related | ||||
| Funds for the intelligent transformation project of common | N | N | 1,340,000.00 | Income |
| rail pump production in Huishan District | related | |||||||
| Reward for the high-tech enterprise identification in management committee of Jiangbei District | N | N | 500,000.00 | Income related | ||||
| Discount reward for imported equipment | N | N | 103,000.00 | Income related | ||||
| Employment subsidy from Employment Administration Service of Ningbo City | N | N | 86,520.00 | Income related | ||||
| Special funds for 333 high-end personnel training | N | N | 30,000.00 | Income related | ||||
| Other | N | N | 19,380.00 | Income related | ||||
| Total | 26,547,209.00 | 3,667,570.46 |
52. Non-operating expense
In RMB/CNY
| Item | Current period | Last Period | Amount reckoned into current non-recurring gains/losses |
| Donations | 43,500.00 | 43,500.00 | |
| Non-current assets disposal losses | 180,170.75 | 167,094.34 | 180,170.75 |
| Including: fixed assets disposal losses | 180,170.75 | 167,094.34 | 180,170.75 |
| Local fund | 2,291,966.58 | 2,015,771.73 | |
| Other | 115,815.69 | 145,006.31 | 115,815.69 |
| Total | 2,631,453.02 | 2,327,872.38 | 339,486.44 |
53. Income tax expense
(1) Income tax expense
In RMB/CNY
| Item | Current period | Last Period |
| Payable tax in current period | 52,525,690.93 | 102,952,291.92 |
| Adjusted the previous income tax | 3,839,633.55 | -603,416.68 |
| Increase/decrease of deferred income tax assets | 20,543,454.34 | 633,939.20 |
| Increase/decrease of deferred income tax liability | 4,473,875.72 | -55,516.48 |
| Total | 81,382,654.54 | 102,927,297.96 |
(2) Adjustment on accounting profit and income tax expenses
In RMB/CNY
| Item | Current period |
| Total profit | 1,356,485,347.77 |
| Income tax measured by statutory/applicable tax rate | 203,472,802.17 |
| Impact by different tax rate applied by subsidies | 1,632,000.65 |
| Adjusted the previous income tax | 3,839,633.55 |
| Impact by non-taxable revenue | -122,975,551.11 |
| Impact by the deductible losses of the un-recognized previous deferred income tax | -3,707,613.33 |
| The deductible temporary differences or deductible losses of the un-recognized deferred income tax assets in the Period | 1,564,899.02 |
| Other | -2,443,516.40 |
| Income tax expense | 81,382,654.54 |
54. Other comprehensive income
Found more in Note -35
55. Items of ash flow statement
(1) Other cash received in relation to operation activities
In RMB/CNY
| Item | Current period | Last Period |
| Interest income from cash in bank | 49,585,253.17 | 12,485,826.79 |
| Government grants | 33,827,547.71 | 8,212,570.46 |
| Other | 2,362,693.88 | 181,546.85 |
| Total | 85,775,494.76 | 20,879,944.10 |
(2) Other cash paid in relation to operation activities
In RMB/CNY
| Item | Current period | Last Period |
| Cash cost | 158,648,871.84 | 147,328,558.66 |
| Other | 10,439,746.86 | 6,641,913.18 |
| Total | 169,088,618.70 | 153,970,471.84 |
(3) Cash received from other investment activities
Nil
(4) Cash paid related with investment activities
In RMB/CNY
| Item | Current period | Last Period |
| Borrowings paid to Baodun (Tianjin) Electro-mechanical | 10,000,000.00 | |
| Borrowings paid to Wuhan Troowin | 24,000,000.00 | |
| Total | 24,000,000.00 | 10,000,000.00 |
(5) Other cash received in relation to financing activities
In RMB/CNY
| Item | Current period | Last Period |
| The borrowings/loans received by Weifu Leader from Wuxi Industry Group | 5,470,000.00 | |
| Total | 5,470,000.00 |
(6) Cash paid related with financing activities
In RMB/CNY
| Item | Current period | Last Period |
| Borrowings/loans paid to Industry Group by Weifu Leader | 5,470,000.00 | |
| National debt paid transfer to loans | 339,091.00 | 339,091.00 |
| Total | 5,809,091.00 | 339,091.00 |
56. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
In RMB/CNY
| Supplementary information | Current period | Last Period |
| 1. Net profit adjusted to cash flow of operation activities: | -- | -- |
| Net profit | 1,275,102,693.23 | 1,577,947,078.01 |
| Add: Assets impairment provision | 7,738,676.02 | -10,087.38 |
| Depreciation of fixed assets, consumption of oil assets and depreciation of productive biology assets | 150,680,275.86 | 142,796,801.99 |
| Amortization of intangible assets | 7,769,977.82 | 8,927,389.15 |
| Amortization of long-term deferred expenses | 1,498,822.02 | 1,093,846.42 |
| Loss from disposal of fixed assets, intangible assets and other long-term assets(gain is listed with “-”) | -5,107,848.45 | -1,588,185.36 |
| Losses on scrapping of fixed assets (gain is listed with “-”) | 180,170.75 | 167,094.34 |
| Gain/loss of fair value changes (gain is listed with “-”) | -30,686,277.13 | |
| Financial expenses (gain is listed with “-”) | 8,918,152.92 | 8,265,783.22 |
| Investment loss (gain is listed with “-”) | -885,938,793.49 | -1,149,683,398.46 |
| Decrease of deferred income tax asset( (increase is listed with “-”) | 17,047,670.29 | 633,939.20 |
| Increase of deferred income tax liability (decrease is listed with “-”) | -55,516.90 | -55,516.48 |
| Decrease of inventory (increase is listed with “-”) | 9,891,557.33 | 241,085,663.64 |
| Decrease of operating receivable accounts (increase is listed with “-”) | -802,107,175.59 | -606,831,311.20 |
| Increase of operating payable accounts (decrease is listed with “-”) | 934,171,985.46 | 154,832,323.82 |
| Other | 1,219,538.11 | 1,342,269.57 |
| Net cash flows arising from operating activities | 690,323,908.25 | 378,923,690.48 |
| 2. Material investment and financing not involved in cash flow | -- | -- |
| 3. Net change of cash and cash equivalents: | -- | -- |
| Balance of cash at period end | 2,596,327,132.26 | 2,842,510,815.26 |
| Less: Balance of cash equivalent at year-begin | 2,404,674,139.49 | 2,948,439,354.22 |
| Net increase of cash and cash equivalents | 191,652,992.77 | -105,928,538.96 |
(2) Net cash payment for the acquisition of a subsidiary in the period
In RMB/CNY
| Amount | |
| Cash and cash equivalent paid in the period for enterprise combination occurred in the period | 54,936,420.00 |
| Including: | -- |
| Less: Cash and cash equivalent held by subsidiary on purchasing date | 5,005,683.38 |
| Including: | -- |
| Add: Cash and cash equivalent paid in the period for enterprise combination occurred previous | 0.00 |
| Including: | -- |
| Net cash paid for subsidiary obtained | 49,930,736.62 |
(3) Net cash received from the disposal of subsidiaries
Nil
(4) Constitution of cash and cash equivalent
57. 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
58. Assets with ownership or use right restricted
In RMB/CNY
| Item | Ending book value | Restriction reason |
| Monetary funds | 52,783,679.85 | A deposit paid for issuing a bank acceptance bill |
| Note receivable | 762,571,527.45 | Notes pledge for bank acceptance |
| Monetary funds | 158,280.00 | A deposit paid for issuance of a letter of guarantee |
| Monetary funds | 38,774,365.26 | Sales of equity of Protean Holdings Corp. |
| Monetary funds | 1,655,119.95 | Court freeze |
| Tradable financial assets | 141,199,062.12 | In accordance with the civil ruling No.(2016)Y03MC2490 and No.(2016) Y03MC2492 of Guangdong Shenzhen Intermediate People's Court , the property with the value of 217 million Yuan under the name of the Company and other seven respondents and the third party Shenzhen Hejun Chuangye Holdings Co., Ltd. was frozen. As of the end of the reporting period, 4.71 million shares of Miracle Automation and 11,739,102 shares of SDEC held by the Company were frozen. |
| Total | 997,142,034.63 | -- |
| Item | Ending balance | Opening balance |
| I. Cash | 2,596,327,132.26 | 2,404,674,139.49 |
| Including: Cash on hand | 71,791.03 | 194,161.03 |
| Bank deposit available for payment at any time | 2,596,255,341.25 | 2,404,479,978.46 |
| I. Balance of cash and cash equivalents at the period-end | 2,596,327,132.26 | 2,404,674,139.49 |
59. Item of foreign currency
(1) Item of foreign currency
In RMB/CNY
| Item | Closing balance of foreign currency | Rate of conversion | Ending balance of RMB converted |
| Monetary funds | -- | -- | |
| Including: USD | 26,561,237.88 | 6.8747 | 182,600,542.05 |
| EUR | 1,738,513.85 | 7.817 | 13,589,962.77 |
| HKD | 7,313.34 | 0.8797 | 6,433.55 |
| DKK | 29,426,919.41 | 1.0472 | 30,815,870.01 |
| Account receivable | -- | -- | |
| Including: USD | 3,330,199.22 | 6.8747 | 22,894,120.58 |
| EUR | 669,678.52 | 7.8170 | 5,234,876.99 |
| HKD | 10,720,574.00 | 0.8797 | 9,430,888.95 |
| DKK | 13,386,058.88 | 1.0472 | 14,017,880.86 |
| Short-term borrowings | -- | -- | |
| Including: EUR | 3,589,023.83 | 7.8170 | 28,055,399.28 |
| Other account receivable | -- | -- | |
| Including: USD | 1,527,205.77 | 6.8747 | 10,499,081.51 |
| HKD | 13,090,182.63 | 0.8797 | 11,515,433.66 |
| Account payable | -- | ||
| Including: USD | 37,466.64 | 6.8747 | 257,571.91 |
| EUR | 336,864.14 | 7.8170 | 2,633,266.98 |
| HKD | 21,899,376.00 | 0.063816 | 1,397,530.58 |
| DKK | 18,440,868.48 | 1.0472 | 19,311,277.48 |
(2) Explanation on foreign operational entity, including as for the major foreign operational entity,disclosed main operation place, book-keeping currency and basis for selection; if the book-keepingcurrency changed, explain reasons
□ Applicable √ Not applicable
60. Hedging
Disclosure of the qualitative and quantitative information on hedging items and related hedging instruments, hedging risks according
to category: nil
61. Government grants
(1) Government grants
In RMB/CNY
| Category | Amount | Item | Amount reckoned in current gain/loss |
| Social security subsidy for newly recruited college graduates by small and medium-size enterprise in Ningbo City | 95,577.00 | Social security subsidy for newly recruited college graduates by small and medium-size enterprise in Ningbo City | 95,577.00 |
| Patent funding | 27,150.00 | Patent funding | 27,150.00 |
| Depreciation/amortization compensation for the assets newly established after parent company relocated | 11,339,130.36 | Depreciation/amortization compensation for the assets newly established after parent company relocated | 11,339,130.36 |
| Intellectual property subsidy | 318,000.00 | Intellectual property subsidy | 318,000.00 |
| The first district-level cash subsidy of special fund for facilitates adjustment in Ningbo City | 90,432.00 | The first district-level cash subsidy of special fund for facilitates adjustment in Ningbo City | 90,432.00 |
| City-level funding for science and technology project from management committee of high-tech industrial partk in Ningbo City | 32,000.00 | City-level funding for science and technology project from management committee of high-tech industrial partk in Ningbo City | 32,000.00 |
| Subsidy for quality brand in Ningbo City | 30,000.00 | Subsidy for quality brand in Ningbo City | 30,000.00 |
| Industrialization project for injection VE pump system with electronically controlled high pressure for less-emission diesel used | 721,000.30 | Industrialization project for injection VE pump system with electronically controlled high pressure for less-emission diesel used | 721,000.30 |
| 2018 technology development plan and project funding | 2,000.00 | 2018 technology development plan and project funding | 2,000.00 |
| Tax contribution award in Huishan District | 30,000.00 | Tax contribution award in Huishan District | 30,000.00 |
| Subsidy for the intelligent production line of automobile components process in Huishan District | 293,406.11 | Subsidy for the intelligent production line of automobile components process in Huishan District | 293,406.11 |
| Special funds for technological transformation in Wuxi City | 3,740,000.00 | Special funds for technological transformation in Wuxi City | 3,740,000.00 |
| Award for strong quality zone in Xinwu District | 50,000.00 | Award for strong quality zone in Xinwu District | 50,000.00 |
| Grants for key laboratory in Wuxi City | 35,000.00 | Grants for key laboratory in Wuxi City | 35,000.00 |
| Key laboratory (engineering center) of the pollution control from motor vehicle exhausting in Jiangsu province | 85,000.00 | Key laboratory (engineering center) of the pollution control from motor vehicle exhausting in Jiangsu province | 85,000.00 |
| Supporting funds for technical improvement for annual output as 140,000 pieces of packaging line of catalytic reduction system for commercial vehicles | 129,500.00 | Supporting funds for technical improvement for annual output as 140,000 pieces of packaging line of catalytic reduction system for commercial vehicles | 129,500.00 |
| Funds for technical improvement for annual output as 180,000 pieces of catalytic reduction system for commercial vehicles - received in 2015 | 59,000.00 | Funds for technical improvement for annual output as 180,000 pieces of catalytic reduction system for commercial vehicles - received in 2015 | 59,000.00 |
| Funds for technical improvement for annual output as 180,000 pieces of catalytic reduction system for commercial vehicles - received in 2016 | 57,777.78 | Funds for technical improvement for annual output as 180,000 pieces of catalytic reduction system for commercial vehicles - received in 2016 | 57,777.78 |
| Funds for the automatic construction of welding production line machine replacement project | 39,964.69 | Funds for the automatic construction of welding production line machine replacement project | 39,964.69 |
| Condolence payments of government of the Huishan District | 20,000.00 | Condolence payments of government of the Huishan District | 20,000.00 |
| Award for the development of high and new technology | 100,000.00 | Award for the development of high and new technology | 100,000.00 |
| Other | 337,179.71 | Other | 337,179.71 |
| Total | 17,632,117.95 | Total | 17,632,117.95 |
(2) Government grants rebate
□ Applicable √ Not applicable
62. Other
NilVIII. Changes of consolidation scope
1. Enterprise combine not under the same control
(1)Enterprise combine not under the same control occurred in the period
In RMB/CNY
| Purchaser | Time point for equity obtained | Cost of equity obtained | Ratio of equity obtained | Acquired way Equity obtained way | Purchasing date | Standard to determine the purchasing date | Income of purchaser from purchasing date to period-end | Net profit of purchaser from purchasing date to period-end |
| IRD Fuel Cells A/S | 2019-04-23 | 54,936,420.00 | 66.00% | Purchasing | 2019-04-23 | Subject asset | 6,274,812.54 | -3,478,574.45 |
(2) Combination cost and goodwill
In RMB/CNY
deliverydate
Combination cost
| Combination cost | IRD Fuel Cells A/S |
| --Cash | 54,936,420.00 |
| Total combination cost | 54,936,420.00 |
| Less: shares of fair value of identifiable net assets acquired | 1,129,159.79 |
| Goodwill/merger cost is less than the shares of fair value of identifiable net assets acquired | 53,807,260.21 |
Determination method for fair value of the combination cost and contingent consideration and changes:
According to the agreement price confirmedMain reasons for large goodwill resulted:
In 2019, the company established SPV (a wholly-owned subsidiary) in Denmark to acquire a 66% stake in Danish IRD Fuel CellsA/S (hereinafter referred to as "IRD") held by FCCTApS., which is equivalent to a total of 7.26 million euros, and CIRO's valuationis 11 million euros; goodwill is the part of the acquisition cost greater than the fair value of the IRD net identifiable assets.
(3) Identifiable assets and liability on purchasing date under the purchaser
In RMB/CNY
| IRD Fuel Cells A/S | ||
| Fair value on purchasing date | Book value on purchasing date | |
| Monetary funds | 5,005,683.38 | 5,005,683.38 |
| Account receivable | 15,435,805.70 | 15,435,805.70 |
| Inventory | 10,402,853.98 | 10,402,853.98 |
| Fixed assets | 8,249,263.58 | 8,249,263.58 |
| Intangible assets | 484,979.88 | 484,979.88 |
| Long-term deferred expenses | 2,862,363.35 | 2,862,363.35 |
| Account payable | 40,730,101.70 | 40,730,101.70 |
| Net assets | 1,710,848.17 | 1,710,848.17 |
| Less: Minority interests | 581,688.38 | 581,688.38 |
| Net assets acquired | 1,129,159.79 | 1,129,159.79 |
Determination method for fair value of the identifiable assets and liabilities:
The book value on the balance sheet
Contingent liability of the purchaser bear during combination: Nil
(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 rights inthe Period or not
□Yes √No
(5)On purchasing date or period-end of the combination, combination consideration or fair value ofidentifiable assets and liability for the purchaser are unable to confirm rationally
(6) Other explanation
2. Enterprise combine under the same control
Nil
3. Reverse purchase
Nil
4. Disposal of subsidiaries
Nil
5.Other reasons for consolidation range changed
Nil
6. Other
Nil
IX. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
| Name of subsidiary | Main operation place | Registered place | Business nature | Shareholding ratio | Acquired by | |
| Directly | Indirectly | |||||
| Weifu Jinning | Nanjing | Nanjing | Spare parts of | 80.00% | Enterprise combine under | |
| internal-combustion engine | the same control | |||||
| Weifu Leader | Wuxi | Wuxi | Automobile exhaust purifier, muffler | 94.81% | Enterprise combine under the same control | |
| Weifu Mashan | Wuxi | Wuxi | Spare parts of internal-combustion engine | 100.00% | Investment | |
| Weifu Chang’an | Wuxi | Wuxi | Spare parts of internal-combustion engine | 100.00% | Investment | |
| Weifu International Trade | Wuxi | Wuxi | Trade | 100.00% | Enterprise combine under the same control | |
| Weifu ITM | Wuxi | Wuxi | Spare parts of internal-combustion engine | 100.00% | Enterprise combine not under the same control | |
| Weifu Schmidt | Wuxi | Wuxi | Spare parts of internal-combustion engine | 66.00% | Investment | |
| Weifu Tianli | Ningbo | Ningbo | Spare parts of internal-combustion engine | 54.23% | Enterprise combine not under the same control | |
| Weifu Autocam | Wuxi | Wuxi | Spare parts of internal-combustion engine | 51.00% | Enterprise combine not under the same control | |
| Weifu Leader (Wuhan) | Wuhan | Wuhan | Automobile exhaust purifier, muffler | 60.00% | Investment | |
| Weifu Leader(Chongqing) | Chongqing | Chongqing | Automobile exhaust purifier, muffler | 100.00% | Investment | |
| Weifu Leader(Nanchang) | Nanchang | Nanchang | Automobile exhaust purifier, muffler | 100.00% | Investment | |
| SPV | Denmark | Denmark | 100.00% | Enterprise combine under the same control | ||
| IRD Fuel Cells A/S | Denmark | Denmark | Fuel cell components | 66.00% | Acquisition |
Explanation on share-holding ratio in subsidiary different from ratio of voting right: nil
Basis of the invested unit control by the Company though holds half or below voting rights; and the invested unit without controls bythe Company but with over half voting rights hold:
Explanation on equity method on Wuxi Weifu Electric Drive Tech. Co., Ltd.The Company holds 80% equity of Weifu Electric Drive; board of the Weifu Electric Drive has 5 directors, including 3 appointed bythe Company; as for the important resolution of Weifu Electric Drive, the resolution can only be passed by unanimous vote of all
directors present, according to the above judges, the Company cannot control Weifu Electric Drive, the investment for Electric Driveshould be regarded as the investment in joint venture, which shall be accounted by the equity method.
Major structured entity included in consolidate statement: nilBasis of termination of agent or consignor: nil
(2) Important non-wholly-owned subsidiary
In RMB/CNY
| Name of subsidiary | Share-holding ratio of minority | Gains/losses attributable to minority in the Period | Dividend announced to distribute for minority in the Period | Ending equity of minority |
| Weifu Jinning | 20.00% | 14,876,923.21 | 209,198,242.07 | |
| Weifu Schmidt | 34.00% | -15,264.15 | 9,466,515.29 | |
| Weifu Leader | 5.19% | 2,153,562.30 | 86,957,134.33 | |
| Weifu Tianli | 45.77% | 1,473,959.13 | 107,685,585.63 | |
| Weifu Autocam | 49.00% | 1,134,650.94 | 144,760,990.56 | |
| Total | 19,623,831.43 | 558,068,467.88 |
Explanation on holding ratio different from the voting right ratio for minority shareholders: nil
(3) Main finance of the important non-wholly-owned subsidiary
In RMB/CNY
| Name of subsidiary | Ending balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Weifu Jinning | 1,070,400,181.05 | 325,848,559.23 | 1,396,248,740.28 | 297,272,709.50 | 49,462,676.40 | 346,735,385.90 |
| Weifu Schmidt | 91,597,165.04 | 48,907,335.05 | 140,504,500.09 | 112,265,804.31 | 112,265,804.31 | |
| Weifu Leader | 2,793,904,070.68 | 1,067,554,624.25 | 3,861,458,694.93 | 2,174,127,440.73 | 24,712,370.05 | 2,198,839,810.78 |
| Weifu Tianli | 360,273,239.11 | 213,757,480.69 | 574,030,719.80 | 309,722,212.42 | 38,486,184.05 | 348,208,396.47 |
| Weifu Autocam | 212,762,612.00 | 315,260,086.73 | 528,022,698.73 | 235,328,512.60 | 235,328,512.60 | |
| Total | 4,528,937,267.88 | 1,971,328,085.95 | 6,500,265,353.83 | 3,128,716,679.56 | 112,661,230.50 | 3,241,377,910.06 |
| Name of subsidiary | Opening balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Weifu Jinning | 994,953,012.95 | 342,560,339.76 | 1,337,513,352.71 | 313,381,459.40 | 50,522,767.70 | 363,904,227.10 |
| Weifu Schmidt | 92,342,474.64 | 48,855,179.90 | 141,197,654.54 | 112,913,283.31 | 112,913,283.31 | |
| Weifu Leader | 1,958,116,370.10 | 1,038,234,646.34 | 2,996,351,016.44 | 1,343,115,779.10 | 23,850,612.52 | 1,366,966,391.62 |
| Weifu Tianli | 357,404,441.32 | 233,476,608.83 | 590,881,050.15 | 310,421,704.26 | 47,838,928.45 | 358,260,632.71 |
| Weifu Autocam | 242,022,679.84 | 310,989,080.94 | 553,011,760.78 | 262,647,739.06 | 262,647,739.06 | |
| Total | 3,644,838,978.85 | 1,974,115,855.77 | 5,618,954,834.62 | 2,342,479,965.13 | 122,212,308.67 | 2,464,692,273.80 |
In RMB/CNY
| Name of subsidiary | Current period | Last Period | ||||||
| Operation Income | Net profit | Total comprehensive income | Cash flow from operation activity | Operation Income | Net profit | Total comprehensive income | Cash flow from operation activity | |
| Weifu Jinning | 328,481,669.39 | 75,516,399.57 | 75,516,399.57 | 33,455,248.40 | 345,257,893.56 | 70,230,711.18 | 70,230,711.18 | 34,921,442.31 |
| Weifu Schmidt | 84,285,489.50 | -45,675.45 | -45,675.45 | 5,467,884.14 | 90,961,973.06 | 304,135.67 | 304,135.67 | 11,277,941.76 |
| Weifu Leader | 1,338,975,875.93 | 32,780,686.77 | 32,780,686.77 | 116,866,170.40 | 1,589,176,188.66 | 76,364,083.43 | 76,364,083.43 | -19,011,866.15 |
| Weifu Tianli | 185,591,276.52 | 3,549,640.03 | 3,549,640.03 | 37,008,735.05 | 196,673,863.48 | 8,293,196.15 | 8,293,196.15 | -9,491,657.17 |
| Weifu Autocam | 177,929,684.84 | 2,330,164.41 | 2,330,164.41 | 33,593,148.87 | 234,675,435.40 | 22,670,547.15 | 22,670,547.15 | 3,466,284.14 |
| Total | 2,115,263,996.18 | 114,131,215.33 | 114,131,215.33 | 226,391,186.86 | 2,456,745,354.16 | 177,862,673.58 | 177,862,673.58 | 21,162,144.89 |
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise groupNil
(5) Financial or other supporting offers to the structured entity included in consolidated financial statementrangeNil
2. Transaction that has owners equity shares changed in subsidiary but still with controlling rightsNil
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 | Shareholding ratio | Accounting treatment on investment for joint venture and associated enterprise | |
| Directly | Indirectly | |||||
| I. Joint venture | ||||||
| Wuxi Weifu Environment Catalyst Co.,Ltd. | Wuxi | Wuxi | Catalyst | 49.00% | Equity method | |
| Wuxi Weifu Electric Drive Tech. Co., Ltd. | Wuxi | Wuxi | Wheel-hub motor | 80.00% | Equity method | |
| II. Associated enterprise | ||||||
| Bosch Automobile Diesel System Co., Ltd. | Wuxi | Wuxi | Internal-combustion engine accessories | 32.50% | 1.50% | Equity method |
| Zhonglian Automobile Electronic Co., Ltd. | Shanghai | Shanghai | Internal-combustion engine accessories | 20.00% | Equity method | |
| Weifu Precision Machinery Manufacturing Co., Ltd. | Wuxi | Wuxi | Internal-combustion engine accessories | 20.00% | Equity method | |
| Shinwell Automobile Tech. (Wuxi) Co., Ltd. | Wuxi | Wuxi | Automobile components | 45.00% | Equity method | |
Holding shares ratio different from the voting right ratio:
1. Explanation on equity method for calculation of the investment for Weifu Electronic DriveThe company holds 80.00% equity of Weifu Electronic Drive; the Board of Directors of Weifu Electronic Drive Board consists of 5directors, 3 of whom are appointed by the company; Weifu Electronic Drive’s important board resolutions can only pass the resolutionwhen being unanimously voted by all the present directors. According to this judgment, the company cannot control Weifu ElectronicDrive, and its investment should be used as an investment in the joint venture, which adopts equity method for business accounting.
2. Explanation on equity method for calculation of the investment for Shinwell Automobile Tech. (Wuxi) Co., Ltd.The subsidiary Weifu International Trade holds a 45.00% stake in Shinwell Automobile Tech. (Wuxi); the Board of Directors ofShinwell Automobile Tech. (Wuxi) consists of 5 directors, 2 of whom are appointed by Weifu International Trade.
Has major influence with less 20% voting rights hold, or has minor influence with over 20% (20% included) voting rights hold: Nil
(2) Main financial information of the important joint venture
In RMB/CNY
| Ending balance/Current period | Opening balance/Last Period | |
| Weifu Environment | Weifu Environment | |
| Current assets | 2,247,248,921.76 | 2,524,886,121.93 |
| Including: cash and cash equivalents | 139,005,591.27 | 62,820,292.38 |
| Non -current assets | 306,699,383.10 | 312,633,597.82 |
| Total assets | 2,553,948,304.86 | 2,837,519,719.75 |
| Current liabilities | 1,348,578,184.48 | 1,658,404,950.50 |
| Non-current liabilities | 27,350,000.00 | 24,735,000.00 |
| Total liabilities | 1,375,928,184.48 | 1,683,139,950.50 |
| Shareholders’ equity attributable to parent company | 1,178,020,120.33 | 1,154,379,769.25 |
| Share of net assets calculated by shareholding ratio | 577,229,858.97 | 565,646,086.93 |
| Book value of equity investment in joint ventures | 577,229,858.97 | 565,646,086.93 |
| Operation income | 1,590,675,320.87 | 1,864,398,010.43 |
| Financial expenses | 40,646,719.18 | 47,189,696.29 |
| Income tax expense | 4,391,396.50 | 3,251,620.98 |
| Net profit | 23,640,351.13 | 92,057,072.82 |
| Total comprehensive income | 23,640,351.13 | 92,057,072.82 |
(3) Main financial information of the important associated enterprise
In RMB/CNY
| Ending balance/Current period | Opening balance/Last Period | |||||
| Bosch Diesel System | Zhonglian Automobile | Weifu Precision Machinery | Bosch Diesel System | Zhonglian Automobile | Weifu Precision Machinery | |
| Current assets | 10,553,293,855.65 | 688,825,448.29 | 293,992,324.65 | 10,042,409,061.04 | 153,125,575.56 | 281,266,308.21 |
| Non -current assets | 2,621,795,993.79 | 5,478,754,404.78 | 147,235,301.51 | 2,756,104,679.18 | 5,277,976,705.66 | 133,470,007.84 |
| Total assets | 13,175,089,849.44 | 6,167,579,853.07 | 441,227,626.16 | 12,798,513,740.22 | 5,431,102,281.22 | 414,736,316.05 |
| Current liabilities | 5,175,720,137.18 | 527,845,052.68 | 141,337,604.50 | 4,100,048,133.30 | 2,999,283.95 | 135,365,421.92 |
| Non-current liabilities | 2,729,313.74 | 2,759,548.45 | ||||
| Total liabilities | 5,175,720,137.18 | 530,574,366.42 | 141,337,604.50 | 4,100,048,133.30 | 5,758,832.40 | 135,365,421.92 |
| Attributable to parent company shareholders’ equity | 7,999,369,712.26 | 5,637,005,486.65 | 302,709,734.20 | 8,698,465,606.92 | 5,425,343,448.82 | 279,370,894.13 |
| Share of net assets calculated by shareholding ratio | 2,719,785,702.17 | 1,127,401,097.32 | 60,541,946.84 | 2,957,478,306.35 | 1,085,068,689.76 | 55,874,178.83 |
| --Goodwill | 267,788,761.35 | 1,407,265.96 | 267,788,761.35 | 1,407,265.96 | ||
| --Unrealized profit of internal trading | -20,628,815.49 | -41,334.69 | -18,144,174.02 | -34,986.88 | ||
| --Other | -0.28 | -529,034.03 | -0.28 | -529,034.05 | ||
| Book value of equity investment in associated enterprise | 2,966,945,647.75 | 1,128,808,363.29 | 59,971,578.12 | 3,207,122,893.40 | 1,086,475,955.72 | 55,310,157.90 |
| Operation income | 7,690,808,970.61 | 11,298,817.88 | 144,654,208.76 | 8,713,485,959.51 | 12,091,114.45 | 190,093,280.56 |
| Net profit | 1,827,071,096.33 | 737,662,037.83 | 23,338,840.07 | 2,076,330,091.90 | 1,059,760,956.40 | 34,760,623.80 |
| Total comprehensive income | 1,827,071,096.33 | 737,662,037.83 | 23,338,840.07 | 2,076,330,091.90 | 1,059,760,956.40 | 34,760,623.80 |
| Dividends received from associated enterprise in the year | 429,448,388.47 | 105,200,000.00 | 303,884,540.74 |
Other explanationadjustment item for other “-0.28”: the differential tail
(4) Financial summary for non-important Joint venture and associated enterprise
In RMB/CNY
| Ending balance/Current period | Opening balance/Last Period | |
| Joint venture: | -- | -- |
| Total book value of investment | 53,565,625.43 | 54,742,375.02 |
| Amount based on share-holding ratio | -- | -- |
| --Net profit | -1,176,749.59 | |
| --Other comprehensive income | -1,176,749.59 | |
| Associated enterprise: | -- | -- |
| Total book value of investment | 6,226,237.91 | 7,476,477.77 |
| Amount based on share-holding ratio | -- | -- |
| --Net profit | -1,250,239.86 | |
| --Other comprehensive income | -1,250,239.86 | 54,742,375.02 |
(5) Major limitation on capital transfer ability to the Company from joint venture or associated enterprise
Nil
(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 conduct joint operation
Nil
5. Structured body excluding in consolidate financial statement
Nil
6. Other
NilX. Risk related with financial instrumentMain financial instrument of the Company including equity investment, loans, account receivable, accountpayable etc., more details of the financial instrument can be found in relevant items of Note V. Risks concernedwith the above mentioned financial instrument, and the risk management policy takes for lower the risks are asfollow:
Aims of engaging in the risk management is to achieve equilibrium between the risk and benefit, lower theadverse impact on performance of the Company to minimum standards, and maximized the benefit forshareholders and other investors. Base on the risk management targets, the basic tactics of the risk management isto recognized and analyzed the vary risks that the Company counted, established an appropriate risk exposurebaseline and caring risk management, supervise the vary risks timely and reliably in order to control the risk in alimited range.
In business process, the risks with financial instrument concerned happen in front of the Company mainlyincluding credit exposure, market risk and liquidity risk. BOD of the Company takes full charge of the riskmanagement target and policy-making, and takes ultimate responsibility for the target of risk management andpolicy. Risk management department and financial control department manager and monitor those risk exposureto ensuring the risks are control in a limited range.
1. Credit Risk
Credit risk refers to the one party fails to perform the obligation of the financial instruments, form the other partycompany mainly face credit risk for financial loss caused by the customer credit risks. In order to prevent the risks,the Company formulated an evaluation system for the new client’s credit and system to analyze the book credit forregular customer. The evaluation system for the new client’s credit aims at the new clients, the Company willconduct an background investigation based on the established process, with purpose of determine whether offercredit limit to the client and the amount of the credit and credit terms or not. Whereby, the Company setting acredit limits and credit period for every new client, and such limit is the maximum amount without additionalapproval. The system to analyze the book credit for regular customer refers to after purchase order received byregular customer, the Company will examine the order amount and outstanding balance, if the total over the creditlimit, on the premise of additional approval, sales on account shall be realized, or prepayments for relevantamount shall be required.
Furthermore, as for the sales on account occurred, the Company will guarantee the total credit risks in acontrolling range by analyzed and review the monthly report of the risk attention for account receivables.
The maximum credit risk exposure of the Company is the book amount of such financial assets, till end of 30
th
June 2019, lists of the maximum credit risk exposure of the Company are as:
| Item | Amount of merge | Amount of parent company |
| Note receivable | 2,319,307,654.58 | 766,756,661.80 |
| Other account receivable -Other account receivable | 60,433,069.23 | 195,451,736.76 |
2. Market risk
Market risk of the financial instrument refers to the fair value of financial instrument or future cash flow due tofluctuations in the market price changes and produce, mainly includes the IRR, FX risk and other price risk.
(1) Interest rate risk (IRR)
IRR refers to the fluctuate risks on Company’s financial status and cash flow arising from rates changes in market.IRR of the Company mainly related with the bank loans. In order to lower the fluctuate of IRR, the Company, inline with the anticipative change orientation, choose floating rate or fixed rate, that is the rate in future period willgoes up prospectively, than choose fixed rate; if the rate in future period will decline prospectively, than choosethe floating rate. In order to minor the bad impact from difference between the expectation and real condition,loans for liquid funds of the Company are choose the short-term period, and agreed the terms of prepayment inparticular.
(2) Foreign exchange (FX) risk
FX risks refer to the losses arising from exchange rate movement. The FX risk sustain by the Company mainlyrelated with the USD, EUR, SF, JPY and HKD, except for the USD, EUR, SF, JPY and HKD carried out for themachinery equipment purchasing of parent company and Autocam, material purchasing of parent company andpaying the technical service fee and trademark usage charge and the import and export trading of WeifuInternational Trade, other main business of the Company are pricing and settle with RMB (Yuan). In consequenceof the foreign financial assets and liabilities takes minor ratio in total assets, the Company has small FX risk of thefinancial instrument, considered by management of the Company.
End as 30 June 2019, except for the follow assets or liabilities listed with foreign currency, assets and liabilities ofthe Company are carried with RMB
①Foreign currency assets of the Company till end of 30 June 2019:
| Item | Ending foreign currency balance | Convert rate | Ending RMB balance converted | Ratio in assets(%) |
| Monetary funds | -- | -- |
| Including: USD | 26,561,237.88 | 6.8747 | 182,600,542.05 | 0.82% |
| EUR | 1,738,513.85 | 7.8170 | 13,589,962.77 | 0.06% |
| HKD | 7,313.34 | 0.8797 | 6,433.55 | 0.00% |
| DKK | 29,426,919.41 | 1.0472 | 30,815,870.01 | 0.14% |
| Account receivable | -- | -- |
| Including: USD | 3,330,199.22 | 6.8747 | 22,894,120.58 | 0.10% |
| EUR | 669,678.52 | 7.8170 | 5,234,876.99 | 0.02% |
| HKD | 10,720,574.00 | 0.8797 | 9,430,888.95 | 0.04% |
| DKK | 13,386,058.88 | 1.0472 | 14,017,880.86 | 0.06% |
| Other account receivable | -- | -- | ||
| Including: USD | 1,527,205.77 | 6.8747 | 10,499,081.51 | 0.05% |
| HKD | 13,090,182.63 | 0.8797 | 11,515,433.66 | 0.05% |
| Total ratio in assets | -- | -- | 1.35% |
②Foreign currency liability of the Company till end of 31st December 2018:
| Item | Ending foreign currency balance | Convert rate | Ending RMB balance converted | Ratio in assets(%) |
| Short-term borrowings | -- | -- |
| Including: EUR | 3,589,023.83 | 7.8170 | 28,055,399.28 | 0.48% |
| Account payable | -- | -- |
| Including: USD | 37,466.64 | 6.8747 | 257,571.91 | 0.00% |
| EUR | 336,864.14 | 7.8170 | 2,633,266.98 | 0.05% |
| JPY | 21,899,376.00 | 0.063816 | 1,397,530.58 | 0.02% |
| DKK | 18,440,868.48 | 1.0472 | 19,311,277.48 | 0.33% |
| Total ratio in assets | -- | -- | 0.89% |
③Other pricing risk
Classification of the Company held is the equity investments in financial assets available for sale, and suchinvestment can be measured by fair value on balance sheet date, thus, the Company owns a risk of stock marketchanges.Furthermore, on the premise of deliberated and approved by the BOD, the Company exercise entrust financingwith the self-owned idle capital; therefore, the Company has the risks of collecting no principal due to entrustfinancial products default. Aims at such risk, the Company formulated a “Management Mechanism of CapitalFinancing”, and well-defined the authority approval, investment decision-making, calculation management andrisk controls for the entrust financing in order to guarantee a security funds and prevent investment risk efficiently.In order to lower the adverse impact from unpredictable factors, the Company choose short-term and mediumperiod for investment and investment product’s term is up to 3 years in principle; in variety of investment, theCompany did not invested for the stocks, derivative products, security investment fund and the entrust financialproducts aims at security investment as well as other investment with securities concerned.
3. Liquidity risk
Liquidity risk refers to the capital shortage risk occurred during the clearing obligation implemented by theenterprise in way of cash paid or other financial assets. The Company aims at guarantee the Company has richcapital to pay the due debts, therefore, a financial control department is established for collectively controlling
such risks. On the one hand, the financial control department monitoring the cash balance, the marketablesecurities which can be converted into cash at any time and the rolling forecast on cash flow in future 12 months,ensuring the Company, on condition of reasonable prediction, owes rich capital to paid the debts; on the otherhand, building a favorable relationship with the banks, rationally design the line of credit, credit products andcredit terms, guarantee a sufficient limit for bank credits in order to satisfy vary short-term financingrequirements.XI. Disclosure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
In RMB/CNY
| Item | Ending fair value | |||
| First-order | Second-order | Third-order | Total | |
| I. Sustaining measured by fair value | -- | -- | -- | -- |
| (i) Tradable financial assets | 151,261,956.00 | 151,261,956.00 | ||
| 1.Financial assets measured by fair value and with variation reckoned into current gains/losses | 151,261,956.00 | 151,261,956.00 | ||
| (2) Equity instrument investment | 151,261,956.00 | 151,261,956.00 | ||
| Total liability sustaining measured by fair value | 151,261,956.00 | 151,261,956.00 | ||
| II. Non-persistent measure | -- | -- | -- | -- |
2. Recognized basis for the market price sustaining and non-persistent measured by fair value onfirst-orderAccording to relevant requirement of accounting standards, the Company continues to measure the financialassets available for sale-equity instrument investment by fair value on balance sheet date. On 30 June 2019, thefinancial assets available for sale-equity instrument investment held by the Company refers to the SDEC (stockcode: 600841) and Miracle Automation (Stock code: 002009), determining basis of the market price at period-endrefers to the closing price of 28 June 2019, the 29 June 2019 and 30 June 2019 are nonworking days.XII. Related party and related transactions
1. Parent company of the enterprise
| Parent company | Registered place | Business nature | Registered capital | Share-holding ratio on the enterprise for parent company | Voting right ratio on the enterprise |
| Wuxi Industry Group | Wuxi | Operation of state-owned assets | 4720.6710 million Yuan | 20.22% | 20.22% |
Explanation on parent company of the enterpriseWuxi Industry Development Group Co., Ltd was solely state-owned enterprise funded and established by Wuxi Municipal People’sGovernment which mainly took responsibility of authorizing the state-owned assets operation within a certain areas, investmentmanagement of significant project, investment and development of manufacturing and services and venture capital in high-techachievementUltimate controller of the Company is State-owned Assets Supervision & Administration Commission of Wuxi Municipality ofJiangsu Province.
2. Subsidiary of the Enterprise
Found more in Note IX. 1.” Equity in subsidiary”
3. Joint venture and associated enterprise
Found more in Note IX.3. “Equity in joint venture and associated enterprise”Other associated enterprise or joint ventures which has related transaction with the Company in the period or occurred previous: nil
4. Other Related party
| Other related party | Relationship with the Enterprise |
| Robert Bosch Company | Second largest shareholder of the Company |
| Key executive | Director, supervisor and senior executive of the Company |
5. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
In RMB/CNY
| Related party | Content of related transaction | Current period | Approved transaction limit | Whether more than the transaction limit (Y/N) | Last Period |
| Weifu Precision Machinery | Goods | 12,828,147.72 | 40,000,000.00 | N | 22,934,380.54 |
| Bosch Diesel System | Goods | 8,332,723.32 | 60,000,000.00 | N | 29,375,329.74 |
| Weifu Environment | Goods | 675,657,317.56 | 2,000,000,000.00 | N | 946,283,103.47 |
| Robert Bosch Company | Goods | 66,801,410.90 | 130,000,000.00 | N | 62,350,113.72 |
Goods sold/labor service providing
In RMB/CNY
| Related party | Content of related transaction | Current period | Last Period |
| Weifu Precision Machinery | Goods and labor | 661,932.69 | 2,772,785.47 |
| Bosch Diesel System | Goods and labor | 1,487,822,558.90 | 1,600,013,496.75 |
| Weifu Environment | Goods and labor | 10,231,437.30 | 28,741,766.37 |
| Robert Bosch Company | Goods and labor | 309,791,012.66 | 319,461,744.57 |
(2) Related trusteeship management/contract & entrust management/ outsourcing
Nil
(3) Related lease
As a lessor:
In RMB/CNY
| Lessee | Assets type | Lease income recognized in the Period | Lease income recognized at last Period |
| Weifu Environment | Workshop | 1,254,028.50 | 1,254,028.50 |
As a tenant: nil
(4) Related guarantee
Nil
(5) Related party’s borrowed/lending funds
In RMB/CNY
| Related party | Loan amount | Start date | Maturity | Note |
| Borrowing | ||||
| Wuxi Industry Group | 5,470,000.00 | 2018-02-13 | 2019-02-12 | Return by Weifu Leader |
| Funds lent | ||||
(6) Related party’s assets transfer and debt reorganization
Nil
(7) Remuneration of key manager
In RMB/CNY
| Item | Current period | Last Period |
| Remuneration of key manager | 2,570,000.00 | 2,400,000.00 |
(8) Other related transactions
| Item | Related party | Current period | Last Period |
| Purchase of fixed assets | Bosch Diesel System | 5,720,900.23 | 42,735.04 |
| Technology royalties paid etc. | Robert Bosch Company | 1,122,250.34 | 2,805,114.55 |
| Technology royalties paid etc. | Bosch Diesel System | 1,002,714.76 | |
| Sales of fixed assets | Weifu Environment | 10,485,153.25 |
6. Receivable/payable items of related parties
(1)Receivable item
In RMB/CNY
| Item | Related party | Ending balance | Opening balance | ||
| Book balance | Bad debt reserve | Book balance | Bad debt reserve | ||
| Account receivable | Weifu Precision Machinery | 197,525.88 | 77,477.41 | ||
| Account receivable | Bosch Diesel System | 447,801,217.87 | 420,746,170.76 | ||
| Account receivable | Robert Bosch Company | 122,663,619.56 | 132,830,976.56 | ||
| Other account receivable | Robert Bosch Company | 12,285,081.81 | |||
| Account received in advance | Robert Bosch Company | 27,359.50 | |||
| Account paid in advance | Robert Bosch Company | 3,255.11 | |||
| Account receivable | Weifu Environment | 8,491,872.63 | 1,233,580.22 | ||
| Account received in advance | Weifu Environment | 184,592.07 | |||
| Account paid in advance | Bosch Diesel System | 1,057,272.58 | |||
(2) Payable item
In RMB/CNY
| Item | Related party | Ending book balance | Opening book balance |
| Account payable | Weifu Precision Machinery | 8,166,482.16 | 7,941,418.36 |
| Account payable | Weifu Environment | 518,192,336.60 | 337,307,634.70 |
| Account payable | Bosch Diesel System | 12,463,997.06 | 24,743,403.24 |
| Account payable | Robert Bosch Company | 21,408,603.28 | 5,170,470.70 |
| Accounts received in advance | Robert Bosch Company | 754,552.15 | |
| Account paid in advance | Robert Bosch Company | 21,000,000.00 | |
| Other accounts payable | Wuxi Industry Group | 5,476,678.00 | |
| Account paid in advance | Wuxi Industry Group | 48,828.87 |
7. Commitments of related party
Nil
8. Other
NilXIII. Share-based paymentNilXIV. Commitment or contingency
1. Important commitments
Important commitments in balance sheet dateNil
2. Contingency
(1) Contingency on balance sheet date
Guarantees to subsidiary
| Guarantee provided | Guarantee received | Debit bank | Guarantee amount (in 10 thousand Yuan) | Starting from | Terminated dated | Whether guarantee implemented or not (Y/N) |
| Weifu High-Technology Group Co., Ltd. | Weifu Tianli | Jiangbei branch of Bank of China in Ningbo | 3,750.00 | 2016-11-15 | 2021-11-10 | N |
(2) For the important contingency not necessary to disclosed by the Company, explained reasonsThe Company has no important contingency that need to disclosed
XV. Events after balance sheet date
1. Important non adjustment matters
Nil
2. Profit distribution
Nil
3. Sales return
Nil
4. Other events after balance sheet date
NilXVI. Other important events
1. Previous accounting errors collection
Nil
2. Debt restructuring
Nil
3. Assets replacement
Nil
4. Pension plan
The Enterprise Annuity Plan under the name of WFHT has deliberated and approved by 8
th
session of 7
thBOD: inorder to mobilize the initiative and creativity of the employees, established a talent long-term incentivemechanism, enhance the cohesive force and competitiveness in enterprise, the Company carried out the abovementioned annuity plan since the date of reply of plans reporting received from labor security administrationdepartment. Annuity plans are: the annuity fund are paid by the enterprise and employees together; the amountpaid by enterprise shall not over the 1/12 of the total salary of last years, amount paid by individual and enterpriseshall not over the 1/6 of the total salary of last year, in accordance with the State’s annuity policy, the Companywill adjusted the economic benefits in due time, in principle of responding to the economic strength of the
enterprise, the amount paid by the enterprise at current period control in the 8.33 percent of the total salary of lastyear, specific paying ratio later shall be adjust correspondingly in line with the operation condition of theCompany.In December 2012, the Company received the Reply on annuity plans reporting under the name of WFHT fromlabor security administration department, later, the Company entered into the Entrusted Management Contract ofthe Annuity Plan of WFHT with PICC.
5. Discontinued operations
Nil
6. Segment
(1) Recognition basis and accounting policy for reportable segment
Determine the operating segments in line with the internal organization structure, management requirement andinternal reporting system. Operating segment of the Company refers to the followed components that have beensatisfied at the same time:
①the component is able to generate revenues and expenses in routine activities;
②management of the Company is able to assess the operation results regularly, and determine resourcesallocation and performance evaluation for the component;
③being analyzed, financial status, operation results and cash flow of the components are able to required by theCompanyThe Company mainly engaged in the manufacture of fuel system of internal combustion engine products, autocomponents, muffler and purifier etc., based on the product segment, the Company determine three reportingsegment as auto fuel injection system, air management system and automotive post processing system.Accounting policy for the three reporting segments are shares the same policy state in Note V
Segment assets exclude financial assets measured by fair value and with variation reckoned into currentgains/losses, derivative instruments, dividends receivables, financial products due within one year, financial assetsavailable for sale, long term equity investment and other undistributed assets, since these assets are not related toproducts operation.
(2) Financial information for reportable segment
In RMB/CNY
| Item | Product segment of automobile fuel injection system | Product segment of automotive post processing system | Product segment of air management system | Add: investment/income measured by equity, income of financial products or possession and | Offset of segment | Total |
| disposal income, the retained assets or gains/losses as the financial assets available for sale or possession and disposal income | ||||||
| Operating income | 2,887,472,034.84 | 1,338,975,875.93 | 249,872,942.78 | 72,876,507.50 | 4,403,444,346.05 | |
| Operating cost | 2,106,502,659.22 | 1,184,686,948.46 | 186,025,785.22 | 71,828,888.46 | 3,405,386,504.44 | |
| Total Profit | 409,096,576.45 | 18,760,424.74 | 13,369,919.27 | 916,625,070.62 | 1,366,643.31 | 1,356,485,347.77 |
| Net profit | 359,669,021.43 | 13,213,081.52 | 13,099,724.16 | 889,978,914.91 | 858,048.78 | 1,275,102,693.23 |
| Total assets | 9,432,703,846.25 | 3,130,358,394.74 | 810,868,051.46 | 9,964,372,961.66 | 1,003,813,950.29 | 22,334,489,303.82 |
| Total liabilities | 3,531,209,246.64 | 2,198,839,810.78 | 469,855,219.61 | 433,784,945.50 | 5,766,119,331.53 |
(3) If there are no segment in the Company, or the total assets and liabilities of the segment are un-able todisclosed, explain the reasonsNot applicable
7. Major transaction and events makes influence on investor’s decision
Nil
XVII. Principle notes of financial statements of parent company
1. Account receivable
(1) Category of account receivable
In RMB/CNY
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
| Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
| Account receivable with bad debt provision accrual on a single basis | 6,800,000.00 | 0.87% | 6,800,000.00 | 100.00% | 7,000,000.00 | 0.93% | 7,000,000.00 | 100.00% | ||
| Including: | ||||||||||
| Including: Account receivable with single significant | 6,800,000.00 | 0.87% | 6,800,000.00 | 100.00% | 7,000,000.00 | 0.93% | 7,000,000.00 | 100.00% | ||
| amount and withdrawal bad debt provision on single basis | ||||||||||
| Account receivable with bad debt provision accrual on portfolio | 772,349,191.61 | 99.13% | 5,592,529.81 | 0.72% | 766,756,661.80 | 745,766,010.32 | 99.07% | 3,519,019.33 | 0.47% | 742,246,990.99 |
| Including: | ||||||||||
| Account receivable with bad debt provision accrual on age analysis | 617,175,959.31 | 79.21% | 5,592,529.81 | 0.91% | 611,334,604.28 | 575,890,771.39 | 76.50% | 3,519,019.33 | 0.61% | 572,371,752.06 |
| Related party | 155,173,232.30 | 19.92% | 155,422,057.52 | 169,875,238.93 | 22.57% | 169,875,238.93 | ||||
| Total | 779,149,191.61 | 100.00% | 12,392,529.81 | 766,756,661.80 | 752,766,010.32 | 100.00% | 10,519,019.33 | 1.40% | 742,246,990.99 |
Accrual bad debt reserve on single basis: 6,800,000.00 Yuan
In RMB/CNY
| Item | Ending balance | |||
| Book balance | Bad debt reserve | Accrual ratio | Accrual causes | |
| BD bills | 6,800,000.00 | 6,800,000.00 | 100.00% | Have difficulty in collection |
| Total | 6,800,000.00 | 6,800,000.00 | -- | -- |
Bad debt reserve accrual by portfolio:5,592,529.81 Yuan
In RMB/CNY
| Item | Ending balance | ||
| Book balance | Bad debt reserve | Accrual ratio | |
| Account receivable with bad debt provision accrual on age analysis | 617,175,959.31 | 5,592,529.81 | 0.91% |
| Total | 617,175,959.31 | 5,592,529.81 | -- |
Explanation on portfolio determines:
Except for the receivables with impairment reserves accrual singly; base on the actual loss ratio of the receivablesof previous years, with same or similar credit portfolio, and combining actual condition accrual bad debt reservesto determined the accrual ratio for bad debt reserves
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please referto the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √ Not applicable
By account age
In RMB/CNY
| Account age | Ending balance |
| Within one year(One year included) | 610,306,392.05 |
| Within 6 months | 589,618,490.41 |
| 6 months to one year | 20,687,901.64 |
| 1-2 years | 3,713,401.89 |
| 2-3 years | 625,176.83 |
| Over 3 years | 2,530,988.54 |
| 3-4 years | 2,530,988.54 |
| Total | 617,175,959.31 |
(2) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB/CNY
| Category | Opening balance | Amount changed in the period | Ending balance | ||
| Accrual | Collected or reversal | Written-off | |||
| Bad debt reserve of account receivable | 10,519,019.33 | 2,081,075.48 | 200,000.00 | 7,565.00 | 12,392,529.81 |
| Total | 10,519,019.33 | 2,081,075.48 | 200,000.00 | 7,565.00 | 12,392,529.81 |
Including major amount bad debt provision that collected or reversal in the period:
In RMB/CNY
| Enterprise | Amount collected or reversal | Collection by |
| BD bills | 200,000.00 | Collected |
| Total | 200,000.00 | -- |
(3) Account receivable actually written-off in the period
In RMB/CNY
| Item | Amount written-off |
| Retail enterprise | 7,565.00 |
Including major account receivable written-off: nil
(4) Top 5 account receivables at ending balance by arrears party
Total receivables collected by arrears party for the Period amounting to 562,914,456.50 Yuan, takes 72.25percent in closing balance of the account receivables; 638,572.32 Yuan are accrual correspondingly for bad debtreserves.
(5) Account receivable derecognition due to financial assets transferNil
(6) Assets and liabilities resulted by account receivable transfer and continues involvementNil
2. Other account receivable
In RMB/CNY
| Item | Ending balance | Opening balance |
| Interest receivable | 30,570.83 | 188,682.78 |
| Dividend receivable | 517,216,193.24 | |
| Other account receivable | 195,451,736.76 | 196,660,409.35 |
| Total | 712,698,500.83 | 196,849,092.13 |
(1) Interest receivable
1) Category of interest receivable
In RMB/CNY
| Item | Ending balance | Opening balance |
| Interest receivable from unified loan and return | 30,570.83 | 188,682.78 |
| Total | 30,570.83 | 188,682.78 |
2) Significant overdue interest Nil
3) Accrual of bad debt provision
□ Applicable √ Not applicable
(2) Dividend receivable
1) Category of dividend receivable
In RMB/CNY
| Item (or invested enterprise) | Ending balance | Opening balance |
| SDEC | 610,417.20 | |
| Guolian Securities Co., Ltd. | 903,640.00 | |
| Zhonglian Electronic | 105,200,000.00 | |
| Bosch Automobile Diesel | 410,502,136.04 | |
| Total | 517,216,193.24 |
2) Important dividend receivable with account age over one year Nil
3) Accrual of bad debt provision
□ Applicable √ Not applicable
(3) Other account receivable
1) Other account receivable by nature
In RMB/CNY
| Nature | Ending book balance | Opening book balance |
| Intercourse funds receivable from units | 34,499,081.51 | |
| Balance of related party in the consolidate scope | 148,552,615.72 | 196,047,735.72 |
| Receivable from the tax refund for withholding the B-share | 11,515,433.66 | |
| Staff loans and petty cash | 904,908.09 | 605,473.63 |
| Other | 7,200.00 | |
| Total | 195,472,038.98 | 196,660,409.35 |
2) Accrual of bad debt provision
| Bad debt reserve | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Current accrual | 20,302.22 | 20,302.22 | ||
| Balance on Jun. 30, 2019 | 20,302.22 | 20,302.22 |
Major change of book value for the loss impairment in the period
□ Applicable √ Not applicable
By account age
In RMB/CNY
| Account age | Ending balance |
| Within one year(One year included) | 20,302.22 |
| Within 6 months | |
| 6 months to one year | 20,302.22 |
| Total | 20,302.22 |
3) Bad debt provision accrual, collected or reversal in the period:
Bad debt provision accrual was 20,302.22 Yuan; the amount collected or switches back amounting to 0 Yuan.
4) Other account receivable actually written-off in the period: nil
5) Top 5 other receivables at ending balance by arrears party: nil
In RMB/CNY
| Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other receivables | Ending balance of bad debt reserve |
| Wuxi Weifu Chang’an Co., Ltd. | Balance of related party in the consolidate scope | 90,000,000.00 | Within 6 months | 46.04% | |
| Weifu Mashan Pump Glib Co., Ltd. | Balance of related party in the consolidate scope | 34,552,615.72 | Within 6 months | 17.68% | |
| Wuxi Weifu Schmidt Power System Spare Parts Co., Ltd. | Balance of related party in the consolidate scope | 24,000,000.00 | Within 6 months | 12.28% | |
| Troowin Power System Technology Co., Ltd. | Intercourse funds of unit | 24,000,000.00 | Within 6 months | 12.28% | |
| Receivable from the tax refund for withholding the B-share | Receivable from the tax refund for withholding the B-share | 11,515,433.66 | Within 6 months | 5.89% | |
| Total | -- | 184,068,049.38 | -- | 94.17% |
6) Account receivable with government grand involved: nil
7) Other receivable for termination of confirmation due to the transfer of financial assets: nil
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved: nil
3. Long-term equity investment
In RMB/CNY
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment for subsidiary | 1,548,768,117.88 | 1,548,768,117.88 | 1,466,611,689.17 | 1,466,611,689.17 | ||
| Investment for associates and joint venture | 4,088,758,277.53 | 4,088,758,277.53 | 4,272,498,737.38 | 4,272,498,737.38 | ||
| Total | 5,637,526,395.41 | 5,637,526,395.41 | 5,739,110,426.55 | 5,739,110,426.55 | ||
(1)Investment for subsidiary
In RMB/CNY
| The invested entity | Opening balance | Current increased | Current decreased | Ending balance | Provision for impairment in the period | Ending balance of impairment provision |
| Weifu Jinning | 178,639,593.52 | 178,639,593.52 | ||||
| Weifu Leader | 460,113,855.00 | 460,113,855.00 | ||||
| Weifu Mashan | 168,693,380.51 | 168,693,380.51 | ||||
| Weifu Chang’an | 220,902,037.30 | 220,902,037.30 | ||||
| Weifu International Trade | 32,849,254.85 | 32,849,254.85 | ||||
| Weifu ITM | 167,000,000.00 | 167,000,000.00 | ||||
| Weifu Schmidt | 50,160,000.00 | 50,160,000.00 | ||||
| Weifu Tianli | 105,799,100.00 | 105,799,100.00 | ||||
| Weifu Autocam | 82,454,467.99 | 82,454,467.99 | ||||
| SPV | 82,156,428.71 | 82,156,428.71 | ||||
| Total | 1,466,611,689.17 | 82,156,428.71 | 1,548,768,117.88 |
(2) Investment for associates and joint venture
In RMB/CNY
| Enterprise | Opening balance | Current changes (+,-) | Ending balance | Ending balance of impairment provision | |||||||
| Additional investment | Capital reduction | Investment gain/loss recognized under equity | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Provision for impairment | Other | ||||
| I. Joint venture | |||||||||||
| Wuxi Weifu Electric Drive Tech. Co., Ltd. | 54,742,375.02 | -1,176,749.59 | 53,565,625.43 | ||||||||
| Subtotal | 54,742,375.02 | -1,176,749.59 | 53,565,625.43 | ||||||||
| II. Associated enterprise | |||||||||||
| Bosch Automobile Diesel System Co., Ltd. | 3,076,037,410.12 | 591,431,846.91 | 821,004,272.08 | 2,846,464,984.95 | |||||||
| Zhonglian Automobile Electronic Co., Ltd. | 1,086,475,955.72 | 147,532,407.57 | 105,200,000.00 | 1,128,808,363.29 | |||||||
| Weifu Precision Machinery Manufacturing Co., Ltd. | 55,242,996.52 | 4,676,307.34 | 59,919,303.86 | ||||||||
| Subtotal | 4,217,756,362.36 | 743,640,561.82 | 926,204,272.08 | 4,035,192,652.10 | |||||||
| Total | 4,272,498,737.38 | 742,463,812.23 | 926,204,272.08 | 4,088,758,277.53 |
(3) Other explanation
4. Operating income and cost
In RMB/CNY
| Item | Current period | Last Period | ||
| Income | Cost | Income | Cost | |
| Main business | 1,895,457,557.71 | 1,303,140,646.02 | 2,136,258,034.82 | 1,533,313,082.59 |
| Other business | 197,016,902.53 | 168,830,868.68 | 178,884,620.31 | 165,203,440.31 |
| Total | 2,092,474,460.24 | 1,471,971,514.70 | 2,315,142,655.13 | 1,698,516,522.90 |
Whether implemented the new revenue standards
□Yes √No
5. Investment income
In RMB/CNY
| Item | Current period | Last Period |
| Income of long-term equity investment calculated based on cost | 62,418,400.00 | |
| Income of long-term equity investment calculated based on equity | 742,463,812.23 | 894,788,126.54 |
| Investment income from period of holding the tradable financial assets | 2,287,308.59 | |
| Investment income from period of holding the financial assets available for sale | 3,220,575.00 | |
| Investment income obtained from disposal of financial assets available for sale | 17,370,816.75 | |
| Entrust financial income | 95,464,240.84 | 159,552,310.73 |
| Total | 840,215,361.66 | 1,137,350,229.02 |
XVIII. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable □ Not applicable
In RMB/CNY
| Item | Amount | Note |
| Gains/losses from the disposal of non-current asset | 4,927,677.70 | |
| Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are closely relevant to enterprise’s business) | 44,179,326.95 | 含House land expropriation and disposal incentives of Weifu Jinning |
| Profit and loss of assets delegation on others’ investment or management | 95,464,240.84 | |
| Held transaction financial asset, gains/losses of changes of fair values from transaction financial liabilities, and investment gains from disposal of transaction financial asset, transaction financial liabilities and financial asset available for sales, exclude the effective hedging business relevant with normal operations of the Company | 30,686,277.13 | |
| Switch back of provision for depreciation of account receivable and contract assets which was singly taken depreciation test | 200,000.00 | |
| Other non-operating income and expenditure except for the aforementioned items | 838,232.57 | |
| Less: Impact on income tax | 26,626,210.20 | |
| Impact on minority shareholders’ equity | 7,102,792.64 | |
| Total | 142,566,752.35 | -- |
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
2. REO and earnings per share
| Profits during report period | Weighted average ROE | Earnings per share | |
| Basic earnings per share (RMB/Share) | Diluted earnings per share (RMB/Share) | ||
| Net profits belong to common stock stockholders of the Company | 7.60% | 1.25 | 1.25 |
| Net profits belong to common stock stockholders of the Company after deducting nonrecurring gains and losses | 6.73% | 1.10 | 1.10 |
3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
(3) Explanation on data differences under the accounting standards in and out of China; as for thedifferences adjustment audited by foreign auditing institute, listed name of the institute
Not applicable
4. Other
Nil
Section XI. Documents available for referenceI. Financial statement carrying the signatures and seals of person in charge of the company, principalof the accounting works and person in charge of accounting organ (accounting Supervisor);II. Original documents of the Company and manuscripts of public notices that disclosed in the websiteJuchao (http://www.cninfo.com.cn) designated by CSRC in the report period;III. Semi-annual report published on China Securities Journal, Securities Times and Hong KongCommercial Daily during the Period.
BOD of Weifu High-Technology Group Co., Ltd.
Chairman:
Chen Xuejun
August 27, 2019