WEIFU HIGH-TECHNOLOGY GROUP CO., LTD.
SEMI-ANNUAL REPORT 2021
AUGUST 2021
Section I. Important Notice, Contents and InterpretationBoard of Directors, Supervisory Committee, all directors, supervisors and seniorexecutives of Weifu High-Technology Group Co., Ltd. (hereinafter referred to as theCompany) hereby confirm that there are no any fictitious statements, misleadingstatements, or important omissions carried in this report, and shall take allresponsibilities, individual and/or joint, for the reality, accuracy and completion ofthe whole contents.Wang Xiaodong, Principal of the Company, Ou Jianbin, person in charger ofaccounting works and Ou Jianbin, person in charge of accounting organ (accountingprincipal) hereby confirm that the Financial Report of 2021 Semi-Annual Report isauthentic, accurate and complete.All directors are attend the Meeting for the 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 do notconstitute a substantial commitment for investors.The China Securities Journal, Securities Times, Hong Kong Commercial Daily andJuchao Website (www.cninfo.com.cn)are the information disclosure media appointedby the Company, 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.
The Report is prepared in Chinese and English respectively. In the event of anydiscrepancy between the two versions, the Chinese version shall prevail.
Contents
Section I. Important Notice, Contents and Interpretation ...................................... 2
Section II Company Profile and Main Financial Indexes ...... 6
Section III Management Discussion and Analysis ...... 9
Section IV. Corporate Governance .......................................................................... 22
Section V. Environmental and Social Responsibility ............................................. 24
Section VI. Important Matters ................................................................................. 25
Section VII. Changes in Shares and Particulars about Shareholders .................. 34
Section VIII. Preferred Stock ................................................................................... 40
Section IX. Corporate Bonds .................................................................................... 41
Section X. Financial Report ...................................................................................... 42
Documents Available for Reference
I. Financial statement carrying the signatures and seals of person in charge of the company, principal of theaccounting 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. The Semi-Annual report published on China Securities Journal, Securities Times and Hong KongCommercial Daily during the Period.
Interpretation
| Items | Refers to | Contents |
| Company, The Company, WFHT | Refers to | WEIFU HIGH-TECHNOLOGY GROUP CO., LTD. |
| Wuxi Industry Group | Refers to | Wuxi Industry Development Group Co., Ltd. |
| Robert Bosch, Robert Bosch Company | Refers to | Robert Bosch Co., Ltd, ROBERT BOSCH GMBH |
| RBCD | Refers to | Bosch Powertrain Systems Co.,Ltd. |
| WFLD | Refers to | Wuxi Weifu Lida Catalytic Converter Co., Ltd. |
| WFJN | Refers to | Nanjing Weifu Jinning Co., Ltd. |
| WFTT | Refers to | Ningbo Weifu Tianli Turbocharging Technology Co., Ltd. |
| WFCA | Refers to | Wuxi Weifu Chang’an Co., Ltd. |
| WFMA | Refers to | Wuxi Weifu Mashan Fuel Injection Equipment Co., Ltd. |
| WFTR | Refers to | Wuxi Weifu International Trade Co., Ltd. |
| WFSC | Refers to | Wuxi Weifu Schmitter Powertrain Components Co., Ltd. |
| WFAM | Refers to | Wuxi Weifu Autocam Precision Machinery Co., Ltd. |
| WFDT | Refers to | Wuxi Weifu E-drive Technologies Co., Ltd. |
| WFAS | Refers to | Wuxi Weifu Autosmart Seating System Co., Ltd. |
| SPV | Refers to | Weifu Holding ApS |
| IRD | Refers to | IRD Fuel Cells A/S |
| Borit | Refers to | Borit NV |
| WFEC | Refers to | Wuxi Weifu Environmental Catalysts Co., Ltd. |
| WFPM | Refers to | Wuxi Weifu Precision Machinery Manufacturing Co., Ltd. |
| Zhonglian Electronics | Refers to | Zhonglian Automobile Electronics Co., Ltd. |
| Shinwell Automobile | Refers to | Shinwell Automobile Technology (Wuxi) Co., Ltd. |
| CSRC | Refers to | China Securities Regulatory Commission |
| SZ Stock Exchange | Refers to | Shenzhen Stock Exchange |
| Reporting period | Refers to | 1 January 2021 to 30 June 2021 |
Section II Company Profile and Main Financial IndexesI. Company profile
| Short form of the stock | WFHT, Su Weifu-B | Stock code | 000581, 200581 |
| Stock exchange for listing | Shenzhen Stock Exchange | ||
| Name of the Company (in Chinese) | 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 | Wang Xiaodong | ||
II. Person/Way to contact
| Secretary of the Board | Rep. of security affairs | |
| Name | Liu Jinjun | Xu Kan |
| Contact add. | No.5 Huashan Road, Xinwu District, Wuxi | No.5 Huashan Road, Xinwu District, Wuxi |
| Tel. | 0510-80505999 | 0510-80505999 |
| Fax. | 0510-80505199 | 0510-80505199 |
| Web@weifu.com.cn | Web@weifu.com.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 2020.
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 2020.
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) | 9,037,691,756.24 | 6,594,403,624.56 | 37.05% |
| Net profit attributable to shareholders of the listed company (RMB) | 1,645,389,487.32 | 1,326,344,424.98 | 24.05% |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB) | 1,702,220,554.09 | 1,175,574,728.86 | 44.80% |
| Net cash flow arising from operating activities (RMB) | 80,191,609.17 | 437,657,072.41 | -81.68% |
| Basic earnings per share (RMB/Share) | 1.66 | 1.32 | 25.76% |
| Diluted earnings per share (RMB/Share) | 1.66 | 1.32 | 25.76% |
| Weighted average ROE | 8.72% | 7.80% | 0.92% |
| Current period-end | period-end of last year | Changes over period-end of last year | |
| Total assets (RMB) | 27,779,188,733.05 | 27,350,695,388.21 | 1.57% |
| Net assets attributable to shareholder of listed company (RMB) | 18,435,134,764.13 | 18,282,017,990.66 | 0.84% |
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
Unit: yuan
| Item | Amount | Note |
| Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | 2,301,315.63 | |
| 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) | 23,433,211.68 | |
| Gains/losses of fair value changes from holding the trading financial asset, derivative financial assets, trading financial liability and derivative financial liability and investment earnings obtained from disposing the trading financial asset, derivative financial assets, trading financial liability, derivative financial liability and other debt investment, except for the effective hedging business related to normal operation of the Company | -91,729,334.10 | |
| Other non-operating income and expenditure except for the aforementioned items | 261,828.55 | |
| Less: Impact on income tax | -9,604,873.99 | |
| Impact on minority shareholders’ equity (post-tax) | 702,962.52 | |
| Total | -56,831,066.77 | -- |
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 Management Discussion and AnalysisI. Main businesses of the company in the reporting periodDuring the reporting period, there were no major changes in the company's main business and business model.Details were as follows:
(i) The company’s main businessThe company's main business is the R & D, production and sales of automotive core components. During thereporting period, the main products were diesel fuel injection system products, and automobile exhaustafter-treatment system products and air management system products. At the same time, the company hasestablished R & D capabilities of fuel cell core components and has achieved production and sales.
1. The diesel fuel management system products are widely used in different power diesel engines supporting alltypes of trucks, passenger cars, buses, construction machinery, marine, and generator sets. The company not onlymakes products matching with the main engines used at home but also exports some products to the Americas,Southeast Asia, and the Middle East. The products meet the needs of national emission standards.
2. The auto exhaust after-treatment system products are supporting all major automobile manufactures in China.And the products meet the needs of national emission standards.
3. The Air management system products, matches with most of the domestic small-bore diesel engine plants andsome 6-cyl diesel engine manufacturers, and meet the needs of the light and heavy commercial vehicles and somepassenger cars and the engineering machinery. And the products meet the needs of national emission standards.
4. Key parts of the fuel cell, including membrane electrodes, graphite bipolar plates, metal bipolar plates and BOPkey components for domestic and foreign fuel cell reactor and system manufacturers.
(ii) Business model of the CompanyThe Company follows the operating philosophy of “making competitive products, creating famous brands, andachieving joint value growth”, implements the business model that parent company unifies the management andsubsidiaries decentralize the production. The parent company is responsible for making strategic developmentplanning and operation targets, and making the unified management, instruction and assessment for the finance,significant personnel management, core raw materials, quality control, and the R&D of technologies. Thesubsidiaries arrange production based on the order management model of market, which makes the subsidiarieskeep the consistent quality with the company, helps keep abreast of customer needs and saving logistics costs,maintain the timeliness of products production and supply, and improve the company’s economic benefits.
(iii) Development of the industrySince this year, the national economy has been showing a continuous and steady recovery, and China's economyis steadily strengthening and improving. In this context, the automobile market is overall stable, constantly laying
a solid foundation for the development of the industry.According to the data of China Association of Automobile Manufactures: From January to June of 2021, theproduction and sales of automobile totaled 12.57 million and 12.89 million respectively, up 24.24% and 25.63%on a y-o-y basis respectively. Among them, the production and sales of passenger vehicles totaled 9.84 millionand 10.01 million respectively with 26.83% and 27.04% increased on a y-o-y basis; the production and sales ofcommercial vehicles completed 2.73 million and 2.88 million respectively, an increase of 15.73% and 20.95%respectively from a year earlier.
(iv) The Company’s business conditions during the reporting periodSince this year, the company has seriously implemented the annual work goal, seized the developmentopportunities of automobile industry, especially the commercial vehicles, and both production and sales of mainproducts including diesel fuel injection system products, automobile exhaust after-treatment system products andair management system products have been thriving. The company's main economic indicators in the first half ofthe year has maintained better growth compared with the same period last year. During the reporting period, theCompany achieved an operating income of 9.038 billion yuan, an increase of 37.05% over the same period of theprevious year; the net profit attributable to shareholder of parent company has 1.645 billion yuan, an increase of
24.05% over the same period last year.
Main work carried out by the company during the reporting period:
1. Seize market opportunities and improve marketing management. The company seized the market developmentopportunities of the automobile industry, especially the commercial vehicles, dynamically focused on the annualkey projects and indicator schedules. Driven by factors such as China VI standard switching, over-limit controland infrastructure projects, the sales of diesel fuel injection system products and automobile exhaustafter-treatment system products have increased significantly, and the share of the company's main products andstrategic customers in the market has increased. The current China VI projects have been making steady progress,and new business projects such as hydrogen fuel cells and intelligent networks have achieved positive progress.The company has accelerated the integration and training of marketing team, continuously improved the operationmechanism of the key customer manager platform, focused on core strategic customers and key customers, andachieved remarkable results in the new energy field. The company's new image and new brand have been steadilypromoted, and the major exchange activities with customers have been carried out intensively.
2. Strengthen technological innovation and accelerate new layout. Key research and development projects such asdiesel fuel injection system, automobile exhaust after-treatment system, air management system, hydrogen energyfuel cell, and intelligent network has been promoting steadily as planned. We deepened the business planning ofthe core components of hydrogen fuel cell, promoted the feasibility study of producing hydrogen by waterelectrolysis, promoted the construction planning of the hydrogen energy department, and obtained the support ofgovernment departments for the development of hydrogen energy business; further improved the planning ofenvironmental situation awareness in the intelligent safeguard field, and combined with the intelligent cockpit tocomplete a new round of intelligent network planning. In order to seek opportunities for coordinated developmentof the industrial chain, we have completed the investments in Qingdao Shang Qi Hui Zhu Zhan Xin Industry
Investment Fund and Wuxi Auto-link World Information Technology Co., Ltd., improved the cooperativemanagement mode of new business and overseas subsidiaries, and made positive progress in customercooperation and market application of new business.
3. Strengthen quality management and promote intelligent manufacturing. Improved the evaluation standards forthe product quality full lifecycle management maturity and the preparation process of 5M1E full factors maturityand completed the pilots; planned and organized special work of high quality improvement in production,strengthened the effectiveness of employee raising hands, review and rectification implementation in processquality control. Intelligent manufacturing system projects such as WMS and MES continued to advance andgradually put into service, and the construction of intelligent factories proceeded in an orderly manner, 5G+Innovation Lab completed the infrastructure work and subject system design, information security systemcompleted construction and passed the on-site audit of the ISO27001 system, and built EHS informationregulatory platform and imported the safety process S-FMEA control.
4. Promote management upgrade and improve business benefits. Established a "one report one meeting"management monitoring mechanism and put into normal operation. Completed the launch of the main plan of thecommon rail parts collaborative system, promoted the raw material quality management improvement project, andstrengthened the analysis and disposal of slow flow materials. Continuously optimized the sharing serviceplatform, and further promoted cost standardization and refined management, and asset operation quality and fundoperating efficiency had continuous improvement. Continuously carried out risk control capacity building andself-investigation work of business division risk control compliance. Further implemented the ten measures forhuman resources control, planned and organized the "Three Sail One Master" special training activities,formulated salary structural adjustment programs, and continued to enhance internal fairness and externalcompetitiveness.II. Core Competitiveness Analysis
1. Industry and brand advantages. The company was established in 1958, after more than 60 years of development,it has become a famous manufacturer of auto parts at home, and has established long-term and stable cooperativerelations with major domestic main engine factories and vehicle manufacturers, the existing automobile corecomponents main products (including diesel fuel injection system, exhaust after-treatment system, airmanagement system) have strong market competitiveness and higher market share. The company is a pacesetterenterprise in China's internal combustion engine industry, and ranks in the top 30 enterprises in China’s auto partsindustry.
2. Technology and product advantages. The company is a national high-tech enterprise. It has scientific researchplatforms such as "National Enterprise Technology Center", "National High-tech Research and Development PlanAchievement Industrialization Base", "Post-Doctoral Scientific Research Workstation", "Jiangsu PostgraduateWorkstation" and number of provincial-level engineering and technological research centers, provincial-levelengineering laboratories, and other research and development institutions, mainly focus on fuel injection systems,exhaust after-treatment systems, and air management systems to conduct technical research and productdevelopment. The company has mastered a number of core patented technologies, the main product technical
indicators are at the leading level in the industry. In recent years, the company focuses on the strategic layout inthe fields of hydrogen energy & driving and intelligent network connection, established a new energy and networktechnology research institute, built a hydrogen energy fuel cell test center, and formed technical research anddevelopment capabilities of hydrogen fuel cell core components and intelligent network products.
3.Management and manufacturing advantages. The company has a complete organizational structure andmanagement systems process, and has built a financial sharing platforms, which can realize the effectivemigration and stable operation of organization & personnel, business & accounting; The established humanresources information system platforms can ensure the timely and accurate standardization of organization,personnel, salary and attendance; built a purchase sharing system, opened up the information interconnection ofenterprises and suppliers, and achieved the closed-loop management of the procurement process; carried out theWeifu Production System (WPS) with lean philosophy, established the quality management system with thewhole process, and has strong capabilities in production and manufacturing, quality assurance, cost control andproduct delivery. The company focuses on intelligent manufacturing, continues to build intelligent factories withWeifu characteristics, and promotes the application of cloud computing and 5G networks, which can stronglysupport the company’s future business development.
4. Advantages in marketing and service. The company has a stable, professional and experienced marketing teamthat can provide targeted support and services according to customer needs, and customer relationships areharmonious. For long-term strategic customers, the company has established a four-in-one marketingcollaboration organization composed of leaders, key account managers, marketing departments, and businessdepartments. The company’s management exchanges regular visits to promote exchanges and cooperation. Thecompany has a relatively perfect after-sales service system, has built after-sales service network and intelligentservice platform, established special maintenance technology service stations nationwide to regularly provide endusers with the training of operation and maintenance, fault analysis and judgment and provide customers with fast,timely and professional comprehensive after-sales services.
5. Talent advantage. The company's management team has extensive experience and a good industry reputation inthe Automobile components industry. The company pays attention to the growth of employees and theconstruction of a core talent team. After years of accumulation, it has accumulated a group of professional andhigh-quality management and technical personnel, established a reasonable talent echelon, and provided strongmanpower resource guarantee for the company's long-term and stable development. The company's humanresource management system is relatively complete, continuously optimizing various human resourcemanagement systems to provide a fair value realization platform for employees' career development. Thecompany pays attention to the service and care of employees, improves the service experience of employeesthrough the establishment of employee self-service platform, and creates a working environment with warmth andsense of belonging.
6. Excellent corporate culture. The company takes “quality and intelligence driving a better life”as a mission and"100-year Weifu auto core parts industry expert" as a vision, fulfills the core value of "focus, innovation,responsibility, integration", insists on the enterprise spirit of "doing practical things, daring to act, being good atcooperation, bravely contending for the first". During the reporting period, the company put forward the cultural
positioning of "quality and intelligence", created a cultural system of "quality and intelligence", quality andintelligence is the company's cultural double engine, reflecting the persistence of the original aspiration and thepursuit of the future. The company held the release and interpretation conference of "quality and intelligence"cultural system (including cultural concept system, behavioral normative system, visual identity system), issuedthe "Five-Year Outline of Enterprise Culture Construction". The continuous innovation of corporate cultureconstruction is a strong support for the company's sustained excellence, provides strong support for the companyto become a trustworthy and respected industrial experts, and plays a positive role in achieving the company'sstrategic objectives.III. Main business analysisSee the “I. Main businesses of the company in the reporting period”Change of main financial data on a y-o-y basis
Unit: yuan
| Current period | Same period of last year | y-o-y changes (+,-) | Reasons | |
| Operation income | 9,037,691,756.24 | 6,594,403,624.56 | 37.05% | Mainly due to the major growth from sales of the products of diesel fuel management system and auto exhaust after-treatment system |
| Operation cost | 7,497,917,157.07 | 5,413,969,374.53 | 38.49% | Mainly due to the major growth from sales of the products of diesel fuel management system and auto exhaust after-treatment system |
| Sales expenses | 111,193,615.56 | 138,394,171.31 | -19.65% | |
| Administrative expenses | 266,226,378.32 | 336,984,661.28 | -21.00% | |
| Financial cost | 15,935,073.06 | -34,606,959.25 | Mainly due to increase in borrowings | |
| Income tax expense | 117,972,661.22 | 57,505,452.12 | 105.15% | Mainly due to profit increase |
| R&D investment | 249,583,255.99 | 211,531,953.72 | 17.99% | |
| Net cash flow arising from operation activities | 80,191,609.17 | 437,657,072.41 | -81.68% | Mainly due to increase in the raw material purchases |
| Net cash flow arising from investment activities | 951,130,720.49 | 1,445,525,014.63 | -34.20% | Mainly due to the year-on-year decrease in dividends received from participating companies |
| Net cash flow arising from financing activities | -496,851,948.29 | -1,000,189,530.78 | Mainly due to increase in borrowings | |
| Net increase of cash and cash equivalent | 531,062,209.58 | 887,655,835.02 | -40.17% |
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 period
Constitution of operation revenue
Unit: yuan
| Current period | Same period of lat year | Increase/decrease y-o-y(+,-) | |||
| Amount | Ratio in operation revenue | Amount | Ratio in operation revenue | ||
| Total operation revenue | 9,037,691,756.24 | 100% | 6,594,403,624.56 | 100% | 37.05% |
| According to industries | |||||
| Automobile components | 8,767,778,890.21 | 97.01% | 6,352,974,489.95 | 96.34% | 38.01% |
| Other business | 269,912,866.03 | 2.99% | 241,429,134.61 | 3.66% | 11.80% |
| According to products | |||||
| Diesel fuel management system | 3,998,550,461.69 | 44.24% | 2,698,345,643.33 | 40.92% | 48.19% |
| Automobile after-treatment system | 4,379,307,721.36 | 48.46% | 3,298,709,150.58 | 50.02% | 32.76% |
| Air management system | 389,920,707.16 | 4.31% | 355,919,696.04 | 5.40% | 9.55% |
| Other business | 269,912,866.03 | 2.99% | 241,429,134.61 | 3.66% | 11.80% |
| According to region | |||||
| Domestic | 8,782,591,522.28 | 97.18% | 6,479,404,165.51 | 98.26% | 35.55% |
| Foreign | 255,100,233.96 | 2.82% | 114,999,459.05 | 1.74% | 121.83% |
The industries, products, or regions accounting for over 10% of the company’s operating revenue or operating profit
√Applicable □ Not applicable
Unit: yuan
| Operating revenue | Operating cost | Gross profit ratio | Increase/decrease of operating revenue y-o-y | Increase/decrease of operating cost y-o-y | Increase/decrease of gross profit ratio y-o-y | |
| According to industries | ||||||
| Automobile components | 8,767,778,890.21 | 7,264,238,382.73 | 17.15% | 38.01% | 38.21% | -0.12% |
| According to products | ||||||
| Diesel fuel management system | 3,998,550,461.69 | 3,055,555,268.29 | 23.58% | 48.19% | 55.11% | -3.41% |
| Automobile after-treatment system | 4,379,307,721.36 | 3,948,752,250.29 | 9.83% | 32.76% | 30.08% | 1.86% |
| Air management system | 389,920,707.16 | 259,930,864.15 | 33.34% | 9.55% | 3.76% | 3.72% |
| According to region | ||||||
| Domestic | 8,512,678,656.25 | 7,016,338,304.86 | 17.58% | 36.47% | 36.38% | 0.05% |
| Foreign | 255,100,233.96 | 247,900,077.87 | 2.82% | 121.83% | 122.41% | -0.26% |
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based onlatest one year’s scope of period-end
□ Applicable √ Not applicable
Reasons for y-o-y relevant data with over 30% changes
√Applicable □Not applicable
Mainly due to the major growth from sales of the products of diesel fuel management system and auto exhaust after-treatment system
IV. Analysis of non-main business
√Applicable □Not applicable
Unit: yuan
| Amount | Ratio in total profit | Note | Whether be sustainable (Y/N) | |
| Investment income | 1,105,771,532.34 | 61.19% | The investment income mainly from the joint ventures RBCD and Zhonglian Electronics | Y (The Company’s joint ventures RBCD and Zhonglian Electronics have stable production and operation both on a sustained basis) |
| Gain/loss of fair value changes | -86,131,772.46 | -4.77% | Mainly the fair value changes from investment on Guolian Securities | |
| Asset impairment | -103,997,387.44 | -5.76% | ||
| Non-operating income | 488,184.66 | 0.03% | ||
| Non-operating expense | 851,627.30 | 0.05% |
V. Assets and liability
1. Major changes of assets composition
Unit: yuan
| End of the current period | End of last year | Ratio changes(+,-) | Notes of major changes | |||
| Amount | Ratio in total assets | Amount | Ratio in total assets | |||
| Monetary fund | 2,459,226,978.01 | 8.85% | 1,963,289,832.33 | 7.18% | 1.67% | |
| Account receivable | 4,213,530,522.34 | 15.17% | 2,824,780,352.41 | 10.33% | 4.84% | Sales revenue increased |
| Inventory | 2,269,721,200.22 | 8.17% | 2,877,182,174.64 | 10.52% | -2.35% | |
| Investment property | 20,124,766.49 | 0.07% | 20,886,681.62 | 0.08% | -0.01% | |
| Long-term equity investment | 5,010,523,270.10 | 18.04% | 4,801,488,290.97 | 17.56% | 0.48% | |
| Fix assets | 2,903,123,563.06 | 10.45% | 2,882,230,191.08 | 10.54% | -0.09% | |
| Construction in progress | 234,758,990.27 | 0.85% | 243,795,493.04 | 0.89% | -0.04% | |
| Right-of-use assets | 19,558,033.46 | 0.07% | 0.07% | Implementing the new lease standards in 2021 | ||
| Short-term loans | 1,209,809,417.24 | 4.36% | 302,238,600.05 | 1.11% | 3.25% | Bank loans from WFLD increased due to the needs of production and operation |
| Contractual liability | 57,488,324.87 | 0.21% | 81,717,387.25 | 0.30% | -0.09% | |
| Long-term loans | 2,921,841.19 | 0.01% | 3,050,640.97 | 0.01% | ||
| Lease liability | 16,761,771.80 | 0.06% | 0.06% | Implementing the new lease standards in 2021 | ||
2. Major foreign assets
√Applicable □Not applicable
| Assets | Formation reasons | Assets size | Location | Operation model | Controls to safeguard the security of assets | Earnings status | Foreign assets as a percentage of the Company’s assets | Whether there is a significant risk of impairment |
| IRD Fuel Cells A/S | Enterprise combined under the different control | RMB 147.52million | Denmark | The wholly-owned subsidiary of the Company, development, production and sales of the component products of fuel cell | The Company will pay full attention to the changes in industry and market, strengthen the corporate governance, personnel management, financial management, auditing supervision and performance assessment | N/A | 0.80% | N |
| Borit NV | Enterprise combined under the different control | RMB 104.6211 million | Belgium | The wholly-owned subsidiary of the Company, production and sales of the component products of fuel cell | The Company will pay full attention to the changes in industry and market, strengthen the corporate governance, personnel management, financial management, auditing supervision and performance assessment | N/A | 0.57% | N |
3. Assets and liability measured by fair value
√ Applicable □ Not applicable
Unit: yuan
| 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 | Other changes (+,-) | Amount at period-end |
| Financial assets | ||||||||
| 1.Trading financial asset(excluding derivative financial assets) | 5,324,221,360.10 | -86,131,772.46 | 8,890,427,670.00 | -7,745,575,899.47 | 6,382,941,358.17 | |||
| 2.Other equity instrument investment | 285,048,000.00 | 285,048,000.00 | ||||||
| 3. Account receivable financing | 1,005,524,477.88 | -410,112,625.30 | 595,411,852.58 | |||||
| Subtotal of financial assets | 6,614,793,837.98 | -86,131,772.46 | 8,890,427,670.00 | -8,155,688,524.77 | 7,263,401,210.75 | |||
| Above total | 6,614,793,837.98 | -86,131,772.46 | 8,890,427,670.00 | -8,155,688,524.77 | 7,263,401,210.75 | |||
| Financial liabilities | 0.00 | 0.00 |
Other changes include the maturity of financial products.Whether there have major changes on measurement attributes for main assets of the Company in report period or not
□ Yes √No
4. The assets rights restricted till end of the period
Unit: yuan
| Item | Book value at period-end | Restriction reason |
| Monetary funds | 5,956,935.70 | Cash deposit paid for bank acceptance |
| Monetary funds | 587,241.00 | L/C margin |
| Monetary funds | 206,740.00 | Cash deposit for Mastercard |
| Monetary funds | 2,838,880.93 | Court freeze |
| Note receivable | 755,821,058.54 | Notes pledge for bank acceptance |
| Receivable financing | 155,506,772.41 | Notes pledge for bank acceptance |
| Trading financial asset | 163,934,219.22 | 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 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. (Hereinafter referred to as Hejun Company) 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 | 1,084,851,847.80 | -- |
VI. Investment analysis
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
Unit: yuan
| Variety of securities | Code of securities | Short form of securities | Initial investment cost | Accounting measurement model | Book value at the beginning of the period | Current gain/loss of fair value changes | 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 | 600 841 | SDEC | 199,208,000.00 | Measured by fair value | 140,395,956.00 | -22,078,920.00 | -22,078,920.00 | 118,317,036.00 | Trading financial asset | Own funds | |||
| Domestic and foreign stocks | 002 009 | Miracle Automation | 69,331,500.00 | Measured by fair value | 47,712,300.00 | 9,278,700.00 | 9,278,700.00 | 56,991,000.00 | Trading financial asset | Own funds | |||
| Domestic and foreign stocks | 601 456 | Guolian Securities | 12,000,000.00 | Measured by fair value | 326,848,122.00 | -78,932,130.66 | -78,932,130.66 | 247,915,991.34 | Trading financial asset | Own funds | |||
| Domestic and foreign stocks | 601 777 | Lifan Technology | 62,845.00 | Measured by fair value | 3,016.56 | 62,845.00 | 3,016.56 | 65,861.56 | Trading financial asset | Own funds | |||
| Total | 280,602,345.00 | -- | 514,956,378.00 | -91,729,334.10 | 0.00 | 62,845.00 | 0.00 | -91,729,334.10 | 423,289,888.90 | -- | -- | ||
| Disclosure date of securities investment approval of the Board | 24 March 2012 |
| 4 June 2013 |
Note: Lifan Technology is arising from the conversion of account receivable
(2) Derivative investment
□ Applicable √ Not applicable
There are no derivative investment during the reporting period.VII. Sales of major assets and equity
1.Sales of major assets
□ Applicable √ Not applicable
No major assets were sold during the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
VIII. Analysis of the main equity participation and controlling subsidiary
√ Applicable □ Not applicable
Main subsidiary and stock-jointly enterprise with over 10% influence on net profit of the Company
Unit: yuan
| Company name | Type | Main business | Register capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| WFLD | Subsidiary | Auto after-treatment system products | 502,596,300.00 | 5,976,062,583.45 | 2,060,970,673.49 | 4,394,119,908.54 | 150,614,557.19 | 139,109,362.55 |
| WFJN | Subsidiary | Diesel fuel management system products | 346,286,825.80 | 1,522,797,308.65 | 1,022,096,979.65 | 541,395,186.39 | 97,928,160.62 | 88,001,445.49 |
| RBCD | Equity participation enterprise | Diesel fuel management system products | USD 382,500,000.00 | 17,805,127,204.87 | 7,883,633,790.77 | 10,208,920,776.81 | 2,273,489,030.31 | 1,988,551,544.06 |
| Zhonglian Electronics | Equity participation enterprise | Gasoline system products | 600,620,000.00 | 7,076,155,948.83 | 6,078,184,036.66 | 11,255,332.80 | 892,841,465.02 | 891,476,084.86 |
Subsidiary obtained and disposed in the Period
□ Applicable √ Not applicable
Explanation on holding equity participation enterpriseBenefited from the booming in the automobile industry in the first half of the year, WFLD, WFJN and RBCD have a good growth inoperation income and net profit; Zhonglian Electronics has a faster growth in net profit, and mainly due to the investment incomefrom its joint venture- UAES.
IX. The structured subject controlled by the Company
□ Applicable √ Not applicable
X. Risks and countermeasures
1. Macro economy and market risks
Affected by the COVID-19 epidemic, the macro economy and market environment are still complicated andsevere, and the industry will still face greater pressure. If industry demand declines, it will have a certain impacton the company's production and operation and profitability.Countermeasures: The company will always pay attention to macroeconomic and industry development trends,consolidate its current business market position, actively expand new businesses, and strive to improve thecompany's core competitiveness and overall risk resistance.
2. Operating management and control risks
As the company’s business scope continues to expand, especially in the new energy field, the management span israther large and there are potential operating management and investment risks.The external environment wasaffected by the epidemic, the varying affected degree of customers and sales declines, restrictions on logistics andtransportation areas, delayed payment by some customers, and increased pressure on fund quality and repaymenthas brought certain risks to the company’s business.Countermeasures: the company will continue to promote the optimization and improvement of internalmanagement, perfect the procedures, further manage standardization and control the management risks; focus onthe impact of market dynamics on the Company; continue to develop strategy customers, and gradually strengthenthe new business market connection and new new products promotion.
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.Countermeasures: the company will pay close attention to the price trend of major raw materials, choose
appropriate procurement opportunities, and make reasonable strategic reserves to resolve the risk of raw materialprice fluctuations.
4. Risks associated with financial instruments
The company's main financial instruments include monetary funds, structured deposits, receivables, equityinstrument investments, wealth management products, loans, payable, etc. In the operation process, the risksrelated to financial instruments faced by the company mainly include credit risk, market risk and liquidity risk.Countermeasures: confirm and analyze the various risks faced by the Company, establish an appropriate risktolerance bottom line and carry out risk management, and timely monitor various risks to ensure that the risks arecontrolled within a limited range and the negative impact of the risks on the company’s operating performance isreduced to the minimum level to maximize the interests of shareholders and other investors.
Section IV. Corporate Governance
I. AGM and extraordinary general meeting
1. AGM held in the period
| Meeting | Type | Participation ratio for investors | Holding date | Disclosure date | Resolutions |
| Annual General Meeting of 2020 | AGM | 45.88% | 2021-05-20 | 2021-05-21 | Notice No.: 2021-024 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. Changes of directors, supervisors and senior executives
√Applicable □Not applicable
| Name | Position | Type | Date | Cause |
| Wang Xiaodong | Chairman | Be elected | May 20, 2021 | Renewal of the BOD |
| Kirsch Christoph | Vice Chairman | Be elected | May 20, 2021 | Renewal of the BOD |
| Xu Yunfeng | Vice Chairman | Be elected | May 20, 2021 | Renewal of the BOD |
| Ou Jianbin | Director | Be elected | May 20, 2021 | Renewal of the BOD |
| Chen Yudong | Director | Be elected | May 20, 2021 | Renewal of the BOD |
| Zhao Hong | Director | Be elected | May 20, 2021 | Renewal of the BOD |
| Huang Rui | Director | Be elected | May 20, 2021 | Renewal of the BOD |
| Yu Xiaoli | Independent Director | Be elected | May 20, 2021 | Renewal of the BOD |
| Xing Min | Independent Director | Be elected | May 20, 2021 | Renewal of the BOD |
| Feng Kaiyan | Independent Director | Be elected | May 20, 2021 | Renewal of the BOD |
| Pan Xinggao | Independent Director | Be elected | May 20, 2021 | Renewal of the BOD |
| Ma Yuzhou | Chairman of Board of Supervisory | Be elected | May 20, 2021 | Renewal of the BOS |
| Chen Ran | Supervisor | Be elected | May 20, 2021 | Renewal of the BOS |
| Liu Songxue | Supervisor | Be elected | May 20, 2021 | Renewal of the BOS |
| Xu Yunfeng | GM | Appointments | May 20, 2021 | Renewal of the BOD |
| Ou Jianbin | Standing Deputy GM and financial manager | Appointments | May 20, 2021 | Renewal of the BOD |
| Miao Yuming | Deputy GM | Appointments | May 20, 2021 | Renewal of the BOD |
| Xu Sheng | Deputy GM | Appointments | May 20, 2021 | Renewal of the BOD |
| Rong Bin | Deputy GM | Appointments | May 20, 2021 | Renewal of the BOD |
| Liu Jinjun | Deputy GM, Secretary of the Board | Appointments | May 20, 2021 | Renewal of the BOD |
| Li Gang | Chief engineer | Appointments | May 20, 2021 | Renewal of the BOD |
| Rudolf Maier | Vice Chairman | Outgoing after term of office | May 20, 2021 | Outgoing after the renewal of the BOD |
| Zhang Xiaogeng | Director | Outgoing after term of office | May 20, 2021 | Outgoing after the renewal of the BOD |
| Hua Wanrong | Director | Outgoing after term of office | May 20, 2021 | Outgoing after the renewal of the BOD |
| Lou Diming | Independent Director | Outgoing after term of office | May 20, 2021 | Outgoing after the renewal of the BOD |
| Jin Zhangluo | Independent Director | Outgoing after term of office | May 20, 2021 | Outgoing after the renewal of the BOD |
| Xu Xiaofang | Independent Director | Outgoing after term of office | May 20, 2021 | Outgoing after the renewal of the BOD |
| Shi Xingyuan | Chairman of Board of Supervisory | Outgoing after term of office | May 20, 2021 | Outgoing after the renewal of the BOS |
| Zhou Weixing | Secretary of the Board | Outgoing after term of office | May 20, 2021 | Outgoing after the renewal of the BOD |
III. 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
IV. Implementation of the stock incentive plans, employee stock ownership plans or otheremployee incentives
√Applicable □Not applicable
The registration for the first grant of restricted shares under the equity incentive plan for year of 2020 was completed on4 December 2020. The incentive objects for this incentives have 601 person in total, number of restricted shares granted19,540,000 shares. For details, please refer to the relevant announcement (No.: 2020-048, 2020-064 and 2020-066)published on Juchao Website (http://www.cninfo.com.cn)
Section V. Environmental and Social Responsibility
I. Important environmental issuesThe listed Company and its subsidiary whether belong to the key sewage units released from environmental protection department:
□Yes √No
The company and its subsidiaries are not the key pollutant discharge units announced by the State EnvironmentalProtection Department. The company attaches great importance to environmental protection management. Duringthe production and operation process, the company strictly abides by relevant national and local environmentalprotection laws, regulations and rules, and timely acquires, updates and conveys relevant environmental laws,regulations and standards, and conducts the company’s internal daily environmental management based on newregulations and standards., actively fulfills corporate environmental protection obligations, and implements nationalenergy conservation and emission reduction guidelines and policies.
II. Social responsibilityIn strict accordance with the requirements of relevant national laws and regulations, while striving to pursueeconomic benefits and protecting shareholders’ interests, the company actively protects the legitimate rights andinterests of employees, strengthens corporate culture construction, improves employee satisfaction, honestlycooperates with suppliers and customers, establishes strategic cooperative relations with suppliers and customersto achieve mutual benefit and win-win results. The company pays attention to environmental protection, activelyparticipates in social welfare undertakings, and actively fulfills social responsibility through a variety of ways, andpromotes the harmonious development of enterprises and society.
Section VI. Important MattersI. Undertakings that the actual controller, shareholders, related party, buyers and theCompany have fulfilled during the reporting period and have not yet fulfilled by the end ofreporting period
□ Applicable √ Not applicable
No undertakings that the actual controller, shareholders, related party, buyers and the Company have fulfilled during the reportingperiod and have not yet fulfilled by the end of the periodII. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
III. External guarantee out of the regulations
□ Applicable √ Not applicable
No external guarantee out of the regulations occurred in the period.IV. Appointment and non-reappointment (dismissal) of CPAWhether the financial report of semi-annual report has been audited
□Yes √No
The semi-annual report of the Company is unaudited.V. Explanation from Board of Directors and Supervisory Committee for “Non-standard auditreport” that issued by CPA
□ Applicable √ Not applicable
VI. Explanation from the BOD on the previous year’s “non-standard audit report”
□ Applicable √ Not applicable
VII. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization occurred during the reporting period.
VIII. Litigations
Major litigations and arbitrations
□ Applicable √ Not applicable
No major litigations and arbitrations occurred in the Period.
Other litigations
√ Applicable □ Not applicable
| Basic Situation of Litigation (Arbitration) | Amount Related to the Case (10’000Yuan) | 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 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. | 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 of the reporting period, the company’s frozen assets were as follows: 4.71 million shares of Miracles Automation 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 (the first trial held on 24 Sept. 2017, and follow trial will wait for notice by the court). | This litigation will not affect the company’s daily operating activities for the time being | Not yet implemented | 8 March 2017 | (Announcement No.: 2017-002) published on Juchao Website (www.cninfo.com.cn) |
| The Company has applied to Futian People's Court of Shenzhen for compulsory liquidation with Hejun Company | 3,300 | N | The Company has applied to Futian People's Court of Shenzhen for compulsory liquidation with Hejun Company. The civil ruling paper (Yue (0304) QS [2017] No. 5) made by Shenzhen Futian District People’s Court ruled that Hejun Company should be made compulsory liquidation. The Company will actively cooperate with the court to work on the liquidation to protect its legitimate rights and interests. | There is no impact on daily operation activities of the Company | Relevant works are in process | 6 Dec. 2017 | (Announcement No.: 2017-023) published on Juchao Website (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. Major related party transaction
1. Day-to-day related party transaction
√ Applicable □ Not applicable
| Related party | Relationship | Type of related transaction | Content of related party transaction | Pricing principle | Related party transaction price | Related party 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 |
| WFPM | Associated enterprise | Procurement of goods and labor services | Procurement of goods and labor services | Fair market pricing | Market price | 1,885.25 | 0.26% | 4,200 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 |
| RBCD | Associated enterprise, controlling subsidiary of Robert Bosch | Procurement of goods and labor services | Procurement of goods and labor services | Fair market pricing | Market price | 21,844.48 | 3.04% | 33,500 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 |
| WFEC | Associated enterprise of WFLD | Procurement of goods | Procurement of goods | Fair market pricing | Market price | 90,577.08 | 12.59% | 165,000 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 |
| Robert Bosch Company | Second largest shareholder of the Company | Procurement of goods and labor services | Procurement of goods and labor services | Fair market pricing | Market price | 11,566.6 | 1.61% | 21,500 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 |
| Shinwell Automobile | Associated enterprise | Procurement of goods | Procurement of goods | Fair market pricing | Market price | 100 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 | ||
| WFPM | Associated enterprise | Sales of goods and services | Sales of goods and services | Fair market pricing | Market price | 1,974.2 | 0.22% | 4,500 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 |
| RBCD | Associated enterprise,controlling subsidiary of Robert Bosch | Sales of goods and services | Sales of goods and services | Fair market pricing | Market price | 225,096.75 | 24.91% | 320,000 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 |
| WFEC | Associated enterprise of WFLD | Sales of goods and services | Sales of goods and services | Fair market pricing | Market price | 358.15 | 0.04% | 2,500 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 |
| Robert Bosch Company | Second largest shareholder of the Company | Sales of goods and services | Sales of goods and services | Fair market pricing | Market price | 64,919.4 | 7.18% | 122,000 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 |
| Shinwell Automobile | Associated enterprise | Sales of goods | Sales of goods | Fair market pricing | Market price | 2.93 | 100 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 |
| RBCD | Associated enterprise,controlling subsidiary of Robert Bosch | Other | Technical service fee payable | Fair market pricing | Market price | 100 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 | ||
| RBCD | Associated enterprise,controlling subsidiary of Robert Bosch | Other | Payment of technical commission fee etc. | Fair market pricing | Market price | 300 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 | ||
| Robert Bosch Company | Second largest shareholder of the Company | Other | Payment of technical commission fee etc. | Fair market pricing | Market price | 412.39 | 700 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 | |
| Robert Bosch Company | Second largest shareholder of the Company | Other | Sales of fixed assets | Fair market pricing | Market price | 27.23 | Y | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 | ||
| WFEC | Associated enterprise of WFLD | Other | Rental fees receivable | Fair market pricing | Market price | 300 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 | ||
| RBCD | Associated enterprise,controlling subsidiary of Robert Bosch | Other | Purchase of fixed assets | Fair market pricing | Market price | 52.84 | Y | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 | ||
| Robert Bosch Company | Second largest shareholder of the Company | Other | Purchase of fixed assets | Fair market pricing | Market price | 59.95 | Y | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 | ||
| WFEC | Associated enterprise of WFLD | Other | Technical service fee payable etc. | Fair market pricing | Market price | 200 | N | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 |
| WFEC | Associated enterprise of WFLD | Other | Sales of fixed assets | Fair market pricing | Market price | 41.46 | Y | According to the contract | Market price | 20 April 2021 | Notice No: 2021-012 | ||
| Total | -- | -- | 418,818.71 | -- | 675,000 | -- | -- | -- | -- | -- | |||
| Detail of sales return with major amount involved | Not applicable | ||||||||||||
| Report the actual implementation of the day-to-day related transactions which were projected about their total amount by types during the reporting period (if applicable) | Being deliberated and approved by AGM of 2020, total day-to-day related party transaction for year of 2021 predicted as 6750 million Yuan, actually 4188.1871 million Yuan occurred in the Period, the related transaction classified according to types are as: 1. it estimated that procurement of goods and labor service from related party in 2021 will up to 2243 million Yuan, while 1258.7341 million Yuan occurred actually in the Period; 2. it estimated that sales of goods and labor service to related party in 2021 will up to 4491 million Yuan, actually 2923.5143 million Yuan occurred during the reporting period for the explosive growth of demand in commercial vehicle market, especially for heavy trucks; 3. it estimated that other related transactions with related party for year of 2021 will up to 16 million Yuan while 5.9387 million Yuan actually occurred. | ||||||||||||
| Reasons for major differences between trading price and market reference price (if applicable) | Not applicable | ||||||||||||
2. Related party transactions of assets acquisition and sold
□ Applicable √ Not applicable
No related party transactions of assets acquisition and sold occurred during the reporting period
3. Related party transactions of mutual investment outside
□ Applicable √ Not applicable
No related party transactions of mutual investment outside occurred during the reporting period.
4. Contact of related party credit and debt
□ Applicable √ Not applicable
The Company had no contact of related party credit and debt in the reporting period.
5. Contact with the related finance companies and finance companies that controlled by the Company
□ Applicable √ Not applicable
There are no deposits, loans, credits or other financial business between the Company and the finance companies with relatedrelationships or between the finance companies controlled by the Company and related parties
6. Other material related party transactions
□ Applicable √ Not applicable
The company had no other material related party transactions in reporting period.
XII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship occurred during the reporting period
(2) Contract
□ Applicable √ Not applicable
No contract occurred during the reporting period
(3) Leasing
□ Applicable √ Not applicable
No leasing occurred during the reporting period
2. Material guarantees
□ Applicable √ Not applicable
No material guarantees occurred during the reporting period
3. Trust financing
√ Applicable □ Not applicable
Unit: 10’000 yuan
| Type | Capital sources | Amount occurred | Outstanding balance | Amount overdue for collection | Impairment for the overdue financial management |
| Bank Wealth Management | Own funds | 296,300.00 | 108,672.00 | 0 | 0 |
| Brokerage financial products | Own funds | 95,000.00 | 95,000.00 | 0 | 0 |
| Trust financial products | Own funds | 315,079.00 | 284,186.00 | 0 | 0 |
| Other types | Own funds | 87,349.00 | 87,349.00 | 0 | 0 |
| Total | 793,728.00 | 575,207.00 | 0 | 0 | |
Details of the single major amount, or high-risk trust investment with low security, poor fluidity and non-guaranteed
√ Applicable □ Not applicable
Unit: 10’000 yuan
| Trustee institution r name | Trustee type | Type | Amount | Source of funds | Start date | End date | Capital investment purpose | Criteria for fixing reward | Reference annual rate of return | Anticipated income (if applicable) | Actual gains/losses in period | Actual collected gains/losses in period | Amount of reserve for devaluation of withdrawing in the Year (if applicable) | Whether approved by legal procedure (Y/N) | Whether has entrust finance plan in the future | Summary of the items and related query index (if applicable) |
| Bank | Bank | Non-guaranteed floating income | 661,933 | Own funds | 2021-03-02 | 2021-09-17 | Bank Wealth Management | The agreement performance-based compensation | 2.95%-4% | 3543.94 | 3543.94 | Collected according to the contract | Y | Y | Notice No.: 2021-014 on 20 April 2021 | |
| Securities trader | Securities | Non-guaranteed floating income | 58,000 | Own funds | 2021-01-12 | 2022-06-28 | Collective assets management plan | The agreement performance-based compensation | 4.2%-6% | 1,141.48 | 1,141.48 | Collected according to the contract | Y | Y | Notice No.: 2021-014 on 20 April 2021 | |
| Trust | Trust | Non-guaranteed floating income | 113,880 | Own funds | 2021-01-08 | 2023-06-25 | Collection trust plan | The agreement performance-based compensation | 3.3%-8% | 8,756.01 | 8,756.01 | Collected according to the contract | Y | Y | Notice No.: 2021-014 on 20 April 2021 | |
| Other | Other professional financial institutions | Non-guaranteed floating income | 35,580 | Own funds | 2021-02-08 | 2025-07-01 | Fund products | The agreement performance-based compensation | 5.3%-7.8% | 1,044.44 | 1,044.44 | Collected according to the contract | Y | Y | Notice No.: 2021-014 on 20 April 2021 |
| Total | 869,393 | -- | -- | -- | -- | -- | -- | 14,485.87 | 14,485.87 | -- | -- | -- | -- |
Entrust financial expected to be unable to recover the principal or impairment might be occurred
□ Applicable √ Not applicable
4.Significant contracts for daily operation
□ Applicable √ Not applicable
5.Other significant contract
□ Applicable √ Not applicable
The company had no other significant contract in the reporting period.XIII. Description of other significant matters
□ Applicable √ Not applicable
The company had no other significant matters that needs description in the reporting period.XIV. Important event of the subsidiaries
□ Applicable √ Not applicable
Section VII. Changes in Shares and Particulars about ShareholdersI. Changes in Share Capital
1. Changes in Share Capital
Unit: share
| Before the Change | Increase/Decrease in the Change (+, -) | After the Change | |||||||
| Amount | Proportion | New shares issued | Bonus shares | Public reserve transfer into share capital | Others | Subtotal | Amount | Proportion | |
| I. Restricted shares | 19,620,830 | 1.94% | 4,059 | 4,059 | 19,624,889 | 1.94% | |||
| 1. State-owned shares | |||||||||
| 2. State-owned legal person’s shares | |||||||||
| 3. Other domestic shares | 19,620,830 | 1.94% | 4,059 | 4,059 | 19,624,889 | 1.94% | |||
| Including: Domestic legal person’s shares | |||||||||
| Domestic natural person’s shares | 19,620,830 | 1.94% | 4,059 | 4,059 | 19,624,889 | 1.94% | |||
| 4. Foreign shares | |||||||||
| Including: Foreign legal person’s shares | |||||||||
| Foreign natural person’s shares | |||||||||
| II. Unrestricted shares | 989,329,740 | 98.06% | -4,059 | -4,059 | 989,325,681 | 98.06% | |||
| 1. RMB ordinary shares | 816,949,740 | 80.97% | -4,059 | -4,059 | 816,945,681 | 80.97% | |||
| 2. Domestically listed foreign shares | 172,380,000 | 17.09% | 172,380,000 | 17.09% | |||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| 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 reducing holdings of shares buy-back 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 or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of lock-up stocks
√ Applicable □ Not applicable
Unit: share
| Shareholders | Opening shares restricted | Shares released in Period | Restricted Shares increased in Period | Ending shares restricted | Restricted reasons | Date for released |
| Shi Xingyuan | 9,505 | 0 | 3,168 | 12,673 | Outgoing after the renewal | As required by the rules |
| Zhou Weixing | 122,674 | 0 | 891 | 123,565 | Outgoing after the renewal | As required by the rules |
| Total | 132,179 | 0 | 4,059 | 136,238 | -- | -- |
II. Securities issuance and listing
□ Applicable √ Not applicable
III. Amount of shareholders of the Company and particulars about shares holding
Unit: share
| Total common stock shareholders in reporting period-end | 69,815 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) | 0 | ||||||||
| Particulars about common shares held above 5% by shareholders or top ten common shareholders | |||||||||||
| Full name of Shareholders | Nature of shareholder | Proportion of shares held | Amount of common shares held at the end of reporting period | Changes in report period | Amount of restricted common shares held | Amount of common shares held without restriction | Information of shares pledged, tagged or frozen | ||||
| State of share | Amount | ||||||||||
| Wuxi Industry Development Group Co., Ltd. | State-owned corporate | 20.22% | 204,059,398 | 0 | 0 | 204,059,398 | |||||
| ROBERT BOSCH GMBH | Foreign corporate | 14.16% | 142,841,400 | 0 | 0 | 142,841,400 | |||||
| Hong Kong Securities Clearing Company | Foreign corporate | 5.80% | 58,474,174 | -6,528,898 | 0 | 58,474,174 | |||||
| BBH BOS S/A FIDELITY FD - CHINA FOCUS FD | Foreign corporate | 1.57% | 15,833,515 | -260,000 | 0 | 15,833,515 | |||||
| Basic Pension Insurance Fund- 1003 | Other | 1.20% | 12,105,618 | 942,312 | 0 | 12,105,618 | |||||
| FIDELITY INVMT TRT FIDELITY INTL SMALL CAP FUND | Foreign corporate | 0.70% | 7,043,386 | -296,200 | 0 | 7,043,386 | ||||
| NSSF - 116 | Other | 0.58% | 5,865,698 | 5,865,698 | 0 | 5,865,698 | ||||
| Haitong Securities Co., Ltd. | State-owned corporate | 0.49% | 4,965,301 | 1,700 | 0 | 4,965,301 | ||||
| NSSF - 413 | Other | 0.48% | 4,830,000 | -1,020,000 | 0 | 4,830,000 | ||||
| GTJA- Allianz Fund - China Pacific Life Insurance Co., Ltd. - With-profit insurance - GTJA- Allianz Fund CPIC Equity Relative Income (Guaranteed Dividend) Single Asset Management Plan | Other | 0.47% | 4,714,900 | 1,801,800 | 0 | 4,714,900 | ||||
| Strategy investor or general legal person becoming the top 10 common shareholders by placing new shares (if applicable) | N/A | |||||||||
| Explanation on associated relationship among the aforesaid shareholders | Among the aforesaid 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 persons acting in concert regulated by the Management Measure for the acquisition of Listed Company. | |||||||||
| Description of the above shareholders in relation to delegate/entrusted voting rights and abstention from voting rights. | N/A | |||||||||
| Special note on the repurchase account among the top 10 shareholders (if applicable) | N/A | |||||||||
| Particular about top ten shareholders with un-lock up common stocks held | ||||||||||
| Shareholders’ name | Amount of common shares held without restriction 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 | |||||||||
| Hong Kong Securities Clearing Company | 58,474,174 | RMB common shares | 58,474,174 | |||||||
| BBH BOS S/A FIDELITY FD - CHINA FOCUS FD | 15,833,515 | Domestically listed foreign shares | 15,833,515 | |||||||
| Basic Pension Insurance Fund- 1003 | 12,105,618 | RMB common shares | 12,105,618 | |||||||
| FIDELITY INVMT TRT FIDELITY INTL SMALL CAP FUND | 7,043,386 | Domestically listed foreign shares | 7,043,386 | |||||||
| NSSF - 116 | 5,865,698 | RMB common shares | 5,865,698 | |||||||
| Haitong Securities Co., Ltd. | 4,965,301 | RMB common shares | 4,965,301 |
| NSSF - 413 | 4,830,000 | RMB common shares | 4,830,000 |
| GTJA- Allianz Fund - China Pacific Life Insurance Co., Ltd. - With-profit insurance - GTJA- Allianz Fund CPIC Equity Relative Income (Guaranteed Dividend) Single Asset Management Plan | 4,714,900 | RMB common shares | 4,714,900 |
| Expiation on associated relationship or consistent actors within the top 10 un-lock up common shareholders and between top 10 un-lock up common shareholders and top 10 common shareholders | Among the aforesaid 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 persons acting in concert regulated by the Management Measure for the acquisition of Listed Company. | ||
| Explanation on top 10 common shareholders involving margin business (if applicable) | Not applicable | ||
Whether top ten common stock shareholders or top ten common stock shareholders with un-lock up shares held have a buy-backagreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-lock up shares held of the Company have nobuy-back agreement dealing in reporting period.IV. Changes of shares held by directors, supervisors and senior executives
√Applicable □Not applicable
| Name | Title | Working status | Shares held at period-begin (Share) | Amount of shares increased in this period (Share) | Amount of shares decreased in this period (Share) | Shares held at period-end (Share) | Amount of restricted shares granted at period-begin (Share) | Amount of restricted shares granted in this period (Share) | Amount of restricted shares granted at period-end (Share) |
| Wang Xiaodong | Chairman | Currently in office | 420,781 | 420,781 | 400,000 | 400,000 | |||
| Kirsch Christoph | Vice Chairman | Currently in office | 0 | 0 | 0 | 0 | |||
| Xu Yunfeng | Vice Chairman, GM | Currently in office | 363,000 | 363,000 | 350,000 | 350,000 | |||
| Ou Jianbin | Director, Executive Deputy General Manager and financing Charger | Currently in office | 290,000 | 290,000 | 280,000 | 280,000 | |||
| Chen Yudong | Director | Currently in office | 0 | 0 | 0 | 0 | |||
| Zhao Hong | Director | Currently in office | 0 | 0 | 0 | 0 |
| Huang Rui | Director | Currently in office | 0 | 0 | 0 | 0 | |||
| Yu Xiaoli | Independent Director | Currently in office | 0 | 0 | 0 | 0 | |||
| Xing Min | Independent Director | Currently in office | 0 | 0 | 0 | 0 | |||
| Feng Kaiyan | Independent Director | Currently in office | 0 | 0 | 0 | 0 | |||
| Pan Xinggao | Independent Director | Currently in office | 0 | 0 | 0 | 0 | |||
| Ma Yuzhou | Chairman of the Supervisory Committee | Currently in office | 0 | 0 | 0 | 0 | |||
| Chen Ran | Supervisor | Currently in office | 1,000 | 1,000 | 0 | 0 | |||
| Liu Songxue | Supervisor | Currently in office | 0 | 0 | 0 | 0 | |||
| Miao Yuming | Deputy GM | Currently in office | 290,000 | 290,000 | 280,000 | 280,000 | |||
| Xu Sheng | Deputy GM | Currently in office | 280,000 | 280,000 | 280,000 | 280,000 | |||
| Rong Bin | Deputy GM | Currently in office | 280,000 | 280,000 | 280,000 | 280,000 | |||
| Liu Jinjun | Deputy General Manager, Secretary of the Board | Currently in office | 280,000 | 280,000 | 280,000 | 280,000 | |||
| Li Gang | Chief engineer | Currently in office | 280,000 | 280,000 | 280,000 | 280,000 | |||
| Rudolf Maier | Vice Chairman | Leave office | 0 | 0 | 0 | 0 | |||
| Zhang Xiaogeng | Director | Leave office | 0 | 0 | 0 | 0 | |||
| Hua Wanrong | Director | Leave office | 0 | 0 | 0 | 0 | |||
| Lou Diming | Independent Director | Leave office | 0 | 0 | 0 | 0 | |||
| Jin Zhangluo | Independent Director | Leave office | 0 | 0 | 0 | 0 | |||
| Xu Xiaofang | Independent Director | Leave office | 0 | 0 | 0 | 0 | |||
| Shi XingYuan | Chairman of the Supervisory Committee | Leave office | 12,673 | 12,673 | 0 | 0 | |||
| Zhou Weixing | Secretary of the Board | Appointment and dismissal | 123,565 | 123,565 | 120,000 | 120,000 |
| Total | -- | -- | 2,621,019 | 0 | 0 | 2,621,019 | 2,550,000 | 0 | 2,550,000 |
V. Changes in controlling shareholders or actual controllersChange of controlling shareholder during the reporting period
□ Applicable √ Not applicable
The Company had no change of controlling shareholder during the reporting periodChange of actual controller during the reporting period
□ Applicable √ Not applicable
The Company had no change of actual controller during the reporting period
Section VIII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period.
Section IX. Corporate Bonds
□ Applicable √ Not applicable
Section X. Financial Report
I. Audit reportWhether the semi annual report is audited
□ Yes √ No
The company's semi annual financial report has not been auditedII. Financial StatementStatement in Financial Notes are carried in RMB/CNY
1. Consolidated Balance Sheet
Prepared by Weifu High-Technology Group Co., Ltd.
June 30, 2021
Unit: yuan
| Item | June 30, 2021 | December 31, 2020 |
| Current assets: | ||
| Monetary funds | 2,459,226,978.01 | 1,963,289,832.33 |
| Settlement provisions | ||
| Capital lent | ||
| Trading financial assets | 5,056,585,067.83 | 3,518,432,939.10 |
| Derivative financial assets | ||
| Note receivable | 1,400,927,322.82 | 1,657,315,723.56 |
| Account receivable | 4,213,530,522.34 | 2,824,780,352.41 |
| Receivable financing | 595,411,852.58 | 1,005,524,477.88 |
| Accounts paid in advance | 169,390,131.32 | 151,873,357.76 |
| Insurance receivable | ||
| Reinsurance receivables | ||
| Contract reserve of reinsurance receivable | ||
| Other account receivable | 489,891,879.53 | 54,209,580.88 |
| Including: Interest receivable | ||
| Dividend receivable | 479,171,532.95 | 49,000,000.00 |
| Buying back the sale of financial assets | ||
| Inventories | 2,269,721,200.22 | 2,877,182,174.64 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current asset due within one year | ||
| Other current assets | 64,570,470.49 | 2,137,921,113.61 |
| Total current assets | 16,719,255,425.14 | 16,190,529,552.17 |
| Non-current assets: | ||
| Loans and payments on behalf | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term account receivable | ||
| Long-term equity investment | 5,010,523,270.10 | 4,801,488,290.97 |
| Investment in other equity instrument | 285,048,000.00 | 285,048,000.00 |
| Other non-current financial assets | 1,326,356,290.34 | 1,805,788,421.00 |
| Investment real estate | 20,124,766.49 | 20,886,681.62 |
| Fixed assets | 2,903,123,563.06 | 2,882,230,191.08 |
| Construction in progress | 234,758,990.27 | 243,795,493.04 |
| Productive biological asset | ||
| Oil and gas asset | ||
| Right-of-use assets | 19,558,033.46 | |
| Intangible assets | 429,503,272.15 | 454,412,947.69 |
| Expense on Research and Development | ||
| Goodwill | 246,048,556.15 | 257,800,696.32 |
| Long-term expenses to be apportioned | 14,892,509.54 | 15,062,171.09 |
| Deferred income tax asset | 332,500,153.28 | 198,393,501.50 |
| Other non-current asset | 237,495,903.07 | 195,259,441.73 |
| Total non-current asset | 11,059,933,307.91 | 11,160,165,836.04 |
| Total assets | 27,779,188,733.05 | 27,350,695,388.21 |
| Current liabilities: | ||
| Short-term loans | 1,209,809,417.24 | 302,238,600.05 |
| Loan from central bank | ||
| Capital borrowed | ||
| Trading financial liability | ||
| Derivative financial liability | ||
| Note payable | 1,849,948,849.32 | 2,462,592,372.82 |
| Account payable | 3,963,025,385.39 | 4,100,984,240.39 |
| Accounts received in advance | 439,949.43 | 4,071,236.87 |
| Contractual liability | 57,488,324.87 | 81,717,387.25 |
| Selling financial asset of repurchase | ||
| Absorbing deposit and interbank deposit | ||
| Security trading of agency | ||
| Security sales of agency | ||
| Wage payable | 181,036,807.25 | 332,421,811.82 |
| Taxes payable | 149,846,901.47 | 67,493,690.29 |
| Other account payable | 518,455,677.71 | 361,556,257.42 |
| Including: Interest payable | 49,246.71 | 4,862.22 |
| Dividend payable | 155,601,810.00 | |
| Commission charge and commission payable | ||
| Reinsurance payable | ||
| Liability held for sale | ||
| Non-current liabilities due within one year | 23,067,464.24 | 36,914,242.02 |
| Other current liabilities | 273,728,160.41 | 222,871,087.33 |
| Total current liabilities | 8,226,846,937.33 | 7,972,860,926.26 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term loans | 2,921,841.19 | 3,050,640.97 |
| Bonds payable | ||
| Including: Preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | 16,761,771.80 | |
| Long-term account payable | 33,265,082.11 | 39,479,218.17 |
| Long-term wages payable | 181,980,293.94 | 181,980,293.94 |
| Accrual liability | ||
| Deferred income | 311,182,354.25 | 328,204,476.73 |
| Deferred income tax liabilities | 27,746,798.73 | 30,653,933.12 |
| Other non-current liabilities | ||
| Total non-current liabilities | 573,858,142.02 | 583,368,562.93 |
| Total liabilities | 8,800,705,079.35 | 8,556,229,489.19 |
| 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 | 3,331,593,434.63 | 3,294,242,368.28 |
| Less: Inventory shares | 303,627,977.74 | 303,627,977.74 |
| Other comprehensive income | -4,796,181.08 | 13,916,619.47 |
| Reasonable reserve | 2,527,617.02 | 2,333,490.03 |
| Surplus public reserve | 510,100,496.00 | 510,100,496.00 |
| Provision of general risk | ||
| Retained profit | 13,890,386,805.30 | 13,756,102,424.62 |
| Total owner’ s equity attributable to parent company | 18,435,134,764.13 | 18,282,017,990.66 |
| Minority interests | 543,348,889.57 | 512,447,908.36 |
| Total owner’ s equity | 18,978,483,653.70 | 18,794,465,899.02 |
| Total liabilities and owner’ s equity | 27,779,188,733.05 | 27,350,695,388.21 |
Legal Representative: Wang XiaodongPerson in charge of accounting works: Ou JianbinPerson in charge of accounting institute: Ou Jianbin
2. Balance Sheet of Parent Company
Unit: yuan
| Item | June 30, 2021 | December 31, 2020 |
| Current assets: | ||
| Monetary funds | 1,557,056,402.95 | 1,157,684,053.05 |
| Trading financial assets | 5,001,412,685.72 | 3,452,348,980.19 |
| Derivative financial assets | ||
| Note receivable | 383,773,330.42 | 422,246,979.39 |
| Account receivable | 1,418,332,154.70 | 982,782,279.22 |
| Receivable financing | ||
| Accounts paid in advance | 115,538,581.67 | 75,650,090.49 |
| Other account receivable | 657,946,549.38 | 197,335,714.63 |
| Including: Interest receivable | 88,888.89 | 897,777.78 |
| Dividend receivable | 466,859,940.06 | |
| Inventories | 522,124,502.67 | 725,276,241.43 |
| Contractual assets | ||
| Assets held for sale |
| Non-current assets maturing within one year | ||
| Other current assets | 25,260,101.36 | 2,057,772,839.50 |
| Total current assets | 9,681,444,308.87 | 9,071,097,177.90 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investments | 6,193,908,075.78 | 5,978,128,303.88 |
| Investment in other equity instrument | 209,108,000.00 | 209,108,000.00 |
| Other non-current financial assets | 1,326,356,290.34 | 1,805,788,421.00 |
| Investment real estate | ||
| Fixed assets | 1,764,631,011.53 | 1,758,198,856.53 |
| Construction in progress | 156,009,477.52 | 154,741,266.85 |
| Productive biological assets | ||
| Oil and natural gas assets | ||
| Right-of-use assets | 1,398,112.88 | |
| Intangible assets | 197,899,553.16 | 208,112,706.57 |
| Research and development costs | ||
| Goodwill | ||
| Long-term deferred expenses | 423,749.70 | |
| Deferred income tax assets | 214,808,253.54 | 76,508,392.85 |
| Other non-current assets | 160,824,514.24 | 117,013,906.01 |
| Total non-current assets | 10,225,367,038.69 | 10,307,599,853.69 |
| Total assets | 19,906,811,347.56 | 19,378,697,031.59 |
| Current liabilities: | ||
| Short-term borrowings | 276,950,888.89 | 102,088,888.89 |
| Trading financial liability | ||
| Derivative financial liability | ||
| Notes payable | 466,681,799.56 | 448,901,718.36 |
| Account payable | 1,433,742,247.32 | 1,265,845,068.26 |
| Accounts received in advance | ||
| Contractual liability | 5,567,973.02 | 6,209,575.73 |
| Wage payable | 113,653,893.16 | 216,870,819.60 |
| Taxes payable | 119,135,774.59 | 32,974,322.59 |
| Other accounts payable | 513,989,296.54 | 339,096,991.12 |
| Including: Interest payable | ||
| Dividend payable | 155,601,810.00 | |
| Liability held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | 243,945,307.78 | 182,611,991.54 |
| Total current liabilities | 3,173,667,180.86 | 2,594,599,376.09 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: Preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | 1,519,779.90 | |
| Long-term account payable | ||
| Long term employee compensation payable | 176,245,345.03 | 176,245,345.03 |
| Accrued liabilities | ||
| Deferred income | 272,225,390.34 | 285,714,239.98 |
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 449,990,515.27 | 461,959,585.01 |
| Total liabilities | 3,623,657,696.13 | 3,056,558,961.10 |
| 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 | 3,446,257,738.38 | 3,407,732,016.61 |
| Less: Inventory shares | 303,627,977.74 | 303,627,977.74 |
| Other comprehensive income | ||
| Special reserve | ||
| Surplus reserve | 510,100,496.00 | 510,100,496.00 |
| Retained profit | 11,621,472,824.79 | 11,698,982,965.62 |
| Total owner’s equity | 16,283,153,651.43 | 16,322,138,070.49 |
| Total liabilities and owner’s equity | 19,906,811,347.56 | 19,378,697,031.59 |
3. Consolidated Profit Statement
Unit: yuan
| Item | 2021 semi-annual | 2020 semi-annual |
| I. Total operating income | 9,037,691,756.24 | 6,594,403,624.56 |
| Including: Operating income | 9,037,691,756.24 | 6,594,403,624.56 |
| Interest income | ||
| Insurance gained | ||
| Commission charge and commission income | ||
| II. Total operating cost | 8,179,064,974.32 | 6,098,234,750.74 |
| Including: Operating cost | 7,497,917,157.07 | 5,413,969,374.53 |
| 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 | 38,209,494.32 | 31,961,549.15 |
| Sales expense | 111,193,615.56 | 138,394,171.31 |
| Administrative expense | 266,226,378.32 | 336,984,661.28 |
| R&D expense | 249,583,255.99 | 211,531,953.72 |
| Financial expense | 15,935,073.06 | -34,606,959.25 |
| Including: Interest expenses | 14,244,003.27 | 5,800,553.09 |
| Interest income | 16,673,615.70 | 43,053,210.79 |
| Add: Other income | 23,433,211.68 | 43,932,417.68 |
| Investment income (Loss is listed with “-”) | 1,105,771,532.34 | 923,574,526.61 |
| Including: Investment income on affiliated company and joint venture | 962,736,510.68 | 785,533,710.72 |
| The termination of income recognition for financial assets measured by amortized cost | -609,970.51 | -408,092.36 |
| Exchange income (Loss is listed with “-”) | ||
| Net exposure hedging income (Loss is listed with “-”) | ||
| Income from change of fair value (Loss is listed with “-”) | -86,131,772.46 | 258,157.65 |
| Loss of credit impairment (Loss is listed with “-”) | 6,750,336.12 | -3,622,549.31 |
| Losses of devaluation of asset (Loss is listed with “-”) | -103,997,387.44 | -52,807,909.47 |
| Income from assets disposal (Loss is listed with “-”) | 2,926,586.82 | 232,499.55 |
| III. Operating profit (Loss is listed with “-”) | 1,807,379,288.98 | 1,407,736,016.53 |
| Add: Non-operating income | 488,184.66 | 164,150.94 |
| Less: Non-operating expense | 851,627.30 | 4,124,451.68 |
| IV. Total profit (Loss is listed with “-”) | 1,807,015,846.34 | 1,403,775,715.79 |
| Less: Income tax expense | 117,972,661.22 | 57,505,452.12 |
| V. Net profit (Net loss is listed with “-”) | 1,689,043,185.12 | 1,346,270,263.67 |
| (i) Classify by business continuity | ||
| 1.continuous operating net profit (net loss listed with ‘-”) | 1,689,043,185.12 | 1,346,270,263.67 |
| 2.termination of net profit (net loss listed with ‘-”) | ||
| (ii) Classify by ownership | ||
| 1.Net profit attributable to owner’s of parent company | 1,645,389,487.32 | 1,326,344,424.98 |
| 2.Minority shareholders’ gains and losses | 43,653,697.80 | 19,925,838.69 |
| VI. Net after-tax of other comprehensive income | -18,712,800.55 | 4,618.33 |
| Net after-tax of other comprehensive income attributable to owners of parent company | -18,712,800.55 | 3,048.10 |
| (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 | -18,712,800.55 | 3,048.10 |
| 1.Other comprehensive income under equity method that can transfer to gain/loss | ||
| 2.Change of fair value of other debt investment | ||
| 3.Amount of financial assets re-classify to other comprehensive income | ||
| 4.Credit impairment provision for other debt investment | ||
| 5.Cash flow hedging reserve | ||
| 6.Translation differences arising on translation of foreign currency financial statements | -18,712,800.55 | 3,048.10 |
| 7.Other | ||
| Net after-tax of other comprehensive income attributable to minority shareholders | 1,570.23 | |
| VII. Total comprehensive income | 1,670,330,384.57 | 1,346,274,882.00 |
| Total comprehensive income attributable to owners of parent Company | 1,626,676,686.77 | 1,326,347,473.08 |
| Total comprehensive income attributable to minority shareholders | 43,653,697.80 | 19,927,408.92 |
| VIII. Earnings per share: | ||
| (i) Basic earnings per share | 1.66 | 1.32 |
| (ii) Diluted earnings per share | 1.66 | 1.32 |
Legal Representative: Wang XiaodongPerson in charge of accounting works: Ou JianbinPerson in charge of accounting institute: Ou Jianbin
4. Profit Statement of Parent Company
Unit: yuan
| Item | Semi-annual of 2021 | Semi-annual of 2020 |
| I. Operating income | 3,220,943,476.43 | 2,336,262,373.08 |
| Less: Operating cost | 2,403,527,534.87 | 1,686,488,679.58 |
| Taxes and surcharge | 21,834,137.85 | 18,740,531.01 |
| Sales expenses | 17,546,893.57 | 13,053,690.12 |
| Administration expenses | 135,426,334.91 | 227,324,018.06 |
| R&D expenses | 87,747,468.92 | 90,410,044.71 |
| Financial expenses | -7,223,028.80 | -40,808,506.49 |
| Including: Interest expenses | 3,350,273.60 | 2,501,198.55 |
| Interest income | 13,656,977.09 | 39,756,148.10 |
| Add: Other income | 15,396,596.15 | 35,239,425.50 |
| Investment income (Loss is listed with “-”) | 1,028,633,777.97 | 907,907,258.50 |
| Including: Investment income on affiliated Company and joint venture | 831,855,487.43 | 708,709,791.17 |
| 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 “-”) | -86,218,789.02 | -403,481.50 |
| Loss of credit impairment (Loss is listed with “-”) | 780,808.33 | -1,033,980.28 |
| Losses of devaluation of asset (Loss is listed with “-”) | -10,358,756.04 | -3,370,784.10 |
| Income on disposal of assets (Loss is listed with “-”) | 723,623.73 | -174,293.98 |
| II. Operating profit (Loss is listed with “-”) | 1,511,041,396.23 | 1,279,218,060.23 |
| Add: Non-operating income | 56,000.29 | 22,947.75 |
| Less: Non-operating expense | 575,906.72 | 3,443,673.01 |
| III. Total Profit (Loss is listed with “-”) | 1,510,521,489.80 | 1,275,797,334.97 |
| Less: Income tax | 76,926,523.99 | 57,174,946.95 |
| IV. Net profit (Net loss is listed with “-”) | 1,433,594,965.81 | 1,218,622,388.02 |
| (i) continuous operating net profit (net loss listed with ‘-”) | 1,433,594,965.81 | 1,218,622,388.02 |
| (ii) termination of net profit (net loss listed with ‘-”) | ||
| V. Net after-tax of other comprehensive income | ||
| (i) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
| 1.Changes of the defined benefit plans that re-measured | ||
| 2.Other comprehensive income under equity method that cannot be transfer to gain/loss | ||
| 3.Change of fair value of investment in other equity instrument | ||
| 4.Fair value change of enterprise's credit risk | ||
| 5. Other | ||
| (ii) Other comprehensive income items which will be reclassified subsequently to profit or loss | ||
| 1.Other comprehensive income under equity method that can transfer to gain/loss | ||
| 2.Change of fair value of other debt investment | ||
| 3.Amount of financial assets re-classify to other comprehensive income | ||
| 4.Credit impairment provision for other debt investment | ||
| 5.Cash flow hedging reserve | ||
| 6.Translation differences arising on translation of foreign currency financial statements | ||
| 7.Other | ||
| VI. Total comprehensive income | 1,433,594,965.81 | 1,218,622,388.02 |
| VII. Earnings per share: | ||
| (i) Basic earnings per share | ||
| (ii) Diluted earnings per share |
5. Consolidated Cash Flow Statement
Unit: yuan
| Item | Semi-annual of 2021 | Semi-annual of 2020 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor services | 7,104,973,474.71 | 5,676,491,804.78 |
| 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 | 22,377,551.77 | 15,404,444.43 |
| Other cash received concerning operating activities | 23,837,717.02 | 70,801,912.94 |
| Subtotal of cash inflow arising from operating activities | 7,151,188,743.50 | 5,762,698,162.15 |
| Cash paid for purchasing commodities and receiving labor service | 5,800,001,521.45 | 4,122,764,678.30 |
| Net increase of customer loans and advances | ||
| Net increase of deposits in central bank and interbank | ||
| Cash paid for original insurance contract compensation | ||
| Net increase of capital lent | ||
| Cash paid for interest, commission charge and commission | ||
| Cash paid for bonus of guarantee slip | ||
| Cash paid to/for staff and workers | 769,474,843.18 | 630,754,424.71 |
| Taxes paid | 241,303,901.65 | 314,691,082.22 |
| Other cash paid concerning operating activities | 260,216,868.05 | 256,830,904.51 |
| Subtotal of cash outflow arising from operating activities | 7,070,997,134.33 | 5,325,041,089.74 |
| Net cash flows arising from operating activities | 80,191,609.17 | 437,657,072.41 |
| II. Cash flows arising from investing activities: | ||
| Cash received from recovering investment | 9,674,956,210.22 | 4,008,128,352.27 |
| Cash received from investment income | 476,145,091.90 | 1,183,089,487.76 |
| Net cash received from disposal of fixed, intangible and other long-term assets | 7,301,988.55 | 25,781,114.63 |
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | 1,108,314.69 | |
| Subtotal of cash inflow from investing activities | 10,159,511,605.36 | 5,216,998,954.66 |
| Cash paid for purchasing fixed, intangible and other long-term assets | 312,048,305.49 | 218,473,940.03 |
| Cash paid for investment | 8,896,332,579.38 | 3,553,000,000.00 |
| Net increase of mortgaged loans | ||
| Net cash received from subsidiaries and other units obtained | ||
| Other cash paid concerning investing activities | ||
| Subtotal of cash outflow from investing activities | 9,208,380,884.87 | 3,771,473,940.03 |
| Net cash flows arising from investing activities | 951,130,720.49 | 1,445,525,014.63 |
| III. Cash flows arising from financing activities: | ||
| Cash received from absorbing investment | ||
| Including: Cash received from absorbing minority shareholders’ investment by subsidiaries | ||
| Cash received from loans | 1,107,957,631.62 | 245,289,418.04 |
| Other cash received concerning financing activities | 5,470,000.00 | |
| Subtotal of cash inflow from financing activities | 1,107,957,631.62 | 250,759,418.04 |
| Cash paid for settling debts | 212,778,637.77 | 203,192,671.61 |
| Cash paid for dividend and profit distributing or interest paying | 1,385,111,066.13 | 747,748,424.37 |
| Including: Dividend and profit of minority shareholder paid by subsidiaries | 13,970,282.31 | |
| Other cash paid concerning financing activities | 6,919,876.01 | 300,007,852.84 |
| Subtotal of cash outflow from financing activities | 1,604,809,579.91 | 1,250,948,948.82 |
| Net cash flows arising from financing activities | -496,851,948.29 | -1,000,189,530.78 |
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | -3,408,171.79 | 4,663,278.76 |
| V. Net increase of cash and cash equivalents | 531,062,209.58 | 887,655,835.02 |
| Add: Balance of cash and cash equivalents at the period -begin | 944,946,018.70 | 820,498,653.85 |
| VI. Balance of cash and cash equivalents at the period -end | 1,476,008,228.28 | 1,708,154,488.87 |
6. Cash Flow Statement of Parent Company
Unit: yuan
| Item | Semi-annual of 2021 | Semi-annual of 2020 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor services | 3,242,751,680.23 | 2,137,522,482.58 |
| Write-back of tax received | ||
| Other cash received concerning operating activities | 12,609,442.48 | 53,647,269.21 |
| Subtotal of cash inflow arising from operating activities | 3,255,361,122.71 | 2,191,169,751.79 |
| Cash paid for purchasing commodities and receiving labor service | 1,994,221,184.67 | 1,258,667,867.50 |
| Cash paid to/for staff and workers | 437,457,769.95 | 356,095,444.60 |
| Taxes paid | 113,149,540.45 | 199,611,845.20 |
| Other cash paid concerning operating activities | 73,953,894.64 | 107,303,419.41 |
| Subtotal of cash outflow arising from operating activities | 2,618,782,389.71 | 1,921,678,576.71 |
| Net cash flows arising from operating activities | 636,578,733.00 | 269,491,175.08 |
| II. Cash flows arising from investing activities: | ||
| Cash received from recovering investment | 7,526,445,210.22 | 3,605,396,703.43 |
| Cash received from investment income | 467,905,359.02 | 1,141,100,004.91 |
| Net cash received from disposal of fixed, intangible and other long-term assets | 4,642,596.78 | 3,870,511.23 |
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | 126,059,237.40 | 139,134,277.49 |
| Subtotal of cash inflow from investing activities | 8,125,052,403.42 | 4,889,501,497.06 |
| Cash paid for purchasing fixed, intangible and other long-term assets | 168,425,236.10 | 113,826,331.79 |
| Cash paid for investment | 6,901,181,670.00 | 3,070,448,157.81 |
| Net cash received from subsidiaries and other units obtained | ||
| Other cash paid concerning investing activities | 135,221,125.00 | 150,000,000.00 |
| Subtotal of cash outflow from investing activities | 7,204,828,031.10 | 3,334,274,489.60 |
| Net cash flows arising from investing activities | 920,224,372.32 | 1,555,227,007.46 |
| III. Cash flows arising from financing activities: | ||
| Cash received from absorbing investment | ||
| Cash received from loans | 276,862,000.00 | 100,000,000.00 |
| Other cash received concerning financing activities | 30,000,000.00 | 21,620,000.00 |
| Subtotal of cash inflow from financing activities | 306,862,000.00 | 121,620,000.00 |
| Cash paid for settling debts | 102,000,000.00 | 60,000,000.00 |
| Cash paid for dividend and profit distributing or interest paying | 1,361,089,903.10 | 744,490,470.75 |
| Other cash paid concerning financing activities | 48,290.60 | 316,627,852.84 |
| Subtotal of cash outflow from financing activities | 1,463,138,193.70 | 1,121,118,323.59 |
| Net cash flows arising from financing activities | -1,156,276,193.70 | -999,498,323.59 |
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | -1,128,178.25 | 4,152,072.50 |
| V. Net increase of cash and cash equivalents | 399,398,733.37 | 829,371,931.45 |
| Add: Balance of cash and cash equivalents at the period -begin | 651,188,544.53 | 532,115,862.26 |
| VI. Balance of cash and cash equivalents at the period -end | 1,050,587,277.90 | 1,361,487,793.71 |
7. Statement of Changes in Owners’ Equity (Consolidated)
Current Amount
Unit: yuan
| Item | Semi-annual of 2021 | ||||||||||||||
| Owners’ equity attributable to the parent Company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||||
| I. The ending balance of the previous year | 1,008,950,570.00 | 3,294,242,368.28 | 303,627,977.74 | 13,916,619.47 | 2,333,490.03 | 510,100,496.00 | 13,756,102,424.62 | 18,282,017,990.66 | 512,447,908.36 | 18,794,465,899.02 | |||||
| Add: Changes of accounting policy | |||||||||||||||
| Error correction of the last period | |||||||||||||||
| Enterprise combine under the same control | |||||||||||||||
| Other | |||||||||||||||
| II. The beginning balance of the current year | 1,008,950,570.00 | 3,294,242,368.28 | 303,627,977.74 | 13,916,619.47 | 2,333,490.03 | 510,100,496.00 | 13,756,102,424.62 | 18,282,017,990.66 | 512,447,908.36 | 18,794,465,899.02 | |||||
| III. Increase/ Decrease in the period (Decrease is listed with “-”) | 37,351,066.35 | -18,712,800.55 | 194,126.99 | 134,284,380.68 | 153,116,773.47 | 30,900,981.21 | 184,017,754.68 | ||||||||
| (i) Total comprehensive income | -18,712,800.55 | 1,645,389,487.32 | 1,626,676,686.77 | 43,653,697.80 | 1,670,330,384.57 | ||||||||||
| (ii) Owners’ devoted and decreased capital | 37,351,066.35 | 37,351,066.35 | 1,174,655.42 | 38,525,721.77 | |||||||||||
| 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 | 37,351,066.35 | 37,351,066.35 | 1,174,655.42 | 38,525,721.77 | |||||||||||
| 4. Other | |||||||||||||||
| (iii) Profit distribution | -1,513,341,439.50 | -1,513,341,439.50 | -13,970,282.31 | -1,527,311,721.81 | |||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or shareholders) | -1,513,341,439.50 | -1,513,341,439.50 | -13,970,282.31 | -1,527,311,721.81 | |||||||||||
| 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 | 194,126.99 | 194,126.99 | 42,910.30 | 237,037.29 | |||||||||||
| 1. Withdrawal in the report period | 12,481,928.66 | 12,481,928.66 | 1,203,727.42 | 13,685,656.08 | |||||||||||
| 2. Usage in the report period | 12,287,801.67 | 12,287,801.67 | 1,160,817.12 | 13,448,618.79 | |||||||||||
| (vi) Others | 2,236,332.86 | 2,236,332.86 | 2,236,332.86 | ||||||||||||
| VI. Balance at the end of the period | 1,008,950,570.00 | 3,331,593,434.63 | 303,627,977.74 | -4,796,181.08 | 2,527,617.02 | 510,100,496.00 | 13,890,386,805.30 | 18,435,134,764.13 | 543,348,889.57 | 18,978,483,653.70 |
Amount of the previous period
Unit: yuan
| Item | Semi-annual of 2020 | ||||||||||||||
| 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. The ending balance of the previous year | 1,008,950,570.00 | 3,391,527,806.33 | 134,871.67 | 3,247,757.06 | 510,100,496.00 | 12,076,443,635.56 | 16,990,405,136.62 | 494,248,174.05 | 17,484,653,310.67 | ||||||
| Add: Changes of accounting policy | |||||||||||||||
| Error correction of the last period | |||||||||||||||
| Enterprise combine under the same control | |||||||||||||||
| Other | |||||||||||||||
| II. The beginning balance of the current year | 1,008,950,570.00 | 3,391,527,806.33 | 134,871.67 | 3,247,757.06 | 510,100,496.00 | 12,076,443,635.56 | 16,990,405,136.62 | 494,248,174.05 | 17,484,653,310.67 | ||||||
| III. Increase/ Decrease in the period (Decrease is listed with “-”) | 300,007,852.84 | 3,048.10 | -611,271.08 | 233,103,154.98 | -67,512,920.84 | 19,845,510.57 | -47,667,410.27 | ||||||||
| (i) Total comprehensive income | 3,048.10 | 1,326,344,424.98 | 1,326,347,473.08 | 19,927,408.92 | 1,346,274,882.00 | ||||||||||
| (ii) Owners’ devoted and decreased capital | 300,007,852.84 | -300,007,852.84 | 15,598,792.00 | -284,409,060.84 |
| 1.Common shares invested by shareholders | 15,598,792.00 | 15,598,792.00 | |||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | |||||||||||||||
| 4. Other | 300,007,852.84 | -300,007,852.84 | -300,007,852.84 | ||||||||||||
| (iii) Profit distribution | -1,093,241,270.00 | -1,093,241,270.00 | -15,748,768.80 | -1,108,990,038.80 | |||||||||||
| 1.Withdrawal of surplus reserves | |||||||||||||||
| 2. ithdrawal of general risk provisions |
| 3. istribution for owners (or shareholders) | -1,093,241,270.00 | -1,093,241,270.00 | -15,748,768.80 | -1,108,990,038.80 | |||||||||||
| 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. emedying loss with surplus reserve |
| 4. arry-over retained earnings from the defined benefit plans | |||||||||||||||
| 5. arry-over retained earnings from other comprehensive income | |||||||||||||||
| 6. Other | |||||||||||||||
| (v) Reasonable reserve | -611,271.08 | -611,271.08 | 68,078.45 | -543,192.63 | |||||||||||
| 1. ithdrawal in the report period | 11,612,779.18 | 11,612,779.18 | 1,079,264.69 | 12,692,043.87 | |||||||||||
| 2. Usage in the report period | 12,224,050.26 | 12,224,050.26 | 1,011,186.24 | 13,235,236.50 | |||||||||||
| (vi) Others | |||||||||||||||
| VI. Balance at the end of the period | 1,008,950,570.00 | 3,391,527,806.33 | 300,007,852.84 | 137,919.77 | 2,636,485.98 | 510,100,496.00 | 12,309,546,790.54 | 16,922,892,215.78 | 514,093,684.62 | 17,436,985,900.40 |
8. Statement of Changes in Owners’ Equity (Parent Company)
Current Amount
Unit: yuan
| Item | Semi-annual of 2021 | |||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. The ending balance of the previous year | 1,008,950,570.00 | 3,407,732,016.61 | 303,627,977.74 | 510,100,496.00 | 11,698,982,965.62 | 16,322,138,070.49 | ||||||
| Add: Changes of accounting policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. The beginning balance of the current year | 1,008,950,570.00 | 3,407,732,016.61 | 303,627,977.74 | 510,100,496.00 | 11,698,982,965.62 | 16,322,138,070.49 | ||||||
| III. Increase/ Decrease in the period (Decrease is listed with “-”) | 38,525,721.77 | -77,510,140.83 | -38,984,419.06 | |||||||||
| (i) Total comprehensive income | 1,433,594,965.81 | 1,433,594,965.81 | ||||||||||
| (ii) Owners’ devoted and decreased capital | 38,525,721.77 | 38,525,721.77 | ||||||||||
| 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 | 38,525,721.77 | 38,525,721.77 | ||||||||||
| 4. Other | ||||||||||||
| (iii) Profit distribution | -1,513,341,439.50 | -1,513,341,439.50 | ||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution for owners (or shareholders) | -1,513,341,439.50 | -1,513,341,439.50 | ||||||||||
| 3. Other | ||||||||||||
| (iv) Carrying forward internal owners’ equity | ||||||||||||
| 1. Capital reserves conversed to capital (share capital) |
| 2. Surplus reserves conversed to capital (share capital) | ||||||||||||
| 3. Remedying loss with surplus reserve | ||||||||||||
| 4. Carry-over retained earnings from the defined benefit plans | ||||||||||||
| 5. Carry-over retained earnings from other comprehensive income | ||||||||||||
| 6. Other | ||||||||||||
| (v) Reasonable reserve | ||||||||||||
| 1. Withdrawal in the report period | 3,218,208.90 | 3,218,208.90 | ||||||||||
| 2. Usage in the report period | 3,218,208.90 | 3,218,208.90 | ||||||||||
| (vi) Others | 2,236,332.86 | 2,236,332.86 | ||||||||||
| IV. Balance at the end of the period | 1,008,950,570.00 | 3,446,257,738.38 | 303,627,977.74 | 510,100,496.00 | 11,621,472,824.79 | 16,283,153,651.43 |
Amount of the previous period
Unit: yuan
| Item | Semi-annual of 2020 | |||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. The ending balance of the previous year | 1,008,950,570.00 | 3,488,221,286.39 | 510,100,496.00 | 10,381,863,816.29 | 15,389,136,168.68 | |||||||
| Add: Changes of accounting policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. The beginning balance of the current year | 1,008,950,570.00 | 3,488,221,286.39 | 510,100,496.00 | 10,381,863,816.29 | 15,389,136,168.68 | |||||||
| III. Increase/ Decrease in the period (Decrease is listed with “-”) | -7,000,000.00 | 300,007,852.84 | 75,460,598.06 | -231,547,254.78 | ||||||||
| (i) Total comprehensive income | 1,218,622,388.02 | 1,218,622,388.02 | ||||||||||
| (ii) Owners’ devoted and decreased capital | 300,007,852.84 | -49,920,519.96 | -349,928,372.80 | |||||||||
| 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 | 300,007,852.84 | -49,920,519.96 | -349,928,372.80 | |||||||||
| (iii) Profit distribution | -1,093,241,270.00 | -1,093,241,270.00 | ||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution for owners (or shareholders) | -1,093,241,270.00 | -1,093,241,270.00 | ||||||||||
| 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 | -1,177,442.02 | -1,177,442.02 | ||||||||||
| 1. Withdrawal in the report period | 2,924,878.27 | 2,924,878.27 | ||||||||||
| 2. Usage in the report period | 4,102,320.29 | 4,102,320.29 | ||||||||||
| (vi) Others | -7,000,000.00 | 1,177,442.02 | -5,822,557.98 | |||||||||
| IV. Balance at the end of the period | 1,008,950,570.00 | 3,481,221,286.39 | 300,007,852.84 | 510,100,496.00 | 10,457,324,414.35 | 15,157,588,913.90 |
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 115.4355 million Yuan,including state-owned share capital amounting to 92.4355 million Yuan, public corporate share capital amountingto 8 million Yuan and inner employee share capital amounting to 15 million Yuan.Between year of 1994 and 1995, the Company was restructured and became a holding subsidiary of Wuxi WeifuGroup Co., Ltd (hereinafter referred to as “Weifu Group”).By the approval of Jiangsu ERC and Shenzhen Securities Administration Office in August 1995, the Companyissued 68 million special ordinary shares (B-share) with value of 1.00 Yuan for each, and the total value of thoseshares amounted to 68 million Yuan. After the issuance, the Company’s total share capital increased to 183.4355million Yuan.By the approval of CSRC in June 1998, the Company issued 120 million RMB ordinary shares (A-share) atShenzhen Stock Exchange through on-line pricing and issuing. After the issuance, the total share capital of theCompany amounted to 303.4355 million Yuan.In the middle of 1999, deliberated and approved by the Board and Shareholders’ General Meeting, the Companyimplemented the plan of granting 3 bonus shares for each 10 shares. After that, the total share capital of theCompany amounted to 394.46615 million Yuan, of which state-owned shares amounted to 120.16615 millionYuan, public corporate shares 10.4 million Yuan, foreign-funded shares (B-share) 88.40 million Yuan, RMBordinary shares (A-share) 156 million Yuan and inner employee shares 19.5 million Yuan.In the year 2000, by the approval of the CSRC and based upon the total share capital of 303.4355 million sharesafter the issuance of A-share in June 1998, the Company allotted 3 shares for each 10 shares, with a price of 10Yuan for each allotted share. Actually 41.9 million shares was allotted, and the total share capital after theallotment increased to 436.36615 million Yuan, of which state-owned corporate shares amounted to 121.56615million Yuan, public corporate shares 10.4 million Yuan, foreign-funded shares (B-share) 88.4 million Yuan andRMB ordinary shares (A-share) 216 million Yuan.In April 2005, Board of Directors of the Company has examined and approved 2004 Profit Pre-distribution Plan,and examined and approved by 2004 Shareholders’ General Meeting , the Company distributed 3 shares for each10 shares to the whole shareholders totaling to 130,909,845 shares in 2005.According to the Share Merger Reform Scheme of the Company that passed by related shareholders’ meeting ofShare Merger Reform and SGZF [2006] No.61 Reply on Questions about State-owned Equity Management inShare Merger Reform of Weifu High-Technology Co., Ltd. issued by State-owned Assets Supervision &Administration Commission of Jiangsu Province, the Weifu Group etc. 8 non-circulating shareholders arrangedpricing with granting 1.7 shares for each 10 shares to circulating A-share shareholders (totally granted 47,736,000shares), so as to realize the originally non-circulating shares can be traded on market when satisfied certain
conditions, 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 February 2012, the Company issuedRMB ordinary shares (A-share) of 112,858,000 shares to Wuxi Industry Groups and overseas strategic investorprivately, Robert Bosch Co., Ltd. (ROBERT BOSCHGMBH) (hereinafter referred to as Robert Bosch Company),face value was ONE Yuan per share, added registered capital of 112,858,000Yuan, and the registered capital afterchange was 680,133,995Yuan. Wuxi Industry Group is the first majority shareholder of the Company, and RobertBosch Company is the second majority shareholder of the Company.In March 2013, the profit distribution pre-plan for year of 2012 was deliberated and approved by the Board, andalso passed in Annual General Meeting 2012 of the Company in May 2013. On basis of total share capital680,133,995 shares, distribute 5-share for every 10 shares held by whole shareholders, 340,066,997 shares in totalare distributed. Total share capital of the Company amounting 1,020,200,992Yuan 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 CorporationLimited Shenzhen Branch on September 16, 2015; after the cancellation of repurchase shares, the company’spaid-up capital (share capital) becomes 1,008,950,570 Yuan after the change.
2. Registered place, organization structure and head office of the Company
Registered place and head office of the Company: No.5 Huashan Road, Xinwu District, WuxiUnified social credit code: 91320200250456967NThe Company sets up Shareholders’ General Meeting, the Board of Directors (BOD) and the Board of Supervisors(BOS)The Company sets up Administration Department, Technology Centre, organization & personnel department,Office of the Board, compliance department, IT department, Strategy & new business Department, marketdevelopment department, Party-masses Department, Finance Department, Purchase Department,ManufacturingQuality Department, MS (Mechanical System) division, AC(Automobile Components) division and DS (Diesel
System ) division etc. and subsidiaries such as Wuxi Weifu Lida Catalytic Converter Co., Ltd., Nanjing WeifuJinning Co., Ltd., IRD Fuel Cells A/S and Borit NV etc.
3. Business nature and major operation activities of the Company
Operation scope of parent company: Technology development and consulting service in 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. Research and testdevelopment of engineering and technical; R&D of the energy recovery system; manufacture of auto componentsand accessories; general equipment manufacturing (excluding special equipment manufacturing), (any projectsthat needs to be approved by laws can only be carried out after getting approval by relevant authorities) Generalitems: engage in investment activities with self-owned funds (except for items subject to approval according to thelaw, independently carry out business activities according to laws with business licenses )Major subsidiaries respectively activate in production and sales of engine accessories, automobile components,mufflers, purifiers and fuel cell components etc.
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 August 20,2021.
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. | WFJN | 80.00 | -- | 80.00 | 34,628.70 | Internal-combustion engine accessories | Y |
| Wuxi Weifu Lida Catalytic Converter Co., Ltd. | WFLD | 94.81 | -- | 94.81 | 50,259.63 | Purifier and muffler | Y |
| Wuxi Weifu Mashan Fuel Injection Equipment Co., Ltd. | WFMA | 100.00 | -- | 100.00 | 16,500 | Internal-combustion engine accessories | Y |
| Wuxi Weifu Chang’an Co., Ltd. | WFCA | 100.00 | -- | 100.00 | 21,000 | Internal-combustion engine accessories | Y |
| Wuxi Weifu International Trade Co., Ltd. | WFTR | 100.00 | -- | 100.00 | 3,000 | Trade | Y |
| Wuxi Weifu Schmitter Powertrain Components Co., Ltd. | WFSC | 66.00 | -- | 66.00 | 7,600 | Internal-combustion engine accessories | Y |
| Ningbo Weifu Tianli Turbocharging Technology Co., Ltd. | WFTT | 98.83 | 1.17 | 100.00 | 11,136 | Internal-combustion engine accessories | Y |
| Wuxi Weifu Autocam Precision Machinery Co., Ltd. | WFAM | 51.00 | -- | 51.00 | USD2,110 | Automobile components | Y |
| Wuxi Weifu Lida Catalytic Purifier (Wuhan) Co., Ltd. | WFLD (Wuhan) | -- | 60.00 | 60.00 | 1,000 | Purifier and muffler | Y |
| Weifu Lida (Chongqing) Automobile Components Co., Ltd. | WFLD (Chongqing) | -- | 100.00 | 100.00 | 5,000 | Purifier and muffler | Y |
| Nanchang Weifu Lida Automobile Components Co., Ltd. | WFLD (Nanchang) | -- | 100.00 | 100.00 | 5,000 | Purifier and muffler | Y |
| Wuxi Weifu Autosmart Seating System Co., Ltd. | WFAS | -- | 66.00 | 66.00 | 10,000 | Smart car device | Y |
| Wuxi Weifu E-drive Technologies Co., Ltd. | WFDT | 80.00 | -- | 80.00 | USD2,000 | Wheel motor | Y |
| Weifu Holding ApS | SPV | 100.00 | -- | 100.00 | DKK238 | Investment | Y |
| IRD Fuel Cells A/S | IRD | -- | 100.00 | 100.00 | DKK8,660 | Fuel cell components | Y |
| IRD FUEL CELLS LLC | IRD America | -- | 100.00 | 100.00 | USD300 | Fuel cell components | Y |
| Borit NV | Borit | -- | 100.00 | 100.00 | EURO316.09 | Fuel cell components | Y |
| Borit Inc. | Borit Inc. | -- | 100.00 | 100.00 | USD0.1 | 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 Estimation
Specific 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, purifiers and fuel cell components etc., in line with the realoperational characteristics and relevant accounting standards, many specific accounting policies and estimationhave been formulated for the transactions and events with revenue recognized concerned. As for the explanationon major accounting judgment and estimation, found more in Note V- 36. Other major accounting policies andestimation .
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 the
combining entities are not ultimately controlled by the same party or parties both before and after thecombination.As a purchaser, fair value of the assets (equity of purchaser held before the date of purchasingincluded) for purchasing controlling right from the purchaser, the liability occurred or undertake on purchasingdate less the fair value of identifiable net assets of the purchaser obtained in combination, recognized as goodwillif the results is positive; if the number is negative, the acquirer shall firstly review the measurement of the fairvalue of the identifiable assets obtained, liabilities incurred and contingent liabilities incurred, as well as thecombination costs.After that, if the combination costs are still lower than the fair value of the identifiable netassets obtained, the acquirer shall recognize the difference as the profit or loss in the current period.Other directlyexpenses cost for combination shall be reckoned into current gains/losses. Difference of the fair value of assetspaid and its book values, reckoned into current gains/losses. On purchasing date, the identifiable assets, liability orcontingency of the purchaser obtained by the Company recognized by fair value, that required identificationconditions; 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 investedparty.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 beingdisposed, 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 are
inconsistent 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 equityinterest, 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 disposal
transactions 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; ②The 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; ④The 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. Recognition standards for cash and cash equivalent
Cash refers to stock cash, savings available for paid at any time; cash and cash equivalent refers to the cash 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. There into,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 converted
according to exchange rate at the balance sheet date and the original recording currency amount is disposed as theexchange gains or losses. There into, 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 areconverted in accordance with the middle rate of the market exchange rate published by the People's Bank of Chinaon the transaction date without changing its original recording currency amount; the foreign currency non-monetaryitems measured 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) Recognition and termination of financial instrument
A financial asset or liability is recognized when the group becomes a party to a financial instrument contract.The recognition of a financial assets shall be terminated if it meets one of the following conditions:
① the contractual right to receive the cash flow of the financial assets terminates; and
② the financial assets is transferred and the company transfers substantially all the risks and rewards of ownershipof the financial asset to the transferring party;
③the financial asset was transferred and control, although the company has neither transferred nor retained almostall the risks and rewards of the ownership of a financial asset, it relinquishes control over the financial asset.If all or part of the current obligations of a financial liability has been discharged, the financial liability or part of itis terminated for recognition. When the Company (debtor) and the creditor sign an agreement to replace the existingfinancial liabilities with new financial liabilities, and the new financial liabilities and the existing financial liabilitiesare substantially different from the contract terms, terminated the recognition of the existing financial liabilities and
recognize the new financial liabilities at the same time.Financial assets are traded in the normal way and their accounting recognition and terminated the recognition ofproceed on a trade date basis.
(2) Classification and measurement of financial assets
At the initial recognition, according to the business model of managing financial assets and 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. Financial assets are measured at fair value at initial recognition, but if the receivables or receivablesfinancing arising from the sale of goods or the provision of services do not include a significant financingcomponent or do not consider a financing component that does not exceed one year, it shall be initially measuredin accordance with the transaction value. For financial assets measured at fair value and whose changes areincluded in the current profit or loss, related transaction costs are directly included in the current profit and loss;for other types of financial assets, related transaction costs are included in the initially recognized amount.The business model for managing financial assets refers to how the Company manages financial assets to 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.
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;B. the contractual terms of the financial assets stipulate that cash flow generated on a specific date is only paid forthe 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 terminated for recognition, amortized byeffective interest method, or impaired.
② Financial assets measured at fair value and whose changes are included in other comprehensive incomeThe Company classifies the financial assets that meet the following conditions and haven’t been designated 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 of contractualcash flows and the sale of financial assets;B. the contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only thepayment 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 terminate forrecognition, the accumulated gains or losses previously included in other comprehensive income are transferredfrom other comprehensive income and included in current profit or loss.
③Financial assets measured at fair value and whose changes are included in current profit or lossExcept for the above financial assets measured at amortized cost and measured at fair value 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 aresubsequently measured at fair value. Dividend income that meets the conditions is included in profit or loss, andother gains or losses and changes in fair value are included in other comprehensive income. When it is terminatedfor recognition, the accumulated gains or losses previously included in other comprehensive income are transferredfrom other comprehensive income and included in retained earnings.
(3) Classification and measurement of financial liabilities
The financial liabilities of the Company are classified as financial liabilities measured at fair value and 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 recognition termination 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 under potentiallyadverse conditions.C. Non-derivative contracts that must be settled or that can be settled by the company's own equity instruments inthe future, and the enterprise will deliver a variable amount of its own equity instruments according to the contract.D. Derivative contracts that must be settled or that can be settled by the company's own equity instruments in thefuture, 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 uses
them in sequence:
① The first-level input value is the unadjusted quotation of the same assets or liabilities that can be obtained on 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 etc. 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.When measuring expected credit losses, the Company individually evaluates credit risk for financial assets withsignificantly different credit risks, such as receivables involving litigation and arbitration with the other party, orreceivables having obvious indications that the debtor is likely to be unable to fulfill its repayment obligations,and so on.Except for the financial assets that separately assess the credit risks, the Company classified the accountreceivable according to their characteristic of risks, calculated the expected credit losses on basis of portfolio.Basis for determining the portfolio as follow:
A - Note receivableNote receivable 1: bank acceptanceNote receivable 2: trade acceptanceB - Account receivableAccount receivable 1: receivable from clientsAccount receivable 2: receivable from internal related party
C- Receivable financingReceivable financing 1: bank acceptanceReceivable financing 2: trade acceptanceD - Other account receivablesOther account receivables 1: receivable from internal related partyOther account receivables 2: receivable from othersAs for the note receivable, account receivable, receivable financing and other account receivable classified inportfolio, by referring to the experience of historical credit loss, the expected credit loss is calculated bycombining the current situation and the forecast of future economic conditions.Except for the financial assets adopting simplified metering method, the Company assesses at each balance sheetdate whether its credit risk has increased significantly since initial recognition. If credit risk has not increasedsignificantly since initial recognition, it is in the first stage, the Company measures the loss provisions based onthe amount equivalent to the expected credit loss in the next 12 months; if the credit risk has increasedsignificantly since initial recognition but no credit impairment has occurred, it is in the second stage, the Companymeasures the loss provisions based on the amount equivalent to the expected credit loss for the entire duration; ifcredit impairment occurs after initial recognition, it is in the third stage, the Company measures the lossprovisions based on the amount equivalent to the expected credit loss for the entire duration.For financialinstruments with low credit risks at the balance sheet date, the Company assumes that their credit risks have notincreased significantly since initial recognition.The Company evaluates the expected credit losses of financial instruments based on individual items andportfolios. When assessing expected credit losses, the Company considers reasonable and evidence-basedinformation about past events, current conditions, and forecasts of future economic conditions.When the Company no longer reasonably expects to be able to fully or partially recover the contractual cash flowof a financial asset, the Company directly writes down the book balance of the financial asset.
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 occurred orare expected;C. Serious deterioration of the debtor’s operating results that have occurred or are expected;D. Changes in existing or anticipated technical, market, economic or legal circumstances that will have a material
adverse effect 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 anassessment 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 economic orcontractual 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.
④Presentation 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 the terminationof recognition for 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 or
loss of the period being recovered as the reversal of the impairment loss
(6) Transfer of financial assets
The transfer of financial assets refers to the transfer or delivery of financial assets to the other party (the transferee)other than the issuer of the financial assets.For financial assets that the Company has transferred almost all risks and rewards of ownership of financial assets tothe transferee, terminate the recognition of the financial assets; if almost all the risks and rewards of ownership offinancial assets have been retained, do not terminate the recognition of the financial assets.If the Company has neither transferred nor retained almost all the risks and rewards of ownership of financial assets,dispose as following situations: If the control of the financial assets is abandoned, terminate the recognition of thefinancial assets and determine the resulting assets and liabilities. If the control of the financial assets is notabandoned, determine the relevant financial assets according to the extent to which they continue to be involved inthe transferred financial assets, 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
Note receivable 1: bank acceptanceNote receivable 2: trade acceptanceThe Company calculates expected credit losses by referring to historical credit loss experience, taking intoaccount current conditions and forecasts of the future economic situation.
12.Account receivable
Account receivable 1: receivable from clientsAccount receivable 2: receivable from internal related partyThe Company calculates expected credit losses by referring to historical credit loss experience, taking intoaccount current conditions and forecasts of the future economic situation.
13.Receivables financing
The note receivable and account receivable which are measured at fair value and whose changes are included inother comprehensive income are classified as receivables financing within one year(including one year) from thedate of acquisition. Relevant accounting policy found more in 10. Financial Instrument in Note V.
14.Other account receivables
Determination method of expected credit loss and accounting treatmentOther account receivables 1: receivable from internal related partyOther account receivables 2: receivable from othersThe Company calculates expected credit losses by referring to historical credit loss experience, taking intoaccount current conditions and forecasts of the future economic situation.
15.Inventory
(1) Classification of inventories
The Company’s inventories are categorized into stock materials, product in process and stock goods etc.
(2) Pricing for delivered inventories
The cost of inventory at the time of acquisition and delivery is calculated according to the standard cost method,and the difference in cost that it should bear is carried forward at the end of the period, and the standard cost isadjusted to the actual cost.
(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 sellingprices 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.
16.Contractual assets
The Company presents the contractual assets or contract liabilities in the balance sheet based on the relationshipbetween the performance obligation and the customer’s payment.Recognition method and standard of contractual assets: contractual assets refer to the right of a company toreceive consideration after transferring goods or providing services to customers, and this right depends on other
factors besides the passage of time. The company's unconditional (that is, only depending on the passage of time)right to collect consideration from customers are separately listed as receivables.Method for determining expected credit losses of contractual assets: the method for determining expected creditlosses of contractual assets is consistent with the method for determining expected credit losses of accountsreceivable.Accounting treatment method of expected credit losses of contractual assets: if the contractual assets are impaired,the company shall debit the "asset impairment loss" subject and credit the "contract asset impairment provision"subject according to the amount that should be written down. When reversing the provision for asset impairmentthat has already been withdrawn, make opposite accounting entries.
17.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 inthe 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 held
for 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.
18.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 by fair value and with variation reckoned into current gains/losses. As for other accountingpolicies found more in “10. Financial instrument” in Note V.
(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 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. 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 under
common 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.
② For the long-term equity investment obtained by business combination not under the same control, the fairvalue of the assets involved, the equity instruments issued and the liabilities incurred or assumed on thetransaction date, plus the combined cost directly related to the acquisition is used as the initial investment cost ofthe long-term equity investment. The identifiable assets of the combined party and the liabilities (includingcontingent liabilities) assumed by the combined party on the combining date are all measured at fair value,regardless of the amount of minority shareholders’ equity. The amount of the combined cost exceeding the fairvalue of the identifiable net assets of the combined party obtained by the Company is recorded as goodwill, andthe amount below the fair value of the identifiable net assets of the combining party is directly recognized in theconsolidated income statement.(For business combination resulted in an enterprise not under common control byacquiring equity of the acquire under common control through a stage-up approach with several transactions,these transactions will be judged whether they shall be treat as “transactions in a basket”. If they belong to“transactions in a basket”, these transactions will be accounted for a transaction in obtaining control. If they arenot belong to “transactions in a basket”, the initial investment cost of the long-term equity investment accountedfor using cost method shall be the aggregate of the carrying amount of equity investment previously held by theacquire and the additional investment cost. For previously held equity accounted for using equity method, relevantother comprehensive income will not be accounted for. For previously held equity investment classified asavailable-for-sale financial asset, the difference between its fair value and carrying amount, as well as theaccumulated movement in fair value previously included in the other comprehensive income shall be transferredto profit or loss for the current period.)
③Long-term investments obtained through other ways:
A. Initial investment cost of long-term equity investment obtained through cash payment 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 in-conformity 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 theportion 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 interestafter 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, in
preparing 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 equitymethod, 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-25.”impairment of long-term assets”
(4) Criteria of Joint control and significant influence
Joint control is the Company’s contractually agreed sharing of control over an arrangement, which relevant
activities of 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 otherparties.While recognizing whether have significant influence by invested party, the potential factors of votingpower as current convertible bonds and current executable warrant of the invested party held by investors andother parties shall be thank over.
19.Investment real estate
Measurement model of investment real estateCost measurementDepreciation or amortizationInvestment 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. Propertiesheld 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- “25.Impairment oflong-term assets”
20. Fixed assets
(1) Recognition conditions
Fixed assets refer to the tangible assets for production of products, provision of labor, lease or operation, with aservice life excess one year and has more unit value.
(2) Depreciation methods
| Category | Depreciation method | Years of depreciation | Scrap value rate | Yearly depreciation rate |
| House and Building | Straight-line depreciation | 20~35 | 5 | 2.71~4.75 |
| Machinery equipment | Straight-line depreciation | 10 | 5 | 9.50 |
| Transportation equipment | Straight-line depreciation | 4~5 | 5 | 19.00~23.75 |
| Electronic and other equipment | Straight-line depreciation | 3～10 | 5 | 9.50～31.67 |
For the fixed assets with impairment provision, the depreciation amount shall be calculated after deducting theaccumulated amount of impairment provision for fixed assets
(3) Recognition basis, valuation and depreciation method for financial lease assetsThe Company affirms those that conform to below one or several criteria as the finance lease fixed assets:
① Agreed in the lease contract (or made a reasonable judgment according to the correlated conditions on thelease commencement date), the ownership of lease fixed assets can be transferred to the Company after the expiryof the 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;
③Even 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 isequivalent to 90% or more of the fair value of the lease fixed assets on the lease commencement date; the presentvalue of the leaser’s of minimum lease payment on the lease commencement date is equivalent to 90% or more ofthe fair value of the lease fixed assets on the lease commencement date;
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 impairmentsee Note V-25“Impairment of long-term assets”.
21.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 Note V-“25.Impairment of long-term assets”
22. Borrowing costs
(1) Recognition of capitalization of borrowing costs
Borrowing costs comprise interest occurred, amortization of discounts or premiums, ancillary costs and 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:
①Capital expenditure has been occurred;
②Borrowing 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 theacquisition, 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.
23.Right-of-use assets
Applicable from January 1, 2021:
(1) Recognition conditions of the right-of-use asset
The Company's right-of-use asset refers to the right of the Company as the lessee to use leased assets during thelease term. On the commencement date of the lease term, the right-of-use asset is initially measured at the cost.This cost includes the initial measured amount of lease liabilities. If there are lease incentives in the leasepayments paid on or before the lease term, deduct the amount relevant to the lease incentives; the Company’sinitial direct cost as the lessee; the Company’s cost predicted to incur as a lessee for disassembling or removingthe leasing assets, or restoring the leasing assets or renewing the leasing assets to the condition as agreed in theleasing clauses. As the lessee, the Company recognizes and measures the cost of dismantling or restoring inaccordance with the "Accounting Standards for Business Enterprises No. 13 - Contingency", and makessubsequent adjustments to any re-measurement of lease liabilities.
(2) Depreciation method for right-of-use asset
The Company uses the straight-line method for depreciation. As the lessee, if the Company can reasonablydetermine to obtain the ownership of leased assets when the lease expires, the accrual of depreciation shall be
conducted within the remaining service life of the leased assets. If it cannot be determined that the ownership ofleased assets can be obtained when the lease expires, the accrual of depreciation shall be conducted during theperiod of which the lease term is shorter than the remaining service life of the leased asset.
(3) Impairment text methods and impairment provision method for the right-to-use assets is referred to Note V-“25.Impairment of long-term assets”
24. 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 by straight-line method with the shortest terms among expected useful life, benefit yearsregulated in the contract and effective age regulated by the laws. The amortization amount shall count in relevantassets costs and current 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-“25.Impairment of long-term assets”.
(2)Internal accounting policies relating to research and development expendituresExpenses incurred during the research phase are recognized as profit or loss in the current period; expensesincurred during the development phase that satisfy the following conditions are recognized as intangible assets(patented technology and non-patents technology):
①It is technically feasible that the intangible asset can be used or sold upon completion;
②there 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;
④there is sufficient support in terms of technology, financial resources and other resources in order to complete
the 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.
25. Impairment of long-term assets
The Company will judge if there is any indication of impairment as at the balance sheet date in respect 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 overthe 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.
26. 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.
27.Contractual liability
The Company lists the obligation to transfer goods or provide labor services to customers for the considerationreceived or receivable from customers as contractual liabilities, such as the amount that the company has receivedbefore the transfer of the promissory goods.
28. Employee compensation
(1) Accounting treatment for short-term compensation
During the accounting period when the staff providing service to the Company, the short-term remuneration 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 costsin 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 treatment 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 is
earlier.The early retirement plan shall be accounted for in accordance with the accounting principles forcompensation for termination of employment. The salaries or wages and the social contributions to be paid for 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 treatment 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 benefitliability 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.
29.Lease liability
Applicable from January 1, 2021:
On the commencement date of the lease term, the Company recognizes the lease liabilities for leases other thanshort-term leases and low-value asset leasing. Lease liabilities are initially measured at the present value ofoutstanding lease payments. The lease payments include:
For fixed payments (including substantive fixed payment), if there is a lease incentive, the amount related to thelease incentive shall be deducted;Variable lease payments depending on the index or ratio;Payments estimated to be paid according to the guaranteed residual value provided by the company;The exercise price of the call option provided that the company reasonably determines that the option will beexercised;Payments need to be paid to exercise the termination of lease option provided that the lease term reflects thecompany shall exercise the termination of lease option.The Company uses the interest rate implicit in lease as the discount rate, but if the interest rate implicit in leasecannot be reasonably determined, the Company's incremental borrowing rate shall be used as the discount rate.The Company calculates the interest expenses of the lease liabilities in each period of the lease term at fixedperiodic interest rates and includes them in the current profit and loss or the related asset cost.Variable lease payments not included in the measurement of lease liabilities are included in the current profit andloss or the related asset cost when they actually incur.After the commencement of the lease term, if any of the following circumstances occurs, the Company shallre-measure the lease liabilities and adjust the corresponding right-of-use assets, if the book value of the
right-of-use assets has been reduced to zero, but the lease liabilities still need to be further reduced, the differenceshall be included in the current profit and loss.If the evaluation result of the call option, the lease renewal option or the termination option changes, or the actualexercise of the aforementioned option is inconsistent with the original evaluation result, the Company shallremeasure the lease liability at the present value calculated by the changed lease payments and the reviseddiscount rate.In the event of a change in the substantial fixed payment, a change in the amount payable estimated by theguaranteed residual value, or a change in the index or ratio used to determine the lease payments, the Companyshall remeasure the lease liability in accordance with the changed lease payments and the present value calculatedat the original discount rate. However, where changes in lease payments result from changes in floating interestrates, the present value is calculated by using the revised discount rate.
30. Accrual liability
(1) Recognition principle
An obligation related to a contingency, such as guarantees provided to outsiders, pending litigation or arbitration,product warranties, redundancy plans, onerous contracts, reconstructing, expected disposal of fixed assets, etc.shall be recognized as an 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
31. Share-based payment
The Company’s share-based payment is a transaction that grants equity instruments or assumes liabilitiesdetermined on the basis of equity instruments in order to obtain services provided by employees or other parties.The Company’s share-based payment is classified as equity-settled share-based payment and cash-settledshare-based payment.
(1) Equity-settled share-based payment and equity instruments
Equity-settled share-based payment in exchange for services provided by employees shall be measured at the fairvalue of the equity instruments granted to employees. If the Company uses restricted stocks for share-basedpayment, employees contribute capital to subscribe for stocks, and the stocks shall not be listed for circulation ortransfer until the unlocking conditions are met and unlocked; if the unlocking conditions specified in the finalequity incentive plan are not met, the Company shall repurchase the stocks at the pre-agreed price. When theCompany obtains the payment for the employees to subscribe for restricted stocks, it shall confirm the sharecapital and capital reserve (share capital premium) according to the obtained subscription money, and at the sametime recognize a liability in full for the repurchase obligation and recognize treasury shares. On each balance sheetdate during the waiting period, the Company makes the best estimate of the number of vesting equity instrumentsbased on the changes in the latest obtained number of vested employees, whether they meet the specified
performance conditions, and other follow-up information. On this basis, the services obtained in the current periodare included in related costs or expenses based on the fair value on the grant date, and the capital reserve shall beincreased accordingly.For share-based payments that cannot be vested in the end, costs or expenses shall not be recognized, unless thevesting conditions are market conditions or non-vesting conditions. At this time, regardless of whether the marketconditions or the non-vesting conditions are met, as long as all non-market conditions in the vesting conditions aremet, it is deemed as vesting.If the terms of equity-settled share-based payment are modified, at least the services obtained should be confirmedin accordance with the unmodified terms. In addition, any modification that increases the fair value of the equityinstruments granted, or a change that is beneficial to employees on the modification date, is recognized as anincrease in services received.If the equity-settled share payment is cancelled, it will be treated as an accelerated vesting on the cancellation day,and the unconfirmed amount will be confirmed immediately. If an employee or other party can choose to meet thenon-vesting conditions but fails to meet within the waiting period, it shall be treated as cancellation ofequity-settled share-based payment. However, if a new equity instrument is granted and it is determined on thedate of grant of the new equity instrument that the new equity instrument granted is used to replace the cancelledequity instrument, the granted substitute equity instruments shall be treated in the same way as the modification ofthe original equity instrument terms and conditions.
(2) Cash-settled share-based payment and equity instruments
Cash-settled share-based payments are measured at the fair value of the liabilities calculated and determined onthe basis of shares or other equity instruments undertaken by the Company. If it’s vested immediately after thegrant, the fair value of the liabilities assumed on the date of the grant is included in the cost or expense, and theliability is increased accordingly. If the service within the waiting period is completed or the specifiedperformance conditions are met, the service obtained in the current period shall be included in the relevant costsor expenses based on the best estimate of the vesting situation within the waiting periodand the fair value of theliabilities assumed to increase the corresponding liabilities. On each balance sheet date and settlement date beforethe settlement of the relevant liabilities, the fair value of the liabilities is remeasured, and the changes are includedin the current profit and loss.
32. Revenue
Accounting policies used in revenue recognition and measurement
(1)Accounting policies used in revenue recognition and measurement
1)Revenue recognition principle
On the starting date of the contract, the company evaluates the contract, identifies each individual performanceobligation contained in the contract, and determines whether each individual performance obligation is performedwithin a certain period of time or at a certain point in time.When one of the following conditions is met, it belongs to the performance obligation within a certain period oftime, otherwise, it belongs to the performance obligation at a certain point in time: ① The customer obtains and
consumes the economic benefits brought by the company's performance while the company performs the contract;
②The customer can control the goods or services under construction during the company’s performance; ③Thegoods or services produced during the company’s performance have irreplaceable uses, and the company has theright to collect payment for the performance part that has been completed so far during the entire contract period.For performance obligations performed within a certain period of time, the company recognizes revenue inaccordance with the performance progress during that period. When the performance progress cannot bereasonably determined, if the cost incurred is expected to be compensated, the revenue shall be recognizedaccording to the amount of the cost incurred until the performance progress can be reasonably determined.Forperformance obligations performed at a certain point in time, revenue is recognized at the point when thecustomer obtains control of the relevant goods or services. When judging whether the customer has obtainedcontrol of the goods, the company considers the following signs:① The company has the current right to receivepayment for the goods, that is, the customer has the current payment obligation for the goods; ②The company hastransferred the legal ownership of the goods to the customer, that is, the customer has the legal ownership of thegoods; ③The company has transferred the goods to the customer in kind, that is, the customer has physicallytaken possession of the goods; ④ The company has transferred the main risks and rewards of the ownership of thegoods to the customer, that is, the customer has obtained the main risks and rewards of the ownership of the goods;
⑤ The customer has accepted the goods; ⑥Other signs that the customer has obtained control of the goods.
2)Revenue measurement principle
①The company measures revenue based on the transaction price allocated to each individual performanceobligation. The transaction price is the amount of consideration that the company expects to be entitled to receivedue to the transfer of goods or services to customers, and does not include payments collected on behalf of thirdparties and payments expected to be returned to customers.
②If there is variable consideration in the contract, the company shall determine the best estimate of the variableconsideration according to the expected value or the most likely amount, but the transaction price including thevariable consideration shall not exceed the amount of cumulatively recognized revenue that is unlikely to besignificantly turned back when the relevant uncertainty is eliminated.
③ If there is a significant financing component in the contract, the company shall determine the transaction pricebased on the amount payable that the customer is assumed to pay in cash when obtaining the control of the goodsor services. The difference between the transaction price and the contract consideration shall be amortized by theeffective interest method during the contract period. On the starting date of the contract, if the company expectsthat the customer pays the price within one year after obtaining control of the goods or services, the significantfinancing components in the contract shall not be considered.
④If the contract contains two or more performance obligations, the company will allocate the transaction price toeach individual performance obligation based on the relative proportion of the stand-alone selling price of thegoods promised by each individual performance obligation on the starting date of the contract.
(2) The Company's standard for the revenue recognition of the sales of goods and the specific judgment standardfor the confirmation time:
The time when the Company’s domestic sales revenue is confirmed: The company delivers the goods according to
the order. On the reconciliation date agreed with the buyer, check the goods received and inspected by the buyerduring the period from the last reconciliation date to this reconciliation date with the buyer, and the risks andrewards are transferred to the buyer after checking, the Company issues an invoice to the buyer according to thetype, quantity and amount confirmed in the reconciliation, and confirms the realization of sales revenue on thereconciliation day.The time when the Company’s foreign sales revenue is confirmed: After the customs review is completed, theCompany will confirm the realization of the sales revenue according to the export date specified on the customsdeclaration.
33. 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 isactually 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.
34.Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets or deferred income tax liabilities are realized based on the difference between 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
35. Lease
(1)Accounting for operating lease
1) Identification of lease
On the commencement date of the contract, as a lessee or a lessor, the Company evaluates whether the customerunder the contract is entitled to receive virtually all the economic benefits arising from the use of the identifiedassets during the use period and is entitled to dominate the use of the identified assets during the use period. TheCompany considers a contract to be a lease or a lease inclusive if a party to the contract assigns the right to controlthe use of one or more identified assets for a certain period of time in exchange for consideration.
2) The Company as a lessee
At the commencement date of the lease term, the Company recognizes the right-of-use asset and lease liabilities forall leases, except for short-term leases and low-value asset lease treated in a simplified manner. For the accountingpolicies of right-of-use asset, see Note V, 23 "Right-of-Use Assets". See Note V, 29, "Lease Liability" for theaccounting policies on lease liabilities.A short term lease means a lease with the lease term not exceeding 12 months at the commencement date of thelease term, except for the lease including call option.The Company includes the lease payments of short-term leases in the relevant asset cost or current profit and lossin each period of the lease term according to the straight line method.Low-value asset lease refers to the lease of a single leased asset whose value is less than 100,000 yuan when it is abrand new asset.The Company includes the lease payments of the low-value asset leases in the relevant asset cost or current profitand loss in each period of the lease term according to the straight line method.
3) The Company as a lessor
When the Company acts as a lessee, the lease which substantially transfers all the risks and rewards related to theownership of the asset shall be recognized as a financial lease, and the lease other than the financial lease shall be
recognized as an operating lease.Operating leaseThe Company recognizes the current profit or loss in various periods during the lease term for the rent in anoperating lease.The initial direct costs related to operating leases should be capitalized, and apportioned on thesame basis as the rental income recognition in the lease period, and included in the current profit and loss byinstallment. The obtained variable lease payments related to the operating lease and not included in the leasereceipts are included in the current profit and loss when they actually incur.
(2) Accounting treatment of finance lease
In a finance lease, on the commencement date of the lease term, the Company takes the net lease investment as theentry value of the finance lease receivable, and the net lease investment is the sum of the unguaranteed residualvalue and the present value of lease receipts not received on the commencement date of the lease term discountingat the interest rate implicit in lease. The Company, as the lessor, calculates and recognizes the interest income foreach period of the lease term according to the fixed periodic interest rate. The variable lease payments obtained bythe Company as the lessor, which are not included in the measurement of the net lease investment, are included inthe profit and loss of the current period when they actually occur.The derecognition and impairment of finance lease receivable shall be treated in accordance with the provisions ofthe Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of FinancialInstruments and the Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets.
36.Other major accounting policy and estimation
In the process of applying the Company's accounting policies, due to the inherent uncertainty of business activities,the 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
The Company has used the expected credit loss model to assess the impairment of financial instruments. Theapplication of the expected credit loss model requires significant judgement and estimates, and must consider allreasonable and evidence-based information, including forward-looking information.In making such judgments
and estimates, the Company infers the expected changes in debtors’ credit risks based on historical repayment datacombined with economic policies, macroeconomic indicators, industry risks and other factors.
(2) Inventory falling price reserves
According to the inventory accounting policies, the Company measures by the comparison 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) 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 tothe 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.
(4) 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 Companyregularly 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 expected
technological updating. If the previous estimates have significant changes, the depreciation and amortizationexpense shall be adjusted in future periods.
(5) Fair value of financial instrument
Financial instruments that do not have active markets to provide quotes need to use valuation techniques todetermine fair value.Valuation techniques include the latest transaction information, discounted cash flow methods,and option pricing models.The Company has established a set of work processes to ensure that qualified personnelare responsible for the calculation, verification and review of fair value.The valuation model used by theCompany uses the market information as much as possible and uses the Company-specific information as little aspossible.It should be noted that part of the information used in the valuation model requires management’sestimation (such as discount rate, target exchange rate volatility, etc.).The Company regularly reviews the aboveestimates and assumptions and makes adjustments if necessary.
(6) Income tax
In the Company’s normal business activities, the final tax treatment and calculation of some transactions havesome uncertainties. Whether some projects can be disbursed from the cost and expenses before taxes requiresneeds to get approval from the tax authorities. If the final affirmation of these tax matters differs from the initiallyestimated amount, the difference shall have an impact on its current and deferred income taxes during the finalidentification period.
37.Changes of important accounting policy and estimation
(1)Changes of important accounting policies
□ Applicable √ Not applicable
(2)Changes of important accounting estimation
□ Applicable √ Not applicable
(3) Adjustment the financial statements at the beginning of the first year of implementation of new leasingstandards since 2021ApplicableWhether need to adjust the items in balance sheet at the beginning of the year
√Yes □No
Consolidate balance sheet
Unit: yuan
| Item | 2020-12-31 | 2021-01-01 | Adjustments |
| Current assets: | |||
| Monetary funds | 1,963,289,832.33 | 1,963,289,832.33 | |
| Settlement provisions | |||
| Capital lent | |||
| Trading financial asset | 3,518,432,939.10 | 3,518,432,939.10 |
| Derivative financial assets | |||
| Note receivable | 1,657,315,723.56 | 1,657,315,723.56 | |
| Account receivable | 2,824,780,352.41 | 2,824,780,352.41 | |
| Receivables financing | 1,005,524,477.88 | 1,005,524,477.88 | |
| Account paid in advance | 151,873,357.76 | 151,873,357.76 | |
| Insurance receivable | |||
| Reinsurance receivables | |||
| Contract reserve of reinsurance receivable | |||
| Other account receivables | 54,209,580.88 | 54,209,580.88 | |
| Including: Interest receivable | |||
| Dividend receivable | 49,000,000.00 | 49,000,000.00 | |
| Buying back the sale of financial assets | |||
| Inventory | 2,877,182,174.64 | 2,877,182,174.64 | |
| Contractual assets | |||
| Assets held for sale | |||
| Non-current asset due within one year | |||
| Other current assets | 2,137,921,113.61 | 2,137,921,113.61 | |
| Total current assets | 16,190,529,552.17 | 16,190,529,552.17 | |
| Non-current assets: | |||
| Loans and payments on behalf | |||
| Debt investment | |||
| Other debt investment | |||
| Long-term account receivables | |||
| Long-term equity investment | 4,801,488,290.97 | 4,801,488,290.97 | |
| Other equity instrument investment | 285,048,000.00 | 285,048,000.00 | |
| Other non-current financial assets | 1,805,788,421.00 | 1,805,788,421.00 | |
| Investment real estate | 20,886,681.62 | 20,886,681.62 | |
| Fixed assets | 2,882,230,191.08 | 2,870,351,470.37 | -11,878,720.71 |
| Construction in progress | 243,795,493.04 | 243,795,493.04 |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use asset | 23,828,070.70 | 23,828,070.70 | |
| Intangible assets | 454,412,947.69 | 454,412,947.69 | |
| Development expenses | |||
| Goodwill | 257,800,696.32 | 257,800,696.32 | |
| Long-term deferred expenses | 15,062,171.09 | 15,062,171.09 | |
| Deferred income tax assets | 198,393,501.50 | 198,393,501.50 | |
| Other non-current assets | 195,259,441.73 | 195,259,441.73 | |
| Total non-current assets | 11,160,165,836.04 | 11,172,115,186.03 | 11,949,349.99 |
| Total assets | 27,350,695,388.21 | 27,362,644,738.20 | 11,949,349.99 |
| Current liabilities: | |||
| Short-term borrowings | 302,238,600.05 | 302,238,600.05 | |
| Loan from central bank | |||
| Capital borrowed | |||
| Trading financial liability | |||
| Derivative financial liability | |||
| Note payable | 2,462,592,372.82 | 2,462,592,372.82 | |
| Account payable | 4,100,984,240.39 | 4,100,984,240.39 | |
| Account received in advance | 4,071,236.87 | 4,071,236.87 | |
| Contractual liability | 81,717,387.25 | 81,717,387.25 | |
| Selling financial asset of repurchase | |||
| Absorbing deposit and interbank deposit | |||
| Security trading of agency | |||
| Security sales of agency | |||
| Wage payable | 332,421,811.82 | 332,421,811.82 | |
| Taxes payable | 67,493,690.29 | 67,493,690.29 | |
| Other account payable | 361,556,257.42 | 361,556,257.42 | |
| Including: Interest payable | 4,862.22 | 4,862.22 | |
| Dividend payable | |||
| Commission charge and commission payable |
| Reinsurance payable | |||
| Liability held for sale | |||
| Non-current liabilities due within one year | 36,914,242.02 | 36,914,242.02 | |
| Other current liabilities | 222,871,087.33 | 222,871,087.33 | |
| Total current liabilities | 7,972,860,926.26 | 7,972,860,926.26 | |
| Non-current liabilities: | |||
| Insurance contract reserve | |||
| Long-term loans | 3,050,640.97 | 3,050,640.97 | |
| Bonds payable | |||
| Including: Preferred stock | |||
| Perpetual capital securities | |||
| Lease liability | 17,811,603.05 | 17,811,603.05 | |
| Long-term account payable | 39,479,218.17 | 33,616,965.11 | -5,862,253.06 |
| Long-term wages payable | 181,980,293.94 | 181,980,293.94 | |
| Accrual liability | |||
| Deferred income | 328,204,476.73 | 328,204,476.73 | |
| Deferred income tax liabilities | 30,653,933.12 | 30,653,933.12 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 583,368,562.93 | 595,317,912.92 | 11,949,349.99 |
| Total liabilities | 8,556,229,489.19 | 8,568,178,839.18 | 11,949,349.99 |
| 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 | 3,294,242,368.28 | 3,294,242,368.28 | |
| Less: Inventory shares | 303,627,977.74 | 303,627,977.74 | |
| Other comprehensive income | 13,916,619.47 | 13,916,619.47 | |
| Reasonable reserve | 2,333,490.03 | 2,333,490.03 | |
| Surplus public reserve | 510,100,496.00 | 510,100,496.00 | |
| Provision of general risk |
| Retained profit | 13,756,102,424.62 | 13,756,102,424.62 | |
| Total owner’ s equity attributable to parent company | 18,282,017,990.66 | 18,282,017,990.66 | |
| Minority interests | 512,447,908.36 | 512,447,908.36 | |
| Total owner’ s equity | 18,794,465,899.02 | 18,794,465,899.02 | |
| Total liabilities and owner’ s equity | 27,350,695,388.21 | 27,362,644,738.20 | 11,949,349.99 |
Balance sheet of parent company
Unit: yuan
| Item | 2020-12-31 | 2021-01-01 | Adjustments |
| Current assets: | |||
| Monetary funds | 1,157,684,053.05 | 1,157,684,053.05 | |
| Trading financial asset | 3,452,348,980.19 | 3,452,348,980.19 | |
| Derivative financial assets | |||
| Note receivable | 422,246,979.39 | 422,246,979.39 | |
| Account receivable | 982,782,279.22 | 982,782,279.22 | |
| Receivable financing | |||
| Accounts paid in advance | 75,650,090.49 | 75,650,090.49 | |
| Other account receivable | 197,335,714.63 | 197,335,714.63 | |
| Including: Interest receivable | 897,777.78 | 897,777.78 | |
| Dividend receivable | |||
| Inventories | 725,276,241.43 | 725,276,241.43 | |
| Contractual assets | |||
| Assets held for sale | |||
| Non-current assets maturing within one year | |||
| Other current assets | 2,057,772,839.50 | 2,057,772,839.50 | |
| Total current assets | 9,071,097,177.90 | 9,071,097,177.90 | |
| Non-current assets: | |||
| Debt investment | |||
| Other debt investment | |||
| Long-term receivables | |||
| Long-term equity investments | 5,978,128,303.88 | 5,978,128,303.88 |
| Investment in other equity instrument | 209,108,000.00 | 209,108,000.00 | |
| Other non-current financial assets | 1,805,788,421.00 | 1,805,788,421.00 | |
| Investment real estate | |||
| Fixed assets | 1,758,198,856.53 | 1,758,198,856.53 | |
| Construction in progress | 154,741,266.85 | 154,741,266.85 | |
| Productive biological assets | |||
| Oil and natural gas assets | |||
| Right-of-use assets | 1,699,807.76 | 1,699,807.76 | |
| Intangible assets | 208,112,706.57 | 208,112,706.57 | |
| Research and development costs | |||
| Goodwill | |||
| Long-term deferred expenses | |||
| Deferred income tax assets | 76,508,392.85 | 76,508,392.85 | |
| Other non-current assets | 117,013,906.01 | 117,013,906.01 | |
| Total non-current assets | 10,307,599,853.69 | 10,309,299,661.45 | 1,699,807.76 |
| Total assets | 19,378,697,031.59 | 19,380,396,839.35 | 1,699,807.76 |
| Current liabilities: | |||
| Short-term borrowings | 102,088,888.89 | 102,088,888.89 | |
| Trading financial liability | |||
| Derivative financial liability | |||
| Notes payable | 448,901,718.36 | 448,901,718.36 | |
| Account payable | 1,265,845,068.26 | 1,265,845,068.26 | |
| Accounts received in advance | |||
| Contractual liability | 6,209,575.73 | 6,209,575.73 | |
| Wage payable | 216,870,819.60 | 216,870,819.60 | |
| Taxes payable | 32,974,322.59 | 32,974,322.59 | |
| Other accounts payable | 339,096,991.12 | 339,096,991.12 | |
| Including: Interest payable | |||
| Dividend payable | |||
| Liability held for sale | |||
| Non-current liabilities due |
| within one year | |||
| Other current liabilities | 182,611,991.54 | 182,611,991.54 | |
| Total current liabilities | 2,594,599,376.09 | 2,594,599,376.09 | |
| Non-current liabilities: | |||
| Long-term loans | |||
| Bonds payable | |||
| Including: Preferred stock | |||
| Perpetual capital securities | |||
| Lease liability | 1,699,807.76 | 1,699,807.76 | |
| Long-term account payable | |||
| Long term employee compensation payable | 176,245,345.03 | 176,245,345.03 | |
| Accrued liabilities | |||
| Deferred income | 285,714,239.98 | 285,714,239.98 | |
| Deferred income tax liabilities | |||
| Other non-current liabilities | |||
| Total non-current liabilities | 461,959,585.01 | 463,659,392.77 | 1,699,807.76 |
| Total liabilities | 3,056,558,961.10 | 3,058,258,768.86 | 1,699,807.76 |
| 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 | 3,407,732,016.61 | 3,407,732,016.61 | |
| Less: Inventory shares | 303,627,977.74 | 303,627,977.74 | |
| Other comprehensive income | |||
| Special reserve | |||
| Surplus reserve | 510,100,496.00 | 510,100,496.00 | |
| Retained profit | 11,698,982,965.62 | 11,698,982,965.62 | |
| Total owner’s equity | 16,322,138,070.49 | 16,322,138,070.49 | |
| Total liabilities and owner’s equity | 19,378,697,031.59 | 19,380,396,839.35 | 1,699,807.76 |
(4) Retrospective adjustment of early comparison data description when initially implemented the newleasing standards since 2021
□ Applicable √ Not applicable
VI. Taxation
1. Major taxes and tax rates
| Tax | Basis | Tax rate |
| VAT | General taxpayers of the company and domestic subsidiaries calculate output tax at the tax rates of 13%, 9%, 6%, and 5% of taxable income, and calculate and pay value-added tax based on the difference after deducting the input VAT that is allowed to be deducted in the current period. | 13%, 9%, 6%, Collection rate 5% |
| City maintaining & construction tax | Turnover tax payable | 7% |
| Corporation income tax | Taxable income | Except for overseas subsidiaries which calculate and pay the taxes according to the statutory tax rate of the country or region where they are located, the corporate income tax of domestic companies is calculated and paid at 15%, 20%, or 25% of the taxable income. |
| Educational surtax | Turnover tax payable | 5% |
Disclose reasons for different taxpaying body
| Taxpaying body | Income tax rate |
| WFMA, WFCA, WFTR, WFAM, WFAS, WFLD(Nanchang), WFDT, Borit | 25% |
| WFLD(Wuhan) | 20% |
| The Company, WFJN, WFLD, WFTT, WFLD(Chongqing), WFSC | 15% |
| SPV、IRD | 22% |
2. Tax incentives
The Company, WFJN, WFLD, WFTT and WFSC are accredited as a high-tech enterprise in 2020, and enjoy a preferential incometax rate of 15% from 1 January 2020 to 31 December 2022.The State Administration of Taxation announced the first item of Announcement of the State Administration of Taxation on theEnterprise Income Tax Issues Concerning the Implementation of the Western Development Strategy No. 12 of 2012 that from January1, 2011 to December 31, 2020, the enterprises located in the west region and mainly engaged in the industrial projects stipulated inthe Catalogue of Encouragement Industries in the Western Region, and whose main business income accounting for more than 70%of the total income of the enterprise in the current year can pay the corporate income tax at the tax rate of 15%. According to the firstarticle of the Announcement on Continuation of the Enterprise Income Tax Policy for the Western Development issued by theMinistry of Finance, the State Administration of Taxation and the National Development and Reform Commission, from January 1,2021 to December 31, 2030, the enterprise income tax of enterprises in the encouraged industries located in the western regions willbe levied at a reduced rate of 15%. The encouraged industrial enterprises mentioned in this article refer to the enterprises whose main
business is the industrial projects specified in the Catalogue of Encouraged Industries in the Western Region and whose mainbusiness income accounts for more than 60% of the total enterprise income. In 2021, WFLD (Chongqing) paid its corporate incometax at the tax rate of 15%.In 2021, WFLD (Wuhan) met the standards of small and low-profit enterprises, and the part of taxable income that did not exceed 1million Yuan was included in the taxable income at a reduced rate of 12.5%, and the corporate income tax was paid at the tax rate of20%; while the part of the taxable income exceeding 1 million Yuan but not exceeding 3 million Yuan was included in the taxableincome at a reduced rate of 50%, and the corporate income tax was paid at the tax rate of 20%.VII. Notes to major items in consolidated financial statements
1. Monetary funds
Unit: yuan
| Item | Ending balance | Opening balance |
| Cash on hand | 118,837.77 | 507.66 |
| Cash in bank | 2,446,888,098.49 | 1,905,945,511.04 |
| Other Monetary funds | 12,220,041.75 | 57,343,813.63 |
| Total | 2,459,226,978.01 | 1,963,289,832.33 |
| Including: Total amount saving aboard | 100,814,171.17 | 33,723,245.25 |
| Total amount with restriction on use for mortgage, pledge or freeze | 12,220,041.75 | 57,343,813.63 |
Other explanationThe ending balance of other monetary funds includes bank acceptance bill deposit 5,956,935.70 Yuan, Mastercard deposit206,740.00 Yuan, in-transit foreign exchange funds 2,630,244.12 Yuan, letter of credit guarantee deposit 587,241.00 Yuan, andfrozen dividends 2,838,880.93 Yuan. The in-transit foreign exchange fund of 2,630,244.12 Yuan is the final payment of theinvestment in Protean Holding Corp; as of June 30, 2021, the amount is still in the foreign exchange supervision account.The frozendividend of 2,838,880.93 Yuan represents the part of dividends distributed by SDEC(stock code:600841) and Miracle Automation(stock code:002009) from 2017 to 2020 held by the Company as financial assets available for sale. According to the noticesnumbered Yue 03MC [2016]2490 and Yue 03MC [2016]2492 served by Guangdong Shenzhen Intermediate People’s Court, thesedividends were frozen.
2. Trading financial asset
Unit: yuan
| Item | Ending balance | Opening balance |
| Financial assets measured at fair value and whose changes are included in current profit or loss | 5,056,585,067.83 | 3,518,432,939.10 |
| Including: | ||
| SDEC | 118,317,036.00 | 140,395,956.00 |
| Miracle Automation | 56,991,000.00 | 47,712,300.00 |
| Lifan Technology | 65,861.56 | |
| Financial products | 4,881,211,170.27 | 3,330,324,683.10 |
| Including: | ||
| Total | 5,056,585,067.83 | 3,518,432,939.10 |
3. Note receivable
(1) Classification of notes receivable
Unit: yuan
| Item | Ending balance | Opening balance |
| Bank acceptance bill | 1,252,354,768.24 | 1,312,571,695.46 |
| Trade acceptance bill | 148,572,554.58 | 344,744,028.10 |
| Total | 1,400,927,322.82 | 1,657,315,723.56 |
Unit: yuan
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Ratio | Amount | Provision ratio | Amount | Ratio | Amount | Provision ratio | |||
| Including: | ||||||||||
| Note receivable with bad debt provision accrual on portfolio | 1,400,927,322.82 | 100.00% | 1,400,927,322.82 | 1,657,315,723.56 | 100.00% | 1,657,315,723.56 | ||||
| Including: | ||||||||||
| Portfolio 1: bank acceptance bill | 1,252,354,768.24 | 89.39% | 1,252,354,768.24 | 1,312,571,695.46 | 79.20% | 1,312,571,695.46 | ||||
| Portfolio 2: trade acceptance bill | 148,572,554.58 | 10.61% | 148,572,554.58 | 344,744,028.10 | 20.80% | 344,744,028.10 | ||||
| Total | 1,400,927,322.82 | 100.00% | 1,400,927,322.82 | 1,657,315,723.56 | 100.00% | 1,657,315,723.56 | ||||
If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses, please refer tothe disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √ Not applicable
(2) Bad debt provision accrual collected or switch back
Provision for bad debts in the current period:
□ Applicable √ Not applicable
(3) Notes receivable already pledged by the Company at the end of the period
Unit: yuan
| Item | Amount pledge at period-end |
| Bank acceptance bill | 657,240,752.54 |
| Trade acceptance bill | 98,580,306.00 |
| Total | 755,821,058.54 |
(4) Notes endorsement or discount and undue on balance sheet date
Unit: yuan
| Item | Amount derecognition at period-end | Amount not derecognition at period-end |
| Bank acceptance bill | 222,217,625.04 | |
| Total | 222,217,625.04 |
(5) Notes transfer to account receivable due for failure implementation by drawer at period-end
Unit: yuan
| Item | Amount transfer to account receivable at period-end |
| Trade acceptance bill | 7,300,000.00 |
| Total | 7,300,000.00 |
(6) Note receivable actually written-off in the period
Nil
4. Account receivable
(1) Classification of account receivable
Unit: yuan
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Ratio | Amount | Provision ratio | Amount | Ratio | Amount | Provision ratio | |||
| Account receivable with bad debt | 78,070,886.32 | 1.81% | 78,070,886.32 | 100.00% | 80,362,095.35 | 2.74% | 80,362,095.35 | 100.00% | ||
| provision accrual on a single basis | ||||||||||
| Including: | ||||||||||
| Account receivable with bad debt provision accrual on portfolio | 4,228,837,350.68 | 98.19% | 15,306,828.34 | 0.36% | 4,213,530,522.34 | 2,847,529,398.11 | 97.26% | 22,749,045.70 | 0.80% | 2,824,780,352.41 |
| Including: | ||||||||||
| Total | 4,306,908,237.00 | 100.00% | 93,377,714.66 | 2.17% | 4,213,530,522.34 | 2,927,891,493.46 | 100.00% | 103,111,141.05 | 3.52% | 2,824,780,352.41 |
Bad debt provision accrual on single basis: 78,070,886.32 yuan
Unit: yuan
| Name | Ending balance | |||
| Book balance | Bad debt provision | Provision ratio | Accrual causes | |
| Hubei Meiyang Auto Industry Co., Ltd. | 20,139,669.45 | 20,139,669.45 | 100.00% | Have difficulty in collection |
| Hunan Leopaard Auto Co., Ltd. | 8,910,778.54 | 8,910,778.54 | 100.00% | Have difficulty in collection |
| Jiangxi Dorcen Automobile Industry Co., Ltd. | 7,287,632.16 | 7,287,632.16 | 100.00% | Have difficulty in collection |
| Jiangxi Dorcen Automobile Co., Ltd. | 2,518,959.01 | 2,518,959.01 | 100.00% | Have difficulty in collection |
| Linyi Zotye Automobile components Manufacturing Co., Ltd. | 6,193,466.77 | 6,193,466.77 | 100.00% | Have difficulty in collection |
| Changchun FAW Sihuan Engine Manufacturing Co., Ltd | 5,852,415.65 | 5,852,415.65 | 100.00% | Have difficulty in collection |
| BD bills | 7,300,000.00 | 7,300,000.00 | 100.00% | Have difficulty in collection |
| Tongling Ruineng Purchasing Co., Ltd. | 4,320,454.34 | 4,320,454.34 | 100.00% | Have difficulty in collection |
| Brilliance Automotive Group Holdings Co., Ltd. | 3,469,091.33 | 3,469,091.33 | 100.00% | Have difficulty in collection |
| Zhejiang Zotye Auto Manufacturing Co., Ltd. | 3,217,763.27 | 3,217,763.27 | 100.00% | Have difficulty in collection |
| Dongfeng Chaoyang Diesel Co., Ltd. | 1,953,054.31 | 1,953,054.31 | 100.00% | Have difficulty in collection |
| Jiangsu Kawei Auto Industrial Group Co., Ltd. | 1,932,476.26 | 1,932,476.26 | 100.00% | Have difficulty in collection |
| Wuxi Kipor Machinery Co., Ltd | 1,820,798.21 | 1,820,798.21 | 100.00% | Have difficulty in collection |
| Jiangsu Jintan Automobile Industry Co., Ltd. | 1,059,798.43 | 1,059,798.43 | 100.00% | Have difficulty in collection |
| Other custom | 2,094,528.59 | 2,094,528.59 | 100.00% | Have difficulty in collection |
| Total | 78,070,886.32 | 78,070,886.32 | -- | -- |
Bad debt provision accrual on portfolio: 15,306,828.34 yuan
Unit: yuan
| Name | Ending balance | ||
| Book balance | Bad debt provision | Provision ratio | |
| Within 6 months | 4,158,297,859.50 | 0.00 | |
| 6 months to 1 year | 48,430,800.92 | 4,843,080.10 | 10.00% |
| 1-2 years | 12,482,507.42 | 2,496,501.48 | 20.00% |
| 2-3 years | 2,764,893.44 | 1,105,957.36 | 40.00% |
| Over 3 years | 6,861,289.40 | 6,861,289.40 | 100.00% |
| Total | 4,228,837,350.68 | 15,306,828.34 | -- |
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
Unit: yuan
| Account age | Ending balance |
| Within 1 year (including 1 year) | 4,209,441,733.57 |
| Including: Within 6 months | 4,158,297,859.50 |
| 6 months to 1 year | 51,143,874.07 |
| 1-2 years | 42,745,575.05 |
| 2-3 years | 37,454,178.06 |
| Over 3 years | 17,266,750.32 |
| 3-4 years | 17,266,750.32 |
| Total | 4,306,908,237.00 |
(2) Bad debt provision accrual collected or switch back
Bad debt provision accrual in the period:
Unit: yuan
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written-off | Other | |||
| Bad debt provision | 103,111,141.05 | 522,080.22 | 7,103,842.30 | 3,133,078.65 | -18,585.66 | 93,377,714.66 |
| Total | 103,111,141.05 | 522,080.22 | 7,103,842.30 | 3,133,078.65 | -18,585.66 | 93,377,714.66 |
Important bad debt provision collected or switch back: nil
(3) Account receivable actual charge off in the Period
Unit: yuan
| Item | Amount charge off |
| Fujian Zhao’an Country Minyue Bianjie Agricultural Machinery Automobile Components Co., Ltd. | 1,111,007.12 |
| Penglai Branch of Beiben Truck Group Co., Ltd. | 677,390.63 |
| Guangxi Nanning Kaiyuan Auto Parts Co., Ltd. | 666,203.00 |
| Engine Branch of Anhui Jianghuai Automobile Group Co., Ltd. | 349,650.00 |
| Laien (China) Power Co., Ltd. | 144,447.46 |
| Chongqing Lifan Passenger Vehicle Co., Ltd. | 137,880.44 |
| Kunming Yunnei Power Co., Ltd. | 46,500.00 |
| Total | 3,133,078.65 |
Major charge-off for the major receivable: Nil
(4) Top 5 receivables at ending balance by arrears party
Unit: yuan
| Name | Ending balance of account receivable | Ratio in total ending balance of account receivables | Ending balance of bad debt reserve |
| RBCD | 932,304,823.41 | 21.65% | 59,766.11 |
| Custom 1 | 292,650,493.73 | 6.79% | 111,680.87 |
| Robert Bosch | 248,253,462.67 | 5.76% | 758,645.71 |
| Custom 3 | 182,795,761.40 | 4.24% | 201,168.71 |
| Custom 4 | 169,559,140.89 | 3.94% | 5,670,427.05 |
| Total | 1,825,563,682.10 | 42.38% |
(5) Account receivable derecognition due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvementNil
5. Receivable financing
Unit: yuan
| Item | Ending balance | Opening balance |
| Bank acceptance bill | 595,411,852.58 | 1,005,524,477.88 |
| Total | 595,411,852.58 | 1,005,524,477.88 |
Increase and decrease in current period and changes in fair value of receivables financing
□ Applicable √ Not applicable
If the bad debt provision for account receivable is calculated and withdrawn according to the general model of expected credit loss,please refer to the disclosure method of other account receivables in aspect of impairment provision:
□ Applicable √ Not applicable
Other explanation:
During the management of enterprise liquidity, the company will discount or endorse transfers before the maturity of some bills, thebusiness model for managing bills receivable is to collect contractual cash flows and sell the financial asset, so it is classified asfinancial assets measured at fair value and whose changes are included in other comprehensive income, which is listed in receivablesfinancing.Notes receivable already pledged by the Company at the end of the period
| Item | Amount pledge at period-end |
| Bank acceptance bill | 155,506,772.41 |
| Total | 155,506,772.41 |
6. Account paid in advance
(1) Account age of account paid in advance
Unit: yuan
| Account age | Ending balance | Opening balance | ||
| Amount | Ratio | Amount | Ratio | |
| Within 1 year | 154,474,608.88 | 91.19% | 146,877,271.37 | 96.71% |
| 1-2 years | 12,497,814.67 | 7.38% | 2,799,827.49 | 1.84% |
| 2-3 years | 1,411,435.14 | 0.83% | 1,254,109.33 | 0.83% |
| Over 3 years | 1,006,272.63 | 0.59% | 942,149.57 | 0.62% |
| Total | 169,390,131.32 | -- | 151,873,357.76 | -- |
Explanation on reasons of failure to settle on important advance payment with age over one year: nil
(2) Top 5 account paid in advance at ending balance by prepayment object
Total year-end balance of top five account paid in advance by prepayment object amounted to 82,660,146.35 Yuan, takes 48.80percent of the total advance payment at year-end.
7. Other account receivables
Unit: yuan
| Item | Ending balance | Opening balance |
| Dividend receivable | 479,171,532.95 | 49,000,000.00 |
| Other account receivables | 10,720,346.58 | 5,209,580.88 |
| Total | 489,891,879.53 | 54,209,580.88 |
(1) Interest receivable
1) Category of interest receivable
Nil
2) Significant overdue interest
Nil
3) Accrual of bad debt provision
□ Applicable √ Not applicable
(2) Dividend receivable
1) Category of dividend receivable
Unit: yuan
| Item (or invested enterprise) | Ending balance | Opening balance |
| Wuxi Weifu Environmental Catalysts. Co., Ltd. | 49,000,000.00 | |
| RBCD | 279,062,772.15 | |
| Zhonglian Automobile Electronics Co., Ltd. | 198,800,000.00 | |
| SDEC | 1,077,970.80 | |
| Miracle Automation | 230,790.00 | |
| Total | 479,171,532.95 | 49,000,000.00 |
2) Important dividend receivable with account age over one year
Nil
3) Accrual of bad debt provision
□ Applicable √ Not applicable
(3) Other account receivables
1) Other account receivables classification by nature
Unit: yuan
| Nature | Ending book balance | Opening book balance |
| Intercourse funds from units | 1,723,254.03 | |
| Cash deposit | 5,809,934.74 | 5,650,143.62 |
| Staff loans and petty cash | 2,849,230.03 | 766,301.05 |
| Other | 3,163,861.46 | 1,651,737.93 |
| Total | 13,546,280.26 | 8,068,182.60 |
2) Accrual of bad debt provision
Unit: yuan
| Bad debt provision | 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, 2021 | 2,826,778.32 | 31,823.40 | 2,858,601.72 | |
| Balance of Jan. 1, 2021 in the period | —— | —— | —— | —— |
| Current accrual | 27,002.96 | 27,002.96 | ||
| Current reversal | 59,671.00 | 59,671.00 | ||
| Balance on Jun. 30, 2021 | 2,794,110.28 | 31,823.40 | 2,825,933.68 |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √ Not applicable
By account age
Unit: yuan
| Account age | Ending balance |
| Within 1 year (including 1 year) | 10,532,866.05 |
| Including: Within 6 months | 10,362,836.45 |
| 6 months to 1 year | 170,029.60 |
| 1-2 years | 251,903.40 |
| 2-3 years | 47,365.81 |
| Over 3 years | 2,714,145.00 |
| 3-4 years | 2,714,145.00 |
| Total | 13,546,280.26 |
3) Bad debt provision accrual, collected or switch back
Bad debt provision accrual in the period:
Unit: yuan
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written-off | Other | |||
| Bad debt provision | 2,858,601.72 | 27,002.96 | 59,671.00 | 2,825,933.68 | ||
| Total | 2,858,601.72 | 27,002.96 | 59,671.00 | 2,825,933.68 | ||
Including the important bad debt provision switch back or collected in the period: nil
4) Other receivables actually written-off during the reporting period
Nil
5) Top 5 other receivables at ending balance by arrears party
Unit: yuan
| Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other receivables | Ending balance of bad debt reserve |
| Ningbo Jiangbei High-Tech Industry Park Development Construction Co., Ltd. | Performance bond | 1,767,000.00 | Over 3 years | 13.04% | 1,767,000.00 |
| Robert Bosch Company | Intercourse funds from units | 1,723,254.03 | Within 6 months | 12.72% | |
| Wuxi China Resources Gas Co., Ltd. | Intercourse funds from units | 1,026,000.00 | Within 6 months | 7.57% | |
| Zhenkunxing Industrial Supermarket (Shanghai) Co., Ltd. | Security deposit | 1,000,000.00 | Within 6 months | 7.38% | |
| Chongqing airport group limited company | Security deposit | 636,710.00 | Within 1 year | 4.70% | 63,671.00 |
| Total | -- | 6,152,964.03 | -- | 45.41% | 1,830,671.00 |
6) Other account receivables related to government grants
Nil
7) Other receivable for termination of confirmation due to the transfer of financial assetsNil
8) The amount of assets and liabilities that are transferred other receivable and continued to be involvedNil
8. Inventory
(1) Category of inventory
Unit: yuan
| Item | Ending balance | Opening balance | ||||
| Book balance | Inventory depreciation reserve or Provision for impairment of contract performance costs | Book value | Book balance | Inventory depreciation reserve or Provision for impairment of contract performance costs | Book value | |
| Raw materials | 659,908,030.27 | 92,429,613.27 | 567,478,417.00 | 584,188,987.86 | 73,833,368.32 | 510,355,619.54 |
| Goods in process | 398,439,321.44 | 16,216,612.81 | 382,222,708.63 | 415,445,852.86 | 14,589,096.65 | 400,856,756.21 |
| Finished goods | 1,443,500,223.57 | 123,480,148.98 | 1,320,020,074.59 | 2,124,817,656.18 | 158,847,857.29 | 1,965,969,798.89 |
| Total | 2,501,847,575.28 | 232,126,375.06 | 2,269,721,200.22 | 3,124,452,496.90 | 247,270,322.26 | 2,877,182,174.64 |
(2) Inventory depreciation reserve or Provision for impairment of contract performance costs
Unit: yuan
| Item | Opening balance | Current increased | Current decreased | Ending balance | ||
| Accrual | Other | Switch back or write-off | Other | |||
| Raw materials | 73,833,368.32 | 28,089,676.40 | -154,809.52 | 9,338,621.93 | 92,429,613.27 | |
| Goods in process | 14,589,096.65 | 9,079,391.73 | 7,451,875.57 | 16,216,612.81 | ||
| Finished goods | 158,847,857.29 | 66,828,319.31 | -2,196.18 | 102,193,831.44 | 123,480,148.98 | |
| Total | 247,270,322.26 | 103,997,387.44 | -157,005.70 | 118,984,328.94 | 232,126,375.06 | |
① Net realizable value of the inventory refers to: during the day-to-day activities, results of the estimated sale price less costs whichare going to happen by estimation till works completed, sales price estimated and relevant taxes.
② Accrual basis for inventory depreciation reserve:
| Item | Accrual basis for inventory impairment provision | Specific basis for recognition |
| Materials in stock | The materials sold due to finished goods manufactured, its net realizable value is lower than the book value | Results from the estimated sale price of such inventory less the cost what will happen, estimated sales expenses and relevant taxes till the goods completed |
| Goods in process | The goods in process sold due to finished goods manufactured, its net realizable value is lower than the book value | Results from the estimated sale price of such inventory less the cost what will happen, estimated sales expenses and relevant taxes till the goods completed |
| Cash on hand | Accrual basis for inventory impairment provision | Specific basis for recognition |
③ Reasons of write-off for inventory falling price reserves:
| Item | Reasons of write-off |
| Materials in stock | Used for production and the finished goods are realized sales |
| Goods in process | Goods in process completed in the Period and corresponding finished goods are realized sales in the Period |
| Finished goods | Sales in the Period |
(3) Explanation on capitalization of borrowing costs at ending balance of inventoryNil
(4) Assets completed without settlement from construction contract at period-endNil
9. Other current assets
Unit: yuan
| Item | Ending balance | Opening balance |
| Structured deposits | 1,925,000,000.00 | |
| Receivable export tax rebates | 10,971,495.97 | 5,286,965.71 |
| VAT refund receivable | 2,116,911.02 | |
| Prepaid taxes and VAT retained | 46,457,458.75 | 200,524,304.70 |
| Input tax to be deducted and certification | 1,367,249.89 | 178,073.42 |
| Other | 3,657,354.86 | 6,931,769.78 |
| Total | 64,570,470.49 | 2,137,921,113.61 |
10. Long-term equity investments
Unit: yuan
| The invested entity | Opening balance (book value) | Current changes (+, -) | Ending balance (book value) | Ending balance of depreciation reserves | |||||||
| Additional investment | Capital reduction | Investment gain/loss recognized under equity | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Impairment accrual | Other | ||||
| I. Joint venture | |||||||||||
| II. Associated enterprise | |||||||||||
| Wuxi Weifu Environmental Catalysts. Co., Ltd. | 677,317,176.28 | 92,780,012.84 | 770,097,189.12 | ||||||||
| RBCD | 2,800,589,709.40 | 670,070,175.48 | 558,125,544.30 | 2,912,534,340.58 | |||||||
| Zhonglian Automobile Electronics Co., Ltd. | 1,237,548,856.31 | 178,295,216.97 | 198,800,000.00 | 1,217,044,073.28 | |||||||
| Weifu Precision Machinery Manufacturing Co., Ltd. | 74,854,070.65 | 19,897,099.40 | 94,751,170.05 | ||||||||
| Shinwell Automobile Technology (Wuxi) Co., Ltd. | 982,750.11 | 9,000,000.00 | 8,017,249.89 | ||||||||
| Changchun Xuyang Weifu Automobile Components Technology Co., Ltd. | 10,195,728.22 | 3,225.46 | 10,198,953.68 | ||||||||
| Precors GmbH | 5,904,909.38 | -7,458.98 | 92.99 | 5,897,543.39 | |||||||
| Subtotal | 4,801,488,290.97 | 5,904,909.38 | 9,000,000.00 | 969,055,521.06 | 756,925,544.30 | 92.99 | 5,010,523,270.10 | ||||
| Total | 4,801,488,290.97 | 5,904,909.38 | 9,000,000.00 | 969,055,521.06 | 756,925,544.30 | 92.99 | 5,010,523,270.10 |
Other explanationWFHT management approved Borit's investment plan for Precors GmbH in March 2021. Borit acquired 8.11% of Precors share equitywith �751,905 in May 2021.( Precors GmbH, founded in 2017, Germany, and active in the R&D and application of carbon-basedcoating on metal bipolar plates used in fuel cell. Its core technology is an efficient and highly scalable vacuum-free depositionnano-carbon application process.)
11. Other equity instrument investment
Unit: yuan
| Item | Ending balance | Opening balance |
| Wuxi Xidong Science & Technology Industrial Park | 5,000,000.00 | 5,000,000.00 |
| Beijing Zhike Industry Investment Holding Group Co., Ltd. | 75,940,000.00 | 75,940,000.00 |
| Rare earth Catalysis Innovation Research Institute (Dongying) Co., Ltd. | 4,108,000.00 | 4,108,000.00 |
| Wuxi Xichang Microchip Semi-Conductor | 200,000,000.00 | 200,000,000.00 |
| Total | 285,048,000.00 | 285,048,000.00 |
Disclosure of the non-trading equity instrument investment item by itemNil
12. Other non-current financial assets
Unit: yuan
| Item | Ending balance | Opening balance |
| Tradable financial assets holding for over one year | 880,000,000.00 | 1,467,000,000.00 |
| Equity instrument investment | 446,356,290.34 | 338,788,421.00 |
| Total | 1,326,356,290.34 | 1,805,788,421.00 |
13. Investment real estate
(1) Investment real estate measured by cost
√ Applicable □ Not applicable
Unit: yuan
| Item | House and Building | Land use right | Construction in progress | Total |
| I. Original book value | ||||
| 1.Opening balance | 65,524,052.61 | 65,524,052.61 | ||
| 2.Current increased | ||||
| (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 | 65,524,052.61 | 65,524,052.61 | ||
| II. Accumulated depreciation and accumulated amortization | ||||
| 1.Opening balance | 44,637,370.99 | 44,637,370.99 | ||
| 2.Current increased | 761,915.13 | 761,915.13 | ||
| (1) Accrual or amortization | 761,915.13 | 761,915.13 |
| 3.Current decreased | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4.Ending balance | 45,399,286.12 | 45,399,286.12 | ||
| 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 | 20,124,766.49 | 20,124,766.49 | ||
| 2.Opening Book value | 20,886,681.62 | 20,886,681.62 |
(2) Investment real estate measured at fair value
□ Applicable √ Not applicable
(3) Investment real estate without property certification held
Nil
14. Fixed assets
Unit: yuan
| Item | Ending balance | Opening balance |
| Fixed assets | 2,903,123,563.06 | 2,870,351,470.37 |
| Total | 2,903,123,563.06 | 2,870,351,470.37 |
(1) Fixed assets
Unit: yuan
| Item | House and Building | Machinery equipment | Transportation equipment | Electronic and other equipment | Total |
| I. Original book value: | |||||
| 1.Opening balance | 1,584,594,589.53 | 3,331,362,060.16 | 30,281,281.50 | 532,011,701.70 | 5,478,249,632.89 |
| 2.Current increased | 18,331,925.13 | 94,418,815.57 | 2,927,656.98 | 120,462,825.85 | 236,141,223.53 |
| (1) Purchase | 772,566.37 | 6,795.35 | 779,361.72 | ||
| (2) Construction in progress | 18,331,925.13 | 86,193,840.99 | 2,927,656.98 | 120,456,030.50 | 227,909,453.60 |
| transfer-in | |||||
| (3) Increased by combination | |||||
| (4)other | 7,452,408.21 | 7,452,408.21 | |||
| 3.Current decreased | 504,633.94 | 5,583,813.90 | 1,119,479.53 | 30,926,714.64 | 38,134,642.01 |
| (1) Disposal or scrapping | 504,633.94 | 5,583,813.90 | 1,119,479.53 | 30,926,714.64 | 38,134,642.01 |
| 4.Conversion of foreign currency financial statement | -2,282,266.27 | -520,100.45 | -2,802,366.72 | ||
| 5.Ending balance | 1,602,421,880.72 | 3,417,914,795.56 | 32,089,458.95 | 621,027,712.46 | 5,673,453,847.69 |
| II. Accumulated depreciation | |||||
| 1.Opening balance | 420,143,043.64 | 1,785,173,380.76 | 22,602,310.15 | 291,068,729.12 | 2,518,987,463.67 |
| 2.Current increased | 23,793,775.24 | 107,400,808.40 | 820,019.14 | 62,732,407.00 | 194,747,009.78 |
| (1) Accrual | 23,793,775.24 | 100,477,297.54 | 820,019.14 | 62,732,407.00 | 187,823,498.92 |
| (2)other | 6,923,510.86 | 6,923,510.86 | |||
| 3.Current decreased | 245,078.59 | 4,165,979.55 | 1,063,359.70 | 23,477,108.96 | 28,951,526.80 |
| (1) Disposal or scrapping | 245,078.59 | 4,165,979.55 | 1,063,359.70 | 23,477,108.96 | 28,951,526.80 |
| 4.Conversion of foreign currency financial statement | -2,054,367.22 | -354,727.30 | -2,409,094.52 | ||
| 5.Ending balance | 443,691,740.29 | 1,886,353,842.39 | 22,358,969.59 | 329,969,299.86 | 2,682,373,852.13 |
| III. Depreciation reserves | |||||
| 1.Opening balance | 81,771,072.40 | 73,319.90 | 7,066,306.55 | 88,910,698.85 | |
| 2.Current increased | |||||
| 3.Current decreased | 15,136.91 | 939,129.44 | 954,266.35 | ||
| (1) Disposal or scrapping | 15,136.91 | 939,129.44 | 954,266.35 | ||
| 4.Conversion of foreign currency financial statement | |||||
| 5.Ending balance | 81,755,935.49 | 73,319.90 | 6,127,177.11 | 87,956,432.50 | |
| IV. Book value | |||||
| 1.Ending Book value | 1,158,730,140.43 | 1,449,805,017.68 | 9,657,169.46 | 284,931,235.49 | 2,903,123,563.06 |
| 2.Opening Book value | 1,164,451,545.89 | 1,464,417,607.00 | 7,605,651.45 | 233,876,666.03 | 2,870,351,470.37 |
(2) Temporarily idle fixed assets
Nil
(3) Fixed assets acquired by operating lease
Unit: yuan
| Item | Ending book value |
| House leasing | 86,345,142.86 |
| Equipment leasing | 121,983.36 |
(4) Fixed assets without property certification held
Unit: yuan
| Item | Book value | Reasons for without the property certification |
| Plant and office building of WFCA | 33,104,524.59 | Still in process of relevant property procedures |
(5) Disposal of fixed assets
Nil
15. Construction in progress
Unit: yuan
| Item | Ending balance | Opening balance |
| Construction in progress | 234,758,990.27 | 243,795,493.04 |
| Total | 234,758,990.27 | 243,795,493.04 |
(1) Construction in progress
Unit: yuan
| Item | Ending balance | Opening balance | ||||
| Book balance | Depreciation reserves | Book value | Book balance | Depreciation reserves | Book value | |
| Technical transformation of parent company | 93,114,671.56 | 93,114,671.56 | 123,249,079.40 | 123,249,079.40 | ||
| Technical transformation of WFAM | 8,992,786.52 | 8,992,786.52 | 20,720,304.97 | 20,720,304.97 | ||
| Technical transformation of WFLD | 18,233,618.60 | 18,233,618.60 | 27,031,547.25 | 27,031,547.25 | ||
| Other item | 114,417,913.59 | 114,417,913.59 | 72,794,561.42 | 72,794,561.42 | ||
| Total | 234,758,990.27 | 234,758,990.27 | 243,795,493.04 | 243,795,493.04 | ||
(2) Changes of major projects under construction
Unit: yuan
| Item | Budget | Opening balance | Current increased | Fixed assets transfer-in in the Period | Other decreased in the Period | Ending balance | Proportion of project investment in budget | Progress | Accumulated amount of interest capitalization | including: interest capitalized amount of the year | Interest capitalization rate of the year | Source of funds |
| Technical transformation of parent company | 123,249,079.40 | 83,147,307.92 | 112,057,786.48 | 1,223,929.28 | 93,114,671.56 | Other | ||||||
| Technical transformation of WFAM | 20,720,304.97 | 6,904,582.30 | 18,621,931.16 | 10,169.59 | 8,992,786.52 | Other | ||||||
| Technical transformation of WFLD | 27,031,547.25 | 29,654,362.21 | 31,964,004.70 | 6,488,286.16 | 18,233,618.60 | Other | ||||||
| Total | 171,000,931.62 | 119,706,252.43 | 162,643,722.34 | 7,722,385.03 | 120,341,076.68 | -- | -- | -- |
(3) The provision for impairment of construction projects
Nil
(4) Engineering materials
Nil
16. Right-of-use assets
Unit: yuan
| Item | Building | Mechanical equipment | Total |
| I. Original book value: | |||
| 1.Opening balance | 8,677,179.35 | 31,600,502.47 | 40,277,681.82 |
| 2.Current increased |
| 3.Current decreased | 7,452,408.21 | 7,452,408.21 | |
| 4.Conversion of foreign currency financial statement | -1,179,252.83 | -1,179,252.83 | |
| 5.Ending balance | 8,677,179.35 | 22,968,841.43 | 31,646,020.78 |
| II. Accumulated depreciation | |||
| 1.Opening balance | 16,449,611.12 | 16,449,611.12 | |
| 2.Current increased | 1,133,657.75 | 2,112,994.32 | 3,246,652.07 |
| 3.Current decreased | 6,923,510.86 | 6,923,510.86 | |
| 4.Conversion of foreign currency financial statement | -684,765.01 | -684,765.01 | |
| 5.Ending balance | 1,133,657.75 | 10,954,329.57 | 12,087,987.32 |
| III. Depreciation reserves | |||
| 1.Opening balance | |||
| 2.Current increased | |||
| 3.Current decreased | |||
| 4.Ending balance | |||
| IV. Book value | |||
| 1.Ending Book value | 7,543,521.60 | 12,014,511.86 | 19,558,033.46 |
| 2.Opening Book value | 8,677,179.35 | 15,150,891.35 | 23,828,070.70 |
17. Intangible assets
(1) Intangible assets
Unit: yuan
| Item | Land use right | Patent | Non-patent technology | Computer software | Trademark and trademark license | Total |
| I. Original book value | ||||||
| 1.Opening balance | 381,012,520.44 | 185,079,328.12 | 97,684,862.76 | 41,597,126.47 | 705,373,837.79 | |
| 2.Current increased | 2,275,463.04 | 18,202.07 | 2,293,665.11 | |||
| (1) Purchase | 2,275,463.04 | 18,202.07 | 2,293,665.11 | |||
| (2) Internal R&D | ||||||
| (3) Increased by combination | ||||||
| 3.Current decreased | 237,179.48 | 237,179.48 | ||||
| (1) Disposal | 237,179.48 | 237,179.48 | ||||
| 4.Conversion of foreign currency financial statement | -7,469,392.37 | -112,873.85 | -7,582,266.22 |
| 5.Ending balance | 381,012,520.44 | 177,609,935.75 | 99,610,272.47 | 41,615,328.54 | 699,848,057.20 | |
| II. Accumulated amortization | ||||||
| 1.Opening balance | 95,252,939.06 | 55,078,092.67 | 74,273,958.37 | 9,709,000.00 | 234,313,990.10 | |
| 2.Current increased | 4,186,726.96 | 7,681,954.47 | 10,184,471.39 | 22,053,152.82 | ||
| (1) Accrual | 4,186,726.96 | 7,681,954.47 | 10,184,471.39 | 22,053,152.82 | ||
| 3.Current decreased | 237,179.48 | 237,179.48 | ||||
| (1) Disposal | 237,179.48 | 237,179.48 | ||||
| 4.Conversion of foreign currency financial statement | -2,359,382.62 | -72,695.77 | -2,432,078.39 | |||
| 5.Ending balance | 99,439,666.02 | 60,400,664.52 | 84,148,554.51 | 9,709,000.00 | 253,697,885.05 | |
| 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 | 281,572,854.42 | 117,209,271.23 | 15,461,717.96 | 15,259,428.54 | 429,503,272.15 | |
| 2.Opening Book value | 285,759,581.38 | 130,001,235.45 | 23,410,904.39 | 15,241,226.47 | 454,412,947.69 |
(2) Land use right without property certification held
Nil
18. Goodwill
(1) Original book value of goodwill
Unit: yuan
| The invested entity or matters forming goodwill | Opening balance | Current increased | Current decreased | Ending balance | |
| Formed by business combination | Translation of foreign currency statements | Disposal | |||
| Merged with WFTT | 1,784,086.79 | 1,784,086.79 | |||
| Merged with Borit | 256,016,609.53 | -11,752,140.17 | 244,264,469.36 | ||
| Total | 257,800,696.32 | -11,752,140.17 | 246,048,556.15 | ||
(2) Goodwill depreciation reserves
NilOther explanation
(1) Goodwill formed by the merger of WFTT:
In 2010, the Company controlling and combine WFTT by increasing the capital, the goodwill is the number that combination costgreater than the fair value of identical net assets of WFTT.
(2) Goodwill formed by the merger of Borit:
In 2020, the company acquired 100.00% equity of Borit in the form of cash purchase, the goodwill was the part that the cost of themerger was greater than the fair value share of the identifiable net assets of Borit.
19. Long-term deferred expenses
Unit: yuan
| Item | Opening balance | Current increased | Amortized in the Period | Other decrease | Ending balance |
| Remodeling costs etc. | 15,062,171.09 | 10,295,243.72 | 10,464,905.27 | 14,892,509.54 | |
| Total | 15,062,171.09 | 10,295,243.72 | 10,464,905.27 | 14,892,509.54 |
20. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets that are not offset
Unit: yuan
| Item | Ending balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Bad debt provision | 95,177,650.74 | 14,452,551.92 | 104,259,030.38 | 15,779,756.63 |
| Inventory depreciation reserve | 207,880,608.17 | 32,123,385.21 | 225,684,043.14 | 35,799,261.60 |
| Depreciation reserves of fixed assets | 54,443,333.50 | 8,261,275.80 | 55,397,599.68 | 8,523,566.97 |
| Depreciation reserves of intangible assets | 16,646,900.00 | 2,497,035.00 | 16,646,900.00 | 2,497,035.00 |
| Other equity instrument investment | 10,000,000.00 | 1,500,000.00 | ||
| Deferred income | 307,737,182.97 | 46,481,102.81 | 323,924,836.18 | 48,935,725.44 |
| Internal un-realized profit | 47,197,359.16 | 7,732,060.38 | 19,551,845.38 | 3,457,610.51 |
| Payable salary, accrued expenses etc. | 945,354,285.34 | 145,632,537.88 | 981,477,549.10 | 151,813,641.23 |
| Depreciation assets, amortization difference | 89,867,140.13 | 14,608,530.39 | 89,867,140.23 | 14,608,530.41 |
| Deductible loss of subsidiary | 2,265,501.37 | 566,375.34 | 9,703,095.17 | 2,425,773.79 |
| Equity incentive | 43,885,502.56 | 6,797,880.46 | 6,330,515.63 | 987,908.92 |
| Investment income | 831,855,487.43 | 124,778,323.13 | ||
| Total | 2,642,310,951.37 | 403,931,058.32 | 1,842,842,554.89 | 286,328,810.50 |
(2) Deferred income tax liabilities that are not offset
Unit: yuan
| Item | Ending balance | Opening balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| The difference between the fair value and taxation basis of WFTT assets in a merger not under the same control | 10,901,079.60 | 1,635,161.92 | 11,271,189.48 | 1,690,678.40 |
| The difference between the fair value and taxation basis of IRD assets in a merger not under the same control | 78,290,603.67 | 17,223,932.80 | 86,905,585.08 | 19,119,228.72 |
| The difference between the fair value and taxation basis of Borit assets in a merger not under the same control | 35,550,816.12 | 8,887,704.01 | 39,376,104.10 | 9,844,026.00 |
| Change of fair value of transaction financial asset | 280,615,151.37 | 42,102,924.76 | 366,808,362.19 | 55,023,506.38 |
| Accelerated depreciation of fixed assets | 189,828,338.16 | 29,327,980.28 | 211,571,729.76 | 32,911,802.62 |
| Total | 595,185,988.92 | 99,177,703.77 | 715,932,970.61 | 118,589,242.12 |
(3) Deferred income tax assets and deferred income tax liabilities listed after off-set
Unit: yuan
| Item | Trade-off between the deferred income tax assets and liabilities | Ending balance of deferred income tax assets or liabilities after off-set | Trade-off between the deferred income tax assets and liabilities at period-begin | Opening balance of deferred income tax assets or liabilities after off-set |
| Deferred income tax assets | -71,430,905.04 | 332,500,153.28 | -87,935,309.00 | 198,393,501.50 |
| Deferred income tax liabilities | -71,430,905.04 | 27,746,798.73 | -87,935,309.00 | 30,653,933.12 |
(4) Details of unrecognized deferred income tax assets
Unit: yuan
| Item | Ending balance | Opening balance |
| Bad debt provision | 1,025,997.60 | 1,710,712.39 |
| Inventory depreciation reserve | 24,245,766.89 | 21,586,279.12 |
| Loss from subsidiary | 207,901,419.35 | 193,713,240.35 |
| Depreciation reserves of fixed assets | 33,513,099.00 | 33,513,099.17 |
| Other equity instrument investment | 46,600,000.00 | 46,600,000.00 |
| Equity incentive | 1,199,728.57 | 154,321.87 |
| Total | 314,486,011.41 | 297,277,652.90 |
(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
Unit: yuan
| Year | Ending amount | Opening amount | Note |
| 2021 | 12,343,844.69 | Subsidiaries have operating losses | |
| 2022 | 3,781,066.93 | Subsidiaries have operating losses | |
| 2023 | 384,510.71 | 1,171,973.53 | Subsidiaries have operating losses |
| 2024 | 18,520,699.71 | 18,520,699.71 | Subsidiaries have operating losses |
| 2025 | 12,151,503.80 | 12,151,503.80 | Subsidiaries have operating losses |
| 2026 | 7,558,212.19 | Subsidiaries have operating losses | |
| No expiration period | 169,286,492.94 | 145,744,151.69 | Overseas subsidiaries have operating losses |
| Total | 207,901,419.35 | 193,713,240.35 | -- |
21. Other non-current assets
Unit: yuan
| Item | Ending balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Engineering equipment paid in advance | 237,495,903.07 | 237,495,903.07 | 195,259,441.73 | 195,259,441.73 | ||
| Total | 237,495,903.07 | 237,495,903.07 | 195,259,441.73 | 195,259,441.73 | ||
22. Short-term borrowings
(1) Category of short-term borrowings
Unit: yuan
| Item | Ending balance | Opening balance |
| Credit loan | 1,208,716,737.11 | 301,958,184.49 |
| Accrued interest | 1,092,680.13 | 280,415.56 |
| Total | 1,209,809,417.24 | 302,238,600.05 |
(2) Overdue short-term loans without payment
Nil
23. Note payable
Unit: yuan
| Category | Ending balance | Opening balance |
| Bank acceptance bill | 1,849,948,849.32 | 2,462,592,372.82 |
| Total | 1,849,948,849.32 | 2,462,592,372.82 |
Notes expired at year-end without paid was 0.00 Yuan.
24. Account payable
(1) Account payable
Unit: yuan
| Item | Ending balance | Opening balance |
| Within 1 year | 3,845,035,532.59 | 3,986,993,867.21 |
| 1-2 years | 45,870,705.92 | 87,605,077.14 |
| 2-3 years | 55,244,655.89 | 13,824,720.43 |
| Over three years | 16,874,490.99 | 12,560,575.61 |
| Total | 3,963,025,385.39 | 4,100,984,240.39 |
(2) Important account payable with account age over one year
Nil
25. Accounts received in advance
(1) Accounts received in advance
Unit: yuan
| Item | Ending balance | Opening balance |
| Within 1 year | 439,949.43 | 4,071,236.87 |
| Total | 439,949.43 | 4,071,236.87 |
(2) Important accounts received in advance with account age over one year
Nil
26. Contractual liability
Unit: yuan
| Item | Ending balance | Opening balance |
| Within 1 year | 50,586,326.41 | 77,554,320.04 |
| 1-2 years | 4,958,818.19 | 2,763,605.96 |
| 2-3 years | 654,380.16 | 255,602.59 |
| Over three years | 1,288,800.11 | 1,143,858.66 |
| Total | 57,488,324.87 | 81,717,387.25 |
27. Wage payable
(1) Wage payable
Unit: yuan
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| I. Short-term compensation | 184,226,322.31 | 547,486,803.56 | 640,558,941.65 | 91,154,184.22 |
| II. Post-employment welfare- defined contribution plans | 49,931,097.42 | 70,112,252.05 | 79,143,798.22 | 40,899,551.25 |
| III. Dismissed welfare | 1,645,271.32 | 136,483.00 | 933,423.78 | 848,330.54 |
| IV. Other welfare due within one year | 84,150,000.00 | 46,534,462.17 | 37,615,537.83 | |
| V. Other short-term welfare-Housing subsidies, employee benefits and welfare funds | 12,469,120.77 | 354,300.00 | 2,304,217.36 | 10,519,203.41 |
| Total | 332,421,811.82 | 618,089,838.61 | 769,474,843.18 | 181,036,807.25 |
(2) Short-term compensation
Unit: yuan
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| 1. Wages, bonuses, allowances and subsidies | 155,323,190.62 | 425,824,158.63 | 514,708,788.22 | 66,438,561.03 |
| 2. Welfare for workers and staff | 112.35 | 41,873,533.62 | 41,510,711.32 | 362,934.65 |
| 3. Social insurance | 17,498,085.68 | 34,013,222.72 | 38,280,621.09 | 13,230,687.31 |
| Including: Medical insurance | 14,251,442.15 | 28,054,429.56 | 31,566,790.06 | 10,739,081.65 |
| Work injury insurance | 1,661,670.58 | 3,092,246.47 | 3,482,783.69 | 1,271,133.36 |
| Maternity insurance | 1,584,972.95 | 2,866,546.69 | 3,231,047.34 | 1,220,472.30 |
| 4. Housing accumulation fund | 1,016,187.00 | 36,481,576.00 | 36,622,479.00 | 875,284.00 |
| 5. Labor union expenditure and | 10,367,089.56 | 9,295,214.13 | 9,436,342.02 | 10,225,961.67 |
| personnel education expense | ||||
| 6.Other short-term salary-social security | 21,657.10 | -901.54 | 0.00 | 20,755.56 |
| Total | 184,226,322.31 | 547,486,803.56 | 640,558,941.65 | 91,154,184.22 |
(3) Defined contribution plans
Unit: yuan
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| 1. Basic endowment insurance | 29,844,835.64 | 54,041,308.77 | 63,332,460.16 | 20,553,684.25 |
| 2. Unemployment insurance | 912,529.16 | 1,715,666.38 | 1,952,095.66 | 676,099.88 |
| 3. Enterprise annuity | 19,173,732.62 | 14,355,276.90 | 13,859,242.40 | 19,669,767.12 |
| Total | 49,931,097.42 | 70,112,252.05 | 79,143,798.22 | 40,899,551.25 |
28. Taxes payable
Unit: yuan
| Item | Ending balance | Opening balance |
| Value-added tax | 18,395,921.72 | 28,744,351.90 |
| Corporation income tax | 122,381,527.45 | 21,458,320.79 |
| Individual income tax | 564,344.62 | 7,184,934.79 |
| City maintaining & construction tax | 1,321,182.66 | 1,983,996.80 |
| Educational surtax | 943,701.91 | 1,417,140.56 |
| Other (including stamp tax and local funds) | 6,240,223.11 | 6,704,945.45 |
| Total | 149,846,901.47 | 67,493,690.29 |
29. Other account payable
Unit: yuan
| Item | Ending balance | Opening balance |
| Interest payable | 49,246.71 | 4,862.22 |
| Dividend payable | 155,601,810.00 | |
| Other accounts payable | 362,804,621.00 | 361,551,395.20 |
| Total | 518,455,677.71 | 361,556,257.42 |
(1) Interest payable
Unit: yuan
| Item | Ending balance | Opening balance |
| Other | 49,246.71 | 4,862.22 |
| Total | 49,246.71 | 4,862.22 |
Major overdue interest: nil
(2) Dividend payable
Unit: yuan
| Item | Ending balance | Opening balance |
| Common stock dividend | 155,601,810.00 | |
| Total | 155,601,810.00 |
Other explanation, including important dividends payable that have not been paid for more than 1 year, and the reasons fornon-payment should be disclosed: Nil
(3) Other account payable
1) Classification of other accounts payable according to nature of account
Unit: yuan
| Item | Ending balance | Opening balance |
| Deposit and margin | 21,468,703.26 | 12,759,592.29 |
| Social insurance and reserves funds that withholding | 8,707,632.99 | 8,853,543.93 |
| Intercourse funds of unit | 25,512,145.98 | 30,982,145.98 |
| Restricted stock repurchase obligations | 302,479,200.00 | 302,479,200.00 |
| Other | 4,636,938.77 | 6,476,913.00 |
| Total | 362,804,621.00 | 361,551,395.20 |
2) Significant other payable with over one year age
Unit: yuan
| 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 | -- |
30. Non-current liabilities due within one year
Unit: yuan
| Item | Ending balance | Opening balance |
| Long-term borrowings due within one year | 21,573,598.64 | 33,271,589.84 |
| Lease payments due within one year | 1,474,310.04 | 3,615,985.51 |
| Interest payable | 19,555.56 | 26,666.67 |
| Total | 23,067,464.24 | 36,914,242.02 |
31. Other current liabilities
Unit: yuan
| Item | Ending balance | Opening balance |
| Rebate payable | 267,859,858.47 | 213,477,951.00 |
| Pending sales tax | 5,868,301.94 | 9,393,136.33 |
| Total | 273,728,160.41 | 222,871,087.33 |
32. Long-term loans
(1) Category of Long-term loans
Unit: yuan
| Item | Ending balance | Opening balance |
| Guaranteed loan | 2,921,841.19 | 3,050,640.97 |
| Total | 2,921,841.19 | 3,050,640.97 |
Explanation of long-term loan classification: nil
33. Lease liability
Unit: yuan
| Item | Ending balance | Opening balance |
| Lease liability | 16,761,771.80 | 17,811,603.05 |
| Total | 16,761,771.80 | 17,811,603.05 |
34. Long-term account payable
Unit: yuan
| Item | Ending balance | Opening balance |
| Long-term account payable | 15,000,000.00 | 15,351,883.00 |
| Special accounts payable | 18,265,082.11 | 18,265,082.11 |
| Total | 33,265,082.11 | 33,616,965.11 |
(1) Long-term account payable listed by nature
Unit: yuan
| Item | Ending balance | Opening balance |
| Hi-tech Branch of Nanjing Finance Bureau (note ①) Financial support funds (2006) | 1,250,000.00 | 1,250,000.00 |
| Hi-tech Branch of Nanjing Finance Bureau (note ②) Financial support funds (2007) | 1,230,000.00 | 1,230,000.00 |
| Loan transferred from treasury bond (note ③) | 339,090.00 | |
| Hi-tech Branch of Nanjing Finance Bureau (note ④) Financial support funds (2008) | 2,750,000.00 | 2,750,000.00 |
| Hi-tech Branch of Nanjing Finance Bureau (note ⑤) Financial support funds (2009) | 1,030,000.00 | 1,030,000.00 |
| Hi-tech Branch of Nanjing Finance Bureau (note ⑥) Financial support funds (2010) | 960,000.00 | 960,000.00 |
| Hi-tech Branch of Nanjing Finance Bureau (note ⑦) Financial support funds (2011) | 5,040,000.00 | 5,040,000.00 |
| Hi-tech Branch of Nanjing Finance Bureau (note ⑧) Financial support funds (2013) | 2,740,000.00 | 2,740,000.00 |
| Total | 15,000,000.00 | 15,339,090.00 |
Other explanation：
Note ①: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 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.Note ②: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 17 September 2007 to 17 September2022. Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.Note ③: Loan transferred from treasury bond: WFJN received 1.87 million Yuan of special funds from budget of the centralgovernment, and 3.73 million Yuan of special funds from budget of the local government in 2007. The non-operating incometransferred in was 1.87 million Yuan in 2011 which was confirmed not to return, the Company paid back special funds of 3.73million Yuan to the local government in 11 years since 2012, the Company paid the principal of 339,090.00 Yuan the year.Note ④: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 10 November 2008 to 10 November2023. Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.Note ⑤: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 27 October 2009 to 27 October 2024.Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.Note ⑥: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 27 December 2010 to 27 December2025. Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.Note ⑦: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 28 December 2011 to 28 December2026. Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.Note ⑧: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 18 December 2013 to 18 December2028. Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.
(2) Special accounts payable
Unit: yuan
| Item | Opening balance | Current increased | Current decreased | Ending balance | Cause of formation |
| Removal compensation of WFJN | 18,265,082.11 | 18,265,082.11 | |||
| Total | 18,265,082.11 | 18,265,082.11 | -- |
Other explanation：
In line with regulation of the house acquisition decision of People’s government of Xuanwu District, Nanjing City, Ning Xuan FuZheng Zi (2012) No.001, part of the lands and property of WFJN needs expropriation in order to carry out the comprehensivelyimprovement of Ming Great Wall. According to the house expropriation and compensation agreement in state-owned lands signedbetween WFJN and House Expropriation Management Office of Xuanwu District, Nanjing City, 19.7067 million yuan in total arecompensate, including operation losses from lessee 1.4416 million yuan in total. The above compensation was received in last periodand is making up for the losses from lessee, and the above lands and property have not been collected up to 30 June 2021.
35. Long-term wages payable
(1) Long-term wages payable
Unit: yuan
| Item | Ending balance | Opening balance |
| II. Dismiss welfare | 5,734,948.91 | 5,734,948.91 |
| III. Other long-term welfare | 176,245,345.03 | 176,245,345.03 |
| Total | 181,980,293.94 | 181,980,293.94 |
(2) Changes in defined benefit plans
Nil
36. Deferred income
Unit: yuan
| Item | Opening balance | Current increased | Current decreased | Ending balance | Cause of formation |
| Government grand | 328,204,476.73 | 1,646,910.09 | 18,669,032.57 | 311,182,354.25 | |
| Total | 328,204,476.73 | 1,646,910.09 | 18,669,032.57 | 311,182,354.25 | -- |
Item with government grants involved:
Unit: yuan
| Item | 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 | 1,442,000.56 | 721,000.30 | 721,000.26 | Assets related/Incom |
| with electronically controlled high pressure for less-emission diesel used | e 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 upgrade (2012) | 642,169.73 | 642,169.73 | Income related | |||||
| Fund of industry upgrade (2013) | 60,520,000.00 | 60,520,000.00 | Income related | |||||
| Appropriation on central basic construction investment | 714,285.73 | 357,142.86 | 357,142.87 | Assets related | ||||
| R&D and industrialization of the high-pressure variable pump of the common rail system of diesel engine for automobile | 5,327,618.88 | 771,547.64 | 4,556,071.24 | Assets related | ||||
| Research institute of motor vehicle exhaust aftertreatment technology | 1,213,727.21 | 282,533.52 | 931,193.69 | 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 | 104,085,274.40 | 10,189,824.14 | 93,895,450.26 | 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 | 6,595,319.83 | 772,823.43 | 5,822,496.40 | Assets related | ||||
| Implementation of the variable cross-section turbocharger for diesel engine | 7,362,788.75 | 740,000.02 | 6,622,788.73 | Assets related | ||||
| Demonstration project for intelligent manufacturing | 849,099.60 | 100,516.63 | 748,582.97 | Assets related | ||||
| The 2nd batch of provincial | 5,000,000.00 | 5,000,000.00 | Assets related |
| special funds for industry transformation of industrial and information in 2019 | ||||||||
| Municipal technological reform fund allocation in 2020 | 4,770,000.00 | 256,056.12 | 4,513,943.88 | Assets related | ||||
| Strategic cooperation agreement funding for key enterprise of smart manufacturing in high-tech zone | 4,060,000.00 | 4,060,000.00 | Assets related | |||||
| Other | 41,691,192.04 | 1,646,910.09 | 3,835,418.18 | 39,502,683.95 | Assets related/Income related | |||
| Total | 328,204,476.73 | 1,646,910.09 | 18,669,032.57 | 311,182,354.25 |
Other explanation：
(1) Appropriation on industrialization project of electrical control and high voltage jet VE system of low emissions diesel: inSeptember 2009, WFJN signed “Project Contract of Technology Outcome Transferring Special Capital in Jiangsu Province” withNanjing Technical Bureau, according to which WFJN received appropriation 6.35 million Yuan in 2009, 4.775 million Yuan receivedin 2010 and 0.875 million Yuan received in 2011. According to the contract, the attendance date of this project was: from October2009 to March 2012. This contract agreed 62% of newly increased investment in project would be spent in fixed assets investmentwhich are belongs to the government grand with assets/income concerned. In 2013, accepted by the science & technology agency ofJiangsu Province, and 4,789,997.04 Yuan with income related was reckoned into current operation revenue directly; the 7,210,002.96Yuan with assets related was amortized during the predicted service period of the assets, and 721,000.30 Yuan amortized in thePeriod.
(2) The appropriation for research and development ability of distributive high-pressure common rail system for diesel engine useand production line technological transformation project: according to XCJ No. [2010] 59, the Company has received special fundsof 7.1 million Yuan appropriated by Finance Bureau of Wuxi New District in 2011 and used for the Company’s research anddevelopment ability of distributive high-pressure common rail system for diesel engine use and production line technologicaltransformation project; this appropriation belongs to government subsidies related to assets, and will be amortized according to thedepreciation process of the underlying assets when the project is completed.
(3) Industry upgrading funds (2012): In accordance with the document Xi Xin Guanjing Fa [2012] No.216 and Document Xi XinGuancai Fa [2012] No. 85, the Company received funds of 60.4 million Yuan appropriated for industry upgrading this year. Currentwrite-off: 642,169.73 Yuan.
(4) Industry upgrading funds (2013): In accordance with the document Xi Xin Guan Jing Fa [2013] No.379, Xi Xin Guan Jing Fa[2013] No.455, Xi Xin Guan Cai Fa [2013] No.128 and Xi Xin Guan Cai Fa [2013] No.153, the Company received funds of 60.52million Yuan appropriated for industry upgrading in 2013.
(5) Appropriation for investment of capital construction from the central government: In accordance with the document Xi Caijian[2012] No.43, the Company received appropriation of 5 million Yuan for investment of capital construction from the centralgovernment in 2012. The project has passed the acceptance check in current period, this appropriation should be amortized within thesurplus service life of current assets, and amortization amount of current period is 357,142.86 Yuan.
(6) R&D and industrialization of the high-pressure variable pump of the common rail system of diesel engine for automobile: theCompany received appropriated for the project in 2013 with 8.05 million Yuan in line with documents of Xi Ke Ji [2013] No.186, Xi
Ke Ji [2013] No.208, Xi Cai Gong Mao [2013] No.104, Xi Cai Gong Mao [2013] No.138, Xi Ke Ji [2014] No.125, Xi Cai GongMao [2014] No.58, Xi Ke Ji [2014] No. 246 and Xi Cai Gong Mao [2014] No.162. Received 3 million Yuan in 2014 and 0.45 millionYuan in 2015; and belongs to government grant with assets concerned, and shall be amortized according to the depreciation process,amount of 771,547.64 Yuan amortizes in the period.
(7) Vehicle exhaust after-treatment technology research institute project: in 2012, the subsidiary WFLD has applied for equipmentpurchase assisting funds to Wuxi Huishan Science and Technology Bureau and Wuxi Science and Technology Bureau for the vehicleexhaust after-treatment technology research institute project. This declaration has been approved by Wuxi Huishan Science andTechnology Bureau and Wuxi Science and Technology Bureau in 2012, and the company has received appropriation of 2.4 millionYuan in 2012, and received 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, amount of 282,533.52 Yuan amortizes in the period.
(8) Industry upgrading funds (2014): In accordance with the document Xi Xin Guan Jing Fa [2014] No.427 and Xi Xin Guan Cai Fa[2014] No.143, the Company received funds of 36.831 million Yuan appropriated for industry upgrading in 2014.
(9) New-built assets compensation after the removal of parent company: policy relocation compensation received by the Company,and will be amortized according to the depreciation of new-built assets, amount of 10,189,824.14 Yuan amortizes in the period.
(10) Fund of industry upgrade (2016): In accordance with the document Xi Xin Guan Jing Fa [2016] No.585 and Xi Xin Fa [2016]No.70, the Company received funds of 40 million Yuan appropriated for industry upgrading in 2016.
(11) Guilding capital for the technical reform from State Hi-Tech Technical Commission: In accordance with the document Xi JingXin ZH [2016] No.9 and Xi Cai GM [2016] No.56, the Company received a 9.74 million Yuan for the guiding capital of technicalreform (1st batch) from Wuxi for year of 2016, and belongs to government grant with assets concerned, and shall be amortizedaccording to the depreciation process, amount of 772,823.43 Yuan amortizes in the period.
(12) Implementation of the variable cross-section turbocharger for diesel engine: In accordance with the document YCZ Fa[2016]NO.623 and “Strong Industrial Base Project Contract for year of 2016”, subsidiary WFTT received a specific subsidy of 16.97million Yuan (760,000 Yuan received in the period), the fund supporting strong industrial base project (made-in-China 2025) ofcentral industrial transformation and upgrading 2016 from Ministry of Industry and Information Technology; and belongs togovernment grant with assets concerned, and shall be amortized according to the depreciation process, amount of 740,000.02 Yuanamortize in the period.
(13) Demonstration project for intelligent manufacturing: under the Notice Relating to Selection of the Intelligent ManufacturingModel Project in Huishan District in 2016 (HJXF[2016]No.36), a fiscal subsidy of 3,000,000 Yuan was granted by relevantgovernment authority in Huishan district to our subsidiary WFLD in 2017 to be utilized for transformation and upgrade of WFLD’sintelligent manufacturing facilities. This subsidy belongs to government grant related to assets which shall be amortized based on thedepreciation progress of the assets. Amortization for the period amounts to 100,516.63 Yuan.
(14) The 2
ndbatch of provincial special funds for industry transformation of industrial and information in 2019: according to XCGM[2019] No. 121, the Company received a special fund of 5 million Yuan in 2020, this subsidy was related to the"WeifuHigh-Technology New Factory Internet Construction" projects, and belonged to government subsidies related to assets.
(15) Municipal technological reform fund allocation in 2020: according to XGXZH [2020] No. 16, the Company received 4.77million Yuan of municipal technological transformation fund project allocation in 2020, which was related to key technologicaltransformation projects and belonged to government subsidies related to assets. And amortized based on the depreciation progress ofthe assets. Amortization for the period amounts to 256,056.12 Yuan.
(16) Strategic cooperation agreement funding for key enterprise of smart manufacturing in high-tech zone: according to XXGXF[2020] No. 61, the Company received a related grant of 4.06 million Yuan in 2020, this subsidy was related to the intelligenttransformation project and belonged to the government subsidies related to assets.
37. Share capital
Unit: yuan
| Opening balance | Change during the period (+, -) | 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 | |||||
38. Capital reserve
Unit: yuan
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Capital premium (Share capital premium) | 3,242,767,917.78 | 3,242,767,917.78 | ||
| Other Capital reserve | 51,474,450.50 | 37,351,066.35 | 88,825,516.85 | |
| Total | 3,294,242,368.28 | 37,351,066.35 | 3,331,593,434.63 |
Other explanation, including changes in the period and reasons for changes;Other capital reserves has 37,351,066.35 yuan increased in the current period, which is the net amount after deducting the 1,174,655.42yuan amount attributable to shareholders from share-based payment fee 38,525,721.77 yuan, settled by equity.
39. Treasury stock
Unit: yuan
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Stock repurchases | 1,148,777.74 | 1,148,777.74 | ||
| Repurchase obligation of restricted stock incentive plan | 302,479,200.00 | 302,479,200.00 | ||
| Total | 303,627,977.74 | 303,627,977.74 |
Other explanations, including changes in the current period and explanations of the reasons for the changes:
(1) Stock repurchases: mainly refers to in 2020 the repurchase of 19,596,277.00 shares by way of centralized competitive bidding forthe implementation of restricted stock incentive plan and the 19,540,000.00 shares awarded to incentive object for theimplementation of restricted stock incentive plan.
(2) Repurchase obligation of restricted stock incentive plan: mainly refers to in 2020 the repurchase obligation recognized inaccordance with the subscription paid by the incentive object for the implementation of restricted stock incentive plan.
40. Other comprehensive income
Unit: yuan
| Item | Opening balance | Current period | Ending balance | |||||
| Account before income tax in the year | Less: written in other comprehensive income in previous period and carried forward to gains and losses in current period | Less: written in other comprehensive income in previous period and carried forward to retained earnings in current period | Less: income tax expense | Belong to parent company after tax | Belong to minority shareholders after tax | |||
| II. Other comprehensive income items which will be reclassified subsequently to profit or loss | 13,916,619.47 | -18,712,800.55 | -18,712,800.55 | -4,796,181.08 | ||||
| Conversion difference of foreign currency financial statement | 13,916,619.47 | -18,712,800.55 | -18,712,800.55 | -4,796,181.08 | ||||
| Total other comprehensive income | 13,916,619.47 | -18,712,800.55 | -18,712,800.55 | -4,796,181.08 | ||||
Other explanation, including the adjustment on initial recognition for arbitrage items that transfer from the effective part of cash flowhedge profit/loss: nil
41. Reasonable reserve
Unit: yuan
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Safety production costs | 2,333,490.03 | 12,481,928.66 | 12,287,801.67 | 2,527,617.02 |
| Total | 2,333,490.03 | 12,481,928.66 | 12,287,801.67 | 2,527,617.02 |
Other explanation, including changes and reasons for changes:
(1) Instructions for the withdrawing of special reserves (safe production cost): According to the CQ [2012] No. 16 - AdministrativeMeasures on the Withdrawing and Use of Enterprise Safety Production Expenses jointly issued by the Ministry of Finance and theState Administration of Work Safety, in the current period, the Company adopted excess retreat method for quarterly withdrawal bytaking the actual operating income of the previous period as the withdrawing basis.
(2) Among the above safety production costs, including the safety production costs accrual by the Company in line with regulationsand the parts enjoy by shareholders of the Company in safety production costs accrual by subsidiary in line with regulations.
42. Surplus reserve
Unit: yuan
| 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 |
43. Retained profit
Unit: yuan
| Item | Current period | Last period |
| Retained profits at the end of last period before adjustment | 13,756,102,424.62 | 12,076,443,635.56 |
| Retained profits at the beginning of the period after adjustment | 13,756,102,424.62 | 12,076,443,635.56 |
| Add: The net profits belong to owners of patent company of this period | 1,645,389,487.32 | 2,772,769,377.96 |
| Less: Common dividend payable | 1,513,341,439.50 | 1,093,241,270.00 |
| Withdraw employee rewards and welfare funds | 2,525,946.49 | |
| Add: Net effect of disposal other equity instrument investment | 2,236,332.86 | 2,656,627.59 |
| Retained profit at period-end | 13,890,386,805.30 | 13,756,102,424.62 |
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 0 Yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan.
5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan
44. Operating income and cost
Unit: yuan
| Item | Current period | Last Period | ||
| Income | Cost | Income | Cost | |
| Main operating | 8,767,778,890.21 | 7,264,238,382.73 | 6,352,974,489.95 | 5,256,052,615.30 |
| Other business | 269,912,866.03 | 233,678,774.34 | 241,429,134.61 | 157,916,759.23 |
| Total | 9,037,691,756.24 | 7,497,917,157.07 | 6,594,403,624.56 | 5,413,969,374.53 |
Information on the top five items of revenue recognized during the reporting period:
Unit: yuan
| Serial | Name | Income amount |
| 1 | RBCD | 2,250,967,590.73 |
| 2 | Customer 1 | 768,044,987.22 |
| 3 | Robert Bosch Company | 649,466,336.55 |
| 4 | Customer 2 | 515,466,318.66 |
| 5 | Customer 3 | 360,181,652.33 |
45. Operating tax and extras
Unit: yuan
| Item | Current period | Last Period |
| City maintaining & construction tax | 14,341,221.75 | 11,315,610.47 |
| Educational surtax | 10,225,750.57 | 8,082,578.87 |
| Property tax | 8,796,684.97 | 8,136,007.34 |
| Land use tax | 2,254,956.27 | 2,258,583.38 |
| Vehicle use tax | 4,723.44 | 17,455.52 |
| Stamp duty | 2,318,539.73 | 2,074,390.19 |
| Other taxes | 267,617.59 | 76,923.38 |
| Total | 38,209,494.32 | 31,961,549.15 |
46. Sales expenses
Unit: yuan
| Item | Current period | Last Period |
| Salary and fringe benefit | 26,304,864.83 | 25,826,320.40 |
| Consumption of office materials and business travel charge | 4,474,074.11 | 3,267,626.29 |
| Warehouse charge | 3,451,305.60 | 7,320,422.39 |
| Three guarantees and quality cost | 41,751,346.64 | 65,575,346.96 |
| Business entertainment fee | 12,819,753.95 | 8,669,963.79 |
| Other | 22,392,270.43 | 27,734,491.48 |
| Total | 111,193,615.56 | 138,394,171.31 |
47. Administration expenses
Unit: yuan
| Item | Current period | Last Period |
| Salary and fringe benefit | 150,875,422.64 | 125,724,396.50 |
| Depreciation charger and long-term assets amortization | 35,267,896.09 | 30,914,703.59 |
| Consumption of office materials and business travel charge | 7,618,286.05 | 5,274,784.55 |
| Incentive fund | 45,360,000.00 | |
| Share-based payment | 24,256,881.94 | |
| Other | 48,207,891.60 | 129,710,776.64 |
| Total | 266,226,378.32 | 336,984,661.28 |
48. R&D expenses
Unit: yuan
| Item | Current period | Last Period |
| Technological development expenses | 249,583,255.99 | 211,531,953.72 |
| Total | 249,583,255.99 | 211,531,953.72 |
49. Financial expenses
Unit: yuan
| Item | Current period | Last Period |
| Interest expenses | 14,244,003.27 | 5,800,553.09 |
| Note discount interest expenses | 13,128,344.93 | 5,393,256.06 |
| Less: interest income | 16,673,615.70 | 43,053,210.79 |
| Gains/losses from exchange | 928,280.82 | -4,472,009.34 |
| Handling charges | 4,308,059.74 | 1,724,451.73 |
| Total | 15,935,073.06 | -34,606,959.25 |
50. Other income
Unit: yuan
| Sources of income generated | Current period | Last Period |
| Government grants with routine operation activity concerned | 23,433,211.68 | 43,932,417.68 |
| Total | 23,433,211.68 | 43,932,417.68 |
51. Investment income
Unit: yuan
| Item | Current period | Last Period |
| Income of long-term equity investment calculated based on equity | 962,736,510.68 | 785,533,710.72 |
| Investment income from holding financial assets | 3,468,760.80 |
| available for sales | ||
| Investment income of financial products | 140,176,231.37 | 138,448,908.25 |
| Other | -609,970.51 | -408,092.36 |
| Total | 1,105,771,532.34 | 923,574,526.61 |
52. Income from change of fair value
Unit: yuan
| Sources | Current period | Last Period |
| Changes in the fair value of wealth management products | 5,597,561.64 | 1,462,717.65 |
| Changes in the fair value of the stocks of listed companies held-excluding the stocks of listed companies that are included in other equity instrument investments | -91,729,334.10 | -1,204,560.00 |
| Total | -86,131,772.46 | 258,157.65 |
53. Credit impairment loss
Unit: yuan
| Item | Current period | Last Period |
| Account receivable bad debt loss | 6,750,336.12 | -3,622,549.31 |
| Total | 6,750,336.12 | -3,622,549.31 |
54. Assets impairment loss
Unit: yuan
| Item | Current period | Last Period |
| II. Loss of inventory falling price and loss of contract performance cost impairment | -103,997,387.44 | -52,807,909.47 |
| Total | -103,997,387.44 | -52,807,909.47 |
55. Income from assets disposal
Unit: yuan
| Sources | Current period | Last Period |
| Income from disposal of non-current assets | 3,076,178.86 | 503,005.53 |
| Losses from disposal of non-current assets | -149,592.04 | -270,505.98 |
| Total | 2,926,586.82 | 232,499.55 |
56. Non-operating income
Unit: yuan
| Item | Current period | Last Period | Amount reckoned into current non-recurring gains/losses |
| Other | 488,184.66 | 164,150.94 | 488,184.66 |
| Total | 488,184.66 | 164,150.94 | 488,184.66 |
Government subsidies included in the current profit and loss: nil
57. Non-operating expense
Unit: yuan
| Item | Current period | Last Period | Amount reckoned into current non-recurring gains/losses |
| Donation | 160,000.00 | 3,003,503.70 | 160,000.00 |
| Non-current assets disposal losses | 625,271.19 | 775,870.54 | 625,271.19 |
| Including: loss of fixed assets scrap | 625,271.19 | 775,870.54 | 625,271.19 |
| Local fund | 343,760.00 | ||
| Other | 66,356.11 | 1,317.44 | 66,356.11 |
| Total | 851,627.30 | 4,124,451.68 | 851,627.30 |
58. Income tax expense
(1) Income tax expense
Unit: yuan
| Item | Current period | Last Period |
| Payable tax in current period | 248,833,342.25 | 79,048,948.52 |
| Adjusted the previous income tax | 1,167,902.15 | -3,635,148.44 |
| Increase/decrease of deferred income tax assets | -131,973,066.28 | -16,387,431.29 |
| Increase/decrease of deferred income tax liability | -55,516.90 | -1,520,916.67 |
| Total | 117,972,661.22 | 57,505,452.12 |
(2) Adjustment on accounting profit and income tax expenses
Unit: yuan
| Item | Current period |
| Total profit | 1,807,015,846.34 |
| Income tax measured by statutory/applicable tax rate | 271,052,376.95 |
| Impact by different tax rate applied by subsidies | -5,190,714.33 |
| Adjusted the previous income tax | 1,167,902.15 |
| Impact by non-taxable revenue | -18,035,348.35 |
| Impact by the deductible losses of the un-recognized previous deferred income tax | -879,192.06 |
| The deductible temporary differences or deductible losses of the un-recognized deferred income tax assets in the Period | -133,837,768.84 |
| Other | 3,695,405.70 |
| Income tax expense | 117,972,661.22 |
59. Other comprehensive income
See Note VII. 40 “Other comprehensive income”
60. Items of ash flow statement
(1) Other cash received in relation to operation activities
Unit: yuan
| Item | Current period | Last Period |
| Interest income | 16,673,615.70 | 43,053,210.79 |
| Government grants | 6,670,613.29 | 21,365,245.08 |
| Other | 493,488.03 | 6,383,457.07 |
| Total | 23,837,717.02 | 70,801,912.94 |
(2) Other cash paid in relation to operation activities
Unit: yuan
| Item | Current period | Last Period |
| Cash cost | 250,964,650.29 | 244,636,121.10 |
| Other | 9,252,217.76 | 12,194,783.41 |
| Total | 260,216,868.05 | 256,830,904.51 |
(3) Cash received from other investment activities
Unit: yuan
| Item | Current period | Last Period |
| Borit acquisition money returned | 1,108,314.69 | |
| Total | 1,108,314.69 |
Description of other cash received related to investment activities:
(4) Cash paid related with investment activities
Nil
(5) Other cash received in relation to financing activities
Unit: yuan
| Item | Current period | Last Period |
| Borrowings received by WFLD | 5,470,000.00 | |
| Total | 5,470,000.00 |
(6) Cash paid related with financing activities
Unit: yuan
| Item | Current period | Last Period |
| Borrowing return by WFLD | 5,470,000.00 | |
| National debt paid transfer to loans | 345,194.00 | |
| Lease payments | 1,104,682.01 | |
| Stock repurchase | 300,007,852.84 | |
| Total | 6,919,876.01 | 300,007,852.84 |
61. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
Unit: yuan
| Supplementary information | Current period | Last Period |
| 1. Net profit adjusted to cash flow of operation activities: | -- | -- |
| Net profit | 1,689,043,185.12 | 1,346,270,263.67 |
| Add: Assets impairment provision | 97,247,051.32 | 56,430,458.78 |
| Depreciation of fixed assets, consumption of oil assets and depreciation of productive biology assets | 188,585,414.05 | 170,298,478.93 |
| Depreciation of right-of-use assets | 3,246,652.07 | |
| Amortization of intangible assets | 22,053,152.82 | 17,856,029.07 |
| Amortization of long-term deferred expenses | 10,464,905.27 | 2,216,221.26 |
| Loss from disposal of fixed assets, intangible assets and other long-term assets (gain is listed with “-”) | -2,926,586.82 | -232,499.55 |
| Losses on scrapping of fixed assets (gain is listed with “-”) | 625,271.19 | 775,870.54 |
| Gain/loss of fair value changes (gain is listed with “-”) | 86,131,772.46 | -258,157.65 |
| Financial expenses (gain is listed with “-”) | 14,026,658.93 | 1,308,072.77 |
| Investment loss (gain is listed with “-”) | -1,105,771,532.34 | -923,574,526.61 |
| Decrease of deferred income tax asset ((increase is listed with “-”) | -134,106,651.78 | -16,604,858.64 |
| Increase of deferred income tax liability (decrease is listed with “-”) | -2,907,134.81 | -1,520,916.67 |
| Decrease of inventory (increase is listed with “-”) | 622,604,921.62 | 722,938,987.42 |
| Decrease of operating receivable accounts (increase is listed with “-”) | -44,866,280.95 | -1,396,333,918.08 |
| Increase of operating payable accounts (decrease is listed with “-”) | -1,402,007,014.29 | 457,453,317.78 |
| Other | 38,747,825.31 | 634,249.39 |
| Net cash flows arising from operating activities | 80,191,609.17 | 437,657,072.41 |
| 2. Material investment and financing not involved in cash flow | -- | -- |
| Conversion of debt into capital | ||
| Switching Company bonds due within one year | ||
| financing lease of fixed assets | ||
| 3. Net change of cash and cash equivalents: | -- | -- |
| Balance of cash at period end | 1,476,008,228.28 | 1,708,154,488.87 |
| Less: Balance of cash equivalent at period-begin | 944,946,018.70 | 820,498,653.85 |
| Add: Balance at period-end of cash equivalents | ||
| Less: Balance at period-begin of cash equivalents | ||
| Net increase of cash and cash equivalents | 531,062,209.58 | 887,655,835.02 |
(2) Net cash payment for the acquisition of a subsidiary in the period
Nil
(3) Net cash received from the disposal of subsidiaries
Nil
(4) Constitution of cash and cash equivalent
Unit: yuan
| Item | Ending balance | Opening balance |
| I. Cash | 1,476,008,228.28 | 944,946,018.70 |
| Including: Cash on hand | 118,837.77 | 507.66 |
| Bank deposit available for payment at any time | 1,475,889,390.51 | 944,945,511.04 |
| III. Balance of cash and cash equivalents at the period-end | 1,476,008,228.28 | 944,946,018.70 |
62. 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
63. Assets with ownership or use right restricted
Unit: yuan
| Item | Ending Book value | Restriction reason |
| Monetary funds | 587,241.00 | L/ C Margin |
| Note receivable | 755,821,058.54 | Notes pledge for bank acceptance |
| Monetary funds | 5,956,935.70 | Cash deposit paid for bank acceptance |
| Monetary funds | 2,838,880.93 | Court freeze |
| Monetary funds | 206,740.00 | Mastercard deposit |
| Receivables financing | 155,506,772.41 | Notes pledge for bank acceptance |
| Transaction financial asset | 163,934,219.22 | 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 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. (Hereinafter referred to as Hejun Company) 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 | 1,084,851,847.80 | -- |
64. Item of foreign currency
(1) Item of foreign currency
Unit: yuan
| Item | Closing balance of foreign currency | Rate of conversion | Ending RMB balance converted |
| Monetary funds | -- | -- | |
| Including: USD | 4,246,556.10 | 6.4601 | 27,433,181.00 |
| EUR | 6,553,930.02 | 7.6862 | 50,374,771.13 |
| HKD | 15,452,033.37 | 0.8321 | 12,857,636.97 |
| JPY | 14,548,514.00 | 0.058428 | 850,040.58 |
| DKK | 78,080,213.98 | 1.0337 | 80,711,517.19 |
| Account receivable | -- | -- | |
| Including: USD | 4,162,801.11 | 6.4601 | 26,892,111.45 |
| EUR | 686,225.65 | 7.6862 | 5,274,467.59 |
| JPY | 13,660,250.00 | 0.058428 | 798,141.09 |
| DKK | 6,202,972.20 | 1.0337 | 6,412,012.36 |
| Long-term borrowings | -- | -- | |
| Including: EUR | 380,142.19 | 7.6862 | 2,921,841.19 |
| Other account receivables | -- | ||
| Including: DKK | 1,368,775.23 | 1.0337 | 1,414,902.96 |
| Short-term borrowings | |||
| Including: USD | 1,188,678.80 | 6.4601 | 7,678,983.92 |
| EUR | 16,397,927.87 | 7.6862 | 126,037,753.19 |
| Account payable | |||
| Including: USD | 519,074.17 | 6.4601 | 3,353,271.05 |
| EUR | 3,171,852.35 | 7.6862 | 24,379,491.53 |
| JPY | 17,385,586.00 | 0.058428 | 1,015,805.02 |
| CHF | 184,558.85 | 7.0134 | 1,294,385.04 |
| DKK | 8,453,505.91 | 1.0337 | 8,738,389.06 |
| GBP | 2,450.00 | 8.941 | 21,905.45 |
| Other account payable | |||
| Including: DKK | 74,147.89 | 1.0337 | 76,646.67 |
(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
Subsidiary of the Company IRD was established in Denmark in 1996. The 66% equity of IRD were required by the Company in cashin April 2019, and in October 2020, increasing the shareholding to 34.00% by cash purchase. After the increase in holdings, thecompany acquired 100.00% of the company's equity. Book-keeping currency of IRD was Danish krone, and IRD mainly engaged inthe R&D, production and sales of fuel cell components.Subsidiary Borit was established in Belgium in 2010. the Company acquired 100% equity of Borit by cash acquisition in November2020. Borit is denominated in Euro and engaged in the R&D, production and sales of fuel cell components.
65. Government grants
(1) Government grants
Unit: yuan
| Category | Amount | Item | Amount reckoned in current gain/loss |
| Newly-added corporate subsidies in 2019 | 240,000.00 | Other income | 240,000.00 |
| Job stabilization subsidy | 582,920.07 | Other income | 582,920.07 |
| Intelligent manufacturing and technological transformation awards and supplementary funds | 712,000.00 | Other income | 712,000.00 |
| Nanjing Postdoctoral Innovation Practice Base was selected for funding in 2019 | 250,000.00 | Other income | 250,000.00 |
| 2019 Quality Award and Finalist Award | 110,000.00 | Other income | 110,000.00 |
| High-tech enterprise rewards | 280,000.00 | Other income | 280,000.00 |
| Intellectual Property Special Fund | 50,000.00 | Other income | 50,000.00 |
| "Work for training" subsidy | 396,280.00 | Other income | 396,280.00 |
| Training subsidy | 122,489.68 | Other income | 122,489.68 |
| Service charge for three agencies | 877,260.62 | Other income | 877,260.62 |
| Other | 3,049,662.92 | Deferred income, other income | 1,928,354.73 |
| Total | 6,670,613.29 |
(2) Government grants rebate
□ Applicable √ Not applicable
66. Other
NilVIII. Changes of consolidation scope
1. Enterprise combine not under the same control
(1) Enterprise combines not under the same control occurred in the period
Nil
(2) Combination cost and goodwill
Nil
(3) Identifiable assets and liability on purchasing date under the purchaserNil
(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) Notes relating to the purchase date or the end of the period in which the merger consideration or thefair value of the purchasee’s identifiable assets and liabilities cannot be reasonable determinedNil
(6) Other explanation
Nil
2. Enterprise combine under the same control
(1) Business combinations under the same control that occurred in the current period
Nil
(2) Consolidation cost
Nil
(3) Book value of assets and liabilities of the merged party on the merger dateNil
3. Reverse purchase
Nil
4. Disposal of subsidiaries
Whether there is a single disposal of an investment in a subsidiary that resulted in a loss of control
□ Yes √ No
Whether there is a step-by-step disposal of investment in a subsidiary through multiple transactions and loss of control during theperiod
□ Yes √ No
5. Other reasons for consolidation range changed
Explain the reasons on consolidate scope changes (i.e. subsidiary newly established, subsidiary liquidation etc.) and relevantinformation: nil
6. Other
Nil
IX. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
| Subsidiary | Main operation place | Registered place | Business nature | Share-holding ratio | Acquired way | |
| Directly | Indirectly | |||||
| WFJN | Nanjing | Nanjing | Spare parts of internal-combustion engine | 80.00% | Enterprise combines under the same control | |
| WFLD | Wuxi | Wuxi | Automobile exhaust purifier, muffler | 94.81% | Enterprise combines under the same control | |
| WFMA | Wuxi | Wuxi | Spare parts of internal-combustion engine | 100.00% | Investment | |
| WFCA | Wuxi | Wuxi | Spare parts of internal-combustion engine | 100.00% | Investment | |
| WFTR | Wuxi | Wuxi | Trading | 100.00% | Enterprise combines under the same control | |
| WFSC | Wuxi | Wuxi | Spare parts of internal-combustion engine | 66.00% | Investment | |
| WFTT | Ningbo | Ningbo | Spare parts of internal-combustion engine | 98.83% | 1.17% | Enterprise combines not under the same control |
| WFAM | Wuxi | Wuxi | Spare parts of internal-combustion engine | 51.00% | Enterprise combines not under the same control | |
| WFLD (Wuhan) | Wuhan | Wuhan | Automobile exhaust purifier, muffler | 60.00% | Investment | |
| WFLD (Chongqing) | Chongqing | Chongqing | Automobile exhaust purifier, muffler | 100.00% | Investment | |
| WFLD (Nanchang) | Nanchang | Nanchang | Automobile exhaust purifier, muffler | 100.00% | Investment | |
| WFAS | Wuxi | Wuxi | Smart car equipment | 66.00% | Investment | |
| WFDT | Wuxi | Wuxi | Hub Motor | 80.00% | Enterprise combines not under the same control | |
| SPV | Denmark | Denmark | Investment | 100.00% | Investment | |
| IRD | Denmark | Denmark | Fuel cell components | 100.00% | Enterprise combines not under the same control | |
| IRD America | America | America | Fuel cell components | 100.00% | Enterprise combines not under the same control | |
| Borit | Belgium | Belgium | Fuel cell components | 100.00% | Enterprise combines not under the same control | |
| Borit Inc. | America | America | Fuel cell components | 100.00% | Enterprise combines not under the same control | |
Explanation on share-holding ratio in subsidiary different from ratio of voting right: nil
(2) Important non-wholly-owned subsidiary
Unit: yuan
| Subsidiary | Share-holding ratio of minority | Gains/losses attributable to minority in the Period | Dividend announced to distribute for minority in the Period | Ending equity of minority |
| WFJN | 20.00% | 18,025,843.29 | 13,970,282.31 | 204,020,909.90 |
| WFSC | 34.00% | 3,546,302.29 | 19,941,189.44 | |
| WFLD | 5.19% | 5,163,616.93 | 112,471,477.85 | |
| WFAM | 49.00% | 17,106,156.82 | 194,373,455.05 | |
| Total | 43,841,919.33 | 13,970,282.31 | 530,807,032.24 |
Explanation on holding ratio different from the voting right ratio for minority shareholders: nil
(3) Main finance of the important non-wholly-owned subsidiary
Unit: yuan
| Subsidiary | Ending balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| WFJN | 1,231,685,952.53 | 291,111,356.12 | 1,522,797,308.65 | 459,479,297.72 | 41,221,031.28 | 500,700,329.00 |
| WFSC | 203,975,392.09 | 46,803,431.06 | 250,778,823.15 | 191,734,028.74 | 191,734,028.74 | |
| WFLD | 4,690,674,119.14 | 1,285,388,464.31 | 5,976,062,583.45 | 3,886,446,188.33 | 28,645,721.63 | 3,915,091,909.96 |
| WFAM | 355,697,962.25 | 423,129,679.73 | 778,827,641.98 | 313,736,049.27 | 68,286,160.82 | 382,022,210.09 |
| Total | 6,482,033,426.01 | 2,046,432,931.22 | 8,528,466,357.23 | 4,851,395,564.06 | 138,152,913.73 | 4,989,548,477.79 |
Unit: yuan
| Subsidiary | Opening balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| WFJN | 1,182,876,680.02 | 293,436,809.97 | 1,476,313,489.99 | 433,667,329.34 | 42,293,914.58 | 475,961,243.92 |
| WFSC | 213,435,154.59 | 47,533,838.59 | 260,968,993.18 | 212,812,487.33 | 212,812,487.33 | |
| WFLD | 4,942,039,786.72 | 1,210,789,869.04 | 6,152,829,655.76 | 4,204,615,377.36 | 30,414,322.76 | 4,235,029,700.12 |
| WFAM | 323,378,083.30 | 427,175,823.65 | 750,553,906.95 | 321,531,075.82 | 67,092,155.28 | 388,623,231.10 |
| Total | 6,661,729,704.63 | 1,978,936,341.25 | 8,640,666,045.88 | 5,172,626,269.85 | 139,800,392.62 | 5,312,426,662.47 |
Unit: yuan
| Subsidiary | Current period | |||
| Operation Income | Net profit | Total comprehensive income | Cash flow from operation activity | |
| WFJN | 541,395,186.39 | 88,001,445.49 | 88,001,445.49 | -11,789,938.06 |
| WFSC | 206,427,800.85 | 10,430,300.86 | 10,430,300.86 | 45,758,253.85 |
| WFLD | 4,394,119,908.54 | 139,109,362.55 | 139,109,362.55 | -670,433,668.67 |
| WFAM | 308,180,892.75 | 34,874,756.04 | 34,874,756.04 | 25,574,054.82 |
| Total | 5,450,123,788.53 | 272,415,864.94 | 272,415,864.94 | -610,891,298.06 |
Unit: yuan
| Subsidiary | Last Period | |||
| Operation Income | Net profit | Total comprehensive income | Cash flow from operation activity | |
| WFJN | 352,597,870.12 | 71,027,425.74 | 71,027,425.74 | 13,549,394.41 |
| WFSC | 98,614,059.14 | 4,832,191.04 | 4,832,191.04 | -15,080,952.12 |
| WFLD | 3,307,136,098.12 | 89,024,252.11 | 89,024,252.11 | 194,818,501.61 |
| WFAM | 174,153,210.61 | 10,975,202.52 | 10,975,202.52 | -11,097,809.19 |
| Total | 3,932,501,237.99 | 175,859,071.41 | 175,859,071.41 | 182,189,134.71 |
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group
Nil
(5) Financial or other supporting offers to the structured entity included in consolidated financial statementrange
Nil
2. Transaction that has owners’ equity shares changed in subsidiary but still with controlling rights
(1) Owners’ equity shares changed in subsidiary
Nil
(2) Impact on minority’s interest and owners’ equity attributable to parent company
Nil
3. Equity in joint venture and associated enterprise
(1) Important joint venture and associated enterprise
| Joint venture or associated enterprise | Main operation place | Registered place | Business nature | Share-holding ratio | Accounting treatment on investment for joint venture and associated enterprise | |
| Directly | Indirectly | |||||
| Wuxi Weifu Environmental Catalysts. Co., Ltd. | Wuxi | Wuxi | Catalyst | 49.00% | Equity method | |
| RBCD | Wuxi | Wuxi | Internal-combustion engine accessories | 32.50% | 1.50% | Equity method |
| Zhonglian Automobile Electronics Co., Ltd. | Shanghai | Shanghai | Internal-combustion engine accessories | 20.00% | Equity method | |
| Weifu Precision Machinery Manufacturing Co., Ltd. | Wuxi | Wuxi | Internal-combustion engine accessories | 20.00% | Equity method | |
| Changchun Xuyang Weifu Automobile Components Technology Co., Ltd. | Changchun | Changchun | Automobile components | 34.00% | Equity method | |
| Precors GmbH | Germany | Germany | Fuel cell parts | 8.11% | Equity method | |
Holding shares ratio different from the voting right ratio: nilHas major influence with less 20% voting rights hold, or has minor influence with over 20% (20% included) voting rights hold: BoritNV holds 8.11% equity of Precors GmbH. The Board of Precors GmbH is composed of four directors, one of whom is appointed byBorit NV, and the director also serves as the chairman of the Board of Precors GmbH. Accordingly, the company uses the equitymethod for accounting the investment of Precors GmbH.
(2) Main financial information of the important joint venture
Nil
(3) Main financial information of the important associated enterprise
Unit: yuan
| Ending balance/Current period | Opening balance/Last Period | |||||
| WFEC | RBCD | Zhonglian Electronics | WFEC | RBCD | Zhonglian Electronics | |
| Current assets | 4,850,368,338.98 | 14,964,413,252.68 | 1,128,380,328.27 | 4,446,438,334.10 | 11,965,249,225.12 | 201,344,601.39 |
| Non -current assets | 350,709,726.59 | 2,840,713,952.19 | 5,947,775,620.56 | 363,513,166.84 | 2,995,027,302.84 | 5,985,689,857.38 |
| Total assets | 5,201,078,065.57 | 17,805,127,204.87 | 7,076,155,948.83 | 4,809,951,500.94 | 14,960,276,527.96 | 6,187,034,458.77 |
| Current liabilities | 3,411,352,894.29 | 9,921,493,414.10 | 995,363,537.27 | 3,251,776,146.44 | 7,423,648,562.76 | 3,687,897.36 |
| Non-current liabilities | 218,098,254.70 | 2,608,374.90 | 175,895,402.90 | 2,638,609.61 | ||
| Total | 3,629,451,148.99 | 9,921,493,414.10 | 997,971,912.17 | 3,427,671,549.34 | 7,423,648,562.76 | 6,326,506.97 |
| liabilities | ||||||
| Attributable to parent company shareholders’ equity | 1,571,626,916.58 | 7,883,633,790.77 | 6,078,184,036.66 | 1,382,279,951.60 | 7,536,627,965.20 | 6,180,707,951.80 |
| Share of net assets calculated by shareholding ratio | 770,097,189.12 | 2,680,435,488.86 | 1,215,636,807.33 | 677,317,176.28 | 2,562,453,508.17 | 1,236,141,590.36 |
| --Goodwill | 267,788,761.35 | 1,407,265.96 | 267,788,761.35 | 1,407,265.96 | ||
| --Unrealized profit of internal trading | -35,689,909.35 | -29,652,559.84 | ||||
| --Other | -0.28 | -0.01 | -0.28 | -0.01 | ||
| Book value of equity investment in associated enterprise | 770,097,189.12 | 2,912,534,340.58 | 1,217,044,073.28 | 677,317,176.28 | 2,800,589,709.40 | 1,237,548,856.31 |
| Operation income | 4,268,529,267.97 | 10,208,920,776.81 | 11,255,332.80 | 3,456,176,529.08 | 7,807,711,867.16 | 11,705,308.41 |
| Net profit | 184,342,978.45 | 1,988,551,544.06 | 891,476,084.86 | 114,476,846.31 | 1,764,998,863.92 | 634,241,700.83 |
| Total comprehensive income | 184,342,978.45 | 1,988,551,544.06 | 891,476,084.86 | 114,476,846.31 | 1,764,998,863.92 | 634,241,700.83 |
| Dividends received from associated enterprise in the year | 49,000,000.00 | 279,062,772.15 | 900,840,579.51 | 140,200,000.00 |
(4) Financial summary for non-important Joint venture and associated enterprise
Unit: yuan
| Ending balance/Current period | Opening balance/Last Period | |
| Joint venture: | -- | -- |
| Amount based on share-holding ratio | -- | -- |
| Associated enterprise: | -- | -- |
| Total book value of investment | 110,847,667.12 | 86,032,548.98 |
| Amount based on share-holding ratio | -- | -- |
| --Net profit | 19,892,865.88 | -732,249.42 |
| --Total comprehensive income | 19,892,865.88 | -732,249.42 |
(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
Relevant explanations for structured entities not included in the scope of the consolidated financial statements: nil
6. Other
NilX. Risk related with financial instrumentMain financial instrument of the Company including monetary funds, structured deposits, account receivable,equity instrument investment, financial products, loans, and account payable etc., more details of the financialinstrument can be found in relevant items of Note VII. Risks concerned with the above-mentioned financialinstrument, and the risk management policy takes for lower the risks are as follow:
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. Compliance department and financial control department manager and monitor those risk exposures toensuring the risks are control in a limited range.
1. Credit Risk
Credit risk refers to the risk that one party of a financial instrument fails to perform its obligations, and resultingin the financial loss of other party. The company's credit risk mainly comes from monetary funds, structured
deposits, note receivable, account receivable, other account receivables. The management has established anappropriate credit policy and continuously monitors the exposure to these credit risks.The monetary funds and structured deposits held by the Company are mainly deposited in financial institutionssuch as commercial banks, the management believes that these commercial banks have higher credit and assetstatus, and have lower credit risks. The Company adopts quota policies to avoid credit risks to any financialinstitutions.For accounts receivable, other receivables and bills receivable, the Company sets relevant policies to control thecredit risk exposure. To prevent the risks, the company has formulated a new customer credit evaluation systemand an existing customer credit sales balance analysis system. The new customer credit evaluation system aims atnew customers, the company will investigate a customer’s background according to the established process todetermine whether to give the customer a credit line and the credit line size and credit period. Accordingly, thecompany has set a credit limit and a credit period for each customer, which is the maximum amount that does notrequire additional approval. The analysis system for credit sales balance of existing customers means that afterreceiving a purchase order from an existing customer, the company will check the order amount and the balanceof the accounts owed by the customer so far, if the total of the two exceeds the credit limit of the customer, thecompany can only sell to the customer on the premise of additional approval, otherwise the customer must berequired to pay the corresponding amount in advance. In addition, for the credit sales that have occurred, thecompany analyzes and audits the monthly statements for risk warning of accounts receivable to ensure that thecompany’s overall credit risk is within a controllable range.The maximum credit risk exposure of the Company is the carrying amount of each financial asset on the balancesheet.
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, HKD, DKK except for the USD, EUR, SF, JPY, HKD and DKK carried outfor the equipment purchasing of parent company and WFAM, material purchasing of parent company, technicalservice and trademark usage costs of parent company, the import and export of WFTR, operation of IRD andoperation of Borit, 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 the
financial instrument, considered by management of the Company.End as 30 June 2021, except for the follow assets or liabilities listed with foreign currency, assets and liabilities ofthe Company are carried with RMB.
① Foreign currency assets of the Company till end of 30 June 2021:
| Item | Ending foreign currency balance | Convert rate | Ending RMB balance converted | Ratio in assets (%) |
| Monetary funds | ||||
| Including: USD | 4,246,556.10 | 6.4601 | 27,433,181.0000 | 0.10 |
| EUR | 6,553,930.02 | 7.6862 | 50,374,771.1300 | 0.18 |
| HKD | 15,452,033.37 | 0.8321 | 12,857,636.9700 | 0.05 |
| JPY | 14,548,514.00 | 0.0584 | 850,040.5800 | 0.00 |
| DKK | 78,080,213.98 | 1.0337 | 80,711,517.1900 | 0.29 |
| Account receivable | ||||
| Including: USD | 4,162,801.11 | 6.4601 | 26,892,111.45 | 0.10 |
| EUR | 686,225.65 | 7.6862 | 5,274,467.59 | 0.02 |
| JPY | 13,660,250.00 | 0.0584 | 798,141.09 | 0.00 |
| DKK | 6,202,972.20 | 1.0337 | 6,412,012.36 | 0.02 |
| Other account receivables | ||||
| Including: DKK | 1,368,775.23 | 1.0337 | 1,414,902.96 | 0.01 |
| Total ratio in assets | 0.77 |
② Foreign currency liability of the Company till end of 30 June 2021:
| Item | Ending foreign currency balance | Convert rate | Ending RMB balance converted | Ratio in assets(%) |
| Short-term borrowings | ||||
| Including: USD | 1,188,678.80 | 6.4601 | 7,678,983.92 | 0.09 |
| EUR | 16,397,927.87 | 7.6862 | 126,037,753.19 | 1.43 |
| Long-term borrowings |
| Including: EUR | 380,142.19 | 7.6862 | 2,921,841.19 | 0.03 |
| Account payable | ||||
| Including: USD | 519,074.17 | 6.4601 | 3,353,271.05 | 0.04 |
| EUR | 3,171,852.35 | 7.6862 | 24,379,491.53 | 0.28 |
| JPY | 17,385,586.00 | 0.0584 | 1,015,805.02 | 0.01 |
| CHF | 184,558.85 | 7.0134 | 1,294,385.04 | 0.01 |
| DKK | 8,453,505.91 | 1.0337 | 8,738,389.06 | 0.10 |
| GBP | 2,450.00 | 8.941 | 21,905.45 | 0.00 |
| Other account payable | ||||
| Including: DKK | 74,147.89 | 1.0337 | 76,646.6700 | 0.00 |
| Total ratio in liabilities | 1.99 |
③ Other pricing risk 1
The equity instrument investment held by the Company with classification as transaction financial asset and othernon-current financial assets are measured on fair value of the balance sheet date. The fluctuation of expected pricefor these investments will affect the gains/losses of fair value changes for the Company.Furthermore, on the premise of deliberated and approved in 10
th
session of 8
th
BOD, the Company exercise entrustfinancing with the self-owned idle capital; therefore, the Company has the risks of collecting no principal due toentrust financial products default. Aims at such risk, the Company formulated a “Management Mechanism ofCapital Financing”, and well-defined the authority approval, investment decision-making, calculationmanagement and risk controls for the entrust financing in order to guarantee a security funds and preventinvestment risk efficiently. In order to lower the adverse impact from unpredictable factors, the Company chooseshort-term and medium period for investment and investment product’s term is up to 3 years in principle; invariety of investment, the Company did not invest for the stocks, derivative products, security investment fundand the entrust financial products aims at security investment as well as other investment with securitiesconcerned.
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 controllingsuch 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
Unit: yuan
| Item | Ending fair value | |||
| First-order | Second-order | Third-order | Total | |
| I. Sustaining measured by fair value | -- | -- | -- | -- |
| (I) Transaction financial asset | 175,373,897.56 | 247,915,991.34 | 5,959,651,469.27 | 6,382,941,358.17 |
| 1.Financial assets measured at fair value and whose changes are included in current profit or loss | 175,373,897.56 | 247,915,991.34 | 5,959,651,469.27 | 6,382,941,358.17 |
| (1) Investment in debt instruments | 5,761,211,170.27 | 5,761,211,170.27 | ||
| (2) Investment in equity instruments | 175,373,897.56 | 247,915,991.34 | 198,440,299.00 | 621,730,187.90 |
| (III) Other equity instrument investment | 285,048,000.00 | 285,048,000.00 | ||
| (IV) Accounts receivable financing | 595,411,852.58 | 595,411,852.58 | ||
| Total liability sustaining measured by fair value | 175,373,897.56 | 247,915,991.34 | 6,840,111,321.85 | 7,263,401,210.75 |
| II. Non-persistent measure | -- | -- | -- | -- |
2. Recognized basis for the market price sustaining and non-persistent measured by fair value onfirst-orderOn 30 June 2021, the financial assets available for sale-equity instrument investment held by the Company refers to the SDEC (stockcode: 600841), Miracle Automation (Stock code: 002009) and Lifan Technology (Stock code: 601777), determining basis of themarket price at period-end refers to the closing price of 30 June 2021.
3. The qualitative and quantitative information for the valuation technique and critical parameter thatsustaining and non-persistent measured by fair value on second-orderOn 30 June 20210, other non-current financial assets-equity instrument investment held by the Company refers to the GuolianSecurities (stock code: 601456), determining basis of the market price at period-end refers to the closing price and liquidity discountsof 30 June 2021.
4. The qualitative and quantitative information for the valuation technique and critical parameter thatsustaining and non-persistent measured by fair value on third-order
(1) Fair value of wealth management products
The fair value of wealth management products is determined by the Company using discounted cash flow valuation techniques.Among them, the important unobservable input values are mainly the expected annualized rate of return and the risk factor of wealthmanagement products.
(2) Financing of accounts receivable
For this part of financial assets, the Company uses discounted cash flow valuation techniques to determine its fair value. Among them,important unobservable input values mainly include discount rate and contractual cash flow maturity period. The cash flow with acontract expiration period of 12 months (inclusive) shall not be discounted, and the cost shall be regarded as its fair value.
(3) Fair value of equity instrument investment and other equity instrument investment
Due to the lack of market liquidity for this part of financial assets, the Company uses the replacement cost method to determine itsfair value. Among them, the important unobservable input values mainly include the financial data of the invested company, etc.
5. Continuous third-level fair value measurement items, adjustment information between the opening andclosing book value and sensitivity analysis of unobservable parameters
Nil
6. Continuous fair value measurement items, if there is a conversion between various levels in the currentperiod, the reasons for the conversion and the policy for determining the timing of the conversionNil
7. Changes in valuation technology during the current period and reasons for the changesNil
8. The fair value of financial assets and financial liabilities not measured by fair valueNil
9. Other
NilXII. Related party and related party transactions
1. Parent company of the enterprise
| Parent company | Registration place | Business nature | Registered capital | Share-holding ratio on the enterprise for parent company | Voting right ratio on the enterprise |
| Wuxi Industry Group | Wuxi | Operation of state-owned assets | 5172.6571 million Yuan | 20.22% | 20.22% |
Explanation on parent company of the enterpriseWuxi Industry Group is an enterprise controlled by the State-owned Assets Management Committee of Wuxi Municipal People’sGovernment. Its business scope includes foreign investment by using its own assets, house leasing services, self-operating and actingas an agent for the import and export business of various commodities and technologies (Except for goods and technologies that arerestricted by the state or prohibited for import and export), domestic trade (excluding national restricted and prohibited items).(Projects that are subject to approval in accordance with the law can be operated only after being approved by relevant departments).Ultimate controller of the Company is State-owned Assets Supervision & Administration Commission of Wuxi Municipality ofJiangsu Province.Other explanation：nil
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
Unit: yuan
| 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 and labor | 18,852,456.91 | 42,000,000.00 | N | 14,833,622.63 |
| RBCD | Goods and labor | 218,444,783.58 | 335,000,000.00 | N | 12,261,781.92 |
| WFEC | Goods | 905,770,785.87 | 1,650,000,000.00 | N | 1,824,736,274.77 |
| Robert Bosch Company | Goods and labor | 115,666,003.14 | 215,000,000.00 | N | 63,669,835.20 |
| Shinwell Automobile | Goods | 1,000,000.00 | N | 881,887.67 |
Goods sold/labor service providing
Unit: yuan
| Related party | Content of related transaction | Current period | Last Period |
| Weifu Precision Machinery | Goods and labor | 19,742,012.48 | 774,094.06 |
| RBCD | Goods and labor | 2,250,967,590.73 | 1,551,233,591.58 |
| WFEC | Goods and labor | 3,581,524.21 | 9,749,595.04 |
| Robert Bosch Company | Goods and labor | 649,193,996.57 | 276,348,061.10 |
| Shinwell Automobile | Goods | 29,250.79 | 67,648.59 |
Description of related transactions in the purchase and sale of goods, provision and acceptance of labor services: Nil
(2) Related trusteeship management/contract & entrust management/ outsourcingNil
(3) Related lease
As a lessor for the Company:
Unit: yuan
| Lessee | Assets type | Lease income recognized in the Period | Lease income recognized at last Period |
| WFEC | Workshop | 1,254,028.50 |
(4) Related guarantee
Nil
(5) Related party’s borrowed/lending funds
Nil
(6) Related party’s assets transfer and debt reorganization
Nil
(7) Remuneration of key manager
Unit: yuan
| Item | Current period | Last Period |
| Remuneration of key manager | 6,230,000.00 | 3,050,000.00 |
(8) Other related transactions
Unit: yuan
| Related party | Item | Current period | Last Period |
| RBCD | Payment of technical commission fees, etc. | 295,419.00 | |
| RBCD | Procurement of fixed assets | 528,378.37 | 162,692.06 |
| Robert Bosch Company | Payment of technical commission fees, etc. | 4,123,940.70 | 140,558.40 |
| Robert Bosch Company | Sale of fixed assets | 272,339.98 | 3,193,888.25 |
| Robert Bosch Company | Procurement of fixed assets | 599,549.16 | |
| Weifu Precision Machinery | Procurement of fixed assets | 50,000.00 | |
| WFEC | Sale of fixed assets | 414,601.77 | 9,036,316.74 |
| Wuxi Industry Group | Payment of interest | 5,348.44 |
6. Receivable/payable items of related parties
(1) Receivable item
Unit: yuan
| Item | Related party | Ending balance | Opening balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Account receivable | Weifu Precision Machinery | 2,392,377.42 | 14,612.15 | 160,565.87 | |
| Other account receivables | Weifu Precision Machinery | ||||
| Account receivable | RBCD | 932,304,823.41 | 59,766.10 | 549,543,387.12 | |
| Account paid in advance | RBCD | 116,976.59 | |||
| Account receivable | Robert Bosch Company | 248,253,462.67 | 758,645.71 | 205,738,695.62 | 84,473.87 |
| Other account receivables | Robert Bosch Company | ||||
| Account paid in advance | Robert Bosch Company | 1,979,474.92 | 2,970,930.93 | ||
| Account receivable | WFEC | 64,400.00 | 6,440.00 | 642,390.75 | |
| Other account receivables | WFEC | 49,000,000.00 | |||
(2) Payable item
Unit: yuan
| Item | Related party | Ending book balance | Opening book balance |
| Account payable | Weifu Precision Machinery | 11,702,777.54 | 12,959,303.46 |
| Other account payable | Weifu Precision Machinery | 29,000.00 | |
| Account payable | WFEC | 559,584,991.66 | 850,384,640.88 |
| Account payable | RBCD | 103,326,693.22 | 7,178,387.17 |
| Account payable | Robert Bosch Company | 12,919,178.47 | 5,370,249.46 |
| Account payable | Shinwell Automobile | 19,320.30 | |
| Other current liabilities | RBCD | 0.05 | 169,620,804.78 |
| Other current liabilities | Weifu Precision Machinery | 425,076.87 | 74,778.76 |
| Other current liabilities | Robert Bosch Company | 2,081.71 | |
| Other current liabilities | WFEC | 183,514.51 | |
| Other account payable | Wuxi Industry Group | 49,246.71 | 5,474,862.22 |
| Contract liabilities | Weifu Precision Machinery | 3,269,822.06 | 619,469.03 |
| Contract liabilities | RBCD | 0.36 | 0.36 |
| Contract liabilities | Robert Bosch Company | 16,013.14 | 18,094.85 |
| Contract liabilities | WFEC | 1,411,650.11 |
7. Undertakings of related party
Nil
8. Other
NilXIII. Share-based payment
1. Overall situation of share-based payment
√ Applicable □ Not applicable
Unit: yuan
| Total amount of various equity instruments granted by the company in the current period | 0.00 |
| Total amount of various equity instruments exercised by the company in the current period | 0.00 |
| Total amount of various equity instruments invalidated by the company in the current period | 0.00 |
| The scope of the exercise price of the stock options issued by the company at the end of the period and the remaining period of the contract | The grant price is 15.48 Yuan per share; the exercise time is from the first trading day 24 months after the completion of the registration of the restricted stocks |
| granted in the first tranche to the last trading day within 60 months from the date of completion of the registration of the restricted stock granted in the first tranche, so the remaining period of the contract is 4 years and 5 months. | |
| The scope of the exercise price of other equity instruments issued by the company at the end of the period and the remaining period of the contract | N/A |
2. Share-based payment settled by equity
√ Applicable □ Not applicable
Unit: yuan
| Method for determining the fair value of equity instruments on the grant date | Determine based on the closing price of the restricted stock on the grant date |
| Basis for determining the number of vesting equity instruments | Unlocking conditions |
| Reasons for the significant difference between estimate in the current period and estimate in the prior period | N/A |
| Cumulative amount of equity-settled share-based payments included in the capital reserve | 45,010,559.27 |
| Total amount of expenses confirmed by equity-settled share-based payments in the current period | 38,525,721.77 |
Other explanationThis restricted stock incentive plan has been reviewed and approved by the company's second extraordinary general meeting ofshareholders in 2020. The overview of this restricted stock incentive plan is as follows:
(1) Stock source: the company's A-share common stock repurchased from the secondary market.
(2) Grant date: November 12, 2020.
(3) Grant objects and number of grants: 19,540,000 restricted stocks were granted to 601 incentive objects of the company and itssubsidiaries.
(4) Grant price: 15.48 Yuan/share.
(5) Grant registration completion date: December 4, 2020.
(6) Lifting the restrictions on sales:
| Unlock period | Unlock time | Ratio of unlocked quantity to granted quantity |
| Phase I unlocked | Starting from the first trading day 24 months after the completion of the registration of the first grant and ending on the last trading day within 36 months | 4/10 |
| Phase II unlocked | Starting from the first trading day 36 months after the completion of the registration of the first grant and ending on the last trading day within 48 months | 3/10 |
| Phase III unlocked | Starting from the first trading day 48 months after the completion of the registration of the first grant and ending on the last trading day within 60 months | 3/10 |
(7) Performance appraisal requirements at the company level:
| Unlock conditions | Performance appraisal requirements |
| The first batch of unlock conditions | 1. the weighted average ROE for year of 2021 is not less than 10%; 2. the growth rate of self-operating profit in 2021 will not be less than 6% compared with the year of 2019, the absolute amount will not be less than 845 million Yuan; 3. the cash dividends for year of 2021 shall be no less than 50% of the profit available for distribution of the current year. |
| The second batch of unlocking conditions | 1. the weighted average ROE for year of 2022 is not less than 10%; 2. the growth rate of self-operating profit in 2022 will not be less than 12% compared with the year of 2019, the absolute amount will not be less than 892 million Yuan; 3. the cash dividends for year of 2022 shall be no less than 50% of the profit available for distribution of the current year. |
| The third batch of unlocking conditions | 1. the weighted average ROE for year of 2023 is not less than 10%; 2. the growth rate of self-operating profit in 2023 will not be less than 20% compared with the year of 2019, the absolute amount will not be less than 958 million Yuan; 3. the cash dividends for year of 2023 shall be no less than 50% of the profit available for distribution of the current year. |
Other explanation: self-operating profit refers to the net profit attributable to the owners of the parent company after deductingnon-recurring gains and losses, and deducting the investment income from RBCD and Zhonglian Electronics.
3. Share-based payment settled by cash
□ Applicable √ Not applicable
4. Modification and termination of share-based payment
Nil
5. Other
NilXIV. Undertakings or contingency
1. Important undertakings
Important undertakings on balance sheet dateNil
2. Contingency
(1) Contingency on balance sheet date
Nil
(2) For the important contingency not necessary to disclosed by the Company, explained reasonsThe Company has no important contingency that need to disclosed
3. Other
NilXV. Events after balance sheet date
1. Important non adjustment matters
Nil
2. Profit distribution
Nil
3. 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 theabove-mentioned annuity plan since the date of reply of plans reporting received from labor securityadministration department. Annuity plans are: the annuity fund are paid by the enterprise and employees together;the enterprise’s contribution shall not exceed 8% of the gross salary of the employees of the enterprise per year,the combined contribution of the enterprise and the individual employee shall not exceed 12% of the total salaryof the employees of the enterprise. In accordance with the State’s annuity policy, the Company will adjusted theeconomic benefits in due time, in principle of responding to the economic strength of the enterprise, the amountpaid by the enterprise at current period control in the 8 percent of the total salary of last year, the maximum annualallocation to employees shall not exceed five times the average allocation to employees and the excess shall not becounted towards the allocation. The individual contribution is limited to 1% of one’s total salary for the previousyear. Specific paying ratio later shall be adjusted 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. Termination of operation
Not applicable
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:
① The component is able to generate revenues and expenses in routine activities;
② Management of the Company is able to assess the operation results regularly, and determine resourcesallocation and performance evaluation for the component;
③ Being analyzed, financial status, operation results and cash flow of the components are able to require by theCompanyThe Company mainly engaged in the manufacture of fuel system of internal combustion engine and fuel cellcomponents products, auto components, muffler and purifier etc., based on the product segment, the Companydetermine three reporting segments as auto fuel injection system and fuel cell components, air managementsystem and automotive post processing system. Accounting policy for the three reporting segments are shares thesame policy state in Note IIISegment assets exclude transaction financial asset, other account receivables-dividend receivable, othernon-current financial assets, other equity instrument investment, long term equity investment and otherundistributed assets, since these assets are not related to products operation.
(2) Financial information for reportable segment
Unit: yuan
| Item | Automotive fuel injection system and fuel cell parts product division | 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 disposal income, the retained assets or gains/losses as the financial assets available for sale or possession and disposal income | Offset of segment | Total |
| Operating revenue | 4,305,354,512.04 | 4,394,119,908.54 | 405,399,927.28 | 67,182,591.62 | 9,037,691,756.24 | |
| Operating cost | 3,239,720,153.16 | 4,036,287,975.75 | 273,030,571.13 | 51,121,542.97 | 7,497,917,157.07 | |
| Total Profit | 644,258,758.92 | 63,621,512.18 | 76,012,351.93 | 1,022,879,974.51 | -243,248.80 | 1,807,015,846.34 |
| Net profit | 558,400,473.39 | 53,595,201.29 | 62,094,332.24 | 1,014,770,741.60 | -182,436.60 | 1,689,043,185.12 |
| Total assets | 10,303,814,900.36 | 5,130,075,839.34 | 1,060,058,427.80 | 12,117,590,380.81 | 832,350,815.26 | 27,779,188,733.05 |
| Total liabilities | 4,372,047,721.55 | 3,915,091,909.96 | 578,076,964.03 | 2,074,553.43 | 66,586,069.62 | 8,800,705,079.35 |
(3) If the company has no reportable segments or is unable to disclose the total assets and liabilities of eachreportable segment, it should state the reasons
Not applicable
(4) Other explanation
Nil
7. Major transaction and events makes influence on investor’s decision
Nil
8. Other
NilXVII. Principal notes of financial statements of parent company
1. Account receivable
(1) Classification of account receivable
Unit: yuan
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Ratio | Amount | Provision ratio | Amount | Ratio | Amount | Provision ratio | |||
| Account receivable with bad debt provision accrual on a single basis | 9,996,116.39 | 0.70% | 9,996,116.39 | 100.00% | 11,107,123.51 | 1.11% | 11,107,123.51 | 100.00% | ||
| Including: | ||||||||||
| Account receivable with bad debt provision accrual on portfolio | 1,420,626,206.51 | 99.30% | 2,294,051.81 | 0.16% | 1,418,332,154.70 | 985,882,139.36 | 98.89% | 3,099,860.14 | 0.31% | 982,782,279.22 |
| Including: | ||||||||||
| Including: receivables from customers | 1,275,194,085.44 | 89.13% | 2,294,051.81 | 0.18% | 1,272,900,033.63 | 836,329,626.26 | 83.89% | 3,099,860.14 | 0.37% | 833,229,766.12 |
| Receivables from internal related parties | 145,432,121.07 | 10.17% | 145,432,121.07 | 149,552,513.10 | 15.00% | 149,552,513.10 | ||||
| Total | 1,430,622,322.90 | 100.00% | 12,290,168.20 | 0.86% | 1,418,332,154.70 | 996,989,262.87 | 100.00% | 14,206,983.65 | 1.42% | 982,782,279.22 |
Bad debt provision accrual on single basis: 9,996,116.39 yuan
Unit: yuan
| Name | Ending balance | |||
| Book balance | Bad debt provision | Provision ratio | Accrual causes | |
| BD bills | 7,300,000.00 | 7,300,000.00 | 100.00% | Have difficulty in collection |
| Changchun FAW Sihuan Engine Manufacturing Co., Ltd | 1,475,731.65 | 1,475,731.65 | 100.00% | Have difficulty in collection |
| Wuxi Kipor Machinery Co., Ltd | 1,220,384.74 | 1,220,384.74 | 100.00% | Have difficulty in collection |
| Total | 9,996,116.39 | 9,996,116.39 | -- | -- |
Bad debt provision accrual on portfolio: 2,294,051.81 yuan
Unit: yuan
| Name | Ending balance | ||
| Book balance | Bad debt provision | Provision ratio | |
| Within 6 months | 1,268,573,282.52 | ||
| 6 months to 1 year | 3,445,113.75 | 344,511.38 | 10.00% |
| 1-2 years | 965,327.97 | 193,065.59 | 20.00% |
| 2-3 years | 756,477.26 | 302,590.90 | 40.00% |
| Over 3 years | 1,453,883.94 | 1,453,883.94 | 100.00% |
| Total | 1,275,194,085.44 | 2,294,051.81 | -- |
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
Unit: yuan
| Account age | Ending balance |
| Within 1 year (including 1 year) | 1,417,450,517.34 |
| Including: Within 6 months | 1,414,005,403.59 |
| 6 months to 1 year | 3,445,113.75 |
| 1-2 years | 965,327.97 |
| 2-3 years | 9,532,208.91 |
| Over 3 years | 2,674,268.68 |
| 3-4 years | 2,674,268.68 |
| Total | 1,430,622,322.90 |
(2) Bad debt provision accrual collected or switch back
Bad debt provision accrual in the period:
Unit: yuan
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written-off | Other | |||
| Bad debt provision | 14,206,983.65 | 805,808.33 | 1,111,007.12 | 12,290,168.20 | ||
| Total | 14,206,983.65 | 805,808.33 | 1,111,007.12 | 12,290,168.20 | ||
Important bad debt provision collected or switch back: nil
(3) Account receivable actual charge off in the Period
Unit: yuan
| Item | Write off Amount |
| Fuzhou Haominxing Automobile components Co., Ltd. | 1,111,007.12 |
| Total | 1,111,007.12 |
Major charge-off for the major receivable: nil
(4) Top 5 receivables at ending balance by arrears party
Unit: yuan
| Name | Ending balance of account receivable | Ratio in total ending balance of account receivables | Ending balance of bad debt reserve |
| RBCD | 932,300,868.41 | 65.17% | 59,766.11 |
| Custom 1 | 76,170,106.50 | 5.32% | 688,930.18 |
| WFSC | 72,454,228.14 | 5.06% | |
| Robert Bosch | 60,055,279.84 | 4.20% | 72,611.24 |
| Custom 2 | 44,648,627.27 | 3.12% | 16,862.45 |
| Total | 1,185,629,110.16 | 82.87% |
(5) Account receivable derecognition due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvementNil
2. Other account receivables
Unit: yuan
| Item | Ending balance | Opening balance |
| Interest receivable | 88,888.89 | 897,777.78 |
| Dividend receivable | 466,859,940.06 | |
| Other account receivables | 190,997,720.43 | 196,437,936.85 |
| Total | 657,946,549.38 | 197,335,714.63 |
(1) Interest receivable
1) Category of interest receivable
Unit: yuan
| Item | Ending balance | Opening balance |
| Interest receivable of unified-borrowing & unified-lending | 88,888.89 | 897,777.78 |
| Total | 88,888.89 | 897,777.78 |
2) Significant overdue interest
Nil
3) Accrual of bad debt provision
□ Applicable √ Not applicable
(2) Dividend receivable
1) Category of dividend receivable
Unit: yuan
| Item (or invested enterprise) | Ending balance | Opening balance |
| Zhonglian Electronics | 198,800,000.00 | |
| RBCD | 266,751,179.26 | |
| SDEC | 1,077,970.80 | |
| Miracle Automation | 230,790.00 | |
| Total | 466,859,940.06 |
2) Important dividend receivable with account age over one year
Nil
3) Accrual of bad debt provision
□ Applicable √ Not applicable
(3) Other account receivables
1) Other account receivables classification by nature
Unit: yuan
| Nature | Ending book balance | Opening book balance |
| Staff loans and petty cash | 1,123,562.79 | 483,650.21 |
| Balance of related party in the consolidate scope | 188,746,521.72 | 194,745,396.72 |
| Margin | 1,230,340.00 | 1,030,340.00 |
| Other | 7,280.00 | 263,534.00 |
| Total | 191,107,704.51 | 196,522,920.93 |
2) Accrual of bad debt provision
Unit: yuan
| Bad debt provision | 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, 2021 | 84,984.08 | 84,984.08 | ||
| Balance of Jan. 1, 2021 in the period | —— | —— | —— | —— |
| Current accrual | 25,000.00 | 25,000.00 | ||
| Balance on Jun. 30, 2021 | 109,984.08 | 109,984.08 |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √ Not applicable
By account age
Unit: yuan
| Account age | Ending balance |
| Within 1 year (including 1 year) | 190,826,514.30 |
| Including: Within 6 months | 190,676,514.30 |
| 6 months to 1 year | 150,000.00 |
| 1-2 years | 200,080.00 |
| 2-3 years | 43,570.21 |
| Over 3 years | 37,540.00 |
| 3-4 years | 37,540.00 |
| Total | 191,107,704.51 |
3) Bad debt provision accrual, collected or switch back
Bad debt provision accrual in the period:
Unit: yuan
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written-off | Other | |||
| Bad debt provision | 84,984.08 | 25,000.00 | 109,984.08 | |||
| Total | 84,984.08 | 25,000.00 | 109,984.08 | |||
Including the important bad debt provision switch back or collected in the period: nil
4) Other receivables actually written-off during the reporting period
Nil
5) Top 5 other receivables at ending balance by arrears party
Unit: yuan
| Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other receivables | Ending balance of bad debt reserve |
| WFLD | Balance of related party in the consolidate scope | 100,000,000.00 | Within 6 months | 52.33% | |
| WFCA | Balance of related party in the consolidate scope | 59,193,906.00 | Within 6 months | 30.97% | |
| WFMA | Balance of related party in the consolidate scope | 17,552,615.72 | Within 6 months | 9.18% | |
| WFTT | Balance of related party in the consolidate scope | 12,000,000.00 | Within 6 months | 6.28% | |
| Zhenkunxing Industrial Supermarket (Shanghai) Co., Ltd. | Security deposit | 1,000,000.00 | Within 6 months | 0.52% | |
| Total | -- | 189,746,521.72 | 99.28% |
6) Other 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 involvedNil
3. Long-term equity investments
Unit: yuan
| Item | Ending balance | Opening balance | ||||
| Book balance | Depreciation reserves | Book value | Book balance | Depreciation reserves | Book value | |
| Investment for subsidiary | 2,094,528,946.39 | 2,094,528,946.39 | 1,978,302,303.40 | 1,978,302,303.40 | ||
| Investment for associates and joint venture | 4,099,379,129.39 | 4,099,379,129.39 | 3,999,826,000.48 | 3,999,826,000.48 | ||
| Total | 6,193,908,075.78 | 6,193,908,075.78 | 5,978,128,303.88 | 5,978,128,303.88 | ||
(1) Investment for subsidiary
Unit: yuan
| The invested entity | Opening balance (book value) | Changes in Current Period | Ending balance (book value) | Ending balance of depreciation reserves | |||
| Additional Investment | Negative Investment | Provision for impairment loss | Other | ||||
| WFJN | 179,208,759.14 | 3,380,148.13 | 182,588,907.27 | ||||
| WFLD | 460,845,639.39 | 4,061,355.30 | 464,906,994.69 | ||||
| WFMA | 168,847,702.38 | 1,045,406.70 | 169,893,109.08 | ||||
| WFCA | 221,046,402.93 | 866,194.08 | 221,912,597.01 | ||||
| WFTR | 32,908,992.35 | 507,769.02 | 33,416,761.37 | ||||
| WFSC | 50,244,628.12 | 457,987.70 | 50,702,615.82 | ||||
| WFTT | 235,185,028.12 | 1,463,569.44 | 236,648,597.56 | ||||
| WFAM | 82,454,467.99 | 82,454,467.99 | |||||
| WFDT | 53,887,039.61 | 179,212.62 | 54,066,252.23 | ||||
| SPV | 493,673,643.37 | 104,265,000.00 | 597,938,643.37 | ||||
| Total | 1,978,302,303.40 | 116,226,642.99 | 2,094,528,946.39 | ||||
(2) Investment for associates and joint venture
Unit: yuan
| Enterprise | Opening balance (book value) | Current changes (+, -) | Ending balance (book value) | Ending balance of depreciation reserves | |||||||
| Additional investment | Capital reduction | Investment gain/loss recognized under equity | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Impairment accrual | Other | ||||
| I. Joint venture | |||||||||||
| II. Associated enterprise | |||||||||||
| RBCD | 2,687,524,679.53 | 633,637,962.50 | 533,502,358.52 | 2,787,660,283.51 | |||||||
| Zhonglian Electronics | 1,237,548,856.31 | 178,295,216.97 | 198,800,000.00 | 1,217,044,073.28 | |||||||
| Weifu Precision Machinery | 74,752,464.64 | 19,922,307.96 | 94,674,772.60 | ||||||||
| Subtotal | 3,999,826,000.48 | 831,855,487.43 | 732,302,358.52 | 4,099,379,129.39 | |||||||
| Total | 3,999,826,000.48 | 831,855,487.43 | 732,302,358.52 | 4,099,379,129.39 | |||||||
(3) Other explanation
Nil
4. Operating income and cost
Unit: yuan
| Item | Current period | Last Period | ||
| Income | Cost | Income | Cost | |
| Main business | 3,010,827,415.47 | 2,214,544,926.38 | 2,175,655,866.58 | 1,548,552,431.71 |
| Other business | 210,116,060.96 | 188,982,608.49 | 160,606,506.50 | 137,936,247.87 |
| Total | 3,220,943,476.43 | 2,403,527,534.87 | 2,336,262,373.08 | 1,686,488,679.58 |
5. Investment income
Unit: yuan
| Item | Current period | Last Period |
| Investment income from holding transaction financial asset | 3,468,760.80 | |
| Investment income in subsidiaries | 55,881,129.25 | 62,995,075.18 |
| Investment income in joint ventures and associated enterprises | 831,855,487.43 | 708,709,791.17 |
| Investment income of financial products | 137,428,400.49 | 136,202,392.15 |
| Total | 1,028,633,777.97 | 907,907,258.50 |
6. Other
NilXVIII. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable □ Not applicable
Unit: yuan
| Item | Amount | Note |
| Gains/losses from the disposal of non-current asset | 2,301,315.63 | |
| 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) | 23,433,211.68 | |
| 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 | -91,729,334.10 | |
| Other non-operating income and expenditure except for the aforementioned items | 261,828.55 | |
| Less: Impact on income tax | -9,604,873.99 | |
| Impact on minority shareholders’ equity | 702,962.52 | |
| Total | -56,831,066.77 | -- |
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. ROE and earnings per share(EPS)
| Profits during report period | Weighted average ROE | Earnings per share(EPS) | |
| Basic earnings per share (RMB/Share) | Diluted earnings per share (RMB/Share) | ||
| Net profits belong to common stock stockholders of the Company | 8.72% | 1.66 | 1.66 |
| Net profits belong to common stock stockholders of the Company after deducting nonrecurring gains and losses | 9.02% | 1.72 | 1.72 |
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
Nil
BOD Of Weifu High-Technology Group Co., Ltd.
Chairman:
Wang Xiaodong
24 August 2021