公证天业会计师事务所(特殊普通合伙)
Gongzheng Tianye Certified Public Accountants SGP
中国 . 江苏 . 无锡 Wuxi . Jiangsu . China
总机：86（510）68798988 Tel：86（510）68798988
传真：86（510）68567788 Fax：86（510）68567788
电子信箱：mail@gztycpa.cn E-mail：mail@gztycpa.cn
Auditor’s Report
Su Gong W【2023】No. A853
To the Shareholders of Weifu High-Technology Group Co. Ltd.:
I. Auditing opinions
We have audited the financial statement under the name of Weifu High-Technology Group Co. Ltd.(hereinafter referred to as WFHT) including the consolidated and parent Company’s balance sheet
of 31 December 2022 and profit statement and cash flow statement and statement on changes of
shareholders’ equity for the year ended and notes to the financial statements for the year ended.In our opinion the Company’s financial statements have been prepared in accordance with the
Enterprises Accounting Standards and Enterprises Accounting System and they fairly present the
financial status of the Company and of its parent company as of 31 December 2022 and its operation
results and cash flows for the year ended.II. Basis of opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountantsof China. Our responsibilities under those standards are further described in the “Auditor’sResponsibilities for the Audit of the Financial Statements” section of the auditor’s report. We are
independent of the Company in accordance with the Certified Public Accountants of China’s Code
of Ethics for Professional Accountants and we have fulfilled our other ethical responsibilities in
accordance with the Code. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion
III. Highlighted paragraphs
We remind users of financial statements to pay attention: As described in Note XIV-6 "Other
important transactions and matters affecting investors' decisions" the security organs have launched
a criminal investigation on the case that WFTR was defrauded by contracts in its "platform trade"
business. At present the case is in the investigation stage and the outcome of the case is uncertain
in the future.This paragraph does not affect the published audit opinion.IV. Key audit mattersKey audit matters are those matters that in our professional judgment were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole and in forming our opinion thereon and
we do not provide a separate opinion on these matters.The key audit issues identified in our audit are as follows:
(i) Accounting treatment of "platform trading" business and the related provision for
expected credit losses
1. Matter description
As described in Note XVI-7 "Other important transactions and matters affecting investors'
decisions" the security organs have launched a criminal investigation on the case that WFTR was
defrauded by contracts in its "platform trade" business. Based on the "platform trade" business’s
background transaction chain sales and purchase contract signing transaction process physical
flow and so on the Company carefully analyzed and made comprehensive judgment finds that the
probability of this business not belonging to normal trade business is extremely high. In terms of
accounting treatment the Company follows the principle of substance over form and does not treat
it as normal trade business but according to the receipt and payment of funds，prudently recognizeas claims and liabilities respectively purchases actually paid to "Suppliers" and sales collected
from "Customers". In the financial statements the "platform trade" business is net reported to other
receivables in the form of the "platform trade" business portfolio the amount is 2741499100 yuan
for which an expected credit loss of 1644068300 yuan has been charged. The "platform trade"
business involved significant amounts of money and was at the stage of criminal investigation the
judgment of the nature of the business accounting treatment and the provision of expected credit
losses are related to management's use of significant accounting estimates and judgments and have
a significant impact on the financial statements. Therefore we identified the accounting treatment
of the "platform trading" business and the provision of expected credit losses of portfolio claims of
"platform trading" business as key audit matters.
2. The solution to the matter in auditing
(1) Interview the management and relevant business personnel of WFTR to understand the business
background operation mode contract signing method pricing method transaction and settlement
process of its "platform trade" business;
(2) Evaluate and test the internal controls of the "platform trade" business evaluate the design of
these controls determine whether they are implemented and test the operational effectiveness of
the relevant internal controls;
(3) Obtain the standing book of purchase and sales contract inspect the purchase and sales contract
and verify the key terms of the subject matter counterparty contract price delivery mode and so
on involved in the purchase and sales contract combine the contract signing time pricing method
and interview records to further judge whether the relevant transaction has commercial substance;
(4) Obtain the industrial and commercial information of "customers" and "suppliers" involved inthe transaction process check the business scope registered address equity structure registered
capital personnel size telephone number and other information of the counterparty to judge whether
the business scope of the counterparty and its own scale match the transaction scale check whether
there is correlation or suspected correlation between the upstream "supplier" and the downstream
"customer" and evaluate the business logic and rationality of the existence of the upstream
"supplier" and the downstream "customer" in the transaction chain at the same time;
(5) Obtain detailed accounts and accounting documents involved in the "platform trade" business
check the original documents related to accounting processing including but not limited to purchase
and sales contracts (orders framework agreements) invoices logistics documents payment and
payment bank documents and ask relevant personnel about logistics documents check their sources
and ways of obtaining. Further judge whether there is real physical circulation in the transaction
process;
(6) Send letters to the "customer" and "supplier" confirm the "transaction amount" and "settlement
balance" to the "customer" and "supplier" check the return letter check the address of the return
letter the seal the amount of the return letter and other information and take further verification
procedures for the return letter with doubts;
(7) Visit the main "customers" and "suppliers" interview the transaction background transaction
content contract signing transaction mode cargo logistics operation capital settlement flow
whether there is a correlation between WFTR and the "customers" and "suppliers" verify the
information formed in the transaction process with the "customers" and "suppliers". Verify the
authenticity of the reply of "customer" and "supplier" and observe the business premises of
"customer" and "supplier" to further judge whether the relevant transaction has commercial
substance and commercial logic;
(8) Evaluate the reasonableness of that the management considers that the business has a high
probability of not having commercial substance and business logic and does not conduct accounting
treatment and presentation as normal trade business according to the principle of substance over
form based on the information obtained in the audit process;
(9) In combination with related transaction audit procedures check whether there are related
relationships related transactions and funds occupied by related parties in the "platform trade"
business;
(10) Obtain and check the supporting credentials for the actual collection of the "platform trade"
business debt portfolio after the balance sheet date visit the competent departments according to
the sources from which the management makes estimates and verify the authenticity and reliability
of the sources;
(11) Check the information related to the "platform trade" business has been properly reported and
disclosed in the financial statements.(ii) Revenue recognition
1. Matter descriptionAs described in Note V-32 “Revenue” and Note VII-44 “Operation revenue and operation cost”
carried in the financial statement WFHT achieved an operation revenue of 12.730 billion yuan for
year of 2022. As one of the biggest source of profits for WFHT operating revenue has a significant
effect on the general financial statement in which there are certain of inherent risks existed for the
reason that the management manipulate the timing of recognition so as to achieve specific objectives
or anticipations. Therefore we will take the Revenue recognition as the key auditing matter.
2. The solution to the matter in auditing
(1) Understand the key internal controls related to revenue recognition evaluate the design of these
controls determine whether they are implemented and test the operational effectiveness of the
relevant internal controls;
(2) Review sales contracts to understand main contract terms or conditions and evaluate the
appropriateness of revenue recognition methods;
(3) Combining with status and data of the industry where WFHT is located the Company should
make a judgment on the rationality of fluctuation of the revenue composition;
(4) The Company should carry out the procedure of account receivable and revenue letter of
confirmation and make a judgment on the rationality of the timing of revenue recognition;
(5) Combining with the procedure of letter of confirmation the Company should make a random
inspection on sales contracts or orders delivery lists logistics bills customs declaration sales
invoices signing-off sheet and other documents related to revenue to verify the authenticity of
revenue;
(6) Referring to the recorded revenue before and after the Balance Sheet Date the Company should
select some samples and check out the supportive documents such as delivery lists customs
declaration and receipt forms to make a judgment on whether the income has been recorded at the
appropriate accounting period.IV. Other information
The management of WFHT is responsible for other information which includes the information
covered in the Company’s 2021 annual report excluding the financial statement and our audit report.Our audit opinions on the financial statements do not cover other information and we do not issue
any form of authentication conclusions on other information.In combination with our audit of the financial statements it is our responsibility to read other
information and in the process consider whether there is material inconsistency or material
misstatement between the other information and the financial statements or what we learned during
the audit.Based on the work we have carried out if we determine that there is a material misstatement of
other information we should report that fact and this regard we have noting to report.V. Responsibilities of management and those charged with governance for the financial
statements
The management is responsible for the preparation of the financial statements in accordance with
the Accounting Standards for Enterprise to secure a fair presentation and for the design
establishment and maintenance of the internal control necessary to enable the preparation of
financial statements that are free from material misstatement whether due to fraud or error.In preparing the financial statements the management is responsible for assessing the Company’s
ability to continue as a going concern disclosing matters related to going concern (if applicable)
and using the going concern assumption unless the management either intends to liquidate the
Company or to cease operations or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting
process.VI. Responsibilities of the auditor for the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement whether due to fraud or error and to issue an audit report that
includes our audit opinion. Reasonable assurance is a high level of assurance but is not a guarantee
that an audit conducted in accordance with the CAS will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if
individually or in the aggregate they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.As part of an audit in accordance with the CAS we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements whether due
to fraud or error design and perform audit procedures responsive to those risks and obtain audit
evidence that is sufficient and appropriate to provide a basis for audit opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error
as fraud may involve collusion forgery intentional omissions misrepresentations or the override
of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern assumption and
based on the audit evidence obtained whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern.If we conclude that a material uncertainty exists we are required by the CAS to draw users’ attention
in audit report to the related disclosures in the financial statements or if such disclosures areinadequate to modify audit opinion. Our conclusions are based on the information obtained up to
the date of audit report. However future events or conditions may cause the Company to cease to
continue as a going concern.
(5) Evaluate the overall presentation structure and content of the financial statements and whether
the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Company to express audit opinion on the financial statements. We
are responsible for the direction supervision and performance of the group audit. We remain solely
responsible for audit opinion.We communicate with those charged with governance regarding among other matters the planned
scope and timing of the audit and significant audit findings including any significant deficiencies
in internal control that we identify during our audit.We also provide the governance with a statement of our compliance with the ethical requirements
relating to our independence and communicate with the governance on all relationships and other
matters that may reasonably be considered to affect our independence as well we the relevant
precautions (if applicable).From the matters communicated with those charged with governance we determine those matters
that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in the auditor’s report unless law or
regulation precludes public disclosure about the matter or when in extremely rare circumstances
we determine that a matter should not be communicated in the auditor’s report because of the
adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.Jiangsu Gongzheng Tianye CPA Chinese CPA: Gu Zhi
(Special General Partnership) (Engagement partner)
Wuxi China Chinese CPA: Zhang Qianqian
26 April 2023II. Financial Statement
Statement in Financial Notes are carried Unit: RMB/CNY
1. Consolidated Balance Sheet
Prepared by Weifu High-Technology Group Co. Ltd.December 31 2022
In RMB
Item December 31 2022 January 1 2022
Current assets:
Monetary funds 2389551930.76 1896063265.69
Settlement provisions
Capital lent
Trading financial assets 2718820654.87 6076436069.42
Derivative financial assets
Note receivable 135559024.27 1116550186.21
Account receivable 3127490177.25 2053800293.77
Receivable financing 1918368845.21 713017014.50
Accounts paid in advance 94323853.87 178059249.99
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other account receivable 1264507456.47 17908078.54
Including: Interest receivable
Dividend receivable 147000000.00
Buying back the sale of financial assets
Inventories 2283119656.27 3445396375.09
Contract assets
Assets held for sale
Non-current asset due within one year
Other current assets 430547201.24 220320922.50
Total current assets 14362288800.21 15717551455.71
Non-current assets:
Loans and payments on behalfDebt investment
Other debt investment
Long-term account receivable
Long-term equity investment 6282818108.96 5717944788.12
Investment in other equity instrument 677790690.00 285048000.00
Other non-current financial assets 1326608914.00 1690795178.00
Investment real estate 49296869.73 19387746.56
Fixed assets 3769984185.94 2932210452.51
Construction in progress 509105587.49 387429933.08
Productive biological asset
Oil and gas asset
Right-of-use assets 41865100.38 23148405.58
Intangible assets 487627987.92 440593119.82
Expense on Research and Development
Goodwill 237682375.72 231255015.75
Long-term expenses to be apportioned 28586235.84 15304783.57
Deferred income tax asset 275627772.45 242248194.57
Other non-current asset 479630436.37 267941354.57
Total non-current asset 14166624264.80 12253306972.13
Total assets 28528913065.01 27970858427.84
Current liabilities:
Short-term loans 3604376527.82 1437958206.55
Loan from central bank
Capital borrowed
Trading financial liability
Derivative financial liability 747115.75
Note payable 1411089606.00 1760032216.30
Account payable 3454601023.60 3206653702.59
Accounts received in advance 3633878.33 2854518.96
Contractual liability 94850083.23 136427636.39
Selling financial asset of repurchase
Absorbing deposit and interbank deposit
Security trading of agency
Security sales of agencyWage payable 317434386.24 339888502.70
Taxes payable 54586315.53 40105648.88
Other account payable 198990948.23 359905317.46
Including: Interest payable 6184.14
Dividend payable 25671100.00
Commission charge and commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due within one year 14285348.90 34088773.68
Other current liabilities 211763779.77 212969271.55
Total current liabilities 9366359013.40 7530883795.06
Non-current liabilities:
Insurance contract reserve
Long-term loans 238000000.00
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability 31589277.20 15795469.25
Long-term account payable 30785082.11 32015082.11
Long-term wages payable 154093044.28 108311923.19
Accrued liability 10106268.87
Deferred income 223123978.78 298052867.56
Deferred income tax liabilities 40149550.99 23097535.20
Other non-current liabilities
Total non-current liabilities 727847202.23 477272877.31
Total liabilities 10094206215.63 8008156672.37
Owner’s equity:
Share capital 1008603293.00 1008659570.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve 3398368567.63 3371344172.82
Less: Inventory shares 541623002.63 270249797.74
Other comprehensive income -911310.13 -36746344.60Reasonable reserve 2119800.95 712215.31
Surplus public reserve 510100496.00 510100496.00
Provision of general risk
Retained profit 13320021325.90 14814787377.86
Total owner’ s equity attributable to parent company 17696679170.72 19398607689.65
Minority interests 738027678.66 564094065.82
Total owner’ s equity 18434706849.38 19962701755.47
Total liabilities and owner’ s equity 28528913065.01 27970858427.84
Legal Representative: Wang Xiaodong
Person in charge of accounting works: Ou Jianbin
Person in charge of accounting institute: Ou Jianbin
2. Balance Sheet of Parent Company
In RMB
Item December 31 2022 January 1 2022
Current assets:
Monetary funds 823574329.53 1002808546.46
Trading financial assets 2693150975.20 5493703374.82
Derivative financial assets
Note receivable 29575852.04 303726372.69
Account receivable 906808283.22 536957890.22
Receivable financing 216462262.44
Accounts paid in advance 56037892.68 93419268.82
Other account receivable 1472102439.27 204125517.63
Including: Interest receivable 206325.34 113055.56
Dividend receivable 26718900.00
Inventories 571571431.95 1076094722.15
Contract assets
Assets held for sale
Non-current assets maturing within one year
Other current assets 107462112.82 149352872.77
Total current assets 6876745579.15 8860188565.56
Non-current assets:
Debt investmentOther debt investment
Long-term receivables
Long-term equity investments 8369843351.10 6867282228.56
Investment in other equity instrument 601850690.00 209108000.00
Other non-current financial assets 1326608914.00 1690795178.00
Investment real estate 35584279.11
Fixed assets 2251495050.80 1786089596.76
Construction in progress 251304655.41 239183999.25
Productive biological assets
Oil and natural gas assets
Right-of-use assets 6061693.75 1240879.96
Intangible assets 209246490.17 209952168.75
Research and development costs
Goodwill
Long-term deferred expenses 6895352.43 348970.34
Deferred income tax assets 109624761.50 85012991.24
Other non-current assets 168744695.04 185646711.53
Total non-current assets 13337259933.31 11274660724.39
Total assets 20214005512.46 20134849289.95
Current liabilities
Short-term borrowings 2121354415.53 272578883.63
Trading financial liability
Derivative financial liability 737424.50
Notes payable 251867652.05 569405391.94
Account payable 1048268519.52 1012390712.80
Accounts received in advance
Contract liability 6564332.93 7879319.15
Wage payable 166314985.33 220719432.58
Taxes payable 6048505.30 12427327.61
Other accounts payable 926276130.15 392455373.80
Including: Interest payable 835069.83 117777.78
Dividend payable
Liability held for sale
Non-current liabilities due within one year 4306935.71 462484.41Other current liabilities 102322311.03 143935332.78
Total current liabilities 4634061212.05 2632254258.70
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual capital securities
Lease liability 2690812.43 1003106.55
Long-term account payable
Long term employee compensation payable 121683760.89 103482333.50
Accrued liabilities 13750.00
Deferred income 198149511.20 265509545.34
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 322537834.52 369994985.39
Total liabilities 4956599046.57 3002249244.09
Owners’ equity:
Share capital 1008603293.00 1008659570.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital public reserve 3515005861.23 3487154855.59
Less: Inventory shares 541623002.63 270249797.74
Other comprehensive income
Special reserve
Surplus reserve 510100496.00 510100496.00
Retained profit 10765319818.29 12396934922.01
Total owner’s equity 15257406465.89 17132600045.86
Total liabilities and owner’s equity 20214005512.46 20134849289.953. Consolidated Profit Statement
In RMB
Item 2022 2021
I. Total operating income 12729634917.03 13682426710.95
Including: Operating income 12729634917.03 13682426710.95
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost 12526691966.36 12772618230.58
Including: Operating cost 11016385488.80 11220367713.57
Interest expense
Commission charge and commission expense
Cash surrender value
Net amount of expense of compensation
Net amount of withdrawal of insurance contract reserve
Bonus expense of guarantee slip
Reinsurance expense
Tax and extras 70575584.89 60256733.73
Sales expense 189528090.71 264651432.56
Administrative expense 586386474.32 611872150.24
R&D expense 581488711.88 595406951.64
Financial expense 82327615.76 20063248.84
Including: Interest expenses 107737432.78 38698621.09
Interest income 41020724.48 41478845.32
Add: other income 112665397.27 71276971.68
Investment income (Loss is listed with “-”) 1849145500.50 1954523836.59
Including: Investment income on affiliated company and joint venture 1636986684.96 1632117748.78
The termination of income recognition for financial assets measured by
-959296.18
amortized cost(Loss is listed with “-”)
Exchange income (Loss is listed with “-”)
Net exposure hedging income (Loss is listed with “-”)
Income from change of fair value (Loss is listed with “-”) -157622752.09 -40270333.81
Loss of credit impairment (Loss is listed with “-”) -1645881142.40 4059750.80
Losses of devaluation of asset (Loss is listed with “-”) -181610433.12 -138117315.80Income from assets disposal (Loss is listed with “-”) 1986804.53 3932344.07
III. Operating profit (Loss is listed with “-”) 181626325.36 2765213733.90
Add: Non-operating income 5699768.04 656202.07
Less: Non-operating expense 7711660.06 25509569.87
IV. Total profit (Loss is listed with “-”) 179614433.34 2740360366.10
Less: Income tax expense -11331574.91 90995689.95
V. Net profit (Net loss is listed with “-”) 190946008.25 2649364676.15
(i) Classify by business continuity
1.continuous operating net profit (net loss listed with ‘-”) 190946008.25 2649364676.15
2.termination of net profit (net loss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to owner’s of parent company 118819836.30 2575371419.80
2.Minority shareholders’ gains and losses 72126171.95 73993256.35
VI. Net after-tax of other comprehensive income 35835034.47 -50662087.73
Net after-tax of other comprehensive income attributable to owners of parent
35835034.47-50662964.07
company
(I) Other comprehensive income items which will not be reclassified
-399165.0616008.80
subsequently to profit of loss
1.Changes of the defined benefit plans that re-measured -399165.06
2.Other comprehensive income under equity method that cannot be transfer
16008.80
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
36234199.53-50678972.87
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
36234199.53-50678972.87
statements
7.Other
Net after-tax of other comprehensive income attributable to minority 876.34shareholders
VII. Total comprehensive income 226781042.72 2598702588.42
Total comprehensive income attributable to owners of parent Company 154654870.77 2524708455.73
Total comprehensive income attributable to minority shareholders 72126171.95 73994132.69
VIII. Earnings per share:
(i) Basic earnings per share 0.09 2.57
(ii) Diluted earnings per share 0.09 2.57
As for the enterprise combined under the same control net profit of 0 yuan achieved by the merged party before
combination while 0 yuan achieved last period
Legal Representative: Wang Xiaodong
Person in charge of accounting works: Ou Jianbin
Person in charge of accounting institute: Ou Jianbin
4. Profit Statement of Parent Company
In RMB
Item 2022 2021
I. Operating income 3864504995.80 4832340790.45
Less: Operating cost 3263994952.63 3605342507.48
Taxes and surcharge 21016396.56 29689175.82
Sales expenses 24032764.17 44807972.25
Administration expenses 312390634.03 324244883.74
R&D expenses 215942706.30 225949431.82
Financial expenses -47492346.99 -15417294.04
Including: interest expenses 75002506.86 7427980.88
Interest income 123450262.42 26881455.19
Add: other income 78660020.95 41029454.01
Investment income (Loss is listed with “-”) 1698892386.70 1758393772.54
Including: Investment income on affiliated Company and joint
1427651731.231366704678.23
venture
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 “-”) -157794622.92 -40747662.86
Loss of credit impairment (Loss is listed with “-”) -1645695111.31 -654218.49Losses of devaluation of asset (Loss is listed with “-”) -94397143.24 -40950682.53
Income on disposal of assets (Loss is listed with “-”) 208706.65 850642.47
II. Operating profit (Loss is listed with “-”) -45505874.07 2335645418.52
Add: Non-operating income 236560.76 527726.36
Less: Non-operating expense 1624603.88 24178368.73
III. Total Profit (Loss is listed with “-”) -46893917.19 2311994776.15
Less: Income tax -24338482.27 101437713.12
IV. Net profit (Net loss is listed with “-”) -22555434.92 2210557063.03(i)continuous operating net profit (net loss listed with ‘-”) -22555434.92 2210557063.03(ii) termination of net profit (net loss listed with ‘-”)
V. Net after-tax of other comprehensive income
(I) Other comprehensive income items which will not be reclassified
subsequently to profit of loss
1.Changes of the defined benefit plans that re-measured
2.Other comprehensive income under equity method that cannot
be transfer to gain/loss
3.Change of fair value of investment in other equity instrument
4.Fair value change of enterprise's credit risk
5. Other
(II) Other comprehensive income items which will be reclassified
subsequently to profit or loss
1.Other comprehensive income under equity method that can
transfer to gain/loss
2.Change of fair value of other debt investment
3.Amount of financial assets re-classify to other comprehensive
income
4.Credit impairment provision for other debt investment
5.Cash flow hedging reserve
6.Translation differences arising on translation of foreign
currency financial statements
7.Other
VI. Total comprehensive income -22555434.92 2210557063.03
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share5. Consolidated Cash Flow Statement
In RMB
Item 2022 2021
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services 12431900362.84 15555511937.16
Net increase of customer deposit and interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Net increase of insured savings and investment
Cash received from interest commission charge and commission
Net increase of capital borrowed
Net increase of returned business capital
Net cash received by agents in sale and purchase of securities
Write-back of tax received 306395040.32 50070441.00
Other cash received concerning operating activities 3682848864.34 86168562.99
Subtotal of cash inflow arising from operating activities 16421144267.50 15691750941.15
Cash paid for purchasing commodities and receiving labor service 10077477240.02 12479791466.70
Net increase of customer loans and advances
Net increase of deposits in central bank and interbank
Cash paid for original insurance contract compensation
Net increase of capital lent
Cash paid for interest commission charge and commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers 1384027081.31 1436357958.29
Taxes paid 580286995.87 499681099.37
Other cash paid concerning operating activities 6955095599.73 648207823.38
Subtotal of cash outflow arising from operating activities 18996886916.93 15064038347.74
Net cash flows arising from operating activities -2575742649.43 627712593.41
II. Cash flows arising from investing activities:
Cash received from recovering investment 10740023339.08 18129191548.43
Cash received from investment income 1183837077.82 1238803864.71
Net cash received from disposal of fixed intangible and other long-term 20576391.79 15303195.04assets
Net cash received from disposal of subsidiaries and other units 136787298.86 9000000.00
Other cash received concerning investing activities 1680766.91
Subtotal of cash inflow from investing activities 12081224107.55 19393979375.09
Cash paid for purchasing fixed intangible and other long-term assets 1152415535.85 753581993.49
Cash paid for investment 7116445479.00 18668448932.90
Net increase of mortgaged loans
Net cash received from subsidiaries and other units obtained 70190329.71
Other cash paid concerning investing activities 146232114.50
Subtotal of cash outflow from investing activities 8485283459.06 19422030926.39
Net cash flows arising from investing activities 3595940648.49 -28051551.30
III. Cash flows arising from financing activities
Cash received from absorbing investment 125000000.00
Including: Cash received from absorbing minority shareholders’
125000000.00
investment by subsidiaries
Cash received from loans 4692002243.34 1711808897.47
Other cash received concerning financing activities 5470000.00
Subtotal of cash inflow from financing activities 4817002243.34 1717278897.47
Cash paid for settling debts 2328551163.70 575619575.18
Cash paid for dividend and profit distributing or interest paying 1761911157.57 1561591089.99
Including: Dividend and profit of minority shareholder paid by subsidiaries 54977987.52 13970282.31
Other cash paid concerning financing activities 591370195.57 17596686.60
Subtotal of cash outflow from financing activities 4681832516.84 2154807351.77
Net cash flows arising from financing activities 135169726.50 -437528454.30
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate 27730942.53 -13059669.78
V. Net increase of cash and cash equivalents 1183098668.09 149072918.03
Add: Balance of cash and cash equivalents at the period -begin 1094018936.73 944946018.70
VI. Balance of cash and cash equivalents at the period -end 2277117604.82 1094018936.73
6. Cash Flow Statement of Parent Company
In RMB
Item 2022 2021
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services 3542749700.01 5563589299.47
Write-back of tax received 184495154.77Other cash received concerning operating activities 47404163.66 42028025.86
Subtotal of cash inflow arising from operating activities 3774649018.44 5605617325.33
Cash paid for purchasing commodities and receiving labor service 2601006413.32 3605626128.99
Cash paid to/for staff and workers 707858677.98 788560324.22
Taxes paid 209864912.81 283285319.76
Other cash paid concerning operating activities 186707374.55 172424308.24
Subtotal of cash outflow arising from operating activities 3705437378.66 4849896081.21
Net cash flows arising from operating activities 69211639.78 755721244.12
II. Cash flows arising from investing activities:
Cash received from recovering investment 7606003001.77 14660350548.43
Cash received from investment income 1230308621.08 1117355887.53
Net cash received from disposal of fixed intangible and other long-term
7573333.23675341.73
assets
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities 1345164876.69 32072638.81
Subtotal of cash inflow from investing activities 10189049832.77 15810454416.50
Cash paid for purchasing fixed intangible and other long-term assets 676750590.56 466841006.41
Cash paid for investment 5495846939.59 15006974321.57
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities 4200652968.77
Subtotal of cash outflow from investing activities 10373250498.92 15473815327.98
Net cash flows arising from investing activities -184200666.15 336639088.52
III. Cash flows arising from financing activities
Cash received from absorbing investment
Cash received from loans 2765016400.00 376524000.00
Other cash received concerning financing activities 668810047.94 100000000.00
Subtotal of cash inflow from financing activities 3433826447.94 476524000.00
Cash paid for settling debts 926483000.00 202000000.00
Cash paid for dividend and profit distributing or interest paying 1660892442.17 1520286898.73
Other cash paid concerning financing activities 426203919.97 4385823.06
Subtotal of cash outflow from financing activities 3013579362.14 1726672721.79
Net cash flows arising from financing activities 420247085.80 -1250148721.79
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate 9734626.92 -4982656.55
V. Net increase of cash and cash equivalents 314992686.35 -162771045.70Add: Balance of cash and cash equivalents at the period -begin 488417498.83 651188544.53
VI. Balance of cash and cash equivalents at the period -end 803410185.18 488417498.83
7. Statement of Changes in Owners’ Equity (Consolidated)
Current Period
In RMB
2022
Owners’ equity attributable to the parent Company
Other
equity instrument Other Minori Total
Item Perpe Less: compr Provisi
Share Reaso Surplu Retain ty owners
tual Capital Invent ehensi on of Subtot
capita Prefe nable s ed Other interes ’
capit reserve ory ve genera al
l rred Other reserve reserve profit ts equity
al shares incom l risk
stock
secur e
ities
100833713-148141939819962
I. Balance at the 270249 712215 510100 564094
end of the last 6595 4 4172. 36746 78 7377 60 7689 701755
year 797.74 .31 496.00 065.82
70.0082344.60.86.65.47
Add:
Changes of
accounting
policy
Error
correction of the
last period
Enterprise
combine under
the same control
Other
100833713-148141939819962
II. Balance at 270249 712215 510100 564094
the beginning of 6595 4 4172. 36746 78 7377 60 7689 701755
this year 797.74 .31 496.00 065.82
70.0082344.60.86.65.47
III. Increase/ - - -
-
Decrease in this 27024 271373 35835 14075 14947 17019 173933 15279
year (Decrease 5627
is listed with 394.81 204.89 034.47 85.64 66051. 28518. 612.84 94906.
7.00
“-”)969309
(i) Total 35835 118819 154654 72126 226781
comprehensive
income 034.47 836.30 870.77 171.95 042.72
(ii) Owners’ - - -
devoted and 27024 271373 130826
5627244405113578
decreased 394.81 204.89 610.83
capital 7.00 087.08 476.25
--
1.Common 397804 130000
shares invested 39 7804 267804
by shareholders 542.63 000.00
542.63 542.632. Capital
invested by
holders of other
equity
instruments
3. Amount
reckoned into 28116 28116 826610 28943
owners equity
with share- 895.55 895.55 .83 506.38
based payment
---
125282125282
4. Other 5627 1 0925 126431
560.00560.00
7.0000.74337.74
---
-
(III) Profit 16135 16135 16428
29306
distribution 85888. 85888. 92775.
887.52
262678
1. Withdrawal
of surplus
reserves
2. Withdrawal
of general risk
provisions
---
-
3. Distribution 16090 16090 16383
for owners (or 29306
shareholders) 59668. 59668. 66556.
887.52
808032
---
4. Other 4 5262 4 5262 4 5262
19.4619.4619.46
(IV) Carrying
forward internal
owners’ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus reserve
4．Carry-over
retained
earnings from
the defined
benefit plans
5．Carry-over
retained
earnings from
other
comprehensiveincome
6. Other
(V) Reasonable 14075 14075 287717 16953
reserve 85.64 85.64 .58 03.22
1. Withdrawal 26087 26087 27000 28787
in the report
period 086.34 086.34 74.03 160.37
2. Usage in the 24679 24679 24123 27091
report period 500.70 500.70 56.45 857.15
(VI)Others
100833983-133201769618434
IV. Balance at 541623 21198 510100 738027
the end of the 6032 6 8567. 911310 02 1325 67 9170 706849
report period 002.63 00.95 496.00 678.66
93.0063.13.90.72.38
Last Period
In RMB
2021
Owners’ equity attributable to the parent Company
Other
equity instrument Other Minorit
Item Perp Less: compr Provisi Total
Share Reaso Surplu Retain y
etual Capital Invent ehensi on of Subtot owners’
capita Prefe nable s ed Other interest
capit reserve ory ve genera al equity
l rred Other reserve reserve profit s
al shares incom l risk
stock
secur e
ities
1008
3294303621391651010137561828218794
I. Balance at 950 2333 512447
the end of the 24 236 7977. 619.4 0496. 1024 0 179 465899
last year 570.0 490.03 908.36
8.287470024.6290.66.02
0
Add:
Changes of
accounting
policy
Error
correction of
the last period
Enterprise
combine under
the same
control
Other
1008
3294303621391651010137561828218794
II. Balance at 950 2333 512447
the beginning 24 236 7977. 619.4 0496. 1024 0 179 465899
of this year 570.0 490.03 908.36
8.287470024.6290.66.02
0
III. Increase/
-77101---1058111611682
Decrease in this 51646
year (Decrease 2910 8 04.5 33378 50662 1621 6 8495 58 969 35856.is listed with 157.46
00.004180.0964.0274.723.248.9945
“-”)07
-
2575252425987
(i) Total 50662 73994
comprehensive 3 7141 70 845 02588.income 964.0 132.69
9.805.7342
7
-
(ii) Owners’ - 70463 10355
devoted and 33378 17321 120872
2910804.50984.
decreased 180.0 034.44 018.98
capital 00.00 4 54
0
--
1.Common 15000 14709
shares invested 2910 29 100
by shareholders 000.00 000.00
00.000.00
2. Capital
invested by
holders of other
equity
instruments
3. Amount
7424174241
reckoned into 23210 76562
owners equity 5 33.6 5 33.6
with share- 34.44 568.04
00
based payment
-
-29600
3337829600
4. Other 3 777 4 50.9
180.0450.94
729.064
0
---
-
(III) Profit 1517 1517 15570
39641
distribution 42279 42279 64181.
382.31
9.429.4273
1. Withdrawal
of surplus
reserves
2. Withdrawal
of general risk
provisions
---
-
3. Distribution 1513 1513 15529
for owners (or 39641
shareholders) 34143 34143 82821.
382.31
9.509.5081
---
4. Other 4 081 4 081 4 0813
359.92359.9259.92
(IV) Carrying
forward
internal
owners’ equity
1. Capital
reserves
conversed to
capital (share
capital)2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus reserve
4．Carry-over
retained
earnings from
the defined
benefit plans
5．Carry-over
retained
earnings from
other
comprehensive
income
6. Other
----
(V) Reasonable
1621162127627.16489
reserve
274.72274.723602.08
2271422714
1. Withdrawal 22843 24999
in the report 7 78.2 7 78.2
period 37.85 116.12
77
2433624336
2. Usage in the 23119 26648
052.9052.9
report period 65.21 018.20
99
663873633737473743
(VI)Others
000.002.86332.8632.86
1008-
33712702451010148141939819962
IV. Balance at 659 36746 71221 564094
the end of the 34 417 9797. 0496. 7873 6 076 701755
report period 570.0 344.6 5.31 065.82
2.82740077.8689.65.47
0 08. Statement of Changes in Owners’ Equity (Parent Company)
Current Period
In RMB
2022
Other equity instrument
Other
Item Perpet Capital Less: ReasonaShare Preferr ual compreh Surplus Retaine Total owners’ public Inventor ble Other
capital ed capital Other ensive reserve d profit equity reserve y shares reserve
stock securiti income
es
1008612396
I. Balance at the end 348715 270249 510100 171326000
59570.93492
of the last year 4855.59 797.74 496.00 45.86
002.01
Add: Changes
of accounting policy
Error
correction of the last
period
Other
1008612396
II. Balance at the 348715 270249 510100 171326000
beginning of this 59570. 93492
year 4855.59 797.74 496.00 45.86
002.01
-
III. Increase/ - -
Decrease in this year 278510 271373 16316
56277.187519357
(Decrease is listed 05.64 204.89 15103.
with “-”) 00 9.97
72
--
(i) Total
comprehensive 22 555 2 2555434.9
income
434.922
--
(ii) Owners’ 278510 271373
devoted and 56277. 2 43578476.decreased capital 05.64 204.89
0025
-
1.Common shares 397804
invested by 3 97804542.shareholders 542.63
63
2. Capital invested
by holders of other
equity instruments
3. Amount reckoned
into owner equity 289435 28943506.3
with share-based 06.38 8
payment
---
125282560.
4. Other 56277. 1 09250 126431
00
000.74337.74
--
(III) Profit
16090160905966
distribution
59668.8.8080
1. Withdrawal of
surplus reserves
-
-
2. Distribution for 16090
owners (or 1 60905966
shareholders) 59668.
8.80
80
3. Other
(IV) Carrying
forward internal
owners’ equity
1. Capital reserves
conversed to capital
(share capital)
2. Surplus reserves
conversed to capital
(share capital)
3. Remedying loss
with surplus reserve
4．Carry-over
retained earnings
from the defined
benefit plans
5．Carry-over
retained earnings
from other
comprehensive
income
6. Other
(V) Reasonable
reserve
1. Withdrawal in the 679150
6791507.46
report period 7.46
2. Usage in the 679150
6791507.46
report period 7.46
(VI)Others
1008610765
IV. Balance at the 351500 541623 510100 152574064
end of the report 03293. 31981
period 5861.23 002.63 496.00 65.89
008.29
Last period
In RMB
2021
Other equity
instrument
Other
Item Perpet Capital Less: Share compre Reasonab Surplus Retained Total owners’
Preferr ual public Inventor Other
capital hensive le reserve reserve profit equity
ed capital Other reserve y shares
income
stock securit
ies1008 34077
I. Balance at the 303627 510100 1169898 1632213807
9505732016.
end of the last year 977.74 496.00 2965.62 0.49
0.0061
Add: Changes
of accounting
policy
Error
correction of the
last period
Other
100834077
II. Balance at the 303627 510100 1169898 1632213807
beginning of this 95057 3 2016.year 977.74 496.00 2965.62 0.49
0.0061
III. Increase/ - -
Decrease in this 79422 6979519 810461975.3
29100333781
year (Decrease is 838.98 56.39 7
listed with “-”) 0.00 80.00
(i) Total 2210557 2210557063.comprehensive
income 063.03 03
--
(ii) Owners’ 72784 105872018.9
devoted and 29100 333781
decreased capital 838.98 8
0.0080.00
1.Common shares
invested by
shareholders
2. Capital invested
by holders of other
equity instruments
3. Amount
reckoned into 76562
owners equity with 7 6562568.04
share-based 568.04
payment
---
4. Other 29100 3 7777 333781 2 9309450.94
0.0029.0680.00
--
(III) Profit
15133411513341439.
distribution
439.5050
1. Withdrawal of
surplus reserves
--
2. Distribution for
owners (or 1 513341 1 513341439.shareholders)
439.5050
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 6436417
6436417.80
the report period .80
2. Usage in the 6436417
6436417.80
report period .80
66380736332.8
(VI)Others 7374332.86
00.006
100834871
IV. Balance at the 270249 510100 1239693 1713260004
end of the report 65957 5 4855.period 797.74 496.00 4922.01 5.86
0.00 59Notes to Financial Statement
I . Basic information of the Company
1. Historical origin of the Company
By the approval of STGS (1992) No. 130 issued by Jiangsu Economic Restructuring Committee
Weifu High-Technology Group Co. Ltd. (hereinafter referred to “the Company” or “Company”)
was established as a company of limited liability with funds raised from targeted sources and
registered at Wuxi Administration for Industry & 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 amounting to 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 Weifu Group Co. Ltd (hereinafter referred to as “Weifu Group”).By the approval of Jiangsu ERC and Shenzhen Securities Administration Office in August 1995 the
Company issued 68 million special ordinary shares (B-share) with value of 1.00 yuan for each and
the total value of those shares amounted to 68 million yuan. After the issuance the Company’s total
share capital increased to 183.4355 million yuan.By the approval of CSRC in June 1998 the Company issued 120 million RMB ordinary shares (A-
share) at Shenzhen Stock Exchange through on-line pricing and issuing. After the issuance the total
share capital of the Company amounted to 303.4355 million yuan.In the middle of 1999 deliberated and approved by the Board and Shareholders’ General Meeting
the Company implemented the plan of granting 3 bonus shares for each 10 shares. After that the
total share capital of the Company amounted to 394.46615 million yuan of which state-owned
shares amounted to 120.16615 million yuan public corporate shares 10.4 million yuan foreign-
funded shares (B-share) 88.40 million yuan RMB ordinary 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 shares after the issuance of A-share in June 1998 the Company allotted 3 shares for each
10 shares with a price of 10 yuan for each allotted share. Actually 41.9 million shares was allotted
and the total share capital after the allotment increased to 436.36615 million yuan of which state-
owned corporate shares amounted to 121.56615 million yuan public corporate shares 10.4 million
yuan foreign-funded shares (B-share) 88.4 million yuan and RMB 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 each 10 shares to the whole shareholders totaling to 130909845
shares in 2005.According to the Share Merger Reform Scheme of the Company that passed by related shareholders’
meeting of Share Merger Reform and SGZF [2006] No.61 Reply on Questions about State-owned
Equity Management in Share Merger Reform of Weifu High-Technology Co. Ltd. issued by State-
owned Assets Supervision & Administration Commission of Jiangsu Province the Weifu Group etc.
8 non-circulating shareholders arranged pricing with granting 1.7 shares for each 10 shares to
circulating A-share shareholders (totally granted 47736000 shares) 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 May 27 2009 Weifu Group satisfied the consideration arrangement by dispatching 0.5 shares
for each 10 shares based on the number of circulating A share as prior to Share Merger Reform
according to the aforesaid Share Merger Reform with an aggregate of 14039979 shares dispatched.Subsequent to implementation of dispatch of consideration shares Weifu Group then held
100021999 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. by Wuxi Industry Development Group Co. Ltd. issued by the State-owned Assets
Supervision and Administration Commission of Wuxi City Government Wuxi Industry
Development Group Co. Ltd. (hereinafter referred to as Wuxi Industry Group) acquired Weifu
Group. After the merger Weifu Group was then revoked and its assets and credits & debts were
transferred to be under the name of Wuxi Industry Group. Accordingly Wuxi Industry Group
became the first largest shareholder of the Company since then.In accordance with the resolutions of shareholders' meeting and provisions of amended constitution
and approved by [2012] No. 109 document of China Securities Regulatory Commission in February
2012 the Company issued RMB ordinary shares (A-share) of 112858000 shares to Wuxi Industry
Groups and overseas strategic investor privately Robert Bosch Co. Ltd. (ROBERT BOSCHGMBH)
(hereinafter referred to as Robert Bosch Company) face value was ONE yuan per share added
registered capital of 112858000 yuan and the registered capital after change was 680133995
yuan. Wuxi Industry Group is the first majority shareholder of the Company and Robert Bosch
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 and also passed in Annual General Meeting 2012 of the Company in May 2013. On basis
of total share capital 680133995 shares distribute 5-share for every 10 shares held by whole
shareholders 340066997 shares in total are distributed. Total share capital of the Company
amounting 1020200992 yuan up to December 31 2013.Deliberated and approved by the company’s first extraordinary general meeting in 2015 the
company has repurchased 11250422 shares of A shares from August 26 2015 to September 8
2015 and has finished the cancellation procedures for above repurchase shares in China Securities
Depository and Clearing Corporation Limited Shenzhen Branch on September 16 2015; after the
cancellation of repurchase shares the company’s paid-up capital (share capital) becomes1008950570 yuan after the change.After deliberation and approved by the 5th meeting of 10th session of the BOD for year of 2021 the
291000 restricted shares are buy-back and cancelled by the Company initially granted under the
2020 Restricted Share Incentive Plan. The cancellation of the above mentioned buy-back shares are
completed at the Shenzhen Branch of CSDC on December 20 2021; the paid-in capital (equity) of
the Company comes to 1008659570.00 yuan after changed.After deliberation and approved by the 8th meeting of 10th session of the BOD for year of 2022 the
56277 restricted shares are buy-back and cancelled by the Company initially granted under the
2020 Restricted Share Incentive Plan. The cancellation of the above mentioned buy-back shares are
completed at the Shenzhen Branch of CSDC on July 8 2022; the paid-in capital (equity) of the
Company comes to 1008603293.00 yuan after changed.
2. Registered place organization structure and head office of the Company
Registered place and head office of the Company: No.5 Huashan Road Xinwu District Wuxi
Unified social credit code: 91320200250456967N
The 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 market development department Party-masses Department Finance Department
Purchase Department Manufacturing Quality Department MS (Mechanical System) division
AC(Automotive Components) division and DS (Diesel System ) division etc. and subsidiaries such
as WUXI WEIFU LIDA CATALYTIC CONVERTER CO. LTD NANJING WFJN CO. LTD
IRD Fuel Cells A/S and Borit NV etc.
3. Business nature and major operation activities of the Company
Operation scope of parent company: Technology development and consulting service in the
machinery industry; manufacture of engine fuel oil system products fuel oil system testers and
equipment manufacturing of auto electronic parts automotive electrical components non-standard
equipment non-standard knife tool and exhaust after-treatment system; sales of the general
machinery hardware & electrical equipment chemical products & raw materials (excluding
hazardous chemicals) automotive components and vehicles (excluding nine-seat passenger car);
internal combustion engine maintenance; leasing of the own houses; import and export business in
respect of diversified commodities and technologies (other than those commodities and technologies
limited or forbidden by the State for import and export) by self-operation and works as agent for
such business. Research and test development of engineering and technical; R&D of the energy
recovery system; manufacture of auto components and accessories; general equipment
manufacturing (excluding special equipment manufacturing) (any projects that needs to beapproved by laws can only be carried out after getting approval by relevant authorities) General
items: engage in investment activities with self-owned funds (except for items subject to approval
according to the law independently carry out business activities according to laws with business
licenses )
Major subsidiaries respectively activate in production and sales of engine accessories automotive
components mufflers purifiers and fuel cell components etc.
4. Authorized reporting parties and reporting dates for the financial report
Financial report of the Company were approved by the Board of Directors for reporting dated April
262023.
5. Scope of consolidate financial statement
Shareholding ratio (%) Statemen
Registered capital t
Short name Proportion of
Name of subsidiary (in 10 thousand Business scope consolid
of subsidiary Directly Indirectly votes (%) yuan) ated
(Y/N)
Internal-
NANJING WFJN CO.WFJN 80.00 -- 80.00 34628.70 combustion engine Y
LTD.accessories
WUXI WEIFU LIDA
Purifier and
CATALYTIC WFLD 94.81 -- 94.81 50259.63 Y
muffler
CONVERTER CO. LTD.WUXI WEIFU MASHAN Internal-
FUEL INJECTION WFMA 100.00 -- 100.00 16500 combustion engine Y
EQUIPMENT CO. LTD. accessories
Internal-
WUXI WEIFU
WFCA 100.00 -- 100.00 21000 combustion engine Y
CHANG A?N CO.LTD.accessories
WUXI WEIFU
INTERNATIONAL WFTR 100.00 -- 100.00 3000 Trade Y
TRADE CO.LTD.WUXI WEIFU
SCHMITTER Internal-
POWERTRAIN WFSC 66.00 -- 66.00 7600 combustion engine Y
COMPONENTS accessories
CO.LTD.NINGBO WFTT
Internal-
TURBOCHARGING
WFTT 98.83 1.17 100.00 11136 combustion engine Y
TECHNOLOGY
accessories
CO.LTD.WUXI WFAM
Automotive
PRECISION WFAM 51.00 -- 51.00 USD2110 Y
components
MACHINERY CO.LTD.WUXI WEIFU LIDA
CATALYTIC WFLD Purifier and
-- 60.00 60.00 1000 Y
CONVERTER (WUHAN) (WUHAN) muffler
CO. LTD.WEIFU LIDA
WFLD Purifier and
(Chongqing) Automotive -- 100.00 100.00 5000 Y
(Chongqing) muffler
components Co. Ltd.Nanchang WEIFU LIDA
WFLD Purifier and
Automotive Components -- 100.00 100.00 5000 Y
(Nanchang) muffler
Co. Ltd.WUXI WEIFU
AUTOSMART SEATING WFAS -- 66.00 66.00 10000 Smart car device Y
SYSTEM CO. LTD.WUXI WEIFU E-DRIVE
TECHNOLOGIES CO. WFDT 80.00 -- 80.00 USD2000 Wheel motor Y
LTD.Wuxi Weifu Qinglong
Fuel cell
Power Technology Co. WFQL 45.00 30.00 75.00 50000 Y
components
Ltd.VHIT Automotive Vacuum and
VHCN 100.00 -- 100.00 13400 Y
Systems(Wuxi) Co. Ltd hydraulic pump
Weifu Holding ApS SPV 100.00 -- 100.00 DKK8638 Investment Y
Fuel cell
IRD Fuel Cells A/S IRD -- 100.00 100.00 DKK10108 Y
components
IRD Fuel cell
IRD FUEL CELLS LLC -- 100.00 100.00 USD651.91 Y
America components
Fuel cell
Borit NV Borit -- 100.00 100.00 EUR1035.32 Y
components
Borit Fuel cell
Borit Inc. -- 100.00 100.00 USD0.1 Y
America components
Vacuum and
VHIT S.p.A VHIT -- 100.00 100.00 EUR500 Y
hydraulic pump
II . Basis of preparation of financial statements
1. Preparation base
The financial statement were stated in compliance with Accounting Standard for Business
Enterprises –Basic Norms issued by Ministry of Finance the specific 42 accounting rules revised
and issued dated 15 February 2006 and later the Application Instruments of Accounting Standardsand interpretation on Accounting standards and other relevant regulations (together as “AccountingStandards for Business Enterprise”) as well as the Compilation Rules for Information Disclosure
by Companies Offering Securities to the Public No.15 – General Provision of Financial Report
(Amended in 2014) issued by CSRC in respect of the actual transactions and proceedings on a basis
of ongoing operation.In line with relevant regulations of Accounting Standards of Business Enterprise accounting of the
Company is on accrued basis. Except for certain financial instruments the financial statement
measured on historical cost. Assets have impairment been found corresponding depreciation
reserves shall accrued according to relevant rules.
2. Going concern
The Company comprehensively assessed the available information and there are no obvious factors
that impact sustainable operation ability of the Company within 12 months since end of the reporting
period.III . 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 system products automotive components mufflers purifiers and fuel cell components etc. in
line with the actual operational characteristics and relevant accounting standards many specific
accounting policies and estimation have been formulated for the transactions and events with
revenue recognized concerned. As for the explanation on major accounting judgment and estimation
found more in Note V- 36. Other major accounting policy and estimation
1. Statement on observation of Accounting Standard for Business Enterprises
Financial statements prepared by the Company were in accordance with requirements of Accounting
Standard for Business Enterprises which truly and completely reflected the financial information
of the Company dated 31 December 2022 such as financial status operation achievements and cash
flow for the year of 2022.
2. Accounting period
Accounting period of the Company consist of annual and mid-term mid-term refers to the reporting
period shorter than one annual accounting year. The company adopts Gregorian calendar as
accounting period namely form each 1 January to 31 December.
3. Business cycles
Normal business cycle is the period from purchasing assets used for process by the Company to the
cash and cash equivalent 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 control
Business combination is the transaction or events that two or two above independent enterprises
combined as a reporting entity. Business combination including enterprise combined under the same
control and business combined under different control.
(1) The business combination under the same control
Enterprise combination under the same control is the enterprise who take part in the combinationare have the same ultimate controller or under the same controller the control is not temporary. The
assets and liability acquired by combining party are measured by book value of the combined party
on combination date. Balance of net asset’s book value acquired by combining party and combine
consideration paid (or total book value of the shares issued) shall adjusted capital reserve (share
premium); if the capital reserves (share premium) is not enough for deducted adjusted for retained
earnings. Vary directly expenses occurred for enterprise combination the combining party shall
reckon into current gains/losses while occurring. Combination day is the date when combining 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 the combination. As a purchaser fair value of the assets (equity of purchaser held
before the date of purchasing included) for purchasing controlling right from the purchaser the
liability occurred or undertake on purchasing date less the fair value of identifiable net assets of the
purchaser obtained in combination recognized as goodwill if the results is positive; if the number
is negative the acquirer shall firstly review the measurement of the fair value of the identifiable
assets obtained liabilities incurred and contingent liabilities incurred as well as the combination
costs. After that if the combination costs are still lower than the fair value of the identifiable net
assets obtained the acquirer shall recognize the difference as the profit or loss in the current period.Other directly expenses cost for combination shall be reckoned into current gains/losses. Difference
of the fair value of assets paid and its book values reckoned into current gains/losses. On purchasing
date the identifiable assets liability or contingency of the purchaser obtained by the Company
recognized by fair value that required identification conditions; Acquisition date refers to the date
on which the acquirer effectively obtains control of the purchaser.
6. Preparation method for consolidated financial statement
(1) Recognition principle of consolidated scope
On basis of the financial statement of the parent company and owned subsidiaries prepared
consolidated statement in line with relevant information. The scope of consolidation of consolidated
financial statements is ascertained on the basis of effective control. Once certain elements involved
in the above definition of control change due to changes of relevant facts or circumstances 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 invested party’s relevant activities and the ability to affect such return by use of the aforesaid
right over the invested party. Relevant activates refers to activates have major influence on return
of the invested party’s.(3) Consolidation process
Subsidiaries are consolidated from the date on which the company obtains their actual control and
are de-consolidated from the date that such control ceases. All significant inter-group balances
investment transactions and unrealized profits are eliminated in the consolidated financial
statements. For subsidiaries being disposed the operating results and cash flows prior to the date of
disposal are included in the consolidated income statement and consolidated cash flow statement;
for subsidiaries disposed during the period the opening balances of the consolidated balance sheet
would not be restated. For subsidiaries acquired from a business combination not under common
control their operating results and cash flows subsequent to the acquisition date are included in the
consolidated income statement and consolidated cash flow statement and the opening balances and
comparative figures of the consolidated balance sheet would not be restated. For subsidiaries
acquired from a business combination under common control their operating results and cash flows
from the date of commencement of the accounting period in which the combination occurred to the
date of combination are included in the consolidated income statement and consolidated cash flow
statement and the comparative figures of 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 in accordance with the accounting policies and accounting period of the
company.Concerning the subsidiary obtained under combination with different control adjusted several
financial statement of the subsidiary based on the fair value of recognizable net assets on purchased
day while financial statement consolidation; concerning the subsidiary obtained under combination
with same control considered current status of 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 the subsidiaries fully offset "the net profit attributable to the owners of the parent company".The unrealized gains and losses from the internal transactions occurred in the assets the subsidiaries
sold to the Company are distributed and offset between "the net profit attributable to the owners of
the parent company" and "minority interest" according to the distribution ratio of the Company to
the subsidiary. The unrealized gains and losses from the internal transactions occurred in the assets
sold among the subsidiaries are distributed and offset between "the net profit attributable to the
owners of the parent company" and "minority interest" according to the distribution ratio of the
Company to the subsidiary of the seller.The share of the subsidiary’s ownership interest not attributable to the Company is listed as
“minority interest” item under the ownership interest in the consolidated balance sheet. The share
of the subsidiary’s current profit or loss attributable to the minority interests is listed as "minority
interest" item under the net profit item in the consolidated income statement. The share of the
subsidiary’s current consolidated income attributable to the minority interests is listed as the “totalconsolidated income attributable to the minority shareholders” item under the total consolidated
income item in the consolidated income statement. If there are minority shareholders add the
"minority interests" item in the consolidated statement of change in equity to reflect the changes of
the minority interests. If the losses of the current period shared by a subsidiary’s minority
shareholders exceed the share that the minority shareholders hold in the subsidiary ownership
interest in the beginning of the period the balance still charges against the minority interests.When the control over a subsidiary is ceased due to disposal of a portion of an interest in a subsidiary
the fair value of the remaining equity interest is re-measured on the date when the control ceased.The difference between the sum of the consideration received from disposal of equity interest and
the fair value of the remaining equity interest less the net assets attributable to the company since
the acquisition date is recognized as the investment income from the loss of control. Other
comprehensive income relating to original equity investment in subsidiaries shall be treated on the
same basis as if the relevant assets or liabilities were disposed of by the purchaser directly when the
control is lost namely be transferred to current investment income other than the relevant part of
the movement arising from re-measuring net liabilities or net assets under defined benefit scheme
by the original subsidiary. Subsequent measurement of the remaining equity interests shall be in
accordance with relevant accounting standards such as Accounting Standards for business
Enterprises 2 – Long-term Equity Investments or Accounting Standards for business Enterprises 22
– Financial Instruments Recognition and Measurement.The company shall determine whether loss of control arising from disposal in a series of transactions
should be regarded as a bundle of transactions. When the economic effects and terms and conditions
of the disposal transactions met one or more of the following situations the transactions shall
normally be accounted for as a bundle of transactions: * The transactions are entered into after
considering the mutual consequences of each individual transaction; * he transactions need to be
considered as a whole in order to achieve a deal in commercial sense;* The occurrence of an
individual transaction depends on the occurrence of one or more individual transactions in the series;
* The result of an individual transaction is not economical but it would be economical after taking
into account of other transactions in the series. When the transactions are not regarded as a bundleof transactions the individual transactions shall be accounted as “disposal of a portion of an interestin a subsidiary which does not lead to loss of control” and “disposal of a portion of an interest in asubsidiary which lead to loss of control”. When the transactions are regarded as a bundle of
transactions the transactions shall be accounted as a single disposal transaction; however the
difference between the consideration received from disposal and the share of net assets disposed in
each individual transaction before loss of control shall be recognized as other comprehensive
income and reclassified as profit or loss arising from the loss of control when control is lost.7. Joint arrangement classification and accounting treatment for joint operations
In accordance with the Company’s rights and obligation under a joint arrangement the Company
classifies joint arrangements into: joint ventures and joint operations.The Company confirms the following items related to the share of interests in its joint operations
and in accordance with 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 in appropriation to the share of the Company;
(2) Recognize the obligations assumed solely by the Company and recognize obligations assumed
jointly by the Company in appropriation to the share of the Company;
(3) Recognize revenue from disposal of the share of joint operations of the Company;
(4) Recognize fees solely occurred by Company;
(5) Recognize fees from joint operations in appropriation to the share of the Company.
8. Recognition standards for cash and cash equivalent
Cash refers to stock cash savings available for paid at any time; cash and cash equivalent refers to
the cash held by the Company with short terms (expired within 3 months since purchased) and
liquid and easy to transfer as known amount and investment with minor variation in risks.
9. Foreign currency business and conversion
The occurred foreign currency transactions are converted into the recording currency in accordance
with the middle 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 in accordance 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 converted into the recording currency amount in accordance with the middle rate of the market
exchange rate published by the 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 the exchange gains or losses. There into the
exchange gains or losses occurred in the foreign currency loans related to the purchase and
construction of fixed assets are disposed according to the principle of capitalization of borrowing
costs; the exchange gains and losses occurred during the start-up are included in the start-up costs;
the rest is included in the current financial expenses.At the balance sheet date the foreign currency non-monetary items measured with the historical
costs are converted in accordance with the middle rate of the market exchange rate published by thePeople's Bank of China on the transaction date without changing its original recording currency
amount; the foreign currency non-monetary items measured with the fair value are converted in
accordance with the middle rate of the market exchange rate published by the People's Bank of
China on the fair value date and the generated exchange gains and losses are included in the current
profits and losses as the gains and losses from changes in fair value.The following displays the methods for translating financial statements involving foreign operations
into the statements in RMB: The asset and liability items in the balance sheets for overseas
operations are translated at the spot exchange rates on the balance sheet date. Among the owners’
equity items the items other than “undistributed profits” are translated at the spot exchange rates of
the transaction dates. The income and expense items in the income statements of overseas operations
are translated at the average exchange rates of the transaction dates. The exchange difference arising
from the above mentioned translation are recognized in other comprehensive income and is shown
separately under owner’ equity in the balance sheet; such exchange difference will be reclassified
to profit or loss in current year when the foreign operation is disposed according to the proportion
of disposal.The cash flows of overseas operations are translated at the average exchange rates on the dates of
the cash flows. The effect 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 financial liability or equity instrument for other units.
(1) Recognition and termination of financial instrument
A financial asset or liability is recognized when the group becomes a party to a financial instrument
contract.The recognition of a financial assets shall be terminated if it meets one of the following conditions:
* the contractual right to receive the cash flow of the financial assets terminates;
* the financial assets is transferred and the company transfers substantially all the risks and rewards
of ownership of the financial asset to the transferring party;
* the financial asset was transferred and control although the company has neither transferred nor
retained almost all 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 it is terminated for recognition. When the Company (debtor) and the creditor sign
an agreement to replace the existing financial liabilities with new financial liabilities and the new
financial liabilities and the existing financial liabilities are substantially different from the contractterms terminated the recognition of the existing financial liabilities and recognize the new financial
liabilities at the same time.Financial assets are traded in the normal way and their accounting recognition and terminated the
recognition of proceed on a 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 cash flow characteristics of financial assets the Company classifies the financial assets
into the financial assets measured at amortized cost the financial assets measured at fair value and
whose changes are included in other comprehensive income and the financial assets measured at
fair value and whose changes are included in current profit or loss. Financial assets are measured at
fair value at initial recognition but if the receivables or receivables financing arising from the sale
of goods or the provision of services do not include a significant financing component or do not
consider a financing component that does not exceed one year it shall be initially measured in
accordance with the transaction value. For financial assets measured at fair value and whose changes
are included 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 generate cash flows. The business model determines whether the cash flow of financial
assets managed by the Company is based on contract cash flow selling financial assets or both. The
Company determines the business model for managing financial assets based on objective facts and
based on the specific business objectives of financial assets management determined by key
management personnel.The Company evaluates the contractual cash flow characteristics of financial assets to determine
whether the contractual cash flows generated by the relevant financial assets on a specific date are
only payments for the principal and the interest based on the outstanding principal amount. The
principal is the fair value of the financial assets at initial recognition; the interest includes the time
value of money the credit risk associated with the outstanding principal amount for a specific period
and other basic borrowing risks costs and consideration of profit. In addition the Company
evaluates the contractual terms that may result in changes in the time distribution or the amount of
contractual cash flows of the financial assets to determine whether they meet the requirements of
the above contractual cash flow characteristics.Only when the Company changes its business model of managing financial assets all affected
financial assets are reclassified on the first day of the first reporting period after the business model
changes otherwise the financial assets are not allowed to be reclassified after initial recognition.* Financial assets measured at amortized cost
The Company classifies the financial assets that meet the following conditions and haven’t beendesignated as financial assets measured at fair value and whose changes are included in current
profit or loss as financial assets measured at amortized cost:
A. the group's business model for managing the financial assets is to collect contractual cash flows;
and
B. the contractual terms of the financial assets stipulate that cash flow generated on a specific date
is only paid for the principal and interest based on the outstanding principal amount.After initial recognition such financial assets are measured at amortized cost by using the effective
interest method. Gains or losses arising from financial assets which are measured at amortized cost
and are not a component of any hedging relationship are included in current profit or loss when
being terminated for recognition amortized by effective interest method or impaired.* Financial assets measured at fair value and whose changes are included in other comprehensive
income
The Company classifies the financial assets that meet the following conditions and haven’t been
designated as financial assets measured at fair value and whose changes are included in current
profit or loss as financial assets measured 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
contractual cash 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 the payment of the principal and the interest based on the outstanding principal amount.After initial recognition such financial assets are subsequently measured at fair value. Interests
impairment losses or gains and exchange gains and losses calculated by using the effective interest
method are included in profit or loss for the period and other gains or losses are included in other
comprehensive income. When being terminate for recognition the accumulated gains or losses
previously included in other comprehensive income are transferred from other comprehensive
income and included in current profit or loss.* Financial assets measured at fair value and whose changes are included in current profit or loss
Except for the above financial assets measured at amortized cost and measured at fair value and
whose changes are included in other comprehensive income the Company classifies all other
financial assets as financial assets measured at fair value and whose changes are included in current
profit or loss. In the initial recognition in order to eliminate or significantly reduce accounting
mismatch the Company irreversibly designates part of the financial assets that should be measured
at amortized cost or measured at fair value and whose changes are included in the other
comprehensive income as the financial assets measured at fair value and whose changes are included
in current profit or loss.After the initial recognition such financial assets are subsequently measured at fair value and the
gains or losses (including interests and dividend income) are included in the current profit and lossunless the financial assets are part of the hedging relationship.However for non-trading equity instrument investments the Company irreversibly designates them
as the financial assets that are measured at fair value and whose changes are included in other
comprehensive income in the initial recognition. The designation is made based on a single
investment and the relevant investment is in line with the definition of equity instruments from the
issuer's perspective. After initial recognition such financial assets are subsequently measured at fair
value. Dividend income that meets the conditions is included in profit or loss and other gains or
losses and changes in fair value are included in other comprehensive income. When it is terminated
for recognition the accumulated gains or losses previously included in other comprehensive income
are transferred from other comprehensive income and included in retained earnings.
(3) Classification and measurement of financial liabilities
The financial liabilities of the Company are classified as financial liabilities measured at fair value
and whose changes are included in current profit or loss and financial liabilities measured at
amortized cost at the initial recognition. For financial liabilities that are not classified as financial
liabilities measured at fair value and whose changes are included in current profit or loss the related
transaction expenses are included in the initial recognition amount.* Financial liability measured by fair value and with variation reckoned into current gains/losses
Financial liability measured by fair value and with variation reckoned into current gains/losses
including tradable financial liability and the financial liabilities that are designated as fair value in
the initial recognition and whose changes are included in current profit or loss. For such financial
liabilities the subsequent measurement is based on fair value and the gains or losses arising from
changes in fair value and the dividends and interest expenses related to these financial liabilities are
included in current profit or loss.* Financial liability measured by amortized cost
Other financial liabilities are subsequently measured at amortized cost by using the effective interest
method. The gain or loss arising from recognition termination or amortization is included in current
profit or loss.* Distinctions between financial liabilities and equity instruments
Financial liabilities are liabilities that meet one of the following conditions:
A. Contractual obligations to deliver cash or other financial assets to other parties.B. Contractual obligations to exchange financial assets or financial liabilities with other parties
under potentially adverse conditions.C. Non-derivative contracts that must be settled or that can be settled by the company's own equity
instruments in the future and 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 the future except for derivatives contracts that exchange a fixed amount of cash orother financial assets with a fixed amount of their own equity instruments.An equity instrument is a contract that proves it has a residual equity in the assets of an enterprise
after deducting all liabilities.If the Company cannot unconditionally avoid performing a contractual obligation by delivering cash
or other financial 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 is necessary to consider whether the Company's own equity instruments used to settle
the instrument are a substitute for cash or other financial assets or to make the instrument holder
enjoy the residual equity in the assets of the issuer after deducting all liabilities. In the former case
the instrument is the Company's financial liability; if it is the latter the instrument is the Company's
equity instrument.
(4) Fair value of financial instruments
The company uses valuation techniques that are applicable under current circumstances and that
have sufficient available data and other information support to determine the fair value of related
financial assets and financial liabilities. The company divides the input values used by valuation
techniques into the following levels and uses them in sequence:
* The first-level input value is the unadjusted quotation of the same assets or liabilities that can be
obtained on the measurement date in the active market;
* The second-level input value is the direct or indirect observable input value of the relevant assets
or liabilities other than the first-level input value including quotations of similar assets or liabilities
in an active market; quotations of same or similar assets or liabilities in an active market; other
observable input value other than quotations such as interest rate and yield curves that are
observable during the normal quote interval; market-validated input value etc.;
* The third-level input value is the unobservable input value of the relevant assets or liabilities
including the interest rate that cannot be directly observed or cannot be verified by observable
market data stock volatility future cash flow of the retirement obligation assumed in the business
combination and financial forecasting made by its own data etc.
(5) Impairment of financial assets
On the basis of expected credit losses the Company performs impairment treatment on financial
assets measured at amortized cost and creditors’ investment etc. measured at fair value and whose
changes are included in other comprehensive income and recognize the provisions for loss.* Measurement of expected credit losses
Expected credit loss refers to the weighted average of credit losses of financial instruments weighted
by the risk of default. Credit loss refers to the difference between all contractual cash flows that the
Company discounts at the original actual interest rate and are receivable in accordance with contract
and all cash flows expected to be received that is the present value of all cash shortages. Amongthem for the purchase or source of financial assets that have suffered credit impairment the
Company discounts the financial assets at the actual interest rate adjusted by credit.When measuring expected credit losses the Company individually evaluates credit risk for financial
assets with significantly different credit risks such as receivables involving litigation and arbitration
with the other party or receivables 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
account receivable according to their characteristic of risks calculated the expected credit losses on
basis of portfolio. Basis for determining the portfolio as follow:
A - Note receivable
Note receivable 1: bank acceptance
Note receivable 2: trade acceptance
B - Account receivable
Account receivable 1: receivable from clients
Account receivable 2: receivable from internal related party
C – Receivable financing
Receivable financing 1: bank acceptance
Receivable financing 2: trade acceptance
D – Other account receivables
Other account receivables 1: receivable from internal related party
Other account receivables 2: receivable from others
As for the note receivable account receivable receivable financing and other account receivable
classified in portfolio by referring to the experience of historical credit loss the expected credit loss
is calculated by combining the current situation and the forecast of future economic conditions.Except for the financial assets adopting simplified metering method the Company assesses at each
balance sheet date whether its credit risk has increased significantly since initial recognition. If
credit risk has not increased significantly since initial recognition it is in the first stage the
Company measures the loss provisions based on the amount equivalent to the expected credit loss
in the next 12 months; if the credit risk has increased significantly since initial recognition but no
credit impairment has occurred it is in the second stage the Company measures the loss provisions
based on the amount equivalent to the expected credit loss for the entire duration; if credit
impairment occurs after initial recognition it is in the third stage the Company measures the loss
provisions based on the amount equivalent to the expected credit loss for the entire duration. For
financial instruments with low credit risks at the balance sheet date the Company assumes that their
credit risks have not increased significantly since initial recognition.The Company evaluates the expected credit losses of financial instruments based on individual items
and portfolios. When assessing expected credit losses the Company considers reasonable andevidence-based information 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 flow of a financial asset the Company directly writes down the book balance of
the financial asset.* Assessment of a significant increase in credit risk:
The Company determines the relative changes in default risk of the financial instrument occurred
in the expected duration and assess whether the credit risks of financial instrument has increased
significantly since the initial recognition by comparing the risk of default of the financial instrument
on the balance sheet date with the risk of default of financial instrument on the initial recognition
date. When determining whether the credit risk has increased significantly since the initial
recognition the Company considers reasonable and evidence-based information that can be
obtained without unnecessary additional costs or effort including forward-looking information. The
information considered by the Company includes:
A. The debtor fails to pay the principal and interest according to the contractual maturity date;
B. Serious worsening of external or internal credit rating (if any) of the financial instruments that
have occurred or are expected;
C. Serious deterioration of the debtor’s operating results that have occurred or are expected;
D. Changes in existing or anticipated technical market economic or legal circumstances that will
have a material adverse effect on the debtor’s ability to repay the company.Based on the nature of financial instruments the Company assesses whether credit risk has increased
significantly on the basis of a single financial instrument or combination of financial instruments.When conducting an assessment based on a combination of financial instruments the Company can
classify financial instruments based on 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 to take recourse actions such as realizing collateral (if held).* Financial assets with credit impairment
On the balance sheet date the Company assesses whether the credit of financial assets measured at
amortized cost and the credit of debt investments measured at fair value and whose changes are
included in other comprehensive income has been impaired. When one or more events that adversely
affect the expected future cash flows of a financial asset occur the financial asset becomes a
financial asset that has suffered credit impairment. Evidence that credit 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 or contractual considerations relating to the financial difficulties of the debtor;
D. The debtor is likely to go bankrupt or carry out other financial restructurings;
E. The financial difficulties of the issuer or the debtor have caused the active market of the financial
asset to disappear.* Presentation of expected credit loss provisions
In order to reflect the changes in the credit risk of financial instruments since the initial recognition
the Company re-measures the expected credit losses on each balance sheet date and the resulting
increase or reversal of the loss provisions shall be included in current profit and loss as impairment
losses or gains. For financial assets measured at amortized cost the loss provisions are written off
against the book value of the financial assets listed in the balance sheet; 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 of the financial asset.* Write-off
If the Company no longer reasonably expects that the financial asset contract cash flow can be fully
or partially recovered directly write down the book balance of the financial asset. Such write-downs
constitute the termination of recognition for related financial assets. This usually occurs when the
Company determines that the debtor has no assets 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 written down may still
be affected by the execution activities.If the financial assets that have been written down are recovered afterwards they shall be included
in the profit or loss of the 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 to the transferee terminate the recognition of the financial assets; if almost all the
risks and rewards of ownership of financial 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 the financial assets and determine the resulting assets and liabilities. If
the control of the financial assets is not abandoned determine the relevant financial assets according
to the extent to which they continue to be involved in the 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 financial assets 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. Receivable financing
The note receivable and account receivable which are measured at fair value and whose changes are
included in other comprehensive income are classified as receivables financing within one year
(including one year) from the date of acquisition. Relevant accounting policy found more in Note
III-10 “Financial Instrument”.
12.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 is adjusted to the actual cost.
(3) Recognition evidence for net realizable value of inventories and withdrawal method for
inventory impairment provision
Inventories as at period-end are priced at the lower of costs and net realizable values; at period end
on the basis of overall clearance about inventories inventory impairment provision is withdrawn
for uncollectible part of costs of inventories which result from destroy of inventories out-of-time
of all and part inventories or sales price lowering than cost. Inventory impairment provision for
stock goods and quantity of raw materials is subject to the difference between costs of single
inventory item over its net realizable value. As for other raw materials with large quantity and
comparatively low unit prices inventory impairment provision is withdrawn pursuant to categories.As for finished goods commodities and materials available for direct sales their net realizable
values are determined by their estimated selling prices less estimated sales expenses and relevant
taxes. For material inventories held for purpose of production their net realizable values are
determined by the estimated selling prices of finished products less estimated costs estimated sales
expenses and relevant taxes accumulated till completion of production. As for inventories held for
implementation of sales contracts or service contracts their net realizable values are calculated on
the basis of contract prices. In the event that inventories held by a company exceed order amount asagreed in sales contracts net realizable values of the surplus part are calculated on the basis 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
* Low-value consumables
The Company adopts one-off amortization method to amortize the low-value consumables.* Wrappage
The Company adopts one-off amortization method to amortize the wrappage at the time of receipt.
13.Assets held for sale
The Company classifies non-current assets or disposal groups that meet all of the following
conditions as held-for-sale: according to the practice of selling this type of assets or disposal groups
in a similar transaction the non-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 the selling is estimated to be completed within
one year. Those assets whose disposal is subject to approval from relevant authority or supervisory
department under relevant requirements are subject to that approval.Where the Company loses control over its subsidiary due to disposal of investment in the subsidiary
whether or not the Company retains part equity investment after such disposal investment in the
subsidiary shall be classified in its entirety as held for sale in the separate financial statement of the
parent company subject to that the investment 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 financial statement.The purchase commitment identified refers to the legally binding purchase agreement entered into
between the Company and other parties which sets out certain major terms relating to transaction
price time and adequately stringent punishment for default which render an extremely minor
possibility for material adjustment or revocation of the agreement.Assets held for sale are measured at the lower of heir carrying value and fair value less selling
expense. If the carrying value is higher than fair value less selling expense the excess shall be
recognized as impairment loss and recorded in profit or loss for the period and allowance for
impairment shall be provided for in respect of the assets. In respect of impairment loss recognized
for disposal group held for sale carrying value of the goodwill in the disposal group shall be
deducted first and then deduct the carrying value of the non-current assets within the disposal group
applicable to this measurement standard on a pro rata basis according to the proportion taken by
their carrying value.If the net amount of fair value of non-current assets held for sale less sales expense on subsequent
balance sheet date increases the amount previously reduced for accounting shall be recovered and
reverted from the impairment loss recognized after the asset is classified under the category of held
for sale with the amount reverted recorded in 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 subsequent balance sheet date
less sales expenses increases the amount reduced for accounting in previous periods shall be
restored and shall be reverted in the impairment loss recognized in respect of the non-current assets
which are applicable to relevant measurement provisions after classification into the category of
held for sale with the reverted amount charged in profit or loss for the current period. The written-
off carrying value of goodwill shall not be reverted.The non-current assets in the non-current assets or disposal group held for sale is not depreciated 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 the condition of being classified as held for sale or the non-current assets are removed
from the disposal group held for sale they will be measured at the lower of the following:
(i)The amount after their book value before they are classified as held for sale is adjusted based on
the depreciation amortization or impairment that should have been recognized given they are not
classified as held for sale;
(ii) The recoverable amount.
14. Long-term equity investment
Long-term equity investments refer to long-term equity investments in which the Company has
control joint control or significant influence over the invested party. Long-term equity investment
without control or joint control or significant influence of the Group is accounted for as available-
for-sale financial assets or financial assets measured by fair value and with variation reckoned intocurrent gains/losses. As for other accounting policies found more in Note-V 10. “Financialinstrument”.
(1) Determination of initial investment cost
Investment costs of the long-term equity investment are recognized by the follow according to
different way of acquirement:
* For a long-term equity investment acquired through a business combination involving enterprises
under common control the initial investment cost of the long-term equity investment shall be the
absorbing party’s share of the carrying amount of the owner’s equity under the consolidated
financial statements of the ultimate controlling party on the date of combination. The difference
between the initial cost of the long-term equity investment and the cash paid non-cash assetstransferred as well as the book value of the debts borne by the absorbing party shall offset against
the capital reserve. If the capital reserve is insufficient to offset the retained earnings shall be
adjusted. If the consideration of the merger is satisfied by issue of equity securities the initial
investment cost of the long-term equity investment shall be the absorbing party’s share of the
carrying amount of the owner’s equity under the consolidated financial statements of the ultimate
controlling party on the date of combination. With the total face value of the shares issued as share
capital the difference between the initial cost of the long-term equity investment and total face value
of the shares issued shall be used to offset against the capital reserve. If the capital reserve is
insufficient to offset the retained earnings shall be adjusted. For business combination 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
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 are not belong to
“transactions in a basket” the initial investment cost of the long-term equity investment shall be the
absorbing party’s share of the carrying amount of the owner’s equity under the consolidated
financial statements of the ultimate controlling party on the date of combination. The difference
between the initial cost of the long-term equity investment and the aggregate of the carrying amount
of the long-term equity investment before merging and the carrying amount the additional
consideration 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 income recognized as a result of the previously held equity investment
accounted for using equity method on the date of combination or recognized for available-for-sale
financial assets will not be accounted for.* For the long-term equity investment obtained by business combination not under the same control
the fair value of the assets involved the equity instruments issued and the liabilities incurred or
assumed on the transaction date plus the combined cost directly related to the acquisition is used as
the initial investment cost of the long-term equity investment. The identifiable assets of the
combined party and the liabilities (including contingent liabilities) assumed by the combined party
on the combining date are all measured at fair value regardless of the amount of minority
shareholders’ equity. The amount of the combined cost exceeding the fair value of the identifiable
net assets of the combined party obtained by the Company is recorded as goodwill and the amount
below the fair value of the identifiable net assets of the combining party is directly recognized in
the consolidated income statement.(For business combination resulted in an enterprise not under
common control by acquiring 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 beaccounted for a transaction in obtaining control. If they are not belonging to “transactions in abasket” the initial investment cost of the long-term equity investment accounted for using costmethod shall be the aggregate of the carrying amount of equity investment previously held by the
acquire and the additional investment cost. For previously held equity accounted for using equity
method relevant other comprehensive income will not be accounted for. For previously held equity
investment classified as available-for-sale financial asset the difference between its fair value and
carrying amount as well as the accumulated movement in fair value previously included in the other
comprehensive income shall be transferred to profit or loss for the current period.)
* Long-term investments obtained through other ways:
A. Initial investment cost of long-term equity investment obtained through cash payment is
determined according to actual payment for purchase;
B. Initial investment cost of long-term equity investment obtained through issuance of equity
securities is determined at fair value of such securities;
C. Initial investment cost of long-term equity investment (exchanged-in) obtained through exchange
with non-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 at fair value of such investment.
(2) Subsequent measurement on long-term equity investment
* Presented controlling ability on invested party the investment shall use cost method for
measurement.* Long-term equity investments with joint control (excluding those constitute joint ventures) or
significant influence on the invested party are accounted for using equity method.Under the equity method where the initial investment cost of a long-term equity investment exceeds
the investor’s interest in the fair value of the invested party’s identifiable net assets at the acquisition
date no adjustment shall be made to the initial investment cost. Where the initial investment cost is
less than the investor’s interest in the fair value of the invested party’s identifiable net assets at the
acquisition date the difference shall be charged to profit or loss for the current period and the cost
of the long term equity investment shall be adjusted accordingly.Under the equity method investment gain and other comprehensive income shall be recognized
based on the Group’s share of the 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 carrying amount of long-term equity investment shall be reduced based on
the Group’s share of profit or cash dividend distributed by the invested party. In respect of the other
movement of net profit or loss other comprehensive income and profit distribution of invested party
the carrying value of long-term equity investment shall be adjusted and included in the capital
reserves. The Group shall recognize its share of the invested party’s net profits or 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
accounting policies and accounting periods of the invested party and the Company the financial
statements of the invested party shall be adjusted in conformity with the accounting policies and
accounting periods of the Company. Investment gain and other comprehensive income shall be
recognized accordingly. In respect of the transactions between the Group and its associates and joint
ventures in which the assets disposed of or sold are not classified as operation the share of
unrealized gain or loss arising from inter-group transactions shall be eliminated by the portion
attributable to the Company. Investment gain shall be recognized accordingly. However any
unrealized loss arising from inter-group transactions between the Group and an invested party is not
eliminated to the extent that the loss is impairment loss of the transferred assets. In the event that
the Group disposed of an asset classified as operation to its joint ventures or associates which
resulted in acquisition of long-term equity investment by the investor without obtaining control the
initial investment cost of additional long-term equity investment shall be the fair value of disposed
operation. The difference between initial investment cost and the carrying value of disposed
operation will be fully included in profit or loss for the current period. In the event that the Group
sold an asset classified as operation to its associates or joint ventures the difference between the
carrying value of consideration received and operation shall be fully included in profit or loss for
the current period. In the event that the Company acquired an asset which formed an operation from
its associates or joint ventures relevant transaction shall be accounted for in accordance with
“Accounting Standards for Business Enterprises No. 20 “Business combination”. All profit or loss
related to the transaction shall be accounted for.The Group’s share of net losses of the invested party shall be recognized to the extent that the
carrying amount of the long-term equity investment together with any long-term interests that in
substance form part of the investor’s net investment in the invested party are reduced to zero. If the
Group has to assume additional obligations the estimated obligation assumed shall be provided for
and charged to the profit or loss as investment loss for the period. Where the invested party is making
profits in subsequent periods the Group shall resume recognizing its share of profits after setting
off against the share of unrecognized losses.* Acquisition of minority interest
Upon the preparation of the consolidated financial statements since acquisition of minority interest
increased of long-term equity investment which was compared to fair value of identifiable net assets
recognized which are measured based on the continuous measurement since the acquisition date (or
combination date) of subsidiaries attributable to the Group calculated according to the proportion
of newly acquired shares the difference of which recognized as adjusted capital surplus capital
surplus insufficient to set off impairment and adjusted retained earnings.* Disposal of long-term equity investments
In these consolidated financial statements for disposal of a portion of the long-term equity
investments in a subsidiary without loss of control the difference between disposal cost and disposalof long-term equity investments relative to the net assets of the subsidiary is charged to the owners’
equity. If disposal of a portion of the long-term equity investments in a subsidiary by the parent
company results in a change in control it shall be accounted for in accordance with the relevantaccounting policies as described in Note V-6 “Preparation Method of the Consolidated FinancialStatements”.On disposal of a long-term equity investment otherwise the difference between the carrying amount
of the investment and the actual consideration paid is recognized through profit or loss in the current
period.In respect of long-term equity investment accounted for using equity method with the remaining
equity interest after disposal also accounted for using equity method other comprehensive income
previously under owners’ equity shall be accounted for in accordance with the same accounting
treatment for direct disposal of relevant asset or liability by invested party on pro rata basis at the
time of disposal. The owners’ equity recognized for the movement of other owners’ equity
(excluding net profit or loss other comprehensive income and profit distribution of invested party)
shall be transferred to profit or loss for the current period on pro rata basis.In respect of long-term equity investment accounted for using cost method with the remaining equity
interest after disposal also accounted for cost equity method other comprehensive income measured
and reckoned under equity method or financial instrument before control of the invested party unit
acquired shall be accounted for in accordance with the same accounting treatment for direct disposal
of relevant asset or liability by invested party on pro rata basis at the time of disposal and shall be
transferred to profit or loss for the current period on pro rata basis; among the net assets of invested
party unit recognized by equity method (excluding net profit or loss other comprehensive income
and profit distribution of invested party) shall be transferred to profit or loss for the current period
on pro rata basis.In 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 impose significant influence over the invested party after disposal shall be
accounted for using equity method. Such remaining equity interest shall be treated as accounting
for using equity method since it is obtained and adjustment was made accordingly. For remaining
equity interest which cannot apply common control or impose significant influence over the invested
party after disposal it shall be accounted for using the recognition and measurement standard of
financial instruments. The difference between its fair value and carrying amount as at the date of
losing control shall be included in profit or loss for the current period. In respect of other
comprehensive income recognized using equity method or the recognition and measurement
standard of financial instruments before the Group obtained control over the invested party it shall
be accounted for in accordance with the same accounting treatment for direct disposal of relevant
asset or liability by invested party at the time when the control over invested party is lost. Movement
of other owners’ equity (excluding net profit or loss other comprehensive income and profitdistribution under net asset of invested party accounted for and recognized using equity method)
shall be transferred to profit or loss for the current period at the time when the control over invested
party is lost. Of which for the remaining equity interest after disposal accounted for using equity
method other comprehensive income and other owners’ equity shall be transferred on pro rata basis.For the remaining equity interest after disposal accounted for using the recognition and
measurement standard of financial instruments other comprehensive income and other owners’
equity shall be fully transferred.In the event of loss of common control or significant influence over invested party due to partial
disposal of equity investment by the Group the remaining equity interest after disposal shall be
accounted for using the recognition and measurement standard of financial instruments. The
difference between its fair value and carrying amount as at the date of losing common control or
significant influence shall be included in profit or loss for the current period. In respect of other
comprehensive income recognized under previous equity investment using equity method it shall
be accounted for in accordance with the same accounting treatment for direct disposal of relevant
asset or liability by invested party at the time when equity method was ceased to be used. Movement
of other owners’ equity (excluding net profit or loss other comprehensive income and profit
distribution under net asset of invested party accounted for and recognized using equity method)
shall be transferred to profit or loss for the current 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 the control over the subsidiary is lost. If the said transactions belong to
“transactions in a basket” each transaction shall be accounted for as a single transaction of disposing
equity investment of subsidiary and loss of control. The difference between the disposal
consideration for each transaction and the carrying amount of the corresponding long-term equity
investment of disposed equity interest before loss of control shall initially recognized as other
comprehensive income and subsequently transferred to profit or loss arising from loss of control
for the current period upon loss of control.
(3) Impairment test method and withdrawal method for impairment provision
Found more in Note V-25 “impairment of long-term assets”.
(4) Criteria of joint control and significant influence
Joint control is the Company’s contractually agreed sharing of control over an arrangement which
relevant activities of such arrangement must be decided by unanimously agreement from parties
who share control. All the participants or participant group whether have controlling over such
arrangement as a group or not shall be judge firstly then judge that whether the decision-making
for such arrangement are agreed unanimity by the participants or not.Significant influence is the power of the Company to participate in the financial and operating policy
decisions of an invested party but to fail to control or joint control the formulation of such policies
together with other parties. While recognizing whether have significant influence by invested partythe potential factors of voting power as current convertible bonds and current executable warrant of
the invested party held by investors and other parties shall be thank over.
15.Investment real estate
Investment real estate is stated at cost. During which the cost of externally purchased properties
held-for-investment includes purchasing price relevant taxes and surcharges and other expenses
which are directly attributable to the asset. Cost of self construction of properties held for investment
is composed of necessary expenses occurred for constructing those assets to a state expected to be
available for use. Properties held for investment by investors are stated at the value agreed in an
investment contract or agreement but those under contract or agreement without fair value are stated
at fair value.The Company adopts cost methodology amid subsequent measurement of properties held for
investment while depreciation 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 of long-term assets”.
16. Fixed assets
(1) Recognition conditions
Fixed assets refer to the tangible assets for production of products provision of labor lease or
operation with a service life excess one year and has more unit value.
(2) Depreciation methods
Yearly depreciation
Category Years of depreciation(year) Scrap value rate(%)
rate(%)
House and Building 20~35 5 2.71~4.75
Machinery equipment 10 5 9.50
Transportation equipment 4~5 5 19.00~23.75
Electronic and other
3～1059.50～31.67
equipment
For the fixed assets with impairment provision the depreciation amount shall be calculated after
deducting the accumulated amount of impairment provision for fixed assets
(3) The impairment test method and provision for impairment of fixed assets
The impairment test method and provision for impairment of fixed assets found more in Note III-
25 “Impairment of long-term assets”.17.Construction in progress
From the date on which the fixed assets built by the Company come into an expected usable state
the construction in progress are converted into fixed assets on the basis of the estimated value of
project estimates or pricing or project actual costs etc. Depreciation is calculated from the next
month. Further adjustments are made to the difference of the original value of fixed assets after final
accounting is completed upon completion of projects.The basis of provision for impairment of properties held for construction in process is referred to
Note III-22 “Impairment of long-term assets”.
18.Contract assets and contract liability
The Company presents the contract assets or contract liabilities in the balance sheet based on the
relationship between the performance obligation and the customer’s payment.
(1) Contract assets
Recognition method and standard of contract assets: contract assets refer to the right of a company
to receive 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 contract assets: the method for determining
expected credit losses of contract assets is consistent with the method for determining expected
credit losses of accounts receivable.Accounting treatment method of expected credit losses of contract assets: if the contract assets are
impaired the company shall 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 impairment that has already been withdrawn make opposite accounting
entries.
(2) Contract liability
The Company lists the obligation to transfer goods or provide labor services to customers for the
consideration received or receivable from customers as contractual liabilities such as the amount
that the company has received before the transfer of the promissory goods.
19. Borrowing costs
(1) Recognition of capitalization of borrowing costs
Borrowing costs comprise interest occurred amortization of discounts or premiums ancillary costs
and exchange differences in connection with foreign currency borrowings. The borrowing costs of
the Company which incur from the special borrowings occupied by the fixed assets that need morethan one year (including one year) for construction development of investment properties or
inventories or from general borrowings are capitalized and recorded in relevant assets costs; other
borrowing costs are recognized as expenses and recorded in the profit or loss in the period when
they are occurred. Relevant borrowing costs start to be capitalized when all of the following three
conditions are met:
* Capital expenditure has been occurred;
* Borrowing costs have been occurred;
* Acquisition or construction necessary for the assets to come into an expected usable state has
been carried out.
(2) Period of capitalization of borrowing costs
Borrowing costs arising from purchasing fixed asset investment real estate and inventory and
occurred after such assets reached to its intended use of status or sales than reckoned into assets
costs while satisfy the above mentioned capitalization condition; capitalization of borrowing costs
shall be suspended and recognized as current expenditure during periods in which construction of
fixed assets investment real estate and inventory are interrupted abnormally when the interruption
is for a continuous period of more than 3 months until the acquisition construction or production
of the qualifying asset is resumed; capitalization shall discontinue when the qualifying asset is ready
for its intended use or sale the borrowing costs occurred subsequently shall reckoned into 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 the assets qualified for capitalization the amount of interests expenses of the special
borrowings actually occurred in the period less interest income derived from unused borrowings
deposited in banks or less investment income derived from provisional investment are recognized.With respect to the general borrowings occupied for acquisition construction or production and
development of the assets qualified for capitalization the capitalized interest amount for general
borrowings is calculated and recognized by multiplying a weighted average of the accumulated
expenditure on the assets in excess of the expenditure on the assets of the special borrowings by a
capitalization rate for general borrowings. The capitalization rate is determined by calculation of
the weighted average interest rate of the general borrowings.
20. Right-of-use assets
The right-of-use asset refers to the right of the Company as the lessee to use the leased asset during
the lease term.On the commencement date of the lease term the Company recognizes the right-of-use assets for
leases other than short-term leases and leases of low-value assets. Right-of-use assets are initially
measured at cost. The cost includes the initial measurement amount of the lease liability; the leasepayments made on or before the commencement date of the lease term deduct the relevant amount
of the lease incentive already enjoyed if there is a lease incentive; the initial direct expenses incurred
by the lessee; the cost expected to be incurred by the lessee to dismantle and remove the leased
assets restore the site where the leased assets locate or restore the leased assets to the condition
agreed upon in the lease terms but this does not include the cost attributable to the production of
inventory.The Company subsequently uses the straight-line method to depreciate the right-of-use assets. If it
can be reasonably determined that the ownership of the leased asset can be obtained at the expiration
of the lease term the Company shall accrue depreciation over the remaining useful life of the leased
asset. If it cannot be reasonably determined that the ownership of the leased asset can be obtained
at the expiration of the lease term the Company shall accrue depreciation within the shorter of the
lease term and the remaining useful life of the leased asset. When the recoverable amount is lower
than the book value of the right-of-use asset the Company shall write down its book value to the
recoverable amount.
21. Intangible assets
(1) Measurement use of life and impairment testing
* Measurement of intangible assets
The intangible assets of the Company including land use rights patented technology and non-
patents technology etc.The cost of a purchased intangible asset shall be determined by the expenditure actually occurred
and other related costs.The cost of an intangible asset contributed by an investor shall be determined in accordance with
the value stipulated in the investment contract or agreement except where the value stipulated in
the contract or agreement is not fair.The intangible assets acquired through exchange of non-monetary assets which is commercial in
substance is carried at the fair value of the assets exchanged out; for those not commercial in
substance they are carried at the carrying amount of the assets exchanged out.The intangible assets acquired through debt reorganization are recognized at the fair value.* 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 the Company are amortized by straight-line method with the shortest terms
among expected useful life benefit years regulated in the contract and effective age regulated by
the laws. The amortization amount shall count in relevant assets costs and current gains/losses
according to the benefit object.As for the intangible assets as trademark with uncertain benefit terms amortization shall not becarried.Impairment testing methods and accrued for depreciation reserves for the intangible assets found
more in Note III-22 “Impairment of long-term assets”.
(2) Internal accounting policies relating to research and development expenditures
Expenses incurred during the research phase are recognized as profit or loss in the current period;
expenses incurred during the development phase that satisfy the following conditions are recognized
as intangible assets (patented technology and non-patents technology):
* It is technically feasible that the intangible asset can be used or sold upon completion;
* There is intention to complete the intangible asset for use or sale;
* The products produced using the intangible asset has a market or the intangible asset itself has
a market;
* There 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;
* The expenses attributable to the development phase of the intangible asset can be measured
reliably.If the expenses incurred during the development phase did not qualify the above mentioned
conditions such expenses incurred are accounted for in the profit or loss for the current period. The
development expenditure reckoned in gains/losses previously shall not be recognized as assets in
later period. The capitalized expenses in development stage listed as development expenditure in
balance sheet and shall be transfer as intangible assets since such item reached its expected
conditions for service.
22. Impairment of long-term assets
The Company will judge if there is any indication of impairment as at the balance sheet date in
respect of non-current non-financial assets such as fixed assets construction in progress intangible
assets with a finite useful life investment properties measured at cost and long-term equity
investments in subsidiaries joint controlled entities and associates. If there is any evidence
indicating that an asset may be impaired recoverable amount shall be estimated for impairment test.Goodwill intangible assets with an indefinite useful life and intangible assets beyond working
conditions will be tested for impairment annually regardless of whether there is any indication of
impairment.If the impairment test result shows that the recoverable amount of an asset is less than its carrying
amount the impairment provision will be made according to the difference and recognized as an
impairment loss. The recoverable amount of an asset is the higher of its fair value less costs of
disposal and the present value of the future cash flows expected to be derived from the asset. Anasset’s fair value is the price in a sale agreement in an arm’s length transaction. If there is no sale
agreement but the asset is traded in an active market fair value shall be determined based on the bid
price. If there is neither sale agreement nor active market for an asset fair value shall be 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 the asset for its intended sale. The present value of the future cash flows expected to be
derived from the asset over the course of continued use and final disposal is determined as the
amount discounted using an appropriately selected discount rate. Provisions for assets impairment
shall be made and recognized for the individual asset. If it is not possible to estimate the recoverable
amount of the individual asset the Group shall determine the recoverable amount of the asset group
to which the asset belongs. The asset group is the smallest group of assets capable of generating
cash flows independently.For the purpose of impairment testing the carrying amount of goodwill presented separately in the
financial statements shall be allocated to the asset groups or group of assets benefiting from synergy
of business combination. If the recoverable amount is less than the carrying amount the Group shall
recognize an impairment loss. The amount of impairment loss shall first reduce the carrying amount
of any goodwill allocated to the asset group or set of asset groups and then reduce the carrying
amount of other assets (other than goodwill) within the asset group or set of asset groups pro rata
on the basis of the carrying amount of each asset.An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period
in respect of the part whose value can be recovered.
23. Long-term deferred expenses
Long-term expenses to be amortized of the Company the expenses that are already charged and with
the beneficial term of more than one year are evenly amortized over the beneficial term. For the
long-term deferred expense items cannot benefit the subsequent accounting periods the amortized
value of such items is all recorded in the profit or loss during recognition.
24. Employee compensation
(1) Accounting treatment for short-term compensation
During the accounting period when the staff providing service to the Company the short-term
remuneration actual occurred shall recognized as liability and reckoned into current gains/losses.During the accounting period when staff providing service to the Company the actual short-term
compensation occurred shall recognized as liabilities and reckoned into current gains/losses except
for those in line with accounting standards or allow to reckoned into capital costs; the welfare
occurred shall reckoned into current gains/losses or relevant asses costs while actually occurred.The employee compensation shall recognize as liabilities and reckoned into current gains/losses orrelevant assets costs while actually occurred. The employee benefits that belong to non-monetary
benefits are measured in accordance with the fair value; the social insurances including the medical
insurance work-injury insurance and maternity insurance and the housing fund that the enterprise
pays for the employees as well as the labor union expenditure and employee education funds
withdrawn by rule should be calculated and determined as the corresponding compensation amount
and determined the corresponding liabilities in accordance with the specified withdrawing basis and
proportion and reckoned in the current profits and losses or relevant asset costs in the accounting
period that the employees provide services.
(2) Accounting treatment for post-employment benefit
The post-employment benefit included the defined contribution plans and defined benefit plans.Post-employment benefits 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. Among them the defined contribution plan refers to the
post-employment benefits plan that the enterprise doesn’t undertake the obligation of payment after
depositing the fixed charges to the independent fund; the defined benefit plans refers to post-
employment benefits plans except the defined contribution plan.
(3) Accounting treatment for retirement benefits
When the Company terminates the employment relationship with employees before the end of the
employment contracts or provides compensation as an offer to encourage employees to accept
voluntary redundancy the Company shall recognize employee compensation liabilities arising from
compensation for staff dismissal and included in profit or loss for the current period when the
Company cannot revoke unilaterally compensation for dismissal due to the cancellation of labor
relationship plans and employee redundant proposals; and the Company recognize 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 for
compensation for termination of employment. The salaries or wages and the social contributions to
be paid for the employees who retire before schedule from the date on which the employees stop
rendering services to the scheduled retirement date shall be recognized (as compensation for
termination of employment) in the current profit 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 the employees satisfying some conditions the supplementary retirement benefits belong to the
defined benefit plans and the defined benefit liability confirmed on the balance sheet is the value
by subtracting the fair value of plan assets from the present value of defined benefit obligation. The
defined benefit obligation is annually calculated in accordance with the expected accumulated
welfare unit method by the independent actuary by adopting the treasury bond rate with similar
obligation term and currency. The service charges related to the supplementary retirement benefits(including the service costs of the current period the previous service costs and the settlement gains
or losses) and the net interest are reckoned in the current profits and losses or other asset costs the
changes generated by recalculating the net liabilities of defined benefit plans or net assets should be
reckoned in other consolidated income.
25. Share-based payment
The Company’s share-based payment is a transaction that grants equity instruments or assumes
liabilities determined 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-settled share-based payment.
(1) Equity-settled share-based payment and equity instruments
Equity-settled share-based payment in exchange for services provided by employees shall be
measured at the fair value of the equity instruments granted to employees. If the Company uses
restricted stocks for share-based payment employees contribute capital to subscribe for stocks and
the stocks shall not be listed for circulation or transfer until the unlocking conditions are met and
unlocked; if the unlocking conditions specified in the final equity incentive plan are not met the
Company shall repurchase the stocks at the pre-agreed price. When the Company obtains the
payment for the employees to subscribe for restricted stocks it shall confirm the share capital and
capital reserve (share capital premium) according to the obtained subscription money and at the
same time recognize a liability in full for the repurchase obligation and recognize treasury shares.On each balance sheet date during the waiting period the Company makes the best estimate of the
number of vesting equity instruments based 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 period are included in related costs
or expenses based on the fair value on the grant date and the capital reserve shall be increased
accordingly.For share-based payments that cannot be vested in the end costs or expenses shall not be recognized
unless the vesting conditions are market conditions or non-vesting conditions. At this time
regardless of whether the market conditions or the non-vesting conditions are met as long as all
non-market conditions in the vesting conditions are met it is deemed as vesting.If the terms of equity-settled share-based payment are modified at least the services obtained should
be confirmed in accordance with the unmodified terms. In addition any modification that increases
the fair value of the equity instruments granted or a change that is beneficial to employees on the
modification date is recognized as an increase in services received.If the equity-settled share payment is canceled it will be treated as an accelerated vesting on the
cancellation day and the unconfirmed amount will be confirmed immediately. If an employee or
other party can choose to meet the non-vesting conditions but fails to meet within the waiting period
it shall be treated as cancellation of equity-settled share-based payment. However if a new equityinstrument is granted and it is determined on the date of grant of the new equity instrument that the
new equity instrument granted is used to replace the cancelled equity instrument the granted
substitute equity instruments shall be treated in the same way as the modification of the original
equity instrument terms and conditions.
(2) Cash-settled share-based payment and equity instruments
Cash-settled share-based payments are measured at the fair value of the liabilities calculated and
determined on the basis of shares or other equity instruments undertaken by the Company. If it’s
vested immediately after the grant the fair value of the liabilities assumed on the date of the grant
is included in the cost or expense and the liability is increased accordingly. If the service within the
waiting period is completed or the specified performance conditions are met the service obtained
in the current period shall be included in the relevant costs or expenses based on the best estimate
of the vesting situation within the waiting periodand the fair value of the liabilities assumed to
increase the corresponding liabilities. On each balance sheet date and settlement date before the
settlement of the relevant liabilities the fair value of the liabilities is remeasured and the changes
are included in the current profit and loss.
26. Lease liability
Substantial On the commencement date of the lease term the Company recognizes the present value
of the unpaid lease payments as lease liabilities. Lease payments include the following five items:
fixed payments and in-substance fixed payments if there is a lease incentive deduct the amount
related to the lease incentive; variable lease payments that depend on an index or ratio which are
determined at the initial measurement according to the index or ratio determination on the
commencement date of lease term; exercise price for a purchase option provided that the lessee is
reasonably certain that the option shall be exercised; payments for exercising the option to terminate
the lease provided that the lease term reflects that the lessee shall exercise the option to terminate
the lease option; estimated payments due based on guaranteed residual value provided by the lessee.When calculating the present value of lease payments the interest rate implicit in the lease is used
as the discount rate. If the interest rate implicit in the lease cannot be determined the company’s
incremental borrowing rate is used as the discount rate. The Company calculates the interest expense
of the lease liability in each period of the lease term according to the fixed periodic interest rate and
includes it in the current profit and loss unless it is otherwise stipulated to be included in the cost
of the relevant assets. Variable lease payments that are not included in the measurement of lease
liabilities are included in the current profit and loss when they are actually incurred unless otherwise
stipulated to be included in the cost of the relevant assets. After the commencement date of the lease
term when there is a change in the in-substance fixed payment or a change in the estimated amount
payable for the guaranteed residual value or a change in the index or ratio used to determine the
lease payment or a change in the evaluation results of the purchase option renewal option ortermination option or when the actual exercise situation changes the Company shall re-measure the
lease liability according to the present value of the changed lease payments.
27. Accrued liability
(1) Recognition principle
An obligation related to a contingency such as guarantees provided to outsiders pending 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:
* the obligation is a present obligation of the Company;
* it is Contingent that an outflow of economic benefits will be required to settle the obligation;
* the amount of the obligation can be measured reliably.
(2) Measurement method: Measure on the basis of the best estimates of the expenses necessary
for paying off the contingencies
28. Revenue
(1) Accounting policies used in revenue recognition and measurement
1)Revenue recognition principle
On the starting date of the contract the company evaluates the contract identifies each individual
performance obligation contained in the contract and determines whether each individual
performance obligation is performed within a certain period of time or at a certain point in time.When one of the following conditions is met it belongs to the performance obligation within a
certain period of time otherwise it belongs to the performance obligation at a certain point in time:
* The customer obtains and consumes the economic benefits brought by the company's
performance while the company performs the contract; * The customer can control the goods or
services in progress during the company’s performance; * The goods or services produced during
the company’s performance have irreplaceable uses and the company has the right 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 in accordance with the performance progress during that period. When the performance
progress cannot be reasonably determined if the cost incurred is expected to be compensated the
revenue shall be recognized according to the amount of the cost incurred until the performance
progress can be reasonably determined. For performance obligations performed at a certain point in
time revenue is recognized at the point when the customer obtains control of the relevant goods or
services. When judging whether the customer has obtained control of the goods the company
considers the following signs: * The company has the current right to receive payment for thegoods that is the customer has the current payment obligation for the goods; * The company has
transferred the legal ownership of the goods to the customer that is the customer has the legal
ownership of the goods; * The company has transferred the goods to the customer in kind that is
the customer has physically taken possession of the goods; * The company has transferred the
main risks and rewards of the ownership of the goods to the customer that is the customer has
obtained the main risks and rewards of the ownership of the goods; * The customer has accepted
the goods; * Other signs that the customer has obtained control of the goods.
2)Revenue measurement principle
* The company measures revenue based on the transaction price allocated to each individual
performance obligation. The transaction price is the amount of consideration that the company
expects to be entitled to receive due to the transfer of goods or services to customers and does not
include payments collected on behalf of third parties and payments expected to be returned to
customers.* If there is variable consideration in the contract the company shall determine the best estimate
of the variable consideration according to the expected value or the most likely amount but the
transaction price including the variable consideration shall not exceed the amount of cumulatively
recognized revenue that is unlikely to be significantly turned back when the relevant uncertainty is
eliminated.* If there is a significant financing component in the contract the company shall determine the
transaction price based on the amount payable that the customer is assumed to pay in cash when
obtaining the control of the goods or services. The difference between the transaction price and the
contract consideration shall be amortized by the effective interest method during the contract period.On the starting date of the contract if the company expects that the customer pays the price within
one year after obtaining control of the goods or services the significant financing components in
the contract shall not be considered.* If the contract contains two or more performance obligations the company will allocate the
transaction price to each individual performance obligation based on the relative proportion of the
stand-alone selling price of the goods promised by each individual performance obligation on the
starting date of the contract.
(2) The Company's criteria for the recognition of commodity income and specific criteria for
the recognition time
The company's domestic sales revenue recognition time: The company shall deliver the goods
according to the agreement of the order and check with the buyer the goods received and inspected
by the buyer from the previous reconciliation date to the current reconciliation date. After the check
by both parties the risks and rewards shall be transferred to the buyer. The Company shall issue
invoices to the buyer according to the varieties quantities and amounts confirmed by the
reconciliation and confirm the realization of sales income on the reconciliation date.The Company's foreign sales revenue recognition time: after the completion of the customs audit
the company in accordance with the export date specified in the customs declaration to confirm the
realization of sales revenue.
29. Government grants
(1) Types
Government grants are transfer of monetary assets or non-monetary assets from the government to
the Group at no consideration. Government grants are classified into government grants related to
assets and government grants related to income.As for the assistance object not well-defined in government’s documents the classification criteria
for assets-related or income-related grants are as: whether the grants turn to long-term assets due to
purchasing for construction or other means.
(2) Recognition and measure
The government grants shall be recognized while meet the additional conditions of the grants and
amount is actually can be obtained.If a government grant is in the form of a transfer of monetary asset the item shall be measured at
the amount received or receivable. If a government grant is in the form of a transfer of non-monetary
asset the item shall be measured at fair value. If the fair value could not be reliably acquired then
measured by nominal amount.
(3) Accounting treatment
A government grant related to an asset shall be recognized as deferred income and reckoned into
current gains/losses according to the depreciation process in use life of such assets.A government grant related to income if they making up relevant expenses and losses for later
period than recognized deferred income and should reckoned into current gain/loss during the
period while relevant expenses are recognized; if they making up relevant expenses and losses that
occurred than reckoned into current gains/losses.A government grant related to daily operation activity of the Company should reckoned into other
income; those without 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.
30. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets or deferred income tax liabilities are realized based on the difference
between the carrying values of assets and liabilities and their taxation bases (as for the ones did not
recognized as assets and liability and with taxation basis recognized in line with tax regulations
different between tax base and its book value) at the tax rates applicable in the periods when 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 is used to set off the deductible temporary difference. As at the balance sheet date if
there is obvious evidence showing that it is probable to obtain sufficient taxable income to set off
the deductible temporary difference in future 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 future periods then the carrying value of deferred income tax assets
shall be reduced accordingly. If it is probable to obtain 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 into current gains/losses excluding the follow income tax:
* Enterprise combination;
* Transactions or events recognized in owner’s equity directly.
31. Lease
Lease refers to a contract in which the lessor transfers the right to use assets to the lessee for
consideration within a certain period of time. On the commencement date of the contract the
company evaluates whether the contract is a lease or includes a lease. If one party in the contract
transfers the right to control the use of one or more identified assets within a certain period in
exchange for consideration the contract is a lease or includes a lease. If the contract includes
multiple separate leases at the same time the company will split the contract and conduct accounting
treatment for each separate lease. If the contract includes both the leased and non-leased parts the
lessee and the lessor shall separate the leased and non-leased parts.
(1) The company as lesseeFor the general accounting treatment of the company as the lessee see note-III 20 “Right-of-useassets” and note-III-26 “Lease liability”.For short-term leases with a lease term of no more than 12 months and low value asset leases with
a lower value when a single asset is new the company chooses not to recognize the right to use
assets and lease liabilities and the relevant rental expenses are included in the current profit and
loss or the cost of relevant assets according to the straight-line method in each period of the lease
term.If the lease changes and meets the following conditions at the same time the company will treat the
lease change as a separate lease for Accounting: the lease change expands the lease scope by adding
the right to use one or more leased assets; The increased consideration is equivalent to the amount
adjusted according to the conditions of the contract at the separate price for most of the expansion
of the lease scope. If the lease change is not accounted for as a separate lease on the effective dateof the lease change the company will re allocate the consideration of the contract after the change
re determine the lease term and re measure the lease liability according to the present value
calculated by the lease payment after the change and the revised discount rate.
(2) The company as lessor
On the lease commencement date the company classifies leases that have substantially transferred
almost all the risks and rewards related to the ownership of the leased assets as financial leases and
all other leases are operating leases.
1) Operating lease
During each period of the lease term the company recognizes the lease receipts as rental income
according to the straight-line method and the initial direct expenses incurred are capitalized
amortized on the same basis as the recognition of rental income and included in the current profit
and loss by stages. The variable lease payments obtained by the company related to operating leases
that are not included in the lease receipts are included in the current profits and losses when actually
incurred.
2) Finance lease
On the beginning date of the lease term the company recognizes the financial lease receivables
according to the net amount of the lease investment (the sum of the unsecured residual value and
the present value of the lease collection not received on the beginning date of the lease term
discounted according to the embedded interest rate of the lease) and terminates the recognition of
the financial lease assets. During each period of the lease term the company calculates and
recognizes the interest income according to the interest rate embedded in the lease. The amount of
variable lease payments obtained by the company that are not included in the measurement of net
lease investment shall be included in the current profit and loss when actually incurred.
(3) Sale leaseback
The company evaluates and determines whether the asset transfer in the sale and leaseback
transaction is a sale in accordance with the Accounting standards for Business Enterprises No. 14-
Revenue.
1) The company as lessee
If the asset transfer in the sale and leaseback transaction is sales the company measures the right to
use assets formed by the sale and leaseback according to the part of the book value of the original
assets related to the right to use obtained by the leaseback and only recognizes the relevant gains
or losses on the rights transferred to the lessor.If the asset transfer in the sale and leaseback transaction does not belong to sales the company will
continue to recognize the transferred asset recognize a financial liability equal to the transfer
income and carry out accounting treatment for the financial liability in accordance with the
accounting standards for Business Enterprises No. 22 - Recognition and measurement of financial
instruments.
2) The company as lessorIf the asset transfer in the sale and leaseback transaction belongs to sales the company will conduct
accounting treatment for asset purchase in accordance with other applicable accounting standards
for business enterprises and accounting treatment for asset lease in accordance with Accounting
standards for Business Enterprises No. 21 - Leasing.If the asset transfer in the sale and leaseback transaction does not belong to sales the company does
not recognize the transferred asset but recognizes a financial asset equal to the transfer income and
carries out accounting treatment for the financial asset in accordance with the Accounting standards
for Business Enterprises No. 22 - Recognition and measurement of financial instruments.
32.Changes of important accounting policies and estimation
(1) Significant changes in accounting policy
1) On Dec. 30 2021 the Ministry of Finance issued Interpretation No. 15 of the Accounting
Standards for Business Enterprises (Cai Kuai [2021] No. 35 hereinafter referred to as
“Interpretation No. 15”).* Accounting treatment for trial operation sales
Interpretation No. 15 stipulates the accounting treatment and presentation of products or by-products
generated during the development process or before fixed assets reach their intended usable state
for external sales by enterprises. It also stipulates that the net amount of trial operation sales revenue
after offsetting costs should not be offset against fixed asset costs or research and development
expenses. This regulation came into effect from January 1 2022 and retrospective adjustments shall
be made to trial sales that occurred between the beginning of the earliest period for financial
statement presentation and January 1 2022. The implementation of this regulation has not had a
significant impact on the company’s financial condition and operating results.* Judgment on loss contracts
Interpretation No. 15 clarifies that the “cost of performing the contract” considered by enterprises
in determining whether the contract constitutes a loss contract should include both the incremental
cost of performing the contract and the allocation amount of other costs directly related to
performing the contract. This regulation came into effect on January 1 2022 and the Company shall
implement such provision for contracts whose obligation hasn’t been fulfilled by January 1 2022.The cumulative impact shall be adjusted to the retained earnings and other related financial
statement accounts at the beginning of the year on the implementation date without adjusting the
comparative financial statement data in the previous period. The implementation of this regulation
has not had a significant impact on the company’s financial condition and operating results.
2) On Nov. 30 2022 the Ministry of Finance issued Interpretation No. 16 of the Accounting
Standards for Business Enterprises (Cai Kuai [2022] No. 31 hereinafter referred to as
“Interpretation No. 16”).* Accounting treatment for the income tax impact of dividends related to financial instruments
classified as equity instruments by the issuer
Interpretation No. 16 stipulates that for financial instruments classified as equity instruments by
enterprises if the relevant dividend expenses are deducted before corporate income tax in
accordance with relevant tax policies the income tax impact related to the dividends should be
recognized when determining the payable dividends and the accounting treatment should be
consistent with the accounting treatment used in past transactions or events that generate
distributable profits. The impact of dividend income tax shall be booked into the current period’s
profit or loss or owner’s equity (including other comprehensive income items). This regulation came
into effect from the date of promulgation. The relevant dividends payable in case of occurring
between January 1 2022 and the implementation date shall be adjusted in accordance with this
regulation; If the relevant dividends were paid before January 1 2022 and the relevant financial
instruments have not been derecognized on January 1 2022 retrospective adjustments should be
made. The implementation of this regulation has not had a significant impact on the company's
financial condition and operating results.* Accounting treatment for enterprises to modify cash settled share-based payments to equity
settled share-based payments
Interpretation No. 16 clarifies that if an enterprise modifies the terms and conditions of a cash settled
share-based payment agreement to become an equity settled share-based payment on the
modification date (whether occurring during the waiting period or after the end) the equity settled
share-based payment shall be measured at the fair value of the granted equity instrument on the date
of modification and the services obtained shall be included in the capital reserve and meanwhile
the recognition of cash settled share-based payments that have been recognized as liabilities on the
modification date shall be terminated and the difference between the two is recorded in the current
profit and loss. This regulation shall come into effect from the date of promulgation and any new
transactions occurring from January 1 2022 to the implementation date shall be adjusted in
accordance with such regulation; If the relevant transactions that occurred before January 1 2022
were not processed in accordance with this regulation retrospective adjustments should be made
and the cumulative impact should be adjusted to the retained earnings and other related items as of
January 1 2022 without adjusting the comparative financial statement data in the previous period.The implementation of this regulation has not had a significant impact on the company’s financial
condition and operating results.
(2) Changes of important accounting estimations
Nil33. Significant accounting judgments and estimates
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 accurately measured. These judgments estimates and assumptions are made on the
basis of the historical experience of the Company’s management and by considering other relevant
factors which shall impact the reported amounts of income 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 current estimates of the Company so
as to carry out the significant adjustments to the book value of the assets or liabilities to be affected.The Company regularly reviews the aforementioned judgments estimates and assumptions on the
basis of continuing operations the changes in accounting estimates only affect the current period
of which the impacts are recognized in the current period; the changes in accounting estimates not
only affect the current period but also the future 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 estimate and assume are as follows:
(1) Provision for bad debts
The Company has used the expected credit loss model to assess the impairment of financial
instruments. The application of the expected credit loss model requires significant judgement and
estimates and must consider all reasonable and evidence-based information including forward-
looking information. In making such judgments and estimates the Company infers the expected
changes in debtors’ credit risks based on historical repayment data combined with economic policies
macroeconomic indicators industry risks and other factors.
(2) Inventory falling price reserves
According to the inventory accounting policies the Company measures by the comparison between
the cost and the net realizable value if the cost is higher than the net realizable value and the old
and unsalable inventories the Company calculates and withdraws the inventory impairment. The
inventory devalues to the net realizable value by evaluating the inventory’s vendibility and net
realizable value. To identify the inventory impairment the management needs to obtain the
unambiguous evidences and consider the purpose to hold the inventory and judge and estimate the
impacts of events after the balance sheet date. The actual results and the differences between the
previously estimated results shall affect the book value of inventory and the provision or return of
the inventory impairment during the period estimated to be changed.
(3) Preparation for the impairment of non-financial and non-current assets
The Company checks whether the non-current assets except for the financial assets may decrease in
value at the balance sheet date. For the intangible assets with indefinite service life in addition to
the annual impairment test the impairment test is also needed when there is a sign of impairment.For the other non-current assets except for the 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 net amount by subtracting the disposal costs from the fair value and the present value
of expected future cash flows it indicates the impairment.As for the net amount by subtracting the disposal costs from the fair value refer to the sales
agreement price similar to the assets in the fair trade or the observable market price and subtract
the incremental costs determination directly attributable to the disposal of the asset.When estimating the present value of the future cash flow the Company needs to make significant
judgments to the output price and related operating expenses of the asset (or asset group) and the
discount rate used for calculating the present value. When estimating the recoverable amount the
Company shall adopt all the relevant information can be obtained including the prediction related
to the output price and related operating expenses based on the reasonable and supportable
assumptions.The Company tests whether its business reputation decreases in value every year which requires to
estimating the present value 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 flows generated by the asset group or the combination
of asset group and select the proper discount rate to determine the present value of the future cash
flows.
(4) Depreciation and amortization
The Company depreciates and amortizes the investment property fixed assets and intangible assets
according to the straight-line method in the service life after considering the residual value. The
Company regularly reviews the service 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 amortization expense shall be
adjusted in future periods.
(5) Fair value of financial instrument
Financial instruments that do not have active markets to provide quotes need to use valuation
techniques to determine fair value. Valuation techniques include the latest transaction information
discounted cash flow methods and option pricing models. The Company has established a set of
work processes to ensure that qualified personnel are responsible for the calculation verification
and review of fair value. The valuation model used by the Company uses the market information as
much as possible and uses the Company-specific information as little as possible. It should be noted
that part of the information used in the valuation model requires management’s estimation (such as
discount rate target exchange rate volatility etc.). The Company regularly reviews the aboveestimates and assumptions and makes adjustments if necessary.
(6) Income tax
In the Company’s normal business activities the final tax treatment and calculation of some
transactions have some uncertainties. Whether some projects can be disbursed from the cost and
expenses before taxes requires needs to get approval from the tax authorities. If the final affirmation
of these tax matters differs from the initially estimated amount the difference shall have an impact
on its current and deferred income taxes during the final identification period.IV. Taxation
1.Major taxes and tax rates
Tax Basis Tax rate
The output tax is calculated based on the taxable
25%(IRD Denmark) 22%(VHIT ，
income and VAT is calculated based on the difference
VAT Italy) 21%(Borit Belgium) 13% 9%
after deducting the input tax available for deduction
6% Collection rate 5%
for the current period
City maintaining
& construction Turnover tax payable 7% 5%
tax
Educational
Turnover tax payable 5%
surtax
15% 20% 21% (IRD America Borit
Corporation
Taxable income America) 22% (IRD Denmark)
income tax
24%(VHIT，Italy) 25%(Borit Belgium)
2.Tax incentives
The Company WFJN WFLD WFTT and WFMA are recognized as high-tech enterprises in 2020
and enjoy a preferential income tax rate of 15% from January 1 2020 to December 31 2022.WFAM is recognized as a high-tech enterprise in 2021 and will enjoy a preferential income tax rate
of 15% from January 1 2021 to December 31 2023. WFSC is recognized as a high-tech enterprise
in 2022 and will enjoy a preferential income tax rate of 15% from January 1 2022 to December 31
2024.
According to the “Continuation of the Enterprise Income Tax Policies for Western Development ”
No.23 (Year of 2020) issued together by Ministry of Finance SAT and NDRC from January 1
2011 to December 31 2030 the enterprises located in the west region and mainly engaged in the
industrial projects stipulated in the Catalogue of Encouragement Industries in Western China and
whose main business income accounting for more than 60% of the total income of the enterprise inthe current year can pay the corporate income tax at the tax rate of 15%. In the first half year of
2022 WFLD (Chongqing) paid its corporate income tax at the tax rate of 15%.
In 2022 WFLD (Wuhan) was a qualified small and low-profit enterprises and the part of taxable
income that did not exceed 1 million Yuan was included in the taxable income at a reduced rate of
12.5% and the corporate income tax was paid at the tax rate of 20%; while the part of the taxable
income exceeding 1 million Yuan but not exceeding 3 million Yuan was included in the taxable
income at a reduced rate of 25% and the corporate income tax was paid at the tax rate of 20%.V. Notes to major items in consolidated financial statements
(There is no special explanation for the following items. The unit of amount is
RMB. The ending period refers to December 31 2022 the beginning period refers
to January 1 2022 the current period refers to the year 2022 and the previous
period refers to the year 2021.)
1.Monetary funds
In RMB
Item Ending balance Opening balance
Cash on hand 51818.51 150438.79
Cash in bank 2304848889.90 1864868497.94
Other Monetary funds 84651222.35 31044328.96
Total 2389551930.76 1896063265.69
Including: Total amount of funds deposited overseas 324409336.06 69969414.25
The total amount of funds restricted on use due to
51080295.6531044328.96
mortgage pledge or freezing
Other explanation
The ending balance of other monetary fund includes RMB 32216896.41 deposited in the stock
repurchase account and RMB 24368385.65 deposited in the bank acceptance deposit，cash depositfor Mastercard RMB 199660.00 in-transit dividends RMB 1262280.00 IRD performance bond
RMB 7487250.00 the foreign exchange contract margin RMB 18840000.00 in-transit foreign
exchange fund RMB 91750.29 judicial frozen fund RMB 180000.00 and ETC freezing RMB
5000.00. The in-transit dividends RMB 1262280.00 was a portion of the dividend distributed by
Miracle Automation (002009) a trading financial asset held by the company from 2017 to 2022
which was not transferred to the company’s current account due to account issues.
2.Trading financial asset
In RMB
Item Ending balance Opening balance
Financial assets measured at fair value and whose changes are included 2718820654.87 6076436069.42in current profit or loss
Including: SNAT 78834732.00 153643308.00
Miracle Automation 66693600.00 113793600.00
Lifan Technology 48516.34 77802.11
Toyze Auto 462414.48 --
Foreign exchange contracts -- 74734940.30
Other debt and equity instrument investments 2572781392.05 5734186419.01
Total 2718820654.87 6076436069.42
3. Note receivable
(1) Classification of notes receivable
In RMB
Item Ending balance Opening balance
Bank acceptance bill -- 968022652.08
Trade acceptance bill 135559024.27 148527534.13
Total 135559024.27 1116550186.21
In RMB
Ending balance
Book balance Bad debts reserve
Category
Amoun Accrued Book value
Amount Ratio(%)
t ratio(%)
Note receivable with bad debt 135559024.2
100.00----135559024.27
provision accrued on portfolio 7
Portfolio 1: bank acceptance bill -- -- -- -- --
135559024.2
Portfolio 2: trade acceptance bill 100.00 -- -- 135559024.27
7
135559024.2
Total 100.00 -- -- 135559024.27
7
On December 31 2022 the Company measured the bad debt reserve based on the expected credit
loss for the whole duration and no bad debt reserve was required for bank acceptance and
commercial acceptance. The Company believes that there is no significant credit risk in the bank
acceptance bill held by the company and it will not cause significant losses due to bank default.
(2) Notes receivable already pledged by the Company at the end of the period
In RMB
Item Amount pledge at period-end
Bank acceptance bill --
Trade acceptance bill 82908186.94
Total 82908186.94(3) Notes endorsement or discount and undue on balance sheet date
In RMB
Item Amount derecognized at period-end Amount not derecognized at period-end
Bank acceptance bill -- --
Trade acceptance bill -- 1214398.69
Total -- 1214398.69
(4) Notes transfer to account receivable due for failure implementation by drawer at period-
end
In RMB
Item Amount transfer to account receivable at period-end
Trade acceptance bill 7201691.00
Other explanation
The trade acceptance bill that the company transferred to the accounts receivable due to in 2018 the failure of the
drawer to perform the agreement at the end of the period were the bills of the subsidiaries controlled by Baota
Petrochemical Group Co. Ltd. and the bills accepted by Baota Petrochemical Group Finance Co. Ltd. (hereinafter
referred to as “BD bills”); In 2018 the amount transferred to account receivable was 7 million yuan receivables of
1.7 million yuan were recovered in 2019 receivables of 2 million yuan increased in 2020 and enforced money 98309
yuan was received in the reporting period.
4. Account receivable
(1) Classification of account receivable
In RMB
Ending balance
Book balance Bad debt reserve
Category
Ratio Accrued Book value
Amount Amount
(%) ratio (%)
Account receivable with
bad debt provision accrued 57806705.14 1.80 57806705.14 100.00 --
on a single basis
Account receivable with
bad debt provision accrued 3149157700.73 98.20 21667523.48 0.69 3127490177.25
on portfolio
Total 3206964405.87 100.00 79474228.62 2.48 3127490177.25
In RMB
Opening balance
Book balance Bad debt reserve
Category
Ratio Accrued Book value
Amount Amount
(%) ratio (%)Account receivable with
bad debt provision accrued 61361142.44 2.87 61361142.44 100.00 --
on a single basis
Account receivable with
bad debt provision accrued 2076986857.82 97.13 23186564.05 1.12 2053800293.77
on portfolio
Total 2138348000.26 100.00 84547706.49 3.95 2053800293.77
* Bad debt provision accrued on single basis
In RMB
Ending balance
Name Accrued Accrued
Book balance Bad debt reserve
ratio(%) causes
Have
Hubei Meiyang Auto Industry Co. Ltd. 20139669.45 20139669.45 100.00 difficulty in
collection
Have
Hunan Leopaard Auto Co. Ltd. 8367245.47 8367245.47 100.00 difficulty in
collection
Have
BD bills 7201691.00 7201691.00 100.00 difficulty in
collection
Linyi Zotye Automobile Components Have
6193466.77 6193466.77 100.00 difficulty in
Manufacturing Co. Ltd.collection
Have
Tongling Ruineng Purchasing Co. Ltd. 4320454.34 4320454.34 100.00 difficulty in
collection
Brilliance Automotive Group Holdings Co. Have
3469091.33 3469091.33 100.00 difficulty in
Ltd.collection
Have
Dongfeng Chaoyang Diesel Co. Ltd. 1823262.64 1823262.64 100.00 difficulty in
collection
Jiangsu Kawei Auto Industrial Group Co. Have
1932476.26 1932476.26 100.00 difficulty in
Ltd.collection
Jiangsu Jintan Automobile Industry Co. Have
1059798.43 1059798.43 100.00 difficulty in
Ltd.collection
Have
Tianjin Levol Engine Co. Ltd. 1018054.89 1018054.89 100.00 difficulty in
collection
Have
Other clients 2281494.56 2281494.56 100.00 difficulty in
collection
Total 57806705.14 57806705.14 100.00
* Bad debt provision accrued on portfolio
In RMB
Name Ending balanceBook balance Bad debt reserve Accrued ratio(%)
Within 6 months 3024862168.01 -- --
6 months to one year 92819798.57 9281979.84 10.00
1-2 years 18948517.89 3789703.59 20.00
2-3 years 6552293.67 2620917.46 40.00
Over 3 years 5974922.59 5974922.59 100.00
Total 3149157700.73 21667523.48 0.69
* In the portfolio there is no account receivable which adopts other methods to set aside for bad
debts.* Age-based disclosure (including single withdrawal and combination withdrawal) :
In RMB
Account age Book balance
Within one year 3118871487.62
Including: within 6 months 3025753558.24
6 months to one year 93117929.38
1-2 years 19350208.92
2-3 years 8919358.15
Over 3 years 59823351.18
Total 3206964405.87
(2) Bad debt provision accrued collected or reversal
In RMB
Amount changed in the period
Translatio
Opening n of Ending
Category Collected or Consolidatio
balance Accrued Charged off foreign balance
reversal n increase
currency
statements
Bad debt
84547706.492904080.142676427.235608467.3676823.85230512.7379474228.62
provision
Important bad debt provision collected or reversal: Nil
(3) Account receivable actually charged off in the Period
In RMB
Whether the payment is generated by related
Item Amount charged off
party transactions
Zhejiang Zotye Automobile
3059115.67 N
Co. Ltd.Ruili Jifeng Import and Export
1091409.60 N
Co. Ltd
Chonqqing Branch of Hunan 935638.55 NJiangnan Auto Co. Ltd
Sporadic clients 522303.54 N
Total 5608467.36
(4) Top 5 receivables at ending balance by arrears party
In RMB
Ending balance of account Ratio in total ending balance of Ending balance of
Name
receivable account receivables(%) bad debt reserve
RBCD 461493652.46 14.39 174766.71
Client 2 376840900.77 11.75 70035.30
Robert Bosch Company 363021724.83 11.32 882016.11
Client 4 142812092.97 4.45 60548.15
Client 5 130978870.40 4.09 2955417.69
Total 1475147241.43 46.00 4142783.96
(5) Account receivable derecognized due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvement
Nil
5. Receivable financing
(1) Receivable financing
In RMB
Item Ending balance Opening balance
Notes receivable 1918368845.21 713017014.50
Including: Bank acceptance bill 1918368845.21 713017014.50
Trade acceptance bill -- --
Total 1918368845.21 713017014.50
Other explanation:
During the management of enterprise liquidity the company will discount or endorse transfers
before the maturity of some bills the business model for managing bills receivable is to collect
contractual cash flows and sell the financial asset so it is classified as financial assets measured at
fair value and whose changes are included in other comprehensive income which is listed in
receivables financing.
(2) The Company's pledged receivables financing at the end of the periodIn RMB
Item Amount pledge at period-end
Bank acceptance bill 530337600.45
Trade acceptance bill --
Total 530337600.45
(3) Receivables financing endorsed or discounted by the Company at the end of the period
and not due at the end of the period
In RMB
Amount not derecognized at
Item Amount derecognized at period-end
period-end
Bank acceptance bill 269050791.15 --
Trade acceptance bill -- --
Total 269050791.15 --
6. Account paid in advance
(1) Account age of account paid in advance
In RMB
Ending balance Opening balance
Account age
Amount Ratio(%) Amount Ratio(%)
Within one year 88207782.70 93.51 172019278.72 96.61
1-2 years 5066837.28 5.37 3318636.20 1.86
2-3 years 778819.68 0.83 1140843.34 0.64
Over 3 years 270414.21 0.29 1580491.73 0.89
Total 94323853.87 100.00 178059249.99 100.00
Explanation of the reasons why prepayments with an aging of over 1 year and significant amounts
were not settled in a timely manner
Nil
(2) Top 5 accounts paid in advance at ending balance by prepayment object
Total year-end balance of top five account paid in advance by prepayment object amounted to 45793646.66 yuan
takes 48.55 percent of the total advance payment at year-end.
7. Other account receivables
In RMB
Item Ending balance Opening balance
Interest receivable -- --
Dividend receivable 147000000.00 --Other account receivables 1117507456.47 17908078.54
Total 1264507456.47 17908078.54
(1) Interest receivable
Nil
(2) Dividend receivable
1) Category of dividend receivable
In RMB
Item (or invested enterprise) Ending balance Opening balance
Wuxi WFEC Catalyst Co. Ltd. 147000000.00 --
Total 147000000.00 --
2） Important dividend receivable with account age over one year
Nil
(3) Other accounts receivable
1) Classify other accounts receivable by nature
In RMB
Nature Ending book balance Opening book balance
Intercourse funds from units 1894818.08 1991247.85
Cash deposit 9087881.41 6212842.61
Staff loans and petty cash 1823842.27 555076.61
Social security and provident fund paid 11341820.83 10547050.70
WFTR “platform trade” business
2741499131.95--
portfolio
Other 66663.56 1952403.17
Total 2765714158.10 21258620.94
2)Accrued of bad debt provision
In RMB
Phase I Phase II Phase III
Expected credit losses Expected credit losses
Expected credit
Bad debt reserve for the entire duration for the entire duration Total
losses over next
(without credit (with credit
12 months
impairment occurred) impairment occurred)
Balance on Jan. 1 2022 3318719.00 -- 31823.40 3350542.40Balance of Jan. 1 2022 in the
--------
period
--Transfer into the second period -- -- -- --
--Transfer into the third period -- -- -- --
--Transfer back to the second
--------
period
--Transfer back to the first
--------
period
Current accrued 1785811.16 -- 1644068327.93 1645854139.09
Current reversal 200553.00 -- 96.60 200649.60
Current charge off 1774500.00 -- -- 1774500.00
Other changes 977169.74 -- -- 977169.74
Balance on Dec. 31 2022 4106646.90 -- 1644100054.73 1648206701.63
By account age (including single withdrawal and combination withdrawal):
In RMB
Account age Book balance
Within one year 2758812664.93
Including: Within 6 months 1919096046.09
6 months to one year 839716618.84
1-2 years 1358405.20
2-3 years 2962710.00
Over 3 years 2580377.97
Total 2765714158.10
3) Bad debt provision accrued collected or reversal
In RMB
Change in current period
Increase in Translation
Opening Ending
Category Collected or business of foreign
balance Accrued Charge off balance
reversal consolidatio currency
n statements
Bad debt 3350542. 1645854139 1648206701.
200649.601774500.00928478.3748691.37
provision 40 .09 63
4) Other accounts actually charged off during the reporting period
In RMB
Item Amount charged off
Ningbo Jiangbei High-Tech Industry Park Development
1767000.00
Construction Co. Ltd.Other sporadic 7500.00
Total 1774500.005) Top 5 other accounts receivable at ending balance by arrears party
In RMB
Ratio in total
Ending
Ending Account ending balance of
Enterprise Nature balance of bad
balance age other accounts
debt reserve
receivables(%)
WFTR “platform trade” business See “Other 27414991 Within one 1644068327.
99.12portfolio explanations” 31.95 year 93
Deposit 1364750.0 Within 3
Wuxi China Resources Gas Co. LTD 0.05 492910.00
margin 0 years
Zhenkunxing Industrial Supermarket Deposit 1000000.0
2-3 years 0.04 400000.00
(Shanghai) Co. LTD margin 0
Wuxi Xingzhou Energy Development Deposit Within one
887227.720.0328176.35
Co. LTD margin year
Wuxi Youlian Thermoelectric Co. Deposit Over 3
750000.000.03750000.00
LTD margin years
274550111645739414.
Total 99.27
09.6728
Other explanations: For details of WFTR “platform trade” business portfolio please refer to the
description in Note-XIV-6 "Other Significant Transactions and Matters Affecting Investors'
Decisions". The ending balance of the "platform trade" business portfolio of WFTR includes the
balance of other receivables shown below NoteX-6 (5).
6) Other account receivables related to government grants: Nil
7) Other accounts receivable derecognized due to the transfer of financial assets: Nil
8) The amount of assets and liabilities formed by transferring other receivables and continuing to
be involved: Nil
8. Inventory
(1) Category of inventory
In RMB
Ending balance Opening balance
Inventory Inventory
Item
Book balance depreciation Book value Book balance depreciation Book value
reserve reserve
Stock
160326360.636614977.484791307.0608845441.6
materia 796941337.6 693636748.6
21201
ls 3 1
Goods
31641606.6406011714.5406224039.118593866.2387630172.8
in 437653321.2
94486
process 3
Finishe 142342140. 1240492964 2578635721 129714961. 2448920760
1382835104
d 58 .31 .74 12 .62.89goods
2617429763334310107.22831196563678496509233100134.3445396375
Total.7548.27.4940.09
(2) Inventory depreciation reserve
In RMB
Current increased
Increase in Translatio
Opening business n of Ending
Item
balance Accrued Resale consolidation foreign balance
currency
statements
Stock
22186378.112735816.5369785.1160326360.2
material 84791307.00 84615829.62
8981
s
Goods
10293454.9427717.9
in 18593866.28 20325267.14 2588210.23 31641606.69
26
process
Finished 129714961.1 66441441.3 136384.4 142342140.5
76669336.362262899.99
goods 2 4 5 8
233100134.4181610433.198921274.417586926.8933887.5334310107.4
Total
024198
* Net realizable value of inventory is equal to during the daily activities the estimated sale price
of inventory less costs which are going to happen by estimation till works completed sales
price estimated and relevant taxes.* Accrued basis for inventory depreciation reserve:
Accrued basis for inventory impairment
Item The specific basis for determining net realizable value
provision
The net realizable value of materials used Results from the estimated sale price of such inventory less the cost
Stock materials to produce finished goods for sale is less what will happen estimated sales expenses and relevant taxes till
than its carrying value the goods completed
The net realizable value of products in Results from the estimated sale price of such inventory less the cost
process used to produce finished what will happen estimated sales expenses and relevant taxes till
Goods in process
products for sale is lower than its book the goods completed
value
Net realizable value is less than its Based on the estimated selling price minus the amount of taxes to
Finished goods
carrying value be borne in the process of sales
* Reasons of inventory falling price reserves written off in current period:
Item Reasons of written off
Stock materials Used for production and the finished goods are realized sales
Goods in process Goods in process completed in the Period and corresponding finished goods are realized sales in the reporting
period
Finished goods Sold in the reporting period(3) Explanation on capitalization of borrowing costs at ending balance of inventory
Nil
9. Other current assets
In RMB
Item Ending balance Opening balance
Receivable export tax rebates 14325020.52 6457803.72
VAT refund receivable 25444657.63 3985115.26
Prepaid taxes and VAT retained 364556192.43 204700549.12
Input tax to be deducted and certification 1192752.68 6274.43
Other 25028577.98 5171179.97
Total 430547201.24 220320922.50
10.Long-term equity investment
In RMB
Current changes (+/ -)
Ending
Investme Cash Transl
Other Oth ation balanc
nt dividen
The Additio Capit compreh er Impair of e of
Opening gain/loss d or Ending
invested nal al ensive equi ment foreig depreci
balance recogniz profit n balance
entity invest reduc income ty accrue ation
ed under announc curren
ment tion adjustme cha d cy reserve
equity ed to
nt nge statem s
method issued ents
Joint
venture
Wuxi
WFEC 7944898 1770389 147000 8245288
------------------
Catalyst 40.10 69.79 000.00 09.89
Co. Ltd.Robert
Bosch 3340114 1085484 765837 3659761
----------------
Powertra 235.45 785.75 710.23 310.97
in Ltd.Zhonglia
n
Automo
137857537523751944001559413
bile -- -- -- --- -- --- --
785.7728.28000.00314.05
Electron
ic Co.Ltd.
460142718815541000005482981
Wuxi -- -- -- -- -- --- --
2.27 0.24 00.00 2.51Weifu
Precisio
n
Machine
ry
Manufac
turing
Co. Ltd.Changch
un
Xuyang
Weifu
Automo -
10348819621734.
bile -- -- 727085.1 -- --- -- -- --- --
9.9383
compon 0
ents
Technol
ogy Co.Ltd.Precors 5345878. 15134 5517924.--20698.24------------
GmbH 98 7.34 56
Wuxi
Chelian
Tianxia
Informat -1430559 370000 1691452
--1091075------------
ion 55.62 00.00 02.15
3.47
Technol
ogy Co.Ltd.
571794437000016449591117237151346282818
Total -- -- -- -- --
788.1200.00683.73710.237.34108.96
Explanation on those holding less than 20% of the voting rights but with significant influence:
(1) Precors GmbH:
The wholly-owned subsidiary of the Company Borit holds 8.11% equity of Precors GmbH. Borit
appointed a director to Precors GmbH. Though the representative Borit can participate in the
operation policies formulation of Precors GmbH and thus exercise a significant influence over
Precors GmbH.
(2) Wuxi Chelian Tianxia Information Technology Co. Ltd. (Hereinafter referred to as "Chelian
Tianxia"):
The Company holds 9.8452% equity of Chelian Tianxia and appointed a director to Chelian Tianxia.Though the representative the Company can participate in the operation policies formulation of
Chelian Tianxi and thus exercise a significant influence over Chelian Tianxi.
11.Other equity instrument investment
In RMB
Item Ending balance Opening balance
Wuxi Xidong Science & Technology Industrial Park 5000000.00 5000000.00Beijing Zhike Industry Investment Holding Group Co.
75940000.0075940000.00
Ltd.Rare earth Catalysis Innovation Research Institute
4108000.004108000.00
(Dongying) Co. Ltd.
Wuxi Xichang Microchip Semi-Conductor 592742690.00 200000000.00
Total 677790690.00 285048000.00
12.Other non-current financial assets
In RMB
Item Ending balance Opening balance
Guolian Securities 186608914.00 208795178.00
Investments in other debt instruments and equity
1140000000.001482000000.00
instruments held for more than one year
Total 1326608914.00 1690795178.00
13. Investment real estate
(1) Investment real estate measured by cost
In RMB
House and Construction in
Item Land use right Total
Building progress
I. Original book value
1.Opening balance 65524052.61 -- -- 65524052.61
2.Current increased 41662196.86 -- -- 41662196.86
(1) Outsourcing -- -- -- --
(2) Inventory\fixed assets\construction
41662196.86----41662196.86
in process transfer-in
(3) Increased by combination -- -- -- --
3.Current decreased 9494473.20 -- -- 9494473.20
(1) Disposal -- -- -- --
(2)Transfer from rental to self use 9494473.20 -- -- 9494473.20
4.Ending balance 97691776.27 -- -- 97691776.27
II. Accumulated depreciation and
accumulated amortization
1.Opening balance 46136306.05 -- -- 46136306.05
2.Current increased 7278108.90 -- -- 7278108.90
(1) Accrued or amortization 2331022.21 -- -- 2331022.21
(2)Transferred from inventory fixed
4947086.69----4947086.69
assets and construction in progress
3.Current decreased 5019508.41 -- -- 5019508.41
(1) Disposal -- -- -- --
(2)Transfer from rental to self use 5019508.41 -- -- 5019508.41
4.Ending balance 48394906.54 -- -- 48394906.54III. Depreciation reserves
1.Opening balance -- -- -- --
2.Current increased -- -- -- --
(1) accrued -- -- -- --
3. Current decreased -- -- -- --
(1) Disposal -- -- -- --
(2) Other transfer-out -- -- -- --
4.Ending balance -- -- -- --
IV. Book value
1.Ending Book value 49296869.73 -- -- 49296869.73
2.Opening Book value 19387746.56 -- -- 19387746.56
(2) Investment real estate measured at fair value
Nil
14. Fixed assets
(1) Fixed assets
In RMB
House and Machinery Transportation Electronic and
Item Land Total
Building equipment equipment other equipment
I. Original book
value:
1.Opening 1570238484. 3540288690. 585762
32772506.07714328321.31--
balance 44 19 8002.01
2.Current 1105926860. 194214
414184200.807106091.81385478644.9829446173.31
increased 71 1971.61
885588
(1) Purchase 244898.40 7530517.28 367371.68 713097.76 --
5.12
(2)Construction in
112377
progress transfer- 282682532.87 743087427.45 6738720.13 91270299.75 --
8980.20
in
(3)Investment real 863986
8639863.02--------
estate transfer-in 3.02
(4)Financial lease 122681
--12268137.32------
transfer in 37.32
(5)Increased by 788599
122616906.51343040778.66--293495247.4729446173.31
combination 105.95
3.Current 168108
54225619.7548213762.731332428.0964336862.53--
decreased 673.10
(1)Disposal or 126446
12563422.8948213762.731332428.0964336862.53--
scrapping 476.24
(2)Transfer to 416621
41662196.86--------
investment real 96.86estate
4.Conversion of
foreign currency 317664
4328995.4715503048.1266093.3910831183.401037118.74
financial 39.12
statement
1934526060.4613504836.766342
5.Ending balance 38612263.18 1046301287.16 30483292.05
96297739.64
II. Accumulated
depreciation
1.Opening 1952082761. 283469
439825229.2920404183.79422378184.50--
balance 65 0359.23
2.Current 931593
110150684.48535453321.582253579.24283736296.65--
increased 881.95
421050
(1) accrued 52819069.57 255295980.54 2253579.24 110681921.66 --
551.01
(2)Investment real 469963
4699630.83--------
estate transfer-in 0.83
(3)Financial lease 104486
--10448678.64------
transfer in 78.64
(4)increased by 495395
52631984.08269708662.40--173054374.99--
combination 021.47
3.Current 935727
15056913.3027569646.381038351.2349907798.40--
decreased 09.31
(1) Disposal or 886256
10109826.6127569646.381038351.2349907798.40--
scrapping 22.62
(2) Transfer to
494708
investment real 4947086.69 -- -- -- --
6.69
estate
4.Conversion of
foreign currency 207918
1891138.0211005788.811956.457892977.17--
financial 60.45
statement
2470972225.369350
5.Ending balance 536810138.49 21621368.25 664099659.92 --
663392.32
III. Depreciation
reserves
1.Opening 907271
--84541933.6173319.906111936.76--
balance 90.27
2.Current 122128
13624811.0576592762.00--17270992.7514639472.46
increased 038.26
(1) Accrued -- -- -- -- -- --
(2)Increased by 122128
13624811.0576592762.00--17270992.7514639472.46
combination 038.26
3.Current 164471
7045.4214338942.29--2101139.20--
decreased 26.91
(1) Disposal or 164471
7045.4214338942.29--2101139.20--
scrapping 26.91(2)Other -- -- -- -- -- --
4.Conversion of
foreign currency 353205
479554.862107885.69--429004.80515614.41
financial 9.76
statement
199940
5.Ending balance 14097320.49 148903639.01 73319.90 21710795.11 15155086.87
161.38
IV. Book value
1.Ending Book 1383618601. 1993628971. 376998
16917575.03360490832.1315328205.18
value 98 62 4185.94
2.Opening Book 1130413255. 1503663994. 293221
12295002.38285838200.05--
value 15 93 0452.51
(2) Temporarily idle fixed assets: Nil
(3) Fixed assets acquired by operating lease: Nil
(4) Fixed assets without property certification held
In RMB
Item Book value Reasons for without the property certification
Plant and office building of WFCA 32165954.92 Still in process of relevant property procedures
15. Construction in progress
In RMB
Item Ending balance Opening balance
Construction in progress 509105587.49 387429933.08
Engineering materials -- --
Total 509105587.49 387429933.08
(1) Construction in progress
In RMB
Ending balance Opening balance
Depreciati
Item Depreciatio
Book balance Book value Book balance on Book value
n reserves
reserves
Technical transformation 132814463 88688772.
132814463.95--88688772.85--
of parent company .95 85
Lot 103 phase V of the 89599174.------89599174.42--
parent company 42
WFMS rebuilding of the 20562758. 12185858.
20562758.75--12185858.74--
parent company 75 74
Renovation of Xinan
41493029.
Branch No. 6 Huashan 41493029.41 -- -- -- --
41
Road of Parent CompanyTechnical transformation 69450019. 72318870.
69450019.06--72318870.79--
of WFAM 06 79
Technical transformation 16739199. 13368288.
16739199.84--13368288.81--
of WFLD 84 81
Technical transformation 82081060. 23293601.
82081060.63--23293601.39--
of Denmark IRD 63 39
Technical transformation 47822275.
47822275.01--------
of Italy VHIT 01
98142780.87975366.
Other projects 98142780.84 -- 87975366.08 --
8408
509105587387429933.0387429933
Total 509105587.49 -- --.498.08
(2) Changes of major construction in progress
In RMB
Fixed assets Other
Opening Current
Item transfer-in in the decreased in Ending balance
balance increased
Period the Period
Technical
transformation of parent 88688772.85 530483541.73 484206373.45 2151477.18 132814463.95
company
Lot 103 phase V of the
89599174.4225082992.38114682166.80----
parent company
WFMS rebuilding of the
12185858.748376900.01----20562758.75
parent company
Renovation of Xinan
Branch No. 6 Huashan
--41493029.41----41493029.41
Road of Parent
Company
Technical
transformation of 72318870.79 142114233.06 144334625.25 648459.54 69450019.06
WFAM
Technical
transformation of 13368288.81 74672106.28 71074193.84 227001.41 16739199.84
WFLD
Technical
transformation of 23293601.39 60594550.01 1807090.77 -- 82081060.63
Denmark IRD
Technical
transformation of Italy -- 59336857.04 11514582.03 -- 47822275.01
VHIT
Total 299454567.00 942154209.92 827619032.14 3026938.13 410962806.65
Following table:
In RMBProportion of Wherein: the
Accumulated
accumulated Project capitalized Current interest
amount of Source of
Item project input progress amount of interest capitalization
capitalized funds
to budget (%) in the current rate (%)
interest
(%) period
Technical Company
transformation of -- -- -- -- -- accumulation
parent company funds
Company
Lot 103 phase V of
-- -- -- -- -- accumulation
the parent company
funds
Company
WFMS rebuilding of
-- -- -- -- -- accumulation
the parent company
funds
Renovation of Xinan Company
Branch No. 6 accumulation
----------
Huashan Road of funds
Parent Company
Technical Company
transformation of -- -- -- -- -- accumulation
WFAM funds
Technical Company
transformation of -- -- -- -- -- accumulation
WFLD funds
Technical Company
transformation of -- -- -- -- -- accumulation
Denmark IRD funds
Technical Company
transformation of Italy -- -- -- -- -- accumulation
VHIT funds
Total
(3) The provision for impairment of construction projects
Nil
16. Right-of-use assets
In RMB
Item Building Mechanical equipment Total
I. Original book value:
1.Opening balance 17604684.01 21763912.85 39368596.86
2.Current increased 15589326.89 15206270.58 30795597.47
(1)Increased lease 13711753.69 15206270.58 28918024.27
(2)Increased by combination 1877573.20 1877573.20
3.Current decreased -- 12268137.32 12268137.32
(1) Transfer to own assets -- 12268137.32 12268137.32
4. Conversion of foreign
1222038.96319399.521541438.48
currency financial statement
5.Ending balance 34416049.86 25021445.63 59437495.49
II. Accumulated depreciation1.Opening balance 4140756.41 12079434.87 16220191.28
2.Current increased 6596209.61 4961207.02 11557416.63
(1) Accrued 5526140.33 4961207.02 10487347.35
(2)increased by combination 1070069.28 1070069.28
3.Current decreased -- 10448678.64 10448678.64
(1) Transfer to own assets -- 10448678.64 10448678.64
4. Conversion of foreign
298972.97-55507.13243465.84
currency financial statement
5.Ending balance 11035938.99 6536456.12 17572395.11
III. Depreciation reserves
1.Opening balance -- -- --
2.Current increased -- -- --
(1) Accrued -- -- --
3.Current decreased -- -- --
(1) Disposal -- -- --
4. Translation of foreign
------
currency statements
5.Ending balance -- -- --
IV. Book value
1.Ending Book value 23380110.87 18484989.51 41865100.38
2.Opening Book value 13463927.60 9684477.98 23148405.58
17. Intangible assets
(1) Intangible assets
In RMB
Computer Trademark and Patent and non-
Item Land use right Total
software trademark license patent technology
I. Original book value
381012520.4
1.Opening balance 123152207.22 41597126.47 181889330.47 727651184.60
4
2.Current increased 854610.18 35211964.82 59548754.53 95615329.53
(1) Purchase -- 1689742.12 3804434.00 5494176.12
(2)Construction in
--25168225.2225168225.22
progress
(3)Increased by
--8353997.4850744320.5359098318.01
combination
(4)Shareholders' capital
5000000.005000000.00
contribution
(5)Transfer from rental
854610.18854610.18
to self use
3.Current decreased -- 2578043.96 2578043.96
(1)Disposal or
--2578043.962578043.96
scrapping
(2) Other --4.Conversion of foreign
currency financial 545533.29 6297657.07 6843190.36
statement
381867130.6
5.Ending balance 156331661.37 41597126.47 247735742.07 827531660.53
2
II. accumulated
amortization
103617738.0
1.Opening balance 92880072.81 9709000.00 64204353.94 270411164.78
3
2.Current increased 8701768.78 28089883.82 15612492.50 52404145.10
(1)Amortization 8381891.20 23420202.87 15612492.50 47414586.57
(2)Transfer from rental
319877.58319877.58
to self use
(3)increased by
4669680.954669680.95
combination
3.Current decreased 2578043.96 2578043.96
(1)Disposal or
2578043.962578043.96
scrapping
(2)Other
4.Conversion of foreign
currency financial 251033.39 2326306.00 2577339.39
statement
112319506.8
5.Ending balance 118642946.06 9709000.00 82143152.44 322814605.31
III. Depreciation
reserves
1.Opening balance -- -- 16646900.00 -- 16646900.00
2.Current increased -- 427123.63 -- -- 427123.63
(1)Accrued -- -- -- -- --
(2)Increased by
427123.63427123.63
combination
3.Current decreased -- -- -- -- --
(1)Disposal or
----------
scrapping
(2)Other -- -- -- -- --
4.Conversion of foreign
currency financial -- 15043.67 -- -- 15043.67
statement
5.Ending balance -- 442167.30 16646900.00 -- 17089067.30
IV. Book value
269547623.8
1.Ending Book value 37246548.01 15241226.47 165592589.63 487627987.92
1
277394782.4
2.Opening Book value 30272134.41 15241226.47 117684976.53 440593119.82
1
(2) Land use right without property certification held: Nil18. Goodwill
(1) Original book value of goodwill
In RMB
Current increased
Translation of foreign Ending
Item Opening balance The purchase price recovered in the
currency statements balance
current period
Merged with
1784086.79----1784086.79
WFTT
Merged with 235898288.9
229470928.96--6427359.97
Borit 3
237682375.7
Total 231255015.75 -- 6427359.97
(2) Reserve for goodwill impairment
1) Goodwill generated by merging Weifu TT:
In 2010 the company consolidated Weifu Tianli through a cash capital increase and the goodwill
is the part of the merger cost greater than the fair value share of Weifu Tianli's identifiable net assets.At the end of the period the Company conducted an impairment test on goodwill to estimate the
recoverable amount of the asset group related to goodwill based on the present value of future cash
flows that is estimating the present value of future cash flows base on the financial budget for the
next 5 years set by management and 12.39% discount rate cash flows remain stable for years beyond
the five-year budget. The asset group identified at the time of goodwill impairment test did not
change.The key parameters determined by goodwill impairment test are as follows: 18%-19% gross profit
rate and 8%-11% growth rate of operating revenue in the forecast period are used as key parameters
to calculate the present value of expected future cash flows of the asset group related to goodwill.Management determines these parameters based on historical conditions prior to the forecast period
and its forecast of market development. After the test above the Company's goodwill does not need
to draw impairment reserves.
2) Goodwill generated by merging Borit:
In 2020 the Company acquired 100.00% of Borit's equity by cash purchase and goodwill is the
amount of merger cost greater than the fair value share of Borit's identifiable net assets. According
to the Asset Appraisal Report issued by Wanlong (Shanghai) Asset Appraisal Co. LTD. (Wanlong
Appraisal Word (2023) No. 40032). The recoverable value of the company's goodwill combined
with Borit in the asset group is RMB 324.22 million which is higher than the book value of RMB
311.24 million so there is no impairment loss of goodwill.
19.Long-term deferred expense
In RMBAmortized in the
Item Opening balance Current increased Other decrease Ending balance
Period
Decoration costs
15304783.5718381792.345676279.94575939.8728586235.84
etc.
20. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets that are not offset
In RMB
Ending balance Opening balance
Item Deductible Deferred income tax Deductible temporary Deferred income
temporary difference assets difference tax assets
Bad debt provision 79078766.93 11972961.27 87681266.17 13383420.21
Inventory depreciation
299752548.9346412618.47224955223.9437688819.01
reserve
Depreciation reserves of
70008612.2112701929.3657218038.148677481.50
fixed assets
Depreciation reserves of
16646900.002497035.0016646900.002497035.00
intangible assets
Deferred income 222850907.79 33668167.75 295502674.12 44620545.44
Unrealized profit from
43939348.598056161.3765251129.5510531677.19
insider transactions
Payable salary accrued
849436667.00139593056.661236037621.62188472847.67
expenses etc.Depreciation assets
25570352.824153581.5254047597.498868412.34
amortization difference
Deductible loss 942706826.57 142138790.82 53658338.05 11465129.69
Equity incentive 3066582.11 459987.32 80742533.73 12498678.30
Fiscal and tax differences
1345462.74234721.68378997.8472554.36
for leasing business
Total 2554402975.69 401889011.22 2172120320.65 338776600.71
(2) Deferred income tax liabilities that are not offset
In RMB
Ending balance Opening balance
Deferred
Item Taxable temporary Deferred income Taxable temporary
income tax
differences tax liabilities differences
liabilities
The difference between the fair value
and taxation basis of WFTT assets in a 10192264.15 1528839.60 10660027.75 1599004.14
merger not under the same control
The difference between the fair value 61131061.24 13448833.47 68854748.78 15148044.73and taxation basis of IRD assets in a
merger not under the same control
The difference between the fair value
and taxation basis of Borit assets in a 21378918.49 5344729.59 25246551.70 6311637.91
merger not under the same control
The difference between the fair value
and taxation basis of VH business in a 59291649.88 14229995.98 -- --
merger not under the same control
Change of fair value of transaction
161415403.7824226534.89318337329.7447794985.96
financial asset
Accelerated depreciation of fixed assets 700548497.31 107631856.23 294934456.08 48772268.60
119625941.3
Total 1013957794.85 166410789.76 718033114.05
4
(3) Deferred income tax assets and deferred income tax liabilities listed after off-set
In RMB
Opening balance
Ending balance of Trade-off between the
Trade-off between the of deferred
deferred income tax deferred income tax
Item deferred income tax income tax assets
assets or liabilities after assets and liabilities at
assets and liabilities or liabilities after
off-set period-begin
off-set
Deferred income tax
-126261238.77275627772.45-96528406.14242248194.57
assets
Deferred income tax
-126261238.7740149550.99-96528406.1423097535.20
liabilities
(4) Details of unrecognized deferred income tax assets
In RMB
Item Ending balance Opening balance Note
It is uncertain whether enough taxable income can
Bad debt reserve 1648602163.32 216982.72
be obtained in the future
Inventory depreciation It is uncertain whether enough taxable income can
34557558.558144910.46
reserve be obtained in the future
It is uncertain whether enough taxable income can
Loss from subsidiary 529884134.82 279247744.04
be obtained in the future
Depreciation reserves of It is uncertain whether enough taxable income can
129931549.17 33509152.13 be obtained in the future
fixed assets
Depreciation reserves of It is uncertain whether enough taxable income can
442167.30--
intangible assets be obtained in the future
Other equity instrument Due to the uncertainty of obtaining evidence
13600000.0013600000.00
investment required by tax authorities
It is uncertain whether enough taxable income can
Equity incentive -- 2304871.81
be obtained in the future
Total 2357017573.16 337023661.16(5) Deductible losses of unrecognized deferred income tax assets expired in following years
In RMB
Maturity year Ending amount Opening amount Note
Operating loss occurs in domestic
2022--3781066.93
subsidiaries
Operating loss occurs in domestic
20232380501.891171973.53
subsidiaries
Operating loss occurs in domestic
202412087441.1218520699.71
subsidiaries
Operating loss occurs in domestic
202512140693.5412151503.80
subsidiaries
Operating loss occurs in domestic
202646418486.8322596818.84
subsidiaries
Operating loss occurs in domestic
2027 and the following years 160833781.13 --
subsidiaries
Operating loss occurs in overseas
No expiration period 296023230.31 221025681.23
subsidiaries
Total 529884134.82 279247744.04
21.Other non-current assets
In RMB
Item Ending balance Opening balance
Engineering
equipment paid in 239775014.10 267941354.57
advance
Contract
19855422.27--
acquisition cost
Large deposit
certificates with a
220000000.00--
maturity of more
than one year
Total 479630436.37 267941354.57
22. Short-term borrowings
(1) Category of short-term borrowings
In RMB
Item Ending balance Opening balance
Credit loan 3511504373.65 1264241086.57
Guaranteed Loan 89074800.00 72197000.00
Bill financing -- 100000000.00
Interest payable 3797354.17 1520119.98
Total 3604376527.82 1437958206.55(2) Overdue short-term loans without payment
The total amount of overdue short-term loans at the end of the period is RMB 0.
23.Derivative financial liabilities
In RMB
Item Ending balance Opening balance
Forward settlement and sales of foreign exchange 747115.75 --
24.Note payable
(1) Notes payable are listed by category
In RMB
Category Ending balance Opening balance
Bank acceptance bill 1411089606.00 1760032216.30
Other explanation:
A deposit of 24368385.65 yuan and pledge notes receivable of 613245787.39 yuan have been
paid for the issuance of the banker's acceptance above.
(2) At the end of the current period the total amount of matured but unpaid notes payable is 0 yuan.
25. Account payable
In RMB
Item Ending balance Opening balance
Within one year 3165855712.48 3066299727.36
1-2 years 207702168.86 64962570.18
2-3 years 31919163.40 52067026.49
Over three years 49123978.86 23324378.56
Total 3454601023.60 3206653702.59
26. Accounts received in advance
(1) Accounts received in advance:
In RMB
Item Ending balance Opening balance
Within one year 3633878.33 2854518.96
Total 3633878.33 2854518.96(2) Important advances over 1 year:
Nil
27.Contract liabilities
(1) Contract liabilities
In RMB
Item Ending balance Opening balance
Within one year 60916157.84 132406102.56
1-2 years 31275903.90 2681086.39
2-3 years 1518759.78 132196.85
Over three years 1139261.71 1208250.59
Total 94850083.23 136427636.39
(2) Important contract liabilities over 1 year:
Nil
28.Wage payable
(1) Wage payable
In RMB
Item Opening balance Current increased Current decreased Ending balance
I. Short-term compensation 207822331.67 1204097708.74 1170045281.42 241874758.99
II. Post-employment welfare- defined
20279307.31185708871.69178310062.1927678116.81
contribution plans
III. Dismissed welfare 1245327.09 1396110.65 1668237.41 973200.33
IV. Incentive funds paid within a
93880000.0063140000.0030740000.00
year
V. Other short-term welfare-
Housing subsidies employee 16661536.63 4526219.46 5019445.98 16168310.11
benefits and welfare funds
Total 339888502.70 1395728910.54 1418183027.00 317434386.24
* Explanation to decrease in incentive funds paid within 1 year:
The decrease of incentive funds paid within a year in the current period of RMB 63.14 million
includes a reclassification of employee compensation payable to long-term employee compensation
payable of RMB 34501427.39 which is determined based on the company's future payment plan.* Dismiss welfare:
The wages payable results from the implementation of inner retirement plan and the amount paid
in the next year is booked into such item.(2) Short-term compensation
In RMB
Item Opening balance Current increased Current decreased Ending balance
1. Wages bonuses allowances and
197176934.90956189963.48925104100.52228262797.86
subsidies
2. Welfare for workers and staff 72058.92 71285245.35 71357304.27
3. Social insurance 192691.73 70075762.32 69988910.42 279543.63
Including: Medical insurance 172605.50 57511916.86 57441697.79 242824.57
Work injury insurance 16653.30 6718325.13 6707580.23 27398.20
Maternity insurance 3432.93 5845520.33 5839632.40 9320.86
4. Housing accumulation fund 656874.00 83027391.00 82898538.00 785727.00
5. Labor union expenditure and
9611229.9316982993.1716634110.119960112.99
personnel education expense
6. Other short-term compensation -
112542.196536353.424062318.102586577.51
social security
Total 207822331.67 1204097708.74 1170045281.42 241874758.99
(3) Post-employment welfare- defined contribution plans
In RMB
Item Opening balance Current increased Current decreased Ending balance
1. Basic endowment
416445.06133875890.13127462957.246829377.95
premium
2. Unemployment
25533.444031116.954020171.9836478.41
insurance
3. Enterprise annuity 19837328.81 47801864.61 46826932.97 20812260.45
Total 20279307.31 185708871.69 178310062.19 27678116.81
Explanations on the Post-employment welfare- defined contribution plans:
The Company participates in the pension insurance and unemployment insurance plans established
by government authorities by laws a certain percentage of the social security fee regulated by the
government will pay by the Company monthly for the plans. Other than the aforesaid monthly
contribution the Company takes no further payment obligation. The relevant expenditure is
included in current profit or loss or cost of relevant assets when occurs. Found more of enterprise
annuity in Note XIV-4 “Annuity plan”.
29.Tax payable
In RMB
Item Ending balance Opening balance
Value-added tax 27961474.84 24533584.80
Corporation income tax 7847731.79 2317331.81
City maintaining & construction tax 1546043.92 1750188.23Educational surtax 1105937.33 1250134.44
Individual income tax 6846289.60 3528037.22
Other (including stamp tax and local
9278838.056726372.38
funds)
Total 54586315.53 40105648.88
30.Other account payable
In RMB
Item Ending balance Opening balance
Interest payable -- 6184.14
Dividends payable -- 25671100.00
Other accounts payable 198990948.23 334228033.32
Total 198990948.23 359905317.46
(1) Interest payable
In RMB
Item Ending balance Opening balance
Other -- 6184.14
Total -- 6184.14
Major overdue interest: Nil
(2) Dividend payable
In RMB
Item Ending balance Opening balance
Common stock dividend -- 25671100.00
Total -- 25671100.00
(3) Other account payable
1) Classification of other accounts payable according to nature of account:
In RMB
Item Ending balance Opening balance
Deposit and margin 15452400.65 24601774.89
Social insurance and reserves funds that
1967741.921695074.09
withholding
Intercourse funds of unit 25512145.98 33562145.98
Restricted stock repurchase obligations 138495060.00 269101020.00
Payable unpaid investment funds 13308176.65 --
Other 4255423.03 5268018.36
Total 198990948.23 334228033.322) Significant other payable with over one year:
In RMB
Item Ending balance Notes
Nanjing Jidian Industrial Group Co. Ltd. 4500000.00 Intercourse funds
Restricted stock repurchase
Restricted stock repurchase business 138495060.00
business
31.Non-current liabilities due within one year
In RMB
Item Ending balance Opening balance
Long-term borrowings due within one
2000000.0027744527.80
year
Lease payments due within one year 12044793.34 6318273.66
Interest payable 240555.56 25972.22
Total 14285348.90 34088773.68
32.Other current liabilities
In RMB
Item Ending balance Opening balance
Rebate payable 201734082.52 198936922.68
Pending sales tax 8815298.56 14032348.87
undue bill endorsed/discounted 1214398.69
Total 211763779.77 212969271.55
33. Long-term borrowings
In RMB
Item Ending balance Opening balance
Guaranteed loan 238000000.00 --
Total 238000000.00 --
34.Lease liability
In RMB
Item Ending balance Opening balance
Lease Payments 31589277.20 15795469.25
Total 31589277.20 15795469.25
35.Long-term account payable
In RMB
Item Ending balance Opening balanceLong-term account payable 12520000.00 13750000.00
Special accounts payable 18265082.11 18265082.11
Total 30785082.11 32015082.11
(1) Long-term account payable listed by nature
In RMB
Item Item Ending balance Opening balance
Hi-tech Branch of Nanjing Finance Financial support funds (2007) -- 1230000.00
Bureau (note * )
Hi-tech Branch of Nanjing Finance Financial support funds (2008) 2750000.00 2750000.00
Bureau (note * )
Hi-tech Branch of Nanjing Finance Financial support funds (2009) 1030000.00 1030000.00
Bureau (note * )
Hi-tech Branch of Nanjing Finance Financial support funds (2010) 960000.00 960000.00
Bureau (note * )
Hi-tech Branch of Nanjing Finance Financial support funds (2011) 5040000.00 5040000.00
Bureau (note * )
Hi-tech Branch of Nanjing Finance Financial support funds (2013) 2740000.00 2740000.00
Bureau (note * )
Total 12520000.00 13750000.00
Long-term account payable explanation:
Note * : To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone financial
supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use the term is
from 17 September 2007 to 17 September 2022. Provided that the operation period in the zone is less than 15
years financial supporting capital will be reimbursed. This support capital has been in use for 15 years in this
period so it has been transferred to other income.Note * : To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone financial
supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use the term is from
10 November 2008 to 10 November 2023. Provided that the operation period in the zone is less than 15 years
financial supporting capital will be reimbursed.Note * : To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone financial
supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use the term is from
27 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 * : To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone financial
supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use the term is from
27 December 2010 to 27 December 2025. Provided that the operation period in the zone is less than 15 years
financial supporting capital will be reimbursed.Note * To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone financial
supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use the term is from
28 December 2011 to 28 December 2026. Provided that the operation period in the zone is less than 15 years
financial supporting capital will be reimbursed.Note * : To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone financial
supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use the term is from
18 December 2013 to 18 December 2028. Provided that the operation period in the zone is less than 15 years
financial supporting capital will be reimbursed.(2) Special accounts payable
In RMB
Item Opening balance Ending balance
Removal compensation of subsidiary WFJN 18265082.11 18265082.11
Other explanation: In line with regulation of the house acquisition decision of People’s government
of Xuanwu District Nanjing City Ning Xuan Fu Zheng Zi (2012) No.001 part of the lands and
property of WFJN needs expropriation in order to carry out the comprehensively improvement of
Ming Great Wall. According to the house expropriation and compensation agreement in state-owned
lands signed between WFJN and House Expropriation Management Office of Xuanwu District
Nanjing City 19.71 million yuan in total are compensate including operation losses from lessee
1.44 million yuan in total. The above compensation was received in last period and is making up
for the losses from lessee and the above lands and property have not been collected up to 31
December 2022.
35. Long-term wages payable
(1) Long-term wages payable
In RMB
Item Ending balance Opening balance
I. Post-employment benefits - Defined
20380744.73--
benefit plan net liabilities
II. Dismiss welfare 12028538.66 4829589.69
III. Other long-term welfare 169323760.89 215252333.50
Less：An incentive fund paid
47640000.00111770000.00
within one year
Other long term benefits -
121683760.89103482333.50
Incentive Fund balance
Total 154093044.28 108311923.19
(2) Defined benefit plan
Present value of defined benefit plan:
In RMB
Item Current Amount
I. Opening balance 19594011.39
II. Cost of defined benefit plan booked into current profit and loss 38706.27
1.Current service cost 38706.27III. Cost of defined benefit plan booked into other comprehensive
399165.06
income
1.Actuarial gains (losses are represented by “-”) 399165.06
IV. Other changes 348862.01
1.Welfare paid -345481.69
2.Translation difference of foreign currency statements 694343.70
V. Ending balance 20380744.73
Planned assets: Nil
Other explanation: According to relevant regulations in Italy the Trattamento di Fine Rapporto
(TFR) system is established. VHIT shall calculate and offer severance to employees in accordance
with employees’ employment period and taxable base salary when they leave or are dismissed. The
plan predicts future cash outflows at the inflation rate and determines its present value at the discount
rate. The above-mentioned benefit plan poses actuarial risks to VHIT mainly including interest rate
risk and inflation risk. The decrease in interest rates will lead to an increase in the present value of
the defined benefit plan obligations. In addition the present value of benefit plan obligations is
related to the future payment standards of the plan which are determined based on inflation rates.Therefore an increase in inflation rate will also lead to an increase in planned liabilities.
37.Anticipated liability
In RMB
Item Ending balance Opening balance
Product quality assurance 8695322.61 --
Investment losses in joint
13750.00--
ventures
Environmental Protection
1150543.24--
Commitment
Pending litigation
246653.02--
total
Total 10106268.87 --
38.Deferred income
In RMB
Current Current Translation of foreign
Item Opening balance Ending balance
increased decreased currency statements
Government grant 298052867.56 3109983.11 78013068.71 -25803.18 223123978.78
Item with government grants involved:
In RMB
New Amount Translation of
Opening grants in reckoned into foreign Ending Assets related/Income
Items
balance the other income currency balance related
Period in the period statementsIndustrialization
project for injection
VE pump system with
721000.2
electronically -- 721000.26 -- -- Asset/Income related
controlled high 6
pressure for less-
emission diesel used
Appropriation on
reforming of
production line
technology and R&D 6318348.
781651.38 -- 5536697.24 Assets related
ability of common rail 62
system for diesel by
distributive high-
voltage
Fund of industry 6052000
41809808.31 -- 18710191.69 Income related
upgrade (2013) 0.00
R&D and
industrialization of
the high-pressure
3817474.
variable pump of the 1117613.70 -- 2699860.97 Assets related
common rail system 67
of diesel engine for
automobile
Research institute of
motor vehicle exhaust 648660.1
530870.24 -- 117789.93 Assets related
after-treatment 7
technology
Fund of industry 3683100
-- 36831000.00 Income related
upgrade (2014) 0.00
New-built assets
compensation after 8313442
19691341.21 -- 63443087.73 Assets related
the removal of parent 8.94
company
Fund of industry 4000000
-- 40000000.00 Income related
upgrade (2016) 0.00
Guiding capital for
the technical reform
5057667.
from State Hi-Tech 1270553.36 -- 3787113.97 Assets related
Technical 33
Commission
Implementation of the
variable cross-section 5882788.
1628355.53 -- 4254433.18 Assets related
turbocharger for 71
diesel engine
Demonstration project
652381.5
for intelligent 220493.70 -- 431887.80 Assets related
manufacturing 0
The 2nd batch of
provincial special
funds for industry 3446350.
1596505.99 -- 1849844.13 Assets related
transformation of 12
industrial and
information in 2019
Municipal
technological reform 4143406.
616309.46 -- 3527096.61 Assets related
fund allocation in 07
2020
Strategic cooperation
agreement funding for
4450869.
key enterprise of 1076250.73 -- 3374618.86 Assets related
smart manufacturing 59
in high-tech zone
The 3rd batch of 1350000 -- 13500000.00 Assets relatedprovincial special 0.00
funds for industry
transformation of
industrial and
information in 2021
2892849 310998 Assets related/Income
Other 6952314.84 -25803.18 25060356.67
1.58 3.11 related
2980528310998223123978.7
Total 78013068.71 -25803.18
67.563.118
Other explanation:
(1) Appropriation on industrialization project of electrical control and high voltage jet VE systemof low emissions diesel: in September 2009 WFJN signed “Project Contract of TechnologyOutcome Transferring Special Capital in Jiangsu Province” with Nanjing Technical Bureau
according to which WFJN received appropriation 6.35 million yuan in 2009 4.775 million yuan
received in 2010 and 0.875 million yuan received in 2011. According to the contract the attendance
date of this project was: from October of 2009 to March of 2012. This contract agreed 62% of newly
increased investment in project would be spent in fixed assets investment which are belongs to the
government grand with assets/income concerned. In 2013 accepted by the science & technology
agency of Jiangsu Province and 4789997.04 yuan with income related was reckoned into current
operation revenue directly; the 7210002.96 yuan with assets related was amortized during the
predicted service period of the assets and 721000.26 yuan was written off in the Period.
(2) The appropriation for research and development ability of distributive high-pressure common
rail system for diesel engine use and production line technological transformation project: according
to XCJ No. [2010] 59 the Company has received special funds of 7.1 million yuan appropriated by
Finance Bureau of Wuxi New District in 2011 and used for the Company’s research and
development ability of distributive high-pressure common rail system for diesel engine use and
production line technological transformation project; this appropriation belongs to government
grants related to assets amount of 781651.38 yuan was written off based on the depreciation
schedule of the related assets during the period.
(3) Industry upgrading funds (2013): In accordance with the document Xi Xin Guan Jing Fa [2013]
No.379 Xi Xin Guan Jing Fa [2013] No.455 Xi Xin Guan Cai Fa [2013] No.128 and Xi Xin Guan
Cai Fa [2013] No.153 the Company received funds of 60.52 million yuan appropriated for industry
upgrading in 2013 and amount of 41809808.31 yuan was written off in the year.
(4) R&D and industrialization of the high pressure variable pump of the common rail system of
diesel engine for automobile: the Company 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 Gong
Mao [2014] No.58 Xi Ke Ji [2014] No. 246 and Xi Cai Gong Mao [2014] No.162. the company
received 8.05 million yuan 3 million yuan and 0.45 million yuan respectively in 2013 2014 and
2015; such funds belong to government grant with assets concerned and shall be written off
according to the depreciation process amount of 1117613.70 yuan was written off in the year.(5) Vehicle exhaust after-treatment technology research institute project: in 2012 the subsidiary
WFLD has applied for equipment purchase assisting funds to Wuxi Huishan Science and
Technology Bureau and Wuxi Science and Technology Bureau for the vehicle exhaust after-
treatment technology research institute project. This declaration has been approved by Wuxi
Huishan Science and Technology Bureau and Wuxi Science and Technology Bureau in 2012 and
the company has received appropriation of 2.4 million yuan in 2012 and received appropriation of
1.6 million yuan in 2013. This appropriation belongs to government grants related to assets and will
be written off according to the depreciation process amount of 530870.24 yuan was written off in
the year.
(6) Industry upgrading funds (2014): In accordance with the document Xi Xin Guan Jing Fa [2014]
No.427 and Xi Xin Guan Cai Fa [2014] No.143 the Company received funds of 36.831 million
yuan appropriated for industry upgrading in 2014.
(7) New-built assets compensation after the removal of parent company: policy relocation
compensation received by the Company and will be written off according to the depreciation of
new-built assets amount of 19691341.21 yuan was written off in the year.
(8) Fund of industry upgrade (2016): In accordance with the document Xi Xin Guan Jing Fa [2016]
No.585 and Xi Xin Fa [2016] No.70 the Company received funds of 40 million yuan appropriated
for industry upgrading in 2016.
(9) Guiding capital for the technical reform from State Hi-Tech Technical Commission: In
accordance with the document Xi Jing Xin ZH [2016] No.9 and Xi Cai GM [2016] No.56 the
Company received a 9.74 million yuan for the guiding capital of technical reform (1st batch) from
Wuxi for year of 2016 and belongs to government grant with assets concerned and shall be written
off according to the depreciation process amount of 1270553.36 yuan was written off in the year.
(10) Implementation of the variable cross-section turbocharger for diesel engine: In accordancewith the document YCZ Fa[2016] No.623 and “Strong Industrial Base Project Contract for year of
2017” subsidiary WFTT received a specific subsidy of 16.97 million yuan in 2016 and of
760000 yuan in 2018 the fund supporting strong industrial base project (made-in-China 2025) of
central industrial transformation and upgrading 2016 from Ministry of Industry and Information
Technology; It belongs to government grant with assets concerned and shall be written off
according to the depreciation process. Amount of 1628355.53 yuan was written off in the year.
(11) Demonstration project for intelligent manufacturing: under the Notice Relating to Selection of
the Intelligent Manufacturing Model Project in Huishan District in 2016 (HJXF[2016]No.36) a
fiscal subsidy of 3000000 yuan was granted by relevant government authority in Huishan district
to our subsidiary WFLD in 2017 to be utilized for transformation and upgrade of WFLD’s intelligent
manufacturing facilities. This subsidy belongs to government grant related to assets which shall be
written off based on the depreciation progress of the assets. Amount of 220493.70 yuan was written
off in the year.(12) The 2nd batch 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 “Weifu High-Technology New FactoryInternet Construction” projects and belonged to government grants related to assets. and shall be
written off according to the depreciation process amount of 1596505.99 yuan was written off in
the year.
(13) Municipal technological reform fund allocation in 2020: according to XGXZH [2020] No. 16
the Company received 4.77 million yuan of municipal technological transformation fund project
allocation in 2020 which was related to key technological transformation projects and belonged to
government grants related to assets. and shall be written off according to the depreciation process.Amount of 616309.46 yuan was written off in the year.
(14) Strategic cooperation agreement funding for key enterprise of smart manufacturing in high-
tech zone: according to XXGXF [2020] No. 61 the Company received a related grant of 4.06
million yuan in 2020 and 0.7 million yuan received in the year this grant was related to the
intelligent transformation project and belonged to the government grants related to assets. and shall
be written off according to the depreciation process amount of 1076250.73 yuan was written off
in the year.
(15) The 3rd batch of provincial special funds for industry transformation of industrial and
information in 2021: according to the SCGM [2021] No.92 the government grant 13.5 million yuan
received in 2021 was for the research development and industrialization of membrane electrodes
for high-performance automotive proton exchange membrane fuel cells which was an assets related
government grants.
39.Share
In RMB
Change during the year (+/-)
Shares
Opening New Ending
Item Bonus transferred Other-
balance shares Subtotal balance
share from capital cancellation
issued
reserve
Total
1008659570-------56277-562771008603293
shares
Other explanation:
Decreased in share capital was due to the buy-back and cancellation of 56277 restricted shares
initially granted under the Restricted Shares Incentive Plan for year of 2020.
40.Capital reserve
In RMBItem Opening balance Current increased Current decreased Ending balance
Capital premium 3238990188.72 81051840.00 1092500.74 3318949527.98
Other Capital reserve 132353984.10 28116895.55 81051840.00 79419039.65
Total 3371344172.82 109168735.55 82144340.74 3398368567.63
Other explanation:
(1) Share capital premium has increased RMB 81051840.00 in the Period mainly because the
capital reserves (other capital reserves) of the restricted stock unlocked during the waiting period
are transferred into the capital premium；Share capital premium has decreased RMB 1092500.74
in the Period mainly because the 56277.00 shares for restricted stock incentive plan were
repurchased and cancellation by the Company.
(2) Other capital reserve has increased RMB 28116895.55 in the reporting period which is a net
amount after deducting RMB 826610.83 attributable to minority from RMB 28943506.38 the
expenses of share-based payment settled by equity; Other capital reserve has decreased RMB
81051840.00 in the reporting period which is because the amount of capital reserves (other capital
reserves) recognized during the waiting period of the restricted stock unlocked in this period is
transferred to the equity premium.
41.Treasury stock
In RMB
Opening Current Current
Item Ending balance
balance increased decreased
Stock repurchases 1148777.74 397804542.63 1148777.74 397804542.63
Repurchase obligation of
269101020.00--125282560.00143818460.00
restricted stock incentive plan
Total 270249797.74 397804542.63 126431337.74 541623002.63
Other explanations including changes in the current period and explanations of the reasons for the
changes:
Share buy-back: the increase of RMB 397804542.63 due to share buy-back by way of centralized
bidding in 2022; The decrease of RMB 1148777.74 in the current period was caused by the
cancellation of 56277.00 shares remaining in the special securities account repurchased by the
company’s Restricted Stock Incentive Plan.Repurchase obligation of restricted stock incentive plan: has decreased RMB 125282560.00 in the
Period mainly including two parts: * the RMB 30798400.00 cash dividends received by
restricted stock incentive recipients during the period; and * RMB 94484160.00 is the
repurchase and cancellation of 7632000.00 restricted shares the first batch of unlocked in the
company’s restricted stock incentive plan by the Company as treasury stock.42.Other comprehensive income
In RMB
Current amount
Opening Less: Belong to Account before Belong to parent Ending
Item income minority
balance income tax in company after balance
tax shareholders
the year tax
expense after tax
I. Other
comprehensive
income that -
16008.80-399165.06---399165.06--
cannot be 383156.26
reclassified to
profit or loss
Including:
Other
comprehensive
income that
cannot be 16008.80 -- -- -- -- 16008.80
transferred to
profit or loss
under the equity
method
Remeasure
changes in -
---399165.06-399165.06--
defined benefit 399165.06
plans
II. Other
comprehensive
income items
--
which will be 36234199.53 -- 36234199.53 --
reclassified 36762353.40 528153.87
subsequently to
profit or loss
Including:
Conversion
difference of - -
36234199.53--36234199.53--
foreign currency 36762353.40 528153.87
financial
statement
Total - -
35835034.47--35835034.47--
36746344.60911310.13
43.Reasonable reserve
In RMB
Item Opening balance Current increased Current decreased Ending balance
Safety production costs 712215.31 26087086.34 24679500.70 2119800.95
Other explanation:
(1) Instructions for the withdrawing of special reserves (safe production cost): According to the CZ
[2022] No.136- Administrative Measures on the Withdrawing and Use of Enterprise Safety
Production Expenses jointly issued by the Ministry of Finance and the State Administration of Work
Safety in the current period the Company adopted excess retreat method for quarterly withdrawal
by taking the actual operating income of the previous period as the withdrawing basis.
(2) Among the above safety production costs including the safety production costs accrued by the
Company in line with regulations and the parts enjoy by shareholders of the Company in safetyproduction costs accrued by subsidiary in line with regulations.
44.Surplus reserve
In RMB
Item Opening balance Current increased Current decreased Ending balance
Statutory surplus
510100496.00----510100496.00
reserves
Other explanation:
Withdrawal of the statutory surplus reserves: Pursuit to the Company Law and Article of
Association the Company withdraws statutory surplus reserve on 10% of the net profit. No more
amounts shall be withdrawal if the accumulated statutory surplus reserve takes over 50% of the
registered capital.
45.Retailed profit
In RMB
Item Current period Last period Extract or assign proportions
Retained profits at the
end of last year before 14814787377.86 13756102424.62 --
adjustment
Adjust the total
undistributed profit at
the beginning of the -- -- --
period (increase +
decrease -)
Retained profits at the
beginning of the year 14814787377.86 13756102424.62 --
after adjustment
Add: The net profits
belong to owners of
118819836.302575371419.80--
patent company of this
period
Less：Draw legal
------
surplus reserve
Less: Withdraw employee
rewards and welfare 4526219.46 4081359.92 --
funds
Cash dividends This year 16 yuan /10 shares last year 15
1609059668.801513341439.50
payable yuan /10 shares
Common stock
dividends converted -- -- --
into capital
Add: Net effect of
disposal other equity -- 736332.86
instrument investment
Retained profit at period- 13320021325.90 14814787377.86end
46.Operating income and cost
In RMB
Current period Last Period
Item
Income Cost Income Cost
Main operating 12333099421.87 10658281929.91 13184138129.88 10822600520.90
Other business 396535495.16 358103558.89 498288581.07 397767192.67
Total 12729634917.03 11016385488.80 13682426710.95 11220367713.57
47.Operating tax and extra
In RMB
Item Current period Last Period
City maintaining & construction tax 22771182.73 19681944.17
Educational surtax 16273199.41 14058531.57
Property tax 18009579.96 17669096.06
Land use tax 4517681.71 4507402.14
Vehicle use tax 19195.41 27218.52
Stamp duty 8187585.86 3834974.65
Other taxes 797159.81 477566.62
Total 70575584.89 60256733.73
48.Sales expenses
In RMB
Item Current period Last Period
Salary and wage related expense 59134720.55 56098840.97
Consumption of office materials and
7978020.259301927.42
business travel charge
Warehouse charge 12489955.81 17101049.13
Three guarantees and quality cost 73394539.28 138960972.56
Business entertainment fee 16300099.96 28210881.07
Other 20230754.86 14977761.41
Total 189528090.71 264651432.56
49.Administration expenses
In RMB
Item Current period Last Period
Salary and wage related expense 312885696.17 322167980.30
Depreciation charger and long-term
80103136.0671899617.49
assets amortization
Consumption of office materials and 20460578.25 24870963.21business travel charge
Share-based payment 18889058.87 48352297.07
Other 154048004.97 144581292.17
Total 586386474.32 611872150.24
50.R&D expenses
In RMB
Item Current period Last Period
Technological development expenses 581488711.88 595406951.64
Total 581488711.88 595406951.64
51.Financial expenses
In RMB
Item Current period Last Period
Interest expenses 107737432.78 38698621.09
Note discount interest expenses -- 19837754.67
Less: interest income 41020724.48 41478845.32
Gains/losses from exchange 10099986.41 -1982034.19
Handling charges 5510921.05 4987752.59
Total 82327615.76 20063248.84
52.Other income
In RMB
Amount booked into non-recurring
Item Current period Last Period
profit or loss for the period
Government grants with routine
111670734.7769734194.44111670734.77
operation activity concerned
VAT instant refund -- 2460.01 --
Refund of individual income tax
994662.501540317.23994662.50
handling fee
Total 112665397.27 71276971.68 112665397.27
Details of government subsidies included in other income:
The amount of the Related to
Subsidy project Current amount
previous period assets/income
Low - row diesel engine with electronic control high - Related to
pressure injection VE pump system industrialization 721000.26 721000.30 assets/income
project
Jiangsu Provincial Key Laboratory of Vehicle Exhaust Related to
170000.00170000.00
Pollution Control (Engineering Center) assets/income
Related to
Wuxi Key Laboratory subsidy 70000.00 70000.00
assets/income
Support Fund for Packaging Line Technology
Improvement Project of Catalytic reduction System for 259000.00 259000.00 Asset-related
Commercial Vehicles with an annual output of 140000The amount of the Related to
Subsidy project Current amount
previous period assets/income
pieces (2014)
Annual output of 300000 units of four-cylinder engine Asset-related
96266.37116363.32
supercharger technology renovation project
Annual output of 150000 units of gasoline turbocharger Asset-related
24239.7658175.42
project
Depreciation/amortization compensation for newly built Asset-related
19691341.2120950845.46
assets after parent relocation
Wuxi Finance Bureau Central Infrastructure Investment Asset-related
--714285.73
Allocation (R&D Center)
Provincial science and technology innovation and Asset-related
--328571.41
achievements transformation guide fund
Annual 180000 pieces of commercial vehicle catalytic Asset-related
233555.56233555.56
reduction system technical transformation
Automotive diesel engine high pressure common rail Asset-related
system of variable pump research and development and 1117613.70 1510144.21
industrialization projects
Intelligent manufacturing demonstration project 220493.70 196718.10 Asset-related
Motor vehicle exhaust after-treatment technology research Asset-related
530870.24565067.04
institute
Diesel engine is a variable cross-section implementation Asset-related
1628355.531480000.04
plan of the turbocharger
Related to
The technical reconstruction special funds -- 46838.76
assets/income
Annual 200000 gasoline engine units turbocharger Asset-related
130825.45322210.40
technology renovation project
Annual 150000 gasoline engine units turbocharger 282056.24 416105.36 Asset-related
National high and new technology the ac technical Asset-related
1270553.361537652.50
transformation to guide capital
Industrial upgrading fund 47459608.31 642169.73 Income related
2015 wuxi science and technology research and Related to
140000.00420000.00
development institutions fund assets/income
Distribution of diesel engine with high pressure common
rail system research and development ability and 781651.38 781651.38 Asset-related
production line technological transformation projects
SCR and DPF aftertreatment system development grants -- 880000.00 Income related
Standard of the VI alternative fuel cars and motorcycle Income related
emission control catalyst pollution emission control -- 880000.00
catalyst industry project
Anione 264812.57 897126.79 Income related
FIT-4-AMANDA -- 723598.73 Income related
Neptune 357572.17 772048.44 Income related
2020 municipal technical renovation fund project Asset-related
616309.46626593.93
appropriation
Particle Capture and Regeneration Technology Asset-related
--600000.00
Development Fund (Shandong University)
Related to
Parent company intelligent transformation project -- 3780000.00
assets/income
International scientific and technological research and Related to
--1000000.00
development cooperation projects assets/income
The second batch of provincial-level funds for industrial
1596505.99 1553649.88 Asset-related
and information industry transformation in 2019
Financial support funds for enterprises attracting -- 3740400.00 Income relatedThe amount of the Related to
Subsidy project Current amount
previous period assets/income
investment in 2020
Borit research and development grant 35419.76 1411156.80 Income related
ECOethylene 1250899.19 1322854.33 Income related
2021 provincial special subsidies for business Income related
--2551200.00
development
People's Government of Jiangbei District on the Income related
recognition of 2020 Annual Economic Innovation -- 1450000.00
Development Award
Project money (Weichai Power Co. LTD.) -- 1590000.00 Income related
Borit withholding return 1400901.38 991481.10 Income related
Intelligent transformation and technology transformation Income related
--1500000.00
guide funds
Steady work post subsidies 3820755.20 1297349.42 Income related
WFJN government assistance fund 1230000.00 1250000.00 Income related
Electronically controlled diesel engine fuel system Income related
intelligent management key technology research and 680983.13 --
development projects
The SPV tax credits 3338966.48 -- Income related
Selection of Top 50 Enterprises in Ningbo Jiangbei District 1030000.00 -- Income related
Sme development funds 2000000.00 -- Income related
Special funds for high-quality development 1000000.00 -- Income related
Strategic cooperation Agreement for key enterprises of Income related
1076250.73--
intelligent manufacturing in High-tech Zone
Tongliang District investment enterprises 2021 annual Income related
6913300.00--
industrial development funds
Training subsidy 432575.00 785880.00 Income related
Talent policy subsidy 1135000.00 --
Related to
Other 8663052.64 8590500.30
assets/income
Total 111670734.77 69734194.44
53.Investment income
In RMB
Item Current period Last period
Income of long-term equity investment calculated
1636986684.961632117748.78
based on equity method
Investment income from disposal of long-term
--8701134.99
equity investments
Investment income from holding financial assets
216491612.58314664249.00
available for sales
Dividend income obtained from other equity
683455.00--
instrument investments during the holding period
Investment income from the disposal of
137682.59--
trading financial assetsRecognition of profit and loss from
-5153934.63--
financing discount of receivables
Interest payments on discounted bills -- -959296.18
Total 1849145500.50 1954523836.59
54.Income from change of fair value
In RMB
Sources Current period Last period
Changes in the fair value of wealth management
-12803609.57-380318.88
products
Changes in the fair value of the stocks of listed
companies held-excluding the stocks of listed
-144072026.77-38709334.89
companies that are included in other equity
instrument investments
Changes in fair value of foreign exchange
-747115.75-1180680.04
contracts
Total -157622752.09 -40270333.81
55.Credit impairment loss
In RMB
Item Current period Last period
Bad debt loss -1645881142.40 4059750.80
Total -1645881142.40 4059750.80
56.Asset impairment loss
In RMB
Item Current period Last period
Loss of inventory falling price -181610433.12 -134434667.54
Impairment loss of fixed assets -- -3682648.26
Total -181610433.12 -138117315.80
57.Income form assets disposal
In RMB
Amount reckoned into current
Item Current period Last period
non-recurring gains/losses
Income from disposal of non-current assets 3687970.49 6580346.41 3687970.49
Losses from disposal of non-current assets -1701165.96 -2648002.34 -1701165.96
Total 1986804.53 3932344.07 1986804.5358.Non-operating income
In RMB
Amount reckoned into
Item Current period Last Period current non-recurring
gains/losses
Payables that do not require
2048698.72--2048698.72
payment
Price difference for business
combinations not under the 3181563.57 -- 3181563.57
same control
Liquidated damages and
281760.53397361.84281760.53
compensation income
Other 187745.22 258840.23 187745.22
Total 5699768.04 656202.07 5699768.04
59.Non-operating expense
In RMB
Amount reckoned into
Item Current period Last Period current non-recurring
gains/losses
Non-current assets disposal
2135371.4324984204.922135371.43
losses
Including: loss on scrapping of
2135371.4324615193.782135371.43
fixed assets
Loss on scrapping of
--369011.14--
intangible assets
Donation 5013500.00 237041.06 5013500.00
Other 562788.63 288323.89 562788.63
Total 7711660.06 25509569.87 7711660.06
60.Income tax expense
(1) Income tax expense
In RMB
Item Current period Last period
Payable tax in current period 11061046.36 140397942.05
Adjusted the previous income tax 2032113.63 941390.84
Increase/decrease of deferred income tax
-56032739.30-54019435.84
assets
Increase/decrease of deferred income tax
31608004.403675792.90
liability
Income tax expense -11331574.91 90995689.95
(2) Adjustment on accounting profit and income tax expenses
In RMB
Item Current periodTotal profit 179614433.34
Income tax measured by statutory/applicable tax rate 26942165.00
Impact by different tax rate applied by subsidies -178056001.37
Adjusted the previous income tax 2032113.63
Impact by non-taxable revenue -249319108.30
Impact on cost expenses and losses that unable to deducted 11515020.27
Impact on the use of deductible losses or deductible differences on
-3778371.61
deferred tax assets not recognized in the prior period
Impact on the deductible temporary differences or deductible losses of the un-
455617403.14
recognized deferred income tax assets in the Period
Impact on additional deduction -104482259.45
Other 28197463.78
Total -11331574.91
61.Other comprehensive income
See Note V-42. “Other comprehensive income”.
62.Items of cash flow statement
(1) Other cash received in relation to operation activities:
In RMB
Item Current period Last period
Interest income 41020724.48 41478845.32
Government grants 32507707.23 38578031.24
Margin on operation bill 170000.00 3237920.90
Capital inflow of WFTR “platform trade”
3604252294.46--
business portfolio
Other 4898138.17 2873765.53
Total 3682848864.34 86168562.99
(2) Other cash paid in relation to operation activities:
In RMB
Item Current period Last period
Cash cost 571583226.93 628017019.32Capital outflow of WFTR “platform
6345751426.41--trade” business portfolio
Other 37760946.39 20190804.06
Total 6955095599.73 648207823.38
(3) Cash received from other investment activities:
In RMB
Item Current period Last periodThe contingent consideration received for
--1136214.91
the purchase of Borit’s equity
Other -- 544552.00
Total -- 1680766.91
(4) Cash paid related with investment activities:
In RMB
Item Current period Last period
Deposit paid for the purchase of VHCN 136739145.73 --
Payment of foreign exchange contract
9492968.77--
deposit
Total 146232114.50 --
(5) Other cash received in relation to financing activities:
In RMB
Item Current period Last period
Borrowings received by WFLD -- 5470000.00
Total -- 5470000.00
(6) Cash paid related with financing activities:
In RMB
Item Current period Last period
Repayment of loans to non-financial enterprises 163470112.06 --
National debt paid transfer to loans -- 339090.00
Borrowing return by WFLD 5470000.00 5470000.00
Lease payments 19302140.88 7718867.54
Repurchase of A shares 397804542.63 --
Shares repurchase and cancellation for restricted stock incentive
5323400.004068729.06
plan and handling charge
Total 591370195.57 17596686.60
63.Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow:
In RMB
Supplementary information Current period Last Period
1. Net profit adjusted to cash flow of operation activities:
Net profit 190946008.25 2649364676.15
Add: Assets impairment provision 1827491575.52 134057565.00
Depreciation of fixed assets consumption of oil assets and
423381573.22399184362.08
depreciation of productive biology assets
Depreciation of right-of-use assets 10487347.35 8672462.76Amortization of intangible assets 47414586.57 42460206.35
Amortization of long-term deferred expenses 5676279.94 4800457.79
Loss from disposal of fixed assets intangible assets and other long-
-1986804.53-3932344.07
term assets
Losses on scrapping of fixed assets 2135371.43 24984204.92
Gain/loss of fair value changes 157622752.09 40270333.81
Financial expenses 106707239.68 31368748.20
Investment loss -1874322320.27 -1944475801.41
Decrease of deferred income tax asset -56032739.30 -54019435.84
Increase of deferred income tax liability 31608004.40 3675792.90
Decrease of inventory 1073359311.32 -723297146.60
Decrease of operating receivable accounts -3936816340.90 1615814968.48
Increase of operating payable accounts -608366974.35 -1676121153.69
Other 24952480.15 74904696.58
Net cash flows arising from operating activities -2575742649.43 627712593.41
2. Net change of cash and cash equivalents:
Balance of cash at period end 2277117604.82 1094018936.73
Less: Balance of cash equivalent at year-begin 1094018936.73 944946018.70
Add: Balance at year-end of cash equivalents -- --
Less: Balance at year-begin of cash equivalents -- --
Net increase of cash and cash equivalents 1183098668.09 149072918.03
(2) Net cash payment for the acquisition of a subsidiary in the period:
In RMB
Item Amount
Cash or cash equivalents paid in the current period for business
182950038.25
mergers occurring in the current period
Less：Cash and cash equivalents held by the Company on the
112759708.54
date of purchase
Total 70190329.71
(3) Net cash received from the disposal of subsidiaries:
In RMB
Item Amount
Cash or cash equivalents received during the period
due to the disposition of subsidiaries in current --
periods
Less: Cash and cash equivalents held by the Company
--
at the date of loss of control
Add：Cash or cash equivalents received during the
period due to the disposition of subsidiaries in 136787298.86
previous periods
Total 136787298.86
Other explanation：
Net cash received for disposal of subsidiaries during the period is that VHIT disposed its
subsidiary before October 31 2022 and received the equity disposal payment in December 2022.(4) Constitution of cash and cash equivalent
In RMB
Item Ending balance Opening balance
I .Cash 2277117604.82 1094018936.73
Including: Monetary funds 51818.51 150438.79
Bank deposit that is readily available for payment 2277065786.31 1093868497.94
Funds in other currencies that are readily available for -- --
payment
II. Cash equivalents -- --
Including: Bond investment that matures
----
within 3 months
III. Ending cash and cash equivalents balance 2277117604.82 1094018936.73
Including: Use of restricted cash and cash equivalents
----
by the parent company or subsidiaries within the Group
Other explanation:
The difference between bank deposits available for payment at any time and the bank deposits in Note V. 1
“Monetary Funds” is the Company's fixed deposits in the bank.
64.Assets with ownership or use right restricted
In RMB
Item Ending book value Restriction reason
Monetary funds 18840000.00 Forex Contracts USD Margin
Security deposit for drawing
Monetary funds 24368385.65
banker's acceptance
Monetary funds 7487250.00 IRD performance bond
Monetary funds 199660.00 Cash deposit for Mastercard
Monetary funds 180000.00 Court freezing
Monetary funds 5000.00 ETC freezing
Note receivable 82908186.94 Notes pledge for bank acceptance
Receivables financing 530337600.45 Notes pledge for bank acceptance
Total 664326083.04
65.Item of foreign currency
(1) Item of foreign currency
In RMB
Closing balance of foreign Rate of conversion Ending RMB balance
Item
currency converted
Monetary funds
Including: USD 21346973.12 6.9646 148673128.99
EUR 48296719.62 7.4229 358501720.07
HKD 17293992.68 0.89327 15448204.84
JPY 46929606.00 0.052358 2457140.31
DKK 111164111.86 0.9983 110975132.87Account receivable
Including: USD 4732628.22 6.9646 32960862.50
EUR 27066494.35 7.4229 200911880.92
JPY 13084572.00 0.052358 685082.02
DKK 6966207.98 0.9983 6954365.43
Other account receivables
Including: DKK 2035772.98 0.9983 2032312.17
Short-term borrowings
Including: USD 457403.05 6.9646 3185629.28
EUR 18989418.64 7.4229 140956555.62
Account payable
Including: USD 885151.79 6.9646 6164728.16
EUR 36055545.43 7.4229 267636708.17
JPY 50362512.00 0.052358 2636880.41
DKK 6081507.53 0.9983 6071168.97
GBP 2450.00 8.3941 20565.55
Other account payable
Including: EUR 5172.58 7.4229 38395.54
DKK 151513.30 0.9983 151255.73
Non-current liabilities due
within one year
Including: USD 156513.08 6.9646 1090051.00
EUR 496988.78 7.4229 3689098.02
DKK 575121.48 0.9983 574143.77
Leasing liabilities
Including: USD 386008.72 6.9646 2688396.33
EUR 1285051.24 7.4229 9538806.85
DKK 11525669.67 0.9983 11506076.03
(2) Explanation on foreign operational entities:
Subsidiary of the Company IRD was established in Denmark in 1996. The 66% equity of IRD were acquired
by the Company in cash in April 2019. In October 2020 the company acquired the remaining 34.00% equity of IRD
in cash thus the Company holds 100% equity of IRD. IRD is denominated in Danish krone and IRD is mainly
engaged in R&D production and sales of fuel cell components.Subsidiary Borit was established in Belgium in 2010. The Company acquired 100% equity of Borit in cash in
November 2020. Borit is denominated in Euro and engaged in R&D production and sales of fuel cell components.Subsidiary VHIT was established in Italy in 2000. The Company acquired 100.00% equity of VHIT in cash in
October 2022. The company is denominated in Euro and engaged in R&D production and sales of vacuum and
hydraulic pumps.
66.Government grants
(1) Government grants
In RMBAmount
Category Amount Item reckoned in
current gain/loss
Development of variable nozzle turbochargers that Deferred income other
950000.00424674.33
meet the requirements of National VI B income
2022 Technical Transformation Fund Allocation 990000.00 Deferred income --
Development of Turbochargers for Automotive
120000.00 Deferred income --
Hybrid Engines
Subsidy funds for water-saving enterprises in the
110000.00 Deferred income --
construction of water-saving carriers in Nanjing
Deferred income other
Borit R&D subsidy -22124.54 35419.76
income
Annual output of 150000 gasoline engine Deferred income other
-40300.00282056.24
turbochargers income
Deferred income other
Neptune 250509.22 357572.17
income
3 R 751898.43 Other income 751898.43
Job stabilization and expanding subsidy 3820755.20 Other income 3820755.20
Training subsidy 432575.00 Other income 432575.00
Talent policy subsidy 1135000.00 Other income 1135000.00
2021 Industrial Development Fund for Investment
6913300.00 Other income 6913300.00
Attracting Enterprises in Tongliang District
BORIT withholding refund 1400901.38 Other income 1400901.38
Industrial upgrading fund 5649800.00 Other income 5649800.00
Special funds for high-quality development 1000000.00 Other income 1000000.00
Development funds for small and medium-sized
2000000.00 Other income 2000000.00
enterprises
Selection of Top 50 Enterprises in Jiangbei District
1030000.00 Other income 1030000.00
Ningbo
Other 5706368.00 Other income 5706368.00
Financial discount 246600.00 Financial expense 246600.00
Total 32445282.69
(2) Government grants rebate
In RMB
Item Amount Reason
The company transferred out
Borit R&D subsidy 22124.54 government subsidies expected to
be refunded
Annual output of 150000 gasoline engine Government recovery of duplicate
40300.00
turbochargers subsidy funds
Total 62424.54VI. Changes of consolidation scope (In RMB)
1. Enterprise combine not under the same control
(1) Enterprise combines not under the same control occurred in the period
In RMB
Name of Date of Cost of Equity Method of Purchase Basis for Income of Net
the equity equity acquisition acquiring date determinin the profit
purchased acquisition acquisition ratio equity g the purchased of the
party purchase party from purch
date the ased
purchase party
date to the from
end of the the
period purch
ase
date
to the
end of
the
period
VHIT/VH
CN(Collect
ively
known as Transfer of 1516
Oct. 31 18295003 Cash Oct. 31 17791143
vacuum 100% control 124.5
2022 8.25 acquisition 2022 3.07
and right 9
hydraulic
pump
business)
(2) Consolidation cost
In RMB
Consolidation cost Amount
--Cash 196258214.90
--Other --
Total consolidated costs 196258214.90
Less: Fair value share of identifiable net assets obtained 199439778.47
The amount of goodwill/merger cost less than the fair value share of identifiable net
3181563.57
assets obtained
--Other --
(3) Book value of assets and liabilities of the merged party on the merger date
In RMBvacuum and hydraulic pump
Fair value on merge date Book value on merge date
Assets:
Monetary funds 112759708.54 112759708.54
Accounts receivable 176472824.41 176472824.41
Inventory 75714864.30 75193955.32
Fixed assets 171076046.21 163063849.08
Intangible assets 37443264.05 3227177.74
Prepayments 30000.00 30000.00
Other receivables 139400701.37 139400701.37
Other current assets 24621113.87 24017677.49
Construction in progress 64268995.00 64268995.00
Right-of-use assets 810420.49 810420.49
Deferred tax assets 7079671.21 7079671.21
Other non-current assets 19478954.99 19478954.99
Liabilities:
Loan
Payables 234320004.21 234320004.21
Deferred Tax Liability 10415727.84
Contractual liabilities 3921267.48 3921267.48
Payable employee compensation 33153750.99 33153750.99
Taxes and fees payable 2552462.68 2552462.68
Other payables 304829051.67 304829051.67
Non-current liabilities due within one
324718.81324718.81
year
Other current liabilities 12987488.80 12987488.80
Lease liabilities 539932.04 539932.04
Long term employee compensation
27863535.8927863535.89
payable
Anticipated liabilities 10940385.19 10940385.19
Deferred income tax liabilities 14239001.21
Net assets 199439778.47 154371337.88
Less: Minority shareholders' equity -- --
Net assets acquired 199439778.47 154371337.88
(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date
Not available.
2. Enterprise combines under the same control
Nil3. Reverse purchase
Nil
4. Disposal of subsidiaries
Nil
5.Changes in the scope of consolidation due to other reasons
In the Period WFQL was jointly funded by the Company with IRD BORIT BOSCH and Wuxi High-Tech
Zone New Dynamic Industrial Development Fund (Limited Partnership). The Company holds 45% equity directly
and 30% equity indirectly via IRD and Borit. The Company is the actual controller of WFQL.VII. Equity in other entity (In RMB)
1.Equity in subsidiary
(1) Constitute of enterprise group:
In RMB
Directly
Indirectl
Main share- Voting
Registered Business y share- Acquired
Subsidiary operation holding proportion(%
place nature holding way
place ratio(% )
ratio(%)
)
Enterprise
Spare parts
combines
of internal-
WFJN Nanjing Nanjing 80.00 -- 80.00 under the
combustion
same
engine
control
Enterprise
Automobile
combines
exhaust
WFLD Wuxi Wuxi 94.81 -- 94.81 under the
purifier
same
muffler
control
Spare parts
of internal- Investmen
WFMA Wuxi Wuxi 100.00 -- 100.00
combustion t
engine
Spare parts
Investmen
WFCA Wuxi Wuxi of internal- 100.00 -- 100.00
t
combustionengine
Enterprise
combines
WFTR Wuxi Wuxi Trading 100.00 -- 100.00 under the
same
control
Spare parts
of internal- Investmen
WFSC Wuxi Wuxi 66.00 -- 66.00
combustion t
engine
Enterprise
Spare parts
combines
of internal-
WFTT Ningbo Ningbo 98.83 1.17 100.00 not under
combustion
the same
engine
control
Enterprise
Spare parts
combines
of internal-
WFAM Wuxi Wuxi 51.00 -- 51.00 not under
combustion
the same
engine
control
Automobile
WFLD exhaust Investmen
Wuhan Wuhan -- 60.00 60.00
(Wuhan) purifier t
muffler
Automobile
WFLD
Chongqin Chongqin exhaust Investmen
(Chongqing -- 100.00 100.00
g g purifier t
)
muffler
Automobile
WFLD exhaust Investmen
Nanchang Nanchang -- 100.00 100.00
(Nanchang) purifier t
muffler
Smart car Investmen
WFAS Wuxi Wuxi -- 66.00 66.00
equipment t
Enterprise
combines
WFDT Wuxi Wuxi Hub Motor 80.00 -- 80.00 not under
the same
control
Fuel cell Investmen
WFQL Wuxi Wuxi component 45.00 30.00 75.00
t
s
Vacuum Enterprise
and
VHCN Wuxi Wuxi 100.00 -- 100.00 combines
hydraulic
pump not underthe same
control
Investmen
SPV Denmark Denmark Investment 100.00 -- 100.00
t
Enterprise
Fuel cell combines
IRD Denmark Denmark component -- 100.00 100.00 not under
s the same
control
Enterprise
Fuel cell combines
IRD
America America component -- 100.00 100.00 not under
America
s the same
control
Enterprise
Fuel cell combines
Borit Belgium Belgium component -- 100.00 100.00 not under
s the same
control
Enterprise
Fuel cell combines
Borit
America America component -- 100.00 100.00 not under
America
s the same
control
Vacuum
and Investmen
VHIT Italy Italy -- 100.00 100.00
hydraulic t
pump
(2) Important non-wholly-owned subsidiary:
In RMB
Dividend announced to
Share-holding ratio of Gains/losses attributable Ending equity of
Subsidiary distribute for minority in
minority(%) to minority in the Period minority
the Period
WFJN 20.00 17248806.27 66468437.62 210600503.32
WFSC 34.00 5564553.15 -- 26591139.14
WFLD 5.19 7744005.93 -- 147668021.86
WFAM 49.00 42540064.71 32680000.00 216555779.48
Total 73097430.06 99148437.62 601415443.80
(3) Main finance of the important non-wholly-owned subsidiary:
In RMB
Subsidia Ending balancery Non-current Current Non-current Total
Current assets Total assets
assets liabilities liabilities liabilities
858419058.577359266.1435778324.346383138.35181853.381564992.
WFJN
162642636023
204138588.48627033.7252765622.174162086.174162086.
WFSC --
749536464
4869373661.1412237671.6281611332.3512116686.218075518.3730192205.
WFLD
601272687947
434472654.554774642.989247296.449094531.99748081.548842612.
WFAM
850287038184
6366403963.2592998613.8959402576.4481756442.353005454.4834761897.
Total
351954982018
Opening balance
Subsidia
Non-current Current Non-current Total
ry Current assets Total assets
assets liabilities liabilities liabilities
116324450312639160.147588366403140636.39065672.442206308.
WFJN
7.43978.40220628
216066879.46302741.6262369620.200467446.200467446.
WFSC
240844949
45032239013546146158578385135583217421480042.357980178
WFLD
3.305.108.403.41255.66
413380063.483832825.897212889.450194211.59932162.510126374.
WFAM
834124909989
629591535219738934849330469461212403120477877473260191
Total
3.803.086.888.02.305.32
In RMB
Current period
Subsidiary
Operation Income Net profit Total comprehensive income Cash flow from operation activity
WFJN 732361563.72 83150768.43 83150768.43 62087338.85
WFSC 387505622.39 16361964.13 16361964.13 -23846712.63
WFLD 5937549034.42 265352997.31 265352997.31 87740237.63
WFAM 704346941.59 90524389.14 90524389.14 145137886.56
Total 7761763162.12 455390119.01 455390119.01 271118750.41
Last Period
Subsidiary
Operation Income Net profit Total comprehensive income Cash flow from operation activity
WFJN 825822469.06 96549390.54 96549390.54 79645579.97
WFSC 350165714.10 12839649.76 12839649.76 38135056.28
WFLD 6527268564.43 337097184.96 337114070.10 -323189683.23
WFAM 641120626.61 81627198.42 81627198.42 53533412.73
Total 8344377374.20 528113423.68 528130308.82 -151875634.25
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the
enterprise group
Nil2. Transaction that has owners’ equity shares changed in subsidiary but still with controlling
rights
Nil
3. Equity in joint venture and associated enterprise
(1) Associated enterprise:
Share-holding Accounting
ratio(%)
treatment on
Main Regist
Joint venture or Enterprise Business investment for
operation ered
associated enterprise abbreviation nature Indire
place place Directly joint venture
ctly and associated
enterprise
Wuxi Weifu
Equity
Environmental WFEC Wuxi Wuxi Catalyst -- 49.00
method
Catalysts. Co. Ltd.Internal-
combustion Equity
RBCD RBCD Wuxi Wuxi 32.50 1.50
engine method
accessories
Internal-
Zhonglian Automobile Zhonglian Shang combustion Equity
Shanghai 20.00 --
Electronics Co. Ltd. Automobile hai engine method
accessories
Internal-
Wuxi Weifu Precision
combustion Equity
Machinery WFPM Wuxi Wuxi 20.00 --
engine method
Manufacturing Co. Ltd.accessories
Changchun Xuyang
Weifu Automobile Changchun Chang Automobile Equity
Changchun -- 34.00
Components Technology Xuyang chun components method
Co. Ltd.Germa Fuel cell Equity
PrecorsGmbH Precors Germany -- 8.11
ny components method
Wuxi ChelianTianxia
ChelianTian Telematics Equity
Information Technology Wuxi Wuxi 8.83 --
xia services method
Co. Ltd.Lezhuo Bowei Hydraulic Lezhuo
Shang Automobile Equity
Technology (Shanghai) Bowei Shanghai 50.00 --
hai components method
Co. Ltd
Holding shares ratio different from the voting right ratio: nil
Has major influence with less 20% voting rights hold or has minor influence with over 20% (20% included) voting
rights hold:
(1) Precors:
Wholly-owned subsidiary of the Company - Borit holds 8.11% equity of Precors Borit appointed a director to
Precors. Though the representative Borit can participate in the operation policies formulation of Precors and thus
exercise a significant influence over Precors.
(2) ChelianTianxia:
The Company holds 9.8452% equity of Chelian Tianxia and appointed a director to Chelian Tianxia. Though the
representative the Company can participate in the operation policies formulation of Chelian Tianxia and thus
exercise a significant influence over Chelian Tianxi.(2) Main financial information of the important associated enterprise:
In RMB
Ending balance/Current amount
Item
WFEC RBCD Zhonglian Automobile
Current assets 3507976754.16 15426523373.99 241595079.15
Including: cash
and cash 813874175.27 10773921.81 225052854.96
equivalents
Non-current assets 333764427.43 3421035986.82 7557124612.32
Total assets 3841741181.59 18847559360.81 7798719691.47
Current liabilities 1665411123.81 8810309639.09 6171780.23
Non-current
493618200.85--2517670.77
liabilities
Total liabilities 2159029324.66 8810309639.09 8689451.00
Minority
shareholders' -- -- --
interests
Equity attributable
to shareholders of
1682711856.9310037249721.727790030240.47
the parent
company
Share of net assets
based on 824528809.90 3412664905.38 1558006048.09
shareholding ratio
Adjustment item -- -- --
-- Goodwill -- 267788761.35 1407265.96
-- Unrealized
profit from -- -20692355.48 --
internal trading
--Other -- -0.28 --
Book value of
equity investment
824528809.903659761310.971559413314.05
in associated
enterprises
Fair value of
equity investment
for the affiliates -- -- --
with consideration
publicly
Operating income 4983370807.15 13443929728.58 26913563.07
Financial expense 37298423.01 -12919599.29 -3814000.75
Income tax
43882305.71494166513.514465983.95
expense
Net profit 354097545.31 3059444530.82 1876187641.39
Net profit from
discontinued -- -- --
operations
Other
comprehensive -- -- --
income
Total
comprehensive 354097545.31 3059444530.82 1876187641.39
income
Dividends
received from
associated 147000000.00 765837710.23 194400000.00
enterprise in the
yearOther explanation
Adjustment item for other “-0.28”: the differential tail;
In RMB
Opening balance/Last amount
Item
WFEC RBCD Zhonglian Automobile
Current assets 4359756878.88 14697384325.87 71871241.06
Including: cash
and cash 158561233.69 10186961.74 68250913.00
equivalents
Non-current assets 344385727.94 3080929311.51 6819520183.89
Total assets 4704142606.82 17778313637.38 6891391424.95
Current liabilities 2858118635.51 8623318592.84 2970685.68
Non-current
224616134.38--2578140.19
liabilities
Total liabilities 3082734769.89 8623318592.84 5548825.87
Minority
shareholders' -- -- --
interests
Equity attributable
to shareholders of
1621407836.939154995044.546885842599.08
the parent
company
Share of net assets
based on 794489840.10 3112698315.15 1377168519.82
shareholding ratio
Adjustment item -- -- --
-- Goodwill -- 267788761.35 1407265.96
-- Unrealized
profit from -- -40372840.77 --
internal trading
--Other -- -0.28 -0.01
Book value of
equity investment
794489840.103340114235.451378575785.77
in associated
enterprises
Fair value of
equity investment
for the affiliates -- -- --
with consideration
publicly
Operating income 7595559889.80 15712821656.32 24479957.39
Financial expense 108452297.18 -56513383.09 -3139306.82
Income tax
51379165.70674071693.783579421.41
expense
Net profit 432505306.32 3237912797.87 1699134647.28
Net profit from
discontinued -- -- --
operations
Other
comprehensive 34459.46 -- --
income
Total
comprehensive 432539765.78 3237912797.87 1699134647.28
income
Dividends
received from
associated 98000000.00 558125544.30 198800000.00
enterprise in the
year(3) Excess loss occurred in joint venture or associated enterprise:
Nil
(4) Unconfirmed commitment with joint venture investment concerned:
Nil
(5) Intangible liability with joint venture or associated enterprise investment concerned:
Nil
4. Financial summary for non-important Joint venture and associated enterprise
In RMB
Item Ending balance/Current amount Opening balance/Last amount
Joint venture:
Total book value of investment -- --
Amount based on share-holding ratio
--Net profit -- --
-- Other comprehensive income -- --
--Total comprehensive income -- --
Associated enterprise:
Total book value of investment 239114674.05 204764926.80
Amount based on share-holding ratio
--Net profit 7198399.91 -13039885.78
-- Other comprehensive income -- --
--Total comprehensive income 7198399.91 -13039885.78
5. Major conduct joint operation
Nil
6. Structured body excluding in consolidate financial statement
NilVIII. Risk related with financial instrument
Main 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 financial instrument can be found in relevant items of Note VII. Risks concerned with
the above-mentioned financial instrument 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 the adverse impact on performance of the Company to minimum standards and maximized
the benefit for shareholders and other investors. Base on the risk management targets the basic
tactics of the risk management is to recognized and analyzed the vary risks that the Company
counted established an appropriate risk exposure baseline and caring risk management supervise
the vary risks timely and reliably in order to control the risk in a limited range.In business process the risks with financial instrument concerned happen in front of the Company
mainly including credit exposure market risk and liquidity risk. BOD of the Company takes full
charge of the risk management target and policy-making and takes ultimate responsibility for the
target of risk management and policy. Compliance department and financial control department
manager and monitor those risk exposures to ensuring the risks are control in a limited range.
1. Credit Risk
Credit risk refers to the risk that one party of a financial instrument fails to perform its obligations
and resulting in the financial loss of other party. The company's credit risk mainly comes from
monetary funds structured deposits note receivable account receivable other account receivables.The management has established an appropriate 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
institutions such as commercial banks the management believes that these commercial banks have
higher credit and asset status and have lower credit risks. The Company adopts quota policies to
avoid credit risks to any financial institutions.For accounts receivable other receivables and bills receivable the Company sets relevant policies
to control the credit risk exposure. To prevent the risks the company has formulated a new customer
credit evaluation system and an existing customer credit sales balance analysis system. The new
customer credit evaluation system aims at new customers the company will investigate a customer’s
background according to the established process to determine whether to give the customer a credit
line and the credit line size and credit period. Accordingly the company has set a credit limit and a
credit period for each customer which is the maximum amount that does not require additional
approval. The analysis system for credit sales balance of existing customers means that after
receiving a purchase order from an existing customer the company will check the order amount and
the balance of the accounts owed by the customer so farif the total of the two exceeds the credit
limit of the customer the company can only sell to the customer on the premise of additional
approval otherwise the customer must be required to pay the corresponding amount in advance. Inaddition for the credit sales that have occurred the company analyzes and audits the monthly
statements for risk warning of accounts receivable to ensure that the company’s overall credit risk
is within a controllable range.The maximum credit risk exposure of the Company is the carrying amount of each financial asset
on the balance sheet.
2.Market risk
Market risk of the financial instrument refers to the fair value of financial instrument or future cash
flow due to fluctuations 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 in line with the anticipative change orientation choose floating rate
or fixed rate that is the rate in future period will goes up prospectively than choose fixed rate; if
the rate in future period will decline prospectively than choose the 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 in particular.
(2) Foreign exchange (FX) risk
FX risks refer to the losses arising from exchange rate movement. The FX risk sustain by the
Company mainly related with the USD EUR SF JPY HKD DKK except for the USD EUR SF
JPY HKD and DKK carried out for the equipment purchasing of parent company and Autocam
material purchasing of parent company technical service and trademark usage costs of parent
company the import and export of Weifu International Trade operation of IRD operation of Borit
and operation of VHIT and other main business of the Company are pricing and settle with RMB
(yuan). In consequence of the foreign financial assets and liabilities takes minor ratio in total assets
the Company has small FX risk of the financial instrument considered by management of the
Company.End as 31st December 2022 except for the follow assets or liabilities listed with foreign currency
assets and liabilities of the Company are carried with RMB
* Foreign currency assets of the Company till end of 31st December 2022:
In RMB
Item Ending foreign Ending RMB balance Ratio in assets
Convert rate
currency balance converted (%)
Monetary funds
Including: USD 21346973.12 6.9646 148673128.99 0.52
EUR 48296719.62 7.4229 358501720.07 1.26
HKD 17293992.68 0.89327 15448204.84 0.05
JPY 46929606.00 0.052358 2457140.31 0.01
DKK 111164111.86 0.9983 110975132.87 0.39Item Ending foreign Ending RMB balance Ratio in assets
Convert rate
currency balance converted (%)
Account receivable
Including: USD 4732628.22 6.9646 32960862.50 0.12
EUR 27066494.35 7.4229 200911880.92 0.70
JPY 13084572.00 0.052358 685082.02 --
DKK 6966207.98 0.9983 6954365.43 0.02
Other account receivables
Including: DKK 2035772.98 0.9983 2032312.17 0.01
Total ratio in assets 3.08
* Foreign currency liability of the Company till end of 31st December 2022:
In RMB
Ending foreign Ending RMB balance Ratio in
Item Convert rate
currency balance converted assets(%)
Short-term borrowings
Including: USD 457403.05 6.9646 3185629.28 0.03
EUR 18989418.64 7.4229 140956555.62 1.40
Account payable
Including: USD 885151.79 6.9646 6164728.16 0.06
EUR 36055545.43 7.4229 267636708.17 2.65
JPY 50362512.00 0.052358 2636880.41 0.03
DKK 6081507.53 0.9983 6071168.97 0.06
GBP 2450.00 8.3941 20565.55 --
Other account payable
Including: EUR 5172.58 7.4229 38395.54 --
DKK 151513.30 0.9983 151255.73 --
Non-current liabilities due
within one year
Including: USD 156513.08 6.9646 1090051.00 0.01
EUR 496988.78 7.4229 3689098.02 0.04
DKK 575121.48 0.9983 574143.77 0.01
Leasing liabilities
Including USD 386008.72 6.9646 2688396.33 0.03
EUR 1285051.24 7.4229 9538806.85 0.09
DKK 11525669.67 0.9983 11506076.03 0.11
Total ratio in liabilities 4.52
* Other pricing risk
The equity instrument investment held by the Company with classification as transaction financial
asset and other non-current financial assets are measured on fair value of the balance sheet date. The
fluctuation of expected price for these investments will affect the gains/losses of fair value changes
for the Company.Furthermore on the premise of deliberated and approved in 10th meeting of 8th session of the
BOD the Company exercise entrust financing with the self-owned idle capital; therefore the
Company has the risks of collecting no principal due to entrust financial products default. Aims at
such risk the Company formulated a “Management Mechanism of Capital Financing” and well-
defined the authority to entrust financial management audit process reporting system Choice of
trustee daily monitoring and verification and investigation of responsibility etc. In order to lower
the adverse impact from unpredictable factors the Company choose short-term and medium period
for investment and investment product’s term is up to 5 years in principle; The variety of investment
includes bank financial products trust plans of trust companies asset management plans of asset
management companies various products issued by securities companies fund companies and
insurance companies etc.
3. Liquidity risk
Liquidity risk refers to the capital shortage risk occurred during the clearing obligation implemented
by the enterprise in way of cash paid or other financial assets. The Company aims at guarantee the
Company has rich capital to pay the due debts therefore a financial control department is
established for collectively controlling such risks. On the one hand the financial control department
monitoring the cash balance the marketable securities 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 other hand building a favorable
relationship with the banks rationally design the line of credit credit products and credit terms
guarantee a sufficient limit for bank credits in order to satisfy vary short-term financing
requirements.IX. Disclosure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
In RMB
Ending fair value
Item
First level Second level Third level Total
I. Sustaining measured by fair value
(I) Financial assets measured at fair value and
4045429568
whose changes are included in current profit or 146039262.82 186608914.00 3712781392.05.87
loss
2718820654
1.Trading financial assets 146039262.82 -- 2572781392.05.87
146039262.8
(1)Investment in equity instrument 146039262.82 -- --
2
(2)Investment in other liability instruments 2572781392
----2572781392.05
and equity instrument .05
1326608914
2. Other non-current financial assets -- 186608914.00 1140000000.00.00
(1)Equity instrument investment -- 186608914.00 515000000.00 701608914.00
(2)Investment in other liability instruments 625000000.0
----625000000.00
and equity instrument 0
(II) Financial assets measured at fair value and
2596159535
whose changes are included in current profit or -- -- 2596159535.21.21
loss
1918368845
1. Receivable financing -- -- 1918368845.21.21
677790690.0
2. Other equity instrument investment -- -- 677790690.00
0
6641266312
Total asset sustaining measured by fair value 146039262.82 186608914.00 6308618136.15.97
(I) Financial liabilities measured at fair value
and whose changes are included in current -- 747115.75 -- 747115.75
profit or loss
Derivative financial liability- foreign
--747115.75--747115.75
exchange contract
Total liability sustaining measured by fair
--747115.75--747115.75
value
II. Non-persistent measure
Total assets not consistently measured at fair
--------
value
Total liabilities not continuously measured at
--------
fair value
2. Recognized basis for the market price sustaining and non-persistent measured by fair
value on first level
On 31 December 2022 the financial assets available for sale equity instrument investments held by the Company
include SNAT (stock code: 600841) Miracle Automation (Stock code: 002009) ifan Technology (Stock Code:
601777) and Zoyte Auto(000980). The fair value at the end of the period is determined at the closing price as of
December 30 2022
3. Recognized basis for the market price sustaining and non-persistent measured by fair
value on second level
On 31 December 2022 other non-current financial assets equity instrument investments held by the Company
include Guolian Securities (stock code: 601456). The fair value at the end of the period is determined at the closing
price and liquidity discount as of December 30 2022.The derivative financial liabilities that continue to be measured at the second level of fair value are forward foreign
exchange settlement and sales contracts and the fair value is measured at the fair value of the forward foreign
exchange settlement and sales contracts provided by the contracting bank.
4. The market price sustaining and non-persistent measured by fair value on third level
(1) Accounts receivable financing
For this part of financial assets the Company uses discounted cash flow valuation techniques to determine its fair
value. Among them important unobservable input values mainly include discount rate and contractual cash flow
maturity period. The cash flow with a contract expiration period of 12 months (inclusive) shall not be discounted
and the cost shall be regarded as its fair value.(2) Fair value of other equity instrument investments - changes in fair value are included in other comprehensive
income
For this part of financial assets due to the lack of market liquidity the Company adopts replacement cost method to
determine their fair value. Among them the important unobservable input values mainly include the financial data
of the invested company.
(3) Fair value of investment in other debt instruments and equity instruments
For this part of financial assets the company uses discounted cash flow valuation technology to determine. Among
them the important unobtainable input values mainly include expected annual return rate and risk coefficient.X. Related party and related party transactions
1. Parent company of the enterprise
In RMB
Parent Association Type of Registration Legal
Business nature Registered capital
company relation enterprise place representative
Wuxi Industry Wholly state- Operation of state-
Parent company Wuxi Yao Zhiyong 5496785600
Group owned owned assets
Shareholding ratio Proportion of The final control party
Parent of the parent voting rights of the of the enterprise
Unified social credit code
company company in the parent company in
enterprise (%) the enterprise (%)
Wuxi State-owned
Wuxi
Assets Supervision and
Industry 20.23 20.23 913202001360026543
Administration
Group
Commission
Explanation on parent company of the enterprise
Wuxi Industry Group is an enterprise controlled by the State-owned Assets Management Committee of Wuxi Municipal
People’s Government. Its business scope includes foreign investment by using its own assets house leasing services self-
operating and acting as an agent for the import and export business of various commodities and technologies (Except for goods
and technologies that are restricted by the state or prohibited for import and export) domestic trade (excluding national
restricted and prohibited items). (Projects that are subject to approval in accordance with the law can be operated only after
being approved by relevant departments).
2. Subsidiary of the Company
For more details of the Company’s subsidiaries please refer to Note IX-1. “Equity in subsidiary”.
3. Joint venture and associated enterprise
For more details please refer to Note IX-3. “Equity in joint venture and associated enterprise”.Other associated enterprise or joint ventures which has related transaction with the Company in the period or
occurred previous:
Nil4. Other related party
Other related party Relationship with the Company
Robert Bosch Company Second largest shareholder of the Company
Guokai Metals Enterprises controlled by the parent company
Urban Public Distribution Enterprises controlled by the parent company
Enterprises controlled by relatives of directors of the
Company A
Company
Key executive Director supervisor and senior executive of the Company
Note: Because it is still in the investigation stage of the public security organs Company A is
temporarily used to indicate Company A itself along with four companies that may be controlled by
it for the sake of case confidentiality. In January 2022 WFTR developed the "platform trade"
business which was defrauded by the contract the public security organ placed on criminal
investigation on April 12 2023. The four companies in this business are not related to the Company
from the perspective of the ownership structure and other information in the industrial and
commercial registration but according to the investigation information feedbacks of the competent
departments the four companies may be materially controlled by Company A The Company has
identified the four companies as related parties base on the principle of caution.
5. Related transaction
(1) Goods purchasing labor service providing and receiving
* Goods purchasing/labor service receiving
In RMB
Content of related
Related party Current period Last Period
transaction
WFPM Goods and labor 52775709.71 49839916.90
RBCD Goods and labor 301077307.73 359903131.37
WFEC Goods 575378265.05 823962918.45
Robert Bosch
Goods and labor 232163763.73 216576637.98
Company
Changchun
Goods 342520.00 1712596.87
Xuyang
Guokai Metals Goods 14516381.84 57991174.20
* Goods sold/labor service providing
In RMB
Related party Content of related transaction Current period Last Period
WFPM Goods and labor 980889.25 29501561.74
RBCD Goods and labor 2220345511.60 3137245415.70
WFEC Goods and labor 944537.87 7630155.96
Robert Bosch Company Goods and labor 1475458231.00 1224350229.77
Shinwell Automobile Goods -- 29250.79Changchun Xuyang Goods and labor 286036.62 21436170.70
Other explanation: Xingwei Automotive Technology (Wuxi) Co. LTD was originally an
associate company of WFTR which was sold in 2021.
(2) Related trusteeship management/contract & entrust management/ outsourcing
Nil
(3) Related lease
* As a lessor for the Company:
In RMB
Lease income recognized in Lease income
Lessee Assets type
the Period recognized at last Period
WFEC Workshop 2380758.09 1683130.70
Explanation on related lease:
* WFLD entered into a house leasing contract with WFEC. The plant locating at No.9 Linjiang Road Wuxi Xinwu
district owed by WFLD was rented out to WFEC. It is agreed that the rental from 1 January 2022 to 31 December
2022 was RMB 2380758.09.
(4) Related guarantee
Nil
(5) Related party’s borrowed/lending funds
During the current period WFLD repaid Wuxi Industry Group RMB 5.47 million of borrowed funds
and paid interest of RMB 119185.22.
(6) Related party’s assets transfer and debt reorganization
Nil
(7) Remuneration of key manager
In RMB
Item Current period Last Period
Remuneration of key executives 679.00 2617.00
(8) Equity related transactions
* In this period the Company and its wholly-owned subsidiary SPV acquired vacuum and hydraulic pumpbusiness from Robert Bosch Company and its subsidiary Robert Bosch S.p.A. Society à Unipersonale at aconsideration of RMB 182950038.25. The net assets acquired are detailed in Note VI-1. “Merger of EnterprisesNot Under Common Control”.* In this period the Company entered into a joint venture contract with Robert Bosch International
Beteiligungen AG a subsidiary of Robert Bosch Company and Bosch (China) Investment Ltd. in which the three
parties jointly invested to establish Lezhuo Bowei Hydraulic Technology (Shanghai) Co. Ltd. (hereinafter referred
to as “Lezhuo Bowei”). Robert Bosch International Beteiligungen AG and Bosch (China) Investment Ltd. subscribed
RMB 220 million accounting for 50% of the registered capital of Lezhuo Bowei.* In the Period Wuxi Weifu Qinglong Power Technology Co. Ltd was jointly funded by the Company with
IRD FUEL CELLS A/S BORIT NV ROBERT BOSCH INTERNATIONALE BETEILIGUNGEN AG(a
subsidiary of Robert Bosch Company) and Wuxi High-Tech Zone New Dynamic Industrial Development Fund
(Limited Partnership). ROBERT BOSCH INTERNATIONALE BETEILIGUNGEN AG a subsidiary of Robert
Bosch Company subscribed RMB 75.00 million accounting for 15% of the registered capital of Wuxi Weifu
Qinglong Power Technology Co. Ltd.
(9) Other related transactions:
Related party Contents of item Current period Last Period
WFPM Purchase of fixed assets 50000.00 --
RBCD Payable for technical services -- 455591.30
RBCD Purchase of fixed assets 4503484.90 528378.37
RBCD Technology royalties paid etc. 1147294.75 2332313.62
Providing of technical
RBCD 2053000.00 --
services etc.Robert Bosch Company Technology royalties paid etc. 2316825.65 5577508.74
Robert Bosch Company Purchase of fixed assets 49061191.70 927851.05
WFEC Purchase of fixed assets -- 20353.98
WFEC Payable for technical services 102075.47 450000.00
WFEC Utilities payable 1187817.04 --
Providing of technology
WFEC 42169.81 873420.02
service etc.Purchase canteen ingredients
Urban public distribution 1392464.33 --
etc
6. Receivable/payable items of related parties
(1) Receivable item:
In RMB
Ending balance Opening balance
Item Related party Bad debt
Book balance Bad debt reserve Book balance
reserveAccount receivable WFPM 299389.13 10925.29 1233084.39 --
Account receivable RBCD 461493652.46 174766.71 48954455.60 56805.74
Robert Bosch 236685486.17 426203.85
Account receivable
Company 363021724.83 882016.11
Other account Robert Bosch
----692995.30--
receivables Company
Changchun
Account receivable 5464.91 -- 995215.93 --
Xuyang
Account receivable WFEC 514638.29 -- 6212780.39 --
Other account
WFEC 147000000.00 -- -- --
receivables
(2) Prepaid items:
Item Related party Ending balance Opening balance
Robert Bosch
Prepayments 5249715.46 539263.12
Company
Other non-current Robert Bosch
1470000.009932547.00
assets Company
Other non-current Wuxi Industry
5452800.00--
assets Group
(3) Payable item:
In RMB
Item Related party Ending balance Opening balance
Account payable WFPM 17783464.23 11634159.55
Other account payable WFPM 29000.00 29000.00
Account payable WFEC 274115921.53 299939408.63
Account payable RBCD 37603958.72 33418536.50
Account payable Robert Bosch Company 49500046.68 16412385.58
Account payable Guokai Metals 3.12 2.86
Other current liabilities RBCD 0.05 120466375.78
Other current liabilities WFPM 76030.18 --
Other current liabilities Robert Bosch Company 63572.08 39165.98
Other account payable Wuxi Industry Group -- 5476184.14
Other account payable Guokai Metals -- 2717849.00
Other account payable Robert Bosch Company 13308176.65 --
(4) Advances received and contractual liabilities:
Item Related party Ending balance Opening balance
Contract liability RBCD 0.36 0.36
Contract liability Robert Bosch Company 510212.12 796325.77
Contract liability WFEC 584847.43 --(5) Related claim in “platform trade” business:
Item Ending balance Opening balance
Company A 2415151888.80 --
Note: Because it is still in the investigation stage of the public security organs Company A is
temporarily used to indicate the company above. Based on the principle of caution the balance of
the 4 companies that may be controlled by Company A is combined under the name of Company A.The balance is the difference between the "purchase fund" paid by WFTR based on the "platform
trade" business and the "sales fund" received by WFTR. According to the principle of substance
over form the "platform trade" business of WFTR is not treated as normal trade business but as
fund receipt and payment so it is listed as other receivables.
7. Undertakings of related party
Nil
XI. Share-based payment
1. Overall situation of share-based payment
In RMB
Total amount of various equity instruments
--
granted by the Company in the current period
Total amount of various equity instruments
exercised by the Company in the current 199195200.00
period
Total amount of various equity instruments
invalidated by the company in the current 157213350.00
period
The scope of the exercise price of the stock 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
options issued by the company at the end of
stocks granted in the first tranche to the last trading day within 60 months
the period and the remaining period of the from the date of completion of the registration of the restricted stock granted
contract in the first tranche so the remaining period of the contract is 3 years and 11
months.The scope of the exercise price of other equity
instruments issued by the company at the end
N/A
of the period and the remaining period of the
contract.2. Share-based payment settled by equity
In RMB
Determine based on the closing price of the
Method for determining the fair value of equity instruments on the grant date
restricted stock on the grant dateBasis for determining the number of vesting equity instruments Unlocking conditions
Reasons for the significant difference between estimate in the current period
Not Applicable
and estimate in the prior period
Cumulative amount of equity-settled share-based payments included in the
111990911.92
capital reserve
Total amount of expenses confirmed by equity-settled share-based payments
28943506.38
in the current period
Other explanations
This restricted stock incentive plan has been reviewed and approved by the company’s second extraordinary general
meeting of shareholders in 2020. The overview of this restricted stock incentive plan is as follows:
(1) Stock source: the company’s A-share common stock repurchased from the secondary market.
(2) Grant date: November 12 2020.
(3) Grant objects and number of grants: 19540000 restricted stocks were granted to 601 incentive recipients of the
company and its subsidiaries.
(4) Grant price: 15.48 yuan/share.
(5) Grant registration completion date: December 4 2020.
(6) Lifting the restrictions on sales:
Unlock Unlock time Ratio of unlocked quantity to granted
period quantity
Phase I Starting from the first trading day 24 months after the completion of the
unlocked registration of the first grant and ending on the last trading day within 36 4/10
months
Phase II Starting from the first trading day 36 months after the completion of the
unlocked registration of the first grant and ending on the last trading day within 48 3/10
months
Phase III Starting from the first trading day 48 months after the completion of the
unlocked registration of the first grant and ending on the last trading day within 60 3/10
months
(7) Performance appraisal requirements at the company level:
Unlock conditions Performance appraisal requirements
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
The first batch of unlock
of 2019 the absolute amount will not be less than RMB 845 million;
conditions
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 1. the weighted average ROE for year of 2022 is not less than 10%;
conditions 2. the growth rate of self-operating profit in 2022 will not be less than 12% compared with the year
of 2019 the absolute amount will not be less than RMB 892 million;
3. the cash dividends for year of 2022 shall be no less than 50% of the profit available for
distribution of the current year.The third batch of unlocking 1. the weighted average ROE for year of 2023 is not less than 10%;
conditions 2. the growth rate of self-operating profit in 2023 will not be less than 20% compared with the yearof 2019 the absolute amount will not be less than RMB 958 million;
3. the cash dividends for year of 2023 shall be no less than 50% of the profit available 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
deducting non-recurring gains and losses and deducting the investment income from RBCD and Zhonglian
Electronics.XII. Undertakings or contingency
1. Important undertakings
Important undertakings on balance sheet date:
Nil
2. Contingency
Nil
XIII. Events after balance sheet date
1. Important non-adjustment matters
Nil
2. Profit distribution
Based on the 983173293 shares which exclude the buy-back
shares on buy-back account (25000000 A-stock) from total share
capital 1008950570 shares (According to the provisions of the
Company Law of the People's Republic of China the listed
company does not have the right to participate in the profit
distribution and the conversion of the capital reserve into the share
capital by repurchasing the shares held by the company through the
The profit or dividend to be special securities account) distributing 1.00 yuan (tax included)
distributed cash dividend for every 10 shares held no bonus shares without
capitalization from capital reserves. The remaining undistributed
profit is carried forward to the next year. The total amount of cash
dividend to be paid is RMB 98317329.3 (tax included). If the total
share capital of the Company changes before the implementation of
the distribution plan the Company will be allocated according to
the principle of unchanged distribution proportion and adjustment
of the total amount of distribution
Profits or dividends declared after The profit distribution plan will be submitted for consideration at
deliberation and approval the 2022 Annual General Meeting3. Return of sales
Important return of sales: Nil
4. Other events after balance sheet date
The Company's wholly-owned subsidiary WFTR received the "case notice" issued by the Wuxi
Public Security Bureau Xinwu branch in April 12 2023 evening. It was informed: Weifu TR
contract fraud case in line with the conditions for filing criminal cases has decided to file.XIV. Other important events
1. Previous accounting errors collection
Nil
2. Debt restructuring
Nil
3. Assets replacement
Nil
4. Pension plan
The Enterprise Annuity Plan under the name of WFHT has deliberated and approved by 8th meeting
of 7th session of the BOD: in order to mobilize the initiative and creativity of the employees
established a talent long-term incentive mechanism enhance the cohesive force and competitiveness
in enterprise the Company carried out the above mentioned annuity plan since the date of reply of
plans reporting received from labor security administration 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 salary
of the employees of the enterprise. In accordance with the State’s annuity policy the Company will
adjusted the economic benefits in due time in principle of responding to the economic strength of
the enterprise the amount paid by the enterprise at current period control in the 8 percent of the total
salary of last year the maximum annual allocation to employees shall not exceed five times the
average allocation to employees and the excess shall not be counted towards the allocation. The
individual contribution is limited to 1% of one’s total salary for the previous year. Specific paying
ratio later shall be adjusted correspondingly in line with the operation condition of the Company.In December 2012 the Company received the Reply on annuity plans reporting under the name of
WFHT from labor security administration department later the Company entered into the Entrusted
Management Contract of the Annuity Plan of WFHT with PICC.
5. Segment
(1) Recognition basis and accounting policy for reportable segment
Determine the operating segments in line with the internal organization structure management
requirement and internal reporting system. Operating segment of the Company refers to the
followed components that have been satisfied at the same time:
* The component is able to generate revenues and expenses in routine activities;
* Management of the Company is able to assess the operation results regularly and determine
resources allocation and performance evaluation for the component;
* Being analyzed financial status operation results and cash flow of the components are able to
require by the Company
The Company is mainly engaged in the manufacture automotive internal combustion engine fuel
system and fuel cell components automotive components mufflers purifiers etc. based on the
product segment the Company determines four reporting segments: automotive fuel injection
systems and fuel cell components automotive reprocessing systems intake systems and vacuum
and hydraulic pumps; Also according to Note XIV-6 WFTR developed “platform trade” business
which was defrauded by contracts in it the police have launched a criminal investigation. The
accounting policies for each reporting segment are consistent with those described in Note III.Segment assets do not include trading financial assets other receivables - dividends receivable
other non-current financial assets investments in other equity instruments long-term equity
investments and other undistributed assets. The reason is that these assets have nothing to do with
each product.
(2) Financial information for reportable segment
In RMB
Automotive
Air
Auto fuel injection system post
management Vacuum pump and
Item and fuel cell component processing
system hydraulic pump segment
segment system
segment
segment
Revenue 6234413040.37 5977419455.46 612416043.11 177911433.07
Cost 5149497567.61 5468414735.16 487027797.49 158596347.31
Total Profit 127367101.76 46173852.85 -651918.79 -52436497.65
Net profit 129708365.32 58011659.04 3946252.07 -51714919.01
Asset 10783021465.98 5302347622.37 941428806.01 914361224.61
Liability 5889731119.01 3784419888.22 501890891.17 709572116.76(to be continued)
Add:
Undistributed
assets and gains
and losses such
as investments or
income accounted
Less: The
“platform trade” for by the equity
Item divisions offset Total
business segment method debt
each other
instruments and
investment in
equity instruments
or income from
their holding and
disposal
Revenue -- 272525054.98 -- 12729634917.03
Cost -- 247150958.77 -- 11016385488.80
Total Profit -1644068327.93 -- 1703230223.10 179614433.34
Net profit -1644068327.93 -- 1695062978.76 190946008.25
Asset 1097430804.02 1642903864.22 11133227006.24 28528913065.01
Liability -- 791446647.95 38848.42 10094206215.636. Major transaction and events influencing investor’s decision
(1) The security organs have launched a criminal investigation on the case that WFTR was
defrauded by contracts in its "platform trade" business. (For details see Notice No. 2023-007
disclosed on Juchao Information Website and other information disclosure websites on April 13
2023). At present the case is in the investigation stage and the outcome of the case is uncertain in
the future.
(2) Based on the "platform trade" business’s background transaction chain sales and purchase
contract signing transaction process physical flow and so on the Company carefully analyzed and
made comprehensive judgment finds that the probability of this business not belonging to normal
trade business is extremely high. In terms of accounting treatment the Company follows the
principle of substance over form and does not treat it as normal trade business but according to the
receipt and payment of funds，prudently recognize as claims and liabilities respectively purchasesactually paid to "Suppliers" and sales collected from "Customers". In the financial statements the
"platform trade" business is net reported to other receivables in the form of the "platform trade"
business portfolio. In 2022 The outflow amount of the "platform trade" business was 6345751400
yuan and the inflow amount was 3604.252300 yuan the amount is 2741499100 yuan for which
an expected credit loss of 1644068300 yuan has been charged.XV. Principal notes of financial statements of parent company
(There is no special explanation for the following items and the amount unit is RMB Yuan.The ending period refers to December 31 2022 the beginning period refers to January 1 2022
the current period refers to the year 2022 and the previous period refers to the year 2021.)
1. Account receivable
(1) Classification of account receivable:
In RMB
Ending balance
Book balance Bad debt reserve
Category
Accrued Book value
Amount Ratio(%) Amount
ratio(%)
Account receivable with bad debt
provision accrued on a single 7705636.24 0.84 7705636.24 100.00 --
basis
Account receivable with bad debt
910831491.6199.164023208.390.44906808283.22
provision accrued on portfolio
Including: receivables from
768218575.7083.634023208.390.52764195367.31
customers
Receivables from internal related
142612915.9115.53----142612915.91
partiesTotal 918537127.85 100.00 11728844.63 1.28 906808283.22
Opening balance
Book balance Bad debt reserve
Category
Accrued Book value
Amount Ratio(%) Amount
ratio(%)
Account receivable with bad
debt provision accrued on a 7803945.24 1.42 7803945.24 100.00 --
single basis
Account receivable with bad
debt provision accrued on 540453844.97 98.58 3495954.75 0.65 536957890.22
portfolio
Including: receivables from
324001494.5059.103495954.751.08320505539.75
customers
Receivables from internal
216452350.4739.48----216452350.47
related parties
Total 548257790.21 100.00 11299899.99 2.06 536957890.22
* Bad debt provision accrued on single basis:
In RMB
Ending balance
Name Book Bad debt Accrued
Accrued causes
balance reserve ratio(%)
Have difficulty in
BD bills 7201691.00 7201691.00 100.00
collection
Tianjin Leiwo Engine Co. Have difficulty in
503945.24503945.24100.00
Ltd. collection
Total 7705636.24 7705636.24 100.00
* Bad debt provision accrued on portfolio:
Ending balance
Name
Book balance Bad debt reserve Accurual ratio(%)
Within 6 months 746778955.46 -- --
6 months to 1 year 17383318.92 1738331.87 10.00
1-2 years 1042800.24 208560.05 20.00
2-3 years 1561974.35 624789.74 40.00
Over 3 years 1451526.73 1451526.73 100.00
Total 768218575.7 4023208.39
* In the portfolio receivables from internal related parties：
Accrued ratio of Bad debt
Name of related party Amount
reserve(%)
WFLD 20600442.61 --
WFTR 57565163.84 --WFTT 5204904.97 --
WFSC 38994998.99 --
VHCN 15795329.64
WFLD(NANCHANG) 3840129.85
WFQL 611946.01
Total 142612915.91 --
* By account age（Including single withdrawal and combination withdrawal）:
In RMB
Account age Book balance
Within one year 906775190.29
Including: within 6 months 889181770.09
6 months to 1 year 17593420.20
1-2 years 1173006.18
2-3 years 1935713.65
Over 3 years 8653217.73
Total 918537127.85
(2) Bad debt provision accrued collected or reversal:
In RMB
Amount changed in the period
Ending
Category Opening balance Collected or
Accrued Written-off balance
reversal
11728844.
Bad debt provision 11299899.99 428948.14 -- 3.50
63
11728844.
Total 11299899.99 428948.14 -- 3.50
63
Important bad debt provision collected or reversal: nil
(3) Account receivable actual charged off in the Period:
In RMB
Whether the payment is generated by related party
Item Amount charged off
transactions
Sporadic difference 3.50 N
Total 3.50
(4) Top 5 receivables at ending balance by arrears party:
In RMB
Ending balance of Ratio in total ending balance of account Ending balance of
Name
account receivable receivables(%) bad debt reserve
RBCD 461437152.46 50.24 174766.71
Robert Bosch Company 78085229.03 8.50 0.01Client 3 60026741.00 6.53 737492.51
WFTR 57565163.84 6.27 --
WFSC 38994998.99 4.24 --
Total 696109285.32 75.78 912259.23
2.Other account receivable
In RMB
Item Ending balance Opening balance
Interest receivable 206325.34 113055.56
Dividend receivable -- 26718900.00
Other account receivables 1471896113.93 177293562.07
Total 1472102439.27 204125517.63
(1) Interest receivable
1) Category of interest receivable
In RMB
Item Ending balance Opening balance
Interest receivable of subsidiary 206325.34 113055.56
Total 206325.34 113055.56
2) Significant overdue interest
Nil
(2) Dividend receivable
1) Category of dividend receivable:
In RMB
Item (or invested enterprise) Ending balance Opening balance
WFAM -- 26718900.00
2) Important dividend receivable with account age over 1 year
Nil
(3) Other account receivables
1)Other account receivables classification by nature:
In RMB
Nature Ending book balance Opening book balanceStaff loans and petty cash 1279080.00 400080.00
Balance of related party in the consolidate
3106006521.72169746521.72
scope
Margin 3738299.33 1518640.00
Social security and provident fund paid 6429166.22 5926527.66
Other 16781.83 9364.69
Total 3117469849.10 177601134.07
3) Accrued of bad debt provision
In RMB
Phase I Phase II Phase III
Expected credit losses Expected credit losses
Expected credit
Bad debt reserve for the entire duration for the entire duration Total
losses over next 12
(without credit (with credit
months
impairment occurred) impairment occurred)
307572.0
Balance of Jan. 1 2022 307572.00 -- --
0
Balance of Jan. 1 2022 in the period -- -- -- --
--Transfer into the second stage -- -- -- --
--Transfer into the third stage -- -- -- --
--Transfer back to the second stage -- -- -- --
-- Transfer back to the first stage -- -- -- --
1645296
Current accrued 1228175.24 -- 1644068327.93
503.17
Current reversal 30340.00 -- -- 30340.00
Current write-off -- -- -- --
Other changes -- -- -- --
1645573
Balance on Dec. 31 2022 1505407.24 -- 1644068327.93
735.17
By account age (including single withdrawal and combination withdrawal):
In RMB
Account age Book balance
Within one year 3114813019.10
Including: within 6 months 768880846.69
6 months to one year 2345932172.41
1-2 years 588300.00
2-3 years 1300000.00
Over 3 years 768530.00
Total 3117469849.10
3) Bad debt provision accrued collected or reversal
In RMB
Category Opening Amount changed in the period Endingbalance Difference in balance
translation of
Collected or
Accrued Written-off foreign
reversal
currency
statements
Bad debt 1645296503. 1645573
307572.0030340.00----
provision 17 735.17
1645296503.1645573
Total 307572.00 30340.00 -- --
17735.17
4) Other receivables actually charged off during the reporting period
Nil
5) Top 5 other receivables at ending balance by arrears party
In RMB
Ratio in total
Name of Account ending balance of Ending balance of
Nature Ending balance
enterprise age other bad debt reserve
receivables(%)
Balance of
related party
Within
WFTR in the 3077260000.00 98.71 1644068327.93
one year
consolidate
scope
Balance of
related party
With six
WFCA in the 28193906.00 0.91 --
months
consolidate
scope
Zhenkunxing
Industrial
Supermarket Margin 1000000.00 2-3 years 0.03 400000.00
(Shanghai) Co.Ltd.Wuxi Youlian Over
Thermal Power Margin 750000.00 three 0.02 750000.00
Co. Ltd years
Wuxi Xingzhou
Energy Within 1
Margin 676232.43 0.02 28176.35
Development year
Co. Ltd
Total 3107880138.43 99.69 1645246504.286) Other account receivables related to government grants: Nil
7) Other receivables derecognized due to the transfer of financial asset: Nil
8) The amount of assets and liabilities formed by transferring other receivables and continuing to
be involved: Nil
3. Long-term equity investments
In RMB
Ending balance Opening balance
Depreciati Depreciati
Item
Book balance on Book value Book balance on Book value
reserves reserves
Investment for 210641590
3080762302.11--3080762302.112106415908.37--
subsidiary 8.37
Investment for
476086632
associates and 5289081048.99 -- 5289081048.99 4760866320.19 --
0.19
joint venture
686728222
Total 8369843351.10 -- 8369843351.10 6867282228.56 --
8.56
(1) Investment for subsidiary
In RMB
Changes in Current Period Ending
balance
Provision Ending
The invested Opening balance Negative of
Additional for Share balance
entity (book value) Investme deprecia
Investment impairme payment (book value)
nt tion
nt loss
reserves
188389084.
WFJN 185974031.01 -- -- -- 2415053.33 --
34
470853106.
WFLD 468968346.39 -- -- -- 1884760.13 --
52
171807584.
WFMA 170998252.32 -- -- -- 809332.39 --
71
223351717.
WFCA 222778790.43 -- -- -- 572926.60 --
03
34067014.7
WFTR 33924529.85 -- -- -- 142484.85 --
0
51490044.2
WFSC 51150646.86 -- -- -- 339397.41 --
7
239283022.
WFTT 238112165.62 -- -- -- 1170856.38 --
00
82454467.9
WFAM 82454467.99 -- -- -- -- --
9
54081519.5
WFDT 54116034.53 -- -- -- -34515.01 --
2597341580.119528022
SPV 597938643.37 -- -- -- --
603.97
WFLD(Chongqi
--------265832.07265832.07--
ng)
WFAS -- -- -- -- 878805.00 878805.00 --
225000000.225000000.
WFQL -- -- -- -- --
0000
143559879.143559879.
VHCN -- -- -- -- --
9999
965901460.308076230
Total 2106415908.37 -- -- 8444933.15 --
592.11
(2) Investment for associates and joint venture
In RMB
Endi
Current changes (+/ -)
ng
Other bala
Openin Ending
Add compr Oth Differenc nce
g Cap Cash Impa balanc
itio Investment ehensi er e in of
Enterpr balance ital dividend or irme e
nal gain/loss ve equ translation depr
ise (book red profit nt (book
inve recognized incom ity of foreign eciat
value) ucti announced to accru value)
stm under equity e cha currency ion
on issued ed
ent adjust nge statements reser
ment ves
Associa
ted
enterpri
se
31933101993505
732050
RBCD 89537. -- -- 43798. -- -- -- -- 74663 --
752.43
44763.77
Zhongli
an 13785 1559375237 194400
75785.------------41331--
Autom 528.28 000.00
774.05
obile
54775
458451893010000
WFPM -- -- -- -- -- -- 899.0 --
041.36857.66000.00
2
Chelian - 16914143055 37000
--10910----------5202.--
Tianxia 955.62 000.000
753.4715
47608140325289
37000936450
Total 66320. -- 01431. -- -- -- -- 08104 --
000.000752.43
19238.99
4. Operating income and cost
In RMBCurrent period Last Period
Item
Income Cost Income Cost
3267569244.
Main business 3524971219.66 2995507161.73 4392019155.83
02
Other business 339533776.14 268487790.90 440321634.62 337773263.46
3605342507.
Total 3864504995.80 3263994952.63 4832340790.45
48
5.Investment income
In RMB
Item Current period Last Period
Investment income in subsidiaries 69841550.10 82600029.25
Investment income in joint ventures and associated
1427651731.231366704678.23
enterprises
Investment income from holding transaction
201399105.37309089065.06
financial asset
Total 1698892386.70 1758393772.54
XVI. Supplementary Information
1.Current non-recurring gains/losses
In RMB
Item Amount Note
Gains/losses from the disposal of non-current asset -148566.90
Governmental grants reckoned into current gains/losses (except for those with normal
operation business concerned and conform to the national policies & regulations and are 111917334.77
continuously enjoyed at a fixed or quantitative basis according to certain standards)
Profit and loss of assets delegation on others’ investment or management 1236142.58
Except for the effective hedging operations related to normal business operation of the
Company the gains/losses of fair value changes from holding the trading financial assets
-145070562.29
and trading financial liabilities and the investment earnings obtained from disposing the
trading financial asset trading financial liability and financial assets available for sale
Reserve for impairment of receivables separately tested for impairment transfer back 1265113.45
Other non-operating income and expenditure except for the aforementioned items 39799099.77
Less: Impact on income tax 1952583.99
Impact on minority shareholders’ equity 8192690.71
Total -1146713.32
Specific information on other items of profits/losses that qualified the definition of non-recurring profit(gain)/loss
2. ROE and earnings per share
In RMB
Profits during report period Weighted average Earnings per shareROE(%) Diluted
Basic earnings per earnings per
share (RMB/Share) share
(RMB/Share)
Net profits belong to common stock stockholders of the
0.640.090.09
Company
Net profits belong to common stock stockholders of the
0.650.090.09
Company after deducting nonrecurring gains and losses
3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report under both IAS
(International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting
Principles)
Not applicable
(2) Explanation on data differences under the accounting standards in and out of China; as for the
differences adjustment audited by foreign auditing institute listed name of the institute
Not applicable
4. Supplementary information related to changes in accounting policies
For details see Note III-32. “Changes in Material Accounting Policies and Estimates”.
沪公网安备31011802005267号
