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【2022】No. A385
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 2021 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 2021 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 Accountants of China.Our responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Auditof 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. Key audit matters
Key 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.Revenue recognition is the key audit matter that we identified in auditing.1. Matter description
As described in the 28. Revenue in Note III and 44. Operation revenue and operation cost in Note V carried in
the financial statement WFHT achieved an operation revenue of 13682426700 yuan for year of 2021. 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)The Company has tested the design and execution of key internal control related to revenue recycling so as
to confirm the validity of internal control;(2) The Company should make sure whether the recognition
condition and method of major operating revenue are compliance with the accounting standards for business
enterprise; it also should pay an attention to that whether the cyclical and occasional revenue is compliance
with the decided revenue recognition principle and 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 i 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 are inadequate 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
15 April 2022II. 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 2021
In RMB
Item December 31 2021 December 31 2020
Current assets:
Monetary funds 1896063265.69 1963289832.33
Settlement provisions
Capital lent
Trading financial assets 6076436069.42 3518432939.10
Derivative financial assets
Note receivable 1116550186.21 1657315723.56
Account receivable 2053800293.77 2824780352.41
Receivable financing 713017014.50 1005524477.88
Accounts paid in advance 178059249.99 151873357.76
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other account receivable 17908078.54 54209580.88
Including: Interest receivable
Dividend receivable 49000000.00
Buying back the sale of financial assets
Inventories 3445396375.09 2877182174.64
Contract assets
Assets held for sale
Non-current asset due within one year
Other current assets 220320922.50 2137921113.61
Total current assets 15717551455.71 16190529552.17
Non-current assets:
Loans and payments on behalfDebt investment
Other debt investment
Long-term account receivable
Long-term equity investment 5717944788.12 4801488290.97
Investment in other equity instrument 285048000.00 285048000.00
Other non-current financial assets 1690795178.00 1805788421.00
Investment real estate 19387746.56 20886681.62
Fixed assets 2932210452.51 2882230191.08
Construction in progress 387429933.08 243795493.04
Productive biological asset
Oil and gas asset
Right-of-use assets 23148405.58
Intangible assets 440593119.82 454412947.69
Expense on Research and Development
Goodwill 231255015.75 257800696.32
Long-term expenses to be apportioned 15304783.57 15062171.09
Deferred income tax asset 242248194.57 198393501.50
Other non-current asset 267941354.57 195259441.73
Total non-current asset 12253306972.13 11160165836.04
Total assets 27970858427.84 27350695388.21
Current liabilities:
Short-term loans 1437958206.55 302238600.05
Loan from central bank
Capital borrowed
Trading financial liability
Derivative financial liability
Note payable 1760032216.30 2462592372.82
Account payable 3206653702.59 4100984240.39
Accounts received in advance 2854518.96 4071236.87
Contractual liability 136427636.39 81717387.25
Selling financial asset of repurchase
Absorbing deposit and interbank deposit
Security trading of agency
Security sales of agencyWage payable 339888502.70 332421811.82
Taxes payable 40105648.88 67493690.29
Other account payable 359905317.46 361556257.42
Including: Interest payable 6184.14 4862.22
Dividend payable 25671100.00
Commission charge and commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due within one year 34088773.68 36914242.02
Other current liabilities 212969271.55 222871087.33
Total current liabilities 7530883795.06 7972860926.26
Non-current liabilities:
Insurance contract reserve
Long-term loans 3050640.97
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability 15795469.25
Long-term account payable 32015082.11 39479218.17
Long-term wages payable 108311923.19 181980293.94
Accrual liability
Deferred income 298052867.56 328204476.73
Deferred income tax liabilities 23097535.20 30653933.12
Other non-current liabilities
Total non-current liabilities 477272877.31 583368562.93
Total liabilities 8008156672.37 8556229489.19
Owner’s equity:
Share capital 1008659570.00 1008950570.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve 3371344172.82 3294242368.28
Less: Inventory shares 270249797.74 303627977.74
Other comprehensive income -36746344.60 13916619.47Reasonable reserve 712215.31 2333490.03
Surplus public reserve 510100496.00 510100496.00
Provision of general risk
Retained profit 14814787377.86 13756102424.62
Total owner’ s equity attributable to parent company 19398607689.65 18282017990.66
Minority interests 564094065.82 512447908.36
Total owner’ s equity 19962701755.47 18794465899.02
Total liabilities and owner’ s equity 27970858427.84 27350695388.21
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 2021 December 31 2020
Current assets:
Monetary funds 1002808546.46 1157684053.05
Trading financial assets 5493703374.82 3452348980.19
Derivative financial assets
Note receivable 303726372.69 422246979.39
Account receivable 536957890.22 982782279.22
Receivable financing
Accounts paid in advance 93419268.82 75650090.49
Other account receivable 204125517.63 197335714.63
Including: Interest receivable 113055.56 897777.78
Dividend receivable 26718900.00
Inventories 1076094722.15 725276241.43
Contract assets
Assets held for sale
Non-current assets maturing within one year
Other current assets 149352872.77 2057772839.50
Total current assets 8860188565.56 9071097177.90
Non-current assets:
Debt investmentOther debt investment
Long-term receivables
Long-term equity investments 6867282228.56 5978128303.88
Investment in other equity instrument 209108000.00 209108000.00
Other non-current financial assets 1690795178.00 1805788421.00
Investment real estate
Fixed assets 1786089596.76 1758198856.53
Construction in progress 239183999.25 154741266.85
Productive biological assets
Oil and natural gas assets
Right-of-use assets 1240879.96
Intangible assets 209952168.75 208112706.57
Research and development costs
Goodwill
Long-term deferred expenses 348970.34
Deferred income tax assets 85012991.24 76508392.85
Other non-current assets 185646711.53 117013906.01
Total non-current assets 11274660724.39 10307599853.69
Total assets 20134849289.95 19378697031.59
Current liabilities
Short-term borrowings 272578883.63 102088888.89
Trading financial liability
Derivative financial liability
Notes payable 569405391.94 448901718.36
Account payable 1012390712.80 1265845068.26
Accounts received in advance
Contract liability 7879319.15 6209575.73
Wage payable 220719432.58 216870819.60
Taxes payable 12427327.61 32974322.59
Other accounts payable 392455373.80 339096991.12
Including: Interest payable 117777.78
Dividend payable
Liability held for sale
Non-current liabilities due within one year 462484.41Other current liabilities 143935332.78 182611991.54
Total current liabilities 2632254258.70 2594599376.09
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual capital securities
Lease liability 1003106.55
Long-term account payable
Long term employee compensation payable 103482333.50 176245345.03
Accrued liabilities
Deferred income 265509545.34 285714239.98
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 369994985.39 461959585.01
Total liabilities 3002249244.09 3056558961.10
Owners’ equity:
Share capital 1008659570.00 1008950570.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital public reserve 3487154855.59 3407732016.61
Less: Inventory shares 270249797.74 303627977.74
Other comprehensive income
Special reserve
Surplus reserve 510100496.00 510100496.00
Retained profit 12396934922.01 11698982965.62
Total owner’s equity 17132600045.86 16322138070.49
Total liabilities and owner’s equity 20134849289.95 19378697031.593. Consolidated Profit Statement
In RMB
Item 2021 2020
I. Total operating income 13682426710.95 12883826306.60
Including: Operating income 13682426710.95 12883826306.60
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost 12772618230.58 12193088999.51
Including: Operating cost 11220367713.57 10429284441.97
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 60256733.73 65323781.87
Sales expense 264651432.56 406353445.10
Administrative expense 611872150.24 782824422.63
R&D expense 595406951.64 532581209.78
Financial expense 20063248.84 -23278301.84
Including: Interest expenses 38698621.09 11466886.33
Interest income 41478845.32 51622216.58
Add: other income 71276971.68 80342497.11
Investment income (Loss is listed with “-”) 1954523836.59 1964805688.57
Including: Investment income on affiliated company and joint venture 1632117748.78 1659752704.14
The termination of income recognition for financial assets measured by
-959296.18-946468.33
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 “-”) -40270333.81 383325765.19
Loss of credit impairment (Loss is listed with “-”) 4059750.80 -11184647.60
Losses of devaluation of asset (Loss is listed with “-”) -138117315.80 -178837472.85
Income from assets disposal (Loss is listed with “-”) 3932344.07 11454408.60III. Operating profit (Loss is listed with “-”) 2765213733.90 2940643546.11
Add: Non-operating income 656202.07 66467021.62
Less: Non-operating expense 25509569.87 4158888.17
IV. Total profit (Loss is listed with “-”) 2740360366.10 3002951679.56
Less: Income tax expense 90995689.95 180215749.00
V. Net profit (Net loss is listed with “-”) 2649364676.15 2822735930.56
(i) Classify by business continuity
1.continuous operating net profit (net loss listed with ‘-”) 2649364676.15 2822735930.56
2.termination of net profit (net loss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to owner’s of parent company 2575371419.80 2772769377.96
2.Minority shareholders’ gains and losses 73993256.35 49966552.60
VI. Net after-tax of other comprehensive income -50662087.73 13839596.07
Net after-tax of other comprehensive income attributable to owners of parent
-50662964.0713781747.80
company
(I) Other comprehensive income items which will not be reclassified
16008.80
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
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
-50678972.8713781747.80
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
-50678972.8713781747.80
statements
7.Other
Net after-tax of other comprehensive income attributable to minority
876.3457848.27
shareholdersVII. Total comprehensive income 2598702588.42 2836575526.63
Total comprehensive income attributable to owners of parent Company 2524708455.73 2786551125.76
Total comprehensive income attributable to minority shareholders 73994132.69 50024400.87
VIII. Earnings per share:
(i) Basic earnings per share 2.57 2.79
(ii) Diluted earnings per share 2.57 2.79
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 2021 2020
I. Operating income 4832340790.45 4536417803.79
Less: Operating cost 3605342507.48 3236311612.73
Taxes and surcharge 29689175.82 38086034.27
Sales expenses 44807972.25 126442956.05
Administration expenses 324244883.74 533649297.97
R&D expenses 225949431.82 205001982.50
Financial expenses -15417294.04 -34275071.44
Including: interest expenses 7427980.88 4163923.00
Interest income 26881455.19 40948820.72
Add: other income 41029454.01 58782085.85
Investment income (Loss is listed with “-”) 1758393772.54 1816759403.42
Including: Investment income on affiliated Company and joint
1366704678.231457471604.06
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 “-”) -40747662.86 383241806.28
Loss of credit impairment (Loss is listed with “-”) -654218.49 2076529.99
Losses of devaluation of asset (Loss is listed with “-”) -40950682.53 -82232381.43Income on disposal of assets (Loss is listed with “-”) 850642.47 -520470.69
II. Operating profit (Loss is listed with “-”) 2335645418.52 2609307965.13
Add: Non-operating income 527726.36 30937706.44
Less: Non-operating expense 24178368.73 3493103.39
III. Total Profit (Loss is listed with “-”) 2311994776.15 2636752568.18
Less: Income tax 101437713.12 162713161.17
IV. Net profit (Net loss is listed with “-”) 2210557063.03 2474039407.01(i)continuous operating net profit (net loss listed with ‘-”) 2210557063.03 2474039407.01(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 2210557063.03 2474039407.01
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share5. Consolidated Cash Flow Statement
In RMB
Item 2021 2020
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services 15555511937.16 11908396653.71
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 50070441.00 32138413.08
Other cash received concerning operating activities 86168562.99 102573818.52
Subtotal of cash inflow arising from operating activities 15691750941.15 12043108885.31
Cash paid for purchasing commodities and receiving labor service 12479791466.70 8277296527.38
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 1436357958.29 1295921487.63
Taxes paid 499681099.37 788150479.38
Other cash paid concerning operating activities 648207823.38 899929156.91
Subtotal of cash outflow arising from operating activities 15064038347.74 11261297651.30
Net cash flows arising from operating activities 627712593.41 781811234.01
II. Cash flows arising from investing activities:
Cash received from recovering investment 18129191548.43 8051178224.52
Cash received from investment income 1238803864.71 2462910424.30
Net cash received from disposal of fixed intangible and other long-term
15303195.0442851678.36
assetsNet cash received from disposal of subsidiaries and other units 9000000.00
Other cash received concerning investing activities 1680766.91 65102250.70
Subtotal of cash inflow from investing activities 19393979375.09 10622042577.88
Cash paid for purchasing fixed intangible and other long-term assets 753581993.49 492683539.12
Cash paid for investment 18668448932.90 9246030000.00
Net increase of mortgaged loans
Net cash received from subsidiaries and other units obtained 297302758.31
Other cash paid concerning investing activities 14579308.94
Subtotal of cash outflow from investing activities 19422030926.39 10050595606.37
Net cash flows arising from investing activities -28051551.30 571446971.51
III. Cash flows arising from financing activities
Cash received from absorbing investment 312640853.85
Including: Cash received from absorbing minority shareholders’
10161653.85
investment by subsidiaries
Cash received from loans 1711808897.47 395691406.43
Other cash received concerning financing activities 5470000.00 5730135.13
Subtotal of cash inflow from financing activities 1717278897.47 714062395.41
Cash paid for settling debts 575619575.18 371154665.80
Cash paid for dividend and profit distributing or interest paying 1561591089.99 1120464009.41
Including: Dividend and profit of minority shareholder paid by subsidiaries 13970282.31 15748768.80
Other cash paid concerning financing activities 17596686.60 449251421.46
Subtotal of cash outflow from financing activities 2154807351.77 1940870096.67
Net cash flows arising from financing activities -437528454.30 -1226807701.26
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate -13059669.78 -2003139.41
V. Net increase of cash and cash equivalents 149072918.03 124447364.85
Add: Balance of cash and cash equivalents at the period -begin 944946018.70 820498653.85
VI. Balance of cash and cash equivalents at the period -end 1094018936.73 944946018.70
6. Cash Flow Statement of Parent Company
In RMB
Item 2021 2020
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services 5563589299.47 4470039778.75
Write-back of tax received
Other cash received concerning operating activities 42028025.86 61033856.80Subtotal of cash inflow arising from operating activities 5605617325.33 4531073635.55
Cash paid for purchasing commodities and receiving labor service 3605626128.99 2312159843.14
Cash paid to/for staff and workers 788560324.22 730528257.00
Taxes paid 283285319.76 562371147.42
Other cash paid concerning operating activities 172424308.24 341484021.47
Subtotal of cash outflow arising from operating activities 4849896081.21 3946543269.03
Net cash flows arising from operating activities 755721244.12 584530366.52
II. Cash flows arising from investing activities:
Cash received from recovering investment 14660350548.43 7324178224.52
Cash received from investment income 1117355887.53 2434385770.96
Net cash received from disposal of fixed intangible and other long-term
675341.73810004.53
assets
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities 32072638.81 214831510.69
Subtotal of cash inflow from investing activities 15810454416.50 9974205510.70
Cash paid for purchasing fixed intangible and other long-term assets 466841006.41 262442259.33
Cash paid for investment 15006974321.57 8853827446.85
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities 112342336.68
Subtotal of cash outflow from investing activities 15473815327.98 9228612042.86
Net cash flows arising from investing activities 336639088.52 745593467.84
III. Cash flows arising from financing activities
Cash received from absorbing investment 302479200.00
Cash received from loans 376524000.00 102000000.00
Other cash received concerning financing activities 100000000.00
Subtotal of cash inflow from financing activities 476524000.00 404479200.00
Cash paid for settling debts 202000000.00 116000000.00
Cash paid for dividend and profit distributing or interest paying 1520286898.73 1097442763.44
Other cash paid concerning financing activities 4385823.06 400017180.33
Subtotal of cash outflow from financing activities 1726672721.79 1613459943.77
Net cash flows arising from financing activities -1250148721.79 -1208980743.77
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate -4982656.55 -2070408.32
V. Net increase of cash and cash equivalents -162771045.70 119072682.27
Add: Balance of cash and cash equivalents at the period -begin 651188544.53 532115862.26
VI. Balance of cash and cash equivalents at the period -end 488417498.83 651188544.537. Statement of Changes in Owners’ Equity (Consolidated)
Current Period
In RMB
2021
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
1008
I. Balance at the 3294 30362 13916 51010 13756 18282 51244 18794
9502333
end of the last 24236 7977. 619.4 0496. 1024 0179 7908. 4658
570.0490.03
year 8.28 74 7 00 24.62 90.66 36 99.02
0
Add:
Changes of
accounting
policy
Error
correction of the
last period
Enterprise
combine under
the same control
Other
1008
II. Balance at 3294 30362 13916 51010 13756 18282 51244 18794
9502333
the beginning of 24236 7977. 619.4 0496. 1024 0179 7908. 4658
570.0490.03
this year 8.28 74 7 00 24.62 90.66 36 99.02
0
III. Increase/
Decrease in this -291 77101 -3337 -5066 1058 1116 51646 1168
-1621
year (Decrease 000.0 804.5 8180. 2964. 68495 58969 157.4 23585
274.72
is listed with 0 4 00 07 3.24 8.99 6 6.45
“-”)
(i) Total -5066 2575 2524 73994 2598
comprehensive 2964. 37141 70845 132.6 70258
income 07 9.80 5.73 9 8.42
(ii) Owners’
-29170463-3337103551732112087
devoted and
000.0804.58180.0984.034.42018.
decreased
040054498
capital
1.Common -291 15000 14709
-2910
shares invested 000.0 000.0 000.0
00.00
by shareholders 0 0 0
2. Capital
invested by
holders of other
equity
instruments
3. Amount
reckoned into
742417424176562
owners equity 2321
533.6533.6568.0
with 034.44
004
share-based
payment-3337 29600 29600
-3777
4. Other 8180. 450.9 450.9
729.06
0044
-1517-1517-3964-1557
(III) Profit
42279422791382.06418
distribution
9.429.42311.73
1. Withdrawal
of surplus
reserves
2. Withdrawal
of general risk
provisions
3. Distribution -1513 -1513 -3964 -1552
for owners (or 34143 34143 1382. 98282
shareholders) 9.50 9.50 31 1.81
-4081-4081-4081
4. Other
359.92359.92359.92
(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 -1621 -1621 -2762 -1648
reserve 274.72 274.72 7.36 902.08
1. Withdrawal 22714 22714 24999
2284
in the report 778.2 778.2 116.1
337.85
period 7 7 2
243362433626648
2. Usage in the 2311
052.9052.9018.2
report period 965.21
990
66387363373747374
(VI)Others
000.002.86332.86332.86
1008
IV. Balance at 3371 27024 -3674 51010 14814 19398 56409 19962
65971221
the end of the 34417 9797. 6344. 0496. 7873 6076 4065. 7017
570.05.31
report period 2.82 74 60 00 77.86 89.65 82 55.47
0Last Period
In RMB
2020
Owners’ equity attributable to the parent Company
Other
equity instrument Other Minorit
Item Perp Less: compr Provisi Total
Share Reaso Surplu Retain y owners’
etual Capital Invent ehensi on of Subtot
capita Prefe nable s ed Other interest
reserve ory ve genera al equity capit
l rred Other reserve reserve profit s
al shares incom l risk
stock
secur e
ities
1008
I. Balance at 3391 51010 12076 16990 17484
950134873247494248
the end of the 52780 0496. 4436 4051 653310
570.01.67757.06174.05
last year 6.33 00 35.56 36.62 .67
0
Add:
Changes of
accounting
policy
Error
correction of
the last period
Enterprise
combine under
the same
control
Other
1008
II. Balance at 3391 51010 12076 16990 17484
950134873247494248
the beginning 52780 0496. 4436 4051 653310
570.01.67757.06174.05
of this year 6.33 00 35.56 36.62 .67
0
III. Increase/
Decrease in this -9728 30362 13781 1679 1291 13098
-914218199
year (Decrease 5438. 7977. 747.8 65878 61285 12588.
67.03734.31
is listed with 05 74 0 9.06 4.04 35
“-”)
(i) Total 13781 2772 2786 28365
50024
comprehensive 747.8 76937 55112 75526.
400.87
income 0 7.96 5.76 63
(ii) Owners’
-972830362-4009-41695
devoted and -16046
5438.7977.134159903.6
decreased 487.85
0574.794
capital
1.Common -9638 30247 -3988 -37378
25079
shares invested 9202. 9200. 68402 8906.5
496.04
by shareholders 59 00 .59 5
2. Capital
invested by
holders of other
equity
instruments
3. Amount
reckoned into
owners equity 6280 6280 204375 64848
with 461.58 461.58 .92 37.50
share-based
payment
-71761148-8325-41330-49655
4. Other
697.04777.74474.78359.81834.59-1095-1095-11115
(III) Profit -15748
767217672115985.
distribution 768.80
6.496.4929
1. Withdrawal
of surplus
reserves
2. Withdrawal
of general risk
provisions
3. Distribution -1093 -1093 -1108
-15748
for owners (or 24127 24127 990038
768.80
shareholders) 0.00 0.00 .80
-2525-2525-2525
4. Other
946.49946.49946.49
(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 -9142 -9142 -29409 -94367
reserve 67.03 67.03 .91 6.94
1. Withdrawal 21673 21673
2158523831
in the report 368.0 368.0
29.38897.47
period 9 9
2258722587
2. Usage in the 21879 24775
635.1635.1
report period 39.29 574.41
22
2656265626566
(VI)Others
627.59627.5927.59
1008
IV. Balance at 3294 30362 13916 51010 13756 18282 18794
9502333512447
the end of the 24236 7977. 619.4 0496. 1024 0179 465899
570.0490.03908.36
report period 8.28 74 7 00 24.62 90.66 .02
08. Statement of Changes in Owners’ Equity (Parent Company)
Current Period
In RMB
2021
Other equity instrument
Perpet Other Item 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
1008911698
I. Balance at the end 340773 303627 510100 163221380
50570.98296
of the last year 2016.61 977.74 496.00 70.49
005.62
Add: Changes
of accounting policy
Error
correction of the last
period
Other
II. Balance at the 10089 11698
340773303627510100163221380
beginning of this 50570. 98296
2016.61977.74496.0070.49
year 00 5.62
III. Increase/
69795
Decrease in this year -29100 794228 -33378 810461975.
1956.3
(Decrease is listed 0.00 38.98 180.00 37
9
with “-”)
(i) Total 22105
221055706
comprehensive 57063.
3.03
income 03
(ii) Owners’
-29100727848-33378105872018.devoted and
0.0038.98180.0098
decreased capital
1.Common shares
invested by
shareholders
2. Capital invested
by holders of other
equity instruments
3. Amount reckoned
into owners equity 765625 76562568.0
with share-based 68.04 4
payment
-29100-37777-3337829309450.9
4. Other
0.0029.06180.004
-1513
(III) Profit -151334143
34143
distribution 9.50
9.50
1. Withdrawal of
surplus reserves
2. Distribution for -1513
-151334143
owners (or 34143
9.50
shareholders) 9.503. 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 643641
6436417.80
report period 7.80
2. Usage in the 643641
6436417.80
report period 7.80
66380073633
(VI)Others 7374332.86
0.002.86
IV. Balance at the 10086 12396
348715270249510100171326000
end of the report 59570. 93492
4855.59797.74496.0045.86
period 00 2.01
Last period
In RMB
2020
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
ies
100834882
I. Balance at the 510100 1038186 1538913616
9505721286.
end of the last year 496.00 3816.29 8.68
0.0039
Add: Changes
of accounting
policy
Error
correction of the
last period
Other
II. Balance at the 1008 34882
51010010381861538913616
beginning of this 95057 21286.
496.003816.298.68
year 0.00 39
III. Increase/
Decrease in this -80489 303627 1317119 933001901.8
year (Decrease is 269.78 977.74 149.33 1
listed with “-”)(i) Total
24740392474039407.
comprehensive
407.0101
income
(ii) Owners’
-80489303627-384117247.devoted and
269.78977.7452
decreased capital
1.Common shares
-96389302479-398868402.invested by
202.59200.0059
shareholders
2. Capital invested
by holders of other
equity instruments
3. Amount
reckoned into
64848
owners equity with 6484837.50
37.50
share-based
payment
94150114877
4. Other 8266317.57
95.317.74
(III) Profit -109324 -109324127
distribution 1270.00 0.00
1. Withdrawal of
surplus reserves
2. Distribution for
-109324-109324127
owners (or
1270.000.00
shareholders)
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 -117744
-1177442.02
reserve 2.02
1. Withdrawal in 5849756
5849756.55
the report period .55
2. Usage in the 7027198
7027198.57
report period .57
1177442-636789-62501545.6
(VI)Others.0287.686
IV. Balance at the 1008 34077
30362751010011698981632213807
end of the report 95057 32016.
977.74496.002965.620.49
period 0.00 61Notes 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 &
25 / 137Administration 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 27 May 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 112858000yuan
and the registered capital after change was 680133995yuan. 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 1020200992yuan up to 31 December
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) becomes 1008950570 yuan after the change.After deliberation and approved by the 5th session of 10th BOD for year of 2021 the 291000 restricted shares
are buy-back and canceled 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.
26 / 1372. Registered place organization structure and head office of the Company
Registered place and head office of the Company: No.5 Huashan Road Xin 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 & Strategy and business development
Department market development department Party-masses Department Finance Department Purchase
DepartmentManufacturing 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 WEIFU JINNING 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 be approved 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 15 2022.
5. Scope of consolidate financial statement
Shareholding ratio Registered State
Short Proporti
(%) capital ment
name of on of
Name of subsidiary (in 10 Business scope consol
subsidia Indirectl votes
Directly thousand idate
ry y (%)
yuan) (Y/N)
NANJING WEIFU JINNING Internal-combustion
WFJN 80.00 -- 80.00 34628.70 Y
CO. LTD. engine accessories
WUXI WEIFU LIDA
WFLD 94.81 -- 94.81 50259.63 Purifier and muffler Y
CATALYTIC CONVERTER
27 / 137Shareholding ratio Registered State
Short Proporti
(%) capital ment
name of on of
Name of subsidiary (in 10 Business scope consol
subsidia Indirectl votes
Directly thousand idate
ry y (%)
yuan) (Y/N)
CO. LTD.WUXI WEIFU MASHAN
Internal-combustion
FUEL INJECTION WFMA 100.00 -- 100.00 16500 Y
engine accessories
EQUIPMENT CO. LTD.WUXI WEIFU CHANG′AN Internal-combustion
WFCA 100.00 -- 100.00 21000 Y
CO.LTD. engine accessories
WUXI WEIFU
INTERNATIONAL TRADE WFTR 100.00 -- 100.00 3000 Trade Y
CO.LTD.WUXI WEIFU SCHMITTER
Internal-combustion
POWERTRAIN WFSC 66.00 -- 66.00 7600 Y
engine accessories
COMPONENTS CO.LTD.NINGBO WEIFU TIANLI
Internal-combustion
TURBOCHARGING WFTT 98.83 1.17 100.00 11136 Y
engine accessories
TECHNOLOGY CO.LTD.WUXI WFAM PRECISION Automotive
WFAM 51.00 -- 51.00 USD2110 Y
MACHINERY CO.LTD. components
WUXI WEIFU LIDA WFLD
CATALYTIC CONVERTER (WUHA -- 60.00 60.00 1000 Purifier and muffler Y
(WUHAN) CO. LTD. N)
Weifu Lida (Chongqing) WFLD
Automotive components Co. (Chongq -- 100.00 100.00 5000 Purifier and muffler Y
Ltd. ing)
Nanchang Weifu Lida WFLD
Automotive Components Co. (Nancha -- 100.00 100.00 5000 Purifier and muffler Y
Ltd. ng)
WUXI WEIFU
AUTOSMART SEATING WFAS -- 66.00 66.00 10000 Smart car device Y
SYSTEM CO. LTD.WUXI WEIFU E-DRIVE
WFDT 80.00 -- 80.00 USD2000 Wheel motor Y
TECHNOLOGIES CO. LTD.Weifu Holding ApS SPV 100.00 -- 100.00 DKK238 Investment Y
IRD Fuel Cells A/S IRD -- 100.00 100.00 DKK8660 Fuel cell components Y
IRD
IRD FUEL CELLS LLC -- 100.00 100.00 USD300 Fuel cell components Y
America
Borit NV Borit -- 100.00 100.00 EUR315.59 Fuel cell components Y
Borit
Borit Inc. -- 100.00 100.00 USD0.1 Fuel cell components Y
America
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 Standards and interpretation on Accounting
standards and other relevant regulations (together as “Accounting Standards for Business Enterprise”) as well
as the Compilation Rules for Information Disclosure by 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.
28 / 137In line with relevant regulations of Accounting Standards of Business Enterprise accounting of the Company
is on accrual basis. Except for certain financial instruments the financial statement measured on historical cost.Assets have impairment been found corresponding depreciation reserves shall accrual according to relevant
rules.
2. Going concern
The Company comprehensively assessed the available information and there are no obvious factors that
impact sustainable 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 III- 33.Critical accounting
judgments and estimates
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 2021 such as financial status operation achievements and cash flow for the year of 2021.
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.
29 / 1375. 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 combination are 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 reckoned 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
30 / 137invested 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 “total consolidated 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
31 / 137changes 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; * The 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 notregarded as a bundle of transactions the individual transactions shall be accounted as “disposal of a portion ofan interest in 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 transactions 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;
32 / 137(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 the People'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 dateand 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
33 / 137other 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; and
* 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 contract terms terminated the recognition of the existing
financial liabilities and recognize the new financial liabilities at the same time.Financial assets are traded in the normal way and their accounting recognition and terminated the recognition 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
34 / 137generate 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 been designated 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; and
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
35 / 137are 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 loss unless the financial assets
are part of the hedging relationship.However for non-trading equity instrument investments the Company irreversibly designates them as the
financial assets that 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.
36 / 137B. 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 or other financial assets with a fixed
amount of their own equity instruments.An equity instrument is a contract that proves it has a residual equity in the assets of an 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.
37 / 137* 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. Among them 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
38 / 137their 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 and evidence-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;
39 / 137D. 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
40 / 137in 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 10. Financial Instrument in Note III.
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 withdrew 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 as agreed 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
41 / 137the 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
42 / 137depreciation 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 into current gains/losses. As for other accounting
policies found more in “10. Financial instrument” in Note III.
(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 assets transferred 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.
43 / 137* 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 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 accounted for using cost method 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
44 / 137investment 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 of acquisition 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
45 / 137subsidiaries 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 disposal of long-term equity
investments relative to the net assets of the subsidiary is charged to the owners’ equity. If disposal of a portion
of the long-term equity investments in a subsidiary by the parent company results in a change in control it
shall be accounted for in accordance with the relevant accounting policies as described in Note III.-6
“Preparation Method of the Consolidated Financial Statements”.On disposal of a long-term equity investment otherwise the difference between the carrying amount of the
investment and the 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
46 / 137(excluding net profit or loss other comprehensive income and profit distribution under net asset of invested
party accounted for and recognized using equity method) shall be transferred to profit or loss for the current
period at the time when the control over 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 provisionFound more in Note III-22.”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 than 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 party the 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.
47 / 13715. 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 III- “22.Impairmentof 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
Category Years of depreciation (Year) Scrap value rate(%) Yearly depreciation rate(%)
House and Building
20~3552.71~4.75
Machinery equipment
1059.50
Transportation equipment
4~5519.00~23.75
Electronic and other
3～1059.50～31.67
For the feiqxueidp maesnste ts with impairment provision the depreciation amount shall be calculated after deducting the
accumulated amount of impairment provision for fixed assets
(3) Recognition basis valuation and depreciation method for financial lease assets 【Applicable to year of
2020】
The Company affirms those that conform to below one or several criteria as the finance lease fixed assets:
* Agreed in the lease contract (or made a reasonable judgment according to the correlated conditions on the
lease commencement date) the ownership of lease fixed assets can be transferred to the Company after the
expiry of the lease period;
* The Company has the option to purchase or lease the fixed assets and the purchase price is estimated to be
much less than the fair value of the lease of fixed assets when exercises the options so whether the Company
will exercise the option can be reasonably determined on the lease commencement date;
* Even though the fixed asset ownership is not transferred the lease term accounts for 75% of the service life
48 / 137of the lease fixed assets;
* The present value of the Company’s of minimum lease payment on the lease commencement date is
equivalent to 90% or more of the fair value of the lease fixed assets on the lease commencement date; the
present value of the leaser’s of minimum lease payment on the lease commencement date is equivalent to 90%
or more of the fair value of the lease fixed assets on the lease commencement date;
* The leased assets with special properties can only be used by the Company without major modifications.The fixed assets rented by finance leases is calculated as the book value according to the lower one between
the fair value of leased assets on the lease commencement date and the present value of the minimum lease
payments.
(4) The impairment test method and provision for impairment of fixed assets
The impairment test method and provision for impairment of fixed assets found more in Note
III-22.“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 projects
under construction 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
Confirmation 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.
49 / 137(2) Contract liabilities
The Company lists the obligation to transfer goods or provide labor services to customers for the consideration
received or receivable from customers as contract 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 more than 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 some 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.
50 / 13720. 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 lease payments 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
51 / 137years 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 be carried.Impairment testing methods and accrual 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. An asset’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
52 / 137prepare 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 or relevant 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.
53 / 137(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. Thereinto 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 benefitliability 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
54 / 137cash-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 equity instrument 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
canceled 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
55 / 137date 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 or termination 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. Accrual liability
(1) Recognition principle
An obligation related to a contingency such as guarantees provided to outsiders pending litigation or
arbitration product warranties redundancy plans onerous contracts reconstructing expected disposal of fixed
assets etc. shall be recognized as an estimated liability when all of the following conditions are satisfied:
* 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
56 / 1371)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 under construction 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 the goods 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
57 / 137company 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 standard for the revenue recognition of the sales of goods and the specific judgment
standard for the confirmation time:
The time when the Company’s domestic sales revenue is confirmed: The company delivers the goods
according to the order. On the reconciliation date agreed with the buyer check the goods received and
inspected by the buyer during the period from the last reconciliation date to this reconciliation date with the
buyer and the risks and rewards are transferred to the buyer after checking the Company issues an invoice to
the buyer according to the type quantity and amount confirmed in the reconciliation and confirms the
realization of sales revenue on the reconciliation day.The time when the Company’s foreign sales revenue is confirmed: After the customs review is completed the
Company will confirm the realization of the sales revenue according to the export date specified on the
customs declaration.
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 can not be reliably acquired than measured by nominal amount.
(3) Accounting treatment
A government grant related to an asset shall be recognized as deferred income and reckoned into 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.
58 / 137A 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
Accounting policy to be applied from January 1 2021
A lease is a contract whereby the lessor transfers the right to use the asset to the lessee for consideration within
a certain period of time. On the commencement date of the contract the Company assesses whether the
contract is a lease or contains a lease. A contract is or contains a lease if a party to a contract transfers its right
to control the use of one or more identified assets for a certain period of time in exchange for consideration. If
the contract contains multiple separate leases at the same time the Company shall split the contract and
conduct accounting treatment for each separate lease. If the contract contains both lease and non-lease parts
the lessee and the lessor shall split the lease and non-lease parts.
(1) The Company as the lesseeFor the general accounting treatment of the Company as a lessee please refer to Note III. 20 “Right-of-useassets” and Note III. 26 “Lease liabilities”.For short-term leases with a lease term of not more than 12 months and leases of low-value assets with low
value when a single asset is new the Company chooses not to recognize right-of-use assets and lease liabilities
and the relevant rental expenses are included in the current profit and loss or related asset cost on a
59 / 137straight-line basis during each period of the lease term.
If the lease changes and the following conditions are met at the same time the Company will account for the
lease change as a separate lease: the lease change expands the scope of the lease by adding the right to use one
or more leased assets; the increased consideration is equivalent to the amount of the separate price for the
expanded part of the lease adjusted according to the contract situation. If the lease change is not accounted for
as a separate lease on the effective date of the lease change the Company shall re-allocate the consideration of
the contract after the change re-determine the lease term and remeasure the lease liability at the present value
calculated according to the changed lease payment and the revised discount rate.
(2) The Company as the lessor
On the lease commencement date the Company classifies the leases that have substantially transferred almost
all the risks and rewards related to the ownership of leased assets as finance leases and other leases are
operating leases.
1) Operating lease
The Company recognizes the lease receipts as rental income on a straight-line basis during each period of the
lease term. The initial direct expenses incurred are capitalized and amortized on the same basis as rental
income recognition and are included in the current profit and loss in installments. The variable lease payments
obtained by the Company related to operating leases but not included in the lease receipts are included in the
current profit and loss when actually incurred.
2) Finance lease
On the commencement date of the lease term the Company recognizes the finance lease receivables based on
the net investment in the lease (the sum of the unguaranteed residual value and the present value of the lease
receipts not yet received on the commencement date of the lease term and discounted at the interest rate
implicit in the lease) and derecognizes the finance lease assets. During each period of the lease term the
Company calculates and recognizes interest income based on the interest rate implicit in the lease. The variable
lease payments obtained by the Company which are not included in the net lease investment measurement are
included in the current profit and loss when actually incurred.
(3) Sale and leaseback
In accordance with the provisions of the Accounting Standards for Business Enterprises No. 14 - Revenue the
Company evaluates and determines whether the asset transfer in the sale and leaseback transaction is a sale.
1) The Company as the lessee
If the asset transfer in a sale-and-leaseback transaction is a sale the Company shall measure the right-of-use
asset formed by the sale and leaseback based on the part of the original book value of the asset related to the
right of use obtained by leaseback and shall only recognize the gain or loss relevant to the rights transferred to
the lessor.If the asset transfer in a sale-and-leaseback transaction is not a sale the Company shall continue to recognize
the transferred asset and at the same time recognize a financial liability equal to the transfer income and
account for the financial liability in accordance with the Accounting Standards for Business Enterprises No. 22
- Recognition and Measurement of Financial Instruments.
60 / 1372) The Company as the lessor
If the asset transfer in a sale-and-leaseback transaction is a sale the Company shall account for the purchase of
assets in accordance with other applicable accounting standards for business enterprises and shall account for
the lease of assets in accordance with the Accounting Standards for Business Enterprises No. 21 - Leases.If the asset transfer in a sale-and-leaseback transaction is not a sale the Company shall not recognize the
transferred asset but recognize a financial asset equal to the transfer income and account for the financial
asset in accordance with the Accounting Standards for Business Enterprises No. 22 - Recognition and
Measurement of Financial Instruments.Accounting policy applied in 2020
(1)Accounting for operating lease
The rental fee paid for renting the properties by the Company are amortized by the straight-line method and
reckoned in the current expenses throughout the lease term without deducting rent-free period. The initial direct
costs related to the lease transactions paid by the company are reckoned in the current expenses.When the lessor undertakes the expenses related to the lease that should be undertaken by the Company the
Company shall deduct the expenses from the total rental costs share by the deducted rental costs during the
lease term and reckon in the current expenses.Rental obtained from assets leasing during the whole leasing period without rent-free period excluded shall
be amortized by straight-line method and recognized as leasing revenue. The initial direct costs paid with
leasing transaction concerned are reckoned into current expenditure; the amount is larger is capitalized when
incurred and accounted for as profit or loss for the current period on the same basis as recognition of rental
income over the entire lease period.When the Company undertakes the expenses related to the lease that should be undertaken by the lessor the
company shall deduct the expenses from the total rental income and distribute by the deducted rental costs
during the lease term.
(2) Accounting treatment for financing lease
Assets lease-in by financing: On the beginning date of the lease the entry value of leased asset shall be at the
lower of the fair value of the leased asset and the present value of minimum lease payment at the beginning
date of the lease. Minimum lease payment shall be the entry value of long-term accounts payable with
difference recognized as unrecognized financing expenses.Unrecognized financing expenses shall be reckoned
in financial expenses and amortized and using effective interest method during the leasing period. The initial
direct costs incurred by the Company shall be reckoned into value of assets lease-in.Finance leased assets: on the lease commencement date the company affirms the balance among the finance
lease receivables the sum of unguaranteed residual value and its present value as the unrealized financing
income and recognizes it as the rental income during the period of receiving the rent. For the initial direct
costs related to the rental transaction the company reckons in the initial measurement of the finance lease
receivables and reduces the amount of income confirmed in the lease term.
61 / 13732. Changes of important accounting policy and estimation
（1）Changes of important accounting policies
Implementation of new leasing standard:
The Ministry of Finance issued the revised Accounting Standards for Business Enterprise No.21- Lease in
December 2018. the Company will implement the new leasing standards from January 1 2021. For the
contracts existing prior to the date of first implementation the Company has chosen not to re-assess whether
they are leases or contains a leases. The Company adjusted the amount of retained earnings and other related
items in financial statements at the beginning of the year of initial implementation based on the cumulative
effect of initial implementation without adjusting the information for comparable period.Main effects of implementing the new leasing standard on financial statement as of January 1 2021 are as
follows:
Consolidated financial statement: Unit: CNY/RMB
Item 2020-12-31 Impact amount 2021-1-1
Fixed assets 2882230191.08 -11878720.71 2870351470.37
Right-of-use assets -- 33192094.14 33192094.14
Non-current liability due within one year 36914242.02 4570870.79 41485112.81
Lease liability -- 22604755.70 22604755.70
Long-term payable 39479218.17 -5862253.06 33616965.11
Financial statement of parent company: Unit: CNY/RMB
Item 2020-12-31 Impact amount 2021-1-1
Right-of-use assets -- 1710935.83 1710935.83
Lease liability -- 1269864.48 1269864.48
Non-current liability due within one year -- 441071.35 441071.35
(2) Changes of important accounting estimations
N/A
(3) Adjustment the financial statements at the beginning of the first year of implementation of new leasing
standards since 2021
Consolidate balance sheet
Unit: CNY/RMB
Item 2020-12-31 2021-01-01 Adjustments
Current assets:
Monetary funds 1963289832.33 1963289832.33
Trading financial asset 3518432939.10 3518432939.10
Derivative financial assets
Note receivable 1657315723.56 1657315723.56
Account receivable 2824780352.41 2824780352.41
Receivable financing 1005524477.88 1005524477.88
62 / 137Item 2020-12-31 2021-01-01 Adjustments
Account paid in advance 151873357.76 151873357.76
Other account receivables 54209580.88 54209580.88
Inventory 2877182174.64 2877182174.64
Contract assets
Assets held for sale
Non-current asset due within
one year
Other current assets 2137921113.61 2137921113.61
Total current assets 16190529552.17 16190529552.17
Non-current assets:
Debt investment
Other debt investment
Long-term account receivables
Long-term equity investment 4801488290.97 4801488290.97
Other equity instrument
285048000.00285048000.00
investment
Other non-current financial
1805788421.001805788421.00
assets
Investment real estate 20886681.62 20886681.62
Fixed assets 2882230191.08 2870351470.37 -11878720.71
Construction in progress 243795493.04 243795493.04
Productive biological assets
Oil and gas assets
Right-of-use assets 33192094.14 33192094.14
Intangible assets 454412947.69 454412947.69
Development expenses
Goodwill 257800696.32 257800696.32
Long-term deferred expenses 15062171.09 15062171.09
Deferred income tax assets 198393501.50 198393501.50
Other non-current assets 195259441.73 195259441.73
Total non-current assets 11160165836.04 11181479209.47 21313373.43
Total assets 27350695388.21 27372008761.64 21313373.43
Current liabilities:
Short-term borrowings 302238600.05 302238600.05
Trading financial liability
Derivative financial liability
Note payable 2462592372.82 2462592372.82
Account payable 4100984240.39 4100984240.39
63 / 137Item 2020-12-31 2021-01-01 Adjustments
Account received in advance 4071236.87 4071236.87
Contract liability 81717387.25 81717387.25
Wage payable 332421811.82 332421811.82
Taxes payable 67493690.29 67493690.29
Other account payable 361556257.42 361556257.42
Liability held for sale
Non-current liability due
36914242.0241485112.814570870.79
within one year
Other current liabilities 222871087.33 222871087.33
Total current liabilities 7972860926.26 7977431797.05 4570870.79
Non-current liabilities:
Long-term loans 3050640.97 3050640.97
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability 22604755.70 22604755.70
Long-term account payable 39479218.17 33616965.11 -5862253.06
Long-term wages payable 181980293.94 181980293.94
Accrual liability
Deferred income 328204476.73 328204476.73
Deferred income tax liabilities 30653933.12 30653933.12
Other non-current liabilities
Total non-current liabilities 583368562.93 600111065.57 16742502.64
Total liabilities 8556229489.19 8577542862.62 21313373.43
Owner’s equity:
Paid-in capital (or share capital) 1008950570.00 1008950570.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve 3294242368.28 3294242368.28
Less: Inventory shares 303627977.74 303627977.74
Other comprehensive income 13916619.47 13916619.47
Reasonable reserve 2333490.03 2333490.03
Surplus public reserve 510100496.00 510100496.00
Retained profit 13756102424.62 13756102424.62
Total owner’ s equity attributable to
18282017990.6618282017990.66
parent company
64 / 137Item 2020-12-31 2021-01-01 Adjustments
Minority interests 512447908.36 512447908.36
Total owner’ s equity 18794465899.02 18794465899.02
Total liabilities and owner’ s equity 27350695388.21 27372008761.64 21313373.43
Balance sheet of parent company
Unit: CNY/RMB
Item 2020-12-31 2021-01-01 Adjustments
Current assets:
Monetary funds 1157684053.05 1157684053.05
Trading financial asset 3452348980.19 3452348980.19
Derivative financial assets
Note receivable 422246979.39 422246979.39
Account receivable 982782279.22 982782279.22
Receivable financing
Account paid in advance 75650090.49 75650090.49
Other account receivable 197335714.63 197335714.63
Inventories 725276241.43 725276241.43
Contract assets
Assets held for sale
Non-current assets maturing
within one year
Other current assets 2057772839.50 2057772839.50
Total current assets 9071097177.90 9071097177.90
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments 5978128303.88 5978128303.88
Investment in other equity
209108000.00209108000.00
instrument
Other non-current financial
1805788421.001805788421.00
assets
Investment real estate
Fixed assets 1758198856.53 1758198856.53
Construction in progress 154741266.85 154741266.85
Productive biological assets
Oil and gas assets
Right-of-use assets 1710935.83 1710935.83
Intangible assets 208112706.57 208112706.57
Research and development
65 / 137Item 2020-12-31 2021-01-01 Adjustments
costs
Goodwill
Long-term deferred expenses
Deferred income tax assets 76508392.85 76508392.85
Other non-current assets 117013906.01 117013906.01
Total non-current assets 10307599853.69 10309310789.52 1710935.83
Total assets 19378697031.59 19380407967.42 1710935.83
Current liabilities:
Short-term borrowings 102088888.89 102088888.89
Trading financial liability
Derivative financial liability
Notes payable 448901718.36 448901718.36
Account payable 1265845068.26 1265845068.26
Accounts received in advance
Contract liability 6209575.73 6209575.73
Wage payable 216870819.60 216870819.60
Taxes payable 32974322.59 32974322.59
Other accounts payable 339096991.12 339096991.12
Liability held for sale
Non-current liability due
441071.35441071.35
within one year
Other current liabilities 182611991.54 182611991.54
Total current liabilities 2594599376.09 2595040447.44 441071.35
Non-current liabilities:
Long-term loans
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability 1269864.48 1269864.48
Long-term payable
Long term employee
176245345.03176245345.03
compensation payable
Accrued liabilities
Deferred income 285714239.98 285714239.98
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 461959585.01 463229449.49 1269864.48
Total liabilities 3056558961.10 3058269896.93 1710935.83
Owners’ equity:
Paid-in capital (Share capital) 1008950570.00 1008950570.00
66 / 137Item 2020-12-31 2021-01-01 Adjustments
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve 3407732016.61 3407732016.61
Less: Inventory shares 303627977.74 303627977.74
Other comprehensive income
Reasonable reserve
Surplus public reserve 510100496.00 510100496.00
Retained profit 11698982965.62 11698982965.62
Total owner’s equity 16322138070.49 16322138070.49
Total liabilities and owner’s equity 19378697031.59 19380407967.42 1710935.83
33. Critical 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 judgements 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 impairment
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
67 / 137the 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 & 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
68 / 137model 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 above estimates and assumptions and makes adjustments if necessary.
(6) Income tax
In the Company’s normal business activities the final tax treatment and calculation of 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 income and 25%(IRDDenmark)
VAT VAT is calculated based on the difference after deducting the 21%(BoritBelgium)13%
input tax available for deduction for the current period 9% 6% Collection rate 5%
City maintaining &
Turnover tax payable 7%、5%
construction tax
Educational surtax Turnover tax payable 5%15% 20% 、 21% （ IRDAmerica、Borit America）
Corporation income tax Taxable income
22%（IRDDenmark） 25%
（BoritBelgium）
2. Preferential taxation
The Company WFJN WFLD and WFTT are accredited as a high-tech enterprise in 2020 and enjoy a preferential income tax
rate of 15% from 1 January 2020 to 31 December 2022. WFAM is accredited as a high-tech enterprise in 2021 and enjoy a
preferential income tax rate of 15% from 1 January 2021 to 31 December 2023.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 NDRCfrom 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 in the current year can pay
the corporate income tax at the tax rate of 15%. In 2021 WFLD (Chongqing) paid its corporate income tax at the tax rate of 15%.In 2021 Weifu Leader (Wuhan) met the standards of small and low-profit enterprises and the part of taxable income that did not
exceed 1 million Yuan was included in the taxable incomeat 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 50% and the corporate income tax was paid at the tax rate of 20%.V. Note s to major it e ms in co nso lidate d f ina nc ial s tate me nts
(Monetary unit refers to RMB/CNY below unless otherwise specified.The end of the period refers to December 31
2021 the beginning of the period refers to January 1 2021 the current period refers to 2021 and the last period
refers to 2020.)
1. Monetary funds
69 / 137Item Ending balance Opening balance
Cash on hand 150438.79 507.66
Cash in bank 1864868497.94 1905945511.04
Other Monetary funds 31044328.96 57343813.63
Total 1896063265.69 1963289832.33
Including: Total amount saving aboard 69969414.25 33723245.25
Total amount with restriction on use for mortgage pledge or freeze 31044328.96 57343813.63
Other explanation:
The ending balance of other monetary funds includes bank acceptance bill deposit 17459061.33 yuan Mastercard deposit
194220.00 yuan frozen dividends 4044016.40 yuan and the foreign exchange contract margin is 9347031.23 yuan. The frozen
dividend of 4044016.40 yuan represents the part of dividends distributed by SDEC (stock code:600841) and Miracle
Automation (stock code:002009) from 2017 to 2021 held by the Company as financial assets available for sale. According to the
notices numbered Yue 03MC [2016]2490 and Yue 03MC [2016]2492 served by Guangdong Shenzhen Intermediate People’s
Court these dividends were frozen.
2. Transaction financial asset
Item Ending balance Opening balance
Financial assets measured by fair value and with variation reckoned into
6076436069.423518432939.10
current gains/losses
Including: SDEC share 153643308.00 140395956.00
Miracle Automation share 113793600.00 47712300.00
Lifan Technology 77802.11 --
Financial products -- 3330324683.10
Foreign exchange contract 74734940.30 --
Investment in other debt instruments and equity instruments 5734186419.01
Total 6076436069.42 3518432939.10
3. Note receivable
(1) Classification of notes receivable:
Item Ending balance Opening balance
Bank acceptance bill 968022652.08 1312571695.46
Trade acceptance bill 148527534.13 344744028.10
Total 1116550186.21 1657315723.56
Ending balance
Category Book balance Bad debt reserve
Accrual ratio Book value
Amount Ratio (%) Amount
(%)
Note receivable with bad debt
1116550186.21100.00----1116550186.21
provision accrual on portfolio
Portfolio 1: bank acceptance bill 968022652.08 86.70 -- -- 968022652.08
Portfolio 2: trade acceptance bill 148527534.13 13.30 -- -- 148527534.13
Total 1116550186.21 100.00 -- -- 1116550186.21
On December 31 2021 the company accrued bad debt provisions according to the expected credit losses for the entire duration
bank acceptance bills and trade acceptance bill do not need to accrue bad debt provisions.The company believed that the bank
70 / 137acceptance bills held did not have significant credit risk and would not cause significant losses due to bank defaults.The trade
acceptance bill held by the Company did not have significant credit risk because these bills were mainly issued by large
state-owned enterprises and listed companies with good reputation and based on historical experience there had been no major
defaults so they did not accrue bad debt provisions for the receivable bank acceptance bills and trade acceptance bill.
(2) Notes receivable already pledged by the Company at the end of the period:
Item Amount pledge at period-end
Bank acceptance bill 655932358.60
Trade acceptance bill 71998451.45
Total 727930810.05
(3) Notes endorsement or discount and undue on balance sheet date
Amount derecognition at Amount not derecognition at
Item
period-end period-end
Bank acceptance bill 209012512.01 --
Trade acceptance bill 299864.89 --
Total 209312376.9 --
(4) Notes transfer to account receivable due for failure implementation by drawer at period-end:
Item Amount transfer to account receivable at period-end
Trade acceptance bill 7300000.00
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 “BDbills”); In 2018 the amount
transferred to account receivable was 7 million yuan and 1.7 million yuan has been recovered in 2019 and an increase of 2
million yuan was added in 2020.
4. Account receivable
(1) Classification of account receivable:
Ending balance
Category Book balance Bad debt reserve
Book value
Amount Ratio (%) Amount Accrual ratio (%)
Account receivable with bad debt
61361142.442.8761361142.44100.00--
provision accrual on a single basis
Account receivable with bad debt
2076986857.8297.1323186564.051.122053800293.77
provision accrual on portfolio
Total 2138348000.26 100.00 84547706.49 3.95 2053800293.77
Opening balance
Category Book balance Bad debt reserve
Book value
Amount Ratio (%) Amount Accrual ratio (%)
with bad debt provision accrual
80362095.352.7480362095.35100.00--
on a single basis
with bad debt provision accrual
2847529398.1197.2622749045.700.802824780352.41
on portfolio
Total 2927891493.46 100.00 103111141.05 3.52 2824780352.41
71 / 137* Bad debt provision accrual on single basis:
Ending balance
Account receivable(by unit) Book balance Bad debt reserve Accrual Accrual causes
ratio (%)
Hubei Meiyang Auto Industry Co. Ltd. 20139669.45 20139669.45 100.00 Have difficulty in collection
Hunan Leopaard Auto Co. Ltd. 8910778.54 8910778.54 100.00 Have difficulty in collection
BD bills 7300000.00 7300000.00 100.00 Have difficulty in collection
Linyi Zotye Automobile components
6193466.77 6193466.77 100.00 Have difficulty in collection
Manufacturing Co. Ltd.TonglingRuineng Purchasing Co. Ltd. 4320454.34 4320454.34 100.00 Have difficulty in collection
Brilliance Automotive Group Holdings Co. Ltd. 3469091.33 3469091.33 100.00 Have difficulty in collection
Zhejiang Zotye Auto Manufacturing Co. Ltd. 3217763.27 3217763.27 100.00 Have difficulty in collection
Dongfeng Chaoyang Diesel Co. Ltd. 1951447.02 1951447.02 100.00 Have difficulty in collection
Jiangsu Kawei Auto Industrial Group Co. Ltd. 1932476.26 1932476.26 100.00 Have difficulty in collection
Jiangsu Jintan Automobile Industry Co. Ltd. 1059798.43 1059798.43 100.00 Have difficulty in collection
Tianjin Leiwo Engine Co. Ltd. 1018054.89 1018054.89 100.00 Have difficulty in collection
Other custom 1848142.14 1848142.14 100.00 Have difficulty in collection
Total 61361142.44 61361142.44 100.00 Have difficulty in collection
* Bad debt provision accrual on portfolio:
Ending balance
Account age
Book balance Bad debt reserve Accrual ratio (%)
Within 6 months 1931412052.09 -- --
6 months to one year 119054169.59 11905416.94 10.00
1-2 years 16418405.74 3283681.15 20.00
2-3 years 3507940.74 1403176.30 40.00
Over 3 years 6594289.66 6594289.66 100.00
Total 2076986857.82 23186564.05 1.12
* In the portfolio there is no account receivable bad debt reserves are accrued by other methods
* By account age (Including single provision and portfolio provision):
Account age Ending Book balance
Within one year 2050737706.77
Including: within 6 months 1931412052.09
6 months to one year 119325654.68
1-2 years 18459228.41
2-3 years 25770931.96
Over 3 years 43380133.12
Total 2138348000.26
(2) Bad debt provision accrual collected or switch back:
Amount changed in the period
Opening Conversion of foreign
Category Collected or Ending balance
balance Accrual Written-off currency financial
reversal
statement
Bad debt
103111141.051857333.456229404.6214157037.63-34325.7684547706.49
reserve
Important bad debt provision collected or switch back: nil
72 / 137(3) Account receivable actual charge off in the Period
Item Amount charge off Resulted by related transaction (Y/N)
Jiangxi Dorcen Automobile Industry Co. Ltd. 3867632.16 N
Changchun FAW Sihuan Engine Manufacturing Co. Ltd 1755724.70 N
Wuxi Kaipu Machinery Co. Ltd. 1713322.55 N
Jiangxi Dorcen Automobile Co. Ltd. 1338959.01 N
MianyangXinchen Power Machinery Co. Ltd. 1268437.72 N
Fujian Zhao’an Country MinyueBianjie Agricultural
1111007.12 N
Machinery Automobile Components Co. Ltd.Penglai Branch of Beiben Truck Group Co. Ltd. 678390.63 N
Guangxi Nanning Kaiyuan Auto Parts Co. Ltd. 666203.00 N
Changzhou Borui Oil Pump & Nozzle Co. Ltd. 646437.00 N
Retail enterprise 1110923.74 N
Total 14157037.63
(4) Top 5 receivables at ending balance by arrears party
Ratio in total ending
Ending balance of account Ending balance of bad
Name balance of account
receivable debt reserve
receivables (%)
Custom 1 289459996.19 13.54 80832.31
Robert Bosch Company 236685486.17 11.07 426203.85
Custom 3 140266272.68 6.56 599358.62
Custom 4 133236949.33 6.23 7142200.43
Custom 5 131705063.69 6.16 1141038.44
Total 931353768.06 43.56 9389633.65
(5) Account receivable derecognition due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvement
Nil
5. Receivables financing
(1) Classification of receivables financing:
Item Ending balance Opening balance
Note receivable 713017014.50 1005524477.88
Including: bank acceptance bill 713017014.50 1005524477.88
Trade acceptance bill -- --
Total 713017014.50 1005524477.88
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) Notes receivable already pledged by the Company at the end of the period:
73 / 137Item Amount pledge at period-end
Bank acceptance bill 191355521.58
Trade acceptance bill --
Total 191355521.58
(3) Notes endorsement or discount and undue on balance sheet date
Amount not derecognition at
Item Amount derecognition at period-end
period-end
Bank acceptance bill 823381192.26 --
Trade acceptance bill -- --
Total 823381192.26 --
6. Account paid in advance
(1) Account age of account paid in advance
Ending balance Opening balance
Account age
Amount Ratio (%) Amount Ratio (%)
Within one year 172019278.72 96.61 146877271.37 96.71
1-2 years 3318636.20 1.86 2799827.49 1.84
2-3 years 1140843.34 0.64 1254109.33 0.83
Over 3 years 1580491.73 0.89 942149.57 0.62
Total 178059249.99 100.00 151873357.76 100.00
Explanation on reasons of failure to settle on important advance payment with age over one year:
Nil
(2) Top 5 advance payment at ending balance by prepayment object
Total year-end balance of top five advance payment by prepayment object amounted to 88572262.16 yuan takes 49.74 percent
of the total advance payment at year-end.
7. Other account receivables
Item Ending balance Opening balance
Interest receivable -- --
Dividend receivable -- 49000000.00
Other account receivables 17908078.54 5209580.88
Total 17908078.54 54209580.88
(1) Interest receivable
Nil
(2) Dividend receivable
1) Category of dividend receivable
Invested enterprise Ending balance Opening balance
Wuxi WFEC Catalyst Co. Ltd. -- 49000000.00
Total -- 49000000.00
2) Important dividend receivable with account age over one year
Nil
(3) Other account receivables
74 / 1371) Other account receivables classification by nature
Nature Ending balance Opening balance
Intercourse funds from units 1991247.85 --
Cash deposit 6212842.61 5650143.62
Staff loans and petty cash 555076.61 766301.05
Social security and provident fund paid 10547050.70 --
Other 1952403.17 1651737.93
Total 21258620.94 8068182.60
2) Accrual of bad debt provision
Phase I Phase II Phase III
Expected credit losses Expected credit losses
Bad debt reserve Expected credit for the entire duration for the entire duration Total
losses over next
(without credit (with credit impairment
12 months
impairment occurred) occurred)
Balance on Jan. 1 2021 2826778.32 -- 31823.40 2858601.72
Balance of Jan. 1 2021 in the period -- -- -- --
--transfer-in phase II -- -- -- --
--transfer-in phase III -- -- -- --
-- switch back phase II -- -- -- --
-- switch back phase I -- -- -- --
Current accrual 493305.68 -- -- 493305.68
Current reversal -- -- -- --
Current written-off 1365.00 -- -- 1365.00
Other change -- -- -- --
Balance on Dec. 31 2021 3318719.00 -- 31823.40 3350542.40
By account age (Including single provision and portfolio provision)
Account age Ending Book balance
Within one year 15539862.54
Including: Within 6 months 15439862.54
6 months to one year 100000.00
1-2 years 3004533.40
2-3 years 80.00
Over 3 years 2714145.00
Total 21258620.94
3) Bad debt provision accrual collected or switch back
Amount changed in the period
Opening
Category Collected or Conversion of foreign Ending balance
balance Accrual Written-off
reversal currency financial statement
Bad debt
2858601.72493305.68--1365.00--3350542.40
reserve
75 / 1374) Other receivables actually written-off during the reporting period
Item Amount charge off
American HESS Company 1365.00
5) Top 5 other receivables at ending balance by arrears party
Ending
Ratio
Name Nature Ending balance Account age balance of bad
(%)
debt reserve
Ningbo Jiangbei High-Tech Industry Park
Deposit margin 1767000.00 Over 3 years 8.31 1767000.00
Development Construction Co. Ltd.Within 6 months
Wuxi China Resources Gas Co. Ltd. Deposit margin 1346300.00 6.33 205200.00
1-2 years
Autocam (China) Auto Parts Co. Ltd. Current accounts 1298252.55 Within 6 months 6.11 --
Zhenkunxing Industrial Supermarket
Deposit margin 1000000.00 1-2 years 4.70 200000.00
(Shanghai) Co. Ltd.Robert Bosch Company Current accounts 692995.30 Within 6 months 3.26 --
Total 6104547.85 28.71 2172200.00
6) Other account receivables related to government grants: Nil
7) Other receivable for termination of confirmation due to the transfer of financial assets: Nil
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved: Nil
8. Inventory
(1) Category of inventory
Ending balance Opening balance
Item
Book balance Depreciation Book value Book balance Depreciation Book value
reserve reserve
Raw materials 693636748.61 84791307.00 608845441.61 584188987.86 73833368.32 510355619.54
Goods in process 406224039.14 18593866.28 387630172.86 415445852.86 14589096.65 400856756.21
Finished goods 2578635721.74 129714961.12 2448920760.62 2124817656.18 158847857.29 1965969798.89
Total 3678496509.49 233100134.40 3445396375.09 3124452496.90 247270322.26 2877182174.64
(2) Inventory depreciation reserve
Current increased
Inventory Opening
Conversion of foreign Ending balance
category balance Accrual Resell
currency financial statement
Raw materials 73833368.32 40167342.95 28741058.76 -468345.51 84791307.00
Goods in process 14589096.65 12204540.06 8199770.43 -- 18593866.28
Finished goods 158847857.29 82062784.53 110926015.28 -269665.42 129714961.12
Total 247270322.26 134434667.54 147866844.47 -738010.93 233100134.40
* Net realizable value of the inventory refers to: during the day-to-day activities results of the estimated sale price less costs
which are going to happen by estimation till works completed sales price estimated and relevant taxes.* Accrual basis for inventory depreciation reserve:
Accrual basis for inventory impairment Specific basis for recognition
Item
provision
The materials sold due to finished goods Results from the estimated sale price of such inventory less the cost
Raw materials manufactured its net realizable value is what will happen estimated sales expenses and relevant taxes till
lower than the book value the goods completed
76 / 137The goods in process sold due to finished Results from the estimated sale price of such inventory less the cost
Goods in process goods manufactured its net realizable what will happen estimated sales expenses and relevant taxes till
value is lower than the book value the goods completed
Accrual basis for inventory impairment Specific basis for recognition
Finished goods
provision
* Reasons of write-off for inventory falling price reserves:
Item Reasons of write-off
Raw 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 Period
Finished goods Sales in the Period
(3) Explanation on capitalization of borrowing costs at ending balance of inventory
Nil
9. Other current assets
Item Ending balance Opening balance
Structured deposits -- 1925000000.00
Receivable export tax rebates 6457803.72 5286965.71
VAT refund receivable 3985115.26 --
Prepaid taxes and VAT retained 204700549.12 200524304.70
Input tax to be deducted and certification 6274.43 178073.42
Other 5171179.97 6931769.78
Total 220320922.50 2137921113.61
77 / 13710. Long-term equity investments
Current changes (+ -)
Conversio
Cash Ending
Investment Other Provision n of
The invested Opening Capital Other dividend or balance of
Additional gain/loss comprehensiv for Disposa foreign Ending balance
entity balance reductio equity profit depreciatio
investment recognized e income impairmen l gains currency
n change announced t n reserves under equity adjustment financial
to issued
statement
Associated
enterprise
Wuxi
WFECal
677317176.28-----215155778.6816885.14--98000000.00--------794489840.10--
Catalysts. Co.Ltd.Robert Bosch
2800589709.41097650070.3558125544.3
Powertrain -- -- -- -- -- --- --- 3340114235.45 --
Ltd. 0 5 0
Zhonglian
Automobile 1237548856.3 198800000.0
----339826929.46------------1378575785.77--
Electronics 1 0
Co. Ltd.Wuxi Weifu
Precision
6638000.0
Machinery 74854070.65 -- -- -5477798.38 -- 30000000.00 -- --- --- 46014272.27 --
Manufacturin 0
g Co. Ltd.Shinwell
Automobile
298865.0
Technology 982750.11 -- -683885.10 -- -- -- -- --- --- --- --
(Wuxi) Co. 1
Ltd.Changchun
XuyangWeifu
Automobile
10195728.22----153091.71--------------10348819.93--
components
Technology
Co. Ltd.
78 / 137Current changes (+ -)
Conversio
Cash Ending
Investment Other Provision n of
The invested Opening Capital Other dividend or balance of
Additional gain/loss comprehensiv for Disposa foreign Ending balance
entity balance reductio equity profit depreciatio
investment recognized e income impairmen l gains currency
n change announced t n reserves under equity adjustment financial
to issued
statement
Precors
--5901794.22---87249.63----------------468665.615378.98
GmbH
Wuxi
ChelianTianxi
150000000.0
a Information -- -- -6944044.38 -- -- -- -- --- --- 143055955.62
Technology 0
Co. Ltd.
4801488290.9155901794.2298865.01639592892.76638000.0884925544.35717944788.1
Total 16885.14 -- --- -468665.61 --
7211002
Explanation on those holding less than 20% of the voting rights but with significant influence:
(1)Precors GmbH:
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 ChelianTianxia Information Technology Co. Ltd.(Hereinafter referred to as "ChelianTianxia"):
The Company holds 8.8295% 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.
79 / 13711. Other equity instrument investment
Item Ending balance Opening balance
Wuxi Xidong Science & Technology Industrial Park 5000000.00 5000000.00
Beijing Zhike Industry Investment Holding Group Co. Ltd. 75940000.00 75940000.00
Rare earth Catalysis Innovation Research Institute (Dongying) Co. Ltd. 4108000.00 4108000.00
Wuxi Xichang Microchip Semi-Conductor 200000000.00 200000000.00
Total 285048000.00 285048000.00
12. Other non-current financial assets
Item Ending balance Opening balance
Guolian Securities 208795178.00 326848122.00
Tradable financial assets holding for over one year 1467000000.00
Investments in other debt instruments and equity
1482000000.0011940299.00
instruments held for more than one year
Total 1690795178.00 1805788421.00
13. Investment real estate
(1) Investment real estate measured by cost
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 -- -- -- --
(1) outsourcing -- -- -- --
(2) Inventory\fixed assets\construction in process
--------
transfer-in
(3) increased by combination -- -- -- --
3.Current decreased -- -- -- --
(1) disposal -- -- -- --
(2) other transfer-out -- -- -- --
4.Ending balance 65524052.61 -- -- 65524052.61
II. Accumulated depreciation and accumulated amortization
1.Opening balance 44637370.99 -- -- 44637370.99
2.Current increased 1498935.06 -- -- 1498935.06
(1) accrual or amortization 1498935.06 -- -- 1498935.06
(2) Inventory\fixed assets\construction in process
--------
transfer-in
3.Current decreased -- -- -- --
(1) disposal -- -- -- --
(2) other transfer-out -- -- -- --
4.Ending balance 46136306.05 -- -- 46136306.05
80 / 137House and Construction in
Item Land use right Total
Building progress
III. Depreciation reserves
1.Opening balance -- -- -- --
2.Current increased -- -- -- --
(1) accrual -- -- -- --
3. Current decreased -- -- -- --
(1) disposal -- -- -- --
(2) other transfer-out -- -- -- --
4.Ending balance -- -- -- --
IV. Book value
1.Ending Book value 19387746.56 -- -- 19387746.56
2.Opening Book value 20886681.62 -- -- 20886681.62
(2) Investment real estate measured at fair value
Nil
14. Fixed assets
(1) Fixed assets
House and Machinery Transportation Electronic and
Item Total
Building equipment equipment other equipment
I. original book value
1.Opening balance 1584594589.53 3331362060.16 30281281.50 532011701.70 5478249632.89
2.Current increased 34390390.58 272796414.41 6970031.67 195616134.81 509772971.47
(1) Purchase -- 10668713.03 -- 833555.11 11502268.14
(2) Construction in
34390390.58254759762.246970031.67194782579.70490902764.19
progress transfer-in
(3)Financial lease transfer
--7367939.14----7367939.14
in
3.Current decreased 48746495.67 55051289.67 4478807.10 12149268.75 120425861.19
(1) disposal or scrapping 48746495.67 55051289.67 4478807.10 12149268.75 120425861.19
(2) Other -- -- -- -- --
4.Conversion of foreign
currency financial -- -8818494.71 -- -1150246.45 -9968741.16
statement
5.Ending balance 1570238484.44 3540288690.19 32772506.07 714328321.31 5857628002.01
II. Accumulated
depreciation
1.Opening balance 420143043.64 1785173380.76 22602310.15 291068729.12 2518987463.67
2.Current increased 47866276.19 213842643.95 2036120.68 141308325.34 405053366.16
(1) accrual 47866276.19 206474704.81 2036120.68 141308325.34 397685427.02
(2)Financial lease transfer
--7367939.14----7367939.14
in
3.Current decreased 28184090.54 41378900.85 4234247.04 9021470.45 82818708.88
(1) disposal or scrapping 28184090.54 41378900.85 4234247.04 9021470.45 82818708.88
81 / 137House and Machinery Transportation Electronic and
Item Total
Building equipment equipment other equipment
(2) Other -- -- -- -- --
4.Conversion of foreign
currency financial -5554362.21 -977399.51 -6531761.72
statement
5.Ending balance 439825229.29 1952082761.65 20404183.79 422378184.50 2834690359.23
III. Depreciation reserves
1.Opening balance -- 81771072.40 73319.90 7066306.55 88910698.85
2.Current increased -- 3682648.26 -- -- 3682648.26
(1) accrual -- 3682648.26 -- -- 3682648.26
(2) Other -- -- -- -- --
3.Current decreased -- 911787.05 -- 954369.79 1866156.84
(1) disposal or scrapping -- 911787.05 -- 954369.79 1866156.84
(2) Other -- -- -- -- --
4. Conversion of foreign
currency financial -- -- -- -- --
statement
5. Ending balance -- 84541933.61 73319.90 6111936.76 90727190.27
IV. Book value
1.Ending Book value 1130413255.15 1503663994.93 12295002.38 285838200.05 2932210452.51
2.Opening Book value 1164451545.89 1464417607.00 7605651.45 233876666.03 2870351470.37
Other explanation: Decreased in the Period including the scrap reduction (original value: 47038726.49 yuan accumulated
depreciation27155173.49 yuan) from WFHT Xinan Branch Plant No.1 Workshop (XI Fang Quan Zheng Zi
No.WX1000475970-1 ). Due to the business development requirement according to the investment filing certificate (Xi Xing
Xing Shen Tou Bei No.: [2021]961) issued by Administrative Approval Bureau of Wuxi Xinwu District and the Granted
Administrative License Decision Letter (Xi Gong (Zhi) Zhun Jue Zi No.: [2022]001) issued by Wuxi Municipal Public Security
Bureau the Company intends to demolish the building by explosives and rebuild to a R&D building the building was scrapped
in the current period.
(2) Temporarily idle fixed assets: nil
(3) Fixed assets acquired by operating lease: nil
(4) Fixed assets without property certification held
Item Book value Reasons for without the property certification
Plant and office building of WeifuChang’an 32262206.56 Still in process of relevant property procedures
15. Construction in progress
Item Ending balance Opening balance
Construction in progress 387429933.08 243795493.04
Engineering materials -- --
Total 387429933.08 243795493.04
82 / 137(1) Construction in progress
Ending balance Opening balance
Item Depreciatio Depreciatio
Book balance Book value Book balance Book value
n reserves n reserves
Technical
transformation of parent 88688772.85 -- 88688772.85 123249079.40 -- 123249079.40
company
Lot 103 phase V of the
89599174.42--89599174.426892365.50--6892365.50
parent company
WFMS rebuilding of
12185858.74--12185858.74------
the parent company
Technical
transformation of 72318870.79 -- 72318870.79 20720304.97 -- 20720304.97
WFAM
Technical
transformation of 13368288.81 -- 13368288.81 27031547.25 -- 27031547.25
WFLD
Technical
transformation of 23293601.39 -- 23293601.39 9649568.91 -- 9649568.91
Denmark RID
Other project 87975366.08 -- 87975366.08 56252627.01 -- 56252627.01
Total 387429933.08 -- 387429933.08 243795493.04 -- 243795493.04
(2) Changes of major projects under construction
Opening Fixed assets Other
Item Current increased transfer-in in the decreased in Ending balance
balance
Period the Period
Technical transformation of 88688772.8
123249079.40221500314.38256060620.93--
parent company 5
Lot 103 phase V of the
6892365.5082706808.92----89599174.42
parent company
WFMS rebuilding of the
--12185858.74----12185858.74
parent company
Technical transformation of
20720304.9786720543.6635121977.84--72318870.79
WFAM
Technical transformation of
27031547.2563771039.5277434297.96--13368288.81
WFLD
Technical transformation of
9649568.9113883069.18239036.70--23293601.39
Denmark RID
Total 187542866.03 480767634.40 368855933.43 -- 299454567.00
Cont.:
Proportion Accumulated
Interest
of project amount of including: interest
capitalization
Item investment Progress interest capitalized amount Source of funds
rate of the year
in budget capitalization of the year
(%)
(%)(%)
Accumulated
Technical transformation of
-- -- -- -- -- funds of the
parent company
company
83 / 137Proportion Accumulated
Interest
of project amount of including: interest
capitalization
Item investment Progress interest capitalized amount Source of funds
rate of the year
in budget capitalization of the year
(%)
(%)(%)
Lot 103 phase V of the Accumulated
-- -- -- -- -- funds of the
parent company
company
WFMS rebuilding of the Accumulated
-- -- -- -- -- funds of the
parent company
company
Accumulated
Technical transformation of
-- -- -- -- -- funds of the
WFAM
company
Accumulated
Technical transformation of
-- -- -- -- -- funds of the
WFLD
company
Accumulated
Technical transformation of
-- -- -- -- -- funds of the
Denmark RID
company
Total -- -- -- -- --
(3) The provision for impairment of construction projects
Nil
16. Right-of-use assets
Mechanical
Item Building Total
equipment
I. Original book value:
1.Opening balance 18125393.02 31516312.24 49641705.26
2.Current increased -- 76187.97 76187.97
3.Current decreased -- 7367939.14 7367939.14
(1) Transfer to own assets -- 7367939.14 7367939.14
4.Conversion of foreign currency financial statement -520709.01 -2460648.22 -2981357.23
5.Ending balance 17604684.01 21763912.85 39368596.86
II. Accumulated depreciation
1.Opening balance -- 16449611.12 16449611.12
2.Current increased 4210378.53 4462084.23 8672462.76
(1) Accrual 4210378.53 4462084.23 8672462.76
3.Current decreased -- 7367939.14 7367939.14
(1) Transfer to own assets -- 7367939.14 7367939.14
4.Conversion of foreign currency financial statement -69622.12 -1464321.34 -1533943.46
5.Ending balance 4140756.41 12079434.87 16220191.28
III. Depreciation reserves
1.Opening balance -- -- --
2.Current increased -- -- --
(1) Accrual -- -- --
84 / 137Mechanical
Item Building Total
equipment
3.Current decreased -- -- --
(1) Disposal -- -- --
4.Conversion of foreign currency financial statement -- -- --
5.Ending balance -- -- --
IV. Book value
1.Ending Book value 13463927.60 9684477.98 23148405.58
2.Opening Book value 18125393.02 15066701.12 33192094.14
17. Intangible assets
(1) Intangible assets
Patent and
Trademark and
Item Land use right Computer software non-patent Total
trademark license
technology
I. original book value
1.Opening balance 381012520.44 97684862.76 41597126.47 185079328.12 705373837.79
2.Current increased -- 25984798.36 -- 15000000.00 40984798.36
(1) Purchase -- 25984798.36 -- -- 25984798.36
(2) internal R&D -- -- -- -- --
(3) Shareholders'
------15000000.0015000000.00
capital contribution
(4) Other -- -- -- -- --
3.Current decreased -- 245278.06 -- 369011.14 614289.20
(1) Disposal or scrap -- 245278.06 -- 369011.14 614289.20
(2) Other -- -- -- -- --
4.Conversion of
foreign currency -272175.84 -17820986.51 -18093162.35
financial statement
5.Ending balance 381012520.44 123152207.22 41597126.47 181889330.47 727651184.60
II. accumulated
amortization
1.Opening balance 95252939.06 74273958.37 9709000.00 55078092.67 234313990.10
2.Current increased 8364798.97 19051784.98 -- 15043622.40 42460206.35
(1) accrual 8364798.97 19051784.98 -- 15043622.40 42460206.35
3.Current decreased -- 245278.06 -- -- 245278.06
(1) Disposal or scrap -- 245278.06 -- -- 245278.06
(2) Other -- -- -- -- --
4.Conversion of
foreign currency -- -200392.48 -- -5917361.13 -6117753.61
financial statement
5.Ending balance 103617738.03 92880072.81 9709000.00 64204353.94 270411164.78
III. Depreciation
reserves
1.Opening balance -- -- 16646900.00 -- 16646900.00
2.Current increased -- -- -- -- --
85 / 137Patent and
Trademark and
Item Land use right Computer software non-patent Total
trademark license
technology
(1) accrual -- -- -- -- --
3.Current decreased -- -- -- -- --
(1) Disposal or scrap -- -- -- -- --
(2) Other -- -- -- -- --
4.Conversion of
foreign currency -- -- -- -- --
financial statement
5.Ending balance -- -- 16646900.00 -- 16646900.00
IV. Book value
1.Ending Book value 277394782.41 30272134.41 15241226.47 117684976.53 440593119.82
2.Opening Book value 285759581.38 23410904.39 15241226.47 130001235.45 454412947.69
(2) Land use right without property certification held: nil
18. Goodwill
Increase in this period
Purchase price Translation of foreign
Item Opening balance Ending balance
recovered in the currency statements
current period
Merged with WFTT 1784086.79 -- -- 1784086.79
Merged with Borit 256016609.53 -1136214.91 -25409465.66 229470928.96
Total 257800696.32 -1136214.91 -25409465.66 231255015.75
Other explanation:
(1) Goodwill formed by the merger of WFTT:
In 2010 the Company controlling and combine WFTT by increasing the capital the goodwill is the number that combination
cost greater than the fair value of identical net assets of WFTT. At the end of the period the company conducted an impairment
test on goodwill to estimate the present value of future cash flows and the recoverable amount of the goodwill-related asset group
that is to estimate the present value of future cash flow based on the management's financial budget for the next five years and the
discount rate of 14.78% the cash flow of the year after the five years of financial budget has remained stable. The asset group
identified during the goodwill impairment test did not change.The key parameters determined by the goodwill impairment test are as follows: The current value of the expected future cash flow
of the asset group related to goodwill is measured by using 20%~24% of gross profit margin and 4%~14% of the operating income
growth rate in the forecast period as key parameters. The management determines these parameters based on histor ical conditions
prior to the forecast period and forecasts of market development. After the above tests the company's goodwill does not need to
make provisions for impairment.
(2) Goodwill formed by the merger of Borit:
In this period the company acquired 100.00% equity of Borit in the form of cash purchase the goodwill was the part that the costof the merger was greater than the fair value share of the identifiable net assets of Borit.According to the “Assets AppraisalReport” (Wanlong PBZi (2021) No. 40016) issued by Wanlong (Shanghai) Assets Appraisal Co. Ltd appointed by the Company
the recoverable value of the assets group where the goodwill of the merged with Borit is 423300000 yuan higher than the
86 / 137carrying value of 288969900 yuan and there is no impairment loss of goodwill.
19. Long-term deferred expenses
Conversion of
Increase in business Amortized in the
Item Opening balance foreign currency Ending balance
combination Period
financial statement
Remodeling 15062171.09 5205012.26 4800457.79 -161941.99 15304783.57
costs etc.
20. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets that are not offset
Ending balance Opening balance
Item Deductible Deferred income tax Deductible temporary Deferred income tax
temporary
assets difference assets
difference
Bad debt reserve 87681266.17 13383420.21 104259030.38 15779756.63
Inventory depreciation reserve 224955223.94 37688819.01 225684043.14 35799261.60
Depreciation reserves of fixed assets 57218038.14 8677481.50 55397599.68 8523566.97
Depreciation reserves of intangible
16646900.002497035.0016646900.002497035.00
assets
Other equity instrument investment -- -- 10000000.00 1500000.00
Deferred income 295502674.12 44620545.44 323924836.18 48935725.44
Internal un-realized profit 65251129.55 10531677.19 19551845.38 3457610.51
Payable salary accrued expenses etc. 1236037621.62 188472847.67 981477549.10 151813641.23
Depreciation assets amortization
54047597.498868412.3489867140.2314608530.41
difference
Deductible loss of subsidiary 53658338.05 11465129.69 9703095.17 2425773.79
Equity incentive 80742533.73 12498678.30 6330515.63 987908.92
Fiscal and tax differences for leasing
378997.8472554.36----
business
Total 2172120320.65 338776600.71 1842842554.89 286328810.50
(2) Deferred income tax liabilities that are not offset
Ending balance Opening balance
Item Taxable temporary Deferred income Taxable temporary Deferred income
differences tax liabilities differences tax liabilities
The difference between the fair value and
taxation basis of WFTT assets in a merger 10660027.75 1599004.14 11271189.48 1690678.40
not under the same control
The difference between the fair value and
taxation basis of IRD assets in a merger 68854748.78 15148044.73 86905585.08 19119228.72
not under the same control
The difference between the fair value and
taxation basis of Borit assets in a merger 25246551.70 6311637.91 39376104.10 9844026.00
not under the same control
Change of fair value of available-for-sale
318337329.7447794985.96366808362.1955023506.38
financial asset
87 / 137Accelerated depreciation of fixed assets 294934456.08 48772268.60 211571729.76 32911802.62
Total 718033114.05 119625941.34 715932970.61 118589242.12
(3) Deferred income tax assets and deferred income tax liabilities listed after off-set:94101300.48
Ending balance of Trade-off between the Opening balance of
Trade-off between the
deferred income tax deferred income tax deferred income tax
Item deferred income tax
assets or liabilities assets and liabilities at assets or liabilities
assets and liabilities
after off-set period-begin after off-set
Deferred income tax assets -96528406.14 242248194.57 -87935309.00 198393501.50
Deferred income tax liabilities -96528406.14 23097535.20 -87935309.00 30653933.12
(4) Details of unrecognized deferred income tax assets
Item Ending balance Opening balance Note
There were uncertainties in the potential of
Bad debt reserve 216982.72 1710712.39
generating enough taxable income.There were uncertainties in the potential of
Inventory depreciation reserve 8144910.46 21586279.12
generating enough taxable income.There were uncertainties in the potential of
Loss from subsidiary 279247744.04 193713240.35
generating enough taxable income.Depreciation reserves of fixed There were uncertainties in the potential of
33509152.1333513099.17
assets generating enough taxable income.Other equity instrument Uncertainty in obtaining evidence required by tax
13600000.0046600000.00
investment authorities
There were uncertainties in the potential of
Equity incentive 2304871.81 154321.87
generating enough taxable income.Total 337023661.16 297277652.90
(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
Maturity year Ending balance Opening balance Note
2021 12343844.69 Subsidiaries have operating losses
2022 3781066.93 3781066.93 Subsidiaries have operating losses
2023 1171973.53 1171973.53 Subsidiaries have operating losses
2024 18520699.71 18520699.71 Subsidiaries have operating losses
2025 12151503.80 12151503.80 Subsidiaries have operating losses
2026 22596818.84 -- Subsidiaries have operating losses
No expiration period 221025681.23 145744151.69 Oversea subsidiaries have operating losses
Total 279247744.04 193713240.35
21. Other non-current assets
Item Ending balance Opening balance
Engineering equipment paid in advance 267941354.57 195259441.73
22. Short-term borrowings
(1) Category of short-term borrowings
Item Ending balance Opening balance
Credit loan 1264241086.57 301958184.49
Guaranteed Loan 72197000.00 --
88 / 137Item Ending balance Opening balance
Bill financing 100000000.00 --
Interest payable 1520119.98 280415.56
Total 1437958206.55 302238600.05
(2) Overdue short-term loans without payment
Overdue short-term loans without payment 0 yuan at period-end
23. Note payable
(1) Note payable
Type Ending balance Opening balance
Bank acceptance bill 1760032216.30 2462592372.82
Other explanation:
Margin saving 17459061.33 yuan was provided for the bank acceptance bill 919286331.63 yuan was pledge for not
receivable.
(2) Notes expired at year-end without paid was 0.00 yuan.
24. Account payable
Item Ending balance Opening balance
Within one year 3066299727.36 3986993867.21
1-2 years 64962570.18 87605077.14
2-3 years 52067026.49 13824720.43
Over 3 years 23324378.56 12560575.61
Total 3206653702.59 4100984240.39
25. Accounts received in advance
(1) Accounts received in advance
Item Ending balance Opening balance
Within one year 2854518.96 4071236.87
Total 2854518.96 4071236.87
(2) Important accounts received in advance with account age over one year
Nil
26. Contract liabilities
(1) List of contract liabilities:
Item Ending balance Opening balance
Within one year 132406102.56 77554320.04
1-2 years 2681086.39 2763605.96
2-3 years 132196.85 255602.59
Over 3 years 1208250.59 1143858.66
Total 136427636.39 81717387.25
(2) Important contract liabilities with account age over 1 year:
Nil
27. Wage payable
(1) Wage payable
89 / 137Add:
Conversion
reclassification
of foreign
Opening Withdraw of long-term Payment in the
Item currency Ending balance
balance increase staff Period
financial
remuneration
statement
payable
I. Short-term
184226322.311230469976.57--1206358955.94-515011.27207822331.67
compensation
II.Post-employment
49931097.42134365341.1715741504.89179742081.34-16554.8320279307.31
welfare- defined
contribution plans
III. Dismissed
1645271.321771166.86905359.223076470.31--1245327.09
welfare
IV. Other
welfare due 84150000.00 57021506.64 47291506.64 -- 93880000.00
within one year
V. Other
short-term
welfare-Housing
subsidies 12469120.77 4081359.92 -- -111055.94 -- 16661536.63
employee
benefits and
welfare funds
Total 332421811.82 1370687844.52 73668370.75 1436357958.29 -531566.10 339888502.70
1. Reclassification of long-term staff remuneration payable:
An amount of RMB 72763011.53is recorded in post office benefits - defined benefit plan and incentive fund payable within one
year which represents the difference between the incentive fund of RMB 111770000.00 expected to be paid in 2022 and the
beginning balance of incentive fund payable within one year post office benefits-defined benefit plan and the actual amount paid
in this period.
2. Other short-term benefits- housing allowance employee incentive and welfare fund: have -111055.94 yuan paid in the period
mainly because the amount of housing allowance refunded from employees received by the enterprise during the period was
greater than the amount of housing allowance paid during the period.
(2) Short-term compensation
Reclassifi
cation of Conversion
Withdraw long-term of foreign
Payment in the
Item Opening balance increase in the staff currency Ending balance
Period
Period remunerat financial
ion statement
payable
1. Wages bonuses
155323190.62994745650.43--952393522.71-498383.44197176934.90
allowances and subsidies
2. Welfare for
112.3580641335.32--80565400.14-3988.6172058.92
workers and staff
3. Social insurance 17498085.68 58616505.62 -- 75920323.29 -1576.28 192691.73
Including: Medical
14251442.1548719754.79--62797587.59-1003.85172605.50
insurance
Work injury
1661670.585184661.44--6829106.29-572.4316653.30
insurance
Maternity insurance 1584972.95 4712089.39 -- 6293629.41 -- 3432.93
90 / 1374. Housing
1016187.0076572294.01--76931607.01--656874.00
accumulation fund
5. Labor union
expenditure and
10367089.5618259284.86--19010410.58-4733.919611229.93
personnel education
expense
6. Short-term paid
21657.101634906.33--1537692.21-6329.03112542.19
absences
1230469976.51206358955.9
Total 184226322.31 -- -515011.27 207822331.67
74
(3) Post-employment welfare- Defined contribution plans
Increase in
Conversion
reclassification
Withdraw of foreign
Opening of long-term Payment in the Ending
Item increase in the currency
balance staff Period balance
Period financial
remuneration
statement
payable
1. Basic
endowment 29844835.64 101337772.12 -- 130750479.61 -15683.09 416445.06
insurance
2.
Unemployment 912529.16 3442139.02 -- 4328263.00 -871.74 25533.44
insurance
3. Enterprise
19173732.6229585430.0315741504.8944663338.73--19837328.81
annuity
Total 49931097.42 134365341.17 15741504.89 179742081.34 -16554.83 20279307.31
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 expenditureis included in current profit or loss or cost of relevant assets when occurs. Found more of enterprise annuity in Note XIV-4.”Annuity plan”
(4) Dismiss welfare
The wages payable resulted from the implementation of inner retirement plan the amount paid in the year 905359.22 yuan
re-classified into the wage payable from long-term wages payable.
28. Taxes payable
Item Ending balance Opening balance
Value-added tax 24533584.80 28744351.90
Corporation income tax 2317331.81 21458320.79
City maintaining & construction tax 1750188.23 1983996.80
Educational surtax 1250134.44 1417140.56
Individual income tax 3528037.22 7184934.79
Other (including stamp tax and local funds) 6726372.38 6704945.45
Total 40105648.88 67493690.29
29. Other account payable
Item Ending balance Opening balance
Interest payable 6184.14 4862.22
Dividend payable 25671100.00 --
Other account payable 334228033.32 361551395.20
91 / 137Total 359905317.46 361556257.42
(1) Interest payable
Item Ending balance Opening balance
Other 6184.14 4862.22
Total 6184.14 4862.22
(2)Dividends payable
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
Item Ending balance Opening balance
Deposit and margin 24601774.89 12759592.29
Social insurance and reserves funds that withholding 1695074.09 8853543.93
Intercourse funds from units 33562145.98 30982145.98
Restricted stock repurchase obligations 269101020.00 302479200.00
Other 5268018.36 6476913.00
Total 334228033.32 361551395.20
2) Significant other payable with over one year age
Item Ending balance Note
Nanjing Jidian Industrial Group Co. Ltd. 4500000.00 Intercourse funds
Restricted stock repurchase obligations 269101020.00 Restricted stock repurchase obligations
30. Non-current liabilities due within one year
Item Ending balance Opening balance
Long-term loans due within one year 27744527.80 33271589.84
Finance lease payments due within one year 6318273.66 8186856.30
Interest payable 25972.22 26666.67
Total 34088773.68 41485112.81
31. Other current liabilities
Item Ending balance Opening balance
Rebate payable 198936922.68 213477951.00
Pending sales tax 14032348.87 9393136.33
Total 212969271.55 222871087.33
32. Long-term borrowings
Item Ending balance Opening balance
Credit loan -- 3050640.97
Total -- 3050640.97
33. Lease liability
Item Ending balance Opening balance
Lease Payments 15795469.25 22604755.70
Total 15795469.25 22604755.70
92 / 13734. Long-term account payable
Item Ending balance Opening balance
Long-term account payable 13750000.00 15339090.00
Interest payable of long-term account payable -- 12793.00
Special accounts payable 18265082.11 18265082.11
Total 32015082.11 33616965.11
(1) Long-term account payable listed by nature
Item Item Ending balance Opening balance
Hi-tech Branch of Nanjing Finance Bureau (note * )
Financial support funds (2006) -- 1250000.00
Financial support funds (2006)
Hi-tech Branch of Nanjing Finance Bureau (note * )
Financial support funds (2007) 1230000.00 1230000.00
Financial support funds (2007)
Loan transferred from treasury bond (note * ) -- 339090.00
Hi-tech Branch of Nanjing Finance Bureau (note * )
Financial support funds (2008) 2750000.00 2750000.00
Financial support funds (2008)
Hi-tech Branch of Nanjing Finance Bureau (note * )
Financial support funds (2009) 1030000.00 1030000.00
Financial support funds (2009)
Hi-tech Branch of Nanjing Finance Bureau (note * )
Financial support funds (2010) 960000.00 960000.00
Financial support funds (2010)
Hi-tech Branch of Nanjing Finance Bureau (note * )
Financial support funds (2011) 5040000.00 5040000.00
Financial support funds (2011)
Hi-tech Branch of Nanjing Finance Bureau (note * )
Financial support funds (2012) 2740000.00 2740000.00
Financial support funds (2013)
Total 13750000.00 15339090.00
Long-term 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 20 July 2006 to 20 July 2021.Provided that the operation period in the zone is less than 15 years financial supporting capital will be reimbursed. This support
fund has expired fifteen years in the current period so it is 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 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.Note * : Loan transferred from treasury bond: WFJN received 1.87 million yuan of special funds from budget of the central
government and .73 million yuan of special funds from budget of the local government. The non-operating income transferred in
was 1.87 million yuan in 2011 which was confirmed not to return the Company paid back special funds of 3.73 million yuan to
the local government in 11 years since 2012 the Company paid the principal of 339090.00 yuan the year fully repaid as of the
period-end.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.
93 / 137Note * : 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
Item Ending balance Opening 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 RMB
19.7067 million in tota l are compensate including operation losses from lessee RMB 1.4416 million 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 2021.
35. Long-term wages payable
Item Ending balance Opening balance
I. Post-employment welfare-defined contribution plans net indebtedness -- --
II. Dismiss welfare 4829589.69 5734948.91
III. Other long-term welfare - incentive fund 215252333.50 277515345.03
Less: incentive fund paid within one year 111770000.00 101270000.00
Other long-term benefits - incentive fund balances 103482333.50 176245345.03
Total 108311923.19 181980293.94
36. Deferred income
Conversion of
Increase in this Decrease in this foreign currency
Item Opening balance Ending balance
period period financial
statement
Government
328204476.7321645481.1551551644.35-245445.97298052867.56
grand
Item with government grants involved:
94 / 137New-added Conversion
Opening government Amount of foreign Assets
Item subsidy reckoned in currency Ending balance related/Income
balance amount in the other income financial related
period statement
Industrialization
project for injection
VE pump system with
Assets
electronically
1442000.56 -- 721000.30 -- 721000.26 related/Income
controlled high related
pressure for
less-emission diesel
used
Appropriation on
reforming of
production line
technology and R&D
7100000.00 -- 781651.38 -- 6318348.62 Assets related
ability of common rail
system for diesel by
distributive
high-voltage
Fund of industry
642169.73 -- 642169.73 -- -- Income related
upgrade (2012)
Fund of industry
60520000.00 -- -- 60520000.00 Income related
upgrade (2013)
Appropriation on
central basic
714285.73 -- 714285.73 -- -- Assets related
construction
investment
R&D and
industrialization of
the high-pressure
variable pump of the 5327618.88 -- 1510144.21 -- 3817474.67 Assets related
common rail system
of diesel engine for
automobile
Research institute of
motor vehicle exhaust
1213727.21 -- 565067.04 -- 648660.17 Assets related
after-treatment
technology
Fund of industry
36831000.00 -- -- -- 36831000.00 Income related
upgrade (2014)
New-built assets
compensation after
104085274.40 -- 20950845.46 -- 83134428.94 Income related
the removal of parent
company
Fund of industry
40000000.00 -- -- 40000000.00 Income related
upgrade (2016)
Guiding capital for
the technical reform
from State Hi-Tech 6595319.83 -- 1537652.50 -- 5057667.33 Assets related
Technical
Commission
Implementation of the
variable cross-section 7362788.75 -- 1480000.04 -- 5882788.71 Assets related
turbocharger for
95 / 137New-added Conversion
Opening government Amount of foreign Assets
Item subsidy reckoned in currency Ending balance related/Income
balance amount in the other income financial related
period statement
diesel engine
Demonstration project
for intelligent 849099.60 -- 196718.10 -- 652381.50 Assets related
manufacturing
nd
The 2 batch of
provincial special
funds for industry
5000000.00 -- 1553649.88 -- 3446350.12 Assets related
transformation of
industrial and
information in 2019
Municipal
technological reform
4770000.00 -- 626593.93 -- 4143406.07 Assets related
fund allocation in
2020
Strategic cooperation
agreement funding for
key enterprise of 4060000.00 700000.00 309130.41 -- 4450869.59 Assets related
smart manufacturing
in high-tech zone
rd
The 3 batch of
provincial special
funds for industry
-- 13500000.00 -- -- 13500000.00 Assets related
transformation of
industrial and
information in 2021
Assets
Other 41691192.04 7445481.15 19962735.64 -245445.97 28928491.58 related/Income
related
Total 328204476.73 21645481.15 51551644.35 -245445.97 298052867.56
Other explanation:
(1) Appropriation on industrialization project of electrical control and high voltage jet VE system of low emissions diesel: in
September 2009 WFJN signed “Project Contract of Technology Outcome 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 4789997.04yuan with income related was reckoned into current operation revenue
directly; the 7210002.96yuan with assets related was amortized during the predicted service period of the assets and
721000.30yuan amortized 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
96 / 137and development ability of distributive high-pressure common rail system for diesel engine use and production line technological
transformation project; this appropriation belongs to government subsidies related to assets amount of 781651.38 yuan was
reversed based on the depreciation schedule of the related assets during the period.
(3) Industry upgrading funds (2012): In accordance with the document Xi Xin Guanjing Fa [2012] No.216 and Document Xi Xin
Guancai Fa [2012] No. 85 the Company received funds of 60.4 million yuan appropriated for industry upgrading this year.Current write off: 642169.73yuan.
(4) Industry upgrading funds (2013): In accordance with the document Xi Xin Guan Jing Fa [2013] No.379 Xi Xin Guan Jing Fa
[2013] No.455 Xi Xin Guan Cai Fa [2013] No.128 and Xi Xin Guan Cai Fa [2013] No.153 the Company received funds of
60.52 million yuan appropriated for industry upgrading in 2013.
(5) Appropriation for investment of capital construction from the central government: In accordance with the document Xi
Caijian [2012] No.43 the Company received appropriation of 5 million yuan for investment of capital construction from the
central government in 2012. The project has passed the acceptance check in current period this appropriation should be
amortized within the surplus service life of current assets and amortization amount of current period is 714285.73 yuan.
(6) 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. Received 3 million yuan in 2014 and
0.45 million yuan in 2015; and belongs to government grant with assets concerned and shall be amortized according to the
depreciation process amount of 1510144.21 yuan amortizes in the year.
(7) 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 subsidies related to assets and will be amortized according to the depreciation process amount of 565067.04 yuan
amortizes in the year.
(8) Industry upgrading funds (2014): In accordance with the document Xi Xin Guan Jing Fa [2014] No.427 and Xi Xin Guan Cai
Fa [2014] No.143 the Company received funds of 36.831 million yuan appropriated for industry upgrading in 2014.
(9) New-built assets compensation after the removal of parent company: policy relocation compensation received by the
Company and will be amortized according to the depreciation of new-built assets amount of 20950845.46yuan amortizes in the
year.
(10) Fund of industry upgrade (2016): In accordance with the document Xi Xin Guan Jing Fa [2016] No.585 and Xi Xin Fa
[2016] No.70 the Company received funds of 40 million yuan appropriated for industry upgrading in 2016.
(11) Guilding capital for the technical reform from State Hi-Tech Technical Commission: In accordance with the document Xi
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
amortized according to the depreciation process amount of 1537652.50 yuan amortize in the year.
(12) Implementation of the variable cross-section turbocharger for diesel engine: In accordance with the document YCZ Fa[2016]
NO.623 and “Strong Industrial Base Project Contract for year of 2016” subsidiary WFTT received a specific subsidy of 16.97
million yuan (760000 yuan received in the period) 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; a nd belongs to
government grant with assets concerned and shall be amortized according to the depreciation process amount of 1480000.04
yuan amortize in the year.
(13) Demonstration project for intelligent manufacturing: under the Notice Relating to Selection of the Intelligent Manufacturing
97 / 137Model 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 amortized
based on the depreciation progress of the assets. Amortization for the year amounts to 196718.10yuan.nd
(14) The 2 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 Factory Internet Construction" projects and belonged to government subsidies related to assets.and shall
be amortized according to the depreciation process amount of 1553649.88 yuan amortize in the year.
(15) 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 subsidies related to assets.and shall be amortized according to the
depreciation process amount of 626593.93 yuan amortize in the year.
(16) Strategic cooperation agreement funding for key enterprise of smart manufacturing in high-tech zone: according to XXGXF
[2020] No. 61 the Company received a related grant of 4.06 million yuan in 2020 0.7 million yuan received in the Period this
grant was related to the intelligent transformation project and belonged to the government grants related to assets. and shall be
amortized according to the depreciation process amount of 309130.41 yuan amortize in the year.rd
(17) The 3 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 the Period 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.
37. Share capital
Change during the year (+ -)
Opening Shares Ending
Item
balance New shares Bonus transferred Other -repurchase Subtotal balance
issued share from capital
reserve
Total shares 1008950570 -- -- -- -291000.00 -291000.00 1008659570
Other explanation:
Decreased in share capital was due to the buy-back and cancellation of 291000 restricted shares initially granted under the
Restricted Shares Incentive Plan for year of 2020.
38. Capital reserve
Item Opening balance Increase in this period Decrease in this period Ending balance
Share capital premium 3242767917.78 -- 3777729.06 3238990188.72
Other Capital reserve 51474450.50 80879533.60 -- 132353984.10
Total 3294242368.28 80879533.60 3777729.06 3371344172.82
Other explanation:
(1) Share capital premium has 3777729.06 yuan decreased in the Period mainly because the 291000 shares for restricted shares
incentive plan were repurchased and cancellation by the Company the difference between repurchase costs of 4068180.00 yuan
and share capital of 291000.00 yuan amounted to 3777180.00 yuan and handling fee for repurchase of 549.06 yuan.
(2) Other Capital reserve has 80879533.60 yuan increased in the Period mainly including two parts: * the 74241533.60 yuan
after deducted 2321034.44 yuan attributable to minority from 76562568.04 yuan the expenses of share-based payment settled
by equity; and * for the equity incentive implemented by associate of the Company -- Wuxi Weifu Precision Machinery
Manufacturing Co. Ltd. the Company is entitled to 6638000.00 yuan in proportion to the shareholdings.
98 / 13739. Treasury stocks
Increase in this Decrease in this
Item Opening balance Ending balance
period period
Stock repurchases 1148777.74 -- -- 1148777.74
Repurchase obligation of restricted
302479200.00--33378180.00269101020.00
stock incentive plan
Total 303627977.74 -- 33378180.00 270249797.74
Other explanation:
Repurchase obligation of restricted stock incentive plan: has 33378180.00 yuan decreased in the Period mainly including two
parts:* the 29310000.00 yuan cash dividends received by restricted stock incentive recipients during the period;
and* 4068180.00 yuan is the repurchase and cancellation of 291000 restricted shares granted but not yet unlocked by the
Company as treasury stock forfeited due to the departure and health of employee’s .
40. Other comprehensive income
Current period
Opening Less: Belong to
Item Account before income Belong to parent minority Ending balance balance income tax in the
tax company after tax shareholder
year
expense s after tax
I. Other comprehensive income that
cannot be reclassified to profit or -- 16885.14 -- 16008.80 876.34 16008.80
loss
Including: Other comprehensive
income that cannot be transferred
--16885.14--16008.80876.3416008.80
to profit or loss under the equity
method
II. Other comprehensive income
items which will be reclassified 13916619.47 -50678972.87 -- -50678972.87 -- -36762353.4
subsequently to profit or loss
Including: Conversion
difference of foreign currency 13916619.47 -50678972.87 -- -50678972.87 -- -36762353.4
financial statement
Total 13916619.47 -50662087.73 -- -50662964.07 876.34 -36746344.60
41. Reasonable reserve
Item Opening balance Accrual in the period Used in the period Ending balance
Safety production costs 2333490.03 22714778.27 24336052.99 712215.31
Other explanation:
(1) Instructions for the withdrawing of special reserves (safe production cost): According to the CQ [2012] No. 16 - 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 accrual by the Company in line with
regulations and the parts enjoy by shareholders of the Company in safety production costs accrual by subsidiary in line with
regulations.
99 / 13742. Surplus reserve
Item Opening balance Increase in this period Decrease in this period Ending balance
Statutory surplus
510100496.00----510100496.00
reserves
Withdrawal of the statutory surplus reserves: Pursuit to the Company Law and Articles of Association the Company extracted
statutory surplus reserve on 10 percent of the net profit. No more amounts shall be withdrawal if the accumulated statutory
surplus reserve takes over 50 percent of the registered capital.
43. Retained profit
Ratio for withdrawal or
Item Current period Last period
distribution
Retained profits at the end of last year before adjustment 13756102424.62 12076443635.56 --
Total retained profit at beginning of the adjustment (+ for
------
increased -for decreased)
Retained profits at the beginning of the year after
13756102424.6212076443635.56--
adjustment
Add: The net profits belong to owners of patent company
2575371419.802772769377.96--
of this period
Less: Withdraw legal surplus reserves -- -- --
Less: Withdraw employee motivation and welfare fund 4081359.92 2525946.49 --
15 yuan / 10-shares in the
Year;
Cash dividend payable 1513341439.50 1093241270.00
11 yuan / 10-shares in last
Year
Common dividend transfer as share capital -- -- --
Add: Net effect of disposal other equity instrument
736332.862656627.59
investment
Retained profit at period-end 14814787377.86 13756102424.62
44. Operating income and cost
Current period Last Period
Item
Income Cost Income Cost
Main operating 13184138129.88 10822600520.90 12430431489.90 10124574480.95
Other business 498288581.07 397767192.67 453394816.70 304709961.02
Total 13682426710.95 11220367713.57 12883826306.60 10429284441.97
45. Taxes and surcharges
Item Current period Last Period
City maintaining & construction tax 19681944.17 22768800.74
Educational surtax 14058531.57 16259673.98
Property tax 17669096.06 16993056.48
Land use tax 4507402.14 4516628.41
Vehicle use tax 27218.52 29923.52
Stamp duty 3834974.65 4508905.03
Other taxes 477566.62 246793.71
Total 60256733.73 65323781.87
100 / 13746. Sales expenses
Item Current period Last Period
Salary and fringe benefit 56098840.97 58727035.03
Consumption of office materials and business travel charge 9301927.42 9260423.14
Warehouse charge 17101049.13 24982242.41
Three guarantees and quality cost 138960972.56 272364223.21
Business entertainment fee 28210881.07 25842735.05
Other 14977761.41 15176786.26
Total 264651432.56 406353445.10
47. Administration expenses
Item Current period Last Period
Salary and fringe benefit 322167980.30 295394722.09
Depreciation charger and long-term assets amortization 71899617.49 65638800.42
Consumption of office materials and business travel charge 24870963.21 16772265.23
Incentive fund -- 187658444.76
Share-based payment 48352297.07 3878656.31
Other 144581292.17 213481533.82
Total 611872150.24 782824422.63
48. R&D expenses
Item Current period Last Period
Technological development expenses 595406951.64 532581209.78
Total 595406951.64 532581209.78
49. Financial expenses
Item Current period Last Period
Interest expenses 38698621.09 11466886.33
Note discount interest expenses 19837754.67 8075178.10
Less: interest income 41478845.32 51622216.58
Gains/losses from exchange -1982034.19 5138503.01
Handling charges 4987752.59 3663347.30
Total 20063248.84 -23278301.84
50. Other income
Amount reckoned
into current
Item Current period Last Period
non-recurring
gains/losses
Government grants with routine operation activity
71274511.6780342497.1171274511.67
concerned
VAT instant refund 2460.01 -- --
Total 71276971.68 80342497.11 71274511.67
Government grant reckoned into other income:
Assets/Income
Government grant item Current period Last Period
related
Industrialization project for injection VE pump system Assets/Income
721000.30721000.30
with electronically controlled high pressure for related
101 / 137Assets/Income
Government grant item Current period Last Period
related
less-emission diesel used
Key laboratory (engineering center) of the pollution
Assets/Income
control from motor vehicle exhausting in Jiangsu 170000.00 170000.00
related
province
Assets/Income
Grants for key laboratory in Wuxi City 70000.00 70000.00
related
Supporting funds for technical improvement for annual
output as 140000 pieces of packaging line of catalytic 259000.00 259000.00 Assets related
reduction system for commercial vehicles (2014)
Technical transformation for annual output as 300000
116363.32 129710.11 Assets related
sets of four-cylinder engine supercharger
Annual output of 150000 gasoline engine superchargers 58175.42 96514.62 Assets related
Depreciation/amortization compensation for the assets
20950845.46 20764119.52 Assets related
newly established after parent company relocated
Central capital investment allocation from Wuxi Finance
714285.73 714285.72 Assets related
Bureau (R&D center)
Provincial special guiding funds for scientific and
328571.41 328571.44 Assets related
technological innovation and achievement conversion
Technical reform of catalytic reduction system for
233555.56 233555.56 Assets related
180000 commercial vehicles annually
Development and industrialization of high pressure
variable pump for common rail system of vehicle diesel 1510144.21 1543095.28 Assets related
engine
Business development funds support allocation from
-- 200000.00 Assets related
Finance bureau of the new district
Demonstration of intelligent manufacturing 196718.10 299341.74 Assets related
Research institute of motor vehicle exhaust
565067.04 622985.37 Assets related
post-treatment
Implementation scheme of the variable section
1480000.04 1609982.67 Assets related
turbocharger for diesel engine
Assets/Income
Special funds for technical transformation 46838.76 83794.37
related
Funds for technical reform of boiler wheel supercharger
322210.40 275572.17 Assets related
for annual output of 200000 gasoline engines
Annual output of 150000 gasoline engine turbochargers 416105.36 717082.83 Assets related
Guiding capital for the technical reform from State
1537652.50 1552110.44 Assets related
Hi-Tech Technical Commission
National high-quality development fund for
642169.73 26015356.44 Income related
manufacturing industry
Assets/Income
Industrial upgrading fund 420000.00 420000.00
related
Appropriation on reforming of production line
technology and R&D ability of common rail system for 781651.38 -- Assets related
diesel by distributive high-voltage
Post-processing system R&D grant for SCR and DPF 880000.00 -- Income related
Industrial funds for the alternative fuel vehicle pollution
emission control catalyst and motorcycle pollution
880000.00 -- Income related
emission control catalysts to meet the national VI
standard
Anione 897126.79 -- Income related
FIT-4-AMANDA 723598.73 -- Income related
102 / 137Assets/Income
Government grant item Current period Last Period
related
Neptune 772048.44 -- Income related
Municipal technological reform fund allocation in 2020 626593.93 -- Assets related
Particle capture and regeneration technology
600000.00 -- Assets related
development (Shandong University)
Assets/Income
Intelligent transformation project of the parent company 3780000.00 --
related
International science & technology R&D cooperation Assets/Income
1000000.00--
funding related
nd
The 2 batch of provincial special funds for industry
1553649.88 -- Assets related
transformation of industrial and information in 2019
2020 Financial Support Fund for Investment Promotion
3740400.00 -- Income related
Enterprises
Borit R&D grants 1411156.80 526856.91 Income related
ECOethylene 1322854.33 -- Income related
Special subsidy for provincial business development in
2551200.00 -- Income related
2021
Jiangbei District People's Government on Commending
1450000.00 -- Income related
the 2020 Economic Innovation and Development Award
Project funding (Weichai Power) 1590000.00 -- Income related
Service charge for three agencies 1540317.23 682632.28 Income related
BORIT withholding refund 991481.10 -- Income related
Intelligent transformation and technology transformation
1500000.00 3740000.00 Income related
guiding fund
Stable subsidy 1297349.42 4125376.68 Income related
WFJN Financial Support Fund 1250000.00 1140000.00 Income related
Generation subsidy for distributed PV projects -- 968800.00 Income related
Wuxi City Intellectual Property Project Operation Service
-- 1050000.00 Income related
System Construction Fund
"Work for training" subsidy -- 1269900.00 Income related
Wuxi Mayor Quality Award -- 1000000.00 Income related
e-store -- 1162700.27 Income related
Training subsidy 785880.00 1005934.35 Income related
Assets/Income
Other 8590500.30 6844218.04
related
Total 71274511.67 80342497.11
51. Investment income
Item Current period Last Period
Income of long-term equity investment calculated based on equity 1632117748.78 1659752704.14
Investment income from disposal of long-term equity investments 8701134.99 --
Investment income from holding financial assets available for sales 314664249.00 683211.60
Investment income of financial products -- 263460954.90
Other -959296.18 40908817.93
103 / 137Item Current period Last Period
Total 1954523836.59 1964805688.57
52. Income from change of fair value
Sources Current period Last Period
Changes in the fair value of wealth management products -380318.88 8223219.19
Changes in the fair value of the stocks of listed companies
-38709334.89375102546.00
held-excluding the stocks of listed companies that are included in other
equity instrument investments
Changes in fair value of foreign exchange contracts -1180680.04 --
Total -40270333.81 383325765.19
53. Credit impairment loss
Item Current period Last Period
Bad debt loss 4059750.80 -11184647.60
Total 4059750.80 -11184647.60
54. Assets impairment loss
Item Current period Last Period
Loss of inventory falling price and loss of contract performance cost
-134434667.54-142400798.47
impairment
Impairment loss of fixed assets -3682648.26 -36436674.38
Total -138117315.80 -178837472.85
55. Income from assets disposal
Amount reckoned into
Sources Current period Last Period current non-recurring
gains/losses
Income from disposal of non-current assets 6580346.41 12962146.98 6580346.41
Losses from disposal of non-current assets -2648002.34 -1507738.38 -2648002.34
Total 3932344.07 11454408.60 3932344.07
56. Non-operating income
Amount reckoned into
Item Current period Last Period current non-recurring
gains/losses
Periodic reduction or exemption of part of social
--60373772.69--
insurance premiums
Periodic reduction of kinetic energy costs -- 5759525.46 --
Liquidated damages and compensation income 397361.84 -- 397361.84
Other 258840.23 333723.47 258840.23
Total 656202.07 66467021.62 656202.07
57. Non-operating expense
104 / 137Amount reckoned into current
Item Current period Last Period
non-recurring gains/losses
Total non-current assets disposal losses 24984204.92 738248.83 24984204.92
Including: fixed assets disposal losses 24615193.78 738248.83 24615193.78
Intangible assets disposal losses 369011.14 -- 369011.14
Donation 237041.06 3107003.70 237041.06
Other 288323.89 313635.64 288323.89
Total 25509569.87 4158888.17 25509569.87
Other notes: The loss of fixed assets scrapped in this period includes the reduction of workshop No. 1 of WFHT Xinan Branch.(No. WX1000475970-1). Due to the business development needs of the company according to the investment project record
certificate issued by the Administrative Examination and Approval Bureau of Xinwu District of Wuxi city (Xi Xinhang Review
and Investment Preparation [2021] no. 961) and the decis ion of administrative Approval issued by the Public Security Bureau of
Wuxi City (Xi Gong (Zhi) Zhunjuezi [2022]001) the company plans to demolish the house in the form of blasting and rebuild it
into a RESEARCH and development building so the house will be scrapped in this period.
58. Income tax expense
(1) Income tax expense
Item Current period Last Period
Payable tax in current period 140397942.05 170925337.68
Adjusted the previous income tax 941390.84 -2349322.00
Increase/decrease of deferred income tax assets -54019435.84 -54432577.63
Increase/decrease of deferred income tax liability 3675792.90 66072310.95
Income tax expense 90995689.95 180215749.00
(2) Adjustment on accounting profit and income tax expenses
Item Current period
Total profit 2740360366.10
Income tax measured by statutory/applicable tax rate 411054054.92
Impact by different tax rate applied by subsidies -4538497.57
Adjusted the previous income tax 941390.84
Impact by non-taxable revenue -246008927.64
Impact on cost expenses and losses that unable to deducted 6100407.95
Impact by the deductible losses of the un-recognized previous deferred income tax -28736658.75
The deductible temporary differences or deductible losses of the un-recognized deferred
18038494.97
income tax assets in the Period
Impact on additional deduction -63047657.53
Other -2806917.24
Total 90995689.95
59. Other comprehensive income
See Note V. 40 “Other comprehensive income”
60. Items of ash flow statement
(1) Refunds of taxes
105 / 137Item Current period Last Period
VAT refund actually received for export commodities 43371571.16 28006851.01
Rebate of allowance for VAT 5805415.13 2805702.10
Rebate of income tax 893454.71 1325859.97
Total 50070441.00 32138413.08
(2) Other cash received in relation to operation activities
Item Current period Last Period
Interest income 41478845.32 52277269.56
Government grants 40118348.47 41044012.67
Margin on operation bill 3237920.90 --
Other 1333448.30 9252536.29
Total 86168562.99 102573818.52
(3) Other cash paid in relation to operation activities
Item Current period Last Period
Cash cost 628017019.32 840363837.09
Other 20190804.06 59565319.82
Total 648207823.38 899929156.91
(4) Cash received from other investment activities
Item Current period Last Period
Received the disposal payment -- 10654092.89
Received investment funds in transit at the end of 2019 -- 30448157.81
Intercourse funds of unit -- 24000000.00
The contingent consideration received for the purchase of Borit’s equity 1136214.91 --
Other 544552.00 --
Total 1680766.91 65102250.70
(5) Cash paid related with investment activities
Item Current period Last Period
Margin paid by L/C for purchase of equipment -- 587241.00
Intercourse funds from units -- 13992067.94
Total -- 14579308.94
(6) Other cash received in relation to financing activities
Item Current period Last Period
Borrowings received by WFLD 5470000.00 5470000.00
Borrowings received by IRD -- 260135.13
Total 5470000.00 5730135.13
(7) Cash paid related with financing activities
Item Current period Last Period
Account paid for purchasing minority equity of IRD -- 48507056.85
National debt paid transfer to loans 339090.00 351298.00
Borrowing return by WFLD 5470000.00 --
106 / 137Lease payments 7718867.54 375886.28
Repurchase of A shares -- 400017180.33
Shares repurchase and cancellation for restricted stock incentive plan and
4068729.06--
handling charge
Total 17596686.60 449251421.46
61. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
Item Current period Last Period
1. Net profit adjusted to cash flow of operation activities:
Net profit 2649364676.15 2822735930.56
Add: Assets impairment provision 134057565.00 190022120.45
Depreciation of fixed assets consumption of oil assets and depreciation
399184362.08390748987.16
of productive biology assets
Depreciation of right-of-use assets 8672462.76 --
Amortization of intangible assets 42460206.35 37146026.79
Amortization of long-term deferred expenses 4800457.79 12637958.88
Loss from disposal of fixed assets intangible assets and other
-3932344.07-11454408.60
long-term assets
Losses on scrapping of fixed assets 24984204.92 738248.83
Gain/loss of fair value changes 40270333.81 -383325765.19
Financial expenses 31368748.20 17798991.04
Investment loss -1944475801.41 -1957024490.66
Decrease of deferred income tax asset -54019435.84 -54432577.63
Increase of deferred income tax liability 3675792.90 66072310.95
Decrease of inventory -723297146.60 -591321045.44
Decrease of operating receivable accounts 1615814968.48 -1326286166.68
Increase of operating payable accounts -1676121153.69 1562204812.18
Other 74904696.58 5550301.37
Net cash flows arising from operating activities 627712593.41 781811234.01
2. Net change of cash and cash equivalents :
Balance of cash at period end 1094018936.73 944946018.70
Less: Balance of cash equivalent at year-begin 944946018.70 820498653.85
Add: Balance of cash equivalent at year-end --
Less: Balance of cash equivalent at year-begin --
Net increase of cash and cash equivalents 149072918.03 124447364.85
(2) Net cash payment for the acquisition of a subsidiary in the period: nil
(3) Net cash received from the disposal of subsidiaries: nil
(4) Constitution of cash and cash equivalent
Item Ending balance Opening balance
I. Cash 1094018936.73 944946018.70
Including: Cash on hand 150438.79 507.66
107 / 137Bank deposit available for payment at any time 1093868497.94 944945511.04
Other monetary fund available for payment at any time -- --
II. Cash equivalent -- --
Including: bond investment due within 3 months -- --
III. Balance of cash and cash equivalents at the period-end 1094018936.73 944946018.70
Including: Cash and cash equivalent with restricted in use for parent
----
company or subsidiary of 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.
62. Assets with ownership or use right restricted
Item Ending Book value Restriction reason
Monetary funds 9347031.23 Forex Contracts USD Margin
Monetary funds 17459061.33 Cash deposit paid for bank acceptance
Monetary funds 4044016.40 Court freeze
Monetary funds 194220.00 Mastercard deposit
Note receivable 727930810.05 Notes pledge for bank acceptance
Receivables financing 191355521.58 Notes pledge for bank acceptance
In accordance with the civil ruling No.(2016)Y03MC2490 and No.(2016)
Y03MC2492 of Guangdong Shenzhen Intermediate People's Court
(Hereinafter referred to as Shenzhen Intermediate People's Court) the
property with the value of 217 million yuan under the name of the
Transactional financial
252667176.66 Company and other seven respondents and the third party Shenzhen
assets
HejunChuangye Holdings Co. Ltd. (Hereinafter referred to as Hejun
Company) was frozen. As of the end of the reporting period 4.71 million
shares of Miracle Automation and 11739102 shares of SDEC held by
the Company were frozen.Total 1202997837.25
63. Item of foreign currency
(1) Item of foreign currency
Ending RMB balance
Item Closing balance of foreign currency Rate of conversion
converted
Monetary funds
Including: USD 4635313.91 6.3757 29553370.90
EUR 3523091.48 7.2197 25435663.56
HKD 16665233.07 0.8176 13625494.56
DKK 47357072.54 0.9711 45988453.14
Account receivable
Including: USD 3189026.92 6.3757 20332278.93
EUR 1194637.24 7.2197 8624922.48
JPY 6317177.00 0.0554 349971.61
DKK 11962185.67 0.9711 11616478.50
108 / 137Ending RMB balance
Item Closing balance of foreign currency Rate of conversion
converted
Other account receivables
Including: DKK 1930131.18 0.9711 1874350.39
Short-term borrowings
Including: USD 1213620.00 6.3757 7737677.03
EUR 26679517.79 7.2197 192618114.59
Account payable
Including: USD 454364.11 6.3757 2896889.26
EUR 2144276.32 7.2197 15481031.74
JPY 31215120.00 0.0554 1729317.65
DKK 9175001.10 0.9711 8909843.57
Other account payable
Including: DKK 76815.40 0.9711 74595.43
Non-current liabilities
due within one year
Including: EUR 380142.19 7.2197 2744512.57
(2) Explanation on foreign operational entity:
Subsidiary of the Company IRD was established in Denmark in 1996. The 66% equity of IRD were required by the Company in
cash in April 2019 and in October 2020 increasing the shareholding to 34.00% by cash purchase. After the increase in holdin gs
the company acquired 100.00% of the company's equity. Book-keeping currency of IRD was Danish krone and IRD mainly
engaged in the R&D production and sales of fuel cell components.Subsidiary Borit was established in Belgium in 2010. the Company acquired 100% equity of Borit by cash acquisition in
November 2020. Borit is denominated in Euro and engaged in the R&D production and sales of fuel cell components.
62. Government grants
(1) Government grants
Amount reckoned in
Category Amount Item
current gain/loss
Annual output of 150000 gasoline engine turbochargers 200000.00 Deferred income other income 416105.36
Strategic cooperation agreement funding for key enterprise
700000.00 Deferred income other income 309130.41
of smart manufacturing in high-tech zone
Borit R&D grants 822830.04 Deferred income other income 1411156.80
Wind2H 425268.54 Deferred income other income 425268.54
FIT-4-AMANDA 723598.73 Deferred income other income 723598.73
Anione 191020.47 Deferred income other income 897126.79
3 R 526428.36 Deferred income other income 526428.36
ECOethylene 2666335.01 Deferred income other income 1322854.33
The third batch of provincial-level industrial and
13500000.00 Deferred income --
information industry transformation special funds in 2021
2020 District Modernization Industry Development Fund 1890000.00 Deferred income other income 177548.52
2020 Financial Support Fund for Investment Promotion 3740400.00 Other income 3740400.00
109 / 137Amount reckoned in
Category Amount Item
current gain/loss
Enterprises
Special subsidy for provincial business development in
2551200.00 Other income 2551200.00
2021
Service charge for three agencies 1540317.23 Other income 1540317.23
Jiangbei District People's Government on Commending the
1450000.00 Other income 1450000.00
2020 Economic Innovation and Development Award
Guiding funds for intelligent transformation and
1500000.00 Other income 1500000.00
technological transformation
Job stabilization subsidy 1297349.42 Other income 1297349.42
BORIT withholding refund 991481.10 Other income 991481.10
Special funds to subsidize municipal enterprises after R&D
401200.00 Other income 401200.00
investment
2021 Enterprise New Apprenticeship Work Subsidy 573000.00 Other income 573000.00
2019 "Taihu Talent Program" project support fund
390000.00 Other income 390000.00
allocation
Subsidy funds for manufacturing individual champions
300000.00 Other income 300000.00
specializing in new small giants
subsidy for protype 250000.00 Other income 250000.00
Patent grant 220000.00 Other income 220000.00
District-level rewards for smart workshops 200000.00 Other income 200000.00
Nanjing Jiangbei New District High-tech Enterprise
200000.00 Other income 200000.00
Cultivation Award
Wuxi Binhu District Innovation Award Fund 160000.00 Other income 160000.00
2021 Science and Technology Innovation Fund 150000.00 Other income 150000.00
Jiangsu Postdoctoral Innovation Practice Base was selected
150000.00 Other income 150000.00
for funding in 2020
To honor Nanchang's 2019 annual work incentive funds for
150000.00 Other income 150000.00
cultivating industrial enterprises above designated size
Nanchang Newly-added corporate subsidies in 2019 150000.00 Other income 150000.00
2018-2020 Development Zone Talent Policy Continuous
241000.00 Other income 241000.00
Subsidy
Special funds for high-quality provinces and high-quality
110000.00 Other income 110000.00
districts in 2019
Postdoctoral pit-stop funding 100000.00 Other income 100000.00
Other 1656919.57 Other income 1656919.57
Total 40118348.47
(2) Government grants rebate
Not applicable
110 / 137VI. Changes of consolidation scope (unit: RMB)
1. Enterprise combine not under the same control
Nil
2. Enterprise combine under the same control
Nil
3. Reverse purchase
Nil
4. Disposal of subsidiaries
Nil
5. Other reasons for consolidation range changed
Nil
VII. Equity in other entity (Unit: RMB)
1. Equity in subsidiary
(1) Constitute of enterprise group
Main Registered Directly Indirectly Proportion
Subsidiary operation Business nature Share-holding Share-holding of voting Acquired way
place place ratio (%) ratio (%) rights (%)
Spare parts of Enterprise
WFJN Nanjing Nanjing internal-combustion 80.00 -- 80.00 combines under
engine the same control
Enterprise
Automobile exhaust
WFLD Wuxi Wuxi 94.81 -- 94.81 combines under
purifier muffler
the same control
Spare parts of
WFMA Wuxi Wuxi internal-combustion 100.00 -- 100.00 Investment
engine
Spare parts of
WFCA Wuxi Wuxi internal-combustion 100.00 -- 100.00 Investment
engine
Enterprise
WFTR Wuxi Wuxi Trading 100.00 -- 100.00 combines under
the same control
Spare parts of
WFSC Wuxi Wuxi internal-combustion 66.00 -- 66.00 Investment
engine
Enterprise
Spare parts of
combines not
WFTT Ningbo Ningbo internal-combustion 98.83 1.17 100.00
under the same
engine
control
Enterprise
Spare parts of
combines not
WFAM Wuxi Wuxi internal-combustion 51.00 -- 51.00
under the same
engine
control
WFLD Automobile exhaust
Wuhan Wuhan -- 60.00 60.00 Investment
(Wuhan) purifier muffler
WFLD Chongqin Automobile exhaust
Chongqing -- 100.00 100.00 Investment
(Chongqing) g purifier muffler
WFLD Automobile exhaust
Nanchang Nanchang -- 100.00 100.00 Investment
(Nanchang) purifier muffler
111 / 137Main Registered Directly Indirectly Proportion
Subsidiary operation Business nature Share-holding Share-holding of voting Acquired way
place place ratio (%) ratio (%) rights (%)
WFAS Wuxi Wuxi Smart car equipment -- 66.00 66.00 Investment
Enterprise
combines not
WFDT Wuxi Wuxi Hub Motor 80.00 -- 80.00
under the same
control
SPV Denmark Denmark Investment 100.00 -- 100.00 Investment
Enterprise
combines not
IRD Denmark Denmark Fuel cell components -- 100.00 100.00
under the same
control
Enterprise
combines not
IRD America America America Fuel cell components -- 100.00 100.00
under the same
control
Enterprise
combines not
Borit Belgium Belgium Fuel cell components -- 100.00 100.00
under the same
control
Enterprise
Borit combines not
America America Fuel cell components -- 100.00 100.00
America under the same
control
(2) Important non-wholly-owned subsidiary
Dividend announced to
Share-holding ratio of Gains/losses attributable
Subsidiary distribute for minority in Ending equity of minority
minority (%) to minority in the Period
the Period
WFJN 20.00 19273102.63 13970282.31 205874656.33
WFSC 34.00 4363973.17 -- 20911190.87
WFLD 5.19 12062050.43 -- 134688907.88
WFAM 49.00 38432716.54 25671100.00 190028914.77
Total 74131842.77 39641382.31 551503669.85
(3) Main finance of the important non-wholly-owned subsidiary
Ending balance
Subsidiary Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
WFJN 1163244507.43 312639160.97 1475883668.40 403140636.22 39065672.06 442206308.28
WFSC 216066879.24 46302741.60 262369620.84 200467446.49 -- 200467446.49
WFLD 4503223903.30 1354614615.10 5857838518.40 3558321743.41 21480042.25 3579801785.66
WFAM 413380063.83 483832825.41 897212889.24 450194211.90 59932162.99 510126374.89
Total 6295915353.80 2197389343.08 8493304696.88 4612124038.02 120477877.30 4732601915.32
Opening balance
Subsidiary Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
WFJN 1182876680.02 293436809.97 1476313489.99 433667329.34 42293914.58 475961243.92
WFSC 213435154.59 47533838.59 260968993.18 212812487.33 -- 212812487.33
WFLD 4942039786.72 1210907784.80 6152947571.52 4206722685.63 28424930.25 4235147615.88
112 / 137Opening balance
Subsidiary Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
WFAM 323378083.30 427175823.65 750553906.95 325074838.81 63548392.29 388623231.10
Total 6661729704.63 1979054257.01 8640783961.64 5178277341.11 134267237.12 5312544578.23
Current period
Subsidiary Total comprehensive Cash flow from operation
Operation Income Net profit
income 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
Last Period
Subsidiary Total comprehensive Cash flow from operation
Operation Income Net profit
income activity
WFJN 685608389.43 110875256.44 110875256.44 42395588.51
WFSC 252434907.65 14694274.89 14694274.89 -2270586.10
WFLD 6427844701.00 245276849.88 245276849.88 41415937.03
WFAM 485081038.09 50518929.75 50518929.75 86836060.40
Total 7850969036.17 421365310.96 421365310.96 168376999.84
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group
Nil
2. 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 ratio Accounting
treatment
(%) on
Main
Enterprise Registered investment
Associated enterprise operation Business nature
abbreviation place for joint place
Directly Indirectly venture and
associated
enterprise
Wuxi WFECal Catalysts. Equity
WFEC Wuxi Wuxi Catalyst -- 49.00
Co. Ltd. method
Robert Bosch Powertrain Internal-combustion Equity
RBCD Wuxi Wuxi 32.50 1.50
Ltd. engine accessories method
Zhonglian Automobile Zhonglian Internal-combustion Equity
Shanghai Shanghai 20.00 --
Electronics Co. Ltd. Automobile engine accessories method
Wuxi Weifu Precision
Internal-combustion Equity
Machinery Manufacturing WFPM Wuxi Wuxi 20.00 --
engine accessories method
Co. Ltd.Shinwell Automobile Shinwell Automobile Equity
Wuxi Wuxi -- 45.00
Technology (Wuxi) Co. Automobile components method
113 / 137Share-holding ratio Accounting
treatment
(%) on
Main
Enterprise Registered investment
Associated enterprise operation Business nature
abbreviation
place place
for joint
Directly Indirectly venture and
associated
enterprise
Ltd. Tech. (Wuxi)
Changchun Xuyang
Weifu Automobile Changchun Automobile Equity
Changchun Changchun -- 34.00
components Technology Xuyang components method
Co. Ltd.Equity
Precors GmbH Precors Germany Germany Fuel cell parts -- 8.11
method
Wuxi ChelianTianxia
Equity
Information Technology ChelianTianxia Wuxi Wuxi Telematics services 8.83 --
method
Co. Ltd.Holding shares ratio different from the voting right ratio: nil
Has major influence with less 20% voting rights hold:
(1)Precors GmbH:
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 8.8295% 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.
(2) Main financial information of the important associated enterprise
Ending balance/Current period
Item
WFECal Protection RBCD Zhonglian Automobile
Current assets
4359756878.8814697384325.8771871241.06
Including: cash and cash equivalents
158561233.6910186961.7468250913.00
Non -current assets
344385727.943080929311.516819520183.89
Total assets 4704142606.82 17778313637.38 6891391424.95
Current liabilities 2858118635.51 8623318592.84 2970685.68
Non-current liabilities 224616134.38 2578140.19
Total liabilities 3082734769.89 8623318592.84 5548825.87
Minority shareholders’ equity
Attributable to parent company shareholders’ equity 1621407836.93 9154995044.54 6885842599.08
Share of net assets calculated by shareholding ratio 794489840.10 3112698315.15 1377168519.82
Adjustment items
--Goodwill 267788761.35 1407265.96
--Unrealized profit of internal trading -40372840.77
--Other -0.28 -0.01
Book value of equity investment in joint venture 794489840.10 3340114235.45 1378575785.77
Fair value of the equity investment of joint ventures
with public offers concerned
Operation income 7595559889.80 15712821656.32 24479957.39
114 / 137Ending balance/Current period
Item
WFECal Protection RBCD Zhonglian Automobile
Financial expenses 108452297.18 -56513383.09 -3139306.82
Income tax expense 51379165.70 674071693.78 3579421.41
Net profit 432505306.32 3237912797.87 1699134647.28
Net profit of the termination of operation
Other comprehensive income 34459.46
Total comprehensive income 432539765.78 3237912797.87 1699134647.28
Dividends received from joint venture in the year 98000000.00 558125544.30 198800000.00
Other explanation: Adjustment item for other “-0.28”: the differential tail;
Opening balance/Last Period
Item
WFECal Protection RBCD Zhonglian Automobile
Current assets 4446438334.10 11965249225.12 201344601.39
Including: cash and cash equivalents 223157715.58 10675106.71 194215134.17
Non -current assets 363513166.84 2995027302.84 5985689857.38
Total assets 4809951500.94 14960276527.96 6187034458.77
Current liabilities 3251776146.44 7423648562.76 3687897.36
Non-current liabilities 175895402.90 -- 2638609.61
Total liabilities 3427671549.34 7423648562.76 6326506.97
Minority shareholders’ equity -- -- --
Attributable to parent company shareholders’ equity 1382279951.60 7536627965.20 6180707951.80
Share of net assets calculated by shareholding ratio 677317176.28 2562453508.17 1236141590.36
Adjustment items -- -- --
--Goodwill -- 267788761.35 1407265.96
--Unrealized profit of internal trading -- -29652559.84 --
--Other -- -0.28 -0.01
Book value of equity investment in joint venture 677317176.28 2800589709.40 1237548856.31
Fair value of the equity investment of joint ventures
------
with public offers concerned
Operation income 7458886474.12 15742669081.61 23790158.00
Financial expenses 173107842.23 41669303.63 -7539295.05
Income tax expense 27279920.00 678258481.92 4780141.71
Net profit 296484991.05 3511327740.19 1538581105.06
Net profit of the termination of operation -- -- --
Other comprehensive income -- -- --
Total comprehensive income 296484991.05 3511327740.19 1538581105.06
Dividends received from joint venture in the year -- 1801681159.00 331400000.00
(3) Excess loss occurred in joint venture or associated enterprise
Nil
(4) Unconfirmed commitment with joint venture investment concerned
Nil
(5) Intangible liability with joint venture or associated enterprise investment concerned
Nil
4. Financial summary for non-important Joint venture and associated enterprise
115 / 137Ending balance / Opening balance /
Item
Current period Last Period
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 204764926.80 86032548.98
Amount based on share-holding ratio
--Net profit -13039885.78 13773166.19
--Other comprehensive income -- --
--Total comprehensive income -13039885.78 13773166.19
5. Major conduct joint operation
Nil
6. Structured body excluding in consolidate financial statement
Nil
VIII. R isk re late d wit h f ina nc ial instrume nt
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 V. 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.
116 / 137The 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 far if 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. In
addition 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 and operation of Borit other main business of the Company are pricing and settle
117 / 137with 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 2021 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 2021
Ending foreign Ending RMB balance
Item Convert rate Ratio in assets (%)
currency balance converted
Monetary funds
Including: USD 4635313.91 6.3757 29553370.90 0.11
EUR 3523091.48 7.2197 25435663.56 0.09
HKD 16665233.07 0.8176 13625494.56 0.05
DKK 47357072.54 0.9711 45988453.14 0.16
Account receivable
Including: USD 3189026.92 6.3757 20332278.93 0.07
EUR 1194637.24 7.2197 8624922.48 0.03
JPY 6317177.00 0.0554 349971.61 0.00
DKK 11962185.67 0.9711 11616478.50 0.04
Other account receivables
Including: DKK 1930131.18 0.9711 1874350.39 0.01
Total ratio in assets 0.56
* Foreign currency liability of the Company till end of 31st December 2021:
Ending foreign Ending RMB balance
Item Convert rate Ratio in assets(%)
currency balance converted
Short-term borrowings
Including: USD 1213620.00 6.3757 7737677.03 0.10
EUR 26679517.79 7.2197 192618114.59 2.41
Account payable
Including: USD 454364.11 6.3757 2896889.26 0.04
EUR 2144276.32 7.2197 15481031.74 0.19
JPY 31215120.00 0.0554 1729317.65 0.02
DKK 9175001.10 0.9711 8909843.57 0.11
Other account payable
Including: DKK 76815.40 0.9711 74595.43 0.00
Non-current liabilities due
within one year
Including: EUR 380142.19 7.2197 2744512.57 0.03
Total ratio in liabilities 2.90
* 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.
118 / 137Furthermore on the premise of deliberated and approved in 10th session of 8th BOD the Company exercise
entrust financing with the self-owned idle capital; therefore the Company has the risks of collecting noprincipal due to entrust financial products default. Aims at such risk the Company formulated a “ManagementMechanism of Capital Financing” and well-defined the authority approval investment decision-making
calculation management and risk controls for the entrust financing in order to guarantee a security funds and
prevent investment risk efficiently. In order to lower the adverse impact from unpredictable factors the
Company choose short-term and medium period for investment and investment product’s term is up to 3 years
in principle; in variety of investment the Company did not invest for the stocks derivative products security
investment fund and the entrust financial products aims at security investment as well as other investment with
securities concerned.
3. Liquidity risk
Liquidity risk refers to the capital shortage risk occurred during the clearing obligation implemented by 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. Disc los ure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
Unit: RMB/CNY
Ending fair value
Item
First-order Second-order Third-order Total
I. Sustaining measured by fair value
(I) Financial assets measured by fair value and
with variation reckoned into current 267514710.11 283530118.30 7216186419.01 7767231247.42
gains/losses
1. Transaction financial asset 267514710.11 74734940.30 5734186419.01 6076436069.42
(1) Equity instrument investment 267514710.11 267514710.11
(2) Forex Contracts 74734940.30 74734940.30
(3) Investment in other debt instruments and
----5734186419.015734186419.01
equity instruments
2. Other non-current financial assets -- 208795178.00 1482000000.00 1690795178.00
(1) Equity instrument investment -- 208795178.00 -- 208795178.00
(2) Investment in other debt instruments and
----1482000000.001482000000.00
equity instruments
(II) Financial assets measured by fair value
and with variation reckoned into other -- -- 998065014.50 998065014.50
comprehensive income
1. Receivables financing 713017014.50 713017014.50
119 / 137Ending fair value
Item
First-order Second-order Third-order Total
2. Other equity instrument investment 285048000.00 285048000.00
Total asset non-sustaining measured by fair
267514710.11283530118.308214251433.518765296261.92
value
Total liability non-sustaining measured by
--------
fair value
II. Non-persistent measure
Total asset non-sustaining measured by fair
--------
value
Total liability non-sustaining measured by
--------
fair value
2. The basis for determining the market price of the fair value measurement items at the first level
On 31 December 2021 the financial assets available for sale-equity instrument investment held by the
Company refers to the SDEC (stock code: 600841) Miracle Automation (Stock code: 002009) and Lifan
Technology (Stock Code: 601777) determining basis of the market price at period-end refers to the closing
price of 31 December 2021.
3. The basis for determining the market price of the fair value measurement items at the second level
On 31 December 2021 other non-current financial assets-equity instrument investment held by the Company
refers to the Guolian Securities (stock code: 601456) determining basis of the market price at period-end
refers to the closing price and liquidity discounts of 31 December 2021.The trading financial assets sustaining measured by fair value refers to the swap contracts and forward
exchange contracts the fair value measurement is based on the fair value of swap contracts and forward
exchange contracts offered by the banks that entered into the contracts.
4. Continuous and non-continuous third level fair value measurement items
(1) Receivables financing
For this part of financial assets the Company uses discounted cash flow valuation technology to determine its
fair value. Among them the important input values that cannot be observed mainly include discount rate and
contract cash flow maturity. Cash flows with a contract maturity period of less than 12 months (inclusive) are
not discounted and their fair value is taken as cost.
(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 transactions
1. Parent company of the enterprise
120 / 137Parent company Relationship Company Registration Legal Business nature Registered capital (in
type place representative 10 thousand yuan)
Wuxi Industry Parent State-run Operation of
Wuxi Yao Zhiyong 528926.20
Group company proprietorship state-owned assets
Share-holding ratio on
Voting right ratio on Uniform social credit
Parent company the enterprise for Ultimate controller of the enterprise
the enterprise (%) code
parent company (%)
State-owned Assets Supervision &
Wuxi Industry
20.23 20.23 Administration Commission of Wuxi 913202001360026543
Group
Municipality
Explanation on parent company of the enterprise
Wuxi Industry Group is an enterprise controlled by the State-owned Assets Supervision 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 tech nologies
that are restricted by the state or prohibited for import and export) domestic trade (excluding national restricted and proh ibited 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 EnterpriseFound more in Note VII. 1.” Equity in subsidiary”
3. Joint venture and associated enterprise
Found more in Note VII.3. “Equity in joint venture and associated enterprise”
Other associated enterprise or joint ventures which has related transaction with the Company in the period or
occurred previous: nil
4. Other related party
Other related party Relationship with the Enterprise
Robert Bosch Company Second largest shareholder of the Company
Wuxi Guokai Metal Resources Co. Ltd. (hereinafter referred to as
Enterprises controlled by the parent company
GuokaiMetal Resources)
Director supervisor and senior executive of the
Key executive
Company
5. Related transaction
(1) Goods purchasing labor service providing and receiving
* Goods purchasing/labor service receiving
Content of related Current period Last Period
Related party
transaction
WFPM Goods and labor 49839916.90 34570825.03
RBCD Goods and labor 359903131.37 29740591.61
WFEC Goods 823962918.45 3051418777.65
Robert Bosch Company Goods and labor 216576637.98 150855622.37
Changchun Xuyang Goods 1712596.87 --
Shinwell Automobile Goods -- 1733572.01
Guokai Metals Goods 57991174.20 --
121 / 137* Goods sold/labor service providing
Content of related Current period Last Period
Related party
transaction
WFPM Goods and labor 29501561.74 6092391.01
RBCD Goods and labor 3137245415.70 2961684269.09
WFEC Goods and labor 7630155.96 29663885.81
Robert Bosch Company Goods and labor 1224350229.77 860611502.90
Shinwell Automobile Goods 29250.79 103329.66
Changchun Xuyang Goods and labor 21436170.70 --
(2) Related trusteeship management/contract & entrust management/ outsourcing
Nil
(3) Related lease
* As a lessor for the Company:
Lease income recognized in the Lease income recognized at last
Lessee Assets type
Period Period
WFECal Protection Workshop 1683130.70 2508057.00
* Explanation on related lease
WFLD entered into the house leasing contract with WFEC as for the plant locates at No.9 Linjiang Road Wuxi Xinwu district
owed by WFLD rent-out to WFEC agreements are made as: Rental from 1 January 2021 to 31 December 2021 was
1683130.70 yuan
(4) Related guarantee
Nil
(5) Related party’s borrowed/lending funds:
This year WFLD received 5.47 million yuan of borrowed funds from Wuxi Industry Group. Repayment of 5.47 million yuan to
Wuxi Industry Group for unbundled funds.
(6) Related party’s assets transfer and debt reorganization
Nil
(7) Remuneration of key manager
Item Current period (in ten thousand yuan) Last Period (in ten thousand yuan)
Remuneration of key manager 2617.00 1698.60
(8) Other related party transactions
Related party Name Current period Last Period
WFPM Payable for technical services -- 54783.81
WFPM Purchase of fixed assets -- 145200.00
RBCD Payable for technical services 455591.30 184740.27
RBCD Purchase of fixed assets 528378.37 447692.06
RBCD Technology royalties paid etc. 2332313.62 295419.00
Robert Bosch Company Technology royalties paid etc. 5577508.74 5072260.23
Robert Bosch Company Purchase of fixed assets 927851.05 22927889.53
WFEC Purchase of fixed assets 20353.98 30000.00
WFEC Payable for technical services 450000.00 64433.96
WFEC Sales of fixed assets -- 9426.00
WFEC Provide technical services etc. 873420.02 --
122 / 1376. Receivable/payable items of related parties
(1) Receivable item
Ending balance Opening balance
Item Related party Bad debt Bad debt
Book balance Book balance
reserve reserve
Account receivable WFPM 1233084.39 -- 160565.87 --
Account receivable RBCD 48954455.60 56805.74 549543387.12 --
Account receivable Robert Bosch Company 236685486.17 426203.85 205738695.62 84473.87
Other account receivables Robert Bosch Company 692995.30 -- -- --
Account receivable Changchun Xuyang 995215.93 -- -- --
Account receivable WFEC 6212780.39 -- 642390.75 --
Other account receivables WFEC -- -- 49000000.00 --
(2) Item of payment in advance
Item Related party Ending balance Opening balance
Account paid in
Robert Bosch Company 539263.12 2970930.93
advance
Other non- current
Robert Bosch Company 9932547.00 --
asset
(3) Payable item
Item Related party Ending balance Opening balance
Account payable WFPM 11634159.55 12959303.46
Other account payable WFPM 29000.00 29000.00
Account payable WFEC 299939408.63 850384640.88
Account payable RBCD 33418536.50 7178387.17
Account payable Robert Bosch Company 16412385.58 5370249.46
Account payable Shinwell Automobile -- 19320.30
Account payable Guokai Metals 2.86 --
Other current
RBCD 120466375.78 169620804.78
liabilities
Other current
WFPM -- 74778.76
liabilities
Other current
Robert Bosch Company 39165.98 --
liabilities
Other account payable Wuxi Industry Group 5476184.14 5474862.22
Other account payable Guokai Metals 2717849.00 --
(4) Advance payments and contract liabilities:
Item Related party Ending balance Opening balance
Weifu Precision
Contract liabilities -- 619469.03
Machinery
Contract liabilities RBCD 0.36 0.36
Contract liabilities Robert Bosch Company 796325.77 18094.85
7. Undertakings of related party
Nil
123 / 137XI.S ha re -base d pay me nt
1. Overall situation of share-based payment
Total amount of various equity instruments granted by the
company in the current period --
Total amount of various equity instruments exercised by the
company in the current period --
Total amount of various equity instruments invalidated by the
company in the current period 4504680.00 yuan
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 scope of the exercise price of the stock options issued by
the restricted stocks granted in the first tranche to the last trading day
the company at the end of the period and the remaining period
within 60 months from the date of completion of the registration of
of the contract
the restricted stock granted in the first tranche so the remaining
period of the contract is 3 years and 11 months.The scope of the exercise price of other equity instruments
issued by the company at the end of the period and the N/A
remaining period of the contract
2. Share-based payment settled by equity
Method for determining the fair value of equity instruments on Determine based on the closing price of the restricted stock on the
the grant date grant date
Basis for determining the number of vesting equity instruments Unlocking conditions
Reasons for the significant difference between estimate in the
Not Applicable
current period and estimate in the prior period
Cumulative amount of equity-settled share-based payments
included in the capital reserve 83047405.54yuan
Total amount of expenses confirmed by equity-settled
76562568.04 yuan
share-based payments in the current period
Other explanation:
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 objectsof 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:
124 / 137Ratio of unlocked quantity to granted
Unlock period Unlock time
quantity
Starting from the first trading day 24 months after the
Phase I unlocked completion of the registration of the first grant and ending on 4/10
the last trading day within 36 months
Starting from the first trading day 36 months after the
Phase II unlocked completion of the registration of the first grant and ending on 3/10
the last trading day within 48 months
Starting from the first trading day 48 months after the
Phase III unlocked completion of the registration of the first grant and ending on 3/10
the last trading day within 60 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 of
The first batch of unlock
2019 the absolute amount will not be less than 845 million yuan;
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.
1. the weighted average ROE for year of 2022 is not less than 10%;
2. the growth rate of self-operating profit in 2022 will not be less than 12% compared with the year of
The second batch of
2019 the absolute amount will not be less than 892 million yuan;
unlocking conditions
3. the cash dividends for year of 2022 shall be no less than 50% of the profit available for distribution of
the current year.
1. the weighted average ROE for year of 2023 is not less than 10%;
2. the growth rate of self-operating profit in 2023 will not be less than 20% compared with the year of
The third batch of
2019 the absolute amount will not be less than 958 million yuan;
unlocking conditions
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 Bosch Diesel System and CNEMS.XII. U nde rtak ings or co nt inge ncy
1. Impo rtant undertakings
Important undertakings on balance sheet date
Nil
2. Contingency
Nil
XIII. Events after balance sheet date
1. Important non adjustment matters
Nil
125 / 1372. Profit distribution
The Company intends to distribute a cash dividend of 16.00 yuan (tax included) per 10
shares to all shareholders based on the 1008603293 shares after deducting the 56277
Profit or dividend plans to distributed A-stock held in the repurchase account from total share capital 1008659570 as of
December 31 2021 for a total cash dividend of 1614 million yuan (tax included). and
there will be no transfer of capital surplus or bonus dividend for the period.Profit or dividend declare to distributed The profit distribution plan needs to submit for deliberation on Annual General Meeting
which have been approved
3. Sales return
Important sales returns: Nil
4. Other events after balance sheet date
(1) On February 7 2022 the Company held the 7th session of 10th BOD to deliberated and approved the
Proposal on Acquisition of Equity and Related Transactions. The Company intends to purchase the
VHIT S.p.A. ocietàUnipersonale and its wholly-owned subsidiary - 100% equity
of VHIT Automotive Systems(Wuxi) Co. Ltd held by Robert Bosch S.p.A. Società Unipersonale for a
consideration of approximately 60 million euros. Upon transaction completion VHIT and VHCN will included
in the consolidate statement of the Company.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 session of 7th 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
126 / 1371% 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 mainly engaged in the manufacture of fuel system of internal combustion engine and fuel cell
components products auto components muffler and purifier etc. based on the product segment the Company
determine three reporting segments as auto fuel injection system and fuel cell components air management
system and automotive post processing system. Accounting policy for the three reporting segments are shares
the same policy state in Note III
Segment assets exclude transaction financial asset other account receivables-dividend receivable other
non-current financial assets other equity instrument investment long term equity investment and other
undistributed assets since these assets are not related to products operation.
(2) Financial information for reportable segment
Add: unallocated
assets and profits and
losses of investments
Automotive
Product or income accounted
fuel injection Product
segment of for by the equity
system and segment of air Less: offset of
Item automotive post method debt Total
fuel cell parts management segment
processing instruments and
product system
system equity instrument
division
investments or gains
from their holding and
disposal
Operating 6614355862 6627678374.5 679279175.8
238886702.36--13682426710.95
revenue .92 9 0
Operating 5014698591 5912290423.7 484489294.0
191110595.96--11220367713.57
cost .79 3 1
Total 657306321.4
118725331.7750122583.7216798.901914222928.042740360366.10
Profit 7
589576060.8
Net profit 133353803.04 52794682.10 12483.21 1873652613.41 2649364676.15
127 / 137Add: unallocated
assets and profits and
losses of investments
Automotive
Product or income accounted
fuel injection Product
segment of for by the equity
system and segment of air Less: offset of
Item automotive post method debt Total
fuel cell parts management segment
processing instruments and
product system
system equity instrument
division
investments or gains
from their holding and
disposal
Total 9524779508 4688890555.6 919986689.8
911762134.0713748963807.8927970858427.84
assets .57 5 0
Total 4105047118 3610393608.6 499348559.6
206448473.25-184141.698008156672.37
liabilities .96 6 9
6. Major transaction and events makes influence on investor’s decision
Nil
128 / 137XV. Note s to major it e ms in co nsol idate d f ina nc ial s tate me nts of pa re nt
co mpa ny
(Monetary unit refers to RMB/CNY below unless otherwise specified.The end of the period refers to December 31 2021 the
beginning of the period refers to January 1 2021 the current period refers to 2021 and the last period refers to 2020.)
1. Account receivable
(1) Classification of account receivable:
Ending balance
Category Book balance Bad debt reserve
Book value
Amount Ratio (%) Amount Accrual ratio (%)
Account receivable with bad debt
7803945.241.427803945.24100.00
provision accrual on a single basis
Account receivable with bad debt
540453844.9798.583495954.750.65536957890.22
provision accrual on portfolio
Including: receivables from
324001494.5059.103495954.751.08320505539.75
customers
Receivables from internal related
216452350.4739.48----216452350.47
parties
Total 548257790.21 100.00 11299899.99 2.06 536957890.22
Opening balance
Category Book balance Bad debt reserve
Book value
Amount Ratio (%) Amount Accrual ratio (%)
Account receivable with bad debt
11107123.511.1111107123.51100.00--
provision accrual on a single basis
Account receivable with bad debt
985882139.3698.893099860.140.31982782279.22
provision accrual on portfolio
Including: receivables from
836329626.2683.893099860.140.37833229766.12
customers
Receivables from internal related
149552513.1015.00----149552513.10
parties
Total 996989262.87 100.00 14206983.65 1.42 982782279.22
* Bad debt provision accrual on single basis:
Ending balance
Account receivable(by unit)
Account receivable Bad debt reserve Accrual ratio (%) Accrual causes
BD bills 7300000.00 7300000.00 100.00 Have difficulty in collection
Tianjin Leiwo Engine Co. Ltd. 503945.24 503945.24 100.00 Have difficulty in collection
Total 7803945.24 7803945.24 100.00
* Bad debt provision accrual on portfolio:
Ending balance
Account age
Book balance Bad debt reserve Accrual ratio (%)
Within 6 months 306383472.02 -- --
6 months to one year 13797094.52 1379709.43 10.00
1-2 years 1883035.50 376607.10 20.00
2-3 years 330423.74 132169.50 40.00
129 / 137Over 3 years 1607468.72 1607468.72 100.00
Total 324001494.50 3495954.75 1.08
* In the portfolio receivables from internal related parties
Name Amount Bad debt reserveAccrual ratio (%)
WFLD 55684351.21 --
WFTR 40840838.10 --
WFTT 2388340.85 --
WFSC 79968096.84 --
WFCA 37570723.47
Total 216452350.47 --
* By account age (Including single provision and portfolio provision):
Account age Ending Book balance
Within one year 531511454.98
Including: within 6 months 499628726.55
6 months to one year 31882728.43
1-2 years 7004497.53
2-3 years 330423.74
Over 3 years 9411413.96
Total 548257790.21
(2) Bad debt provision accrual collected or switch back:
Amount changed in the period
Opening
Category Collected or Ending balance balance Accrual Written-off
reversal
Bad debt
14206983.65431630.57--3338714.2311299899.99
reserve
Total 14206983.65 431630.57 -- 3338714.23 11299899.99
Important bad debt provision collected or switch back: nil
(3) Account receivable actual charge off in the Period
Item Amount charge off Resulted by related transaction (Y/N)
Wuxi Kaipu Machinery Co. Ltd. 1126236.40 N
Fujian Zhao’an Country MinyueBianjie
Agricultural Machinery Automobile 1111007.12 N
Components Co. Ltd.Changzhou Borui Oil Pump & Nozzle Co.
646437.00 N
Ltd.Other customers 455033.71 N
Total 3338714.23
(4) Top 5 receivables at ending balance by arrears party
Ending balance of account Ratio in total ending balance Ending balance of bad debt
Name
receivable of account receivables (%) reserve
WFSC 79968096.84 14.59 --
WFLD 55684351.21 10.16 --
130 / 137RBCD 46501776.95 8.48 56805.74
Custom 4 41026419.35 7.48 1092323.65
WFTR 40840838.10 7.45 --
Total 264021482.45 48.16 1149129.39
2. Other account receivables
Item Ending balance Opening balance
Interest receivable 113055.56 897777.78
Dividend receivable 26718900.00 --
Other account receivables 177293562.07 196437936.85
Total 204125517.63 197335714.63
(1)Interest receivable
1) Category of interest receivable
Item Ending balance Opening balance
Interest receivable of unified-borrowing & unified-lending 113055.56 897777.78
Total 113055.56 897777.78
2) Significant overdue interest
Nil
(2) Dividend receivable
1) Details of dividend receivable
The invested entity Ending balance Opening balance
WFAM 26718900.00 --
2) Important dividend receivable with account age over one year
Nil
(3)Other account receivables
1) Other account receivables classification by nature
Nature Ending balance Opening balance
Staff loans and petty cash 400080.00 483650.21
Balance of related party in the consolidate scope 169746521.72 194745396.72
Margin 1518640.00 1030340.00
Social security and provident fund paid 5926527.66 256334.00
Other 9364.69 7200.00
Total 177601134.07 196522920.93
2) Accrual of bad debt provision
Phase I Phase II Phase III
Bad debt reserve Expected credit Expected credit losses for the Expected credit losses for the Total
losses over next 12 entire duration (without entire duration (with credit
months credit impairment occurred) impairment occurred)
Balance on Jan. 1 2021 84984.08 -- -- 84984.08
Balance of Jan. 1 2021
--------
in the period
131 / 137Phase I Phase II Phase III
Bad debt reserve Expected credit Expected credit losses for the Expected credit losses for the Total
losses over next 12 entire duration (without entire duration (with credit
months credit impairment occurred) impairment occurred)
--transfer-in phase II -- -- -- --
--transfer-in phase III -- -- -- --
-- switch back phase II -- -- -- --
-- switch back phase I -- -- -- --
Current accrual 222587.92 -- -- 222587.92
Current reversal -- --
Current written-off -- -- -- --
Other change -- -- -- --
Balance on Dec. 31
307572.00----307572.00
2021
By account age (Including single provision and portfolio provision)
Account age Ending Book balance
Within one year 142516992.35
Including: Within 6 months 137416992.35
6 months to one year 5100000.00
1-2 years 20493906.00
2-3 years 14552695.72
Over 3 years 37540.00
Total 177601134.07
3) Bad debt provision accrual collected or switch back
Amount changed in the period
Conversion
Opening
Category different of
balance Collected or
Ending balance
Accrual Written-off foreign currency
reversal
financial
statement
Bad debt
84984.08222587.92----307572.00
reserve
Total 84984.08 222587.92 -- -- 307572.00
4) Other receivables actually written-off during the reporting period
Nil
5) Top 5 other receivables at ending balance by arrears party
Ending
Ratio
Item Nature Ending balance Account age balance of bad
(%)
debt reserve
Balance of related party in
WFLD 100000000.00 Within 1 year 56.31 --
the consolidate scope
Balance of related party in
WFCA 54193906.00 Within 2 years 30.51 --
the consolidate scope
WFMA Balance of related party in 15552615.72 Within 3 years 8.76 --
132 / 137the consolidate scope
Zhenkunxing Industrial
Margin 1000000.00 1-2 years 0.56 200000.00
Supermarket (Shanghai) Co. Ltd.Employee Loans and
Wang Xiaojin 400000.00 Within 2 years 0.23 70000.00
Reserve Funds
Total 171146521.72 96.37 270000.00
6) Other account receivables related to government grants:
Nil
7) Other receivable for termination of confirmation due to the transfer of financial assets:
Nil
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved: Nil
133 / 1373. Long-term equity investments
Ending balance Opening balance
Item
Book balance Depreciation reserves Book value Book balance Depreciation reserves Book value
Investment for
2106415908.37--2106415908.371978302303.40--1978302303.40
subsidiary
Investment for
associates and joint 4760866320.19 -- 4760866320.19 3999826000.48 -- 3999826000.48
venture
Total 6867282228.56 -- 6867282228.56 5978128303.88 -- 5978128303.88
(1) Investment for subsidiary
Impairment accrual in Ending balance of
The invested entity Opening balance Increase in this period Decrease in this period Ending balance
the period depreciation reserves
WFJN 179208759.14 6765271.87 -- 185974031.01 -- --
WFLD 460845639.39 8122707.00 -- 468968346.39 -- --
WFMA 168847702.38 2150549.94 -- 170998252.32 -- --
WFCA 221046402.93 1732387.50 -- 222778790.43 -- --
WFTR 32908992.35 1015537.50 -- 33924529.85 -- --
WFSC 50244628.12 906018.74 -- 51150646.86 -- --
WFTT 235185028.12 2927137.50 -- 238112165.62 -- --
WFAM 82454467.99 -- 82454467.99 -- --
WFDT 53887039.61 228994.92 -- 54116034.53 -- --
SPV 493673643.37 104265000.00 -- 597938643.37 -- --
Total 1978302303.40 128113604.97 2106415908.37 -- --
(2) Investment for associates and joint venture
134 / 137Nature Ending balance of
Enterprise Opening balance Current changes (+ -) Ending balance
depreciation reserves
RBCD Associated enterprise 2687524679.53 505864857.91 3193389537.44 --
Zhonglian Automobile Associated enterprise 1237548856.31 141026929.46 1378575785.77 --
WFPM Associated enterprise 74752464.64 -28907423.28 45845041.36 --
ChelianTianxia Associated enterprise -- 143055955.62 143055955.62
Total 3999826000.48 761040319.71 4760866320.19 --
Current changes (+ -):
Item RBCD Zhonglian Automobile WFPM ChelianTianxia
Additional investment -- -- -- 150000000.00
Capital reduction -- -- --
Investment gain/loss recognized -6944044.38
1039367216.43339826929.46-5545423.28
under equity
Other comprehensive income
------
adjustment
Other equity change -- -- 6638000.00
Cash dividend or profit announced
-533502358.52-198800000.00-30000000.00
to issued
Impairment accrual -- -- --
Other -- -- --
Total 505864857.91 141026929.46 -28907423.28 143055955.62
135 / 1374. Operating income and cost
Current period Last Period
Item
Income Cost Income Cost
Main business 4392019155.83 3267569244.02 4164444997.29 2955881019.87
Other business 440321634.62 337773263.46 371972806.50 280430592.86
Total 4832340790.45 3605342507.48 4536417803.79 3236311612.73
5. Investment income
Item Current period Last Period
Investment income in subsidiaries 82600029.25 62995075.18
Investment income in joint ventures and associated enterprises 1366704678.23 1457471604.06
Investment income from holding transaction financial asset 309089065.06 683211.60
Investment income of financial products -- 258702394.98
Other -- 36907117.60
Total 1758393772.54 1816759403.42
136 / 137XVI. Supplementary Information
1. Current non-recurring gains/losses
Item Amount Note
Gains/losses from the disposal of non-current asset -12350725.86
Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in
quota or ration according to national standards which are closely relevant to enterprise’s 71274511.67
business)
Profit and loss of assets delegation on others’ investment or management 2425.40
Except for the effective hedging operations related to normal business operation of the
Company the gains/losses of fair value changes from holding the trading financial assets and
-29889140.23
trading financial liabilities and the investment earnings obtained from disposing the trading
financial asset trading financial liability and financial assets available for sale
Switch-back of impairment of account receivable that practice impairment test independent 8976264.09
Other non-operating income and expenditure except for the aforementioned items 130837.12
Impact on income tax -4345456.60
Impact on minority shareholders’ equity -2987222.54
Total 30811493.05
Note: “+” refers to income and revenue while “-” stands for losses or expenses for the above mentioned numbers
2. ROE and earnings per share
Weighted Earnings per share (RMB)
Profits during report period average ROE
Basic earnings per share Diluted earnings per share
(%)
Net profits belong to common stock stockholders of the
13.672.572.57
Company
Net profits belong to common stock stockholders of the
13.512.542.54
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) Difference of the net profit and net assets disclosed in financial report under both foreign accounting rules and Chinese
GAAP (Generally Accepted Accounting Principles)
Not applicable
4. Supplementation for change of accounting policy
Found more in the explanation on 32. Change of the important accounting policy and estimation in Note III
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