Full Text of 2022 Semi-annual Report of FAW JIEFANG GROUP CO., LTD.
FAW JIEFANG GROUP CO., LTD.
Semi-annual Report 2022
August 31, 2022
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Full Text of 2022 Semi-annual Report of FAW JIEFANG GROUP CO., LTD.
Section I Important Notes, Contents and Definitions
The Board of Directors and Board of Supervisors, as well as directors,
supervisors and senior executives of the Company guarantee that the contents of
the semi-annual report are true, accurate and complete, there is no false record,
misleading statement or major omission, and shall bear individual and joint legal
responsibilities.
Hu Hanjie, the person in charge of the Company, Ou Aimin, the person in
charge of accounting, and Si Yuzhuo, the person in charge of the accounting
organization (chief accountant) declare that they guarantee the authenticity,
accuracy and completeness of the financial report in this semi-annual report.
Except for the following directors, others attended the board meeting to
review the semi-annual report in person
Names of Positions of
Reasons for not Name of the
Directors not Directors not
Present in Person Trustee
Present in Person Present in Person
Yang Xiao Director Work Li Hongjian
Bi Wenquan Director Work Li Hongjian
This semi-annual report involves prospective statements such as future plans,
and does not constitute a substantial commitment of the Company to investors.
Investors and relevant persons shall maintain sufficient risk awareness of this,
and shall understand the differences between plans, forecasts and commitments.
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The Company has described the risks that the Company may face in the
future development and the countermeasures in detail in the section of
management discussion and analysis, which shall be noted by investors. China
Securities Journal, Securities Times and CNINFO (http://www.cninfo.com.cn) are
the information disclosure media selected by the Company. All information of the
Company is subject to that published in the above selected media. Investors are
kindly requested to pay attention to investment risks.
The Company does not plan to pay cash dividends or bonus shares, or
convert reserves into share capital.
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Table of Contents
Section I Important Notes, Contents and Definitions................................................................................... 2
Section II Company Profile and Main Financial Indicators ......................................................................... 7
Section III Management Discussion and Analysis ......................................................................................... 11
Section IV Corporate Governance.................................................................................................................. 24
Section V Environmental and Social Responsibilities ................................................................................. 27
Section VI Important Matters ......................................................................................................................... 38
Section VII Changes in Shares and Shareholders ........................................................................................... 47
Section VIII Preferred Shares ............................................................................................................................ 57
Section IX Bonds .............................................................................................................................................. 58
Section X Financial Report ............................................................................................................................ 59
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List of Documents for Future Reference
(I) Financial statements signed and sealed by the person in charge of the Company, the person in
charge of accounting and the person in charge of the accounting organization (chief accountant).
(II) Originals of all company documents and announcements publicly disclosed on the website
designated by China Securities Regulatory Commission in the reporting period.
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Interpretation
Item Refers to Definition
The Company, FAW Jiefang Refers to FAW JIEFANG GROUP CO., LTD.
Jiefang Limited Refers to FAW JIEFANG AUTOMOTIVE CO., LTD.
FAW Car Refers to FAW Car Co., Ltd.
Car Limited Refers to FAW Bestune Car Co., Ltd.
FAW Refers to China FAW Co., Ltd.
Finance company Refers to First Automobile Finance Co., Ltd.
Sanguard Insurance Refers to Sanguard Automobile Insurance Co., Ltd.
Board of Directors of FAW JIEFANG GROUP CO.,
Board of Directors Refers to
LTD.
Shareholders’ Meeting of FAW JIEFANG GROUP
Shareholders’ meeting Refers to
CO., LTD.
Board of Supervisors of FAW JIEFANG GROUP
Board of Supervisors Refers to
CO., LTD.
State-owned Assets Supervision and Administration
SASAC Refers to
Commission of the State Council
CSRC Refers to China Securities Regulatory Commission
China Securities Depository
Shenzhen Branch, China Securities Depository and
and Clearing Corporation Refers to
Clearing Corporation Limited
Limited (CSDC)
After FAW Car transfers all assets and liabilities
except the equity and some reserved assets of
Finance Company and Sanguard Insurance to Car
Limited, 100% equity of Car Limited is used as the
Major asset restructuring Refers to
sold assets and replaced with the equivalent part of
100% equity of Jiefang Limited held by FAW. The
difference is purchased by FAW Car from FAW by
issuing shares and paying cash.
Reporting period Refers to January 1, 2022-June 30, 2022
CNY, CNY 10,000, CNY 100
Refers to CNY, CNY 10,000, CNY 100 million
million
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Section II Company Profile and Main Financial Indicators
I. Company Profile
Stock abbreviation FAW Jiefang Stock code 000800
Stock exchanges on which shares are listed Shenzhen Stock Exchange
Chinese name of the Company FAW JIEFANG GROUP CO., LTD.
Chinese abbreviation of the Company FAW Jiefang
English name of the Company FAW JIEFANG GROUP CO., LTD.
English abbreviation of the Company FAW Jiefang
Legal representative of the Company Hu Hanjie
II. Contact Person and Contact Information
Secretary of the Board of Directors Securities Affairs Representative
Name Wang Jianxun Yang Yuxin
No. 2259, Dongfeng Street, Changchun No. 2259, Dongfeng Street, Changchun
Address Automobile Development Zone, Jilin Automobile Development Zone, Jilin
Province Province
Tel. 0431-80918881 0431-80918882 0431-80918881 0431-80918882
Fax 0431-80918883 0431-80918883
E-mail faw0800@fawjiefang.com.cn faw0800@fawjiefang.com.cn
III. Other Information
1. Contact information of the Company
Whether the registered address, office address and postal code, website and e-mail address of the
Company have changed in the reporting period
□ Applicable Not applicable
The registered address, office address and postal code, website and e-mail address of the Company
have not changed in the reporting period; please refer to the Annual Report 2021 for details.
2. Information disclosure and preparation location
Whether the information disclosure and preparation location have changed in the reporting period
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□ Applicable Not applicable
The name of the information disclosure newspaper selected by the Company, the website designated
by the China Securities Regulatory Commission for publishing the semi-annual report, and the
reparation location of the Company's semi-annual report have not changed in the reporting period,
please see the Annual Report 2021 for details.
3. Other relevant information
Whether other relevant information has changed in the reporting period
□ Applicable Not applicable
IV. Main Accounting Data and Financial Indicators
Whether the Company needs to retroactively adjust or restate the accounting data of previous years
□ Yes No
Increase/Decrease in
Same Period of Last This Reporting Period
This Reporting Period
Year over the Same Period
of Last Year
Operating income (CNY) 22,871,535,261.56 78,600,163,121.16 -70.90%
Net profit attributable to
shareholders of the listed 170,153,887.32 3,268,978,566.54 -94.79%
company (CNY)
Net profit attributable to
shareholders of the listed
company after deducting -106,246,804.18 3,156,099,004.55 -103.37%
non-recurring profits and
losses (CNY)
Net cash flows from
1,443,137,726.63 15,525,714,363.17 -90.70%
operating activities (CNY)
Basic earnings per share
0.0366 0.7047 -94.81%
(CNY/share)
Diluted earnings per share
0.0366 0.7047 -94.81%
(CNY/share)
Weighted average return
0.65% 12.46% Decreased by 11.81%
on equity
At the End of this At the End of Last Increase/Decrease at
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Reporting Period Year the End of this
Reporting Period over
the End of Last Year
Total assets (CNY) 69,181,380,718.15 69,765,943,932.81 -0.84%
Net assets attributable to
shareholders of the listed 23,488,321,388.03 26,242,240,723.26 -10.49%
company (CNY)
V. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Differences in net profits and net assets in the financial report disclosed simultaneously
according to the international accounting standards and China accounting standards
□ Applicable Not applicable
In the reporting period of the Company, there is no difference in net profits and net assets in the
financial report disclosed according to the international accounting standards and China accounting
standards.
2. Differences in net profits and net assets in the financial report disclosed simultaneously
according to foreign accounting standards and China accounting standards
□ Applicable Not applicable
In the reporting period of the Company, there is no difference in net profits and net assets in the
financial report disclosed according to foreign accounting standards and China accounting standards.
VI. Items and Amounts of Non-recurring Profit and Loss
Applicable □ Not Applicable
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Unit: CNY
Item Amount Description
Profits or losses on disposal of non-
current assets (including the write-off It refers to the net gain on
42,431.19
part of the provision for impairment of disposal of non-current assets.
assets withdrawn)
Government subsidies included in
current profits and losses (except for
those closely related to normal business
operations of the Company, conforming 227,954,740.41
to national policies and regulations, and
continuously enjoyed according to
certain standard quota or quantity)
It mainly refers to the reversal
Reversal of impairment provision for
of impairment provision for
receivables subject to separate 12,000,000.00
receivables subject to separate
impairment test
impairment test.
They mainly refer to the net
Non-operating income and expenses
91,843,871.67 non-operating income and
other than the above
expenses
Less: amount affected by income tax 55,440,351.77
Total 276,400,691.50
Specific conditions of other profit and loss items meeting the definition of non-recurring profit and
loss:
□ Applicable Not applicable
There is no specific condition of other profit and loss items meeting definition of non-recurring profit
and loss for the Company.
Explanation on defining the non-recurring profit and loss items listed in the Explanatory
Announcement No. 1 on Information Disclosure by Companies Issuing Securities Publicly - Non-
recurring Profit and Loss as recurring profit and loss items
□ Applicable Not applicable
The Company does not define the non-recurring profit and loss items listed in the Explanatory
Announcement No. 1 on Information Disclosure by Companies Issuing Securities Publicly - Non-
recurring Profit and Loss as recurring profit and loss items.
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Section III Management Discussion and Analysis
I. Main Businesses of the Company in the Reporting Period
(I) Main business
The Company is a commercial vehicle manufacturer which produces heavy, medium and light
trucks, buses, as well as core components such as engines, transmissions and axles, and has a
complete manufacturing system covering raw materials, core components, key large assemblies and
complete vehicles. The products of the Company are mainly used in market segments such as traction,
cargo carrying, dumping, special purposes, highway passenger transport, bus passenger transport, etc.,
and the Company also provides standardized and customized commercial vehicle products.
The Company is committed to becoming a "China's first and world-class" provider of intelligent
transportation solutions, focusing on the main production lines, insisting on innovation-driven and
reform-driven, and creating leading advantages.
(II) Industry situation
In the first half of 2022, the frequent epidemic situation across the country as well as the
influence of international conflicts and geopolitics brought about great uncertainties to the global
economic recovery and the stability of commodity prices, supply chains and grain output. The
demand is inhibited because the domestic logistics industry is in a serious "surplus" state and due to
the impact of high oil and gas prices and the epidemic situation. The sales volume of commercial
vehicle industry in the first half of 2022 was 1.702 million, which was reduced by 41.2% year-on-
year, and the sales volume of medium and heavy truck industry was 437,000, which was reduced by
62.1% year-on-year. The commercial vehicle industry is highly mature and the competition is fierce.
The current sluggish market has intensified the competition among leading enterprises in the industry
and further reduced the living space of other enterprises. The concentration of market share in the
industry continues to increase, resulting in the situation that the strong will remain strong.
(III) Operation situation
In the first half of 2022, when facing changes and challenges in the internal and external
environment, and in addition to taking strict and careful normalized epidemic prevention and control
measures, the Company made early deployment, overall planning, targeted policies, and rapid and
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active adjustments, and also made unprecedented efforts to face the most severe situation and perform
various key tasks steadily and vigorously, therefore, 85,000 medium and heavy trucks were sold, with
a terminal market share of 25.6%, and an increase of 1.7 percentage points over 2021, maintaining
the leading position in the industry; nearly 10,000 vehicles were sold in overseas markets, with a
year-on-year increase of 42%. The main work in the first half of 2022 was as follows:
1. Focusing on the mainstream product line and creating leading advantages. In terms of
platform products, the Company continued to create product advantages, and the three major platform
product projects were promoted in order. In terms of series products, more than 100 series of new
products such as J6V flat-floor tractors, J6L exclusive flat-floor trucks, 2022 new J6P dump trucks
and new J6L series mixer trucks were launched; a sales volume of nearly 50,000 and a market share
of more than 12% were achieved, with a leading position in the market segment. In terms of new
energy products, more than 40 new energy heavy trucks were developed; 7 new medium trucks were
developed and water-cooled battery switching was completed; more than 30 new light trucks were
developed.
2. Adhering to innovation-driven development and building core advantages. In terms of
technological innovation, the first heavy-duty commercial vehicle in-cylinder direct injection
hydrogen engine in China was ignited successfully; the high-speed oil-cooled motor project
completed the trial production of the first batch of functional prototypes in China and passed the
performance test; the E/E architecture of the second-generation commercial vehicle was adapted to
all models. In terms of business innovation, the planning of fleet management solutions for three
scenarios: urban construction muck, intelligent refrigeration and intelligent mixing, was completed;
the investigation of business types such as "second-hand vehicles" and "online freight platform" was
completed, and the implementation of business type innovation was accelerated.
3. Adhering to change-driven development and improving the transformation ability. In terms
of management reform, the company established the headquarters medium and heavy vehicles
production line and released the IPD2.0 process successfully; the IPD reform of Qingdao medium
and heavy vehicle product line and light vehicle product line was launched officially; integrated
reform was promoted vigorously to realize the concentration of resources and unified planning in the
IT field; attentions were paid to key areas such as marketing and Internet of Vehicles, the digital co-
creation team plan was designed to provide great support to scenario planning. In terms of personnel
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system reform, the construction of three teams was strengthened and more than 800 talents were
introduced. Attentions were paid to value creation and incentives and constraints such as sales betting
were implemented to effectively stimulate the motivation of all employees.
4. Focusing on winning the following "three battles" to improve the system, capability and
implementation: (1) Market leadership: The Company sold 85,000 medium and heavy vehicles by
seizing the opportunities of terminal market and focusing on a good sales performance in the first
quarter, competition for the Winter Olympics and key markets; sold 15,000 light vehicles by focusing
on two products, i.e. refrigeration and LINKTOUR; sold nearly 10,000 vehicles overseas by focusing
on key markets, border trade, major customers and light trucks. (2) Profitability improvement: The
Company strengthened cost reduction, especially material cost, and canceled and optimized more
than 700 projects following the principle of "output reduction and efficiency increase"; carried out
value creation in multiple dimensions, with nearly 3,000 proposals submitted by all employees. (3)
Digital and intelligent transformation: The Company held the conference on the deployment of digital
and intelligent transformation and upgrading to clarify the "1143" work framework, and
comprehensively accelerated the transformation in 8 major fields; quickly responded to the digital
construction of epidemic prevention and continuously reduced costs and increased efficiency;
promoted digital and intelligent transformation and clarified the vision and path of digital and
intelligent transformation by focusing the four fields of marketing, R&D, supply chain and operation
and improving the digital capability in data, technology platform and network security.
In the second half of the year, the Company will continue to implement the spirit of General
Secretary Xi Jinping's important speech during his visit to FAW, perform the "11236" annual key
tasks in a stable way, continue to seize opportunities, occupy the terminal market and reduce inventory
with an unprecedented will, reduce costs and expenses to the unprecedented extent, reduce risks and
strengthen confidence with an unprecedented initiative, do a good job in regular epidemic prevention
and control, complete annual operation and party building tasks, and lay a solid foundation for next
year and winning the 14th Five-Year Plan.
II. Analysis of Core Competitiveness
The Company adheres to the corporate vision of "being the most proud commercial vehicle
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enterprise and the most trustworthy commercial vehicle brand", the mission of "becoming the China's
first and world-class provider of intelligent transportation solutions and building a more prosperous
society", and the brand concept of "being trustworthy, intelligent and courageous, and benefiting the
world"; takes products and services as the main task, customers and employees as the foundation,
innovation and reform as the driving force; focuses on industry trends and customer needs, and
improves product competitiveness and service level rapidly.
1. Product research and development: Four major fields: heavy, medium, light and passenger
vehicles are covered. Heavy trucks include six products: FAW Jiefang J7, J6P, J6V, Yingtu, JH6 and
Han V. Medium trucks include three products: FAW Jiefang J6L, JK6 and Long V. Light trucks
include three products: LINKTOUR, J6F and Hu V. Passenger vehicles include road vehicles, new
energy buses, etc. The Company, which is guided by the idea of "leading technology, pioneering
experience, integrated innovation, strengthened application and collaborative efficiency", builds a
strong and complete independent research and development system ranging from foresight
technology, engine, transmission, axle to complete vehicle; forms an efficient collaborative research
and development team of nearly 2,500 people, with five core capabilities: technological innovation,
performance development, lean design, trial production and test certification; creates five technical
platforms of low carbonization, electrification, intelligence, informatization and high quality. It is one
of the commercial vehicle enterprises that master the core technologies of world-class complete
vehicles and three powertrains.
2. Marketing and procurement: The Company, which is customer value-oriented, has taken the
lead in establishing a fully functional marketing service system. The marketing service network
consisting of over 900 dealers, over 1,000 service stations, over 50 spare parts centers and nearly 100
spare parts dealers covers more than 200 prefecture-level cities in China, with a coverage rate of 96%
prefecture-level cities with more than 1,000 vehicles, and an average service radius in China of 47.5
km. It provides users with 24-hour efficient and high-quality services, and takes lead in the industry.
The Company is committed to integrating global high-quality resources to provide a strong guarantee
for the high reliability of Jiefang trucks. In recent years, the Company has signed contracts with top
enterprises at home and abroad successively, including Huawei, Knorr-Bremse, ZF, Shell, VOSS,
China Unicom, JD and PlusAI, to become strategic partners or establish joint ventures with them.
3. In terms of production and manufacturing, the Company has the most complete
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manufacturing system in China covering raw materials and core components, key large assemblies
and complete vehicles, and its processing and manufacturing level ranks first in the industry. The
Company has five vehicle bases in Changchun, Qingdao, Chengdu/Guanghan, Liuzhou and Foshan,
three assembly bases in Changchun, Wuxi and Dalian, and three new business bases in Suzhou,
Nanjing and Tianjin.
4. Product export: The Company’s products are exported to 80 countries and regions such as
Southeast Asia, the Middle East, Latin America, Africa and Eastern Europe. It has more than 70
primary distributors and nearly 300 distributors in almost 40 countries and regions around the world.
The export products include models such as J6, JH6 and Hu V.
III. Analysis of Main Business
General
Please refer to "I. Main Businesses of the Company in the Reporting Period".
Year-on-year Changes of Main Financial Data
Unit: CNY
Year-on-
year
This Reporting Same Period of Last
Increase Reason for Change
Period Year
and
Decrease
The income is reduced
Operating mainly due to the decrease
22,871,535,261.56 78,600,163,121.16 -70.90%
income in sales volume in the
current period.
The cost is reduced mainly
due to the decrease in sales
Operating cost 21,115,050,469.61 71,861,081,519.02 -70.62%
volume in the current
period.
The expense is reduced
Selling mainly due to the decrease
566,490,728.82 1,315,060,101.99 -56.92%
expense in sales volume in the
current period.
Management
887,020,116.52 1,103,407,146.33 -19.61%
cost
Financial
-571,153,971.08 -519,020,299.28 -10.04%
expense
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It is reduced mainly due to
Income tax
-171,674.50 452,443,037.35 -100.04% the decrease in profit in the
expense
current period.
R&D
1,016,316,222.64 1,239,379,205.08 -18.00%
investment
This is mainly due to the
Net cash flows decrease in cash received
from operating 1,443,137,726.63 15,525,714,363.17 -90.70% from sales of goods and
activities rendering of services in the
current period.
Net cash flows
from investing -674,634,455.38 -697,102,414.01 3.22%
activities
Net cash flows It mainly refers to the cash
from financing -3,041,097,420.19 309,046,933.78 -1,084.02% dividends paid in the
activities current period.
Net increase in It mainly refers to the cash
cash and cash -2,272,594,148.94 15,137,658,882.94 -115.01% dividends paid in the
equivalents current period.
The tax is reduced mainly
Taxes and due to the decrease in sales
106,500,261.51 293,944,056.24 -63.77%
surcharges volume in the current
period.
The income is increased
mainly due to the increase
Other incomes 230,047,050.32 123,839,818.59 85.76% in amortization of
government subsidies in
the current period.
This is mainly due to the
Investment decrease in investment
203,908,916.41 387,219,719.37 -47.34%
income income recognized in the
current period.
This is mainly due to the
Credit increase in the provision
impairment -21,826,743.35 6,757,848.51 -422.98% for impairment of
loss receivables in the current
period.
This is mainly due to the
Income from increase in income from
42,431.19 -183,677.14 123.10%
assets disposal disposal of fixed assets in
the current period.
Non-operating 104,058,106.26 30,755,399.12 238.34% This is mainly due to the
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income increase in non-operating
income in the current
period.
Major changes in the Company's profit composition or profit sources in the reporting period: There
is no major change in the Company's profit composition or profit sources in the reporting period.
Composition of Operating Income
Unit: CNY
This Reporting Period Same Period of Last Year
Year-on-year
Proportion in Proportion in
Increase and
Amount Operating Amount Operating
Decrease
Income Income
Total operating
22,871,535,261.56 100% 78,600,163,121.16 100% -70.90%
income
By Industries
Automobile
manufacturing 22,871,535,261.56 100.00% 78,600,163,121.16 100.00% -70.90%
industry
By Products
Commercial
20,573,298,027.59 89.95% 74,407,776,667.41 94.67% -72.35%
vehicle
Spare parts and
2,298,237,233.97 10.05% 4,192,386,453.75 5.33% -45.18%
others
By Areas
Northeast China,
North China,
Southwest China 11,576,136,202.31 50.61% 39,417,498,884.11 50.15% -70.63%
and Northwest
China
East China, South
China and South 11,295,399,059.25 49.39% 39,182,664,237.05 49.85% -71.17%
Central China
Information on industries, products or regions accounting for more than 10% of the Company's
operating income or operating profit
Applicable □ Not Applicable
Unit: CNY
Gross Increase/D Increase/D Increase/Dec
Operating income Operating cost Profit ecrease of ecrease of rease of
Rate Operating Operating Gross Profit
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Income Cost over Rate over the
over the the Same Same Period
Same Period of of Last Year
Period of Last Year
Last Year
By Industries
Automobile
Reduced by
manufacturing 21,805,259,709.38 20,220,312,403.72 7.27% -71.68% -71.37%
0.98%
industry
By products
Commercial Reduced by
20,573,298,027.59 19,087,210,663.60 7.22% -72.35% -72.17%
vehicle 0.60%
Spare parts and Reduced by
1,231,961,681.79 1,133,101,740.12 8.02% -52.24% -44.55%
others 12.76%
By areas
Northeast
China, North
China,
Reduced by
Southwest 11,036,454,415.32 10,286,125,703.14 6.80% -71.41% -71.11%
0.98%
China and
Northwest
China
East China,
South China Reduced by
10,768,805,294.06 9,934,186,700.58 7.75% -71.94% -71.64%
and South 0.97%
Central China
The main business data of the Company adjusted at the end of the latest reporting period if the
statistical caliber of the Company's main business data is adjusted in the reporting period
□ Applicable Not applicable
IV. Analysis of Non-main Business
□ Applicable Not applicable
V. Analysis of Assets and Liabilities
1. Major changes in asset composition
Unit: CNY
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At the End of this Reporting Period End of Last Year
Description
Proportion Proportion Increase/Decrease
of Major
Amount in Total Amount in Total in Proportion
Changes
Assets Assets
Monetary
28,545,747,104.70 41.26% 30,761,262,721.40 44.09% -2.83%
capital
Accounts
2,033,585,686.23 2.94% 1,279,693,951.70 1.83% 1.11%
receivable
Contractual
61,968,023.59 0.09% 53,047,687.72 0.08% 0.01%
assets
Inventory 9,035,457,594.09 13.06% 9,268,120,531.25 13.28% -0.22%
Investment real
159,534,670.00 0.23% 80,202,825.09 0.11% 0.12%
estate
Long-term
equity 5,023,596,387.36 7.26% 4,766,734,671.74 6.83% 0.43%
investment
Fixed assets 9,005,998,503.41 13.02% 9,236,789,322.03 13.24% -0.22%
Project under
966,294,107.55 1.40% 965,997,208.23 1.38% 0.02%
construction
Right-of-use
121,039,384.71 0.17% 143,766,265.44 0.21% -0.04%
assets
Contract
1,898,901,256.47 2.74% 2,700,642,475.91 3.87% -1.13%
liabilities
Lease liabilities 95,066,903.44 0.14% 88,307,218.05 0.13% 0.01%
2. Main overseas assets
□ Applicable Not applicable
3. Assets and liabilities measured at fair value
□ Applicable Not applicable
4. Restrictions on asset rights as of the end of the reporting period
For details, please refer to Note 60 "Assets with restricted ownership or use right" in part VII
"Notes to Items in Consolidated Financial Statements" of Section X - Financial Report.
VI. Investment Analysis
1. Overall
□ Applicable Not applicable
2. Major equity investments acquired in the reporting period
□ Applicable Not applicable
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3. Major non-equity investments in progress in the reporting period
□ Applicable Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable Not applicable
The Company has no securities investment in the reporting period.
(2) Investment in derivatives
□ Applicable Not applicable
The Company has no derivative investment in the reporting period.
5. Use of raised funds
□ Applicable Not applicable
The Company does not use raised funds in the reporting period.
VII. Sale of Major Assets and Equity
1. Sale of major assets
□ Applicable Not applicable
The Company does not sell major assets in the reporting period.
2. Sale of major equity
□ Applicable Not applicable
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VIII. Analysis on main holding and joint-stock companies
Applicable □ Not Applicable
Major Subsidiaries and Joint-stock Companies affecting over 10% Net Profit of the Company
Unit: CNY
Company Company
Main Business Registered Capital Total Assets Net Assets Operating income Operating Profit Net Profit
Name Type
Development,
FAW
manufacturing
JIEFANG
and sales of
AUTOMOT Subsidiaries CNY 1,080,301.25 67,583,672,280.41 22,181,594,194.18 22,871,535,261.56 -213,519,399.21 -121,503,853.04
complete
IVE CO.,
vehicles and
LTD.
parts
Handling of
financial
business within
First
the Group and
Automobile Joint-stock
other financial CNY 260,000 161,798,938,446.29 22,538,947,163.89 3,422,338,661.73 1,859,399,149.62 1,405,479,645.81
Finance companies
businesses
Co., Ltd.
approved by
the People's
Bank of China
Acquisition and disposal of subsidiaries in the reporting period
□ Applicable Not applicable
Description of main holding and joint-stock companies: none
IX. Structured Entities Controlled by the Company
□ Applicable Not applicable
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X. Risks Faced by the Company and Countermeasures
(I) Market competition risk
Risk description: The state of stock competition in the domestic commercial vehicle market will
not change under the effect of factors such as international political situation, economic situation, and
domestic market demand. The Company will face greater market competition pressure in the second
half of the year with foreign automobile enterprises accelerating their deployment in the domestic
market and the increase of wait-and-see mood in commercial vehicle consumption.
Countermeasures: The Company shall seize market opportunities, launch key campaigns in hot
areas and compete for growth; optimize inventory structure, strengthen inventory management, and
promote rapid digestion of difficult inventory; enrich financial products, strengthen preventive
measures, and prevent and control financial risks accurately; focus on key areas and accelerate the
construction of private networks; improve product development and cover market segment; improve
the channel capability comprehensively. All the above measures are taken to improve the Company's
competitiveness in the market.
(II) Risk of international environmental change
Risk description: In the second half of the year, the Company will face more uncertainty in
developing international businesses due to the severe international situation, the global epidemic
situation and geopolitical conflicts which are intertwined, the acceleration of Federal Reserve in
interest rate increase, higher downward risk of the world economy, and the increase of ocean freight.
Countermeasures: The Company shall win key battles and make breakthroughs in key markets
to make sure to reach the set goals; focus on star projects, promote channel layout, deepen
professional cooperation, and achieve breakthroughs in border trade; focus on advantageous fields,
keep up with key projects, and promote breakthroughs in big customers; increase policy support,
improve product development, and move the business team to critical areas.
(III) Policy risk
Risk description: The impact on the industry will be more obvious due to the issuance of the
regulations on fuel consumption limits of heavy commercial vehicles in the fourth stage and the
implementation of the new regulations on blue-license light trucks in the second half of the year. In
addition, various policies will bring about more variations to the commercial vehicle market due to
environmental factors such as the promotion of multimodal transportation.
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Countermeasures: The Company shall deeply study and judge the industry changes caused by
policy implementation in the second half of the year according to the research results of existing
policies and regulations; pay attention to the new trend of the industry and use other new policies to
hedge risks; launch products that meet the requirements of the new policy in time to seize the market
opportunity.
(IV) Risk of raw material price fluctuation
Risk description: The prices of some important raw materials continue to fluctuate due to factors
such as the epidemic situation and the national dual control policy on energy consumption. In the
second half of the year, the prices of important raw materials may rise, which will affect the efficient
and stable state of the existing supply chain and increase the cost.
Countermeasures: The Company shall establish reasonable reserves to resist the adverse effects
of price fluctuations according to the price change trend of key raw materials; promote the awareness
of internal competition and cooperation, and optimize the procurement cost of bulk raw materials by
improving the management mechanism; optimize the upstream cooperation mechanism, formulate
and implement optimization strategies, and ensure quality and efficiency while optimizing cost.
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Section IV Corporate Governance
I. Information on Annual Shareholders’ Meeting and Extraordinary Shareholders’ Meeting Held in the Reporting Period
1. Shareholders’ meeting in the reporting period
Participation Ratio of
Session Meeting Type Date Date of Disclosure Meeting Resolution
Investors
Reviewed and approved the
Proposal on Estimated Amount
of Daily Related Transactions in
2022, the Proposal on Estimated
First extraordinary Extraordinary Amount of Financial Business
February 16,
shareholders’ meeting shareholders’ 84.94% February 17, 2022 with First Automobile Finance
2022
of 2022 meeting Co., Ltd. in 2022, the Proposal
on Change of Registered Capital
of the Company and the Proposal
on Amending the Articles of
Association.
Reviewed and approved the 2021
Annual Work Report of the Board
of Directors, the 2021 Annual
Work Report of the Board of
Supervisors, the 2021 Annual
Annual
2021 annual Financial Statements, the 2021
shareholders’ 83.82% April 29, 2022 April 30, 2022
shareholders’ meeting Profit Distribution Plan, the
meeting
2021 Annual Report and its
Summary, and the Proposal on
Electing Li Hongjian as the Non-
independent Director of the
Company.
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2. Preferred shareholders with resumed voting rights request to convene an extraordinary
shareholders' meeting
□ Applicable Not applicable
II. Changes in Directors, Supervisors and Senior Management of the Company
Applicable □ Not Applicable
Name Position Type Date Cause
Li Hongjian Director Elected April 29, 2022
Liu Changqing Director Quit March 29, 2022 Job changes
III. Profit Distribution and Transfer from Capital Reserve to Share Capital in the Reporting
Period
□ Applicable Not applicable
The Company does not plan to pay cash dividends or bonus shares, or convert reserves into share
capital in the first half of the year.
IV. IV. Implementation of the Company's Equity Incentive Plan, Employee Stock Ownership
Plan or Other Employee Incentive Measures
Applicable □ Not Applicable
1. Equity incentive
(1) On December 9, 2021, the Company held the 20th meeting of the 9th Board of Directors and
the 19th meeting of the 9th Board of Supervisors respectively, reviewed and approved the Proposal
on Granting Reserved Part of Restricted Shares in the Phase I Restricted Share Incentive Plan to
Incentive Objects, and granted 3,721,601 restricted shares to 33 incentive objects. On January 6, 2022,
The Company issued the Announcement on Completion of Registration of Grant of Reserved Part of
Restricted Shares in Phase I Restricted Share Incentive Plan on CNINFO
(http://www.cninfo.com.cn).
(2) On December 9, 2021, the Company held the 20th meeting of the 9th Board of Directors and
the 19th meeting of the 9th Board of Supervisors respectively, reviewed and approved the Proposal
on Adjusting the Repurchase Price of Restricted Shares in the Phase I Restricted Share Incentive
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Plan and the Proposal on Repurchase and Cancellation of Partial Restricted Shares in the Phase I
Restricted Share Incentive Plan, and agreed to repurchase and cancel 260,857 shares of all restricted
shares granted to the original 2 incentive objects but not yet released from sale. On January 17, 2022,
the Company issued the Announcement on Completion of Repurchase and Cancellation of Some
Restricted Shares on CNINFO (http://www.cninfo.com.cn).
2. Implementation of employee stock ownership plan
□ Applicable Not applicable
3. Other employee incentive measures
□ Applicable Not applicable
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Section V Environmental and Social Responsibilities
I. Major Environmental Protection Problems
Whether the listed company and its subsidiaries are key pollutant discharging entities announced by the environmental protection authority
Yes □ No
Names of
Number Pollutant
Name of Main Total
Discharge of Distribution of Discharge Discharge Total Excessive
Company or Pollutants Approved
Mode Discharge Discharge Outlets Concentration Standards Discharge Discharge
Subsidiary and Specific Discharge
Outlets Implemented
Pollutants
Continuous 1 for frame, cab and
or non-metal coating
No
Sewage: intermittent respectively, and 1
4 54mg/L 800mg/L 11.6632t 630.104t excessive
COD discharge for general
Truck Factory discharge
of domestic sewage
of FAW Jiefang
wastewater outlet
Automotive
Continuous
Co., Ltd
Waste gas: discharge Frame, cab, roof of No
non-methane during 71 non-metallic 2.8mg/m 120mg/m 7.53t 335.4t excessive
hydrocarbon waste gas coating workshop discharge
production
No
Sewage: Intermittent Southeast of the 0.3565
1 41mg/L 500mg/L 21.3t excessive
Chengdu COD discharge Company Ton
discharge
Branch of FAW
Continuous
JIEFANG
Waste gas: discharge No
AUTOMOTIVE Roof of coating
non-methane during 2 2.34mg/m 60mg/m 14.043t 75.91t excessive
CO., LTD. workshop
hydrocarbon waste gas discharge
production
Transmission Intermittent 1 in the northwest No
Sewage:
Branch discharge 2 corner of substation 57mg/L 500mg/L 1.9318t 10t excessive
COD
(Transformation of 1 workshop and 1 discharge
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Names of
Number Pollutant
Name of Main Total
Discharge of Distribution of Discharge Discharge Total Excessive
Company or Pollutants Approved
Mode Discharge Discharge Outlets Concentration Standards Discharge Discharge
Subsidiary and Specific Discharge
Outlets Implemented
Pollutants
Factory) of wastewater in the southwest
FAW JIEFANG corner of substation
AUTOMOTIVE 2 workshop
CO., LTD.
Continuous
4 for No. 1
Waste gas: discharge No
workshop and 1 for
non-methane during 5 2.99mg/m 120mg/m 0.252t - excessive
the south outside
hydrocarbon waste gas discharge
No. 1 workshop
production
2 for No. 1, No. 2
No
Sewage: Intermittent and No. 3
Transmission 6 312mg/L 500mg/L 1.51t - excessive
COD discharge workshops
Branch (Axle discharge
respectively
Factory) of
Continuous
FAW JIEFANG 8 for No. 1
Waste gas: discharge No
AUTOMOTIVE workshop, 7 for No.
non-methane during 20 2.81mg/ m 120mg/L 1.03t - excessive
CO., LTD. 2 workshop, and 5
hydrocarbon waste gas discharge
for No. 3 workshop
production
Continuous
or
South gate of No
Sewage: intermittent
Changchun 1 sewage treatment 39.5mg/L 500mg/L 0.8631t 4.575t excessive
COD discharge
Intelligent Bus station discharge
of
Branch of FAW
wastewater
JIEFANG
Continuous
AUTOMOTIVE Roof of painting
Waste gas: discharge No
CO., LTD. and welding
non-methane during 12 1.26mg/m 120mg/m 3.161t 49.5t excessive
workshop of the
hydrocarbon waste gas discharge
Company
production
Engine Branch
Intermittent
of FAW Waste gas: No
discharge
JIEFANG non-methane 3 Workshop roof 1.62mg/m 120 mg/m 0.0264t - excessive
of waste
AUTOMOTIVE hydrocarbon discharge
gas
CO., LTD.
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Names of
Number Pollutant
Name of Main Total
Discharge of Distribution of Discharge Discharge Total Excessive
Company or Pollutants Approved
Mode Discharge Discharge Outlets Concentration Standards Discharge Discharge
Subsidiary and Specific Discharge
Outlets Implemented
Pollutants
No
Sewage: Continuous 1 for west gate and
3 117mg/m 500mg/m 11.35t 25t excessive
COD discharge 2 for south gate
discharge
Wuxi Diesel 3 for assembly
Engine Works workshop, 5 for the
of FAW Waste gas: 84 mg/m for 240 mg/m
R&D Department,
JIEFANG nitrogen Continuous nitrogen for nitrogen 10.74t for 27.2t
2 for QA No
AUTOMOTIVE oxides, discharge oxide, 2.62 oxide, 120 nitrogen for nitrogen
12 Department, 2 for excessive
CO., LTD. smoke and during mg/m for mg/m for oxide, 0.62t oxide, 1.77t
processing discharge
non-methane production non-methane non-methane for VOC for VOC
workshop and 1 for
hydrocarbons hydrocarbon hydrocarbon
hazardous waste
warehouse
No
Sewage: Continuous
1 1 for north gate 44mg/m 500mg/m 1t 5.35t excessive
COD discharge
discharge
Wuxi Diesel
Engine Huishan
Factory of FAW 125 mg/m 240 mg/m
Waste gas:
JIEFANG Continuous for nitrogen for nitrogen 1.06t for 8.48t for
nitrogen No
AUTOMOTIVE discharge oxide, 16.6 oxide, 120 nitrogen nitrogen
oxide, non- 6 Complex workshop excessive
CO., LTD. during mg/m for mg/m for oxide, 0.07t oxide, 1.62t
methane discharge
production non-methane non-methane for VOC for VOC
hydrocarbon
hydrocarbon hydrocarbon
Continuous
COD: 59.1 COD: 500
FAW Jiefang Sewage: or COD: 5.89t; COD: 88.79t;
Outside the sewage mg/L mg/L; No
(Qingdao) COD, intermittent Ammonia Ammonia
1 treatment station of Ammonia ammonia excessive
Automotive ammonia discharge nitrogen: nitrogen:
the Company nitrogen: 2.91 nitrogen: 45 discharge
Co., Ltd. nitrogen of 0.358t 5.11t
mg/L mg/L
wastewater
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Names of
Number Pollutant
Name of Main Total
Discharge of Distribution of Discharge Discharge Total Excessive
Company or Pollutants Approved
Mode Discharge Discharge Outlets Concentration Standards Discharge Discharge
Subsidiary and Specific Discharge
Outlets Implemented
Pollutants
Continuous
Waste gas: discharge Roof of each No
non-methane during 15 workshop of the 4.68 mg/m 30mg/m 17.23t 164.98t excessive
hydrocarbon waste gas Company discharge
production
Continuous
COD: 500
Sewage: or COD:58mg/L COD: 1.41t; COD: 88.79t;
Outside the sewage mg/L; No
COD, intermittent Ammonia Ammonia Ammonia
1 treatment station of ammonia excessive
ammonia discharge nitrogen: 27 nitrogen: nitrogen:
the Company nitrogen: 45 discharge
nitrogen of mg/L 0.4746t 5.11t
mg/L
wastewater
FAW Jiefang
Dalian Diesel
Engine Co., Ltd. Non-methane Non-methane Non- Non-methane
Waste gas: Continuous
hydrocarbon: hydrocarbon: methane hydrocarbon:
non-methane discharge Roof of the No
4.57 mg/m; 120 mg/m; hydrocarbon: 14.2t;
hydrocarbon during 5 Company's excessive
nitrogen nitrogen 1.3022t, nitrogen
and nitrogen waste gas workshop discharge
oxide: 57 oxide: 240 nitrogen oxide:
oxide production
mg/m mg/m oxide: 0.859t 11.967t
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Construction and operation of pollution prevention facilities
1. Wastewater treatment:
(1) The Truck Factory of FAW JIEFANG AUTOMOTIVE CO., LTD. has three sewage
treatment stations currently, namely, frame workshop sewage treatment station, coating workshop
sewage treatment station and non-metallic coating sewage treatment station. ① The frame sewage
treatment station has a treatment capacity of 300 tons/day, and mainly treats the electrophoresis
process wastewater before it enters the frame workshop. ② The cab coating workshop sewage
treatment station has a treatment capacity of 400 tons/day, and mainly treats the wastewater and
painting wastewater before they enter the workshop. ③ The non-metallic line sewage treatment
station has a treatment capacity of 240 tons/day, and mainly treats the painting wastewater before it
enters the production line. The wastewater and domestic sewage pretreated by the above three sewage
stations are discharged into the FAW Integrated Sewage Treatment Plant, and then discharged into
the Changchun Western Suburbs Sewage Treatment Plant after reaching the Class III standard in the
Integrated Wastewater Discharge Standard (GB8978-1996).
(2) The Chengdu Branch of FAW JIEFANG AUTOMOTIVE CO., LTD. has an internal sewage
treatment station which is mainly used to treat the company's production and domestic wastewater,
has a total treatment capacity of 300 tons/day, and adopts the SBR method for treatment. The sewage
treatment station can operate continuously and stably. The sewage is discharged to the urban sewage
treatment plant through the municipal pipe network for further treatment after reaching the standard.
(3) The Transmission Branch (Shaft Gear Park) of FAW JIEFANG AUTOMOTIVE CO., LTD.
has an internal sewage treatment station which is used to treat the company's production wastewater,
and has a total treatment capacity of 120 tons/day. The station is currently being repaired due to the
failure of some facilities. There is an industrial sewage storage tank in each of the two workshops of
the transmission branch gearbox workshop. A contract is signed with FAW for the disposal of
industrial sewage, and the sewage is transferred by the FAW tanks every day to the comprehensive
sewage treatment workshop for compliant disposal.
(4) There is an industrial sewage storage tank in each of the three workshops in the Transmission
Branch (Axle Factory) of FAW JIEFANG AUTOMOTIVE CO., LTD., which signs a disposal
contract with FAW to transfer the sewage by FAW tanks to the comprehensive treatment workshop
for complaint disposal every day.
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(5) The Changchun Intelligent Bus Branch of FAW JIEFANG AUTOMOTIVE CO., LTD. has
an internal sewage treatment station which is used to treat the company's production and domestic
wastewater, has a treatment capacity of 120 tons/day, and adopts the physicochemical + biochemical
treatment process. The station can operate continuously and stably and realize real-time up-to-
standard discharge. The sewage is discharged to the urban sewage treatment plant through the
municipal pipe network for further treatment after reaching the standard.
(6) The industrial wastewater generated by the Engine Branch of FAW JIEFANG
AUTOMOTIVE CO., LTD. is entrusted to FAW with disposal qualification for disposal.
(7) The Wuxi Diesel Engine Works of FAW JIEFANG AUTOMOTIVE CO., LTD. has an
internal sewage treatment station which is used to treat the company's production and domestic
wastewater, has a total treatment capacity of 3,000 tons/day, and runs 24 hours a day. The station
adopts the physicochemical + biochemical treatment process, and can operate continuously and stably
and realize real-time up-to-standard discharge. The sewage enters the urban sewage treatment plant
through the municipal pipe network for further treatment after reaching the standard.
(8) The Wuxi Diesel Engine Huishan Factory of FAW JIEFANG AUTOMOTIVE CO., LTD.
has an internal sewage treatment station which is used to treat the company's production and domestic
wastewater, has a total treatment capacity of 1,000 tons/day, and runs 24 hours a day. The station
adopts the physicochemical + biochemical treatment process, and can operate continuously and stably
and realize real-time up-to-standard discharge. The sewage enters the urban sewage treatment plant
through the municipal pipe network for further treatment after reaching the standard.
(9) FAW Jiefang Qingdao Automotive Co., Ltd. has an internal sewage treatment station which
combines physicochemical method and biochemical method, and is mainly used to treat the
phosphating wastewater, electrophoresis wastewater and degreasing wastewater discharged from
daily production of the coating workshop, as well as the daily domestic sewage of the Company. The
designed maximum daily treatment capacity of the station is 2,160 tons/day. The treated wastewater
meets the index requirements of the Wastewater Quality Standards for Discharge to Municipal
Sewers (GB/T 31962-2015), and reaches the Water Quality Standard for Domestic Miscellaneous
Water (GB/T18290-2002) after being further treated by the MBR improvement equipment, thus
reducing the sewage concentration significantly, increasing the reuse amount of recycled water, and
saving water. The wastewater is discharged to Jimo sewage treatment station for detailed treatment
through the sewage outlet after reaching the standard.
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(10) The FAW Jiefang Dalian Diesel Engine Co., Ltd. has an internal sewage treatment
station which is used to treat the company's production and domestic wastewater, has a total treatment
capacity of 816 tons/day, and runs 24 hours a day. The station adopts the distillation pretreatment
process for production wastewater and biochemical treatment process for comprehensive wastewater,
and can operate continuously and stably and realize real-time up-to-standard discharge. The sewage
enters the urban sewage treatment plant through the municipal pipe network for further treatment
after reaching the standard.
2. Waste gas treatment:
(1) All waste gas treatment facilities in the Truck Factory of FAW JIEFANG AUTOMOTIVE
CO., LTD. can operate continuously and stably. The dust generated by the plasma cutting machine
in the stamping workshop is collected and filtered and then discharged through a 15m exhaust pipe.
The CO2 welding machine adopts a single-machine dust removal system, and the waste gas is
discharged locally in the workshop after being treated by a single-machine dust collector. The waste
gas generated by the treatment and drying process before entering the frame workshop is discharged
through a 15m exhaust pipe after being treated by a direct combustion device. VOC waste gas from
cab coating and non-metal coating is discharged after reaching the standard through hydrocyclone +
dry filtration + zeolite runner adsorption and concentration + RTO (regenerative incineration).
(2) All waste gas treatment facilities of Chengdu Branch of FAW JIEFANG AUTOMOTIVE
CO., LTD. can operate continuously and stably. The painting waste gas of the coated body is
discharged after reaching the standard through hydrocyclone + dry filtration + zeolite runner
adsorption and concentration + RTO (regenerative incineration). All welding fumes are discharged
after reaching the standard and being treated by centralized and mobile dust removal systems.
(3) All waste gas treatment facilities of the Transmission Branch (Transformation Factory) of
FAW JIEFANG AUTOMOTIVE CO., LTD. can operate continuously and stably. The painting waste
gas generated from the coating line is discharged after reaching the standard and being treated by
activated carbon adsorption and desorption catalytic combustion devices. All welding fumes are
discharged after reaching the standard and being treated by centralized and mobile dust removal
systems.
(4) All waste gas treatment facilities of the Transmission Branch (Axle Factory) of FAW
JIEFANG AUTOMOTIVE CO., LTD. can operate continuously and stably, and all welding fumes
are discharged after reaching the standard and being treated by centralized and mobile dust removal
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systems. The VOC treatment facilities for the No. 3 workshop coating line have been installed and
are currently in the stage of networking and commissioning.
(5) All welding fumes of Changchun Intelligent Bus Branch of FAW JIEFANG
AUTOMOTIVE CO., LTD. are discharged after being treated by the centralized dust removal system
and reaching the standard. The VOC treatment project has entered the equipment installation stage
and is expected to be completed and put into use in October 2022.
(6) The Engine Branch of FAW JIEFANG AUTOMOTIVE CO., LTD. has three quenching
machines generating waste gas and equipped with adsorption purification devices. The waste gas is
discharged after reaching the standard and being treated.
(7) All waste gas treatment facilities of Wuxi Diesel Engine Works of FAW JIEFANG
AUTOMOTIVE CO., LTD. can operate continuously and stably. The painting waste gas generated
from coating is discharged after reaching the standard and receiving activated carbon adsorption and
desorption + catalysis, and the waste gas generated from test run is discharged after reaching the
standard and being treated by SCR treatment device.
(8) All waste gas treatment facilities of Wuxi Diesel Engine Huishan Factory of FAW JIEFANG
AUTOMOTIVE CO., LTD. can operate continuously and stably. The painting waste gas generated
from coating is discharged after reaching the standard and receiving activated carbon adsorption and
desorption + catalysis, and the waste gas generated from test run is discharged after reaching the
standard and being treated by SCR treatment device.
(9) All waste gas treatment facilities of FAW Jiefang (Qingdao) Automotive Co., Ltd. can
operate continuously and stably. The painting waste gas generated by the plastic parts coating
workshop, the cab coating workshop and the general assembly workshop is discharged after reaching
the standard and being purified by paint mist, adsorbed by zeolite concentration runner and treated
by RTO incineration device in the three workshops. The drying waste gas generated by the general
assembly workshop is burned with low nitrogen, and discharged after reaching the standard and being
treated by the quaternary combustion device. The drying waste gas generated by the coating workshop
is burned with low nitrogen and discharged after reaching the standard and receiving TNV thermal
incineration. All welding fumes are discharged after reaching the standard and being treated by filter
cartridge dust collector.
(10) All waste gas treatment facilities of FAW Jiefang Dalian Diesel Engine Co., Ltd. can
operate continuously and stably. The painting waste gas generated by coating is discharged after
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reaching the standard and being treated by the water curtain paint mist treatment device, and the waste
gas generated by test run is discharged after reaching the standard and being treated by the alkali
liquor washing waste gas treatment device.
3. Noise control:
All noise reduction and shock absorption measures of branches and subsidiaries of the Company
can meet the requirements of national laws and regulations, and the noise within the plant boundary
meets the requirements of national emission regulations.
4. Hazardous waste disposal:
All branches and subsidiaries of the Company deliver 100% of hazardous wastes to organizations
with hazardous waste transportation and disposal qualification for compliant transfer and disposal in
strict accordance with the requirements of national laws, regulations and standards.
Environmental impact assessment of construction projects and other administrative permits for
environmental protection
Environmental impact assessment is carried out, reply to the assessment is obtained, and all
environmental protection requirements are implemented for the construction projects of J7 intelligent
assembly line, Foshan new energy base and Guanghan base of the truck factory affiliated to the
Company, and environmental protection acceptance is carried out after these projects are completed.
The Company pays environmental protection tax in full on a quarterly basis according to the
requirements of the tax law based on wastewater, waste gas and discharge.
Emergency plan for environmental emergencies
All branches and subsidiaries of the Company prepare their own emergency plans for
environmental emergencies as required, which are approved and filed by the local ecological
environment bureau. All organizations organize drills every year according to the emergency plans
and further revise them, and have good emergency response capabilities for environmental
emergencies.
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Environmental self-monitoring plan
All branches and subsidiaries of the Company have prepared their own monitoring plans
according to the requirements of pollutant discharge permits and regulations, and organized qualified
monitoring organizations to monitor wastewater, waste gas, noise and soil in accordance with the
requirements of the plans. The test report for the first half of 2022 shows that all monitoring indicators
meet the requirements of all national emission regulations and standards.
Administrative Penalties due to Environmental Problems in the Reporting Period
Name of Impact on Production Rectification
Cause for Results of
Company or Violations and Operation of the Measures of the
Penalties Penalties
Subsidiary Listed Company Company
None None None None None None
Other environmental information that shall be disclosed
All branches and subsidiaries of the Company have been certified by the environmental
management system (GB/T24001-2020), and carried out cleaner production audits in strict
accordance with the requirements. As a responsible central enterprise, the Company strictly abides
by the national requirements, has been practicing the concept of scientific development, builds a clean
and green enterprise, and is committed to becoming a socialist ecological civilization benchmarking
environment-friendly enterprise of "energy conservation, consumption reduction, emission reduction
and efficiency improvement".
Measures taken to reduce carbon emissions in the reporting period and their effects
Applicable □ Not Applicable
FAW JIEFANG AUTOMOTIVE CO., LTD. pays close attention to energy conservation and
carbon reduction, actively docks with the government's preferential energy policies, and completes
the market-oriented transaction of green electricity for the first time. The Company organizes its
branches and subsidiaries such as Changchun Special Vehicle Branch, Axle Branch, Wuxi Diesel
Engine Works and FAW Jiefang (Qingdao) Automotive Co., Ltd. to start the clean energy application
planning, and plans to implement 5 PV projects. It is estimated that 43.5MW clean energy can be
connected to the grid for power generation to further reduce the carbon emission.
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Other information about environmental protection: none
II. Social Responsibility
The Company actively implements the important strategic deployment of the CPC Central
Committee and the State Council on rural revitalization, implements the work requirements of FAW
for targeted assistance, and provides targeted assistance to Zhenlai County in Jilin Province and
Fengshan County in Guangxi Zhuang Autonomous Region to help them consolidate rural
infrastructure, activate industrial development, improve education and consumption level, and
continuously consolidate the achievements of poverty alleviation, thus making contributions to
realizing rural revitalization.
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Section VI Important Matters
I. Commitments Made by the Company's Actual Controllers, Shareholders, Related Parties,
Purchasers and the Company to Interested Parties that will be Fulfilled in the Reporting Period,
and Commitments not Fulfilled by the End of the Reporting Period
□ Applicable Not applicable
For the Company, there is no commitment made by the Company's actual controllers, shareholders,
related parties, purchasers and the Company to interested parties that will be fulfilled in the reporting
period, or other commitments not fulfilled by the end of the reporting period.
II. Non-operating Occupation of Funds by Controlling Shareholders and Other Related
Parties to the Listed Company
□ Applicable Not applicable
For the Company, there is no non-operating occupation of funds by controlling shareholders and other
related parties to the listed company.
III. Illegal External Guarantee
□ Applicable Not applicable
The Company has no illegal external guarantee in the reporting period.
IV. Appointment and Dismissal of Accounting Firm
Has the semi-annual financial report been audited?
□ Yes No
The semi-annual report of the Company is not audited.
V. Description of the Board of Directors and the Board of Supervisors on the "Non-standard
Audit Report" of the Accounting Firm in the Reporting Period
□ Applicable Not applicable
VI. Description of the Board of Directors on the "Non-standard Audit Report" of the Last Year
□ Applicable Not applicable
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VII. Matters Related to Bankruptcy Reorganization
□ Applicable Not applicable
The Company has no matter related to bankruptcy reorganization in the reporting period.
VIII. Litigation Matters
Major litigation and arbitration matters
□ Applicable Not applicable
The Company has no major litigation or arbitration matter in the reporting period.
Other litigation matters
Applicable □ Not Applicable
Litigation Implementation
Basic Information Amount Are There Progress of Date of Disclo
(Arbitration) of Litigation
about Litigation Involved Estimated Litigation Disclos sure
Results and (Arbitration)
(Arbitration) (CNY 10,000) Liabilities (Arbitration) ure Index
Impact Judgment
Including
Summary of other
estimated Case not closed
litigation not Case not No significant
24,739.01 liabilities of by the end of the
reaching the major closed impact
CNY reporting period
disclosure standard
32,770,300
Summary of other
litigation not No significant
56.10 No Case closed Completed
reaching the major impact
disclosure standard
IX. Punishment and Rectification
□ Applicable Not applicable
X. Integrity of the Company and Its Controlling Shareholders and Actual Controllers
□ Applicable Not applicable
XI. Major Related Transactions
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1. Related transactions related to daily operations
Applicable □ Not Applicable
Price of Related Transaction
Proportion to the Amount of
Type of Related Transaction
Pricing Principle of Related
Transaction (CNY 10,000)
Available Market Value of
Related Transaction Party
Is the Approved Amount
Amount (CNY 10,000)
Approved Transaction
Settlement Method of
Similar Transactions
Similar Transactions
Related Transaction
Amount of Related
Content of Related
Date of Disclosure
Disclosure Index
Transaction
Transaction
Correlation
Exceeded
http://www.cni
nfo.com.cn/new
China FAW
The same Mark /disclosure/stoc
Group Sales Sales
ultimate Marke et Cash + bill 229,264.7 January 28, k?stockCode=0
Import & of of 229,264.76 10.02% 343,417 No
controllin t price prici settlement 6 2022 00800&orgId=
Export Co., goods goods
g party ng gssz0000800#la
Ltd.
testAnnouncem
ent
Total -- -- 229,264.76 -- 343,417 -- -- -- -- --
Details on the return of large goods None
Actual performance in the reporting period, if
the total amount of daily related transactions For details about the actual performance of related transactions in the reporting period, please see Item XI "Related parties and
to be incurred in the current period is related transactions" in Section X of this report.
estimated by category
Reasons for large difference between
Not applicable
transaction price and market reference price
40
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2. Related transactions arising from the acquisition and sale of assets or equity
□ Applicable Not applicable
The Company has no related transaction arising from the acquisition and sale of assets or equity in
the reporting period.
3. Related transactions of joint external investment
□ Applicable Not applicable
The Company has no related transaction of joint foreign investment in the reporting period.
4. Related credit and debt transactions
Applicable □ Not Applicable
Whether there are non-operating related credit and debt transactions
□ Yes No
The Company has no non-operating related credit and debt transactions in the reporting period.
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5. Transaction with related finance companies
Applicable □ Not Applicable
Deposit Business
Amount Incurred in Current Period
Maximum
Total Deposit Total Withdrawal
Daily Deposit Deposit Interest Rate Opening Balance Ending Balance
Related Parties Correlation Amount in the Amount in the
Limit (CNY Range (CNY 10,000) (CNY 10,000)
10,000) Current Period Current Period
(CNY 10,000) (CNY 10,000)
Associated
enterprise of
the Company,
First Automobile
the same 3,000,000 0.35%-2.85% 2,265,311.07 19,646,176.20 19,822,347.55 2,089,139.72
Finance Co., Ltd.
ultimate
controlling
party
Credit Granting or Other Financial Businesses
Actual Amount Incurred (CNY
Related Parties Correlation Business Type Total Price (in CNY 10,000)
10,000)
Associated enterprise of the
First Automobile Finance Co., Other financial
Company, the same ultimate 900,000 82,647.25
Ltd. businesses
controlling party
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6. Transactions between finance companies controlled by the Company and related parties
□ Applicable Not applicable
There is no deposit, loan, credit granting or other financial businesses between the finance companies controlled by the Company and related
parties.
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7. Other major related transactions
Applicable □ Not Applicable
On January 27, 2022, the 21st meeting of the 9th Board of Directors of the Company reviewed
and approved the Proposal on Estimated Amount of Daily Related Transactions in 2022 and the
Proposal on Estimated Amount of Financial Business with First Automobile Finance Co., Ltd. in
2022, which were reviewed and approved by the first extraordinary shareholders' meeting of the
Company in 2022.
Relevant Inquiries on Disclosure Website of Interim Report of Major Related Transactions
Disclosure Date of
Name of Temporary Name of Temporary Announcement
Temporary
Announcement Disclosure Website
Announcement
Announcement on estimated
CNINFO
amount of daily related January 28, 2022
(http://www.cninfo.com.cn)
transactions in 2022
Announcement on estimated
amount of financial business CNINFO
January 28, 2022
with First Automobile Finance (http://www.cninfo.com.cn)
Co., Ltd. in 2022
XII. Major Contracts and Their Performance
1. Trusteeship, contracting and lease
(1) Trusteeship
Applicable □ Not Applicable
Description of trusteeship
The Entrustment Management Agreement signed by Jiefang Limited with FAW and FAW Light
Commercial Vehicle Co., Ltd. (hereinafter referred to as "FAW Light Vehicle Company"), shows
that FAW will entrust Jiefang Limited to manage the FAW Harbin Light Automobile Co., Ltd. and
FAW Hongta Yunnan Automobile Manufacturing Co., Ltd., which are affiliated to FAW Light
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Vehicle Company. For main contents of relevant entrustment management agreement, please see the
Report on Major Assets Replacement, Shares Issuance and Cash Payment for Assets Purchase and
Related Transactions of FAW Car Co., Ltd.
Projects that bring about profits and losses exceeding 10% of the total profit of the Company in the
reporting period
□ Applicable Not applicable
The Company has no trusteeship project that brings about profits and losses exceeding 10% of the
total profit of the Company in the reporting period.
(2) Contracting
□ Applicable Not applicable
There is no contracting made by the Company in the reporting period.
(3) Lease
Applicable □ Not Applicable
Description of lease
For details of the Company's operating lease, please refer to Note 13 "Investment real estate", Note
14 "Fixed assets", and Note 18 "Right-of-use assets" in Notes to Items in Consolidated Financial
Statements (VII) of Section X, and Note 5 "Related parties and related transactions" in Item XI
"Related parties and related transactions".
Projects that bring about profits and losses exceeding 10% of the total profit of the Company in the
reporting period
□ Applicable Not applicable
The Company has no leasing project that brings about profits and losses exceeding 10% of the total
profit of the Company in the reporting period.
2. Major guarantees
□ Applicable Not applicable
The Company has no major guarantee in the reporting period.
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3. Entrusted financial management
□ Applicable Not applicable
The Company has no entrusted financial management in the reporting period.
4. Other major contracts
□ Applicable Not applicable
The Company has no other major contracts in the reporting period.
XIII. Other Major Matters to be Explained
□ Applicable Not applicable
There are no other major matters to be explained by the Company in the reporting period.
XIV. Major Events of Subsidiaries
□ Applicable Not applicable
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Section VII Changes in Shares and Shareholders
I. Changes in Shares
1. Changes in shares
Unit: share
Before the Change Increase/Decrease Made by the Change (+, -) After the Change
Share Transferred
Issue of New from
Quantity Scale Bonus Others Subtotal Quantity Scale
Shares Accumulation
Fund
I. Restricted shares 3,238,899,791 69.64% 3,721,601 -260,857 3,460,744 3,242,360,535 69.67%
1. Shares held by the state
2. Shares held by the state-owned
3,197,912,134 68.76% 3,197,912,134 68.71%
legal person
3. Shares held by other domestic
40,987,657 0.88% 3,721,601 -260,857 3,460,744 44,448,401 0.96%
enterprises
Including: shares held by domestic
legal person
Shares held by domestic natural person 40,987,657 0.88% 3,721,601 -260,857 3,460,744 44,448,401 0.96%
4. Shares held by foreign enterprises
Including: shares held by overseas
legal person
Shares held by overseas
natural person
II. Unrestricted shares 1,411,754,078 30.36% 1,411,754,078 30.33%
1. CNY ordinary shares 1,411,754,078 30.36% 1,411,754,078 30.33%
2. Foreign shares listed in China
3. Foreign shares listed overseas
4. Others
III. Total number of shares 4,650,653,869 100.00% 3,721,601 -260,857 3,460,744 4,654,114,613 100.00%
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Reasons for changes in shares
Applicable □ Not Applicable
In the reporting period, the Company granted 3,721,601 shares in total included in the reserved
part of the phase I restricted share incentive plan. The new shares are listed on January 10, 2022. Two
original incentive objects of the Company do not conform to the provisions on incentive objects in
the restricted share incentive plan due to job transfer, and a total number of 260,857 restricted shares
held by them is repurchased and canceled by the Company. The total share capital of the Company
is 4,654,114,613 shares after the grant, repurchase and cancellation of the above reserved part.
Approval of share changes
Applicable □ Not Applicable
On December 9, 2021, the 20th meeting of the 9th Board of Directors and the 19th meeting of
the 9th Board of Supervisors of the Company reviewed and approved the Proposal on Granting
Reserved Part of Restricted Shares in the Phase I Restricted Share Incentive Plan to Incentive Objects
and the Proposal on Repurchase and Cancellation of Partial Restricted Shares in the Phase I
Restricted Share Incentive Plan respectively.
Transfer of share changes
Applicable □ Not Applicable
(1) On January 4, 2022, the Company submitted registration materials to CSDC for the additional
shares involved in the grant of the reserved part of this equity incentive plan. On January 10, 2022,
new shares were listed, and the total share capital of the Company increased to 4,654,375,470 shares.
(2) On January 12, 2022, the Company submitted registration materials to CSDC for the shares
repurchased and canceled in this equity incentive plan. On January 13, 2022, CSDC issued the
Confirmation of Securities Transfer Registration to the Company, and the total share capital of the
Company was reduced to 4,654,114,613 shares.
Implementation progress of share repurchase
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□ Applicable Not applicable
Implementation progress of reducing repurchased shares by centralized bidding
□ Applicable Not applicable
Impact of changes in shares on financial indicators such as basic earnings per share and diluted
earnings per share in the latest year and the latest period, and net assets per share attributable to
common shareholders of the Company
Applicable □ Not Applicable
In the reporting period, the net increase in share capital of the Company was 3,460,744 shares, which
had little impact on the Company's financial indicators such as basic earnings per share, diluted
earnings per share and net assets per share attributable to common shareholders of the Company.
Other information disclosed as deemed necessary by the Company or required by the securities
regulatory authority
□ Applicable Not applicable
2. Changes in restricted shares
Applicable □ Not Applicable
49
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Unit: share
Number of
Restricted Number of
Number of Restricted Number of Restricted
Name of Shares Restricted Shares Reason for
Shares at the Beginning Shares at the End of the Release Date
Shareholder Released in Increased in the Restriction
of the Period Period
the Current Current Period
Period
China FAW Co., Major asset
2,413,412,134 2,413,412,134 April 9, 2023
Ltd. restructuring
FAW Bestune Major asset
784,500,000 784,500,000 April 9, 2023
Car Co., Ltd. restructuring
Equity The restricted period
Hu Hanjie 334,331 334,331
incentive of all restricted
Equity shares granted to
Wu Bilei 228,552 228,552
incentive incentive objects is 2
Equity years, and three
Zhang Guohua 228,493 228,493
incentive release dates are set,
Equity which are the next
Kong Dejun 228,498 228,498
incentive day after the
Equity expiration of the
Wang Ruijian 253,496 253,496
incentive restricted period and
Equity the first and second
Shang Xingwu 228,631 228,631
incentive anniversary days of
Equity that day (postponed
Ou Aimin 229,010 229,010
incentive to the first trading
50
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Equity day after that in case
Wang Jianxun 192,778 192,778
incentive of holidays). The
upper limit of the
number of restricted
Other core shares released is
employees of Equity 33%, 33% and 34%
39,063,868 3,460,744 42,524,612
senior director incentive of the total number of
and above shares granted to
incentive objects
respectively.
Total 3,238,899,791 3,460,744 3,242,360,535 -- --
II. Issuance and Listing of Securities
Applicable □ Not Applicable
Name of Issue Price Quantity Transaction
Shares and Issue Quantity Date of Date of
(or Interest Approved Termination Disclosure Index
Derivative Date Issued Listing Disclosure
Rate) for Listing Date
Securities
Stocks
http://www.cninfo.com.cn/new/dis
Decem CNY 3,721,601 January closure/stock?stockCode=000800 January 6,
A share ber 9, 3,721,601
6.38/share 10, 2022 &orgId=gssz0000800#latestAnno 2022
2021 uncement
Description of securities issuance in the reporting period: In the reporting period, the Company issued 3,721,601 common A shares in total to the
reserved grant objects of the phase I restricted share incentive plan.
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III. Number of Shareholders and Shareholdings of the Company
Unit: share
Total Number of Common
Total Number of Preferred Shareholders with Restored Voting
Shareholders at the End of the 92,864 0
Rights at the End of the Reporting Period
Reporting Period
Shareholding of Common Shareholders Holding More Than 5% of the Shares or Top 10 Common Shareholders
Pledge, Marking
Number of Ordinary Increase and Number of or Freezing
Name of Nature of Shareholding Shares Held at the Decrease in the Number of Restricted Unrestricted
Shareholder Shareholders Proportion End of the Reporting Reporting Ordinary Shares Held Ordinary Shares Status
Period Period Held of Quantity
Shares
China FAW Co., State-owned
65.76% 3,060,649,901 2,413,412,134 647,237,767
Ltd. legal person
FAW Bestune State-owned
16.86% 784,500,000 784,500,000
Car Co., Ltd. legal person
Hong Kong
Securities Overseas
1.53% 71,029,475. 9,859,979
Clearing legal person
Company Ltd.
Domestic
Qu Haipeng natural 0.78% 36,096,600
person
Jilin Province
State-owned
State-owned 0.29% 13,712,916
legal person
Capital
Domestic
Chao Guo natural 0.22% 10,139,358 6,087,429
person
Li Yan Domestic 0.16% 7,660,000
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natural
person
Zhong Ou AMC
- Agricultural
Bank of China -
Zhong Ou &
Others 0.12% 5,549,500
CITIC Securities
Financial Asset
Management
Plan
Bosera Asset
Management
Co., Ltd. -
Agricultural
Bank of China -
Others 0.12% 5,549,500
Bosera & CITIC
Securities
Financial Asset
Management
Plan
Dacheng Fund -
Agricultural
Bank of China -
Dacheng &
Others 0.08% 3,713,100
CITIC Securities
Financial Asset
Management
Plan
Strategic investors or general None
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legal persons who become the
top 10 common shareholders
due to the issuance of new
shares
Among the above shareholders, FAW Bestune is a wholly-owned subsidiary of FAW, and is a person acting in concert as
Description of correlation or
specified in the Regulations for the Takeover of Listed Companies. The public disclosure data indicates that the Company does
concerted action of the above
shareholders not know whether there is a correlation between other shareholders of outstanding shares, nor whether other shareholders of
outstanding shares are persons acting in concert as specified in the Regulations for the Takeover of Listed Companies.
Involvement of the above
shareholders in
None
entrusting/entrusted voting
rights and waiving voting rights
Special description on the
existence of repurchase special
None
accounts among the top 10
shareholders
Shareholding of Top 10 Common Shareholders with Unrestricted Ordinary Shares
Number of Unrestricted Ordinary Type of Shares
Name of Shareholder Shares Held at the End of the
Reporting Period Type of Shares Quantity
China FAW Co., Ltd. 647,237,767 CNY ordinary shares 647,237,767
Hong Kong Securities Clearing Company Ltd. 71,029,475 CNY ordinary shares 71,029,475
Qu Haipeng 36,096,600 CNY ordinary shares 36,096,600
Jilin Province State-owned Capital 13,712,916 CNY ordinary shares 13,712,916
Chao Guo 10,139,358 CNY ordinary shares 10,139,358
Li Yan 7,660,000 CNY ordinary shares 7,660,000
Zhong Ou AMC - Agricultural Bank of China - Zhong Ou 5,549,500 CNY ordinary shares 5,549,500
54
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& CITIC Securities Financial Asset Management Plan
Bosera Asset Management Co., Ltd. - Agricultural Bank
of China - Bosera & CITIC Securities Financial Asset 5,549,500 CNY ordinary shares 5,549,500
Management Plan
Dacheng Fund - Agricultural Bank of China - Dacheng &
3,713,100 CNY ordinary shares 3,713,100
CITIC Securities Financial Asset Management Plan
Yang Canxiong 3,555,926 CNY ordinary shares 3,555,926
Among the above shareholders, FAW Bestune is a wholly-owned subsidiary of FAW, and is a person
Description of correlation or concerted action between the
acting in concert as specified in the Regulations for the Takeover of Listed Companies. The public
top 10 shareholders of unrestricted ordinary shares, and
disclosure data indicates that the Company does not know whether there is a correlation between
between the top 10 shareholders of unrestricted ordinary
other shareholders of outstanding shares, nor whether other shareholders of outstanding shares are
shares and the top 10 common shareholders
persons acting in concert as specified in the Regulations for the Takeover of Listed Companies.
Qu Haipeng, a domestic natural person, holds 36,096,600 shares of the Company through the
guaranteed securities account for customer credit trading of CITIC Securities; Chao Guo, a domestic
Description of top 10 common shareholders' participation natural person, holds 7,825,200 shares of the Company through the guaranteed securities account for
in financing bonds business customer credit trading of Minsheng Securities; Li Yan, a domestic natural person, holds 7,660,000
shares of the Company through the guaranteed securities account for customer credit trading of
Dongguan Securities.
Whether the top 10 common shareholders and the top 10 common shareholders with unrestricted ordinary shares of the Company have agreed
repurchase transactions in the reporting period
□ Yes No
The top 10 common shareholders and the top 10 common shareholders with unrestricted ordinary shares of the Company do not agree
repurchase transactions in the reporting period
55
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IV. Changes in Shareholding of Directors, Supervisors and Senior Management
□ Applicable Not applicable
There is no change in the shareholding of the Company's directors, supervisors and senior
management in the reporting period. Please refer to the 2021 Annual Report for details.
V. Changes in Controlling Shareholders or Actual Controllers
Changes in controlling shareholders in the reporting period
□ Applicable Not applicable
There is no change in the controlling shareholders of the Company in the reporting period.
Change of actual controller in the reporting period
□ Applicable Not applicable
There is no change in the actual controller of the Company in the reporting period.
56
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Section VIII Preferred Shares
□ Applicable Not applicable
The Company has no preferred shares in the reporting period.
57
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Section IX Bonds
□ Applicable Not applicable
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Section X Financial Report
I. Audit Report
Whether the semi-annual report is audited
□ Yes No
The semi-annual financial report of the Company is not audited.
II. Financial Statements
The unit of statement in the financial notes is CNY
1. Consolidated balance sheet
Prepared by: FAW JIEFANG GROUP CO., LTD.
June 30, 2022
Unit: CNY
Item June 30, 2022 January 1, 2022
Current assets:
Monetary capital 28,545,747,104.70 30,761,262,721.40
Settlement reserve fund
Loans to banks and other financial
institutions
Financial assets held for trading
Derivative financial assets
Notes receivable 6,795,406.57 12,936,978.11
Accounts receivable 2,033,585,686.23 1,279,693,951.70
Receivables financing 7,091,605,627.68 5,305,018,299.79
Prepayment 1,378,154,656.21 868,811,412.99
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves
receivable
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Item June 30, 2022 January 1, 2022
Other receivables 308,357,637.68 249,088,090.95
Including: interest receivable
Dividends receivable 26,488,012.75 8,567,040.00
Financial assets purchased under
agreements to resell
Inventory 9,035,457,594.09 9,268,120,531.25
Contractual assets 61,968,023.59 53,047,687.72
Held-for-sale assets
Current portion of non-current
114,825,391.38 114,825,391.38
assets
Other current assets 473,068,938.63 2,014,149,591.51
Total current assets 49,049,566,066.76 49,926,954,656.80
Non-current assets:
Loans and advances
Debt investment
Other debt investments
Long-term receivables 217,930,218.79 222,590,757.79
Long-term equity investment 5,023,596,387.36 4,766,734,671.74
Other equity instrument
investments
Other non-current financial assets
Investment real estate 159,534,670.00 80,202,825.09
Fixed assets 9,005,998,503.41 9,236,789,322.03
Project under construction 966,294,107.55 965,997,208.23
Bearer biological assets
Oil and gas assets
Right-of-use assets 121,039,384.71 143,766,265.44
Intangible assets 2,728,231,478.67 2,772,277,116.13
Development expenditures
Goodwill
60
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Item June 30, 2022 January 1, 2022
Long-term deferred expenses 232,518.98 334,598.30
Deferred tax assets 1,908,957,381.92 1,650,296,511.26
Other non-current assets
Total non-current assets 20,131,814,651.39 19,838,989,276.01
Total assets 69,181,380,718.15 69,765,943,932.81
Current liabilities:
Short-term borrowings
Borrowing from the central bank
Placements from banks and other
financial institutions
Financial liabilities held for
trading
Derivative financial liabilities
Notes payable 17,538,100,899.05 13,062,704,192.54
Accounts payable 12,943,539,758.82 14,564,899,994.47
Advance receipts 254,326.19 1,712,917.27
Contract liabilities 1,898,901,256.47 2,700,642,475.91
Financial assets sold for
repurchase
Deposits taking and interbank
deposits
Acting trading securities
Acting underwriting securities
Employee compensation payable 421,204,060.05 364,450,425.37
Taxes payable 358,991,484.63 173,948,529.53
Other payables 7,299,870,926.01 7,383,223,172.30
Including: interest payable
Dividends payable 171,500.02 171,500.02
Handling charges and
commissions payable
Reinsurance accounts payable
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Item June 30, 2022 January 1, 2022
Held-for-sale liabilities
Current portion of non-current
33,214,415.10 47,060,544.71
liabilities
Other current liabilities 157,933,439.12 267,479,444.78
Total current liabilities 40,652,010,565.44 38,566,121,696.88
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: preferred shares
Perpetual bonds
Lease liabilities 95,066,903.44 88,307,218.05
Long-term payables
Long-term employee
763,977,826.41 764,529,046.36
compensation payable
Estimated liabilities 1,210,644,082.24 1,257,487,319.78
Deferred incomes 2,662,322,917.73 2,473,072,814.33
Deferred income tax liabilities 309,037,034.86 374,185,114.15
Other non-current liabilities
Total non-current liabilities 5,041,048,764.68 4,957,581,512.67
Total liabilities 45,693,059,330.12 43,523,703,209.55
Owner's equities:
Share capital 4,654,114,613.00 4,654,114,613.00
Other equity instruments
Including: preferred shares
Perpetual bonds
Capital reserve 10,469,689,124.38 10,439,365,093.18
Less: treasury shares 281,569,025.73 310,460,486.38
Other comprehensive income -32,839,796.01 -32,794,902.20
Special reserve 357,328,826.61 315,398,148.75
Surplus reserve 2,742,214,904.83 2,742,214,904.83
General risk provision
62
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Item June 30, 2022 January 1, 2022
Undistributed profits 5,579,382,740.95 8,434,403,352.08
Total owners’ equity attributable to
23,488,321,388.03 26,242,240,723.26
the parent company
Minority equity
Total owners' equity 23,488,321,388.03 26,242,240,723.26
Total liabilities and owner's equities 69,181,380,718.15 69,765,943,932.81
Legal representative: Hu Hanjie Person in charge of accounting: Ou Aimin Person in charge of the accounting
organization: Si Yuzhuo
2. Balance sheet of parent company
Unit: CNY
Item June 30, 2022 January 1, 2022
Current assets:
Monetary capital 16,217,499.97 9,646,455.17
Financial assets held for trading
Derivative financial assets
Notes receivable
Accounts receivable
Receivables financing
Prepayment
Other receivables 18,353,402.55 432,429.80
Including: interest receivable
Dividends receivable 17,920,972.75
Inventory
Contractual assets
Held-for-sale assets
Current portion of non-current
assets
Other current assets 112,457.43 720,491.14
Total current assets 34,683,359.95 10,799,376.11
Non-current assets:
Debt investment
63
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Item June 30, 2022 January 1, 2022
Other debt investments
Long-term receivables
Long-term equity investment 25,915,068,767.16 25,640,802,370.53
Other equity instrument
investments
Other non-current financial assets
Investment real estate
Fixed assets
Project under construction
Bearer biological assets
Oil and gas assets
Right-of-use assets
Intangible assets
Development expenditures
Goodwill
Long-term deferred expenses
Deferred tax assets
Other non-current assets
Total non-current assets 25,915,068,767.16 25,640,802,370.53
Total assets 25,949,752,127.11 25,651,601,746.64
Current liabilities:
Short-term borrowings
Financial liabilities held for
trading
Derivative financial liabilities
Notes payable
Accounts payable 1,968,902.00 200,000.00
Advance receipts
Contract liabilities
Employee compensation payable
64
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Item June 30, 2022 January 1, 2022
Taxes payable 6,793,734.46 1,462,703.57
Other payables 3,548,225,291.50 552,502,809.86
Including: interest payable
Dividends payable 171,500.02 171,500.02
Held-for-sale liabilities
Current portion of non-current
liabilities
Other current liabilities
Total current liabilities 3,556,987,927.96 554,165,513.43
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee
compensation payable
Estimated liabilities
Deferred incomes
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 3,556,987,927.96 554,165,513.43
Owner's equities:
Share capital 4,654,114,613.00 4,654,114,613.00
Other equity instruments
Including: preferred shares
Perpetual bonds
Capital reserve 12,267,337,664.44 12,267,337,664.44
Less: treasury shares 281,569,025.73 310,460,486.38
Other comprehensive income 257,376.69 304,113.31
65
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Item June 30, 2022 January 1, 2022
Special reserve
Surplus reserve 1,511,497,143.93 1,511,497,143.93
Undistributed profits 4,241,126,426.82 6,974,643,184.91
Total owners' equity 22,392,764,199.15 25,097,436,233.21
Total liabilities and owner's equities 25,949,752,127.11 25,651,601,746.64
3. Consolidated profit statement
Unit: CNY
Item Half of 2022 Half of 2021
I. Total operating income 22,871,535,261.56 78,600,163,121.16
Including: operating income 22,871,535,261.56 78,600,163,121.16
Interest income
Premium earned
Handling charges and commission income
II. Total operating cost 23,120,223,828.02 75,291,776,865.42
Including: operating cost 21,115,050,469.61 71,861,081,519.02
Interest expense
Handling charges and commission expense
Surrender value
Net payments for insurance claims
Net allotment of reserves for insurance liabilities
Policy dividend expenditure
Expenses for reinsurance accepted
Taxes and surcharges 106,500,261.51 293,944,056.24
Selling expense 566,490,728.82 1,315,060,101.99
Management cost 887,020,116.52 1,103,407,146.33
R&D expenses 1,016,316,222.64 1,237,304,341.12
Financial expense -571,153,971.08 -519,020,299.28
Including: interest expenses 2,361,612.41
Interest income 502,087,676.33 363,409,455.88
Add: other incomes 230,047,050.32 123,839,818.59
66
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Item Half of 2022 Half of 2021
Investment income (losses expressed with "-") 203,908,916.41 387,219,719.37
Including: investment income in associated
281,180,159.71 386,449,232.03
enterprises and joint ventures
Gains on derecognition of financial assets at
amortized cost
Foreign exchange gains (losses expressed with "-")
Net exposure hedging income (losses expressed with "-")
Profit arising from changes in fair value (losses expressed
with "-")
Credit impairment loss (losses expressed with "-") -21,826,743.35 6,757,848.51
Asset impairment loss (losses expressed with "-") -85,344,746.96 -121,005,056.96
Income from assets disposal (losses expressed with "-") 42,431.19 -183,677.14
III. Operating profit (losses expressed with "-") 78,138,341.15 3,705,014,908.11
Add: Non-operating income 104,058,106.26 30,755,399.12
Less: Non-operating expenses 12,214,234.59 14,348,703.34
IV. Total profit (losses expressed with "-") 169,982,212.82 3,721,421,603.89
Less: income tax expenses -171,674.50 452,443,037.35
V. Net profit (net losses expressed with "-") 170,153,887.32 3,268,978,566.54
(I) Classified according to business continuity
1. Net profit from continuing operations (net losses
170,153,887.32 3,268,978,566.54
expressed with "-")
2. Net profit from discontinuing operations (net losses
expressed with "-")
(II) Classified according to attribution of the ownership
1. Net profit attributable to the owners of the parent
170,153,887.32 3,268,978,566.54
company
2. Minority interests
VI. Net after-tax amount of other comprehensive income -44,893.81 -8,800.15
Net after-tax amount of other comprehensive income
-44,893.81 -8,800.15
attributable to the owners of the parent company
(I) Other comprehensive income that cannot be reclassified
into profit or loss
1. Changes arising from re-measurement of the defined
benefit plan
67
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Item Half of 2022 Half of 2021
2. Other comprehensive incomes that cannot be
transferred to profit and loss under the equity method
3. Changes in fair value of investment in other equity
instruments
4. Changes in fair value of the Company’s credit risk
5. Others
(II) Other comprehensive income to be reclassified into
-44,893.81 -8,800.15
profit or loss
1. Other comprehensive incomes that can be reclassified
-46,736.62 -7,226.33
into profit and loss under the equity method
2. Changes in the fair value of other debt investments
3. Amount of financial assets reclassified into other
comprehensive incomes
4. Impairment provision of credit in other debt
investments
5. Cash flow hedging reserve
6. Exchange differences arising from foreign currency
1,842.81 -1,573.82
financial statements
7. Others
Net after-tax amount of other comprehensive income
attributable to minority shareholders
VII. Total comprehensive income 170,108,993.51 3,268,969,766.39
Total comprehensive income attributable to the owners of
170,108,993.51 3,268,969,766.39
parent company
Total comprehensive income attributable to minority
shareholders
VIII. Earnings per share:
(I) Basic earnings per share 0.0366 0.7047
(II) Diluted earnings per share 0.0366 0.7047
In case of business combination under common control in the current period, the net profit realized by the combined
party before combination and that in the previous period are CNY 0.00.
Legal representative: Hu Hanjie Person in charge of accounting: Ou Aimin Person in charge of the accounting
organization: Si Yuzhuo
4. Profit statement of parent company
Unit: CNY
68
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Item Half of 2022 Half of 2021
I. Operating income
Less: operating cost 871,274.65 420,747.40
Taxes and surcharges 96,668.40 260.30
Selling expense
Management cost 793,096.66 707,539.36
R&D expenses
Financial expense -18,490.41 -242,724.28
Including: interest expenses
Interest income 19,230.41 246,160.17
Add: Other incomes 294,909.01 96,438.23
Investment income (losses expressed with "-") 292,234,106.00 3,103,351,507.45
Including: investment income in associated enterprises
292,234,106.00 383,431,507.45
and joint ventures
Gains on derecognition of financial assets at
amortized cost (losses expressed with "-")
Net exposure hedging income (losses expressed with "-")
Profit arising from changes in fair value (losses expressed
with "-")
Credit impairment loss (losses expressed with "-")
Asset impairment loss (losses expressed with "-")
Income from assets disposal (losses expressed with "-")
II. Operating profit (losses expressed with "-") 291,657,740.36 3,102,982,870.30
Add: Non-operating income 30.00
Less: Non-operating expenses
III. Total profit (total (losses expressed with "-") 291,657,740.36 3,102,982,900.30
Less: income tax expenses
IV. Net profit (net losses expressed with "-") 291,657,740.36 3,102,982,900.30
(I) Net profit from continuing operations (net losses expressed
291,657,740.36 3,102,982,900.30
with "-")
(II) Net profit from discontinuing operations (net losses
expressed with "-")
V. Net after-tax amount of other comprehensive income -46,736.62 -7,226.33
(I) Other comprehensive income that cannot be reclassified
69
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Item Half of 2022 Half of 2021
into profit or loss
1. Changes arising from re-measurement of the defined
benefit plan
2. Other comprehensive incomes that cannot be
transferred to profit and loss under the equity method
3. Changes in fair value of investment in other equity
instruments
4. Changes in fair value of the Company’s credit risk
5. Others
(II) Other comprehensive income to be reclassified into
-46,736.62 -7,226.33
profit or loss
1. Other comprehensive incomes that can be reclassified
-46,736.62 -7,226.33
into profit and loss under the equity method
2. Changes in the fair value of other debt investments
3. Amount of financial assets reclassified into other
comprehensive incomes
4. Impairment provision of credit in other debt
investments
5. Cash flow hedging reserve
6. Exchange differences arising from foreign currency
financial statements
7. Others
VI. Total comprehensive income 291,611,003.74 3,102,975,673.97
VII. Earnings per share:
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated cash flow statement
Unit: CNY
Item Half of 2022 Half of 2021
I. Cash flows from operating activities:
Cash received from sales of goods or rendering of services 22,972,631,458.07 39,287,647,573.86
Net increase in customer bank deposits and due to banks and
other financial institutions
Net increase in borrowings from the central bank
Net increase in placements from other financial institutions
Premiums received from original insurance contracts
70
Full Text of 2022 Semi-annual Report of FAW JIEFANG GROUP CO., LTD.
Item Half of 2022 Half of 2021
Net cash received from reinsurance business
Net increase in deposits and investments from policyholders
Cash received from interests, handling charges and
commissions
Net increase in placements from banks and other financial
institutions
Net increase in repurchase business capital
Net cash received from securities brokerage
Tax refunds received 1,010,974,954.15
Other cash receipts related to operating activities 845,166,247.90 547,477,041.89
Subtotal of cash inflows from operating activities 24,828,772,660.12 39,835,124,615.75
Cash paid for goods and services 20,189,789,863.19 18,701,696,474.78
Net increase in loans and advances to customers
Net increase in deposits with central bank and other financial
institutions
Cash paid for original insurance contract claims
Net increase in loans to banks and other financial institutions
Cash paid for interests, handling charges and commissions
Cash paid for policyholder dividend
Cash paid to and for employees 2,288,542,182.41 2,600,871,987.98
Taxes paid 70,848,814.67 1,994,456,924.80
Other cash paid relating to operating activities 836,454,073.22 1,012,384,865.02
Subtotal of cash outflows from operating activities 23,385,634,933.49 24,309,410,252.58
Net cash flows from operating activities 1,443,137,726.63 15,525,714,363.17
II. Cash flows from investing activities:
Cash received from disposal of investments
Cash received from investment income 6,300,012.21 4,907,799.92
Net cash received from disposal of fixed assets, intangible
3,519,331.24 2,145,684.73
assets and other long-term assets
Net cash received from disposal of subsidiaries and other
business units
Cash received relating to other investing activities 441,265,670.20 283,825,095.39
Subtotal of cash inflows from investing activities 451,085,013.65 290,878,580.04
Cash paid to acquire fixed assets, intangible assets and other
1,125,719,469.03 987,980,994.05
long-term assets
71
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Item Half of 2022 Half of 2021
Cash paid for investment
Net increase in impawn loans
Net cash paid to acquire subsidiaries and other business units
Cash paid relating to other investing activities
Subtotal of cash outflows from investing activities 1,125,719,469.03 987,980,994.05
Net cash flows from investing activities -674,634,455.38 -697,102,414.01
III. Cash flows from financing activities:
Cash received from capital contributions 309,046,933.78
Including: cash received by subsidiaries from capital
contributions of minority shareholders
Cash received from borrowings
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities 309,046,933.78
Cash paid for repayment of debts
Cash paid for distribution of dividends, profits or repayment of
3,025,174,498.45
interest
Including: dividends and profits paid to minority shareholders
by subsidiaries
Other cash paid relating to financing activities 15,922,921.74
Subtotal of cash outflows from financing activities 3,041,097,420.19
Net cash flows from financing activities -3,041,097,420.19 309,046,933.78
IV. Effect of foreign exchange rate changes on cash and cash
equivalents
V. Net increase in cash and cash equivalents -2,272,594,148.94 15,137,658,882.94
Add: beginning balance of cash and cash equivalents 30,542,676,891.89 14,786,680,218.82
VI. Ending balance of cash and cash equivalents 28,270,082,742.95 29,924,339,101.76
6. Cash flow statement of the parent company
Unit: CNY
Item Half of 2022 Half of 2021
I. Cash flows from operating activities:
Cash received from sales of goods or rendering of services
Tax refunds received 735,000.75
Other cash receipts related to operating activities 3,032,128,468.42 96,521.52
Subtotal of cash inflows from operating activities 3,032,863,469.17 96,521.52
Cash paid for goods and services
72
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Item Half of 2022 Half of 2021
Cash paid to and for employees 207,000.00 219,000.00
Taxes paid 96,728.40 6,334,983.10
Other cash paid relating to operating activities 834,581.41 1,485,537,604.60
Subtotal of cash outflows from operating activities 1,138,309.81 1,492,091,587.70
Net cash flows from operating activities 3,031,725,159.36 -1,491,995,066.18
II. Cash flows from investing activities:
Cash received from disposal of investments
Cash received from investment income 2,719,920,000.00
Net cash received from disposal of fixed assets, intangible
assets and other long-term assets
Net cash received from disposal of subsidiaries and other
business units
Other cash received relating to financing activities 19,230.41 246,160.17
Subtotal of cash inflows from investing activities 19,230.41 2,720,166,160.17
Cash paid to acquire fixed assets, intangible assets and other
long-term assets
Cash paid for investment
Net cash paid to acquire subsidiaries and other business units
Cash paid relating to other investing activities
Subtotal of cash outflows from investing activities
Net cash flows from investing activities 19,230.41 2,720,166,160.17
III. Cash flows from financing activities:
Cash received from capital contributions 309,046,933.78
Cash received from borrowings
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities 309,046,933.78
Cash paid for repayment of debts
Cash paid for distribution of dividends, profits or repayment of
3,025,174,498.45
interest
Other cash paid relating to financing activities
Subtotal of cash outflows from financing activities 3,025,174,498.45
Net cash flows from financing activities -3,025,174,498.45 309,046,933.78
IV. Effect of foreign exchange rate changes on cash and cash
equivalents
V. Net increase in cash and cash equivalents 6,569,891.32 1,537,218,027.77
Add: beginning balance of cash and cash equivalents 8,109,077.01 1,584,858.35
VI. Ending balance of cash and cash equivalents 14,678,968.33 1,538,802,886.12
73
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7. Consolidated statement of changes in owners' equity
Amount in the current period
Unit: CNY
Half of 2022
Owners' equity attributable to the parent company
Other equity instruments Genera Minori
Item Total owners'
Less: Other ty
Preferr Perpetu Special Surplus l risk Undistributed Othe
Share capital Capital reserve treasury comprehens Subtotal equity equity
Othe
ed al reserve reserve provisi profits rs
rs shares ive income
Shares bonds on
I. Ending -
4,654,114,61 10,439,365,09 310,460,486 315,398,148 2,742,214,90 8,434,403,35 26,242,240,72 26,242,240,72
balance of the 32,794,902.
3.00 3.18 .38 .75 4.83 2.08 3.26 3.26
previous year 20
Add:
changes in
accounting
policies
Correc
tion of errors in
the previous
period
Busin
ess combination
under common
control
Others
II. Opening -
4,654,114,61 10,439,365,09 310,460,486 315,398,148 2,742,214,90 8,434,403,35 26,242,240,72 26,242,240,72
balance of the 32,794,902.
3.00 3.18 .38 .75 4.83 2.08 3.26 3.26
current year 20
III.
- - - -
Increase/decreas 41,930,677.
30,324,031.20 28,891,460. -44,893.81 2,855,020,611 2,753,919,335. 2,753,919,335.
e in amount of 86
65 .13 23 23
the current
74
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Half of 2022
Owners' equity attributable to the parent company
Other equity instruments Genera Minori
Item Total owners'
Less: Other ty
Preferr Perpetu Special Surplus l risk Undistributed Othe
Share capital Capital reserve treasury comprehens Subtotal equity equity
Othe
ed al reserve reserve provisi profits rs
rs shares ive income
Shares bonds on
period (decrease
expressed with
"-")
(I) Total
170,153,887. 170,108,993.5 170,108,993.5
comprehensive -44,893.81
32 1 1
income
(II) Invested and
-
decreased
30,324,031.20 28,891,460. 59,215,491.85 59,215,491.85
capital of
65
owners
1. Ordinary
shares invested
by owners
2. Capital
contributed by
holders of other
equity
instruments
3. Amounts of
share-based
payments
recorded in
owner's equity
-
4. Others 30,324,031.20 28,891,460. 59,215,491.85 59,215,491.85
65
- - -
(III) Profit
3,025,174,49 3,025,174,498. 3,025,174,498.
distribution
8.45 45 45
1. Surplus
75
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Half of 2022
Owners' equity attributable to the parent company
Other equity instruments Genera Minori
Item Total owners'
Less: Other ty
Preferr Perpetu Special Surplus l risk Undistributed Othe
Share capital Capital reserve treasury comprehens Subtotal equity equity
Othe
ed al reserve reserve provisi profits rs
rs shares ive income
Shares bonds on
reserves
withdrawn
2. General risk
provision
withdrawn
3. Distribution - - -
to owners (or 3,025,174,49 3,025,174,498. 3,025,174,498.
shareholders) 8.45 45 45
4. Others
(IV) Internal
carryover of
owners' equity
1. Transfer from
capital reserve
to paid-in
capital (or share
capital)
2. Transfer from
surplus reserves
to paid-in
capital (or share
capital)
3. Recovery of
losses by
surplus reserves
4. Retained
earnings carried
forward from
changes in
76
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Half of 2022
Owners' equity attributable to the parent company
Other equity instruments Genera Minori
Item Total owners'
Less: Other ty
Preferr Perpetu Special Surplus l risk Undistributed Othe
Share capital Capital reserve treasury comprehens Subtotal equity equity
Othe
ed al reserve reserve provisi profits rs
rs shares ive income
Shares bonds on
defined benefit
plans
5. Retained
earnings carried
forward from
other
comprehensive
incomes
6. Others
(V) Special 41,930,677.
41,930,677.86 41,930,677.86
reserve 86
1. Withdrawal in
53,753,366.
the current 53,753,366.46 53,753,366.46
46
period
2. Use in the 11,822,688.
11,822,688.60 11,822,688.60
current period 60
(VI) Others
IV. Ending -
4,654,114,61 10,469,689,12 281,569,025 357,328,826 2,742,214,90 5,579,382,74 23,488,321,38 23,488,321,38
balance of the 32,839,796.
3.00 4.38 .73 .61 4.83 0.95 8.03 8.03
current period 01
Amount of previous year
Unit: CNY
77
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Half of 2021
Owners' equity attributable to the parent company
Item Other equity instruments Genera Minori
Less: Other Total owners'
Preferr Perpetu Special Surplus l risk Undistributed Othe ty
Share capital Othe Capital reserve treasury comprehens Subtotal equity
ed al reserve reserve provisi profits rs equity
rs shares ive income
Shares bonds on
I. Ending -
4,609,666,21 10,098,280,76 253,571,466 2,394,517,07 7,207,573,35 24,560,505,43 24,560,505,43
balance of the 3,103,446.4
2.00 7.34 .48 9.97 1.05 0.40 0.40
previous year 4
Add:
changes in
-1,233,011.80 -1,233,011.80 -1,233,011.80
accounting
policies
Correc
tion of errors in
the previous
period
Busin
ess combination
under common
control
Others
II. Opening -
4,609,666,21 10,098,280,76 253,571,466 2,394,517,07 7,206,340,33 24,559,272,41 24,559,272,41
balance of the 3,103,446.4
2.00 7.34 .48 9.97 9.25 8.60 8.60
current year 4
III.
Increase/decreas
e in amount of
40,987,657.0 294,164,315.5 288,553,105 43,124,293. 943,651,632. 1,033,365,992. 1,033,365,992.
the current -8,800.15
0 2 .28 39 04 52 52
period (decrease
expressed with
"-")
(I) Total
3,268,978,56 3,268,969,766. 3,268,969,766.
comprehensive -8,800.15
6.54 39 39
income
(II) Invested and
decreased 40,987,657.0 294,164,315.5 288,553,105
46,598,867.24 46,598,867.24
capital of 0 2 .28
owners
1. Ordinary
shares invested
by owners
2. Capital
contributed by
holders of other
equity
instruments
3. Amounts of
share-based
40,987,657.0 294,164,315.5 288,553,105
payments 46,598,867.24 46,598,867.24
0 2 .28
recorded in
owner's equity
78
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Half of 2021
Owners' equity attributable to the parent company
Item Other equity instruments Genera Minori
Less: Other Total owners'
Preferr Perpetu Special Surplus l risk Undistributed Othe ty
Share capital Othe Capital reserve treasury comprehens Subtotal equity
ed al reserve reserve provisi profits rs equity
rs shares ive income
Shares bonds on
4. Others
- - -
(III) Profit
2,325,326,93 2,325,326,934. 2,325,326,934.
distribution
4.50 50 50
1. Surplus
reserves
withdrawn
2. General risk
provision
withdrawn
3. Distribution - - -
to owners (or 2,325,326,93 2,325,326,934. 2,325,326,934.
shareholders) 4.50 50 50
4. Others
(IV) Internal
carryover of
owners' equity
1. Transfer from
capital reserve
to paid-in
capital (or share
capital)
2. Transfer from
surplus reserves
to paid-in
capital (or share
capital)
3. Recovery of
losses by
surplus reserves
4. Retained
earnings carried
forward from
changes in
defined benefit
plans
5. Retained
earnings carried
forward from
other
comprehensive
incomes
6. Others
(V) Special 43,124,293.
43,124,293.39 43,124,293.39
reserve 39
1. Withdrawal in 57,124,832. 57,124,832.18 57,124,832.18
79
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Half of 2021
Owners' equity attributable to the parent company
Item Other equity instruments Genera Minori
Less: Other Total owners'
Preferr Perpetu Special Surplus l risk Undistributed Othe ty
Share capital Othe Capital reserve treasury comprehens Subtotal equity
ed al reserve reserve provisi profits rs equity
rs shares ive income
Shares bonds on
the current 18
period
-
2. Use in the
14,000,538. -14,000,538.79 -14,000,538.79
current period
79
(VI) Others
IV. Ending -
4,650,653,86 10,392,445,08 288,553,105 296,695,759 2,394,517,07 8,149,991,97 25,592,638,41 25,592,638,41
balance of the 3,112,246.5
9.00 2.86 .28 .87 9.97 1.29 1.12 1.12
current period 9
8. Statement of changes in owners' equity of the parent company
Amount in the current period
Unit: CNY
Half of 2022
Other equity instruments Other
Item Less: treasury Special Undistributed Total owners'
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Others
Others shares reserve profits equity
Shares bonds income
I. Ending balance of
4,654,114,613.00 12,267,337,664.44 310,460,486.38 304,113.31 1,511,497,143.93 6,974,643,184.91 25,097,436,233.21
the previous year
Add: changes
in accounting
policies
Correction
of errors in the
previous period
Others
II. Opening balance
4,654,114,613.00 12,267,337,664.44 310,460,486.38 304,113.31 1,511,497,143.93 6,974,643,184.91 25,097,436,233.21
of the current year
III. -
-28,891,460.65 -46,736.62 -2,704,672,034.06
Increase/decrease in 2,733,516,758.09
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Half of 2022
Other equity instruments Other
Item Less: treasury Special Undistributed Total owners'
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Others
Others shares reserve profits equity
Shares bonds income
amount of the
current period
(decrease expressed
with "-")
(I) Total
comprehensive -46,736.62 291,657,740.36 291,611,003.74
income
(II) Invested and
decreased capital of -28,891,460.65 28,891,460.65
owners
1. Ordinary shares
invested by owners
2. Capital
contributed by
holders of other
equity instruments
3. Amounts of
share-based
payments recorded
in owner's equity
4. Others -28,891,460.65 28,891,460.65
(III) Profit -
-3,025,174,498.45
distribution 3,025,174,498.45
1. Surplus reserves
withdrawn
2. Distribution to
-
owners (or -3,025,174,498.45
3,025,174,498.45
shareholders)
3. Others
(IV) Internal
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Half of 2022
Other equity instruments Other
Item Less: treasury Special Undistributed Total owners'
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Others
Others shares reserve profits equity
Shares bonds income
carryover of owners'
equity
1. Transfer from
capital reserve to
paid-in capital (or
share capital)
2. Transfer from
surplus reserves to
paid-in capital (or
share capital)
3. Recovery of
losses by surplus
reserves
4. Retained earnings
carried forward
from changes in
defined benefit
plans
5. Retained earnings
carried forward
from other
comprehensive
incomes
6. Others
(V) Special reserve
1. Withdrawal in the
current period
2. Use in the current
period
(VI) Others
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Half of 2022
Other equity instruments Other
Item Less: treasury Special Undistributed Total owners'
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Others
Others shares reserve profits equity
Shares bonds income
IV. Ending balance
4,654,114,613.00 12,267,337,664.44 281,569,025.73 257,376.69 1,511,497,143.93 4,241,126,426.82 22,392,764,199.15
of the current period
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Amount of previous year
Unit: CNY
Half of 2021
Item Other equity instruments Other
Less: treasury Special Undistributed Total owners'
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Others
Others shares reserve profits equity
Shares bonds income
I. Ending balance of
4,609,666,212.00 11,926,123,599.85 338,977.41 1,163,799,319.07 6,170,689,695.69 23,870,617,804.02
the previous year
Add: changes
in accounting
policies
Correction
of errors in the
previous period
Others
II. Opening balance
4,609,666,212.00 11,926,123,599.85 338,977.41 1,163,799,319.07 6,170,689,695.69 23,870,617,804.02
of the current year
III.
Increase/decrease in
amount of the
40,987,657.00 268,059,276.78 288,553,105.28 -7,226.33 777,655,965.80 798,142,567.97
current period
(decrease expressed
with "-")
(I) Total
comprehensive -7,226.33 3,102,982,900.30 3,102,975,673.97
income
(II) Invested and
decreased capital of 40,987,657.00 268,059,276.78 288,553,105.28 20,493,828.50
owners
1. Ordinary shares
invested by owners
2. Capital
contributed by
holders of other
equity instruments
3. Amounts of
share-based
40,987,657.00 268,059,276.78 288,553,105.28 20,493,828.50
payments recorded
in owner's equity
4. Others
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Half of 2021
Item Other equity instruments Other
Less: treasury Special Undistributed Total owners'
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Others
Others shares reserve profits equity
Shares bonds income
(III) Profit -
-2,325,326,934.50
distribution 2,325,326,934.50
1. Surplus reserves
withdrawn
2. Distribution to
owners (or
shareholders)
-
3. Others -2,325,326,934.50
2,325,326,934.50
(IV) Internal
carryover of owners'
equity
1. Transfer from
capital reserve to
paid-in capital (or
share capital)
2. Transfer from
surplus reserves to
paid-in capital (or
share capital)
3. Recovery of
losses by surplus
reserves
4. Retained earnings
carried forward
from changes in
defined benefit
plans
5. Retained earnings
carried forward
from other
comprehensive
incomes
6. Others
(V) Special reserve
1. Withdrawal in the
current period
2. Use in the current
period
(VI) Others
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Half of 2021
Item Other equity instruments Other
Less: treasury Special Undistributed Total owners'
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Others
Others shares reserve profits equity
Shares bonds income
IV. Ending balance
4,650,653,869.00 12,194,182,876.63 288,553,105.28 331,751.08 1,163,799,319.07 6,948,345,661.49 24,668,760,371.99
of the current period
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III. Company Profile
FAW JIEFANG GROUP CO., LTD., formerly known as FAW Car Co., Ltd., is a limited liability company
registered in Changchun City, Jilin Province.
FAW Car was approved by the TGS (1997) No.55 document issued by State Commission for Restructuring the
Economic System in 1997, and was established exclusively by China FAW Group Co., Ltd. (hereinafter referred to
as FAW Group). On June 18, 1997, FAW Car was approved by the China Securities Regulatory Commission to
issue shares publicly and listed on the Shenzhen Stock Exchange for circulation.
On April 9, 2012, FAW Group invested 862,983,689 shares of FAW Car into FAW as its capital contribution, and
received the Confirmation of Securities Transfer Registration issued by China Securities Depository & Clearing
Co., Ltd. Shenzhen Branch on the same day.
On November 28, 2019, FAW Car held the 10th meeting of the 8th Board of Directors, and reviewed and approved
the adjustment plan for major asset reorganization. After the adjustment, FAW Car transferred all its assets and
liabilities, excludingthe equity of First Automobile Finance Co., Ltd. and Sanguard Automobile Insurance Co., Ltd.
and some reserved assets, to FAW Bestune, and then replaced 100% equity of FAW Bestune Car Co., Ltd. with the
equivalent part of 100% equity of Jiefang Limited held by FAW. At the same time, FAW Car purchased the
difference between the purchased assets and the sold assets from FAW by issuing shares and paying cash.
On March 12, 2020, FAW Car received the Reply on Approving the Major Asset Restructuring of FAW Car Co.,
Ltd. and Issuing Shares to China FAW Co., Ltd. for Asset Purchase (ZJXK [2020] No. 352) issued by the China
Securities Regulatory Commission, and China Securities Regulatory Commission reviewed and approved the major
asset replacement, share issuance and cash payment for assets purchase and related transactions of FAW Car.
The Capital Verification Report (XYZH/2020BJA100417) issued by ShineWing Accounting Firm (special general
partnership) indicates that, as of March 19, 2020, all proposed purchased assets, i.e. 100% equity of Jiefang Limited,
to be replaced by FAW Car to FAW by issuing shares had been transferred to FAW Car. The industrial and
commercial change registration procedures of Jiefang Limited had been completed, all proposed assets, i.e. 100%
equity of FAW Bestune, had been transferred to FAW, and the industrial and commercial change registration
procedures of FAW Bestune had been completed. The registered capital of FAW Car is CNY 4,609,666,212.00
after this change.
In May 2020, the name of FAW Car was changed to "FAW JIEFANG GROUP CO., LTD." and the stock
abbreviation was changed to "FAW Jiefang".
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On January 11, 2021, the Company held the first 2021 extraordinary shareholders' meeting, and reviewed and
approved the Proposal on the Restricted Share Incentive Plan of FAW JIEFANG GROUP CO., LTD. (Draft) and
Its Abstract, the Proposal on the Regulations for the Implementation Assessment of Restricted Share Incentive Plan
of FAW JIEFANG GROUP CO., LTD., the Proposal on the Regulations for Restricted Share Incentive of FAW
JIEFANG GROUP CO., LTD., and the Proposal on Requesting the Shareholders Meeting to Authorize the Board
of Directors to Handle Matters Related to the Company's Restricted Share Incentive Plan. On January 15, 2021,
the Company held the 12th meeting of the 9th Board of Directors, and reviewed and approved the Proposal on
Adjusting the List of the First Batch of Incentive Objects and the Number of Grants in the Phase I Restricted Share
Incentive Plan and the Proposal on Granting Restricted Shares to the Incentive Objects of the Phase I Restricted
Share Incentive Plan for the First Time. Nine directors and senior executives, including Hu Hanjie, Zhu Qixin,
Zhang Guohua, Wang Ruijian, Shang Xingwu, Ou Aimin, Kong Dejun, Wu Bilei and Wang Jianxun, and 310 other
core employees with the tile of senior director and above were granted to subscribe for 40,987,657 new shares of
the Company at an issue price of CNY 7.54 per share, and the registered capital of the Company was changed to
CNY 4,650,653,869.00. This change was verified by the Capital Verification Report (ZTYZ (2021) No.
110C000033) issued by Grant Thornton Accounting Firm (special general partnership). On February 1, 2021, the
Company disclosed the Announcement on the Completion of the First Grant Registration of Phase I Restricted
Share Incentive Plan.
On December 9, 2021, the Company held the 20th meeting of the 9th Board of Directors and the 19th meeting of
the 9th Board of Supervisors, and reviewed and approved the Proposal on Granting Reserved Part of Restricted
Shares in the Phase I Restricted Share Incentive Plan to Incentive Objects and the Proposal on Repurchase and
Cancellation of Partial Restricted Shares in the Phase I Restricted Share Incentive Plan respectively. 33 core
technicians and management backbones, including Wang Manhong, Zhang Yu and Qu Yi, subscribed for 3,721,601
new shares at an issue price of CNY 6.38/share, and 260,857 shares were repurchased from 2 employees who were
no longer eligible for incentive objects at a price of CNY 7.04/share. The registered capital of the Company was
changed to CNY 4,654,114,613.00. This change was verified by the Capital Verification Report (ZTYZ (2021) No.
110C000927) issued by Grant Thornton Accounting Firm (special general partnership). On January 6, 2022, the
Company disclosed the Announcement on the Completion of Registration of the Grant of Reserved Part of
Restricted Shares in the Phase I Restricted Share Incentive Plan. On January 17, 2022, the Company disclosed the
Announcement on the Completion of Repurchase and Cancellation of Some Restricted Shares.
The Company establishes a corporate governance structure consisting of the Shareholders' Meeting, the Board of
Directors and the Board of Supervisors, and has one wholly-owned subsidiary, Jiefang Limited. Jiefang Limited has
six wholly-owned subsidiaries, including FAW Jiefang Automotive Sales Co., Ltd., FAW Jiefang (Qingdao)
Automotive Co., Ltd., Wuxi Dahao Power Co., Ltd., FAW Jiefang Dalian Diesel Engine Co., Ltd., FAW Jiefang
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Austria R&D Co., Ltd., and FAW Jiefang New Energy Automotive Sales Co., Ltd. It also has 8 associated
companies, including First Automobile Finance Co., Ltd., Sanguard Automobile Insurance Co., Ltd., FAW
Changchun Baoyou Steel Processing and Distribution Co., Ltd., FAW Changchun Ansteel Steel Processing and
Distribution Co., Ltd., Changchun Wabco Automotive Control System Co., Ltd., Suzhou Zhito Technology Co.,
Ltd., FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd., and SmartLink.
Business scope of the Company: R&D, production and sales of medium and heavy trucks, complete vehicles, buses,
bus chassis, medium truck deformation vehicles, automobile assemblies and parts, machining, diesel engines and
accessories (non-vehicle), mechanical equipment and accessories, instruments, technical services, technical
consultation, installation and maintenance of mechanical equipment, lease of mechanical equipment and facilities,
lease of houses and workshops, labor services (excluding foreign labor cooperation and domestic labor dispatch),
sales of steel, automobile trunks, hardware & electrical equipment and electronic products, testing of internal
combustion engine, engineering technology research and testing, advertising design, production and release, import
and export of goods and technologies (excluding publication import business and commodities and technologies
that are restricted or prohibited for import and export by the state); (The following items are operated by the branch
company) Chinese food production and sales, warehousing and logistics (excluding flammable, explosive and
precursor dangerous chemicals), automobile repair, tank manufacturing of chemical liquid tanker, automobile trunk
manufacturing (items subject to approval according to law can be operated only after being approved by relevant
authorities).
Registered address of the Company: No. 2259, Dongfeng Street, Changchun Automobile Development Zone, Jilin
Province
The legal representative of the Company is Hu Hanjie.
The financial statements and notes to the financial statements have been approved for issue by the Board of Directors
of the Company on August 29, 2022.
In 2022, the Company has 1 secondary subsidiary and 6 tertiary subsidiaries included in the consolidation scope.
For details, please refer to VIII "Equity in Other Entities" in Section X - Financial Report.
IV. Basis for Preparation of Financial Statements
1. Preparation basis
The financial statements are prepared according to the Accounting Standards for Business Enterprises issued by the
Ministry of Finance and its application guidelines, interpretations and other relevant provisions (hereinafter
collectively referred to as "ASBE"). In addition, the Company also discloses relevant financial information
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according to the Disclosure of Company Information Disclosure Rules No. 15. - General Provisions on Financial
Reporting (revised in 2014) issued by China Securities Regulatory Commission.
The financial statements are presented on a going concern basis.
The financial accounting of the Company is based on the accrual basis. The financial statements are prepared on a
historical cost basis except for certain financial instruments. If the assets are impaired, the corresponding provision
for impairment shall be made as specified.
2. Going concern
The Company has no event or condition that causes significant doubt about its ability to continue as a going concern
for 12 months from the end of the reporting period.
V. Significant Accounting Policies and Accounting Estimates
Tips for specific accounting policies and accounting estimates:
The Company determines the depreciation of fixed assets, amortization of intangible assets, capitalization
conditions of R&D expenses and income recognition policies according to its own production and operation
characteristics. For specific accounting policies, please see V "Significant Accounting Policies and Accounting
Estimates" 21, 25 and 33 in Section X - Financial Report.
1. Statement of compliance with ASBE
The financial statements meet the requirements of ASBE, and truly and fully reflect the consolidated and company
financial conditions as of June 30, 2022 and the consolidated and company operating results, consolidated and
company cash flows and other information in the first half of 2022.
2. Accounting period
The accounting period of the Company is a calendar year, namely, from January 1 to December 31 every year.
3. Business cycle
The business cycle of the Company is 12 months.
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4. Recording currency
The Company and its domestic subsidiaries use CNY as their recording currency. The overseas subsidiaries of the
Company determine EUR as the recording currency according to the currency in the main economic environment
in which they operate. The Company uses CNY to prepare the financial statements.
5. Accounting method for business combination under common control and different control
(1) Business combination under common control
In case of business combination under common control, the assets and liabilities of the combined party obtained by
the combining party in the combination are measured based on the book value of the combined party in the
consolidated financial statements of the ultimate controlling party on the combination date, except for the adjustment
made due to different accounting policies. The capital reserve (stock premium) is adjusted based on the difference
between the book value of the combination consideration and the book value of the net assets obtained in the
combination. The retained earnings are adjusted if the capital reserve (stock premium) is insufficient for offset.
Business combination under common control realized step-by-step through multiple transactions
In individual financial statements, the share of book value of the combined party's net assets in the consolidated
financial statements of the ultimate controlling party on the combination date calculated based on the shareholding
proportion on the combination date is taken as the initial cost of the investment. The capital reserve (stock premium)
is adjusted based on the difference between the initial investment cost and the sum of the book value of the pre-
combination investment and the book value of the newly paid consideration on the combination date, and the
retained earnings are adjusted if the capital reserve is insufficient for offset.
In the consolidated financial statements, the assets and liabilities of the combined party obtained by the combining
party in the combination are measured based on the book value of the ultimate controlling party in the consolidated
financial statements on the combination date, except for the adjustment due to different accounting policies. The
capital reserve (stock premium) is adjusted based on the difference between the sum of the book value of the pre-
combination investment and the book value of the newly paid consideration on the combination date and the book
value of the net assets obtained in the combination. The retained earnings are adjusted if the capital reserve is
insufficient for offset. The long-term equity investment held by the combining party before the acquisition of control
of the combined party as well as the profit or loss, other comprehensive income and changes in other owners' equity
that have been recognized during the period from the date of acquisition of the original equity and the date of final
control of the combining party and the combined party (whichever is later) to the combination date shall offset
against the beginning retained earnings or current profit or loss respectively during the period of comparative
statement.
(2) Business combination under different control
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In case of business combination under different control, the combination cost is the fair value of assets paid,
liabilities incurred or assumed and equity securities issued on the acquisition date for acquiring the control over the
acquiree. The assets, liabilities and contingent liabilities acquired from the acquiree on the acquisition date are
recognized at fair value.
If the combination cost is greater than the fair value of identifiable net assets obtained from the acquiree in the
combination, the difference is recognized as goodwill and subsequently measured by deducting the accumulated
impairment provision from the cost. If the combination cost is less than the fair value of identifiable net assets
obtained from the acquiree in the combination, the difference is included in current profits and losses after review.
Business combination under different control realized step-by-step through multiple transactions
In individual financial statements, the sum of the book value of the equity investment of the acquiree held before
the acquisition date and the new investment cost on the acquisition date is taken as the initial cost of the investment.
Other comprehensive income of the equity investment held before the acquisition date and verified and recognized
with equity method is not disposed of on the acquisition date, and the investment is accounted for by disposing of
related assets or liabilities directly together with the investee. The owner's equity recognized due to changes in other
owner's equity in addition to net profit or loss, other comprehensive income and profit distribution of the investee
is transferred to the current profit or loss during the disposal period when the investment is being disposed of. If the
equity investment held before the acquisition date is measured at fair value, the accumulated changes in fair value
originally included in other comprehensive income are transferred to retained earnings when cost method is adopted
for calculation.
In the consolidated financial statements, the combination cost is the sum of the consideration paid on the acquisition
date and the fair value of the acquiree's equity already held before the acquisition date on the acquisition date. The
acquiree's equity held before the acquisition date is re-measured at its fair value on the acquisition date, and the
difference between the fair value and its book value is included in current profit or loss. Other comprehensive
income and other changes in owner's equity involved in the acquiree's equity held before the acquisition date are
transferred to current income on the acquisition date, except for other comprehensive income generated from the
changes due to the investee's re-measurement of net liabilities or net assets of the defined benefit plan.
(3) Disposal of transaction expenses in business combination
Intermediation costs such as audit, legal services, assessment and consultation and other related management costs
incurred for business combination are included in the current profits and losses when incurred. The transaction
expenses of equity securities or debt securities issued as consolidated consideration are included in the initially
recognized amount of equity securities or debt securities.
6. Preparation method of consolidated financial statements
(1) Scope of consolidation
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The consolidation scope of consolidated financial statements is determined on the basis of control. Control means
the power of the Company over the investee, and the Company can enjoy variable returns by taking part into related
activities of the investee and is able to influence its amount of return with the power over the investee. Subsidiaries
refer to entities controlled by the Company (including enterprises, separable parts of investees, structured entities,
etc.).
(2) Preparation method of consolidated financial statements
The consolidated financial statements are prepared by the Company based on the financial statements of the
Company and its subsidiaries and in accordance with other relevant information. During the preparation of
consolidated financial statements, the accounting policies and accounting periods of the Company and its
subsidiaries shall be consistent, and the balances of major transactions and transactions between the companies are
offset.
Subsidiaries and businesses increased in the reporting period due to the business combination under common control
are deemed to be incorporated in the consolidation scope of the Company from the date of control by the ultimate
controlling party, and their operating results and cash flows from the date of control by the ultimate controlling
party are included in the consolidated profit statement and consolidated cash flow statement respectively.
For the subsidiaries and businesses increased in the reporting period due to business combination under different
control, their earnings, expenses and profits from the acquisition date to the end of the reporting period are included
in the consolidated profit statement, and their cash flows are included in the consolidated cash flow statement.
The portion of shareholder's equity in a subsidiary that is not owned by the Company is presented separately as
minority shareholders' interest under the item of shareholder's equity in the consolidated balance sheet; the portion
of current net profit or loss of a subsidiary that is attributable to minority interest is presented as "minority
shareholder's interests" under the item of net profit in the consolidated profit statement. If the loss of a subsidiary
borne by minority shareholders exceeds the amount of their shares of owners' equity in the subsidiary at the
beginning, the balance shall offset against the minority equity.
(3) Purchase of minority shareholders' equity of subsidiaries
The capital reserve (stock premium) in the consolidated balance sheet is adjusted based on the difference between
the newly acquired long-term equity investment cost from the purchase of minority equity and the share of net assets
in the subsidiary calculated constantly from the purchase date or combination date as per the newly increased
shareholding proportion, and the difference between the disposal price obtained from the partial disposal of equity
investment in the subsidiary without losing the right of control and the share of net assets in the subsidiary calculated
continuously from the purchase date or combination date corresponding to the disposed long-term equity investment.
The retained earnings are adjusted if the capital reserve is insufficient for offset.
(4) Disposal with loss of control over subsidiaries
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When the Company loses the right of control over its subsidiary due to the disposal of partial equity investment or
other reasons, the residual equity is re-measured at the fair value on the day when the right of control is lost. The
difference between the sum of the value received from disposal of equity and fair value of the residual equity, and
the share in book value of net assets and goodwill of the original subsidiary calculated constantly based on the
original shareholding proportion from the acquisition date is included in the investment income of the current period
when the right of control is lost.
Other comprehensive income in connection with equity investment of the original subsidiaries is transferred to
current profits and losses when the right of control is lost, except for other comprehensive income generated from
the changes due to the investee's re-measurement of net liabilities or net assets of the defined benefit plan.
7. Classification of joint venture arrangements and accounting method for joint operations
Joint arrangement refers to an arrangement jointly controlled by two or more participants. Joint arrangements of the
Company include joint operations and joint ventures.
(1) Joint operation
Joint operation refers to the joint arrangement in which the Company enjoys related assets and bears related
liabilities.
The Company recognizes the following items related to the interest share in the joint operation and carries out
accounting according to the ASBE:
A. Recognizing the assets held solely and the assets held jointly identified as per its shares;
B. Recognizing the liabilities borne solely and the liabilities borne jointly identified as per its shares;
C. Recognizing the income generated from the sale of shares enjoyed in the joint operation;
D. Recognizing the income generated from the sale of shares enjoyed in the joint operation as per its shares;
E. Recognizing the expenses incurred separately and the expenses arising from joint operation as per its shares.
(2) Joint ventures
Joint venture refers to a joint arrangement in which the Company only has power over the net assets of the
arrangement.
The Company conducts accounting for the investment of joint ventures according to provisions of the equity method
accounting for long-term equity investments.
8. Standards for defining cash and cash equivalents
Cash refers to the cash on hand and the deposits that are readily available for payment. Cash equivalents refer to the
short-term and highly liquid investments held by the Company that are readily convertible into known amounts of
cash and with low risk in value change.
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9. Foreign currency transactions and conversion of foreign currency statements
(1) Foreign currency transactions
Foreign currency transactions of the Company are converted into the recording currency amount according to the
spot exchange rate on the transaction date.
On the balance sheet date, the foreign currency monetary items are converted at the spot exchange rate on the
balance sheet date. The exchange difference arising from the difference between the spot exchange rate on the
balance sheet date and the spot exchange rate at the time of initial recognition or on the previous balance sheet date
are included in current profits and losses. Foreign currency non-monetary items measured at historical cost are still
converted at the spot exchange rate on the transaction date. Foreign currency non-monetary items measured at fair
value are converted at the spot exchange rate on the date when the fair value is determined. The difference between
the converted recording currency amount and the original recording currency amount is included in current profits
and losses or other comprehensive income according to the nature of the non-monetary items.
(2) Conversion of foreign currency statements
When the foreign currency financial statements of overseas subsidiaries are converted on the balance sheet date, the
assets and liabilities items in the balance sheet are converted at the spot exchange rate on the balance sheet date; the
shareholders' equity items, except for "undistributed profits", are converted at the spot exchange rate on the date of
occurrence.
The income and expense items in the profit statement are converted at the spot exchange rate on the transaction
date.
All items in the cash flow statement are converted at the spot exchange rate on the cash flow date. The effect of
exchange rate changes on cash is taken as a regulation item, and reflected in the item "Effect of exchange rate
changes on cash and cash equivalents" listed separately in the cash flow statement.
The difference arising from the conversion of financial statements is reflected in the item "Other comprehensive
income" under the item "Shareholders' equity" in the balance sheet.
During the disposal of overseas operation and when the right of control is lost, the conversion difference of foreign
currency statements listed under the shareholders' equity items in the balance sheet and related to the overseas
operation is transferred to the current profits and losses of disposal in full or as per the disposal proportion of the
overseas operation.
10. Financial instruments
Financial instruments refer to contracts that form the financial assets of one party and form the financial liabilities
or equity instruments of other parties.
(1) Recognition and derecognition of financial instruments
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The Company recognizes a financial asset or financial liability when it becomes a party to the contract of the
financial instrument.
Financial assets are derecognized if they meet one of the following conditions:
① The contractual right to receive the cash flow of the financial asset is terminated;
② The financial assets have been transferred and meet the following derecognition conditions for the transfer of
financial assets.
The financial liabilities are derecognized in full or in part if the current obligation of financial liabilities has been
wholly or partially released. The Company (the Debtor) signs an agreement with the Creditor to replace the existing
financial liabilities with new financial liabilities; the existing financial liabilities are derecognized and the new
financial liabilities are recognized when the contractual terms of the new financial liabilities and those of the existing
financial liabilities are different in essence.
Financial assets are purchased and sold in a conventional manner, and accounting recognition and derecognition are
performed on the transaction date.
(2) Classification and measurement of financial assets
The Company classifies financial assets into the following three categories according to the business mode of
financial assets management and the contractual cash flow characteristics of financial assets at the time of initial
recognition: financial assets measured at amortized cost, financial assets measured at fair value and whose changes
are included in other comprehensive income, and financial assets measured at fair value and whose changes are
included in the current profits or losses.
Financial assets measured at amortized cost
The Company classifies the financial assets that meet the following conditions but are not designated to be measured
at fair value and with the changes included in current profits or losses as the financial assets measured at amortized
cost:
The Company's business model for managing the financial assets is to collect contractual cash flows;
The contractual terms of the financial asset specify that the cash flow generated on a specific date is only the
payment of principal and interest based on the outstanding principal amount.
After initial recognition, such financial assets are measured at amortized cost with the effective interest method.
Gains or losses arising from financial assets measured at amortized cost and not part of any hedging relationship
are included in the current profits or losses at the time of derecognition, amortization with effective interest method
or recognition for impairment.
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 but are not designated to be measured
at fair value and with the changes included in the current profits or losses as the financial assets measured at fair
value and whose changes are included in other comprehensive income:
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The Company's business model for managing the financial assets aims at both collecting contractual cash flows
and selling the financial assets;
The contractual terms of the financial asset specify that the cash flow generated on a specific date is only the
payment of principal and 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 with the effective interest method are included in the current
profits and losses, and other gains or losses are included in other comprehensive income. At the time of
derecognition, the accumulated gains or losses previously included in other comprehensive income are transferred
out and included in the current profits and losses.
Financial assets measured at fair value and whose changes are included in current profits and losses
Except for the above financial assets measured at amortized cost and that measured at fair value and whose changes
are included in other comprehensive income, the Company classifies all other financial assets into that measured at
fair value and whose changes are included in current profits or losses. At the time of initial recognition, the Company
irrevocably designates some financial assets that should have been measured at amortized cost or that should be
measured at fair value and whose changes are included in other comprehensive income as the financial assets
measured at fair value and whose changes are included in current profits or losses in order to eliminate or
significantly reduce accounting mismatch.
After initial recognition, such financial assets are subsequently measured at fair value, and the resulting gains or
losses (including interest and dividend income) are included in the current profits or losses, unless the financial
assets are part of the hedging relationship.
The business model for managing financial assets refers to the way adopted by the Company to manage financial
assets to generate cash flows. The business model determines the cash flow sources of the financial assets managed
by the Company, which may come from the collection of contractual cash flow or the sale of financial assets or
both. The Company determines the business model for managing financial assets based on objective facts and the
specific business objectives for managing financial assets decided by key management personnel.
The Company evaluates the contractual cash flow characteristics of financial assets to determine whether the
contractual cash flow generated by the financial assets on a specific date is only the payment of principal and interest
based on the amount of outstanding principal. Principal refers to the fair value of financial assets at the time of
initial recognition; interest includes consideration for the time value of money, credit risk related to the amount of
outstanding principal in a specific period, and other basic borrowing risks, costs and profits. In addition, the
Company evaluates the contract terms that may cause changes in the time distribution or amount of contractual cash
flow of financial assets to determine whether they meet the requirements of the above contractual cash flow
characteristics.
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All affected financial assets are reclassified on the first day of the first reporting period after the business mode is
changed only if the Company changes the business mode for managing financial assets, otherwise financial assets
shall not be reclassified after initial recognition.
Financial assets are measured at fair value at the time of initial recognition. The transaction expenses of the financial
assets measured at fair value and whose changes are included into current profits or losses are directly included in
the current profits or losses; the transaction expenses of other financial assets are included in the initially recognized
amount. For accounts receivable arising from the sale of products or the rendering of services, which do not include
or do not take into account significant financing components, the Company takes the amount of consideration
expected to be entitled to receive as the initially recognized amount.
(3) Classification and measurement of financial liabilities
The financial liabilities of the Company are classified into the following types at the time of initial recognition:
financial liabilities measured at fair value and whose changes are included in profits or losses, and financial
liabilities measured at amortized cost. For the financial liabilities not classified as those measured at fair value and
whose changes are included in the current profits or losses, the transaction expenses are included in their initially
recognized amounts.
Financial liabilities measured at fair value and whose changes are included in the current profits and losses
Financial liabilities measured at fair value and whose changes are included in the current profits and losses include
trading financial liabilities and the financial liabilities designated to be measured at fair value and whose changes
are included in the current profits and losses at the time of initial recognition. Such financial liabilities are
subsequently measured at fair value, and the gains or losses arising from changes in fair value as well as the
dividends and interest expenses related to such financial liabilities are included in current profits and losses.
Financial liabilities measured at amortized cost
Other financial liabilities are subsequently measured at amortized cost with the effective interest method, and gains
or losses arising from derecognition or amortization are included in current profits and losses.
Difference between financial liabilities and equity instruments
Financial liabilities refer to the liabilities that meet one of the following conditions:
① Contractual obligations of delivering cash or other financial assets to other parties.
② Contractual obligations of exchanging financial assets or financial liabilities with other parties under
potentially adverse conditions.
③ Non-derivative instrument contracts which must or may be settled with the enterprise's own equity instruments
in the future, and the equity instrument of the enterprise with which a variable number is delivered under the contract.
④ Derivative instrument contracts which must or may be settled with the enterprise's own equity instruments in
the future, except for those with a fixed amount of equity instruments to exchange for a fixed amount of cash or
other financial assets.
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Equity instrument refers to the contract which can prove the residual equity in the assets of an enterprise after all
liabilities are deducted.
The contractual obligation satisfies the definition of financial liability if the Company fails to perform one
contractual obligation by avoiding delivering cash or other financial assets unconditionally.
If a financial instrument must or can be settled by the Company's own equity instrument, it needs to consider whether
the equity instrument is used to replace cash or other financial assets, or help its holder to enjoy the residual equity
in the issuer's assets after all liabilities are deducted. If it is used for the former purpose, the instrument is the
financial liability of the Company; if it is used for the latter purpose, the instrument is the equity instrument of the
Company.
(4) Fair value of financial instruments
The determination methods for fair values of financial assets and financial liabilities are described in 37 "Other
significant accounting policies and accounting estimates" in V "Significant Accounting Policies and Accounting
Estimates" of Section X - Financial Report.
(5) Impairment of financial assets
The Company carries out impairment accounting and recognizes the loss provision for the following items based
on the expected credit loss:
Financial assets measured at amortized cost;
Receivables and debt investments measured at fair value and whose changes are included in other comprehensive
income;
Contractual assets as defined in the Accounting Standards for Business Enterprises No. 14 - Revenue.
Lease receivables.
Financial guarantee contracts (except those formed by measuring at fair value with its changes included in current
profits and losses, and when the transfer of financial assets does not meet the conditions for derecognition or the
transferred financial assets are involved continuously).
Measurement of expected credit loss
The expected credit loss refers to the weighted average of the credit losses of financial instruments that are weighted
by the risk of default. Credit loss refers to the difference between all contractual cash flows receivable according to
the contract and discounted according to the original effective interest rate and all cash flows receivable of the
Company, that is, the present value of all cash shortages.
The Company considers reasonable and reliable information about past events, current situation and forecast of
future economic situation, weighs the risk of default, calculates the probability weighted amount of the present value
of the difference between the cash flow receivable from the contract and the cash flow expected to be received, and
recognizes the expected credit loss.
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The Company measures the expected credit losses of financial instruments at different stages respectively. The
financial instruments with the credit risk not increased significantly since the initial recognition is in phase I, and
the Company measures the provision for loss based on the expected credit loss in the next 12 months. The financial
instrument with credit loss increased significantly since its initial recognition but without credit impairment is in
phase II, and the Company measures the provision for loss based on the expected credit loss of the instrument in
the whole duration. The financial instrument with credit impairment since its initial recognition is in phase III, and
the Company measures the provision for loss based on the expected credit loss of the instrument in the whole
duration.
The Company assumes that the credit risk of the financial instruments with low credit risk on the balance sheet date
has not increased significantly since the initial recognition, and measures the provision for loss based on the
expected credit loss in the next 12 months.
The expected credit loss in the whole duration refers to the loss caused by all possible default events in the whole
expected duration of the financial instruments. The expected credit loss in the next 12 months refers to that caused
by the possible default events of the financial instruments within 12 months after the balance sheet date (or the
expected duration if the expected duration of financial instruments is less than 12 months), which is a part of the
expected credit loss in the whole duration.
During the measurement of expected credit losses, the maximum term to be considered by the Company is the
maximum contract term of the enterprise facing credit risk (including the option to renew the contract).
The Company calculates interest income of the financial instruments in the phase I and phase II and with low credit
risk according to the book balance without deduction of impairment provision and the effective interest rate. For
financial instruments in phase III, the Company calculates the interest income based on their book balance minus
the amortized cost after the impairment provision has been made and the effective interest rate.
Notes receivable, accounts receivable and contractual assets
For notes receivable, accounts receivable and contractual assets, the Company always measures their loss provision
according to the amount equivalent to the expected credit loss in the whole duration no matter whether there is any
significant financing component.
If the expected credit loss of a single financial asset cannot be evaluated at a reasonable cost, the Company divides
the notes receivable and accounts receivable into portfolios according to the credit risk characteristics based on the
following, and calculates the expected credit loss on the basis of the portfolios:
A. Notes receivable
Notes receivable portfolio 1: bank acceptance bills
Notes receivable portfolio 2: commercial acceptance bills
B. Aging portfolio of accounts receivable
C. Aging portfolio of contractual assets
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The Company calculates the expected credit loss of the notes receivable and contractual assets divided into
portfolios by referring to the historical credit loss experience, combining the current situation and the forecast of
the future economic situation, and based on the default risk exposure and the expected credit loss rate for the whole
duration.
The Company calculates the expected credit loss of the accounts receivable divided into portfolios by referring to
the historical credit loss experience, combining the current situation and the forecast of the future economic situation,
and preparing a comparison table of accounts receivable aging/overdue days and the expected credit loss rate for
the whole duration.
Other receivables
The Company divides other receivables into several portfolios according to the credit risk characteristics based on
the following, and calculates the expected credit loss according to the portfolios:
Portfolio 1 of other receivables: portfolio of margin, deposit and reserve fund
Portfolio 2 of other receivables: aging portfolio
The Company calculates the expected credit loss of other receivables divided into portfolios according to the default
risk exposure and the expected credit loss rate in the next 12 months or the whole duration.
Long-term receivables
The Company's long-term receivables include the receivables from sales of goods by installments.
The Company divides the receivables from sales of goods by installments into several portfolios according to the
credit risk characteristics based on the following, and calculates the expected credit loss on the basis of the portfolios:
Long-term receivables portfolio 1: receivables from sales of goods by installments
Long-term receivables portfolio 2: other receivables
The Company calculates the expected credit loss of the receivables from sales of goods by installments by referring
to the historical credit loss experience, combining the current situation and the forecast of the future economic
situation, and based on the default risk exposure and the expected credit loss rate for the whole duration.
Debt investment and other debt investments
The Company calculates the expected credit loss of debt investment and other debt investments according to the
nature of the investment, the type of counterparties and risk exposures, and the default risk exposure and the
expected credit loss rate in the next 12 months or the whole duration.
Assessment of significant increase in credit risk
The Company evaluates whether the credit risk of financial instruments has increased significantly since the initial
recognition by comparing the default risk of financial instruments on the balance sheet date with the default risk on
the initial recognition date to determine the relative change in the default risk of financial instruments in the expected
duration.
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The Company considers the reasonable and reliable information (including forward-looking information) which can
be obtained without unnecessary additional cost or effort when determining whether the credit risk has increased
significantly since the initial recognition. The information considered by the Company includes the following:
Failure of the debtor to pay the principal and interest on the due date of the contract;
Existing or expected great degradation of external or internal credit ratings (if any) of financial instruments;
Existing or expected serious deterioration of the debtor's operating results;
Existing or expected changes in the technical, market, economic or legal environment, which will have a significant
adverse effect on the debtor's repayment ability to the Company.
The Company assesses whether the credit risk has increased significantly on the basis of a single financial
instrument or portfolios of financial instruments according to the nature of financial instruments. The Company
may classify financial instruments based on common credit risk characteristics, such as overdue information and
credit risk ratings, when evaluating on the basis of financial instruments portfolios.
If it is overdue for more than 30 days, the Company determines that the credit risk of financial instruments has
increased significantly.
Credit-impaired financial assets
The Company evaluates the financial assets measured at amortized cost and creditor's debt investment measured at
fair value and with changes included in other comprehensive income for credit impairment on the balance sheet
date. The financial assets become the credit-impaired financial assets in case of one or more events adversely
affecting their expected future cash flow. Evidence of credit impairment of financial assets includes the following
observable information:
Major financial difficulty of the issuer or debtor;
Default of the debtor, such as default in the payment of interest or principal, or overdue payment;
Concessions made by the Company to the debtor that would not be made under any other circumstances for
economic or contractual reasons related to the debtor's financial difficulty;
Great possibility of bankruptcy or other financial restructuring of the debtor;
Disappearance of the active market of the financial assets due to financial difficulty of the issuer or debtor;
Presentation of provisions for expected credit losses
In order to reflect the changes in the credit risk of financial instruments since the initial recognition, the Company
remeasures the expected credit loss on each balance sheet date, and the increased or reversed amount of the loss
provision arising therefrom shall be included in the current profits and losses as impairment losses or gains. The
loss provision of the financial assets measured at amortized cost is used to offset their book value presented in the
balance sheet. For the debt investment measured at fair value with its changes included in other comprehensive
income, the Company recognizes its loss provision in other comprehensive income, which will not offset the book
value of the financial assets.
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Cancel after verification
The Company writes down the book balance of the financial assets when it no longer reasonably expects that the
contractual cash flow of the financial asset can be recovered in whole or in part. Such write-down constitutes the
derecognition of related financial assets. This usually occurs when the Company determines that the debtor has no
assets or sources of income that can generate sufficient cash flows to repay the amount to be written down. However,
the written-down financial assets may still be affected by the execution activities according to the Company's
procedures for recovering due amounts.
If the written-down financial assets are recovered later, the reverse of the impairment loss are included in the current
profits or losses.
(6) Transfer of financial assets
Transfer of financial assets refers to the assignment or delivery of financial assets to the other party (transferee)
other than the issuer of such financial assets.
The financial asset is derecognized if the Company has transferred substantially all the risks and rewards on
ownership of a financial asset to the transferee. The financial asset is not derecognized if the Company has retained
substantially all the risks and rewards on ownership of a financial asset.
The following measures are taken when the Company neither transfers nor retains substantially all the risks and
rewards on ownership of a financial asset: The financial assets are derecognized and the assets and liabilities
incurred are recognized if the Company waives control over the financial assets. Relevant financial assets are
recognized based on the extent of their continued involvement in the transferred financial assets, and relevant
liabilities are recognized accordingly if the Company does not waive control over the financial assets.
(7) Offset of financial assets and financial liabilities
Financial assets and financial liabilities are presented in the balance sheet with the amount after offsetting each other
when the Company has a legal right to offset the recognized financial assets and financial liabilities and the legal
right can be exercised currently, and when the Company intends either to settle on a net basis, or to realize the
financial assets and pay off the financial liabilities simultaneously. In other cases, financial assets and financial
liabilities are presented separately in the balance sheet and are not offset against each other.
11. Notes receivable
Refer to 10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates" of Section X
- Financial Report.
12. Accounts receivable
Refer to 10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates" of Section X
- Financial Report.
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13. Receivables financing
Refer to 10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates" of Section X
- Financial Report.
14. Other receivables
For the determination method and accounting method of expected credit losses of other receivables, please refer to
10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates" of Section X -
Financial Report.
15. Inventories
(1) Classification of inventories
The inventories of the Company are divided into raw materials, self-made semi-finished products and finished
products, goods in stock, revolving materials, etc.
(2) Valuation method for dispatched inventories
It is accounted for according to the planned cost when the Company's inventory is obtained. The difference between
the planned cost and the actual cost is accounted for based on the cost difference account, and the planned cost is
adjusted to the actual cost according to the cost difference which shall be borne for the inventory carried forward
and dispatched on schedule.
(3) Basis for determining the net realizable value of inventories and drawing methods for provision for decline in
the value of inventories
The net realizable value of inventories refers to the amount of the estimated selling price of the inventories minus
the estimated costs upon completion, estimated selling expenses and relevant taxes. The net realizable value of
inventories is determined based on the unambiguous evidence obtained and by considering the purpose of holding
inventories and the effect of events after the balance sheet date.
The provision for decline in the value of inventories is made if the inventory cost is higher than its net realizable
value on the balance sheet date. The Company generally makes provision for decline in the value of inventories
according to a single inventory item. The provision for decline in the value of inventories previously made is
reversed if the influence of the write-down inventory value before the balance sheet date disappears.
(4) Inventory system
The Company adopts the perpetual inventory system.
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(5) Amortization method for low value consumables and packing materials
Low-value consumables and packaging materials of the Company are amortized by one-off write-off method when
being acquired.
16. Contractual assets
The Company presents the contractual assets or contract liabilities in the balance sheet according to the relationship
between the performance obligations and the customer's payment. The Company presents the net amount of
contractual assets and contract liabilities under the same contract after offsetting them.
A contractual asset refers to a right to receive consideration for goods or services that have been transferred to a
customer, and the right depends on factors other than the passage of time.
For the determination method and accounting method of the Company for the expected credit loss of the contractual
assets, please refer to 10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates"
of Section X - Financial Report.
17. Contract cost
Contract costs include incremental costs incurred to obtain contracts and contract performance costs.
The incremental cost incurred for obtaining the contract refers to the cost that will not incur if the Company fails to
obtain the contract (such as sales commission, etc.). The Company recognizes the cost as an asset of the contract
acquisition cost if it is expected to be recovered. Other expenses incurred by the Company for obtaining the contract,
except the incremental cost that is expected to be recovered, are included in the current profits and losses when
incurred.
The Company recognizes the cost incurred for the performance of the contract as the asset of contract performance
cost if it does not fall within the scope of other accounting standards for business enterprises such as inventory and
meets the following conditions at the same time:
① This cost is directly related to a current or expected contract, including direct labor, direct materials and
manufacturing expenses (or similar expenses), costs explicitly borne by the customer and other costs incurred only
by the Contract;
② This cost increases the future resources of the Company to fulfill the performance obligations;
③ This cost is expected to be recovered.
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Assets recognized as contract acquisition costs and that recognized as contract performance costs (hereinafter
referred to as "assets related to contract costs") are amortized on the same basis as revenue recognition of goods or
services related to the assets and are included in current profits and losses.
The Company makes provision for impairment of the excess and recognizes it as the asset impairment loss when
the book value of the assets related to the contract cost is higher than the difference between the following two items:
① Residual consideration expected to be obtained by the Company by transferring goods or services related to
the asset;
② The estimated cost to be incurred for the transfer of such goods or services.
The contract performance cost recognized as an asset is presented in the item "Inventory" if the amortization period
at the time of initial recognition does not exceed one year or one normal business cycle, and is presented in the item
"Other non-current assets" if the amortization period at the time of initial recognition exceeds one year or one normal
business cycle.
The contract acquisition cost recognized as an asset is presented in the item "Other current assets" if the amortization
period at the time of initial recognition does not exceed one year or one normal business cycle, and is presented in
the item "Other non-current assets" if the amortization period at the time of initial recognition exceeds one year or
one normal business cycle.
18. Held-for-sale assets
(1) Classification and measurement of held-for-sale non-current assets or disposal groups
The non-current asset or disposal group is classified as the held-for-sale asset if the Company recovers its book
value mainly by selling (including the exchange of non-monetary assets of commercial nature) rather than
continuously using the non-current asset or disposal group.
The above-mentioned non-current assets do not include investment real estates subsequently measured at fair value,
biological assets measured at the net amount obtained by deducting the selling expenses from the fair value, assets
obtained from employee compensation, financial assets, deferred tax assets and rights arising from insurance
contracts.
Disposal group refers to a group of assets which is sold or disposed of together as a whole in a transaction and the
liabilities directly related to these assets and transferred in the transaction. The disposal group includes goodwill
obtained from business combination under certain circumstances.
Non-current assets or disposal groups that meet all the following conditions are classified as the held-for-sale assets:
The non-current assets or disposal groups can be sold immediately under current conditions according to the practice
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of selling such assets or disposal groups in similar transactions; they are extremely likely to be sold, i.e. a resolution
has been made on a sales plan and a certain purchase commitment has been obtained, and the sales are expected to
be completed within one year. The overall investment to subsidiaries is classified as held-for-sale assets in individual
financial statements, and all assets and liabilities of subsidiaries are classified as the held-for-sale assets in
consolidated financial statements when the investment to subsidiaries meets the conditions for the held-for-sale
assets if the Company loses control over its subsidiaries due to reasons such as the sales of investment to subsidiaries,
whether the Company reserves some of its equity investments after the sales or not.
The difference between the book value and the net amount obtained by deducting the selling expenses from the fair
value is recognized as the asset impairment loss when the held-for-sale non-current assets or disposal groups are
measured initially or re-measured on the balance sheet date. The asset impairment loss recognized by the held-for-
sale disposal group deducts the book value of the goodwill in the disposal group, and then deducts the book value
of each non-current asset in the disposal group based on its proportion.
The previous write-down amount is recovered and reversed from the asset impairment losses recognized after being
classified as the held-for-sale assets, and the reversed amount is included in the current profits and losses if the net
amount obtained by deducting the selling expenses from the fair value of held-for-sale non-current assets or disposal
groups on the subsequent balance sheet date increases. The book value of goodwill deducted shall not be reversed.
Held-for-sale non-current assets and assets in the held-for-sale disposal group are not depreciated or amortized. The
interest on liabilities and other expenses in the held-for-sale disposal group are recognized continuously. For all or
part of the investments of held-for-sale associated enterprises or joint ventures, the held-for-sale part will not be
accounted for with equity method, and the retained part (not classified as the held-for-sale asset) will be accounted
for continuously with the equity method. The equity method will not be used any more when the Company has no
significant influence on associated enterprises and joint ventures due to sales.
For a non-current asset or disposal group which is classified as the held-for-sale asset but later no longer meets the
conditions for the held-for-sale asset, the Company will cease to classify it as the held-for-sale asset and measure it
based on the lower of the following two amounts:
① The amount of the book value of the asset or disposal group before it is classified as the held-for-sale asset
after adjustment for depreciation, amortization or impairment that should have been recognized under the
assumption that it is not classified as the held-for-sale asset;
② Recoverable amount.
(2) Presentation
The Company presents the held-for-sale non-current assets or the assets in the held-for-sale disposal group in the
balance sheet as the "held-for-sale assets", and presents the liabilities in the held-for-sale disposal group as the "held-
for-sale liabilities".
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The Company presents the profits and losses from continuing operations and discontinued operations separately in
the profit statement. For the held-for-sale non-current assets or disposal groups failing to meet the definition of
discontinued operation, their impairment losses and reversed amounts as well as profits or losses of disposal are
presented as profits or losses from continuing operations. Operating profits and losses such as impairment losses
and reversed amounts of discontinued operations and profits and losses of disposal are presented as profits and
losses from discontinued operations.
Disposal groups that are intended to be discontinued rather than sold and meet the conditions of relevant components
in the definition of discontinued operation are presented as discontinued operations from the date of discontinuance.
For discontinued operations presented in the current period, the information originally presented as profits or losses
from continuing operations in the current financial statements is presented again as profits or losses from
discontinued operations in comparable accounting period. If the discontinued operation no longer meets the
conditions for the classification of held-for-sale assets, the information originally presented as profits or losses from
discontinued operations in the current financial statements is presented again as profits or losses from continuing
operations in comparable accounting period.
19. Long-term equity investment
Long-term equity investments include equity investments to subsidiaries, joint ventures and associated enterprises.
The investee which may be subject to significant influence of the Company is an associated enterprise of the
Company.
(1) Recognition of initial investment cost
Long-term equity investment acquired from business combination: For the long-term equity investment acquired
from the business combination under common control, the investment cost refers to the share of book value of the
owner's equity of the combined party in the consolidated financial statements of the ultimate controlling party on
the combination date; for the long-term equity investment acquired from the business combination under different
control, the investment cost refers to the combination cost.
Long-term equity investment acquired by other means: For the long-term equity investment acquired by cash
payment, the initial investment cost refers to the actually paid purchase price; for the long-term equity investment
acquired by issuing equity securities, the initial investment cost refers to the fair value of the issued equity securities.
(2) Subsequent measurement and recognition of profit or loss
Investments to subsidiaries are accounted for with the cost method unless the investment meets the conditions for
held-for-sale; investments to associated enterprises and joint ventures are accounted for with the equity method.
For the long-term equity investment accounted for with the cost method, the distributed cash dividends or profits
declared by the investee are recognized as investment income and included in the current profits and losses, except
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for the declared but not released cash dividends or profits included in the price or consideration actually paid for
acquiring the investment.
For the long-term equity investment accounted for with the equity method, the investment cost is not adjusted if the
initial investment cost exceeds the share of the fair value of the investee's identifiable net assets at the time of the
investment; the book value of the long-term equity investment is adjusted and the difference is included in the
current profits and losses if the initial investment cost is less than the share of fair value of the investee's identifiable
net assets at the time of the investment.
When the equity method is adopted, the investment income and other comprehensive income are recognized
respectively according to its share of net profit or loss and other comprehensive income realized by the investee,
and the book value of long-term equity investments is adjusted at the same time. The part of due share is calculated
according to the distributed profit or cash dividend declared by the investee, and the book value of the long-term
equity investment is reduced accordingly. In case of other changes in owners' equity except net profit or loss, other
comprehensive income and profit distribution of the investee, the book value of long-term equity investment is
adjusted and included in capital reserve (other capital reserves). The due share of net profit and loss of an investee
is determined based on the fair value of various identifiable assets in the investee when the investment is obtained
after net profit of the investee is adjusted according to accounting policies and accounting period of the Company.
The sum of the fair value of the original equity and the new investment cost is taken as the initial investment cost
calculated with the equity method on the date of conversion if it is possible to exert significant influence on or
implement joint control but not constitute control over the investee due to additional investment or other reasons.
The cumulative changes in fair value originally included in other comprehensive income related to the original
equity are transferred to retained earnings when the equity method is adopted if the original equity is classified as a
non-trading equity instrument investment measured at fair value with its changes included in other comprehensive
income.
In case that the Company loses joint control of or the significant influence on the investee due to the disposal of
part of the equity investment, the residual equity after the disposal is accounted for in accordance with the
Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments on
the date of losing the joint control or significant influence, and the difference between the fair value and the book
value is included in the current profits and losses. Other comprehensive income from original equity investment
recognized with the equity method is accounted for on the same basis as the direct disposal of related assets or
liabilities by the investee when the equity method is terminated. Other changes in owners' equity related to the
original equity investment are transferred to current profits and losses.
In case that the Company loses the right of control over the investee due to disposal of partial equity investment or
other reasons, the equity method is applied, and it is deemed that the residual equity is adjusted with equity method
from the time of acquisition if the residual equity after disposal can exert joint control over or significant influence
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on the investee; the accounting is carried out according to the Accounting Standards for Business Enterprises No.
22 - Recognition and Measurement of Financial Instruments, and the difference between the fair value and the book
value on the date of losing control is included in the current profits and losses if the residual equity after disposal
cannot exert joint control over or significant influence on the investee.
If the Company loses the right of control over the investee but may exert joint control over or significant influence
on the investee due to the reduction in its shareholding proportion caused by capital increase of other investors, the
share of the Company in net assets of the investee increased due to capital increase and share expansion is recognized
based on the new shareholding proportion, and the difference with the original book value of the long-term equity
investment corresponding to the decrease of the shareholding proportion is included in the current profits and losses.
Then, it is deemed that the equity method is adopted for adjustment according to the new shareholding proportion
since the investment is acquired.
For the internal trading profits and losses incurred but not realized between the Company and its associated
enterprises and joint ventures, the part attributable to the Company is calculated as per the shareholding proportion,
and the investment profits and losses are recognized on the basis of offset. However, the internal transaction loss
not realized between the Company and its investees shall not be offset if it is not an impairment loss of the assets
transferred.
(3) Basis for determining joint control over and significant influence on the investee
Joint control refers to the control over certain arrangement under related agreements, and related activities of the
arrangement can only be determined with the unanimous consent of the parties sharing the control. During the
judgment of joint control, it is required to determine whether the arrangement is controlled collectively by all
participants or a group of participants, and then determine whether the activities related to the arrangement must be
decided after being unanimously agreed by the participants who collectively control the arrangement. It is deemed
that all participants or a group of participants collectively control the arrangement if related activities of an
arrangement can be decided only with concerted action of all participants or a group of participants. It does not
constitute joint control if an arrangement can be controlled collectively by two or more groups of participants. The
determination of joint control does not consider the protective rights enjoyed.
Significant influence refers to the power of the investor to participate in making decisions on the financial and
operating policies of the investee, but cannot control or jointly control with other parties over the preparation of
these policies. The possibility of exerting significant influence on the investee is determined by considering the
influence of the voting shares of the investee directly or indirectly held by the investor and when it is assumed that
the potential voting rights executable for the current period held by the investor and other parties are converted into
the equity of the investee, including the influence of the warrants, stock options and corporate bonds which can be
converted in the current period issued by the investee.
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It is generally considered that the Company has significant influence on the investee when the Company directly
holds more than 20% (including 20%) but less than 50% of the voting shares of the investee or holds indirectly
through subsidiaries, unless there is clear evidence indicating that it cannot participate in the production and
operation decisions of the investee under such circumstances, in which case it has no significant influence. It is
generally not considered that the Company has significant influence on the investee when the Company owns less
than 20% (exclusive) of the voting shares of the investee, unless there is clear evidence indicating that it can
participate in the production and operation decisions of the investee under such circumstances, in which case it has
significant influence.
(4) Impairment test method and drawing methods for impairment provision
For investments to subsidiaries, associated enterprises and joint ventures, the method of drawing asset impairment
is described in 26 "Long-term asset impairment" in V "Significant Accounting Policies and Accounting Estimates"
of Section X - Financial Report.
20. Investment real estate
Measurement mode of investment real estate: cost method
Depreciation or amortization method
Investment real estates refer to the real estates held to earn rent or increase capital, or both. Investment real estates
of the Company include the land use rights which have already been rented, the land use rights held and to be
transferred after appreciation, and the buildings which have been rented.
The investment real estates of the Company are initially measured according to the cost upon acquisition, and
depreciated or amortized on schedule according to the relevant provisions of fixed assets or intangible assets.
For the investment real estate which is subsequently measured with the cost mode, the method of drawing asset
impairment is described in 26 "Long-term asset impairment" in V "Significant Accounting Policies and Accounting
Estimates" of Section X - Financial Report.
The disposal income from the sale, transfer, discard or destroy of the investment real estates is included in the
current profits and losses after the book value and relevant taxes are deducted.
21. Fixed assets
(1) Recognition conditions
Fixed assets of the Company refer to the tangible assets held for the sake of producing commodities, rendering
labor services, renting or operating management, with a service life in excess of one accounting year.
The fixed assets can be recognized only if the economic benefits related to such fixed assets are likely to flow into
the enterprise and the cost of such fixed assets can be measured reliably.
Fixed assets of the Company are initially measured based on the actual cost at the time of acquisition.
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Subsequent expenditures related to fixed assets are included in the cost of fixed assets when the related economic
benefits are likely to flow into the Company and the costs can be measured reliably. The daily repair costs of fixed
assets that do not meet the conditions for subsequent expenditure of fixed assets capitalization are included in the
current profits and losses or the costs of relevant assets according to the beneficiaries when the costs incurred. The
book value is derecognized for the replaced part.
(2) Depreciation method
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Annual
Depreciation
Category Depreciation Period Residuals Rate Depreciation Rate
Method
(%)
Houses and Straight-line
20 years 3-5 4.85-4.75
buildings method
Machinery Straight-line
10 years 0-3 10.00-9.70
equipment method
Transportation Straight-line
4-10 years 0-5 25.00-9.50
equipment method
Electronic Straight-line
3 years 0-5 33.33-31.67
equipment method
Straight-line
Office equipment 3-5 years 3-5 32.33-19.00
method
Straight-line
Others 4-10 years 0-5 24.25-9.50
method
① The Company adopts straight-line depreciation method. Fixed assets are depreciated when they are ready for
their intended use, and ceased for depreciation when they are derecognized or classified as held-for-sale non-current
assets. Without considering the provision for impairment, the annual depreciation rates of various fixed assets are
determined according to their category, estimated service life and estimated residual value. The depreciation rate of
fixed assets with impairment provision drawn is calculated and determined after their accumulated amount of
impairment provision drawn is deducted.
② The impairment test method and drawing method for impairment provision of fixed assets are described in 26
"Long-term asset impairment" in V "Significant Accounting Policies and Accounting Estimates" of Section X -
Financial Report.
③ The Company reviews the service life, expected net residual value and depreciation method of fixed assets at
the end of each year.
The service life of fixed assets is adjusted if the expected service life is different from the original estimate. The
expected net residual value is adjusted if it is different from the original estimate.
④ Disposal of fixed assets
A fixed asset is derecognized if it is disposed of or it is expected that no economic benefit will be obtained by using
or disposing it. The disposal income from the sale, transfer, discard or destroy of the fixed assets is included in the
current profits and losses after the book value and relevant taxes are deducted.
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(3) Recognition basis, valuation and depreciation methods for fixed assets under finance lease
The fixed assets leased by the Company are recognized as the fixed assets under finance lease when they meet one
or more of the following criteria:
① The ownership of the leased assets will be transferred to the Company at the expiration of the lease term.
② The Company has the option to purchase the leased assets, and the purchase price agreed is expected to be far
lower than the fair value of the leased assets when the option is exercised. Therefore, it can be reasonably determined
that the Company will exercise this option on the commencement date of lease.
③ The lease term accounts for the majority of the service life of the leased assets, even if the ownership of such
assets is not transferred.
④ The present value of the minimum lease payment of the Company on the commencement date of lease almost
equals to the fair value of the leased assets on the same day.
⑤ The leased assets are of a special nature, and they can only be used by the Company if no major transformation
is made.
For the fixed assets under finance lease, the entry value refers to the lower the fair value of the leased assets from
the commencement date of lease and the present value of minimum lease payment. The minimum lease payment is
taken as the entry value of long-term payables and its balance as the unrecognized financing charge. Initial direct
expenses such as handling fees, attorney fees, travel expenses and stamp duties attributable to the lease project
incurred during lease negotiation and signing of the lease contract are included in the value of the leased assets.
Unrecognized financing charges are amortized with the effective interest method in each period of the lease term.
For the fixed assets under finance lease, the depreciation is drawn in the same way as that of the self-owned fixed
assets. The depreciation is drawn within the service life of leased assets if it can be reasonably confirmed that the
ownership of the assets can be obtained at the expiration of the lease term; otherwise, the depreciation is drawn
within the lease term or the service life of leased assets, whichever is shorter.
22. Project under construction
The cost of the Company's project under construction is recognized according to the actual construction expenses,
including various necessary construction expenses incurred during construction, borrowing costs which need to be
capitalized before the projects reach the expected usable state and other relevant expenses.
The project under construction is transferred to fixed assets when they are ready for their intended use.
For the drawing method of asset impairment of the project under construction, please see 26 "Long-term asset
impairment" in V "Significant Accounting Policies and Accounting Estimates" of Section X - Financial Report.
23. Borrowing costs
(1) Recognition principles for capitalization of borrowing costs
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The borrowing costs incurred by the Company are capitalized and included in the cost of relevant assets if they can
be directly attributed to the acquisition and construction or production of assets eligible for capitalization. Other
borrowing costs are recognized as expenses according to the amount incurred and included in the current profit and
loss. The borrowing costs are capitalized if they meet all of the following conditions:
① Expenditures on assets have been incurred, and they include the expenditures in the form of payments in cash,
transfer of non-cash assets, or assumption of debts with interest for the acquisition, construction, or production of
the assets eligible for capitalization;
② Borrowing costs have already been incurred;
③ Acquisition, construction, or production activities necessary to make the asset ready for its intended use or sale
are in progress.
(2) Capitalization period of borrowing costs
The capitalization of borrowing costs will cease when the assets eligible for capitalization acquired, constructed, or
produced by the Company are ready for their intended use or sale. Borrowing costs incurred after the assets eligible
for capitalization are ready for their intended use or sale are recognized as expenses according to the amount incurred
and included in current profits and losses.
The capitalization of the borrowing costs is suspended when the acquisition and construction or production of the
assets eligible for capitalization are interrupted abnormally for more than 3 months. The capitalization of the
borrowing costs continues when the acquisition and construction or production are interrupted normally.
(3) Capitalization rate of borrowing costs and calculation method of capitalized amount
The balance of the interest from special borrowings actually occurred in current period deducting the interest income
acquired from unused borrowings which are deposited in banks, or deducting investment income from temporary
investment of the borrowings is capitalized. The capitalization amount of general borrowings is determined by
multiplying the weighted average of the part of accumulated asset expenditures exceeding special borrowings by
the capitalization rate of general borrowings occupied. The capitalization rate is determined based on the weighted
average interest rate of the general borrowings.
The balance of exchange for special borrowings in foreign currency is capitalized in full in the capitalization period.
The balance of exchange for general borrowings in foreign currency is included in the current profits and losses.
24. Right-of-use assets
(1) Recognition conditions of 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.
The right-to-use asset is initially measured at cost from the commencement of the lease term. This cost includes the
amount of lease liabilities measured initially; the rent paid on or before the commencement of the lease term, which
needs to deduct the amount of lease incentive enjoyed (if any); initial direct expenses incurred by the Company as
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the lessee; cost expected to be incurred by the Company as the lessee for dismantling and removing the leased assets,
restoring the site where the leased assets are located or restoring the leased assets to the state agreed in the lease
terms. The Company, as the lessee, recognizes and measures the cost of demolition and restoration in accordance
with the Accounting Standards for Business Enterprises No. 13 - Contingencies. Subsequent adjustments are made
for any remeasurement of the lease liabilities.
(2) Depreciation method of right-of-use assets
The Company adopts the straight-line method for depreciation. The depreciation is drawn within the remaining
service life of the leased assets if the Company, as the lessee, can reasonably confirm that can obtain the ownership
of the leased assets at the expiration of the lease term. The depreciation is drawn within the lease term or the
remaining life of such assets, whichever is shorter, if it cannot be reasonably determined that the ownership of the
leased assets can be obtained at the expiration of the lease term.
(3) The impairment test method and drawing method for impairment provision of right-of-use assets are described
in 26 "Long-term asset impairment" in V "Significant Accounting Policies and Accounting Estimates" of Section
X - Financial Report.
25. Intangible assets
(1) Valuation method, service life and impairment test
Intangible assets of the Company include land use rights, software, non-patented technologies, etc.
Intangible assets are initially measured at cost and their service life is analyzed and judged at the time of acquisition.
Where the service life is limited, the intangible asset is amortized over its expected service life, from the time it is
available, with an amortization method that reflects the expected realization of the economic benefits associated
with the asset. The straight-line method is adopted for amortization if the expected realization mode cannot be
determined reliably. Intangible assets with uncertain service life are not amortized.
The amortization method for intangible assets with limited service life is as follows:
Category Service Life Amortization Method Remarks
Land use right 50 years Straight-line method
Software 2-10 years Straight-line method
Non-patented technology 5-10 years Straight-line method
The Company reviews the service life and amortization method of intangible assets with limited service life at the
end of each year; adjusts the original estimate if it is different from the actual value, and handles based on changes
in accounting estimate.
The book value of an intangible asset is transferred into the current profits and losses in full if it is expected that the
asset cannot bring economic benefits to the enterprise in the future on the balance sheet date.
For the drawing method of asset impairment of the intangible assets, please see 26 "Long-term asset impairment"
in V "Significant Accounting Policies and Accounting Estimates" of Section X - Financial Report.
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(2) Accounting policies for expenditures on internal research and development
The Company divides the expenditures of internal research and development projects into expenditures in research
stage and expenditures in development stage.
The expenditures in research stage are included in current profits and losses when incurred.
The expenditures in the development stage can be capitalized only if they meet all of the following conditions: It is
technically feasible to complete the intangible asset so that it will be available for use or sale; there is an intention
to complete the intangible asset and use or sell it; the model of economic benefits generated by operating the
intangible assets, including the proof that there is a market for the products manufactured based on the intangible
assets or the assets themselves, and the serviceability of the assets which are to be used internally; there are sufficient
technical, financial and other resources to complete the development of intangible asset, and it is capable to use or
sell the asset; the expenditure attributable to the intangible asset in the development stage can be measured reliably.
The development expenditures failing to meet above conditions are included in current profits and losses when
occurred.
The research and development project of the Company will enter the development stage after meeting the above
conditions and being approved through technical feasibility and economic feasibility study.
The capitalized expenditures in the development stage are presented as development expenditures on the balance
sheet and are transferred into intangible assets from the date when the project realizes the intended use.
26. Long-term asset impairment
The asset impairment of long-term equity investment to subsidiaries and associated enterprises, investment real
estates subsequently measured by cost model, fixed assets, project under construction, right-of-use assets, intangible
assets, etc. (except for inventories, deferred income tax assets and financial assets) is recognized with the following
methods:
The Company will determine whether there is any sign of possible impairment of assets on the balance sheet date.
If any, the Company will estimate the recoverable amount and conduct an impairment test. Impairment tests shall
be carried out every year on goodwill resulting from business combination, intangible assets with uncertain service
life and intangible assets that are not available no matter whether there is any sign of impairment.
The recoverable amount is the net amount of the fair value of the assets after deducting the disposal expenses or the
present value of the expected future cash flow of the assets, whichever is higher. The Company estimates the
recoverable amount on a single asset basis. The Company determines the recoverable amount of the asset group to
which a single asset belongs if it is difficult to estimate the recoverable amount of the asset. An asset group is
recognized based on the fact that whether the main cash inflows generated by the asset group are independent of the
cash inflows of other assets or asset groups.
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When the recoverable amount of an asset or asset group is lower than its book value, the Company writes down its
book value to the recoverable amount, and the write-down amount is included in the current profits and losses, and
the corresponding provision for impairment of assets is made at the same time.
For the impairment test of goodwill, the book value of goodwill resulting from business combination is amortized
to relevant asset groups with reasonable methods from the acquisition date, or amortized to relevant asset group
portfolio if it is difficult to amortize it to relevant asset groups. The relevant asset group or portfolio of asset groups
can benefit from the synergy effect of the business combination and is not greater than the reporting segment
determined by the Company.
If there is any sign of impairment in the asset group or portfolio of asset groups related to goodwill during the
impairment test, the impairment test shall be carried out to the asset group or portfolio of asset groups not including
goodwill, and the recoverable amount shall be calculated to recognize the corresponding impairment loss. Then, an
impairment test is carried out to the asset group or portfolio of asset groups including goodwill to compare its book
value and recoverable amount, and recognize the impairment loss of goodwill if the recoverable amount is lower
than the book value.
Once confirmed, the impairment loss of assets will not be reversed in subsequent accounting periods.
27. Long-term deferred expenses
Long-term deferred expenses incurred by the Company are valued at actual cost and amortized evenly over the
expected benefit period. The amortized value of the long-term deferred expenses that cannot benefit the future
accounting period is included in the current profits and losses.
28. Contract liabilities
The Company presents the contractual assets or contract liabilities in the balance sheet according to the relationship
between the performance obligations and the customer's payment. The Company presents the net amount of
contractual assets and contract liabilities under the same contract after offsetting them.
Contractual liability refers to an obligation to transfer goods or services to a customer for which customer
consideration has been received or receivable, such as payments received by an enterprise prior to the transfer of
promised goods or services.
29. Employee compensation
(1) Accounting method of short-term compensation
The Company recognizes the actual employee salaries and bonuses, the medical insurance premiums, work-related
injury insurance premiums, maternity insurance premiums and other social insurance premiums as well as housing
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provident fund paid for the employees according to the specified benchmark and proportion in the accounting period
when the employees provide services as liabilities, and includes them in the current profits and losses or relevant
asset costs. Such liabilities will be measured at the discounted amount if it is expected that they cannot be fully paid
within 12 months at the end of the annual reporting period during which the employees provide relevant services,
and the financial impact is significant.
(2) Accounting method of post-employment benefits
The post-employment benefit plan includes defined contribution plan and defined benefit plan. The defined
contribution plan refers to the post-employment benefit plan that the enterprise will no longer bear the payment
obligation after paying fixed fees to independent funds. The defined benefit plan refers to the post-employment
benefit plan other than the defined contribution plan.
Defined contribution plan
The defined contribution plan includes basic pension insurance, unemployment insurance and enterprise annuity
plan.
In the accounting period when an employee provides services, the Company recognizes the amount payable to a
defined contribution plan as a liability, and includes it in the current profit or loss or relevant asset cost.
Defined benefit plan
The defined benefit plan shows that an actuarial valuation is performed by an independent actuary on the annual
balance sheet date, and the benefit cost is determined with the expected cumulative benefit unit method. The
employee compensation cost arising from the defined benefit plan of the Company includes the following:
① Service costs, including current service costs, past service costs and settlement gains or losses. Among them,
the current service cost refers to the increase in the present value of the defined benefit plan obligations due to the
provision of services by employees in the current period; the past service cost refers to the increase or decrease in
the present value of the defined benefit plan obligations related to the employee services in the previous period due
to the modification of the defined benefit plan.
② Net interest of net liabilities or net assets of the defined benefit plan, including interest income of plan assets,
interest expenses of defined benefit plan obligations and interest impacted by upper asset limit.
③ Changes caused by re-measurement of net liabilities or net assets of the defined benefit plan.
The Company includes the above items ① and ② in the current profits and losses, unless other accounting standards
require or allow the cost of employee benefits to be included in the cost of assets; item ③ is included in other
comprehensive income and will not be reversed back to profit or loss in subsequent accounting periods, and the part
originally included in other comprehensive income within the equity scope is carried forward to undistributed profit
when the original defined benefit plan terminates.
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(3) Accounting method of dismissal welfare
When the Company provides dismissal welfare to employees, it recognizes the liabilities of employee compensation
arising from dismissal welfare at the earlier of the following two dates and includes them in current profits and
losses: The Company cannot unilaterally withdraw the dismissal welfare provided due to the termination of
employment or adoption of staff reduction suggestion; the Company recognizes the costs or expenses related to the
restructuring involving the payment of dismissal welfare.
If the early retirement plan is implemented, the economic compensation before the official retirement date belongs
to dismissal welfare. The wages proposed to be paid to the early retired employee and the social insurance premiums
to be paid are included in the current profits and losses in a lump sum from the date when the employee stops
providing services to the normal retirement date. Economic compensation after the official retirement date (such as
normal pension) belongs to post-employment benefits.
(4) Accounting method of other long-term employee benefits
Other long-term employee benefits provided by the Company to employees are treated according to provisions of
above defined contribution plan if they meet the conditions of the plan. The benefits that meet the requirements of
the defined benefit plan are treated in accordance with the provisions of the plan. However, the "changes caused by
re-measurement of net liabilities or net assets of the defined benefit plan" in relevant employee compensation cost
are included in current profits and losses or relevant asset cost.
30. Lease liabilities
(1) Identification of lease
When the contract takes effect, the Company, as the lessee or lessor, evaluates whether the customer in the contract
is entitled to obtain almost all economic benefits arising from the use of the identified assets during the use period,
and is entitled to dominate the use of the identified assets during the use period. The Company determines that the
contract is a lease or includes a lease if one party to the contract abalienates the right to control the use of one or
more identified assets within a certain period of time in exchange for consideration.
(2) The Company acting as the lessee
The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement of the lease
term, except for simplified short-term leases and low-value asset leases.
For the accounting policies of right-of-use assets, see 24 in V "Significant Accounting Policies and Accounting
Estimates" of Section X - Financial Report.
Lease liabilities are initially measured at the present value of the lease payment that has not been made on the
commencement date of the lease term calculated by the interest rate implicit in lease. The incremental borrowing
rate is used as the discount rate if the interest rate implicit in lease cannot be determined. Lease payments include
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fixed payment and substantial fixed payment, which need to deduct the lease incentive (if any); variable lease
payments depending on index or ratio; the exercise price of the purchase option, provided that the lessee reasonably
determines that the option will be exercised; amount to be paid for exercise of the option to terminate the lease,
provided that it is reflected that the lessee will exercise the option to terminate the lease in the lease term; the amount
expected to be payable based on the guaranteed residual value provided by the lessee. Subsequently, the interest
expenses of the lease liabilities in each period of the lease term are calculated at a fixed periodic rate and included
in the current profits and losses. Variable lease payments not included in the measurement of lease liabilities are
included in the current profits and losses when they actually occur.
Short-term lease
Short-term leases are leases last for not more than 12 months from the commencement of the lease term, except the
lease including a purchase option.
The Company includes the payment of short-term lease into relevant asset costs or current profits and losses with
the straight-line method in each period within the lease term.
For short-term lease, the Company selects the above simplified treatment method for the items meeting the short-
term lease conditions in the following asset types according to the category of leased assets.
Low-value asset lease
Low-value asset lease refers to the lease in which the value of a single new leased asset is less than CNY 40,000.
The Company includes the payment of low-value asset lease into relevant asset costs or current profits and losses
with the straight-line method in each period within the lease term.
For low-value asset leases, the Company selects the above simplified treatment method according to the specific
conditions of each lease.
Lease change
If the lease changes and meets all of the following conditions, the Company will account for the lease change by
taking it as a separate lease: ① The lease change expands the lease scope by adding the right to use one or more
leased assets; ② The increased consideration equals to the separate price of the expanded part of the lease scope
the after adjustment according to the contract.
If the lease change reduces the lease scope or the lease term, the Company reduces the book value of the right-to-
use asset accordingly and includes the gains or losses from the partial or complete termination of the lease into the
current profits and losses.
The Company adjusts the book value of the right-to-use asset accordingly if other lease changes lead to the
remeasurement of lease liabilities.
(3) The Company acting as the lessor
When acting as the lessor, the Company recognizes the lease that substantially transfers all risks and rewards related
to the ownership of the assets as a finance lease, and other leases other than finance leases as operating leases.
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Finance lease
The Company takes the net investment in a finance lease as the entry value of the lease receivables from the
commencement of the lease term, and the net investment in a lease is the sum of the unguaranteed residual value
and the present value of the lease receipts not yet received at the commencement of the lease term discounted at the
interest rate implicit in lease. The Company, as the lessor, calculates and recognizes the interest income in each
period within the lease term at a fixed periodic rate. The variable lease payment obtained by the Company as the
lessor and not included in the measurement of net lease investment is included in the current profits and losses when
it actually occurs.
Derecognition and impairment of finance lease receivables are accounted for according to the Accounting Standards
for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments and the Accounting
Standards for Business Enterprises No. 23 - Transfer of Financial Assets.
Operating lease
The Company recognizes the rents from operating lease as the current profits and losses with the straight-line
method in each period within the lease term. The initial direct expenses related to the operating lease incurred shall
be capitalized, amortized over the lease term on the same basis as the recognition of rental income, and included in
the current profits and losses by stages. The variable lease payments obtained that are related to the operating lease
but not included in the lease receipts are included in the current profits and losses when they actually occur.
Lease change
The Company treats the changed lease under the following circumstances respectively if the change of finance lease
is not taken as a separate lease for accounting: ① The Company will take the lease as a new one for accounting
from the effective date of lease change, and take the net investment in the lease before the effective date of the lease
change as the book value of the leased asset if the change takes effect on the commencement date of the lease and
the lease is classified as an operating lease; ② The Company will carry out accounting according to the provisions
on the modification or renegotiation of contract in the Accounting Standards for Business Enterprises No. 22 -
Recognition and Measurement of Financial Instruments if the change takes effect on the commencement date of
the lease and the lease is classified as a finance lease.
31. Estimated liabilities
The Company recognizes the obligations related to contingencies as estimated liabilities if they meet all of the
following conditions:
(1) The obligation is the current obligation of the Company;
(2) Performance of the obligation will probably cause outflow of economic benefits from the Company;
(3) The amount of the obligation can be measured reliably.
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Estimated liabilities are initially measured at the best estimate required to be paid for the performance of relevant
current obligations, and comprehensively consider factors as risks, uncertainties and time value of money related to
contingencies. The best estimate is determined by discounting the relevant future cash outflow if the time value of
money has a significant impact. The Company reviews the book value of estimated liabilities and adjusts the book
value on the balance sheet date to reflect the current best estimate.
The amount of compensation is recognized as assets separately only if it is basically certain that the amount can be
obtained in case that all or part of expenditures necessary for clearing off the recognized estimated liabilities are
expected to be compensated by a third party or other parties. The recognized compensation amount shall not exceed
the book value of the recognized liabilities.
32. Share-based payment
(1) Types of share-based payment
The share-based payments of the Company are divided into equity-settled share-based payment and cash-settled
share-based payment.
(2) Determination methods for fair value of equity instruments
The Company recognizes the fair value of equity instruments such as granted options in an active market according
to the quotation of the active market. For equity instruments such as granted options not in active market, the fair
value is determined by the option pricing model. The selected option pricing model considers the following factors:
A. Exercise price of options; B. Validity period of options; C. Current price of underlying shares; D. Expected
fluctuation ratio of stock price; E. Expected dividends of shares; F. Risk-free interest rate within the validity period
of options.
(3) Basis for determining the best estimate of exercisable equity instruments
The Company makes the best estimate based on the latest follow-up information such as changes in the number of
vesting employees and corrects the expected number of exercisable equity instruments on each balance sheet date
within the waiting period. On the vesting date, the final estimated number of exercisable equity instruments shall
be consistent with the number of actual exercisable equity instruments.
(4) Accounting related to implementation, modification and termination of share-based payment plan
The equity-settled share-based payment is measured at the fair values of the equity instruments granted to employees.
The share-based payment is included in relevant costs or expenses at the fair value of equity instrument on the
granting date if the equity instrument can be vested immediately upon being granted, and the capital reserve is
increased accordingly. If the equity instrument cannot be exercised until services within the vesting period are
completed or until the specified performance conditions are met, the services obtained in the current period can be
included in relevant costs or expenses and capital reserve at the fair value on the granting date of the equity
instrument based on the best estimate on the number of exercisable equity instruments on each balance sheet date
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within the vesting period. No adjustment shall be made to relevant costs or expenses and the total amount of owner's
equity that have been recognized after the vesting date.
The cash-settled share-based payment is measured according to the fair value of liabilities calculated and recognized
based on the shares or other equity instruments assumed by the Company. The payment is included in relevant costs
or expenses at the fair value of the liabilities assumed by the Company on the granting date if the equity instrument
can be vested immediately upon being granted, and the liabilities are increased accordingly. Where the cash-settled
share-based payment cannot be exercised until the services within the vesting period are completed or until the
specified performance conditions are met, the services obtained in the current period are included in relevant costs
or expenses and liabilities at the fair value of liabilities assumed by the Company based on the best estimate on
exercisable right on each balance sheet date within the vesting period. Fair value of the liabilities is re-measured
and the changes in fair value are included in current profits and losses on each balance sheet date and each settlement
date prior to the settlement of the relevant liabilities.
If the fair value of granted equity instruments is increased due to the modification made by the Company to the
share-based payment plan, the increase in services obtained is recognized based on the increase in the fair value of
equity instruments. If the number of granted equity instruments is increased due to the modification, the fair value
of the increased equity instruments is recognized accordingly as the increase in obtained services. The increase in
the fair value of equity instruments refers to the difference between the fair value of equity instruments before and
after the modification on the modification date. The obtained services are accounted for continuously as if the
change has never occurred if the modification reduces total fair value of share-based payment or other ways
unfavorable to employees are adopted to modify the terms and conditions of the share-based payment plan, unless
the Company has canceled part or all of the granted equity instruments.
If the granted equity instruments are canceled in the vesting period (except those canceled due to the failure to meet
exercisable non-market conditions), the Company will accelerate the exercise of the granted equity instruments,
include the amount to be recognized in the remaining vesting period in the current profits and losses immediately,
and recognize the capital reserve at the same time. If the employees or other parties can choose to meet the non-
exercisable conditions but fail to do so in the vesting period, the Company will consider that the granted equity
instruments are canceled.
33. Income
Accounting policies adopted for income recognition and measurement
(1) General principles
The Company recognizes the income after performing its obligations under the contract, i.e. the customers obtain
the right to control relevant goods or services.
If there are two or more obligations under the Contract, the Company will amortize the transaction price to each
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single obligation according to the relative proportion of the individual selling price of the goods or services promised
by each single obligation on the contract commencement date, and measure the income based on the transaction
price amortized to each single obligation.
When one of the following conditions is met, it is deemed that the Company performs the obligations within a
certain period of time; otherwise, it is deemed that the Company performs obligations at a certain time point:
① The customer obtains and consumes the economic benefits brought by the performance of the contract by the
Company at the time of contract performance.
② The customer can control the goods under construction during the performance of the Company.
③ The goods generated during the performance of the Company are irreplaceable, and the Company reserves
right to receive payment for the performance accumulated so far throughout the contract period.
For the obligations performed within a certain period of time, the income is recognized by the Company based on
the performance progress within that period of time. When the performance progress cannot be determined in a
reasonable way and it is expected that the costs incurred by the Company can be compensated, the income will be
recognized based on the cost incurred until the performance progress can be determined reasonably.
For obligations performed at a certain time point, the income is recognized by the Company at the time point when
the customer obtains right to control relevant goods or services. The Company will consider the following
indications in determining whether the customer has obtained the right to control the goods or services:
① The Company enjoys the current collection right in respect of the goods or services, that is, the customer has
the current payment obligation in respect of the goods.
② The Company has transferred the legal ownership of the goods to the customer, that is, the customer has the
legal ownership of the goods.
③ The Company has transferred the physical goods to the customer, that is, the customer has occupied the
physical goods.
④ The Company has transferred the main risks and rewards on the ownership of the goods to the customer, that
is, the customer has obtained the main risks and rewards on the ownership of the goods.
⑤ The customer has accepted the goods or services.
⑥ Other signs indicating that the customer has obtained the right of control over the goods.
The right of the Company to receive the consideration due to the transfer of goods or services to the customer (and
the right depends on other factors other than the passage of time) is taken as a contractual asset, and the
contractual assets are impaired based on the expected credit losses (please refer to 16 in V "Significant Accounting
Policies and Accounting Estimates" of Section X - Financial Report.). The right owned by the Company to collect
consideration from customer unconditionally (which only depends on the passage of time) is presented as
receivables. The obligations of the Company to transfer goods or services to customers for which consideration
has been received or receivable are regarded as contractual liabilities.
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Contractual assets and contract liabilities under the same contract are presented in net amount, which is presented
in the item "Contractual assets" or "Other non-current assets" according to its liquidity if it is the debit balance;
presented in the item "Contract liabilities" or "Other non-current liabilities" according to its liquidity if it is the
credit balance.
(2) Specific method
The specific method for recognizing the sales income of the Company's complete vehicles and their accessories is
as follows: When the complete vehicles and their accessories and other goods are transported to the customer and
the customer has accepted the goods, the customer obtains the right to control over them, and the Company
recognizes the income.
Differences in accounting policies for income recognition due to different business models for similar businesses:
none
34. Government subsidies
Government subsidies are recognized when the attached conditions are met and the government subsidies can be
received.
The government subsidies for monetary assets are measured at the amount received or receivable. The government
subsidies for non-monetary assets are measured at fair value; or at nominal amount of CNY 1 if the fair value cannot
be determined reliably.
The asset-related government subsidies refer to those obtained by the Company and used for the acquisition or
construction of long-term assets or forming long-term assets in other ways. Other government subsidies are income-
related government subsidies.
If the government documents do not clearly specify the subsidy object and long-term assets can be resulted in, the
government subsidies corresponding to the asset value are regarded as asset-related government subsidies and others
as income-related government subsidies; if it is difficult to distinguish, the government subsidies are regarded as
income-related government subsidies.
Asset-related government subsidies are offset against the book value of related assets, or recognized as deferred
incomes, and are included in profits and losses within the service life of related assets with a reasonable and
systematic method. The income-related government subsidies used to compensate for the related costs or losses
incurred are included in the current profits and losses or offset against relevant costs; those used to compensate for
future related costs or losses are included in deferred income, and included in the current profits and losses or offset
against relevant costs in the recognition period of related costs or losses. Government subsidies measured at the
nominal amount are directly included in current profits and losses. The Company adopts the same method for the
same or similar government subsidies.
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The government subsidies related to daily activities are included in other incomes or offset against relevant costs
based on the nature of business transactions. The government subsidies irrelevant to daily activities are included in
non-operating revenue and expenditure.
If it is necessary to refund the government subsidies which have been recognized, the book value of the assets which
has been offset at the time of initial recognition is adjusted; the book balance of the deferred income concerned (if
any) is offset, and the excess is included in the current profits and losses; others are directly included in the current
profits and losses.
35. Deferred income tax assets/deferred tax liabilities
Income tax includes current income tax and deferred income tax. Except that the deferred income taxes related to
the adjustment of goodwill resulting from business combination or the transactions or matters directly included in
the owner's equity are included in the owner's equity, other deferred income taxes are regarded as income tax
expenses and included in the current profits and losses.
The Company recognizes deferred income tax with the balance sheet liability method based on the temporary
difference between the book value of assets and liabilities on the balance sheet date and the tax base.
Relevant deferred income tax liabilities are recognized for each taxable temporary difference, unless the difference
is incurred in the following transactions:
(1) Initial recognition of goodwill or initial recognition of assets or liabilities incurred in a transaction which is
neither a business combination nor affects accounting profit or taxable income;
(2) For the taxable temporary difference associated with investments in subsidiaries, associated enterprises and
joint ventures, its reversal time can be controlled and it may not be reversed in the foreseeable future.
For the deductible temporary difference, and deductible losses and tax deduction that can be carried forward to the
next year, the Company recognizes the deferred tax assets arising from it by taking the future taxable income which
can be used to deduct the deductible temporary differences, deductible losses and tax deduction as the limit, unless
the deductible temporary difference is incurred in the following transactions:
(1) The transaction is neither a business combination nor affects accounting profit or taxable income;
(2) Corresponding deferred tax assets are recognized if the deductible temporary difference associated with
investments in subsidiaries, associated enterprises and joint ventures meets all of the following conditions: The
temporary difference is likely to be reversed in the foreseeable future, and the taxable income which is used to
deduct the deductible temporary difference is likely to be obtained in the future.
The Company measures the deferred tax assets and deferred income tax liabilities at the applicable tax rate during
the expected period for recovering the assets or paying off the liabilities on the balance sheet date, and reflects the
impact on income tax from assets recovery or liability settlement on the balance sheet date.
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The Company reviews the book value of deferred tax assets on the balance sheet date. The book value of the deferred
tax assets is written down if it is likely that sufficient taxable income will not be available in the future to deduct
the benefits of deferred tax assets. The write-down amount is reversed when it is likely that sufficient taxable income
will be available.
36. Lease
(1) Accounting method of operating leases
The Company recognizes the rents from operating lease as the current profits and losses with the straight-line
method in each period within the lease term. The initial direct expenses related to the operating lease incurred shall
be capitalized, amortized over the lease term on the same basis as the recognition of rental income, and included in
the current profits and losses by stages. The variable lease payments obtained that are related to the operating lease
but not included in the lease receipts are included in the current profits and losses when they actually occur.
(2) Accounting method of finance leases
The Company takes the net investment in a finance lease as the entry value of the lease receivables from the
commencement of the lease term, and the net investment in a lease is the sum of the unguaranteed residual value
and the present value of the lease receipts not yet received at the commencement of the lease term discounted at the
interest rate implicit in lease. The Company, as the lessor, calculates and recognizes the interest income in each
period within the lease term at a fixed periodic rate. The variable lease payment obtained by the Company as the
lessor and not included in the measurement of net lease investment is included in the current profits and losses when
it actually occurs.
Derecognition and impairment of finance lease receivables are accounted for according to the Accounting Standards
for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments and the Accounting
Standards for Business Enterprises No. 23 - Transfer of Financial Assets.
37. Other significant accounting policies and accounting estimates
(1) Fair value measurement
Fair value refers to the price to be received for the sale of an asset or to be paid for the transfer of a liability by
market participants in the orderly transaction on the measurement date.
The Company measures relevant assets or liabilities at fair value by assuming that the orderly transaction of selling
assets or transferring liabilities is carried out in the main market of relevant assets or liabilities; if there is no main
market, the Company assumes that the transaction is carried out in the most favorable market for relevant assets or
liabilities. The main market (or the most favorable market) refers to the trading market which the Company can
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enter on the measurement date. The Company adopts the assumptions used by market participants to maximize their
economic benefits when pricing the asset or liability.
The Company recognizes the fair value of financial assets or financial liabilities with active market based on the
quotation in the market. The Company recognizes the fair value of the financial instrument without an active market
with the valuation technique.
When non-financial assets are measured at fair value, the ability of market participants to use the asset for the
optimum purpose to generate economic benefits, or to sell the asset to other market participants who can use it for
the optimum purpose to generate economic benefits shall be considered.
The Company adopts the valuation technique which is currently applicable and contains sufficient available data
and other information, and gives priority to the use of relevant observable input values, or uses non-observable input
values only if it is impossible or infeasible to obtain the observable input values.
For assets and liabilities measured or disclosed at fair value in the financial statements, the level of fair value to
which they belong is determined according to the lowest level input value which is significant for the overall fair
value measurement: The first level input value refers to the unadjusted quotation of the same assets or liabilities in
the active market that can be obtained on the measurement date; the second level input value refers to the direct or
indirect observable input value of related assets or liabilities other than the first level input value; the third level
input value refers to the non-observable input value of related assets or liabilities.
The Company reassesses the assets and liabilities measured continuously at fair value recognized in the financial
statements on each balance sheet date to determine whether the fair value measurement levels are converted with
each other.
(2) Construction materials
Construction materials of the Company refer to various materials prepared for the project under construction,
including project materials, uninstalled equipment, tools and instruments prepared for production, etc.
The purchased construction materials are measured at cost, the received construction materials are transferred to the
project under construction, and the remaining construction materials after the completion of the project are
transferred to inventory.
For the drawing method of asset impairment of the project materials, please see 26 "Long-term asset impairment"
in V "Significant Accounting Policies and Accounting Estimates" of Section X - Financial Report.
The ending balance of construction materials is presented in the item "Project under construction" of the balance
sheet.
(3) Work safety cost
The Company withdraws the work safety cost month by month in an average manner by taking the method of excess
regression based on the actual operating income of the previous year according to the provisions of CQ [2012] No.
16 document. The specific standards are as follows:
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For the machinery manufacturing enterprises with an operating income of not exceeding CNY 10 million, 2% of
work safety cost will be withdrawn; for the part of operating income between CNY 10 million and CNY 100 million,
1% shall be withdrawn; for the part of the operating income between CNY 100 million and CNY 1 billion, 0.2%
will be withdrawn; for the part of the operating income between CNY 1 billion and CNY 5 billion, 0.1% will be
withdrawn; for the part of the operating income over CNY 5 billion, 0.05% will be withdrawn.
For transportation enterprises, the work safety cost is withdrawn month by month in an average manner according
to the following standards based on the actual operating income in the previous year: 1% for ordinary freight
business; 1.5% for passenger transportation business, and special freight business such as pipeline transportation
and dangerous goods transportation.
Work safety costs are included in the cost of relevant products or current profits and losses at the time of withdrawal,
and are also included in the item "special reserve".
When the withdrawn work safety costs are used within the specified scope, those belonging to expenditures are
directly offset against the special reserves; those resulting in fixed assets are recognized as fixed assets when the
safety project is completed and ready for its intended use after expenditures incurred are collected under the item
"Project under construction". At the same time, the Company will offset the special reserve according to the cost of
fixed assets and recognize the accumulated depreciation of the same amount. The fixed assets will no longer be
depreciated in subsequent periods.
(4) Significant accounting judgments and estimates
The Company evaluates the significant accounting estimates and key assumptions adopted continuously based on
historical experience and other factors, including reasonable expectations for future events. Significant accounting
estimates and key assumptions which may lead to significant adjustment risk to the book value of assets and
liabilities in the next accounting year are presented as follows:
Classification of financial assets
Major judgments involved in determining the classification of financial assets by the Company include analysis of
business models and contractual cash flow characteristics.
The Company determines the business model for financial assets management at the level of financial asset portfolio
while considering factors such as the way to evaluate and report the performance of financial assets to key
management personnel, the risks affecting the performance of financial assets and their management mode, and the
way in which relevant business management personnel receive remuneration.
When evaluating the consistence between the contractual cash flow of financial assets and the basic lending
arrangements, the Company needs to determine whether the principal may change the time distribution or amount
in the duration due to prepayment and other reasons; whether the interest only includes the time value of money,
credit risk, other underlying borrowing risks, and consideration for costs and profits. For example, whether the
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amount of prepayment only reflects the unpaid principal and interest based on the outstanding principal, as well as
reasonable compensation paid due to early termination of the contract.
Measurement of expected credit losses on accounts receivable
The Company calculates the expected credit loss of accounts receivable based on default risk exposure of accounts
receivable and the expected credit loss rate, and determines the expected credit loss rate based on the probability
and the loss rate of default. The Company determines the expected credit loss rate based on the data such as internal
historical credit loss experience, and adjusts the historical data in combination with the current situation and
forward-looking information. The Company uses indicators such as the risk of economic downturn, changes in
external market environment, technical environment and customer situation, etc. when considering forward-looking
information. The Company monitors and reviews the assumptions related to the calculation of expected credit losses
regularly.
Impairment of goodwill
The Company assesses the impairment of goodwill at least once every year. This requires estimating the use value
of the asset group allocated with goodwill. When estimating the use value, the Company needs to estimate the future
cash flow from the asset group and select an appropriate discount rate to calculate the present value of the future
cash flow.
Development expenditures
The management must assume the expected future cash generation of the asset, the discount rate to be applied, and
the expected benefit period when determining the amount of capitalization.
Deferred tax assets
Deferred tax assets are recognized for all unutilized tax losses to the extent that it is probable that there will be
sufficient taxable profits available against which the losses can be utilized. Therefore, the management needs to use
a lot of judgment to estimate the time and amount of future taxable profits, and to determine the amount of deferred
tax assets to be recognized in combination with tax planning strategies.
Estimated liabilities
Estimated liabilities are initially measured at the best estimate required to be paid for the performance of relevant
current obligations, and comprehensively consider factors as risks, uncertainties and time value of money related to
contingencies. The best estimate is determined by discounting the relevant future cash outflow if the time value of
money has a significant impact. The Company reviews the book value of estimated liabilities and adjusts the book
value on the balance sheet date to reflect the current best estimate.
The amount of compensation is recognized as assets separately only if it is basically certain that the amount can be
obtained in case that all or part of expenditures necessary for clearing off the recognized estimated liabilities are
expected to be compensated by a third party or other parties. The recognized compensation amount shall not exceed
the book value of the recognized liabilities.
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38. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
□ Applicable Not applicable
(2) Changes in significant accounting estimates
□ Applicable Not applicable
VI. Taxes
1. Main taxes and tax rates
Tax Category Tax Basis Tax Rate
Value-added tax Taxable income 13%、9%、6%、5%
Urban maintenance and
Turnover tax payable 7%、5%
construction tax
Corporate income tax Taxable income 25%
Educational surcharges Turnover tax payable 3%
Local educational surcharges Turnover tax payable 2%
Land use tax Land use area CNY 9/㎡, CNY 14/㎡
Residual value of property and
Property tax 1.2%, 12%
rental income
Disclosure shall be made if there are different enterprise income tax rates for different taxpayers
Name of Taxpayer Income Tax Rate
FAW JIEFANG GROUP CO., LTD. 25%
FAW JIEFANG AUTOMOTIVE CO., LTD. 15%
Wuxi Dahao Power Co., Ltd. 25%
FAW Jiefang Automotive Sales Co., Ltd. 25%
FAW Jiefang (Qingdao) Automotive Co., Ltd. 25%
FAW Jiefang Dalian Diesel Engine Co., Ltd. 15%
FAW Jiefang Austria R&D Co., Ltd. 25%
FAW Jiefang New Energy Automotive Sales Co., Ltd. 25%
2. Tax preference
Jiefang Limited, a subsidiary of the Company, is recognized as a high-tech enterprise, with a validity period of three
years and an income tax rate of 15% within the validity period according to the High-tech Enterprise Certificate
(issued on September 10, 2020, with a certificate number of GR202022000336) jointly issued by the Science and
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Technology Department of Jilin Province, the Department of Finance of Jilin Province and the Jilin Provincial Tax
Service of State Taxation Administration.
FAW Jiefang Dalian Diesel Engine Co., Ltd., a subsidiary of the Company, is recognized as a high-tech enterprise,
with a validity period of three years and an income tax rate of 15% within the validity period according to the list
of third batch of high-tech enterprises (with a certificate number of GR202121200892) recognized in 2021 and
issued by Dalian on December 15, 2021.
VII. Notes to Items in Consolidated Financial Statements
1. Monetary capital
Unit: CNY
Item Ending Balance Opening Balance
Bank deposits 28,493,437,173.79 30,709,255,009.05
Other monetary capitals 52,309,930.91 52,007,712.35
Total 28,545,747,104.70 30,761,262,721.40
Including: total amount deposited
13,555,345.21 13,585,238.95
abroad
Total amount with limited
use due to mortgage, pledge or 52,309,930.91 56,005,226.87
freezing
Other notes: none
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2. Notes receivable
(1) Classification of notes receivable
Unit: CNY
Item Ending Balance Opening Balance
Commercial acceptance notes 6,795,406.57 12,936,978.11
Total 6,795,406.57 12,936,978.11
Unit: CNY
Ending Balance Opening Balance
Provision for Bad Provision for Bad
Book Balance Book Balance
Debts Debts
Category Provisi Provisi
Book Value Book Value
on on
Amount Scale Amount Amount Scale Amount
Proport Proport
ion ion
Including:
Notes
receivable
with
provision for 6,832,988.00 100.00% 37,581.43 0.55% 6,795,406.57 13,008,525.00 100.00% 71,546.89 0.55% 12,936,978.11
bad debts
made by
portfolio
Including:
Commercial
acceptance 6,832,988.00 100.00% 37,581.43 0.55% 6,795,406.57 13,008,525.00 100.00% 71,546.89 0.55% 12,936,978.11
bill
Total 6,832,988.00 100.00% 37,581.43 0.55% 6,795,406.57 13,008,525.00 100.00% 71,546.89 0.55% 12,936,978.11
Information about the provision for bad debts shall be disclosed in the same way as that of other receivables if the provision for bad debts of notes receivable is
withdrawn based on the general model of expected credit losses:
Applicable □ Not Applicable
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Portfolio provision item: commercial acceptance bill Unit: CNY
2022.6.30 2021.12.31
Aging Provision for Bad Expected Credit Loss Provision for Bad Expected Credit Loss Rate
Notes receivable Notes receivable
Debts Rate (%) Debts (%)
Within 1 year 6,832,988.00 37,581.43 0.55 13,008,525.00 71,546.89 0.55
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(2) Provision for bad debts provided, recovered or reversed in the current period
Provision for bad debts in the current period:
Unit: CNY
Amount Changed in the Current Period
Opening
Category Recovery or Cancel after Ending Balance
Balance Provision Others
Reversal verification
Commercial
71,546.89 -33,965.46 37,581.43
acceptance bill
Total 71,546.89 -33,965.46 37,581.43
Important provision for bad debts recovered or reversed in the current period:
□ Applicable Not applicable
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3. Accounts receivable
(1) Disclosure of accounts receivable by category
Unit: CNY
Ending Balance Opening Balance
Book Balance Provision for Bad Debts Book Balance Provision for Bad Debts
Category
Provision Book Value Provision Book Value
Amount Scale Amount Amount Scale Amount
Proportion Proportion
Accounts
receivable
with
provision 85,146,390.69 3.87% 85,146,390.69 100.00% 97,146,390.69 6.79% 97,146,390.69 100.00%
for bad debt
made
individually
Including:
Accounts
receivable
with
provision 2,116,937,778.02 96.13% 83,352,091.79 3.94% 2,033,585,686.23 1,332,966,224.45 93.21% 53,272,272.75 4.00% 1,279,693,951.70
for bad
debts made
by portfolio
Including:
Aging
2,116,937,778.02 96.13% 83,352,091.79 3.94% 2,033,585,686.23 1,332,966,224.45 93.21% 53,272,272.75 4.00% 1,279,693,951.70
portfolio
Total 2,202,084,168.71 100.00% 168,498,482.48 7.65% 2,033,585,686.23 1,430,112,615.14 100.00% 150,418,663.44 10.52% 1,279,693,951.70
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Provision for bad debts made individually:
Unit: CNY
Ending Balance
Name Provision for Bad Provision Reasons for
Book Balance
Debts Proportion Provision
Liangshan Huatai Highly unlikely to
349,190.00 349,190.00 100.00%
Trading Co., Ltd. be recovered
Yancheng
Highly unlikely to
Zhongwei Bus Co., 13,599.99 13,599.99 100.00%
be recovered
Ltd.
FAW Jingye Engine Highly unlikely to
1,820,957.23 1,820,957.23 100.00%
Co., Ltd. be recovered
Shenyang Jinbei It has been
Vehicle prosecuted, but
889,279.05 889,279.05 100.00%
Manufacturing Co., highly unlikely to
Ltd. be recovered
It has been
Dalian Baofeng
prosecuted, but
Automobile Sales 496,200.00 496,200.00 100.00%
highly unlikely to
Co., Ltd.
be recovered
Jilin Zhuzhan
Highly unlikely to
Automobile Trading 883,566.00 883,566.00 100.00%
be recovered
Co., Ltd.
Dalian Qingfeng Highly unlikely to
8,043,264.87 8,043,264.87 100.00%
Bus Co., Ltd. be recovered
Jiangsu Xinrui New It has been
Energy Vehicle prosecuted, but
37,612,001.70 37,612,001.70 100.00%
Technology Co., highly unlikely to
Ltd. be recovered
It has been
Changchun Xiongtu
prosecuted, but
New Energy 6,230,500.00 6,230,500.00 100.00%
highly unlikely to
Vehicle Co., Ltd.
be recovered
Beijing Hotan
Automobile Highly unlikely to
7,436,520.00 7,436,520.00 100.00%
Modification Co., be recovered
Ltd.
Zhonghe Shunyang
Supply Chain Highly unlikely to
5,643,600.00 5,643,600.00 100.00%
Management Co., be recovered
Ltd.
Transportation
Group (Qingdao)
Sunshine Highly unlikely to
3,020,835.47 3,020,835.47 100.00%
Automobile Sales be recovered
and Service Co.,
Ltd.
Zhejiang Hanglun 8,581,536.83 8,581,536.83 100.00% It has been
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Ending Balance
Name Provision for Bad Provision Reasons for
Book Balance
Debts Proportion Provision
Ligang Trading Co., prosecuted, but
Ltd. highly unlikely to
be recovered
Beijing Institute of Highly unlikely to
71,740.00 71,740.00 100.00%
Radio Measurement be recovered
It has been
Zhejiang Baoding
prosecuted, but
Automobile Sales 80,035.12 80,035.12 100.00%
highly unlikely to
Co., Ltd.
be recovered
It has been
Shuozhou Jinsheng
prosecuted, but
Automobile Trading 1,822,961.43 1,822,961.43 100.00%
highly unlikely to
Co., Ltd.
be recovered
It has been
Xinjiang Jingyang
prosecuted, but
Optoelectronic Co., 1,179,590.41 1,179,590.41 100.00%
highly unlikely to
Ltd.
be recovered
It has been
Yulin Jiayu Jiefang
prosecuted, but
Automobile Sales 971,012.59 971,012.59 100.00%
highly unlikely to
Co., Ltd.
be recovered
Total 85,146,390.69 85,146,390.69
Provision for bad debts made by portfolio:
Unit: CNY
Ending Balance
Name
Book Balance Provision for Bad Debts Provision Proportion
Within 1 year 1,788,152,599.19 9,525,849.15 0.53%
1-2 years 304,070,093.93 50,776,892.70 16.70%
2-3 years 9,706,386.64 8,040,651.68 82.84%
3-4 years 885,600.00 885,600.00 100.00%
Over 4 years 14,123,098.26 14,123,098.26 100.00%
Total 2,116,937,778.02 83,352,091.79
Description of the basis for determining the portfolio:
Information about the provision for bad debts shall be disclosed in the same way as that of other receivables if the
provision for bad debts of accounts receivable is withdrawn based on the general model of expected credit losses:
□ Applicable Not applicable
Disclosure by aging
Unit: CNY
Aging Ending Balance
Within 1 year (including 1 year) 1,768,423,418.31
Including: 0-6 months 1,527,609,092.40
7-12 months 240,814,325.91
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1-2 years 320,670,077.79
2-3 years 12,924,488.18
Over 3 years 100,066,184.43
3-4 years 58,907,076.82
4 to 5 years 8,581,536.83
Over 5 years 32,577,570.78
Total 2,202,084,168.71
(2) Provision for bad debts provided, recovered or reversed in the current period
Provision for bad debts in the current period:
Unit: CNY
Amount Changed in the Current Period
Cance
Category Opening Balance Recovery or l after Ending Balance
Provision Others
Reversal verific
ation
Accounts
150,418,663.44 30,079,819.04 12,000,000.00 168,498,482.48
receivable
Total 150,418,663.44 30,079,819.04 12,000,000.00 168,498,482.48
Important provision for bad debts recovered or reversed in the current period:
Unit: CNY
Company Name Amount Recovered or Reversed Recovery Method
Transportation Group (Qingdao)
Sunshine Automobile Sales and 8,000,000.00 Recovery of bank acceptance bills
Service Co., Ltd.
Dalian Qingfeng Bus Co., Ltd. 4,000,000.00 Recovery of bank deposits
Total 12,000,000.00
(3) Accounts receivable from top five borrowers classified based on the ending balance
Unit: CNY
Proportion in Total
Ending Balance of Ending Balance of Bad
Company Name Ending Balance of
Accounts Receivable Debts Provision
Accounts Receivable
China FAW Group
Import & Export Co., 771,150,288.04 35.02% 827,499.69
Ltd.
Customer 1 516,085,710.00 23.44% 30,358,552.41
Customer 2 139,320,940.32 6.33% 139,320.94
FAW Hongta Yunnan
Automobile 52,763,670.55 2.40% 2,902,224.84
Manufacturing Co., Ltd.
Customer 3 50,172,900.00 2.28% 1,197,052.34
Total 1,529,493,508.91 69.47%
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4. Receivables financing
Unit: CNY
Item Ending Balance Opening Balance
Notes receivable 7,091,605,627.68 5,305,018,299.79
Total 7,091,605,627.68 5,305,018,299.79
Increase/decrease in receivables financing in the current period and changes in fair value
□ Applicable Not applicable
Information about the provision for impairment shall be disclosed in the same way as that of other receivables if
the provision for impairment of receivables financing is withdrawn based on the general model of expected credit
losses:
□ Applicable Not applicable
5. Prepayments
(1) Presentation of prepayment by aging
Unit: CNY
Ending Balance Opening Balance
Aging
Amount Scale Amount Scale
Within 1 year 1,219,924,277.32 88.52% 797,055,366.07 91.74%
1-2 years 128,133,658.18 9.30% 44,227,099.84 5.09%
2-3 years 21,867,458.90 1.59% 15,714,068.26 1.81%
Over 3 years 8,229,261.81 0.60% 11,814,878.82 1.36%
Total 1,378,154,656.21 868,811,412.99
Reasons for untimely settlement of prepayments with significant amount and age of over 1 year:
Unit: CNY
Proportion in Total Reasons for
Name of Debtor Book Balance
Prepayments (%) Non-settlement
China FAW Group Import & Export Co., Undue settlement
79,903,463.69 5.80
Ltd. period
Undue settlement
Supplier 1 8,097,000.00 0.59
period
Undue settlement
0.40
Supplier 2 5,478,800.00 period
Undue settlement
Supplier 3 0.34
4,649,400.00 period
Supplier 4 Undue settlement
4,463,058.00 0.32
period
Total 102,591,721.69 7.45
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(2) Prepayments of the top five objects classified based on the ending balance
The total prepayments of top five objects classified based on the ending balance in the current period is CNY
870,278,190.51, accounting for 63.15% of the total ending balance of prepayment.
Other notes: none
6. Other receivables
Unit: CNY
Item Ending Balance Opening Balance
Dividends receivable 26,488,012.75 8,567,040.00
Other receivables 281,869,624.93 240,521,050.95
Total 308,357,637.68 249,088,090.95
(1) Dividends receivable
1) Classification of dividends receivable
Unit: CNY
Item (or Investee) Ending Balance Opening Balance
FAW Changchun Ansteel Steel
8,567,040.00 8,567,040.00
Processing and Distribution Co., Ltd.
Sanguard Automobile Insurance Co.,
17,920,972.75
Ltd.
Total 26,488,012.75 8,567,040.00
2) Provision for bad debts
□ Applicable Not applicable
Other notes: none
(2) Other receivables
1) Classification of other receivables by nature
Unit: CNY
Payable Nature Ending Book Balance Opening Book Balance
Current account 119,381,326.85 99,570,166.66
Claim payment 200,987,802.97 196,444,173.02
Margin, deposit 31,170,932.13 34,872,256.53
Reserve fund 24,594,326.93 4,777,757.97
Total 376,134,388.88 335,664,354.18
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2) Provision for bad debts
Unit: CNY
Phase I Phase II Phase III
Provision for Bad Expected credit loss Expected credit loss
Expected credit loss Total
Debts for the entire for the entire
for the next 12
duration (without duration (with
months
credit impairment) credit impairment)
Balance on January
5,034,178.04 29,609,303.24 60,499,821.95 95,143,303.23
1, 2022
Balance on January
1, 2022 in the
current period
- Transfer to phase
-21.38 21.38
II
Provision in the
-801,731.00 -76,808.28 -878,539.28
current period
Balance on June 30,
4,232,425.66 29,532,516.34 60,499,821.95 94,264,763.95
2022
Changes in the book balance of the loss provision with significant changes in the current period
□ Applicable Not applicable
Disclosure by aging
Unit: CNY
Aging Ending Balance
Within 1 year (including 1 year) 277,028,327.59
Including: 0-6 months 275,654,981.14
7-12 months 1,373,346.45
1-2 years 5,336,283.49
2-3 years 8,475,764.97
Over 3 years 85,294,012.83
3-4 years 39,638,797.62
4 to 5 years 10,014,602.00
Over 5 years 35,640,613.21
Total 376,134,388.88
3) Provision for bad debts provided, recovered or reversed in the current period
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Provision for bad debts in the current period:
Unit: CNY
Amount Changed in the Current Period
Cancel
Category Opening Balance Recovery or after Ending Balance
Provision Others
Reversal verific
ation
Other
95,143,303.23 -878,539.28 94,264,763.95
receivables
Total 95,143,303.23 -878,539.28 94,264,763.95
4) Other receivables from top five borrowers classified based on the ending balance
Unit: CNY
Proportion in
Total Ending Ending Balance
Payment
Company Name Ending Balance Aging Balance of of Bad Debts
Nature
Other Provision
Receivables
New energy
3-4 years, 4-5
Customer 1 vehicle sales 48,155,960.00 12.80% 48,155,960.00
years
subsidies
Relocation
Customer 2 20,500,000.00 Over 5 years 5.45% 20,500,000.00
compensation
The Ninth
Institute of Project
Planning & Current
10,728,984.01 0-6 months 2.85% 10,728.98
Research of China account
Machinery
Industry (FIPPR)
Qingdao
Automotive
Advance
Research Institute 8,227,110.28 2-3 years 2.19% 5,675,883.38
payment
of China FAW
Co., Ltd.
Current
Customer 3 3,545,640.00 1-2 years 0.94% 2,155,394.56
account
Total 91,157,694.29 24.23% 76,497,966.92
7. Inventories
Whether the Company is required to comply with the disclosure requirements of the real estate industry: No
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(1) Classification of inventories
Unit: CNY
Ending Balance Opening Balance
Provision for Provision for
Item impairment of impairment of
Book Balance Book Value Book Balance Book Value
inventory or contract inventory or contract
performance cost performance cost
Raw
408,026,420.68 34,750,531.21 373,275,889.47 379,195,753.25 35,363,287.47 343,832,465.78
materials
Goods in
665,363,377.35 3,524,161.33 661,839,216.02 676,093,365.06 4,732,672.33 671,360,692.73
process
Goods in
5,434,465,998.98 145,457,247.62 5,289,008,751.36 5,864,661,527.18 143,363,374.55 5,721,298,152.63
stock
Revolving
101,874,640.46 2,186,616.31 99,688,024.15 103,311,491.37 1,244,042.64 102,067,448.73
materials
Others 2,783,683,375.66 172,037,662.57 2,611,645,713.09 2,618,917,617.54 189,355,846.16 2,429,561,771.38
Total 9,393,413,813.13 357,956,219.04 9,035,457,594.09 9,642,179,754.40 374,059,223.15 9,268,120,531.25
(2) Provision for impairment of inventory and contract performance cost
Unit: CNY
Increase in the Current Period Decrease in the Current Period
Item Opening Balance Ending Balance
Provision Others Reversal or Write-off Others
Raw
35,363,287.47 94,945.50 707,701.76 34,750,531.21
materials
Goods in
4,732,672.33 1,208,511.00 3,524,161.33
process
Goods in
143,363,374.55 84,220,627.88 82,126,754.81 145,457,247.62
stock
Revolving
1,244,042.64 942,573.67 2,186,616.31
materials
Others 189,355,846.16 228,206.00 17,546,389.59 172,037,662.57
Total 374,059,223.15 85,486,353.05 101,589,357.16 357,956,219.04
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8. Contractual assets
Unit: CNY
Ending Balance Opening Balance
Item Impairment Impairment
Book Balance Book Value Book Balance Book Value
Provision Provision
Contra
ctual 66,427,687.56 4,459,663.97 61,968,023.59 57,650,067.72 4,602,380.00 53,047,687.72
assets
Total 66,427,687.56 4,459,663.97 61,968,023.59 57,650,067.72 4,602,380.00 53,047,687.72
Information about the provision for impairment shall be disclosed in the same way as that of other receivables if the
provision for impairment of contractual assets is withdrawn based on the general model of expected credit losses:
Applicable □ Not Applicable
Provision for impairment by aging portfolio Unit: CNY
2022.06.30 2021.12.31
Category Expected
Contractual Provision for Contractual Provision for Expected Credit
Credit Loss
assets Bad Debts assets Bad Debts Loss Rate (%)
Rate (%)
Within 1 year 40,485,347.56 124,698.96 0.31 31,421,323.96 86,311.95 0.27
1-2 years 25,942,340.00 4,334,965.01 16.71 26,228,743.76 4,516,068.05 17.22
Total 66,427,687.56 4,459,663.97 6.71 57,650,067.72 4,602,380.00 7.98
Provision for impairment of contractual assets in the current period:
Unit: CNY
Write-
Provision in the Reversal in the
Item off/Verification in Cause
current period Current Period
the Current Period
Provision for
Provision and
impairment of -142,716.03
reversal by aging
contractual assets
Total -142,716.03 ——
Other notes: none
9. Current portion of non-current assets
Unit: CNY
Item Ending Balance Opening Balance
Current portion of long-term
114,825,391.38 114,825,391.38
receivables
Total 114,825,391.38 114,825,391.38
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10. Other current assets
Unit: CNY
Item Ending Balance Opening Balance
Input tax 471,389,881.76 1,368,192,743.48
Input tax to be verified 1,679,056.87 19,065,353.23
Prepaid income tax 626,891,494.80
Total 473,068,938.63 2,014,149,591.51
Other notes: none
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11. Long-term receivables
(1) Long-term receivables
Unit: CNY
Ending Balance Opening Balance
Discount Rate
Item Provision for Bad Provision for
Book Balance Book Value Book Balance Book Value Range
Debts Bad Debts
Sales of goods
338,691,573.49 5,935,963.32 332,755,610.17 338,691,573.49 1,275,424.32 337,416,149.17 2.5%-5.6%
by installments
Current portion
of long-term -115,267,222.47 -441,831.09 -114,825,391.38 -115,267,222.47 -441,831.09 -114,825,391.38
receivables
Total 223,424,351.02 5,494,132.23 217,930,218.79 223,424,351.02 833,593.23 222,590,757.79
Impairment of provision for bad debts
Unit: CNY
Phase I Phase II Phase III
Expected credit loss for
Provision for Bad Debts Expected credit loss for the Total
Expected credit loss for the the entire duration
entire duration (with credit
next 12 months (without credit
impairment)
impairment)
Balance on January 1, 2022 1,275,424.32 1,275,424.32
Balance on January 1, 2022 in the
current period
Provision in the current period 4,660,539.00 4,660,539.00
Balance on June 30, 2022 5,935,963.32 5,935,963.32
Changes in the book balance of the loss provision with significant changes in the current period
□ Applicable Not applicable
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12. Long-term equity investments
Unit: CNY
Increase/Decrease in the Current Period
Investment Cash Ending
Opening Balance Adjustment to Ending Balance Balance of
Investee Gains or Other Dividends or Provision
(Book Value) Investment Investment Other (Book Value) Impairment
Losses Equity Profits for Others
Increase Reduction Comprehensive Provision
Recognized by Changes Announced to Impairment
Incomes
Equity Method be Paid
I. Joint ventures
II. Associated enterprises
First
Automobile
4,341,181,324.38 280,639,831.32 -8,619.76 4,621,812,535.94
Finance
Co., Ltd.
Sanguard
Automobile
213,584,040.85 11,594,274.68 -38,116.86 17,920,972.75 207,219,225.92
Insurance
Co., Ltd.
FAW
Changchun
Ansteel
Steel -
85,910,484.18 1,805,468.66 87,665,230.33
Processing 50,722.51
and
Distribution
Co., Ltd.
Changchun
Wabco
Automotive
20,301,325.09 -1,565,452.94 18,735,872.15
Control
System
Co., Ltd.
Suzhou
Zhito
Technology
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Increase/Decrease in the Current Period
Investment Cash Ending
Opening Balance Adjustment to Ending Balance Balance of
Investee Gains or Other Dividends or Provision
(Book Value) Investment Investment Other (Book Value) Impairment
Losses Equity Profits for Others
Increase Reduction Comprehensive Provision
Recognized by Changes Announced to Impairment
Incomes
Equity Method be Paid
Co., Ltd.
FAW
Changchun
Baoyou
Steel
43,140,497.54 3,328,945.02 6,300,012.21 40,169,430.35
Processing
and
Distribution
Co., Ltd.
FAW
Jiefang
Fujie
(Tianjin) 35,181,984.88 542,476.17 35,724,461.05
Technology
Industry
Co., Ltd.
SmartLink 27,435,014.82 -15,165,383.20 12,269,631.62
-
Subtotal 4,766,734,671.74 281,180,159.71 -46,736.62 24,220,984.96 5,023,596,387.36
50,722.51
-
Total 4,766,734,671.74 281,180,159.71 -46,736.62 24,220,984.96 5,023,596,387.36
50,722.51
Other notes: none
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13. Investment real estate
(1) Investment real estates measured at cost
Applicable □ Not Applicable
Unit: CNY
Houses and Project under
Item Land use right Total
Buildings construction
I. Original book value
1. Opening balance 148,337,701.92 2,042,122.60 150,379,824.52
2. Increase in the current
14,358,650.65 99,615,759.08 113,974,409.73
period
(1) Outsourcing
(2) Transferred from
inventory/fixed assets/project 14,358,650.65 99,615,759.08 113,974,409.73
under construction
(3) Increase due to
business combination
3. Decrease in the current
474,248.30 474,248.30
period
(1) Disposal
(2) Other transfer-out 474,248.30 474,248.30
4. Ending balance 162,222,104.27 101,657,881.68 263,879,985.95
II. Accumulated depreciation and
accumulated amortization
1. Opening balance 70,076,640.08 100,359.35 70,176,999.43
2. Increase in the current
13,435,715.82 21,061,709.95 34,497,425.77
period
(1) Provision or
13,435,715.82 493,139.62 13,928,855.44
amortization
(2) Other increases 20,568,570.33 20,568,570.33
3. Decrease in the current
329,109.25 329,109.25
period
(1) Disposal
(2) Other transfer-out 329,109.25 329,109.25
4. Ending balance 83,183,246.65 21,162,069.30 104,345,315.95
III. Provision for impairment
1. Opening balance
2. Increase in the current
period
(1) Provision
3. Decrease in the current
period
(1) Disposal
(2) Other transfer-out
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Houses and Project under
Item Land use right Total
Buildings construction
4. Ending balance
IV. Book value
1. Ending book value 79,038,857.62 80,495,812.38 159,534,670.00
2. Opening book value 78,261,061.84 1,941,763.25 80,202,825.09
(2) Investment real estates measured at fair value
□ Applicable Not applicable
(3) Investment real estates without property ownership certificates
Unit: CNY
Reasons for failure to obtain the
Item Book Value
certificate
This plot has been included in the
government renovation project,
Property, No. 949, Chongqing
1,264,704.51 and the property ownership
Middle Road, Licang District
certificate cannot be applied for at
present
Final assembly and loading It is a new plant, and the certificate
16,736,495.23
workshop of Liuzhou Plant is being applied for
Other notes: none
14. Fixed assets
Unit: CNY
Item Ending Balance Opening Balance
Fixed assets 8,995,163,623.45 9,224,786,362.59
Disposal of fixed assets 10,834,879.96 12,002,959.44
Total 9,005,998,503.41 9,236,789,322.03
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(1) Details of fixed assets
Unit: CNY
Houses and Transportation Electronic
Item Machinery equipment Office equipment Others Total
buildings equipment equipment
I. Original book value
1. Opening balance 5,364,682,902.67 14,858,383,470.22 153,534,389.98 572,672,042.00 52,042,350.35 1,273,333,998.80 22,274,649,154.02
2. Increase in the current
25,816,702.44 503,584,756.93 2,199,980.09 13,780,666.83 3,425,761.54 3,497,006.54 552,304,874.37
period
(1) Purchase 4,143,392.83 502,000.00 2,970,473.76 36,482.94 553,614.97 8,205,964.50
(2) Transferred from
25,816,702.44 499,441,364.10 1,697,980.09 10,810,193.07 3,389,278.60 2,943,391.57 544,098,909.87
the project under construction
(3) Increase due to
business combination
3. Decrease in the current
91,431,691.88 163,485,517.78 1,400,099.94 14,681,572.77 1,407,271.22 243,000.00 272,649,153.59
period
(1) Disposal or scrapping 73,287,071.73 162,849,113.85 1,400,099.94 14,681,572.77 877,356.68 243,000.00 253,338,214.97
(2) Other decreases 18,144,620.15 636,403.93 529,914.54 19,310,938.62
4. Ending balance 5,299,067,913.23 15,198,482,709.37 154,334,270.13 571,771,136.06 54,060,840.67 1,276,588,005.34 22,554,304,874.80
II. Accumulated depreciation 0.00
1. Opening balance 2,147,910,381.29 9,294,680,049.68 102,945,097.26 416,199,124.76 39,631,878.93 970,703,762.25 12,972,070,294.17
2. Increase in the current
131,182,280.49 517,249,669.24 9,322,653.54 39,490,590.83 1,993,548.17 48,642,434.56 747,881,176.83
period
(1) Provision 130,861,371.12 517,249,669.24 9,322,653.54 39,490,590.83 1,993,548.17 48,642,434.56 747,560,267.46
(2) Other increases 320,909.37 320,909.37
3. Decrease in the current
67,855,283.85 116,762,240.10 1,377,833.51 14,618,422.79 1,144,016.07 235,710.00 201,993,506.32
period
(1) Disposal or
54,320,715.01 116,359,808.77 1,377,833.51 14,618,422.79 827,038.87 235,710.00 187,739,528.95
scrapping
(2) Other decreases 13,534,568.84 402,431.33 316,977.20 14,253,977.37
4. Ending balance 2,211,237,377.93 9,695,167,478.82 110,889,917.29 441,071,292.80 40,481,411.03 1,019,110,486.81 13,517,957,964.68
III. Provision for impairment 0.00
1. Opening balance 12,344.37 75,572,210.09 2,207,942.80 77,792,497.26
153
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Houses and Transportation Electronic
Item Machinery equipment Office equipment Others Total
buildings equipment equipment
2. Increase in the current
0.00
period
(1) Provision 0.00
3. Decrease in the current
36,609,210.59 36,609,210.59
period
(1) Disposal or
36,609,210.59 36,609,210.59
scrapping
4. Ending balance 12,344.37 38,962,999.50 2,207,942.80 41,183,286.67
IV. Book value
1. Ending book value 3,087,818,190.93 5,464,352,231.05 43,444,352.84 130,699,843.26 13,579,429.64 255,269,575.73 8,995,163,623.45
2. Opening book value 3,216,760,177.01 5,488,131,210.45 50,589,292.72 156,472,917.24 12,410,471.42 300,422,293.75 9,224,786,362.59
154
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(2) Fixed assets not used currently
Unit: CNY
Original Book Accumulated Impairment
Item Book Value Remarks
Value Depreciation Provision
Machinery
63,276,688.04 35,797,917.84 21,960,257.70 5,518,512.50
equipment
(3) Fixed assets leased out under operating leases
Unit: CNY
Item Ending Book Value
Houses and buildings 2,758,704.42
Machinery equipment 2,515,447.28
Mode of transportation 9,059.84
Total 5,283,211.54
(4) Fixed assets without property ownership certificates
Unit: CNY
Reasons for failure to obtain the
Item Book Value
certificate
Jimo phase II light truck new It is just put into use, and the
310,241,566.22
energy base project procedures are not completed
Project of exiting the city and It is a new plant, and the certificate is
323,920,016.01
entering the industrial park being applied for
Hazardous waste station in plant It is just put into use, and the
3,048,983.35
area I procedures are not completed
Land applications are not submitted, so
Equipment workshop works 1,142,169.66 the property ownership certificate
cannot be obtained
Other notes: none
(5) Disposal of fixed assets
Unit: CNY
Item Ending Balance Opening Balance
Houses and Buildings 8,280.77 8,280.77
Machinery equipment 10,094,480.61 10,642,669.15
Mode of transportation 131,175.05 219,822.98
Electronic equipment 60,494.58 8,298.69
Office equipment 35,072.37 18,904.69
Others 505,376.58 1,104,983.16
Total 10,834,879.96 12,002,959.44
Other notes: none
155
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15. Project under construction
Unit: CNY
Item Ending Balance Opening Balance
Project under construction 966,294,107.55 965,997,208.23
Total 966,294,107.55 965,997,208.23
156
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(1) Project under construction
Unit: CNY
Ending Balance Opening Balance
Item Impairment Impairment
Book Balance Book Value Book Balance Book Value
Provision Provision
New and reconstructed
250,836,955.61 1,945,416.12 248,891,539.49 235,582,222.31 1,945,416.12 233,636,806.19
investment project
Technical transformation
717,458,065.25 55,497.19 717,402,568.06 732,415,899.23 55,497.19 732,360,402.04
investment project
Total 968,295,020.86 2,000,913.31 966,294,107.55 967,998,121.54 2,000,913.31 965,997,208.23
(2) Changes of important project under construction in the current period
Unit: CNY
Amount
Other Including: Capitalization
Transferred Ratio of Cumulative
Decrease Capitalized Rate of
Opening Increase in the to Fixed Ending Accumulative Project Amount of Capital
Project Name Budget in the Interest in Interest in the
Balance Current Period Assets in Balance Investment to Progress Capitalized Source
Current the Current Current
the Current Budget Interest
Period Period Period
Period
FAW Jiefang
commercial
vehicle 999,970,000.00 138,759,113.95 171,122,572.03 309,881,685.98 30.99% 37.28% Others
Guanghan
base project
16L engine
construction
and natural
gas test 1,160,670,000.00 112,386,329.25 29,129,835.91 141,516,165.16 12.19% 68.06% Others
capacity
improvement
project
FAW Jiefang 388,500,000.00 82,263,770.61 12,433,407.02 94,697,177.63 47.23% 70.75% Others
157
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Amount
Other Including: Capitalization
Transferred Ratio of Cumulative
Decrease Capitalized Rate of
Opening Increase in the to Fixed Ending Accumulative Project Amount of Capital
Project Name Budget in the Interest in Interest in the
Balance Current Period Assets in Balance Investment to Progress Capitalized Source
Current the Current Current
the Current Budget Interest
Period Period Period
Period
south new
energy base
project
Axle base
construction
project and
heavy
replacement 989,859,950.93 79,972,863.66 11,890,268.28 91,863,131.94 20.88% 27.13% Others
axle
technology
upgrade
(phase I)
Intelligent
parts logistics 107,806,500.00 16,080,266.01 10,957,173.36 27,037,439.37 38.85% 56.44% Others
center project
Project of
exiting the
city and
936,068,800.00 19,204,724.39 13,349.94 19,218,074.33 84.44% 93.75% Others
entering the
industrial
park
Engine
environmental
22,600,000.00 16,850,804.63 16,850,804.63 74.56% 90.17% Others
chamber test
bench
Front axle
four-line
technology 20,782,201.00 14,420,256.74 14,420,256.74 69.39% 90.35% Others
improvement
project of axle
158
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Amount
Other Including: Capitalization
Transferred Ratio of Cumulative
Decrease Capitalized Rate of
Opening Increase in the to Fixed Ending Accumulative Project Amount of Capital
Project Name Budget in the Interest in Interest in the
Balance Current Period Assets in Balance Investment to Progress Capitalized Source
Current the Current Current
the Current Budget Interest
Period Period Period
Period
factory
Renovation of
Jiefang
Limited
buildings on 38,444,591.00 13,088,417.18 13,088,417.18 34.04% 53.03% Others
the west side
of Hongqi
Auditorium
capacity
expansion
project of
light truck
169,960,000.00 11,506,831.14 11,506,831.14 6.77% 17.47% Others
welding line
in welding
workshop of
Jimo factory
Diesel engine
virtual
25,602,600.00 10,383,044.13 10,383,044.13 40.55% 60.28% Others
calibration
test bench
Total 4,860,264,642.93 490,321,173.37 260,141,854.86 0.00 0.00 750,463,028.23
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16. Bearer biological assets
(1) Bearer biological assets measured at cost
□ Applicable Not applicable
(2) Bearer biological assets measured at fair value
□ Applicable Not applicable
17. Oil and gas assets
□ Applicable Not applicable
18. Right-of-use assets
Unit: CNY
Houses and Machinery
Item Land Total
buildings equipment
I. Original book value
1. Opening
152,994,385.75 17,495,179.84 23,719,044.14 194,208,609.73
balance
2. Increase in the
3,288,926.12 3,288,926.12
current period
Including: rent 3,288,926.12 3,288,926.12
3. Decrease in the
current period
4. Ending balance 156,283,311.87 17,495,179.84 23,719,044.14 197,497,535.85
II. Accumulated
depreciation
1. Opening
35,642,623.35 8,288,590.54 6,511,130.40 50,442,344.29
balance
2. Increase in the
19,828,590.51 4,267,872.00 1,919,344.34 26,015,806.85
current period
(1) Provision 19,828,590.51 4,267,872.00 1,919,344.34 26,015,806.85
3. Decrease in the
current period
(1) Disposal
4. Ending balance 55,471,213.86 12,556,462.54 8,430,474.74 76,458,151.14
III. Provision for
impairment
1. Opening
balance
2. Increase in the
current period
(1) Provision
3. Decrease in the
current period
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Houses and Machinery
Item Land Total
buildings equipment
(1) Disposal
4. Ending balance
IV. Book value
1. Ending book
100,812,098.01 4,938,717.30 15,288,569.40 121,039,384.71
value
2. Opening book
117,351,762.40 9,206,589.30 17,207,913.74 143,766,265.44
value
Other notes: For the lease expenses related to short-term leases and low-value asset leases recognized by the
Company as of June 30, 2022, please see 2 in XIV "Other Major Events" of Section X - Financial Report.
19. Intangible assets
(1) Details of intangible assets
Unit: CNY
Patent Non-patented
Item Land use right Software Total
Rights technology
I. Original book value
1. Opening
2,872,112,661.06 677,388,766.94 511,564,769.26 4,061,066,197.26
balance
2. Increase in the
122,353,689.17 43,227,654.73 165,581,343.90
current period
(1) Purchase 122,353,689.17 43,227,654.73 165,581,343.90
(2) Internal R&D
(3) Increase due to
business combination
3. Decrease in the
158,931,798.98 309,877,041.02 7,082,431.98 475,891,271.98
current period
(1) Disposal 59,316,039.90 309,877,041.02 7,082,431.98 376,275,512.90
(2) Others 99,615,759.08 99,615,759.08
4. Ending balance 2,835,534,551.25 367,511,725.92 547,709,992.01 3,750,756,269.18
II. Accumulated
amortization
1. Opening
573,374,388.26 562,286,837.32 153,127,855.55 1,288,789,081.13
balance
2. Increase in the
31,343,837.45 25,475,605.59 27,717,055.55 84,536,498.59
current period
(1) Provision 31,343,837.45 25,475,605.59 27,717,055.55 84,536,498.59
3. Decrease in the
33,841,316.21 309,877,041.02 7,082,431.98 350,800,789.21
current period
(1) Disposal 13,272,745.88 309,877,041.02 7,082,431.98 330,232,218.88
(2) Others 20,568,570.33 20,568,570.33
4. Ending balance 570,876,909.50 277,885,401.89 173,762,479.12 1,022,524,790.51
III. Provision for
impairment
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Patent Non-patented
Item Land use right Software Total
Rights technology
1. Opening
balance
2. Increase in the
current period
(1) Provision
3. Decrease in the
current period
(1) Disposal
4. Ending balance
IV. Book value
1. Ending book
2,264,657,641.75 89,626,324.03 373,947,512.89 2,728,231,478.67
value
2. Opening book
2,298,738,272.80 115,101,929.62 358,436,913.71 2,772,277,116.13
value
The intangible assets not resulting from internal research and development of the Company accounts for 3.29% of
the balance of intangible assets at the end of the current period.
20. Development expenditures
Unit: CNY
Increase in the Current Period Decrease in the Current Period
Opening Recogniz Ending
Item Internal Transferred to
Balance ed Balance
Development Others Current Profits and
Intangible
Expenditure Losses
Assets
Cost-based
1,016,316,222.64 1,016,316,222.64
expenditure
Total 1,016,316,222.64 1,016,316,222.64
Other notes: none
21. Long-term deferred expenses
Unit: CNY
Amortization
Opening Increase in the
Item Amount in the Other Decreases Ending Balance
Balance Current Period
Current Period
Maintenance,
fire protection
transformation 334,598.30 102,079.32 232,518.98
and supporting
expenses
Total 334,598.30 102,079.32 232,518.98
Other notes: none
22. Deferred tax assets/deferred tax liabilities
162
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(1) Deferred tax assets not offset
Unit: CNY
Ending Balance Opening Balance
Item Deductible Deductible
Temporary Deferred tax assets Temporary Deferred tax assets
Difference Difference
Provision for
623,666,771.23 127,369,484.45 644,896,017.71 108,060,894.94
impairment of assets
Unrealized profits of
433,668,860.00 108,417,215.00 433,668,860.00 108,417,215.00
internal transactions
Deductible losses 2,144,885,421.77 447,040,755.45 1,337,622,355.67 275,224,988.92
Estimated liabilities 1,092,253,732.81 182,064,549.11 1,133,139,410.76 189,238,389.56
Employee
102,535,040.33 18,030,113.39 95,057,719.68 16,232,178.23
compensation payable
Accrued expenses 3,625,319,854.24 814,792,015.17 3,203,797,740.11 738,848,418.90
Deferred incomes 545,618,507.50 107,493,554.55 586,360,167.55 114,073,451.58
Contract liabilities 612,216,679.96 103,749,694.80 575,584,804.51 100,200,974.13
Total 9,180,164,867.84 1,908,957,381.92 8,010,127,075.99 1,650,296,511.26
(2) Deferred income tax liabilities not offset
Unit: CNY
Ending Balance Opening Balance
Item Taxable Temporary Deferred income Taxable Temporary Deferred income
Difference tax liabilities Difference tax liabilities
Depreciation of
fixed assets with
amortization period 1,710,138,244.89 275,243,675.76 2,056,171,246.16 349,311,074.60
longer than tax
preference period
Interest income
224,118,991.93 33,793,359.10 162,580,602.64 24,874,039.55
accrued
Total 1,934,257,236.82 309,037,034.86 2,218,751,848.80 374,185,114.15
(3) Deferred tax assets or liabilities presented in net amount after offset
Unit: CNY
Ending Mutual Ending Balance of Opening Mutual Opening Balance of
Offset Amount of Deferred Tax Assets Offset Amount of Deferred Tax Assets
Item
Deferred Tax Assets or Liabilities after Deferred Tax Assets or Liabilities after
and Liabilities Offset and Liabilities Offset
Deferred tax assets 1,908,957,381.92 1,650,296,511.26
Deferred income
309,037,034.86 374,185,114.15
tax liabilities
163
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(4) Details of unrecognized deferred tax assets
Unit: CNY
Item Ending Balance Opening Balance
Deductible Temporary Difference 476,163,328.97 664,263,202.95
Deductible losses 264,563,629.38 276,845,879.98
Total 740,726,958.35 941,109,082.93
(5) Deductible losses of unrecognized deferred tax assets will be due in the following years
Unit: CNY
Year Ending Amount Opening Amount Remarks
2026 1,441,940.00
2027
2028 221,013,270.26 231,853,580.86
2029 43,550,359.12 43,550,359.12
Total 264,563,629.38 276,845,879.98
Other notes: none
23. Notes payable
Unit: CNY
Type Ending Balance Opening Balance
Bank acceptance bill 17,538,100,899.05 13,062,704,192.54
Total 17,538,100,899.05 13,062,704,192.54
The total amount of notes payable due but unpaid at the end of the current period is CNY 0.00.
24. Accounts payable
(1) Presentation of accounts payable
Unit: CNY
Item Ending Balance Opening Balance
Payment for goods 10,726,822,830.00 12,959,963,131.32
Project and equipment payment 34,920,116.04 21,713,517.52
Fees and others 2,181,796,812.78 1,583,223,345.63
Total 12,943,539,758.82 14,564,899,994.47
(2) Significant accounts payable with the aging over 1 year
Unit: CNY
Reasons for Non-reimbursement or
Item Ending Balance
Carry-forward
Supplier 1 14,038,833.43 Undue settlement period
Supplier 2 1,907,749.88 Undue settlement period
Total 15,946,583.31
Other notes: none
164
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25. Advance receipts
(1) Presentation of advances receipts
Unit: CNY
Item Ending Balance Opening Balance
Rental fee 254,326.19 1,712,917.27
Total 254,326.19 1,712,917.27
26. Contract liabilities
Unit: CNY
Item Ending Balance Opening Balance
Payment for goods 1,344,246,736.72 2,324,758,318.77
Others 688,028,547.33 643,363,601.92
Contract liabilities included in
-133,374,027.58 -267,479,444.78
other current liabilities
Total 1,898,901,256.47 2,700,642,475.91
27. Employee compensation payable
(1) Presentation of employee compensation payable
Unit: CNY
Increase in Current Decrease in Current
Item Opening Balance Ending Balance
Period Period
I. Short-term
248,475,175.17 1,978,516,941.27 1,919,563,183.65 307,428,932.79
compensation
II. Post-
employment
20,760,130.28 336,982,472.94 329,760,473.05 27,982,130.17
benefits-defined
contribution plan
III. Dismissal
40,525,119.92 43,000,978.26 32,293,262.16 51,232,836.02
welfare
IV. Current portion
54,690,000.00 20,129,838.93 34,560,161.07
of other welfare
Total 364,450,425.37 2,358,500,392.47 2,301,746,757.79 421,204,060.05
(2) Presentation of short-term compensation
Unit: CNY
Increase in Current Decrease in Current
Item Opening Balance Ending Balance
Period Period
1. Wages, bonuses, allowances
1,298,776,232.35 1,254,288,252.54 44,487,979.81
and subsidies
2. Employee welfare 83,155,621.11 83,155,621.11
3. Social insurance premium 4,091,540.25 164,363,320.65 165,823,287.16 2,631,573.74
Including: medical 4,091,540.25 156,751,385.90 158,211,352.41 2,631,573.74
165
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insurance premium
Work-related injury
7,611,934.75 7,611,934.75
insurance premium
4. Housing fund 243,791,075.23 243,791,075.23
5. Labor union funds and
244,383,634.92 53,565,186.48 37,639,442.16 260,309,379.24
employee education funds
6. Others 134,865,505.45 134,865,505.45
Total 248,475,175.17 1,978,516,941.27 1,919,563,183.65 307,428,932.79
(3) Presentation of defined contribution plan
Unit: CNY
Increase in Current Decrease in Current
Item Opening Balance Ending Balance
Period Period
1. Basic endowment
16,032,537.24 229,112,937.29 229,112,937.29 16,032,537.24
insurance
2. Unemployment
2,374,937.21 9,364,095.25 9,364,095.25 2,374,937.21
insurance premium
3. Enterprise
2,352,655.83 98,505,440.40 91,283,440.51 9,574,655.72
annuity
Total 20,760,130.28 336,982,472.94 329,760,473.05 27,982,130.17
Other notes: The Company participates in the endowment insurance and unemployment insurance plans established
by government authorities as specified, and pays monthly contributions to these plans based on a proportion of the
basic salary of employees in the previous year. The Company will not assume any further payment obligation,
except the above monthly payment. Corresponding expenditures are included in the current profits and losses or the
cost of related assets when incurred.
28. Taxes payable
Unit: CNY
Item Ending Balance Opening Balance
Value-added tax 291,416,334.25 11,331,447.35
Corporate income tax 661,693.44 21,659.10
Individual income tax 7,104,901.20 40,089,512.39
Urban maintenance and
19,635,881.61 1,789,459.45
construction tax
Resource tax 7,143.40
Property tax 7,430,694.15 7,611,594.27
Land use tax 4,865,951.82 4,508,520.75
Educational surcharges 16,507,619.12 3,751,315.40
Other taxes 11,368,409.04 104,837,877.42
Total 358,991,484.63 173,948,529.53
Other notes: none
166
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29. Other payables
Unit: CNY
Item Ending Balance Opening Balance
Dividends payable 171,500.02 171,500.02
Other payables 7,299,699,425.99 7,383,051,672.28
Total 7,299,870,926.01 7,383,223,172.30
(1) Dividends payable
Unit: CNY
Item Ending Balance Opening Balance
Common stock dividends 171,500.02 171,500.02
Total 171,500.02 171,500.02
Other notes, including the disclosure of the reasons for not paying the significant dividends payable for more than
1 year: none
(2) Other payables
1) Presentation of other payables by nature
Unit: CNY
Item Ending Balance Opening Balance
Expenses payable 4,351,426,251.24 4,656,353,118.05
Margin, deposit 323,686,408.09 377,161,619.49
Project funds payable 1,294,666,896.18 1,381,458,524.66
Current accounts payable and
1,048,350,844.75 657,617,923.70
others
Repurchase obligations of
281,569,025.73 310,460,486.38
restricted shares
Total 7,299,699,425.99 7,383,051,672.28
2) Other significant payables with the aging over 1 year
Unit: CNY
Reasons for Non-reimbursement or
Item Ending Balance
Carry-forward
The government advances the
project construction funds, and the
Supplier 1 260,000,000.00
payment of old factory is not
disposed of or settled
Compensation payable, R&D
FAW Group 233,303,791.17
expenses
Supplier 2 20,000,000.00 Project not completed
Supplier 3 14,637,490.18 Project not completed
The Ninth Institute of Project
Planning & Research of China 12,441,065.20 Project not completed
Machinery Industry (FIPPR)
Supplier 4 10,496,000.00 Project not completed
Supplier 5 7,160,946.17 Project not completed
167
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Qiming Information Technology
6,687,345.77 Project not completed
Co., Ltd.
Total 564,726,638.49
Other notes: none
30. Current portion of non-current liabilities
Unit: CNY
Item Ending Balance Opening Balance
Current portion of lease liabilities 33,214,415.10 47,060,544.71
Total 33,214,415.10 47,060,544.71
Other notes: none
31. Other current liabilities
Unit: CNY
Item Ending Balance Opening Balance
Taxes to be written off 157,933,439.12 267,479,444.78
Total 157,933,439.12 267,479,444.78
32. Lease liabilities
Unit: CNY
Item Ending Balance Opening Balance
Lease payment 141,899,609.84 146,978,150.99
Unrecognized financing charges -13,618,291.30 -11,610,388.23
Current portion of lease liabilities -33,214,415.10 -47,060,544.71
Total 95,066,903.44 88,307,218.05
Other notes: The interest of lease liabilities accrued in 2022 is CNY 2,801,600, which is included in financial
expenses - interest expenses.
33. Long-term employee compensation payable
(1) Statement of long-term employee compensation payable
Unit: CNY
Item Ending Balance Opening Balance
I. Post-employment welfare - net liabilities
737,930,161.07 756,440,000.00
of defined benefit plan
II. Dismissal welfare 111,840,662.43 103,304,166.28
Current portion of long-term employee
-85,792,997.09 -95,215,119.92
compensation payable
Total 763,977,826.41 764,529,046.36
168
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34. Estimated liabilities
Unit: CNY
Item Ending Balance Opening Balance Cause
Product quality disputes,
Pending litigation 32,770,266.70 27,454,443.34 traffic accident liability
disputes and others
Expenses for return,
Product quality assurance 1,160,646,820.25 1,212,805,881.15
replacement and repair
Others 17,226,995.29 17,226,995.29 Labor social security
Total 1,210,644,082.24 1,257,487,319.78
Other notes, including important assumptions and estimation descriptions related to important estimated liabilities:
none
35. Deferred income
Unit: CNY
Increase in Decrease in
Item Opening Balance Ending Balance Cause
Current Period Current Period
Governm
ent 2,473,072,814.33 450,563,427.73 261,313,324.33 2,662,322,917.73
subsidies
Total 2,473,072,814.33 450,563,427.73 261,313,324.33 2,662,322,917.73
36. Share capital
Unit: CNY
Increase/Decrease (+/-)
Share
Transferr
Opening Balance Issue of Ending Balance
Bonu ed from Other Subtot
New
s Accumul s al
Shares
ation
Fund
Total number
4,654,114,613.00 4,654,114,613.00
of shares
Other notes: none
37. Capital reserve
Unit: CNY
Increase in Current Decrease in Current
Item Opening Balance Ending Balance
Period Period
Capital premium
9,384,981,147.23 9,384,981,147.23
(stock premium)
Other capital
683,596,941.75 30,374,753.71 50,722.51 713,920,972.95
reserves
Transfer from
370,787,004.20 370,787,004.20
capital reserve
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under the previous
accounting system
Total 10,439,365,093.18 30,374,753.71 50,722.51 10,469,689,124.38
Other notes, including descriptions of changes and reasons for changes in the current period:
(1) The capital reserve (other capital reserves) is increased by CNY 30,374,753.71 in the current period, which is
caused by the recognition of share payment expenses in the waiting period of the Company's equity incentive plan;
(2) The capital reserve (other capital reserves) is decreased by CNY 50,722.51 in the current period, which is
caused by the Company's recognition of changes in other owner's equity of the investee in proportion to its equity,
other than net profit or loss, other comprehensive income and profit distribution.
38. Treasury shares
Unit: CNY
Increase in Current Decrease in Current
Item Opening Balance Ending Balance
Period Period
Treasury shares 310,460,486.38 28,891,460.65 281,569,025.73
Total 310,460,486.38 28,891,460.65 281,569,025.73
Other notes, including the description of changes and reasons for the changes in the current period: Treasury
shares are decreased by CNY 28,891,460.65 in the current period, which is caused by the cash dividends
distributed by the Company.
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39. Other comprehensive income
Unit: CNY
Amount Incurred in Current Period
Less: Profits Less: Retained
and Losses Earnings
Included in Included in
Amount Other Other After-tax After-tax
Less:
Incurred Before Comprehensive Comprehensive Amount Amount
Item Opening Balance income Ending Balance
Income Tax in Income in the Income in the Attributable to Attributable
tax
the Current Previous Previous the Parent to Minority
expenses
Period Period and Period and Company Shareholders
Transferred in Transferred in
the Current the Current
Period Period
I. Other
comprehensive
income which
-31,824,777.80 -31,824,777.80
cannot be
reclassified into
profits or losses
Including:
changes arising
from re-
-31,840,000.00 -31,840,000.00
measurement of
the defined
benefit plan
Other
comprehensive
incomes that
cannot be
15,222.20 15,222.20
transferred into
profits or losses
under the equity
method
II. Other
comprehensive -970,124.40 -44,893.81 -44,893.81 -1,015,018.21
income to be
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Amount Incurred in Current Period
Less: Profits Less: Retained
and Losses Earnings
Included in Included in
Amount Other Other After-tax After-tax
Less:
Incurred Before Comprehensive Comprehensive Amount Amount
Item Opening Balance income Ending Balance
Income Tax in Income in the Income in the Attributable to Attributable
tax
the Current Previous Previous the Parent to Minority
expenses
Period Period and Period and Company Shareholders
Transferred in Transferred in
the Current the Current
Period Period
reclassified into
profits or losses
Including: other
comprehensive
incomes that can
be reclassified 288,891.11 -46,736.62 -46,736.62 242,154.49
into profits or
losses under the
equity method
Exchange
differences
arising from
-1,259,015.51 1,842.81 1,842.81 -1,257,172.70
foreign currency
financial
statements
Total other
comprehensive -32,794,902.20 -44,893.81 -44,893.81 -32,839,796.01
incomes
Other notes, including the adjustment of the effective part of cash flow hedging profit or loss transferred to the initially recognized amount of the hedged item: none
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40. Special reserves
Unit: CNY
Increase in Current Decrease in Current
Item Opening Balance Ending Balance
Period Period
Work safety cost 315,398,148.75 53,753,366.46 11,822,688.60 357,328,826.61
Total 315,398,148.75 53,753,366.46 11,822,688.60 357,328,826.61
Other notes, including descriptions of changes and reasons for changes in the current period: none
41. Surplus reserves
Unit: CNY
Increase in Current Decrease in Current
Item Opening Balance Ending Balance
Period Period
Statutory surplus
2,444,688,413.12 2,444,688,413.12
reserve
Discretionary
297,526,491.71 297,526,491.71
surplus reserves
Total 2,742,214,904.83 2,742,214,904.83
Description of surplus reserves, including descriptions of changes and reasons for changes in the current period:
none
42. Undistributed profits
Unit: CNY
Item Current Period Previous Period
Undistributed profit at the end of the previous
8,434,403,352.08 7,207,573,351.05
period before adjustment
Total undistributed profits at the beginning of the
-1,233,011.80
adjustment period (increase +, decrease -)
Opening undistributed profits after adjustment 8,434,403,352.08 7,206,340,339.25
Add: net profits attributable to owners of parent
170,153,887.32 3,268,978,566.54
company in the current period
Less: common stock dividends payable 3,025,174,498.45 2,325,326,934.50
Ending undistributed profits 5,579,382,740.95 8,149,991,971.29
Details of undistributed profits at the beginning of adjustment:
1) The retroactive adjustment of the Accounting Standards for Business Enterprises and its relevant new
regulations impacts the opening undistributed profit by CNY 0.00.
2) The changes in accounting policies impact the opening undistributed profit by CNY 0.00.
3) The correction of major accounting errors impact the opening undistributed profit by CNY 0.00.
4) The change in combination scope caused by the same control impacts the opening undistributed profit by
CNY 0.00.
5) Other adjustments affect the opening undistributed profit by CNY 0.00 in total.
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43. Operating income and cost
Unit: CNY
Amount Incurred in Current Period Amount Incurred in the Previous Period
Item
Income Cost Income Cost
Main
21,805,259,709.38 20,220,312,403.72 76,987,149,061.47 70,634,457,478.13
business
Other
1,066,275,552.18 894,738,065.89 1,613,014,059.69 1,226,624,040.89
business
Total 22,871,535,261.56 21,115,050,469.61 78,600,163,121.16 71,861,081,519.02
Information related to performance obligations: none
Information related to the transaction price allocated to the remaining performance obligation: The income
corresponding to the performance obligations that have been signed at the end of the reporting period but have not
been performed or fully performed is CNY 688,028,547.33, of which CNY 344,014,273.67 is expected to be
recognized in 2022, and CNY 344,014,273.66 is expected to be recognized in 2023.
44. Taxes and surcharges
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Urban maintenance and
21,670,465.02 108,431,696.85
construction tax
Educational surcharges 15,501,287.61 77,452,122.60
Resource tax 0.00 66,976.88
Property tax 25,351,529.04 28,853,205.15
Land use tax 19,556,934.07 22,426,465.38
Vehicle and vessel use tax 54,706.28 42,152.50
Stamp duty 23,538,154.45 54,352,905.94
Others 635,765.71 1,871,713.44
Environmental protection tax 191,419.33 446,817.50
Total 106,500,261.51 293,944,056.24
Other notes: For the calculation and payment standards of various taxes and surcharges, please see VI "Taxes" of
Section X - Financial Report.
45. Selling expense
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Product quality assurance fee 176,597,991.74 718,752,013.09
Employee compensation 196,348,174.29 268,773,091.51
Storage fee 56,206,844.19 78,145,877.06
Promotion fee 26,616,044.88 70,732,519.68
Packing cost 32,009,966.23 42,824,355.80
Business promotion expense 13,770,613.76 37,134,114.89
Travel expense 15,775,038.28 23,822,881.91
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Sales service fee 11,115,081.89 22,628,930.52
Rental fee 26,468,705.36 18,534,347.14
Insurance premium 3,179,938.52 12,897,425.26
Others 8,402,329.68 20,814,545.13
Total 566,490,728.82 1,315,060,101.99
Other notes: none
46. Management cost
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Employee compensation 598,558,389.99 702,107,637.10
Fixed assets repair cost 69,924,624.89 148,351,507.00
Depreciation cost 59,078,687.98 48,265,801.13
Amortization of intangible assets 44,522,259.21 47,402,151.37
Labor outsourcing fee 24,977,327.54 29,651,038.22
Information system service fee 20,402,954.88 20,710,778.41
Sewage charge 8,702,172.92 17,359,864.93
Kinetic energy and workshop
12,918,192.98 15,310,773.76
heating cost
Publicity expense 1,367,051.26 12,894,654.74
Test and inspection fees 3,884,917.30 10,295,435.55
Others 42,683,537.57 51,057,504.12
Total 887,020,116.52 1,103,407,146.33
Other notes: none
47. R&D expenses
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Employee compensation 682,745,813.55 683,076,330.02
Test fee 106,067,297.14 245,266,331.41
Trial production cost 61,977,054.15 93,023,045.50
Depreciation cost 125,686,161.11 84,179,968.23
Joint R&D expenses 3,323,914.67 35,916,023.29
Design fee 26,118,317.60 12,116,292.13
Others 10,397,664.42 83,726,350.54
Total 1,016,316,222.64 1,237,304,341.12
Other notes: none
48. Financial expense
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Interest income -502,087,676.33 -363,409,455.88
Bill discount interest 29,871,041.52
Net actuarial interest 166,532.74 505,692.60
Handling charge of financial 81,595.17 78,881.73
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institutions
Interest expense 2,361,612.41
Exchange gains and losses -186,398.61 -11,126.24
Cash discount -72,301,858.23 -187,836,095.36
Others 812,221.77 1,780,762.35
Total -571,153,971.08 -519,020,299.28
Other notes: none
49. Other incomes
Unit: CNY
Amount Incurred in the Previous
Sources of Other Incomes Amount Incurred in Current Period
Period
Subsidy 227,954,740.41 122,295,408.72
Others 2,092,309.91 1,544,409.87
Total 230,047,050.32 123,839,818.59
50. Investment income
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Long-term equity investment
income calculated with equity 281,180,159.71 386,449,232.03
method
Others -77,271,243.30 770,487.34
Total 203,908,916.41 387,219,719.37
Other notes: none
51. Credit impairment loss
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Bad debt loss of other receivables 2,682,455.55 1,530,546.41
Bad debt loss of long-term
-4,660,539.00
receivables
Bad debts loss of notes receivable 33,965.46 125,200.28
Bad debts loss of accounts
-19,882,625.36 5,102,101.82
receivable
Total -21,826,743.35 6,757,848.51
Other notes: none
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52. Asset impairment loss
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
I. Inventory depreciation provision
and contract performance cost -85,486,353.05 -119,154,665.50
impairment provision
II. Loss from fixed assets
-1,806,400.04
impairment
III. Loss from contractual asset
141,606.09 -43,991.42
impairment
Total -85,344,746.96 -121,005,056.96
Other notes: none
53. Income from assets disposal
Unit: CNY
Sources of Income from Assets Amount Incurred in the Previous
Amount Incurred in Current Period
Disposal Period
Gains from disposal of fixed assets 42,431.19 -183,677.14
Total 42,431.19 -183,677.14
54. Non-operating income
Unit: CNY
Amount included
Amount Incurred in Amount Incurred in the in Current Non-
Item
Current Period Previous Period recurring Profit
and Loss
Income from compensation,
liquidated damages and 5,797,555.07 10,827,226.78 5,797,555.07
penalties
Others 98,260,551.19 19,928,172.34 98,260,551.19
Total 104,058,106.26 30,755,399.12 104,058,106.26
55. Non-operating expenses
Unit: CNY
Amount included
Amount Incurred in Amount Incurred in the in Current Non-
Item
Current Period Previous Period recurring Profit
and Loss
Donations 10,000,000.00 10,000,000.00
Expenditure of compensation,
liquidated damages and 1,303,569.25 1,532,890.06 1,303,569.25
penalties
Losses from damage and 897,265.34 12,300,936.35 897,265.34
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scrapping of non-current assets
Others 13,400.00 514,876.93 13,400.00
Total 12,214,234.59 14,348,703.34 12,214,234.59
Other notes: none
56. Income tax expense
(1) Statement of income tax expenses
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Current income tax expenses 323,637,275.45 860,525,525.79
Deferred income tax expenses -323,808,949.95 -408,082,488.44
Total -171,674.50 452,443,037.35
(2) Adjustment process of accounting profits and income tax expenses
Unit: CNY
Item Amount Incurred in Current Period
Total profits 169,982,212.82
Income tax expense calculated at statutory/applicable
42,495,553.21
tax rate
Effect of applying different tax rates by subsidiaries 27,476,124.88
Effect of non-deductible costs, expenses and losses 1,849,819.48
Effect of using deductible losses of unrecognized
-592,737.51
deferred tax assets
Profit or loss of joint ventures and associated
-71,400,434.56
enterprises calculated with the equity method
Income tax expense -171,674.50
Other notes: none
57. Other comprehensive income
For details, please refer to 39 "Other comprehensive income" in VII "Notes to Items in Consolidated Financial
Statements" of Section X - Financial Report.
58. Items of cash flow statement
(1) Other cash received related to operating activities
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Deposit 3,131,394.83 29,509,410.01
Government subsidies received 541,049,227.17 145,206,067.67
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Rental income 36,073,991.02
Other current accounts 300,985,625.90 336,687,573.19
Total 845,166,247.90 547,477,041.89
Description of other cash received related to operating activities: none
(2) Other cash paid related to operating activities
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Cost-based expenditure 209,177,588.74 531,664,760.16
Payment of deposit 2,845,157.04 10,596,902.21
Other current accounts 624,431,327.44 470,123,202.65
Total 836,454,073.22 1,012,384,865.02
Description of other cash paid related to operating activities: none
(3) Other cash received related to investing activities
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Interest received 441,265,670.20 283,825,095.39
Total 441,265,670.20 283,825,095.39
Description of other cash received related to investing activities: none
(4) Other cash paid related to financing activities
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Donations 10,000,000.00
Principal and interest on lease
1,206,360.06
liabilities
Cash paid to acquire fixed assets
4,716,561.68
under finance leases
Total 15,922,921.74
Description of other cash paid related to financing activities: none
59. Supplementary information of cash flow statement
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(1) Supplementary information of cash flow statement
Unit: CNY
Amount in the current Amount in the
Supplementary Information
period Previous Period
1. Reconciliation of net profit to cash flows from operating
activities:
Net Profit 170,153,887.32 3,268,978,566.54
Add: provision for impairment of assets 107,171,490.31 114,247,208.45
Depreciation/consumption of fixed assets, oil and gas assets
802,424,319.33 681,608,149.93
and bearer biological assets
Depreciation of right-of-use asset 36,125,831.02 3,801,400.02
Amortization of intangible assets 52,038,602.60 54,155,785.69
Amortization of long-term deferred expenses
Losses from disposal of fixed assets, intangible assets and
-42,431.19 183,677.14
other long-term assets (gains expressed with "-")
Loss from retirement of fixed assets (gains expressed with
897,265.34 12,300,936.35
"-")
Loss from changes in fair value (gains expressed with "-")
Financial expenses (gains expressed with "-") -499,726,063.92 -363,409,455.88
Investment loss (gains expressed with "-") -203,908,916.41 -387,219,719.37
Decrease of deferred tax assets (increases expressed with
-258,660,870.66 -420,024,149.10
“-”)
Increase of deferred income tax liabilities (decrease
-65,148,079.29 11,941,660.66
expressed with “-”)
Decrease of inventory (increase expressed with “-”) 232,662,937.16 14,063,389,203.50
Decrease of operating receivables (increase expressed with
-1,476,787,647.94 -36,575,555,720.83
“-”)
Increase in operating payables (decrease expressed with
2,314,756,621.70 34,960,585,255.88
“-”)
Others 231,180,781.26 100,731,564.19
Net cash flows from operating activities 1,443,137,726.63 15,525,714,363.17
2. Major investment and financing activities not related to cash
deposit and withdrawal:
Conversion of debt into capital
Current portion of convertible corporate bonds
Fixed assets under financial lease
3. Net changes in cash and cash equivalents:
Ending balance of cash 28,270,082,742.95 29,924,339,101.76
Less: opening balance of cash 30,542,676,891.89 14,786,680,218.82
Add: ending balance of cash equivalents
Less: opening balance of cash equivalents
Net increase in cash and cash equivalents -2,272,594,148.94 15,137,658,882.94
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(2) Composition of cash and cash equivalents
Unit: CNY
Item Ending Balance Opening Balance
I. Cash 28,270,082,742.95 30,542,676,891.89
Bank deposits available for
28,270,082,742.95 30,542,676,891.89
payment at any time
II. Ending balance of cash and cash
28,270,082,742.95 30,542,676,891.89
equivalents
Other notes: none
60. Assets with restricted ownership or use right
Unit: CNY
Item Ending Book Value Cause for Restrictions
Housing maintenance fund,
Monetary capital 52,309,930.91 security deposit for three types of
personnel
Total 52,309,930.91
Other notes: none
61. Monetary items for foreign currency
(1) Monetary items for foreign currency
Unit: CNY
Ending Balance of Ending Balance of
Item Conversion Rate
Foreign Currency Converted CNY
Monetary capital
Including: USD
Euro
HK dollar
Accounts receivable
Including: USD
Euro 1,877,549.65 7.2197 13,555,345.21
HK dollar
Long-term borrowings
Including: USD
Euro
HK dollar
Other notes: The main business place of FAW Jiefang Austria R&D Co., Ltd., a subsidiary of the Company, is Steyr,
Austria, with a registered capital of EUR 2 million and a recording currency of EUR.
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(2) Description of overseas operating entities, including the disclosure of main overseas business place,
recording currency and selection basis, or changes in the recording currency (if any) for important overseas
operating entities.
□ Applicable Not applicable
62. Government subsidies
(1) Basic information of government subsidies
Unit: CNY
Amount Included in the
Type Amount Presented Items
Current Profit and Loss
Other incomes and
Government subsidies 2,662,322,917.73 incomes from asset 227,954,740.41
disposal
(2) Refund of government subsidies
□ Applicable Not applicable
VIII. Interests in Other Entities
1. Interests in subsidiaries
(1) Composition of enterprise group
Main Shareholding
Place of Nature of Proportion Way of
Name of Subsidiary Business
Registration Business Acquisition
Place Direct Indirect
Business
combination
FAW JIEFANG Vehicle
Changchun Changchun 100.00% under
AUTOMOTIVE CO., LTD. manufacturing
common
control
Under
FAW Jiefang Automotive
Changchun Changchun Vehicle sales 100.00% common
Sales Co., Ltd.
control
Vehicle Under
FAW Jiefang (Qingdao)
Qingdao Qingdao manufacturing 100.00% common
Automotive Co., Ltd.
and sales control
Automotive Under
FAW Jiefang Dalian Diesel
Dalian Dalian engine 100.00% common
Engine Co., Ltd.
manufacturing control
Manufacturing Under
Wuxi Dahao Power Co.,
Wuxi Wuxi of automotive 100.00% common
Ltd.
components control
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and
accessories
Technology Under
FAW Jiefang Austria R&D
Austria Austria research and 100.00% common
Co., Ltd.
development control
Established
FAW Jiefang New Energy
Changchun Changchun Vehicle sales 100.00% by
Automotive Sales Co., Ltd.
investment
2. Interests in joint ventures or associated enterprises
(1) Important joint ventures or associated enterprises
Shareholding Accounting
Proportion Method for
Main Investment
Name of Joint Ventures or Place of Nature of
Business in Joint
Associated Enterprises Registration Business
Place Direct Indirect Ventures or
Associated
Enterprises
First Automobile Finance Co., Financial Equity
Changchun Changchun 21.84%
Ltd. services method
Sanguard Automobile Financial Equity
Changchun Changchun 17.50%
Insurance Co., Ltd. insurance method
FAW Changchun Ansteel
Industrial Equity
Steel Processing and Changchun Changchun 40.00%
manufacturing method
Distribution Co., Ltd.
FAW Changchun Baoyou
Industrial Equity
Steel Processing and Changchun Changchun 21.81%
manufacturing method
Distribution Co., Ltd.
Manufacturing
Changchun Wabco of automotive
Equity
Automotive Control System Changchun Changchun components 40.00%
method
Co., Ltd. and
accessories
Application
Suzhou Zhito Technology Equity
Suzhou Suzhou software 30.59%
Co., Ltd. method
development
Software and
FAW Jiefang Fujie (Tianjin) information Equity
Tianjin Tianjin 10.00%
Technology Industry Co., Ltd. technology method
services
Software and
information Equity
SmartLink Nanjing Nanjing 35.00%
technology method
services
Explanation of the fact that the shareholding proportion in joint ventures or associated enterprises is different from
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the proportion of voting rights: there is no difference between the shareholding proportion and the proportion of
voting rights.
Basis for holding less than 20% of voting rights but with significant influence, or holding 20% or more of voting
rights but without significant influence: The Company holds 17.50% of the shares of Sanguard Automobile
Insurance Co., Ltd., but it sends one director to the later according to the Articles of Association of the later, so the
Company can exert significant influence on Sanguard Automobile Insurance Co., Ltd. The Company holds 10.00%
of the shares of FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd., but it sends three directors to the later
according to the Articles of Association of the later, so the Company can exert significant influence on FAW Jiefang
Fujie (Tianjin) Technology Industry Co., Ltd.
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(2) Main financial information of important associated enterprises
Unit: CNY
Ending Balance / Amount Incurred in Current Period
FAW Changchun FAW Changchun Changchun FAW Jiefang
Baoyou Steel Ansteel Steel Wabco Suzhou Zhito Fujie (Tianjin) Sanguard
First Automobile
Processing and Processing and Automotive SmartLink Technology Co., Technology Automobile
Finance Co., Ltd.
Distribution Co., Distribution Co., Control System Ltd. Industry Co., Insurance Co., Ltd.
Ltd. Ltd. Co., Ltd. Ltd.
Current assets 357,592,996.93 278,522,819.48 22,604,543.47 166,287,175.89 92,976,522.96 604,784,687.80 2,055,726,219.44 65,349,661,667.46
Non-current
68,567,565.49 69,553,448.80 28,703,770.83 8,218,097.08 58,196,011.61 125,280,925.23 956,918,773.23 96,449,276,778.83
assets
Total assets 426,160,562.42 348,076,268.28 51,308,314.30 174,505,272.97 151,172,534.57 730,065,613.03 3,012,644,992.67 161,798,938,446.29
Current
238,357,407.15 107,495,592.44 4,468,634.00 142,954,791.67 173,766,023.67 306,520,266.84 565,916,950.18 132,294,375,348.75
liabilities
Non-current
3,590,414.13 0.00 127,514,542.67 65,171,886.28 1,262,618,180.12 6,965,615,933.65
liabilities
Total liabilities 241,947,821.28 107,495,592.44 4,468,634.00 142,954,791.67 301,280,566.34 371,692,153.12 1,828,535,130.30 139,259,991,282.40
Minority
1,354,930,888.76
equity
Equity
attributable to
shareholders of 184,212,741.14 240,580,675.84 46,839,680.30 31,550,481.30 -150,108,031.77 358,373,459.91 1,184,109,862.37 21,184,016,275.13
the parent
company
Shares of net
assets
calculated by 40,169,430.35 96,232,270.33 18,735,872.15 12,269,631.62 -45,918,046.92 35,837,345.99 207,219,225.92 4,626,440,866.37
shareholding
proportion
Adjustments -8,567,040.00 45,918,046.92 -112,884.94 -4,628,330.43
-Goodwill
-Unrealized
profits of
internal
transactions
-Others
Book value of
40,169,430.35 87,665,230.33 18,735,872.15 12,269,631.62 0.00 35,724,461.05 207,219,225.92 4,621,812,535.94
equity
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Ending Balance / Amount Incurred in Current Period
FAW Changchun FAW Changchun Changchun FAW Jiefang
Baoyou Steel Ansteel Steel Wabco Suzhou Zhito Fujie (Tianjin) Sanguard
First Automobile
Processing and Processing and Automotive SmartLink Technology Co., Technology Automobile
Finance Co., Ltd.
Distribution Co., Distribution Co., Control System Ltd. Industry Co., Insurance Co., Ltd.
Ltd. Ltd. Co., Ltd. Ltd.
investment in
associated
enterprises
Fair value of
equity
investment in
associated
enterprises
with public
offer
Operating
713,063,817.33 193,852,315.00 1,615,734.44 77,641,765.61 9,159,426.31 518,166,168.85 296,473,754.70 3,422,338,661.73
income
Net Profit 15,266,188.29 4,513,671.66 -3,913,632.35 -40,090,487.17 -101,848,190.93 5,424,761.72 66,252,998.15 1,405,479,645.81
Net profit from
discontinued
operations
Other
comprehensive -217,810.65 -39,469.03
income
Total
comprehensive 15,266,188.29 4,513,671.66 -3,913,632.35 -40,090,487.17 -101,848,190.93 5,424,761.72 66,035,187.50 1,405,440,176.78
income
Dividends
received from
associated
6,300,012.21
enterprises in
the current
year
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Opening Balance / Amount Incurred in Previous Period
FAW Changchun FAW Changchun Changchun
FAW Jiefang Fujie
Baoyou Steel Ansteel Steel Wabco Suzhou Zhito Sanguard
(Tianjin) First Automobile
Processing and Processing and Automotive SmartLink Technology Co., Automobile
Technology Industry Finance Co., Ltd.
Distribution Co., Distribution Co., Control System Ltd. Insurance Co., Ltd.
Co., Ltd.
Ltd. Ltd. Co., Ltd.
Current assets 372,141,757.88 244,723,023.42 23,309,549.83 169,220,705.74 148,696,572.21 462,222,981.21 1,969,614,739.80 40,131,178,525.09
Non-current
75,445,516.96 72,149,193.36 30,290,681.55 7,677,314.57 50,229,659.04 48,836,246.18 963,760,754.36 102,242,717,942.06
assets
Total assets 447,587,274.84 316,872,216.78 53,600,231.38 176,898,020.31 198,926,231.25 511,059,227.39 2,933,375,494.16 142,373,896,467.15
Current
245,495,948.34 80,678,406.33 2,846,918.73 106,172,619.73 122,890,098.03 159,239,378.61 351,776,062.47 115,901,925,957.98
liabilities
Non-current
4,253,586.77 124,728,570.49 1,361,119,198.26 5,338,477,309.41
liabilities
Total
249,749,535.11 80,678,406.33 2,846,918.73 106,172,619.73 247,618,668.52 159,239,378.61 1,712,895,260.73 121,240,403,267.39
liabilities
Minority
178,219.62 1,234,473,342.18
equity
Equity
attributable to
shareholders 197,837,739.73 236,193,810.45 50,753,312.73 70,547,180.96 -48,692,437.27 351,819,848.78 1,220,480,233.43 19,899,019,857.58
of the parent
company
Shares of net
assets
calculated by 43,140,497.54 94,477,524.18 20,301,325.09 24,691,513.34 -14,896,347.92 35,181,984.88 213,584,040.85 4,345,806,643.76
shareholding
proportion
Adjustments -8,567,040.00 2,743,501.48 14,896,347.92 -4,625,319.38
-Goodwill
-Unrealized
profits of
internal
transactions
-Others
Book value of
43,140,497.54 85,910,484.18 20,301,325.09 27,435,014.82 0.00 35,181,984.88 213,584,040.85 4,341,181,324.38
equity
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Opening Balance / Amount Incurred in Previous Period
FAW Changchun FAW Changchun Changchun
FAW Jiefang Fujie
Baoyou Steel Ansteel Steel Wabco Suzhou Zhito Sanguard
(Tianjin) First Automobile
Processing and Processing and Automotive SmartLink Technology Co., Automobile
Technology Industry Finance Co., Ltd.
Distribution Co., Distribution Co., Control System Ltd. Insurance Co., Ltd.
Co., Ltd.
Ltd. Ltd. Co., Ltd.
investment in
associated
enterprises
Fair value of
equity
investment in
associated
enterprises
with public
offer
Operating
914,790,890.78 530,991,735.99 22,514,120.71 41,156,020.53 1,152,304,641.48 361,691,496.28 4,618,818,450.60
income
Net Profit 15,386,409.45 11,440,957.11 -2,799,575.28 -763,126.65 -45,270,604.68 8,359,047.01 65,791,109.70 1,821,159,023.60
Net profit
from
discontinued
operations
Other
comprehensiv -33,088.66
e income
Total
comprehensiv 15,386,409.45 11,440,957.11 -2,799,575.28 -763,126.65 -45,270,604.68 8,359,047.01 65,791,109.70 1,821,125,934.94
e income
Dividends
received from
associated
4,907,799.92
enterprises in
the current
year
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(3) Excess losses incurred by joint ventures or associated enterprises
Unit: CNY
Unrecognized Losses in
Unrecognized Losses Accumulated
Name of Joint Ventures the Current Period (or
Accumulated in Prior Unrecognized Losses at
or Associated Enterprises Net Profit Shared in the
Periods the End of the Period
Current Period)
Suzhou Zhito Technology
-14,896,347.92 -31,025,803.29 -45,922,151.21
Co., Ltd.
Other notes: none
IX. Risks Related to Financial Instruments
The main financial instruments of the Company include monetary capital, notes receivable, accounts receivable,
receivables financing, other receivables, current portion of non-current assets, other current assets, long-term
receivables, notes payable, accounts payable, other payables, current portion of non-current liabilities, lease
liabilities and long-term payables. Details of each financial instrument have been disclosed in relevant notes.
The risks related to these financial instruments and the risk management policies adopted by the Company to
reduce these risks are described below. The management of the Company ensures to control above risks within
a limited range by managing and monitoring these risk exposures.
1. Risk management objectives and policies
The Company carries out risk management to achieve an appropriate balance between risks and benefits,
minimize the negative impact of risks on the Company's business performance, and maximize the interests of
shareholders and other equity investors. The Company, based on the risk management objectives, adopts the
basic risk management strategy of determining and analyzing various risks faced by the Company, establishing
an appropriate baseline for risk tolerance and carrying out risk management, and supervising various risks in
a timely and reliable manner to control the risks within a limited range.
Main risks caused by financial instruments of the Company include credit risk, liquidity risk and market risk
(including exchange rate risk and interest rate risk).
(1) Credit risk
Credit risk refers to the risk of financial loss to the Company caused by the counterparty's failure to perform its
contractual obligations.
The Company manages credit risks by portfolio classification. Credit risk mainly arises from bank deposits,
notes receivable, accounts receivable, other receivables, long-term receivables, etc.
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The Company's deposits are mainly deposited in state-owned banks and other large and medium-sized listed
banks, and the Company does not expect significant credit risks in its bank deposits.
The Company makes relevant policies to control the credit risk exposure of notes receivable, accounts
receivable, other receivables and long-term receivables. The Company evaluates the credit qualification of
customers and sets the credit period based on their financial conditions, credit records and other factors such as
current market situations. The Company will monitor the credit records of customers regularly, and take
measures such as written reminders, reduction of credit period or cancellation of credit period for customers
with poor credit records, so as to ensure that the overall credit risk is within a controllable range.
The debtors of the Company's accounts receivable are customers distributed in different industries and regions.
The Company carries out continuous credit assessment on the financial condition of accounts receivable and
purchases credit guarantee insurance when appropriate.
The maximum credit risk exposure borne by the Company is the carrying amount of each financial asset in the
balance sheet. The Company does not provide any other guarantee that may expose the Company to credit risk.
The accounts receivable of the top five customers account for 69.47% of the total accounts receivable of the
Company. Other receivables of the top five companies with debts account for 24.23% of the total other
receivables of the Company.
(2) Liquidity risk
Liquidity risk refers to the risk of capital shortage when the Company performs its obligation requiring
settlement by cash or other financial assets.
The Company maintains and monitors cash and cash equivalents deemed adequate by the management during
liquidity risk management to meet the Company's operating needs and reduce the impact of fluctuations in cash
flows. The management of the Company monitors the use of bank loans and ensures compliance with the loan
agreements. Meanwhile, the Company obtains commitments from major financial institutions to provide
sufficient reserve funds to meet short-term and long-term funding needs.
The Company raises working capital by collecting funds generated from operating businesses as well as bank
loans and other loans. The unused bank loan limit of the Company was CNY 14.206 billion as of June 30, 2022.
(3) Market risk
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Market risk of financial instruments refers to the risk of fluctuation in fair value or future cash flow of financial
instruments due to the changes in market price, including interest rate risk, exchange rate risk and other price
risks.
Interest rate risk
The risk of changes in cash flow of financial instruments caused by changes in interest rates of the Company is
mainly related to bank loans with floating interest rates. It is the policy of the Company to maintain floating
interest rates on these loans.
Sensitivity analysis on interest rate risk:
The sensitivity analysis on interest rate risk is based on the assumption that changes in market interest rates
affect interest income or expenses on variable rate financial instruments.
The Company had no interest-bearing debts such as bank loans as of June 30, 2022.
Exchange rate risk
Exchange rate risk refers to the risk of fluctuations in fair value or future cash flows of financial instruments
due to changes in foreign exchange rates. The exchange rate risk may arise from financial instruments valued
in a foreign currency other than the recording currency.
The foreign exchange risk borne by the Company is mainly related to euros. Main business activities of the
Company are settled in CNY, except that the subsidiary established in Austria holds assets settled in euros. The
balance of Company's assets and liabilities were all in CNY as of June 30, 2022, except a small amount of
monetary capitals including the balance in euros. Therefore, the Company does not believe that the exchange
rate risk faced is significant.
2. Capital management
The Company prepares capital management policy to ensure continuous operation of the Company, thus
providing returns to shareholders, benefiting other stakeholders, and maintaining the best capital structure to
reduce capital costs.
In order to maintain or adjust the capital structure, the Company may adjust the financing method, adjust the
amount of dividends paid to shareholders, return capital to shareholders, issue new shares and other equity
instruments, or sell assets to reduce debt.
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The Company monitors the capital structure based on the asset-liability ratio (i.e. total liabilities divided by total
assets). The asset-liability ratio of the Company was 66.05% as of June 30, 2022.
X. Disclosure of Fair Value
1. Others
The fair value level can be divided as follows according to the lowest level of input value that is significant for the
whole fair value measurement:
Level 1: Quotation of the same assets or liabilities in active markets (unadjusted).
Level 2: Observable inputs other than market quotations for assets or liabilities in Level 1 are used directly (i.e.
prices) or indirectly (i.e. derived from prices).
Level 3: Any input value (non-observable input value) not based on observable market data is used for assets or
liabilities.
The Company's financial assets and financial liabilities measured at amortized cost mainly include monetary capital,
notes receivable, accounts receivable, other receivables, notes payable, accounts payable, other payables, etc.
XI. Related Parties and Related Transactions
1. Information about parent company of the Company
Shareholding Voting Right
Place of Proportion of Proportion of
Name of Parent Nature of
Registrati Registered Capital the Parent the Parent
Company Business
on Company in the Company in the
Company Company
Production and
Changch sales of
FAW CNY 78,000,000,000.00 65.76% 65.76%
un automobiles and
parts
Description of the parent company of the Company: The ultimate controlling party of the Company is China FAW
Group Co., Ltd.
Other notes: The registered capital of the parent company has not changed in the reporting period.
2. Subsidiaries of the Company
For details of subsidiaries of the Company, please refer to 1 in VIII "Interests in Other Entities" of Section X -
Financial Report.
3. Information about joint ventures and associated enterprises of the Company
For details of important joint ventures or associated enterprises of the Company, please refer to 2 in VIII "Interests
in Other Entities" of Section X - Financial Report.
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Other joint ventures or associated enterprises that have related party transactions with the Company in the current
period or in the previous period, resulting in balance, are as follows:
Name of Joint Ventures or Associated Enterprises Relationship with the Company
Associated enterprise of the Company, the same
First Automobile Finance Co., Ltd.
ultimate controlling party
Associated enterprise of the Company, the same
Sanguard Automobile Insurance Co., Ltd.
ultimate controlling party
FAW Changchun Ansteel Steel Processing and
Associated enterprise of the Company
Distribution Co., Ltd.
Changchun Wabco Automotive Control System Co.,
Associated enterprise of the Company
Ltd.
Suzhou Zhito Technology Co., Ltd. Associated enterprise of the Company
FAW Changchun Baoyou Steel Processing and
Associated enterprise of the Company
Distribution Co., Ltd.
FAW Jiefang Fujie (Tianjin) Technology Industry Co.,
Associated enterprise of the Company
Ltd.
SmartLink Associated enterprise of the Company
Other notes: none
4. Information about other related parties
Relationship between Other Related Parties and the
Name of Other Related Parties
Company
China FAW Group Import & Export Co., Ltd. The same ultimate controlling party
FAW Changchun Automobile Trading Service Co.,
The same ultimate controlling party
Ltd.
Changchun Automotive Test Center Co., Ltd. The same ultimate controlling party
FAW Foundry Co., Ltd. The same ultimate controlling party
FAW New Energy Vehicle Sales (Shenzhen) Co., Ltd. The same ultimate controlling party
FAW Logistics Co., Ltd. The same ultimate controlling party
FAW Logistics (Changchun Lushun) Storage and
The same ultimate controlling party
Transportation Co., Ltd.
FAW Logistics (Qingdao) Co., Ltd. The same ultimate controlling party
FAW Mold Manufacturing Co., Ltd. The same ultimate controlling party
FAW Harbin Light Automobile Co., Ltd. The same ultimate controlling party
FAW Fuhua Ecological Co., Ltd. The same ultimate controlling party
FAW Forging (Jilin) Co., Ltd. The same ultimate controlling party
FAW-Volkswagen Automotive Co., Ltd. The same ultimate controlling party
FAW (Dalian) International Logistics Co., Ltd. The same ultimate controlling party
Wuxi Sawane Spring Co., Ltd. The same ultimate controlling party
Qiming Information Technology Co., Ltd. The same ultimate controlling party
Chengdu Qiming Chunrong Information Technology
The same ultimate controlling party
Co., Ltd.
First Automobile Finance Co., Ltd. The same ultimate controlling party
Sanguard Automobile Insurance Co., Ltd. The same ultimate controlling party
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Relationship between Other Related Parties and the
Name of Other Related Parties
Company
FAW Asset Management Co., Ltd. Other related parties
FAW Changchun Comprehensive Utilization Co., Ltd. Other related parties
FAW Changchun Yanfeng Visteon Electronics Co.,
Other related parties
Ltd.
FAW Changchun Communication Technology Co.,
Other related parties
Ltd.
FAW Changchun Tianqi Process Equipment
Other related parties
Engineering Co., Ltd.
FAW Changchun Industrial Sodis Management
Other related parties
Service Co., Ltd.
FAW Changchun Industrial Shuixing Rubber and
Other related parties
Plastic Products Co., Ltd.
Changchun FAW United Casting Company Other related parties
Changchun FAWAY Automobile Components Co.,
Other related parties
Ltd.
Changchun FAWSN Group Co., Ltd. Other related parties
Changchun Yidong Clutch Co., Ltd. Other related parties
Changchun Automotive Economic and Technological
Development Zone Environmental Sanitation and Other related parties
Cleaning Co., Ltd.
FAW Jingye Engine Co., Ltd. Other related parties
FAW Jilin Automobile Co., Ltd. Other related parties
FAW Hongta Yunnan Automobile Manufacturing Co.,
Other related parties
Ltd.
Shandong Pengxiang Automobile Co., Ltd. Other related parties
China Unicom Intelligent Network Technology Co.,
Other related parties
Ltd.
The Ninth Institute of Project Planning & Research of
Other related parties
China Machinery Industry (FIPPR)
Hongqi Intelligent Mobility Technology (Beijing) Co.,
Other related parties
Ltd.
Hainan Tropical Automobile Test Co., Ltd. Other related parties
Harbin FAW Transmission Co., Ltd. Other related parties
Fawer Auto Parts Co., Ltd. Other related parties
Volkswagen FAW Engine (Dalian) Co., Ltd. Other related parties
FAW Changchun Ansteel Steel Processing and
Other related parties
Distribution Co., Ltd.
Changchun Wabco Automotive Control System Co.,
Other related parties
Ltd.
Suzhou Zhito Technology Co., Ltd. Other related parties
FAW Changchun Baoyou Steel Processing and
Other related parties
Distribution Co., Ltd.
FAW Jiefang Fujie (Tianjin) Technology Industry Co.,
Other related parties
Ltd.
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Relationship between Other Related Parties and the
Name of Other Related Parties
Company
SmartLink Other related parties
Other notes: Changchun First Automobile Service Trade Co., Ltd. is renamed as FAW Fuhua Ecological Co., Ltd.
5. Information of related transactions
(1) Related transactions of purchasing or selling goods and providing or receiving labor services
Statement of Goods Purchase/Reception of Labor Services
Unit: CNY
Is the
Content of Approved Amount Incurred
Amount Incurred Transaction
Related Parties Related Transaction in the Previous
in Current Period Amount
Transaction Amount Period
Exceeded
Goods
China FAW purchase
Group Co., Ltd. and
69,322,916.67 614,160,000.00 No 224,854,895.70
and other reception of
related parties labor
services
Goods
purchase
and
FAW 137,571,360.06 534,290,000.00 No 283,346,731.59
reception of
labor
services
Goods
China FAW purchase
Group Import and
45,346,979.72 959,820,000.00 No 65,324,202.38
& Export Co., reception of
Ltd. labor
services
Goods
purchase
FAW Foundry and
264,317,382.66 1,452,440,000.00 No 1,054,834,595.19
Co., Ltd. reception of
labor
services
Goods
purchase
FAW Forging and
195,192,720.59 917,570,000.00 No 590,578,809.96
(Jilin) Co., Ltd. reception of
labor
services
FAW Logistics Goods 155,444,625.15 560,080,000.00 No 298,038,347.80
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Is the
Content of Approved Amount Incurred
Amount Incurred Transaction
Related Parties Related Transaction in the Previous
in Current Period Amount
Transaction Amount Period
Exceeded
Co., Ltd. purchase
and
reception of
labor
services
FAW Logistics Goods
(Changchun purchase
Lushun) and
29,848,441.66 145,350,000.00 No 35,742,303.72
Storage and reception of
Transportation labor
Co., Ltd. services
Goods
purchase
FAW Logistics
and
(Qingdao) Co., 132,447,632.30 422,000,000.00 No 291,389,088.99
reception of
Ltd.
labor
services
Goods
purchase
FAW Mold
and
Manufacturing 7,752,418.52 137,050,000.00 No
reception of
Co., Ltd.
labor
services
Goods
Qiming purchase
Information and
31,889,903.88 294,580,000.00 No 135,166,223.28
Technology reception of
Co., Ltd. labor
services
Goods
purchase
Changchun
and
FAWSN Group 166,091,546.54 933,850,000.00 No 756,711,000.42
reception of
Co., Ltd.
labor
services
Goods
Changchun
purchase
FAWAY
and
Automobile 125,298,339.31 526,170,000.00 No 456,390,204.85
reception of
Components
labor
Co., Ltd.
services
The Ninth Goods 99,069,799.94 823,850,000.00 No 210,394,510.27
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Is the
Content of Approved Amount Incurred
Amount Incurred Transaction
Related Parties Related Transaction in the Previous
in Current Period Amount
Transaction Amount Period
Exceeded
Institute of purchase
Project and
Planning & reception of
Research of labor
China services
Machinery
Industry
(FIPPR)
FAW Goods
Changchun purchase
Ansteel Steel and
115,077,342.40 418,270,000.00 No 317,657,774.90
Processing and reception of
Distribution labor
Co., Ltd. services
FAW Goods
Changchun purchase
Baoyou Steel and
124,182,905.17 266,470,000.00 No 194,439,610.80
Processing and reception of
Distribution labor
Co., Ltd. services
Goods
purchase
and
SmartLink 56,377,549.17 271,710,000.00 No 5,216,266.62
reception of
labor
services
Goods
purchase
Changchun
and
Yidong Clutch 111,271,220.54 570,710,000.00 No 348,405,230.38
reception of
Co., Ltd.
labor
services
Goods
purchase
Fawer Auto and
581,666,983.45 2,737,930,000.00 No 1,845,693,609.89
Parts Co., Ltd. reception of
labor
services
Shandong Goods
Pengxiang purchase
136,864,850.80 922,870,000.00 No 561,421,389.97
Automobile and
Co., Ltd. reception of
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Is the
Content of Approved Amount Incurred
Amount Incurred Transaction
Related Parties Related Transaction in the Previous
in Current Period Amount
Transaction Amount Period
Exceeded
labor
services
Statement of Goods Sales/Rendering of Services
Unit: CNY
Content of
Amount Incurred in Amount Incurred in
Related Parties Related
Current Period the Previous Period
Transaction
FAW Harbin Light Automobile Co., Ltd. Sales of goods 5,885,228.80 9,630,298.34
China FAW Group Import & Export Co., Ltd. Sales of goods 2,292,647,625.45 963,019,948.04
FAW Logistics (Qingdao) Co., Ltd. Sales of goods 7,736,830.19
FAW Fuhua Ecological Co., Ltd. Sales of goods 115,783,309.46 2,201,089,212.15
Changchun Automotive Test Center Co., Ltd. Sales of goods 5,531,086.80
Volkswagen FAW Engine (Dalian) Co., Ltd. Sales of goods 8,250,254.03
FAW Hongta Yunnan Automobile
Sales of goods 16,606,503.41 32,546,371.08
Manufacturing Co., Ltd.
Suzhou Zhito Technology Co., Ltd. Sales of goods 22,641,300.00
FAW Jiefang Fujie (Tianjin) Technology
Sales of goods 342,974,356.23 1,238,897,249.87
Industry Co., Ltd.
FAW Changchun Comprehensive Utilization
Sales of goods 83,819,550.59 201,527,116.73
Co., Ltd.
China FAW Group Co., Ltd. and other related
Sales of goods 19,886,116.10 57,602,081.22
parties
FAW Foundry Co., Ltd. Sales of goods 43,302,922.22
Description of related transactions of purchasing or selling goods and providing or receiving labor services: none
(2) Related entrusted management/contracting and entrusted management/outsourcing
Statement of Entrusted Management/Contracting of the Company:
Unit: CNY
Entrustment
Pricing Basis Income/Cont
Type of Termination of racting
Name of the Name of the Start Date of
Entrusted/ date of Entrustment Income
Client/Emplo Trustee/Contrac Entrustment/
Contracted Entrustment/ Income/Cont Recognized
yer tor Contracting
Assets Contracting racting in the
Income Current
Period
FAW JIEFANG
AUTOMOTIV
Equity Entrustment
China FAW E CO., LTD. November 1, October 31,
entrustmen Management 0.00
Co., Ltd. and its 2019 2022
t Agreement
designated
entities
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(3) Related lease
The Company as the lessor:
Unit: CNY
Lease Income Lease Income
Name of the Lessee Type of Leased Assets Recognized in the Recognized in the
Current Period Previous Period
Changchun Automotive
Houses and buildings 2,678,255.50 1,386,905.14
Test Center Co., Ltd.
FAW Houses and buildings 3,022,825.56 844,614.54
Fawer Auto Parts Co.,
Houses and buildings 197,702.76
Ltd.
FAW Changchun
Communication Land 109,541.28
Technology Co., Ltd.
Shandong Pengxiang
Houses and buildings 377,350.46
Automobile Co., Ltd.
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The Company as the lessee:
Unit: CNY
Rental Expenses for Variable Lease
Simplified Short- Payments not
Interest Expense on Lease Increased Right-of-use
term Leases and Included in Lease Rent Paid
Liabilities Assumed Assets
Low-value Asset Liabilities
Type of Leases Measurement
Name of the
Leased
Lessor Amount Amount Amount Amount Amount
Assets Amount Amount Amount Amount Amount
Incurred Incurred Incurred Incurred Incurred
Incurred in Incurred in Incurred in Incurred in Incurred in
in in the in in the in
Current the Previous Current the Previous the Previous
Current Previous Current Previous Current
Period Period Period Period Period
Period Period Period Period Period
House and
FAW Group 2,132,938.00 2,603,816.82 262,865.98 346,980.30 15,080,040.03
land
Houses and
FAW 4,427,832.76 8,371,019.30 773,218.73 1,045,370.42 8,605,787.96
buildings
FAW Asset
Houses and
Management 157,096.00 5,750.02 426,014.07
buildings
Co., Ltd.
FAW
Changchun
Automobile Sightseeing
39,568.14
Trading vehicle
Service Co.,
Ltd.
200
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Description of related lease
The Company as the lessor:
1. The Company leases the house located at No. 1063, Chuangye Street to Changchun Automotive Test Center
Co., Ltd., with an area of 14,924.5 square meters, an annual rent of CNY 5,165,800 (including tax), and a lease term
from April 1, 2020 to March 31, 2023, according to the house lease contract (JF-ZNB20200010) signed between
them.
2. The Company leases the land used by the test center located in the commercial courtyard of Jiefang Company
to Changchun Automotive Test Center Co., Ltd., with an area of 5,500 square meters, an annual rent of CNY
451,600 (including tax), and a lease term from April 1, 2020 to March 31, 2023, according to the house lease contract
(JF-ZNB20200021) signed between them.
3. The Company leases the factory site located at No.2 Loushan Road, Licang District, Qingdao City to
Changchun Automotive Test Center Co., Ltd., with a total construction area of 532 ㎡ and a land area of 7.7 mu,
and a lease term from January 1, 2022 to December 31, 2024, according to the house lease contract signed between
them. The rent of the leased area in the first year is CNY 213,100 (including tax), which will increase by 3% from
the next year.
4. The Company leases the No.2 workshop of Gearbox Factory, Transmission Division, FAW Shaft Gear Park
in the Green Park, Changchun City, Jilin Province, with a lease area of 2,097.9 square meters, an annual rent of
CNY 844,600 (including tax) and a lease term from January 1, 2022 to December 31, 2022, to China FAW Co.,
Ltd. (Party B) for heat treatment and processing of gears according to the house lease contract signed between them.
5. The Company leases the houses located in the east commercial courtyard and the Nong'an test site to China
FAW Co., Ltd., with an area of 5,331.41 square meters, an annual rent of CNY 1,055,600 (including tax), and a
lease term from April 1, 2020 to March 31, 2023, according to the house lease contract signed between them.
6. The Company leases the assembly workshop plot located in Liuzhou Jiefang Factory, Xiushuiheng 6th Road,
Yufeng District, Liuzhou City to Drive Shaft Branch of Fawer Auto Parts Co., Ltd., with an area of 1,752 ㎡, an
annual rent of CNY 431,000 (including tax), and a lease term from July 1, 2021 to June 30, 2024, according to the
workshop lease contract signed between them.
7. The Company leases two lands located in the Transmission Division of FAW Shaft Gear Park in Changchun
Green Park, Jilin Province, with a leased area of 22 square meters for each, to FAW Changchun Communication
Technology Co., Ltd. (Party B) according to the land lease contract signed between them to build communication
base stations for China Telecom, China Mobile and China Unicom. The lease term of base station 1 is from
December 10, 2020 to December 9, 2023, with an annual rent of CNY 12,000 (including tax); the lease term of base
station 2 is from July 20, 2020 to July 19, 2023, with an annual rent of CNY 12,000 (including tax).
8. The Company leases the land located 30 meters east of the intersection of Benchi Road and Jiefang Viaduct,
with an area of 22 square meters, an annual rent of CNY 12,000 (including tax) and a lease term from July 20, 2020
to January 19, 2022; the green belt (300 meters due east of Gate 7) located at the intersection of Road 1 and Road
201
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13, with an area of 22 square meters, an annual rent of CNY 12,000 (including tax), and a lease term from July 20,
2020 to July 19, 2023, to FAW Changchun Communication Technology Co., Ltd. according to the land lease
contract signed between them.
9. The Company leases the assembly workshop plot located in Liuzhou Jiefang Factory, Xiushuiheng 6th Road,
Yufeng District, Liuzhou City to Shandong Pengxiang Automobile Co., Ltd., with an area of 3344 ㎡, an annual
rent of CNY 822,600 (including tax), and a lease term from July 1, 2021 to June 30, 2024, according to the workshop
lease contract signed between them.
The Company as the lessee:
1. China FAW Group Co., Ltd. leases the land located at Tangnan First Branch, Liangxi District, Wuxi City, with
a lease term from April 1, 2020 to March 31, 2025, and an annual rent of CNY 4,265,900 (including tax), to the
Company according to the lease agreement signed between them.
2. China FAW Co., Ltd. leases the tool workshop for storage located at No. 83, Dongfeng Street, with an area of
10000 ㎡ and an annual rent of CNY 2,848,991 (including tax) to the Transmission Branch of FAW JIEFANG
AUTOMOTIVE CO., LTD., and that with an area of 3868 ㎡ and annual rent of CNY 1,001,809 (including tax) to
the Truck Factory, and both with a lease term from January 1, 2021 to December 31, 2023, according to the lease
agreement signed between the Company and China FAW Co., Ltd.
3. China FAW Co., Ltd. leases the No.1 workshop of Axle Company located at No.83 Dongfeng Street, with an
area of 30,203.05 ㎡, an annual rent of CNY 8,371,019.3 (including tax) and a lease term from April 1, 2020 to
May 31, 2025, to the Transmission Branch of FAW JIEFANG AUTOMOTIVE CO., LTD. according to the lease
agreement signed between the Company and China FAW Co., Ltd.
4. China FAW Co., Ltd. leases 18 buildings in total located at Dongfeng Avenue and Heping Avenue, with an
area of 3,496.19 ㎡, an annual rent of CNY 734,227.22 (including tax) and a lease term from April 1, 2020 to March
31, 2025, to FAW JIEFANG AUTOMOTIVE CO., LTD. according to the lease agreement signed between the
Company and China FAW Co., Ltd.
5. China FAW Co., Ltd. leases the house located at No. 45, Heping Street to the Company, with an area of
5,278.75 square meters, an annual rent of CNY 1,557,231.25 (including tax), and a lease term from April 1, 2020
to March 31, 2025, according to the lease contract signed between them.
6. FAW Asset Management Co., Ltd. leases the residential house located at No. 18 Xijiang Road, Liuzhou City,
with an area of 2,379.5 ㎡, an annual rent of CNY 1,570,960,000 (including tax) and a lease term from January 1,
2020 to December 31, 2022, to Liuzhou Branch for use according to the lease agreement signed between the
Company and FAW Asset Management Co., Ltd.
202
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7. FAW Changchun Automobile Trading Service Co., Ltd. leases three Hongqi H5 cars to the Company as
sightseeing vehicles, with a rent of CNY 4,968 (including tax)/month/car, and a lease term from January 4, 2019 to
January 4, 2022, according to the car lease contract signed between them.
(4) Remuneration of key management personnel
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Remuneration of key management
15,228,996.18 17,555,413.98
personnel
(5) Other related transactions
① Interest income and interest expense
Related Parties Content of Related Amount Incurred in Amount Incurred in the
Transaction Current Period (CNY Previous Period (CNY
10,000) 10,000)
First Automobile Finance Co., Ltd. Interest income 17,744.08 18,486.16
6. Receivables and payables of related parties
(1) Receivables
Unit: CNY
Ending Balance Opening Balance
Project Name Related Parties Provision for Provision for
Book Balance Book Balance
Bad Debts Bad Debts
Accounts
FAW 3,224,356.65 10,982.25 148,038.86 503.33
receivable
China FAW Group
Accounts
Import & Export 771,150,288.04 827,499.69 133,665,249.08 133,665.25
receivable
Co., Ltd.
FAW Hongta
Accounts Yunnan Automobile
52,763,670.55 2,902,224.84 43,738,644.78 168,532.52
receivable Manufacturing Co.,
Ltd.
Changchun
Accounts
Automotive Test 5,617,679.60 19,100.11 3,953,858.47 13,443.11
receivable
Center Co., Ltd.
Accounts FAW Jingye Engine
1,820,957.23 1,820,957.23
receivable Co., Ltd.
Accounts FAW Asset 1,051,901.58 2,484.47
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Ending Balance Opening Balance
Project Name Related Parties Provision for Provision for
Book Balance Book Balance
Bad Debts Bad Debts
receivable Management Co.,
Ltd.
FAW-Volkswagen
Accounts
Automotive Co., 343,200.00 1,166.88
receivable
Ltd.
FAW Harbin Light
Accounts
Automobile Co., 157,790.76 536.49
receivable
Ltd.
FAW Changchun
Accounts
Yanfeng Visteon 63,207.42 214.91
receivable
Electronics Co., Ltd.
Accounts Fawer Auto Parts
8,972.71 30.51 58,079.00 197.47
receivable Co., Ltd.
FAW Changchun
Accounts Communication
66,000.00 224.40
receivable Technology Co.,
Ltd.
FAW Changchun
Accounts
Comprehensive 1,721,263.44 5,852.29
receivable
Utilization Co., Ltd.
China FAW Group
Prepayments Import & Export 622,728,933.44 299,415,808.16
Co., Ltd.
The Ninth Institute
of Project Planning
Prepayments & Research of China 69,084,800.00 31,280,800.00
Machinery Industry
(FIPPR)
FAW Hongta
Yunnan Automobile
Prepayments 23,451,243.21
Manufacturing Co.,
Ltd.
FAW Mold
Prepayments Manufacturing Co., 13,751,495.26 11,355,895.26
Ltd.
Qiming Information
Prepayments Technology Co., 7,441,683.80 7,041,353.80
Ltd.
Prepayments SmartLink 4,494,055.79 2,364,055.79
FAW Changchun
Tianqi Process
Prepayments 537,315.00
Equipment
Engineering Co.,
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Ending Balance Opening Balance
Project Name Related Parties Provision for Provision for
Book Balance Book Balance
Bad Debts Bad Debts
Ltd.
FAW Changchun
Communication
Prepayments 30,749.36
Technology Co.,
Ltd.
Other 8,227,110.28 5,675,883.38
FAW 8,227,110.28 5,675,883.38
receivables
FAW Asset
Other
Management Co., 482,529.21 10,431.31 241,717.46 10,431.31
receivables
Ltd.
FAW Mold
Other
Manufacturing Co., 79,212.46 4,586.40
receivables
Ltd.
Other FAW Logistics Co.,
59,402.96 3,439.43
receivables Ltd.
Other FAW Forging (Jilin)
37,596.07 2,176.81
receivables Co., Ltd.
FAW Logistics
(Changchun
Other
Lushun) Storage and 5,801.51 335.91
receivables
Transportation Co.,
Ltd.
The Ninth Institute
of Project Planning
Other
& Research of China 10,728,984.01 10,728.98
receivables
Machinery Industry
(FIPPR)
(2) Payables
Unit: CNY
Project Name Related Parties Ending Book Balance Opening Book Balance
Accounts
FAW Forging (Jilin) Co., Ltd. 39,966,359.95 220,555,696.82
payable
Accounts
FAW Foundry Co., Ltd. 28,369,138.75 183,830,708.06
payable
Accounts
Fawer Auto Parts Co., Ltd. 180,929,957.34 169,640,260.34
payable
Accounts Changchun FAWAY Automobile Components
3,781.55 152,148,699.11
payable Co., Ltd.
Accounts
Changchun FAWSN Group Co., Ltd. 20,634,355.59 129,367,496.49
payable
Accounts SmartLink 28,120,257.40 99,415,297.12
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Project Name Related Parties Ending Book Balance Opening Book Balance
payable
Accounts
Shandong Pengxiang Automobile Co., Ltd. 162,051,000.42 73,531,515.19
payable
Accounts
FAW Logistics (Qingdao) Co., Ltd. 105,082,009.75 68,025,114.39
payable
Accounts
Changchun Yidong Clutch Co., Ltd. 42,931,709.74 67,047,152.21
payable
Accounts
FAW Logistics Co., Ltd. 82,617,632.36 57,571,100.02
payable
Accounts
Qiming Information Technology Co., Ltd. 24,029,396.23 41,883,498.37
payable
Accounts
FAW 17,472,584.58 38,452,564.39
payable
Accounts
Changchun Automotive Test Center Co., Ltd. 59,360.00 35,547,810.00
payable
Accounts FAW Logistics (Changchun Lushun) Storage
15,247,389.29 17,089,430.56
payable and Transportation Co., Ltd.
Accounts FAW Changchun Ansteel Steel Processing
14,533,080.61
payable and Distribution Co., Ltd.
Accounts FAW Changchun Baoyou Steel Processing
9,272,615.36
payable and Distribution Co., Ltd.
Accounts FAW (Dalian) International Logistics Co.,
2,080,121.61 6,106,590.35
payable Ltd.
Accounts FAW Changchun Automobile Trading Service
0.82 5,721,646.90
payable Co., Ltd.
Accounts
Suzhou Zhito Technology Co., Ltd. 4,487,478.33
payable
Accounts
FAW Harbin Light Automobile Co., Ltd. 4,172,366.61
payable
Accounts FAW Changchun Comprehensive Utilization
3,467,411.69 3,294,031.20
payable Co., Ltd.
Accounts FAW Changchun Industrial Sodis
179,898.40 2,790,797.22
payable Management Service Co., Ltd.
Accounts
FAW Mold Manufacturing Co., Ltd. 64,800.00 2,434,279.91
payable
Accounts
FAW Fuhua Ecological Co., Ltd. 2,375,954.69
payable
Accounts
Wuxi Sawane Spring Co., Ltd. 472,994.41 1,555,556.34
payable
Accounts
Sanguard Automobile Insurance Co., Ltd. 2,054,319.50 1,283,140.98
payable
Changchun Automotive Economic and
Accounts Technological Development Zone
961,433.87
payable Environmental Sanitation and Cleaning Co.,
Ltd.
206
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Project Name Related Parties Ending Book Balance Opening Book Balance
Accounts FAW Changchun Communication Technology
3,982.00 843,342.80
payable Co., Ltd.
The Ninth Institute of Project Planning &
Accounts
Research of China Machinery Industry 79,280,606.16 735,721.78
payable
(FIPPR)
Accounts FAW Changchun Industrial Shuixing Rubber
508,293.86 676,420.56
payable and Plastic Products Co., Ltd.
Accounts
Changchun FAW United Casting Company 667,354.32
payable
Accounts
China FAW Group Import & Export Co., Ltd. 3,208,260.56 642,326.53
payable
Accounts FAW Changchun Yanfeng Visteon Electronics
40,247.56 478,759.95
payable Co., Ltd.
Accounts
Hainan Tropical Automobile Test Co., Ltd. 31,977.00 437,094.00
payable
Accounts
FAW Group 831.00 367,385.00
payable
Accounts FAW Hongta Yunnan Automobile
175,200.00
payable Manufacturing Co., Ltd.
Accounts Chengdu Qiming Chunrong Information
159,215.21
payable Technology Co., Ltd.
Accounts FAW Jiefang Fujie (Tianjin) Technology
114,974.64 156,685.65
payable Industry Co., Ltd.
Accounts
FAW Jilin Automobile Co., Ltd. 126,000.00
payable
Accounts
Harbin FAW Transmission Co., Ltd. 93,627.49 93,627.49
payable
Accounts Hongqi Intelligent Mobility Technology
2,541.38 16,448.28
payable (Beijing) Co., Ltd.
Accounts China Unicom Intelligent Network
12,984.00
payable Technology Co., Ltd.
Accounts
received in Changchun Automotive Test Center Co., Ltd. 2,471,935.24 1,288,392.99
advance
Accounts
received in Shandong Pengxiang Automobile Co., Ltd. 205,656.00
advance
Accounts
received in FAW Logistics Co., Ltd. 11.16
advance
Accounts
FAW Jiefang Fujie (Tianjin) Technology
received in 33,404,094.97
Industry Co., Ltd.
advance
Contract FAW Jiefang Fujie (Tianjin) Technology
796,299.12 79,085,729.95
liabilities Industry Co., Ltd.
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Project Name Related Parties Ending Book Balance Opening Book Balance
Contract
FAW Fuhua Ecological Co., Ltd. 36,893,039.11
liabilities
Contract
Suzhou Zhito Technology Co., Ltd. 12,317,158.00
liabilities
Contract FAW Changchun Comprehensive Utilization
4,364,564.62
liabilities Co., Ltd.
Contract
China FAW Group Import & Export Co., Ltd. 1,341.83 632,188.13
liabilities
Contract
Shandong Pengxiang Automobile Co., Ltd. 436,036.83 492,805.88
liabilities
Contract
FAW Asset Management Co., Ltd. 23,388.96
liabilities
Contract FAW New Energy Vehicle Sales (Shenzhen)
8,060.00
liabilities Co., Ltd.
Contract
Harbin FAW Transmission Co., Ltd. 134.65 134.65
liabilities
Contract
FAW Logistics Co., Ltd. 11.16
liabilities
Contract FAW Changchun Comprehensive Utilization
2,457,089.66
liabilities Co., Ltd.
Other
FAW Group 233,303,791.17 233,303,791.17
payables
Other
FAW 6,603,120.79 216,522,779.89
payables
The Ninth Institute of Project Planning &
Other
Research of China Machinery Industry 158,016,708.38 178,013,170.48
payables
(FIPPR)
Other
FAW Mold Manufacturing Co., Ltd. 42,730,081.53 42,797,927.25
payables
Other
Qiming Information Technology Co., Ltd. 15,990,903.00 37,234,276.05
payables
Other FAW Jiefang Fujie (Tianjin) Technology
20,220,000.00 20,700,000.00
payables Industry Co., Ltd.
Other
China FAW Group Import & Export Co., Ltd. 2,679,534.40 2,782,645.30
payables
Other
FAW Fuhua Ecological Co., Ltd. 1,397,786.21
payables
Other
Shandong Pengxiang Automobile Co., Ltd. 2,036,533.19 1,050,000.00
payables
Other
Sanguard Automobile Insurance Co., Ltd. 274,539.31
payables
Other FAW Changchun Communication Technology
757,573.73 207,971.15
payables Co., Ltd.
Other
FAW Asset Management Co., Ltd. 3,925.62
payables
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Project Name Related Parties Ending Book Balance Opening Book Balance
Other
Fawer Auto Parts Co., Ltd. 30,988,968.39
payables
Other
Changchun Yidong Clutch Co., Ltd. 5,880,397.48
payables
Other
FAW Foundry Co., Ltd. 5,963,517.62
payables
Other
Changchun FAWSN Group Co., Ltd. 21,030,969.93
payables
Other Changchun FAWAY Automobile Components
54,339,637.71
payables Co., Ltd.
Other
FAW Forging (Jilin) Co., Ltd. 5,836,044.82
payables
Other
SmartLink 4,012,812.05
payables
Other FAW Changchun Yanfeng Visteon Electronics
17,543.38
payables Co., Ltd.
7. Commitments of related parties
The Profit Forecast Compensation Agreement between FAW Car Co., Ltd. and China FAW Co., Ltd. signed by
FAW Car Co., Ltd. and China FAW Co., Ltd. on August 29, 2019 indicates that, for the purchased assets, the audited
revenue shares of mainstream product-related patents and proprietary technologies assessed with income method
and realized in 2020, 2021 and 2022 were not less than CNY 655.889 million, CNY 688.1552 million and CNY
109.3864 million respectively.
8. Others
(1) Deposits and interests of finance companies
Unit: CNY
Project Related Parties Content 2022.06.30 2021.06.30
Name
Deposits and interests of
Monetary First Automobile
finance company included in 20,891,397,211.96 26,321,804,811.08
capital Finance Co., Ltd.
bank deposits
XII. Commitments and Contingencies
1. Important commitments
Important commitments existing on the balance sheet date: The Company had no other commitments that should
be disclosed as of June 30, 2022.
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2. Contingencies
(1) Important contingencies existing on the balance sheet date
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Contingent liabilities arising from pending litigation and arbitration and their financial impact
Court of Amount of Subject Case
Plaintiff Defendant Cause of Action
Acceptance (CNY) Progress
The Company, FAW
Farasis Energy Bestune Car Co., Shanghai Second
Other contract First
Technology Ltd., Shanghai Intermediate 116,394,488.78
cases instance
(Ganzhou) Co., Ltd. Ruimei New Energy People's Court
Technology Co., Ltd.
The Company, FAW
Farasis Energy Bestune Car Co., Changchun
Other contract First
Technology Ltd., Shanghai Intermediate 45,702,880.00
cases instance
(Ganzhou) Co., Ltd. Ruimei New Energy People's Court
Technology Co., Ltd.
Shanghai Pudong
JinRon Factors Other contract First
Jiefang Limited New Area 32,091,768.51
(Shanghai) Co., Ltd. cases instance
People's Court
Zhou Qinglong,
Qijiang Changfeng
Gear (Group) Co.,
Ltd., Lin Xiying,
Chongqing Branch, Beijing High Second
Qijiang Changfeng Other cases 30,426,121.54
Bank of Harbin People’s Court instance
Forging Co., Ltd.,
Zhou Xiaojun,
Jiefang Limited
(third party)
FAW Jiefang Dalateqi People's First
Product liability
Bai Haitao Automotive Sales Court of Inner 19,899,350.00 instance of
cases
Co., Ltd. Mongolia retrial
Dalian Ganjingzi
First
Lin Maolin Jiefang Limited Lease contract case District People's 9,040,010.76
instance
Court
Natural persons such
as Wang Jihui and
Wei Mengmeng,
Zheng Ruiguo, Lian Suizhou
insurance companies, Traffic accident Second
Meiying, Zhang Intermediate 1,353,495.62
Dongfeng liability case instance
Yujun, Zhang Ziling People's Court
Automobile Co., Ltd.
(31 defendants),
FAW Group
Bengbu Huaxin
Huaiyuan Changtong Bengbu Yuhui
Automobile Sales & Product quality First
Transportation Co., District People's 1,248,346.47
Service Co., Ltd., case instance
Ltd. Court
FAW Group
Qingdao Changjiu
Logistics Co., Ltd.,
Wuxi Huipeng
Automobile Sales
Qingdao Jimo
Zhang Zhengming、 Co., Ltd., Qingdao Traffic accident First
District People's 1,056,666.00
Ma Xiumei Jianhang Runtong liability case instance
Court
Logistics Co., Ltd.,
FAW Jiefang
(Qingdao)
Automotive Co., Ltd.
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Court of Amount of Subject Case
Plaintiff Defendant Cause of Action
Acceptance (CNY) Progress
Natural persons such
as Wang Jihui and
Cao Zhuanyin、Cao Wei Mengmeng, Suizhou
insurance companies, Traffic accident Second
Quanzheng、Cao Intermediate 1,004,405.62
Dongfeng liability case instance
Yinling、Cao Jinling Automobile Co., Ltd. People's Court
(31 defendants),
FAW Group
Other 28 items 8,237,155.41
The Company had no other contingencies to be disclosed as of June 30, 2022.
(2) Explanation is also required when the Company has no important contingencies to be disclosed
The Company has no important contingencies to be disclosed.
XIII. Events after the Balance Sheet Date
The Company had no events after the balance sheet date to be disclosed as of June 30, 2022.
XIV. Other Important Matters
1. Annuity plan
The Company decides to participate in the enterprise annuity plan implemented by FAW Group from January 1,
2010, and 5 other companies will implement self-defined enterprise annuity plans according to the Labor Law of
the People's Republic of China, the Trust Law of the People's Republic of China, the Trial Measures for Enterprise
Annuity (Order No. 20 of the Ministry of Labor and Social Security) and other laws and regulations, and in
combination with actual situation of the Company.
Main contents of annuity plan are as follows:
(1) "Enterprise annuity" mentioned in this plan refers to the enterprise supplementary endowment insurance
system voluntarily established by the enterprise and its employees according to national policies and regulations on
the basis of purchasing the basic endowment insurance and fulfilling the payment obligation according to law, and
is an integral part of the enterprise employee compensation and welfare system.
(2) Organization, management and supervision: Enterprise representatives and employee representatives establish
the FAW Enterprise Annuity Council (hereinafter referred to as the Annuity Council) through collective negotiation.
The Annuity Council is composed of enterprise and employee representatives, of which not less than one third are
employee representatives. As the trustee of the Plan, the Annuity Council is responsible for operating and managing
the enterprise annuity fund of FAW Group.
(3) Fund raising and payment methods: The expenses required for enterprise annuity are jointly paid by the
enterprise and employees.
212
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(4) Account management: The enterprise annuity fund implements a full accumulation system and is managed by
personal accounts. At the same time, enterprise accounts are established to collect unvested rights and interests.
(5) Fund management: The enterprise annuity fund consists of the following items: ① Enterprise's payment; ②
Employees' payment; ③ Investment and operation income. The enterprise annuity fund is entrusted to the Annuity
Council for management. The enterprise and employee representatives entrust the Company to sign the enterprise
annuity fund entrusted management contract with the Annuity Council through collective negotiation, and entrust
the Annuity Council for management and market-oriented operation of the enterprise annuity fund collected by this
plan.
(6) Benefit planning and distribution: The employee's payment and its investment income belong to the employee;
the part of enterprise's payment distributed to the individual account and its investment income belong to the
employee as specified, and the part not belonging to the individual is transferred to the enterprise account.
(7) Payment method of enterprise annuity: ① For the retired employee and the employee completing the retirement
procedures, the balance of the annuity personal account can be received at one time (or monthly, in several times or
at one time based the balance of the individual account, the individual income tax burden, etc.); ② For the dead,
the balance of the individual account of the enterprise annuity can be collected by the legal successor at one time;
③ For the overseas residents, the balance of the personal account of the enterprise annuity may be paid to him/her
at one time according to his/her requirements.
2. Others
Lease: as lessee
The Company simplifies the short-term lease and low-value asset lease, and does not recognize the right-of-use
assets and lease liabilities. The short-term lease, low-value assets and variable lease payments not included in the
lease liabilities measurement are included in the expenses in the current period as follows:
Unit: CNY
Item January-June 2022
Short-term lease 27,702,166.26
Low-value lease
Variable Lease Payments not Included in Lease Liabilities
Measurement
Total 27,702,166.26
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XV. Notes to Main Items of Parent Company's Financial Statements
1. Other receivables
Unit: CNY
Item Ending Balance Opening Balance
Dividends receivable 17,920,972.75
Other receivables 432,429.80 432,429.80
Total 18,353,402.55 432,429.80
(1) Other receivables
1) Classification of other receivables by nature
Unit: CNY
Payable Nature Ending Book Balance Opening Book Balance
Current account 459,006.26 459,006.26
Total 459,006.26 459,006.26
2) Provision for bad debts
Unit: CNY
Phase I Phase II Phase III
Provision for Bad Expected credit loss Expected credit loss
Expected credit loss Total
Debts for the entire for the entire
for the next 12
duration (without duration (with
months
credit impairment) credit impairment)
Balance on January
26,576.46 26,576.46
1, 2022
Balance on January
1, 2022 in the
current period
Balance on June 30,
26,576.46 26,576.46
2022
Changes in the book balance of the loss provision with significant changes in the current period
□ Applicable Not applicable
Disclosure by aging
Unit: CNY
Aging Ending Balance
Within 1 year (including 1 year) 459,006.26
7-12 months 459,006.26
Total 459,006.26
3) Provision for bad debts provided, recovered or reversed in the current period
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Provision for bad debts in the current period:
Unit: CNY
Amount Changed in the Current Period
Opening Ending
Category Recovery or Cancel after
Balance Provision Others Balance
Reversal verification
Current
26,576.46 26,576.46
account
Total 26,576.46 26,576.46
4) Other receivables from top five borrowers classified based on the ending balance
Unit: CNY
Proportion in
Total Ending Ending Balance
Company Name Payment Nature Ending Balance Aging Balance of of Bad Debts
Other Provision
Receivables
Changchun
Committee of
Municipal and Current account 459,006.26 7-12 months 100.00% 26,576.46
Rural
Construction
Total 459,006.26 100.00% 26,576.46
2. Long-term equity investment
Unit: CNY
Ending Balance Opening Balance
Item Impairment Impairment
Book Balance Book Value Book Balance Book Value
Provision Provision
Investment
to 21,086,037,005.30 21,086,037,005.30 21,086,037,005.30 21,086,037,005.30
subsidiaries
Investment
to
associated
4,829,031,761.86 4,829,031,761.86 4,554,765,365.23 4,554,765,365.23
enterprises
and joint
ventures
Total 25,915,068,767.16 25,915,068,767.16 25,640,802,370.53 25,640,802,370.53
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(1) Investment to subsidiaries
Unit: CNY
Increase/Decrease in the Current Period Ending
Opening Balance Provision Ending Balance Balance of
Investee Investment Investment
(Book Value) for Others (Book Value) Impairment
Increase Reduction Provision
Impairment
FAW JIEFANG
AUTOMOTIVE 21,086,037,005.30 21,086,037,005.30
CO., LTD.
Total 21,086,037,005.30 21,086,037,005.30
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(2) Investment to associated enterprises and joint ventures
Unit: CNY
Increase/Decrease in the Current Period
Investment Cash Ending
Opening Balance Adjustment to Ending Balance Balance of
Investor Gains or Other Dividends or Provision
(Book Value) Investment Investment Other (Book Value) Impairment
Losses Equity Profits for Others
Increase Reduction Comprehensive Provision
Recognized by Changes Announced to Impairment
Incomes
Equity Method be Paid
I. Joint ventures
II. Associated enterprises
First
Automobile
4,341,181,324.38 280,639,831.32 -8,619.76 4,621,812,535.94
Finance
Co., Ltd.
Sanguard
Automobile
213,584,040.85 11,594,274.68 -38,116.86 17,920,972.75 207,219,225.92
Insurance
Co., Ltd.
Subtotal 4,554,765,365.23 292,234,106.00 -46,736.62 17,920,972.75 4,829,031,761.86
Total 4,554,765,365.23 292,234,106.00 -46,736.62 17,920,972.75 4,829,031,761.86
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3. Investment income
Unit: CNY
Amount Incurred in the Previous
Item Amount Incurred in Current Period
Period
Long-term equity investment
income calculated with cost 2,719,920,000.00
method
Long-term equity investment
income calculated with equity 292,234,106.00 383,431,507.45
method
Total 292,234,106.00 3,103,351,507.45
XVI. Supplementary Information
1. Breakdown of non-recurring profit or loss of current period
Applicable □ Not Applicable
Unit: CNY
Item Amount Description
It refers to the net gain on disposal of non-
Profits or losses on disposal of non-current assets 42,431.19
current assets.
Government subsidies included in current profits
and losses (except for those closely related to
normal business operations of the Company,
227,954,740.41
conforming to national policies and regulations,
and continuously enjoyed according to certain
standard quota or quantity)
It mainly refers to the reversal of
Reversal of impairment provision for receivables
12,000,000.00 impairment provision for receivables
subject to separate impairment test
subject to separate impairment test.
Non-operating income and expenses other than the They mainly refer to the net non-operating
91,843,871.67
above income and expenses
Less: amount affected by income tax 55,440,351.77
Total 276,400,691.50 --
Specific conditions of other profit and loss items meeting the definition of non-recurring profit and loss:
□ Applicable Not applicable
There are no specific conditions of profit and loss items meeting definition of non-recurring profit and loss for the
Company.
Explanation on defining the non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on
Information Disclosure by Companies Issuing Securities Publicly - Non-recurring Profit and Loss as recurring profit
and loss items
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□ Applicable Not applicable
2. Return on net assets and earnings per share
Earnings per Share
Profit for the Reporting Weighted average return
Period on equity Basic earnings per share Diluted earnings per
(CNY/share) share (CNY/share)
Net profit attributable to
common shareholders of 0.65% 0.0366 0.0366
the Company
Net profit attributable to
common shareholders of
the Company after non- -0.41% -0.0228 -0.0228
recurring profits and
losses are deducted
3. Differences in accounting data under domestic and foreign accounting standards
(1) Differences in net profits and net assets in the financial report disclosed simultaneously according to the
international accounting standards and China accounting standards
□ Applicable Not applicable
(2) Differences in net profits and net assets in the financial report disclosed simultaneously according to
foreign accounting standards and China accounting standards
□ Applicable Not applicable
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