公证天业会计师事务所(特殊普通合伙)
Gongzheng Tianye Certified Public Accountants, SGP
中国 . 江苏 . 无锡 Wuxi . Jiangsu . China
总机：86（510）68798988 Tel：86（510）68798988
传真：86（510）68567788 Fax：86（510）68567788
电子信箱：mail@gztycpa.cn E-mail：mail@gztycpa.cn
Auditor’s Report
Su Gong W[2021]No. 443
To the Shareholders of Weifu High-Technology Group Co., Ltd.:
I. Auditing opinions
We have audited the financial statement under the name of Weifu High-Technology Group Co., Ltd. (hereinafter
referred to as WFHT), including the consolidated and parent Company’s balance sheet of 31 December 2020 and
profit statement, and cash flow statement, and statement on changes of shareholders’ equity for the year ended,
and notes to the financial statements for the year ended.
In our opinion, the Company’s financial statements have been prepared in accordance with the Enterprises
Accounting Standards and Enterprises Accounting System, and they fairly present the financial status of the
Company and of its parent company as of 31 December 2020 and its operation results and cash flows for the year
ended.
II. Basis of opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our
responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the
Financial Statements” section of the auditor’s report. We are independent of the Company in accordance with the
Certified Public Accountants of China’s Code of Ethics for Professional Accountants, and we have fulfilled our
other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
III. Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Revenue recognition is the key audit matter that we identified in auditing.
1. Matter description
As described in the 25. Revenue in Note III and 42. Operation revenue and operation cost in Note V carried in the
financial statement, WFHT achieved an operation revenue of 12,883,826,300 Yuan for year of 2020, 46.67%
increase over year of 2019.
As one of the biggest source of profits for WFHT, operating revenue has a significant effect on the general
financial statement, in which there are certain of inherent risks existed for the reason that the management
manipulate the timing of recognition so as to achieve specific objectives or anticipations. Therefore, we will take
the Revenue recognition as the key auditing matter.
2. The solution to the matter in auditing
(1)The Company has tested the design and execution of key internal control related to revenue recycling so as to
confirm the validity of internal control; (2) The Company should make sure whether the recognition condition and
method of major operating revenue are compliance with the accounting standards for business enterprise; it also
should pay an attention to that whether the cyclical and occasional revenue is compliance with the decided
revenue recognition principle and methods; (3) Combining with status and data of the industry where WFHT is
located, the Company should make a judgment on the rationality of fluctuation of the revenue composition; (4)
The Company should carry out the procedure of account receivable and revenue letter of confirmation, and make
a judgment on the rationality of the timing of revenue recognition; (5) Combining with the procedure of letter of
confirmation, the Company should make a random inspection on sales contracts or orders, delivery lists, logistics
bills, customs declaration, sales invoices, signing-off sheet and other documents related to revenue to verify the
authenticity of revenue; (6) Referring to the recorded revenue before and after the Balance Sheet Date, the
Company should select some samples and check out the supportive documents such as delivery lists, customs
declaration and receipt forms to make a judgment on whether the income has been recorded at the appropriate
accounting period.
IV. Other information
The management of WFHT is responsible for other information which includes the information covered in the
Company’s 2020 annual report excluding the financial statement and our audit report.
Our audit opinions on the financial statements do not cover other information, and we do not issue any form of
authentication conclusions on other information.
In combination with our audit of the financial statements, it is our responsibility to read other information and, in
the process, consider whether there is material inconsistency or material misstatement between the other
information and the financial statements or what we learned during the audit.
Based on the work we have carried out, if we determine that there is a material misstatement of other information,
we should report that fact and i this regard we have noting to report.
V. Responsibilities of management and those charged with governance for the financial statements
The management is responsible for the preparation of the financial statements in accordance with the Accounting
Standards for Enterprise to secure a fair presentation, and for the design, establishment and maintenance of the
internal control necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing matters related to going concern (if applicable) and using the going
concern assumption unless the management either intends to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
VI. Responsibilities of the auditor for the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an audit report that includes our audit opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with the CAS, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern assumption and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required by the CAS to draw users’ attention in audit report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify audit opinion. Our conclusions are based
on the information obtained up to the date of audit report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express audit opinion on the financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the governance with a statement of our compliance with the ethical requirements relating to our
independence and communicate with the governance on all relationships and other matters that may reasonably be
considered to affect our independence, as well we the relevant precautions (if applicable).
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in the auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in the auditor’s report because of the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Jiangsu Gongzheng Tianye CPA Chinese CPA: Bai Lingjing
(Special General Partnership) (engagement partner)
Wuxi China Chinese CPA: Zhang Qianqian
16 April 2021
Financial Statement
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated Balance Sheet
Prepared by Weifu High-Technology Group Co., Ltd.
December 31, 2020
In RMB
Item December 31, 2020 December 31, 2019
Current assets:
Monetary funds 1,963,289,832.33 1,596,893,711.87
Settlement provisions
Capital lent
Transaction financial assets 3,518,432,939.10 3,940,885,674.32
Derivative financial assets
Note receivable 1,657,315,723.56 1,812,141,371.94
Account receivable 2,824,780,352.41 2,310,666,475.89
Receivable financing 1,005,524,477.88 23,873,317.86
Accounts paid in advance 151,873,357.76 139,241,917.78
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other account receivable 54,209,580.88 43,730,023.31
Including: Interest receivable 655,052.98
Dividend receivable 49,000,000.00 1,070,000.00
Buying back the sale of financial assets
Inventories 2,877,182,174.64 2,418,744,835.82
Contractual assets
Assets held for sale
Non-current asset due within one year
Other current assets 2,137,921,113.61 1,012,055,605.74
Total current assets 16,190,529,552.17 13,298,232,934.53
Non-current assets:
Loans and payments on behalf
Debt investment
Other debt investment
Long-term account receivable
Long-term equity investment 4,801,488,290.97 5,322,405,953.35
Investment in other equity instrument 285,048,000.00 285,048,000.00
Other non-current financial assets 1,805,788,421.00 1,043,589,987.43
Investment real estate 20,886,681.62 22,410,511.87
Fixed assets 2,882,230,191.08 2,845,176,078.20
Construction in progress 243,795,493.04 247,857,777.25
Productive biological asset
Oil and gas asset
Right-of-use assets
Intangible assets 454,412,947.69 430,594,372.12
Expense on Research and Development
Goodwill 257,800,696.32 1,784,086.79
Long-term expenses to be apportioned 15,062,171.09 18,536,000.25
Deferred income tax asset 198,393,501.50 212,476,501.54
Other non-current asset 195,259,441.73 230,235,982.45
Total non-current asset 11,160,165,836.04 10,660,115,251.25
Total assets 27,350,695,388.21 23,958,348,185.78
Current liabilities:
Short-term loans 302,238,600.05 312,153,969.81
Loan from central bank
Capital borrowed
Trading financial liability
Derivative financial liability
Note payable 2,462,592,372.82 1,745,218,439.52
Account payable 4,100,984,240.39 3,312,254,229.84
Accounts received in advance 4,071,236.87 113,737,432.61
Contractual liability 81,717,387.25
Selling financial asset of repurchase
Absorbing deposit and interbank deposit
Security trading of agency
Security sales of agency
Wage payable 332,421,811.82 314,343,737.66
Taxes payable 67,493,690.29 129,538,411.86
Other account payable 361,556,257.42 65,266,262.39
Including: Interest payable 4,862.22
Dividend payable
Commission charge and commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due within one year 36,914,242.02
Other current liabilities 222,871,087.33
Total current liabilities 7,972,860,926.26 5,992,512,483.69
Non-current liabilities:
Insurance contract reserve
Long-term loans 3,050,640.97
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability
Long-term account payable 39,479,218.17 35,108,263.11
Long-term wages payable 181,980,293.94 58,392,053.61
Accrual liability
Deferred income 328,204,476.73 365,116,022.98
Deferred income tax liabilities 30,653,933.12 22,566,051.72
Other non-current liabilities
Total non-current liabilities 583,368,562.93 481,182,391.42
Total liabilities 8,556,229,489.19 6,473,694,875.11
Owner’s equity:
Share capital 1,008,950,570.00 1,008,950,570.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve 3,294,242,368.28 3,391,527,806.33
Less: Inventory shares 303,627,977.74
Other comprehensive income 13,916,619.47 134,871.67
Reasonable reserve 2,333,490.03 3,247,757.06
Surplus public reserve 510,100,496.00 510,100,496.00
Provision of general risk
Retained profit 13,756,102,424.62 12,076,443,635.56
Total owner’ s equity attributable to parent company 18,282,017,990.66 16,990,405,136.62
Minority interests 512,447,908.36 494,248,174.05
Total owner’ s equity 18,794,465,899.02 17,484,653,310.67
Total liabilities and owner’ s equity 27,350,695,388.21 23,958,348,185.78
Legal Representative: Wang Xiaodong
Person in charge of accounting works: Ou Jianbin
Person in charge of accounting institute: Ou Jianbin
2. Balance Sheet of Parent Company
In RMB
Item December 31, 2020 December 31, 2019
Current assets:
Monetary funds 1,157,684,053.05 965,770,877.82
Trading financial assets 3,452,348,980.19 3,758,789,072.68
Derivative financial assets
Note receivable 422,246,979.39 202,403,993.13
Account receivable 982,782,279.22 768,500,929.93
Receivable financing
Accounts paid in advance 75,650,090.49 89,116,730.45
Other account receivable 197,335,714.63 250,014,956.74
Including: Interest receivable 897,777.78 804,929.68
Dividend receivable 1,070,000.00
Inventories 725,276,241.43 565,144,234.49
Contractual assets
Assets held for sale
Non-current assets maturing within one year
Other current assets 2,057,772,839.50 938,616,881.51
Total current assets 9,071,097,177.90 7,538,357,676.75
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments 5,978,128,303.88 6,331,363,630.04
Investment in other equity instrument 209,108,000.00 209,108,000.00
Other non-current financial assets 1,805,788,421.00 1,043,589,987.43
Investment real estate
Fixed assets 1,758,198,856.53 1,646,333,216.50
Construction in progress 154,741,266.85 136,573,912.28
Productive biological assets
Oil and natural gas assets
Right-of-use assets
Intangible assets 208,112,706.57 203,663,423.60
Research and development costs
Goodwill
Long-term deferred expenses
Deferred income tax assets 76,508,392.85 105,137,877.84
Other non-current assets 117,013,906.01 172,646,721.05
Total non-current assets 10,307,599,853.69 9,848,416,768.74
Total assets 19,378,697,031.59 17,386,774,445.49
Current liabilities
Short-term borrowings 102,088,888.89 116,126,459.33
Trading financial liability
Derivative financial liability
Notes payable 448,901,718.36 284,054,137.00
Account payable 1,265,845,068.26 930,273,146.35
Accounts received in advance 12,010,730.30
Contractual liability 6,209,575.73
Wage payable 216,870,819.60 213,626,754.45
Taxes payable 32,974,322.59 56,540,307.59
Other accounts payable 339,096,991.12 11,976,576.21
Including: Interest payable
Dividend payable
Liability held for sale
Non-current liabilities due within one year
Other current liabilities 182,611,991.54
Total current liabilities 2,594,599,376.09 1,624,608,111.23
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual capital securities
Lease liability
Long-term account payable
Long term employee compensation payable 176,245,345.03 50,058,386.76
Accrued liabilities
Deferred income 285,714,239.98 322,971,778.82
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 461,959,585.01 373,030,165.58
Total liabilities 3,056,558,961.10 1,997,638,276.81
Owners’ equity:
Share capital 1,008,950,570.00 1,008,950,570.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital public reserve 3,407,732,016.61 3,488,221,286.39
Less: Inventory shares 303,627,977.74
Other comprehensive income
Special reserve
Surplus reserve 510,100,496.00 510,100,496.00
Retained profit 11,698,982,965.62 10,381,863,816.29
Total owner’s equity 16,322,138,070.49 15,389,136,168.68
Total liabilities and owner’s equity 19,378,697,031.59 17,386,774,445.49
3. Consolidated Profit Statement
In RMB
Item 2020 2019
I. Total operating income 12,883,826,306.60 8,784,356,960.30
Including: Operating income 12,883,826,306.60 8,784,356,960.30
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost 12,193,088,999.51 7,870,700,853.45
Including: Operating cost 10,429,284,441.97 6,670,354,380.54
Interest expense
Commission charge and commission expense
Cash surrender value
Net amount of expense of compensation
Net amount of withdrawal of insurance contract reserve
Bonus expense of guarantee slip
Reinsurance expense
Tax and extras 65,323,781.87 66,634,636.66
Sales expense 406,353,445.10 259,650,752.33
Administrative expense 782,824,422.63 514,028,451.76
R&D expense 532,581,209.78 417,924,908.28
Financial expense -23,278,301.84 -57,892,276.12
Including: Interest expenses 11,466,886.33 21,770,516.39
Interest income 51,622,216.58 79,299,239.77
Add: other income 80,342,497.11 91,170,663.57
Investment income (Loss is listed with “-”) 1,964,805,688.57 1,614,540,714.83
Including: Investment income on affiliated company and joint
1,659,752,704.14 1,378,264,061.18
venture
The termination of income recognition for financial assets
-946,468.33 -2,214,159.11
measured by amortized cost(Loss is listed with “-”)
Exchange income (Loss is listed with “-”)
Net exposure hedging income (Loss is listed with “-”)
Income from change of fair value (Loss is listed with “-”) 383,325,765.19 25,019,666.32
Loss of credit impairment (Loss is listed with “-”) -11,184,647.60 -52,825,875.25
Losses of devaluation of asset (Loss is listed with “-”) -178,837,472.85 -169,460,299.73
Income from assets disposal (Loss is listed with “-”) 11,454,408.60 32,154,460.21
III. Operating profit (Loss is listed with “-”) 2,940,643,546.11 2,454,255,436.80
Add: Non-operating income 66,467,021.62 2,413,561.54
Less: Non-operating expense 4,158,888.17 6,126,427.17
IV. Total profit (Loss is listed with “-”) 3,002,951,679.56 2,450,542,571.17
Less: Income tax expense 180,215,749.00 147,805,810.06
V. Net profit (Net loss is listed with “-”) 2,822,735,930.56 2,302,736,761.11
(i) Classify by business continuity
1.continuous operating net profit (net loss listed with ‘-”) 2,822,735,930.56 2,302,736,761.11
2.termination of net profit (net loss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to owner’s of parent company 2,772,769,377.96 2,268,026,432.78
2.Minority shareholders’ gains and losses 49,966,552.60 34,710,328.33
VI. Net after-tax of other comprehensive income 13,839,596.07 203,603.86
Net after-tax of other comprehensive income attributable to owners of
13,781,747.80 134,871.67
parent company
(I) Other comprehensive income items which will not be reclassified
subsequently to profit of loss
1.Changes of the defined benefit plans that re-measured
2.Other comprehensive income under equity method that cannot be
transfer to gain/loss
3.Change of fair value of investment in other equity instrument
4.Fair value change of enterprise's credit risk
5. Other
(ii) Other comprehensive income items which will be reclassified
13,781,747.80 134,871.67
subsequently to profit or loss
1.Other comprehensive income under equity method that can transfer
to gain/loss
2.Change of fair value of other debt investment
3.Amount of financial assets re-classify to other comprehensive
income
4.Credit impairment provision for other debt investment
5.Cash flow hedging reserve
6.Translation differences arising on translation of foreign currency
13,781,747.80 134,871.67
financial statements
7.Other
Net after-tax of other comprehensive income attributable to minority
57,848.27 68,732.19
shareholders
VII. Total comprehensive income 2,836,575,526.63 2,302,940,364.97
Total comprehensive income attributable to owners of parent
2,786,551,125.76 2,268,161,304.45
Company
Total comprehensive income attributable to minority shareholders 50,024,400.87 34,779,060.52
VIII. Earnings per share:
(i) Basic earnings per share 2.79 2.25
(ii) Diluted earnings per share 2.79 2.25
As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged party before
combination while 0 Yuan achieved last period
Legal Representative: Wang Xiaodong
Person in charge of accounting works: Ou Jianbin
Person in charge of accounting institute: Ou Jianbin
4. Profit Statement of Parent Company
In RMB
Item 2020 2019
I. Operating income 4,536,417,803.79 3,832,925,360.42
Less: Operating cost 3,236,311,612.73 2,641,612,915.27
Taxes and surcharge 38,086,034.27 31,863,942.28
Sales expenses 126,442,956.05 52,567,986.14
Administration expenses 533,649,297.97 292,983,915.45
R&D expenses 205,001,982.50 197,574,348.21
Financial expenses -34,275,071.44 -71,470,479.91
Including: interest expenses 4,163,923.00 6,984,512.71
Interest income 40,948,820.72 74,450,739.86
Add: other income 58,782,085.85 67,874,015.41
Investment income (Loss is listed with “-”) 1,816,759,403.42 1,646,209,064.39
Including: Investment income on affiliated Company and joint
1,457,471,604.06 1,310,687,436.86
venture
The termination of income recognition for financial assets
measured by amortized cost (Loss is listed with “-”)
Net exposure hedging income (Loss is listed with “-”)
Changing income of fair value (Loss is listed with “-”) 383,241,806.28 22,923,064.68
Loss of credit impairment (Loss is listed with “-”) 2,076,529.99 -6,132,833.36
Losses of devaluation of asset (Loss is listed with “-”) -82,232,381.43 -43,916,712.41
Income on disposal of assets (Loss is listed with “-”) -520,470.69 1,887,302.76
II. Operating profit (Loss is listed with “-”) 2,609,307,965.13 2,376,636,634.45
Add: Non-operating income 30,937,706.44 562,276.63
Less: Non-operating expense 3,493,103.39 3,810,717.52
III. Total Profit (Loss is listed with “-”) 2,636,752,568.18 2,373,388,193.56
Less: Income tax 162,713,161.17 143,606,161.28
IV. Net profit (Net loss is listed with “-”) 2,474,039,407.01 2,229,782,032.28
(i)continuous operating net profit (net loss listed with ‘-”) 2,474,039,407.01 2,229,782,032.28
(ii) termination of net profit (net loss listed with ‘-”)
V. Net after-tax of other comprehensive income
(I) Other comprehensive income items which will not be reclassified
subsequently to profit of loss
1.Changes of the defined benefit plans that re-measured
2.Other comprehensive income under equity method that cannot be
transfer to gain/loss
3.Change of fair value of investment in other equity instrument
4.Fair value change of enterprise's credit risk
5. Other
(II) Other comprehensive income items which will be reclassified
subsequently to profit or loss
1.Other comprehensive income under equity method that can transfer
to gain/loss
2.Change of fair value of other debt investment
3.Amount of financial assets re-classify to other comprehensive
income
4.Credit impairment provision for other debt investment
5.Cash flow hedging reserve
6.Translation differences arising on translation of foreign currency
financial statements
7.Other
VI. Total comprehensive income 2,474,039,407.01 2,229,782,032.28
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share
5. Consolidated Cash Flow Statement
In RMB
Item 2020 2019
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services 11,908,396,653.71 8,145,939,987.84
Net increase of customer deposit and interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Net increase of insured savings and investment
Cash received from interest, commission charge and commission
Net increase of capital borrowed
Net increase of returned business capital
Net cash received by agents in sale and purchase of securities
Write-back of tax received 32,138,413.08 51,722,970.47
Other cash received concerning operating activities 102,573,818.52 143,912,897.80
Subtotal of cash inflow arising from operating activities 12,043,108,885.31 8,341,575,856.11
Cash paid for purchasing commodities and receiving labor service 8,277,296,527.38 5,020,827,379.58
Net increase of customer loans and advances
Net increase of deposits in central bank and interbank
Cash paid for original insurance contract compensation
Net increase of capital lent
Cash paid for interest, commission charge and commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers 1,295,921,487.63 1,222,358,828.87
Taxes paid 788,150,479.38 501,167,008.38
Other cash paid concerning operating activities 899,929,156.91 548,552,586.05
Subtotal of cash outflow arising from operating activities 11,261,297,651.30 7,292,905,802.88
Net cash flows arising from operating activities 781,811,234.01 1,048,670,053.23
II. Cash flows arising from investing activities:
Cash received from recovering investment 8,051,178,224.52 11,384,917,612.00
Cash received from investment income 2,462,910,424.30 1,230,657,039.85
Net cash received from disposal of fixed, intangible and other long-term
42,851,678.36 147,609,697.19
assets
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities 65,102,250.70 70,025,432.83
Subtotal of cash inflow from investing activities 10,622,042,577.88 12,833,209,781.87
Cash paid for purchasing fixed, intangible and other long-term assets 492,683,539.12 589,522,818.28
Cash paid for investment 9,246,030,000.00 13,384,156,157.81
Net increase of mortgaged loans
Net cash received from subsidiaries and other units obtained 297,302,758.31 49,930,740.75
Other cash paid concerning investing activities 14,579,308.94 25,115,357.50
Subtotal of cash outflow from investing activities 10,050,595,606.37 14,048,725,074.34
Net cash flows arising from investing activities 571,446,971.51 -1,215,515,292.47
III. Cash flows arising from financing activities
Cash received from absorbing investment 312,640,853.85 14,022,428.73
Including: Cash received from absorbing minority shareholders’
10,161,653.85 14,022,428.73
investment by subsidiaries
Cash received from loans 395,691,406.43 809,517,778.36
Other cash received concerning financing activities 5,730,135.13 845,291.11
Subtotal of cash inflow from financing activities 714,062,395.41 824,385,498.20
Cash paid for settling debts 371,154,665.80 841,746,769.02
Cash paid for dividend and profit distributing or interest paying 1,120,464,009.41 1,258,933,561.00
Including: Dividend and profit of minority shareholder paid by
15,748,768.80 26,271,705.11
subsidiaries
Other cash paid concerning financing activities 449,251,421.46 146,064,936.00
Subtotal of cash outflow from financing activities 1,940,870,096.67 2,246,745,266.02
Net cash flows arising from financing activities -1,226,807,701.26 -1,422,359,767.82
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate -2,003,139.41 5,029,521.42
V. Net increase of cash and cash equivalents 124,447,364.85 -1,584,175,485.64
Add: Balance of cash and cash equivalents at the period -begin 820,498,653.85 2,404,674,139.49
VI. Balance of cash and cash equivalents at the period -end 944,946,018.70 820,498,653.85
6. Cash Flow Statement of Parent Company
In RMB
Item 2020 2019
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services 4,470,039,778.75 3,928,802,469.74
Write-back of tax received
Other cash received concerning operating activities 61,033,856.80 77,926,941.80
Subtotal of cash inflow arising from operating activities 4,531,073,635.55 4,006,729,411.54
Cash paid for purchasing commodities and receiving labor service 2,312,159,843.14 2,163,992,101.67
Cash paid to/for staff and workers 730,528,257.00 645,107,564.57
Taxes paid 562,371,147.42 320,098,914.24
Other cash paid concerning operating activities 341,484,021.47 180,660,925.40
Subtotal of cash outflow arising from operating activities 3,946,543,269.03 3,309,859,505.88
Net cash flows arising from operating activities 584,530,366.52 696,869,905.66
II. Cash flows arising from investing activities:
Cash received from recovering investment 7,324,178,224.52 10,054,917,612.00
Cash received from investment income 2,434,385,770.96 1,289,170,321.39
Net cash received from disposal of fixed, intangible and other long-term
810,004.53 42,777,932.53
assets
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities 214,831,510.69 171,801,850.24
Subtotal of cash inflow from investing activities 9,974,205,510.70 11,558,667,716.16
Cash paid for purchasing fixed, intangible and other long-term assets 262,442,259.33 360,473,332.45
Cash paid for investment 8,853,827,446.85 11,870,526,196.52
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities 112,342,336.68 204,000,000.00
Subtotal of cash outflow from investing activities 9,228,612,042.86 12,434,999,528.97
Net cash flows arising from investing activities 745,593,467.84 -876,331,812.81
III. Cash flows arising from financing activities
Cash received from absorbing investment 302,479,200.00
Cash received from loans 102,000,000.00 231,500,000.00
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities 404,479,200.00 231,500,000.00
Cash paid for settling debts 116,000,000.00 227,500,000.00
Cash paid for dividend and profit distributing or interest paying 1,097,442,763.44 1,217,748,704.04
Other cash paid concerning financing activities 400,017,180.33
Subtotal of cash outflow from financing activities 1,613,459,943.77 1,445,248,704.04
Net cash flows arising from financing activities -1,208,980,743.77 -1,213,748,704.04
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate -2,070,408.32 5,250,115.02
V. Net increase of cash and cash equivalents 119,072,682.27 -1,387,960,496.17
Add: Balance of cash and cash equivalents at the period -begin 532,115,862.26 1,920,076,358.43
VI. Balance of cash and cash equivalents at the period -end 651,188,544.53 532,115,862.26
7. Statement of Changes in Owners’ Equity (Consolidated)
Current Period
In RMB
2020
Owners’ equity attributable to the parent Company
Other
equity
instrumen
t
Pe
Prov
rp
Pr ision
Item etu Less: Other Ot Minority
ef Reasonable Surplus of Total owners’ equity
Share capital al Capital reserve Inventory comprehensi Retained profit he Subtotal interests
er reserve reserve gene
ca Ot shares ve income r
re ral
pit he
d risk
al r
st
se
oc
cu
k
riti
es
I. Balance at
1,008,950,57 3,391,527,806. 510,100,496.0
the end of the 134,871.67 3,247,757.06 12,076,443,635.56 16,990,405,136.62 494,248,174.05 17,484,653,310.67
0.00 33 0
last year
Add:
Changes of
accounting
policy
Error
correction of
the last period
Enterprise
combine under
the same
control
Other
II. Balance at
1,008,950,57 3,391,527,806. 510,100,496.0
the beginning 134,871.67 3,247,757.06 12,076,443,635.56 16,990,405,136.62 494,248,174.05 17,484,653,310.67
0.00 33 0
of this year
III. Increase/
Decrease in
this year 303,627,97 13,781,747.
-97,285,438.05 -914,267.03 1,679,658,789.06 1,291,612,854.04 18,199,734.31 1,309,812,588.35
(Decrease is 7.74 80
listed with
“-”)
(i) Total
13,781,747.
comprehensiv 2,772,769,377.96 2,786,551,125.76 50,024,400.87 2,836,575,526.63
80
e income
(ii) Owners’
devoted and 303,627,97
-97,285,438.05 -400,913,415.79 -16,046,487.85 -416,959,903.64
decreased 7.74
capital
1.Common 302,479,20
-96,389,202.59 -398,868,402.59 25,079,496.04 -373,788,906.55
shares 0.00
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
6,280,461.58 6,280,461.58 204,375.92 6,484,837.50
with
share-based
payment
1,148,777.7
4. Other -7,176,697.04 -8,325,474.78 -41,330,359.81 -49,655,834.59
4
(III) Profit
-1,095,767,216.49 -1,095,767,216.49 -15,748,768.80 -1,111,515,985.29
distribution
1. Withdrawal
of surplus
reserves
2. Withdrawal
of general risk
provisions
3. Distribution
for owners (or -1,093,241,270.00 -1,093,241,270.00 -15,748,768.80 -1,108,990,038.80
shareholders)
4. Other -2,525,946.49 -2,525,946.49 -2,525,946.49
(IV) Carrying
forward
internal
owners’ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus
reserve
4．Carry-over
retained
earnings from
the defined
benefit plans
5．Carry-over
retained
earnings from
other
comprehensiv
e income
6. Other
(V) -914,267.03 -914,267.03 -29,409.91 -943,676.94
Reasonable
reserve
1. Withdrawal
in the report 21,673,368.09 21,673,368.09 2,158,529.38 23,831,897.47
period
2. Usage in
the report 22,587,635.12 22,587,635.12 2,187,939.29 24,775,574.41
period
(VI)Others 2,656,627.59 2,656,627.59 2,656,627.59
IV. Balance at
1,008,950,57 3,294,242,368. 303,627,97 13,916,619. 510,100,496.0
the end of the 2,333,490.03 13,756,102,424.62 18,282,017,990.66 512,447,908.36 18,794,465,899.02
0.00 28 7.74 47 0
report period
Last Period
In RMB
2019
Owners’ equity attributable to the parent Company
Other
equity
instrument
Prov
Perp
ision
Item etua Less: Other Ot Minority
Share Capital Reasonable Surplus of Total owners’ equity
l Inventor comprehensive Retained profit he Subtotal interests
capital Prefe reserve reserve reserve gene
capi Othe y shares income r
rred ral
tal r
stock risk
secu
ritie
s
I. Balance at
1,008,950, 3,416,022, 510,100,496.0
the end of the -19,809,442.95 1,618,490.50 10,996,945,870.13 15,913,828,778.82 538,142,268.53 16,451,971,047.35
570.00 795.14 0
last year
Add: Changes
of accounting 19,809,442.95 1,584,556.37 21,393,999.32 21,393,999.32
policy
Error
correction of
the last period
Enterprise
combine under
the same
control
Other
II. Balance at
1,008,950, 3,416,022, 510,100,496.0
the beginning 1,618,490.50 10,998,530,426.50 15,935,222,778.14 538,142,268.53 16,473,365,046.67
570.00 795.14 0
of this year
III. Increase/
Decrease in
this year -24,494,98
134,871.67 1,629,266.56 1,077,913,209.06 1,055,182,358.48 -43,894,094.48 1,011,288,264.00
(Decrease is 8.81
listed with
“-”)
(i) Total
comprehensiv 134,871.67 2,268,026,432.78 2,268,161,304.45 34,779,060.52 2,302,940,364.97
e income
(ii) Owners’
devoted and -24,494,98
567,732.83 -23,927,255.98 -52,813,665.23 -76,740,921.21
decreased 8.81
capital
1.Common
shares
14,022,428.73 14,022,428.73
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
-24,494,98
4. Other 567,732.83 -23,927,255.98 -66,836,093.96 -90,763,349.94
8.81
(III) Profit
-1,210,740,684.00 -1,210,740,684.00 -26,271,705.11 -1,237,012,389.11
distribution
1. Withdrawal
of surplus
reserves
2. Withdrawal
of general risk
provisions
3. Distribution
for owners (or -1,210,740,684.00 -1,210,740,684.00 -26,271,705.11 -1,237,012,389.11
shareholders)
4. Other
(IV) Carrying
forward
internal
owners’ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus
reserve
4．Carry-over
retained
earnings from
the defined
benefit plans
5．Carry-over
retained
earnings from
other
comprehensiv
e income
6. Other
(V)
Reasonable 1,061,533.73 1,061,533.73 412,215.34 1,473,749.07
reserve
1. Withdrawal
in the report 19,156,254.11 19,156,254.11 2,508,506.58 21,664,760.69
period
2. Usage in
the report 18,094,720.38 18,094,720.38 2,096,291.24 20,191,011.62
period
(VI)Others 20,627,460.28 20,627,460.28 20,627,460.28
IV. Balance at
1,008,950, 3,391,527, 510,100,496.0
the end of the 134,871.67 3,247,757.06 12,076,443,635.56 16,990,405,136.62 494,248,174.05 17,484,653,310.67
570.00 806.33 0
report period
8. Statement of Changes in Owners’ Equity (Parent Company)
Current Period
In RMB
2020
Other equity instrument Other
Item Perpetual Capital public Less: Inventory comprehe Reasonable Othe Total owners’
Share capital Preferred Surplus reserve Retained profit
capital Other reserve shares nsive reserve r equity
stock
securities income
I. Balance at the
1,008,950,570.00 3,488,221,286.39 510,100,496.00 10,381,863,816.29 15,389,136,168.68
end of the last year
Add: Changes
of accounting
policy
Error
correction of the
last period
Other
II. Balance at the
beginning of this 1,008,950,570.00 3,488,221,286.39 510,100,496.00 10,381,863,816.29 15,389,136,168.68
year
III. Increase/
Decrease in this
-80,489,269.78 303,627,977.74 1,317,119,149.33 933,001,901.81
year (Decrease is
listed with “-”)
(i) Total
comprehensive 2,474,039,407.01 2,474,039,407.01
income
(ii) Owners’
-80,489,269.78 303,627,977.74 -384,117,247.52
devoted and
decreased capital
1.Common shares
invested by -96,389,202.59 302,479,200.00 -398,868,402.59
shareholders
2. Capital invested
by holders of other
equity instruments
3. Amount
reckoned into
owners equity with 6,484,837.50 6,484,837.50
share-based
payment
4. Other 9,415,095.31 1,148,777.74 8,266,317.57
(III) Profit
-1,093,241,270.00 -1,093,241,270.00
distribution
1. Withdrawal of
surplus reserves
2. Distribution for
owners (or -1,093,241,270.00 -1,093,241,270.00
shareholders)
3. Other
(IV) Carrying
forward internal
owners’ equity
1. Capital reserves
conversed to
capital (share
capital)
2. Surplus reserves
conversed to
capital (share
capital)
3. Remedying loss
with surplus
reserve
4．Carry-over
retained earnings
from the defined
benefit plans
5．Carry-over
retained earnings
from other
comprehensive
income
6. Other
(V) Reasonable
-1,177,442.02 -1,177,442.02
reserve
1. Withdrawal in
5,849,756.55 5,849,756.55
the report period
2. Usage in the
7,027,198.57 7,027,198.57
report period
(VI)Others 1,177,442.02 -63,678,987.68 -62,501,545.66
IV. Balance at the
end of the report 1,008,950,570.00 3,407,732,016.61 303,627,977.74 510,100,496.00 11,698,982,965.62 16,322,138,070.49
period
Last period
In RMB
2019
Other equity instrument
Less: Other
Item Perpetual Capital public Reasonable Othe Total owners’
Share capital Preferred Inventor comprehensive Surplus reserve Retained profit
capital Other reserve reserve r equity
stock y shares income
securities
I. Balance at the end
1,008,950,570.00 3,488,221,286.39 -19,809,442.95 510,100,496.00 9,340,610,451.36 14,328,073,360.80
of the last year
Add: Changes of
19,809,442.95 1,584,556.37 21,393,999.32
accounting policy
Error correction
of the last period
Other
II. Balance at the
beginning of this 1,008,950,570.00 3,488,221,286.39 510,100,496.00 9,342,195,007.73 14,349,467,360.12
year
III. Increase/
Decrease in this
1,039,668,808.56 1,039,668,808.56
year (Decrease is
listed with “-”)
(i) Total
comprehensive 2,229,782,032.28 2,229,782,032.28
income
(ii) Owners’
devoted and
decreased capital
1.Common shares
invested by
shareholders
2. Capital invested
by holders of other
equity instruments
3. Amount reckoned
into owners equity
with share-based
payment
4. Other
(III) Profit
-1,210,740,684.00 -1,210,740,684.00
distribution
1. Withdrawal of
surplus reserves
2. Distribution for
owners (or -1,210,740,684.00 -1,210,740,684.00
shareholders)
3. Other
(IV) Carrying
forward internal
owners’ equity
1. Capital reserves
conversed to capital
(share capital)
2. Surplus reserves
conversed to capital
(share capital)
3. Remedying loss
with surplus reserve
4．Carry-over
retained earnings
from the defined
benefit plans
5．Carry-over
retained earnings
from other
comprehensive
income
6. Other
(V) Reasonable
reserve
1. Withdrawal in the
5,898,191.19 5,898,191.19
report period
2. Usage in the
5,898,191.19 5,898,191.19
report period
(VI)Others 20,627,460.28 20,627,460.28
IV. Balance at the
end of the report 1,008,950,570.00 3,488,221,286.39 510,100,496.00 10,381,863,816.29 15,389,136,168.68
period
Notes to Financial Statement
I. Basic information of the Company
1. Historical origin of the Company
By the approval of STGS (1992) No. 130 issued by Jiangsu Economic Restructuring Committee, Weifu
High-Technology Group Co., Ltd. (hereinafter referred to “the Company” or “Company”) was established as a
company of limited liability with funds raised from targeted sources, and registered at Wuxi Administration for
Industry & Commerce in October 1992. The original share capital of the Company totaled 115.4355 million
Yuan, including state-owned share capital amounting to 92.4355 million Yuan, public corporate share capital
amounting to 8 million Yuan and inner employee share capital amounting to 15 million Yuan.
Between year of 1994 and 1995, the Company was restructured and became a holding subsidiary of Wuxi
Weifu Group Co., Ltd (hereinafter referred to as “Weifu Group”).
By the approval of Jiangsu ERC and Shenzhen Securities Administration Office in August 1995, the Company
issued 68 million special ordinary shares (B-share) with value of 1.00 Yuan for each, and the total value of
those shares amounted to 68 million Yuan. After the issuance, the Company’s total share capital increased to
183.4355 million Yuan.
By the approval of CSRC in June 1998, the Company issued 120 million RMB-ordinary shares (A-share) at
Shenzhen Stock Exchange through on-line pricing and issuing. After the issuance, the total share capital of the
Company amounted to 303.4355 million Yuan.
In the middle of 1999, deliberated and approved by the Board and Shareholders’ General Meeting, the
Company implemented the plan of granting 3 bonus shares for each 10 shares. After that, the total share capital
of the Company amounted to 394.46615 million Yuan, of which state-owned shares amounted to 120.16615
million Yuan, public corporate shares 10.4 million Yuan, foreign-funded shares (B-share) 88.40 million Yuan,
RMB ordinary shares (A-share) 156 million Yuan and inner employee shares 19.5 million Yuan.
In the year 2000, by the approval of the CSRC and based upon the total share capital of 303.4355 million
shares after the issuance of A-share in June 1998, the Company allotted 3 shares for each 10 shares, with a
price of 10 Yuan for each allotted share. Actually 41.9 million shares was allotted, and the total share capital
after the allotment increased to 436.36615 million Yuan, of which state-owned corporate shares amounted to
121.56615 million Yuan, public corporate shares 10.4 million Yuan, foreign-funded shares (B-share) 88.4
million Yuan and RMB ordinary shares (A-share) 216 million Yuan.
31 / 146
In April 2005, Board of Directors of the Company has examined and approved 2004 Profit Pre-distribution
Plan, and examined and approved by 2004 Shareholders’ General Meeting , the Company distributed 3 shares
for each 10 shares to the whole shareholders totaling to 130,909,845 shares in 2005.
According to the Share Merger Reform Scheme of the Company that passed by related shareholders’ meeting
of Share Merger Reform and SGZF [2006] No.61 Reply on Questions about State-owned Equity Management
in Share Merger Reform of Weifu High-Technology Co., Ltd. issued by State-owned Assets Supervision &
Administration Commission of Jiangsu Province, the Weifu Group etc. 8 non-circulating shareholders arranged
pricing with granting 1.7 shares for each 10 shares to circulating A-share shareholders (totally granted
47,736,000 shares), so as to realize the originally non-circulating shares can be traded on market when
satisfied certain conditions, the scheme has been implemented on April 5, 2006.
On 27 May 2009, Weifu Group satisfied the consideration arrangement by dispatching 0.5 shares for each 10
shares based on the number of circulating A share as prior to Share Merger Reform, according to the aforesaid
Share Merger Reform, with an aggregate of 14,039,979 shares dispatched. Subsequent to implementation of
dispatch of consideration shares, Weifu Group then held 100,021,999 shares of the Company, representing
17.63% of the total share capital of the Company.
Pursuant to the document (XGZQ(2009)No.46) about Approval for Merger of Wuxi Weifu Group Co., Ltd. by
Wuxi Industry Development Group Co., Ltd. issued by the State-owned Assets Supervision and Administration
Commission of Wuxi City Government, Wuxi Industry Development Group Co., Ltd. (hereinafter referred to
as Wuxi Industry Group) acquired Weifu Group. After the merger, Weifu Group was then revoked, and its
assets and credits & debts were transferred to be under the name of Wuxi Industry Group. Accordingly, Wuxi
Industry Group became the first largest shareholder of the Company since then.
In accordance with the resolutions of shareholders' meeting and provisions of amended constitution, and
approved by [2012] No. 109 document of China Securities Regulatory Commission, in February 2012, the
Company issued RMB ordinary shares (A-share) of 112,858,000 shares to Wuxi Industry Groups and overseas
strategic investor privately, Robert Bosch Co., Ltd. (ROBERT BOSCHGMBH) (hereinafter referred to as
Robert Bosch Company), face value was ONE Yuan per share, added registered capital of RMB 112,858,000,
and the registered capital after change was RMB 680,133,995. Wuxi Industry Group is the first majority
shareholder of the Company, and Robert Bosch Company is the second majority shareholder of the Company.
In March 2013, the profit distribution pre-plan for year of 2012 was deliberated and approved by the Board,
and also passed in Annual General Meeting 2012 of the Company in May 2013. On basis of total share capital
680,133,995 shares, distribute 5-share for every 10 shares held by whole shareholders, 340,066,997 shares in
total are distributed. Total share capital of the Company amounting RMB 1,020,200,992 up to 31 December
2013.
32 / 146
Deliberated and approved by the company’s first extraordinary general meeting in 2015, the company has
repurchased 11,250,422 shares of A shares from August 26, 2015 to September 8, 2015, and has finished the
cancellation procedures for above repurchase shares in China Securities Depository and Clearing Corporation
Limited Shenzhen Branch on September 16, 2015; after the cancellation of repurchase shares, the company’s
paid-up capital (share capital) becomes 1,008,950,570 Yuan after the change.
2. Registered place, organization structure and head office of the Company
Registered place and head office of the Company: No.5 Huashan Road, Xinwu District, Wuxi
Unified social credit code: 91320200250456967N
The Company sets up Shareholders’ General Meeting, the Board of Directors (BOD) and the Board of
Supervisors (BOS)
The Company sets up Administration Department, Technology Centre, organization & personnel department,
Office of the Board, compliance department, IT department, Strategy & new business Department, market
development department, Party-masses Department, Finance Department, Purchase Department,
Manufacturing Quality Department, MS (Mechanical System) division, AC(Automobile Components) division
and DS (Diesel System ) division etc. and subsidiaries such as Wuxi Weifu Leader Catalytic Converter Co.,
Ltd., Nanjing Weifu Jinning Co., Ltd., IRD Fuel Cells A/S and Borit NV etc.
3. Business nature and major operation activities of the Company
Operation scope of parent company: Technology development and consulting service in the machinery
industry; manufacture of engine fuel oil system products, fuel oil system testers and equipment, manufacturing
of auto electronic parts, automotive electrical components, non-standard equipment, non-standard knife tool
and exhaust after-treatment system; sales of the general machinery, hardware & electrical equipment, chemical
products & raw materials (excluding hazardous chemicals), automobile components and vehicles (excluding
nine-seat passenger car); internal combustion engine maintenance; leasing of the own houses; import and
export business in respect of diversified commodities and technologies (other than those commodities and
technologies limited or forbidden by the State for import and export) by self-operation and works as agent for
such business. Research and test development of engineering and technical; R&D of the energy recovery
system; manufacture of auto components and accessories; general equipment manufacturing (excluding special
equipment manufacturing), (any projects that needs to be approved by laws can only be carried out after
getting approval by relevant authorities)
Major subsidiaries respectively activate in production and sales of engine accessories, automobile components,
mufflers, purifiers and fuel cell components etc.
33 / 146
4. Relevant party offering approval reporting of financial statements and date thereof
Financial statements of the Company were approved by the Board of Directors for reporting dated 16 April
2021.
5. Scope of consolidate financial statement
Registered
Shareholding ratio
Short (%) Proportion capital Statement
Name of subsidiary name of of votes (in 10 Business scope consolidat
Indire
subsidiary Directly (%) thousand e (Y/N)
ctly
Yuan)
Nanjing Weifu Jinning Weifu Internal-combustion
80.00 -- 80.00 34,628.70 Y
Co., Ltd. Jinning engine accessories
Wuxi Weifu Leader
Weifu
Catalytic Converter Co., 94.81 -- 94.81 50,259.63 Purifier and muffler Y
Leader
Ltd.
Weifu Mashan Pump Weifu Internal-combustion
100.00 -- 100.00 16,500 Y
Glib Co., Ltd. Mashan engine accessories
Wuxi Weifu Chang’an Weifu Internal-combustion
100.00 -- 100.00 21,000 Y
Co., Ltd. Chang’an engine accessories
Wuxi Weifu Weifu
International Trade Co. Internatio 100.00 -- 100.00 3,000 Trade Y
Ltd. nal Trade
Wuxi Weifu Schmidt
Weifu Internal-combustion
Power System Spare 66.00 -- 66.00 7,600 Y
Schmidt engine accessories
Parts Co., Ltd.
Ningbo Weifu Tianli
Weifu Internal-combustion
Supercharging 98.83 1.17 100.00 11,136 Y
Tianli engine accessories
Technique Co., Ltd.
Wuxi Weifu Autocam
Weifu Automobile
Fine Machinery Co. 51.00 -- 51.00 USD2,110 Y
Autocam components
Ltd.
Wuxi Weifu Leader Weifu
Catalytic Purifier Leader -- 60.00 60.00 1,000 Purifier and muffler Y
(Wuhan) Co., Ltd. (Wuhan)
Weifu
Weifu Leader
Leader 100.0
(Chongqing)Automobil -- 100.00 5,000 Purifier and muffler Y
(Chongqin 0
e components Co., Ltd.
g)
Nanchang Weifu Leader Weifu
Automobile Leader 100.0
-- 100.00 5,000 Purifier and muffler Y
Components Co., Ltd (Nanchan 0
g)
Wuxi Weifu Autosmart
Autosmart
Seating System Co., -- 66.00 66.00 10,000 Smart car device Y
Seating
Ltd.
Wuxi Weifu Electric Weifu
Drive Technology Co., Electric 80.00 -- 80.00 USD2,000 Wheel motor Y
Ltd. Drive
Weifu Holding ApS SPV 100.00 -- 100.00 DKK38 Investment Y
100.0 Fuel cell
IRD Fuel Cells A/S IRD -- 100.00 DKK8,560 Y
0 components
IRD FUEL CELLS IRD 100.0 Fuel cell
-- 100.00 USD300 Y
LLC America 0 components
100.0 Fuel cell
Borit NV Borit -- 100.00 EURO316.09 Y
0 components
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Registered
Shareholding ratio
Short (%) Proportion capital Statement
Name of subsidiary name of of votes (in 10 Business scope consolidat
Indire
subsidiary Directly (%) thousand e (Y/N)
ctly
Yuan)
100.0 Fuel cell
Borit Inc. Borit Inc. -- 100.00 USD0.1 Y
0 components
Compared with the previous period, the scope of consolidated financial statement have increase the follow enterprises including
Autosmart Seating, Borit and Borit Inc. Of which, the Autosmart Seating was the subsidiary jointly established by the Company
and Qiqiong Automobile Technology (Shanghai) Co., Ltd. Found more in the description of 5. Other reasons of change of
consolidation scope carried in Note VI; Borit is the subsidiary acquired in the Period through SPV, found more in the description
of 1.Enterprise combine not under the same control carried in Note VI; and Borit Inc. is the wholly-owned subsidiary of Borit
established in the U.S.A.
On 1 January 2020, the former wholly-owned subsidiary - Wuxi Weifu ITM Supercharging Technique Co., Ltd was merger by
absorption.
II. Basis of preparation of financial statements
1. Preparation base
The financial statement were stated in compliance with Accounting Standard for Business Enterprises –Basic
Norms issued by Ministry of Finance, the specific 42 accounting rules revised and issued dated 15 February
2006 and later, the Application Instruments of Accounting Standards and interpretation on Accounting
standards and other relevant regulations (together as “Accounting Standards for Business Enterprise”), as well
as the Compilation Rules for Information Disclosure by Companies Offering Securities to the Public No.15 –
General Provision of Financial Report (Amended in 2014) issued by CSRC in respect of the actual
transactions and proceedings, on a basis of ongoing operation.
In line with relevant regulations of Accounting Standards of Business Enterprise, accounting of the Company
is on accrual basis. Except for certain financial instruments, the financial statement measured on historical cost.
Assets have impairment been found, corresponding depreciation reserves shall accrual according to relevant
rules.
2. Going concern
The Company comprehensively assessed the available information, and there are no obvious factors that
impact sustainable operation ability of the Company within 12 months since end of the reporting period.
III. Major Accounting Policies and Estimation
Specific accounting policies and estimation attention:
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The Company and its subsidiaries are mainly engaged in the manufacture and sales of engine fuel oil system
products, automobile components, mufflers, purifiers and fuel cell components etc., in line with the real
operational characteristics and relevant accounting standards, many specific accounting policies and estimation
have been formulated for the transactions and events with revenue recognized concerned. As for the
explanation on major accounting judgment and estimation, found more in Note III- 31.Critical accounting
judgments and estimates
1. Statement on observation of Accounting Standard for Business Enterprises
Financial statements prepared by the Company were in accordance with requirements of Accounting Standard
for Business Enterprises, which truly and completely reflected the financial information of the Company dated
31 December 2020, such as financial status, operation achievements and cash flow for the year of 2020.
2. Accounting period
Accounting period of the Company consist of annual and mid-term, mid-term refers to the reporting period
shorter than one annual accounting year. The company adopts Gregorian calendar as accounting period,
namely form each 1 January to 31 December.
3. Business cycles
Normal business cycle is the period from purchasing assets used for process by the Company to the cash and
cash equivalent achieved. The Company’s normal business cycle was one-year (12 months).
4. Recording currency
The Company’s reporting currency is the RMB Yuan.
5. Accounting Treatment Method for Business Combinations under the same/different control
Business combination is the transaction or events that two or two above independent enterprises combined as a
reporting entity. Business combination including enterprise combined under the same control and business
combined under different control.
(1) The business combination under the same control
Enterprise combination under the same control is the enterprise who take part in the combination are have the
same ultimate controller or under the same controller, the control is not temporary. The assets and liability
acquired by combining party are measured by book value of the combined party on combination date. Balance
of net asset’s book value acquired by combining party and combine consideration paid (or total book value of
the shares issued), shall adjusted capital reserve (share premium); if the capital reserves (share premium) is not
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enough for deducted, adjusted for retained earnings. Vary directly expenses occurred for enterprise
combination, the combining party shall reckoned into current gains/losses while occurring. Combination day is
the date when combining party obtained controlling rights from the combined party.
(2) Combine not under the same control
A business combination not involving entities under common control is a business combination in which all of
the combining entities are not ultimately controlled by the same party or parties both before and after the
combination. As a purchaser, fair value of the assets (equity of purchaser held before the date of purchasing
included) for purchasing controlling right from the purchaser, the liability occurred or undertake on purchasing
date less the fair value of identifiable net assets of the purchaser obtained in combination, recognized as
goodwill if the results is positive; if the number is negative, the acquirer shall firstly review the measurement
of the fair value of the identifiable assets obtained, liabilities incurred and contingent liabilities incurred, as
well as the combination costs. After that, if the combination costs are still lower than the fair value of the
identifiable net assets obtained, the acquirer shall recognize the difference as the profit or loss in the current
period. Other directly expenses cost for combination shall be reckoned into current gains/losses. Difference of
the fair value of assets paid and its book values, reckoned into current gains/losses. On purchasing date, the
identifiable assets, liability or contingency of the purchaser obtained by the Company recognized by fair value,
that required identification conditions; Acquisition date refers to the date on which the acquirer effectively
obtains control of the purchaser.
6. Preparation method for consolidated financial statement
(1) Recognition principle of consolidated scope
On basis of the financial statement of the parent company and owned subsidiaries, prepared consolidated
statement in line with relevant information. The scope of consolidation of consolidated financial statements is
ascertained on the basis of effective control. Once certain elements involved in the above definition of control
change due to changes of relevant facts or circumstances, the Company will make separate assessment.
(2) Basis of control
Control is the right to govern an invested party so as to obtain variable return through participating in the
invested party’s relevant activities and the ability to affect such return by use of the aforesaid right over the
invested party. Relevant activates refers to activates have major influence on return of the invested party’s.
(3) Consolidation process
Subsidiaries are consolidated from the date on which the company obtains their actual control, and are
de-consolidated from the date that such control ceases. All significant inter-group balances, investment,
transactions and unrealized profits are eliminated in the consolidated financial statements. For subsidiaries
being disposed, the operating results and cash flows prior to the date of disposal are included in the
consolidated income statement and consolidated cash flow statement; for subsidiaries disposed during the
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period, the opening balances of the consolidated balance sheet would not be restated. For subsidiaries acquired
from a business combination not under common control, their operating results and cash flows subsequent to
the acquisition date are included in the consolidated income statement and consolidated cash flow statement,
and the opening balances and comparative figures of the consolidated balance sheet would not be restated. For
subsidiaries acquired from a business combination under common control, their operating results and cash
flows from the date of commencement of the accounting period in which the combination occurred to the date
of combination are included in the consolidated income statement and consolidated cash flow statement, and
the comparative figures of the consolidated balance sheet would be restated.
In preparing the consolidated financial statements, where the accounting policies or the accounting periods are
inconsistent between the company and subsidiaries, the financial statements of subsidiaries are adjusted in
accordance with the accounting policies and accounting period of the company.
Concerning the subsidiary obtained under combination with different control, adjusted several financial
statement of the subsidiary based on the fair value of recognizable net assets on purchased day while financial
statement consolidation; concerning the subsidiary obtained under combination with same control, considered
current status of being control by ultimate controller for consolidation while financial statement consolidation.
The unrealized gains and losses from the internal transactions occurred in the assets the Company sold to the
subsidiaries fully offset "the net profit attributable to the owners of the parent company". The unrealized gains
and losses from the internal transactions occurred in the assets the subsidiaries sold to the Company are
distributed and offset between "the net profit attributable to the owners of the parent company" and "minority
interest" according to the distribution ratio of the Company to the subsidiary. The unrealized gains and losses
from the internal transactions occurred in the assets sold among the subsidiaries are distributed and offset
between "the net profit attributable to the owners of the parent company" and "minority interest" according to
the distribution ratio of the Company to the subsidiary of the seller.
The share of the subsidiary’s ownership interest not attributable to the Company is listed as “minority interest”
item under the ownership interest in the consolidated balance sheet. The share of the subsidiary’s current profit
or loss attributable to the minority interests is listed as "minority interest" item under the net profit item in the
consolidated income statement. The share of the subsidiary’s current consolidated income attributable to the
minority interests is listed as the “total consolidated income attributable to the minority shareholders” item
under the total consolidated income item in the consolidated income statement. If there are minority
shareholders, add the "minority interests" item in the consolidated statement of change in equity to reflect the
changes of the minority interests. If the losses of the current period shared by a subsidiary’s minority
shareholders exceed the share that the minority shareholders hold in the subsidiary ownership interest in the
beginning of the period, the balance still charges against the minority interests.
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When the control over a subsidiary is ceased due to disposal of a portion of an interest in a subsidiary, the fair
value of the remaining equity interest is re-measured on the date when the control ceased. The difference
between the sum of the consideration received from disposal of equity interest and the fair value of the
remaining equity interest, less the net assets attributable to the company since the acquisition date, is
recognized as the investment income from the loss of control. Other comprehensive income relating to original
equity investment in subsidiaries shall be treated on the same basis as if the relevant assets or liabilities were
disposed of by the purchaser directly when the control is lost, namely be transferred to current investment
income other than the relevant part of the movement arising from re-measuring net liabilities or net assets
under defined benefit scheme by the original subsidiary. Subsequent measurement of the remaining equity
interests shall be in accordance with relevant accounting standards such as Accounting Standards for business
Enterprises 2 – Long-term Equity Investments or Accounting Standards for business Enterprises 22 –
Financial Instruments Recognition and Measurement.
The company shall determine whether loss of control arising from disposal in a series of transactions should be
regarded as a bundle of transactions. When the economic effects and terms and conditions of the disposal
transactions met one or more of the following situations, the transactions shall normally be accounted for as a
bundle of transactions: ①The transactions are entered into after considering the mutual consequences of each
individual transaction; ② The transactions need to be considered as a whole in order to achieve a deal in
commercial sense; ③The occurrence of an individual transaction depends on the occurrence of one or more
individual transactions in the series; ④ The result of an individual transaction is not economical, but it would
be economical after taking into account of other transactions in the series. When the transactions are not
regarded as a bundle of transactions, the individual transactions shall be accounted as “disposal of a portion of
an interest in a subsidiary which does not lead to loss of control” and “disposal of a portion of an interest in a
subsidiary which lead to loss of control”. When the transactions are regarded as a bundle of transactions, the
transactions shall be accounted as a single disposal transaction; however, the difference between the
consideration received from disposal and the share of net assets disposed in each individual transactions before
loss of control shall be recognized as other comprehensive income, and reclassified as profit or loss arising
from the loss of control when control is lost.
7. Joint arrangement classification and accounting treatment for joint operations
In accordance with the Company’s rights and obligation under a joint arrangement, the Company classifies
joint arrangements into: joint ventures and joint operations.
The company confirms the following items related to the share of interests in its joint operations, and in
accordance with the provisions of the relevant accounting standards for accounting treatment:
(1) Recognize the assets held solely by the Company, and recognize assets held jointly by the Company in
appropriation to the share of the Company;
(2) Recognize the obligations assumed solely by the Company, and recognize obligations assumed jointly by
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the Company in appropriation to the share of the Company;
(3) Recognize revenue from disposal of the share of joint operations of the Company;
(4) Recognize fees solely occurred by Company;
(5) Recognize fees from joint operations in appropriation to the share of the Company.
8. Recognition standards for cash and cash equivalent
Cash refers to stock cash, savings available for paid at any time; cash and cash equivalent refers to the cash
held by the Company with short terms(expired within 3 months since purchased), and liquid and easy to
transfer as known amount and investment with minor variation in risks.
9. Foreign currency business and conversion
The occurred foreign currency transactions are converted into the recording currency in accordance with the
middle rate of the market exchange rate published by the People's Bank of China on the transaction date.
Thereinto, the occurred foreign currency exchange or transactions involved in the foreign currency exchange
are converted in accordance with the actual exchange rate in the transactions.
At the balance sheet date, the account balance of the foreign currency monetary assets and liabilities is
converted into the recording currency amount in accordance with the middle rate of the market exchange rate
published by the People's Bank of China on the transaction date. The balance between the recording currency
amount converted according to exchange rate at the balance sheet date and the original recording currency
amount is disposed as the exchange gains or losses. Thereinto, the exchange gains or losses occurred in the
foreign currency loans related to the purchase and construction of fixed assets are disposed according to the
principle of capitalization of borrowing costs; the exchange gains and losses occurred during the start-up are
included in the start-up costs; the rest is included in the current financial expenses.
At the balance sheet date, the foreign currency non-monetary items measured with the historical costs are
converted in accordance with the middle rate of the market exchange rate published by the People's Bank of
China on the transaction date without changing its original recording currency amount; the foreign currency
non-monetary items measured with the fair value are converted in accordance with the middle rate of the
market exchange rate published by the People's Bank of China on the fair value date, and the generated
exchange gains and losses are included in the current profits and losses as the gains and losses from changes in
fair value.
The following displays the methods for translating financial statements involving foreign operations into the
statements in RMB: The asset and liability items in the balance sheets for overseas operations are translated at
the spot exchange rates on the balance sheet date. Among the owners’ equity items, the items other than
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“undistributed profits” are translated at the spot exchange rates of the transaction dates. The income and
expense items in the income statements of overseas operations are translated at the average exchange rates of
the transaction dates. The exchange difference arising from the above mentioned translation are recognized in
other comprehensive income and is shown separately under owner’ equity in the balance sheet; such exchange
difference will be reclassified to profit or loss in current year when the foreign operation is disposed according
to the proportion of disposal.
The cash flows of overseas operations are translated at the average exchange rates on the dates of the cash
flows. The effect of exchange rate changes on cash is presented separately in the cash flow statement.
10. Financial instrument
Financial instrument is the contract that taken shape of the financial asses for an enterprise and of the financial
liability or equity instrument for other units.
(1) Recognition and termination of financial instrument
A financial asset or liability is recognized when the group becomes a party to a financial instrument contract.
The recognition of a financial assets shall be terminated if it meets one of the following conditions:
① the contractual right to receive the cash flow of the financial assets terminates; and
② the financial assets is transferred and the company transfers substantially all the risks and rewards of
ownership of the financial asset to the transferring party;
③the financial asset was transferred and control, although the company has neither transferred nor retained
almost all the risks and rewards of the ownership of a financial asset, it relinquishes control over the financial
asset.
If all or part of the current obligations of a financial liability has been discharged, the financial liability or part of
it is terminated for recognition. When the Company (debtor) and the creditor sign an agreement to replace the
existing financial liabilities with new financial liabilities, and the new financial liabilities and the existing
financial liabilities are substantially different from the contract terms, terminated the recognition of the existing
financial liabilities and recognize the new financial liabilities at the same time.
Financial assets are traded in the normal way and their accounting recognition and terminated the recognition of
proceed on a trade date basis.
(2) Classification and measurement of financial assets
At the initial recognition, according to the business model of managing financial assets and the contractual cash
flow characteristics of financial assets, the Company classifies the financial assets into the financial assets
measured at amortized cost, the financial assets measured at fair value and whose changes are included in other
comprehensive income, and the financial assets measured at fair value and whose changes are included in
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current profit or loss. Financial assets are measured at fair value at initial recognition, but if the receivables or
receivables financing arising from the sale of goods or the provision of services do not include a significant
financing component or do not consider a financing component that does not exceed one year, it shall be
initially measured in accordance with the transaction value. For financial assets measured at fair value and
whose changes are included in the current profit or loss, related transaction costs are directly included in the
current profit and loss; for other types of financial assets, related transaction costs are included in the initially
recognized amount.
The business model for managing financial assets refers to how the Company manages financial assets to
generate cash flows. The business model determines whether the cash flow of financial assets managed by the
Company is based on contract cash flow, selling financial assets or both. The Company determines the business
model for managing financial assets based on objective facts and based on the specific business objectives of
financial assets management determined by key management personnel.
The Company evaluates the contractual cash flow characteristics of financial assets to determine whether the
contractual cash flows generated by the relevant financial assets on a specific date are only payments for the
principal and the interest based on the outstanding principal amount. The principal is the fair value of the
financial assets at initial recognition; the interest includes the time value of money, the credit risk associated with
the outstanding principal amount for a specific period, and other basic borrowing risks, costs and consideration
of profit. In addition, the Company evaluates the contractual terms that may result in changes in the time
distribution or the amount of contractual cash flows of the financial assets to determine whether they meet the
requirements of the above contractual cash flow characteristics.
Only when the Company changes its business model of managing financial assets, all affected financial assets
are reclassified on the first day of the first reporting period after the business model changes, otherwise the
financial assets are not allowed to be reclassified after initial recognition.
① Financial assets measured at amortized cost
The Company classifies the financial assets that meet the following conditions and haven’t been designated as
financial assets measured at fair value and whose changes are included in current profit or loss as financial assets
measured at amortized cost:
A. the group's business model for managing the financial assets is to collect contractual cash flows; and
B. the contractual terms of the financial assets stipulate that cash flow generated on a specific date is only paid
for the principal and interest based on the outstanding principal amount.
After initial recognition, such financial assets are measured at amortized cost by using the effective interest
method. Gains or losses arising from financial assets which are measured at amortized cost and are not a
component of any hedging relationship are included in current profit or loss when being terminated for
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recognition, amortized by effective interest method, or impaired.
② Financial assets measured at fair value and whose changes are included in other comprehensive income
The Company classifies the financial assets that meet the following conditions and haven’t been designated as
financial assets measured at fair value and whose changes are included in current profit or loss as financial assets
measured at fair value and whose changes are included in other comprehensive income:
A. the Group's business model for managing the financial assets is targeted at both the collection of contractual
cash flows and the sale of financial assets; and
B. the contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only
the payment of the principal and the interest based on the outstanding principal amount.
After initial recognition, such financial assets are subsequently measured at fair value. Interests, impairment
losses or gains and exchange gains and losses calculated by using the effective interest method are included in
profit or loss for the period, and other gains or losses are included in other comprehensive income. When being
terminate for recognition, the accumulated gains or losses previously included in other comprehensive income
are transferred from other comprehensive income and included in current profit or loss.
③Financial assets measured at fair value and whose changes are included in current profit or loss
Except for the above financial assets measured at amortized cost and measured at fair value and whose changes
are included in other comprehensive income, the Company classifies all other financial assets as financial assets
measured at fair value and whose changes are included in current profit or loss. In the initial recognition, in
order to eliminate or significantly reduce accounting mismatch, the Company irreversibly designates part of the
financial assets that should be measured at amortized cost or measured at fair value and whose changes are
included in the other comprehensive income as the financial assets measured at fair value and whose changes are
included in current profit or loss.
After the initial recognition, such financial assets are subsequently measured at fair value, and the gains or losses
(including interests and dividend income) are included in the current profit and loss, unless the financial assets
are part of the hedging relationship.
However, for non-trading equity instrument investments, the Company irreversibly designates them as the
financial assets that are measured at fair value and whose changes are included in other comprehensive income
in the initial recognition. The designation is made based on a single investment and the relevant investment is in
line with the definition of equity instruments from the issuer's perspective. After initial recognition, such
financial assets are subsequently measured at fair value. Dividend income that meets the conditions is included
in profit or loss, and other gains or losses and changes in fair value are included in other comprehensive income.
When it is terminated for recognition, the accumulated gains or losses previously included in other
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comprehensive income are transferred from other comprehensive income and included in retained earnings.
(3) Classification and measurement of financial liabilities
The financial liabilities of the Company are classified as financial liabilities measured at fair value and whose
changes are included in current profit or loss and financial liabilities measured at amortized cost at the initial
recognition. For financial liabilities that are not classified as financial liabilities measured at fair value and
whose changes are included in current profit or loss, the related transaction expenses are included in the initial
recognition amount.
①Financial liability measured by fair value and with variation reckoned into current gains/losses
Financial liability measured by fair value and with variation reckoned into current gains/losses including
tradable financial liability and the financial liabilities that are designated as fair value in the initial recognition
and whose changes are included in current profit or loss. For such financial liabilities, the subsequent
measurement is based on fair value, and the gains or losses arising from changes in fair value and the dividends
and interest expenses related to these financial liabilities are included in current profit or loss.
②Financial liability measured by amortized cost
Other financial liabilities are subsequently measured at amortized cost by using the effective interest method.
The gain or loss arising from recognition termination or amortization is included in current profit or loss.
③Distinctions between financial liabilities and equity instruments
Financial liabilities are liabilities that meet one of the following conditions:
A. Contractual obligations to deliver cash or other financial assets to other parties.
B. Contractual obligations to exchange financial assets or financial liabilities with other parties under potentially
adverse conditions.
C. Non-derivative contracts that must be settled or that can be settled by the company's own equity instruments
in the future, and the enterprise will deliver a variable amount of its own equity instruments according to the
contract.
D. Derivative contracts that must be settled or that can be settled by the company's own equity instruments in the
future, except for derivatives contracts that exchange a fixed amount of cash or other financial assets with a fixed
amount of their own equity instruments.
An equity instrument is a contract that proves it has a residual equity in the assets of an enterprise after deducting
all liabilities.
If the Company cannot unconditionally avoid performing a contractual obligation by delivering cash or other
financial assets, the contractual obligation is consistent with the definition of financial liability.
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If a financial instrument is required to be settled or can be settled by the Company's own equity instruments, it is
necessary to consider whether the Company's own equity instruments used to settle the instrument are a
substitute for cash or other financial assets, or to make the instrument holder enjoy the residual equity in the
assets of the issuer after deducting all liabilities. In the former case, the instrument is the Company's financial
liability; if it is the latter, the instrument is the Company's equity instrument.
(4) Fair value of financial instruments
The company uses valuation techniques that are applicable under current circumstances and that have sufficient
available data and other information support to determine the fair value of related financial assets and financial
liabilities. The company divides the input values used by valuation techniques into the following levels and uses
them in sequence:
① The first-level input value is the unadjusted quotation of the same assets or liabilities that can be obtained on
the measurement date in the active market;
② The second-level input value is the direct or indirect observable input value of the relevant assets or liabilities
other than the first-level input value, including quotations of similar assets or liabilities in an active market;
quotations of same or similar assets or liabilities in an active market; other observable input value other than
quotations, such as interest rate and yield curves that are observable during the normal quote interval; market-
validated input value, etc.;
③ The third-level input value is the unobservable input value of the relevant assets or liabilities, including the
interest rate that cannot be directly observed or cannot be verified by observable market data, stock volatility,
future cash flow of the retirement obligation assumed in the business combination, and financial forecasting
made by its own data, etc.
(5) Impairment of financial assets
On the basis of expected credit losses, the Company performs impairment treatment on financial assets
measured at amortized cost and creditors’ investment etc. measured at fair value and whose changes are
included in other comprehensive income and recognize the provisions for loss.
①Measurement of expected credit losses
Expected credit loss refers to the weighted average of credit losses of financial instruments weighted by the
risk of default. Credit loss refers to the difference between all contractual cash flows that the Company
discounts at the original actual interest rate and are receivable in accordance with contract and all cash flows
expected to be received, that is, the present value of all cash shortages. Among them, for the purchase or
source of financial assets that have suffered credit impairment, the Company discounts the financial assets at
the actual interest rate adjusted by credit.
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When measuring expected credit losses, the Company individually evaluates credit risk for financial assets
with significantly different credit risks, such as receivables involving litigation and arbitration with the other
party, or receivables having obvious indications that the debtor is likely to be unable to fulfill its repayment
obligations, and so on.
Except for the financial assets that separately assess the credit risks, the Company classified the account
receivable according to their characteristic of risks, calculated the expected credit losses on basis of portfolio.
Basis for determining the portfolio as follow:
A - Note receivable
Note receivable 1: bank acceptance
Note receivable 2: trade acceptance
B - Account receivable
Account receivable 1: receivable from clients
Account receivable 2: receivable from internal related party
C-Receivable financing
Receivable financing 1: bank acceptance
Receivable financing 2: trade acceptance
D - Other account receivables
Other account receivables 1: receivable from internal related party
Other account receivables 2: receivable from others
As for the note receivable, account receivable, receivable financing and other account receivable classified in
portfolio, by referring to the experience of historical credit loss, the expected credit loss is calculated by
combining the current situation and the forecast of future economic conditions.
Except for the above-mentioned financial assets adopting simplified metering method, the Company assesses
at each balance sheet date whether its credit risk has increased significantly since initial recognit ion. If credit
risk has not increased significantly since initial recognition, it is in the first stage, the Company measures the
loss provisions based on the amount equivalent to the expected credit loss in the next 12 months; if the credit
risk has increased significantly since initial recognition but no credit impairment has occurred, it is in the
second stage, the Company measures the loss provisions based on the amount equivalent to the expected credit
loss for the entire duration; if credit impairment occurs after initial recognition, it is in the third stage, the
Company measures the loss provisions based on the amount equivalent to the expected credit loss for the entire
duration. For financial instruments with low credit risks at the balance sheet date, the Company assumes that
their credit risks have not increased significantly since initial recognition.
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The Company evaluates the expected credit losses of financial instruments based on individual items and
portfolios. When assessing expected credit losses, the Company considers reasonable and evidence-based
information about past events, current conditions, and forecasts of future economic conditions.
When the Company no longer reasonably expects to be able to fully or partially recover the contractual cash
flow of a financial asset, the Company directly writes down the book balance of the financial asset.
②Assessment of a significant increase in credit risk:
The Company determines the relative changes in default risk of the financial instrument occurred in the expected
duration and assess whether the credit risks of financial instrument has increased significantly since the initial
recognition by comparing the risk of default of the financial instrument on the balance sheet date with the risk of
default of financial instrument on the initial recognition date. When determining whether the credit risk has
increased significantly since the initial recognition, the Company considers reasonable and evidence-based
information that can be obtained without unnecessary additional costs or effort, including forward-looking
information. The information considered by the Company includes:
A. The debtor fails to pay the principal and interest according to the contractual maturity date;
B. Serious worsening of external or internal credit rating (if any) of the financial instruments that have occurred
or are expected;
C. Serious deterioration of the debtor’s operating results that have occurred or are expected;
D. Changes in existing or anticipated technical, market, economic or legal circumstances that will have a
material adverse effect on the debtor's ability to repay the company.
Based on the nature of financial instruments, the Company assesses whether credit risk has increased
significantly on the basis of a single financial instrument or combination of financial instruments. When
conducting an assessment based on a combination of financial instruments, the Company can classify financial
instruments based on common credit risk characteristics, such as overdue information and credit risk ratings.
The Company believes that financial assets are subject to default in the following circumstances:
The debtor is unlikely to pay the full amount to the Company, and the assessment does not consider the
Company to take recourse actions such as realizing collateral (if held).
③Financial assets with credit impairment
On the balance sheet date, the Company assesses whether the credit of financial assets measured at amortized
cost and the credit of debt investments measured at fair value and whose changes are included in other
comprehensive income has been impaired. When one or more events that adversely affect the expected future
cash flows of a financial asset occur, the financial asset becomes a financial asset that has suffered credit
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impairment. Evidence that credit impairment has occurred in financial assets includes the following observable
information:
A. The issuer or the debtor has significant financial difficulties;
B. The debtor breaches the contract, such as default or overdue repayment of interest or principal;
C. The Company gives concessions to the debtor that will not be made in any other circumstances for economic
or contractual considerations relating to the financial difficulties of the debtor;
D. The debtor is likely to go bankrupt or carry out other financial restructurings;
E. The financial difficulties of the issuer or the debtor have caused the active market of the financial asset to
disappear.
④ Presentation of expected credit loss provisions
In order to reflect the changes in the credit risk of financial instruments since the initial recognition, the
Company re-measures the expected credit losses on each balance sheet date, and the resulting increase or
reversal of the loss provisions shall be included in current profit and loss as impairment losses or gains. For
financial assets measured at amortized cost, the loss provisions are written off against the book value of the
financial assets listed in the balance sheet; for debt investments measured at fair value and whose changes are
included in other comprehensive income, the Company recognizes the loss provisions in other comprehensive
income and does not deduct the book value of the financial asset.
⑤Write-off
If the Company no longer reasonably expects that the financial asset contract cash flow can be fully or partially
recovered, directly write down the book balance of the financial asset. Such write-downs constitute the
termination of recognition for related financial assets. This usually occurs when the Company determines that
the debtor has no assets or sources of income to generate sufficient cash flow to repay the amount that will be
written down. However, according to the Company's procedures for recovering the due amount, the financial
assets that have been written down may still be affected by the execution activities.
If the financial assets that have been written down are recovered afterwards, they shall be included in the profit or
loss of the period being recovered as the reversal of the impairment loss
(6) Transfer of financial assets
The transfer of financial assets refers to the transfer or delivery of financial assets to the other party (the
transferee) other than the issuer of the financial assets.
For financial assets that the Company has transferred almost all risks and rewards of ownership of financial
assets to the transferee, terminate the recognition of the financial assets; if almost all the risks and rewards of
ownership of financial assets have been retained, do not terminate the recognition of the financial assets.
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If the Company has neither transferred nor retained almost all the risks and rewards of ownership of financial
assets, dispose as following situations: If the control of the financial assets is abandoned, terminate the
recognition of the financial assets and determine the resulting assets and liabilities. If the control of the financial
assets is not abandoned, determine the relevant financial assets according to the extent to which they continue to
be involved in the transferred financial assets, and determine the related liabilities accordingly.
(7) Balance-out between the financial assets and liabilities
As the Group has the legal right to balance out the financial liabilities by the net or liquidation of the financial
assets, the balance-out sum between the financial assets and liabilities is listed in the balance sheet. In addition,
the financial assets and liabilities are listed in the balance sheet without being balanced out.
11.Receivables financing
The note receivable and account receivable which are measured at fair value and whose changes are included
in other comprehensive income are classified as receivables financing within one year(including one year)
from the date of acquisition. Relevant accounting policy found more in 10. Financial Instrument in Note V.
12. Inventory
(1) Classification of inventories
The Company’s inventories are categorized into stock materials, product in process and stock goods etc.
(2) Pricing for delivered inventories
The cost of inventory at the time of acquisition and delivery is calculated according to the standard cost
method, and the difference in cost that it should bear is carried forward at the end of the period, and the
standard cost is adjusted to the actual cost.
(3) Recognition evidence for net realizable value of inventories and withdrawal method for inventory
impairment provision
Inventories as at period-end are priced at the lower of costs and net realizable values; at period end, on the
basis of overall clearance about inventories, inventory impairment provision is withdrew for uncollectible part
of costs of inventories which result from destroy of inventories, out-of-time of all and part inventories, or sales
price lowering than cost. Inventory impairment provision for stock goods and quantity of raw materials is
subject to the difference between costs of single inventory item over its net realizable value. As for other raw
materials with large quantity and comparatively low unit prices, inventory impairment provision is withdrawn
pursuant to categories.
As for finished goods, commodities and materials available for direct sales, their net realizable values are
determined by their estimated selling prices less estimated sales expenses and relevant taxes. For material
inventories held for purpose of production, their net realizable values are determined by the estimated selling
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prices of finished products less estimated costs, estimated sales expenses and relevant taxes accumulated till
completion of production. As for inventories held for implementation of sales contracts or service contracts,
their net realizable values are calculated on the basis of contract prices. In the event that inventories held by a
company exceed order amount as agreed in sales contracts, net realizable values of the surplus part are
calculated on the basis of normal sale price.
(4) Inventory system
Perpetual Inventory System is adopted by the Company and takes a physical inventory.
(5) Amortization of low-value consumables and wrappage
①Low-value consumables
The Company adopts one-off amortization method to amortize the low-value consumables.
②Wrappage
The Company adopts one-off amortization method to amortize the wrappage at the time of receipt.
13. Assets held for sale
The Company classifies non-current assets or disposal groups that meet all of the following conditions as
held-for-sale: according to the practice of selling this type of assets or disposal groups in a similar transaction,
the non-current assets or disposal group can be sold immediately at its current condition; The sale is likely to
occur, that is, the Company has made resolution on the selling plan and obtained definite purchase
commitment, the selling is estimated to be completed within one year. Those assets whose disposal is subject
to approval from relevant authority or supervisory department under relevant requirements are subject to that
approval.
Where the Company loses control over its subsidiary due to disposal of investment in the subsidiary, whether
or not the Company retains part equity investment after such disposal, investment in the subsidiary shall be
classified in its entirety as held for sale in the separate financial statement of the parent company subject to that
the investment in the subsidiary proposed to be disposed satisfies the conditions for being classified as held for
sale, and all the assets and liabilities of the subsidiary shall be classified as held for sale in consolidated
financial statement.
The purchase commitment identified refers to the legally binding purchase agreement entered into between the
Company and other parties, which sets out certain major terms relating to transaction price, time and
adequately stringent punishment for default, which render an extremely minor possibility for material
adjustment or revocation of the agreement.
Assets held for sale are measured at the lower of heir carrying value and fair value less selling expense. If the
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carrying value is higher than fair value less selling expense, the excess shall be recognized as impairment loss
and recorded in profit or loss for the period, and allowance for impairment shall be provided for in respect of
the assets. In respect of impairment loss recognized for disposal group held for sale, carrying value of the
goodwill in the disposal group shall be deducted first, and then deduct the carrying value of the non-current
assets within the disposal group applicable to this measurement standard on a pro rata basis according to the
proportion taken by their carrying value.
If the net amount of fair value of non-current assets held for sale less sales expense on subsequent balance
sheet date increases, the amount previously reduced for accounting shall be recovered and reverted from the
impairment loss recognized after the asset is classified under the category of held for sale, with the amount
reverted recorded in profit or loss for the period. Impairment loss recognized before the asset is classified
under the category of held for sale shall not be reverted.If the net amount of fair value of the disposal group
held for sale on the subsequent balance sheet date less sales expenses increases, the amount reduced for
accounting in previous periods shall be restored, and shall be reverted in the impairment loss recognized in
respect of the non-current assets which are applicable to relevant measurement provisions after classification
into the category of held for sale, with the reverted amount charged in profit or loss for the current period. The
written-off carrying value of goodwill shall not be reverted.
The non-current assets in the non-current assets or disposal group held for sale is not depreciated or amortized,
and the debt interests and other fees in the disposal group held for sale continue to be recognized.
If the non-current assets or disposal group are no longer classified as held for sale since they no longer meet
the condition of being classified as held for sale or the non-current assets are removed from the disposal group
held for sale, they will be measured at the lower of the following:
(i)The amount after their book value before they are classified as held for sale is adjusted based on the
depreciation, amortization or impairment that should have been recognized given they are not classified as held
for sale;
(ii) The recoverable amount.
14. Long-term equity investment
Long-term equity investments refer to long-term equity investments in which the Company has control, joint
control or significant influence over the invested party. Long-term equity investment without control or joint
control or significant influence of the Group is accounted for as available-for-sale financial assets or financial
assets measured by fair value and with variation reckoned into current gains/losses. As for other accounting
policies found more in “10. Financial instrument” in Note III.
(1) Determination of initial investment cost
Investment costs of the long-term equity investment are recognized by the follow according to different way of
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acquirement:
①For a long-term equity investment acquired through a business combination involving enterprises under
common control, the initial investment cost of the long-term equity investment shall be the absorbing party’s
share of the carrying amount of the owner’s equity under the consolidated financial statements of the ultimate
controlling party on the date of combination. The difference between the initial cost of the long-term equity
investment and the cash paid, non-cash assets transferred as well as the book value of the debts borne by the
absorbing party shall offset against the capital reserve. If the capital reserve is insufficient to offset, the
retained earnings shall be adjusted. If the consideration of the merger is satisfied by issue of equity securities,
the initial investment cost of the long-term equity investment shall be the absorbing party’s share of the
carrying amount of the owner’s equity under the consolidated financial statements of the ultimate controlling
party on the date of combination. With the total face value of the shares issued as share capital, the difference
between the initial cost of the long-term equity investment and total face value of the shares issued shall be
used to offset against the capital reserve. If the capital reserve is insufficient to offset, the retained earnings
shall be adjusted. For business combination resulted in an enterprise under common control by acquiring
equity of the absorbing party under common control through a stage-up approach with several transactions,
these transactions will be judged whether they shall be treat as “transactions in a basket”. If they belong to
“transactions in a basket”, these transactions will be accounted for a transaction in obtaining control. If they
are not belong to “transactions in a basket”, the initial investment cost of the long-term equity investment shall
be the absorbing party’s share of the carrying amount of the owner’s equity under the consolidated financial
statements of the ultimate controlling party on the date of combination. The difference between the initial cost
of the long-term equity investment and the aggregate of the carrying amount of the long-term equity
investment before merging and the carrying amount the additional consideration paid for further share
acquisition on the date of combination shall offset against the capital reserve. If the capital reserve is
insufficient to offset, the retained earnings shall be adjusted. Other comprehensive income recognized as a
result of the previously held equity investment accounted for using equity method on the date of combination
or recognized for available-for-sale financial assets will not be accounted for.
② For the long-term equity investment obtained by business combination not under the same control, the fair
value of the assets involved, the equity instruments issued and the liabilities incurred or assumed on the
transaction date, plus the combined cost directly related to the acquisition is used as the initial investment cost
of the long-term equity investment. The identifiable assets of the combined party and the liabilities (including
contingent liabilities) assumed by the combined party on the combining date are all measured at fair value,
regardless of the amount of minority shareholders’ equity. The amount of the combined cost exceeding the fair
value of the identifiable net assets of the combined party obtained by the Company is recorded as goodwill,
and the amount below the fair value of the identifiable net assets of the combining party is directly recognized
in the consolidated income statement. (For business combination resulted in an enterprise not under common
control by acquiring equity of the acquire under common control through a stage-up approach with several
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transactions, these transactions will be judged whether they shall be treat as “transactions in a basket”. If they
belong to “transactions in a basket”, these transactions will be accounted for a transaction in obtaining control.
If they are not belong to “transactions in a basket”, the initial investment cost of the long-term equity
investment accounted for using cost method shall be the aggregate of the carrying amount of equity investment
previously held by the acquire and the additional investment cost. For previously held equity accounted for
using equity method, relevant other comprehensive income will not be accounted for. For previously held
equity investment classified as available-for-sale financial asset, the difference between its fair value and
carrying amount, as well as the accumulated movement in fair value previously included in the other
comprehensive income shall be transferred to profit or loss for the current period.)
③Long-term investments obtained through other ways:
A. Initial investment cost of long-term equity investment obtained through cash payment is determined
according to actual payment for purchase;
B. Initial investment cost of long-term equity investment obtained through issuance of equity securities is
determined at fair value of such securities;
C. Initial investment cost of long-term equity investment (exchanged-in) obtained through exchange with
non-monetary assets, which is of commercial nature, is determined at fair value of the assets exchanged-out;
otherwise determined at carrying value of the assets exchanged-out if it is not of commercial nature;
D. Initial investment cost of long-term equity investment obtained through debt reorganization is determined at
fair value of such investment.
(2) Subsequent measurement on long-term equity investment
①Presented controlling ability on invested party, the investment shall use cost method for measurement.
②Long-term equity investments with joint control (excluding those constitute joint ventures) or significant
influence on the invested party are accounted for using equity method.
Under the equity method, where the initial investment cost of a long-term equity investment exceeds the
investor’s interest in the fair value of the invested party’s identifiable net assets at the acquisition date, no
adjustment shall be made to the initial investment cost. Where the initial investment cost is less than the
investor’s interest in the fair value of the invested party’s identifiable net assets at the acquisition date, the
difference shall be charged to profit or loss for the current period, and the cost of the long term equity
investment shall be adjusted accordingly.
Under the equity method, investment gain and other comprehensive income shall be recognized based on the
Group’s share of the net profits or losses and other comprehensive income made by the invested party,
respectively. Meanwhile, the carrying amount of long-term equity investment shall be adjusted. The carrying
amount of long-term equity investment shall be reduced based on the Group’s share of profit or cash dividend
distributed by the invested party. In respect of the other movement of net profit or loss, other comprehensive
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income and profit distribution of invested party, the carrying value of long-term equity investment shall be
adjusted and included in the capital reserves. The Group shall recognize its share of the invested party’s net
profits or losses based on the fair values of the invested party’s individual separately identifiable assets at the
time of acquisition, after making appropriate adjustments thereto. In the event of in-conformity between the
accounting policies and accounting periods of the invested party and the Company, the financial statements of
the invested party shall be adjusted in conformity with the accounting policies and accounting periods of the
Company. Investment gain and other comprehensive income shall be recognized accordingly. In respect of the
transactions between the Group and its associates and joint ventures in which the assets disposed of or sold are
not classified as operation, the share of unrealized gain or loss arising from inter-group transactions shall be
eliminated by the portion attributable to the Company. Investment gain shall be recognized accordingly.
However, any unrealized loss arising from inter-group transactions between the Group and an invested party is
not eliminated to the extent that the loss is impairment loss of the transferred assets. In the event that the Group
disposed of an asset classified as operation to its joint ventures or associates, which resulted in acquisition of
long-term equity investment by the investor without obtaining control, the initial investment cost of additional
long-term equity investment shall be the fair value of disposed operation. The difference between initial
investment cost and the carrying value of disposed operation will be fully included in profit or loss for the
current period. In the event that the Group sold an asset classified as operation to its associates or joint
ventures, the difference between the carrying value of consideration received and operation shall be fully
included in profit or loss for the current period. In the event that the Company acquired an asset which formed
an operation from its associates or joint ventures, relevant transaction shall be accounted for in accordance
with “Accounting Standards for Business Enterprises No. 20 “Business combination”. All profit or loss related
to the transaction shall be accounted for.
The Group’s share of net losses of the invested party shall be recognized to the extent that the carrying amount
of the long-term equity investment together with any long-term interests that in substance form part of the
investor’s net investment in the invested party are reduced to zero. If the Group has to assume additional
obligations, the estimated obligation assumed shall be provided for and charged to the profit or loss as
investment loss for the period. Where the invested party is making profits in subsequent periods, the Group
shall resume recognizing its share of profits after setting off against the share of unrecognized losses.
③Acquisition of minority interest
Upon the preparation of the consolidated financial statements, since acquisition of minority interest increased
of long-term equity investment which was compared to fair value of identifiable net assets recognized which
are measured based on the continuous measurement since the acquisition date (or combination date) of
subsidiaries attributable to the Group calculated according to the proportion of newly acquired shares, the
difference of which recognized as adjusted capital surplus, capital surplus insufficient to set off impairment
and adjusted retained earnings.
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④Disposal of long-term equity investments
In these consolidated financial statements, for disposal of a portion of the long-term equity investments in a
subsidiary without loss of control, the difference between disposal cost and disposal of long-term equity
investments relative to the net assets of the subsidiary is charged to the owners’ equity. If disposal of a portion
of the long-term equity investments in a subsidiary by the parent company results in a change in control, it
shall be accounted for in accordance with the relevant accounting policies as described in Note III.-6
“Preparation Method of the Consolidated Financial Statements”.
On disposal of a long-term equity investment otherwise, the difference between the carrying amount of the
investment and the actual consideration paid is recognized through profit or loss in the current period.
In respect of long-term equity investment accounted for using equity method with the remaining equity interest
after disposal also accounted for using equity method, other comprehensive income previously under owners’
equity shall be accounted for in accordance with the same accounting treatment for direct disposal of relevant
asset or liability by invested party on pro rata basis at the time of disposal. The owners’ equity recognized for
the movement of other owners’ equity (excluding net profit or loss, other comprehensive income and profit
distribution of invested party) shall be transferred to profit or loss for the current period on pro rata basis.
In respect of long-term equity investment accounted for using cost method with the remaining equity interest
after disposal also accounted for cost equity method, other comprehensive income measured and reckoned
under equity method or financial instrument before control of the invested party unit acquired shall be
accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability
by invested party on pro rata basis at the time of disposal and shall be transferred to profit or loss for the
current period on pro rata basis; among the net assets of invested party unit recognized by equity method
(excluding net profit or loss, other comprehensive income and profit distribution of invested party) shall be
transferred to profit or loss for the current period on pro rata basis.
In the event of loss of control over invested party due to partial disposal of equity investment by the Group, in
preparing separate financial statements, the remaining equity interest which can apply common control or
impose significant influence over the invested party after disposal shall be accounted for using equity method.
Such remaining equity interest shall be treated as accounting for using equity method since it is obtained and
adjustment was made accordingly. For remaining equity interest which cannot apply common control or
impose significant influence over the invested party after disposal, it shall be accounted for using the
recognition and measurement standard of financial instruments. The difference between its fair value and
carrying amount as at the date of losing control shall be included in profit or loss for the current period. In
respect of other comprehensive income recognized using equity method or the recognition and measurement
standard of financial instruments before the Group obtained control over the invested party, it shall be
accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability
by invested party at the time when the control over invested party is lost. Movement of other owners’ equity
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(excluding net profit or loss, other comprehensive income and profit distribution under net asset of invested
party accounted for and recognized using equity method) shall be transferred to profit or loss for the current
period at the time when the control over invested party is lost. Of which, for the remaining equity interest after
disposal accounted for using equity method, other comprehensive income and other owners’ equity shall be
transferred on pro rata basis. For the remaining equity interest after disposal accounted for using the
recognition and measurement standard of financial instruments, other comprehensive income and other
owners’ equity shall be fully transferred.
In the event of loss of common control or significant influence over invested party due to partial disposal of
equity investment by the Group, the remaining equity interest after disposal shall be accounted for using the
recognition and measurement standard of financial instruments. The difference between its fair value and
carrying amount as at the date of losing common control or significant influence shall be included in profit or
loss for the current period. In respect of other comprehensive income recognized under previous equity
investment using equity method, it shall be accounted for in accordance with the same accounting treatment
for direct disposal of relevant asset or liability by invested party at the time when equity method was ceased to
be used. Movement of other owners’ equity (excluding net profit or loss, other comprehensive income and
profit distribution under net asset of invested party accounted for and recognized using equity method) shall be
transferred to profit or loss for the current period at the time when equity method was ceased to be used.
The Group disposes its equity investment in subsidiary by a stage-up approach with several transactions until
the control over the subsidiary is lost. If the said transactions belong to “transactions in a basket”, each
transaction shall be accounted for as a single transaction of disposing equity investment of subsidiary and loss
of control. The difference between the disposal consideration for each transaction and the carrying amount of
the corresponding long-term equity investment of disposed equity interest before loss of control shall initially
recognized as other comprehensive income, and subsequently transferred to profit or loss arising from loss of
control for the current period upon loss of control.
(3) Impairment test method and withdrawal method for impairment provision
Found more in Note III-21.”impairment of long-term assets”
(4) Criteria of Joint control and significant influence
Joint control is the Company’s contractually agreed sharing of control over an arrangement, which relevant
activities of such arrangement must be decided by unanimously agreement from parties who share control. All
the participants or participant group whether have controlling over such arrangement as a group or not shall be
judge firstly, than judge that whether the decision-making for such arrangement are agreed unanimity by the
participants or not.
Significant influence is the power of the Company to participate in the financial and operating policy decisions
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of an invested party, but to fail to control or joint control the formulation of such policies together with other
parties.While recognizing whether have significant influence by invested party, the potential factors of voting
power as current convertible bonds and current executable warrant of the invested party held by investors and
other parties shall be thank over.
15. Investment real estate
Investment real estate is stated at cost. During which, the cost of externally purchased properties
held-for-investment includes purchasing price, relevant taxes and surcharges and other expenses which are
directly attributable to the asset. Cost of self construction of properties held for investment is composed of
necessary expenses occurred for constructing those assets to a state expected to be available for use. Properties
held for investment by investors are stated at the value agreed in an investment contract or agreement, but
those under contract or agreement without fair value are stated at fair value.
The Company adopts cost methodology amid subsequent measurement of properties held for investment,
while depreciation and amortization is calculated using the straight-line method according to their estimated
useful lives.
The basis of provision for impairment of properties held for investment is referred to Note III-“21.Impairment
of long-term assets”
16. Fixed assets
(1) Recognition conditions
Fixed assets refer to the tangible assets for production of products, provision of labor, lease or operation, with
a service life excess one year and has more unit value.
(2) Depreciation methods
Category Years of depreciation (years) Scrap value rate(%) Yearly depreciation rate(%)
House and Building
20~35 5 2.71~4.75
Machinery equipment
10 5 9.50
Transportation equipment
4~5 5 19.00~23.75
Electronic and other
3～10 5 9.50～31.67
equipment
For the fixed assets with impairment provision, the depreciation amount shall be calculated after deducting the
accumulated amount of impairment provision for fixed assets
(3) Recognition basis, valuation and depreciation method for financial lease assets
The Company affirms those that conform to below one or several criteria as the finance lease fixed assets:
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① Agreed in the lease contract (or made a reasonable judgment according to the correlated conditions on the
lease commencement date), the ownership of lease fixed assets can be transferred to the Company after the
expiry of the lease period;
② The Company has the option to purchase or lease the fixed assets, and the purchase price is estimated to be
much less than the fair value of the lease of fixed assets when exercises the options, so whether the Company
will exercise the option can be reasonably determined on the lease commencement date;
③ Even though the fixed asset ownership is not transferred, the lease term accounts for 75% of the service life
of the lease fixed assets;
④ The present value of the Company’s of minimum lease payment on the lease commencement date is
equivalent to 90% or more of the fair value of the lease fixed assets on the lease commencement date; the
present value of the leaser’s of minimum lease payment on the lease commencement date is equivalent to 90%
or more of the fair value of the lease fixed assets on the lease commencement date;
⑤ The leased assets with special properties can only be used by the Company without major modifications.
The fixed assets rented by finance leases is calculated as the book value according to the lower one between
the fair value of leased assets on the lease commencement date and the present value of the minimum lease
payments.
(4) The impairment test method of fixed assets and the method of provision for impairment see Note
III-“21.Impairment of long-term assets”.
17. Construction in progress
From the date on which the fixed assets built by the Company come into an expected usable state, the projects
under construction are converted into fixed assets on the basis of the estimated value of project estimates or
pricing or project actual costs, etc. Depreciation is calculated from the next month. Further adjustments are
made to the difference of the original value of fixed assets after final accounting is completed upon completion
of projects.
The basis of provision for impairment of properties held for construction in process is referred to Note
III-“21.Impairment of long-term assets”
18. Contract assets and contract liabilities
Applicable from 1 Jan. 2020.
The Company presents the contract assets or contract liabilities in the balance sheet based on the relationship
between the performance obligation and the customer’s payment.
(1) Contract assets
Confirmation method and standard of contract assets: contract assets refer to the right of a company to receive
consideration after transferring goods or providing services to customers, and this right depends on other
factors besides the passage of time. The company's unconditional (that is, only depending on the passage of
time) right to collect consideration from customers are separately listed as receivables.
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Method for determining expected credit losses of contract assets: the method for determining expected credit
losses of contract assets is consistent with the method for determining expected credit losses of accounts
receivable.
Accounting treatment method of expected credit losses of contract assets: if the contract assets are impaired,
the company shall debit the "asset impairment loss" subject and credit the "contract asset impairment
provision" subject according to the amount that should be written down. When reversing the provision for
asset impairment that has already been withdrawn, make opposite accounting entries.
(2) Contract liabilities
The Company lists the obligation to transfer goods or provide labor services to customers for the consideration
received or receivable from customers as contract liabilities, such as the amount that the company has received
before the transfer of the promissory goods.
19. Borrowing costs
(1) Recognition of capitalization of borrowing costs
Borrowing costs comprise interest occurred, amortization of discounts or premiums, ancillary costs and
exchange differences in connection with foreign currency borrowings. The borrowing costs of the Company,
which incur from the special borrowings occupied by the fixed assets that need more than one year (including
one year) for construction, development of investment properties or inventories or from general borrowings,
are capitalized and recorded in relevant assets costs; other borrowing costs are recognized as expenses and
recorded in the profit or loss in the period when they are occurred. Relevant borrowing costs start to be
capitalized when all of the following three conditions are met:
①Capital expenditure has been occurred;
②Borrowing costs have been occurred;
③ Acquisition or construction necessary for the assets to come into an expected usable state has been carried
out.
(2) Period of capitalization of borrowing costs
Borrowing costs arising from purchasing fixed asset, investment real estate and inventory, and occurred after
such assets reached to its intended use of status or sales, than reckoned into assets costs while satisfy the above
mentioned capitalization condition; capitalization of borrowing costs shall be suspended and recognized as
current expenditure during periods in which construction of fixed assets, investment real estate and inventory
are interrupted abnormally, when the interruption is for a continuous period of more than 3 months, until the
acquisition, construction or production of the qualifying asset is resumed; capitalization shall discontinue when
the qualifying asset is ready for its intended use or sale, the borrowing costs occurred subsequently shall
reckoned into financial expenses while occurring for the current period.
(3) Measure of capitalization for borrowing cost
In respect of the special borrowings borrowed for acquisition, construction or production and development of
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the assets qualified for capitalization, the amount of interests expenses of the special borrowings actually
occurred in the period less interest income derived from unused borrowings deposited in banks or less
investment income derived from provisional investment, are recognized.
With respect to the general borrowings occupied for acquisition, construction or production and development
of the assets qualified for capitalization, the capitalized interest amount for general borrowings is calculated
and recognized by multiplying a weighted average of the accumulated expenditure on the assets in excess of
the expenditure on the some assets of the special borrowings, by a capitalization rate for general borrowings.
The capitalization rate is determined by calculation of the weighted average interest rate of the general
borrowings.
20. Intangible assets
(1) Measurement, use of life and impairment testing
① Measurement of intangible assets
The intangible assets of the Company including land use rights, patented technology and non-patents
technology etc.
The cost of a purchased intangible asset shall be determined by the expenditure actually occurred and other
related costs.
The cost of an intangible asset contributed by an investor shall be determined in accordance with the value
stipulated in the investment contract or agreement, except where the value stipulated in the contract or
agreement is not fair.
The intangible assets acquired through exchange of non-monetary assets, which is commercial in substance, is
carried at the fair value of the assets exchanged out; for those not commercial in substance, they are carried at
the carrying amount of the assets exchanged out.
The intangible assets acquired through debt reorganization, are recognized at the fair value.
② Amortization methods and time limit for intangible assets:
Land use right of the company had average amortization by the transfer years from the beginning date of transfer
(date of getting land use light); Patented technology, non-patented technology and other intangible assets of the
Company are amortized by straight-line method with the shortest terms among expected useful life, benefit
years regulated in the contract and effective age regulated by the laws. The amortization amount shall count in
relevant assets costs and current gains/losses according to the benefit object.
As for the intangible assets as trademark, with uncertain benefit terms, amortization shall not be carried.
Impairment testing methods and accrual for depreciation reserves for the intangible assets found more in Note
III-“21. Impairment of long-term assets”.
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(2)Internal accounting policies relating to research and development expenditures
Expenses incurred during the research phase are recognized as profit or loss in the current period; expenses
incurred during the development phase that satisfy the following conditions are recognized as intangible assets
(patented technology and non-patents technology):
①It is technically feasible that the intangible asset can be used or sold upon completion;
②there is intention to complete the intangible asset for use or sale;
③ The products produced using the intangible asset has a market or the intangible asset itself has a market;
④there is sufficient support in terms of technology, financial resources and other resources in order to
complete the development of the intangible asset, and there is capability to use or sell the intangible asset;
⑤ the expenses attributable to the development phase of the intangible asset can be measured reliably.
If the expenses incurred during the development phase did not qualify the above mentioned conditions, such
expenses incurred are accounted for in the profit or loss for the current period.The development expenditure
reckoned in gains/losses previously shall not be recognized as assets in later period. The capitalized expenses
in development stage listed as development expenditure in balance sheet, and shall be transfer as intangible
assets since such item reached its expected conditions for service.
21. Impairment of long-term assets
The Company will judge if there is any indication of impairment as at the balance sheet date in respect of
non-current non-financial assets such as fixed assets, construction in progress, intangible assets with a finite
useful life, investment properties measured at cost, and long-term equity investments in subsidiaries, joint
controlled entities and associates. If there is any evidence indicating that an asset may be impaired, recoverable
amount shall be estimated for impairment test. Goodwill, intangible assets with an indefinite useful life and
intangible assets beyond working conditions will be tested for impairment annually, regardless of whether
there is any indication of impairment.
If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount, the
impairment provision will be made according to the difference and recognized as an impairment loss. The
recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the
future cash flows expected to be derived from the asset. An asset’s fair value is the price in a sale agreement in
an arm’s length transaction. If there is no sale agreement but the asset is traded in an active market, fair value
shall be determined based on the bid price. If there is neither sale agreement nor active market for an asset, fair
value shall be based on the best available information. Costs of disposal are expenses attributable to disposal
of the asset, including legal fee, relevant tax and surcharges, transportation fee and direct expenses incurred to
prepare the asset for its intended sale. The present value of the future cash flows expected to be derived from
the asset over the course of continued use and final disposal is determined as the amount discounted using an
appropriately selected discount rate. Provisions for assets impairment shall be made and recognized for the
individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Group shall
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determine the recoverable amount of the asset group to which the asset belongs. The asset group is the smallest
group of assets capable of generating cash flows independently.
For the purpose of impairment testing, the carrying amount of goodwill presented separately in the financial
statements shall be allocated to the asset groups or group of assets benefiting from synergy of business
combination. If the recoverable amount is less than the carrying amount, the Group shall recognize an
impairment loss. The amount of impairment loss shall first reduce the carrying amount of any goodwill
allocated to the asset group or set of asset groups, and then reduce the carrying amount of other assets (other
than goodwill) within the asset group or set of asset groups, pro rata on the basis of the carrying amount of
each asset.
An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period in respect
of the part whose value can be recovered.
22. Long-term deferred expenses
Long-term expenses to be amortized of the Company the expenses that are already charged and with the
beneficial term of more than one year are evenly amortized over the beneficial term. For the long-term
deferred expense items cannot benefit the subsequent accounting periods, the amortized value of such items is
all recorded in the profit or loss during recognition.
23. Employee compensation
(1) Accounting treatment for short-term compensation
During the accounting period when the staff providing service to the Company, the short-term remuneration
actual occurred shall recognized as liability and reckoned into current gains/losses. During the accounting
period when staff providing service to the Company, the actual short-term compensation occurred shall
recognized as liabilities and reckoned into current gains/losses, except for those in line with accounting
standards or allow to reckoned into capital costs; the welfare occurred shall reckoned into current gains/losses
or relevant asses costs while actually occurred. The employee compensation shall recognize as liabilities and
reckoned into current gains/losses or relevant assets costs while actually occurred. The employee benefits that
belong to non-monetary benefits are measured in accordance with the fair value; the social insurances
including the medical insurance, work-injury insurance and maternity insurance and the housing fund that the
enterprise pays for the employees as well as the labor union expenditure and employee education funds
withdrawn by rule should be calculated and determined as the corresponding compensation amount and
determined the corresponding liabilities in accordance with the specified withdrawing basis and proportion,
and reckoned in the current profits and losses or relevant asset costs in the accounting period that the
employees provide services.
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(2) Accounting treatment for post-employment benefit
The post-employment benefit included the defined contribution plans and defined benefit plans.
Post-employment benefits plan refers to the agreement about the post-employment benefits between the
enterprise and employees, or the regulations or measures the enterprise established for providing
post-employment benefits to employees. Thereinto, the defined contribution plan refers to the
post-employment benefits plan that the enterprise doesn’t undertake the obligation of payment after depositing
the fixed charges to the independent fund; the defined benefit plans refers to post-employment benefits plans
except the defined contribution plan.
(3)Accounting for retirement benefits
When the Company terminates the employment relationship with employees before the end of the employment
contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, the
Company shall recognize employee compensation liabilities arising from compensation for staff dismissal and
included in profit or loss for the current period, when the Company cannot revoke unilaterally compensation
for dismissal due to the cancellation of labor relationship plans and employee redundant proposals; and the
Company recognize cost and expenses related to payment of compensation for dismissal and restructuring,
whichever is earlier.The early retirement plan shall be accounted for in accordance with the accounting
principles for compensation for termination of employment. The salaries or wages and the social contributions
to be paid for the employees who retire before schedule from the date on which the employees stop rendering
services to the scheduled retirement date, shall be recognized (as compensation for termination of employment)
in the current profit or loss by the Group if the recognition principles for provisions are satisfied.
(4)Accounting for other long-term employee benefits
Except for the compulsory insurance, the Company provides the supplementary retirement benefits to the
employees satisfying some conditions, the supplementary retirement benefits belong to the defined benefit
plans, and the defined benefit liability confirmed on the balance sheet is the value by subtracting the fair value
of plan assets from the present value of defined benefit obligation. The defined benefit obligation is annually
calculated in accordance with the expected accumulated welfare unit method by the independent actuary by
adopting the treasury bond rate with similar obligation term and currency. The service charges related to the
supplementary retirement benefits (including the service costs of the current period, the previous service costs,
and the settlement gains or losses) and the net interest are reckoned in the current profits and losses or other
asset costs, the changes generated by recalculating the net liabilities of defined benefit plans or net assets
should be reckoned in other consolidated income.
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24. Share-based payment
The Company’s share-based payment is a transaction that grants equity instruments or assumes liabilities
determined on the basis of equity instruments in order to obtain services provided by employees or other
parties. The Company’s share-based payment is classified as equity-settled share-based payment and
cash-settled share-based payment.
(1) Equity-settled share-based payment and equity instruments
Equity-settled share-based payment in exchange for services provided by employees shall be measured at the
fair value of the equity instruments granted to employees. If the Company uses restricted stocks for
share-based payment, employees contribute capital to subscribe for stocks, and the stocks shall not be listed for
circulation or transfer until the unlocking conditions are met and unlocked; if the unlocking conditions
specified in the final equity incentive plan are not met, the Company shall repurchase the stocks at the
pre-agreed price. When the Company obtains the payment for the employees to subscribe for restricted stocks,
it shall confirm the share capital and capital reserve (share capital premium) according to the obtained
subscription money, and at the same time recognize a liability in full for the repurchase obligation and
recognize treasury shares. On each balance sheet date during the waiting period, the Company makes the best
estimate of the number of vesting equity instruments based on the changes in the latest obtained number of
vested employees, whether they meet the specified performance conditions, and other follow-up information.
On this basis, the services obtained in the current period are included in related costs or expenses based on the
fair value on the grant date, and the capital reserve shall be increased accordingly.
For share-based payments that cannot be vested in the end, costs or expenses shall not be recognized, unless
the vesting conditions are market conditions or non-vesting conditions. At this time, regardless of whether the
market conditions or the non-vesting conditions are met, as long as all non-market conditions in the vesting
conditions are met, it is deemed as vesting.
If the terms of equity-settled share-based payment are modified, at least the services obtained should be
confirmed in accordance with the unmodified terms. In addition, any modification that increases the fair value
of the equity instruments granted, or a change that is beneficial to employees on the modification date, is
recognized as an increase in services received.
If the equity-settled share payment is cancelled, it will be treated as an accelerated vesting on the cancellation
day, and the unconfirmed amount will be confirmed immediately. If an employee or other party can choose to
meet the non-vesting conditions but fails to meet within the waiting period, it shall be treated as cancellation of
equity-settled share-based payment. However, if a new equity instrument is granted and it is determined on the
date of grant of the new equity instrument that the new equity instrument granted is used to replace the
cancelled equity instrument, the granted substitute equity instruments shall be treated in the same way as the
modification of the original equity instrument terms and conditions.
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(2) Cash-settled share-based payment and equity instruments
Cash-settled share-based payments are measured at the fair value of the liabilities calculated and determined
on the basis of shares or other equity instruments undertaken by the Company. If it’s vested immediately after
the grant, the fair value of the liabilities assumed on the date of the grant is included in the cost or expense, and
the liability is increased accordingly. If the service within the waiting period is completed or the specified
performance conditions are met, the service obtained in the current period shall be included in the relevant
costs or expenses based on the best estimate of the vesting situation within the waiting period and the fair
value of the liabilities assumed to increase the corresponding liabilities. On each balance sheet date and
settlement date before the settlement of the relevant liabilities, the fair value of the liabilities is remeasured,
and the changes are included in the current profit and loss.
25. Accrual liabilities
(1) Recognition principle
An obligation related to a contingency, such as guarantees provided to outsiders, pending litigation or
arbitration, product warranties, redundancy plans, onerous contracts, reconstructing, expected disposal of fixed
assets, etc. shall be recognized as an estimated liability when all of the following conditions are satisfied:
① the obligation is a present obligation of the Company;
② it is Contingent that an outflow of economic benefits will be required to settle the obligation;
③ the amount of the obligation can be measured reliably.
(2) Measurement method: Measure on the basis of the best estimates of the expenses necessary for paying off
the contingencies
26. Revenue
Accounting policies applicable as of 1 January 2020:
(1)Accounting policies used in revenue recognition and measurement
1)Revenue recognition principle
On the starting date of the contract, the company evaluates the contract, identifies each individual performance
obligation contained in the contract, and determines whether each individual performance obligation is
performed within a certain period of time or at a certain point in time.
When one of the following conditions is met, it belongs to the performance obligation within a certain period
of time, otherwise, it belongs to the performance obligation at a certain point in time: ① The customer
obtains and consumes the economic benefits brought by the company's performance while the company
performs the contract; ②The customer can control the goods or services under construction during the
company’s performance; ③The goods or services produced during the company’s performance have
irreplaceable uses, and the company has the right to collect payment for the performance part that has been
completed so far during the entire contract period.
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For performance obligations performed within a certain period of time, the company recognizes revenue in
accordance with the performance progress during that period. When the performance progress cannot be
reasonably determined, if the cost incurred is expected to be compensated, the revenue shall be recognized
according to the amount of the cost incurred until the performance progress can be reasonably determined.
For performance obligations performed at a certain point in time, revenue is recognized at the point when the
customer obtains control of the relevant goods or services. When judging whether the customer has obtained
control of the goods, the company considers the following signs:① The company has the current right to
receive payment for the goods, that is, the customer has the current payment obligation for the goods; ②The
company has transferred the legal ownership of the goods to the customer, that is, the customer has the legal
ownership of the goods; ③The company has transferred the goods to the customer in kind, that is, the
customer has physically taken possession of the goods; ④ The company has transferred the main risks and
rewards of the ownership of the goods to the customer, that is, the customer has obtained the main risks and
rewards of the ownership of the goods; ⑤ The customer has accepted the goods; ⑥Other signs that the
customer has obtained control of the goods.
2)Revenue measurement principle
①The company measures revenue based on the transaction price allocated to each individual performance
obligation. The transaction price is the amount of consideration that the company expects to be entitled to
receive due to the transfer of goods or services to customers, and does not include payments collected on
behalf of third parties and payments expected to be returned to customers.
②If there is variable consideration in the contract, the company shall determine the best estimate of the
variable consideration according to the expected value or the most likely amount, but the transaction price
including the variable consideration shall not exceed the amount of cumulatively recognized revenue that is
unlikely to be significantly turned back when the relevant uncertainty is eliminated.
③ If there is a significant financing component in the contract, the company shall determine the transaction
price based on the amount payable that the customer is assumed to pay in cash when obtaining the control of
the goods or services. The difference between the transaction price and the contract consideration shall be
amortized by the effective interest method during the contract period. On the starting date of the contract, if the
company expects that the customer pays the price within one year after obtaining control of the goods or
services, the significant financing components in the contract shall not be considered.
④If the contract contains two or more performance obligations, the company will allocate the transaction price
to each individual performance obligation based on the relative proportion of the stand-alone selling price of
the goods promised by each individual performance obligation on the starting date of the contract.
(2) The Company's standard for the revenue recognition of the sales of goods and the specific judgment
standard for the confirmation time:
The time when the Company’s domestic sales revenue is confirmed: The company delivers the goods
according to the order. On the reconciliation date agreed with the buyer, check the goods received and
inspected by the buyer during the period from the last reconciliation date to this reconciliation date with the
buyer, and the risks and rewards are transferred to the buyer after checking, the Company issues an invoice to
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the buyer according to the type, quantity and amount confirmed in the reconciliation, and confirms the
realization of sales revenue on the reconciliation day.
The time when the Company’s foreign sales revenue is confirmed: After the customs review is completed, the
Company will confirm the realization of the sales revenue according to the export date specified on the
customs declaration.
Accounting policies applicable for year of 2019:
(1) Concrete judging criteria for time of recognized
The major risks and remuneration entitled to the ownership of goods are transferred to buyer; neither retain the
continued management right generally related to ownership, nor exercise effective control over the sold
products; the relevant economic benefits are probable to flow into the Company; the relevant income and costs
can be measured reliably.
Concrete judging criteria for time of recognized the income from goods sales:
The Company's domestic sales revenue recognition time: The company delivers goods as agreed, checks the
goods that the buyers have received and inspected during the period of the last reconciliation date and this
reconciliation date with the buyers on the reconciliation date as agreed, and transfers the risks and
remunerations to the buyers after checking, the Company issues the invoices to the buyers in accordance with
the recognized varieties, quantities and amounts and affirms the sales revenue realization on the reconciliation
date.
The Company's overseas sales revenue recognition time: After checking by the customs, the Company affirms
the sales revenue realization according to the date of departure on the customs declaration.
(2) Recognition of revenue of assets using right alienation
Revenue from use by others of enterprise assets shall be recognized only when the associated economic benefit
can flow into the Company, and the amount of revenue can be measured reliably, revenue measured by the
follow:
① Interest income amount: calculated and determined in accordance with the time that others use the
enterprises cash and the actual interest rate.
② Royalty revenue amount: calculated and determined in accordance with the charging time and method of the
relevant contract or agreement as agreed.
The basis that the Company confirms the revenue from transferring the right to use assets.
Rental income: the revenue realization is confirmed after collecting the rent on the date as agreed in the rental
contract (or agreement). For the rent not received on the date as agreed in the contract or agreement but can be
received, and of which the amount of revenue can be measured reliably can also be recognized as revenue.
(3) When confirming the incomes of labor services and construction contracts according to the percentage of
completion method, determine the basis and method of the contract completion plan.
For the service transaction results can be estimated reliably on the balance sheet date, the service revenue is
determined and recognized by adopting the percentage of completion method. The completion progress of
service transaction is determined by the proportion of incurred costs in the estimated total cost.
The total service revenue is determined by the received or receivable contract or agreement costs, except that
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the received or receivable contract or agreement costs are not fair. On the balance sheet date, the service revenue
of the current period is determined by multiplying the total service revenue by the completion progress and
deducting the amount accumulated in the previous accounting period and confirmed to render the service
revenue. Meanwhile, the labor costs of the current period are carried forward by multiplying the total estimated
costs of labor services by the completion progress and deducting the amount accumulated in the previous
accounting period with confirmed service costs.
For the service transaction results cannot be estimated reliably on the balance sheet date, respectively dispose as
following circumstances:
①The incurred labor costs estimated to be compensated are confirmed to render the service revenue according
to the incurred labor costs, and are carried forward by the equivalent amount.
②The incurred labor costs estimated not to be compensated are reckoned in the current profits or losses, and
are not confirmed to render the service revenue.
27. Government grants
(1) Types
Government grants are transfer of monetary assets or non-monetary assets from the government to the Group
at no consideration. Government grants are classified into government grants related to assets and government
grants related to income.
As for the assistance object not well-defined in government’s documents, the classification criteria for
assets-related or income-related grants are as: whether the grants turn to long-term assets due to purchasing for
construction or other means.
(2) Recognition and measure
The government grants shall be recognized while meet the additional conditions of the grants and amount is
actually can be obtained.
If a government grant is in the form of a transfer of monetary asset, the item shall be measured at the amount
received or receivable. If a government grant is in the form of a transfer of non-monetary asset, the item shall
be measured at fair value. If the fair value can not be reliably acquired, than measured by nominal amount.
(3) Accounting treatment
A government grant related to an asset shall be recognized as deferred income, and reckoned into current
gains/losses according to the depreciation process in use life of such assets.
A government grant related to income, if they making up relevant expenses and losses for later period, than
recognized deferred income, and should reckoned into current gain/loss during the period while relevant
expenses are recognized; if they making up relevant expenses and losses that occurred, than reckoned into
current gains/losses.
A government grant related to daily operation activity of the Company should reckoned into other income;
those without related to daily operation activity should reckoned into non-operation income and expenses.
The financial discount funds received by the Company shall write down relevant borrowing costs.
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28. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets or deferred income tax liabilities are realized based on the difference between
the carrying values of assets and liabilities and their taxation bases (as for the ones did not recognized as assets
and liability and with taxation basis recognized in line with tax regulations, different between tax base and its
book value) at the tax rates applicable in the periods when the Company recovers such assets or settles such
liabilities.
(2) Deferred income tax assets are realized to the extent that it is probable to obtain such taxable income which
is used to set off the deductible temporary difference. As at the balance sheet date, if there is obvious evidence
showing that it is probable to obtain sufficient taxable income to set off the deductible temporary difference in
future periods, deferred income tax assets not realized in previous accounting periods shall be realized.
(3) On balance sheet date, re-review shall be made in respect of the carrying value of deferred income tax
assets. If it is impossible to obtain sufficient taxable income to set off the benefits of deferred income tax assets
in future periods, then the carrying value of deferred income tax assets shall be reduced accordingly. If it is
probable to obtain sufficient taxable income, then the amount reduced shall be switched back.
(4) Current income tax and deferred income tax considered as income tax expenses or incomes reckoned into
current gains/losses, excluding the follow income tax:
①Enterprise combination;
②Transactions or events recognized in owner’s equity directly
29. Lease
(1) Accounting for operating lease
The rental fee paid for renting the properties by the company are amortized by the straight-line method and
reckoned in the current expenses throughout the lease term without deducting rent-free period. The initial direct
costs related to the lease transactions paid by the company are reckoned in the current expenses.
When the lessor undertakes the expenses related to the lease that should be undertaken by the company, the
company shall deduct the expenses from the total rental costs, share by the deducted rental costs during the
lease term, and reckon in the current expenses.
Rental obtained from assets leasing, during the whole leasing period without rent-free period excluded, shall
be amortized by straight-line method and recognized as leasing revenue. The initial direct costs paid with
leasing transaction concerned are reckoned into current expenditure; the amount is larger is capitalized when
incurred, and accounted for as profit or loss for the current period on the same basis as recognition of rental
income over the entire lease period.
When the company undertakes the expenses related to the lease that should be undertaken by the lessor, the
company shall deduct the expenses from the total rental income, and distribute by the deducted rental costs
during the lease term.
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(2) Accounting treatment for financing lease
Assets lease-in by financing: On the beginning date of the lease, the entry value of leased asset shall be at the
lower of the fair value of the leased asset and the present value of minimum lease payment at the beginning
date of the lease. Minimum lease payment shall be the entry value of long-term accounts payable, with
difference recognized as unrecognized financing expenses. Unrecognized financing expenses shall be reckoned
in financial expenses and amortized and using effective interest method during the leasing period. The initial
direct costs incurred by the Company shall be reckoned into value of assets lease-in.
Finance leased assets: on the lease commencement date, the company affirms the balance among the finance
lease receivables, the sum of unguaranteed residual value and its present value as the unrealized financing
income, and recognizes it as the rental income during the period of receiving the rent. For the initial direct
costs related to the rental transaction, the company reckons in the initial measurement of the finance lease
receivables, and reduces the amount of income confirmed in the lease term.
30.Changes of important accounting policy and estimation
(1)Changes of important accounting policies
Implementation of new revenue standard:
The Ministry of Finance revised the Accounting Standards for Business Enterprise No.14- Revenue in 2017,
which go into effect on 1 January 2020. The revised standard requires that the cumulative impact of the first
implementation of the standard be adjusted by the amount of opening retained earnings and other related items
in the financial statement for the period of first-time implementation for comparable periods.
Main impact on the financial statement of the Company on 1 Jan. 2020 while implementing the new revenue
standard:
Consolidated financial statement: In RMB/CNY
Item 2019-12-31 Reclassify Remeasurement 2020-1-1
Account receivable 2,310,666,475.89 115,015,466.40 -- 2,425,681,942.29
Other current liability -- 115,015,466.40 -- 115,015,466.40
--
Account received in
113,737,432.61 -110,874,750.61 -- 2,862,682.00
advance
Contract liability -- 98,565,613.54 -- 98,565,613.54
Other current liability -- 12,309,137.07 -- 12,309,137.07
Financial statement of parent company: In RMB/CNY
Item 2019-12-31 Reclassify Remeasurement 2020-1-1
Account receivable 768,500,929.93 79,739,079.11 -- 848,240,009.04
Other current liability -- 79,739,079.11 -- 79,739,079.11
Account received in
12,010,730.30 -12,010,730.30 -- --
advance
Contract liability -- 10,628,964.87 -- 10,628,964.87
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Other current liability -- 1,381,765.43 -- 1,381,765.43
(2)Changes of important accounting estimate
Nil
(3) Adjustment the financial statements at the beginning of the first year of implementation of new financial
instrument standards since 2020:
Consolidate balance sheet
In RMB/CNY
Item 2019-12-31 2020-1-1 Adjustments
Current assets:
Monetary funds 1,596,893,711.87 1,596,893,711.87
Financial assets measured at fair value and whose
changes are included in current profit or loss
Transaction financial asset 3,940,885,674.32 3,940,885,674.32
Derivative financial assets
Note receivable 1,812,141,371.94 1,812,141,371.94
Account receivable 2,310,666,475.89 2,425,681,942.29 115,015,466.40
Receivables financing 23,873,317.86 23,873,317.86
Account paid in advance 139,241,917.78 139,241,917.78
Other account receivables 43,730,023.31 43,730,023.31
Inventory 2,418,744,835.82 2,418,744,835.82
Contract assets
Assets held for sale
Non-current asset due within one year
Other current assets 1,012,055,605.74 1,012,055,605.74
Total current assets 13,298,232,934.53 13,413,248,400.93 115,015,466.40
Non-current assets:
Creditors’ investment
Other creditors’ investment
Long-term account receivables
Long-term equity investment 5,322,405,953.35 5,322,405,953.35
Other equity instrument investment 285,048,000.00 285,048,000.00
Other non-current financial assets 1,043,589,987.43 1,043,589,987.43
Investment real estate 22,410,511.87 22,410,511.87
Fixed assets 2,845,176,078.20 2,845,176,078.20
Construction in progress 247,857,777.25 247,857,777.25
Productive biological assets
Oil and gas assets
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Item 2019-12-31 2020-1-1 Adjustments
Intangible assets 430,594,372.12 430,594,372.12
Development expenses
Goodwill 1,784,086.79 1,784,086.79
Long-term deferred expenses 18,536,000.25 18,536,000.25
Deferred income tax assets 212,476,501.54 212,476,501.54
Other non-current assets 230,235,982.45 230,235,982.45
Total non-current assets 10,660,115,251.25 10,660,115,251.25
Total assets 23,958,348,185.78 24,073,363,652.18 115,015,466.40
Current liabilities:
Short-term borrowings 312,153,969.81 312,153,969.81
Financial liability measured by fair value and with
variation reckoned into current gains/losses
Transaction financial liability
Derivative financial liability
Note payable 1,745,218,439.52 1,745,218,439.52
Account payable 3,312,254,229.84 3,312,254,229.84
Account received in advance 113,737,432.61 2,862,682.00 -110,874,750.61
Contract liability 98,565,613.54 98,565,613.54
Employee compensation payable 314,343,737.66 314,343,737.66
Taxes payable 129,538,411.86 129,538,411.86
Other account payable 65,266,262.39 65,266,262.39
Liability held for sale
Non-current liabilities due within one year
Other current liability 127,324,603.47 127,324,603.47
Total current liabilities 5,992,512,483.69 6,107,527,950.09 115,015,466.40
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: preferred stock
Perpetual capital securities
Long-term account payable 35,108,263.11 35,108,263.11
Long-term employee compensation payable 58,392,053.61 58,392,053.61
Accrual liabilities
Deferred income 365,116,022.98 365,116,022.98
Deferred income tax liabilities 22,566,051.72 22,566,051.72
Other non-current liabilities
Total non-current liabilities 481,182,391.42 481,182,391.42
Total liabilities 6,473,694,875.11 6,588,710,341.51 115,015,466.40
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Item 2019-12-31 2020-1-1 Adjustments
Owners’ equity:
Paid-in capital (or share capital) 1,008,950,570.00 1,008,950,570.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital reserve 3,391,527,806.33 3,391,527,806.33
Less: Inventory shares
Other comprehensive income 134,871.67 134,871.67
Reasonable reserve 3,247,757.06 3,247,757.06
Surplus reserve 510,100,496.00 510,100,496.00
Retained profit 12,076,443,635.56 12,076,443,635.56
Total owners’ equity attributable to parent company 16,990,405,136.62 16,990,405,136.62
Minority interests 494,248,174.05 494,248,174.05
Total owners’ equity 17,484,653,310.67 17,484,653,310.67
Total liabilities and owner’s equity 23,958,348,185.78 24,073,363,652.18 115,015,466.40
Balance sheet of parent company
In RMB/CNY
Item 2019-12-31 2020-1-1 Adjustments
Current assets:
Monetary funds 965,770,877.82 965,770,877.82
Financial assets measured at fair value and
whose changes are included in current profit or loss
Transaction financial asset 3,758,789,072.68 3,758,789,072.68
Derivative financial assets
Note receivable 202,403,993.13 202,403,993.13
Account receivable 768,500,929.93 848,240,009.04 79,739,079.11
Receivables financing
Account paid in advance 89,116,730.45 89,116,730.45
Other account receivables 250,014,956.74 250,014,956.74
Inventory 565,144,234.49 565,144,234.49
Contract assets
Assets held for sale
Non-current asset due within one year
Other current assets 938,616,881.51 938,616,881.51
Total current assets 7,538,357,676.75 7,618,096,755.86 79,739,079.11
Non-current assets:
Creditors’ investment
Other creditors’ investment
Long-term account receivables
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Item 2019-12-31 2020-1-1 Adjustments
Long-term equity investment 6,331,363,630.04 6,331,363,630.04
Other equity instrument investment 209,108,000.00 209,108,000.00
Other non-current financial assets 1,043,589,987.43 1,043,589,987.43
Investment real estate
Fixed assets 1,646,333,216.50 1,646,333,216.50
Construction in progress 136,573,912.28 136,573,912.28
Productive biological assets
Oil and gas assets
Intangible assets 203,663,423.60 203,663,423.60
Development expenses
Goodwill
Long-term deferred expenses
Deferred income tax assets 105,137,877.84 105,137,877.84
Other non-current assets 172,646,721.05 172,646,721.05
Total non-current assets 9,848,416,768.74 9,848,416,768.74
Total assets 17,386,774,445.49 17,466,513,524.60 79,739,079.11
Current liabilities:
Short-term borrowings 116,126,459.33 116,126,459.33
Financial liability measured by fair value and
with variation reckoned into current gains/losses
Transaction financial liability
Derivative financial liability
Note payable 284,054,137.00 284,054,137.00
Account payable 930,273,146.35 930,273,146.35
Account received in advance 12,010,730.30 -12,010,730.30
Contract liability 10,628,964.87 10,628,964.87
Employee compensation payable 213,626,754.45 213,626,754.45
Taxes payable 56,540,307.59 56,540,307.59
Other account payable 11,976,576.21 11,976,576.21
Liability held for sale
Non-current liabilities due within one year
Other current liability 81,120,844.54 81,120,844.54
Total current liabilities 1,624,608,111.23 1,704,347,190.34 79,739,079.11
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: preferred stock
Perpetual capital securities
Long-term account payable
Long-term employee compensation payable 50,058,386.76 50,058,386.76
Accrual liabilities
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Item 2019-12-31 2020-1-1 Adjustments
Deferred income 322,971,778.82 322,971,778.82
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 373,030,165.58 373,030,165.58
Total liabilities 1,997,638,276.81 2,077,377,355.92 79,739,079.11
Owners’ equity:
Paid-in capital (or share capital) 1,008,950,570.00 1,008,950,570.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital reserve 3,488,221,286.39 3,488,221,286.39
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus reserve 510,100,496.00 510,100,496.00
Retained profit 10,381,863,816.29 10,381,863,816.29
Total owners’ equity 15,389,136,168.68 15,389,136,168.68
Total liabilities and owner’s equity 17,386,774,445.49 17,466,513,524.60 79,739,079.11
31. Critical accounting judgments and estimates
In the process of applying the Company's accounting policies, due to the inherent uncertainty of business
activities, the Company needs to judge, estimate and assume the book value of the report items cannot be
accurately measured. These judgments, estimates and assumptions are made on the basis of the historical
experience of the Company’s management and by considering other relevant factors, which shall impact the
reported amounts of income, expenses, assets and liabilities and the disclosure of contingent liabilities on the
balance sheet date. However, the actual results caused by the estimated uncertainties may differ from the
management's current estimates of the Company so as to carry out the significant adjustments to the book value
of the assets or liabilities to be affected.
The Company regularly reviews the aforementioned judgments, estimates and assumptions on the basis of
continuing operations, the changes in accounting estimates only affect the current period, of which the impacts
are recognized in the current period; the changes in accounting estimates not only affect the current period but
also the future periods, of which the impacts are recognized in the current and future periods.
On the balance sheet date, the important areas of the financial statements that the Company needs to judge,
estimate and assume are as follows:
(1) Provision for bad debts
The Company has used the expected credit loss model to assess the impairment of financial instruments. The
application of the expected credit loss model requires significant judgements and estimates, and must consider
all reasonable and evidence-based information, including forward-looking information. In making such
judgments and estimates, the Company infers the expected changes in debtors’ credit risks based on historical
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repayment data combined with economic policies, macroeconomic indicators, industry risks and other factors.
(2) Inventory impairment
According to the inventory accounting policies, the Company measures by the comparison between the cost and
the net realizable value, if the cost is higher than the net realizable value and the old and unsalable inventories,
the Company calculates and withdraws the inventory impairment. The inventory devalues to the net realizable
value by evaluating the inventory’s vendibility and net realizable value. To identify the inventory impairment,
the management needs to obtain the unambiguous evidences, and consider the purpose to hold the inventory,
and judge and estimate the impacts of events after the balance sheet date. The actual results and the differences
between the previously estimated results shall affect the book value of inventory and the provision or return of
the inventory impairment during the period estimated to be changed.
(3) Preparation for the impairment of non-financial & non-current assets
The Company checks whether the non-current assets except for the financial assets may decrease in value at
the balance sheet date. For the intangible assets with indefinite service life, in addition to the annual impairment
test, the impairment test is also needed when there is a sign of impairment. For the other non-current assets
except for the financial assets, the impairment test is needed when it indicates that the book amounts may not be
recoverable.
When the book value of the asset or group of assets exceeds its recoverable amount, i.e. the higher between the
net amount by subtracting the disposal costs from the fair value and the present value of expected future cash
flows, it indicates the impairment.
As for the net amount by subtracting the disposal costs from the fair value, refer to the sales agreement price
similar to the assets in the fair trade or the observable market price, and subtract the incremental costs
determination directly attributable to the disposal of the asset.
When estimating the present value of the future cash flow, the Company needs to make significant judgments
to the output, price, and related operating expenses of the asset (or asset group) and the discount rate used for
calculating the present value. When estimating the recoverable amount, the Company shall adopt all the
relevant information can be obtained, including the prediction related to the output, price, and related operating
expenses based on the reasonable and supportable assumptions.
The Company tests whether its business reputation decreases in value every year, which requires to estimating
the present value of the asset group allocated with goodwill or the future cash flow combined by the asset
group. When estimating the present value of the future cash flow, the Company needs to estimate the future
cash flows generated by the asset group or the combination of asset group, and select the proper discount rate
to determine the present value of the future cash flows.
(4) Depreciation and amortization
The Company depreciates and amortizes the investment property, fixed assets and intangible assets according
to the straight-line method in the service life after considering the residual value. The Company regularly
reviews the service life to determine the depreciation and amortization expense amount to be reckoned in each
reporting period. The service life is determined by the Company based on the past experience of similar assets
and the expected technological updating. If the previous estimates have significant changes, the depreciation and
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amortization expense shall be adjusted in future periods.
(5) Fair value of financial instrument
Financial instruments that do not have active markets to provide quotes need to use valuation techniques to
determine fair value. Valuation techniques include the latest transaction information, discounted cash flow
methods, and option pricing models. The Company has established a set of work processes to ensure that
qualified personnel are responsible for the calculation, verification and review of fair value. The valuation
model used by the Company uses the market information as much as possible and uses the Company-specific
information as little as possible. It should be noted that part of the information used in the valuation model
requires management’s estimation (such as discount rate, target exchange rate volatility, etc.). The Company
regularly reviews the above estimates and assumptions and makes adjustments if necessary.
(6) Income tax
In the Company’s normal business activities, the final tax treatment and calculation of some transactions have
some uncertainties. Whether some projects can be disbursed from the cost and expenses before taxes requires
needs to get approval from the tax authorities. If the final affirmation of these tax matters differs from the
initially estimated amount, the difference shall have an impact on its current and deferred income taxes during
the final identification period.
IV. Taxation
1. Major taxes and tax rates
Tax Basis Tax rate
General taxpayers of the company and domestic
subsidiaries calculate output tax at the tax rates of
13%, 9%, 6%, and 5% of taxable income, and
VAT 13%, 9%, 6%, Collection rate 5%
calculate and pay value-added tax based on the
difference after deducting the input VAT that is
allowed to be deducted in the current period.
City
maintaining & Turnover tax payable 7%
construction tax
Educational
Turnover tax payable 5%.4.5%
surtax
Except for overseas subsidiaries which calculate
and pay the taxes according to the statutory tax rate
Corporation of the country or region where they are located, the
Taxable income corporate income tax of domestic companies is
income tax
calculated and paid at 15%、20% or 25% of the
taxable income.
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2. Preferential taxation
The Company, Weifu Jinning, Weifu Leader and Weifu Tianli are accredited as a high-tech enterprise in 2020,
and enjoy a preferential income tax rate of 15% from 1 January 2020 to 31 December 2022.
The State Administration of Taxation announced the first item of Announcement of the State Administration of
Taxation on the Enterprise Income Tax Issues Concerning the Implementation of the Western Development
Strategy No. 12 of 2012 that from January 1, 2011 to December 31, 2020, the enterprises located in the west
region and mainly engaged in the industrial projects stipulated in the Catalogue of Encouragement Industriesin
the Western Region, and whose main business income accounting for more than 70% of the total income of the
enterprise in the current year can pay the corporate income tax at the tax rate of 15%. In 2020, Weifu Leader
(Chongqing) paid its corporate income tax at the tax rate of 15%.
According to the provision of the State Administration of Taxation on the Announced the Cancellation of 22
Tax Non-administrative Review (No. 58 documents in 2015) dated 18 August 2015, the enterprise that benefit
from the 15% tax incentive for western development do not need to approve only to file, and Weifu Leader
(Chongqing) has passed the tax filing audit in 2020.
In 2020, Weifu Leader (Wuhan) met the standards of small and low-profit enterprises, and the part of taxable
income that did not exceed 1 million yuan was included in the taxable income at a reduced rate of 25%, and
the corporate income tax was paid at the tax rate of 20%; while the part of the taxable income exceeding 1
million yuan but not exceeding 3 million yuan was included in the taxable income at a reduced rate of 50%,
and the corporate income tax was paid at the tax rate of 20%.
V. Not e s t o maj or it e ms i n c o ns o li dat e d f i na nc ial s t at e me nt s
(Monetary unit refers to RMB/CNY below unless otherwise specified.The end of the period refers to
December 31, 2020, the beginning of the period refers to January 1, 2020, the current period refers to
2020, and the last period refers to 2019.)
1. Monetary funds
Item Ending balance Opening balance
Cash on hand 507.66 93,165.33
Cash in bank 1,905,945,511.04 1,531,405,488.52
Other Monetary funds 57,343,813.63 65,395,058.02
Total 1,963,289,832.33 1,596,893,711.87
Including: Total amount saving aboard 33,723,245.25 31,442,836.86
Total amount with restriction on
57,343,813.63 34,946,900.21
use for mortgage, pledge or freeze
Other explanation:
The ending balance of other monetary funds includes bank acceptance bill deposit 51,045,344.11 yuan, Mastercard deposit
215,720.00 yuan, in-transit foreign exchange funds 2,656,627.59 yuan, letter of credit guarantee deposit 587,241.00 yuan, and
frozen dividends 2,838,880.93 yuan. The in-transit foreign exchange fund of 2,656,627.59 yuan is the final payment of the
investment in Protean Holding Corp; as of December 31, 2020, the amount is still in the foreign exchange supervision
account.The frozen dividend of 2,838,880.93 Yuan represents the part of dividends distributed by SDEC(stock code:600841) and
Miracle Automation (stock code:002009) from 2017 to 2020 held by the Company as financial assets available for sale.
According to the notices numbered Yue 03MC [2016]2490 and Yue 03MC [2016]2492 served by Guangdong Shenzhen
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Intermediate People’s Court, these dividends were frozen.
2. Transaction financial asset
Item Ending balance Opening balance
Financial assets measured by fair value and with
3,518,432,939.10 3,940,885,674.32
variation reckoned into current gains/losses
Including: SDEC share 140,395,956.00 91,822,332.00
Miracle Automation share 47,712,300.00 36,031,500.00
Financial products 3,330,324,683.10 3,813,031,842.32
Other -- --
Total 3,518,432,939.10 3,940,885,674.32
3. Note receivable
(1) Classification of notes receivable:
Item Ending balance Opening balance
Bank acceptance bill 1,312,571,695.46 1,755,135,175.42
Trade acceptance bill 344,744,028.10 57,006,196.52
Total 1,657,315,723.56 1,812,141,371.94
Ending balance
Category Book balance Bad debt reserve
Accrual ratio Book value
Amount Ratio (%) Amount
(%)
Note receivable with bad debt
1,657,315,723.56 100.00 -- -- 1,657,315,723.56
provision accrual on portfolio
Portfolio 1: bank acceptance bill 1,312,571,695.46 79.20 -- -- 1,312,571,695.46
Portfolio 2: trade acceptance bill 344,744,028.10 20.80 -- -- 344,744,028.10
Total 1,657,315,723.56 100.00 -- -- 1,657,315,723.56
On December 31, 2020, the company accrued bad debt provisions according to the expected credit losses for the entire duration ,
bank acceptance bills and trade acceptance bill do not need to accrue bad debt provisions.The company believed that the bank
acceptance bills held did not have significant credit risk and would not cause significant losses due to bank defaults.The trade
acceptance bill held by the Company did not have significant credit risk, because these bills were mainly issued by large
state-owned enterprises and listed companies with good reputation, and based on historical experience, there had been no major
defaults, so they did not accrue bad debt provisions for the receivable bank acceptance bills and trade acceptance bill.
(2) Notes receivable already pledged by the Company at the end of the period:
Item Amount pledge at period-end
Bank acceptance bill 677,962,881.14
Trade acceptance bill 203,951,495.81
Total 881,914,376.95
(3) Notes endorsement or discount and undue on balance sheet date
Amount derecognition at Amount not derecognition at
Item
period-end period-end
Bank acceptance bill 883,989,936.32 --
Trade acceptance bill 33,750,000.00 --
Total 917,739,936.32 --
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(4) Notes transfer to account receivable due for failure implementation by drawer at period-end:
Item Amount transfer to account receivable at period-end
Trade acceptance bill 7,300,000.00
Other explanation:
The trade acceptance bill that the company transferred to the accounts receivable due to in 2018 the failure of the drawer to perform
the agreement at the end of the period were the bills of the subsidiaries controlled by Baota Petrochemical Group Co., Ltd. and the
bills accepted by Baota Petrochemical Group Finance Co., Ltd. (hereinafter referred to as “BDbills”); In 2018, the amount
transferred to account receivable was 7 million yuan, and 1.7 million yuan has been recovered in 2019, this year, an increase of 2
million yuan was added.
4. Account receivable
(1) Classification of account receivable:
Ending balance
Book balance Bad debt reserve
Category
Amount Ratio (%) Amount Accrual ratio Book value
(%)
Account receivable with bad
debt provision accrual on a 80,362,095.35 2.74 80,362,095.35 100.00 --
single basis
Account receivable with bad
debt provision accrual on 2,847,529,398.11 97.26 22,749,045.70 0.80 2,824,780,352.41
portfolio
Total 2,927,891,493.46 100.00 103,111,141.05 3.52 2,824,780,352.41
Opening balance
Book balance Bad debt reserve
Category
Amount Ratio (%) Amount Accrual ratio Book value
(%)
with bad debt provision
64,818,802.14 2.58 64,818,802.14 100 --
accrual on a single basis
with bad debt provision
2,448,486,812.37 97.42 22,804,870.08 0.93 2,425,681,942.29
accrual on portfolio
Total 2,513,305,614.51 100.00 87,623,672.22 3.49 2,425,681,942.29
①Bad debt provision accrual on single basis:
Ending balance
Account receivable(by unit) Bad debt Accrual ratio
Book balance Accrual causes
reserve (%)
Hubei Meiyang Auto Industry Co., Ltd. 20,139,669.45 20,139,669.45 100.00 Have difficulty in collection
Hunan Leopaard Auto Co., Ltd. 8,910,778.54 8,910,778.54 100.00 Have difficulty in collection
BD bills 7,300,000.00 7,300,000.00 100.00 Have difficulty in collection
Jiangxi Dorcen Automobile Industry Co.,
7,287,632.16 7,287,632.16 100.00 Have difficulty in collection
Ltd.
Linyi Zotye Automobile components 6,193,466.77 6,193,466.77 100.00 Have difficulty in collection
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Ending balance
Account receivable(by unit) Bad debt Accrual ratio
Book balance Accrual causes
reserve (%)
Manufacturing Co., Ltd.
Changchun FAW Sihuan Engine
5,852,415.65 5,852,415.65 100.00 Have difficulty in collection
Manufacturing Co., Ltd
Tongling Ruineng Purchasing Co., Ltd. 4,320,454.34 4,320,454.34 100.00 Have difficulty in collection
Brilliance Automotive Group Holdings
3,469,091.33 3,469,091.33 100.00 Have difficulty in collection
Co., Ltd.
Zhejiang Zotye Auto Manufacturing Co.,
3,217,763.27 3,217,763.27 100.00 Have difficulty in collection
Ltd.
Jiangxi Dorcen Automobile Co., Ltd. 2,518,959.01 2,518,959.01 100.00 Have difficulty in collection
Dongfeng Chaoyang Diesel Co., Ltd. 1,953,054.31 1,953,054.31 100.00 Have difficulty in collection
Jiangsu Kawei Auto Industrial Group Co.,
1,932,476.26 1,932,476.26 100.00 Have difficulty in collection
Ltd.
Wuxi Kipor Machinery Co., Ltd 1,820,798.21 1,820,798.21 100.00 Have difficulty in collection
Fujian Zhao’an Country Minyue Bianjie
Agricultural Machinery Automobile 1,111,007.12 1,111,007.12 100.00 Have difficulty in collection
components Co., Ltd.
Jiangsu Jintan Automobile Industry Co.,
1,059,798.43 1,059,798.43 100.00 Have difficulty in collection
Ltd.
Other custom 3,274,730.50 3,274,730.50 100.00 Have difficulty in collection
Total 80,362,095.35 80,362,095.35 100.00
②Bad debt provision accrual on portfolio:
Ending balance
Account age
Book balance Bad debt reserve Accrual ratio (%)
Within 6 months 2,708,236,852.25 -- --
6 months to one year 112,424,780.47 11,242,478.05 10.00
1-2 years 16,733,198.33 3,346,639.68 20.00
2-3 years 3,291,064.86 1,316,425.77 40.00
Over 3 years 6,843,502.20 6,843,502.20 100.00
Total 2,847,529,398.11 22,749,045.70 0.80
③In the portfolio, there is no account receivable bad debt reserves are accrued by other methods
④By account age (Including single provision and portfolio provision):
Account age Ending Book balance
Within one year 2,822,428,153.44
Including: within 6 months 2,708,470,485.40
6 months to one year 113,957,668.04
1-2 years 54,617,379.30
2-3 years 35,820,608.24
Over 3 years 15,025,352.48
Total 2,927,891,493.46
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(2) Bad debt provision accrual collected or switch back:
Amount changed in the period
Conversion
Opening of foreign Increase in
Category Collected or Ending balance
balance Accrual Written-off currency business
reversal
financial combination
statement
Bad debt
87,623,672.22 17,176,890.53 931,854.92 988,058.21 23,670.92 206,820.51 103,111,141.05
reserve
Important bad debt provision collected or switch back: nil
(3) Account receivable actual charge off in the Period
Item Amount charge off Resulted by related transaction (Y/N)
Anhui Quanchai Power Co., Ltd. 143,750.00 N
Zhejiang Gonow Automobile Co., Ltd. 138,571.90 N
Chongqing Tuopu Diesel Engine Factory 134,197.30 N
Fuzhou Haominxing Automobile
129,739.47 N
components Co., Ltd.
Shanghai Yangma Generator Co., Ltd. 104,496.00 N
Retail enterprise 337,303.54 N
Total 988,058.21
(4) Top 5 receivables at ending balance by arrears party
Ratio in total ending
Ending balance of account Ending balance of bad debt
Name balance of account
receivable reserve
receivables (%)
Bosch Automobile Diesel System Co., Ltd. 549,543,387.12 18.77 --
Robert Bosch Company 205,738,695.62 7.03 84,473.87
Custom 3 220,253,622.18 7.52 7,236.15
Custom 4 183,940,277.82 6.28 85,495.24
Custom 5 171,736,086.39 5.87 8,253,890.59
Total 1,331,212,069.13 45.47 8,431,095.85
(5) Account receivable derecognition due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvement
Nil
5. Receivables financing
(1)Classification of receivables financing:
Item Ending balance Opening balance
Note receivable 1,005,524,477.88 23,873,317.86
Including: bank acceptance bill 1,005,524,477.88 23,873,317.86
Trade acceptance bill -- --
Total 1,005,524,477.88 23,873,317.86
Other explanation: During the management of enterprise liquidity, the company will discount or endorse
transfers before the maturity of some bills, the business model for managing bills receivable is to collect
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contractual cash flows and sell the financial asset, so it is classified as financial assets measured at fair value
and whose changes are included in other comprehensive income, which is listed in receivables financing.
(2) Notes receivable already pledged by the Company at the end of the period:
Item Amount pledge at period-end
Bank acceptance bill 646,892,501.28
Trade acceptance bill --
Total 646,892,501.28
6. Account paid in advance
(1) Account age of account paid in advance
Ending balance Opening balance
Account age
Amount Ratio (%) Amount Ratio (%)
Within one year 146,877,271.37 96.71 118,030,952.47 84.77
1-2 years 2,799,827.49 1.84 19,644,713.49 14.11
2-3 years 1,254,109.33 0.83 683,098.16 0.49
Over 3 years 942,149.57 0.62 883,153.66 0.63
Total 151,873,357.76 100.00 139,241,917.78 100.00
Explanation on reasons of failure to settle on important advance payment with age over one year:
Nil
(2) Top 5 advance payment at ending balance by prepayment object
Total year-end balance of top five advance payment by prepayment object amounted to 61,951,950.89 Yuan,
takes 40.79 percent of the total advance payment at year-end.
7. Other account receivables
Item Ending balance Opening balance
Interest receivable -- 655,052.98
Dividend receivable 49,000,000.00 1,070,000.00
Other account receivables 5,209,580.88 42,004,970.33
Total 54,209,580.88 43,730,023.31
(1)Interest receivable
1) Category of interest receivable
Item Ending balance Opening balance
Time deposit -- --
Interest of fund occupation -- 655,052.98
Total -- 655,052.98
2) Significant overdue interest
Nil
(2) Dividend receivable
1) Category of dividend receivable
Invested enterprise Ending balance Opening balance
Wuxi Weifu Environment Catalyst Co., Ltd. 49,000,000.00 --
Weifu Precision Machinery Manufacturing Co., -- 1,070,000.00
83 / 146
Invested enterprise Ending balance Opening balance
Ltd.
Total 49,000,000.00 1,070,000.00
2) Important dividend receivable with account age over one year
Nil
(3) Other account receivables
1) Other account receivables classification by nature
Nature Ending balance Opening balance
Intercourse funds from units -- 35,441,483.88
Protean Holdings Corp. equity disposal fund -- 10,654,092.89
Cash deposit 5,650,143.62 3,625,917.96
Staff loans and petty cash 766,301.05 1,346,241.81
Other 1,651,737.93 300,206.93
Total 8,068,182.60 51,367,943.47
2) Accrual of bad debt provision
Phase I Phase II Phase III
Expected credit losses Expected credit losses
Bad debt reserve Expected credit losses for the entire duration for the entire duration Total
over next 12 months (without credit (with credit impairment
impairment occurred) occurred)
Balance on Jan. 1, 2020 7,848,301.94 -- 1,514,671.20 9,362,973.14
Balance of Jan. 1, 2020 in the
-- -- -- --
period
--transfer-in phase I -- -- -- --
--transfer-in phase II -- -- --
-- switch back phase II -- -- -- --
-- switch back phase I -- -- -- --
Current accrual 33,302.78 -- 31,823.40 65,126.18
Current reversal 5,056,807.33 -- 68,706.86 5,125,514.19
Current written-off -- -- 1,445,964.34 1,445,964.34
Other change 1,980.93 -- -- 1,980.93
Balance on Dec. 31, 2020 2,826,778.32 -- 31,823.40 2,858,601.72
By account age (Including single provision and portfolio provision)
Account age Ending Book balance
Within one year 5,306,591.79
Including: Within 6 months 4,338,058.39
6 months to one year 968,533.40
1-2 years 80.00
2-3 years 47,365.81
Over 3 years 2,714,145.00
Total 8,068,182.60
84 / 146
3) Bad debt provision accrual, collected or switch back
Amount changed in the period
Conversion
Opening of foreign Increase in
Category Collected or Ending balance
balance Accrual Written-off currency business
reversal
financial combination
statement
Bad debt
9,362,973.14 65,126.18 5,125,514.19 1,445,964.34 1,980.93 -- 2,858,601.72
reserve
4) Other receivables actually written-off during the reporting period
Item Amount charge off
American HESS Company 1,445,964.34
5) Top 5 other receivables at ending balance by arrears party
Ending
Ratio
Name Nature Ending balance Account age balance of bad
(%)
debt reserve
Ningbo Jiangbei High-Tech Industry Park
Deposit margin 1,767,000.00 Over 3 years 21.90 1,767,000.00
Development Construction Co., Ltd.
Within 6
Wuxi China Resources Gas Co., Ltd. Deposit margin 1,026,000.00 12.73 --
months
Zhenkunxing Industrial Supermarket Within 6
Deposit margin 1,000,000.00 12.39 --
(Shanghai) Co., Ltd. months
6 months to one
Chongqing Airport Group Co., Ltd. Deposit margin 636,710.00 7.89 63,671.00
year
Nanjing Chimbusco City Gas
Deposit margin 575,640.00 Over 3 years 7.13 575,640.00
Development Co., Ltd.
Total 5,005,350.00 62.04 2,406,311.00
6) Other account receivables related to government grants: Nil
7) Other receivable for termination of confirmation due to the transfer of financial assets: Nil
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved: Nil
8. Inventory
(1) Category of inventory
Ending balance Opening balance
Item
Book balance Depreciation Book value Book balance Depreciation Book value
reserve reserve
Raw materials 584,188,987.86 73,833,368.32 510,355,619.54 495,927,678.66 81,069,128.03 414,858,550.63
Goods in process 415,445,852.86 14,589,096.65 400,856,756.21 243,525,007.82 13,963,866.92 229,561,140.90
Finished goods 2,124,817,656.18 158,847,857.29 1,965,969,798.89 1,937,368,868.87 163,043,724.58 1,774,325,144.29
Total 3,124,452,496.90 247,270,322.26 2,877,182,174.64 2,676,821,555.35 258,076,719.53 2,418,744,835.82
(2) Inventory depreciation reserve
Inventory Opening Current increased
Ending balance
category balance Increase in Accrual Resell Conversion of
Raw materials 81,069,128.03 business
192,731.93 32,396,791.38 39,951,549.94 foreign
126,266.92 73,833,368.32
Goods in combination currency
13,963,866.92 -- 8,567,123.76 7,941,894.03 -- 14,589,096.65
process goods financial
Finished 163,043,724.58 -- 101,436,883.33 105,666,604.29 33,853.67 158,847,857.29
statement
Total 258,076,719.53 192,731.93 142,400,798.47 153,560,048.26 160,120.59 247,270,322.26
85 / 146
① Net realizable value of the inventory refers to: during the day-to-day activities, results of the estimated sale
price less costs which are going to happen by estimation till works completed, sales price estimated and
relevant taxes.
② Accrual basis for inventory depreciation reserve:
Accrual basis for inventory Specific basis for recognition
Item
impairment provision
The materials sold due to finished Results from the estimated sale price of such inventory less the cost
Raw materials goods manufactured, its net realizable what will happen, estimated sales expenses and relevant taxes till
value is lower than the book value the goods completed
The goods in process sold due to Results from the estimated sale price of such inventory less the cost
Goods in finished goods manufactured, its net what will happen, estimated sales expenses and relevant taxes till
process realizable value is lower than the the goods completed
book value
Accrual basis for inventory Specific basis for recognition
Finished goods
impairment provision
③ Reasons of write-off for inventory falling price reserves:
Item Reasons of write-off
Raw materials Used for production and the finished goods are realized sales
Goods in process Goods in process completed in the Period and corresponding finished goods are realized sales in the Period
Finished goods Sales in the Period
(3) Explanation on capitalization of borrowing costs at ending balance of inventory
Nil
9. Other current assets
Item Ending balance Opening balance
Structured deposits 1,925,000,000.00 965,000,000.00
Receivable export tax rebates 5,286,965.71 5,383,485.34
VAT refund receivable -- 1,648,669.86
Prepaid taxes and VAT retained 200,524,304.70 36,067,254.77
Input tax to be deducted and certification 178,073.42 764,895.21
Other 6,931,769.78 3,191,300.56
Total 2,137,921,113.61 1,012,055,605.74
86 / 146
10. Long-term equity investments
Current changes (+, -)
Ending
The invested Investment Other balance of
Opening balance Other Cash dividend or Provision Ending balance
entity Additional Capital gain/loss comprehensive depreciation
equity profit announced for Other
investment reduction recognized under income impairment reserves
change to issued
equity adjustment
Associated
enterprise
Wuxi Weifu
Environment 578,366,832.27 -- -- 147,950,344.01 -- -- 49,000,000.00 -- -- 677,317,176.28 --
Catalyst Co., Ltd.
Bosch
Automobile
Diesel System 3,417,092,136.65 -- -- 1,185,178,731.75 -- -- 1,801,681,159.00 -- -- 2,800,589,709.40 --
Co., Ltd.
Zhonglian
Automobile
Electronic Co., 1,261,232,635.30 -- -- 307,716,221.01 -- -- 331,400,000.00 -- -- 1,237,548,856.31 --
Ltd.
Weifu Precision
Machinery
Manufacturing 61,536,602.82 -- -- 16,917,467.83 -- -- 3,600,000.00 -- -- 74,854,070.65 --
Co., Ltd.
Shinwell
Automobile Tech. 4,177,746.31 -- -- -3,194,996.20 -- -- -- -- -- 982,750.11 --
(Wuxi) Co., Ltd.
Changchun
Xuyang Weifu
Auto Parts -- 10,200,000.00 -- -4,271.78 -- -- -- -- -- 10,195,728.22 --
Technology Co.,
Ltd.
Total 5,322,405,953.35 10,200,000.00 -- 1,654,563,496.62 -- -- 2,185,681,159.00 -- -- 4,801,488,290.97 --
87 / 146
11. Other equity instrument investment
Item Ending balance Opening balance
Wuxi Xidong Science & Technology Industrial Park 5,000,000.00 5,000,000.00
Beijing Zhike Industry Investment Holding Group Co., Ltd. 75,940,000.00 75,940,000.00
Rare earth Catalysis Innovation Research Institute (Dongying)
4,108,000.00 4,108,000.00
Co., Ltd.
Wuxi Xichang Microchip Semi-Conductor 200,000,000.00 200,000,000.00
Total 285,048,000.00 285,048,000.00
12. Other non-current financial assets
Item Ending balance Opening balance
Tradable financial assets holding for over one year 1,467,000,000.00 1,000,246,703.43
Equity instrument investment 338,788,421.00 43,343,284.00
Total 1,805,788,421.00 1,043,589,987.43
13. Investment real estate
(1) Investment real estate measured by cost
Construction
Item House and Building Land use right Total
in progress
I. original book value
1.Opening balance 65,524,052.61 -- -- 65,524,052.61
2.Current increased -- -- -- --
(1) outsourcing -- -- -- --
(2) Inventory\fixed assets\construction in
-- -- -- --
process transfer-in
(3) increased by combination -- -- -- --
3.Current decreased -- -- -- --
(1) disposal -- -- -- --
(2) other transfer-out -- -- -- --
4.Ending balance 65,524,052.61 -- -- 65,524,052.61
II. Accumulated depreciation and accumulated
amortization
1.Opening balance 43,113,540.74 -- -- 43,113,540.74
2.Current increased 1,523,830.25 -- -- 1,523,830.25
(1) accrual or amortization 1,523,830.25 -- -- 1,523,830.25
(2) Inventory\fixed assets\construction in
-- -- -- --
process transfer-in
3.Current decreased -- -- -- --
(1) disposal -- -- -- --
(2) other transfer-out -- -- -- --
4.Ending balance 44,637,370.99 -- -- 44,637,370.99
III. Depreciation reserves
88 / 146
Construction
Item House and Building Land use right Total
in progress
1.Opening balance -- -- -- --
2.Current increased -- -- -- --
(1) accrual -- -- -- --
3. Current decreased -- -- -- --
(1) disposal -- -- -- --
(2) other transfer-out -- -- -- --
4.Ending balance -- -- -- --
IV. Book value
1.Ending Book value 20,886,681.62 -- -- 20,886,681.62
2.Opening Book value 22,410,511.87 -- -- 22,410,511.87
(2) Investment real estate measured at fair value
Nil
14. Fixed assets
(1) Fixed assets
House and Machinery Transportation Electronic and
Item Total
Building equipment equipment other equipment
I. original book value
1.Opening balance 1,577,727,234.03 2,892,177,324.22 33,031,605.81 518,844,612.28 5,021,780,776.34
2.Current increased 7,563,975.38 498,442,904.87 1,083,968.58 44,140,463.89 551,231,312.72
(1) Purchase -- 5,768,487.05 -- 5,779,483.65 11,547,970.70
(2) Construction in progress
7,563,975.38 406,156,147.42 1,083,968.58 26,833,999.90 441,638,091.28
transfer-in
(3) increased by combination -- 86,518,270.40 -- 11,526,980.34 98,045,250.74
3.Current decreased 696,619.88 32,375,566.33 3,834,292.89 31,182,407.69 68,088,886.79
(1) disposal or scrapping 696,619.88 32,375,566.33 3,834,292.89 31,182,407.69 68,088,886.79
(2)Other -- -- -- -- --
4.Conversion of foreign
-- 1,445,729.23 -- 209,033.22 1,654,762.45
currency financial statement
5.Ending balance 1,584,594,589.53 3,359,690,391.99 30,281,281.50 532,011,701.70 5,506,577,964.72
II. Accumulated depreciation
1.Opening balance 373,468,771.98 1,466,289,636.27 24,572,383.79 259,549,999.99 2,123,880,792.03
2.Current increased 47,226,786.07 341,600,542.42 1,505,443.82 50,929,896.22 441,262,668.53
(1) accrual 47,226,786.07 295,932,176.04 1,505,443.82 44,560,750.98 389,225,156.91
(2)Increase in business
-- 45,668,366.38 -- 6,369,145.24 52,037,511.62
combination
3.Current decreased 552,514.41 7,100,470.77 3,475,517.46 19,546,483.92 30,674,986.56
(1) disposal or scrapping 552,514.41 7,100,470.77 3,475,517.46 19,546,483.92 30,674,986.56
(2)Other -- -- -- -- --
89 / 146
House and Machinery Transportation Electronic and
Item Total
Building equipment equipment other equipment
4.Conversion of foreign
-- 833,283.96 -- 135,316.83 968,600.79
currency financial statement
5.Ending balance 420,143,043.64 1,801,622,991.88 22,602,310.15 291,068,729.12 2,535,437,074.79
III. Depreciation reserves
1.Opening balance -- 45,370,341.62 73,319.90 7,280,244.59 52,723,906.11
2.Current increased -- 36,436,674.38 -- -- 36,436,674.38
(1) accrual -- 36,436,674.38 -- -- 36,436,674.38
(2)Other -- -- -- -- --
3.Current decreased 35,943.60 -- 213,938.04 249,881.64
(1) disposal or scrapping -- 35,943.60 -- 213,938.04 249,881.64
(2)Other -- -- -- -- --
4. Conversion of foreign
-- -- -- -- --
currency financial statement
5. Ending balance -- 81,771,072.40 73,319.90 7,066,306.55 88,910,698.85
IV. Book value
1.Ending Book value 1,164,451,545.89 1,476,296,327.71 7,605,651.45 233,876,666.03 2,882,230,191.08
2.Opening Book value 1,204,258,462.05 1,380,517,346.33 8,385,902.12 252,014,367.70 2,845,176,078.20
(2) Temporarily idle fixed assets: nil
(3) Fixed assets acquired by financing lease:
Accumulated
Item Original book value Impairment provision Book value
depreciation
Mechanical equipment 28,328,331.83 16,449,611.12 -- 11,878,720.71
(4) Fixed assets acquired by operating lease: nil
(5) Fixed assets without property certification held
Item Book value Reasons for without the property certification
Plant and office building of Weifu Chang’an 34,117,284.65 Still in process of relevant property procedures
15. Construction in progress
Item Ending balance Opening balance
Construction in progress 243,795,493.04 247,857,777.25
Engineering materials -- --
Total 243,795,493.04 247,857,777.25
(1) Construction in progress
Ending balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Technical transformation
123,249,079.40 -- 123,249,079.40 98,032,515.22 -- 98,032,515.22
of parent company
Technical transformation
20,720,304.97 -- 20,720,304.97 44,412,832.62 -- 44,412,832.62
of Weifu Autocam
90 / 146
Technical transformation
27,031,547.25 -- 27,031,547.25 25,051,156.03 -- 25,051,156.03
of Weifu Leader
Other Item 72,794,561.42 -- 72,794,561.42 80,361,273.38 -- 80,361,273.38
247,857,777.2
Total 243,795,493.04 -- 243,795,493.04 247,857,777.25 --
5
(2) Changes of major projects under construction
Opening Fixed assets
Other decreased
Item Current increased transfer-in in the Ending balance
balance in the Period
Period
Technical transformation of
98,032,515.22 258,248,011.11 233,031,446.93 -- 123,249,079.40
parent company
Technical transformation of
44,412,832.62 59,344,058.68 83,036,586.33 -- 20,720,304.97
Weifu Autocam
Technical transformation of
25,051,156.03 49,714,021.24 47,733,630.02 -- 27,031,547.25
Weifu Leader
Total 167,496,503.87 367,306,091.03 363,801,663.28 -- 171,000,931.62
Cont.:
Proportion Accumulated including:
Interest
of project amount of interest
capitalization
Item investment Progress interest capitalized Source offunds
rate of the
in budget capitalization amount of the
year (%)
(%) (%) year
Technical transformation Accumulated funds of
-- -- -- -- --
of parent company the company
Technical transformation Accumulated funds of
-- -- -- -- --
of Weifu Autocam the company
Technical transformation Accumulated funds of
-- -- -- -- --
of Weifu Leader the company
Total -- -- -- -- --
(3) The provision for impairment of construction projects
Nil
16. Intangible assets
(1) Intangible assets
Patent and
Trademark and
Item Land use right Computer software non-patent Total
trademark license
technology
I. original book value
1.Opening balance 380,986,757.11 81,823,603.48 41,597,126.47 105,086,673.46 609,494,160.52
2.Current increased 25,763.33 15,790,128.41 -- 75,384,836.56 91,200,728.30
(1) Purchase -- 15,019,691.80 -- 2,842,372.92 17,862,064.72
(2) internal R&D -- -- -- -- --
(3)Increase in
-- 770,436.61 -- 72,542,463.64 73,312,900.25
business combination
(4)Other 25,763.33 -- -- -- 25,763.33
3.Current decreased -- -- -- -- --
91 / 146
Patent and
Trademark and
Item Land use right Computer software non-patent Total
trademark license
technology
(1) Disposal or scrap -- -- -- -- --
(2)Other -- -- -- -- --
4.Conversion of
foreign currency -- 71,130.87 -- 4,607,818.10 4,678,948.97
financial statement
5.Ending balance 381,012,520.44 97,684,862.76 41,597,126.47 185,079,328.12 705,373,837.79
II. accumulated
amortization
1.Opening balance 88,200,675.16 54,519,248.03 9,709,000.00 9,823,965.21 162,252,888.40
2.Current increased 7,052,263.90 19,718,966.93 -- 44,226,916.11 70,998,146.94
(1) accrual 7,052,263.90 19,034,067.57 -- 11,059,695.32 37,146,026.79
(2)Increase in
-- 684,899.36 -- 33,167,220.79 33,852,120.15
business combination
3.Current decreased -- -- -- -- --
(1) Disposal or scrap -- -- -- -- --
(2)Other -- -- -- -- --
4.Conversion of
foreign currency -- 35,743.41 -- 1,027,211.35 1,062,954.76
financial statement
5.Ending balance 95,252,939.06 74,273,958.37 9,709,000.00 55,078,092.67 234,313,990.10
III. Depreciation
reserves
1.Opening balance -- -- 16,646,900.00 -- 16,646,900.00
2.Current increased -- -- -- -- --
(1) accrual -- -- -- -- --
(2)Increase in
-- -- -- -- --
business combination
3.Current decreased -- -- -- -- --
(1) Disposal or scrap -- -- -- -- --
(2)Other -- -- -- -- --
4.Conversion of
foreign currency -- -- -- -- --
financial statement
5.Ending balance -- -- 16,646,900.00 -- 16,646,900.00
IV. Book value
1.Ending Book value 285,759,581.38 23,410,904.39 15,241,226.47 130,001,235.45 454,412,947.69
2.Opening Book value 292,786,081.95 27,304,355.45 15,241,226.47 95,262,708.25 430,594,372.12
(2) Land use right without property certification held: nil
17. Goodwill
Increase in this period
Item Opening balance Increase in business Conversion of foreign Ending balance
combination under currency financial
different control statement
92 / 146
Merged with Weifu Tianli 1,784,086.79 -- -- 1,784,086.79
Merged with Borit -- 247,766,648.21 8,249,961.32 256,016,609.53
Total 1,784,086.79 247,766,648.21 8,249,961.32 257,800,696.32
Other explanation:
(1) Goodwill formed by the merger of Weifu Tianli:
In 2010, the Company controlling and combine Weifu Tianli by increasing the capital, the goodwill is the number that
combination cost greater than the fair value of identical net assets of Weifu Tianli. At the end of the period, the company
conducted an impairment test on goodwill to estimate the present value of future cash flows and the recoverable amount of the
goodwill-related asset group, that is to estimate the present value of future cash flow based on the management's financial budget
for the next five years and the discount rate of 15.05%, the cash flow of the year after the five years of financial budget has remained
stable. The asset group identified during the goodwill impairment test did not change.
The key parameters determined by the goodwill impairment test are as follows: The current value of the expected future cash flow
of the asset group related to goodwill is measured by using 20%~24% of gross profit margin and 4%~14% of the operating income
growth rate in the forecast period as key parameters. The management determines these parameters based on historical conditions
prior to the forecast period and forecasts of market development. After the above tests, the company's goodwill does not need to
make provisions for impairment.
(2) Goodwill formed by the merger of Borit:
In this period, the company acquired 100.00% equity of Borit in the form of cash purchase, the goodwill was the part that the cost
of the merger was greater than the fair value share of the identifiable net assets of Borit.According to the “Assets Appraisal
Report” (Wanlong PBZi (2021) No. 40016) issued by Wanlong (Shanghai) Assets Appraisal Co., Ltd, appointed by the Company,
the recoverable value of the assets group where the goodwill of the merged with Borit is 391,332,500 yuan, higher than the
carrying value of 339,171,600 yuan, and there is no impairment loss of goodwill.
18. Long-term deferred expenses
Opening Increase in Current Amortized in Conversion of
Item Ending balance
balance business increased the Period foreign
combination currency
Remodeling costs etc. 18,536,000.25 -- 9,099,137.73 12,637,958.88 64,991.99
financial 15,062,171.09
statement
19. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets that are not offset
Ending balance Opening balance
Deductible Deductible
Item Deferred income Deferred income
temporary temporary
tax assets tax assets
difference difference
Bad debt reserve 104,259,030.38 15,779,756.63 94,527,571.76 14,302,572.39
Inventory depreciation reserve 225,684,043.14 35,799,261.60 237,900,564.04 38,773,864.59
Depreciation reserves of fixed assets 55,397,599.68 8,523,566.97 19,197,534.00 3,095,824.19
Depreciation reserves of intangible assets 16,646,900.00 2,497,035.00 16,646,900.00 2,497,035.00
Other equity instrument investment 10,000,000.00 1,500,000.00 10,000,000.00 1,500,000.00
Change of fair value of transaction financial asset -- -- 16,517,403.00 2,477,610.45
Deferred income 323,924,836.18 48,935,725.44 362,993,022.12 54,664,953.32
93 / 146
Ending balance Opening balance
Deductible Deductible
Item Deferred income Deferred income
temporary temporary
tax assets tax assets
difference difference
Internal un-realized profit 19,551,845.38 3,457,610.51 22,481,656.04 4,568,190.39
Payable salary, accrued expenses etc. 981,477,549.10 151,813,641.23 622,348,855.94 96,720,511.00
Depreciation assets, amortization difference 89,867,140.23 14,608,530.41 49,220,776.87 7,779,059.56
Deductible loss of subsidiary 9,703,095.17 2,425,773.79 21,714,524.19 4,101,171.83
Equity incentive 6,330,515.63 987,908.92 -- --
Total 1,842,842,554.89 286,328,810.50 1,473,548,807.96 230,480,792.72
(2) Deferred income tax liabilities that are not offset
Ending balance Opening balance
Item Taxable temporary Deferred income Taxable temporary Deferred income
differences tax liabilities differences tax liabilities
The difference between the fair value and
taxation basis of Weifeu Tianli assets in a 11,271,189.48 1,690,678.40 12,011,409.46 1,801,711.40
merger not under the same control
The difference between the fair value and
taxation basis of IRD assets in a merger 86,905,585.08 19,119,228.72 94,383,365.10 20,764,340.32
not under the same control
The difference between the fair value and
taxation basis of Borit assets in a merger 39,376,104.10 9,844,026.00 -- --
not under the same control
Change of fair value of available-for-sale
366,808,362.19 55,023,506.38 18,231,842.32 2,734,776.35
financial asset
Accelerated depreciation of fixed assets 211,571,729.76 32,911,802.62 98,019,924.32 15,269,514.83
Total 715,932,970.61 118,589,242.12 222,646,541.20 40,570,342.90
(3) Deferred income tax assets and deferred income tax liabilities listed after off-set
Ending balance of Trade-off between the Opening balance of
Trade-off between the
deferred income tax deferred income tax deferred income tax
Item deferred income tax
assets or liabilities assets and liabilities at assets or liabilities
assets and liabilities
after off-set period-begin after off-set
Deferred income tax assets -87,935,309.00 198,393,501.50 -18,004,291.18 212,476,501.54
Deferred income tax liabilities -87,935,309.00 30,653,933.12 -18,004,291.18 22,566,051.72
(4) Details of unrecognized deferred income tax assets
Item Ending balance Opening balance Note
There were uncertainties in the potential of
Bad debt reserve 1,710,712.39 2,459,073.60
generating enough taxable income.
There were uncertainties in the potential of
Inventory depreciation reserve 21,586,279.12 20,176,155.49
generating enough taxable income.
There were uncertainties in the potential of
Loss from subsidiary 193,713,240.35 103,734,801.82
generating enough taxable income.
Depreciation reserves of fixed There were uncertainties in the potential of
33,513,099.17 33,526,372.11
assets generating enough taxable income.
94 / 146
Item Ending balance Opening balance Note
Other equity instrument Uncertainty in obtaining evidence required by tax
46,600,000.00 48,633,106.95
investment authorities
There were uncertainties in the potential of
Equity incentive 154,321.87 --
generating enough taxable income.
Total 297,277,652.90 208,529,509.97
(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
Maturity year Ending balance Opening balance Note
2020 -- 23,567,088.89 Subsidiaries have operating losses
2021 12,343,844.69 43,218,245.04 Subsidiaries have operating losses
2022 3,781,066.93 9,901,777.74 Subsidiaries have operating losses
2023 1,171,973.53 7,882,026.39 Subsidiaries have operating losses
2024 18,520,699.71 19,165,663.76 Subsidiaries have operating losses
2025 12,151,503.80 -- Subsidiaries have operating losses
No expiration period 145,744,151.69 -- Oversea subsidiaries have operating losses
Total 193,713,240.35 103,734,801.82
20. Other non-current assets
Item Ending balance Opening balance
Engineering equipment paid in advance 195,259,441.73 230,235,982.45
21. Short-term borrowings
(1) Category of short-term borrowings
Item Ending balance Opening balance
Credit loan 301,958,184.49 305,835,808.28
Bill financing -- 5,976,347.95
Interest payable 280,415.56 341,813.58
Total 302,238,600.05 312,153,969.81
(2) Overdue short-term loans without payment
Overdue short-term loans without payment 0 yuan at period-end
22. Note payable
(1) Note payable
Type Ending balance Opening balance
Bank acceptance bill 2,462,592,372.82 1,745,218,439.52
Other explanation:
Margin saving 51,045,344.11 Yuan was provided for the bank acceptance bill, 1,528,806,878.23 Yuan was
pledge for not receivable.
(2) Notes expired at year-end without paid was 0.00 Yuan.
23. Account payable
Item Ending balance Opening balance
Within one year 3,986,993,867.21 3,214,392,402.81
1-2 years 87,605,077.14 74,021,217.00
95 / 146
Item Ending balance Opening balance
2-3 years 13,824,720.43 5,854,811.50
Over 3 years 12,560,575.61 17,985,798.53
Total 4,100,984,240.39 3,312,254,229.84
24. Accounts received in advance
(1) Accounts received in advance
Item Ending balance Opening balance
Within one year 4,071,236.87 2,862,682.00
Total 4,071,236.87 2,862,682.00
(2) Important accounts received in advance with account age over one year
Nil
25. Contract liabilities
(1) List of contract liabilities:
Item Ending balance Opening balance
Within one year 77,554,320.04 96,736,917.15
1-2 years 2,763,605.96 654,710.65
2-3 years 255,602.59 243,585.27
Over 3 years 1,143,858.66 930,400.47
Total 81,717,387.25 98,565,613.54
(2) Important contract liabilities with account age over 1 year:
Nil
26. Wage payable
(1) Wage payable
Add:
Conversion
reclassification
Increase in of foreign
Opening Withdraw of long-term Payment in the
Item business currency Ending balance
balance increase staff Period
combination financial
remuneration
statement
payable
I. Short-term
161,202,257.62 2,723,108.82 1,327,754,754.46 -223,910,852.76 1,083,683,592.15 140,646.32 184,226,322.31
compensation
II.
Post-employment
welfare- defined 27,587,740.03 81,963.88 103,295,134.68 16,441,504.89 97,479,526.53 4,280.47 49,931,097.42
contribution
plans
III. Dismissed
2,249,529.82 -- 1,061,967.00 2,598,717.94 4,264,943.44 -- 1,645,271.32
welfare
IV. Other welfare
due within one 106,180,000.00 -- -- 81,282,389.60 103,312,389.60 -- 84,150,000.00
year
V. Other
short-term
welfare-Housing 17,124,210.19 -- 2,525,946.49 -- 7,181,035.91 -- 12,469,120.77
subsidies,
employee
96 / 146
Add:
Conversion
reclassification
Increase in of foreign
Opening Withdraw of long-term Payment in the
Item business currency Ending balance
balance increase staff Period
combination financial
remuneration
statement
payable
benefits and
welfare funds
Total 314,343,737.66 2,805,072.70 1,434,637,802.63 -123,588,240.33 1,295,921,487.63 144,926.79 332,421,811.82
Reclassification of long-term staff remuneration payable:
①An amount of RMB 223,910,852.76 in short-term remuneration is reclassified into long-term staff remuneration payable,
which represents the incentive fund of RMB 223,910,852.76 provided for in this period.
②An amount of RMB 97,723,894.49 is recorded in post office benefits - defined benefit plan and incentive fund payable within
one year, which represents the difference between the incentive fund of RMB 101,270,000.00 expected to be paid in 2021 and
the beginning balance of incentive fund payable within one year, post office benefits-defined benefit plan and the actual amount
paid in this period.
(2) Short-term compensation
Conversio
Reclassificatio
Increase in n of
Withdraw n of long-term
Opening business Payment in the foreign Ending
Item increase in the staff
balance combinatio Period currency balance
Period remuneration
n financial
payable
statement
1. Wages, bonuses,
141,247,196. 2,048,841.1 137,619.9 155,323,190.6
allowances and 1,106,219,433.65 -223,910,852.76 870,419,048.20
85 4 4 2
subsidies
2. Welfare for
-- 658,404.45 75,696,847.48 -- 76,356,937.24 1,797.66 112.35
workers and staff
17,498,085.6
3. Social insurance 8,701,447.13 -- 58,977,657.61 -- 50,181,099.40 80.34
8
Including: 14,251,442.1
7,575,173.65 -- 49,025,390.01 -- 42,349,121.51 --
Medical insurance 5
Work
541,230.02 -- 3,737,026.16 -- 2,616,665.94 80.34 1,661,670.58
injury insurance
585,043.46 -- 6,215,241.44 -- 5,215,311.95 -- 1,584,972.95
Maternity insurance
70,137,926.00
4. Housing
679,677.00 -- 70,474,436.00 -- -- 1,016,187.00
accumulation fund
97 / 146
5. Labor union
expenditure and 10,573,936.6 10,367,089.5
-- 15,609,816.31 -- 15,817,413.27 749.88
personnel education 4 6
expense
6. Short-term paid
-- 15,863.23 776,563.41 -- 771,168.04 398.50 21,657.10
absences
Total 161,202,257.62 2,723,108.82 1,327,754,754.46 -223,910,852.76 1,083,683,592.15 140,646.32 184,226,322.31
(3) Post-employment welfare- Defined contribution plans
Increase in
Conversion
reclassification
Increase in Withdraw of foreign
Opening of long-term Payment in Ending
Item business increase in the currency
balance staff the Period balance
combination Period financial
remuneration
statement
payable
1. Basic
endowment 9,782,749.83 65,608.24 73,924,898.32 -- 53,932,701.22 4,280.47 29,844,835.64
insurance
2.
Unemployment 412,974.22 -- 2,215,497.53 -- 1,715,942.59 -- 912,529.16
insurance
3. Enterprise
17,392,015.98 16,355.64 27,154,738.83 16,441,504.89 41,830,882.72 -- 19,173,732.62
annuity
Total 27,587,740.03 81,963.88 103,295,134.68 16,441,504.89 97,479,526.53 4,280.47 49,931,097.42
Post-employment welfare- defined contribution plans:
The Company participates in the pension insurance and unemployment insurance plans established by
government authorities by laws, a certain percentage of the social security fee regulated by the government
will pay by the Company monthly for the plans.Other than the aforesaid monthly contribution, the Company
takes no further payment obligation. The relevant expenditure is included in current profit or loss or cost of
relevant assets when occurs. Found more of enterprise annuity in Note XIV-4.” Annuity plan”
(4) Dismiss welfare
The wages payable resulted from the implementation of inner retirement plan, the amount paid in the year
2,598,717.94 yuan re-classified into the wage payable from long-term wages payable.
27. Taxes payable
Item Ending balance Opening balance
Value-added tax 28,744,351.90 61,749,095.75
Corporation income tax 21,458,320.79 50,686,013.43
City maintaining & construction tax 1,983,996.80 4,348,399.47
Educational surtax 1,417,140.56 3,105,999.62
Individual income tax 7,184,934.79 2,689,642.51
Other (including stamp tax and local 6,704,945.45 6,959,261.08
funds)
Total 67,493,690.29 129,538,411.86
28. Other account payable
Item Ending balance Opening balance
Interest payable 4,862.22 --
Dividend payable -- --
98 / 146
Other account payable 361,551,395.20 65,266,262.39
Total 361,556,257.42 65,266,262.39
(1)Interest payable
Item Ending balance Opening balance
Other 4,862.22 --
Total 4,862.22 --
(2) Other account payable
1) Classification of other accounts payable according to nature of account
Item Ending balance Opening balance
Deposit and margin 12,759,592.29 14,458,865.71
Social insurance and reserves funds that withholding 8,853,543.93 8,434,584.35
Intercourse funds from units 30,982,145.98 37,055,997.50
Restricted stock repurchase obligations 302,479,200.00 --
Other 6,476,913.00 5,316,814.83
Total 361,551,395.20 65,266,262.39
2) Significant other payable with over one year age
Item Ending balance Note
Nanjing Jidian Industrial Group Co., Ltd. 4,500,000.00 Intercourse funds
29. Non-current liabilities due within one year
Item Ending balance Opening balance
Long-term loans due within one year 33,271,589.84 --
Finance lease payments due within one year 3,615,985.51 --
Interest payable 26,666.67 --
Total 36,914,242.02 --
30. Other current liabilities
Item Ending balance Opening balance
Rebate payable 213,477,951.00 115,015,466.40
Pending sales tax 9,393,136.33 12,309,137.07
Total 222,871,087.33 127,324,603.47
31. Long-term borrowings
Item Ending balance Opening balance
Credit loan 3,050,640.97 --
Total 3,050,640.97 --
32. Long-term account payable
Item Ending balance Opening balance
Long-term account payable 15,339,090.00 16,818,181.00
Interest payable of long-term account payable 12,793.00 25,000.00
Special accounts payable 18,265,082.11 18,265,082.11
Finance lease payments 5,862,253.06 --
99 / 146
Total 39,479,218.17 35,108,263.11
(1) Long-term account payable listed by nature
Item Item Ending balance Opening balance
Hi-tech Branch of Nanjing Finance Bureau (note ①) Financial support funds (2005) -- 1,140,000.00
Hi-tech Branch of Nanjing Finance Bureau (note ②) Financial support funds (2006) 1,250,000.00 1,250,000.00
Hi-tech Branch of Nanjing Finance Bureau (note ③) Financial support funds (2007) 1,230,000.00 1,230,000.00
Loan transferred from treasury bond (note ④) 339,090.00 678,181.00
Hi-tech Branch of Nanjing Finance Bureau (note ⑤) Financial support funds (2008) 2,750,000.00 2,750,000.00
Hi-tech Branch of Nanjing Finance Bureau (note ⑥) Financial support funds (2009) 1,030,000.00 1,030,000.00
Hi-tech Branch of Nanjing Finance Bureau (note ⑦) Financial support funds (2010) 960,000.00 960,000.00
Hi-tech Branch of Nanjing Finance Bureau (note ⑧) Financial support funds (2011) 5,040,000.00 5,040,000.00
Hi-tech Branch of Nanjing Finance Bureau (note ⑨) Financial support funds (2013) 2,740,000.00 2,740,000.00
Total 15,339,090.00 16,818,181.00
Long-term payable explanation:
Note ①: To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,
financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,
the term is from 20 October 2005 to 20 October 2020. Provided that the operation period in the zone is less
than 15 years, financial supporting capital will be reimbursed. This support fund has expired fifteen years in
the current period, so it is transferred to other income.
Note ②: To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,
financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,
the term is from 20 July 2006 to 20 July 2021. Provided that the operation period in the zone is less than 15
years, financial supporting capital will be reimbursed.
Note ③: To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,
financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,
the term is from 17 September 2007 to 17 September 2022. Provided that the operation period in the zone is
less than 15 years, financial supporting capital will be reimbursed.
Note ④: Loan transferred from treasury bond: Weifu Jinning received 1.87 million Yuan of special funds from
budget of the central government, and 1.73 million Yuan of special funds from budget of the local government.
The non-operating income transferred in was 1.87 million Yuan in 2011 which was confirmed not to return, if
the Company pays back special funds of 3.73 million Yuan to the local government in 11 years since 2012,
then the Company needs to repay the principal of 339,091.00 Yuan each year.
Note ⑤: To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,
financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,
the term is from 10 November 2008 to 10 November 2023. Provided that the operation period in the zone is
less than 15 years, financial supporting capital will be reimbursed.
Note ⑥: To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,
financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,
the term is from 27 October 2009 to 27 October 2024. Provided that the operation period in the zone is less
than 15 years, financial supporting capital will be reimbursed.
Note ⑦: To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,
financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,
the term is from 27 December 2010 to 27 December 2025. Provided that the operation period in the zone is
100 / 146
less than 15 years, financial supporting capital will be reimbursed.
Note ⑧: To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,
financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,
the term is from 28 December 2011 to 28 December 2026. Provided that the operation period in the zone is
less than 15 years, financial supporting capital will be reimbursed.
Note ⑨: To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,
financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,
the term is from 18 December 2013 to 18 December 2028. Provided that the operation period in the zone is
less than 15 years, financial supporting capital will be reimbursed.
(2) Special accounts payable
Item Ending balance Opening balance
Removal compensation of subsidiary Weifu Jinning 18,265,082.11 18,265,082.11
Other explanation: In line with regulation of the house acquisition decision of People’s government of Xuanwu District, Nanjing
City, Ning Xuan Fu Zheng Zi (2012) No.001, part of the lands and property of Weifu Jingning needs expropriation in order to
carry out the comprehensively improvement of Ming Great Wall. According to the house expropriation and compensation
agreement in state-owned lands signed between Weifu Jinning and House Expropriation Management Office of Xuanwu District,
Nanjing City, 19.7067 million yuan in total are compensate, including operation losses from lessee 1.4416 million yuan in total.
The above compensation was received in last period and is making up for the losses from lessee, and the above lands and
property have not been collected up to 31 December 2020.
33. Long-term wages payable
Item Ending balance Opening balance
I. Post-employment welfare-defined contribution plans net indebtedness -- --
II. Dismiss welfare 5,734,948.91 8,333,666.85
III. Other long-term welfare - incentive fund 277,515,345.03 171,888,386.76
Less: incentive fund paid within one year 101,270,000.00 121,830,000.00
Other long-term benefits - incentive fund balances 176,245,345.03 50,058,386.76
Total 181,980,293.94 58,392,053.61
34. Deferred income
Conversion of
Increase in
Opening Increase in Decrease in this foreign currency
Item business Ending balance
balance this period period financial
combination
statement
Government grand 365,116,022.98 22,969,181.27 1,197,109.35 61,127,665.71 49,828.84 328,204,476.73
Item with government grants involved:
New-added Conversion of
Assets
Opening government Increase in Amount foreign
related/In
Item subsidy business reckoned in currency Ending balance
balance come
amount in combination other income financial
related
the period statement
Industrialization
project for injection Assets
related/In
VE pump system 2,163,000.86 -- -- 721,000.30 -- 1,442,000.56 come
with electronically related
controlled high
101 / 146
New-added Conversion of
Assets
Opening government Increase in Amount foreign
related/In
Item subsidy business reckoned in currency Ending balance
balance come
amount in combination other income financial
related
the period statement
pressure for
less-emission diesel
used
Appropriation on
reforming of
production line
technology and
Assets
R&D ability of 7,100,000.00 -- -- -- -- 7,100,000.00 related
common rail system
for diesel by
distributive
high-voltage
Fund of industry Income
26,657,526.17 -- -- 26,015,356.44 -- 642,169.73 related
upgrade (2012)
Fund of industry Income
60,520,000.00 -- -- -- -- 60,520,000.00 related
upgrade (2013)
Appropriation on
central basic Assets
1,428,571.45 -- -- 714,285.72 -- 714,285.73 related
construction
investment
R&D and
industrialization of
the high-pressure
variable pump of Assets
6,870,714.16 -- -- 1,543,095.28 -- 5,327,618.88 related
the common rail
system of diesel
engine for
automobile
Research institute of
motor vehicle
Assets
exhaust 1,836,712.58 -- -- 622,985.37 -- 1,213,727.21 related
after-treatment
technology
Fund of industry Income
36,831,000.00 -- -- -- -- 36,831,000.00 related
upgrade (2014)
New-built assets
compensation after 124,849,393.9 Assets
-- -- 20,764,119.52 -- 104,085,274.40 related
the removal of 2
parent company
Fund of industry Income
40,000,000.00 -- -- -- -- 40,000,000.00 related
upgrade (2016)
Guiding capital for
the technical reform
Assets
from State Hi-Tech 8,147,430.27 -- -- 1,552,110.44 -- 6,595,319.83 related
Technical
Commission
Implementation of
the variable
Assets
cross-section 8,972,771.42 -- -- 1,609,982.67 -- 7,362,788.75 related
turbocharger for
diesel engine
102 / 146
New-added Conversion of
Assets
Opening government Increase in Amount foreign
related/In
Item subsidy business reckoned in currency Ending balance
balance come
amount in combination other income financial
related
the period statement
Demonstration
project for Assets
1,148,441.34 -- -- 299,341.74 -- 849,099.60 related
intelligent
manufacturing
The 2nd batch of
provincial special
funds for industry Assets
-- 5,000,000.00 -- -- -- 5,000,000.00 related
transformation of
industrial and
information in 2019
Municipal
technological Assets
-- 4,770,000.00 -- -- -- 4,770,000.00 related
reform fund
allocation in 2020
Strategic
cooperation
agreement funding
Assets
for key enterprise of -- 4,060,000.00 -- -- -- 4,060,000.00 related
smart
manufacturing in
high-tech zone
Assets
related/In
Other 38,590,460.81 9,139,181.27 1,197,109.35 7,285,388.23 49,828.84 41,691,192.04 come
related
365,116,022.9 22,969,181.2
Total 1,197,109.35 61,127,665.71 49,828.84 328,204,476.73
8 7
Other explanation:
(1) Appropriation on industrialization project of electrical control and high voltage jet VE system of low
emissions diesel: in September 2009, Weifu Jinning signed “Project Contract of Technology Outcome
Transferring Special Capital in Jiangsu Province” with Nanjing Technical Bureau, according to which Weifu
Jinning received appropriation 6.35 million Yuan in 2009, 4.775 million Yuan received in 2010 and 0.875
million Yuan received in 2011. According to the contract, the attendance date of this project was: from October
of 2009 to March of 2012. This contract agreed 62% of newly increased investment in project would be spent
in fixed assets investment which are belongs to the government grand with assets/income concerned. In 2013,
accepted by the science & technology agency of Jiangsu Province, and 4,789,997.04 Yuan with income related
was reckoned into current operation revenue directly; the 7,210,002.96 Yuan with assets related was amortized
during the predicted service period of the assets, and 721,000.30 Yuan amortized in the Period.
(2) The appropriation for research and development ability of distributive high-pressure common rail system
for diesel engine use and production line technological transformation project: according to XCJ No. [2010] 59,
the Company has received special funds of 7.1 million Yuan appropriated by Finance Bureau of Wuxi New
103 / 146
District in 2011 and used for the Company’s research and development ability of distributive high-pressure
common rail system for diesel engine use and production line technological transformation project; this
appropriation belongs to government subsidies related to assets, and will be amortized according to the
depreciation process of the underlying assets when the project is completed.
(3) Industry upgrading funds (2012): In accordance with the document Xi Xin Guanjing Fa [2012] No.216 and
Document Xi Xin Guancai Fa [2012] No. 85, the Company received funds of 60.4 million Yuan appropriated
for industry upgrading this year. Current write off: 26,015,356.44 Yuan.
(4) Industry upgrading funds (2013): In accordance with the document Xi Xin Guan Jing Fa [2013] No.379, Xi
Xin Guan Jing Fa [2013] No.455, Xi Xin Guan Cai Fa [2013] No.128 and Xi Xin Guan Cai Fa [2013] No.153,
the Company received funds of 60.52 million Yuan appropriated for industry upgrading in 2013.
(5) Appropriation for investment of capital construction from the central government: In accordance with the
document Xi Caijian [2012] No.43, the Company received appropriation of 5 million Yuan for investment of
capital construction from the central government in 2012. The project has passed the acceptance check in
current period, this appropriation should be amortized within the surplus service life of current assets, and
amortization amount of current period is 714,285.71 Yuan.
(6) R&D and industrialization of the high pressure variable pump of the common rail system of diesel engine
for automobile: the Company received appropriated for the project in 2013 with 8.05 million Yuan in line with
documents of Xi Ke Ji [2013] No.186, Xi Ke Ji [2013] No.208, Xi Cai Gong Mao [2013] No.104, Xi Cai
Gong Mao [2013] No.138, Xi Ke Ji [2014] No.125, Xi Cai Gong Mao [2014] No.58, Xi Ke Ji [2014] No. 246
and Xi Cai Gong Mao [2014] No.162. Received 3 million Yuan in 2014 and 0.45 million Yuan in 2015; and
belongs to government grant with assets concerned, and shall be amortized according to the depreciation
process, amount of 1,543,095.28 Yuan amortizes in the year.
(7) Vehicle exhaust after-treatment technology research institute project: in 2012, the subsidiary Weifu Leader
has applied for equipment purchase assisting funds to Wuxi Huishan Science and Technology Bureau and
Wuxi Science and Technology Bureau for the vehicle exhaust after-treatment technology research institute
project. This declaration has been approved by Wuxi Huishan Science and Technology Bureau and Wuxi
Science and Technology Bureau in 2012, and the company has received appropriation of 2.4 million Yuan in
2012, and received appropriation of 1.6 million Yuan in 2013. This appropriation belongs to government
subsidies related to assets and will be amortized according to the depreciation process, amount of 622,985.37
Yuan amortizes in the year.
(8) Industry upgrading funds (2014): In accordance with the document Xi Xin Guan Jing Fa [2014] No.427
and Xi Xin Guan Cai Fa [2014] No.143, the Company received funds of 36.831 million Yuan appropriated for
industry upgrading in 2014.
(9) New-built assets compensation after the removal of parent company: policy relocation compensation
received by the Company, and will be amortized according to the depreciation of new-built assets, amount of
20,764,119.52 Yuan amortizes in the year.
(10) Fund of industry upgrade (2016): In accordance with the document Xi Xin Guan Jing Fa [2016] No.585
and Xi Xin Fa [2016] No.70, the Company received funds of 40 million Yuan appropriated for industry
104 / 146
upgrading in 2016.
(11) Guilding capital for the technical reform from State Hi-Tech Technical Commission: In accordance with
the document Xi Jing Xin ZH [2016] No.9 and Xi Cai GM [2016] No.56, the Company received a 9.74 million
Yuan for the guiding capital of technical reform (1st batch) from Wuxi for year of 2016, and belongs to
government grant with assets concerned, and shall be amortized according to the depreciation process, amount
of 1,552,110.44 Yuan amortize in the year.
(12) Implementation of the variable cross-section turbocharger for diesel engine: In accordance with the
document YCZ Fa[2016] NO.623 and “Strong Industrial Base Project Contract for year of 2016”, subsidiary
Weifu Tianli received a specific subsidy of 16.97 million Yuan (760,000 Yuan received in the period), the
fund supporting strong industrial base project (made-in-China 2025) of central industrial transformation and
upgrading 2016 from Ministry of Industry and Information Technology; and belongs to government grant with
assets concerned, and shall be amortized according to the depreciation process, amount of 1,609,982.67 Yuan
amortize in the year.
(13) Demonstration project for intelligent manufacturing: under the Notice Relating to Selection of the
Intelligent Manufacturing Model Project in Huishan District in 2016 (HJXF[2016]No.36), a fiscal subsidy of
3,000,000 Yuan was granted by relevant government authority in Huishan district to our subsidiary Weifu
Leader in 2017 to be utilized for transformation and upgrade of Weifu Leader’s intelligent manufacturing
facilities. This subsidy belongs to government grant related to assets which shall be amortized based on the
depreciation progress of the assets. Amortization for the year amounts to 299,341.74 Yuan.
(14) The 2nd batch of provincial special funds for industry transformation of industrial and information in 2019:
according to XCGM [2019] No. 121, the Company received a special fund of 5 million yuan in 2020, this
subsidy wasrelated to the"Weifu High-Technology New Factory Internet Construction" projects, and belonged
to government subsidies related to assets.
(15) Municipal technological reform fund allocation in 2020: according to XGXZH [2020] No. 16, the
Company received 4.77 million yuan of municipal technological transformation fund project allocation in
2020, which was related to key technological transformation projects and belonged to government subsidies
related to assets.
(16) Strategic cooperation agreement funding for key enterprise of smart manufacturing in high-tech zone:
according to XXGXF [2020] No. 61, the Company received a related grant of 4.06 million yuan in 2020, this
subsidy was related to the intelligent transformation project and belonged to the government subsidiesrelated
to assets.
35. Share capital
Change during the year(+,-)
Opening Ending
Item New shares Bonus Shares transferred Other
balance Subtotal balance
issued share from capital reserve -repurchase
Total shares 1,008,950,570 -- -- -- -- -- 1,008,950,570
105 / 146
36. Capital reserve
Item Opening balance Increase in this period Decrease in this period Ending balance
Share capital premium 3,346,333,817.41 -- 103,565,899.63 3,242,767,917.78
Other Capital reserve 45,193,988.92 6,280,461.58 -- 51,474,450.50
Total 3,391,527,806.33 6,280,461.58 103,565,899.63 3,294,242,368.28
Other explanation:
(1) Share capital premium has 103,565,899.63 yuan declined in the Period, mainly due to the following:
①the difference between the long-term equity investment newly acquired by the company to purchase
minority of IRD and the net assets that the company should enjoy continuously calculated from the date of
purchase based on the newly increased shareholding ratio is 7,176,697.04 yuan;
② the difference between the repurchase cost of 398,868,402.59 yuan(19,540,000 shares repurchased for use
in the restricted share incentive plan) and the amount of subscription money 302,479,200.00 yuan is
96,389,202.59 yuan.
(2) Other Capital reserve increase 6,280,461.58 yuan in the period, mainly resulted by the share payment
settled by equity 6,484,837.50 yuan deducted 204,375.92 yuan attributable to minority’s shareholder.
37. Treasury stocks
Item Opening balance Increase in this period Decrease in this period Ending balance
Stock repurchases -- 400,017,180.33 398,868,402.59 1,148,777.74
Repurchase obligation of
-- 302,479,200.00 -- 302,479,200.00
restricted stock incentive plan
Total -- 702,496,380.33 398,868,402.59 303,627,977.74
Other explanation:
(1) Stock repurchase: increased 400,017,180.33 yuan in the Period, mainly refers to the repurchase of 19,596,277.00 shares by
way of centralized competitive bidding for the implementation of restricted stock incentive plan; decreased 398,868,402.59 yuan
in the Period, mainly refers to the 19,540,000.00 shares awarded to incentive object for the implementation of restricted stock
incentive plan.
(2) Repurchase obligation of restricted stock incentive plan: increased 302,479,200.00 yuan in the Period, mainly refers to the
repurchase obligation recognized in accordance with the subscription paid by the incentive object for the implementation of
restricted stock incentive plan.
38. Other comprehensive income
Current period
Belong to
Opening Less: Belong to Ending
Item Account minority
balance income parent balance
before income sharehold
tax company after
tax in the year ers after
expense tax
tax
Other comprehensive income items
which will be reclassified 134,871.67 13,839,596.07 -- 13,781,747.80 57,848.27 13,916,619.47
subsequently to profit or loss
Including: Conversion difference of
134,871.67 13,839,596.07 -- 13,781,747.80 57,848.27 13,916,619.47
foreign currency financial statement
106 / 146
Total 134,871.67 13,839,596.07 -- 13,781,747.80 57,848.27 13,916,619.47
39. Reasonable reserve
Item Opening balance Accrual in the period Used in the period Ending balance
Safety production costs 3,247,757.06 21,673,368.09 22,587,635.12 2,333,490.03
Other explanation:
(1) Instructions for the withdrawing of special reserves (safe production cost): According to the CQ [2012] No. 16 - Administrative
Measures on the Withdrawing and Use of Enterprise Safety Production Expenses jointly issued by the Ministry of Finance and the
State Administration of Work Safety, in the current period, the Company adopted excess retreat method for quarterly withdrawal
by taking the actual operating income of the previous period as the withdrawing basis.
(2) Among the above safety production costs, including the safety production costs accrual by the Company in line with
regulations and the parts enjoy by shareholders of the Company in safety production costs accrual by subsidiary in line with
regulations.
40. Surplus reserve
Item Opening balance Increase in this period Decrease in this period Ending balance
Statutory surplus reserves 510,100,496.00 -- -- 510,100,496.00
Withdrawal of the statutory surplus reserves: Pursuit to the Company Law and Articles of Association, the Company extracted
statutory surplus reserve on 10 percent of the net profit. No more amounts shall be withdrawal if the accumulated statutory
surplus reserve takes over 50 percent of the registered capital.
41. Retained profit
Ratio for withdrawal or
Item Current period Last period
distribution
Retained profits at the end of last year before
12,076,443,635.56 10,996,945,870.13 --
adjustment
Total retained profit at beginning of the adjustment (+
-- 1,584,556.37 --
for increased, -for decreased)
Retained profits at the beginning of the year after
12,076,443,635.56 10,998,530,426.50 --
adjustment
Add: The net profits belong to owners of patent
2,772,769,377.96 2,268,026,432.78 --
company of this period
Less: Withdraw legal surplus reserves -- -- --
Less: Withdraw employee motivation and welfare fund 2,525,946.49 -- --
11 Yuan / 10-shares in the Year;
Cash dividend payable 1,093,241,270.00 1,210,740,684.00 12 Yuan / 10-shares in last
Year
Common dividend transfer as share capital -- -- --
Add: Net effect of disposal other equity instrument
2,656,627.59 20,627,460.28
investment
Retained profit at period-end 13,756,102,424.62 12,076,443,635.56
42. Operating income and cost
Current period Last Period
Item
Income Cost Income Cost
Main operating 12,430,431,489.90 10,124,574,480.95 8,354,743,964.67 6,322,810,707.67
Other business 453,394,816.70 304,709,961.02 429,612,995.63 347,543,672.87
Total 12,883,826,306.60 10,429,284,441.97 8,784,356,960.30 6,670,354,380.54
107 / 146
43. Taxes and surcharges
Item Current period Last Period
City maintaining & construction tax 22,768,800.74 24,124,239.92
Educational surtax 16,259,673.98 17,320,175.67
Property tax 16,993,056.48 16,236,869.24
Land use tax 4,516,628.41 5,991,933.84
Vehicle use tax 29,923.52 31,410.44
Stamp duty 4,508,905.03 2,720,462.05
Other taxes 246,793.71 209,545.50
Total 65,323,781.87 66,634,636.66
44. Sales expenses
Item Current period Last Period
Salary and fringe benefit 58,727,035.03 53,193,376.14
Consumption of office materials and business travel 9,260,423.14 12,114,381.29
charge
Transportation charge -- 36,110,291.16
Warehouse charge 24,982,242.41 13,540,499.34
Three guarantees and quality cost 272,364,223.21 102,034,286.75
Business entertainment fee 25,842,735.05 26,297,874.14
Other 15,176,786.26 16,360,043.51
Total 406,353,445.10 259,650,752.33
45. Administration expenses
Item Current period Last Period
Salary and fringe benefit 295,394,722.09 261,541,676.32
Depreciation charger and long-term assets amortization 65,638,800.42 55,145,177.10
Consumption of office materials and business travel 16,772,265.23 19,603,194.54
charge
Incentive fund 187,658,444.76 71,880,000.00
Share-based payment 3,878,656.31 --
Other 213,481,533.82 105,858,403.80
Total 782,824,422.63 514,028,451.76
46. R&D expenses
Item Current period Last Period
Technological development expenses 532,581,209.78 417,924,908.28
Total 532,581,209.78 417,924,908.28
47. Financial expenses
Item Current period Last Period
Interest expenses 11,466,886.33 21,770,516.39
Note discount interest expenses 8,075,178.10 1,205,789.22
Less: interest income 51,622,216.58 79,299,239.77
Gains/losses from exchange 5,138,503.01 -5,453,798.20
Handling charges 3,663,347.30 3,884,456.24
Total -23,278,301.84 -57,892,276.12
48. Other income
108 / 146
Amount reckoned into
Item Current period Last Period current non-recurring
gains/losses
Government grants with routine operation activity
80,342,497.11 91,170,663.57 80,342,497.11
concerned
Other -- -- --
Total 80,342,497.11 91,170,663.57 80,342,497.11
Government grant reckoned into other income:
Government grant item Current period Last Period Assets/Income related
Industrialization project for injection VE pump system with
721,000.30 721,000.30 Assets/Income related
electronically controlled high pressure for less-emission diesel used
Key laboratory (engineering center) of the pollution control from
170,000.00 170,000.00 Assets/Income related
motor vehicle exhausting in Jiangsu province
Grants for key laboratory in Wuxi City 70,000.00 70,000.00 Assets/Income related
Supporting funds for technical improvement for annual output as
140,000 pieces of packaging line of catalytic reduction system for 259,000.00 259,000.00 Assets related
commercial vehicles (2014)
Technical transformation for annual output as 300,000 sets of
four-cylinder engine supercharger 129,710.11 179,357.35 Assets related
Annual output of 150000 gasoline engine superchargers 96,514.62 100,000.00 Assets related
Depreciation/amortization compensation for the assets newly
22,726,281.
established after parent company relocated 20,764,119.52 Assets related
60
Central capital investment allocation from Wuxi Finance Bureau
(R&D center) 714,285.72 714,285.71 Assets related
Provincial special guiding funds for scientific and technological
innovation and achievement conversion 328,571.44 328,571.43 Assets related
Technical reform of catalytic reduction system for 180,000
commercial vehicles annually 233,555.56 233,555.56 Assets related
Development and industrialization of high pressure variable pump
1,543,095.2
for common rail system of vehicle diesel engine 1,543,095.28 Assets related
8
Business development funds support allocation from Finance
bureau of the new district 200,000.00 200,000.00 Assets related
Demonstration of intelligent manufacturing 299,341.74 301,588.76 Assets related
Research institute of motor vehicle exhaust post-treatment 622,985.37 635,758.63 Assets related
Implementation scheme of the variable section turbocharger for
1,935,949.6
diesel engine 1,609,982.67 Assets related
1
Special funds for technical transformation 83,794.37 91,041.11 Assets/Income related
Funds for technical reform of boiler wheel supercharger for annual
output of 200,000 gasoline engines 275,572.17 420,568.53 Assets related
Annual output of 150,000 gasoline engine turbochargers 717,082.83 700,701.44 Assets related
Guiding capital for the technical reform from State Hi-Tech 1,592,569.7
1,552,110.44 Assets related
Technical Commission 3
National high-quality development fund for manufacturing industry 4,850,000.0
-- Income related
0
109 / 146
Government grant item Current period Last Period Assets/Income related
Industrial upgrading fund 33,742,473.
26,015,356.44 Income related
83
Financing for mergers and acquisition of IRD project 1,370,000.0
-- Income related
0
Funds for R&D of Science & Technology in Wuxi for 2015 1,020,000.0 Assets/Income related
420,000.00
0
Intelligent transformation and technology transformation guiding
5,110,000.0
fund 3,740,000.00 Income related
0
Special fund for policy guidance 1,000,000.0
-- Income related
0
Stable subsidy 2,291,128.5
4,125,376.68 Income related
3
Weifu Jinning Financial Support Fund 1,140,000.00 -- Income related
Generation subsidy for distributed PV projects 968,800.00 -- Income related
Wuxi City Intellectual Property Project Operation Service System
1,050,000.00 -- Income related
Construction Fund
"Work for training" subsidy 1,269,900.00 -- Income related
Wuxi Mayor Quality Award 1,000,000.00 -- Income related
e-store 1,162,700.27 -- Income related
Training subsidy 1,005,934.35 317,400.00 Income related
8,546,336.1 Assets/Income related
Other 8,053,707.23
7
91,170,663.
Total 80,342,497.11
57
49. Investment income
Item Current period Last Period
Income of long-term equity investment calculated based on equity 1,659,752,704.14 1,378,264,061.18
Investment income of financial products 263,460,954.90 236,832,172.54
Investment income from holding financial assets available for sales 683,211.60 1,383,668.59
Dividend income from holding other equity instrument investment -- 900,000.00
Other 40,908,817.93 -2,839,187.48
Total 1,964,805,688.57 1,614,540,714.83
50. Income from change of fair value
Item Current period Last Period
Changes in the fair value of wealth management products 8,223,219.19 18,231,842.32
Changes in the fair value of the stocks of listed companies held-excluding the
stocks of listed companies that are included in other equity instrument 375,102,546.00 6,787,824.00
investments
Other -- --
110 / 146
Total 383,325,765.19 25,019,666.32
51. Credit impairment loss
Item Current period Last Period
Bad debt loss -11,184,647.60 -52,825,875.25
Total -11,184,647.60 -52,825,875.25
52. Assets impairment loss
Item Current period Last Period
Loss on inventory valuation -142,400,798.47 -169,460,299.73
Impairment loss on fixed assets -36,436,674.38 --
Total -178,837,472.85 -169,460,299.73
53. Income from assets disposal
Amount reckoned into current
Item Current period Last Period
non-recurring gains/losses
Income from disposal of non-current assets 12,962,146.98 34,050,815.11 12,962,146.98
Losses from disposal of non-current assets -1,507,738.38 -1,896,354.90 -1,507,738.38
Total 11,454,408.60 32,154,460.21 11,454,408.60
54. Non-operating income
Amount reckoned into current
Item Current period Last Period
non-recurring gains/losses
Periodic reduction or exemption of part of social
60,373,772.69 -- 60,373,772.69
insurance premiums
Periodic reduction of kinetic energy costs 5,759,525.46 -- 5,759,525.46
Other 333,723.47 2,413,561.54 333,723.47
Total 66,467,021.62 2,413,561.54 66,467,021.62
55. Non-operating expense
Amount reckoned into current
Item Current period Last Period
non-recurring gains/losses
Total non-current assets disposal losses 738,248.83 3,161,855.50 738,248.83
Including: fixed assets disposal losses 738,248.83 3,161,855.50 738,248.83
Intangible assets disposal losses -- -- --
Donation 3,107,003.70 73,332.31 3,107,003.70
Local fund -- 2,734,286.52 --
Other 313,635.64 156,952.84 313,635.64
Total 4,158,888.17 6,126,427.17 4,158,888.17
56. Income tax expense
(1) Income tax expense
Item Current period Last Period
Payable tax in current period 170,925,337.68 147,179,544.24
Adjusted the previous income tax -2,349,322.00 5,674,478.65
Increase/decrease of deferred income tax assets -54,432,577.63 -12,918,338.05
111 / 146
Item Current period Last Period
Increase/decrease of deferred income tax liability 66,072,310.95 7,870,125.22
Income tax expense 180,215,749.00 147,805,810.06
(2) Adjustment on accounting profit and income tax expenses
Item Current period
Total profit 3,002,951,679.56
Income tax measured by statutory/applicable tax rate 450,442,751.93
Impact by different tax rate applied by subsidies 4,347,476.78
Adjusted the previous income tax -2,349,322.00
Impact by non-taxable revenue -248,721,266.24
Impact on cost, expenses and losses that unable to deducted 37,323,520.03
Impact by the deductible losses of the un-recognized previous deferred income tax -34,045,025.55
The deductible temporary differences or deductible losses of the un-recognized deferred income tax
11,968,364.43
assets in the Period
Impact on additional deduction -41,288,278.77
Other 2,537,528.39
Total 181,266,656.28
57. Other comprehensive income
See Note V 38 “Other comprehensive income”
58. Items of ash flow statement
(1) Refunds of taxes
Item Current period Last Period
VAT refund actually received for export commodities 28,006,851.01 40,712,905.08
Rebate of allowance for VAT 2,805,702.10 3,171,001.83
Rebate of income tax 1,325,859.97 7,839,063.56
Total 32,138,413.08 51,722,970.47
(2) Other cash received in relation to operation activities
Item Current period Last Period
Interest income 52,277,269.56 77,690,762.13
Government grants 41,044,012.67 30,510,895.39
Margin on operation bill -- 27,804,815.03
Other 9,252,536.29 7,906,425.25
Total 102,573,818.52 143,912,897.80
(3) Other cash paid in relation to operation activities
Item Current period Last Period
Cash cost 840,363,837.09 525,923,320.71
Other 59,565,319.82 22,629,265.34
Total 899,929,156.91 548,552,586.05
(4) Cash received from other investment activities
Item Current period Last Period
Received the disposal payment 10,654,092.89 --
112 / 146
Received investment funds in transit at the end of 2019 30,448,157.81 --
Import equipment letter of credit guarantee -- 1,450,000.00
Cash from Weifu Electronic Drive merger not under the same control -- 67,622,008.17
Intercourse funds from units 24,000,000.00 --
Other -- 953,424.66
Total 65,102,250.70 70,025,432.83
(5) Cash paid related with investment activities
Item Current period Last Period
Margin paid by L/C for purchase of equipment 587,241.00 --
Trading losses on forward foreign exchange and RMB options -- 1,115,357.50
Intercourse funds from units 13,992,067.94 24,000,000.00
Total 14,579,308.94 25,115,357.50
(6) Other cash received in relation to financing activities
Item Current period Last Period
Borrowings received by Weifu Leader 5,470,000.00 --
Borrowings received by IRD 260,135.13 845,291.11
Total 5,730,135.13 845,291.11
(7) Cash paid related with financing activities
Item Current period Last Period
Account paid for purchasing minority equity of Weifu Tianli -- 132,522,000.00
Account paid for purchasing minority equity of IRD 48,507,056.85 --
National debt paid transfer to loans 351,298.00 339,091.00
Borrowing return by Weifu Leader -- 5,470,000.00
Borrowing return by IRD -- 7,733,845.00
Payments from finance leases 375,886.28 --
Repurchase of A shares 400,017,180.33 --
Total 449,251,421.46 146,064,936.00
59. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
Item Current period Last Period
1. Net profit adjusted to cash flow of operation activities:
Net profit 2,822,735,930.56 2,302,736,761.11
Add: Assets impairment provision 190,022,120.45 222,286,174.98
Depreciation of fixed assets, consumption of oil assets and
390,748,987.16 315,650,455.35
depreciation of productive biology assets
Amortization of intangible assets 37,146,026.79 24,276,364.81
Amortization of long-term deferred expenses 12,637,958.88 6,293,470.69
Loss from disposal of fixed assets, intangible assets and other
-11,454,408.60 -32,154,460.21
long-term assets
Losses on scrapping of fixed assets 738,248.83 3,161,855.50
Gain/loss of fair value changes -383,325,765.19 -25,019,666.32
Financial expenses 17,798,991.04 15,026,154.36
113 / 146
Item Current period Last Period
Investment loss -1,957,024,490.66 -1,613,945,471.30
Decrease of deferred income tax asset -54,432,577.63 -12,918,338.05
Increase of deferred income tax liability 66,072,310.95 7,870,125.22
Decrease of inventory -591,321,045.44 -1,130,561,363.05
Decrease of operating receivable accounts -1,326,286,166.68 -1,110,387,668.48
Increase of operating payable accounts 1,562,204,812.18 2,074,881,909.55
Other 5,550,301.37 1,473,749.07
Net cash flows arising from operating activities 781,811,234.01 1,048,670,053.23
2. Net change of cash and cash equivalents :
Balance of cash at period end 944,946,018.70 820,498,653.85
Less: Balance of cash equivalent at year-begin 820,498,653.85 2,404,674,139.49
Add: Balance of cash equivalent at year-end -- --
Less: Balance of cash equivalent at year-begin -- --
Net increase of cash and cash equivalents 124,447,364.85 -1,584,175,485.64
(2) Net cash payment for the acquisition of a subsidiary in the period
Item Amount
Cash and cash equivalent paid in the period for enterprise combination occurred in the period 318,708,001.47
Less: Cash and cash equivalent held by subsidiary on purchasing date 21,405,243.16
Add: Cash or cash equivalent paid in the period arising from enterprise combination occurred
--
previous
Net cash paid for subsidiary obtained 297,302,758.31
(3) Constitution of cash and cash equivalent
Item Ending balance Opening balance
I. Cash 944,946,018.70 820,498,653.85
Including: Cash on hand 507.66 93,165.33
Bank deposit available for payment at any time 944,945,511.04 820,405,488.52
Other monetary fund available for payment at any time -- --
II. Cash equivalent -- --
Including: bond investment due within 3 months -- --
III. Balance of cash and cash equivalents at the period-end 944,946,018.70 820,498,653.85
Including: Cash and cash equivalent with restricted in use for parent
-- --
company or subsidiary of the Group
Other explanation:
The difference between bank deposits available for payment at any time and the bank deposits in Note V. 1
"Monetary Funds" is the company's fixed deposits in the bank.
60. Assets with ownership or use right restricted
Item Ending Book value Restriction reason
Monetary funds 587,241.00 Letter of Credit Margin
Monetary funds 51,045,344.11 Cash deposit paid for bank acceptance
Monetary funds 2,838,880.93 Court freeze
Monetary funds 215,720.00 Mastercard deposit
Note receivable 881,914,376.95 Notes pledge for bank acceptance
114 / 146
Item Ending Book value Restriction reason
Receivables financing 646,892,501.28 Notes pledge for bank acceptance
In accordance with the civil ruling No.(2016)Y03MC2490
and No.(2016) Y03MC2492 of Guangdong Shenzhen
Intermediate People's Court (Hereinafter referred to as
Shenzhen Intermediate People's Court), the property with
the value of 217 million Yuan under the name of the
Transactional financial assets 174,611,992.62 Company and other seven respondents and the third party
Shenzhen Hejun Chuangye Holdings Co., Ltd. (Hereinafter
referred to as Hejun Company) was frozen. As of the end of
the reporting period, 4.71 million shares of Miracle
Automation and 11,739,102 shares of SDEC held by the
Company were frozen.
Total 1,758,106,056.89
61. Item of foreign currency
(1) Item of foreign currency
Item Closing balance of foreign currency Rate of conversion Ending RMB balance converted
Monetary funds
Including: USD 11,596,564.24 6.5249 75,666,419.10
EUR 3,694,505.41 8.025 29,648,405.15
HKD 11,548,347.98 0.84164 9,719,551.59
DKK 9,616,906.23 1.0786 10,372,795.06
Account receivable
Including: USD 2,190,411.21 6.5249 14,292,214.10
EUR 1,290,945.42 8.025 10,359,837.00
JPY 12,179,808.00 0.063236 770,202.34
DKK 2,239,065.57 1.0786 2,415,056.12
Other account receivables
Including: EUR 70,143.68 8.025 562,903.03
DKK 462,081.08 1.0786 498,400.65
Short-term borrowings
Including: EUR 4,981,278.48 8.025 39,974,759.80
Account payable
Including: USD 812,035.19 6.5249 5,298,448.41
EUR 1,031,866.82 8.025 8,280,731.24
JPY 15,780,699.00 0.063236 997,908.28
CHF 103,580.75 7.4006 766,559.70
DKK 2,865,734.26 1.0786 3,090,980.97
GBP 59,450.00 8.8903 528,528.34
Other account payable
Including: EUR 255.00 8.025 2,046.38
DKK 402,113.23 1.0786 433,719.33
115 / 146
(2) Explanation on foreign operational entity:
Subsidiary of the Company IRD was established in Denmark in 1996. The 66% equity of IRD were required
by the Company in cash in April 2019, and in October 2020, increasing the shareholding to 34.00% by cash
purchase. After the increase in holdings, the company acquired 100.00% of the company's equity.
Book-keeping currency of IRD was Danish krone, and IRD mainly engaged in the R&D, production and sales
of fuel cell components.
Subsidiary Borit was established in Belgium in 2010. the Company acquired 100% equity of Borit by cash
acquisition in November 2020. Borit is denominated in Euro and engaged in the R&D, production and sales of
fuel cell components.
62. Government grants
(1) Government grants
Amount reckoned
Category Amount Item
in current gain/loss
The second batch of provincial-level industrial and information
5,000,000.00 Deferred income --
industry transformation special funds in 2019
Municipal technological reform fund allocation in 2020
Appropriations for Municipal Technical Reform Fund Projects in 4,770,000.00 Deferred income --
2020
Strategic cooperation agreement funding for key enterprise of smart
manufacturing in high-tech zone
4,060,000.00 Deferred income --
Strategic cooperation agreement funds for key intelligent
manufacturing enterprises in the high-tech zone
2020 Wuxi Science and Technology Development Fund 19th Batch
1,000,000.00 Deferred income --
of Science and Technology Development Plan Project Funds
Intelligent transformation of Automobile components
1,310,000.00 Deferred income --
manufacturing process
Deferred income,
e-store 1,162,700.27 1,162,700.27
other income
Deferred income,
Anione 1,410,199.51 211,192.07
other income
Deferred income,
Annual output of 150,000 gasoline engine turbochargers 1,095,300.00 717,082.83
other income
Neptune 918,551.27 Deferred income --
Development of variable nozzle turbocharger meeting the
800,000.00 Deferred income --
requirements of National VI B
Deferred income,
Pegasus 528,530.85 528,530.85
other income
Deferred income,
HighPem2 Gas 356,327.63 356,327.63
other income
Job stabilization subsidy 4,125,376.68 Other income 4,125,376.68
Intelligent transformation and technical transformation guidance
3,740,000.00 Other income 3,740,000.00
funds
Wuxi City Intellectual Property Project Operation Service System
1,050,000.00 Other income 1,050,000.00
Construction Fund
116 / 146
Amount reckoned
Category Amount Item
in current gain/loss
"Work for training" subsidy 1,269,900.00 Other income 1,269,900.00
Training subsidy 1,005,934.35 Other income 926,294.35
2019 Wuxi Mayor Quality Award 1,000,000.00 Other income 1,000,000.00
Distributed photovoltaic project power generation subsidies 968,800.00 Other income 968,800.00
Service charge for three agencies 682,632.28 Other income 682,632.28
The second batch of supporting project funds (manufacturing
350,000.00 Other income 350,000.00
taxation top 30)
2019 Quality Special Award 350,000.00 Other income 350,000.00
Huishan District Support Fund 340,000.00 Other income 340,000.00
Special subsidies for enterprise vocational education in Binhu
324,300.00 Other income 324,300.00
District in the third quarter of 2019
Vocational Appraisal Guidance Center Collection 303,600.00 Other income 303,600.00
Technology plan subsidy 300,000.00 Other income 300,000.00
2020 Wuxi Smart Manufacturing Project Support Fund 300,000.00 Other income 300,000.00
Subsidies for manufacturing individual champion enterprises 200,000.00 Other income 200,000.00
Intellectual property reward 114,670.00 Other income 114,670.00
In 2019, the integration of industrialization and industrialization,
and the provincial-level segmentation project reward for enterprise 180,000.00 Other income 180,000.00
cloud
2019 Huishan District "P ioneer Talent Program" Talent Award 150,000.00 Other income 150,000.00
2019 corporate postdoctoral subsidy funds 120,000.00 Other income 120,000.00
2019 tax contribution incentives for key enterprises 100,000.00 Other income 100,000.00
Supporting funding for key talent programs above the provincial
100,000.00 Other income 100,000.00
level
Deferred income,
Other 1,557,189.83 998,816.62
other income
Total 41,044,012.67
(2) Government grants rebate
Not applicable
117 / 146
VI. Changes of consolidation scope (unit: RMB)
1. Enterprise combine not under the same control
(1) Enterprise combine not under the same control occurred in the period
Acquire
Time Standard to Income of Net profit of
Ratio of d way
point for Cost of equity Purchas determine the purchaser from purchaser from
Purchaser equity Equity
equity obtained ing date purchasing purchasing date purchasing date
obtained obtained
obtained date to period-end to period-end
way
Cash Obtained
2020-11-3 2020-11-
Borit 318,708,001.47 100% purchas controlling 9,143,241.73 -5,166,510.61
0 30
e rights
(2) Combination cost and goodwill
Combination cost Borit
--Cash 318,708,001.47
--Fair value of the equity prior to the purchasing date --
Total combination cost 318,708,001.47
Less: shares of fair value of identifiable net assets acquired 70,941,353.26
Goodwill/merger cost is less than the shares of fair value of identifiable
247,766,648.21
net assets acquired
(3) Identifiable assets and liability on purchasing date under the purchaser
Borit
Item
Fair value on purchasing date Book value on purchasing date
Assets:
Monetary funds 21,405,243.16 21,405,243.16
Account receivable 2,306,622.48 2,306,622.48
Account paid in advance 478,370.09 478,370.09
Other account receivables 748,859.12 748,859.12
Inventory 12,692,549.70 11,925,135.80
Fixed assets 46,007,739.12 28,314,172.77
Construction in progress 950,331.98 950,331.98
Intangible assets 39,460,780.10 13,349,057.73
Deferred tax assets 1,388,436.59 1,388,436.59
Liability:
Account payable 7,894,432.49 7,894,432.49
Contract liabilities 3,067,697.93 3,067,697.93
Payroll payable 2,805,072.70 2,805,072.70
Taxes payable 273,570.08 273,570.08
Other account payable 13,935,900.17 13,935,900.17
Non-current liabilities due within one
872,471.02 872,471.02
year
118 / 146
Borit
Item
Fair value on purchasing date Book value on purchasing date
Long term loan 6,201,616.25 6,201,616.25
Long-term payables 7,106,533.43 7,106,533.43
Deferred income 1,197,109.35 1,197,109.35
Deferred income tax liabilities 11,143,175.66 --
Net assets 70,941,353.26 37,511,826.30
Less: Minority interests -- --
Net assets acquired 70,941,353.26 37,511,826.30
(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date
Not applicable.
2. Enterprise combine under the same control
Nil
3. Reverse purchase
Nil
4. Disposal of subsidiaries
Nil
5. Other reasons for consolidation range changed
In the reporting period, Weifu Leader- subsidiary of the company established the Autosmart Seating jointly with Qiqiong
Automobile Technology (Shanghai) Co., Ltd. According to the Article of Association under the name of Autosmart Seating,
Weifu Leader holds 66.00% equity of Autosmart Seating while 34.00% held by Qiqiong Automobile Technology (Shanghai) Co.,
Ltd.
VII. Equity in other entity (Unit: RMB)
1. Equity in subsidiary
(1) Constitute of enterprise group
Main Registered Directly Indirectly Proportion
Subsidiary operation Business nature Share-holding Share-holding of voting Acquired way
place place ratio (%) ratio (%) rights (%)
Spare parts of Enterprise
Weifu
Nanjing Nanjing internal-combustion 80.00 -- 80.00 combines under
Jinning
engine the same control
Automobile Enterprise
Weifu
Wuxi Wuxi exhaust purifier, 94.81 -- 94.81 combines under
Leader
muffler the same control
Spare parts of
Weifu
Wuxi Wuxi internal-combustion 100.00 -- 100.00 Investment
Mashan
engine
Weifu Spare parts of
Wuxi Wuxi 100.00 -- 100.00 Investment
Chang’an internal-combustion
119 / 146
Main Registered Directly Indirectly Proportion
Subsidiary operation Business nature Share-holding Share-holding of voting Acquired way
place place ratio (%) ratio (%) rights (%)
engine
Weifu Enterprise
International Wuxi Wuxi Trading 100.00 -- 100.00 combines under
Trade the same control
Spare parts of
Weifu
Wuxi Wuxi internal-combustion 66.00 -- 66.00 Investment
Schmidt
engine
Enterprise
Spare parts of
combines not
Weifu Tianli Ningbo Ningbo internal-combustion 98.83 1.17 100.00
under the same
engine
control
Enterprise
Spare parts of
Weifu combines not
Wuxi Wuxi internal-combustion 51.00 -- 51.00
Autocam under the same
engine
control
Weifu Automobile
Leader Wuhan Wuhan exhaust purifier, -- 60.00 60.00 Investment
(Wuhan) muffler
Weifu Automobile
Leader Chongqing Chongqing exhaust purifier, -- 100.00 100.00 Investment
(Chongqing) muffler
Weifu Automobile
Leader Nanchang Nanchang exhaust purifier, -- 100.00 100.00 Investment
(Nanchang) muffler
Autosmart Smart car
Wuxi Wuxi -- 66.00 66.00 Investment
Seating equipment
Enterprise
Weifu
combines not
Electric Wuxi Wuxi Hub Motor 80.00 -- 80.00
under the same
Drive
control
SPV Denmark Denmark Investment 100.00 -- 100.00 Investment
Enterprise
Fuel cell combines not
IRD Denmark Denmark -- 100.00 100.00
components under the same
control
Enterprise
IRD Fuel cell combines not
America America -- 100.00 100.00
America components under the same
control
Fuel cell Enterprise
Borit Belgium Belgium -- 100.00 100.00
components combines not
120 / 146
Main Registered Directly Indirectly Proportion
Subsidiary operation Business nature Share-holding Share-holding of voting Acquired way
place place ratio (%) ratio (%) rights (%)
under the same
control
Enterprise
Fuel cell combines not
Borit Inc. America America -- 100.00 100.00
components under the same
control
(2) Important non-wholly-owned subsidiary
Dividend announced to
Share-holding ratio Gains/losses attributable
Subsidiary distribute for minority in Ending equity of minority
of minority (%) to minority in the Period
the Period
Weifu Jinning 20.00 21,848,100.90 15,748,768.80 199,246,408.99
Weifu Schmidt 34.00 4,996,898.99 -- 16,239,171.33
Weifu Leader 5.19 11,252,872.88 -- 107,011,846.40
Weifu Autocam 49.00 22,118,036.30 -- 177,267,298.23
Total 60,215,909.07 15,748,768.80 499,764,724.95
(3) Main finance of the important non-wholly-owned subsidiary
Ending balance
Subsidiary Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
Weifu Jinning 1,182,876,680.02 293,436,809.97 1,476,313,489.99 433,667,329.34 42,293,914.58 475,961,243.92
Weifu
213,435,154.59 47,533,838.59 260,968,993.18 212,812,487.33 -- 212,812,487.33
Schmidt
Weifu Leader 4,942,039,786.72 1,200,764,541.57 6,142,804,328.29 4,204,615,377.36 20,388,995.29 4,225,004,372.65
Weifu
323,378,083.30 360,083,668.37 683,461,751.67 321,531,075.82 -- 321,531,075.82
Autocam
Total 6,661,729,704.63 1,901,818,858.50 8,563,548,563.13 5,172,626,269.85 62,682,909.87 5,235,309,179.72
Opening balance
Subsidiary Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
Weifu Jinning 999,097,495.08 334,721,775.17 1,333,819,270.25 318,915,621.86 47,104,930.82 366,020,552.68
Weifu
141,991,506.20 49,208,881.93 191,200,388.13 157,822,785.29 -- 157,822,785.29
Schmidt
Weifu Leader 3,941,739,116.15 1,095,110,196.65 5,036,849,312.80 3,351,853,614.37 22,204,377.06 3,374,057,991.43
Weifu
245,057,798.53 323,114,477.06 568,172,275.59 254,234,583.00 -- 254,234,583.00
Autocam
Total 5,327,885,915.96 1,802,155,330.81 7,130,041,246.77 4,082,826,604.52 69,309,307.88 4,152,135,912.40
Current period
Subsidiary Total comprehensive Cash flow from operation
Operation Income Net profit
income activity
Weifu Jinning 685,608,389.43 110,875,256.44 110,875,256.44 42,395,588.51
Weifu Schmidt 252,434,907.65 14,694,274.89 14,694,274.89 -2,270,586.10
Weifu Leader 6,427,844,701.00 245,276,849.88 245,276,849.88 41,415,937.03
121 / 146
Current period
Subsidiary Total comprehensive Cash flow from operation
Operation Income Net profit
income activity
Weifu Autocam 485,081,038.09 50,518,929.75 50,518,929.75 86,836,060.40
Total 7,850,969,036.17 421,365,310.96 421,365,310.96 168,376,999.84
Last Period
Subsidiary Total comprehensive Cash flow from operation
Operation Income Net profit
income activity
Weifu Jinning 591,679,134.25 124,990,228.55 124,990,228.55 73,403,344.49
Weifu Schmidt 221,352,114.68 5,093,231.61 5,093,231.61 19,622,886.37
Weifu Leader 3,020,424,650.65 33,406,696.55 33,406,696.55 112,342,744.56
Weifu Autocam 417,638,897.85 23,573,670.87 23,573,670.87 125,547,456.63
Total 4,251,094,797.43 187,063,827.58 187,063,827.58 330,916,432.05
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group
Nil
2. Transaction that has owners’ equity shares changed in subsidiary but still with controlling rights
(1) Owners equity shares changed in subsidiary
In October 2020, the company purchased the equity held by minority shareholders of IRD with 48,507,056.85
yuan in cash. After this transaction, the company's shareholding in IRD was changed from 66.00% to
100.00%.
(2) Impact on minority’s interest and owners’ equity attributable to parent company
Item IRD
Cost of acquisition——Cash 48,507,056.85
Less: Net assets share of the subsidiary calculated according to the equity ratio obtained 41,330,359.81
Balance 7,176,697.04
Including: Capital reserve adjustment 7,176,697.04
3. Equity in joint venture and associated enterprise
(1)Associated enterprise:
Share-holding ratio Accounting
treatment
(%) on
Main Registere
Enterprise investment
Associated enterprise operation Business nature
abbreviation d place for joint
place
Directly Indirectly venture and
associated
enterprise
Wuxi Weifu Environment Weifu Equity
Wuxi Wuxi Catalyst -- 49.00
Catalyst Co., Ltd. Environment method
Bosch Automobile Diesel Bosch Diesel Internal-combustion Equity
Wuxi Wuxi 32.50 1.50
System Co., Ltd. System engine accessories method
Zhonglian Automobile Zhonglian Internal-combustion Equity
Shanghai Shanghai 20.00 --
Electronic Co., Ltd. Automobile engine accessories method
Weifu Precision Weifu
Internal-combustion Equity
Machinery Manufacturing Precision Wuxi Wuxi 20.00 --
engine accessories method
Co., Ltd. Machinery
Shinwell Automobile Shinwell Wuxi Wuxi Automobile -- 45.00 Equity
122 / 146
Share-holding ratio Accounting
treatment
(%) on
Main Registere
Enterprise investment
Associated enterprise operation Business nature
abbreviation d place for joint
place
Directly Indirectly venture and
associated
enterprise
Tech. (Wuxi) Co., Ltd. Automobile components method
Tech. (Wuxi)
Changchun Xuyang
Changchun Changchu Changch Automobile Equity
Weifu Auto Parts -- 34.00
Xuyang n un components method
Technology Co., Ltd.
(2) Main financial information of the important associated enterprise
Ending balance/Current period
Item
Weifu Environmental Protection Bosch Diesel System Zhonglian Automobile
Current assets 4,446,438,334.10 11,965,249,225.12 201,344,601.39
Including: cash and cash equivalents 223,157,715.58 10,675,106.71 194,215,134.17
Non -current assets 363,513,166.84 2,995,027,302.84 5,985,689,857.38
Total assets 4,809,951,500.94 14,960,276,527.96 6,187,034,458.77
Current liabilities 3,251,776,146.44 7,423,648,562.76 3,687,897.36
Non-current liabilities 175,895,402.90 -- 2,638,609.61
Total liabilities 3,427,671,549.34 7,423,648,562.76 6,326,506.97
Minority shareholders’ equity -- -- --
Attributable to parent company
1,382,279,951.60 7,536,627,965.20 6,180,707,951.80
shareholders’ equity
Share of net assets calculated by
677,317,176.28 2,562,453,508.17 1,236,141,590.36
shareholding ratio
Adjustment items -- -- --
--Goodwill -- 267,788,761.35 1,407,265.96
--Unrealized profit of internal trading -- -29,652,559.84 --
--Other -- -0.28 -0.01
Book value of equity investment in
677,317,176.28 2,800,589,709.40 1,237,548,856.31
joint venture
Fair value of the equity investment of
joint ventures with public offers -- -- --
concerned
Operation income 7,458,886,474.12 15,742,669,081.61 23,790,158.00
Financial expenses 173,107,842.23 41,669,303.63 -7,539,295.05
Income tax expense 27,279,920.00 678,258,481.92 4,780,141.71
Net profit 296,484,991.05 3,511,327,740.19 1,538,581,105.06
Net profit of the termination of
operation -- -- --
Other comprehensive income -- -- --
Total comprehensive income 296,484,991.05 3,511,327,740.19 1,538,581,105.06
Dividends received from joint venture
-- 1,801,681,159.00 331,400,000.00
in the year
Other explanation: Adjustment item for other “-0.28”: the differential tail;
Item Opening balance/Last Period
123 / 146
Weifu Environmental Protection Bosch Diesel System Zhonglian Automobile
Current assets 3,285,078,665.28 10,878,760,988.82 175,292,101.34
Including: cash and cash
52,542,261.45 36,763,894.06 27,062,362.95
equivalents
Non -current assets 323,188,749.54 3,059,116,036.23 6,129,564,645.28
Total assets 3,608,267,414.82 13,937,877,025.05 6,304,856,746.62
Current liabilities 2,401,381,614.27 4,613,514,567.69 3,030,820.85
Non-current liabilities 26,545,326.53 -- 2,699,079.03
Total liabilities 2,427,926,940.80 4,613,514,567.69 5,729,899.88
Minority shareholders’ equity -- -- --
Attributable to parent
1,180,340,474.02 9,324,362,457.36 6,299,126,846.74
company shareholders’ equity
Share of net assets calculated
578,366,832.27 3,170,283,235.50 1,259,825,369.35
by shareholding ratio
Adjustment items -- -- --
--Goodwill -- 267,788,761.35 1,407,265.96
--Unrealized profit of internal
-- -20,979,859.92 --
trading
--Other -- -0.28 --
Book value of equity
578,366,832.27 3,417,092,136.65 1,261,232,635.31
investment in joint venture
Fair value of the equity
investment of joint ventures -- -- --
with public offers concerned
Operation income 3,729,583,492.29 14,224,084,504.12 23,049,985.98
Financial expenses 105,866,567.08 4,653,984.37 -545,753.01
Income tax expense -21,899,596.61 708,163,353.13 4,124,733.74
Net profit 26,414,017.30 3,152,063,841.44 1,399,783,397.92
Net profit of the termination
-- -- --
of operation
Other comprehensive income -- -- --
Total comprehensive income 26,414,017.30 3,152,063,841.44 1,399,783,397.92
Dividends received from joint
-- 858,896,776.94 105,200,000.00
venture in the year
(3) Excess loss occurred in joint venture or associated enterprise
Nil
(4) Unconfirmed commitment with joint venture investment concerned
Nil
(5) Intangible liability with joint venture or associated enterprise investment concerned
Nil
4. Financial summary for non-important Joint venture and associated enterprise
Ending balance / Opening balance /
Item
Current period Last Period
Joint venture:
Total book value of investment -- --
Amount based on share-holding ratio
124 / 146
Ending balance / Opening balance /
Item
Current period Last Period
--Net profit -- -910,094.79
--Other comprehensive income -- --
--Total comprehensive income -- -910,094.79
Associated enterprise：
Total book value of investment 86,032,548.98 65,714,349.12
Amount based on share-holding ratio
--Net profit 13,773,166.19 6,501,430.20
--Other comprehensive income -- --
--Total comprehensive income 13,773,166.19 6,501,430.20
5. Major conduct joint operation
Nil
6. Structured body excluding in consolidate financial statement
Nil
VI I I. R is k re lat e d wit h f i na nc ial i ns t r ume nt
Main financial instrument of the Company including monetary funds, structured deposits, account receivable,
equity instrument investment, financial products, loans, and account payable etc., more details of the financial
instrument can be found in relevant items of Note V. Risks concerned with the above-mentioned financial
instrument, and the risk management policy takes for lower the risks are as follow:
Aims of engaging in the risk management is to achieve equilibrium between the risk and benefit, lower the
adverse impact on performance of the Company to minimum standards, and maximized the benefit for
shareholders and other investors. Base on the risk management targets, the basic tactics of the risk
management is to recognized and analyzed the vary risks that the Company counted, established an appropriate
risk exposure baseline and caring risk management, supervise the vary risks timely and reliably in order to
control the risk in a limited range.
In business process, the risks with financial instrument concerned happen in front of the Company mainly
including credit exposure, market risk and liquidity risk. BOD of the Company takes full charge of the risk
management target and policy-making, and takes ultimate responsibility for the target of risk management and
policy. Compliance department and financial control department manager and monitor those risk exposures to
ensuring the risks are control in a limited range.
1. Credit Risk
Credit risk refers to the risk that one party of a financial instrument fails to perform its obligations, and
resulting in the financial loss of other party. The company's credit risk mainly comes from monetary funds,
structured deposits, note receivable, account receivable, other account receivables. The management has
established an appropriate credit policy and continuously monitors the exposure to these credit risks.
The monetary funds and structured deposits held by the Company are mainly deposited in financial institutions
125 / 146
such as commercial banks, the management believes that these commercial banks have higher credit and asset
status, and have lower credit risks.The Company adopts quota policies to avoid credit risks to any financial
institutions.
For accounts receivable, other receivables and bills receivable, the Company sets relevant policies to control
the credit risk exposure. To prevent the risks, the company has formulated a new customer credit evaluation
system and an existing customer credit sales balance analysis system. The new customer credit evaluation
system aims at new customers, the company will investigate a customer’s background according to the
established process to determine whether to give the customer a credit line and the credit line size and credit
period. Accordingly, the company has set a credit limit and a credit period for each customer, which is the
maximum amount that does not require additional approval. The analysis system for credit sales balance of
existing customers means that after receiving a purchase order from an existing customer, the company will
check the order amount and the balance of the accounts owed by the customer so far,if the total of the two
exceeds the credit limit of the customer, the company can only sell to the customer on the premise of
additional approval, otherwise the customer must be required to pay the corresponding amount in advance. In
addition, for the credit sales that have occurred, the company analyzes and audits the monthly statements for
risk warning of accounts receivable to ensure that the company’s overall credit risk is within a controllable
range.
The maximum credit risk exposure of the Company is the carrying amount of each financial asset on the
balance sheet.
2. Market risk
Market risk of the financial instrument refers to the fair value of financial instrument or future cash flow due to
fluctuations in the market price changes and produce, mainly includes the IRR, FX risk and other price risk.
(1) Interest rate risk (IRR)
IRR refers to the fluctuate risks on Company’s financial status and cash flow arising from rates changes in
market. IRR of the Company mainly related with the bank loans. In order to lower the fluctuate of IRR, the
Company, in line with the anticipative change orientation, choose floating rate or fixed rate, that is the rate in
future period will goes up prospectively, than choose fixed rate; if the rate in future period will decline
prospectively, than choose the floating rate. In order to minor the bad impact from difference between the
expectation and real condition, loans for liquid funds of the Company are choose the short-term period, and
agreed the terms of prepayment in particular.
(2) Foreign exchange (FX) risk
FX risks refer to the losses arising from exchange rate movement. The FX risk sustain by the Company mainly
related with the USD, EUR, SF, JPY, HKD, DKK except for the USD, EUR, SF, JPY, HKD and DKK carried
out for the equipment purchasing of parent company and Autocam, material purchasing of parent company,
technical service and trademark usage costs of parent company, the import and export of Weifu International
Trade, operation of IRD and operation of Borit, other main business of the Company are pricing and settle
126 / 146
with RMB (Yuan). In consequence of the foreign financial assets and liabilities takes minor ratio in total assets,
the Company has small FX risk of the financial instrument, considered by management of the Company.
End as 31st December 2020, except for the follow assets or liabilities listed with foreign currency, assets and
liabilities of the Company are carried with RMB
① Foreign currency assets of the Company till end of 31st December 2020
Ending foreign Ending RMB balance
Item Convert rate Ratio in assets (%)
currency balance converted
Monetary funds
Including: USD 11,596,564.24 6.5249 75,666,419.10 0.28
EUR 3,694,505.41 8.025 29,648,405.15 0.11
HKD 11,548,347.98 0.84164 9,719,551.59 0.04
DKK 9,616,906.23 1.0786 10,372,795.06 0.04
Account receivable
Including: USD 2,190,411.21 6.5249 14,292,214.10 0.05
EUR 1,290,945.42 8.025 10,359,837.00 0.04
JPY 12,179,808.00 0.063236 770,202.34 0.00
DKK 2,239,065.57 1.0786 2,415,056.12 0.01
Other account receivables
Including: USD 70,143.68 8.025 562,903.03 0.00
DKK 462,081.08 1.0786 498,400.65 0.00
Total ratio in assets 0.57
② Foreign currency liability of the Company till end of 31st December 2020:
Ending foreign Ending RMB balance
Item Convert rate Ratio in assets(%)
currency balance converted
Short-term borrowings
Including: EUR 4,981,278.48 8.025 39,974,759.80 0.47
Account payable
Including: USD 812,035.19 6.5249 5,298,448.41 0.06
EUR 1,031,866.82 8.025 8,280,731.24 0.10
JPY 15,780,699.00 0.063236 997,908.28 0.01
CHF 103,580.75 7.4006 766,559.70 0.01
DKK 2,865,734.26 1.0786 3,090,980.97 0.04
GBP 59,450.00 8.8903 528,528.34 0.01
Other account payable
Including: EUR 255.00 8.025 2,046.38 0.00
DKK 402,113.23 1.0786 433,719.33 0.01
Total ratio in liabilities 0.71
③ Other pricing risk
The equity instrument investment held by the Company with classification as transaction financial asset and
127 / 146
other non-current financial assets are measured on fair value of the balance sheet date. The fluctuation of
expected price for these investments will affect the gains/losses of fair value changes for the Company.
Furthermore, on the premise of deliberated and approved in 10th session of 8th BOD, the Company exercise
entrust financing with the self-owned idle capital; therefore, the Company has the risks of collecting no
principal due to entrust financial products default. Aims at such risk, the Company formulated a “Management
Mechanism of Capital Financing”, and well-defined the authority approval, investment decision-making,
calculation management and risk controls for the entrust financing in order to guarantee a security funds and
prevent investment risk efficiently. In order to lower the adverse impact from unpredictable factors, the
Company choose short-term and medium period for investment and investment product’s term is up to 3 years
in principle; in variety of investment, the Company did not invest for the stocks, derivative products, security
investment fund and the entrust financial products aims at security investment as well as other investment with
securities concerned.
3. Liquidity risk
Liquidity risk refers to the capital shortage risk occurred during the clearing obligation implemented by the
enterprise in way of cash paid or other financial assets. The Company aims at guarantee the Company has rich
capital to pay the due debts, therefore, a financial control department is established for collectively controlling
such risks. On the one hand, the financial control department monitoring the cash balance, the marketable
securities which can be converted into cash at any time and the rolling forecast on cash flow in future 12
months, ensuring the Company, on condition of reasonable prediction, owes rich capital to paid the debts; on
the other hand, building a favorable relationship with the banks, rationally design the line of credit, credit
products and credit terms, guarantee a sufficient limit for bank credits in order to satisfy vary short-term
financing requirements.
I X. Dis c los ure of f air val ue
1. Ending fair value of the assets and liabilities measured by fair value
In RMB/CNY
Ending fair value
Item
First-order Second-order Third-order Total
I. Sustaining measured by fair value
(I) Financial assets measured by fair value
and with variation reckoned into current 188,108,256.00 326,848,122.00 4,809,264,982.10 5,324,221,360.10
gains/losses
1. Transaction financial asset 188,108,256.00 -- 3,330,324,683.10 3,518,432,939.10
(1)financial products -- -- 3,330,324,683.10 3,330,324,683.10
(2) Equity instrument investment 188,108,256.00 -- -- 188,108,256.00
2. Other non-current financial assets -- 326,848,122.00 1,478,940,299.00 1,805,788,421.00
(1)financial products -- -- 1,467,000,000.00 1,467,000,000.00
(2) Equity instrument investment -- 326,848,122.00 11,940,299.00 338,788,421.00
128 / 146
Ending fair value
Item
First-order Second-order Third-order Total
(II) Financial assets measured by fair
value and with variation reckoned into -- -- 1,290,572,477.88 1,290,572,477.88
other comprehensive income
1. Receivables financing -- -- 1,005,524,477.88 1,005,524,477.88
2. Other equity instrument investment -- -- 285,048,000.00 285,048,000.00
Total asset non-sustaining measured by
188,108,256.00 326,848,122.00 6,099,837,459.98 6,614,793,837.98
fair value
Total liability non-sustaining measured
-- -- -- --
by fair value
II. Non-persistent measure
Total asset non-sustaining measured by
-- -- -- --
fair value
Total liability non-sustaining measured
-- -- -- --
by fair value
2. Recognized basis for the market price sustaining and non-persistent measured by fair value on
first-order
On 31 December 2020, the financial assets available for sale-equity instrument investment held by the Company refers to the
SDEC (stock code: 600841) and Miracle Automation (Stock code: 002009), determining basis of the market price at period-end
refers to the closing price of 31 December 2020.
3. The qualitative and quantitative information for the valuation technique and critical parameter that
sustaining and non-persistent measured by fair value on second-order
On 31 December 2020, other non-current financial assets-equity instrument investment held by the Company refers to the
Guolian Securities (stock code: 601456), determining basis of the market price at period-end refers to the closing price and
liquidity discounts of 31 December 2020.
4. The sustaining and non-persistent measured by fair value on first-order
(1) Fair value of wealth management products
The fair value of wealth management products is determined by the Company using discounted cash flow
valuation techniques.Among them, the important unobservable input values are mainly the expected
annualized rate of return and the risk factor of wealth management products.
(2) Financing of accounts receivable
For this part of financial assets, the Company uses discounted cash flow valuation techniques to determine its
fair value. Among them, important unobservable input values mainly include discount rate and contractual
cash flow maturity period. The cash flow with a contract expiration period of 12 months (inclusive) shall not
be discounted, and the cost shall be regarded as its fair value.
(3) Fair value of equity instrument investment and other equity instrument investment
Due to the lack of market liquidity for this part of financial assets, the Company uses the replacement cost
method to determine its fair value.Among them, the important unobservable input values mainly include the
financial data of the invested company, etc.
X. Related party and related transactions
1. Parent company of the enterprise
129 / 146
Parent company Relationship Company Registration Legal Business nature Registered capital (in
type place representative 10 thousand Yuan)
Wuxi Industry Parent State-run Jiang Operation of
Wuxi 517,265.71
Group company proprietorship Guoxiong state-owned assets
Share-holding ratio on
Voting right ratio on Uniform social credit
Parent company the enterprise for Ultimate controller of the enterprise
the enterprise (%) code
parent company (%)
State-owned Assets Supervision &
Wuxi Industry
20.22 20.22 Administration Commission of Wuxi 913202001360026543
Group
Municipality
Explanation on parent company of the enterprise
Wuxi Industry Group is an enterprise controlled by the State-owned Assets Management Committee of Wuxi Municipal People’s
Government. Its business scope includes foreign investment by using its own assets, house leasing services, self-operating and acting
as an agent for the import and export business of various commodities and technologies (Except for goods and technologies that are
restricted by the state or prohibited for import and export), domestic trade (excluding national restricted and prohibited items).
(Projects that are subject to approval in accordance with the law can be operated only after being approved by relevant departments).
2. Subsidiary of the Enterprise
Found more in Note VII. 1.” Equity in subsidiary”
3. Joint venture and associated enterprise
Found more in Note VII.3. “Equity in joint venture and associated enterprise”
Other associated enterprise or joint ventures which has related transaction with the Company in the period or
occurred previous: nil
4. Other related party
Other related party Relationship with the Enterprise
Robert Bosch Company Second largest shareholder of the Company
Director, supervisor and senior executive of the
Key executive
Company
5. Related transaction
(1) Goods purchasing, labor service providing and receiving
①Goods purchasing/labor service receiving
Related party Content of related transaction Current period Last Period
Weifu Precision Machinery Goods and labor 34,570,825.03 37,649,400.25
Bosch Diesel System Goods and labor 29,740,591.61 42,492,806.04
Weifu Environment Goods 3,051,418,777.65 1,663,362,526.18
Robert Bosch Company Goods and labor 150,855,622.37 173,854,905.98
Shinwell Automobile Tech. (Wuxi) Co., Ltd. Goods 1,733,572.01 11,195,174.16
②Goods sold/labor service providing
Content of related Current period Last Period
Related party
transaction
Weifu Precision Machinery Goods and labor 6,092,391.01 1,428,332.05
130 / 146
Bosch Diesel System Goods and labor 2,961,684,269.09 2,670,139,591.68
Weifu Environment Goods and labor 29,663,885.81 29,810,340.60
Robert Bosch Company Goods and labor 860,611,502.90 730,599,270.85
Shinwell Automobile Tech. (Wuxi)
Goods 103,329.66 1,241,682.55
Co., Ltd.
(2) Related trusteeship management/contract & entrust management/ outsourcing
Nil
(3) Related lease
①As a lessor for the Company:
Lease income recognized in the Lease income recognized at last
Lessee Assets type
Period Period
Weifu Environmental Protection Workshop 2,508,057.00 2,508,057.00
②Explanation on related lease
Weifu Leader entered into the house leasing contract with Weifu Environment, as for the plant locates at No.9
Linjiang Road, Wuxi new district, owed by Weifu Leader, rent-out to Weifu Environment, agreements are
made as: Rental from 1 January 2020 to 31 December 2020 was 2,508,057.00 Yuan
(4) Related guarantee
Nil
(5) Related party’s borrowed/lending funds:
This year, Weifu Lida received 5.47 million yuan of borrowed funds from Wuxi Industry Group.
(6) Related party’s assets transfer and debt reorganization
Nil
(7) Remuneration of key manager
Item Current period (in ten thousand yuan) Last Period (in ten thousand yuan)
Remuneration of key manager 1,698.60 537.00
(8) Other related party transactions
Related party Name Current period Last Period
Weifu Precision Machinery Payable for technical services 54,783.81 --
Weifu Precision Machinery Purchase of fixed assets 145,200.00 --
Bosch Diesel System Payable for technical services 184,740.27 337,369.76
Bosch Diesel System Purchase of fixed assets 447,692.06 5,720,900.23
Bosch Diesel System Technology royalties paid etc. 295,419.00 --
Robert Bosch Company Technology royalties paid etc. 5,072,260.23 3,489,339.19
Robert Bosch Company Payable for technical services -- 702,303.80
Robert Bosch Company Purchase of fixed assets 22,927,889.53 6,150,100.00
Weifu Environmental Protection House rental fee payable -- 214,285.71
Weifu Environmental Protection Purchase of fixed assets 30,000.00 148,668.39
Weifu Environmental Protection Payable for technical services 64,433.96 --
Weifu Environmental Protection Sales of fixed assets 9,426.00 --
Wuxi Industry Group Interest paying 89,564.40
6. Receivable/payable items of related parties
131 / 146
(1) Receivable item
Ending balance Opening balance
Item Related party Bad debt Bad debt
Book balance Book balance
reserve reserve
Account receivable Weifu Precision Machinery 160,565.87 -- 243,544.57 --
Other account receivables Weifu Precision Machinery -- -- 1,070,000.00 --
Account receivable Bosch Diesel System 549,543,387.12 547,423,047.70 --
Account receivable Robert Bosch Company 205,738,695.62 84,473.87 155,195,576.42 135,534.13
Other account receivables Robert Bosch Company -- -- 7,600,000.00 1,520,000.00
Weifu Environmental
Account receivable 642,390.75 -- 3,925,564.95 --
Protection
Weifu Environmental
Other account receivables 49,000,000.00 -- -- --
Protection
(2) Item of payment in advance
Item Related party Ending balance Opening balance
Other non- current asset Weifu Precision Machinery -- 53,788.00
Other non- current asset Bosch Diesel System -- 183,842.03
Account paid in advance Robert Bosch Company 2,970,930.93 5,954,823.56
Other non- current asset Robert Bosch Company -- 6,600,000.00
(3) Payable item
Item Related party Ending balance Opening balance
Account payable Weifu Precision Machinery 12,825,011.74 10,556,782.28
Other account payable Weifu Precision Machinery 29,000.00 29,000.00
Account payable Weifu Environmental Protection 850,384,640.88 553,049,630.17
Account payable Bosch Diesel System 7,178,387.17 5,664,266.10
Account payable Robert Bosch Company 5,370,249.46 12,297,410.48
Account payable Shinwell Automobile Tech. (Wuxi) Co., Ltd. 19,320.30 2,212,768.26
Other current liabilities Bosch Diesel System 169,620,804.78 69,164,600.47
Other current liabilities Weifu Precision Machinery 74,778.76
Other account payable Wuxi Industry Group 5,474,862.22 --
(4) Advance payments and contract liabilities:
Item Related party Ending balance Opening balance
Contract liabilities Weifu Precision Machinery 619,469.03 --
Contract liabilities Bosch Diesel System 0.36 --
Contract liabilities Robert Bosch Company 18,094.85 854,162.51
Contract liabilities Weifu Environmental Protection -- 5,812,521.86
7. Undertakings of related party
Nil
132 / 146
XI.S ha re - bas e d pay me nt
1. Overall situation of share-based payment
Total amount of various equity instruments granted by the
company in the current period Fair value on the grant date 509,994,000.00 yuan
Total amount of various equity instruments exercised by
the company in the current period --
Total amount of various equity instruments invalidated by
the company in the current period --
The grant price is 15.48 yuan per share; the exercise time is from the
The scope of the exercise price of the stock options issued first trading day 24 months after the completion of the registration of
by the company at the end of the period and the remaining the restricted stocks granted in the first tranche to the last trading day
period of the contract within 60 months from the date of completion of the registration of
the restricted stock granted in the first tranche, so the remaining
period of the contract is 4 years and 11 months.
The scope of the exercise price of other equity instruments
issued by the company at the end of the period and the N/A
remaining period of the contract
2. Share-based payment settled by equity
Method for determining the fair value of equity Determine based on the closing price of the restricted stock on the
instruments on the grant date grant date
Basis for determining the number of vesting equity
Unlocking conditions
instruments
Reasons for the significant difference between estimate in
Not Applicable
the current period and estimate in the prior period
Cumulative amount of equity-settled share-based payments
6,484,837.50
included in the capital reserve
Total amount of expenses confirmed by equity-settled
6,484,837.50
share-based payments in the current period
Other explanation:
This restricted stock incentive plan has been reviewed and approved by the company's second extraordinary general meeting of
shareholders in 2020. The overview of this restricted stock incentive plan is as follows:
(1) Stock source: the company's A-share common stock repurchased from the secondary market.
(2) Grant date: November 12, 2020.
(3) Grant objects and number of grants: 19,540,000 restricted stocks were granted to 601 incentive objects of the company and its
subsidiaries.
(4) Grant price: 15.48 yuan/share.
(5) Grant registration completion date: December 4, 2020.
(6) Lifting the restrictions on sales:
Unlock period Unlock time Ratio of unlocked quantity to granted
quantity
Phase I unlocked Starting from the first trading day 24 months after the 4/10
133 / 146
completion of the registration of the first grant and ending
on the last trading day within 36 months
Phase II unlocked Starting from the first trading day 36 months after the
completion of the registration of the first grant and ending 3/10
on the last trading day within 48 months
Phase III unlocked Starting from the first trading day 48 months after the
completion of the registration of the first grant and ending 3/10
on the last trading day within 60 months
(7) Performance appraisal requirements at the company level:
Unlock conditions Performance appraisal requirements
The first batch of 1. the weighted average ROE for year of 2021 is not less than 10%;
unlock conditions 2. the growth rate of self-operating profit in 2021 will not be less than 6% compared with the year of
2019, the absolute amount will not be less than 845 million yuan;
3. the cash dividends for year of 2021 shall be no less than 50% of the profit available for distribution of
the current year.
The second batch of 1. the weighted average ROE for year of 2022 is not less than 10%;
unlocking conditions 2. the growth rate of self-operating profit in 2022 will not be less than 12% compared with the year of
2019, the absolute amount will not be less than 892 million yuan;
3. the cash dividends for year of 2022 shall be no less than 50% of the profit available for distribution of
the current year.
The third batch of 1. the weighted average ROE for year of 2023 is not less than 10%;
unlocking conditions 2. the growth rate of self-operating profit in 2023 will not be less than 20% compared with the year of
2019, the absolute amount will not be less than 958 million yuan;
3. the cash dividends for year of 2023 shall be no less than 50% of the profit available for distribution of
the current year.
Other explanation: self-operating profit refers to the net profit attributable to the owners of the parent company after deducting
non-recurring gains and losses, and deducting the investment income from Bosch Diesel System and CNEMS.
XI I. U nde rt ak i ngs or c o nt i nge nc y
1 . I m po rt an t u n d e rt a ki n g s
Important undertakings on balance sheet date
Nil
2. Contingency
Nil
XIII. Events after balance sheet date
1. Important non adjustment matters
Nil
2. Profit distribution
The profit distribution plan for 2020: with the total share capital of the
Profit or dividend plans to distributed
company at the end of 2020 (1,008,950,570 shares), excluding the shares
134 / 146
already repurchased on the repurchase account (56,277 shares of A-stock),
that is the 1,008,894,293 shares as the base, distribute 15.00 Yuan (tax
included) in cash for every 10 shares to all shareholders without bonus
shares and capitalization of capital reserve. (In accordance with the
Company Laws, shares of the company held by a listed company through a
special securities account for repurchase shall not be entitled to participate
in profit distribution and capitalization of capital reserves).The remaining
undistributed profits will be carried forward to the next year. The proposed
cash dividend is 1,513,341,400 Yuan (tax included),
Profit or dividend declare to distributed The profit distribution plan needs to submit for deliberation on Annual General
which have been approved Meeting
3. Sales return
Important sales returns: Nil
4. Other events after balance sheet date
(1)The Proposal on External Investment was deliberated and approved by the 22 nd session of 9th BOD dated 26
Feb. 2021. the Company intends to invest in Qingdao Shangqi HuiZhu Zhanxing Industry Investment Fund
(Limited Partnership) with its own funds of 150 million yuan.
(2) According to the resolution of the 23rd session of the 9th board of directors of the company held on April 16,
2021, the company plans to use its own idle funds for entrusted financial management in 2021, with the total
investment amount not exceeding 9.5 billion Yuan, and the above amount can be rolled
XIV. Other important events
1. Previous accounting errors collection
Nil
2. Debt restructuring
Nil
3. Assets replacement
Nil
4. Pension plan
The Enterprise Annuity Plan under the name of WFHT has deliberated and approved by 8th session of 7th BOD:
in order to mobilize the initiative and creativity of the employees, established a talent long-term incentive
mechanism, enhance the cohesive force and competitiveness in enterprise, the Company carried out the above
mentioned annuity plan since the date of reply of plans reporting received from labor security administration
department. Annuity plans are: the annuity fund are paid by the enterprise and employees together; the
enterprise’s contribution shall not exceed 8% of the gross salary of the employees of the enterprise per year,
the combined contribution of the enterprise and the individual employee shall not exceed 12% of the total
salary of the employees of the enterprise. In accordance with the State’s annuity policy, the Company will
135 / 146
adjusted the economic benefits in due time, in principle of responding to the economic strength of the
enterprise, the amount paid by the enterprise at current period control in the 8 percent of the total salary of last
year, the maximum annual allocation to employees shall not exceed five times the average allocation to
employees and the excess shall not be counted towards the allocation. The individual contribution is limited to
1% of one’s total salary for the previous year. Specific paying ratio later shall be adjusted correspondingly in
line with the operation condition of the Company.
In December 2012, the Company received the Reply on annuity plans reporting under the name of WFHT
from labor security administration department, later, the Company entered into the Entrusted Management
Contract of the Annuity Plan of WFHT with PICC.
5. Segment
(1) Recognition basis and accounting policy for reportable segment
Determine the operating segments in line with the internal organization structure, management requirement
and internal reporting system. Operating segment of the Company refers to the followed components that have
been satisfied at the same time:
① The component is able to generate revenues and expenses in routine activities;
② Management of the Company is able to assess the operation results regularly, and determine resources
allocation and performance evaluation for the component;
③ Being analyzed, financial status, operation results and cash flow of the components are able to require by
the Company
The Company mainly engaged in the manufacture of fuel system of internal combustion engine and fuel cell
components products, auto components, muffler and purifier etc., based on the product segment, the Company
determine three reporting segments as auto fuel injection system and fuel cell components, air management
system and automotive post processing system. Accounting policy for the three reporting segments are shares
the same policy state in Note III
Segment assets exclude transaction financial asset, other account receivables-dividend receivable, other
non-current financial assets, other equity instrument investment, long term equity investment and other
undistributed assets, since these assets are not related to products operation.
(2) Financial information for reportable segment
136 / 146
Add:
investment/income
measured by
equity, income of
financial products
Automotive fuel Product segment Product segment
or possession and
injection system of automotive of air Less: offset of
Item disposal income, Total
and fuel cell parts post processing management segment
the retained assets
product division system system
or gains/losses as
the financial assets
available for sale
or possession and
disposal income
Operating
5,993,310,683.00 6,427,844,701.00 697,872,646.74 235,201,724.14 -- 12,883,826,306.60
revenue
Operating
4,448,683,801.55 5,731,947,799.03 446,496,408.80 197,843,567.41 -- 10,429,284,441.97
cost
Total
524,729,824.97 96,006,636.11 71,788,594.68 -524,839.83 2,309,901,783.97 3,002,951,679.56
Profit
Net profit 452,179,859.49 101,778,469.69 55,671,416.42 -393,128.74 2,212,713,056.22 2,822,735,930.56
Total
11,471,288,383.40 5,342,888,369.35 1,013,319,278.74 881,624,474.24 10,404,823,830.96 27,350,695,388.21
assets
Total
3,923,773,971.66 4,225,004,372.65 592,960,211.88 186,744,801.93 1,235,734.93 8,556,229,489.19
liabilities
6. Major transaction and events makes influence on investor’s decision
Nil
137 / 146
XV. Not e s t o maj or it e ms i n c o ns ol i dat e d f i na nc ial s t at e me nt s of pa re nt
c o mpa ny
(Monetary unit refers to RMB/CNY below unless otherwise specified.The end of the period refers to
December 31, 2020, the beginning of the period refers to January 1, 2020, the current period refers to
2020, and the last period refers to 2019.)
1. Account receivable
(1) Classification of account receivable:
Ending balance
Category Book balance Bad debt reserve
Book value
Amount Ratio (%) Amount Accrual ratio (%)
Account receivable with bad debt
11,107,123.51 1.11 11,107,123.51 100.00 --
provision accrual on a single basis
Account receivable with bad debt
985,882,139.36 98.89 3,099,860.14 0.31 982,782,279.22
provision accrual on portfolio
Including: receivables from
836,329,626.26 83.89 3,099,860.14 0.37 833,229,766.12
customers
Receivables from internal related
149,552,513.10 15.00 -- -- 149,552,513.10
parties
Total 996,989,262.87 100.00 14,206,983.65 1.42 982,782,279.22
Opening balance
Book balance Bad debt reserve
Category
Amount Ratio (%) Amount Accrual ratio Book value
(%)
Account receivable with bad debt
9,107,123.51 1.06 9,107,123.51 100.00 --
provision accrual on a single basis
Account receivable with bad debt
851,956,578.91 98.94 3,716,569.87 0.44 848,240,009.04
provision accrual on portfolio
Including: receivables from
715,722,790.25 83.12 3,716,569.87 0.52 712,006,220.38
customers
Receivables from internal related
136,233,788.66 15.82 -- -- 136,233,788.66
parties
Total 861,063,702.42 100.00 12,823,693.38 1.49 848,240,009.04
①Bad debt provision accrual on single basis:
Ending balance
Account receivable(by unit) Account Bad debt Accrual ratio Accrual causes
receivable reserve (%)
BD bills 7,300,000.00 7,300,000.00 100.00 Have difficulty in collection
Changchun FAW Sihuan Engine
1,475,731.65 1,475,731.65 100.00 Have difficulty in collection
Manufacturing Co., Ltd
Wuxi Kipor Machinery Co., Ltd 1,220,384.74 1,220,384.74 100.00 Have difficulty in collection
Fujian Zhao’an Country Minyue Bianjie
Agricultural Machinery Automobile 1,111,007.12 1,111,007.12 100.00 Have difficulty in collection
components Co., Ltd.
138 / 146
Ending balance
Account receivable(by unit) Account Bad debt Accrual ratio Accrual causes
receivable reserve (%)
Total 11,107,123.51 11,107,123.51 100.00
②Bad debt provision accrual on portfolio:
Ending balance
Account age
Book balance Bad debt reserve Accrual ratio (%)
Within 6 months 822,921,167.68 -- --
6 months to one year 8,783,211.93 878,321.19 10.00
1-2 years 2,434,208.25 486,841.65 20.00
2-3 years 760,568.50 304,227.40 40.00
Over 3 years 1,430,469.90 1,430,469.90 100.00
Total 836,329,626.26 3,099,860.14 0.37
③In the portfolio, receivables from internal related parties
Name Amount Bad debt reserveAccrual ratio (%)
Weifu Leader 68,976,711.20 --
Weifu International Trade 22,530,615.85 --
Weifu Tianli 2,563,953.76 --
Weifu Schmidt 55,481,232.29 --
Total 149,552,513.10 --
④By account age (Including single provision and portfolio provision):
Account age Ending Book balance
Within one year 976,000,464.78
Including: within 6 months 965,950,994.85
6 months to one year 10,049,469.93
1-2 years 7,690,636.18
2-3 years 10,292,548.30
Over 3 years 3,005,613.61
Total 996,989,262.87
(2) Bad debt provision accrual collected or switch back:
Amount changed in the period
Opening
Category Collected or Absorption and Ending balance
balance Accrual Written-off
reversal merger increase
Bad debt
12,823,693.38 1,336,214.96 -- 210,660.88 257,736.19 14,206,983.65
reserve
Total 12,823,693.38 1,336,214.96 -- 210,660.88 257,736.19 14,206,983.65
Important bad debt provision collected or switch back: nil
(3) Account receivable actual charge off in the Period
Item Amount charge off Resulted by related transaction (Y/N)
Fuzhou Haominxing Automobile
129,739.47 N
components Co., Ltd.
139 / 146
Kunming Yunnei Power Co., Ltd. 47,449.10 N
Xinxiang Xincheng Machinery Equipment
28,895.81 N
Co., Ltd.
Other customers 4,576.50 N
Total 210,660.88
(4) Top 5 receivables at ending balance by arrears party
Ending balance of account Ratio in total ending balance Ending balance of bad debt
Name
receivable of account receivables (%) reserve
Bosch Diesel System 548,842,896.72 55.05 --
Weifu Leader 68,976,711.20 6.92 --
Weifu Schmidt 55,481,232.29 5.56 --
Custom 4 49,207,860.47 4.94 703,826.23
Custom 5 45,023,657.85 4.52 102,723.13
Total 767,532,358.53 76.99 806,549.36
2. Other account receivables
Item Ending balance Opening balance
Interest receivable 897,777.78 804,929.68
Dividend receivable -- 1,070,000.00
Other account receivables 196,437,936.85 248,140,027.06
Total 197,335,714.63 250,014,956.74
(1)Interest receivable
1) Category of interest receivable
Item Ending balance Opening balance
Interest receivable of unified-borrowing & unified-lending 897,777.78 149,876.70
Interest of fund occupation -- 655,052.98
Total 897,777.78 804,929.68
2) Significant overdue interest
Nil
(2) Dividend receivable
1) Details of dividend receivable
The invested entity Ending balance Opening balance
Weifu Precision Machinery -- 1,070,000.00
2) Important dividend receivable with account age over one year
Ni
(3)Other account receivables
1) Other account receivables classification by nature
Nature Ending balance Opening balance
Staff loans and petty cash 483,650.21 462,664.16
140 / 146
Balance of related party in the consolidate scope 194,745,396.72 216,403,060.04
Margin 1,030,340.00 --
Intercourse funds of unit -- 24,000,000.00
Protean Holdings Corp. equity disposal fund -- 10,654,092.89
Other 263,534.00 117,939.00
Total 196,522,920.93 251,637,756.09
2) Accrual of bad debt provision
Phase I Phase II Phase III
Expected credit losses Expected credit losses for
Bad debt reserve Expected credit losses for the entire duration the entire duration (with Total
over next 12 months (without credit credit impairment
impairment occurred) occurred)
Balance on Jan. 1, 2020 3,497,729.03 -- -- 3,497,729.03
Balance of Jan. 1, 2020 in the
-- -- -- --
period
--transfer-in phase I -- -- -- --
--transfer-in phase II -- -- -- --
-- switch back phase II -- -- -- --
-- switch back phase I -- -- -- --
Current accrual 52,664.34 -- -- 52,664.34
Current reversal 3,465,409.29 -- -- 3,465,409.29
Current written-off -- -- -- --
Other change -- -- -- --
Balance on Dec. 31, 2020 84,984.08 -- -- 84,984.08
By account age (Including single provision and portfolio provision)
Account age Ending Book balance
Within one year 160,889,115.00
Including: Within 6 months 71,626,274.30
6 months to one year 89,262,840.70
1-2 years 35,552,695.72
2-3 years 43,570.21
Over 3 years 37,540.00
Total 196,522,920.93
3) Bad debt provision accrual, collected or switch back
Amount changed in the period
Conversion
Opening different of
Category Collected or Ending balance
balance Accrual Written-off foreign currency
reversal
financial
statement
Bad debt
3,497,729.03 52,664.34 3,465,409.29 -- -- 84,984.08
reserve
Total 3,497,729.03 52,664.34 3,465,409.29 -- -- 84,984.08
141 / 146
4) Other receivables actually written-off during the reporting period
Nil
5) Top 5 other receivables at ending balance by arrears party
Ending
Ratio balance of
Item Nature Ending balance Account age
(%) bad debt
reserve
Balance of related party in
Weifu Leader 100,000,000.00 Within one year 50.88 --
the consolidate scope
Balance of related party in
Weifu Chang’an 54,192,781.00 Within one year 27.58 --
the consolidate scope
Balance of related party in
Weifu Schmidt 21,000,000.00 1-2 years 10.68 --
the consolidate scope
Balance of related party in
Weifu Mashan 19,552,615.72 Within 2 years 9.95 --
the consolidate scope
Zhenkunxing Industrial
Margin 1,000,000.00 Within 6 months 0.51 --
Supermarket (Shanghai) Co., Ltd.
Total 195,745,396.72 99.60 --
6) Other account receivables related to government grants:
Nil
7) Other receivable for termination of confirmation due to the transfer of financial assets:
Nil
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved:
Nil
142 / 146
无锡威孚高科技集团股份有限公司 2020 年度财务报表附注
3. Long-term equity investments
Ending balance Opening balance
Item
Book balance Depreciation reserves Book value Book balance Depreciation reserves Book value
Investment for subsidiary 1,978,302,303.40 -- 1,978,302,303.40 1,731,814,008.11 -- 1,731,814,008.11
Investment for associates and
3,999,826,000.48 -- 3,999,826,000.48 4,599,549,621.93 -- 4,599,549,621.93
joint venture
Total 5,978,128,303.88 -- 5,978,128,303.88 6,331,363,630.04 -- 6,331,363,630.04
(1) Investment for subsidiary
Impairment accrual in Ending balance of
The invested entity Opening balance Increase in this period Decrease in this period Ending balance
the period depreciation reserves
Weifu Jinning 178,639,593.52 569,165.62 -- 179,208,759.14 -- --
Weifu Leader 460,113,855.00 731,784.39 -- 460,845,639.39 -- --
Weifu Mashan 168,693,380.51 154,321.87 -- 168,847,702.38 -- --
Weifu Chang’an 220,902,037.30 144,365.63 -- 221,046,402.93 -- --
Weifu International Trade 32,849,254.85 59,737.50 -- 32,908,992.35 -- --
Weifu ITM 167,000,000.00 -- 167,000,000.00 -- -- --
Weifu Schmidt 50,160,000.00 84,628.12 -- 50,244,628.12 -- --
Weifu Tianli 234,941,100.00 243,928.12 -- 235,185,028.12 -- --
Weifu Autocam 82,454,467.99 -- -- 82,454,467.99 -- --
Weifu Electronic Drive 53,832,280.23 54,759.38 -- 53,887,039.61 -- --
SPV 82,228,038.71 411,445,604.66 -- 493,673,643.37 -- --
Total 1,731,814,008.11 413,488,295.29 167,000,000.00 1,978,302,303.40 -- --
(2) Investment for associates and joint venture
Nature Ending balance of
Enterprise Opening balance Current changes (+, -) Ending balance
depreciation reserves
Bosch Diesel System Associated enterprise 3,276,853,986.35 -589,329,306.82 2,687,524,679.53 --
143 / 146
无锡威孚高科技集团股份有限公司 2020 年度财务报表附注
Zhonglian Automobile Associated enterprise 1,261,232,635.30 -23,683,778.99 1,237,548,856.31 --
Weifu Precision Machinery Associated enterprise 61,463,000.28 13,289,464.36 74,752,464.64 --
Total Associated enterprise 4,599,549,621.93 -599,723,621.45 3,999,826,000.48 --
Current changes (+, -):
Item Bosch Diesel System Zhonglian Automobile Weifu Precision Machinery
Additional investment -- -- --
Capital reduction -- -- --
Investment gain/loss recognized under equity 1,132,865,918.69 307,716,221.01 16,889,464.36
Other comprehensive income adjustment -- -- --
Other equity change -- -- --
Cash dividend or profit announced to issued -1,722,195,225.51 -331,400,000.00 -3,600,000.00
Impairment accrual -- -- --
Other -- -- --
Total -589,329,306.82 -23,683,778.99 13,289,464.36
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4. Operating income and cost
Current period Last Period
Item
Income Cost Income Cost
Main business 4,164,444,997.29 2,955,881,019.87 3,470,103,915.90 2,330,022,370.30
Other business 371,972,806.50 280,430,592.86 362,821,444.52 311,590,544.97
Total 4,536,417,803.79 3,236,311,612.73 3,832,925,360.42 2,641,612,915.27
5. Investment income
Item Current period Last Period
Investment income in subsidiaries 62,995,075.18 105,086,820.44
Investment income in joint ventures and associated enterprises 1,457,471,604.06 1,310,687,436.86
Investment income from holding transaction financial asset 683,211.60 1,383,668.59
Investment income from holding other equity instrument investment -- 900,000.00
Investment income of financial products 258,702,394.98 228,151,138.50
Other 36,907,117.60 --
Total 1,816,759,403.42 1,646,209,064.39
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XV I. S upple me nt a ry I nf or mat io n
1. Current non-recurring gains/losses
Item Amount Note
Gains/losses from the disposal of non-current asset 10,719,959.77
Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in
quota or ration according to national standards, which are closely relevant to enterprise’s 146,475,795.26
business)
Profit and loss of assets delegation on others’ investment or management 271,684,174.09
Except for effective hedge business relevant to normal operation of the Company, gains and
losses arising from fair value change of tradable financial assets and tradable financial liabilities,
and investment income from disposal of tradable financial assets, tradable financial liabilities 375,102,546.00
and financial assets available for sale
Switch-back of impairment of account receivable that practice impairment test independent 3,078,424.43
Other non-operating income and expenditure except for the aforementioned items -3,090,715.87
Impact on income tax -116,175,046.47
Impact on minority shareholders’ equity -5,011,845.35
Total 682,783,291.86
Note: “+” refers to income and revenue while “-” stands for losses or expenses for the above mentioned numbers
2. ROE and earnings per share
Earnings per share (RMB)
Weighted average
Profits during report period Diluted earnings per
ROE (%) Basic earnings per share
share
Net profits belong to common stock stockholders of the
15.78 2.79 2.79
Company
Net profits belong to common stock stockholders of the
11.90 2.10 2.10
Company after deducting nonrecurring gains and losses
3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
Not applicable
(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules
and Chinese GAAP (Generally Accepted Accounting Principles)
Not applicable
4. Supplementation for change of accounting policy
Found more in the explanation on 30. Change of the important accounting policy and estimation in Note III
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