Weifu High-Technology Group Co., Ltd.
Semi-Annual Report 2019
August 2019
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Weifu High-Technology Group Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents.
Chen Xuejun, Principal of the Company, Ou Jianbin, person in charger of accounting works and Ou Jianbin, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of 2019 Semi-Annual Report is authentic, accurate and complete.
All directors are attended the Board Meeting for report deliberation.
In this report, details of relevant risks and countermeasures in operation have described, found more in relevant content in the Report. Concerning the forward-looking statements with future planning involved in the Report, they do not constitute a substantial commitment for investors. The China Securities Journal, Securities Times, Hong Kong Commercial Daily and Juchao Website（www.cninfo.com.cn）are the information disclosure media appointed by the Company, all information should be prevail on the above mentioned media, investors are advice to pay attention on investment risks.
The Company has no plan of cash dividend distributed, no cash bonus and capitalizing of common reserves either carried out.
Contents
Section I Important Notice, Contents and Paraphrase ................................................................. 2 Section II Company Profile and Main Financial Indexes ............................................................. 5 Section III Summary of Company Business .................................................................................. 8 Section IV Discussion and Analysis of Operation ........................................................................ 11 Section V Important Events .......................................................................................................... 19 Section VI Changes in shares and particular about shareholders ............................................... 30 Section VII PreferredStock……………………………………………………………………….34 Section VIII Particulars about Directors, Supervisors and SeniorExecutives…. ..................... 35 Section IX Corporate Bonds ........................................................................................................... 36 Section X Financial Report ............................................................................................................. 37 Section XI Documents Available for Reference ........................................................................... 185
Paraphrase
||||
|-|-|-|
|Items|Refers to|Contents|
|Company, The Company, Weifu|||
||Refers to|Weifu High-Technology Group Co., Ltd.|
|High-technology|||
|Weifu Group|Refers to|Wuxi Weifu Group Co., Ltd.|
|Industry Group|Refers to|Wuxi Industry Development Group Co., Ltd.|
|Robert Bosch, Robert Bosch Company|Refers to|Robert Bosch Co., Ltd, ROBERT BOSCH GMBH|
|Bosch Automobile Diesel, Bosch Diesel|||
||Refers to|Bosch Automobile Diesel System Co., Ltd.|
|System|||
|Weifu Leader|Refers to|Wuxi Weifu Leader Catalytic Converter Co., Ltd.|
|Weifu Jinning|Refers to|Nanjing Nanjing Weifu Jinning Co., Ltd. Co., Ltd.|
|Weifu Environment|Refers to|Wuxi Weifu Environment Catalyst Co., Ltd.|
|Weifu Precision Machinery|Refers to|Weifu Precision Machinery Manufacturing Co., Ltd.|
|SPV|Refers to|Weifu Holding Aps|
|IRD|Refers to|IRD Fuel Cells A/S|
|Zhonglian Electronic|Refers to|Zhonglian Automobile Electronic Co., Ltd.|
|CSRC|Refers to|China Securities Regulatory Commission|
|SZ Stock Exchange|Refers to|Shenzhen Stock Exchange|
|Reporting period|Refers to|1 January 2019 to 30 June 2019|

Section II. Company Profile and Main Financial Indexes
I. Company information
|||||
|-|-|-|-|
|Short form of the stock|Weifu High- Tech, Su Weifu-B|Stock code|000581, 200581|
|Stock exchange for listing|Shenzhen Stock Exchange|||
|Chinese name of the Company|无 锡威孚高科技集团股份有限公司|||
|Short form of the Company in||||
||威孚高科|||
|Chinese (if applicable)||||
|Foreign name of the Company||||
||WEIFU HIGH-TECHNOLOGY GROUP CO.,LTD.|||
|(if applicable)||||
|Short form of foreign name of||||
||WFHT|||
|the Company (if applicable)||||
|Legal representative|Chen Xuejun|||

II. Person/Way to contact
||||
|-|-|-|
||Secretary of the Board|Rep. of security affairs|
|Name|Zhou Weixing|Yan Guohong|
|Contact add.|No.5, Huashan Road, Xin Wu District, Wuxi City|No.5, Huashan Road, Xin Wu District, Wuxi City|
|Tel.|0510-80505999|0510-80505999|
|Fax.|0510-80505199|0510-80505199|
|E-mail|wfjt@public1.wx.js.cn|wfjt@public1.wx.js.cn|

III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not
□ Applicable√ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period, found more details in Annual Report 2018.
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable√ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation place for semi-annual report have no change in reporting period, found more details in Annual Report 2018.
IV. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
□ Yes√ No
|||||
|-|-|-|-|
||Current period|Same period of last year|Changes over last year|
|Operating income (RMB)|4,403,444,346.05|4,960,801,890.99|-11.24%|
|Net profit attributable to shareholders of|1,256,661,577.09|1,545,242,704.92||
||||-18.68%|
|the listed company (RMB)||||
|Net profit attributable to shareholders of||||
|the listed company after deducting|1,114,094,824.74|1,378,865,501.57|-19.20%|
|non-recurring gains and losses (RMB)||||
|Net cash flow arising from operating|690,323,908.25|378,923,690.48||
||||82.18%|
|activities (RMB)||||
|Basic earnings per share (RMB/Share)|1.25|1.53|-18.30%|
|Diluted earnings per share (RMB/Share)|1.25|1.53|-18.30%|
|Weighted average ROE|7.60%|9.92%|-2.32%|
||||Changes over period-end of last|
||Period-end|Period-end of last year||
||||year|
|Total assets (RMB)|22,334,489,303.82|20,892,041,460.30|6.90%|
|Net assets attributable to shareholder of|15,997,076,128.08|15,913,828,778.82||
||||0.52%|
|listed company (RMB)||||

V. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.
VI. Items and amounts of extraordinary profit (gains)/loss
√Applicable□ Not applicable
In RMB
||||
|-|-|-|
|Item|Amount|Note|
|Gains/losses from the disposal of non-current asset (including the write-off that|4,927,677.70||
|accrued for impairment of assets)|||
||44,179,326.95|Including the house landexpropriation anddisposal incentives ofWeifu Jingning|
|Governmental subsidy reckoned into current gains/losses (not including the|||
|subsidy enjoyed in quota or ration according to national standards, which are|||
|closely relevant to enterprise’s business)|||
|Profit and loss of assets delegation on others’ investment or management|95,464,240.84||
|Held transaction financial asset, gains/losses of changes of fair values from|30,686,277.13||
|transaction financial liabilities, and investment gains from disposal of transaction|||
|financial asset, transaction financial liabilities and financial asset available for|||
|sales, exclude the effective hedging business relevant with normal operations of|||
|the Company|||
|Switch back of provision for depreciation of account receivable which was singly|200,000.00||
|taken depreciation test|||
|Other non-operating income and expenditure except for the aforementioned items|838,232.57||
|Less: Impact on income tax|26,626,210.20||
|Impact on minority shareholders’ equity (post-tax)|7,102,792.64||
|Total|142,566,752.35|--|

Concerning the extraordinary profit (gain)/loss defined byQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable√ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss
Section III. Summary of Company Business
I. Main businesses of the company in the reporting period
1. The Company belongs to auto parts industry, and its main business products include diesel fuel injection system products, exhaust after-treatment system products and air management system products.
2. Main uses of the Company's products
(1) The diesel fuel injection system products are widely used in different power diesel engines supporting all types of trucks, passenger cars, buses, construction machinery, marine, and generator sets. The company not only makes products matching with the main engines used at home but also exports some products to the Americas, Southeast Asia, and the Middle East. The products meet the needs of national emission standards.
(2) The auto exhaust after-treatment system products: mainly support the major manufacturers of automobile, motorcycle and general machinery at home which meet the national emission standards.
(3) The intake system products (supercharger): matches with most of the domestic small-bore diesel engine plants and some six-cylinder diesel engine manufacturers, and meet the needs of the light and heavy commercial vehicles and some passenger cars, and meets the national emission standards.
3. Business model of the Company
The Company follows the operating philosophy of making competitive products, creating famous brands, striving for first choices, and creating value for the users, implements the business model that parent company unifies the management and subsidiaries decentralize the production. Namely, the group company is responsible for making strategic development planning and operation targets, and making the unified management, instruction and assessment for the finance, significant personnel management, core raw materials, quality control, and technology of the subsidiaries. The subsidiaries arrange production based on the order management model of market, which makes the subsidiaries keep the consistent quality with the company, helps keep abreast of customer needs and saving logistics costs, maintain the timeliness of products production and supply, and improve thecompany’s economic benefits.
During the reporting period, theCompany’s main business and business model have no significant changes. II. Major changes in main assets
1. Major changes in main assets
|||
|-|-|
|Major assets|Note of major changes|
|Equity assets|No major change|
|Fixed assets|No major change|
|Intangible assets|No major change|
|Construction in progress|The increase of investment in equipment for technology reformation|

2. Main overseas assets
√Applicable□ Not applicable
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||||The|Whether|
||||||||proportion|there are|
|Specific|||||Control measures|Incom|||
||||Locati|Operatio|||of overseas|significan|
|content of the|Cause of formation|Asset size|||to guarantee asset|e|||
||||on|n model|||assets to the|t risks of|
|asset|||||security|status|||
||||||||company’s|impairme|
||||||||net assets|nt?|
|The|In order to accelerate the|The company|||||||
|Company|cultivation of the company's|invested €7.26|||||||
|established|new business growth point and|million and|||||||
|SPV (a|accelerate the transformation|gained control|||||||
|wholly-owne|and upgrading of the company,|of IRD Fuel|||||||
|d subsidiary)|the 4th meeting of the Ninth|Cells A/S.|||||||
||||||The Company will||||
|in Denmark|Board of Directors reviewed||||||||
||||||pay full attention||||
|to acquire a|and approved the “Proposal on||||||||
||||||to changes in the||||
|66% stake in|the Company's Foreign||||||||
||||||industry and the||||
|Danish IRD|Investment”. The company|||Holding|||||
||||Denm||market, give play||||
|Fuel Cells|established SPV (a|||subsidiar||N/A|0.57%|No|
||||ark||to its own||||
|A/S|wholly-owned subsidiary) in|||y|||||
||||||advantages, and||||
|(hereinafter|Denmark to acquire a 66%||||||||
||||||actively prevent||||
|referred to as|stake in the Danish IRD with||||||||
||||||and resolve||||
|“IRD”) with|7.26 million euros||||||||
||||||various risks.||||
|7.26 million|||||||||
|euros (IRD's|||||||||
|valuation of|||||||||
|11 million|||||||||
|euros).|||||||||

III. Core Competitiveness Analysis
The Company is a high technology enterprise with a number of patented technologies. For years, based on the
scientific research as National Enterprise Technical Center, Post-doctor Scientific Research Station, Jiangsu
Provincial Engineering and Technology Research Center and Industrialization Base of National Hi-Tech Research and Development Achievement, we have become the backbone enterprise of the core parts of domestic automobile (power engineering) after 60 years of cultivation.80% of the current core business of auto parts are matching with electronic control system and with electronic control realized, which owes a leading position in self-owned brand.
The company lays emphasis on the manufacturing quality management, relies on WPS (Weifu production system) and manufacturing information platform with Weifu characteristics to continuously improve the production system structure, personnel organization, operation mode and market supply and demand relationship, and continues to carry out the process quality indicator quantitative management and process management, and improve production efficiency, product quality and product delivery capabilities, and thecompany’s manufacturing quality control capabilities are further improved.
The company pays attention to the business operation quality of and lays emphasis on the resource integration. At present, the company has established a high-speed, stable and reliable network environment and an efficient data center, successfully built the ERP platform, opened up the value chain, and realized the integration of financial services, which made the information resources fully shared, and thecompany’s comprehensive operational management level has been further improved.
The company pays attention to the construction of core talent system. At present, it has built a relatively complete human resource management platform to strive to build a high-quality core talent team, which provides a strong human resource guarantee for the long-term development of the company.
Core competitiveness of the Company has no major changes in the Period.
Section IV. Discussion and Analysis of Operation
I. Overview
In the first half of 2019, the auto market was generally running at a low level, with a double-digit decline in the first half of the year. In the face of severe market conditions, the company faced difficulties and strived to seize market opportunities, took advantage of the trend, strengthened internal management, paid attention to risk management and control, and strive to ensure the stability of the company's overall economic operation. During the period, the Company achieved an operation revenue of 4.4 billion Yuan with a y-o-y decrease of11.24%; profit amounted to 1.356 billion Yuan, a decrease of19.3% from a year earlier; the net profit attributable to owners of parent company amounted as 1.257 billion Yuan, a decrease of18.68% over same period of last year. Main work in the first half of the year
1. Figure out the situation, face difficulties, seek opportunities, strive to open up markets, focus on production and delivery, strive to maintain market share of key products, and ensure the continuous stability of related product markets. In the first half of the year, the production and sales volume of common rail pumps exceeded 900,000 units;
2. Focus on management quality, make full use of interconnection technologies, strengthen data interconnection and interoperability, and further enhance the abilities of data collection, analysis and prediction. Continuously improve manufacturing process management, strengthen flexible and agile production, and realize intelligent deployment capability of manufacturing process; continuously promote internal management of the company, sort out management duties, upgrade and optimize standardization of system processes, and optimize organization; strengthen the group information system security construction, continuously promote the construction of business project information management platform, and promote the financial sharing center construction, the procurement sharing platform project construction and the human resources management system platform construction. Constantly enhance the foundation of the company's development.
3. In order to accelerate the cultivation of the company's new business growth point and accelerate the transformation and upgrading of the company, the company established SPV (a wholly-owned subsidiary) in Denmark to acquire a66% stake in Danish IRD Fuel Cells A/S held by FCCT ApS, equivalent to 7.26 million euros. By acquiring the equity of IRD, the company achieved the control of IRD, which is conducive to enhancing the company's competitiveness in the new energy business market and in line with the company's development strategy, and lays a good foundation for the company's sustainable, rapid and healthy development and transformation and upgrading.
II. Main business analysis
See the “I-Introduction” in “Discussion and Analysis of the Operation”
Change of main financial data on a y-o-y basis
In RMB
||||||
|-|-|-|-|-|
|||Same period of last|y-o-y changes||
||Current period|||Reasons|
|||year|(+,-)||
|Operation income|4,403,444,346.05|4,960,801,890.99|-11.24%||
|Operation cost|3,405,386,504.44|3,889,590,289.69|-12.45%||
|Sales expenses|104,270,647.40|106,347,559.85|-1.95%||
||310,909,980.43|236,539,410.63||Salary and wage|
|Administrative expenses|||31.44%|expenses have increased|
|||||over that of last year|
|Financial cost|-29,492,795.58|-1,776,908.37|||
|Income tax expense|81,382,654.54|102,927,297.96|-20.93%||
|R&D investment|180,167,642.16|177,443,968.15|1.53%||
||690,323,908.25|378,923,690.48||Cash paid by purchasing|
|Net cash flow arising from operation|||||
||||82.18%|goods and accepting|
|activities|||||
|||||labor service declined|
|Net cash flow arising from investment|314,744,349.46|-592,455,421.53||Cash paid for investment|
|activities||||declined|
|Net cash flow arising from financing|-813,830,454.63|106,793,020.26|||
||||-862.06%|Dividend distribution|
|activities|||||
|Net increase of cash and cash equivalent|191,652,992.77|-105,928,538.96|||

Major changes on profit composition or profit resources in reporting period
□ Applicable√ Not applicable
No major changes on profit composition or profit resources occurred in reporting period
Constitution of main business
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||Increase or|Increase or|Increase or|
|||||decrease of|decrease of|decrease of gross|
||Operating||||||
|||Operating cost|Gross profit ratio|operating revenue|operating cost|profit ratio over|
||revenue||||||
|||||over same period|over same period|same period of|
|||||of last year|of last year|last year|
|According to industries|||||||
|Auto parts|4,133,178,892.36|3,179,484,258.13|23.07%|-12.54%|-13.65%|4.46%|
|According to products|||||||
|Auto fuel|||||||
||2,538,597,772.47|1,806,427,276.08|28.84%|-11.70%|-12.70%|2.90%|
|injection system|||||||
|Post-processing|||||||
||1,354,791,563.22|1,192,914,112.31|11.95%|-15.80%|-17.12%|13.36%|
|system|||||||
|Induction system|239,789,556.67|180,142,869.74|24.87%|-0.84%|3.89%|-12.10%|
|According to region|||||||

||||||||
|-|-|-|-|-|-|-|
|Domestic|3,966,974,100.14|3,023,685,102.13|23.78%|-12.60%|-13.57%|3.75%|
|Overseas|166,204,792.22|155,799,156.00|6.26%|-11.17%|-15.06%|217.80%|

 III. Analysis of non-main business
√Applicable□Not applicable
In RMB
||||||
|-|-|-|-|-|
|||Ratio in total|||
||Amount||Note|Whether be sustainable|
|||profit|||
|||||Yes (The Company’s joint ventures|
||||Income mainly from the two joint||
|||||Bosch Automobile Diesel and Zhonglian|
|Investment|||ventures the Company (Bosch||
||888,216,680.48|65.48%||Electronics’ joint venture- Lianhe|
|income|||Automobile Diesel and Zhonglian||
|||||Electronic have stable production and|
||||Electronic)||
|||||operation both on a sustained basis)|
|Gain/loss of|||Income from the change of shares||
|fair value|30,686,277.13|2.26%|of SDEC and Miracle Automation|No|
|changes|||that held by the Company||
|Asset|||||
||-1,500,885.27|-0.11%||No|
|impairment|||||
|Non-operating|||||
||27,544,757.26|2.03%||No|
|income|||||
|Non-operating|||||
||2,631,453.02|0.19%||No|
|expense|||||

IV. Assets and liability
1. Major changes of assets composition
In RMB
||||||||
|-|-|-|-|-|-|-|
||Period-end||Period-end of last year||||
||||||Ratio||
|||Ratio in total||Ratio in total||Notes of major changes|
||Amount||Amount||changes||
|||assets||assets|||
|Monetary fund|2,689,698,577.33|12.04%|3,042,709,775.25|13.88%|-1.84%||
|Account|2,319,307,654.58||||||
|||10.38%|2,374,955,337.33|10.83%|-0.45%||
|receivable|||||||
|Inventory|1,427,136,271.99|6.39%|1,241,695,545.38|5.66%|0.73%||
|Investment|21,131,775.19||||||
|||0.09%|22,761,528.91|0.10%|-0.01%||
|property|||||||
|Long-term equity|4,792,747,311.47||||||
|||21.46%|4,261,256,191.08|19.44%|2.02%||
|investment|||||||

||||||||
|-|-|-|-|-|-|-|
|Fix assets|2,680,884,221.89|12.00%|2,625,557,400.23|11.98%|0.02%||
|Construction inprocess|259,557,105.61|||||Investment of|
|||||||equipment for|
|||1.16%|195,609,102.08|0.89%|0.27%||
|||||||technology capacity|
|||||||expansion|
|Short-term loans|321,055,399.28|1.44%|359,000,000.00|1.64%|-0.20%||
|Long-term loans|22,500,000.00|||||Loans of subsidiary|
|||0.10%|45,000,000.00|0.21%|-0.11%||
|||||||decreased|

2. Assets and liability measured by fair value
√Applicable□Not applicable
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||||Devaluatio|Amount|||
|||Changes of fair|Accumulative|||||
||Amount at the|||n of|of|||
|||value|changes of fair|||Amount of sale|Amount at|
|Items|beginning|||withdrawi|purchas|||
|||gains/losses in|value reckoned|||in the period|period-end|
||period|||ng in the|e in the|||
|||this period|into equity|||||
|||||period|period|||
|Financial assets||||||||
|1. Transactional||||||||
|financial assets||||||||
||121,066,008.00|30,195,948.00|||||151,261,956.00|
|(excluding derivative||||||||
|financial assets)||||||||
|Subtotal of financial||||||||
||121,066,008.00|30,195,948.00|||||151,261,956.00|
|assets||||||||
|Above total|121,066,008.00|30,195,948.00|||||151,261,956.00|
|Financial liabilities|490,329.13|||||490,329.13|0.00|

 Whether there have major changes on measurement attributes for main assets of the Company in report period or not
□ Yes√No
3. The assets rights restricted till end of the period
||||
|-|-|-|
||Book value at||
|Item||Restriction reasons|
||period-end||
|Monetary fund|158,280.00|Margin paid for the issuance of letter of guarantee|
|Monetary fund|52,783,679.85|C ash deposit for bank acceptance|
|Monetary fund|38,774,365.26|Selling equity of Protean Holdings Corp.|
|Monetary fund|1,655,119.95|C ourt freeze|
|Notes receivable|762,571,527.45|Notes pledge for bank acceptance|

||||
|-|-|-|
||141,199,062.12|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 Court"）, the property with the value of 217 million Yuan under|
|Transactional|||
|||the name of the Company and other seven respondents and the third party Shenzhen|
|financial assets|||
|||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 Logistics and|
|||11,739,102 shares of SDEC held by the Company were frozen|
|Total|997,142,034.63|--|

V. Investment
1. Overall situation
□ Applicable√ Not applicable
2. The major equity investment obtained in the reporting period
□ Applicable√ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable√ Not applicable
4. Financial assets investment
(1) Securities investment
√Applicable□Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||Initial||Book|Changes||||||||
||||||||Cumulat|||Profit||||
|||||Account|value at|in fair|||||Book|||
||||||||ive fair|Current||and loss|||Capit|
|Variety||Short||ing|the|value of|||Current||value at|||
||Code of||||||value|purchas||in the||Accountin|al|
|of|securitie|form of|investm|measure|beginni|the|||sales||the end|||
|securitie||securitie|||||changes|e||Reporti||g subject|Sourc|
|s|s|s|ent cost|ment|ng of|current|||amount||of the|||
||||||||in|amount||ng|||e|
|||||model|the|profit|||||period|||
||||||||equity|||Period||||
||||||period|and loss||||||||
|Domesti|||199,208,000.00|||||||||Transactio||
|||||Measure||||||||||
|c and|||||85,458,|19,221,||||19,221,|104,680|nal|Own|
||600841|SDEC||d by fair||||||||||
|foreign|||||408.00|648.00||||648.00|,056.00|financial|funds|
|||||value||||||||||
|stocks||||||||||||assets||
|Domesti|||69,331,500.00|||||||||Transactio||
|||Miracle||Measure||||||||||
|c and|||||35,607,|10,974,||||10,974,|46,581,|nal|Own|
||002009|Automat||d by fair||||||||||
|foreign|||||600.00|300.00||||300.00|900.00|financial|funds|
|||ion||value||||||||||
|stocks||||||||||||assets||

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||268,539,500.00||121,066|30,195,||||30,195,|151,261|||
|Total||--|||0.00|0.00|0.00|||--|--|
||||,008.00|948.00||||948.00|,956.00|||
|Disclosure date of|2012-03-24|||||||||||
|securities investment|2013-06-04|||||||||||
|approval of the Board||||||||||||

(2) Derivative investment
□ Applicable√ Not applicable
The Company has no derivatives investment in the Period
VI. Significant asset and equity sales
1. Significant asset sales
□ Applicable√ Not applicable
No significant assets being sold in the Period
2. Significant equity sales
□ Applicable√ Not applicable
VII. Analysis of the main stock-jointly and controlling subsidiary
√ Applicable□ Not applicable
Main subsidiary and stock-jointly enterprise with over10% influence on net profit of the Company
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Comp|||||||||
|||Main|Register|||Operating|||
|any|Type|||Total assets|Net Assets||Operating profit|Net profit|
|||business|capital|||revenue|||
|name|||||||||
|||Post|||||||
|Weifu|Subsid|processing|502,596,3||||||
|||||3,861,458,694.93|1,662,618,884.15|1,338,975,875.93|38,801,279.23|32,780,686.77|
|Leader|iary|system|00.00||||||
|||products|||||||
|Weifu||Fuel|||||||
||Subsid||346,286,8||||||
|Jinnin||injection||1,396,248,740.28|1,049,513,354.38|328,481,669.39|48,557,515.93|75,516,399.57|
||iary||25.80||||||
|g||system|||||||
|Bosch|Joint-s||||||||
|||Fuel|||||||
|Autom|tock||USD241,0||||||
|||injection||13,175,089,849.44|7,999,369,712.26|7,690,808,970.61|2,084,188,035.10|1,827,071,096.33|
|obile|compa||00,000.00||||||
|||system|||||||
|Diesel|ny||||||||
|Zhong|Joint-s|Gasoline|600,620,0|6,167,579,853.07|5,637,005,486.65|11,298,817.88|739,595,992.63|737,662,037.83|

|||||
|-|-|-|-|
|lian|tock|system|00.00|
|Electr|compa|||
|onic|ny|||

Subsidiary obtained and disposed in the Period
√ Applicable□ Not applicable
||||
|-|-|-|
||The method of obtaining and handling|The influence to the whole production and|
|Company Name|||
||subsidiaries during the report period|performance|
|SPV|Establishment|No change|
|IRD Fuel Cells A/S|Acquisition|No change|

Explanation on holding equity participation enterprise
In the first half of this year, the auto market was generally running at a low level with a double-digit decline. The main business income and profit of the company, its holding subsidiaries and its shareholding subsidiaries were affected to varying degrees.
VIII. The structured subject controlled by the Company
□ Applicable√ Not applicable
IX. Prediction of business performance from January– September 2019
Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable√ Not applicable
X. Risks and countermeasures
(1) Macro economy and market risks
The macro-economy and market environment are still complex and severe, and many factors such as the automobile industry cycle and the automobile industry policy remain uncertain. The company will change its deterministic model thinking to cope with future uncertainties, rely on existing businesses, actively expand new fields, consolidate the existing business market position, and position in new business potential markets, and strive to improve the company's core competitiveness and overall risk resistance.
(2) The risks of operation management and control
With the rapid growth of the Company's assets and the continuous expansion of business scope, but there are still potential risks of operation management and control because of the large span and multiple links in personnel, business, finance, and capital management. The company will continue to promote the optimization and improvement of internal management, focus on strengthening compliance management, further improve the systems and processes, promote the institutionalization and standardization of company management, and control
operational risks.
(3) The risks of fluctuations in raw material prices
The company's main raw materials include various grades of steel, aluminum, precious metals, etc., the continuous rise in prices will bring the risks of rising costs to the company. The company will pay close attention to the price trend of major raw materials, choose appropriate procurement opportunities, and make reasonable strategic reserves to resolve the risk of raw material price fluctuations.
(4) Risks associated with financial instruments
The major financial tools of the company includes equity investments, loans, account receivables& payables, etc.. The basic strategy of company risk management is to confirm and analyze various potential risks that may occur, strictly control the risks, so as to narrow the negative impact down to the minimum and make theshareholders’ and otherinvestors’ interests to the maximum.
Section V. Important Events
I. AGM and extraordinary general meeting
1. AGM held in the period
|||||||
|-|-|-|-|-|-|
|||Participation ratio||||
|Meeting|Type||Holding date|Disclosure date|Index|
|||for investors||||
|Annual General|||||Notice No.: 2019-015 released on|
||AGM|44.56%|2019-05-28|2019-05-29||
|Meeting of 2018|||||Juchao Website (www.cninfo.com.cn)|

 2. Request for extraordinary general meeting by preferred stockholders with rights to vote
□ Applicable√ Not applicable
II. Profit distribution plan and capitalizing of common reserves in the period
□ Applicable√ Not applicable
There are no cash dividend, bonus and capitalizing of common reserves carried out in the semi-annual
III. Commitments that actual controller, shareholder, related parties, buyer and committed party as the Company etc. have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period
□ Applicable√ Not applicable
There are no commitments that the actual controller, shareholder, related parties, buyer and committed party as the Company etc. have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period
IV. Appointment and non-reappointment (dismissal) of CPA
Whether the semi-annual financial report had been audited
□Yes√ No
The semi-annual report was not audited
V. Explanation on “Qualified Opinion” from CPA by the Board and Supervisory Committee
□ Applicable√ Not applicable
VI. Explanation from the Board for “Qualified Opinion” of lastyear’s
□ Applicable√ Not applicable
VII. Bankruptcy reorganization
□ Applicable√ Not applicable
No bankruptcy reorganization in Period.
VIII. Lawsuits
Material lawsuits and arbitration
□ Applicable√ Not applicable
No material lawsuits and arbitration in the reporting
Other lawsuits
√Applicable□ Not applicable
|||||||||
|-|-|-|-|-|-|-|-|
||Amount||||Judgment|||
|||Whether||Trial Results||||
||Related||||Implementat|||
|Basic Situation of||Formed|Progress of Litigation|and Effects of||Disclosure|Disclosure|
||to the||||ion of|||
|Litigation (Arbitration)||Accrued|(Arbitration)|Litigation||Date|Index|
||Case (10||||Litigation|||
|||Liabilitie||(Arbitration)||||
||thousan||||(Arbitration)|||
|||s||||||
||d Yuan)|||||||
|On March 6, 2017, the|||By the Company’s application|||||
|company received the|||for reconsideration, Shenzhen|||||
|civil ruling|||Intermediate People's Court|||||
|No.(2016)Y03MC2490|||deemed the total assets that|||||
|and No.(2016)|||Cinda Company applied for|||||
|Y03MC2492 from|||preservation to be RMB|This litigation||||
||||||||(Announceme|
|Shenzhen Intermediate|||217,027,697.23. The total|will not affect||||
||||||||nt No.:|
|People's Court about the|||value of 15.3 million shares of|the company’s|Not yet|||
|||||||2017-03-0|2017-002)|
|dispute case that the|21,703|N|SDEC Stock and 4.71 million|daily|implemente|||
|||||||8|published on|
|plaintiff applicant China|||shares of Miracle Automation|operating|d|||
||||||||www.cninfo.c|
|Cinda Asset|||held by the Company has|activities for||||
||||||||om.cn|
|Management Co., Ltd.|||exceeded the total assets that|the time being||||
|Shenzhen Branch|||Cinda Company applied for|||||
|(hereinafter referred to|||preservation, therefore,|||||
|as “Cinda Company”)|||3,560,898 shares of SDEC|||||
|appealed the respondent|||Stock held by the Company|||||
|Weifu High Technology|||was unfrozen. Up to the end|||||

|||||||||
|-|-|-|-|-|-|-|-|
|and other seven|||of the reporting period, the|||||
|respondents and the|||Company’s frozen assets were|||||
|shareholders of the third|||as follows: 4.71 million shares|||||
|party Hejun Company|||of Miracles Logistics held by|||||
|damaged the interests of|||the Company and its fruits,|||||
|corporate creditors,|||and 11,739,102 shares of|||||
|which adopted the|||SDEC Stock held by the|||||
|mandatory measures to|||company and its fruits. At|||||
|freeze the assets with|||present, this litigation is in the|||||
|value of RMB 217|||first instance (First trail on 24|||||
|million under the name|||September 2017 and|||||
|of the Company and|||follow-up session will held|||||
|other seven respondents|||until further notice)|||||
|and Hejun Company.||||||||
|Freeze 4.71 million||||||||
|shares of Miracle||||||||
|Automation and 15.3||||||||
|million shares of SDEC||||||||
|Stock held by the||||||||
|company.||||||||
||||The Company has applied to|||||
||||the Futian Court for|||||
||||compulsory liquidation of|||||
||||Hejun Company. Futian Court|||||
||||has made a civil ruling|This event||||
||||((2017) Yue 0304 QS No. 5)|will not affect|||(Announceme|
|The Company applied to||||||||
||||which ruled to execute|the|Relevant||nt No.:|
|the Futian Court for||||||2017-12-0||
||3,300|N|compulsory liquidation to|Company’s|works still||2017-023)|
|compulsory liquidation||||||6||
||||Hejun Company. The|daily|in process||published on|
|of Hejun Company.||||||||
||||Company will actively|operating|||www.cninfo.c|
||||cooperate with the court to do|activities|||om.cn|
||||the relevant liquidation work|||||
||||and safeguard the legitimate|||||
||||rights and interests of the|||||
||||Company.|||||

IX. Penalty and rectification
□ Applicable√ Not applicable
No penalty and rectification for the Company in reporting period.
X. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable√ Not applicable
XI. Implementation of thecompany’s stock incentive plan, employee stock ownership plan or other employee incentives
√ Applicable□ Not applicable
On 20 June 2014, the Company held the 2013 AGM which deliberated "theCompany’s incentive fund implementation methods", the Company has implemented the medium and long term special incentive allocation for core talents during the reporting period
XII. Major related transaction
1. Related transaction with routine operation concerned
√ Applicable□ Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Wheth|||||
|||||||||Trading|er over|||||
||||||||||||Availa|||
||||Conte|||Related||limit|the||||Index|
|||Type|||Relate||Proporti|||Clearing||||
||||nt of|||transaction|||||ble|||
|||of||Pricing|d||on in|approve|approv|form for||Date of|of|
|Related|Relationship|related|relate|principl|transac|amount (in|similar|||related|similar|||
|party|||d|||10||d (in 10|ed|||disclosure|disclos|
|||transac|transa|e|tion|thousand|transacti|||transacti|market|||
|||tion|||price||ons (%)|thousan|limited|on|||ure|
||||ction|||Yuan)|||||price|||
|||||||||d Yuan)|or not|||||
||||||||||(Y/N)|||||
|||||Based||||||||||
|Weifu||||||||||||||
|||||on fair||||||Based||||
|Precisio|||||||||||||Notice|
||Associated|Procur|Good|value|Marke|||||on the|Marke|||
|n||||||1,282.81|0.44%|4,000|N|||2019-04-23|No.:20|
||company|ement|s|of the|t price|||||contract|t price|||
|Machine|||||||||||||19-009|
|||||market||||||terms||||
|ry||||||||||||||
|||||price||||||||||
||Associated|||||||||||||
|||||Based||||||||||
||company,|||||||||||||
|||||on fair||||||Based||||
|Bosch|Controlling||||||||||||Notice|
|||Procur|Good|value|Marke|||||on the|Marke|||
|Diesel|subsidiary of|||||833.27|0.29%|6,000|N|||2019-04-23|No.:20|
|||ement|s|of the|t price|||||contract|t price|||
|System|German||||||||||||19-009|
|||||market||||||terms||||
||Bosch|||||||||||||
|||||price||||||||||
||Company|||||||||||||
|||||Based||||||||||
|||||on fair||||||Based||||
|Weifu|Joint venture||||||||||||Notice|
|||Procur|Good|value|Marke|||||on the|Marke|||
|Environ|of Weifu|||||67,565.73|23.20%|200,000|N|||2019-04-23|No.:20|
|||ement|s|of the|t price|||||contract|t price|||
|ment|Leader||||||||||||19-009|
|||||market||||||terms||||
|||||price||||||||||
|Robert|Second|||Based||||||Based|||Notice|
|||Procur|Good||Marke||||||Marke|||
|Bosch|largest|||on fair||6,680.14|2.29%|13,000|N|on the||2019-04-23|No.:20|
|||ement|s||t price||||||t price|||
|Compan|shareholder|||value||||||contract|||19-009|

|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|y|of the|||of the||||||terms||||
||Company|||market||||||||||
|||||price||||||||||
|||||Based||||||||||
|Weifu||||||||||||||
|||||on fair||||||Based||||
|Precisio|||Good||||||||||Notice|
||Associated|||value|Marke|||||on the|Marke|||
|n||Sales|s and|||66.19|0.02%|300|N|||2019-04-23|No.:20|
||company|||of the|t price|||||contract|t price|||
|Machine|||labors||||||||||19-009|
|||||market||||||terms||||
|ry||||||||||||||
|||||price||||||||||
||Associated|||||||||||||
|||||Based||||||||||
||company、|||||||||||||
|||||on fair||||||Based||||
|Bosch|Controlling||Good||||||||||Notice|
|||||value|Marke|||||on the|Marke|||
|Diesel|subsidiary of|Sales|s and|||148,782.26|33.79%|260,000|N|||2019-04-23|No.:20|
|||||of the|t price|||||contract|t price|||
|System|German||labors||||||||||19-009|
|||||market||||||terms||||
||Bosch|||||||||||||
|||||price||||||||||
||Company|||||||||||||
|||||Based||||||||||
|||||on fair||||||Based||||
|Weifu|Joint venture||Good||||||||||Notice|
|||||value|Marke|||||on the|Marke|||
|Environ|of Weifu|Sales|s and|||1,023.14|0.23%|5,000|N|||2019-04-23|No.:20|
|||||of the|t price|||||contract|t price|||
|ment|Leader||labors||||||||||19-009|
|||||market||||||terms||||
|||||price||||||||||
|||||Based||||||||||
||Second|||||||||||||
|Robert||||on fair||||||Based||||
||largest||Good||||||||||Notice|
|Bosch||||value|Marke|||||on the|Marke|||
||shareholder|Sales|s and|||30,979.1|7.04%|90,000|N|||2019-04-23|No.:20|
|Compan||||of the|t price|||||contract|t price|||
||of the||labors||||||||||19-009|
|y||||market||||||terms||||
||Company|||||||||||||
|||||price||||||||||
||Associated||Paym|||||||||||
|||||Based||||||||||
||company、||ent of|||||||||||
|||||on fair||||||Based||||
|Bosch|Controlling||techni||||||||||Notice|
|||||value|Marke|||||on the|Marke|||
|Diesel|subsidiary of|Other|cal|||100.27||100|N|||2019-04-23|No.:20|
|||||of the|t price|||||contract|t price|||
|System|German||royalt||||||||||19-009|
|||||market||||||terms||||
||Bosch||ies,|||||||||||
|||||price||||||||||
||Company||etc.|||||||||||
||||Paym|||||||||||
|||||Based||||||||||
||Second||ent of|||||||||||
|||||on fair||||||Based||||
||largest||techni||||||||||Notice|
|Robert||||value|Marke|||||on the|Marke|||
||shareholder|Other|cal|||112.23||300|N|||2019-04-23|No.:20|
|Bosch||||of the|t price|||||contract|t price|||
||of the||royalt||||||||||19-009|
|||||market||||||terms||||
||Company||ies,|||||||||||
|||||price||||||||||
||||etc.|||||||||||

|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||Based||||||||||
|||||on fair||||||Based||||
|Weifu|Joint venture||Rent||||||||||Notice|
|||||value|Marke|||||on the|Marke|||
|Environ|of Weifu|Other|receiv|||125.4||300|N|||2019-04-23|No.:20|
|||||of the|t price|||||contract|t price|||
|ment|Leader||able||||||||||19-009|
|||||market||||||terms||||
|||||price||||||||||
||Associated|||||||||||||
|||||Based||||||||||
||company、||Procu|||||||||||
|||||on fair||||||Based||||
|Bosch|Controlling||reme||||||||||Notice|
|||||value|Marke|||||on the|Marke|||
|Diesel|subsidiary of|Other|nt of|||572.09||1,000|N|||2019-04-23|No.:20|
|||||of the|t price|||||contract|t price|||
|System|German||fixed||||||||||19-009|
|||||market||||||terms||||
||Bosch||assets|||||||||||
|||||price||||||||||
||Company|||||||||||||
|||||Based||||||||||
||||Sales|on fair||||||Based||||
|Weifu|Joint venture|||||||||||||
||||of|value|Marke|||||on the|Marke|||
|Environ|of Weifu|Other||||1,048.52|||Y|||||
||||fixed|of the|t price|||||contract|t price|||
|ment|Leader|||||||||||||
||||assets|market||||||terms||||
|||||price||||||||||
|Total||||--|--|259,171.15|--|580,000|--|--|--|--|--|
|Detail of sales return with major||||||||||||||
|||||Not applicable||||||||||
|amount involved||||||||||||||
|||||After deliberated and approved by AGM of 2018, it is estimated that the routine related||||||||||
|||||transaction for year of 2019 amounting to 5800 million Yuan, actually 2591.7115 million||||||||||
|||||Yuan in total occurred in reporting period, including:||||||||||
|Report the actual implementation of||||||||||||||
|||||1. It is estimated that purchasing goods and labors from related parties amounted as 2230||||||||||
|the normal related transactions which||||||||||||||
|||||million Yuan at most for year of 2019, actually 763.6196 million Yuan occurred in reporting||||||||||
|were projected about their total||||||||||||||
|||||period;||||||||||
|amount by types during the reporting||||||||||||||
|||||2. It is estimated that sales of goods and labors to related parties amounted as 3553 million||||||||||
|period (if applicable)||||||||||||||
|||||Yuan at most for year of 2019, actually 1808.5069 million Yuan occurred in reporting period;||||||||||
|||||3. It is estimated that other related transactions with related parties amounted as 17 million||||||||||
|||||Yuan at most for year of 2019, actually 19.585 million Yuan occurred in reporting period;||||||||||
|Reasons for major differences||||||||||||||
|between trading price and market||||Not applicable||||||||||
|reference price (if applicable)||||||||||||||

2. Related transactions by assets acquisition and sold
□ Applicable√ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period
3. Main related transactions of mutual investment outside
□ Applicable√ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period
4. Contact of related credit and debt
□ Applicable√ Not applicable
The Company had no contact of related credit and debt in the reporting period.
5. Other related transactions
√ Applicable□ Not applicable
On June 4, 2019, the
7th
meeting of the Ninth Board of Directors held by the company reviewed and approved the “Proposal on Joint Investment and Establishment of Companies and Related Transactions between the Company and Related Parties”. In the important period of innovation and upgrading of the technology industry in the auto industry, in order to conform to the new development trends (i.e. electromotion, intelligentization, network, and sharing) of the auto industry. The company and its major shareholders, Wuxi Industry Development Group Co., Ltd. (hereinafter referred to as "Industry Group"), Wuxi Taiji Industry Corporation limited (hereinafter referred to as "Taiji Industry"), Chuxin Semiconductor Technology Co., Ltd. (hereinafter referred to as "Chuxin Semiconductor"), Wuxi Spark Microelectronics Partnership (Limited Partnership) (hereinafter referred to as "Spark") jointly invested and established a company engaged in the design, development and sales of semiconductor devices and integrated circuits and the use of its own assets for external investment. (Wuxi Xichan Microchip Semiconductor Co., Ltd.). Wuxi Xichan Microchip Semiconductor Co., Ltd. (hereinafter referred to as “Xichan Microchip”) has been established and completed the industrial and commercial registration procedures, and obtained the “Business License” issued by Wuxi Xinwu District Market Supervision Administration. The registered capital of Xichan Microchip is RMB 2.11 billion. The shareholding structure is: the related party Industry Group invested RMB 910 million (accounting for43.13%), and Spark invested RMB 600 million (accounting for28.43%), Weifu High Tech invested RMB 200 million (accounting for9.48%), related party Taiji Industry invested RMB 200 million (accounting for9.48%), and Chuxin Semiconductor invested RMB 200 million (accounting for9.48%).
Related searches for disclosure website of interim report with major related transaction concerned
||||
|-|-|-|
|Interim report|Disclosure date|Website for disclosure|
|Proposal on Joint Investment and Establishment ofCompanies and Related Transactions between theCompany and Related Parties|||
|||More details were published on Juchao Website|
||2019-06-05||
|||(http://www.cninfo.com.cn) (Notice No.: 2019-018)|
|Progress of the Joint Investment and Establishment ofCompanies and Related Transactions between theCompany and Related Parties|||
|||More details were published on Juchao Website|
||2019-06-13||
|||(http://www.cninfo.com.cn) (Notice No.: 2019-019)|

XIII. Non-business capital occupying by controlling shareholders and its related parties□ Applicable√ Not applicable
No non-business capital occupied by controlling shareholders and its related parties in Period
XIV. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable√ Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable√ Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable√ Not applicable
No leasing for the Company in reporting period
2. Major guarantees
√ Applicable□ Not applicable
(1) Guarantees
In 10 thousand Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)|||||||||||
||||||Actual date of|||||Guarante|
|Name of the|Related|||||||||e for|
|||||Guarant|happening (Date|Actual|Guarantee|Guarantee|Implemen||
|Company|Announcement|||||||||related|
|||||ee limit|of signing|guarantee limit|type|term|ted (Y/N)||
|guaranteed|disclosure date|||||||||party|
||||||agreement)||||||
|||||||||||(Y/N)|
|Guarantee of the Company and the subsidiaries|||||||||||
|||Related||||||||Guarante|
||||||Actual date of||||||
|Name of the||Announce||||||||e for|
||||Guarantee||happening (Date|Actual|Guarantee|Guarantee|Implemen||
|Company||ment||||||||related|
||||limit||of signing|guarantee limit|type|term|ted (Y/N)||
|guaranteed||disclosure||||||||party|
||||||agreement)||||||
|||date||||||||(Y/N)|

||||||||||
|-|-|-|-|-|-|-|-|-|
|Ningbo Tianli|||||||||
|Turbo charging|||||Joint liability||||
||2016-10-27|6,000|2016-11-11|3,750||5|N|N|
|Technology Co.,|||||guaranty||||
|Ltd.|||||||||
|||||Total amount of actual|||||
|Total amount of approving|||||||||
|||||occurred guarantee for|||||
|guarantee for subsidiaries in||0||||3,750|||
|||||subsidiaries in report period|||||
|report period (B1)|||||||||
|||||(B2)|||||
|||||Total balance of actual|||||
|Total amount of approved|||||||||
|||||guarantee for subsidiaries at|||||
|guarantee for subsidiaries at the||6,000||||3,750|||
|||||the end of reporting period|||||
|end of reporting period (B3)|||||||||
|||||(B4)|||||
|Guarantee of the subsidiaries for the subsidiaries|||||||||
||Related|||||||Guarante|
||||Actual date of||||||
|Name of the|Announce|||||||e for|
|||Guarantee|happening (Date|Actual|Guarantee|Guarantee|Implemen||
|Company|ment|||||||related|
|||limit|of signing|guarantee limit|type|term|ted (Y/N)||
|guaranteed|disclosure|||||||party|
||||agreement)||||||
||date|||||||(Y/N)|
|Total amount of guarantee of the Company( total of three abovementioned guarantee)|||||||||
|Total amount of approving||||Total amount of actual|||||
|guarantee in report period||0||occurred guarantee in report||3,750|||
|(A1+B1+C1)||||period (A2+B2+C2)|||||
|Total amount of approved||||Total balance of actual|||||
|guarantee at the end of report||6,000||guarantee at the end of report||3,750|||
|period (A3+B3+C3)||||period (A4+B4+C4)|||||
|The proportion of the total amount of actually guarantee in the|||||||||
|||||0.23%|||||
|net assets of the Company (that is A4+ B4+C4)|||||||||
|Including:|||||||||
|Amount of guarantee for shareholders, actual controller and its|||||||||
|||||0|||||
|related parties (D)|||||||||
|The debts guarantee amount provided for the guaranteed|||||||||
|parties whose assets-liability ratio exceed 70% directly or||||0|||||
|indirectly (E)|||||||||
|Proportion of total amount of guarantee in net assets of the|||||||||
|||||0|||||
|Company exceed 50% (F)|||||||||
|Total amount of the aforesaid three guarantees (D+E+F)||||0|||||
|Explanations on possibly bearing joint and several liquidating|||||||||
|||||N/A|||||
|responsibilities for undue guarantees (if applicable)|||||||||
|Explanations on external guarantee against regulated|||||||||
|||||N/A|||||
|procedures (if applicable)|||||||||

Explanation on guarantee with composite way
Nil
(2) Guarantee outside against the regulation
□ Applicable√ Not applicable
No guarantee outside against the regulation in Period.
3. Other material contracts
□ Applicable√ Not applicable
No other material contracts for the Company in reporting period
XV. Social responsibility
1. Major environmental issues
The company and its subsidiariesdon’t belong to the key pollutant discharging units published by the environmental protection department.
Protecting the environment is the corporate mission of Weifu High Technology. Thecompany’s main business is expanded around the energy saving and emission reduction of automobiles. At present, thecompany’s main products have all met the emission regulations required by the state, and the company is actively preparing products that can meet the requirements of more stringent emission regulations. Saving resources and reducing consumption are part of the core value of Weifu High Technology. On the one hand, it is conducive to the improvement of enterprise efficiency, and at the same time, it is conducive to improving the resource utilization rate of the whole society. Therefore, the company will continue to improve the resource utilization through technological innovation.
The company resolutely implements the “three simultaneous” system of construction projects and strictly performs the procedures for environmental impact assessment, approval, and acceptance of construction projects. In the process of new project and technical transformation, the new and old pollution can be solved together according to the principle of technical feasibility and economic rationality, and the “three wastes” management project must be designed, constructed and accepted at the same time as the main project.
2. Precise poverty alleviation social responsibility
There is no precise poverty alleviation carried out in the period and no follow plan either
XVI. Explanation on other significant events
√ Applicable□ Not applicable
Matters relating to the sale of the equity interest in the joint-stock company Protean Holdings Corp.
In view of the fact that the majority shareholder of Protean Holdings Corp. exercised the “Drag-along right”, that is, the vast majority of Protean HoldingsCorp.’s shareholders were in favor of the shareholding, and the Protean Holdings Corp. board of directors mostly agreed, which met the drag-along conditions, so Weifu High Tech must agree to sell its9.61% stake in Protean Holdings Corp., and there were dozens of other shareholders who held the remaining16.04% of the issued shares were dragged to sell their shares. After the sale, Weifu High Tech no longer holds a stake in Protean Holdings Corp. (This acquisition invoked 5.1“Drag-along right” in the fifth revision and the restatement of the shareholder agreement of Protean Holdings Corp., i.e. 5.1 (a) i. The most majority of shareholders agree with the shareholding ratio; ii. Oak Investment Partners XII LP ("Oak") with privilege and holding64.77% of the issued shares agrees; iii. GSR Ventures ("GSR") with privilege and holding9.58% of the issued shares agrees; iv. The majority of the board of directors of Protean Holdings Corp. agrees.) Since Protean Holdings Corp., which was invested by the company, was100% acquired by Virtue Surge Limited, Virtue Surge Limited continues to exist after the merger, and Protean Holdings Corp. no longer exists. More details about “Notice of the sale of equity interest in the joint-stock company Protean Holdings Corp.” (No.: 2019-018) were published on Juchao Information Website (http://www.cninfo.com.cn).
XVII. Significant event of subsidiary of the Company
□ Applicable√ Not applicable
Section VI. Changes in Shares and Particulars about Shareholders I. Changes in Shares
1. Changes in Shares
In Share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the Change||Increase/Decrease in the Change (+, -)|||||After the Change||
||||||Capitaliza|||||
||||New|||||||
|||||Bonus|tion of||Subtot||Proportio|
||Amount|Proportion|shares|||Others||Amount||
||||issued|shares|public||al||n|
||||||reserve|||||
|I. Restricted shares|80,079|0.01%||||||80,079|0.01%|
|3. Other domestic shares|80,079|0.01%||||||80,079|0.01%|
|Domestic nature||||||||||
||80,079|0.01%||||||80,079|0.01%|
|person shares||||||||||
|II. Unrestricted shares|1,008,870,491|99.99%||||||1,008,870,491|99.99%|
|1. RMB Ordinary shares|836,490,491|82.90%||||||836,490,491|82.90%|
|2. Domestically listed||||||||||
||172,380,000|17.09%||||||172,380,000|17.09%|
|foreign shares||||||||||
|III. Total shares|1,008,950,570|100.00%||||||1,008,950,570|100.00%|

 Reasons for share changed
□Applicable√ Not applicable
Approval of share changed
□Applicable√ Not applicable
Ownership transfer of share changed
□Applicable√Not applicable
Progress of shares buy-back
□ Applicable√ Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable√ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period
□Applicable√Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□Applicable√Not applicable
2. Changes of restricted shares
□ Applicable√ Not applicable
II. Securities issuance and listing
□ Applicable√ Not applicable
III. Amount of shareholders of the Company and particulars about shares holding
In share
||||||||||
|-|-|-|-|-|-|-|-|-|
|Total common shareholders at|||Total preference shareholders with voting rights recovered at||||||
||60,037||||||0||
|period-end|||end of reporting period (if applicable) (see note 8)||||||
|Particulars about shares held above 5% by common shareholders or top ten common shareholders|||||||||
||||||||Number of||
||||||||share||
||||Total common||Amount of|Amount of|||
|||Proporti|||||pledged/froze||
||||shareholders|Changes in|restrict|un-restrict|||
|Full name of Shareholders|Nature of|on of|||||n||
||shareholder|shares|at the end of|report period|common|common|||
|||held|||||State||
||||report period||shares held|shares held||Amo|
||||||||of||
|||||||||unt|
||||||||share||
|Wuxi Industry DevelopmentGroup Co., Ltd.|State-ownedcorporate|20.22%|204,059,398|0||204,059,398|||
|ROBERT BOSCH GMBH|Foreigncorporate|14.16%|142,841,400|0||142,841,400|||
|Hong Kong SecuritiesClearing Company Ltd.(HKSCC)|Foreigncorporate|5.73%|57,857,357|17,375,313||57,857,357|||
|BBH BOS S/A FIDELITY FD- CHINA FOCUS FD|Foreigncorporate|1.84%|18,530,315|527,518||18,530,315|||
|Bank of Communication –HSBC Jixin Double CoreStrategy Mixed SecuritiesInvestment Fund|Other|1.82%|18,331,307|-8,281,266||18,331,307|||
|Central Huijin AssetsManagement Co., Ltd.|State-ownedcorporate|1.27%|12,811,200|0||12,811,200|||
|China Life Insurance -traditional - general insuranceproducts - 005L-CT001 Shen|Other|1.21%|12,238,898|12,238,898||12,238,898|||
|China Life Insurance- Bonus-Individual bonus -|Other|1.14%|11,459,033|9,673,133||11,459,033|||

|||||||||
|-|-|-|-|-|-|-|-|
|-005L-FH002 Shen||||||||
|Tianda Assets ManagementCo., Ltd. - Tianda GlobalStrategy Fund - All Chinaequity fund (Exchange)|Foreigncorporate|0.97%|9,802,559|9,802,559||9,802,559||
|Agricultural Bank of China -CS 500 ETF|Other|0.69%|7,007,675|796,607||7,007,675||
|Strategy investors or general corporation||||||||
|comes top 10 shareholders due to rights||Not applicable||||||
|issue (if applicable) (see note 3)||||||||
|||Among the top ten shareholders, there has no associated relationship between Wuxi||||||
|||Industry Development Croup Co., Ltd. and other shareholders, the first largest||||||
|Explanation on associated relationship||||||||
|||shareholder of the Company; and they do not belong to the consistent actionist||||||
|among the aforesaid shareholders||||||||
|||regulated by the Management Measure of Information Disclosure on Change of||||||
|||Shareholding for Listed Company.||||||
|Particular about top ten shareholders with un-restrict common shares held||||||||
|||||Amount of un-restrict|Type of shares|||
|Shareholders’ name||||common shares held||||
||||||Type||Amount|
|||||at Period-end||||
|Wuxi Industry Development Group Co., Ltd.||||204,059,398|RMB common shares||204,059,398|
|ROBERT BOSCH GMBH||||142,841,400|RMB common shares||115,260,600|
||||||Domestically listed|||
||||||||27,580,800|
||||||foreign shares|||
|ROBERT BOSCH GMBH||||57,857,357|RMB common shares||57,857,357|
|BBH BOS S/A FIDELITY FD - CHINA FOCUS FD||||18,530,315|Domestically listed|||
||||||||18,530,315|
||||||foreign shares|||
|Bank of Communication – HSBC Jixin Double Core Strategy MixedSecurities Investment Fund||||18,331,307||||
||||||RMB common shares||18,331,307|
|Central Huijin Assets Management Co., Ltd.||||12,811,200|RMB common shares||12,811,200|
|China Life Insurance - traditional - general insurance products -005L-CT001 Shen||||12,238,898||||
||||||RMB common shares||12,238,898|
|China Life Insurance- Bonus -Individual bonus - -005L-FH002 Shen||||11,459,033|RMB common shares||11,459,033|
|Tianda Assets Management Co., Ltd. - Tianda Global Strategy Fund -All China equity fund (Exchange)||||9,802,559||||
||||||RMB common shares||9,802,559|
|Agricultural Bank of China - CS 500 ETF||||7,007,675|RMB common shares||7,007,675|
|||||Among the top ten shareholders, there has no associated||||
|Expiation on associated relationship or consistent actors within the||||||||
|||||relationship between Wuxi Industry Development Croup||||
|top 10 un-restrict common shareholders and between top 10||||||||
|||||Co., Ltd. and other shareholders, the first largest shareholder||||
|un-restrict common shareholders and top 10 common shareholders||||||||
|||||of the Company; and they do not belong to the consistent||||

|||
|-|-|
||actionist regulated by the Management Measure of|
||Information Disclosure on Change of Shareholding for|
||Listed Company.|
|Explanation on top 10 shareholders involving margin business (if||
||Not applicable|
|applicable) (see note 4)||

Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period
□ Yes√ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy-back agreement dealing in reporting period.
IV. Changes of controlling shareholders or actual controller
Changes of controlling shareholders in reporting period
□ Applicable√ Not applicable
Changes of controlling shareholders had no change in reporting period.
Changes of actual controller in reporting period
□ Applicable√ Not applicable
Changes of actual controller in reporting period had no change in reporting period.
Section VII. Preferred Stock
□ Applicable√ Not applicable
The Company had no preferred stock in the reporting.
Section VIII. Directors, Supervisors and Senior Executives
I. Changes of shares held by directors, supervisors and senior executives
□ Applicable√ Not applicable
No change of shares held by directors, supervisors and senior executives, found more details in Annual Report 2018.
II. Resignation and dismissal of directors, supervisors and senior executives
□ Applicable√ Not applicable
No changes of directors, supervisors and senior executives, found more details in Annual Report 2018.
Section IX. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when semi-annual report approved for released or fail to cash in full on due
No
Section X. Financial Report
I. Audit report
Whether the semi annual report is audited
□ Yes√ No
The company's semi annual financial report has not been audited.
II. Financial statement
Unit in note of financial statement refers to CNY: RMB (Yuan)
1. Consolidated balance sheet
Prepared by Weifu High-Technology Group Co., Ltd
2019-6-30
In RMB
||||
|-|-|-|
|Item|2019-6-30|2018-12-31|
|Current assets:|||
|Monetary funds|2,689,698,577.33|2,616,321,740.73|
|Settlement provisions|||
|Capital lent|||
|Tradable financial assets|4,409,469,555.43||
|Financial assets measured by fair value and with variation|||
|reckoned into current gains/losses|||
|Derivative financial assets|||
|Note receivable|1,492,394,221.35|1,148,107,603.68|
|Account receivable|2,319,307,654.58|1,919,793,266.91|
|Receivable financing|||
|Accounts paid in advance|130,898,819.37|94,651,431.31|
|Insurance receivable|||
|Reinsurance receivables|||
|Contract reserve of reinsurance receivable|||
|Other account receivable|597,269,619.06|84,582,246.16|
|Including: Interest receivable|674,104.16|1,842,437.50|
|Dividend receivable|536,162,445.67||

||||
|-|-|-|
|Buying back the sale of financial assets|||
|Inventories|1,427,136,271.99|1,438,528,714.59|
|Contractual assets|||
|Assets held for sale|||
|Non-current asset due within one year|||
|Other current assets|59,554,852.86|4,632,137,600.26|
|Total current assets|13,125,729,571.97|11,934,122,603.64|
|Non-current assets:|||
|Loans and payments on behalf|||
|Debt investment|||
|Finance asset available for sales||255,975,176.91|
|Other debt investment|||
|Held-to-maturity investment|||
|Long-term account receivable|||
|Long-term equity investment|4,792,747,311.47|4,976,773,946.74|
|Investment in other equity instrument|180,940,000.00||
|Other non-current financial assets|368,800,000.00||
|Investment real estate|21,131,775.19|21,906,134.52|
|Fixed assets|2,680,884,221.89|2,707,374,678.61|
|Construction in progress|259,557,105.61|166,414,542.18|
|Productive biological asset|||
|Oil and gas asset|||
|Right-of-use assets|||
|Intangible assets|320,409,700.92|324,892,822.75|
|Expense on Research and Development|||
|Goodwill|55,591,347.00|1,784,086.79|
|Long-term expenses to be apportioned|18,905,250.00|16,637,652.31|
|Deferred income tax asset|214,153,685.24|234,697,139.58|
|Other non-current asset|295,639,334.53|251,462,676.27|
|Total non-current asset|9,208,759,731.85|8,957,918,856.66|
|Total assets|22,334,489,303.82|20,892,041,460.30|
|Current liabilities:|||
|Short-term loans|321,055,399.28|298,928,213.94|
|Loan from central bank|||

||||
|-|-|-|
|Capital borrowed|||
|Transactional financial liability|||
|Financial liability measured by fair value and with variation|||
|reckoned into current gains/losses|||
|Derivative financial liability||490,329.13|
|Note payable|1,591,019,357.36|1,018,367,533.74|
|Account payable|2,492,584,058.39|2,047,336,834.66|
|Accounts received in advance|53,037,864.67|41,329,857.80|
|Selling financial asset of repurchase|||
|Absorbing deposit and interbank deposit|||
|Security trading of agency|||
|Security sales of agency|||
|Wage payable|235,601,920.23|312,113,178.24|
|Taxes payable|73,450,696.65|74,271,613.92|
|Other account payable|430,239,321.47|64,448,723.52|
|Including: Interest payable|752,404.25|517,469.08|
|Dividend payable|369,352,725.60||
|Commission charge and commission payable|||
|Reinsurance payable|||
|Contractual liability|||
|Liability held for sale|||
|Non-current liabilities due within one year|15,000,000.00|15,000,000.00|
|Other current liabilities|||
|Total current liabilities|5,211,988,618.05|3,872,286,284.95|
|Non-current liabilities:|||
|Insurance contract reserve|||
|Long-term loans|22,500,000.00|30,000,000.00|
|Bonds payable|||
|Including: Preferred stock|||
|Perpetual capital securities|||
|Lease liability|||
|Long-term account payable|35,083,263.11|35,422,354.11|
|Long-term wages payable|74,679,175.36|74,679,175.36|
|Accrual liability|||

||||
|-|-|-|
|Deferred income|415,418,074.89|425,769,854.13|
|Deferred income tax liabilities|6,386,620.12|1,912,744.40|
|Other non-current liabilities|||
|Total non-current liabilities|554,067,133.48|567,784,128.00|
|Total liabilities|5,766,055,751.53|4,440,070,412.95|
|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|3,416,022,795.14|3,416,022,795.14|
|Less: Inventory shares|||
|Other comprehensive income|261,591.54|-19,809,442.95|
|Reasonable reserve|2,535,660.69|1,618,490.50|
|Surplus public reserve|510,100,496.00|510,100,496.00|
|Provision of general risk|||
|Retained profit|11,059,205,014.71|10,996,945,870.13|
|Total owner’ s equity attributable to parent company|15,997,076,128.08|15,913,828,778.82|
|Minority interests|571,357,424.21|538,142,268.53|
|Total owner’ s equity|16,568,433,552.29|16,451,971,047.35|
|Total liabilities and owner’ s equity|22,334,489,303.82|20,892,041,460.30|

 Legal Representative: Chen Xuejun
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|2019-6-30|2018-12-31|
|Current assets:|||
|Monetary funds|2,110,649,144.04|1,922,408,227.00|
|Transactional financial assets|4,109,469,555.43||
|Financial assets measured by fair value and with variation|||
|reckoned into current gains/losses|||
|Derivative financial assets|||

||||
|-|-|-|
|Note receivable|202,038,803.99|264,264,207.30|
|Account receivable|766,756,661.80|742,246,990.99|
|Receivable financing|||
|Accounts paid in advance|84,477,497.47|59,028,927.25|
|Other account receivable|712,698,500.83|196,849,092.13|
|Including: Interest receivable|30,570.83|188,682.78|
|Dividend receivable|517,216,193.24||
|Inventories|436,366,950.75|492,054,274.67|
|Contractual assets|||
|Assets held for sale|||
|Non-current assets maturing within one year|||
|Other current assets|26,252,619.45|4,576,688,553.49|
|Total current assets|8,448,709,733.76|8,253,540,272.83|
|Non-current assets:|||
|Debt investment|||
|Available-for-sale financial assets||180,035,176.91|
|Other debt investment|||
|Held-to-maturity investments|||
|Long-term receivables|||
|Long-term equity investments|5,637,526,395.41|5,739,110,426.55|
|Investment in other equity instrument|105,000,000.00||
|Other non-current financial assets|368,800,000.00||
|Investment real estate|||
|Fixed assets|1,497,920,785.67|1,534,109,106.80|
|Construction in progress|163,098,662.24|78,673,300.59|
|Productive biological assets|||
|Oil and natural gas assets|||
|Right-of-use assets|||
|Intangible assets|186,309,565.33|188,101,655.94|
|Research and development costs|||
|Goodwill|||
|Long-term deferred expenses|||
|Deferred income tax assets|119,906,203.71|140,286,756.70|
|Other non-current assets|224,004,875.34|184,208,090.40|

||||
|-|-|-|
|Total non-current assets|8,302,566,487.70|8,044,524,513.89|
|Total assets|16,751,276,221.46|16,298,064,786.72|
|Current liabilities|||
|Short-term borrowings|92,000,000.00|112,000,000.00|
|Transactional financial liability|||
|Financial liability measured by fair value and with variation|||
|reckoned into current gains/losses|||
|Derivative financial liability|||
|Notes payable|332,383,071.60|330,545,052.37|
|Account payable|953,466,419.74|823,693,469.51|
|Accounts received in advance|3,446,051.71|6,639,554.63|
|Contractual liability|||
|Wage payable|159,004,259.87|200,205,508.25|
|Taxes payable|58,256,869.09|39,193,425.15|
|Other accounts payable|411,692,830.03|12,142,596.68|
|Including: Interest payable|283,127.78|149,966.66|
|Dividend payable|369,352,725.60||
|Liability held for sale|||
|Non-current liabilities due within one year|||
|Other current liabilities|||
|Total current liabilities|2,010,249,502.04|1,524,419,606.59|
|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|63,962,762.93|63,962,762.93|
|Accrued liabilities|||
|Deferred income|370,269,926.04|381,609,056.40|
|Deferred income tax liabilities|4,529,392.20||
|Other non-current liabilities|||
|Total non-current liabilities|438,762,081.17|445,571,819.33|

||||
|-|-|-|
|Total liabilities|2,449,011,583.21|1,969,991,425.92|
|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|3,488,221,286.39|3,488,221,286.39|
|Less: Inventory shares|||
|Other comprehensive income||-19,809,442.95|
|Special reserve|||
|Surplus reserve|510,100,496.00|510,100,496.00|
|Retained profit|9,294,992,285.86|9,340,610,451.36|
|Total owner’s equity|14,302,264,638.25|14,328,073,360.80|
|Total liabilities and owner’s equity|16,751,276,221.46|16,298,064,786.72|

 3. Consolidated Profit Statement
In RMB
||||
|-|-|-|
|Item|Semi-annual of 2019|Semi-annual of 2018|
|I. Total operating income|4,403,444,346.05|4,960,801,890.99|
|Including: Operating income|4,403,444,346.05|4,960,801,890.99|
|Interest income|||
|Insurance gained|||
|Commission charge and commission income|||
|II. Total operating cost|4,005,776,550.51|4,446,144,672.35|
|Including: Operating cost|3,405,386,504.44|3,889,590,289.69|
|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|34,534,571.66|38,000,352.40|
|Sales expense|104,270,647.40|106,347,559.85|

||||
|-|-|-|
|Administrative expense|310,909,980.43|236,539,410.63|
|R&D expense|180,167,642.16|177,443,968.15|
|Financial expense|-29,492,795.58|-1,776,908.37|
|Including: Interest expenses|9,264,648.42|9,075,955.05|
|Interest income|48,416,919.83|11,684,097.62|
|Add: other income|17,632,117.95|14,032,459.71|
|Investment income (Loss is listed with “-”)|888,216,680.48|1,149,033,168.39|
|Including: Investment income on affiliated company and joint|||
||790,465,131.05|968,640,145.91|
|venture|||
|The termination of income recognition for financial|||
|assets 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 “-”)|30,686,277.13||
|Loss of credit impairment (Loss is listed with “-”)|-6,237,790.75||
|Losses of devaluation of asset (Loss is listed with “-”)|-1,500,885.27|10,087.38|
|Income from assets disposal (Loss is listed with “-”)|5,107,848.45|1,588,185.36|
|III. Operating profit (Loss is listed with “-”)|1,331,572,043.53|1,679,321,119.48|
|Add: Non-operating income|27,544,757.26|3,881,128.87|
|Less: Non-operating expense|2,631,453.02|2,327,872.38|
|IV. Total profit (Loss is listed with “-”)|1,356,485,347.77|1,680,874,375.97|
|Less: Income tax expense|81,382,654.54|102,927,297.96|
|V. Net profit (Net loss is listed with “-”)|1,275,102,693.23|1,577,947,078.01|
|(i) Classify by business continuity|||
|1.continuous operating net profit (net loss listed with ‘-”)|1,275,102,693.23|1,577,947,078.01|
|2.termination of net profit (net loss listed with ‘-”)|||
|(ii) Classify by ownership|||
|1.Net profit attributable to owner’s of parent company|1,256,661,577.09|1,545,242,704.92|
|2.Minority shareholders’ gains and losses|18,441,116.14|32,704,373.09|
|VI. Net after-tax of other comprehensive income|271,537.20|-58,302,580.35|
|Net after-tax of other comprehensive income attributable to owners|||
||261,591.54|-58,302,580.35|
|of 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|||
||261,591.54|-58,302,580.35|
|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.gain/loss of fair value changes for available-for-sale financial|||
|||-58,302,580.35|
|assets|||
|4.Amount of financial assets re-classify to other comprehensive|||
|income|||
|5.Gain/loss of held-to-maturity investments that re-classify to|||
|available-for-sale financial asset|||
|6.Credit impairment provision for other debt investment|||
|7.Cash flow hedging reserve|||
|8.Translation differences arising on translation of foreign|||
||261,591.54||
|currency financial statements|||
|9.Other|||
|Net after-tax of other comprehensive income attributable to minority|||
||9,945.66||
|shareholders|||
|VII. Total comprehensive income|1,275,374,230.43|1,519,644,497.66|
|Total comprehensive income attributable to owners of parent|||
||1,256,923,168.63|1,486,940,124.57|
|Company|||
|Total comprehensive income attributable to minority shareholders|18,451,061.80|32,704,373.09|
|VIII. Earnings per share:|||
|(i) Basic earnings per share|1.25|1.53|
|(ii) Diluted earnings per share|1.25|1.53|

 Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and realized 0 Yuan at last period for combined party
Legal Representative: Chen Xuejun
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|Semi-annual of 2019|Semi-annual of 2018|
|I. Operating income|2,092,474,460.24|2,315,142,655.13|
|Less: Operating cost|1,471,971,514.70|1,698,516,522.90|
|Taxes and surcharge|17,510,903.97|20,760,852.64|
|Sales expenses|15,320,342.43|17,030,807.96|
|Administration expenses|211,000,027.34|145,983,978.35|
|R&D expenses|75,873,810.90|70,275,784.76|
|Financial expenses|-41,092,188.59|-5,330,079.95|
|Including: interest expenses|3,597,363.92|3,589,658.32|
|Interest income|44,742,417.24|9,047,393.86|
|Add: other income|11,683,224.30|11,813,783.39|
|Investment income (Loss is listed with “-”)|840,215,361.66|1,137,350,229.02|
|Including: Investment income on affiliated Company and|||
||742,463,812.23|894,788,126.54|
|joint 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 “-”)|30,195,948.00||
|Loss of credit impairment (Loss is listed with “-”)|-1,901,377.70||
|Losses of devaluation of asset (Loss is listed with “-”)|-24,294.39|-468,622.39|
|Income on disposal of assets (Loss is listed with “-”)|1,844,051.48|698,843.73|
|II. Operating profit (Loss is listed with “-”)|1,223,902,962.84|1,517,299,022.22|
|Add: Non-operating income|15,034.36|26,550.35|
|Less: Non-operating expense|1,196,252.91|989,892.95|
|III. Total Profit (Loss is listed with “-”)|1,222,721,744.29|1,516,335,679.62|
|Less: Income tax|73,937,477.28|82,844,629.16|
|IV. Net profit (Net loss is listed with “-”)|1,148,784,267.01|1,433,491,050.46|
|(i)continuous operating net profit (net loss listed with ‘-”)|1,148,784,267.01|1,433,491,050.46|
|(ii) termination of net profit (net loss listed with ‘-”)|||
|V. Net after-tax of other comprehensive income||-58,302,580.35|
|(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|||
|||-58,302,580.35|
|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.gain/loss of fair value changes for available-for-sale financial|||
|||-58,302,580.35|
|assets|||
|4.Amount of financial assets re-classify to other comprehensive|||
|income|||
|5.Gain/loss of held-to-maturity investments that re-classify to|||
|available-for-sale financial asset|||
|6.Credit impairment provision for other debt investment|||
|7.Cash flow hedging reserve|||
|8.Translation differences arising on translation of foreign|||
|currency financial statements|||
|9.Other|||
|VI. Total comprehensive income|1,148,784,267.01|1,375,188,470.11|
|VII. Earnings per share:|||
|(i) Basic earnings per share|||
|(ii) Diluted earnings per share|||

5. Consolidated Cash Flow Statement
In RMB
||||
|-|-|-|
|Item|Semi-annual of 2019|Semi-annual of 2018|
|I. Cash flows arising from operating activities:|||
|Cash received from selling commodities and providing labor|||
||4,275,001,010.93|4,321,753,642.57|
|services|||
|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|25,327,532.10|28,784,608.45|
|Other cash received concerning operating activities|85,775,494.76|20,879,944.10|
|Subtotal of cash inflow arising from operating activities|4,386,104,037.79|4,371,418,195.12|
|Cash paid for purchasing commodities and receiving labor service|2,534,137,461.67|2,812,244,020.34|
|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 financial assets held for transaction purposes|||
|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|681,756,769.56|683,701,600.44|
|Taxes paid|310,797,279.61|342,578,412.02|
|Other cash paid concerning operating activities|169,088,618.70|153,970,471.84|
|Subtotal of cash outflow arising from operating activities|3,695,780,129.54|3,992,494,504.64|
|Net cash flows arising from operating activities|690,323,908.25|378,923,690.48|
|II. Cash flows arising from investing activities:|||
|Cash received from recovering investment|3,686,500,000.00|5,361,095,457.96|
|Cash received from investment income|525,843,992.65|463,686,171.47|
|Net cash received from disposal of fixed, intangible and other|||
||72,457,256.41|39,773,802.87|
|long-term assets|||
|Net cash received from disposal of subsidiaries and other units|||
|Other cash received concerning investing activities|||
|Subtotal of cash inflow from investing activities|4,284,801,249.06|5,864,555,432.30|
|Cash paid for purchasing fixed, intangible and other long-term|||
||237,326,162.98|362,947,568.87|
|assets|||
|Cash paid for investment|3,658,800,000.00|6,084,063,284.96|
|Net increase of mortgaged loans|||
|Net cash received from subsidiaries and other units obtained|49,930,736.62||

||||
|-|-|-|
|Other cash paid concerning investing activities|24,000,000.00|10,000,000.00|
|Subtotal of cash outflow from investing activities|3,970,056,899.60|6,457,010,853.83|
|Net cash flows arising from investing activities|314,744,349.46|-592,455,421.53|
|III. Cash flows arising from financing activities|||
|Cash received from absorbing investment|13,880,037.60||
|Including: Cash received from absorbing minority shareholders’|||
||13,880,037.60||
|investment by subsidiaries|||
|Cash received from loans|393,249,222.11|330,000,000.00|
|Cash received from issuing bonds|||
|Other cash received concerning financing activities||5,470,000.00|
|Subtotal of cash inflow from financing activities|407,129,259.71|335,470,000.00|
|Cash paid for settling debts|378,622,036.77|219,000,000.00|
|Cash paid for dividend and profit distributing or interest paying|836,528,586.57|9,337,888.74|
|Including: Dividend and profit of minority shareholder paid by|||
|||174,600.00|
|subsidiaries|||
|Other cash paid concerning financing activities|5,809,091.00|339,091.00|
|Subtotal of cash outflow from financing activities|1,220,959,714.34|228,676,979.74|
|Net cash flows arising from financing activities|-813,830,454.63|106,793,020.26|
|IV. Influence on cash and cash equivalents due to fluctuation in|||
||415,189.69|810,171.83|
|exchange rate|||
|V. Net increase of cash and cash equivalents|191,652,992.77|-105,928,538.96|
|Add: Balance of cash and cash equivalents at the period -begin|2,404,674,139.49|2,948,439,354.22|
|VI. Balance of cash and cash equivalents at the period -end|2,596,327,132.26|2,842,510,815.26|

 6. Cash Flow Statement of Parent Company
In RMB
||||
|-|-|-|
|Item|Semi-annual of 2019|Semi-annual of 2018|
|I. Cash flows arising from operating activities:|||
|Cash received from selling commodities and providing labor|||
||2,342,213,493.89|2,707,966,926.41|
|services|||
|Write-back of tax received|||
|Other cash received concerning operating activities|48,525,763.15|9,047,393.86|
|Subtotal of cash inflow arising from operating activities|2,390,739,257.04|2,717,014,320.27|
|Cash paid for purchasing commodities and receiving labor service|1,218,981,667.53|1,572,426,004.69|
|Cash paid to/for staff and workers|369,225,756.08|361,672,047.87|

||||
|-|-|-|
|Taxes paid|186,084,989.75|242,573,191.33|
|Other cash paid concerning operating activities|107,664,076.68|142,557,335.52|
|Subtotal of cash outflow arising from operating activities|1,881,956,490.04|2,319,228,579.41|
|Net cash flows arising from operating activities|508,782,767.00|397,785,740.86|
|II. Cash flows arising from investing activities:|||
|Cash received from recovering investment|3,521,500,000.00|5,174,745,373.00|
|Cash received from investment income|506,897,740.22|450,095,688.15|
|Net cash received from disposal of fixed, intangible and other|||
||4,034,532.29|38,214,564.65|
|long-term assets|||
|Net cash received from disposal of subsidiaries and other units|||
|Other cash received concerning investing activities|215,512,158.54||
|Subtotal of cash inflow from investing activities|4,247,944,431.05|5,663,055,625.80|
|Cash paid for purchasing fixed, intangible and other long-term|||
||158,044,430.36|187,935,182.03|
|assets|||
|Cash paid for investment|3,328,800,000.00|5,687,713,200.00|
|Net cash received from subsidiaries and other units obtained|82,156,428.71||
|Other cash paid concerning investing activities|187,880,372.33|173,000,000.00|
|Subtotal of cash outflow from investing activities|3,756,881,231.40|6,048,648,382.03|
|Net cash flows arising from investing activities|491,063,199.65|-385,592,756.23|
|III. Cash flows arising from financing activities|||
|Cash received from absorbing investment|||
|Cash received from loans|160,000,000.00|180,000,000.00|
|Cash received from issuing bonds|||
|Other cash received concerning financing activities|||
|Subtotal of cash inflow from financing activities|160,000,000.00|180,000,000.00|
|Cash paid for settling debts|180,000,000.00|78,000,000.00|
|Cash paid for dividend and profit distributing or interest paying|831,020,889.20|3,391,380.55|
|Other cash paid concerning financing activities|||
|Subtotal of cash outflow from financing activities|1,011,020,889.20|81,391,380.55|
|Net cash flows arising from financing activities|-851,020,889.20|98,608,619.45|
|IV. Influence on cash and cash equivalents due to fluctuation in|||
||593,522.94|761,175.27|
|exchange rate|||
|V. Net increase of cash and cash equivalents|149,418,600.39|111,562,779.35|
|Add: Balance of cash and cash equivalents at the period -begin|1,920,076,358.43|2,454,696,969.20|
|VI. Balance of cash and cash equivalents at the period -end|2,069,494,958.82|2,566,259,748.55|

7. Statement of Changes inOwners’ Equity (Consolidated)
Amount for current period
In RMB
|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Semi-annual of 2019|||||||||||||||
||Owners’ equity attributable to the parent Company|||||||||||||||
|||Other||||||||||||||
|||equity||||||||||||||
|||instrument||||||||||||||
|||||||Le||||Pr||||||
||||Pe|||||||||||||
|||||||ss:||||ov||||||
||||rp|||||||||||||
|||||||In||||isi||||||
||||et|||||||||||||
|||||||ve||||on||||||
|Item||Pr|ua||||Other|||||Ot||Minority|Total owners’|
||||||Capital|nt||Reasonable||of||||||
||Share capital|efe|l||||comprehensive||Surplus reserve||Retained profit|he|Subtotal|interests|equity|
||||||reserve|or||reserve||ge||||||
|||rre|ca|Ot|||income|||||r||||
|||||||y||||ne||||||
|||d|pit|her||||||||||||
|||||||sh||||ral||||||
|||sto|al|||||||||||||
|||||||ar||||ris||||||
|||ck|se|||||||||||||
|||||||es||||k||||||
||||cu|||||||||||||
||||riti|||||||||||||
||||es|||||||||||||
|I. Balance at the|1,008,950,5||||3,416,022,7|||||||||||
||||||||-19,809,442.95|1,618,490.50|510,100,496.00||10,996,945,870.13||15,913,828,778.82|538,142,268.53|16,451,971,047.35|
|end of the last||||||||||||||||
||70.00||||95.14|||||||||||
|year||||||||||||||||
|Add: Changes of||||||||||||||||
||||||||19,809,442.95||||-19,809,442.95|||||
|accounting policy||||||||||||||||
|Error correction of||||||||||||||||
|the last period||||||||||||||||
|Enterprise||||||||||||||||
|combine under||||||||||||||||
|the same control||||||||||||||||
|Other||||||||||||||||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|II. Balance at the|1,008,950,5|3,416,022,7||||||||
||||0.00|1,618,490.50|510,100,496.00|10,977,136,427.18|15,913,828,778.82|538,142,268.53|16,451,971,047.35|
|beginning of this||||||||||
||70.00|95.14||||||||
|year||||||||||
|III. Increase/||||||||||
|Decrease in this||||||||||
||||261,591.54|917,170.19||82,068,587.53|83,247,349.26|33,215,155.68|116,462,504.94|
|year (Decrease is||||||||||
|listed with “-”)||||||||||
|(i) Total||||||||||
|||||||1,256,661,577.09|1,256,661,577.09|18,451,061.80|1,275,112,638.89|
|comprehensive||||||||||
|income||||||||||
|(ii) Owners’||||||||||
|||||||||14,461,725.98|14,461,725.98|
|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||||||||||
|||||||||14,461,725.98|14,461,725.98|
|4. Other||||||||||
|(III) Profit||||||||||
|||||||-1,174,592,989.56|-1,174,592,989.56||-1,174,592,989.56|
|distribution||||||||||
|1. Withdrawal of||||||||||
|surplus reserves||||||||||
|2. Withdrawal of||||||||||
|general risk||||||||||
|provisions||||||||||
|3. Distribution for||||||||||
|||||||-1,210,740,684.00|-1,210,740,684.00||-1,210,740,684.00|
|owners (or||||||||||

|||||||
|-|-|-|-|-|-|
|shareholders)||||||
|||36,147,694.44|36,147,694.44||36,147,694.44|
|4. Other||||||
|(IV) Carrying||||||
|forward internal||||||
|owners’ equity||||||
|1. Capital reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|2. Surplus||||||
|reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|3. Remedying loss||||||
|with surplus||||||
|reserve||||||
|4．Carry-over||||||
|retained||||||
|earnings from||||||
|the defined||||||
|benefit plans||||||
|5．Carry-over||||||
|retained earnings||||||
|from other||||||
|comprehensive||||||
|income||||||
|6. Other||||||
|(V) Reasonable||||||
||917,170.19||917,170.19|302,367.90|1,219,538.09|
|reserve||||||
|1. Withdrawal in|10,101,863.7|||||
||||10,101,863.74|892,049.10|10,993,912.84|
|the report period|4|||||
|2. Usage in the||||||
||9,184,693.55||9,184,693.55|589,681.20|9,774,374.75|
|report period||||||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|(VI)Others|||261,591.54||||261,591.54||261,591.54|
|IV. Balance at theend of the reportperiod|1,008,950,570.00|3,416,022,795.14|||||||16,568,433,552.29|
||||261,591.54|2,535,660.69|510,100,496.00|11,059,205,014.71|15,997,076,128.08|571,357,424.21||

Amount for last year
In RMB
|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Semi-annual of 2018|||||||||||||||
||Owners’ equity attributable to the parent Company|||||||||||||||
|||Other||||||||||||||
|||||||||||Pr||||||
|||equity||||||||||||||
|||||||||||ov||||||
|||instrument||||Les||||||||||
|||||||||||isi||||||
||||Per|||s:||||||||||
|||||||||||on||||||
|Item|||pet|||Inv|Other|||||Ot||Minority|Total owners’|
||Share|Pre|||Capital|||Reasonable||of||||||
||||ual|||ent|comprehensiv||Surplus reserve||Retained profit|he|Subtotal|interests|equity|
||capital|ferr|||reserve|||reserve||ge||||||
||||cap|Ot||ory|e income|||||r||||
|||ed||||||||ne||||||
||||ital|her||sha||||||||||
|||sto||||||||ral||||||
||||sec|||res||||||||||
|||ck||||||||ris||||||
||||urit|||||||||||||
|||||||||||k||||||
||||ies|||||||||||||
||1,008,950,5||||3,417,841,4|||||||||||
|I. Balance at the end||||||||||||||||
||||||||87,169,455.01|2,606.93|510,100,496.00||9,811,609,138.92||14,835,673,669.75|515,693,194.48|15,351,366,864.23|
|of the last year|70.00||||02.89|||||||||||
|Add: Changes of||||||||||||||||
|accounting policy||||||||||||||||
|Error correction of||||||||||||||||
|the last period||||||||||||||||
|Enterprise||||||||||||||||
|combine under the||||||||||||||||
|same control||||||||||||||||
|Other||||||||||||||||
|II. Balance at the|1,008,950,5||||3,417,841,4|||||||||||
||||||||87,169,455.01|2,606.93|510,100,496.00||9,811,609,138.92||14,835,673,669.75|515,693,194.48|15,351,366,864.23|
|beginning of this||||||||||||||||
||70.00||||02.89|||||||||||
|year||||||||||||||||
|III. Increase/|||||-1,824,597.||-58,302,580.3|1,116,994.8|||334,502,004.92||275,491,821.99|4,374,207.74|279,866,029.73|

|||||||||
|-|-|-|-|-|-|-|-|
|Decrease in this year|47|5|9|||||
|(Decrease is listed||||||||
|with “-”)||||||||
|(i) Total||-58,302,580.3||||||
|||||1,545,242,704.92|1,486,940,124.57|32,704,373.09|1,519,644,497.66|
|comprehensive||||||||
|||5||||||
|income||||||||
|(ii) Owners’|-1,824,597.|||||||
||||||-1,824,597.47|-12,945,402.53|-14,770,000.00|
|devoted and||||||||
||47|||||||
|decreased capital||||||||
|1.Common shares||||||||
|||||||-12,945,402.53|-12,945,402.53|
|invested by||||||||
|shareholders||||||||
|2. Capital invested||||||||
|by holders of other||||||||
|equity instruments||||||||
|3. Amount reckoned||||||||
|into owners equity||||||||
|with share-based||||||||
|payment||||||||
||-1,824,597.|||||||
||||||-1,824,597.47||-1,824,597.47|
|4. Other||||||||
||47|||||||
|(III) Profit||||||||
|||||-1,210,740,700.00|-1,210,740,700.00|-15,604,600.00|-1,226,345,300.00|
|distribution||||||||
|1. Withdrawal of||||||||
|surplus reserves||||||||
|2. Withdrawal of||||||||
|general risk||||||||
|provisions||||||||
|3. Distribution for||||||||
|||||-1,210,740,700.00|-1,210,740,700.00|-15,604,600.00|-1,226,345,300.00|
|owners (or||||||||
|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||||||||||
|comprehensive||||||||||
|income||||||||||
|6. Other||||||||||
|||||1,116,994.8||||||
|(V) Reasonable||||||||||
||||||||1,116,994.89|219,837.18|1,336,832.07|
|reserve||||9||||||
|1. Withdrawal in the||||10,050,468.||||||
||||||||10,050,468.85|1,395,689.84|11,446,158.69|
|report period||||85||||||
|2. Usage in the report||||8,933,473.9||||||
||||||||8,933,473.96|1,175,852.66|10,109,326.62|
|period||||6||||||
|(VI)Others||||||||||
|IV. Balance at the|1,008,950,5|3,416,016,8||1,119,601.8||||||
||||28,866,874.66||510,100,496.00|10,146,111,143.84|15,111,165,491.74|520,067,402.22|15,631,232,893.96|
|end of the report||||||||||
||70.00|05.42||2||||||
|period||||||||||

8. Statement of Changes inOwners’ Equity (Parent Company)
Amount for current period
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Semi-annual of 2019||||||||||||
|||Other equity instrument|||||||||||
|||||||Less:|||||||
||||Perpetu||||||||||
|||||||Inven|Other||||||
|Item||Preferr|al||Capital public|||Reasonable|||Oth|Total owners’|
||Share capital|||||tory|comprehensive||Surplus reserve|Retained profit|||
|||ed|capital|Other|reserve|||reserve|||er|equity|
|||||||share|income||||||
|||stock|securiti||||||||||
|||||||s|||||||
||||es||||||||||
|I. Balance at the end of|||||||||||||
||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|
|the last year|||||||||||||
|Add: Changes of|||||||||||||
||||||||19,809,442.95|||-19,809,442.95|||
|accounting policy|||||||||||||
|Error correction of the|||||||||||||
|last period|||||||||||||
|Other|||||||||||||
|II. Balance at the|||||||||||||
||1,008,950,570.00||||3,488,221,286.39||0.00||510,100,496.00|9,320,801,008.41||14,328,073,360.80|
|beginning of this year|||||||||||||
|III. Increase/ Decrease|||||||||||||
|||||||||||-25,808,722.55||-25,808,722.55|
|in this year (Decrease is|||||||||||||
|listed with “-”)|||||||||||||
|(i) Total comprehensive|||||||||||||
|||||||||||1,148,784,267.01||1,148,784,267.01|
|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|||||||||||||
|||||||||||-1,174,592,989.56||-1,174,592,989.56|
|(III) Profit distribution|||||||||||||

|||||||||
|-|-|-|-|-|-|-|-|
|1. Withdrawal of surplus||||||||
|reserves||||||||
|2. Distribution for||||||||
|||||||-1,210,740,684.00|-1,210,740,684.00|
|owners (or shareholders)||||||||
|||||||36,147,694.44|36,147,694.44|
|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||||||||
|||||1,474,547.80|||1,474,547.80|
|report period||||||||
|2. Usage in the report||||||||
|||||1,474,547.80|||1,474,547.80|
|period||||||||
|(VI)Others||||||||
|IV. Balance at the end of|||||||14,302,264,638.25|
||1,008,950,570.00|3,488,221,286.39|0.00||510,100,496.00|9,294,992,285.86||
|the report period||||||||

Amount for last year
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Semi-annual of 2018||||||||||||
|||Other equity instrument|||||||||||
|||||||Less:|||||||
||||Perpetu||||||||||
|||||||Inven|Other||||||
|Item|||al||Capital public|||Reasonable|||Othe|Total owners’|
||Share capital|Preferre||||tory|comprehensive||Surplus reserve|Retained profit|||
||||capital|Other|reserve|||reserve|||r|equity|
|||d stock||||share|income||||||
||||securiti||||||||||
|||||||s|||||||
||||es||||||||||
|I. Balance at the end of|||||||||||||
||1,008,950,570.00||||3,488,221,286.39||87,169,455.01||510,100,496.00|8,360,801,089.38||13,455,242,896.78|
|the last year|||||||||||||
|Add: Changes of|||||||||||||
|accounting policy|||||||||||||
|Error correction of the|||||||||||||
|last period|||||||||||||
|Other|||||||||||||
|II. Balance at the|||||||||||||
||1,008,950,570.00||||3,488,221,286.39||87,169,455.01||510,100,496.00|8,360,801,089.38||13,455,242,896.78|
|beginning of this year|||||||||||||
|III. Increase/ Decrease in|||||||||||||
||||||||-58,302,580.35|||222,750,350.46||164,447,770.11|
|this year (Decrease is|||||||||||||
|listed with “-”)|||||||||||||
|(i) Total comprehensive|||||||||||||
||||||||-58,302,580.35|||1,433,491,050.46||1,375,188,470.11|
|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|||||||||||||
|||||||||||-1,210,740,700.00||-1,210,740,700.00|
|(III) Profit distribution|||||||||||||

|||||||||
|-|-|-|-|-|-|-|-|
|1. Withdrawal of surplus||||||||
|reserves||||||||
|2. Distribution for||||||||
|||||||-1,210,740,700.00|-1,210,740,700.00|
|owners (or 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||||3,751,960.6||||
||||||||3,751,960.66|
|report period||||6||||
|2. Usage in the report||||3,751,960.6||||
||||||||3,751,960.66|
|period||||6||||
|(VI)Others||||||||
|IV. Balance at the end of||||||||
||1,008,950,570.00|3,488,221,286.39|28,866,874.66||510,100,496.00|8,583,551,439.84|13,619,690,666.89|
|the report period||||||||

III. Basic information of the Company
1. Historical origin of the Company
By the approval of STGS (1992) No. 130 issued by Jiangsu Economic Restructuring Committee, 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 RMB 115.4355 million, including state-owned share capital amounting to RMB 92.4355 million, public corporate share capital amounting to RMB 8 million and inner employee share capital amounting to RMB 15 million.
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 RMB 1.00 for each, and the total value of those shares amounted to RMB 68 million. After the issuance, theCompany’s total share capital increased to RMB 183.4355 million.
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 RMB 303.4355 million.
In the middle of 1999, deliberated and approved by the Board andShareholders’ 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 RMB 394.46615 million, of which state-owned shares amounted to RMB 120.16615 million, public corporate shares RMB 10.4 million, foreign-funded shares (B-share) RMB 88.40 million, RMB ordinary shares (A-share) RMB 156 million and inner employee shares RMB 19.5 million.
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 RMB 10 for each allotted share. Actually 41.9 million shares was allotted, and the total share capital after the allotment increased to RMB 436.36615 million, of which state-owned corporate shares amounted to RMB 121.56615 million, public corporate shares RMB 10.4 million, foreign-funded shares (B-share) RMB 88.4 million and RMB ordinary shares (A-share) RMB 216 million.
In April 2005, Board of Directors of the Company has examined and approved 2004 Profit Pre-distribution Plan, and examined and approved by 2004Shareholders’ 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 relatedshareholders’ 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, representing17.63% 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 Feb., the Company issued RMB ordinary shares (A-share) of 112,858,000 shares to Wuxi Industry Groups and overseas strategic investor, 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. Deliberated and approved by thecompany’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, thecompany’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, New District, Wuxi
Unified social credit code: 91320200250456967N
The Company sets upShareholders’ General Meeting, the Board of Directors and the Supervisory Committee. The Company sets up Administration Department, Technology Centre, organization& personnel department, Office of the Board, compliance department, IT department, Market& Strategy 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. 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. (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, and purifiers.
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 27 August 2019
5. Scope of consolidate financial statement
|||||||||
|-|-|-|-|-|-|-|-|
|Name of subsidiary|Short name ofsubsidiary|Shareholding ratio(%)||Proportionof votes(%)|Registeredcapital(in 10thousandYuan)|Business scope|Statementconsolidate (Y/N)|
|||Directly|Indirectly|||||
|Nanjing Weifu Jinning Co., Ltd. Co., Ltd.|Weifu Jinning|80.00|--|80.00|34,628.70|Internal-combustion engineaccessories|Y|
|Wuxi Weifu Leader Catalytic Converter Co.,Ltd.|Weifu Leader|94.81|--|94.81|50,259.63|Purifier andmuffler|Y|

|||||||||
|-|-|-|-|-|-|-|-|
|Weifu Mashan Pump Glib Co., Ltd.|Weifu Mashan|100.00|--|100.00|16,500|Internal-combustion engineaccessories|Y|
|Wuxi Weifu Chang’an Co., Ltd.|WeifuChang’an|100.00|--|100.00|21,000|Internal-combustion engineaccessories|Y|
|Wuxi Weifu International Trade Co. Ltd.|WeifuInternationalTrade|100.00|--|100.00|3,000|Trade|Y|
|Wuxi Weifu ITM Supercharging TechniqueCo., Ltd.|Weifu ITM|100.00|--|100.00|16,000|Internal-combustion engineaccessories|Y|
|Wuxi Weifu Schmidt Power System SpareParts Co., Ltd.|Weifu Schmidt|66.00|--|66.00|7,600|Internal-combustion engineaccessories|Y|
|Ningbo Weifu Tianli SuperchargingTechnique Co., Ltd.|Weifu Tianli|54.2295|--|54.2295|11,136|Internal-combustion engineaccessories|Y|
|Wuxi Weifu-Autocam Fine Machinery Co.Ltd.|WeifuAutocam|51.00|--|51.00|US$ 2,110|Automobilecomponents|Y|
|Wuxi Weifu Leader Catalytic Converter(Wuhan) Co., Ltd.|Weifu Leader(Wuhan)|--|60.00|60.00|1,000|Purifier andmuffler|Y|
|Weifu Leader (Chongqing) Automobilecomponents Co., Ltd|Weifu Leader(Chongqing)|--|100.00|100.00|5,000|Purifier andmuffler|Y|
|Nanchang Weifu Leader Auto Parts &Components Co., Ltd.|Weifu Leader(Nanchang)|--|100.00|100.00|5,000|Purifier andmuffler|Y|
|Weifu Holding Aps|SPV|100.00||100.00|DKK 2620.60||Y|
|IRD Fuel Cells A/S|IRD||66.00|66.00|DKK 4,160|Fuel cellcomponents|Y|

 IV. 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.
V. Major Accounting Policies and Estimation
Specific accounting policies and estimation attention:
The Company and its subsidiaries are mainly engaged in the manufacture and sales of engine fuel oil system products, automobile components, mufflers and purifiers 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 V- Other major accounting policy and accounting estimation.
1. Statement on observation of Accounting Standard for Business Enterprises
Financial statements prepared by the Company were in accordance with requirements of Accounting Standard for Business Enterprises, which truly and completely reflected the financial information of the Company during the reporting period such as financial position, operation achievements and cash flow.
2. Accounting period
Accounting period of the Company consist of annual and mid-term, mid-term refers to the reporting period 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. TheCompany’s normal business cycle was one-year (12 months).
4. Recording currency
TheCompany’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 netasset’s book value acquired by combining party and combine consideration paid (or total book value of the shares issued), shall adjusted capital reserve (share premium); if the capital reserves (share premium) is not enough for deducted, adjusted for retained earnings. Vary directly expenses occurred for enterprise combination, the combining party shall reckoned into current gains/losses while occurring. Combination day is the date when combining party obtained controlling rights from the combined party.
(2) Combine not under the same control
A business combination not involving entities under common control is a business combination in which all of the combining entities are not ultimately controlled by the same party or parties both before and after the combination. As a purchaser, fair value of the assets (equity of purchaser held before the date of purchasing included) for purchasing controlling right from the purchaser, the liability occurred or undertake on purchasing date less the fair value of identifiable net assets of the purchaser obtained in combination, recognized as goodwill if the results is positive; if the number is negative, the acquirer shall firstly review the measurement of the fair value of the identifiable assets obtained, liabilities incurred and contingent liabilities incurred, as well as the combination costs. After that, if the combination costs are still lower than the fair value of the identifiable net assets obtained, the acquirer shall recognize the difference as the profit or loss in the current period. Other directly expenses cost for combination shall be reckoned into current gains/losses. Difference of the fair value of assets paid and its book values, reckoned into current gains/losses. On purchasing date, the identifiable assets, liability or contingency of the purchaser obtained by the Company recognized by fair value, that required identification conditions; Acquisition date refers to the date on which the acquirer effectively obtains control of the purchaser.
6. Preparation method for consolidated financial statement
(1) Recognition principle of consolidated scope
On basis of the financial statement of the parent company and owned subsidiaries, prepared consolidated statement in line with relevant information. The scope of consolidation of consolidated financial statements is ascertained on the basis of effective control. Once certain elements involved in the above definition of control change due to changes of relevant facts or circumstances, the Company will make separate assessment.
(2) Basis of control
Control is the right to govern an invested party so as to obtain variable return through participating in the investedparty’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 investedparty’s.
(3) Consolidation process
Subsidiaries are consolidated from the date on which the company obtains their actual control, and are de-consolidated from the date that such control ceases. All significant inter-group balances, investment, transactions and unrealized profits are eliminated in the consolidated financial statements. For subsidiaries being
disposed, the operating results and cash flows prior to the date of disposal are included in the consolidated income statement and consolidated cash flow statement; for subsidiaries disposed during the period, the opening balances of the consolidated balance sheet would not be restated. For subsidiaries acquired from a business combination not under common control, their operating results and cash flows subsequent to the acquisition date are included in the consolidated income statement and consolidated cash flow statement, and the opening balances and comparative figures of the consolidated balance sheet would not be restated. For subsidiaries acquired from a business combination under common control, their operating results and cash flows from the date of commencement of the accounting period in which the combination occurred to the date of combination are included in the consolidated income statement and consolidated cash flow statement, and the comparative figures of the consolidated balance sheet would be restated.
In preparing the consolidated financial statements, where the accounting policies or the accounting periods are inconsistent between the company and subsidiaries, the financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting period of the company.
Concerning the subsidiary obtained under combination with different control, adjusted several financial statement of the subsidiary based on the fair value of recognizable net assets on purchased day while financial statement consolidation; concerning the subsidiary obtained under combination with same control, considered current status of being control by ultimate controller for consolidation while financial statement consolidation.
The unrealized gains and losses from the internal transactions occurred in the assets the Company sold to the subsidiaries fully offset "the net profit attributable to the owners of the parent company". The unrealized gains and losses from the internal transactions occurred in the assets the subsidiaries sold to the Company are distributed and offset between "the net profit attributable to the owners of the parent company" and "minority interest" according to the distribution ratio of the Company to the subsidiary. The unrealized gains and losses from the internal transactions occurred in the assets sold among the subsidiaries are distributed and offset between "the net profit attributable to the owners of the parent company" and "minority interest" according to the distribution ratio of the Company to the subsidiary of the seller.
The share of thesubsidiary’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 thesubsidiary’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 thesubsidiary’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 asubsidiary’s minority shareholders exceed the share that the minority shareholders hold in the subsidiary ownership interest in the beginning of the period, the balance still charges against the minority interests.
When the control over a subsidiary is ceased due to disposal of a portion of an interest in a subsidiary, the fair value of the remaining equity interest is re-measured on the date when the control ceased. The difference between the sum of the consideration received from disposal of equity interest and the fair value of the remaining equity
interest, less the net assets attributable to the company since the acquisition date, is recognized as the investment income from the loss of control. Other comprehensive income relating to original equity investment in subsidiaries shall be treated on the same basis as if the relevant assets or liabilities were disposed of by the purchaser directly when the control is lost, namely be transferred to current investment income other than the relevant part of the movement arising from re-measuring net liabilities or net assets under defined benefit scheme by the original subsidiary. Subsequent measurement of the remaining equity interests shall be in accordance with relevant accounting standards such as Accounting Standards for business Enterprises 2– Long-term Equity Investments or Accounting Standards for business Enterprises 22– Financial Instruments Recognition and Measurement.
The company shall determine whether loss of control arising from disposal in a series of transactions should be regarded as a bundle of transactions. When the economic effects and terms and conditions of the disposal transactions met one or more of the following situations, the transactions shall normally be accounted for as a bundle of transactions: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 theCompany’s rights and obligation under a joint arrangement, the Company classifies joint arrangements into: joint ventures and joint operations.
The company confirms the following items related to the share of interests in its joint operations, and in accordance with the provisions of the relevant accounting standards for accounting treatment:
(1) Recognize the assets held solely by the Company, and recognize assets held jointly by the Company in appropriation to the share of the Company;
(2) Recognize the obligations assumed solely by the Company, and recognize obligations assumed jointly by the Company in appropriation to the share of the Company;
(3) Recognize revenue from disposal of the share of joint operations of the Company;
(4) Recognize fees solely occurred by Company;
(5) Recognize fees from joint operations in appropriation to the share of the Company.
8. Determining 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 theowners’ equity items, the items other than “undistributed profits” are translated at the spot exchange rates of the transaction dates. The income and expense items in the income statements of overseas operations are translated at the average exchange rates of the transaction dates. The exchange difference arising from the above mentioned translation are recognized in other comprehensive income and is shown separately underowner’ 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) Determination 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 have been transferred and meets the following termination recognition conditions for the transfer of financial assets
If all or part of the current obligations of a financial liability has been discharged, the financial liability or part of it is derecognized. 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, derecognize 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 derecognition proceed on a trade date basis.
(2) Classification and measurement of financial assets
At the initial recognition, according to the business model of managing financial assets and the contractual cash flow characteristics of financial assets, the Company classifies the financial assets into the financial assets measured at amortized cost, the financial assets measured at fair value and whose changes are included in other comprehensive income, and the financial assets measured at fair value and whose changes are included in current profit or loss.
① Financial assets measured at amortized cost
The Company classifies the financial assets that meet the following conditions andhaven’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 derecognized, 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 andhaven’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 derecognized, the accumulated gains or losses previously included in other comprehensive income are transferred from other comprehensive income and included in current profit or loss.
③ Financial assets measured at fair value and whose changes are included in current profit or loss
Except for the above financial assets measured at amortized cost and measured at fair value and whose changes are included in other comprehensive income, the Company classifies all other financial assets as financial assets measured at fair value and whose changes are included in current profit or loss. In the initial recognition, in order to eliminate or significantly reduce accounting mismatch, the Company irreversibly designates part of the financial assets that should be measured at amortized cost or measured at fair value and whose changes are included in the other comprehensive income as the financial assets measured at fair value and whose changes are included in current profit or loss.
After the initial recognition, such financial assets are subsequently measured at fair value, and the gains or losses (including interests and dividend income) are included in the current profit and loss, unless the financial assets are part of the hedging relationship.
However, for non-trading equity instrument investments, the Company irreversibly designates them as the financial assets that are measured at fair value and whose changes are included in other comprehensive income in the initial recognition. The designation is made based on a single investment and the relevant investment is in line with the definition of equity instruments from the issuer's perspective.
After initial recognition, such financial assets are subsequently measured at fair value. Dividend income that meets the conditions is included in profit or loss, and other gains or losses and changes in fair value are included in other comprehensive income. When it is derecognized, the accumulated gains or losses previously included in other comprehensive income are transferred from other comprehensive income and included in retained earnings. The business model for managing financial assets refers to how the Company manages financial assets to generate cash flows. The business model determines whether the cash flow of financial assets managed by the Company is based on contract cash flow, selling financial assets or both. The Company determines the business model for managing financial assets based on objective facts and based on the specific business objectives of financial assets management determined by key management personnel.
The Company evaluates the contractual cash flow characteristics of financial assets to determine whether the contractual cash flows generated by the relevant financial assets on a specific date are only payments for the principal and the interest based on the outstanding principal amount. The principal is the fair value of the financial assets at initial recognition; the interest includes the time value of money, the credit risk associated with the outstanding principal amount for a specific period, and other basic borrowing risks, costs and consideration of profit. In addition, the Company evaluates the contractual terms that may result in changes in the time distribution or the amount of contractual cash flows of the financial assets to determine whether they meet the requirements of the above contractual cash flow characteristics.
Only when the Company changes its business model of managing financial assets, all affected financial assets are reclassified on the first day of the first reporting period after the business model changes, otherwise the financial assets are not allowed to be reclassified after initial recognition. .
Financial assets are measured at fair value on initial recognition. For financial assets measured at fair value and whose changes are included in current profit or loss, the related transaction expenses are directly included in current profit or loss. For other types of financial assets, the related transaction costs are included in the initial recognition amount. For the accounts receivable or notes receivable arising from the sale of products or the provision of labor services that do not contain or consider the significant financing components, the Company uses the consideration amount that is expected to be received as the initial recognition amount.
(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 derecognition 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.
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 andcreditors’ investment 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.
The Company measures the expected credit losses of financial instruments at different stages. If the credit risk of a financial instrument has not increased significantly since the initial recognition, the financial instrument is in the first stage, and the Company measures the loss provisions according to the expected credit losses in the next 12 months. If the credit risk of a financial instrument has increased significantly but the credit impairment has not yet occurred since the initial recognition, the financial instrument is in the second stage, and the Company measures the loss provisions according to the expected credit losses of the instrument for the entire duration. If the financial instrument has suffered credit impairment since the initial confirmation, it is in the third stage, the Company measures the loss provisions according to the expected credit losses of the instrument for the entire duration. For the financial instrument with lower credit risk on the balance sheet date, the Company assumes that its credit risk has not increased significantly since the initial recognition, and measures the loss provisions according to the expected credit losses in the next 12 months.
The expected credit losses for the entire duration refer to the expected credit losses due to all possible credit events during the entire expected duration of the financial instrument. Expected credit losses in the next 12 months refer to the expected credit losses caused by the possible credit events of financial instrument that may occur within 12 months after the balance sheet date (if the expected duration of financial instrument is less than 12 months, it shall be the expected duration), which are part of the expected credit loss for the entire duration.
When measuring expected credit losses, the maximum period that the Company needs to consider is the longest contract period for which the company is exposed to credit risk (including options for consideration of renewal). For notes receivable and accounts receivable, regardless of whether there is a major financing, the Company always measures its loss provisions according to the amount of expected credit losses for the entire duration.
The Company divides the combination of the notes receivable and accounts receivable according to the credit risk characteristics, and calculates the expected credit losses on the basis of combinations, the basis for determining the combination is as follows:
A. Note receivable
Note receivable1：Bank acceptance bill
Note receivable2：Trade acceptance
B. Account receivable
Account receivable1：Receivables from internal related party
Account receivable2：Receivable from other clients
For the notes receivable divided into combinations, the Company calculates the expected credit losses by referring to the historical credit loss experience, combing with the current situation and the forecast of future economic conditions, and through the default risk exposure and the expected credit loss rate for the entire duration.
For the accounts receivable divided into combinations, the Company calculates the expected credit losses by referring to the historical credit loss experience, combing with the current situation and the forecast of future economic conditions, and compiling a comparison table of accounts receivable aging and the expected credit loss rate for the entire duration.
C. Other receivables
When a single other receivables cannot be used to estimate the expected credit loss at a reasonable cost, the Company divides other receivables into several combinations based on the credit risk characteristics, and calculates the expected credit losses based on a combination, the basis for determining the combination is as follows: Other account receivable1：Receivables from internal related party
Other account receivable2：Receivable from other clients
For other receivables classified as a combination, the Company calculates the expected credit loss through the default risk exposure and the expected credit loss rate over the next 12 months or the entire duration.
D. Debt investment, other debt investment
For debt investment and other debt investment, the Company calculates the expected credit losses according to the nature of the investment, according to various types of counter parties and risk exposures, and through default risk exposure and expected credit loss rate in the next 12 months or the entire duration.
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 thedebtor’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 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 derecognition of 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, derecognize the financial assets; if almost all the risks and rewards of ownership of financial assets have been retained, do not derecognize the financial assets.
If the Company has neither transferred nor retained almost all the risks and rewards of ownership of financial assets, dispose as following situations: If the control of the financial assets is abandoned, derecognize 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. Note receivable
Found more in the impairment of financial instrument carried in Financial Instrument
12. Account receivable
Found more in the impairment of financial instrument carried in Financial Instrument
13. Other account receivable
Found more in the impairment of financial instrument carried in Financial Instrument
11. Note receivable
The notes receivable settled by the Company are all bank acceptance and letters of credit, based on the credit risk characteristics of notes receivable, the credit risk of notes receivable is comprehensively evaluated, the Company does not make credit impairment losses for notes receivable.
12. Account receivable
(1) Account Receivable withdrawal on single significant amount and with bad debt provision accrued for single item
|||
|-|-|
|Determine basis or amount standards for single|The Company’s account receivables with above RMB 1 million in single item is|
|significant amount|defined as account receivables with significant amount in single item.|
||In line with the difference of present value of future cash flow lower its book|
|Withdrawal method for account with single significant||
||value, carried out impairment test independently and withdrawal the bad debt|
|amount and withdrawal single item bad debt provision||
||reserves|

(2) Receivables with bad debt provision accrual by credit portfolio
|||
|-|-|
|Portfolio|Bad debt provision|
||accrual|
|Classify to many combination based on credit portfolio for those receivables with minor account singly and|Age analysis method|
|those with major amount but has no impairment been found after testing independently; base on the actual||
|loss ratio of the receivables of previous years, with same or similar credit portfolio, and combining actual||
|condition accrual bad debt reserves.||

In portfolio, accounts whose bad debts provision was accrued by age analysis:
√ Applicable□ Not applicable
||||
|-|-|-|
|Account age|Accrual ratio for account receivable|Accrual ratio for other receivables|
|Within 6 months|||
|6 months to one year|10.00%|10.00%|
|1－2 years|20.00%|20.00%|
|2－3 years|40.00%|40.00%|
|Over 3 years|100.00%|100.00%|
|3－4 years|100.00%|100.00%|
|4－5 years|100.00%|100.00%|
|Over 5 years|100.00%|100.00%|

 In portfolio, withdrawal proportion of bad debt provision based on balance proportion
□ Applicable√ Not applicable
In portfolio, withdrawal proportion of bad debt provision based on other methods:
□ Applicable√ Not applicable
(3) Account receivable with minor single amount but with withdrawal bad debt provision for single item
|||
|-|-|
|Reasons for withdrawal single item|The present value of future cash flow has major difference with the receivable group’s present|
|bad debt provision|value of future cash flow|
|Withdrawal method for bad debt|Carried out impairment test independently, accrual bad debt reserves according to the difference of|
|provision|present value of future cash flow lower its book value|

13. Other account receivable
Method for determining expected credit losses of other receivables and accounting treatment methods
For other receivables, whether or not it contains significant financing components, the company always measures its
loss provisions according to the amount of expected credit losses during the entire renewal period, and the resulting
increase or reversal amount of loss provisions is included in the current profit and loss as an impairment loss.
The company classifies other receivables into several combinations based on similar credit risk characteristics, and calculates the expected credit losses based on all reasonable and evidenced information (including forward-looking information) on the basis of combination, the basis for determining the combination is as follows:
||||
|-|-|-|
||Basis for determiningportfolio|Method of measuring expected credit loss|
|Item|||
||Account age|Refer to the historical credit loss experience, combine with the current situation andthe forecast of future economic conditions, compile a comparison table of the age ofother receivables and the expected credit loss rate of the entire renewal period, andcalculate the expected credit losses.|
|Other account|||
|receivable|||

14. Inventory
Whether the Company needs to comply with the disclosure requirement of special industry
N
(1) Classification of inventories
TheCompany’s inventories are categorized into stock materials, product in process and stock goods etc.
(2) Pricing for delivered inventories
A. Generally, stock materials are calculated at planned cost. Material cost difference is individually set according to classification of grant types. Pursuant to the difference between the planned cost of the received or delivered raw materials and the material cost the aforesaid cost should share after carrying forward at period-end, the Company adjusts the planned cost to effective cost; finished products are priced at effective costs, and carried forward to operating cost by weighted average method when being delivered;
B. Products in process are priced at effective costs, and carried forward to finished products at actually occurred cost;
C. Finished self-produced products are priced at effective costs, and carried forward to operating cost by weighted average method; external purchase goods (from import and export trades) are carried forward to sales cost by individual pricing method.
(3) Recognition evidence for net realizable value of inventories and withdrawal method for inventory impairment provision
Inventories as at period-end are priced at the lower of costs and net realizable values; at period end, on the basis of overall clearance about inventories, inventory impairment provision is withdrew for uncollectible part of costs of inventories which result from destroy of inventories, out-of-time of all and part inventories, or sales price lowering than cost. Inventory impairment provision for stock goods and quantity of raw materials is subject to the difference between costs of single inventory item over its net realizable value. As for other raw materials with large quantity and comparatively low unit prices, inventory impairment provision is withdrawn pursuant to categories.
As for finished goods, commodities and materials available for direct sales, their net realizable values are
determined by their estimated selling prices less estimated sales expenses and relevant taxes. For material
inventories held for purpose of production, their net realizable values are determined by the estimated selling
prices of finished products less estimated costs, estimated sales expenses and relevant taxes accumulated till completion of production. As for inventories held for implementation of sales contracts or service contracts, their net realizable values are calculated on the basis of contract prices. In the event that inventories held by a company exceed order amount as agreed in sales contracts, net realizable values of the surplus part are calculated on the basis of normal sale price.
(4) Inventory system
Perpetual Inventory System is adopted by the Company and takes a physical inventory.
(5) Amortization of low-value consumables and wrappage
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.
15. Assets held for sale
The Company classifies non-current assets or disposal groups that meet all of the following conditions as held-for-sale: according to the practice of selling this type of assets or disposal groups in a similar transaction, the non-current assets or disposal group can be sold immediately at its current condition; The sale is likely to occur, that is, the Company has made resolution on the selling plan and obtained definite purchase commitment, the selling is estimated to be completed within one year. Those assets whose disposal is subject to approval from relevant authority or supervisory department under relevant requirements are subject to that approval.
Where the Company loses control over its subsidiary due to disposal of investment in the subsidiary, whether or not the Company retains part equity investment after such disposal, investment in the subsidiary shall be classified in its entirety as held for sale in the separate financial statement of the parent company subject to that the investment in the subsidiary proposed to be disposed satisfies the conditions for being classified as held for sale, and all the assets and liabilities of the subsidiary shall be classified as held for sale in consolidated financial statement.
The purchase commitment identified refers to the legally binding purchase agreement entered into between the Company and other parties, which sets out certain major terms relating to transaction price, time and adequately stringent punishment for default, which render an extremely minor possibility for material adjustment or revocation of the agreement.
Assets held for sale are measured at the lower of heir carrying value and fair value less selling expense. If the carrying value is higher than fair value less selling expense, the excess shall be recognized as impairment loss and recorded in profit or loss for the period, and allowance for impairment shall be provided for in respect of the assets. In respect of impairment loss recognized for disposal group held for sale, carrying value of the goodwill in
the disposal group shall be deducted first, and then deduct the carrying value of the non-current assets within the disposal group applicable to this measurement standard on a pro rata basis according to the proportion taken by their carrying value.
If the net amount of fair value of non-current assets held for sale less sales expense on subsequent balance sheet date increases, the amount previously reduced for accounting shall be recovered and reverted from the impairment loss recognized after the asset is classified under the category of held for sale, with the amount reverted recorded in profit or loss for the period. Impairment loss recognized before the asset is classified under the category of held for sale shall not be reverted. If the net amount of fair value of the disposal group held for sale on the subsequent balance sheet date less sales expenses increases, the amount reduced for accounting in previous periods shall be restored, and shall be reverted in the impairment loss recognized in respect of the non-current assets which are applicable to relevant measurement provisions after classification into the category of held for sale, with the reverted amount charged in profit or loss for the current period. The written-off carrying value of goodwill shall not be reverted.
The non-current assets in the non-current assets or disposal group held for sale is not depreciated or amortized, and the debt interests and other fees in the disposal group held for sale continue to be recognized.
If the non-current assets or disposal group are no longer classified as held for sale since they no longer meet the condition of being classified as held for sale or the non-current assets are removed from the disposal group held for sale, they will be measured at the lower of the following:
(i) The amount after their book value before they are classified as held for sale is adjusted based on the depreciation, amortization or impairment that should have been recognized given they are not classified as held for sale;
(ii) The recoverable amount.
16.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 at fair value with any change in fair value charged to profit or loss.
(1) Determination of initial investment cost
Investment costs of the long-term equity investment are recognized by the follow according to different way of acquirement:
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 absorbingparty’s share of the carrying amount of theowner’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 absorbingparty’s share of the carrying amount of theowner’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 absorbingparty’s share of the carrying amount of theowner’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.)
②For a long-term equity investment acquired through a business combination involving enterprises not under common control, the initial investment cost of the long-term equity investment shall be the cost of combination on the date of acquisition. Cost of combination includes the aggregate fair value of assets paid by the acquirer, liabilities incurred or borne and equity securities issued. (For business combination resulted in an enterprise not under common control by acquiring equity of the acquire under common control through a stage-up approach with several transactions, these transactions will be judged whether they shall be treat as “transactions in a basket”. If they belong to “transactions in a basket”, these transactions will be accounted for a transaction in obtaining control. If they are not belong to “transactions in a basket”, the initial investment cost of the long-term equity investment accounted for using cost method shall be the aggregate of the carrying amount of equity investment previously held by the acquire and the additional investment cost. For previously held equity accounted for using equity method, relevant other comprehensive income will not be accounted for. For previously held equity investment classified as available-for-sale financial asset, the difference between its fair value and carrying amount, as well as the accumulated movement in fair value previously included in the other comprehensive income shall be transferred to profit or loss for the current period.) plus the combination cost measured by costs which have directly connection with acquisition are considered as initial investment cost of such long-term equity investment. Realizable assets and liabilities undertaken by such assets (including contingent liabilities) of the party being combined as at the combination date are all measured at fair values, without consideration to amount of minority interests. The surplus of combination cost less fair value net realizable assets of the party being combined is recorded as goodwill, and the deficit is directly recognized in the consolidated statement of gains and losses.
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 theinvestor’s interest in the fair value of the investedparty’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 theinvestor’s interest in the fair value of the investedparty’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 theGroup’s share of the net profits or losses and other comprehensive income made by the invested party, respectively. Meanwhile, the carrying amount of long-term equity investment shall be adjusted. The carrying amount of long-term equity investment shall be reduced based on theGroup’s share of profit or cash dividend distributed by the invested party. In respect of the other movement of net profit or loss, other comprehensive income and profit distribution of invested party, the carrying value of long-term equity investment shall be adjusted and included in the capital reserves. The Group shall recognize its share of the investedparty’s net profits or losses based on the fair values of the investedparty’s individual separately identifiable assets at the time of acquisition, after making appropriate adjustments thereto. In the event of inconformity 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.
TheGroup’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 theinvestor’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.
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 theowners’ 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 V.- 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 underowners’ 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. Theowners’ equity recognized for the movement of otherowners’ 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 otherowners’ 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 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 otherowners’ 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 otherowners’ 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 otherowners’ equity (excluding net profit or loss, other comprehensive income and profit distribution under net asset of invested party accounted for and recognized using equity method) shall be transferred to profit or loss for the current period at the time when equity method was ceased to be used.
The Group disposes its equity investment in subsidiary by a stage-up approach with several transactions until the control over the subsidiary is lost. If the said transactions belong to “transactions in a basket”, each transaction shall be accounted for as a single transaction of disposing equity investment of subsidiary and loss of control. The difference between the disposal consideration for each transaction and the carrying amount of the corresponding long-term equity investment of disposed equity interest before loss of control shall initially recognized as other comprehensive income, and subsequently transferred to profit or loss arising from loss of control for the current period upon loss of control.
(3) Impairment test method and withdrawal method for impairment provision
Found more in Note V-”impairment of long-term investment”
(4) Criteria of Joint control and significant influence
Joint control is theCompany’s contractually agreed sharing of control over an arrangement, which relevant activities of such arrangement must be decided by unanimously agreement from parties who share control. All the participants or participant group whether have controlling over such arrangement as a group or not shall be judge firstly, than judge that whether the decision-making for such arrangement are agreed unanimity by the participants or not.
Significant influence is the power of the Company to participate in the financial and operating policy decisions of an invested party, but to fail to control or joint control the formulation of such policies together with other parties. While recognizing whether have significant influence by invested party, the potential factors of voting power as current convertible bonds and current executable warrant of the invested party held by investors and other parties shall be thank over.
17. Investment real estate
Measurement mode
Measured by cost method
Depreciation or amortization method
Investment real estate is stated at cost. During which, the cost of externally purchased properties held-for-investment includes purchasing price, relevant taxes and surcharges and other expenses which are directly attributable to the asset. Cost of self construction of properties held for investment is composed of necessary expenses occurred for constructing those assets to a state expected to be available for use. Properties
held for investment by investors are stated at the value agreed in an investment contract or agreement, but those under contract or agreement without fair value are stated at fair value.
The Company adopts cost methodology amid subsequent measurement of properties held for investment, while depreciation and amortization is calculated using the straight-line method according to their estimated useful lives. The basis of provision for impairment of properties held for investment is referred to Note V-“Impairment of long-term assets”
18. Fixed assets
(1) Confirmation 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|Depreciation Method|Years of depreciation|Scrap value rate|Yearly depreciation rate|
|House and Building|Straight-line depreciation|20~35|5|2.71~4.75|
|Machinery equipment|Straight-line depreciation|10|5|9.50|
|Transportation|||||
||Straight-line depreciation|4~5|5|19.00~23.75|
|equipment|||||
|Electronic and other|||||
||Straight-line depreciation|3～10|5|9.50～31.67|
|equipment|||||

(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: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 for75% of the service life of the lease fixed assets;
④ The present value of theCompany’s of minimum lease payment on the lease commencement date is equivalent
to90% 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 to90% 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 V-20-“Long term asset impairment”.
19. 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 V-“Impairment of long-term assets”
20. 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:
① Capital expenditure has been occurred;
② Borrowing 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 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. 21. 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 evenly 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 V-20-“Long-term assets impairment”.
(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):
① It is technically feasible that the intangible asset can be used or sold upon completion;
② there 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;④ there is sufficient support in terms of technology, financial resources and other resources in order to complete the development of the intangible asset, and there is capability to use or sell the intangible asset;
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.
22. Impairment of long-term assets
The Company will judge if there is any indication of impairment as at the balance sheet date in respect of non-current non-financial assets such as fixed assets, construction in progress, intangible assets with a finite useful life, investment properties measured at cost, and long-term equity investments in subsidiaries, joint controlled entities and associates. If there is any evidence indicating that an asset may be impaired, recoverable amount shall be estimated for impairment test. Goodwill, intangible assets with an indefinite useful life and intangible assets beyond working conditions will be tested for impairment annually, regardless of whether there is any indication of impairment.
If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount, the impairment provision will be made according to the difference and recognized as an impairment loss. The recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the future cash flows expected to be derived from the asset. Anasset’s fair value is the price in a sale agreement in anarm’s length transaction. If there is no sale agreement but the asset is traded in an active market, fair value shall be determined based on the bid price. If there is neither sale agreement nor active market for an asset, fair value shall be based on the best available information. Costs of disposal are expenses attributable to disposal of the asset, including legal fee, relevant tax and surcharges, transportation fee and direct expenses incurred to prepare the asset for its intended sale. The present value of the future cash flows expected to be derived from the asset over
the course of continued use and final disposal is determined as the amount discounted using an appropriately selected discount rate. Provisions for assets impairment shall be made and recognized for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Group shall determine the recoverable amount of the asset group to which the asset belongs. The asset group is the smallest group of assets capable of generating cash flows independently.
For the purpose of impairment testing, the carrying amount of goodwill presented separately in the financial statements shall be allocated to the asset groups or group of assets benefiting from synergy of business combination. If the recoverable amount is less than the carrying amount, the Group shall recognize an impairment loss. The amount of impairment loss shall first reduce the carrying amount of any goodwill allocated to the asset group or set of asset groups, and then reduce the carrying amount of other assets (other than goodwill) within the asset group or set of asset groups, pro rata on the basis of the carrying amount of each asset.
An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period in respect of the part whose value can be recovered.
23. Long-term deferred expenses
Long-term expenses to be amortized of the Company the expenses that are already charged and with the beneficial term of more than one year are evenly amortized over the beneficial term. For the long-term deferred expense items cannot benefit the subsequent accounting periods, the amortized value of such items is all recorded in the profit or loss during recognition.
24. Employee compensation
(1) Accounting treatment for short-term compensation
During the accounting period when the staff providing service to the Company, the short-term remuneration actual occurred shall recognized as liability and reckoned into current gains/losses. During the accounting period when staff providing service to the Company, the actual short-term compensation occurred shall recognized as liabilities and reckoned into current gains/losses, except for those in line with accounting standards or allow to reckoned into capital costs; the welfare occurred shall reckoned into current gains/losses or relevant asses costs while actually occurred. The employee compensation shall recognize as liabilities and reckoned into current gains/losses 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.
(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 enterprisedoesn’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.
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
Whether the Company needs to comply with the disclosure requirement of special industry
No
Whether implemented the new revenue standards
□ Yes√ No
(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 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 ingovernment’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.
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 inowner’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.
(2) Accounting 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. Other important accounting policy and accounting estimation
In the process of applying the Company's accounting policies, due to the inherent uncertainty of business activities,
the Company needs to judge, estimate and assume the book value of the report items cannot be accurately measured. These judgments, estimates and assumptions are made on the basis of the historical experience of theCompany’s management and by considering other relevant factors, which shall impact the reported amounts 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
According to the accounting policies of the accounts receivable, the Company adopts the allowance method to calculate the bad debt losses. The impairment of receivables is based on the assessment to the collectability of the accounts receivable. The impairment of accounts receivable requires themanagement’s judgments and estimates. The actual results and the differences between the previously estimated results shall affect the book value of accounts receivable and the provision or return of thereceivables’ bad debt reserves during the period estimated to be changed.
(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 theinventory’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) Held-to-maturity investments
The Company classifies the non-derivative financial assets that meet the requirements, have the fixed or ascertainable repayment amount and fixed due date, and that the Company has the positive intention and ability to hold to maturity as the held-to-maturity investment. This classification involves a lot of judgments. In the process of making the judgments, the Company will evaluate its willingness and ability to this held-to-maturity investment.
Except in certain cases (such as the investments with insignificant sales amount when the maturity date comes), if the Company fails to hold these investments till the maturity date, then all the investments shall be reclassified to the available-for-sale financial assets which cannot be classified as the held-to-maturity investments in this fiscal year and the next two fiscal years. This kind of case may have a significant impact on the relevant financial assets value listed on the financial statements, and may affect the Company's financial instruments risk management strategy.
(4) Impairment of held-to-maturity investments
The Company determines that the impairment of held-to-maturity investments largely relies on management's judgments. The objective evidences of impairment include that the issuer has serious financial difficulties so that the financial assets cannot continue to be traded in an active market, or cannot be able to fulfill the contract terms (for example, breach the contract of paying the interests or principal), etc. In the process of making the judgments, the Company needs to evaluate the impact of the objective evidence of impairment to the expected future cash flows of the investment.
(5) Impairment of financial assets available for sale
The Company determines that the impairment of held-to-maturity investments largely relies on management's judgments and assumptions so as to determine whether it is needed to affirm its impairment loss in the profit statement. In the process of making the judgments and assumptions, the Company needs to evaluate the extent and duration when the fair value of the investment is less than the cost, as well as the financial situation and short-term business prospects of the invested party, including the industry conditions, technological change, credit rating, default rates, and risks of the counter party.
(6) 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.
(7) Depreciation and amortization
The Company depreciates and amortizes the investment property, fixed assets and intangible assets according to the straight-line method in the service life after considering the residual value. The Company regularly reviews the service life to determine the depreciation and amortization expense amount to be reckoned in each reporting period. The service life is determined by the Company based on the past experience of similar assets and the expected technological updating. If the previous estimates have significant changes, the depreciation and amortization expense shall be adjusted in future periods.
(8) Income tax
In theCompany’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.
(9) Early retirement benefits and supplementary retirement benefits
The expenses of the Company's early retirement benefits and supplementary retirement benefits and the amount of liabilities are determined in accordance with various assumptions. These assumptions include the discount rate, the average growth rate of health care costs, the subsidy growth rate of the early retired personnel and retirees and the other factors. The differences between the actual results and assumptions will be immediately identified and included in the costs of the current year. Although the management thought the reasonable assumptions have been adopted, the changes in the actual experience and assumed conditions will impact the costs and liability balances of the Company's internal early retirement benefits and supplementary retirement benefits.
31. Changes of important accounting policy and estimation
(1) Changes of major accounting policies
√ Applicable□ Not applicable
||||
|-|-|-|
||Approval||
|Content and causes for changes of accounting policy||Note|
||procedures||
|In 2017, the Ministry of Finance revised and issued the Accounting Standards for Business|||
|Enterprises No. 22 - Recognition and Measurement of Financial Instruments and Accounting|||
|Standards for Business Enterprises No. 23 - Transfer of Financial Assets , Accounting Standards for|Approved and||
|Business Enterprises No. 24 - Hedge Accounting, and the Accounting Standards for Business|deliberated by|Notice No.:|
|Enterprises No. 37 – Financial Instruments Presentation, and the domestic listed companies are|5th session of|2019-006|
|required to put the relevant accounting standards of new financial instruments into force from|9th BOD||
|January 1, 2019. The Company implement the above mentioned four accounting standards since|||
|1 Jan. 2019|||
|On April 2019, the Ministry of Finance issued No. 6 Document 2019-“Notice on Amending the 2019|Ministry of||
|Annual Financial Statements of General Enterprises”, which revised the financial statement format of|Finance No. 6||
|general enterprises in light of the relevant situation in the implementation of enterprise accounting|Document||
|standards.|2019||

(2) Changes of important accounting estimate
□ Applicable√ Not applicable
(3) Adjustment the financial statements at the beginning of the first year of implementation of new financial instrument standards, new revenue standards and new leasing standards
√ Applicable□ Not applicable
Consolidate balance sheet
In RMB/CNY
|||||
|-|-|-|-|
|Item|2018-12-31|2019-01-01|Adjustments|
|Current assets:||||
|Monetary funds|2,616,321,740.73|2,616,321,740.73||
|Settlement provisions||||
|Capital lent||||
|Tradable financial assets||4,740,773,607.43|4,740,773,607.43|
|Financial assets measured by fair value and with||||
|variation reckoned into current gains/losses||||
|Derivative financial assets||||

|||||
|-|-|-|-|
|Note receivable|1,148,107,603.68|1,148,107,603.68||
|Note receivable|1,919,793,266.91|1,919,793,266.91||
|Account receivable financing||||
|Account paid in advance|94,651,431.31|94,651,431.31||
|Insurance receivable||||
|Reinsurance receivables||||
|Contract reserve of reinsurance receivable||||
|Other account receivable|84,582,246.16|84,582,246.16||
|Including: Interest receivable|1,842,437.50|1,842,437.50||
|Dividend receivable||||
|Buying back the sale of financial assets||||
|Inventory|1,438,528,714.59|1,438,528,714.59||
|Contract assets||||
|Assets held for sale||||
|Non-current asset due within one year||||
|Other current assets|4,632,137,600.26|60,250,896.83|-4,571,886,703.43|
|Total current assets|11,934,122,603.64|12,103,009,507.64|168,886,904.00|
|Non-current assets:||||
|Loans and payments on behalf||||
|Creditors’ investment||||
|Available-for-sale financial assets|255,975,176.91||-255,975,176.91|
|Other creditors’ investment||||
|Held-to-maturity investments||||
|Long-term receivables||||
|Long-term equity investment|4,976,773,946.74|4,976,773,946.74||
|Other equity instrument investment||87,088,272.91|87,088,272.91|
|Other non-current financial assets||||
|Investment real estate|21,906,134.52|21,906,134.52||
|Fixed assets|2,707,374,678.61|2,707,374,678.61||
|Construction in progress|166,414,542.18|166,414,542.18||
|Productive biological assets||||
|Oil and gas assets||||
|Right-of-use asset||||
|Intangible assets|324,892,822.75|324,892,822.75||

|||||
|-|-|-|-|
|Research and development costs||||
|Goodwill|1,784,086.79|1,784,086.79||
|Long-term deferred expenses|16,637,652.31|16,637,652.31||
|Deferred income tax assets|234,697,139.58|234,697,139.58||
|Other non-current assets|251,462,676.27|251,462,676.27||
|Total non-current assets|8,957,918,856.66|8,789,031,952.66|-168,886,904.00|
|Total assets|20,892,041,460.30|20,892,041,460.30||
|Current liabilities:||||
|Short-term borrowings|298,928,213.94|298,928,213.94||
|Loan from central bank||||
|Capital borrowed||||
|Tradable financial liability||||
|Financial liability measured by fair value and with||||
|variation reckoned into current gains/losses||||
|Derivative financial liability|490,329.13|490,329.13||
|Note payable|1,018,367,533.74|1,018,367,533.74||
|Account payable|2,047,336,834.66|2,047,336,834.66||
|Accounts received in advance|41,329,857.80|41,329,857.80||
|Selling financial asset of repurchase||||
|Absorbing deposit and interbank deposit||||
|Security trading of agency||||
|Security sales of agency||||
|Employee compensation payable|312,113,178.24|312,113,178.24||
|Taxes payable|74,271,613.92|74,271,613.92||
|Other accounts payable|64,448,723.52|64,448,723.52||
|Including: Interest payable|517,469.08|517,469.08||
|Dividend payable||||
|Commission charge and commission payable||||
|Reinsurance payable||||
|Contract liability||||
|Liability held for sale||||
|Non-current liabilities due within one year|15,000,000.00|15,000,000.00||
|Other current liabilities||||
|Total current liabilities|3,872,286,284.95|3,872,286,284.95||
|Non-current liabilities:||||

|||||
|-|-|-|-|
|Insurance contract reserve||||
|Long-term loans|30,000,000.00|30,000,000.00||
|Bonds payable||||
|Including: preferred stock||||
|Perpetual capital securities||||
|Lease liability||||
|Long-term account payable|35,422,354.11|35,422,354.11||
|Long-term employee compensation payable|74,679,175.36|74,679,175.36||
|Accrual liabilities||||
|Deferred income|425,769,854.13|425,769,854.13||
|Deferred income tax liabilities|1,912,744.40|1,912,744.40||
|Other non-current liabilities||||
|Total non-current liabilities|567,784,128.00|567,784,128.00||
|Total liabilities|4,440,070,412.95|4,440,070,412.95||
|Owners’ equity:||||
|Share capital|1,008,950,570.00|1,008,950,570.00||
|Other equity instrument||||
|Including: preferred stock||||
|Perpetual capital securities||||
|Capital reserve|3,416,022,795.14|3,416,022,795.14||
|Less: Inventory shares||||
|Other comprehensive income|-19,809,442.95||19,809,442.95|
|Reasonable reserve|1,618,490.50|1,618,490.50||
|Surplus reserve|510,100,496.00|510,100,496.00||
|Provision of general risk||||
|Retained profit|10,996,945,870.13|10,996,945,870.13|-19,809,442.95|
|Total owners’ equity attributable to parent company|15,913,828,778.82|15,913,828,778.82||
|Minority interests|538,142,268.53|538,142,268.53||
|Total owners’ equity|16,451,971,047.35|16,451,971,047.35||
|Total liabilities and owner’s equity|20,892,041,460.30|20,892,041,460.30||

Explanation
In 2017, the Ministry of Finance revised and issued the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments and Accounting Standards for Business Enterprises No.
23 - Transfer of Financial Assets , Accounting Standards for Business Enterprises No. 24 - Hedge Accounting, and
the Accounting Standards for Business Enterprises No. 37– Financial Instruments Presentation, and the domestic
listed companies are required to put the relevant accounting standards of new financial instruments into force from January 1, 2019. The Company implement the above mentioned four accounting standards since 1 Jan. 2019 (1) Add new item of “Tradable financial assets”, parts of the former “Other current assets” and
“Available-for-sale financial assets” are re-classified for listing
(2) Add new item of “Other equity instrument investment”, parts of the former “Available-for-sale financial assets” is re-classified for listing
(3) Re-classify “Other comprehensive income” to “Retained profit”
Balance sheet of parent company
In RMB/CNY
|||||
|-|-|-|-|
|Item|2018-12-31|2019-01-01|Adjustments|
|Current assets:||||
|Monetary funds|1,922,408,227.00|1,922,408,227.00||
|Tradable financial assets||4,740,773,607.43|4,740,773,607.43|
|Financial assets measured by fair value and with||||
|variation reckoned into current gains/losses||||
|Derivative financial assets||||
|Note receivable|264,264,207.30|264,264,207.30||
|Note receivable|742,246,990.99|742,246,990.99||
|Account receivable financing||||
|Account paid in advance|59,028,927.25|59,028,927.25||
|Other account receivable|196,849,092.13|196,849,092.13||
|Including: Interest receivable|188,682.78|188,682.78||
|Dividend receivable||||
|Inventory|492,054,274.67|492,054,274.67||
|Contract assets||||
|Assets held for sale||||
|Non-current asset due within one year||||
|Other current assets|4,576,688,553.49|4,801,850.06|-4,571,886,703.43|
|Total current assets|8,253,540,272.83|8,422,427,176.83|168,886,904.00|
|Non-current assets:||||
|Creditors’ investment||||
|Available-for-sale financial assets|180,035,176.91||-180,035,176.91|
|Other creditors’ investment||||
|Held-to-maturity investments||||

|||||
|-|-|-|-|
|Long-term receivables||||
|Long-term equity investment|5,739,110,426.55|5,739,110,426.55||
|Other equity instrument investment||11,148,272.91|11,148,272.91|
|Other non-current financial assets||||
|Investment real estate||||
|Fixed assets|1,534,109,106.80|1,534,109,106.80||
|Construction in progress|78,673,300.59|78,673,300.59||
|Productive biological assets||||
|Oil and gas assets||||
|Right-of-use asset||||
|Intangible assets|188,101,655.94|188,101,655.94||
|Research and development costs||||
|Goodwill||||
|Long-term deferred expenses||||
|Deferred income tax assets|140,286,756.70|140,286,756.70||
|Other non-current assets|184,208,090.40|184,208,090.40||
|Total non-current assets|8,044,524,513.89|7,875,637,609.89|-168,886,904.00|
|Total assets|16,298,064,786.72|16,298,064,786.72||
|Current liabilities:||||
|Short-term borrowings|112,000,000.00|112,000,000.00||
|Tradable financial liability||||
|Financial liability measured by fair value and with||||
|variation reckoned into current gains/losses||||
|Derivative financial liability||||
|Note payable|330,545,052.37|330,545,052.37||
|Account payable|823,693,469.51|823,693,469.51||
|Accounts received in advance|6,639,554.63|6,639,554.63||
|Contract liability||||
|Employee compensation payable|200,205,508.25|200,205,508.25||
|Taxes payable|39,193,425.15|39,193,425.15||
|Other accounts payable|12,142,596.68|12,142,596.68||
|Including: Interest payable|149,966.66|149,966.66||
|Dividend payable||||
|Liability held for sale||||
|Non-current liabilities due within one year||||

|||||
|-|-|-|-|
|Other current liabilities||||
|Total current liabilities|1,524,419,606.59|1,524,419,606.59||
|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|63,962,762.93|63,962,762.93||
|Accrual liabilities||||
|Deferred income|381,609,056.40|381,609,056.40||
|Deferred income tax liabilities||||
|Other non-current liabilities||||
|Total non-current liabilities|445,571,819.33|445,571,819.33||
|Total liabilities|1,969,991,425.92|1,969,991,425.92||
|Owners’ equity:||||
|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|-19,809,442.95||19,809,442.95|
|Reasonable reserve||||
|Surplus reserve|510,100,496.00|510,100,496.00||
|Retained profit|9,340,610,451.36|9,320,801,008.41|-19,809,442.95|
|Total owners’ equity|14,328,073,360.80|14,328,073,360.80||
|Total liabilities and owner’s equity|16,298,064,786.72|16,298,064,786.72||

Explanation
In 2017, the Ministry of Finance revised and issued the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments and Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets , Accounting Standards for Business Enterprises No. 24 - Hedge Accounting, and
the Accounting Standards for Business Enterprises No. 37– Financial Instruments Presentation, and the domestic
listed companies are required to put the relevant accounting standards of new financial instruments into force from
January 1, 2019. The Company implement the above mentioned four accounting standards since 1 Jan. 2019 (1) Add new item of “Tradable financial assets”, parts of the former “Other current assets” and
“Available-for-sale financial assets” are re-classified for listing
(2) Add new item of “Other equity instrument investment”, parts of the former “Available-for-sale financial assets” is re-classified for listing
(3) Re-classify “Other comprehensive income” to “Retained profit”
(4) Retrospective adjustment of early comparison data description when initially implemented the new financial instrument standards and new leasing standards
□ Applicable√ Not applicable
32. Other
Nil
VI. Taxation
1. Major taxes and tax rates
||||
|-|-|-|
|Tax|Basis|Tax rate|
|||Tax rate of 17%, 16%, 13%, 11%, 10%, 9%, 6% and 5%, rate for|
|||exported commodities is stipulated by the state with declaration|
|VAT|Taxable income||
|||of export tax rebate, rate of tax may be “exempted, credited and|
|||refunded”|
|City maintaining & construction tax|Turnover tax payable|7%|
|Corporation income tax|Taxable income|25%, 22%, 15%|
|Educational surtax|Turnover tax payable|5%, 4.5%|

Disclose reasons for different taxpaying body
|||
|-|-|
|Taxpaying body|Income tax rate|
|Weifu Mashan, Weifu Chang’an, Weifu International Trade, Weifu ITM, Weifu Schmidt, Weifu Leader||
||25%|
|(Wuhan), Weifu Leader(Nanchang)||
|The Company, Weifu Jinning, Weifu Leader, Weifu Tianli, Weifu Autocam, Weifu Leader(Chongqing)|15%|
|SPV, IRD Fuel Cells A/S|22%|

2. Tax preference
On 17 November 2017, the Company got a “High-Tech Enterprise Certificate” issued jointly by Science&
Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu Provincial
Office, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201732000007. Corporate income tax of the
Company shall be taxed by15% in three years since 1 January 2017 in accordance with State regulations. On 27 December 2017, Weifu Jinning got a “High-Tech Enterprise Certificate” issued jointly by Science& Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu Provincial Office, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201732004010. Corporate income tax of the Weifu Jinning shall be taxed by15% in three years since 1 January 2017 in accordance with State regulations. On 17 November 2017, Weifu Leader got a “High-Tech Enterprise Certificate” issued jointly by Science& Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu Provincial Office, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201732001828. Corporate income tax of the Weifu Leader shall be taxed by15% in three years since 1 January 2017 in accordance with State regulations. On 29 November 2017, Weifu Tianli got a “High-Tech Enterprise Certificate” issued jointly by Science& Technology Bureau of Ningbo, Department of Finance of Ningbo, Ningbo Office, SAT and Ningbo, Zhejiang Provincial Local Taxation Bureau, certificate No.: GR201733100363. Corporate income tax of the Weifu Tianli shall be taxed by15% in three years since 1 January 2017 in accordance with State regulations.
On 17 November 2017, Weifu Autocam got a “High-Tech Enterprise Certificate” issued jointly by Science& Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu Provincial Office, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201732001043. Corporate income tax of the Weifu Autocam shall be taxed by15% in three years since 1 January 2017 in accordance with State regulations. 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 Industries in the Western Region, and whose main business income accounting for more than70% of the total income of the enterprise in the current year can pay the corporate income tax at the tax rate of15%. In 2018, Weifu Leader (Chongqing) paid its corporate income tax at the tax rate of15%.
VII. Notes to major items in consolidated financial statements
1.Monetary funds
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Cash on hand|71,791.03|194,161.03|
|Cash in bank|2,596,255,341.24|2,534,479,978.46|
|Other monetary funds|93,371,445.06|81,647,601.24|
|Total|2,689,698,577.33|2,616,321,740.73|
|Including: Total amount saving aboard|32,827,414.62||

Other explanation
||||
|-|-|-|
|Item|2019-06-30|2018-12-31|
|Bank acceptance bill, L/C and other collateral|52,783,679.85|80,765,732.67|
|Deposit for Letter of Guarantee|158,280.00||
|Frozen dividend|1,655,119.95|881,868.57|
|The currency funds in transit for selling the equity of|38,774,365.26||
|Protean Holdings Corp.|||
|Total|93,371,445.06|81,647,601.24|

 The frozen dividend of 1,655,119.95 Yuan represents the part of dividends distributed by SDEC (stock code:600841) and Miracle Automation (stock code:002009) for 2017, 2018 and 2019 held by the Company as tradable financial assets. According to the notices numbered Yue03MC[2016]2490 and Yue03MC[2016]2492 served by Guangdong Shenzhen IntermediatePeople’s Court, these dividends were frozen.
The currency funds in transit for selling the equity of Protean Holdings Corp. is the equity selling money that sold by the Company, it is not available for relevant procedures are in process
2. Tradable financial assets
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Financial assets measured by fair value and with variation reckoned into|||
||151,261,956.00|121,066,008.00|
|current gains/losses|||
|Including:|||
|SDEC|104,680,056.00|85,458,408.00|

||||
|-|-|-|
|Miracle Automation|46,581,900.00|35,607,600.00|
|Financial assets designated to be measured by fair value and with variation|||
||4,258,207,599.43|4,619,707,599.43|
|reckoned into current gains/losses|||
|Including:|||
|Guolian Securities Shares|12,000,000.00|12,000,000.00|
|Shanghai Chengding Detong Equity Investment|35,820,896.00|35,820,896.00|
|Other: financial products|4,210,386,703.43|4,571,886,703.43|
|Total|4,409,469,555.43|4,740,773,607.43|

 Other explanation
Implemented new financial instrument standards in 2019, the tradable financial assets was re-classified from former
available-for-sale financial assets
3. Note receivable
(1) Classification of notes receivable
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Bank acceptance bill|1,402,441,411.19|1,082,574,482.88|
|Trade acceptance bill|89,952,810.16|65,533,120.80|
|Total|1,492,394,221.35|1,148,107,603.68|

 (2) Bad debt provision accrual, collected or reversal in the period
□ Applicable√ Not applicable
(3) Note receivable that pledged at period-end
In RMB/CNY
|||
|-|-|
|Item|Amount pledged at period-end|
|Bank acceptance bill|762,571,527.45|
|Total|762,571,527.45|

 (4) Notes endorsement or discount and undue on balance sheet date
In RMB/CNY
||||
|-|-|-|
|Item|Amount derecognition at period-end|Amount not derecognition at period-end|
|Bank acceptance bill|359,389,642.56||

|||
|-|-|
|Trade acceptance bill|4,190,000.00|
|Total|363,579,642.56|

(5) Notes transfer to account receivable due for failure implementation by drawer at period-end
In RMB/CNY
|||
|-|-|
|Item|Amount transfer to account receivable at period-end|
|Trade acceptance bill|6,800,000.00|
|Total|6,800,000.00|

 Other explanation
The Trade acceptance bills that the company transferred to the accounts receivable due to the failure of the drawer to perform the agreement at the end of the period were the bills of the subsidiaries controlled by Baota Petrochemical Group Co., Ltd. and the bills accepted by Baota Petrochemical Group Finance Co., Ltd. (hereinafter referred to as “BD bills”); as of June 30, 2019, these bills had expired.
(6) Note receivable actually written-off in the period
Nil
4. Account receivable
(1) Classification of account receivable
In RMB/CNY
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Opening balance|||||
||Book balance||Bad debt reserve|||Book balance||Bad debt reserve|||
|Category|||||Book||||||
|||||Accrualratio|||||Accrual|Book value|
||Amount|Ratio|Amount||value|Amount|Ratio|Amount|||
||||||||||ratio||
|Account receivable|||||||||||
|with bad debt|8,552,24||8,552,24|||8,685,110||8,685,110|||
|||0.36%||100.00%|||0.44%||100.00%||
|provision accrual on|2.26||2.26|||.25||.25|||
|a single basis|||||||||||
|Including:|||||||||||
|Account receivable|||||||||||
|with single|||||||||||
||6,800,00||6,800,00|||7,000,000||7,000,000|||
|significant amount||0.29%||100.00%|||0.36%||100.00%||
||0.00||0.00|||.00||.00|||
|and withdrawal bad|||||||||||
|debt provision on|||||||||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|single basis|||||||||||
|Account receivable|||||||||100.00%||
|with single minor|||||||||||
|amount but with bad|1,752,24||1,752,24|||1,685,110||1,685,110|||
|||0.07%||100.00%|||0.08%||||
|debts provision|2.26||2.26|||.25||.25|||
|accrued on a single|||||||||||
|basis|||||||||||
|Account receivable|||||||||1.60%||
|with bad debt|2,356,86||37,552,6||2,319,307|1,951,016||31,222,95||1,919,793,2|
|||99.64%||1.59%|||99.56%||||
|provision accrual on|0,269.31||14.73||,654.58|,221.14||4.23||66.91|
|portfolio|||||||||||
|Including:|||||||||||
|Account receivable|||||||||1.60%||
|with bad debt|2,356,86||37,552,6||2,319,307|1,951,016||31,222,95||1,919,793,2|
|||99.64%||1.59%|||99.56%||||
|provision accrual on|0,269.31||14.73||,654.58|,221.14||4.23||66.91|
|age analysis|||||||||||
||2,365,41||46,104,8||2,319,307,654.58|1,959,701||39,908,06|2.04%|1,919,793,2|
|Total||100.00%||1.95%|||100.00%||||
||2,511.57||56.99|||,331.39||4.48||66.91|

 Bad debt provision accrual on single basis: RMB 6,800,000.00.
In RMB/CNY
||||||
|-|-|-|-|-|
||Ending balance||||
|Name|||||
||Book balance|Bad debt reserve|Accrual ratio|Accrual causes|
||||100.00%|Have difficulty in|
|BD bills|6,800,000.00|6,800,000.00|||
|||||collection|
|Total|6,800,000.00|6,800,000.00|--|--|

Bad debt provision accrual on single basis: RMB 1,752,242.26
In RMB/CNY
||||||
|-|-|-|-|-|
||Ending balance||||
|Name|||||
||Book balance|Bad debt reserve|Accrual ratio|Accrual causes|
|Account receivable with single|||100.00%||
|minor amount but with bad||||Have difficulty in|
||1,752,242.26|1,752,242.26|||
|debts provision accrued on a||||collection|
|single basis|||||
|Total|1,752,242.26|1,752,242.26|--|--|

Bad debt provision accrual on portfolio: RMB 37,552,614.73.
In RMB/CNY
|||||
|-|-|-|-|
||Ending balance|||
|Name||||
||Book balance|Bad debt reserve|Accrual ratio|
|Account receivable with bad debt provision accrual on||||
||2,356,860,269.31|37,552,614.73|1.59%|
|age analysis||||
|Total|2,356,860,269.31|37,552,614.73|--|

Explanation on portfolio determines:
Excluding the account receivable accrual impairment provision separately; based on actual loss ratio of the receivable groups that owes same or similar risk features, which has classify by age in previous years, determine accrual ratio for bad debt provision combine with real condition
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable√ Not applicable
By account age
In RMB/CNY
|||
|-|-|
|Account age|Ending balance|
|Within one year(One year included)|2,277,983,177.64|
|Within 6 months|2,116,062,868.00|
|6 months to one year|161,920,309.64|
|1-2 years|69,703,171.66|
|2-3 years|2,923,284.26|
|Over 3 years|6,250,635.75|
|3-4 years|6,250,635.75|
|Total|2,356,860,269.31|

 (2) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB/CNY
|||||||
|-|-|-|-|-|-|
|||Amount changed in the period||||
|Category|Opening balance||Collected or||Ending balance|
|||Accrual||Written-off||
||||reversal|||
|Bad debt provision accrual on credit||||||
||39,908,064.48|6,607,638.33|403,280.82|7,565.00|46,104,856.99|
|risk portfolio||||||
|Total|39,908,064.48|6,607,638.33|403,280.82|7,565.00|46,104,856.99|

Including major amount bad debt provision that collected or reversal in the period:
In RMB/CNY
||||
|-|-|-|
|Enterprise|Amount collected or reversal|Collection by|
|BD bills|200,000.00|Collection|
|Total|200,000.00|--|

(3) Account receivable actually written-off in the period
In RMB/CNY
|||
|-|-|
|Item|Amount written-off|
|Retail enterprise|7,565.00|

 Including major account receivable written-off : nil
(4) Top 5 account receivables at ending balance by arrears party
Total period-end balance of top five receivables by arrears party amounting to 1,245,808,296.79 Yuan, takes 52.67 percent of the total account receivable at period-end, bad debt provision accrual correspondingly at year-end amounting as 7,579,746.83 Yuan.
(5) Account receivable derecognition due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvement
Nil
5. Account paid in advance
(1) By account age
In RMB/CNY
||||||
|-|-|-|-|-|
||Ending balance||Opening balance||
|Account age|||||
||Amount|Ratio|Amount|Ratio|
|Within one year|123,926,769.78|94.67%|89,076,980.53|94.11%|
|1-2 years|5,312,592.60|4.06%|4,536,408.47|4.79%|
|2-3 years|1,569,872.98|1.20%|980,958.32|1.04%|
|Over 3 years|89,584.01|0.07%|57,083.99|0.06%|
|Total|130,898,819.37|--|94,651,431.31|--|

Explanation on reasons of failure to settle on important account paid in advance with age over one year: Nil
(2) Top 5 account paid in advance at ending balance by prepayment object
Total period-end balance of top five account paid in advance by prepayment object amounted to42,001,171.79 Yuan, takes 32.09 percent of the total advance payment at period-end.
6. Other account receivable
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Interest receivable|674,104.16|1,842,437.50|
|Dividend receivable|536,162,445.67||
|Other account receivable|60,433,069.23|82,739,808.66|
|Total|597,269,619.06|84,582,246.16|

 (1) Interest receivable
1) Category of interest receivable
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Time deposit|674,104.16|1,842,437.50|
|Total|674,104.16|1,842,437.50|

 2) Significant overdue interest: nil
3) Accrual of bad debt provision
□ Applicable√ Not applicable
(2) Dividend receivable
1) Category of dividend receivable
In RMB/CNY
||||
|-|-|-|
|Item (or invested enterprise )|Ending balance|Opening balance|
|SDEC|610,417.20||
|Guolian Securities Co., Ltd.|903,640.00||
|Zhonglian Electronic|105,200,000.00||
|Bosch Automobile Diesel|429,448,388.47||
|Total|536,162,445.67||

2) Important dividend receivable with account age over one year: nil
3) Accrual of bad debt provision
□ Applicable√ Not applicable
(3) Other account receivable
1) By nature
In RMB/CNY
||||
|-|-|-|
|Nature|Ending book balance|Opening book balance|
|Intercourse funds receivable from units|46,492,901.74|15,328,121.55|
|Compensation for assets disposal|||
|||67,981,726.00|
|receivable|||
|Receivable from the tax refund for|||
||11,515,433.66||
|withholding the B-share|||
|Cash deposit|3,076,126.84|3,206,825.88|
|Staff loans and petty cash|4,656,003.60|1,172,017.93|
|Other|184,793.26|509,873.93|
|Total|65,925,259.10|88,198,565.29|

 2) Accrual of bad debt provision
In RMB/CNY
||||||
|-|-|-|-|-|
||Phase I|Phase II|Phase III||
||Expected credit|Expected credit losses for|Expected credit losses for||
|Bad debt reserve||||Total|
||losses over next 12|the entire duration (without|the entire duration (with||
||months|credit impairment occurred)|credit impairment occurred)||
|Balance on Jan. 1, 2019|2,683,204.00||2,775,552.63|5,458,756.63|
|Balance of Jan. 1, 2019|||||
||——|——|——|——|
|in the period|||||
|Current accrual|34,961.84|||34,961.84|
|Current reversal|1,528.60|||1,528.60|
|Balance on Jun. 30, 2019|2,716,637.24||2,775,552.63|5,492,189.87|

 Change of book balance of loss provision with amount has major changes in the period
□ Applicable√ Not applicable
By account age
In RMB/CNY
|||
|-|-|
|Account age|Ending balance|
|Within one year(One year included)|60,446,202.47|
|Within 6 months|60,122,838.05|

|||
|-|-|
|6 months to one year|323,364.42|
|1-2 years|21,454.00|
|2-3 years|3,400.00|
|Over 3 years|2,678,650.00|
|3-4 years|2,678,650.00|
|Total|63,149,706.47|

 3) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB/CNY
||||||
|-|-|-|-|-|
|||Amount changed in the period|||
|Category|Opening balance||Collected or|Ending balance|
|||Accrual|||
||||reversal||
|Account receivable with single significant amount|||||
||2,775,552.63|||2,775,552.63|
|and withdrawal bad debt provision on single basis|||||
|Account receivable with bad debt provision accrual|||||
||2,683,204.00|34,961.84|1,528.60|2,716,637.24|
|on portfolio|||||
|Total|5,458,756.63|34,961.84|1,528.60|5,492,189.87|

 Including major amount with bad debt provision reverse or collected in the period: nil
4) Other account receivable actually written-off in the period: nil
5) Top 5 other receivables at ending balance by arrears party
In RMB/CNY
|||||||
|-|-|-|-|-|-|
|||||Ratio in total ending|Ending balance|
|Enterprise|Nature|Ending balance|Account age|balance of other|of bad debt|
|||||receivables|reserve|
|Troowin Power System||||36.40%||
||Intercourse funds of unit|24,000,000.00|Within 6 months|||
|Technology Co., Ltd.||||||
|Protean Holdings Corp.|Amount from equity|||15.93%||
|||10,499,081.51|Within 6 months|||
|（Note）|sales|||||
|Robert Bosch Company|Intercourse funds of unit|7,600,000.00|Within 6 months|11.53%||
|Ningbo Jiangbei High-Tech||||2.68%||
|Industry Park Development|Performance bond|1,767,000.00|Over three years||1,767,000.00|
|Construction Co., Ltd.||||||
|American HESS Company|Intercourse funds of unit|1,514,671.20|个别认定|2.30%|1,514,671.20|
|Total|--|45,380,752.71|--|68.84%|3,281,671.20|

6) 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 Other explanation
Note: In June 2019, Protean Holdings Corp. which was invested by the company was100% acquired by Virtue Surge Limited, Virtue Surge Limited continues to exist after the merger, and Protean Holdings Corp. no longer exists. This acquisition invoked 5.1 “Drag-along right” in the fifth revision and the restatement of the shareholder agreement of Protean Holdings Corp., i.e. 5.1 (a) i. The most majority of shareholders agree with the shareholding ratio; ii. Oak Investment Partners XII LP ("Oak") with privilege and holding64.77% of the issued shares agrees; iii. GSR Ventures ("GSR") with privilege and holding9.58% of the issued shares agrees; iv. The majority of the board of directors of Protean Holdings Corp. agrees.
In view of the fact that the majority shareholder of Protean Holdings Corp. exercised the “Drag-along right”, that is, the vast majority of Protean HoldingsCorp.’s shareholders were in favor of the shareholding, and the Protean Holdings Corp. board of directors mostly agreed, which met the drag-along conditions, so Weifu High Tech must agree to sell its9.61% stake in Protean Holdings Corp., and there were dozens of other shareholders who held the remaining16.04% of the issued shares were dragged to sell their shares. After the sale, the company no longer holds a stake in Protean Holdings Corp.
In thisM&A and sale of equity transactions, the company is expected to obtainUS$7.17 million in revenue, of which the expected down payment ofUS$5,640,153.79 has been received at the end of June, and the remainingUS$1.53 million will be used as a reserve guarantee for theM&A and is expected to be received in 12 months. 7. Inventory
Whether implemented the new revenue standards
□Yes√No
(1) Category
In RMB/CNY
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserve|||reserve||
|Raw materials|383,335,648.45|64,071,932.72|319,263,715.73|405,113,183.37|71,085,820.65|334,027,362.72|
|Goods in process|177,818,860.49|13,699,553.98|164,119,306.51|182,564,277.52|13,682,081.67|168,882,195.85|
|Finished goods|1,077,721,703.57|133,968,453.82|943,753,249.75|1,080,800,727.38|145,181,571.36|935,619,156.02|
|Total|1,638,876,212.51|211,739,940.52|1,427,136,271.99|1,668,478,188.27|229,949,473.68|1,438,528,714.59|

(2) Inventory depreciation reserve
In RMB/CNY
||||||||
|-|-|-|-|-|-|-|
|||Current increased||Current decreased|||
|Item|Opening balance|||Reversal or||Ending balance|
|||Accrual|Other||Other||
|||||write-off|||
|Raw materials|71,085,820.65|1,422,322.52||8,436,210.45||64,071,932.72|
|Goods in process|13,682,081.67|17,472.31||||13,699,553.98|
|Finished goods|145,181,571.36|61,090.44||11,274,207.98||133,968,453.82|
|Total|229,949,473.68|1,500,885.27||19,710,418.43||211,739,940.52|

 (3) Explanation on capitalization of borrowing costs at ending balance of inventory
Nil
(4) Assets completed without settlement from construction contract at period-end
Nil
8. Other current assets
Whether implemented the new revenue standards
□Yes√No
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Entrusted financial product|||
|Export tax refund receivable|5,764,074.36|7,848,937.72|
|Prepaid tax fees and VAT retained|52,783,100.03|47,808,273.37|
|Input tax to be deducted and certified|420,338.49|3,420,317.46|
|Other|587,339.98|1,173,368.28|
|Total|59,554,852.86|60,250,896.83|

 9. Long-term equity investment
In RMB/CNY
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Current changes (+,-)|||||||||Endin|
|The invested|Opening balance|Ad|Cap|Investment|Other|Othe|Cash dividend|Provisi|Ot|Ending|g|
|entity||||||||||balance|balan|
|||dit|ital|gain/loss|compr|r|or profit|on for|her|||
||||||||||||ce of|

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||ion|red|recognized under|ehensi|equit|announced to|impair||impai|
|||al|ucti|equity|ve|y|issued|ment||rment|
|||inv|on||incom|chan||||provi|
|||est|||e|ge||||sion|
|||me|||adjust||||||
|||nt|||ment||||||
|I. Joint venture|||||||||||
|Wuxi Weifu|||||||||||
||||||||||577,229,858.9||
|Environment|565,646,086.93|||11,583,772.04|||||||
||||||||||7||
|Catalyst Co.,Ltd.|||||||||||
|Wuxi Weifu|||||||||||
|Electric Drive|54,742,375.02|||-1,176,749.59|||||53,565,625.43||
|Tech. Co., Ltd.|||||||||||
||||||||||630,795,484.4||
|Subtotal|620,388,461.95|||10,407,022.45|||||||
||||||||||0||
|II. Associated enterprise|||||||||||
|Bosch Automobile|||||||||||
||||||||||2,966,945,647||
|Diesel System|3,207,122,893.40|||618,719,531.29|||858,896,776.94||||
||||||||||.75||
|Co., Ltd.|||||||||||
|Zhonglian|||||||||||
|Automobile|||||||||1,128,808,363||
||1,086,475,955.72|||147,532,407.57|||105,200,000.00||||
|Electronic Co.,|||||||||.29||
|Ltd.|||||||||||
|Weifu Precision|||||||||||
|Machinery|||||||||||
||55,310,157.90|||4,661,420.22|||||59,971,578.12||
|Manufacturing|||||||||||
|Co., Ltd.|||||||||||
|Shinwell|||||||||||
|Automobile Tech.|7,476,477.77|||-1,250,239.86|||||6,226,237.91||
|(Wuxi) Co., Ltd.|||||||||||
||||||||||4,161,951,827||
|Subtotal|4,356,385,484.79|||769,663,119.22|||964,096,776.94||||
||||||||||.07||
||||||||||4,792,747,311||
|Total|4,976,773,946.74|||780,070,141.67|||964,096,776.94||||
||||||||||.47||

 10. Other equity instrument investment
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Beijing Zhike Industry Investment Holding Group Co., Ltd.|75,940,000.00|75,940,000.00|

||||
|-|-|-|
|Wuxi Xidong Science & Technology Industrial Park Co., Ltd|5,000,000.00|5,000,000.00|
|Wuxi Xichang Microchip Semi-Conductor|100,000,000.00||
|Protean Holdings Corp.||6,148,272.91|
|Total|180,940,000.00|87,088,272.91|

 11. Other non-current financial assets
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Tradable financial assets holding for over one year|368,800,000.00||
|Total|368,800,000.00||

12. Investment real estate
(1) Investment real estate measured by cost
√ Applicable□ Not applicable
In RMB/CNY
||||||
|-|-|-|-|-|
||||Construction in||
|Item|House and Building|Land use right||Total|
||||progress||
|I. Original book value|||||
|1.Opening balance|61,677,335.83|||61,677,335.83|
|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|61,677,335.83|||61,677,335.83|
|II. Accumulated depreciation and accumulated|||||
|amortization|||||
|1.Opening balance|39,771,201.31|||39,771,201.31|
|2.Current increased|774,359.33|||774,359.33|
|(1) Accrual or amortization|774,359.33|||774,359.33|

||||
|-|-|-|
|3.Current decreased|||
|(1) Disposal|||
|(2) Other transfer-out|||
|4.Ending balance|40,545,560.64|40,545,560.64|
|III. Depreciation reserves|||
|1.Opening balance|||
|2.Current increased|||
|(1) Accrual|||
|3. Current decreased|||
|(1) Disposal|||
|(2) Other transfer-out|||
|4.Ending balance|||
|IV. Book value|||
|1. Ending book value|21,131,775.19|21,131,775.19|
|2. Opening book value|21,906,134.52|21,906,134.52|

 (2) Investment real estate measured at fair value
□ Applicable√ Not applicable
(3) Investment real estate without property certification held
Nil
13. Fixed assets
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Fixed assets|2,680,884,221.89|2,707,374,678.61|
|Total|2,680,884,221.89|2,707,374,678.61|

 (1) Fixed assets
In RMB/CNY
|||||||
|-|-|-|-|-|-|
|||Machinery|Transportation|Electronic and other||
|Item|House and Building||||Total|
|||equipment|equipment|equipment||
|I. Original book||||||
|value:||||||

|||||||
|-|-|-|-|-|-|
|1.Opening balance|1,552,720,830.68|2,491,008,841.08|35,760,995.37|506,932,413.54|4,586,423,080.67|
|2.Current||||||
||50,785,697.90|67,996,785.02||27,287,346.56|146,069,829.48|
|increased||||||
|(1) Purchase|27,350.00|2,194,645.89||1,218,137.82|3,440,133.71|
|(2) Construction in||||||
||50,758,347.90|38,117,012.08||25,682,906.08|114,558,266.06|
|progress transfer-in||||||
|(3) Increased by||||||
|||27,685,127.05||386,302.66|28,071,429.71|
|combination||||||
|3.Current||||||
||105,775.86|6,974,597.84|573,529.92|4,326,432.35|11,980,335.97|
|decreased||||||
|(1) Disposal or||||||
|||6,974,597.84|573,529.92|4,326,432.35|11,874,560.11|
|scrapping||||||
|(2) Construction in||||||
|progress transfer to|105,775.86||||105,775.86|
|fixed assets||||||
|4.Ending balance|1,603,400,752.72|2,552,031,028.26|35,187,465.45|529,893,327.75|4,720,512,574.18|
|II. Accumulated||||||
|depreciation||||||
|1.Opening balance|329,964,732.08|1,229,552,990.27|24,745,652.33|240,562,371.27|1,824,825,745.95|
|2.Current||||||
||22,965,941.24|107,544,181.46|1,368,053.76|38,029,254.26|169,907,430.72|
|increased||||||
|(1) Accrual|22,965,941.24|87,891,862.13|1,368,053.76|37,680,059.40|149,905,916.53|
|(2) Increased by||||||
|||19,652,319.33||349,194.86|20,001,514.19|
|combination||||||
|3.Current||||||
||83,749.27|5,091,489.41|475,772.49|2,802,789.50|8,453,800.67|
|decreased||||||
|(1) Disposal or||||||
||83,749.27|5,091,489.41|475,772.49|2,802,789.50|8,453,800.67|
|scrapping||||||
|4.Ending balance|352,846,924.05|1,332,005,682.32|25,637,933.60|275,788,836.03|1,986,279,376.00|
|III. Depreciation||||||
|reserves||||||
|1.Opening balance||46,869,092.62|73,319.90|7,280,243.59|54,222,656.11|
|2.Current||||||
|increased||||||
|(1) Accrual||||||
|3.Current||||||
|||859,429.88||14,249.94|873,679.82|
|decreased||||||
|(1) Disposal or||859,429.88||14,249.94|873,679.82|

|||||||
|-|-|-|-|-|-|
|scrapping||||||
|4.Ending balance||46,009,662.74|73,319.90|7,265,993.65|53,348,976.29|
|IV. Book value||||||
|1. Ending book||||||
||1,250,553,828.67|1,174,015,683.20|9,476,211.95|246,838,498.07|2,680,884,221.89|
|value||||||
|2. Opening book||||||
||1,222,756,098.60|1,214,586,758.19|10,942,023.14|259,089,798.68|2,707,374,678.61|
|value||||||

(2) Temporarily idle fixed assets
Nil
(3) Fixed assets acquired by financing lease
Nil
(4) Fixed assets acquired by operating lease
Nil
(5) Fixed assets without property certification held
In RMB/CNY
||||
|-|-|-|
|Item|Book value|Reasons for without the property certification|
|Boiler room and guard house of Weifu Jinning|2,640,467.55|Still in process of relevant property procedures|
|Plant and office building of Weifu Chang’an|42,607,819.23|Still in process of relevant property procedures|

(6) Disposal of fixed assets
Nil
14. Construction in progress
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Construction in progress|259,557,105.61|166,414,542.18|
|Total|259,557,105.61|166,414,542.18|

(1) Construction in progress
In RMB/CNY
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Item||Impairment|||Impairmentprovision||
||Book balance||Book value|Book balance||Book value|
|||provision|||||
|Weifu Tianli Technical|||||||
||4,285,789.25||4,285,789.25|3,214,458.65||3,214,458.65|
|Transformation Project|||||||
|echnical Transformation|||||||
||125,369,185.24|1,470,033.00|123,899,152.24|62,131,476.77|1,470,033.00|60,661,443.77|
|Project of parent company|||||||
|Technical transformation|||||||
||33,251,718.48||33,251,718.48|64,861,621.60||64,861,621.60|
|of Weifu Autocam|||||||
|Other|100,216,788.26|2,096,342.62|98,120,445.64|39,773,360.78|2,096,342.62|37,677,018.16|
|Total|263,123,481.23|3,566,375.62|259,557,105.61|169,980,917.80|3,566,375.62|166,414,542.18|

 (2) Changes of major construction in progress in the period
In RMB/CNY
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||Proporti|||includin|||
||||||||||Accum||Interes||
|||||||||||g:|||
||||||||||ulated||t||
||B||||Other||on of|Pr||interest|||
|||||Amount|||||amount||capital||
||ud|Opening|Current||decreased||project|og||capitali||Source|
|Item||||transfer-in||Ending balance|||of||ization||
||ge|balance|increased||in the||investme|res||zed||of funds|
|||||fixed assets|||||interest||rate of||
||t||||Period||nt in|s||amount|||
||||||||||capitali||the||
||||||||budget|||of the|||
||||||||||zation||year||
|||||||||||year|||
|Weifu|||||||||||||
|Tianli|||||||||||||
|Technica|||||||||||||
||||||151,724.1||||||||
|l||3,214,458.65|3,132,210.40|1,909,155.66||4,285,789.25||||||Other|
||||||4||||||||
|Transfor|||||||||||||
|mation|||||||||||||
|Project|||||||||||||
|Technica|||||||||||||
|l|||||||||||||
|Transfor||62,131,476.7|106,018,046.|42,780,337.7|||||||||
|||||||125,369,185.24||||||Other|
|mation||7|19|2|||||||||
|Project|||||||||||||
|of parent|||||||||||||
|company|||||||||||||
|Technica|||||||||||||
|||64,861,621.6|23,970,066.5|54,952,720.4|627,249.2||||||||
|l||||||33,251,718.48||||||Other|
|||0|9|6|5||||||||
|transfor|||||||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|mation|||||||||
|of Weifu|||||||||
|Autocam|||||||||
||130,207,557.|133,120,323.|99,642,213.8|778,973.3|||||
|Total|||||162,906,692.97|--|--|--|
||02|18|4|9|||||

(3) The provision for impairment of construction in progress
Nil
(4) Engineering material
Nil
15. Intangible assets
(1) Intangible assets
In RMB/CNY
||||||||
|-|-|-|-|-|-|-|
||||Non-patent|Trademark and|Computer||
|Item|Land use right|Patent||||Total|
||||technology|trademark license|software||
|I. Original book value|||||||
|1.Opening balance|381,203,520.00||3,539,793.05|41,597,126.47|52,996,879.28|479,337,318.80|
|2.Current increased|||317,685.92||3,394,263.76|3,711,949.68|
|(1) Purchase|||||2,756,543.81|2,756,543.81|
|(2) Internal R&D|||||||
|(3) Increased by|||||||
||||317,685.92||637,719.95|955,405.87|
|combination|||||||
|3.Current decreased|||||||
|(1) Disposal|||||||
|4.Ending balance|381,203,520.00||3,857,478.97|41,597,126.47|56,391,143.04|483,049,268.48|
|II. Accumulated|||||||
|amortization|||||||
|1.Opening balance|78,623,510.56||2,625,346.70|9,709,000.00|46,839,738.79|137,797,596.05|
|2.Current increased|4,176,430.34||178,718.30||3,839,922.87|8,195,071.51|
|(1) Accrual|4,176,430.34||176,988.96||3,416,558.52|7,769,977.82|
|(2) Increased by|||||||
||||1,729.34||423,364.35|425,093.69|
|combination|||||||
|3.Current decreased|||||||

|||||||
|-|-|-|-|-|-|
|(1) Disposal||||||
|4.Ending balance|82,799,940.90|2,804,065.00|9,709,000.00|50,679,661.66|145,992,667.56|
|III. Depreciation reserves||||||
|1.Opening balance|||16,646,900.00||16,646,900.00|
|2.Current increased||||||
|(1) Accrual||||||
|3.Current decreased||||||
|(1) Disposal||||||
|4.Ending balance|||16,646,900.00||16,646,900.00|
|IV. Book value||||||
|1. Ending book value|298,403,579.10|1,053,413.97|15,241,226.47|5,711,481.38|320,409,700.92|
|2. Opening book value|302,580,009.44|914,446.35|15,241,226.47|6,157,140.49|324,892,822.75|

 (2) Land use right without property certification held
Nil
16. Goodwill
(1) Original book value of goodwill
In RMB/CNY
||||||
|-|-|-|-|-|
|The invested entity or matters forming|||||
||Opening balance|Current increased|Current decreased|Ending balance|
|goodwill|||||
|Weifu Tianli|1,784,086.79|||1,784,086.79|
|IRD Fuel Cells A/S||53,807,260.21||53,807,260.21|
|Total|1,784,086.79|53,807,260.21||55,591,347.00|

 (2) Impairment provision for goodwill
Nil
Relevant information about the assets group or portfolio goodwill included
①Goodwill of the Weifu Tianli: 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
12.21%, 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 using20%~23% of gross profit margin and9%~15% 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.
②IRD Fuel Cells A/S Goodwill: In 2019, the company established SPV (a wholly-owned subsidiary) in Denmark to acquire a66% stake in Danish IRD Fuel Cells A/S (hereinafter referred to as "IRD") held by FCCTApS., which is equivalent to a total of 7.26 million euros, and CIRO's valuation is 11 million euros; goodwill is the part of the acquisition cost greater than the fair value of the IRD net identifiable assets.
Instructions for goodwill impairments test process and key parameters (such as the forecast period growth rate, stable period growth rate, profit rate, discount rate, and forecast period when estimating the present value of the future cash flow), and the method of confirming the impairment loss of goodwill:
Nil
17. Long-term deferred expenses
In RMB/CNY
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|Current increased|Amortized in the Period|Other decrease|Ending balance|
|Remodeling costs etc.|16,637,652.31|3,766,419.71|1,498,822.02||18,905,250.00|
|Total|16,637,652.31|3,766,419.71|1,498,822.02||18,905,250.00|

 18. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets that are not offset
In RMB/CNY
||||||
|-|-|-|-|-|
||Ending balance||Opening balance||
||||Deductible|Deferred incometax assets|
|Item|Deductible temporary|Deferred income|||
||||temporary||
||difference|tax assets|||
||||difference||
|Bad debt reserve|50,810,260.67|7,783,655.00|44,576,998.51|6,770,470.23|
|Inventory depreciation reserve|191,893,925.45|30,139,509.60|210,088,809.57|32,942,217.43|
|Impairment provision for fixed assets|19,801,699.55|3,186,449.03|20,661,129.43|3,315,363.51|
|Impairment provision for construction in progress|3,566,375.62|534,956.34|3,566,375.62|534,956.34|
|Impairment provision for intangible assets|16,646,900.00|2,497,035.00|16,646,900.00|2,497,035.00|

||||||
|-|-|-|-|-|
|Change of fair value of available-for-sale|||||
||||23,305,227.00|3,495,784.05|
|financial assets|||||
|Impairment provision for other equity instrument|||||
||10,000,000.00|1,500,000.00|||
|investment|||||
|Depreciation reserves of available-for-sale|||||
||||155,994,927.09|23,399,239.06|
|financial asset|||||
|Deferred income|410,876,651.99|61,631,497.80|422,215,782.35|63,332,367.36|
|Internal un-realized profit|61,587,106.96|9,238,066.05|33,204,053.14|6,439,903.29|
|Payable salary, accrued expenses etc.|602,725,422.49|95,239,575.84|539,804,494.87|85,801,436.71|
|Depreciation assets, amortization difference|29,138,524.33|4,748,000.87|53,624,344.54|8,439,877.52|
|Deductible loss of subsidiary|9,677,975.44|2,419,493.86|9,677,975.44|2,419,493.86|
|Change of fair value of derivative financial|||||
||||490,329.13|73,549.37|
|liability|||||
|Total|1,406,724,842.50|218,918,239.39|1,533,857,346.69|239,461,693.73|

 (2) Deferred income tax liabilities that are not offset
In RMB/CNY
||||||
|-|-|-|-|-|
||Ending balance||Opening balance||
|Item|Taxable temporary|Deferred income tax|Taxable temporary|Deferred income tax|
||differences|liabilities|differences|liabilities|
|Asset evaluation increment for|||||
|combination not under the same|12,381,519.47|1,857,227.92|12,751,629.44|1,912,744.40|
|control|||||
|Change of fair value of other|||||
||30,195,948.00|4,529,392.20|||
|creditors’ investment|||||
|Change of fair value of other equity|||||
||31,763,694.33|4,764,554.15|31,763,694.33|4,764,554.15|
|instrument investment|||||
|Total|74,341,161.80|11,151,174.27|44,515,323.77|6,677,298.55|

 (3) Deferred income tax assets and deferred income tax liabilities listed after off-set
In RMB/CNY
||||||
|-|-|-|-|-|
|||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 after|assets and liabilities at|assets or liabilities after|
||assets and liabilities||||
|||off-set|period-begin|off-set|
|Deferred income tax|-4,764,554.15|214,153,685.24|-4,764,554.15|234,697,139.58|

||||||
|-|-|-|-|-|
|assets|||||
|Deferred income tax||6,386,620.12|||
||-4,764,554.15||-4,764,554.15|1,912,744.40|
|liabilities|||||

(4) Details of unrecognized deferred income tax assets
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Bad debt reserve|786,786.19|789,822.60|
|Inventory depreciation reserve|19,846,015.07|19,860,664.11|
|Loss from subsidiary|134,492,349.34|139,281,223.32|
|Impairment provision for fixed assets|33,547,276.74|33,561,526.68|
|Impairment provision for other equity|||
||48,633,106.95|48,633,106.95|
|instrument investment|||
|Total|237,305,534.29|242,126,343.66|

 (5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
In RMB/CNY
|||||
|-|-|-|-|
|Maturity year|Ending amount|Opening amount|Note|
|2019|13,864,159.93|25,671,694.55|Subsidiaries have operating losses|
|2020|44,795,747.87|44,795,747.87|Subsidiaries have operating losses|
|2021|46,080,956.48|46,080,956.48|Subsidiaries have operating losses|
|2022|10,503,882.86|10,503,882.86|Subsidiaries have operating losses|
|2023|4,188,264.45|12,228,941.56|Subsidiaries have operating losses|
|2024|3,249,606.38||Subsidiaries have operating losses|
|Total|122,682,617.97|139,281,223.32|--|

19. Other non-current assets
Whether implemented the new revenue standards
□Yes√No
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Engineering equipment paid in advance|295,639,334.53|251,462,676.27|
|Total|295,639,334.53|251,462,676.27|

20. Short-term borrowings
(1) Category of short-term borrowings
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Debt of honor|321,055,399.28|298,928,213.94|
|Total|321,055,399.28|298,928,213.94|

 Explanation on category of short-term borrowings: nil
(2) Overdue short-term loans without payment
Nil
21. Derivative financial liability
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Derivative financial liability||490,329.13|
|Total||490,329.13|

 22. Note payable
In RMB/CNY
||||
|-|-|-|
|Category|Ending balance|Opening balance|
|Bank acceptance bill|1,591,019,357.36|1,018,367,533.74|
|Total|1,591,019,357.36|1,018,367,533.74|

 Notes expired at year-end without paid was 0.00 Yuan.
23. Account payable
(1) Account payable
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Within one year|2,349,278,569.14|1,957,672,043.76|
|1-2 years|96,290,673.62|10,208,129.49|
|2-3 years|10,696,107.46|7,830,950.08|

||||
|-|-|-|
|Over three years|36,318,708.17|71,625,711.33|
|Total|2,492,584,058.39|2,047,336,834.66|

 (2) Important account payable with account age over one year
Nil
24. Accounts received in advance
Whether implemented the new revenue standards
□Yes√No
(1) Accounts received in advance
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Within one year|51,239,061.80|33,337,169.03|
|1-2 years|935,180.49|6,544,805.44|
|2-3 years|64,130.40|425,759.63|
|Over three years|799,491.98|1,022,123.70|
|Total|53,037,864.67|41,329,857.80|

 (2) Important account received in advance with account age over one year
Nil
(3) Projects that settle without completed from construction contract at period-end
Nil
25. Employee compensation payable
(1) Employee compensation payable
In RMB/CNY
||||||
|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|
|I. Short-term compensation|167,414,050.82|531,926,552.27|549,654,450.68|149,686,152.41|
|II. Post-employment welfare- defined|||||
||32,505,677.48|72,803,533.28|84,157,402.12|21,151,808.64|
|contribution plans|||||

||||||
|-|-|-|-|-|
|III. Dismissed welfare|2,601,561.75|515,426.00|1,863,263.01|1,253,724.74|
|IV. Other welfare due within one|||||
||90,050,000.00||44,085,521.00|45,964,479.00|
|year|||||
|V. Other short-term|||||
|welfare-Housing subsidies,|||||
||19,541,888.19||1,996,132.75|17,545,755.44|
|employee benefits and welfare|||||
|funds|||||
|Total|312,113,178.24|605,245,511.55|681,756,769.56|235,601,920.23|

 (2) Short-term compensation
In RMB/CNY
||||||
|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|
|1. Wages , bonuses, allowances and subsidies|148,435,979.41|428,283,206.11|444,745,192.60|131,973,992.92|
|2. Welfare for workers and staff||32,428,482.17|32,428,482.17||
|3. Social insurance|9,451,627.58|30,400,781.73|33,141,499.65|6,710,909.66|
|Including: Medical insurance|7,681,163.73|25,519,780.88|27,920,811.47|5,280,133.14|
|Work injury insurance|997,896.55|2,276,917.80|2,373,914.26|900,900.09|
|Maternity insurance|772,567.30|2,604,083.05|2,846,773.92|529,876.43|
|4. Housing accumulation fund|658,798.00|33,775,081.00|33,808,788.00|625,091.00|
|5. Labor union expenditure and|||||
||8,867,645.83|7,039,001.26|5,530,488.26|10,376,158.83|
|personnel education expense|||||
|Total|167,414,050.82|531,926,552.27|549,654,450.68|149,686,152.41|

 (3) Defined contribution plans
In RMB/CNY
||||||
|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|
|1. Basic endowment insurance|17,945,666.3|2 59,741,208.52|65,508,569.43|12,178,305.41|
|2. Unemployment insurance|581,515.1|6 1,649,534.04|1,792,887.85|438,161.35|
|3. Enterprise annuity|13,978,496.0|0 11,412,790.72|16,855,944.84|8,535,341.88|
|Total|32,505,677.4|8 72,803,533.28|84,157,402.12|21,151,808.64|

 26. Taxes payable
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|VAT|11,847,039.81|15,332,751.18|
|Corporation income tax|53,460,184.87|48,855,330.99|
|Individual income tax|413,036.74|1,861,196.92|
|City maintaining & construction tax|1,053,237.23|884,819.63|
|Educational surtax|752,312.33|543,438.10|
|Other (including stamp tax and local funds)|5,924,885.67|6,794,077.10|
|Total|73,450,696.65|74,271,613.92|

 27. Other accounts payable
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Interest payable|752,404.25|517,469.08|
|Dividend payable|369,352,725.60||
|Other accounts payable|60,134,191.62|63,931,254.44|
|Total|430,239,321.47|64,448,723.52|

 (1) Interest payable
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Long-term borrowing interest for installment|90,312.50|90,312.50|
|Interest payable for short-term loans|662,091.75|420,478.58|
|Other||6,678.00|
|Total|752,404.25|517,469.08|

 Major overdue interest: nil
(2) Dividend payable
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Ordinary stock dividends|369,352,725.60||
|Total|369,352,725.60||

Other explanation, including important dividend payable over one year without payment, disclose reasons for un-paid: Nil
(3) Other accounts payable
1) Other accounts payable by nature
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Deposit and margin|23,589,117.50|18,680,843.00|
|Social insurance and reserves funds that withholding|7,786,440.63|7,682,496.48|
|Intercourse funds of unit|25,512,145.98|30,982,145.98|
|Other|3,246,487.51|6,585,768.98|
|Total|60,134,191.62|63,931,254.44|

 2) Significant other payable with over one year age
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Reasons for non-repayment or carry-over|
|Nanjing Jidian Industrial Group Co., Ltd.|4,500,000.00|Intercourse funds|
|Total|4,500,000.00|--|

28. Non-current liabilities due within one year
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Long-term loans due within one year|15,000,000.00|15,000,000.00|
|Total|15,000,000.00|15,000,000.00|

 29. Long-term loans
(1) Category of long-term loans
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Guaranteed loan|22,500,000.00|30,000,000.00|
|Total|22,500,000.00|30,000,000.00|

 30. Long-term account payable
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Long-term account payable|16,818,181.00|17,157,272.00|

||||
|-|-|-|
|Special accounts payable|18,265,082.11|18,265,082.11|
|Total|35,083,263.11|35,422,354.11|

 (1) Long-term account payable by nature
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Hi-tech Branch of Nanjing Finance Bureau(note①)|1,140,000.00|1,140,000.00|
|Hi-tech Branch of Nanjing Finance Bureau(note②)|1,250,000.00|1,250,000.00|
|Hi-tech Branch of Nanjing Finance Bureau(note③)|1,230,000.00|1,230,000.00|
|Loan transferred from treasury bond (note④)|678,181.00|1,017,272.00|
|Hi-tech Branch of Nanjing Finance Bureau(note⑤)|2,750,000.00|2,750,000.00|
|Hi-tech Branch of Nanjing Finance Bureau(note⑥)|1,030,000.00|1,030,000.00|
|Hi-tech Branch of Nanjing Finance Bureau(note⑦)|960,000.00|960,000.00|
|Hi-tech Branch of Nanjing Finance Bureau(note⑧)|5,040,000.00|5,040,000.00|
|Hi-tech Branch of Nanjing Finance Bureau(note⑨)|2,740,000.00|2,740,000.00|
|Total|16,818,181.00|17,157,272.00|

 Other explanation
note①: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.
note②: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.
note③: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.
note④:Loan transferred from treasury bond: Weifu Jinning received RMB1.87 million Yuan of special funds from budget of the central government, and RMB1.73 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.
note⑤: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.
note⑥: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.
note⑦: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 less than 15 years, financial supporting capital will be reimbursed.
note⑧: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.
note⑨: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
In RMB/CNY
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|Cause|
|Removal compensation of||||||
||18,265,082.11|||18,265,082.11||
|subsidiary Weifu Jinning||||||
|Total|18,265,082.11|||18,265,082.11|--|

 Other explanation
In line with regulation of the house acquisition decision ofPeople’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, RMB 19.7067 million in total are compensate, including operation losses from lessee RMB 1.4416 million in total. The above compensation was received in last period and is making up for the losses from lessee, and the above lands and property have not been collected up to 30 June 2019.
31. Long-term employee compensation payable
(1) Long-term employee compensation payable
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|II. Dismiss welfare|10,716,412.43|10,716,412.43|
|III. Other long-term welfare|63,962,762.93|63,962,762.93|
|Total|74,679,175.36|74,679,175.36|

 (2) Change of defined benefit plans
Nil
32. Deferred income
In RMB/CNY
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|Cause|
|Government grants|425,769,854.13|2,428,000.00|12,779,779.24|415,418,074.89|Financial allocation received|
|Total|425,769,854.13|2,428,000.00|12,779,779.24|415,418,074.89|--|

Item with government grants involved:
In RMB/CNY
||||||||||
|-|-|-|-|-|-|-|-|-|
||||Amount|Amount|Cost||||
|||||||||Assets|
|||New grants|reckoned in|reckoned into|reductio|Other|||
|Liability|Opening balance||||||Ending balance|related/Incom|
|||in the Period|non-operatio|other income|n in the|changes|||
|||||||||e related|
||||n revenue|in the period|period||||
|Industrialization|||||||||
|project for|||||||||
|injection VE|||||||||
|pump system with|||||||||
|electronically|2,884,001.16||||||2,884,001.16|Assets related|
|controlled high|||||||||
|pressure for|||||||||
|less-emission|||||||||
|diesel used|||||||||
|Appropriation on|||||||||
|reforming of|||||||||
|production line|||||||||
|technology and|||||||||
|R&D ability of|7,100,000.00||||||7,100,000.00|Assets related|
|common rail|||||||||
|system for diesel|||||||||
|by distributive|||||||||
|high-voltage|||||||||
|Fund of industry|60,400,000.00||||||60,400,000.00|Income|

||||||
|-|-|-|-|-|
|upgrade(2012)||||related|
|Fund of industry||||Income|
||60,520,000.00||60,520,000.00||
|upgrade(2013)||||related|
|Appropriation on|||||
|central basic|||||
||2,142,857.16||2,142,857.16|Assets related|
|construction|||||
|investment|||||
|R&D and|||||
|industrialization|||||
|of the high|||||
|pressure variable|||||
|pump of the|8,413,809.44||8,413,809.44|Assets related|
|common rail|||||
|system of diesel|||||
|engine for|||||
|automobile|||||
|Research institute|||||
|of motor vehicle|||||
|exhaust|2,472,471.21||2,472,471.21|Assets related|
|aftertreatment|||||
|technology|||||
|Fund of industry||||Income|
||36,831,000.00||36,831,000.00||
|upgrade(2014)||||related|
|New-built assets|||||
|compensation||11,339,130.3|||
||147,575,675.52||136,236,545.16|Assets related|
|after the removal||6|||
|of parent company|||||
|Fund of industry||||Income|
||40,000,000.00||40,000,000.00||
|upgrade(2016)||||related|
|Guiding capital|||||
|for the technical|||||
|reform from State|9,740,000.00||9,740,000.00|Assets related|
|Hi-Tech Technical|||||
|Commission|||||
|Implementation of|||||
|the variable|||||
|cross-section|10,908,721.03||10,908,721.03|Assets related|
|turbocharger for|||||
|diesel engine|||||
|Demonstration|||||
||1,450,030.10||1,450,030.10|Assets related|
|project for|||||

|||||||
|-|-|-|-|-|-|
|intelligent||||||
|manufacturing||||||
|Other|35,331,288.51|2,428,000.00|1,440,648.88|36,318,639.63|Assets related|
||||12,779,779.2|||
|Total|425,769,854.13|2,428,000.00||415,418,074.89||
||||4|||

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 RMB 6.35 million in 2009, RMB 4.775 million received in 2010 and RMB 0.875 million received in 2011. According to the contract, the attendance date of this project was: from October of 2009 to March of 2012. This contract agreed62% 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 RMB 4,789,997.04 with income related was reckoned into current operation revenue directly; the RMB 7,210,002.96 with assets related was amortized during the predicted service period of the assets, and RMB 721,000.30 amortized in the Period.
(2) The appropriation for research and development ability of distributive high-pressure common rail system for diesel engine use and production line technological transformation project: according to XCJ No.[2010] 59, the Company has received special funds of 7.1 million Yuan appropriated by Finance Bureau of Wuxi New District in 2011 and used for theCompany’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.
(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 appropriation belongs to the government grants
with assets related and will amortized according to relevant assets depreciation.
(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 RMB 3 million in 2014 and RMB 0.45 million in 2015; and belongs to government grant with assets concerned, and shall be amortized according to the depreciation process.
(7) Research institute of motor vehicle exhaust after-treatment technology: 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.
(8) Fund of industry upgrade(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 11,339,130.36 Yuan amortize in the year.
(10) Fund of industry upgrade(2016): In accordance with the document Xi Xin Guan Jing Fa[2016] No.585 and Xi Xin Fa[2016] No.70, the Company received funds of 40 million Yuan appropriated for industry upgrading in 2016.
(11) Guiding capital for the technical reform from State Hi-Tech Technical Commission: In accordance with the document Xi Jing Xin ZH[2016] No.9 and Xi Cai GM[2016] No.56, the Company received a 9.74 million Yuan for the guiding capital of technical reform (1st batch) from Wuxi for year of 2016, which included in the government subsidy with assets-concerned, and will amortized according to the depreciation process after acceptance
(12) Implementation of the variable cross-section turbocharger for diesel engine: In accordance with the document YCZFa[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.
(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 WeifuLeader’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.
33. Share capital
In RMB/CNY
|||||||||
|-|-|-|-|-|-|-|-|
|||Change during the year(+,-)||||||
||Opening balance|New shares||Shares transferred|Other||Ending balance|
||||Bonus share|||Subtotal||
|||issued||from capital reserve||||
|Total shares|1,008,950,570.00||||||1,008,950,570.00|

 34. Capital reserve
In RMB/CNY
||||||
|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|
|Capital premium(Share capital premium)|3,370,828,806.22|||3,370,828,806.22|
|Other capital reserve|45,193,988.92|||45,193,988.92|
|Total|3,416,022,795.14|||3,416,022,795.14|

 Other explanation, including changes in the period and reasons for changes: nil
35. Other comprehensive income
In RMB/CNY
||||||||||
|-|-|-|-|-|-|-|-|-|
|||Current period|||||||
||||Less:|Less:|||||
||||written in|written in|||||
||||other|other|||||
||Openi||||||||
||||comprehen|comprehe|||||
|||Account|||Less :||Belong to||
|Item|ng||sive|nsivei||Belong to||Ending|
|||before|||ncome||minority||
||balanc||income in|income in||parent company||balance|
|||income tax|||tax||shareholders||
||e||previous|previouse||after tax|||
|||in the year|||xpense||after tax||
||||period and|period and|||||
||||carried|carried|||||
||||forward to|forward to|||||
||||gains and|retained|||||

||||||||
|-|-|-|-|-|-|-|
|||losses in|earnings in||||
|||current|current||||
|||period|period||||
|II. Other comprehensive income items||||261,591.54|||
|which will be reclassified subsequently|271,537.20||||9,945.66|261,591.54|
|to profit or loss|||||||
|Translation reserve|271,537.20|||261,591.54|9,945.66|261,591.54|
|Total other comprehensive income|271,537.20|||261,591.54|9,945.66|261,591.54|

 36. Reasonable reserve
In RMB/CNY
||||||
|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|
|Safety production costs|1,618,490.50|9,658,567.54|8,741,397.35|2,535,660.69|
|Total|1,618,490.50|9,658,567.54|8,741,397.35|2,535,660.69|

 37. Surplus reserve
In RMB/CNY
||||||
|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|
|Statutory surplus reserves|510,100,496.00|||510,100,496.00|
|Total|510,100,496.00|||510,100,496.00|

 38. Retained profit
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last period|
|Retained profits at the end of last period before adjustment|10,996,945,870.13|9,811,609,138.92|
|Total retained profit at beginning of the adjustment (+ for increased,|||
||-19,809,442.95||
|-for decreased)|||
|Retained profits at the beginning of the period after adjustment|10,977,136,427.18|9,811,609,138.92|
|Add: The net profits belong to owners of patent company of this period|1,256,661,577.09|2,396,077,415.21|
|Common dividend payable|1,210,740,684.00|1,210,740,684.00|
|Impact earnings from other equity instrument investment disposal|36,147,694.44||
|Retained profit at period-end|11,059,205,014.71|10,996,945,870.13|

 Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retained
profits at the beginning of the period amounting to 0 Yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 19,809,442.95 Yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan. 5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan
39.Operating income and cost
In RMB/CNY
||||||
|-|-|-|-|-|
||Current period||Last Period||
|Item|||||
||Income|Cost|Income|Cost|
|Main operating|4,133,178,892.36|3,179,484,258.13|4,725,759,054.05|3,682,028,566.53|
|Other business|270,265,453.69|225,902,246.31|235,042,836.94|207,561,723.16|
|Total|4,403,444,346.05|3,405,386,504.44|4,960,801,890.99|3,889,590,289.69|

 Whether implemented the new revenue standards
□Yes√No
40. Operating tax and extras
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|City maintaining & construction tax|12,840,319.07|15,131,214.76|
|Educational surtax|9,260,002.10|10,807,786.47|
|Property tax|7,976,886.64|7,130,285.13|
|Land use tax|3,000,765.60|3,243,530.28|
|Vehicle use tax|5,540.64|24,297.00|
|Stamp duty|1,349,389.57|1,578,877.86|
|Other taxes|101,668.04|84,360.90|
|Total|34,534,571.66|38,000,352.40|

 41. Sales expenses
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|Salary and fringe benefit|26,545,495.48|23,852,704.11|
|Consumption of office materials and business travel charge|5,902,212.14|5,767,944.92|
|Transportation charge|13,044,708.75|19,146,343.03|
|Warehouse charge|2,516,917.39|3,241,966.63|
|Three-guarantee fee|39,932,538.62|40,015,843.08|

||||
|-|-|-|
|Business entertainment fee|9,328,770.85|8,251,206.32|
|Other|7,000,004.17|6,071,551.76|
|Total|104,270,647.40|106,347,559.85|

 42. Administration expenses
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|Salary and fringe benefit|134,821,395.41|94,992,042.41|
|Depreciation charger and long-term assets amortization|17,239,939.30|24,091,878.82|
|Consumption of office materials and business travel charge|5,392,838.23|7,840,515.40|
|Incentive fund|35,940,000.00|64,279,800.00|
|Other|117,515,807.49|45,335,174.00|
|Total|310,909,980.43|236,539,410.63|

 43.R&D expenses
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|Technological development expenses|180,167,642.16|177,443,968.15|
|Total|180,167,642.16|177,443,968.15|

 44. Financial expenses
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|Interest expenses|9,264,648.42|9,075,955.05|
|Note discount interest expenses|6,867,326.37|409,282.24|
|Saving interest income|-48,416,919.83|-11,684,097.62|
|Gains/losses from exchange|583,881.77|-491,644.75|
|Handling charges|2,208,267.69|913,596.71|
|Total|-29,492,795.58|-1,776,908.37|

 45. Other income
In RMB/CNY
||||
|-|-|-|
|Source|Current period|Last Period|
|Government grants with routine activities concerned|17,632,117.95|14,032,459.71|
|Total|17,632,117.95|14,032,459.71|

 46. Investment income
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|Income of long-term equity investment calculated based on equity|790,465,131.05|968,640,145.91|
|Investment income from holding tradable financial assets|2,287,308.59||
|Investment income from period of holding the financial assets|||
|||3,220,575.00|
|available for sale|||
|Investment income obtained from disposal of financial assets|||
|||17,370,816.75|
|available for sales|||
|Entrust financial income|95,464,240.84|159,801,630.73|
|Total|888,216,680.48|1,149,033,168.39|

 47. Income from change of fair value
In RMB/CNY
||||
|-|-|-|
|Sources|Current period|Last Period|
|Tradable financial assets|30,195,948.00||
|Investment income from disposal of tradable financial|||
||490,329.13||
|assets|||
|Total|30,686,277.13||

48. Credit impairment loss
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|Bad debt loss of other account receivable|-33,433.24||
|Bad debt loss of account receivable|-6,204,357.51||
|Total|-6,237,790.75||

49. Assets impairment loss
Whether implemented the new revenue standards
□Yes√No
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|I. Bad debt losses||-2,192,563.70|
|II. Loss on inventory valuation|-1,500,885.27|2,202,651.08|
|Total|-1,500,885.27|10,087.38|

 50. Income from assets disposal
In RMB/CNY
||||
|-|-|-|
|Sources|Current period|Last Period|
|Income from disposal of non-current assets|5,542,556.91|1,820,229.59|
|Losses from disposal of non-current assets|-434,708.46|-232,044.23|
|Total|5,107,848.45|1,588,185.36|

 51. Non-operating income
In RMB/CNY
|||||
|-|-|-|-|
||||Amount reckoned into current|
|Item|Current period|Last Period||
||||non-recurring gains/losses|
|Government grants|26,547,209.00|3,667,570.46|26,547,209.00|
|Other|997,548.26|213,558.41|997,548.26|
|Total|27,544,757.26|3,881,128.87|27,544,757.26|

 Government grants reckoned into current gains/losses:
In RMB/CNY
||||||||||
|-|-|-|-|-|-|-|-|-|
||Grantingsubject|||Whether the|||||
|||Cause||impact of|||||
||||||Whether|||Assets|
|||of|Nature|subsidies on|||||
|Government grants|||||special|Current period|Last period|related/Incom|
|||distrib|type|the current|||||
||||||subsidies|||e related|
|||ution||profit and|||||
|||||loss|||||
|House land expropriation and|||||||||
|||||||||Income|
|disposal incentives of Weifu||||N|N|26,547,209.00|||
|||||||||related|
|Jinning|||||||||
|||||||||Income|
|Stabilization subsidy in Wuxi||||N|N||967,170.46||
|||||||||related|
|||||||||Income|
|Patent funding||||N|N||621,500.00||
|||||||||related|
|Funds for the intelligent|||||||||
|||||N|N||1,340,000.00|Income|
|transformation project of common|||||||||

|||||||
|-|-|-|-|-|-|
|rail pump production in Huishan|||||related|
|District||||||
|Reward for the high-tech||||||
|enterprise identification in|||||Income|
||N|N||500,000.00||
|management committee of|||||related|
|Jiangbei District||||||
|Discount reward for imported|||||Income|
||N|N||103,000.00||
|equipment|||||related|
|Employment subsidy from||||||
||||||Income|
|Employment Administration|N|N||86,520.00||
||||||related|
|Service of Ningbo City||||||
|Special funds for 333 high-end|||||Income|
||N|N||30,000.00||
|personnel training|||||related|
||||||Income|
|Other|N|N||19,380.00||
||||||related|
|Total|||26,547,209.00|3,667,570.46||

52. Non-operating expense
In RMB/CNY
|||||
|-|-|-|-|
||||Amount reckoned into current|
|Item|Current period|Last Period||
||||non-recurring gains/losses|
|Donations|43,500.00||43,500.00|
|Non-current assets disposal||||
||180,170.75|167,094.34|180,170.75|
|losses||||
|Including: fixed assets disposal||||
||180,170.75|167,094.34|180,170.75|
|losses||||
|Local fund|2,291,966.58|2,015,771.73||
|Other|115,815.69|145,006.31|115,815.69|
|Total|2,631,453.02|2,327,872.38|339,486.44|

 53. Income tax expense
(1) Income tax expense
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|Payable tax in current period|52,525,690.93|102,952,291.92|
|Adjusted the previous income tax|3,839,633.55|-603,416.68|

||||
|-|-|-|
|Increase/decrease of deferred income tax assets|20,543,454.34|633,939.20|
|Increase/decrease of deferred income tax liability|4,473,875.72|-55,516.48|
|Total|81,382,654.54|102,927,297.96|

 (2) Adjustment on accounting profit and income tax expenses
In RMB/CNY
|||
|-|-|
|Item|Current period|
|Total profit|1,356,485,347.77|
|Income tax measured by statutory/applicable tax rate|203,472,802.17|
|Impact by different tax rate applied by subsidies|1,632,000.65|
|Adjusted the previous income tax|3,839,633.55|
|Impact by non-taxable revenue|-122,975,551.11|
|Impact by the deductible losses of the un-recognized previous deferred income tax|-3,707,613.33|
|The deductible temporary differences or deductible losses of the un-recognized deferred income||
||1,564,899.02|
|tax assets in the Period||
|Other|-2,443,516.40|
|Income tax expense|81,382,654.54|

 54. Other comprehensive income
Found more in Note -35
55. Items of ash flow statement
(1) Other cash received in relation to operation activities
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|Interest income from cash in bank|49,585,253.17|12,485,826.79|
|Government grants|33,827,547.71|8,212,570.46|
|Other|2,362,693.88|181,546.85|
|Total|85,775,494.76|20,879,944.10|

 (2) Other cash paid in relation to operation activities
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|Cash cost|158,648,871.84|147,328,558.66|
|Other|10,439,746.86|6,641,913.18|
|Total|169,088,618.70|153,970,471.84|

 (3) Cash received from other investment activities
Nil
(4) Cash paid related with investment activities
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|Borrowings paid to Baodun (Tianjin) Electro-mechanical||10,000,000.00|
|Borrowings paid to Wuhan Troowin|24,000,000.00||
|Total|24,000,000.00|10,000,000.00|

 (5) Other cash received in relation to financing activities
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|The borrowings/loans received by Weifu Leader from Wuxi|||
|||5,470,000.00|
|Industry Group|||
|Total||5,470,000.00|

 (6) Cash paid related with financing activities
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|Borrowings/loans paid to Industry Group by Weifu Leader|5,470,000.00||
|National debt paid transfer to loans|339,091.00|339,091.00|
|Total|5,809,091.00|339,091.00|

 56. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
In RMB/CNY
||||
|-|-|-|
|Supplementary information|Current period|Last Period|
|1. Net profit adjusted to cash flow of operation activities:|--|--|
|Net profit|1,275,102,693.23|1,577,947,078.01|
|Add: Assets impairment provision|7,738,676.02|-10,087.38|
|Depreciation of fixed assets, consumption of oil assets and depreciation of|||
||150,680,275.86|142,796,801.99|
|productive biology assets|||
|Amortization of intangible assets|7,769,977.82|8,927,389.15|
|Amortization of long-term deferred expenses|1,498,822.02|1,093,846.42|
|Loss from disposal of fixed assets, intangible assets and other long-term|||
||-5,107,848.45|-1,588,185.36|
|assets(gain is listed with “-”)|||
|Losses on scrapping of fixed assets (gain is listed with “-”)|180,170.75|167,094.34|
|Gain/loss of fair value changes (gain is listed with “-”)|-30,686,277.13||
|Financial expenses (gain is listed with “-”)|8,918,152.92|8,265,783.22|
|Investment loss (gain is listed with “-”)|-885,938,793.49|-1,149,683,398.46|
|Decrease of deferred income tax asset( (increase is listed with “-”)|17,047,670.29|633,939.20|
|Increase of deferred income tax liability (decrease is listed with “-”)|-55,516.90|-55,516.48|
|Decrease of inventory (increase is listed with “-”)|9,891,557.33|241,085,663.64|
|Decrease of operating receivable accounts (increase is listed with “-”)|-802,107,175.59|-606,831,311.20|
|Increase of operating payable accounts (decrease is listed with “-”)|934,171,985.46|154,832,323.82|
|Other|1,219,538.11|1,342,269.57|
|Net cash flows arising from operating activities|690,323,908.25|378,923,690.48|
|2. Material investment and financing not involved in cash flow|--|--|
|3. Net change of cash and cash equivalents:|--|--|
|Balance of cash at period end|2,596,327,132.26|2,842,510,815.26|
|Less: Balance of cash equivalent at year-begin|2,404,674,139.49|2,948,439,354.22|
|Net increase of cash and cash equivalents|191,652,992.77|-105,928,538.96|

 (2) Net cash payment for the acquisition of a subsidiary in the period
In RMB/CNY
|||
|-|-|
||Amount|
|Cash and cash equivalent paid in the period for enterprise combination occurred in the period|54,936,420.00|
|Including:|--|
|Less: Cash and cash equivalent held by subsidiary on purchasing date|5,005,683.38|
|Including:|--|

|||
|-|-|
|Add: Cash and cash equivalent paid in the period for enterprise combination occurred previous|0.00|
|Including:|--|
|Net cash paid for subsidiary obtained|49,930,736.62|

 (3) Net cash received from the disposal of subsidiaries
Nil
(4) Constitution of cash and cash equivalent
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|I. Cash|2,596,327,132.26|2,404,674,139.49|
|Including: Cash on hand|71,791.03|194,161.03|
|Bank deposit available for payment at any time|2,596,255,341.25|2,404,479,978.46|
|I. Balance of cash and cash equivalents at the period-end|2,596,327,132.26|2,404,674,139.49|

 57. Note of the changes ofowners’ equity
Explain the items and amount at period-end adjusted for “Other” at end of the last year: nil
58. Assets with ownership or use right restricted
In RMB/CNY
||||
|-|-|-|
|Item|Ending book value|Restriction reason|
|Monetary funds|52,783,679.85|A deposit paid for issuing a bank acceptance bill|
|Note receivable|762,571,527.45|Notes pledge for bank acceptance|
|Monetary funds|158,280.00|A deposit paid for issuance of a letter of guarantee|
|Monetary funds|38,774,365.26|Sales of equity of Protean Holdings Corp.|
|Monetary funds|1,655,119.95|Court freeze|
|||In accordance with the civil ruling No.(2016)Y03MC2490 and No.(2016)|
|||Y03MC2492 of Guangdong Shenzhen Intermediate People's Court , the property|
|Tradable financial||with the value of 217 million Yuan under the name of the Company and other seven|
||141,199,062.12||
|assets||respondents and the third party Shenzhen Hejun Chuangye Holdings Co., Ltd. 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|997,142,034.63|--|

59. Item of foreign currency
(1) Item of foreign currency
In RMB/CNY
|||||
|-|-|-|-|
|Item|Closing balance of foreign currency|Rate of conversion|Ending balance of RMB converted|
|Monetary funds|--|--||
|Including: USD|26,561,237.88|6.8747|182,600,542.05|
|EUR|1,738,513.85|7.817|13,589,962.77|
|HKD|7,313.34|0.8797|6,433.55|
|DKK|29,426,919.41|1.0472|30,815,870.01|
|Account receivable|--|--||
|Including: USD|3,330,199.22|6.8747|22,894,120.58|
|EUR|669,678.52|7.8170|5,234,876.99|
|HKD|10,720,574.00|0.8797|9,430,888.95|
|DKK|13,386,058.88|1.0472|14,017,880.86|
|Short-term borrowings|--|--||
|Including: EUR|3,589,023.83|7.8170|28,055,399.28|
|Other account receivable|--|--||
|Including: USD|1,527,205.77|6.8747|10,499,081.51|
|HKD|13,090,182.63|0.8797|11,515,433.66|
|Account payable||--||
|Including: USD|37,466.64|6.8747|257,571.91|
|EUR|336,864.14|7.8170|2,633,266.98|
|HKD|21,899,376.00|0.063816|1,397,530.58|
|DKK|18,440,868.48|1.0472|19,311,277.48|

 (2) Explanation on foreign operational entity, including as for the major foreign operational entity, disclosed main operation place, book-keeping currency and basis for selection; if the book-keeping currency changed, explain reasons
□ Applicable√ Not applicable
60. Hedging
Disclosure of the qualitative and quantitative information on hedging items and related hedging instruments, hedging risks according
to category: nil
61. Government grants
(1) Government grants
In RMB/CNY
|||||
|-|-|-|-|
||||Amount|
||||reckoned in|
|Category|Amount|Item||
||||current|
||||gain/loss|
|Social security subsidy for newly recruited||Social security subsidy for newly recruited||
|college graduates by small and medium-size|95,577.00|college graduates by small and medium-size|95,577.00|
|enterprise in Ningbo City||enterprise in Ningbo City||
|Patent funding|27,150.00|Patent funding|27,150.00|
|Depreciation/amortization compensation for the||Depreciation/amortization compensation for the||
|assets newly established after parent company|11,339,130.36|assets newly established after parent company|11,339,130.36|
|relocated||relocated||
|Intellectual property subsidy|318,000.00|Intellectual property subsidy|318,000.00|
|The first district-level cash subsidy of special||The first district-level cash subsidy of special||
||90,432.00||90,432.00|
|fund for facilitates adjustment in Ningbo City||fund for facilitates adjustment in Ningbo City||
|City-level funding for science and technology||City-level funding for science and technology||
|project from management committee of|32,000.00|project from management committee of|32,000.00|
|high-tech industrial partk in Ningbo City||high-tech industrial partk in Ningbo City||
|Subsidy for quality brand in Ningbo City|30,000.00|Subsidy for quality brand in Ningbo City|30,000.00|
|Industrialization project for injection VE pump||Industrialization project for injection VE pump||
|system with electronically controlled high|721,000.30|system with electronically controlled high|721,000.30|
|pressure for less-emission diesel used||pressure for less-emission diesel used||
|2018 technology development plan and project||2018 technology development plan and project||
||2,000.00||2,000.00|
|funding||funding||
|Tax contribution award in Huishan District|30,000.00|Tax contribution award in Huishan District|30,000.00|
|Subsidy for the intelligent production line of||Subsidy for the intelligent production line of||
|automobile components process in Huishan|293,406.11|automobile components process in Huishan|293,406.11|
|District||District||
|Special funds for technological transformation||Special funds for technological transformation||
||3,740,000.00||3,740,000.00|
|in Wuxi City||in Wuxi City||
|Award for strong quality zone in Xinwu District|50,000.00|Award for strong quality zone in Xinwu District|50,000.00|
|Grants for key laboratory in Wuxi City|35,000.00|Grants for key laboratory in Wuxi City|35,000.00|
|Key laboratory (engineering center) of the||Key laboratory (engineering center) of the||
|pollution control from motor vehicle exhausting|85,000.00|pollution control from motor vehicle exhausting|85,000.00|
|in Jiangsu province||in Jiangsu province||

|||||
|-|-|-|-|
|Supporting funds for technical improvement for||Supporting funds for technical improvement for||
|annual output as 140,000 pieces of packaging||annual output as 140,000 pieces of packaging||
||129,500.00||129,500.00|
|line of catalytic reduction system for||line of catalytic reduction system for||
|commercial vehicles||commercial vehicles||
|Funds for technical improvement for annual||Funds for technical improvement for annual||
|output as 180,000 pieces of catalytic reduction||output as 180,000 pieces of catalytic reduction||
||59,000.00||59,000.00|
|system for commercial vehicles - received in||system for commercial vehicles - received in||
|2015||2015||
|Funds for technical improvement for annual||Funds for technical improvement for annual||
|output as 180,000 pieces of catalytic reduction||output as 180,000 pieces of catalytic reduction||
||57,777.78||57,777.78|
|system for commercial vehicles - received in||system for commercial vehicles - received in||
|2016||2016||
|Funds for the automatic construction of welding||Funds for the automatic construction of welding||
||39,964.69||39,964.69|
|production line machine replacement project||production line machine replacement project||
|Condolence payments of government of the||Condolence payments of government of the||
||20,000.00||20,000.00|
|Huishan District||Huishan District||
|Award for the development of high and new||Award for the development of high and new||
||100,000.00||100,000.00|
|technology||technology||
|Other|337,179.71|Other|337,179.71|
|Total|17,632,117.95|Total|17,632,117.95|

 (2) Government grants rebate
□ Applicable√ Not applicable
62. Other
Nil
VIII. Changes of consolidation scope
1. Enterprise combine not under the same control
(1)Enterprise combine not under the same control occurred in the period
In RMB/CNY
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||||Income of|Net profit of|
|||||||Standard to|purchaser|purchaser|
||Time point for||Ratio of|Acquired|||||
|||Cost of equity|||Purchasing|determine the|from|from|
|Purchaser|equity||equity|way Equity|||||
|||obtained|||date|purchasing|purchasing|purchasing|
||obtained||obtained|obtained way|||||
|||||||date|date to|date to|
||||||||period-end|period-end|
|IRD FuelCells A/S|||||2019-04-23|Subjectasset|6,274,812.54|-3,478,574.45|
||2019-04-23|54,936,420.00|66.00%|Purchasing|||||

||
|-|
|deliverydate|

(2) Combination cost and goodwill
In RMB/CNY
|||
|-|-|
|Combination cost|IRD Fuel Cells A/S|
|--Cash|54,936,420.00|
|Total combination cost|54,936,420.00|
|Less: shares of fair value of identifiable net assets acquired|1,129,159.79|
|Goodwill/merger cost is less than the shares of fair value of identifiable net assets acquired|53,807,260.21|

 Determination method for fair value of the combination cost and contingent consideration and changes:
According to the agreement price confirmed
Main reasons for large goodwill resulted:
In 2019, the company established SPV (a wholly-owned subsidiary) in Denmark to acquire a66% stake in Danish IRD Fuel Cells A/S (hereinafter referred to as "IRD") held by FCCTApS., which is equivalent to a total of 7.26 million euros, and CIRO's valuation is 11 million euros; goodwill is the part of the acquisition cost greater than the fair value of the IRD net identifiable assets.
(3) Identifiable assets and liability on purchasing date under the purchaser
In RMB/CNY
||||
|-|-|-|
||IRD Fuel Cells A/S||
||Fair value on purchasing date|Book value on purchasing date|
|Monetary funds|5,005,683.38|5,005,683.38|
|Account receivable|15,435,805.70|15,435,805.70|
|Inventory|10,402,853.98|10,402,853.98|
|Fixed assets|8,249,263.58|8,249,263.58|
|Intangible assets|484,979.88|484,979.88|
|Long-term deferred expenses|2,862,363.35|2,862,363.35|
|Account payable|40,730,101.70|40,730,101.70|
|Net assets|1,710,848.17|1,710,848.17|
|Less: Minority interests|581,688.38|581,688.38|
|Net assets acquired|1,129,159.79|1,129,159.79|

 Determination method for fair value of the identifiable assets and liabilities:
The book value on the balance sheet
Contingent liability of the purchaser bear during combination: Nil
(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date Whether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control rights in the Period or not
□Yes√No
(5)On purchasing date or period-end of the combination, combination consideration or fair value of identifiable assets and liability for the purchaser are unable to confirm rationally
(6) Other explanation
2. Enterprise combine under the same control
Nil
3. Reverse purchase
Nil
4. Disposal of subsidiaries
Nil
5.Other reasons for consolidation range changed
Nil
6. Other
Nil
IX. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
||||||||
|-|-|-|-|-|-|-|
||Main|||Shareholding ratio|||
|||Registered|||||
|Name of subsidiary|operation||Business nature|||Acquired by|
|||place||Directly|Indirectly||
||place||||||
|Weifu Jinning|Nanjing|Nanjing|Spare parts of|80.00%||Enterprise combine under|

||||||||
|-|-|-|-|-|-|-|
||||internal-combustion|||the same control|
||||engine||||
||||Automobile exhaust|||Enterprise combine under|
|Weifu Leader|Wuxi|Wuxi||94.81%|||
||||purifier, muffler|||the same control|
||||Spare parts of||||
|Weifu Mashan|Wuxi|Wuxi|internal-combustion|100.00%||Investment|
||||engine||||
||||Spare parts of||||
|Weifu Chang’an|Wuxi|Wuxi|internal-combustion|100.00%||Investment|
||||engine||||
|||||||Enterprise combine under|
|Weifu International Trade|Wuxi|Wuxi|Trade|100.00%|||
|||||||the same control|
||||Spare parts of||||
|||||||Enterprise combine not|
|Weifu ITM|Wuxi|Wuxi|internal-combustion|100.00%|||
|||||||under the same control|
||||engine||||
||||Spare parts of||||
|Weifu Schmidt|Wuxi|Wuxi|internal-combustion|66.00%||Investment|
||||engine||||
||||Spare parts of||||
|||||||Enterprise combine not|
|Weifu Tianli|Ningbo|Ningbo|internal-combustion|54.23%|||
|||||||under the same control|
||||engine||||
||||Spare parts of||||
|||||||Enterprise combine not|
|Weifu Autocam|Wuxi|Wuxi|internal-combustion|51.00%|||
|||||||under the same control|
||||engine||||
||||Automobile exhaust||||
|Weifu Leader (Wuhan)|Wuhan|Wuhan|||60.00%|Investment|
||||purifier, muffler||||
||||Automobile exhaust||||
|Weifu Leader(Chongqing)|C hongqing|Chongqing|||100.00%|Investment|
||||purifier, muffler||||
||||Automobile exhaust||||
|Weifu Leader(Nanchang)|Nanchang|Nanchang|||100.00%|Investment|
||||purifier, muffler||||
|||||||Enterprise combine under|
|SPV|Denmark|Denmark||100.00%|||
|||||||the same control|
|IRD Fuel Cells A/S|Denmark|Denmark|Fuel cell components||66.00%|Acquisition|

Explanation on share-holding ratio in subsidiary different from ratio of voting right: nil
Basis of the invested unit control by the Company though holds half or below voting rights; and the invested unit without controls by the Company but with over half voting rights hold:
Explanation on equity method on Wuxi Weifu Electric Drive Tech. Co., Ltd.
The Company holds80% equity of Weifu Electric Drive; board of the Weifu Electric Drive has 5 directors, including 3 appointed by
the Company; as for the important resolution of Weifu Electric Drive, the resolution can only be passed by unanimous vote of all
directors present, according to the above judges, the Company cannot control Weifu Electric Drive, the investment for Electric Drive should be regarded as the investment in joint venture, which shall be accounted by the equity method.
Major structured entity included in consolidate statement: nil
Basis of termination of agent or consignor: nil
(2) Important non-wholly-owned subsidiary
In RMB/CNY
||||||
|-|-|-|-|-|
|Name of|Share-holding|Gains/losses attributable to|Dividend announced to distribute|Ending equity of|
|subsidiary|ratio of minority|minority in the Period|for minority in the Period|minority|
|Weifu Jinning|20.00%|14,876,923.21||209,198,242.07|
|Weifu Schmidt|34.00%|-15,264.15||9,466,515.29|
|Weifu Leader|5.19%|2,153,562.30||86,957,134.33|
|Weifu Tianli|45.77%|1,473,959.13||107,685,585.63|
|Weifu Autocam|49.00%|1,134,650.94||144,760,990.56|
|Total||19,623,831.43||558,068,467.88|

 Explanation on holding ratio different from the voting right ratio for minority shareholders: nil
(3) Main finance of the important non-wholly-owned subsidiary
In RMB/CNY
||||||||
|-|-|-|-|-|-|-|
||Ending balance||||||
|Name of|||||||
||||||Non-current||
|subsidiary|Current assets|Non-current assets|Total assets|Current liabilities||Total liabilities|
||||||liabilities||
|Weifu|||||||
||1,070,400,181.05|325,848,559.23|1,396,248,740.28|297,272,709.50|49,462,676.40|346,735,385.90|
|Jinning|||||||
|Weifu|||||||
||91,597,165.04|48,907,335.05|140,504,500.09|112,265,804.31||112,265,804.31|
|Schmidt|||||||
|Weifu|||||||
||2,793,904,070.68|1,067,554,624.25|3,861,458,694.93|2,174,127,440.73|24,712,370.05|2,198,839,810.78|
|Leader|||||||
|Weifu Tianli|360,273,239.11|213,757,480.69|574,030,719.80|309,722,212.42|38,486,184.05|348,208,396.47|
|Weifu|||||||
||212,762,612.00|315,260,086.73|528,022,698.73|235,328,512.60||235,328,512.60|
|Autocam|||||||
|Total|4,528,937,267.88|1,971,328,085.95|6,500,265,353.83|3,128,716,679.56|112,661,230.50|3,241,377,910.06|

||||||||
|-|-|-|-|-|-|-|
||Opening balance||||||
|Name of|||||||
||||||Non-current||
|subsidiary|Current assets|Non-current assets|Total assets|Current liabilities||Total liabilities|
||||||liabilities||
|Weifu|||||||
||994,953,012.95|342,560,339.76|1,337,513,352.71|313,381,459.40|50,522,767.70|363,904,227.10|
|Jinning|||||||
|Weifu|||||||
||92,342,474.64|48,855,179.90|141,197,654.54|112,913,283.31||112,913,283.31|
|Schmidt|||||||
|Weifu|||||||
||1,958,116,370.10|1,038,234,646.34|2,996,351,016.44|1,343,115,779.10|23,850,612.52|1,366,966,391.62|
|Leader|||||||
|Weifu|||||||
||357,404,441.32|233,476,608.83|590,881,050.15|310,421,704.26|47,838,928.45|358,260,632.71|
|Tianli|||||||
|Weifu|||||||
||242,022,679.84|310,989,080.94|553,011,760.78|262,647,739.06||262,647,739.06|
|Autocam|||||||
|Total|3,644,838,978.85|1,974,115,855.77|5,618,954,834.62|2,342,479,965.13|122,212,308.67|2,464,692,273.80|

 In RMB/CNY
||||||||||
|-|-|-|-|-|-|-|-|-|
||Current period||||Last Period||||
||OperationIncome|||Cash flow||||Cash flow|
|Name of|||Total||||Total||
|||||from|Operation|||from|
|subsidiary||Net profit|comprehensi|||Net profit|comprehensi||
|||||operation|Income|||operation|
||||ve income||||ve income||
|||||activity||||activity|
|Weifu|328,481,669.|75,516,399.5|75,516,399.5|33,455,248.4|345,257,893.|70,230,711.1|70,230,711.1|34,921,442.3|
|Jinning|39|7|7|0|56|8|8|1|
|Weifu|84,285,489.50||||90,961,973.0|||11,277,941.7|
|||-45,675.45|-45,675.45|5,467,884.14||304,135.67|304,135.67||
|Schmidt|||||6|||6|
||1,338,975,87|32,780,686.7|32,780,686.7|116,866,170.|1,589,176,18|76,364,083.4|76,364,083.4|-19,011,866.1|
|Weifu Leader|||||||||
||5.93|7|7|40|8.66|3|3|5|
||185,591,276.52|||37,008,735.0|196,673,863.||||
|Weifu Tianli||3,549,640.03|3,549,640.03|||8,293,196.15|8,293,196.15|-9,491,657.17|
|||||5|48||||
|Weifu|177,929,684.84|||33,593,148.8|234,675,435.|22,670,547.1|22,670,547.1||
|||2,330,164.41|2,330,164.41|||||3,466,284.14|
|Autocam||||7|40|5|5||
||2,115,263,99|114,131,215.|114,131,215.|226,391,186.|2,456,745,35|177,862,673.|177,862,673.|21,162,144.8|
|Total|||||||||
||6.18|33|33|86|4.16|58|58|9|

 (4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group Nil
(5) Financial or other supporting offers to the structured entity included in consolidated financial statement range
Nil
2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights
Nil
3. Equity in joint venture and associated enterprise
(1) Important joint venture and associated enterprise
||||||||
|-|-|-|-|-|-|-|
|||||Shareholding ratio||Accounting|
|||||||treatment on|
||Main||||||
|||Register||||investment for|
|Joint venture or associated enterprise|operation||Business nature||||
|||ed place||Directly|Indirectly|joint venture and|
||place||||||
|||||||associated|
|||||||enterprise|
|I. Joint venture|||||||
|Wuxi Weifu Environment Catalyst|||||||
||Wuxi|Wuxi|Catalyst||49.00%|Equity method|
|Co.,Ltd.|||||||
|Wuxi Weifu Electric Drive Tech. Co., Ltd.|Wuxi|Wuxi|Wheel-hub motor|80.00%||Equity method|
|II. Associated enterprise|||||||
|Bosch Automobile Diesel System Co.,|||Internal-combustion||||
||Wuxi|Wuxi||32.50%|1.50%|Equity method|
|Ltd.|||engine accessories||||
|Zhonglian Automobile Electronic Co.,||Shangha|Internal-combustion||||
||Shanghai|||20.00%||Equity method|
|Ltd.||i|engine accessories||||
|Weifu Precision Machinery|||Internal-combustion||||
||Wuxi|Wuxi||20.00%||Equity method|
|Manufacturing Co., Ltd.|||engine accessories||||
|Shinwell Automobile Tech. (Wuxi) Co.,|||||||
||Wuxi|Wuxi|Automobile components||45.00%|Equity method|
|Ltd.|||||||

Holding shares ratio different from the voting right ratio:
1. Explanation on equity method for calculation of the investment for Weifu Electronic Drive
The company holds80.00% equity of Weifu Electronic Drive; the Board of Directors of Weifu Electronic Drive Board consists of 5 directors, 3 of whom are appointed by the company; Weifu ElectronicDrive’s important board resolutions can only pass the resolution when being unanimously voted by all the present directors. According to this judgment, the company cannot control Weifu Electronic Drive, and its investment should be used as an investment in the joint venture, which adopts equity method for business accounting. 2. Explanation on equity method for calculation of the investment for Shinwell Automobile Tech. (Wuxi) Co., Ltd.
The subsidiary Weifu International Trade holds a45.00% stake in Shinwell Automobile Tech. (Wuxi); the Board of Directors of
Shinwell Automobile Tech. (Wuxi) consists of 5 directors, 2 of whom are appointed by Weifu International Trade.
Has major influence with less20% voting rights hold, or has minor influence with over20%(20% included) voting rights hold: Nil (2) Main financial information of the important joint venture
In RMB/CNY
||||
|-|-|-|
||Ending balance/Current period|Opening balance/Last Period|
||Weifu Environment|Weifu Environment|
|Current assets|2,247,248,921.76|2,524,886,121.93|
|Including: cash and cash equivalents|139,005,591.27|62,820,292.38|
|Non -current assets|306,699,383.10|312,633,597.82|
|Total assets|2,553,948,304.86|2,837,519,719.75|
|Current liabilities|1,348,578,184.48|1,658,404,950.50|
|Non-current liabilities|27,350,000.00|24,735,000.00|
|Total liabilities|1,375,928,184.48|1,683,139,950.50|
|Shareholders’ equity attributable to parent company|1,178,020,120.33|1,154,379,769.25|
|Share of net assets calculated by shareholding ratio|577,229,858.97|565,646,086.93|
|Book value of equity investment in joint ventures|577,229,858.97|565,646,086.93|
|Operation income|1,590,675,320.87|1,864,398,010.43|
|Financial expenses|40,646,719.18|47,189,696.29|
|Income tax expense|4,391,396.50|3,251,620.98|
|Net profit|23,640,351.13|92,057,072.82|
|Total comprehensive income|23,640,351.13|92,057,072.82|

 (3) Main financial information of the important associated enterprise
In RMB/CNY
||||||||
|-|-|-|-|-|-|-|
||Ending balance/Current period|||Opening balance/Last Period|||
||Bosch Diesel|Zhonglian|Weifu Precision|Bosch Diesel|Zhonglian|Weifu Precision|
||System|Automobile|Machinery|System|Automobile|Machinery|
|Current|||||||
||10,553,293,855.65|688,825,448.29|293,992,324.65|10,042,409,061.04|153,125,575.56|281,266,308.21|
|assets|||||||
|Non -current|||||||
||2,621,795,993.79|5,478,754,404.78|147,235,301.51|2,756,104,679.18|5,277,976,705.66|133,470,007.84|
|assets|||||||
|Total assets|13,175,089,849.44|6,167,579,853.07|441,227,626.16|12,798,513,740.22|5,431,102,281.22|414,736,316.05|
|Current|||||||
||5,175,720,137.18|527,845,052.68|141,337,604.50|4,100,048,133.30|2,999,283.95|135,365,421.92|
|liabilities|||||||

||||||||
|-|-|-|-|-|-|-|
|Non-current|||||||
|||2,729,313.74|||2,759,548.45||
|liabilities|||||||
|Total|||||||
||5,175,720,137.18|530,574,366.42|141,337,604.50|4,100,048,133.30|5,758,832.40|135,365,421.92|
|liabilities|||||||
|Attributable|||||||
|to parent|||||||
|company|7,999,369,712.26|5,637,005,486.65|302,709,734.20|8,698,465,606.92|5,425,343,448.82|279,370,894.13|
|shareholders|||||||
|’ equity|||||||
|Share of net|||||||
|assets|||||||
|calculated|||||||
||2,719,785,702.17|1,127,401,097.32|60,541,946.84|2,957,478,306.35|1,085,068,689.76|55,874,178.83|
|by|||||||
|shareholding|||||||
|ratio|||||||
|--Goodwill|267,788,761.35|1,407,265.96||267,788,761.35|1,407,265.96||
|--Unrealized|||||||
|profit of|||||||
||-20,628,815.49||-41,334.69|-18,144,174.02||-34,986.88|
|internal|||||||
|trading|||||||
|--Other|-0.28||-529,034.03|-0.28||-529,034.05|
|Book value|||||||
|of equity|||||||
|investment|2,966,945,647.75|1,128,808,363.29|59,971,578.12|3,207,122,893.40|1,086,475,955.72|55,310,157.90|
|in associated|||||||
|enterprise|||||||
|Operation|||||||
||7,690,808,970.61|11,298,817.88|144,654,208.76|8,713,485,959.51|12,091,114.45|190,093,280.56|
|income|||||||
|Net profit|1,827,071,096.33|737,662,037.83|23,338,840.07|2,076,330,091.90|1,059,760,956.40|34,760,623.80|
|Total|||||||
|comprehensi|1,827,071,096.33|737,662,037.83|23,338,840.07|2,076,330,091.90|1,059,760,956.40|34,760,623.80|
|ve income|||||||
|Dividends|||||||
|received|||||||
|from|||||||
||429,448,388.47|105,200,000.00||303,884,540.74|||
|associated|||||||
|enterprise in|||||||
|the year|||||||

Other explanation
adjustment item for other “-0.28”: the differential tail
(4) Financial summary for non-important Joint venture and associated enterprise
In RMB/CNY
||||
|-|-|-|
||Ending balance/Current period|Opening balance/Last Period|
|Joint venture:|--|--|
|Total book value of investment|53,565,625.43|54,742,375.02|
|Amount based on share-holding ratio|--|--|
|--Net profit|-1,176,749.59||
|--Other comprehensive income|-1,176,749.59||
|Associated enterprise:|--|--|
|Total book value of investment|6,226,237.91|7,476,477.77|
|Amount based on share-holding ratio|--|--|
|--Net profit|-1,250,239.86||
|--Other comprehensive income|-1,250,239.86|54,742,375.02|

 (5) Major limitation on capital transfer ability to the Company from joint venture or associated enterprise Nil
(6) Excess loss occurred in joint venture or associated enterprise
Nil
(7) Unconfirmed commitment with joint venture investment concerned
Nil
(8) Intangible liability with joint venture or associated enterprise investment concerned
Nil
4. Major conduct joint operation
Nil
5. Structured body excluding in consolidate financial statement
Nil
6. Other
Nil
X. Risk related with financial instrument
Main financial instrument of the Company including equity investment, loans, account receivable, 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. Risk management department and financial control department manager and monitor those risk exposure to ensuring the risks are control in a limited range.
1. Credit Risk
Credit risk refers to the one party fails to perform the obligation of the financial instruments, form the other party company mainly face credit risk for financial loss caused by the customer credit risks. In order to prevent the risks, the Company formulated an evaluation system for the newclient’s credit and system to analyze the book credit for regular customer. The evaluation system for the newclient’s credit aims at the new clients, the Company will conduct an background investigation based on the established process, with purpose of determine whether offer credit limit to the client and the amount of the credit and credit terms or not. Whereby, the Company setting a credit limits and credit period for every new client, and such limit is the maximum amount without additional approval. The system to analyze the book credit for regular customer refers to after purchase order received by regular customer, the Company will examine the order amount and outstanding balance, if the total over the credit limit, on the premise of additional approval, sales on account shall be realized, or prepayments for relevant amount shall be required.
Furthermore, as for the sales on account occurred, the Company will guarantee the total credit risks in a controlling range by analyzed and review the monthly report of the risk attention for account receivables.
The maximum credit risk exposure of the Company is the book amount of such financial assets, till end of 30th June 2019, lists of the maximum credit risk exposure of the Company are as:
||||
|-|-|-|
|Item|Amount of merge|Amount of parent company|
|Note receivable|2,319,307,654.58|766,756,661.80|
|Other account receivable -Other account receivable|60,433,069.23|195,451,736.76|

 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 onCompany’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 and HKD, except for the USD, EUR, SF, JPY and HKD carried out for the machinery equipment purchasing of parent company and Autocam, material purchasing of parent company and paying the technical service fee and trademark usage charge and the import and export trading of Weifu International Trade, other main business of the Company are pricing and settle with RMB (Yuan). In consequence of the foreign financial assets and liabilities takes minor ratio in total assets, the Company has small FX risk of the financial instrument, considered by management of the Company.
End as 30 June 2019, except for the follow assets or liabilities listed with foreign currency, assets and liabilities of the Company are carried with RMB
①Foreign currency assets of the Company till end of 30 June 2019:
||||||
|-|-|-|-|-|
||||Ending RMB balance||
|Item|Ending foreign currency balance|Convert rate||Ratio in assets(%)|
||||converted||
|Monetary funds|--|--|||
|Including: USD|26,561,237.88|6.8747|182,600,542.05|0.82%|
|EUR|1,738,513.85|7.8170|13,589,962.77|0.06%|
|HKD|7,313.34|0.8797|6,433.55|0.00%|
|DKK|29,426,919.41|1.0472|30,815,870.01|0.14%|
|Account receivable|--|--|||

||||||
|-|-|-|-|-|
|Including: USD|3,330,199.22|6.8747|22,894,120.58|0.10%|
|EUR|669,678.52|7.8170|5,234,876.99|0.02%|
|HKD|10,720,574.00|0.8797|9,430,888.95|0.04%|
|DKK|13,386,058.88|1.0472|14,017,880.86|0.06%|
|Other account receivable|--|--|||
|Including: USD|1,527,205.77|6.8747|10,499,081.51|0.05%|
|HKD|13,090,182.63|0.8797|11,515,433.66|0.05%|
|Total ratio in assets|--|--||1.35%|

②Foreign currency liability of the Company till end of 31st December 2018:
||||||
|-|-|-|-|-|
||Ending foreign currency||Ending RMB balance||
|Item||Convert rate||Ratio in assets(%)|
||balance||converted||
|Short-term borrowings|--|--|||
|Including: EUR|3,589,023.83|7.8170|28,055,399.28|0.48%|
|Account payable|--|--|||
|Including: USD|37,466.64|6.8747|257,571.91|0.00%|
|EUR|336,864.14|7.8170|2,633,266.98|0.05%|
|JPY|21,899,376.00|0.063816|1,397,530.58|0.02%|
|DKK|18,440,868.48|1.0472|19,311,277.48|0.33%|
|Total ratio in assets|--|--||0.89%|

③Other pricing risk
Classification of the Company held is the equity investments in financial assets available for sale, and such investment can be measured by fair value on balance sheet date, thus, the Company owns a risk of stock market changes.
Furthermore, on the premise of deliberated and approved by the BOD, the Company exercise entrust financing with the self-owned idle capital; therefore, the Company has the risks of collecting no principal due to entrust financial products default. Aims at such risk, the Company formulated a “Management Mechanism of Capital Financing”, and well-defined the authority 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 investmentproduct’s term is up to 3 years in principle; in variety of investment, the Company did not invested 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.
XI. Disclosure of fair value
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) Tradable financial assets|151,261,956.00|||151,261,956.00|
|1.Financial assets measured by fair value and with variation|||||
||151,261,956.00|||151,261,956.00|
|reckoned into current gains/losses|||||
|(2) Equity instrument investment|151,261,956.00|||151,261,956.00|
|Total liability sustaining measured by fair value|151,261,956.00|||151,261,956.00|
|II. Non-persistent measure|--|--|--|--|

 2. Recognized basis for the market price sustaining and non-persistent measured by fair value on first-order
According to relevant requirement of accounting standards, the Company continues to measure the financial assets available for sale-equity instrument investment by fair value on balance sheet date. On 30 June 2019, 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 28 June 2019, the 29 June 2019 and 30 June 2019 are nonworking days.
XII. Related party and related transactions
1. Parent company of the enterprise
|||||||
|-|-|-|-|-|-|
|||||Share-holding ratio||
||||||Voting right ratio on|
|Parent company|Registered place|Business nature|Registered capital|on the enterprise for||
||||||the enterprise|
|||||parent company||

|||||||
|-|-|-|-|-|-|
|Wuxi Industry||Operation of|4720.6710 million|||
||Wuxi|||20.22%|20.22%|
|Group||state-owned assets|Yuan|||

Explanation on parent company of the enterprise
Wuxi Industry Development Group Co., Ltd was solely state-owned enterprise funded and established by Wuxi MunicipalPeople’s Government which mainly took responsibility of authorizing the state-owned assets operation within a certain areas, investment management of significant project, investment and development of manufacturing and services and venture capital in high-tech achievement
Ultimate controller of the Company is State-owned Assets Supervision& Administration Commission of Wuxi Municipality of Jiangsu Province.
2. Subsidiary of the Enterprise
Found more in Note IX. 1.” Equity in subsidiary”
3. Joint venture and associated enterprise
Found more in Note IX.3. “Equity in joint venture and associated enterprise”
Other associated enterprise or joint ventures which has related transaction with the Company in the period or occurred previous: nil 4. Other Related party
|||
|-|-|
|Other related party|Relationship with the Enterprise|
|Robert Bosch Company|Second largest shareholder of the Company|
|Key executive|Director, supervisor and senior executive of the Company|

 5. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
In RMB/CNY
|||||||
|-|-|-|-|-|-|
|||Current period||Whether more than||
||Content of related||Approved|||
|Related party||||the transaction limit|Last Period|
||transaction||transaction limit|||
|||||(Y/N)||
|Weifu Precision||||||
||Goods|12,828,147.72|40,000,000.00|N|22,934,380.54|
|Machinery||||||
|Bosch Diesel System|Goods|8,332,723.32|60,000,000.00|N|29,375,329.74|
|Weifu Environment|Goods|675,657,317.56|2,000,000,000.00|N|946,283,103.47|
|Robert Bosch Company|Goods|66,801,410.90|130,000,000.00|N|62,350,113.72|

Goods sold/labor service providing
In RMB/CNY
|||||
|-|-|-|-|
|Related party|Content of related transaction|Current period|Last Period|
|Weifu Precision Machinery|Goods and labor|661,932.69|2,772,785.47|
|Bosch Diesel System|Goods and labor|1,487,822,558.90|1,600,013,496.75|
|Weifu Environment|Goods and labor|10,231,437.30|28,741,766.37|
|Robert Bosch Company|Goods and labor|309,791,012.66|319,461,744.57|

 (2) Related trusteeship management/contract& entrust management/ outsourcing
Nil
(3) Related lease
As a lessor:
In RMB/CNY
|||||
|-|-|-|-|
|||Lease income recognized in the|Lease income recognized at last|
|Lessee|Assets type|||
|||Period|Period|
|Weifu Environment|Workshop|1,254,028.50|1,254,028.50|

 As a tenant: nil
(4) Related guarantee
Nil
(5) Relatedparty’s borrowed/lending funds
In RMB/CNY
||||||
|-|-|-|-|-|
|Related party|Loan amount|Start date|Maturity|Note|
|Borrowing|||||
|Wuxi Industry Group|5,470,000.00|2018-02-13|2019-02-12|Return by Weifu Leader|
|Funds lent|||||

(6) Relatedparty’s assets transfer and debt reorganization
Nil
(7) Remuneration of key manager
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|Remuneration of key manager|2,570,000.00|2,400,000.00|

 (8) Other related transactions
|||||
|-|-|-|-|
|Item|Related party|Current period|Last Period|
|Purchase of fixed assets|Bosch Diesel System|5,720,900.2|3 42,735.0|
|Technology royalties paid etc.|Robert Bosch Company|1,122,250.3|4 2,805,114.5|
|Technology royalties paid etc.|Bosch Diesel System|1,002,714.7|6|
|Sales of fixed assets|Weifu Environment|10,485,153.2|5|

6. Receivable/payable items of related parties
(1)Receivable item
In RMB/CNY
|||||||
|-|-|-|-|-|-|
|||Ending balance||Opening balance||
|Item|Related party||Bad debtreserve||Bad debt|
|||Book balance||Book balance||
||||||reserve|
|Account receivable|Weifu Precision Machinery|197,525.88||77,477.41||
|Account receivable|Bosch Diesel System|447,801,217.87||420,746,170.76||
|Account receivable|Robert Bosch Company|122,663,619.56||132,830,976.56||
|Other account receivable|Robert Bosch Company|||12,285,081.81||
|Account received in advance|Robert Bosch Company|27,359.50||||
|Account paid in advance|Robert Bosch Company|3,255.11||||
|Account receivable|Weifu Environment|8,491,872.63||1,233,580.22||
|Account received in advance|Weifu Environment|184,592.07||||
|Account paid in advance|Bosch Diesel System|||1,057,272.58||

(2) Payable item
In RMB/CNY
|||||
|-|-|-|-|
|Item|Related party|Ending book balance|Opening book balance|
|Account payable|Weifu Precision Machinery|8,166,482.16|7,941,418.36|
|Account payable|Weifu Environment|518,192,336.60|337,307,634.70|
|Account payable|Bosch Diesel System|12,463,997.06|24,743,403.24|
|Account payable|Robert Bosch Company|21,408,603.28|5,170,470.70|

|||||
|-|-|-|-|
|Accounts received in advance|Robert Bosch Company||754,552.15|
|Account paid in advance|Robert Bosch Company|21,000,000.00||
|Other accounts payable|Wuxi Industry Group||5,476,678.00|
|Account paid in advance|Wuxi Industry Group|48,828.87||

7. Commitments of related party
Nil
8. Other
Nil
XIII. Share-based payment
Nil
XIV. Commitment or contingency
1. Important commitments
Important commitments in balance sheet date
Nil
2. Contingency
(1) Contingency on balance sheet date
Guarantees to subsidiary
||||||||
|-|-|-|-|-|-|-|
|||||||Whether|
||||Guarantee amount||||
||Guarantee|||||guarantee|
|Guarantee provided||Debit bank|(in 10 thousand|Starting from|Terminated dated||
||received|||||implemented or|
||||Yuan)||||
|||||||not (Y/N)|
|WeifuHigh-TechnologyGroup Co., Ltd.|Weifu Tianli|Jiangbei branch ofBank of China inNingbo|3,750.00|2016-11-15|2021-11-10|N|

(2) For the important contingency not necessary to disclosed by the Company, explained reasons
The Company has no important contingency that need to disclosed
XV. Events after balance sheet date
1. Important non adjustment matters
Nil
2. Profit distribution
Nil
3. Sales return
Nil
4. Other events after balance sheet date
Nil
XVI. 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 amount paid by enterprise shall not over the 1/12 of the total salary of last years, amount paid by individual and enterprise shall not over the 1/6 of the total salary of last year, in accordance with theState’s annuity policy, the Company will adjusted the economic benefits in due time, in principle of responding to the economic strength of the
enterprise, the amount paid by the enterprise at current period control in the 8.33 percent of the total salary of last year, specific paying ratio later shall be adjust 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. Discontinued operations
Nil
6. 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:
①the component is able to generate revenues and expenses in routine activities;
②management of the Company is able to assess the operation results regularly, and determine resources allocation and performance evaluation for the component;
③being analyzed, financial status, operation results and cash flow of the components are able to required by the Company
The Company mainly engaged in the manufacture of fuel system of internal combustion engine products, auto components, muffler and purifier etc., based on the product segment, the Company determine three reporting segment as auto fuel injection system, air management system and automotive post processing system. Accounting policy for the three reporting segments are shares the same policy state in Note V
Segment assets exclude financial assets measured by fair value and with variation reckoned into current gains/losses, derivative instruments, dividends receivables, financial products due within one year, financial assets available for sale, long term equity investment and other undistributed assets, since these assets are not related to products operation.
(2) Financial information for reportable segment
In RMB/CNY
||||||||
|-|-|-|-|-|-|-|
|||||Add:|||
||Product segment|Product segment|Product segment|investment/incom|||
|Item|of automobile|of automotive|of air|e measured by|Offset of segment|Total|
||fuel injection|post processing|management|equity, income of|||
||system|system|system|financial products|||
|||||or possession and|||

||||||||
|-|-|-|-|-|-|-|
|||||disposal income,|||
|||||the retained assets|||
|||||or gains/losses as|||
|||||the financial|||
|||||assets available|||
|||||for sale or|||
|||||possession and|||
|||||disposal income|||
|Operating income|2,887,472,034.84|1,338,975,875.93|249,872,942.78||72,876,507.50|4,403,444,346.05|
|Operating cost|2,106,502,659.22|1,184,686,948.46|186,025,785.22||71,828,888.46|3,405,386,504.44|
|Total Profit|409,096,576.45|18,760,424.74|13,369,919.27|916,625,070.62|1,366,643.31|1,356,485,347.77|
|Net profit|359,669,021.43|13,213,081.52|13,099,724.16|889,978,914.91|858,048.78|1,275,102,693.23|
|Total assets||||||22,334,489,303.8|
||9,432,703,846.25|3,130,358,394.74|810,868,051.46|9,964,372,961.66|1,003,813,950.29||
|||||||2|
|Total liabilities|3,531,209,246.64|2,198,839,810.78|469,855,219.61||433,784,945.50|5,766,119,331.53|

 (3) If there are no segment in the Company, or the total assets and liabilities of the segment are un-able to disclosed, explain the reasons
Not applicable
7. Major transaction and events makes influence oninvestor’s decision
Nil
XVII. Principle notes of financial statements of parent company
1. Account receivable
(1) Category of account receivable
In RMB/CNY
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Opening balance|||||
||Book balance||Bad debt reserve|||Book balance||Bad debt reserve|||
|Category|||||Book||||||
|||||Accrual|||||Accrual|Book value|
||Amount|Ratio|Amount||value|Amount|Ratio|Amount|||
|||||ratio|||||ratio||
|Account receivable|||||||||||
|with bad debt|6,800,00||6,800,00|||7,000,000||7,000,000|||
|||0.87%||100.00%|||0.93%||100.00%||
|provision accrual on|0.00||0.00|||.00||.00|||
|a single basis|||||||||||
|Including:|||||||||||
|Including: Account|||||||||||
||6,800,00||6,800,00|||7,000,000||7,000,000|||
|receivable with||0.87%||100.00%|||0.93%||100.00%||
||0.00||0.00|||.00||.00|||
|single significant|||||||||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|amount and|||||||||||
|withdrawal bad debt|||||||||||
|provision on single|||||||||||
|basis|||||||||||
|Account receivable||99.13%|||||||||
|with bad debt|772,349,||5,592,52||766,756,|6745,766,0||3,519,019||742,246,99|
|||||0.72%|||99.07%||0.47%||
|provision accrual on|191.61||9.81||61.8|0 10.32||.33||0.99|
|portfolio|||||||||||
|Including:|||||||||||
|Account receivable||79.21%|||||||||
|with bad debt|617,175,||5,592,52||611,334,|6575,890,7||3,519,019||572,371,75|
|||||0.91%|||76.50%||0.61%||
|provision accrual on|959.31||9.81||04.2|8 71.39||.33||2.06|
|age analysis|||||||||||
||155,173,||||155,422,|0169,875,2||||169,875,23|
|Related party||19.92%|||||22.57%||||
||232.30||||57.5|2 38.93||||8.93|
||779,149,|100.00%|12,392,5||766,756,61.8|6752,766,00 10.32||10,519,01||742,246,99|
|Total|||||||100.00%||1.40%||
||191.61||29.81|||||9.33||0.99|

 Accrual bad debt reserve on single basis: 6,800,000.00 Yuan
In RMB/CNY
||||||
|-|-|-|-|-|
||Ending balance||||
|Item|||||
||Book balance|Bad debt reserve|Accrual ratio|Accrual causes|
|BD bills|6,800,000.00|6,800,000.00|100.00%|Have difficulty in collection|
|Total|6,800,000.00|6,800,000.00|--|--|

Bad debt reserve accrual by portfolio:5,592,529.81 Yuan
In RMB/CNY
|||||
|-|-|-|-|
||Ending balance|||
|Item||||
||Book balance|Bad debt reserve|Accrual ratio|
|Account receivable with bad debt provision|617,175,959.31|||
|||5,592,529.81|0.91%|
|accrual on age analysis||||
|Total|617,175,959.31|5,592,529.81|--|

Explanation on portfolio determines:
Except for the receivables with impairment reserves accrual singly; base on the actual loss ratio of the receivables of previous years, with same or similar credit portfolio, and combining actual condition accrual bad debt reserves
to determined the accrual ratio for bad debt reserves
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable√ Not applicable
By account age
In RMB/CNY
|||
|-|-|
|Account age|Ending balance|
|Within one year(One year included)|610,306,392.05|
|Within 6 months|589,618,490.41|
|6 months to one year|20,687,901.64|
|1-2 years|3,713,401.89|
|2-3 years|625,176.83|
|Over 3 years|2,530,988.54|
|3-4 years|2,530,988.54|
|Total|617,175,959.31|

 (2) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB/CNY
|||||||
|-|-|-|-|-|-|
|||Amount changed in the period||||
|Category|Opening balance||||Ending balance|
|||Accrual|Collected or reversal|Written-off||
|Bad debt reserve of||||||
||10,519,019.33|2,081,075.48|200,000.00|7,565.00|12,392,529.81|
|account receivable||||||
|Total|10,519,019.33|2,081,075.48|200,000.00|7,565.00|12,392,529.81|

 Including major amount bad debt provision that collected or reversal in the period:
In RMB/CNY
||||
|-|-|-|
|Enterprise|Amount collected or reversal|Collection by|
|BD bills|200,000.00|Collected|
|Total|200,000.00|--|

(3) Account receivable actually written-off in the period
In RMB/CNY
|||
|-|-|
|Item|Amount written-off|
|Retail enterprise|7,565.00|

Including major account receivable written-off: nil
(4) Top 5 account receivables at ending balance by arrears party
Total receivables collected by arrears party for the Period amounting to 562,914,456.50 Yuan, takes 72.25 percent in closing balance of the account receivables; 638,572.32 Yuan are accrual correspondingly for bad debt reserves.
(5) Account receivable derecognition due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvement
Nil
2. Other account receivable
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Interest receivable|30,570.83|188,682.78|
|Dividend receivable|517,216,193.24||
|Other account receivable|195,451,736.76|196,660,409.35|
|Total|712,698,500.83|196,849,092.13|

 (1) Interest receivable
1) Category of interest receivable
In RMB/CNY
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Interest receivable from unified loan and return|30,570.83|188,682.78|
|Total|30,570.83|188,682.78|

 2) Significant overdue interest Nil
3) Accrual of bad debt provision
□ Applicable√ Not applicable
(2) Dividend receivable
1) Category of dividend receivable
In RMB/CNY
||||
|-|-|-|
|Item (or invested enterprise)|Ending balance|Opening balance|
|SDEC|610,417.20||
|Guolian Securities Co., Ltd.|903,640.00||
|Zhonglian Electronic|105,200,000.00||
|Bosch Automobile Diesel|410,502,136.04||
|Total|517,216,193.24||

2) Important dividend receivable with account age over one year Nil
3) Accrual of bad debt provision
□ Applicable√ Not applicable
(3) Other account receivable
1) Other account receivable by nature
In RMB/CNY
||||
|-|-|-|
|Nature|Ending book balance|Opening book balance|
|Intercourse funds receivable from units|34,499,081.51||
|Balance of related party in the consolidate scope|148,552,615.72|196,047,735.72|
|Receivable from the tax refund for withholding the B-share|11,515,433.66||
|Staff loans and petty cash|904,908.09|605,473.63|
|Other||7,200.00|
|Total|195,472,038.98|196,660,409.35|

 2) Accrual of bad debt provision
||||||
|-|-|-|-|-|
||Phase I|Phase II|Phase III||
|||Expected credit losses for|Expected credit losses for||
|Bad debt reserve|Expected credit losses|||Total|
|||the entire duration (without|the entire duration (with||
||over next 12 months||||
|||credit impairment occurred)|credit impairment occurred)||
|Current accrual|20,302.22|||20,302.22|
|Balance on Jun. 30, 2019|20,302.22|||20,302.22|

 Major change of book value for the loss impairment in the period
□ Applicable√ Not applicable
By account age
In RMB/CNY
|||
|-|-|
|Account age|Ending balance|
|Within one year(One year included)|20,302.22|
|Within 6 months||
|6 months to one year|20,302.22|
|Total|20,302.22|

3) Bad debt provision accrual, collected or reversal in the period:
Bad debt provision accrual was 20,302.22 Yuan; the amount collected or switches back amounting to 0 Yuan.
4) Other account receivable actually written-off in the period: nil
5) Top 5 other receivables at ending balance by arrears party: nil
In RMB/CNY
|||||||
|-|-|-|-|-|-|
|||||Ratio in total|Ending|
|||||ending|balance|
|Enterprise|Nature|Ending balance|Account age|balance of|of bad|
|||||other|debt|
|||||receivables|reserve|
||Balance of related party in the||Within 6|||
|Wuxi Weifu Chang’an Co., Ltd.||90,000,000.00||46.04%||
||consolidate scope||months|||
||Balance of related party in the||Within 6|||
|Weifu Mashan Pump Glib Co., Ltd.||34,552,615.72||17.68%||
||consolidate scope||months|||
|Wuxi Weifu Schmidt Power System|Balance of related party in the||Within 6|||
|||24,000,000.00||12.28%||
|Spare Parts Co., Ltd.|consolidate scope||months|||
|Troowin Power System Technology|||Within 6|||
||Intercourse funds of unit|24,000,000.00||12.28%||
|Co., Ltd.|||months|||
|Receivable from the tax refund for|Receivable from the tax refund for||Within 6|||
|||11,515,433.66||5.89%||
|withholding the B-share|withholding the B-share||months|||
|Total|--|184,068,049.38|--|94.17%||

6) Account receivable with government grand involved: 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
3. Long-term equity investment
In RMB/CNY
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Item||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Investment for|||||||
||1,548,768,117.88||1,548,768,117.88|1,466,611,689.17||1,466,611,689.17|
|subsidiary|||||||
|Investment for|||||||
|associates and joint|4,088,758,277.53||4,088,758,277.53|4,272,498,737.38||4,272,498,737.38|
|venture|||||||
|Total|5,637,526,395.41||5,637,526,395.41|5,739,110,426.55||5,739,110,426.55|

(1)Investment for subsidiary
In RMB/CNY
||||||||
|-|-|-|-|-|-|-|
||||||Provision for|Ending balance of|
||||Current||||
|The invested entity|Opening balance|Current increased||Ending balance|impairment in the|impairment|
||||decreased||||
||||||period|provision|
|Weifu Jinning|178,639,593.52|||178,639,593.52|||
|Weifu Leader|460,113,855.00|||460,113,855.00|||
|Weifu Mashan|168,693,380.51|||168,693,380.51|||
|Weifu Chang’an|220,902,037.30|||220,902,037.30|||
|Weifu|||||||
||32,849,254.85|||32,849,254.85|||
|International Trade|||||||
|Weifu ITM|167,000,000.00|||167,000,000.00|||
|Weifu Schmidt|50,160,000.00|||50,160,000.00|||
|Weifu Tianli|105,799,100.00|||105,799,100.00|||
|Weifu Autocam|82,454,467.99|||82,454,467.99|||
|SPV||82,156,428.71||82,156,428.71|||
|Total|1,466,611,689.17|82,156,428.71||1,548,768,117.88|||

(2) Investment for associates and joint venture
In RMB/CNY
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Current changes (+,-)|||||||||Endin|
||||||||||||g|
||||||Other|||||||
|||||||Other|||||balan|
|||Additi|Capit|Investment|compreh||Cash dividend|Provisi||||
|||||||equit|||Ot||ce of|
|Enterprise|Opening balance|||||||||Ending balance||
|||onal|al|gain/loss|ensive||or profit|on for||||
|||||||y|||he||impai|
|||invest|reduc|recognized|income||announced to|impair||||
|||||||chan|||r||rment|
|||ment|tion|under equity|adjustme||issued|ment||||
|||||||ge|||||provi|
||||||nt|||||||
||||||||||||sion|
|I. Joint venture||||||||||||
|Wuxi||||||||||||
|Weifu||||||||||||
|Electric||||||||||||
||54,742,375.02|||-1,176,749.59||||||53,565,625.43||
|Drive||||||||||||
|Tech. Co.,||||||||||||
|Ltd.||||||||||||
|Subtotal|54,742,375.02|||-1,176,749.59||||||53,565,625.43||
|II. Associated enterprise||||||||||||

||||||
|-|-|-|-|-|
|Bosch|||||
|Automobi|||||
|le Diesel|3,076,037,410.12|591,431,846.91|821,004,272.08|2,846,464,984.95|
|System|||||
|Co., Ltd.|||||
|Zhonglian|||||
|Automobi|||||
|le|1,086,475,955.72|147,532,407.57|105,200,000.00|1,128,808,363.29|
|Electronic|||||
|Co., Ltd.|||||
|Weifu|||||
|Precision|||||
|Machiner|||||
|y|55,242,996.52|4,676,307.34||59,919,303.86|
|Manufact|||||
|uring Co.,|||||
|Ltd.|||||
|Subtotal|4,217,756,362.36|743,640,561.82|926,204,272.08|4,035,192,652.10|
|Total|4,272,498,737.38|742,463,812.23|926,204,272.08|4,088,758,277.53|

 (3) Other explanation
4. Operating income and cost
In RMB/CNY
||||||
|-|-|-|-|-|
||Current period||Last Period||
|Item|||||
||Income|Cost|Income|Cost|
|Main business|1,895,457,557.71|1,303,140,646.02|2,136,258,034.82|1,533,313,082.59|
|Other business|197,016,902.53|168,830,868.68|178,884,620.31|165,203,440.31|
|Total|2,092,474,460.24|1,471,971,514.70|2,315,142,655.13|1,698,516,522.90|

 Whether implemented the new revenue standards
□Yes√No
5. Investment income
In RMB/CNY
||||
|-|-|-|
|Item|Current period|Last Period|
|Income of long-term equity investment calculated based on cost||62,418,400.00|
|Income of long-term equity investment calculated based on equity|742,463,812.23|894,788,126.54|

||||
|-|-|-|
|Investment income from period of holding the tradable financial assets|2,287,308.59||
|Investment income from period of holding the financial assets available for sale||3,220,575.00|
|Investment income obtained from disposal of financial assets available for sale||17,370,816.75|
|Entrust financial income|95,464,240.84|159,552,310.73|
|Total|840,215,361.66|1,137,350,229.02|

 XVIII. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable□ Not applicable
In RMB/CNY
||||
|-|-|-|
|Item|Amount|Note|
|Gains/losses from the disposal of non-current asset|4,927,677.70||
|Governmental subsidy reckoned into current gains/losses (not including the||含House land expropriation|
|subsidy enjoyed in quota or ration according to national standards, which are|44,179,326.95|and disposal incentives of|
|closely relevant to enterprise’s business)||Weifu Jinning|
|Profit and loss of assets delegation on others’ investment or management|95,464,240.84||
|Held transaction financial asset, gains/losses of changes of fair values from|||
|transaction financial liabilities, and investment gains from disposal of|||
|transaction financial asset, transaction financial liabilities and financial asset|30,686,277.13||
|available for sales, exclude the effective hedging business relevant with|||
|normal operations of the Company|||
|Switch back of provision for depreciation of account receivable and contract|||
||200,000.00||
|assets which was singly taken depreciation test|||
|Other non-operating income and expenditure except for the aforementioned|||
||838,232.57||
|items|||
|Less: Impact on income tax|26,626,210.20||
|Impact on minority shareholders’ equity|7,102,792.64||
|Total|142,566,752.35|--|

Concerning the extraordinary profit (gain)/loss defined byQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable√ Not applicable
2. REO and earnings per share
|||||
|-|-|-|-|
|||Earnings per share||
||Weighted|||
|Profits during report period||Basic earnings per share|Diluted earnings per|
||average ROE|||
|||(RMB/Share)|share (RMB/Share)|
|Net profits belong to common stock stockholders of the||1.25|1.25|
||7.60%|||
|Company||||
|Net profits belong to common stock stockholders of the||||
||6.73%|1.10|1.10|
|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)
□ Applicable√ 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)
□ Applicable√ Not applicable
(3) Explanation on data differences under the accounting standards in and out of China; as for the differences adjustment audited by foreign auditing institute, listed name of the institute
Not applicable
4. Other
Nil
Section XI. Documents available for reference
I. Financial statement carrying the signatures and seals of person in charge of the company, principal of the accounting works and person in charge of accounting organ (accounting Supervisor);
II. Original documents of the Company and manuscripts of public notices that disclosed in the website Juchao (http://www.cninfo.com.cn) designated by CSRC in the report period;
III. Semi-annual report published on China Securities Journal, Securities Times and Hong Kong Commercial Daily during the Period.
BOD of Weifu High-Technology Group Co., Ltd. Chairman:
Chen Xuejun
August 27, 2019