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苏威孚B:2021年年度报告(英文版) 下载公告
公告日期:2022-04-19

无锡威孚高科技集团股份有限公司WEIFU HIGH-TECHNOLOGY GROUP CO., LTD.

ANNUAL REPORT 2021

April 2022

Section I. Important Notice, Contents and InterpretationBoard of Directors, Board of Supervisory, all directors, supervisors and senior executives of WeifuHigh-Technology Group Co., Ltd. (hereinafter referred to as the Company) hereby confirm thatthere are no any fictitious statements, misleading statements, or important omissions carried in thisreport, and shall take all responsibilities, individual and/or joint, for the reality, accuracy andcompletion of the whole contents.Wang Xiaodong, Principal of the Company, Ou Jianbin, person in charger of accounting works andOu Jianbin, person in charge of accounting organ (accounting principal) hereby confirm that theFinancial Report of 2021 Annual Report is authentic, accurate and complete.All directors are attend the Meeting for the Report deliberation.The forward-looking statements with future plans involved in the Report do not constitute asubstantial commitment for investors. Investors and related parties should maintain sufficient riskawareness and investors are advised to exercise caution of investment risks.Main risks that the Company may face in future operation are describes in the “prospects for thefuture development” under the “Management Discussion and Analysis” in the Report, the investorsare advised to check them out.The profit distribution plan that deliberated and approved by the Board Meeting is: based on totalshare capital of 1,008,603,293, distributed 16 yuan (tax included) bonus in cash for every 10-sharehold by all shareholders, 0 share bonus issued (tax included) and no public reserve transfer intoshare capital either.

The Report is prepared in Chinese and English respectively. In the event of any discrepancybetween the two versions, the Chinese version shall prevail.

Contents

Section I. Important Notice, Contents and Interpretation ............................................................. 2

Section II Company Profile and Main Financial Indexes ...... 6

Section III Management Discussion and Analysis ...... 11

Section IV. Corporate Governance ................................................................................................. 42

Section V. Environmental and Social Responsibility .................................................................... 63

Section VI. Important Matters ....................................................................................................... 65

Section VII. Changes in Shares and Particulars about Shareholders ......................................... 74

Section VIII. Preferred Stock .......................................................................................................... 81

Section IX. Corporate Bonds .......................................................................................................... 82

Section X. Financial Report ............................................................................................................ 83

Documents Available for Reference

I. Financial statement carrying the signatures and seals of person in charge of the company, principal of theaccounting works and person in charge of accounting organ (accounting Supervisor);II. Original audit report with the seal of Accounting Firms and Signature and Seal of the CPA;III. Original documents of the Company and manuscripts of public notices that disclosed in the websitedesignated by CSRC in the reporting period;IV. Text of the Annual Report 2021 containing the signature of the legal representative of the Company;V. Place for preparation: Office of the BOD of the Company

Interpretation

ItemsRefers toContents
Company, The Company, WFHTRefers toWEIFU HIGH-TECHNOLOGY GROUP CO., LTD.
Weifu GroupRefers toWuxi Weifu Group Co., Ltd.
Wuxi Industry GroupRefers toWuxi Industry Development Group Co., Ltd.
Robert Bosch, Robert Bosch CompanyRefers toRobert Bosch Co., Ltd, ROBERT BOSCH GMBH
RBCDRefers toRobert Bosch Powertrain Ltd.
WFLDRefers toWUXI WEIFU LIDA CATALYTIC CONVERTER CO., LTD.
WFJNRefers toNANJING WFJN CO., LTD.
WFTTRefers toNINGBO WFTT TURBOCHARGING TECHNOLOGY CO.,LTD.
WFCARefers toWUXI WEIFU CHANG?AN CO.,LTD.
WFMARefers toWUXI WEIFU MASHAN FUEL INJECTION EQUIPMENT CO., LTD.
WFTRRefers toWUXI WEIFU INTERNATIONAL TRADE CO.,LTD.
WFSCRefers toWUXI WEIFU SCHMITTER POWERTRAIN COMPONENTS CO.,LTD.
WFAMRefers toWUXI WFAM PRECISION MACHINERY CO.,LTD.
WFDTRefers toWUXI WEIFU E-DRIVE TECHNOLOGIES CO., LTD.
WFASRefers toWUXI WEIFU AUTOSMART SEATING SYSTEM CO., LTD.
SPVRefers toWeifu Holding ApS
IRDRefers toIRD Fuel Cells A/S
BoritRefers toBorit NV
WFECRefers toWuxi WFECal Catalysts. Co., Ltd.
WFPMRefers toWuxi Weifu Precision Machinery Manufacturing Co., Ltd.
Zhonglian ElectronicsRefers toZhonglian Automobile Electronics Co., Ltd.
Shinwell AutomobileRefers toShinwell Automobile Technology (Wuxi) Co., Ltd.
Guokai MetalRefers toWuxi Guokai Metal Resources Co., Ltd.
CSRCRefers toChina Securities Regulatory Commission
SZSERefers toShenzhen Stock Exchange
Gongzheng TianyeRefers toGongzheng Tianye Certified Public Accountants (Special General Partnership)
The reporting periodRefers toFrom Jan. 1, 2021 to Dec. 31, 2021

Section II Company Profile and Main Financial Indexes

I. Company information

Short form of the stockWFHT, Su Weifu-BStock code000581, 200581
Stock exchange for listingShenzhen Stock Exchange
Name of the Company (in Chinese)无锡威孚高科技集团股份有限公司
Short form of the Company (in Chinese)威孚高科
Foreign name of the Company (if applicable)WEIFU HIGH-TECHNOLOGY GROUP CO.,LTD.
Short form of foreign name of the Company (if applicable)WFHT
Legal representativeWang Xiaodong
Registrations add.No.5 Huashan Road, Xinwu District, Wuxi (production & operation place:1. No.8 Huashan Road, Xinwu District, Wuxi; 2. No.17 Changjiang Road, Xinwu District, Wuxi; 3. No.139 Xixie Road, Xinwu District, Wuxi; 4. No.13 Xinhua Road, Xinwu District, Wuxi)
Code for registrations add214028
Historical changes of registered addressOn May 25, 1994, registered address of the Company changed to “Lot 46, National High-Tech Industrial Development Zone, Wuxi” instead of “No.107, Renmin West Road, Wuxi”; on December 9, 2008, registered address changed to “No.5 Huashan Road, New District, Wuxi” instead of“Lot 46, National High-Tech Industrial Development Zone, Wuxi”; on June 12, 2019, registered address changed to “No.5 Huashan Road, Xiwu District, Wuxi (production & operation place:1. No.8 Huashan Road, Xinwu District, Wuxi; 2. No.17 Changjiang Road, Xinwu District, Wuxi; 3. No.139 Xixie Road, Xinwu District, Wuxi; 4. No.13 Xinhua Road, Xinwu District, Wuxi)”
Offices add.No.5 Huashan Road, Xinwu District, Wuxi
Codes for office add.214028
Company’s Internet Web Sitehttp://www.weifu.com.cn
E-mailWeb@weifu.com.cn

II. Person/Way to contact

Secretary of the BoardRep. of security affairs
NameLiu JinjunXu Kan
Contact add.No.5 Huashan Road, Xinwu District, WuxiNo.5 Huashan Road, Xinwu District, Wuxi
Tel.0510-805059990510-80505999
Fax.0510-805051990510-80505199
E-mailWeb@weifu.com.cnWeb@weifu.com.cn

III. Information disclosure and preparation place

Website of the Stock Exchange where the annual report of the Company disclosedShenzhen Stock Exchange(http://www.szse.cn/)
Media and Website where the annual report of the Company disclosedChina Securities Journal; Securities Times; Hong Kong Commercial Daily and Juchao Website(http://www.cninfo.com.cn)
Preparation place for annual reportOffice of the Board of Directors

IV. Registration changes of the Company

Organization code91320200250456967N
Changes of main business since listing (if applicable)No change
Previous changes for controlling shareholders (if applicable)Controlling shareholder of the Company was Weifu Group before 2009. and in 2019, controlling shareholder changed to Wuxi Industry Group since 31 May 2009 due to the merged of Wuxi Industry Group and Weifu Group. Weifu Group and Wuxi Industry Group were wholly state-owned companies of Wuxi State-owned Assets Supervision & Administration Commission of State Council, therefore, actual controller of the Company turns to Wuxi State-owned Assets Supervision & Administration Commission of State Council.

V. Other relevant information

CPA engaged by the Company

Name of CPAGongzheng Tianye Certified Public Accountants (Special General Partnership)
Offices add. for CPA10/F, No.5 Building, Jiakaicheng Fortune Center, Jingrong 3rd Street, Taihu Xincheng, Binghu District, Wuxi, Jiangsu Province
Signing AccountantsGu Zhi, Zhang Qianqian

Sponsor engaged by the Company for performing continuous supervision duties in reporting period

□ Applicable √ Not applicable

Financial consultant engaged by the Company for performing continuous supervision duties in reporting period

□ Applicable √ Not applicable

VI. Main accounting data and financial indexesWhether the Company is required to retrospectively adjust or restate prior year’s accounting data

□ Yes √ No

20212020Changes in the current year over the previous year (+,-)2019
Operation income (RMB)13,682,426,710.9512,883,826,306.606.20%8,784,356,960.30
Net profit attributable to shareholders of the listed company(RMB)2,575,371,419.802,772,769,377.96-7.12%2,268,026,432.78
Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses(RMB)2,544,559,926.752,089,986,086.1021.75%1,947,408,959.68
Net cash flows arising from operating activities (RMB)627,712,593.41781,811,234.01-19.71%1,048,670,053.23
Basic earnings per share (RMB/Share)2.572.79-7.89%2.25
Diluted earnings per share (RMB/Share)2.572.79-7.89%2.25
Weighted average ROE13.67%15.78%-2.11%13.77%
Year-end of 2021Year-end of 2020Changes at end of the current year compared with the end of previous year (+,-)Year-end of 2019
Total assets (RMB)27,970,858,427.8427,350,695,388.212.27%23,958,348,185.78
Net assets attributable to shareholder of listed company (RMB)19,398,607,689.6518,282,017,990.666.11%16,990,405,136.62

The lower of the company’s net profit before or after deduction of non-recurring profit (gain)/loss for the last three financial years isnegative, and the audit report for the latest year indicates that there is uncertainty about the company’s ability to continue as a goingconcern

□Yes √No

The lower of the net profit before or after deduction of non-recurring profit (gain)/loss is negative

□Yes √No

VII. 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 (InternationalAccounting 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 (InternationalAccounting 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 accountingrules 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 orChinese GAAP (Generally Accepted Accounting Principles) in the period.

VIII. Quarterly main financial index

In RMB

Q 1Q 2Q 3Q 4
Operation income4,700,158,675.544,337,533,080.703,336,372,995.831,308,361,958.88
Net profit attributable to shareholders of the listed company861,572,997.00783,816,490.32484,604,192.65445,377,739.83
Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses932,554,535.06769,666,019.03444,013,803.42398,325,569.24
Net cash flows arising from operating activities-229,541,250.49309,732,859.66429,334,626.03118,186,358.21

Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financialindex disclosed in the company’s quarterly report and semi-annual report

□Yes √ No

IX. Items and amounts of extraordinary(non-recurring) profit (gains)/loss

√Applicable □ Not applicable

In RMB

Item202120202019Note
Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets)-12,350,725.8610,719,959.7728,992,604.71
Governmental grants reckoned into current gains/losses (except for those with normal operation business concerned, and conform to the national policies & regulations and are continuously enjoyed at a fixed or quantitative basis according to certain standards)71,274,511.67146,475,795.2691,170,663.57
Fund possession fees reckoned in current gains/losses that charged to non-financial enterprises1,608,477.64
Profit and loss of assets delegation on others’ investment or management2,425.40271,684,174.09236,832,172.54
Except for the effective hedging operations related to normal business operation of the Company, the gains/losses of fair value changes from holding the trading financial assets and trading financial liabilities, and the investment earnings obtained from disposing the trading financial asset, trading financial liability and financial assets available for sale- 29,889,140.23375,102,546.0024,394,637.95
Switch back of provision for depreciation of account receivable which was singly taken depreciation test8,976,264.093,078,424.431,700,000.00
Other non-operating income and expenditure except for the aforementioned items130,837.12-3,090,715.872,183,276.39
Less: Impact on income tax4,345,456.60116,175,046.4757,345,714.82
Impact on minority shareholders’ equity (post-tax)2,987,222.545,011,845.358,918,644.88
Total30,811,493.05682,783,291.86320,617,473.10--

Specific information on other items of profits/losses that qualified the definition of non-recurring profit(gain)/loss

□Applicable √Not applicable

The Company does not have other items of profits/losses that qualified the definition of non-recurring profit(gain)/loss

Information on the definition of non-recurring profit(gain)/loss that listed in the Q&A Announcement No.1 on Information Disclosurefor Companies Offering Their Securities to the Public --- Extraordinary (non-recurring) Profit(gain)/loss as the recurringprofit(gain)/loss

□Applicable √Not applicable

The Company does not have any non-recurring profit(gain)/loss listed under the Q&A Announcement No.1 on Information Disclosurefor Companies Offering Their Securities to the Public --- Extraordinary (non-recurring) Profit(gain)/loss defined as recurringprofit(gain)/loss

Section III Management Discussion and Analysis

I. Industry of the Company during the reporting period

The Company need to comply with the disclosure requirement on related industry of automobile manufacturing in the ShenzhenStock Exchange Self-Regulatory Guidelines for Listed Companies No.3 - Disclosure of Industry Information

The year 2021 was the convergence of the “Two Centenary Goals” and the beginning of the “14

thFive-Year Plan”,China’s economy continued to recover steadily, and its economic development and pandemic prevention andcontrol maintained its leading position in the world, and the main indicators achieved the expected goals. As astrategic and pillar industry of the national economy, the automobile industry to which the Company belongsstrived to achieve recovery and growth under multiple challenges. In 2021, China’s automobile productionvolume and sales volume were 26.082 million units and 26.275 million units respectively, with production volumeand sales volume increasing by 3.4% and 3.8% respectively over the same period of last year, ending thethree-year downtrend since 2018.

1. Commercial vehicle market

In 2021, the market demand for commercial vehicles in the second half of the year was weaker than the first halfof 2021 due to factors such as the switch of National VI emission standards for heavy-duty diesel vehicles, thewait-and-see consumption brought about by the policy for “light truck with blue license plate”, the sluggish realestate development industry, and the gradual weakening of early-stage policy dividends, the downward pressureon the commercial vehicle market was gradually emerging. In 2021, the production volume and sales volume ofcommercial vehicles were 4.674 million units and 4.793 million units, declined by 10.7% and 6.6% on ayear-on-year basis.From the production and sales of subdivided vehicle models, among the trucks, the number of heavy trucks, lighttrucks and mini trucks decreased significantly, with the largest decrease in heavy trucks; among passengervehicles, the growth of light bus drove the growth of the production and sales of overall buses. In 2021, theproduction volume and sales volume of trucks were 4.166 million units and 4.288 million units, a year-on-yeardecrease of 12.8% and 8.5% respectively, among them, the sales volume of heavy trucks was 1.395 million units,a year-on-year decrease of 13.8%; the sales volume of medium-duty trucks was 179,000 units, a year-on-yearincrease of 12.3%; the sales volume of light trucks was 2.11 million units, a year-on-year decrease of 4.0%; thesales volume of mini-trucks was 605,000 units, a year-on-year decrease of 14.7%. In 2021, the production volumeand sales volume of passenger vehicles were 508,000 units and 505,000 units, a year-on-year increase of 12.2%and 12.6% respectively, among them, 48,000 large-sized buses were sold, a year-on-year decrease of 15.4%;46,000 medium-sized buses were sold, a year-on-year decrease of 3.1%; and 411,000 light buses were sold, ayear-on-year increase of 19.4%.In 2021, the commercial vehicle market was still dominated by traditional fuels, with diesel vehicles and gasolinevehicles accounting for 69.02% and 26.15% of the annual commercial vehicle market, respectively. New energy

vehicles (pure electric, plug-in hybrid, fuel cell) only accounted for about 3.51%, and other alternative fuelvehicles only accounted for a negligible 0.05%, which was still a niche choice. Pure electric commercial vehiclesaccounted for the highest proportion, reaching 3.4%; the fuel gas vehicles accounted for 1.26% in the commercialvehicle market in 2021.

2. Passenger car market

In 2021, the passenger car market showed substantial growth since the beginning of the year due to a low base. Inthe middle of the year, it declined due to the shortage of chip, and the market stabilized again in the fourth quarteras the supply of chip eased. At the same time, with the gradual increase in the income level of residents, China’sautomobile market presented a clear trend of consumption upgrading. In 2021, the production volume and salesvolume of passenger vehicles were 21.408 million units and 21.482 million units respectively, a year-on-yearincrease of 7.1% and 6.5% respectively, an increase of 3.7% and 2.7% higher than the industry growth.

3. New energy vehicle market

In 2021, the production volume and sales volume of new energy vehicles were 3.545 million units and 3.521million units respectively, an increase of 1.6 times on a year-on-year basis, and the market penetration rate was

13.4%, an increase of 8 percentage points on a year-on-year basis. In terms of vehicle models, the productionvolume and sales volume of pure electric vehicles were 2.942 million units and 2.916 million units, an increase of

1.7 times and 1.6 times on a year-on-year basis, respectively; the production volume and sales volume of plug-inhybrid vehicles were 601,000 units and 603,000 units, an increase of 1.3 times and 1.4 times on a year-on-yearbasis, respectively; the production volume and sales volume of fuel cell vehicles were both 2,000 units, anincrease of 48.7% and 35.0% on a year-on-year basis, respectively.(Data sources from China Association of Automobile Manufacturers, cvworld.cn)

4. Matching between the Company's operation and the industry

In 2021, the Company's operations matched with the development of the industry. In the first half of the year, drivenby the strong demand in the domestic commercial vehicle market, the Company's product orders were full and salesincreased. In the second half of the year, it declined with industry adjustments. During the reporting period, theCompany achieved an operating income of 13.682 billion yuan, an increase of 6.20% over the same period last year,and realized a net profit attributable to shareholders of the listed Company of 2.575 billion yuan, a decrease of 7.12%over the same period last year.

II. Main businesses of the company in the reporting periodThe Company need to comply with the disclosure requirement on related industry of automobile manufacturing in the ShenzhenStock Exchange Self-Regulatory Guidelines for Listed Companies No.3 - Disclosure of Industry Information

(i)Main business of the CompanyMain business of the Company including R&D, production and sales on the automotive core component products,core products during the reporting period were diesel fuel injection system products, automotive exhaustafter-treatment system products and air management system products. Meanwhile, products with core componentsof fuel cell have achieved small production and sales.

1. The diesel fuel management system products are widely used in different power diesel engines supporting alltypes of trucks, passenger cars, buses, construction machinery, marine, and generator sets. The company not onlymakes 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 national emission standards.

2. The automotive exhaust after-treatment system products are supporting all major automobile manufactures inChina. And the products meet the national emission standards.

3. The Air management system products, matches with most of the domestic small-bore diesel engine plants andsome 6-cyl diesel engine manufacturers, and meet the needs of the light and heavy commercial vehicles and somepassenger cars and the engineering machinery. And the products meet the national emission standards.

4. Core component of the fuel cell, including “one membrane & two plates” (membrane electrodes, graphitebipolar plates, metal bipolar plates) and BOP key components for domestic and foreign fuel cell reactor andsystem manufacturers.(ii) Business model of the CompanyThe Company follows the operating philosophy of “making competitive products, creating famous brands, andachieving joint value growth”, implements the business model that parent company unifies the management andsubsidiaries decentralize the production. The parent company is responsible for making strategic developmentplanning and operation targets, and making the unified management, instruction and assessment for the finance,significant personnel management, core raw materials, quality control, and the R&D of technologies. Thesubsidiaries arrange production based on the order management model of market, which makes the subsidiarieskeep 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 the Company’s economic benefits.Production and operation of the vehicle manufacturing during the reporting period

□Applicable √Not applicable

Production and operation of the auto components during the reporting period

√Applicable □Not applicable

Unit: 10,000 pieces

CapacitySales volume
Current periodSame period last yearY-o-y increase/decrease (+,-)Current periodSame period last yearY-o-y increase/decrease (+,-)
According to components
Fuel management system- multi-cylinder pumps2792770.72%284.8256.810.90%
Fuel management system- fuel injector216.7253.7-14.58%189.6242.8-21.91%
After-treatment system - purifier583470.59%44.43334.55%
Air management87.588.2-0.79%90.5847.74%
system -turbocharger
According to vehicle package
After-treatment system - purifier286303-5.61%263.6296-10.95%
According to after-sale service market
Fuel management system- multi-cylinder pumps12-50.00%1.22.2-45.45%
Fuel management system- fuel injector0.31.3-76.92%0.41.2-66.67%
Air management system -turbocharger1.51.8-16.67%1.52-25.00%
According to region
Fuel management system- multi-cylinder pumps2802790.36%28625910.42%
Fuel management system- fuel injector217255-14.90%190244-22.13%
After-treatment system - purifier3443372.08%308329-6.38%
Air management system -turbocharger8990-1.11%92866.98%
Others

Explanation of reasons for more than 30% changes on a y-o-y basis

√ Applicable □ Not applicable

Increasing market demand for after-treatment system products in 2021

Sales model of the componentsThe Company has adhered to customer-oriented, using flexible marketing strategies and standardizeddevelopment procedures to meet the needs of different types of customers so as to ensure the smooth progress ofcustomer development plans and strive for more customers and larger market shares. The Company hasestablished a mechanism for mutual visits to strategic customers. The Company's senior executives regularly visitcustomers or receive customer visits, hold high-level strategic meetings, special cooperation and exchanges andother activities. Implement special management to the company's strategic customers, establish a four-in-onecollaborative organization composed of Company leaders, key account managers, marketing departments, andbusiness departments, and do a good job in customer demand analysis and management, customer satisfactionsurvey analysis, etc. At the same time, the Company optimizes business processes through information technologymeans to increase the speed of response to customer needs, and assists customer relationship management throughmodern technical tools such as call centers, customer data warehouses, business intelligence, mobile devices, and

web conferences. The Company promotes the collaborative marketing of existing and new businesses, strengthensexchanges and cooperation with existing business customers in new businesses, and actively expands newcustomers and develops potential customers.

The Company carries out auto finance business

□ Applicable √ Not applicable

The Company carries out related business of new-energy vehicles

√ Applicable □ Not applicable

Production and operation of the complete and parts of new-energy vehicles

In RMB

CategoryCapacity statusOutputSales volumeSales revenue
Core components of hydrogen fuel cell1.5 million pieces618,000 pieces574,000 pieces58,593,000.00
Core parts of E-drive1.65 million pieces466,000 pieces402,000 pieces32,080,000.00
Intake (PHEV) supercharger150,000 sets2,000 sets1,000 sets1,194,000.00

III. Core Competitiveness Analysis

The Company need to comply with the disclosure requirement on related industry of automobile manufacturing in the ShenzhenStock Exchange Self-Regulatory Guidelines for Listed Companies No.3 - Disclosure of Industry Information

1. Industry and brand advantages. The Company was established in 1958, after more than 60 years ofdevelopment, it has become a famous manufacturer of auto parts at home, and has established long-term andstable cooperative relations with major domestic main engine factories and vehicle manufacturers, the existingautomobile core components main products (including diesel fuel injection system, exhaust after-treatment system,air management system) have strong market competitiveness and higher market share. The company is apacesetter enterprise in China's internal combustion engine industry, and ranks in the top 30 enterprises in China’sauto parts industry.

2. Technology and product advantages. The Company is a national high-tech enterprise. It has scientific researchplatforms such as "National Enterprise Technology Center", "National High-tech Research and Development PlanAchievement Industrialization Base", "Post-Doctoral Scientific Research Workstation", "Jiangsu PostgraduateWorkstation" and number of provincial-level engineering and technological research centers, provincial-levelengineering laboratories, and other research and development institutions, mainly focus on fuel injection systems,exhaust after-treatment systems, and air management systems to conduct technical research and productdevelopment. The Company has mastered a number of core patented technologies, the main product technicalindicators are at the leading level in the industry. In recent years, the Company focuses on the strategic layout inthe fields of green hydrogen and smart electric, established a new energy and network technology researchinstitute, built a hydrogen energy fuel cell test center, and formed technical research and development capabilitiesof hydrogen fuel cell core components and intelligent network products.

3.Management and manufacturing advantages. The Company has a complete organizational structure andmanagement systems process, and has built a financial sharing platforms, which can realize the effective

migration and stable operation of organization & personnel, business & accounting; The established humanresources information system platforms can ensure the timely and accurate standardization of organization,personnel, salary and attendance; built a purchase sharing system, opened up the information interconnection ofenterprises and suppliers, and achieved the closed-loop management of the procurement process; carried out theWeifu Production System (WPS) with lean philosophy, established the quality management system with thewhole process, and has strong capabilities in production and manufacturing, quality assurance, cost control andproduct delivery. The Company focuses on intelligent manufacturing, continues to build intelligent factories withWeifu characteristics, and promotes the application of cloud computing and 5G networks, which can stronglysupport the Company’s future business development.

4. Advantages in marketing and service. The Company has a stable, professional and experienced marketing teamthat can provide targeted support and services according to customer needs, and customer relationships areharmonious. For long-term strategic customers, the company has established a four-in-one marketingcollaboration organization composed of leaders, key account managers, marketing departments, and businessdepartments. The Company’s management exchanges regular visits to promote exchanges and cooperation. TheCompany has a relatively perfect after-sales service system, has built after-sales service network and intelligentservice platform, established special maintenance technology service stations nationwide to regularly provide endusers with the training of operation and maintenance, fault analysis and judgment and provide customers with fast,timely and professional comprehensive after-sales services.

5.Talent team advantage. The Company's management team has extensive experience and a good industryreputation in the Automobile components industry. The Company pays attention to the growth of employees andthe construction of a core talent team. After years of accumulation, it has accumulated a group of professional andhigh-quality management and technical personnel, established a reasonable talent echelon, and provided strongmanpower resource guarantee for the Company's long-term and stable development. The Company's humanresource management system is relatively complete, continuously optimizing various human resourcemanagement systems to provide a fair value realization platform for employees' career development. TheCompany pays attention to the service and care of employees, improves the service experience of employeesthrough the establishment of employee self-service platform, and creates a working environment with warmth andsense of belonging.

6. Advantages of international cooperation. The Company is committed to the core auto parts industry, and hascontinued to carry out in-depth cooperation with domestic and foreign strategic partners for a long time. TheCompany began to cooperate with the industry giant Robert Bosch Company in 1984, established a long-term andstable cooperative relationship, and continued to expand cooperation in new business areas, the cooperation modelbetween the two parties has become a model in the industry. At the same time, the Company has established jointventures with Autocam Corporation of the United States and Schmidt Corporation of Germany, and hascooperated closely in the field of high-end precision manufacturing. Through long-term cooperation withwell-known European and American enterprises, the Company has cultivated a group of middle and seniormanagement and technical personnel who have international communication skills, international vision, andfamiliarity with international standards and have mastered the international advanced R&D process design, quality

control and production management capabilities, which accelerated the sound development of the Company'sbusiness and promoted the development in international business and market.

7. Excellent corporate culture. The Company takes “quality and intelligence driving a better life”as a mission and"100-year Weifu auto core parts industry expert" as a vision, fulfills the core value of "focus, innovation,responsibility, integration", insists on the enterprise spirit of "doing practical things, daring to act, being good atcooperation, bravely contending for the first". During the reporting period, the Company put forward the culturalpositioning of "quality and intelligence", created a cultural system of "quality and intelligence", "quality" and"intelligence" is the Company's cultural double engine, reflecting the persistence of the original aspiration and thepursuit of the future. The continuous innovation of corporate culture construction is a strong support for theCompany's sustained excellence, provides strong support for the Company to become a trustworthy and respectedindustrial experts, and plays a positive role in achieving the Company's strategic objectives.

IV. Main business analysis

1.Overview

The year 2021 was the first year of the “14

thFive-Year” Plan, and the overall operation of the national economywas showing a trend of stable recovery and sustainable development. During the reporting period, under thepressure of the complex and changeable macroeconomic situation and the fierce competition in the industry, theCompany adhered to the principle of “stabilizing operation quality, promoting management upgrades,implementing strategic guidance, and accelerating new businesses expansion”, and with the joint efforts of allemployees, the Company fully completed various operating performance indicators, operating income reached arecord high. In 2021, the Company achieved operating revenue of 13.682 billion yuan, a year-on-year increase of

6.20%; net profit attributable to shareholders of listed companies was 2.575 billion yuan, a year-on-year decreaseof 7.12%; total assets were 27.971 billion yuan, a year-on-year increase of 2.27%; net assets attributable toshareholders of listed companies were 19.399 billion yuan, a year-on-year increase of 6.11%.Main work carried out by the Company during the reporting period:

1. Faced up to the difficulties, dared to challenge, and achieved steady growth in operating income.In the face of complex environment and industry changes in 2021, the Company actively responded, gave full playto the advantages of key customers in collaborative operations, tapped potentials, bravely challenged, activelyexpanded, seized key markets and key projects, and achieved steady growth in operating income. Fuel managementsystem products: the annual sales volume of common rail pumps exceeded 2.1 million units; the sales volume of VEdistribution pumps exceeded 450,000 units, a year-on-year increase of over 29%; the annual sales volume ofhigh-pressure fuel rails exceeded 1.61 million units, hitting a record high. After-treatment system products: theannual sales volume of gasoline purifiers was nearly 2.2 million sets, hitting a record high, and the annual salesvolume of diesel purifiers was nearly 320,000 sets. The market share of passenger vehicles increased steadily,achieving a breakthrough in the high-end autonomous passenger vehicle market; the commercial vehicles obtaineda number of National VI projects from key customers, and the overall market position was further improved. Thenew market of car manufacturers also made breakthroughs. Air management system products: the annual sales

volume of four-cylinder superchargers exceeded 750,000 units, hitting a record high. The gasoline engine acquiredkey projects from a number of customers; the diesel engine acquired projects of a number of new customers, andcontinued to maintain the industry position as the largest domestic market share of four-cylinder diesel engines. Thesix-cylinder supercharger maintained the dominant position of many key customers, acquired natural gas and dieselprojects from many mainstream customers, and further expanded the mainstream customer base for six-cylindersuperchargers. With its high-end precision manufacturing products, the Company has entered the supplier system ofwell-known companies in the new energy vehicle industry, and has obtained designated projects from customers.

2. Grasped at the National VI key projects and accelerated the research and development of new businessproducts.High-efficiency internal combustion power products: completed the sample development of product C for GPelectronic fuel system project, completed B sample development of CB6-25; integrated electronic VE pumpachieved various T4 engines. The six-cylinder supercharger completed the performance finalization of variousmodels of multiple customers, and realized the small batch supply of many National VI diesel engine superchargers;the four-cylinder gasoline supercharger completed the PPAP of several customer projects and successfully obtainedthe new National VI projects of a variety of 2.5L-displacement in key markets. The after-treatment systemcompleted the sample development of light diesel platform product A and the sample development of heavy dieselplatform product B; completed the conversion of after-treatment products for several key customers.Hydrogen energy and intelligent networking products: completed the construction of incubation line forplatinum-carbon catalyst, completed the process design of the main equipment of the incubation line for platinumalloy catalyst; the performance of the membrane electrode prepared with the water-based catalyst ink formulationreached the industry-leading level; the gas diffusion layer completed the testing and verification of sample B ofmicropore layer preparation; the metal single cell completed the testing of A sample. The 35MPa high-pressurevalve completed the development of sample A and the trial production of sample B; the low-pressure hydrogensubsystem completed the small batch production of four low-pressure valves, and the air bearing completed theoptimization for complete set of manufacturing process; the electronic water pump and electronic thermostatcompleted the development of sample A and the design of sample B. The medium-range radar and security radarcompleted the development of the sample A, and the in-cabin radar completed the prototype sample design; the 4Dmillimeter-wave radar completed the trial production and delivery of the first batch of prototype samples.

3. The strategic plan was advanced in an orderly manner, and the new business layout was fruitfulIn terms of strategic planning and implementation, the Company completed and issued the “Strategic Planningand Management System”, established the Company’s strategic planning line organization, and implemented its“14

th

Five-Year” strategic planning work. The Company carried out special planning research for strategic newbusiness, deepened the business planning for core components of hydrogen fuel cell, promoted the feasibilitystudy of hydrogen production by electrolysis of water, promoted the construction planning of the hydrogen energybusiness department, and obtained the support of the government department for the development of hydrogenenergy business; further improved the planning of environmental situational awareness in the intelligent securityfield, combined with the intelligent cockpit to complete a new round of intelligent network planning; built ahydrogen fuel cell business cooperation platform, and actively promoted strategic cooperation with relevant

parties. In terms of investment cooperation, we implemented the construction planning for three major globalbases for hydrogen fuel cell core components, advanced the completion of the investment in the European baseand the acquisition of the equity of a German coating Company, and completed the preliminary work for theconstruction of the Asia-Pacific base. In order to seek opportunities for the coordinated development of theindustrial chain, the Company has successively completed investments in Qingdao Shangqihui Zhuzhan NewIndustry Investment Fund, Wuxi Auto-link World Information Technology Co., Ltd., and Shanghai Bo yuanJiacheng Venture Capital Partnership (Limited Partnership). We strengthened the normalized management afterinvestment, continuously improved the management mechanism for “three meetings”, and implemented the“bimonthly report of new business project” mechanism.

4. Strengthened quality and safety management and promoted the construction of intelligentinformatization.The zero-kilometer core products of quality management all reached the annual target, and the zero-kilometerfailure rate of common rail products was less than or equal to 10PPM; the establishment, application, promotionand solidification of the standards for the evaluation of all elements of the process and the regular review ofcustomer complaints were strengthened; integrated the development of quality valves and the requirements ofquality management system, introduced the tools and methods for the quality function development, andoptimized the functions of the new FMEA software; promoted the positive development of quality managementcapabilities, advanced the preparation of the new version of Q11 manual and carried out graded training. Strictlycontrolled the project quality, completed the construction of the new product incubation base of the headquarters,WFMS logistics and the plant at Lingjiang Road; basically completed the construction of the fifth phase of the103 block; completed the preliminary preparations for the R&D building project. Built an EHS informationsupervision platform to realize real-time monitoring and early warning of safety risk points and sewage dischargepoints.Continued to promote the upgrade of intelligent informatization, completed the standardization of logistics andwarehousing business processes, and launched and promoted the logistics warehouse and production execution inmultiple business divisions; completed the implementation and launch of the company’s supply chain projectplanning system; and advanced the smart factory construction in an orderly manner. Innovatively completed theconstruction of Weifu Intelligent Manufacturing 5G+ laboratory, and more than 20 innovative technologies havebeen verified in the Company’s six typical production scenarios. Completed the implementation and launch of thedata service platform, and built a complete Company data service platform architecture. The Company’sinformation security system has been completed and put into trial operation, and successfully passed theinformation security ISO27001 system certification.

5. Promoted management upgrade and improved business quality.

The Company established the “one report one meeting” supervisory control and analysis mechanism for operationand operated it on a normal basis, promoted process management and completed the optimization and launch ofprocess portal; completed the construction of file management system, and achieved full coverage of electronicfile management system; completed the popularization and application of seal management system in subsidiaries.Completed the planning and adjustment of the first stage of the Company’s procurement organization reform;

established the operation and management methods for bulk raw material futures; implemented hierarchicalmanagement for improvement of the suppliers’ quality problems; built an inventory analysis data platform topromote slow-flow analysis and disposal. Promoted asset quality optimization and operational efficiencyimprovement, optimized wealth management structure; implemented penetration analysis of strategic product cost,clarified target cost, and promoted continuous cost optimization. According to the strategic development policy,the Company started the “San Hang Yi Jiang” talent development system, and created a valuable talent supplychain system through various forms; optimized the salary structure, formulated and tried out salary promotionplans, and continuously improved internal fairness and external competitiveness. Focused on core and newbusinesses and new processes, focused on conducting ex-ante risk reviews on foreign investment, entrusted wealthmanagement, and bulk futures, did a good job in legal risk due diligence and reminders, continued to carry outinternal control, self-inspection, self-inspection and special inspections, strengthened closed-loop management,and improved the Company’s risk control management system so as to escort for the business development.

2.Revenue and cost

(1)Composition of operation revenue

In RMB

20212020Increase/decrease y-o-y(+,-)
AmountRatio in operation revenueAmountRatio in operation revenue
Total operation revenue13,682,426,710.95100%12,883,826,306.60100%6.20%
According to industries
Automotive components13,184,138,129.8896.36%12,430,431,489.9096.48%6.06%
Other business498,288,581.073.64%453,394,816.703.52%9.90%
According to products
Automotive fuel management system6,025,368,344.7144.04%5,365,576,457.9641.65%12.30%
Automotive after-treatment system6,511,015,127.5547.59%6,408,508,512.7649.74%1.60%
Air management system647,754,657.624.73%656,346,519.185.09%-1.31%
Other business498,288,581.073.64%453,394,816.703.52%9.90%
According to region
Domestic13,304,186,980.9497.24%12,670,892,115.4798.35%5.00%
Foreign378,239,730.012.76%212,934,191.131.65%77.63%
According to sales model
Direct sales13,682,426,710.95100.00%12,883,826,306.60100.00%6.20%

(2) The industries, products, regions or sales model accounting for over 10% of the Company’s operationrevenue or operation profit

√Applicable □ Not applicable

In RMB

Operation revenueOperation costGross profit ratioIncrease/decrease of operation revenue y-o-yIncrease/decrease of operation cost y-o-yIncrease/decrease of gross profit ratio y-o-y
According to industries
Automotive components13,184,138,129.8810,822,600,520.9017.91%6.06%6.89%-0.64%
According to products
Automotive fuel management system6,025,368,344.714,547,678,483.8124.52%12.30%14.76%-1.63%
Automotive after-treatment system6,511,015,127.555,811,299,783.5210.75%1.60%1.09%0.45%
Air management system647,754,657.62463,622,253.5728.43%-1.31%12.17%-8.60%
According to region
Domestic sales12,805,898,399.8710,455,310,517.2118.36%4.82%5.35%-0.41%
Foreign sales378,239,730.01367,290,003.692.89%77.63%83.34%-3.03%
According to sales model
Direct sales13,184,138,129.8810,822,600,520.9017.91%6.06%6.89%-0.64%

Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based onlatest one year’s scope of period-end

□ Applicable √ Not applicable

(3) Whether the Company’s revenue from physical sales is greater than its revenue from labor services

√ Yes □ No

IndustriesItemUnit20212020Increase/decrease y-o-y (+,-)
Fuel management system- multi-cylinder pumpsSales volumeIn 10 thousand sets28625910.42%
OutputIn 10 thousand sets2802790.36%
StorageIn 10 thousand sets3844-13.64%
Fuel management system- fuel injectorSales volumeIn 10 thousand suits190244-22.13%
OutputIn 10 thousand suits217255-14.90%
StorageIn 10 thousand suits5225108.00%
After-treatment system - purifierSales volumeIn 10 thousand pieces308329-6.38%
OutputIn 10 thousand pieces3443372.08%
StorageIn 10 thousand pieces814580.00%
Air management system -turbochargerSales volumeIn 10 thousand sets92866.98%
OutputIn 10 thousand sets8990-1.11%
StorageIn 10 thousand sets1720-15.00%

Reasons for y-o-y relevant data with over 30% changes

√ Applicable □ Not applicable

The installed market demand for fuel injectors is getting less and less according to the national T4 emission controls. Storage ofpurifier increased due to the fluctuation of precious metal price.

(4) Performance of significant sales contracts, major procurement contract entered into by the company upto the current reporting period

□ Applicable √ Not applicable

(5)Composition of operation cost

Classification of industries and products

In RMB

IndustriesItem20212020Increase/decrease y-o-y (+,-)
AmountRatio in operation costAmountRatio in operation cost
Automotive componentsDirect material9,048,058,229.7283.60%8,569,425,665.0584.64%5.59%
Automotive componentsLabor cost790,874,802.437.31%698,928,471.646.90%13.16%
Automotive componentsDepreciation257,633,922.532.38%248,063,547.162.45%3.86%
Automotive componentsVarieties of consumption726,033,566.226.71%608,156,797.106.01%19.38%

In RMB

ProductsItem20212020Increase/decrease y-o-y (+,-)
AmountRatio in operation costAmountRatio in operation cost
Fuel management systemDirect material3,080,614,222.0567.74%2,715,216,192.4868.52%13.46%
Fuel management systemLabor cost676,106,197.6614.87%566,823,619.3514.30%19.28%
Fuel management systemDepreciation214,171,045.704.71%192,635,987.104.86%11.18%
Fuel management systemVarieties of consumption576,787,018.4012.68%488,016,067.1012.32%18.19%
After-treatment systemDirect material5,554,787,086.5795.59%5,500,221,875.0495.68%0.99%
After-treatment systemLabor cost90,930,353.551.56%104,394,069.571.82%-12.90%
After-treatment systemDepreciation27,076,236.770.47%35,518,676.760.62%-23.77%
After-treatment systemVarieties of consumption138,506,106.632.38%108,415,545.841.88%27.75%
Air management systemDirect material412,656,921.1089.01%353,987,597.5385.64%16.57%
Air management systemLabor cost23,838,251.225.14%27,710,782.726.70%-13.97%
Air management systemDepreciation16,386,640.063.53%19,908,883.304.82%-17.69%
Air management systemVarieties of consumption10,740,441.192.32%11,725,184.162.84%-8.40%

ExplanationNot applicable

(6) Whether there was a change in the scope of consolidation during the reporting period

□Yes √No

(7) Major changes or adjustment in business, product or service of the Company in Reporting Period

□ Applicable √ Not applicable

(8) Major sales and main suppliers

Major sales clients of the Company

Total top five clients in sales (RMB)7,081,982,680.18
Proportion in total annual sales volume for top five clients51.77%
Ratio of the related party sales in total annual sales from top five clients31.88%

Information of top five clients of the Company

SerialNameSales (RMB)Proportion in total annual sales
1RBCD3,137,245,415.7022.93%
2Robert Bosch Company1,224,350,229.778.95%
3Client 11,180,434,132.108.63%
4Client 21,101,363,049.878.05%
5Client 3438,589,852.743.21%
Total--7,081,982,680.1851.77%

Other situation of main clients

√ Applicable □ Not applicable

The Company has association with RBCD and Robert Bosch Company. In addition, the directors, supervisors, senior executives,core technicians and actual controller of the Company have no equity in main suppliers directly or indirectly.Main suppliers of the Company

Total purchase amount from top five suppliers (RMB)3,750,318,609.06
Proportion in total annual purchase amount for top five suppliers29.67%
Ratio of the related party purchase in total annual purchase amount from top five suppliers6.52%

Information of top five suppliers of the Company

SerialSuppliersPurchasing amount (RMB)Ratio in annual total purchasing amount
1Supplier 11,220,093,194.179.65%
2WFEC824,433,272.436.52%
3Supplier 2744,095,990.005.89%
4Supplier 3563,466,710.084.46%
5Supplier 4398,229,442.383.15%
Total--3,750,318,609.0629.67%

Other notes of main suppliers of the Company

√ Applicable □ Not applicable

The Company has association with WFEC. In addition, the directors, supervisors, senior executives, core technicians and actualcontroller of the Company have no equity in main suppliers directly or indirectly.

3. Expenses

In RMB

20212020Increase/decrease y-o-y (+,-)Note of major changes
Sales expenses264,651,432.56406,353,445.10-34.87%mainly due to the continuous optimization of product quality management and the reduction of three guarantee fees for customers
Administration expenses611,872,150.24782,824,422.63-21.84%
Financial expenses20,063,248.84-23,278,301.84
R&D expenses595,406,951.64532,581,209.7811.80%

4. R&D investment

√ Applicable □ Not applicable

ProjectsPurposeProgressGoals to be achievedExpected impact on the future development of the Company
Development and application of the core components of clean fuel injection systemR&D the technology for alternative(natural gas, etc) traditional fuel injection systemIn progress, and some models are in customer application alreadyResulting a core component products for clean fuel injection system and apply to the marketPromotes the market share of clean fuel products in the future
Development and application on the common-rail pump products to meet the National VI emission standardDevelopment on the common-rail pump products that meets the National VI emission standards for automotive diesel enginesIn progress, and some models are in customer application alreadyResulting the products that meets the National VI emission standards for automotive diesel engines and apply to the marketEnhance the existing products and extend the life of traditional products
Development and application on the diesel fuel injection parts products to meet the off-road T4 emission standardsDevelopment on the diesel fuel injection parts products that meets the off-road T4 emission standardsIn progress, and some models are in customer application alreadyResulting the diesel fuel injection parts products that meets the off-road T4 emission standards and apply to the marketEnhance the existing products and extend the life of traditional products
Development and application on the passenger car after-treatment products to meet the National VI emission standardsDevelopment on the passenger car after-treatment products that meets the National VI emission standardsIn progress, and some models are in customer application alreadyResulting the passenger car after-treatment products that meets the National VI emission standards and apply to the marketEnhance the existing products and extend the life of traditional products
Development and application on the commercial vehicle after-treatment products to meet the National VI emission standardsDevelopment on the commercial vehicle after-treatment products that meets the National VI emission standardsIn progress, and some models are in customer application alreadyResulting the commercial vehicle after-treatment products that meets the National VI emission standards and apply to the marketEnhance the existing products and extend the life of traditional products
Development and application on the after-treatment products to meet the off-road T4 emission standardsDevelopment on the after-treatment products that meets the off-road T4 emission standardsIn progress, and some models are in customer application alreadyResulting the after-treatment products that meets the off-road T4 emission standards and apply to the marketEnhance the existing products and extend the life of traditional products
Development and application on the supercharger products forDevelopment on the supercharger products for gasoline engine that meets the National VIIn progress, and some models are in customer application already.Resulting the supercharger products for gasoline engine that meets the National VI emission standards and putEnhance the existing products and extend the life of traditional products
gasoline engine to meet the National VI emission standardsemission standardsthem on the market
Development and application on the supercharger products for diesel engine to meet the National VI emission standardsDevelopment on the supercharger products for diesel engine that meets the National VI emission standardsIn progress, and some models are in customer application alreadyResulting the supercharger products for diesel engine that meets the National VI emission standards and put them on the marketEnhance the existing products and extend the life of traditional products
Development and application on the supercharger products for natural gas engine to meet the National VI emission standardsDevelopment on the supercharger products for natural gas engine that meets the National VI emission standardsIn progress, and some models are in customer application alreadyResulting the supercharger products for natural gas engine that meets the National VI emission standards and put them on the marketEnhance the existing products and extend the life of traditional products
Development and application of the supercharger for automotive incremental engineDevelopment on the supercharger for automotive incremental engineIn progress, and some models are in customer application alreadyResulting the supercharger products for automotive incremental engine and put them on the marketEnhance the existing products, fit in with new application scenarios and extend the life of traditional products
Development and application on the core materials of hydrogen fuel cellDevelopment on the core materials (one membrane & two plates, catalyst)of hydrogen fuel cellIn progress, relevant products have achieved small production and have entered customer applicationResulting a large-scale production of core materials for the hydrogen fuel cells and put them on the marketMain direction of the emerging business of the Company in the future and new business growth points
Development and application on BOP key component products of hydrogen fuel cellsDevelopment on the BOP key component (valve, pumps, etc.) products of hydrogen fuel cellsIn progress, relevant products have achieved small production and have entered customer applicationResulting a large-scale production of BOP key component products of hydrogen fuel cells and put them on the marketMain direction of the emerging business of the Company in the future and new business growth points
Development and application of the E-drive components products for new energy vehiclesDevelopment on E-drive component (motor shaft, motor case, etc. ) products for new energy vehiclesIn progress, relevant products have been mass-produced and have entered customer applicationsResulting development on the E-drive components products for new energy vehicles and put them on the marketMain direction of the emerging business of the Company in the future and new business growth points
Development and application of intelligent sensingDevelopment on intelligent sensing core module productsIn progress, sample delivery of relevant products have beenResulting the intelligent sensing core module products and put them on the marketMain direction of the emerging business of the Company in the future and
core module products(milliliter-wave radar)achievednew business growth points
Development and application of smart seating productsDevelopment on smart seating productsIn progress, some products have entered customer applicationsResulting the smart seating products and put them on the marketMain direction of the emerging business of the Company in the future and new business growth points
Development and application on core component products of hydraulic systemDevelopment on hydraulic system core component productsIn progress, some products have entered customer applicationsResulting the hydraulic system core component products and put them on the marketMain direction of the emerging business of the Company in the future and new business growth points
Development and application on core component products of brake systemDevelopment on brake system core component productsIn progress, some products have entered customer applicationsResulting the brake system core component products and put them on the marketMain direction of the emerging business of the Company in the future and new business growth points
Development and application of the intelligent manufacturing equipmentDevelopment on intelligent manufacturing equipmentIn progress, some equipment has been used in manufacturing and testing by the customersResulting the intelligent manufacturing equipment and put them on the marketImprove the technological capabilities in field of intelligent manufacturing and creating economic benefits

Personnel of R&D

20212020Change ratio (+,-)
Number of R&D (people)1,1121,0941.65%
Ratio of number of R&D20.82%20.30%0.52%
Educational background——————
Undergraduate679703-3.41%
Master20716525.45%
Age composition——————
Under 302892803.21%
30~405705660.71%

Investment of R&D

20212020Change ratio (+,-)
R&D investment (RMB)595,406,951.64532,581,209.7811.80%
R&D investment/Operation revenue4.35%4.13%0.22%
Capitalization of R&D investment (RMB)0.000.00
Capitalization of R&D investment/R&D investment0.00%0.00%

Reasons and effects of significant changes in composition of the R&D personnel

□Applicable √Not applicable

The reason of great changes in the proportion of total R&D investment accounted for operation income than last year

□ Applicable √ Not applicable

Reason for the great change in R&D investment capitalization rate and rational description

□ Applicable √ Not applicable

5. Cash flow

In RMB

Item20212020Increase/decrease y-o-y (+,-)
Subtotal of cash inflow arising from operating activities15,691,750,941.1512,043,108,885.3130.30%
Subtotal of cash outflow arising from operating activities15,064,038,347.7411,261,297,651.3033.77%
Net cash flows arising from operating activities627,712,593.41781,811,234.01-19.71%
Subtotal of cash inflow from investing activities19,393,979,375.0910,622,042,577.8882.58%
Subtotal of cash outflow from investing activities19,422,030,926.3910,050,595,606.3793.24%
Net cash flows arising from investing activities-28,051,551.30571,446,971.51-104.91%
Subtotal of cash inflow from financing activities1,717,278,897.47714,062,395.41140.49%
Subtotal of cash outflow from financing activities2,154,807,351.771,940,870,096.6711.02%
Net cash flows arising from financing activities-437,528,454.30-1,226,807,701.26
Net increase of cash and cash equivalents149,072,918.03124,447,364.8519.79%

Main reasons for y-o-y major changes in aspect of relevant data

√ Applicable □ Not applicable

1. Net cash flows arising from operating activities decreased compared with the previous period, mainly due to the change ofsettlement pattern for previous metals in the reporting period;

2. Net cash flows arising from investing activities decreased compared with the previous period, mainly due to the decrease individends from participating enterprises and increase in investment;

3. Net cash flows arising from financing activities increased compared with the previous period, mainly due to the increase in bankloans in the reporting period.

Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company

√ Applicable □ Not applicable

Mainly due to the investment earnings, and specific influencing factors found more in supplementary information of cash flowstatement carried in Annotation of the Report.

V. Analysis of the non-main business

√ Applicable □ Not applicable

In RMB

AmountRatio in total profitCause descriptionWhether be sustainable
Investment earnings1,954,523,836.5971.32%Investment earnings mainly form the two joint ventures (RBCD and Zhonglian Electronics) with stock participated by the CompanyThe joint ventures RBCD and Zhonglian Electronics have stable production and operation , so the investment returns can be sustained and stable
Gain/loss of fair value changes-40,270,333.81-1.47%
Asset impairment-138,117,315.80-5.04%
Non-operating income656,202.070.02%
Non-operating expense25,509,569.870.93%

VI. Assets and liability analysis

1. Major changes of assets composition

In RMB

Year-end of 2021Year-begin of 2021Ratio changes (+,-)Note of major changes
AmountRatio in total assetsAmountRatio in total assets
Monetary funds1,896,063,265.696.78%1,963,289,832.337.17%-0.39%
Account receivable2,053,800,293.777.34%2,824,780,352.4110.32%-2.98%
Inventory3,445,396,375.0912.32%2,877,182,174.6410.51%1.81%
Investment real estate19,387,746.560.07%20,886,681.620.08%-0.01%
investment5,717,944,788.1220.44%4,801,488,290.9717.54%2.90%
Fixed assets2,932,210,452.5110.48%2,870,351,470.3710.49%-0.01%
progress387,429,933.081.39%243,795,493.040.89%0.50%mainly due to the increase of equipment and engineering investment
Right-of-use assets23,148,405.580.08%33,192,094.140.12%-0.04%mainly due to depreciation of right of use assets
Short-term borrowings1,437,958,206.555.14%302,238,600.051.10%4.04%Mainly due to the increase of bank loans
Contract liability136,427,636.390.49%81,717,387.250.30%0.19%Mainly due to the increase of advance payment from customers
Long-term borrowings3,050,640.970.01%-0.01%Mainly for the subsidiary loan due to return
Lease liability15,795,469.250.06%22,604,755.700.08%-0.02%Mainly refers to the actual recognition and settlement of lease liabilities in the current year

Foreign assets account for a relatively high proportion

□Applicable √Not applicable

2. Assets and liability measured by fair value

√ Applicable □ Not applicable

In RMB

ItemsAmount at the beginning periodChanges of fair value gains/losses in this periodAccumulative changes of fair value reckoned into equityDevaluation of withdrawing in the periodAmount of purchase in the periodAmount of sale in the periodOther changes (+,-)Amount at period-end
Financial assets
1.Trading financial asset(excluding derivative financial assets)5,324,221,360.10-39,089,653.7718,427,520,515.00-16,020,155,914.217,692,496,307.12
2.Other equity instrument investment285,048,000.00285,048,000.00
3.Receivable financing1,005,524,477.88-292,507,463.38713,017,014.50
4.Foreign exchange contracts-1,180,680.0475,915,620.3474,734,940.30
Subtotal of financial assets6,614,793,837.98-40,270,333.8118,503,436,135.34-16,312,663,377.598,765,296,261.92
Above total6,614,793,837.98-40,270,333.8118,503,436,135.34-16,312,663,377.598,765,296,261.92
Financial liabilities0.000.00

Other changesMaturity redemptionWhether 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

ItemBook value at period-endRestriction reason
Monetary funds9,347,031.23The USD margin for foreign exchange contracts
Monetary funds17,459,061.33Cash deposit paid for bank acceptance

Monetary funds

Monetary funds4,044,016.40Court freezing
Monetary funds194,220.00Cash deposit for Mastercard
Note receivable727,930,810.05Notes pledge for bank acceptance

Receivable financing

Receivable financing191,355,521.58Notes pledge for bank acceptance
Trading financial asset252,667,176.66In accordance with the civil ruling No.(2016)Y03MC2490 and No.(2016) Y03MC2492 of Guangdong Shenzhen Intermediate People's Court (Hereinafter referred to as Shenzhen Intermediate People's Court), the property with the value of 217 million yuan under the name of the Company and other seven respondents and the third party Shenzhen Hejun Chuangye Holdings Co., Ltd. (Hereinafter referred to as Hejun Company) was frozen. As of the end of the reporting period, 4.71 million shares of Miracle Automation and 11,739,102 shares of SDEC held by the Company were frozen.
Total1,202,997,837.25--

VII. Investment analysis

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

In RMB

Variety of securitiesCode of securitiesShort form of securitiesInitial investment costAccounting measurement modelBook value at the beginning of the periodCurrent gain/loss of fair value changesCumulative fair value changes in equityCurrent purchase amountCurrent sales amountProfit and loss in the Reporting PeriodBook value at the end of the periodAccounting subjectCapital Source
Domestic and foreign stocks600841SDEC199,208,000.00Measured by fair value140,395,956.0013,247,352.0013,247,352.00153,643,308.00Trading financial assetOwn funds
Domestic and foreign stocks002009Miracle Automation69,331,500.00Measured by fair value47,712,300.0066,081,300.0066,081,300.00113,793,600.00Trading financial assetOwn funds
Domestic and foreign stocks601456Guolian Securities12,000,000.00Measured by fair value326,848,122.00-118,052,944.00-118,052,944.00208,795,178.00Trading financial assetOwn funds
Domestic and foreign stocks601777Lifan Technology62,845.00Measured by fair value14,957.1162,845.0014,957.1177,802.11Trading financial assetOwn funds
Total280,602,345.00--514,956,378.00-38,709,334.890.0062,845.000.00-38,709,334.89476,309,888.11----
Disclosure date of securities investment approval of the Board2012-03-24
2013-06-04
Disclosure date of securities investment approval by Shareholders’ general meeting (if any)

(2) Derivative investment

□ Applicable √ Not applicable

There are no derivative investment during the reporting period.

5. Application of raised proceeds

□ Applicable √ Not applicable

There are no application of raised proceeds during the reporting period.

VIII. Sales of major assets and equity

1.Sales of major assets

□ Applicable √ Not applicable

No major assets were sold during the reporting period.

2. Sales of major equity

□ Applicable √ Not applicable

IX. Analysis of the main equity participation and controlling subsidiary

√ Applicable □ Not applicable

Main subsidiary and stock-jointly enterprise with over 10% influence on net profit of the Company

In RMB

Company nameTypeMain businessRegister capitalTotal assetsNet assetsOperating revenueOperating profitNet profit
WFLDSubsidiaryAfter-treatment system products502,596,300.005,857,838,518.402,278,036,732.746,527,268,564.43325,034,632.89337,097,184.96
WFJNSubsidiaryFuel management system products346,286,825.801,475,883,668.401,033,677,360.12825,822,469.06101,092,828.2096,549,390.54
RBCDEquity participation enterpriseFuel management system productsUSD382,500,000.0017,778,313,637.389,154,995,044.5415,712,821,656.323,720,316,760.313,237,912,797.87
Zhonglian ElectronicsEquity participation enterpriseGasoline system products600,620,000.006,891,391,424.956,885,842,599.0824,479,957.391,702,508,438.951,699,134,647.28

Subsidiary obtained and disposed in the Period

□ Applicable √ Not applicable

Explanation on holding equity participation enterpriseDuring the reporting period, WFLD's operating profit and net profit grew better because of the increase in investment income fromthe shareholding enterprise WFEC.X. The structured subject controlled by the Company

□ Applicable √ Not applicable

XI. Prospects for future developmenti.Future development strategyBased on the corporate vision of “Century Weifu Automotive Core Parts Industry Expert”, during the “14thFive-Year Plan” period, the Company will continue to adhere to the “international, independent,multi-dimensional” strategic concept, and accelerate the “two-engine drive” strategy of “optimizing andimproving existing core business, breaking through and positioning strategic emerging business”, form a newstrategic pattern of comprehensive development of four major sectors of “energy saving and emission reduction”,

“green hydrogen energy”, “intelligent electric” and “other core parts”, and strive to achieve the strategic goal ofdoubling the scale and maintaining high profitability.(i) As the Company’s existing core business segment, energy saving and emission reduction includes three majorbusiness areas, i.e. high-pressure fuel management system, after-treatment system, and turbocharger, positioningnew increments, actively promoting business transformation and upgrading, maintaining the leading position inthe industry, and maintaining organic growth of businesses. Under the general trend of low-carbon andenergy-saving, we will seize the strategic opportunity of upgrading emission regulations, accelerate the marketexpansion of related products, such as ordinary hybrids and plug-in hybrids, strengthen cooperation with jointventure brands and new leading car manufacturers, and further improve the market share of products; productdevelopment focuses on the fuel oil, after-treatment and turbocharging of high-efficiency, energy-saving(including plug-in hybrids), and clean alternative fuels (natural gas, etc.), strengthen the research and developmentcapabilities of key technology products, enhance forward engineering capabilities, system integration andapplication development capabilities; consolidate and improve process operation capabilities, and improve costand quality control capabilities.(ii) Green hydrogen energy is an important strategic direction for the transformation of the Company’s businessstructure, it focuses on the core parts of hydrogen fuel cell and the hydrogen production from renewable energysources in the middle and upper reaches of the hydrogen energy industry chain to build core competitiveness andachieve large-scale business growth.

1. The core parts business of hydrogen fuel cells will be based on the core materials of the galvanic pile(membrane electrodes, graphite bipolar plates, metal bipolar plates) and the core technical capabilities of BOP keycomponents that have been acquired and constructed to accelerate the establishment and and operation oforganizational planning, promote the construction of three global bases, and realize small-scale marketapplication.

① Enhance global engineering capabilities. Actively promote the construction of engineering centers in AsiaPacific, Europe and North America, strengthen investment, continuously improve the engineering technologylevel, especially the research and development and application of product technology, and quickly realize themass production of customer market projects.

② Expand global business functions. Accelerate the capacity building of business centers in Asia Pacific, Europeand North America, strengthen the planning and coordination of global markets and operations, realize strategicresource sharing and efficient market synergistic expansion between centers and business segments, activelyexpand international and domestic customers, continue to deepen the partnerships with strategic partners, strategiccustomers and major customers, and promote large-scale applications in the market.

③ Improve global manufacturing capacity. Accelerate the capacity building of manufacturing centers in AsiaPacific, Europe, and North America. During 2021-2025, the Company is going to achieve global productioncapacity of 8 million membrane electrodes, 9 million graphite bipolar plates, 4 million metal bipolar plates and100,000 pieces of BOP key components, among them, Asia Pacific (China) is about to achieve a productioncapacity of 4 million membrane electrodes, 5 million graphite bipolar plates, 2 million metal bipolar plates and100,000 pieces of BOP key components.

④ Strengthen strategic coordination and resource integration. Based on the platform of the hydrogen energybusiness unit, strengthen the global business strategy synergy and resource integration. In particular, regarding theconstruction of the Asia-Pacific base, we will integrate the business related to the core parts of hydrogen fuel cells,strengthen cooperation with various strategic partners, and set up independent business companies to face theAsia-Pacific market dominated by China, and conduct product application development, supply chain, andmanufacturing. , sales and service, etc.

2. Renewable energy hydrogen production business will focus on cultivating and incubating PEM electrolysis ofwater hydrogen production system equipment technology based on the Company’s current core componenttechnologies such as membrane electrodes and graphite/metal bipolar plates, as well as the R&D, testing andverification capabilities of PEM electrolysis of water galvanic pile, and achieve product market application.

① Make efforts to implement the demonstration line project. Complete the first and second phases of the PEMelectrolysis of water hydrogen production demonstration line, and obtain the overall scheme design andimplementation service capabilities of electrolysis of water hydrogen production.

② Actively acquire key technical capabilities. Seek cooperation opportunities for external technology andindustrial investment, accelerate independent research and development, and build key technical capabilities suchas galvanic pile, system equipment design, development and integration. Form and incubate a batch of low-powersystem equipment products in subdivided fields (hydrogen production field), and develop high-power systemequipment technologies and products suitable for energy storage and hydrogen refueling stations.

③ Expand market application projects. Vigorously expand the customer market, strive to realize the applicationof low-power system equipment to form a small-scale market application, actively participate in large-scalerenewable energy hydrogen production demonstration projects, and contact with domestic industry leaders toexplore cooperation opportunities.(iii) The intelligent electric sector focuses on four major business areas, i.e. the core parts of the electric drivesystem, the thermal management system and core parts, the intelliSense core modules, and the in-cabin core parts,builds the core competitiveness of the market, technology and intelligent manufacturing, and achieves businesstransformation development and large-scale growth.

1. Based on the understanding of the research and development on the automotive core parts system and thehigh-end intelligent manufacturing capabilities, the core parts business of the electric drive system expands thecore parts business of the electric drive, and promotes the market scale, and the Company makes advanced layoutof the forward-looking technology of the in-wheel motor, comprehensively cultivates and incubates products toachieve product market application.

①The core parts of electric drive take the motor shaft, water jacket, end cap, etc. as the starting point, and expandto other core parts, enrich the product map, and form the supply capacity of key products; based on a large numberof practical experience accumulated in cooperation with well-known domestic electric drive enterprises, makebreakthroughs in key new energy vehicle enterprises, especially high-end new forces, establish in-depth strategiccooperation, and promote the diversified development of strategic customers.

②Accelerate the product technology optimization of in-wheel motors, realize penetration into the passenger carscene, promote the construction of set assembly capacity construction, and form mass production capacity.

2. The thermal management system and core parts business take the electronic oil pump as the entry point, rely onthe Company’s group-based technology, market and manufacturing platform advantages, fully promote theresearch and development and application of key components such as battery cooling plates, heat exchangers, aswell as the strategic products of thermal management system, and further actively seek the development in otherapplication scenarios such as energy storage.

① Achieve breakthroughs in high-end customers and have in-depth strategic cooperation with customers. Utilizethe VH overseas technology and product accumulation acquired by the Company, actively penetrate into thedomestic and European mature mainstream high-end customers, complete technical verification, and form the firstbatch of product supply; actively develop global customer resources such as OEMs and electric drive systemintegrators with self-developed electric drive/thermal management systems, aggregate channel resourceintegration capabilities, and break through key strategic customers.

② Synchronize global R&D and actively expand product business. Promote global resource planning and layout,build global synchronous R&D capabilities, realize global synchronous R&D collaboration, further expandproduct series, actively carry out the development and supply capabilities of core parts of thermal managementsystem-level solutions, and expand products such as water-cooled plates and heat exchangers.

③ Enhance the global supply capacity for mass production. Strengthen the capacity building of global supplychain systems in Europe and China, integrate the Company’s intelligent manufacturing genes, and achievelarge-scale production and supply capabilities.

3. IntelliSense core module

In the intelliSense core module business, the Company strategically focuses on millimeter-wave radar, providescustomized radar module products and sense solutions, starts from basic scenarios, cultivates capabilities, andaims at the high-end application market for automatic driving.

① Expand multi-scenario applications and gradually develop to high-end applications. Take the lead in enteringthe non-vehicle radar field, expand the radar application in the smart cockpit field synchronously, quickly realizethe market application of 3D radar products, and take the vehicle ADAS 3D radar as an opportunity to graduallyenter the in-vehicle market and accumulate vehicle-mounted scene technology, and penetrate into thevehicle-mounted automatic driving application scenarios with the maturity of 4D radar technology.

② Technological accumulation capabilities pave the way for technological breakthroughs in high-end products.Strengthen the key technologies and R&D capabilities of millimeter-wave radars, establish large-scale productioncapacity of 3D radars for ADAS, at the same time, speed up the research and development progress of 4D radarproducts, make technological breakthroughs in high-end products, and gradually realize the commercialization ofADAS 4D radars.

4. Core parts in the cabin

The core parts business in the cabin forms a differentiated competitive advantage with high-performance,high-quality and cost-effective products, among which the car seat is the first to enter the mid-to-high-endcommercial vehicle market, accelerates the realization of industrial scale development, and moves towards themid-to-high-end passenger car market; it establishes the systematic design and testing capabilities of seat products,enhances the technological innovation capabilities, and develops towards networking and intelligence to meet the

needs of intelligent cockpit scenarios. At the same time, with the help of cooperation with intelligent cockpitpartners, the Company will participate in the intelligent cockpit business field based on domain control technology,and strive to seek and expand business opportunities related to intelligent cockpits.(iv) For other core parts and components, the Company will continue to promote the transformation andupgrading of hydraulic systems and core parts, core parts of brake systems, intelligent manufacturing equipment,and aftermarket and trade businesses, and actively explore and lay out the cutting-edge technologies and marketsin line with the Company’s development strategy to increase the business volume.The Company will continue to deepen the business plan, budget management and performance managementsystem under the guidance of the strategy, implement differentiated management and control, make efficientbusiness coordination among sectors, accelerate the cultivation of strategic core talents, comprehensively enhancethe operation and management capabilities during the strategic transformation period, and adapt to the Company’smedium and long-term strategic development needs.

ii. Key work in 2022In the face of the changeable and severe macro economy and automobile market development trends, in 2022, theCompany will still closely follow the “14th Five-Year Plan” development goals, make the industry more refinedand stronger, deepen and develop new businesses, and improve the Company’s market position in automotivecore components. The Company’s operating guidelines in 2022 are aiming at strategic goals, improving businessquality, consolidating management system, accelerating the implementation of new businesses, and ensuring therealization of the second annual goal of the “14th Five-Year” strategic plan.

1. Thoroughly implement strategic guidance and promote industrial investment distributionFocus on strategic goals such as market share and profitability of high-efficiency internal combustion powerbusiness, and strengthen dynamic research and planning for strategic new businesses. Comprehensively refine andimplement the capacity planning of three major global bases of the hydrogen energy business, and accelerate theestablishment and operation of the Asia-Pacific (China) base; actively promote the operation of the electrolysis ofwater hydrogen production demonstration line; actively explore the mechanism innovation for smart electric andother businesses. Steadily promote the investment and construction of hydrogen energy business, and at the sametime plan and promote the investment in the Company’s new major potential strategic business producttechnology and the cooperation projects at a high level; actively explore new models of industrial fund investment,and gradually expand external investment cooperation.

2. Steadily improve the existing business market and accelerate the expansion of new business and new markets.Steadily increase the market share of strategic business and strategic customers, expand and promote thesuccessful batch production of strategic market projects such as National VI and T4, and win the correspondingmarket position. Fuel injection system: ensure the order delivery rate and market share of the common rail pump;ensure the market share of dispensing pump and promote the export projects of dispensing pump; ensure thesupply to existing customers and obtain key projects from key customers for GP electronic control products;continue to improve the market share of high-pressure fuel rail and develop new markets. After-treatment system:

accelerate the layout of independent high-end brand customers at passenger car market; focus on promoting the

development of National VI projects for leading customers at the commercial vehicle market;actively acquire theassembly projects of leading companies at the hybrid market and expand product coverage; ensure the smoothoperation of projects at the non-road market. Air intake system: gradually expand the market scale of gasolinesupercharger for the four-cylinder supercharger; stabilize the existing customers of six-cylinder supercharger, andensure the batch production of new customer projects.Accelerate the acquisition of new business leading customer market projects, and continue to promote newbusiness cooperation with strategic partners; actively develop high-end precision manufacturing and castingbusiness markets for new energy parts; actively promote mass production of core parts for galvanic pile, andstrengthen the establishment of strategic cooperation with domestic customers, and actively obtain the productproject of “one membrane and two plates”; promote the industrialization of hydrogen fuel cell parts andcomponents, realize the small batch production of platinum carbon catalyst products, and complete theconstruction of domestic pilot lines for platinum alloy catalyst and membrane electrode products; achieve massproduction and delivery for existing security radar products, and expand new customers and complete verificationand delivery for 3D radar products, and achieve strategic customer project product development for 4Dmillimeter-wave radar products.

3. Strengthen quality management and intelligent manufacturing, and promote engineering construction and safetyguarantee.Plan the blueprint of the Company’s quality management information system, deepen the implementation of theQ11 quality basic standards, and continue to strengthen physical quality management. Promote the specialimprovement of maturity evaluation, consolidate the maturity evaluation mechanism of all elements of the process,and strengthen the maturity of product quality life cycle management. Import positive development quality tools,and implement the application and improvement of quality valves and quality management systems in developingprojects. Go deep into the continuous improvement and on-site management, and deepen the effective applicationof system improvement methods. Optimize the WPS maturity assessment model, and build workshopbenchmarking teams of each business division. Further improve the equipment operation management system,thoroughly promote the in-depth maintenance work of equipment, establish equipment maintenance knowledgebase, and improve equipment operation efficiency. Accelerate the full implementation of the Company’s I-WPSsystem, realize the launch of the PLM and MES systems of related business divisions, and do a good job in theconstruction and launch of the PLM process module. Promote the application of 5G+ innovation laboratorytechnology in the business divisions.Orderly promote the Company’s R&D building construction project, complete the preliminary planning andpreliminary design of the new energy industry base, and do a good job in the promotion of the logistics warehouseand other projects of Weifu Industrial Park. Complete the ISO50001 energy management system construction, andpromote the implementation of the compressed air system energy-saving plan. Focus on preventive management,implement the main responsibility of EHS, and strengthen the process risk identification and control. Through theEHS information supervision platform, form the ability of intelligent EHS management and monitoring,convenient handling of hidden dangers, integrated process files and automatic external data exchange.Introduce S-FMEA, carry out special rectification of dual control in key areas, and improve intrinsic safety. Carry

out the re-examination and certification of the first-class enterprise of safety production standardization, andimprove the management level of safety production.

4. Continuously promote management upgrades and steadily improve operational efficiency.Consolidate and elaborately operate the operation and management system, deepen the operation monitoring andrectification of the Company and business divisions, and promote the closed-loop management of the long-termoperation mechanism of the process; implement hierarchical management and control of projects, strengthencross-organizational coordination of projects, and promote project management upgrading of the Group.Continue to optimize shared management, optimize the integration process of enterprise, finance and taxation;build a comprehensive budget management system and create a closed management loop; further promote coststandardization and refined management, continue to improve the quality and efficiency of asset operations, andoptimize wealth management structure. Complete the second-stage planning and adjustment of the Company’sprocurement organization reform; realize the process unification, standardization and information sharing of directmaterial procurement business; realize integrated procurement supply chain management, continuously optimizethe process and supplier assessment indicators, and realize supplier classification management and resourcesintegration. Do a good job in the overall planning of warehousing, transportation and logistics, improve the supplyand demand plan coordination and the in-depth inventory analysis, increase effective delivery and reduceinventory. Plan the logistics visualization, tap the value of logistics data, and guide logistics improvement.Promote the optimization and upgrading of SAP, implement the process sub-module project, and realize thestandardization and integration of process management. Promote the group’s promotion of various modules ofintelligent manufacturing, pay attention to the implementation of logistics and warehousing business processesand the comprehensive promotion of core production and manufacturing modules, promote the construction andoperation of 5G+ innovation laboratories, and promote the implementation of intelligent application scenarios.

5. Strengthen the construction of talent team to promote the sustainable development of the Company.Accelerate talent recruitment and training, promote talent sharing, and optimize the deployment of technicalpersonnel of core businesses. Consolidate the foundation of talent management, promote the construction andapplication of capability models, focus on the cultivation of talents in professional fields, strengthen thedevelopment of human resources, and continue to promote the talent development project of “San Hang Yi Jiang”.Optimize the incentive model, explore and pilot a more competitive incentive mechanism for new businesses. Forthe research and development field, implement the project-based incentive model to promote the improvement ofproject management. Based on the human resources information system platform, deeply analyze the group’shuman resources data, explore the human resources service sharing mechanism, try to implement the internalrecruitment and salary settlement sharing in the group, and improve the efficiency of human resources services.iii.Risks and countermeasures

1. Macro economy and market risks

Affected by the COVID-19 epidemic, the macro economy and market environment are still complicated andsevere, and the industry will still face greater pressure. If industry demand declines, it will have a certain impacton the company's production and operation and profitability.Countermeasures: The company will always pay attention to macroeconomic and industry development trends,

consolidate its current business market position, actively expand new businesses, and strive to improve thecompany's core competitiveness and overall risk resistance.

2. Operating management and risks controlling

As the company’s business scope continues to expand, especially in the new energy field, the management span israther large and there are potential operating management and investment risks.The external environment wasaffected by the epidemic, the varying affected degree of customers and sales declines, restrictions on logistics andtransportation areas, delayed payment by some customers, and increased pressure on fund quality and repaymenthas brought certain risks to the company’s business.Countermeasures: the company will continue to promote the optimization and improvement of internalmanagement, perfect the procedures, further manage standardization and control the management risks; focus onthe impact of market dynamics on the Company; continue to develop strategy customers, and gradually strengthenthe new business market connection and new new products promotion.

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 continuousrise in prices will bring the risks of rising costs to the Company.Countermeasures: The Company will actively take measures such as improving market forecasting capabilities,planning production capacity in advance, and reasonably controlling raw material inventories to reduce the risk ofprice fluctuations in raw materials. At the same time, the Company will continue to optimize supply chainmanagement, strengthen vertical integration capabilities of the industrial chain, and transfer some risks throughcost control measures and product price adjustments so as to reduce the impact of raw material price fluctuationson performance.

4. Risks associated with financial instruments

The Company's main financial instruments include monetary funds, structured deposits, receivables, equityinstrument investments, wealth management products, loans, payable, etc. In the operation process, the risksrelated to financial instruments faced by the company mainly include credit risk, market risk and liquidity risk.Countermeasures: confirm and analyze the various risks faced by the Company, establish an appropriate risktolerance bottom line and carry out risk management, and timely monitor various risks to ensure that the risks arecontrolled within a limited range and the negative impact of the risks on the company’s operating performance isreduced to the minimum level to maximize the interests of shareholders and other investors.

XII. Reception of research, communication and interview during the reporting period

√ Applicable □ Not applicable

TimeReception locationWayReception typeObjectMain content and information providedBasic situation index of investigation
2021-07-02Conference room of the CompanySpot researchInstitutionInstitution and individual investors organized by Shanghai SecuritiesFound more in the Investor Relations Activity Record (No.: 2021-001) released on Juchao Websitehttp://www.cninfo.com.cn
2021-07-20Conference room of the CompanySpot researchInstitutionInstitutional investorsFound more in the Investor Relations Activity Record (No.: 2021-002) released on Juchao Websitehttp://www.cninfo.com.cn
2021-08-24Conference room of the CompanyTelephoningInstitutionInstitutional investorsFound more in the Investor Relations Activity Record (No.: 2021-003) released on Juchao Websitehttp://www.cninfo.com.cn
Jan. 1, 2021- Dec. 31Interactive platform for investor relationsWritten inquiriesOtherOtherFundamentals of the Company and views on the marketAnswered 330 questions online through the interactive platform for investor relations
Jan. 1, 2021- Dec. 31phoneTelephoningOtherOtherFundamentals of the Company and views on the market535 telephone communications with the investors

Section IV. Corporate GovernanceI. Corporate governance of the CompanyDuring the reporting period, the Company earnestly implemented the Basic Internal Control Standards forEnterprise and its guidance in strict accordance to the requirements of laws, administrative regulations,department provisions and normative documents as Company Law, Securities Law, Code of Governance forListed Companies, Rules Governing the Listing of Stock on Shenzhen Stock Exchange and Guidance on StandardOperation of Listed Company on Shenzhen Stock Exchange, continued to improve and enhance legal persongovernance structure and internal control system, thus to standardize its operation.The actual status of corporategovernance in accordance with the requirements of China Securities Regulatory Commission regulatorydocuments related to listing Corporation.The Company has established a series of document systems for standardized management including the Rules ofProcedure of three committees, Working Rules, internal control system, Evaluation Management System ofInternal Control, Information Disclosure Management Approach, Financial Decision-making System ofSignificant Investment, Related Party Transaction Management System and Inside Information and InsiderManagement System.According to the Company Law, Articles of Association and relevant laws and regulations, the companyestablished a relatively complete organizational control architecture system. The company’s board of directorsexecutes the resolution of general meeting of stockholders, takes charge of the company’s great decisions, andtake responsible for the general meeting of stockholders; the company sets up the general manager according tolaw to preside over the company’s daily production and operation and management, organize and implement theresolutions of the board of directors, and take responsible for the board of directors; the company’s board ofsupervisors is the company’s supervisory body, takes responsible for behaviors of the directors and seniormanagement and the supervise the company’s financial affairs. The board of directors has four special committeesincluding the strategy committee, remuneration committee, audit committee, and nominations committee. Thecompany’s general meeting of stockholders, board of directors, board of supervisors, and management layer haveclear rights and obligations, perform their own duties, effectively check and balance, scientifically make decisions,coordinate operations, and lay a solid foundation for the Company’s sustainable, stable and healthy development.The Company’s independent directors perform their duties and faithfully and conscientiously fulfill theirobligations in strict accordance with relevant regulations of Articles of Association and the Independent DirectorSystem, and actively attend the board meetings and shareholders' meetings, understand and obtain relevantinformation before meetings; carefully consider each motion, and actively participate in the discussions and makerecommendations. Seriously make independent opinions, and effectively protect the interests of the Company andshareholders, especially the minority shareholders. Independent directors have no objections on relevant mattersof the Company.The Company further implements the Basic Norms of Enterprise Internal Control and its guidelines, constructs

the internal control system in the Company headquarters and major subsidiaries, enhance the Company'smanagement and control level, optimize the work flow, improve the internal control system, identify and controlthe operational risks. Please see the detailed contents of 2021 Internal Control Evaluation Report onwww.cninfo.com.cn which is the information disclosure website designated by Shenzhen Stock Exchange.

Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance forlisted company from CSRC?

□ Yes √ No

There are no differences between the actual condition of corporate governance and relevant regulations about corporate governancefor listed company from CSRC.II. Independence of the Company relative to controlling shareholder and the actual controllerin ensuring the Company’s assets, personnel, finance, organization and businesses

1. Business: the company has a complete independent research and development, procurement, production andsales systems, the main business does not have horizontal competition with the controlling shareholders. Thebusiness is absolutely separated.

2. Personnel: the company has mutual independence with its controlling shareholders in labor, personnel andsalary management; there is no mixed operation and management with the controlling shareholders. Thecompany’s general manager, vice general manager, financial administrator, secretary of the board, and seniorexecutives don’t hold any position in the shareholders’ units.

3. Assets: the company's assets are independent and complete, the property relations with the controllingshareholders are clear.

4. Organization: the company has established organization completely independent from its controllingshareholders, the duty and authority of the company’s stockholders' meeting, board of directors, board ofsupervisors and management level are clearly defined, the internal management system can operateindependently.

5. Finance: the company has set up an independent financial department, established the independent financialaccounting system and financial management system, opened the independent bank account, and paid taxesseparately according to law.III. Horizontal competition

□ Applicable √ Not applicable

IV. In the report period, the Company held annual shareholders’ general meeting andextraordinary shareholders’ general meeting

1. Annual Shareholders’ General Meeting in the report period

Ordinal number of the shareholders’ general meetingTypeRatio of investor participationDateDate of disclosureResolution of the Meeting
Annual General Meeting of 2020AGM45.88%2021-05-202021-05-21(Notice No.: 2021-024) published on Juchao Website(www.cninfo.com.cn)

2. Request for extraordinary shareholders’ general meeting by preferred stockholders whose voting rightsrestore

□ Applicable √ Not applicable

V. Directors, supervisors and senior officers

1. Basic information

NameTitleWorking statusSexAgeStart dated of office termEnd date of office termShares held at period-begin (Share)Amount of shares increased in this period (Share)Amount of shares decreased in this period (Share)Other changes (share)(Share)Reasons for increase or decrease of shares
Wang XiaodongChairmanCurrently in officeMale552020-05-282024-05-19420,781420,781
Kirsch ChristophVice ChairmanCurrently in officeMale602021-05-202024-05-19
Xu YunfengVice Chairman, GMCurrently in officeMale502020-05-282024-05-19363,000363,000
Ou JianbinDirector, Executive Deputy General Manager and financing ChargerCurrently in officeMale552012-03-072024-05-19290,000290,000
Chen YudongDirectorCurrently in officeMale602012-03-072024-05-19
Zhao HongDirectorCurrently in officemale402021-05-202024-05-19
Huang RuiDirectorCurrently in officeMale372021-05-202024-05-19
Yu XiaoliIndependent DirectorCurrently in officemale582018-06-272024-05-19
Xing MinIndependent DirectorCurrently in officeMale672021-05-202024-05-19
Feng KaiyanIndependent DirectorCurrently in officemale482021-05-202024-05-19
Pan XinggaoIndependent DirectorCurrently inMale502021-05-202024-05-19
office
Ma YuzhouChairman of the Supervisory CommitteeCurrently in officeMale472021-05-202024-05-19
Chen RanSupervisorCurrently in officeMale492020-05-282024-05-191,0001,000
Liu SongxueSupervisorCurrently in officemale362021-05-202024-05-19
Miao YumingDeputy GMCurrently in officeMale582003-04-162024-05-19290,000290,000
Xu ShengDeputy GMCurrently in officeMale472020-05-282024-05-19280,000280,000
Rong BinDeputy GMCurrently in officeMale462020-05-282024-05-19280,000280,000
Liu JinjunDeputy GM and Secretary of the BoardCurrently in officeMale462020-05-282024-05-19280,000280,000
Li GangChief engineerCurrently in officeMale512020-05-282024-05-19280,000280,000
Rudolf MaierVice ChairmanLeave officeMale642012-03-072021-05-20
Zhang XiaogengDirectorLeave officeMale582015-05-282021-05-20
Hua WanrongDirectorLeave officemale572012-03-072021-05-20
Lou DimingIndependent DirectorLeave officeMale582015-05-282021-05-20
Jin ZhangluoIndependent DirectorLeave officeMale712015-05-282021-05-20
Xu XiaofangIndependent DirectorLeave officeMale582015-05-282021-05-20
Shi Xing yuanChairman of the Supervisory CommitteeLeave officeMale592012-03-072021-05-2012,67312,673
Zhou WeixingSecretary of the BoardLeave officeMale582005-06-092021-05-20123,565123,565
Total------------2,621,0190002,621,019--

During the reporting period, whether there was any departure of directors and supervisors and dismissal of Senior Executives

□Yes √No

Changes of directors, supervisors and senior executives

√Applicable □ Not applicable

NamePositionTypeDateCause
Kirsch ChristophVice ChairmanBe elected2021-05-20Be elected
Zhao HongDirectorBe elected2021-05-20Be elected
Huang RuiDirectorBe elected2021-05-20Be elected
Xing MinIndependent DirectorBe elected2021-05-20Be elected
Feng KaiyanIndependent DirectorBe elected2021-05-20Be elected
Pan XinggaoIndependent DirectorBe elected2021-05-20Be elected
Ma YuzhouChairman of the Supervisory CommitteeBe elected2021-05-20Be elected
Liu SongxueSupervisorBe elected2021-05-20Be elected
Rudolf MaierVice ChairmanLeaving at the end of the term of office2021-05-20Leaving at the end of the term of office
Zhang XiaogengDirectorLeaving at the end of the term of office2021-05-20Leaving at the end of the term of office
Hua WanrongDirectorLeaving at the end of the term of office2021-05-20Leaving at the end of the term of office
Lou DimingIndependent DirectorLeaving at the end of the term of office2021-05-20Leaving at the end of the term of office
Jin ZhangluoIndependent DirectorLeaving at the end of the term of office2021-05-20Leaving at the end of the term of office
Xu XiaofangIndependent DirectorLeaving at the end of the term of office2021-05-20Leaving at the end of the term of office
Shi Xing yuanChairman of the Supervisory CommitteeLeaving at the end of the term of office2021-05-20Leaving at the end of the term of office
Zhou WeixingSecretary of the BoardLeaving at the end of the term of office2021-05-20Leaving at the end of the term of office

2. Post-holding

Professional background, major working experience and present main responsibilities in Company of directors,supervisors and senior executiveMr. Wang Xiaodong, was born in November 1966, Chinese nationality and no permanent residence abroad, member ofthe CPC, a university graduate, MBA and full senior engineer. He previously served as the engineer, director anddeputy chief engineer in technology center of the Company, sales director, deputy GM of RBCD, Supervisor ofthe company, vice chairman and GM of the Company. Currently serves as Chairman and Party Secretary of theCompany.Mr. Kirsch Christoph, was born in October 1961, German nationality, Master’s degree. He previously served asR&D engineer, product manager and key account sales maneger of the diesel system division in Robert BoschGroup, GM of Bosch Automotive Diesel System Co., Ltd, senior vice president of the commercial vehiclebusiness, Bosch Diesel System Division, the executive vice president of production & quality in UnitedAutomotive Electronic Systems Co., Ltd(UAES), executive vice president of production & quality, gasolinesystem division of Bosch Group, the executive vice president of commercial vehicle & off-road business, the

solution business division of RBCD. Currently he serves as executive vice president, representing the BoschAutomotive and Intelligent Mobility Asia Pacific Board, and Vice Chairman of the Company.Mr. Xu Yunfeng, born in November 1971, Chinese nationality and no permanent residence abroad, member of theCPC, a university graduate and an engineer, and holds a master's degree. He worked as a test engineer and designteam leader in technical center of the Company, assistant of the oil pump & nozzle research institute of thetechnical center, deputy director of the product research institute of technical center, the technical sales manager,GM assistant and GM of the Wuxi Weifu Automobile Diesel System Co., ltd, and deputy GM of the Company. Hecurrently serves as Vice Chairman and GM of the Company and deputy secretary of the party committee of theCompany.Mr. Ou Jianbin, born in June 1966, Chinese nationality and no permanent residence abroad, member of the CPC, asenior college graduated and an accountant. Previously served as Deputy Minister of Financial Department ofWeifu Company, Director and deputy GM of subsidiary WFJN, Deputy GM and GM of subsidiary WFLD andsupervisor of the Company. Currently he serves as director and standing deputy GM as well as chief of thefinancial of the Company.Mr. Chen Yudong, was born in September 1961, an America citizenship and a Doctor. He previously served assenior vice president of the gasoline system division of Robert Bosch Group, executive vice president of Bosch(China) Investment Ltd. Now he serves as President of Bosch (China) Investment Ltd. and Director of theCompany.Ms. Zhao Hong, born in September 1981, Chinese nationality and no permanent residence abroad, member of theCPC, Bachelor’s degree, an accountant. She worked as an account in Wuxi Tianyi Membrane TechnologyApplication Equipment Factory, the project auditor of Wuxi Founder Taxation Firm, the deputy director of auditand inspection department, director, deputy secretary of discipline inspection commission, secretary of directorbureau and chief of staff in Wuxi Industry Development Group Co., Ltd. Now she is the secretary to the BOD andchief operating officer of Wuxi Industry Development Group Co., Ltd and the Director of the Company.Mr. Huang Rui, born in December 1984, Chinese nationality and no permanent residence abroad, member of theCPC, Master’s degree. He worked as the product manager of Shangde Power, senior project manager of WuxiMerchants Bureau, manager of the Ernst & Young Huaming CPA (Shanghai), deputy GM, municipal environmentdivision of Wuxi Guolian Environmental Energy Group, the vice president of investment development department,vice president of investment development department II (presiding over the work), vice president of investmentbanking of Wuxi Industry Development Group Co., Ltd. Now he is the GM of investment banking department ofWuxi Industry Development Group Co., Ltd and Director of the Company.Ms. Yu Xiaoli, born in January 1963, Chinese nationality and no permanent residence abroad, member of the CPC,Ph.D., a professor, she has been teaching at Zhejiang University since 1985. She served as an independent directorof the sixth, seventh and ninth of the Board of the Company, and the dean of the engineering branch of ZhejiangUniversity City College. She is currently a professor at Zhejiang University and Doctoral supervisor, the chairmanof the Society of Automotive Engineers of Zhejiang, an director of Zhejiang Bozhong Automobile Technology Co.,Ltd., and independent director of Zhejiang Yinlun Co., Ltd, an independent director of Zhejiang EVTECH Co.,

Ltd.and independent director of Zhejiang Fenglong Electric Co., Ltd., and the independent director of theCompany.Mr. Xing Min, born in January 1954, Chinese nationality and no permanent residence abroad, member of the CPC,Bachelor’s degree, a professor-level senior engineer. He worked as the secretary of the Party Committee of ChinaHeavy Machinery Corporation, secretary of the Party Committee and GM of China Machine Tool Corporation.Now he is the executive vice president and secretary general of China Internal Combustion Engine IndustryAssociation, Independent Director of Zhejiang Zhongjian Technology Co., Ltd, Independent Director of JiangsuYunyi Electric Co., Ltd., Independent Director of Changchai Company Limited, Independent Director of ZhejiangXinchai Co., Ltd, Director of Anhui Aikelan Environmental Protection Co., Ltd, and Independent Director of theCompany.Ms. Feng Kaiyan, born in October 1973, Chinese nationality and no permanent residence abroad, member of theCPC, a Bachelor’s degree, Certified Public Accountant and senior accountant. She worked as the accounting forWuxi Production Materials Corporation and Wuxi Geological & Mining Information Service Center. Currently, sheis the chief accountant of Wuxi Donghua Accounting Firms Co., Ltd, responsible person of the Sunan Branch,Jiangsu Fuhua Engineering Cost Consulting Co., Ltd, the independent director of Wuxi Weifeng Technology Co.,Ltd, independent director of yuancheng Cable Co., Ltd, independent director of Kangdexin Composite MaterialGroup Co., Ltd, the external director of Wuxi Urban Construction Development Group Co., Ltd and independentdirector of the Company.Mr. Pan Xinggao, born in June 1971, Chinese nationality and no permanent residence abroad, a Bachelor’s degreeand a lawyer. He served as a lawyer of Shandong Jinan Quancheng Laws Firm, a lawyer of Beijing Zhongyin LawFirm and lawyer of Beijing Zhonglun Jingtong Laws Firm. Now he is the Partner of Beijing Tongshang Law Firm,the independent director of Huarui Traffic Technology Co., Ltd and independent director of the Company.Mr. Ma Yuzhou, born in September 1974, Chinese nationality and no permanent residence abroad, member of theCPC, a Master graduate and an engineer. He worked as the craftsman in the Company’s assembly branch, assistantsecretary of the mission committee of the Company, deputy secretary of the Company’s fuel injection branch,deputy director of the Company’s Party Committee Work Dept., plunger branch deputy plant manager, headtreatment plan manager, director of oil pump branch plant, assembly plant manager, deputy GM of WFTT, deputyGM and GM of the Company’s mechanical system division and director of organization & personnel dept. of theCompany. Now he is the deputy secretary of the Company’s Party Committee and chairman of the SupervisoryCommittee of the Company.Mr. Chen Ran, born in December 1972, Chinese nationality and no permanent residence abroad, member of the CPC,a Bachelor’s degree, and a senior human resource manager. He once served as deputy director of the company’smanagement department, deputy director of the investment and audit department, director of human resourcesdepartment, deputy director of the party and mass department, deputy director of administration department,deputy director of engineering procurement department, director of the company’s party and mass department anddirector of the disciplinary inspection and supervision department. He is currently a director of the Company's

organization and personnel department and supervisor of the Company.Ms. Liu Songxue, born in July 1985, Chinese nationality and no permanent residence abroad, member of the CPC, aBachelor’s degree, and an engineer. She worked as the product testing engineer and product design engineer intechnical center of the Company. Currently she is the secretary general of the Science & Technology Associationof the Company and Supervisor of the Company.Mr. Miao Yuming, born in April 1963, Chinese nationality and no permanent residence abroad, member of the CPC,Master’s Degree and senior engineer. He previously served as deputy director and director of sales department andassistant GM and deputy GM of the Company. Currently he serves as deputy GM of the Company, deputy GM ofRBCD.Mr. Xu Sheng, born in March 1974, Chinese nationality and no permanent residence abroad, member of the CPC,graduate degree, holds a master’s degree, and is an engineer. He once served as secretary of the party committeeof the company’s party committee work department, deputy director of the office of the general manager of thecompany, deputy secretary of the party branch and deputy factory manager of the company’s injector parts branch,HSE manager of Bosch Automotive Diesel System Co., Ltd., senior manager of BPS, director of MOE5, andassistant general manager of the company. He is currently the deputy GM of the Company.Mr. Rong Bin, born in December 1975, Chinese nationality and no permanent residence abroad, member of the CPC,holds a bachelor's degree, and is an assistant engineer. He joined the Company in July 1998 and worked as viceplant manager of the company's plunger branch, deputy manager of the common rail component company, deputymanager and manager of the first manufacturing department of the company's mechanical system businessdepartment, assistant to the general manager, deputy general manager, and general manager of the company'smechanical system business department, and general manager of the automotive diesel system division andgeneral manager of the mechanical system division. He currently serves as the deputy GM of the Company.Mr. Liu Jinjun, born in September 1975, Chinese nationality and no permanent residence abroad, member of the CPC,holds a bachelor’s degree and a master’s degree, and is an engineer. He once served as the manager of thepersonnel administration department and technical sales manager of Wuxi Weifu Automotive Diesel System Co.,Ltd., the director of the company's human resources department, supervisor of the seventh and eighth of theSupervisory Committee of the Company, head of the corporate strategy & new business department and head ofmarket development department of the Company. He is currently the deputy GM and secretary of the Board of theCompany.Mr. Li Gang, born in November 1970, Chinese nationality and no permanent residence abroad, member of the publicinterest Party, holds a bachelor’s degree and a master’s degree, and a full senior engineer. He once served as theproduct design engineer of the company's technology center, the production supervisor of the productiondepartment and the technical director of the technical sales department of Wuxi Weifu Automotive Diesel SystemCo., Ltd., the deputy director of the company's technology center, deputy dean of the company's engineeringtechnology research institute and the director of the technology center, and the standing deputy director (deputychief engineer) of the company's technology center. He is currently the chief engineer of the Company.

Post-holding in shareholder’s unit

√ Applicable □ Not applicable

NameName of shareholder’s unitPosition in shareholder’s unit nStart dated of office termEnd date of office termReceived remuneration from shareholder’s unit (Y/N)
Kirsch ChristophROBERT BOSCH GMBHExecutive vice president, representing the Bosch Automotive and Intelligent Mobility Asia Pacific Board2021-04-01Y
Chen YudongBosch (China) Investment Ltd.President2011-01-01Y
Zhao HongWuxi Industry Development Group Co., Ltd.Secretary of director bureau, chief operating officer2021-04-19Y
Huang RuiWuxi Industry Development Group Co., Ltd.GM of Investment Banking Dept.2021-05-01Y
Miao YumingRobert Bosch Powertrain Ltd.Deputy GM2012-03-01Y

Post-holding in other unit

√ Applicable □ Not applicable

NameName of other unitsPosition in other unitStart dated of office termEnd date of office termReceived remuneration from other unit (Y/N)
Yu XiaoliZhejiang UniversityTeacher and professor1985-08-01Y
Yu XiaoliSociety of Automotive Engineers of ZhejiangDirector2015-06-01N
Yu XiaoliZhejiang Bozhong Automobile Technology Co., LtdDirector2008-04-01N
Yu XiaoliZhejiang Fenglong Electric Co., Ltd.Independent Director2016-04-01Y
Yu XiaoliZhejiang EVTECH Co., LtdIndependent Director2016-06-01Y
Yu XiaoliZhejiang Yinlun Co., LtdIndependent Director2020-08-06Y
Xing MinChina Internal Combustion Engine Industry AssociationExecutive vice president and secretary general2008-08-01Y
Xing MinJiangsu Yunyi Electric Co., LtdIndependent Director2019-07-31Y
Xing MinZhejiang Zhongjian Technology Co., LtdIndependent Director2017-06-20Y
Xing MinZhejiang Xinchai Co., LtdIndependent Director2019-12-06Y
Xing MinChangchai Company LimitedIndependent Director2020-04-16Y
Xing MinAnhui Aikelan Environmental Protection Co., LtdDirector2021-11-22Y
Feng KaiyanWuxi Donghua Accounting Firms Co., LtdChief accountant1998-10-01Y
Feng KaiyanJiangsu Fuhua Engineering Cost Consulting Co., Ltd - Sunan BranchResponsible person2020-07-16Y
Feng KaiyanWuxi Weifeng Technology Co., LtdIndependent Director2017-12-28Y
Feng Kaiyanyuancheng Cable Co., Ltd.Independent Director2019-11-22Y
Feng KaiyanKangdexin Composite Material Group Co., LtdIndependent Director2020-08-26Y
Feng KaiyanWuxi Urban Construction Development Group Co., LtdExternal Director2021-12-31Y
Pan XinggaoBeijing Tongshang Law FirmLawyer/ Partner2007-10-01Y
Pan XinggaoHuarui Traffic Technology Co., LtdIndependent Director2022-02-26Y
Explanation on post-holding in other unitThe aforesaid are the independent directors of the Company

Punishment of securities regulatory authority in recent three years to the company’s current and outgoing directors, supervisors andsenior management during the reporting period

□ Applicable √ Not applicable

3. Remuneration for directors, supervisors and senior executives

Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives

1. Decision-making procedure: the remuneration committee of the Board shall make proposals according to completion status of themajor annual targets, the implementation of which is subject to submission to and approval by the Board;

2. Determination reference: remuneration of directors, supervisors and senior management who receive remuneration from theCompany is determined based on the Annual Operating Results Assessment Measures of Senior Management and RemunerationManagement Rules of Senior Management as approved at the shareholders’ general meetings. Allowance for independent directorsof the Company is determined by shareholders’ general meeting which is set at 15,000 yuan per person/year (tax included), and thetraveling expense occurred by them arising from attending the Company’s board meeting, general meetings and relevant activitieswill be reimbursed according to the actual conditions.

3. Actual payment: remuneration of directors, supervisors and senior management who receive remuneration from the Companycomprises of basic annual pay and performance related annual salary. The basic annual pay shall be determined based on specificpositions and paid monthly, while the performance related salary is determined and paid based on satisfaction of the variousperformance indicators since it is directly linked with the economic benefits of the Company. Remuneration of independent directorswill be paid on a quarterly basis.Remuneration for directors, supervisors and senior executives in reporting period

In 10,000 yuan

NameTitleSexAgePost-holding statusTotal remuneration obtained from the Company (before taxes)remuneration obtained from related party of the Company (Y/N)
Wang XiaodongChairmanMale55Currently in office449N
Kirsch ChristophVice ChairmanMale60Currently in officeY
Xu YunfengVice Chairman、GMMale50Currently in office383N
Ou JianbinDirector, Executive Deputy General Manager and financing ChargerMale55Currently in office328N
Chen YudongDirectorMale60Currently in officeY
Zhao HongDirectorFemale40Currently in officeY
Huang RuiDirectorMale37Currently in officeY
Yu XiaoliIndependent DirectorFemale58Currently in office14.1N
Xing MinIndependent DirectorMale67Currently in office10N
Feng KaiyanIndependent DirectorFemale48Currently in office10N
Pan XinggaoIndependent DirectorMale50Currently in office10N
Ma YuzhouChairman of the Supervisory CommitteeMale47Currently in office192N
Chen RanSupervisorMale49Currently in office72N
Liu SongxueSupervisorFemale36Currently in office16N
Miao YumingDeputy GMMale58Currently in officeY
Xu ShengDeputy GMMale47Currently in office192N
Rong BinDeputy GMMale46Currently in office192N
Liu JinjunDeputy GM, Secretary of the BoardMale46Currently in office192N
Li GangChief engineerMale51Currently in office192N
Rudolf MaierVice ChairmanMale64Leave officeY
Zhang XiaogengDirectorMale58Leave officeY
Hua WanrongDirectorFemale57Leave officeY
Lou DimingIndependent DirectorMale58Leave office4.1N
Jin ZhangluoIndependent DirectorMale71Leave office4.1N
Xu XiaofangIndependent DirectorMale58Leave office4.1N
Shi Xing yuanChairman of the Supervisory CommitteeMale59Leave office328N
Zhou WeixingSecretary of the BoardMale58Leave office81N
Total--------2,673.4--

VI. Responsibility performance of directors during the reporting period

1. The board of directors during the reporting period

Session of meetingDate of meetingDisclosure dateMeeting resolutions
The 22nd Session of 9th BOD2021-02-262021-03-02The Notice of the Resolution of 22nd Session of 9th BOD (Notice No.: 2021-001) published on Juchao Website (www.cninfo.com.cn)
The 23rd Session of 9th BOD2021-04-162021-04-20The Notice of the Resolution of 23rd Session of 9th BOD (Notice No.: 2021-006) published on Juchao Website (www.cninfo.com.cn)
The 24th Session of 9th BOD2021-04-23The Notice of the Resolution of 24th Session of 9th BOD (announcement-free according to relevant regulations)
The 1st Session of 10th BOD2021-05-202021-05-21The Notice of the Resolution of 1st Session of 10th BOD (Notice No.: 2021-025) published on Juchao Website (www.cninfo.com.cn)
The 2nd Session of 10th BOD2021-06-182021-06-19The Notice of the Resolution of 2nd Session of 10th BOD (Notice No.: 2021-028) published on Juchao Website (www.cninfo.com.cn)
The 3rd Session of 10th BOD2021-08-20The Notice of the Resolution of 3rd Session of 10th BOD (announcement-free according to relevant regulations)
The 4th Session of 10th BOD2021-09-172021-09-18The Notice of the Resolution of 4th Session of 10th BOD (Notice No.: 2021-035) published on Juchao Website (www.cninfo.com.cn)
The 5th Session of 10th BOD2021-10-222021-10-26The Notice of the Resolution of 5th Session of 10th BOD (Notice No.: 2021-038) published on Juchao Website (www.cninfo.com.cn)

2. The attending of directors to Board meetings and shareholders general meeting

The attending of directors to Board Meeting and Shareholders General Meeting
DirectorTimes of Board meeting supposed to attend in the report periodTimes of Presenceattending the Board Meeting by communicationTimes of entrusted presenceTimes of AbsenceAbsent the Meeting for the second time in a row (Y/N)Times of attend the general meeting
Wang Xiaodong826N1
Kirsch Christoph55N1
Xu Yunfeng826N1
Ou Jianbin826N1
Chen Yudong88N1
Zhao Hong514N1
Huang Rui514N1
Yu Xiaoli826N1
Xing Min514N1
Feng Kaiyan514N1
Pan Xinggao514N1
Rudolf Maier33N0
Zhang Xiaogeng312N0
Hua Wanrong312N0
Lou Diming312N0
Jin Zhangluo312N0
Xu Xiaofang312N0

Explanation of absent the Board Meeting for the second time in a row

3. Objection for relevant events from directors

Directors come up with objection about Company’s relevant matters

□ Yes √ No

No directors come up with objection about Company’s relevant matters in the Period

4. Other explanation on responsibility performance of directors

The opinions from directors have been adopted

√ Yes □ No

Director's statement to the Company that a proposal has been or has not been adopted

During the reporting period, all the directors of the Company were diligent and conscientious, carried out their work in strictaccordance with the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange, as wellas the Articles of Association, Rules of Procedure for the Board of Directors and other systems, and paid close attention to theCompany’s standardized operation and business condition, put forward relevant opinions on the Company’s major governance andoperation decisions according to the actual situation of the Company, form a consensus after full communication and discussion, andsupervise and promote the implementation of the resolutions of the board of directors, ensure scientific, timely and efficientdecision-making, and maintain the legitimate rights and interests of the Company and all shareholders.

VII. The special committees under the BOD during the reporting period

Committee nameMembersNumber of meetings heldDate of meetingMeeting contentImportant comments and suggestions madeOther performance of dutiesSpecific circumstances of the objection (if applicable)
The 9th Strategy CommitteeWang Xiaodong, Rudolf Maier, Chen Yudong, Yu Xiaoli and Lou Diming12021-04-16Consideration of the Strategic Vision of the Company’s Future DevelopmentStrategy Committee verified and deliberated on the matters strictly in terms of the Rules of Work of Strategy Committee of the Board and relevant laws and regulations, relevant proposals are unanimously agreed.N/AN/A
The 9th Audit CommitteeJin Zhangluo, Xu Xiaofang and Hua Wanrong12021-04-16Consideration of the (1)Annual Report of 2020 (full-text) and Summary of Annual Report 2020; (2)Financial Report of 2020; (3)Proposal Regarding the Actual Amount of Some Routine Related Transactions in 2020 Exceeds the Estimated Amount; (4)Summary Report of Audit Work for year of 2020; (5) Proposal on Estimating the Total Amount of Routine Related Transactions in 2021; (6) Proposal to Revise the Financial Management System of Funds; (7) Proposal on Entrusted Wealth Management with Idle Own-Funds of the Company; (8) Proposal on Appointment of the Auditing Institution for 2021 Financial Report; and (9) Proposal on Appointment of Auditing Institution for 2021 Internal Control EvaluationAudit Committee verified and deliberated on the matters strictly in terms of the Rules of Work of Audit Committee of the Board and relevant laws and regulations, relevant proposals are unanimously agreed.N/AN/A
The 10th Audit CommitteeFeng Kaiyan, Pan Xinggao and Zhao Hong22021-08-20Consideration of the Semi-Annual Report of 2021 (full-text) and Summary of Semi-Annual Report 2021Audit Committee verified and deliberated on the matters strictly in terms of the Rules of Work of Audit Committee of the Board and relevant laws and regulations, relevant proposals are unanimously agreed.N/AN/A
2021-10-22Consideration of the Third Quarter Report of 2021Audit Committee verified and deliberated on the matters strictly in terms of the Rules of Work of Audit Committee of the Board and relevant laws and regulations,N/AN/A
relevant proposals are unanimously agreed.
The 9th Remuneration CommitteeXu Xiaofang, Jin Zhangluo and Zhang Xiaogeng12021-04-16Consideration of the (1)Proposal Report on Remuneration Assessment for Senior Executives and Payout for year of 2020; (2) Proposal on Revision of Remuneration Management Measures for Senior Executives; and (3) Proposal Report of the Allowance for Independent DirectorRemuneration Committee verified and deliberated on the matters strictly in terms of the Rules of Work of Remuneration Committee of the Board and relevant laws and regulations, relevant proposals are unanimously agreed.N/AN/A
The 10th Remuneration CommitteeYu Xiaoli, Feng Kaiyan and Huang Rui12021-10-22Consideration of the (1)Proposal on Adjustment of the Buy-back Price on Restricted Stock Incentive Plan for year of 2020; and (2) Proposal on Buy-back and Cancellation of the Restricted Stocks Partially Granted without Circulation for year of 2020Remuneration Committee verified and deliberated on the matters strictly in terms of the Rules of Work of Remuneration Committee of the Board and relevant laws and regulations, relevant proposals are unanimously agreed.N/AN/A
The 9th Nomination CommitteeLou Diming, Yu Xiaoli and Wang Xiaodong12021-04-16N/AN/A
The 10th Nomination CommitteePan Xinggao, Xing Min and Chen Yudong12021-05-20Nomination Committee verified and deliberated on the matters strictly in terms of the Rules of Work of Nomination Committee of the Board and relevant laws and regulations, relevant proposals are unanimously agreed.N/AN/A

VIII. Works from Supervisory CommitteeThe Company has risks in reporting period that found in supervisory activity from supervisory committee

□ Yes √ No

IX. Particulars of workforce

1.Number of Employees, Professional composition, Education background

Employee in-post of the parent Company at period-end (people)2,623
Employee in-post of main Subsidiaries at period-end (people)2,717
The total number of current employees at period-end (people)5,340
The total number of current employees to receive pay (people)5,340
Retired employee’ s expenses borne by the parent Company and0
main Subsidiaries (people)
Professional composition
Category of professional compositionNumbers of professional composition (people)
Production personnel3,203
Sales personnel167
Technical personnel1,231
Financial personnel95
Administrative personnel644
Total5,340
Education background
Category of education backgroundNumbers (people)
Master degree and above335
Undergraduate1,513
Junior college1,101
Other2,391
Total5,340

2. Remuneration Policy

According to the talent concept of “joint endeavour and fair sharing”, the Company further improves theperformance management and salary management system, strengthens the scientificity and pertinence ofperformance goals, and focuses on the Company’s strategy and business plan to give full play to the guiding andpromoting role of goals; further plays the role of incentive funds, strengthens the promotion and incentive strengthof major innovation and development projects so as to promote the realization of the Company’s strategic goals.

3. Training programs

The Company takes “building a strategy-oriented talent team” as the goal, further improves and trains thedevelopment capabilities, actively promotes the construction of the “San Hang Yi Jiang” talent training system,and develops ability improvement plans and specific training plans for employees in different developmentchannels; builds an online training platform, expands multi-dimensional training resources, and increases trainingcoverage; further improves the ability of internal trainers, strengthens training development and curriculumsettings for new businesses; further strengthens action learning, promotes the implementation of training effects,and comprehensively promotes the ability improvement of the Company’s employees.

4. Labor outsourcing

□ Applicable √ Not applicable

X. Profit distribution plan and transfer of public reserve into share capitalFormulation, implementation and adjustment of profit distribution policy, in particular the cash dividend policy during the reportingperiod

√ Applicable □ Not applicable

1. Cash dividend policy: carry out bonus distribution according to the regulations of Articles of Association

2. During reporting period, the Company implemented the profit distribution for year of 2020, based on the totalshare capital after excluding the buy-back shares on buy-back account (56,277 A-stock) from total share capital1,008,950,570 shares, distributed 15 yuan (tax included) bonus in cash for every 10 shares held, no capitalizationfrom public reserves. The plan was completed in June 2021. The implementation of the Company's cash dividendpolicy is in compliance with the provisions of Articles of Association, relevant decision-making procedures arecomplete and fully listen to the views of independent directors and small & medium shareholders and maintain thelegitimate rights and interests of small & medium shareholders.

Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement of Article of Association (Y/N):Y
Well-defined and clearly dividend standards and proportion (Y/N):Y
Completed relevant decision-making process and mechanism (Y/N):Y
Independent directors perform duties completely and play a proper role (Y/N):Y
Small & medium shareholders have opportunity to express opinions and demands totally and their legal rights are fully protected (Y/N):Y
Condition and procedures are compliance and transparent while the cash bonus policy adjusted or changed (Y/N):Not applicable

The Company earnings during the reporting period and profit available for distribution to shareholders from parent company isnegative, but no cash dividend distribution plan has been proposed

□ Applicable √Not applicable

Profit distribution and capitalization of capital reserves during the reporting period

√Applicable □Not applicable

Bonus shares for every 10-share (Share)0
Dividends for every 10-share (RMB) (Tax included)16.00
Increase for every 10-share (Share)0
Equity base of distribution plan (Share)1,008,603,293
Total cash dividend (RMB) (Tax included)1,613,765,268.80
Cash dividend by other ways (share buy-back included) (RMB)0.00
Total cash dividend (other ways included) (RMB)1,613,765,268.80
Profits available for distribution (RMB)12,396,934,922.01
Ratio of the total cash dividend (other ways included) in total profit distribution100%
Cash dividend policy
Other
Detail explanation on profit distribution or capitalization from capital public reserve
Audited by Gongzheng Tianye Certified Public Accountants, net profit of the parent company for year of 2021 amount as 2,210,557,100Yuan, as of 31 December 2021 the profit available for distribution for shareholders amounted as 12,396,934,900 Yuan. The profit distribution plan for 2021: with the total share capital of the company at the end of 2021(1,008,659,570 shares), excluding the shares already repurchased on the repurchase account (56,277 shares of A-stock), that is the 1,008,603,293 shares as the base, distribute 16.00 Yuan (tax included) in cash for every 10 shares to all shareholders without bonus shares and capitalization of capital reserve. (In accordance with the Company Laws, shares of the company held by a listed company through a special securities account for repurchase shall not be entitled to participate in profit distribution and capitalization of capital reserves).The remaining undistributed profits will be carried forward to the next year. The proposed cash dividend is 1,613,765,300Yuan (tax included), accounting for 62.66% of the net profit attributable to shareholder of listed company for year of 2021 in consolidate statement. Independent directors expressed their independent opinions in this regard and agreed with the above proposal. The profit distribution proposal has yet to be deliberation by AGM of 2021.

XI. Implementation of the company’s stock incentive scheme, employee stock ownership planor other employee incentives

√Applicable □Not applicable

1.Stock incentive

On October 12, 2020, the Company held the 17

th

session of the 9

th

Board of Directors to deliberated and approvedrelevant proposal as the "Restricted Stock Incentive Plan 2020 (Draft)".On November 3, 2020, the Company held the second extraordinary shareholders’ general meeting of 2020 todeliberated and approved relevant proposals as the "Restricted Stock Incentive Plan 2020 (Draft) and itssummary", "Proposal on Assessment Management Measures for Restricted Stock Incentive Plan Implementation"and "Proposal to Request the Shareholders’ General Meeting to Authorized BOD to Fully Handle MattersRegarding Stock Incentive"On November 12, 2020, the Company held the 21

st

session of 9

thBOD, as authorized by the second extraordinaryshareholders’ general meeting of 2020, deliberated and approved the "Proposal on Adjusting the List of IncentiveObjects of the Restricted Stock Incentive Plan and the Number of Rights Granted" and the "Proposal on the FirstGrant of Restricted Stocks to Incentive Objects of the 2020 Restricted Stock Incentive Plan". The BOD considersthat conditions for the initial grant of 2020 restricted stock incentive plan have been met, and November 12, 2020is determine as the initial grant date, 19,540,000 restricted shares are granted to 601 incentive recipients at a grantprice of 15.48 yuan/Share.The Notice on Completion of the First Grant of 2020 Restricted Stock Incentive Plan was released by theCompany dated December 8, 2020.On October 22, 2021, the Company held the 5

th session of 10

thBOD to deliberated and approved relevantproposals as Adjustment of the Buy-back Price on Restricted Stock Incentive Plan for year of 2020 and Buy-back

and Cancellation of the Restricted Stocks Partially Granted without Circulation for year of 2020, and decided tobuy-back and cancel 291,000 restricted shares held by 11 incentive recipients that had been granted but not yetunlocked. As of December 20, 2021, cancellation of the above mentioned buy-back shares are completed at theShenzhen Branch of CSDC. After cancellation, number of the incentive recipients for the first grant of 2020restricted stock incentive plan was adjusted from 601 to 590, restricted stock of 19,249,000 shares are being held intotal.

Equity incentive received by directors and senior executives

√ Applicable □ Not applicable

In share

NameTitleNumber of stock options held at beginning of the yearNumber of new stock options granted during the reporting periodNumber of stock exercisable during the reporting periodNumber of stock exercised during the reporting periodExercise price of the stock exercised during the reporting period(RMB/Share)Number of stock options held at end of the periodMarket value at end of the Period (RMB/Share)Number of restricted shares held at beginning of the periodNumber of shares unlocked during the periodNumber of new restricted shares granted during the reporting periodGrant price of restricted shares (RMB/Share)Number of restricted shares held at end of the period
Wang XiaodongChairman21.54400,00015.48400,000
Xu YunfengVice Chairman, GM21.54350,00015.48350,000
Ou JianbinDirector, executive vice president and head of finance21.54280,00015.48280,000
Miao YumingDeputy GM21.54280,00015.48280,000
Xu ShengDeputy GM21.54280,00015.48280,000
Rong BinDeputy GM21.54280,00015.48280,000
Liu JinjunDeputy GM, Secretary of the Board21.54280,00015.48280,000
Li GangChief engineer21.54280,00015.48280,000
Total--0000--0--2,430,00000--2,430,000

Assessment mechanism and incentive condition of the senior executivesAssessment and incentive of senior management of the Company is conducted pursuant to the Company Law,Articles of Association, and the Annual Operating Results Assessment Measures of Senior Management andRemuneration Management Rules of Senior Management as approved at the general meetings. Assessment ofoperating results of senior management comprises of annual operating results assessment and term-of-serviceoperating results assessment. Assessment on results and procedure was combined, and assessment results werelinked to incentives and punishment. With respect to annual operating results review, the remuneration committeeof the Board made comprehensive assessment on satisfaction of the annual operating targets and determined the

annual remuneration, incentives or punishment for senior management based on their review results (which wasimplemented according to remuneration management rules of senior management), based on the major annualoperating targets set by the Board under required procedures and methods through establishment of scientificperformance indicators and assessment system and combination of scoring in terms of quantity and reviewcomments. During the reporting period, the Company made appropriate assessment on its senior managementunder the performance indicator and assessment system, the results of which had been reflected in the annualperformance related remuneration.Given that the Company implements the 2020 restricted stock incentive plan, and the incentive targets overlapwith the long-term incentives for core talents, the remuneration committee of the BOD proposes that theCompany’s 2020 restricted stock incentive plan suspend the provision of incentive funds during theimplementation period and use for medium and long-term incentives for core talents.

2. Implementation of employee stock ownership plan

□Applicable √Not applicable

3. Other employee incentives

□Applicable √Not applicable

XII. Construction and implementation of internal control system during the reporting period

1. Construction and implementation of internal control

During the reporting period, the Company strictly followed requirement of Basic Internal Control Standards forEnterprises and its accompanying guidelines, persist in the risk control concept of “keeping the bottom line;controlling risks; guarding the development”, constantly consolidate the fundamental of internal controlmanagement, continuously optimize the internal control process and vigorously promote the construction of internalcontrol system, conducted the supervision and improvement of the operation of internal control with risk-oriented toeffectively prevent risks in business management, provided a strong guarantee for high-quality and healthydevelopment of the enterprise and accelerate the achievement of Company’s strategic goals.

2. Details of major defects in internal control identified during the reporting period

□Yes √ No

XIII. Management and controls on the subsidiary during reporting period

NameIntegration plansIntegration progressProblems encountered in integrationMeasures taken to resolveProgress in solutionFollow-up solution plan
Not applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicable

XIV. Internal control self-assessment report or internal control audit report

1. Self-assessment Report of Internal Control

Disclosure date of full internal control assessment report2022-04-19
Disclosure index of full internal control assessment reportSelf-assessment report of internal control for 2021, more details found in Juchao website (www.cninfo.com.cn) appointed by Shenzhen Stock Exchange
The ratio of the total assets of units included in the scope of assessment accounting for the total assets on the company's consolidated financial statements97.88%
The ratio of the operating income of units included in the scope of assessment accounting for the operating income on the company's consolidated financial statements99.60%
Defects recognition criteria
CategoryFinancial ReportsNon-financial Reports
Qualitative criteriaSee details in (II) Basis for assessment of internal controls and defect recognition criteria of internal controls of III Assessment of Internal Controls in 2021 Annual Internal Control Self-Assessment Report disclosed on www.cninfo.com.cn dated April 19, 2022.See details in (II) Basis for assessment of internal controls and defect recognition criteria of internal controls of III Assessment of Internal Controls in 2021 Annual Internal Control Self-Assessment Report disclosed on www.cninfo.com.cn dated April 19, 2022.
Quantitative standardSee details in (II) Basis for assessment of internal controls and defect recognition criteria of internal controls of III Assessment of Internal Controls in 2021 Annual Internal Control Self-Assessment Report disclosed on www.cninfo.com.cn dated April 19, 2022.See details in (II) Basis for assessment of internal controls and defect recognition criteria of internal controls of III Assessment of Internal Controls in 2021 Annual Internal Control Self-Assessment Report disclosed on www.cninfo.com.cn dated April 19, 2022.
Number of significant defects in financial reports0
Number of significant defects in non-financial reports0
Number of important defects in financial reports0
Number of important defects in non-financial reports0

2. Auditing report of internal control

√Applicable □ Not applicable

Deliberations in Internal Control Audit Report
Audit institute considers that: according to relevant regulations and Basic Internal Control Standards for Enterprise, Weifu High-Technology Group Co., Ltd. in all major aspects, keeps an efficiency of internal control of financial report dated 31 December 2021
Disclosure details of audit report of internal controlDisclosed
Disclosure date of audit report of internal control (full-text)2022-04-19
Index of audit report of internal control (full-text)Audit report of internal control for year of 2021, more details found in Juchao website (www.cninfo.com.cn) appointed by Shenzhen
Stock Exchange
Opinion type of auditing report of ICStandard unqualified
Whether the non-financial report had major defects (Y/N)N

Carried out modified opinion for internal control audit report from CPA

□Yes √ No

The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board

√ Yes □ No

XV. Rectification of Self-examination Problems in Special Governance Actions in ListedCompany

N/A

Section V. Environmental and Social ResponsibilityI. Major environmentalThe listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department

□Yes √ No

Administrative punishment for environmental problems during the reporting period

Name of company or subsidiaryReason for punishmentViolationPunishment resultThe impact on the production and operation of listed companiesThe Company's rectification measures
N/AN/AN/AN/AN/AN/A

Other environmental information disclosed refer to key pollutersNot applicableMeasures taken to reduce carbon emissions during the reporting period and their effects

√ Applicable □ Not applicable

As an important part of the Company’s core value, saving resources and reducing consumption, on the one hand,are conducive to the improvement of enterprise efficiency, and at the same time, are also conducive to theimprovement of resource utilization rate of the whole society. Therefore, the Company continuously improvesresource utilization rate through technological innovation, vigorously promotes energy conservation and emissionreduction, and strives to achieve green production. The Company’s existing main business is based on the energysaving and emission reduction of automobiles. At present, the Company’s main products have all met therequirements of national emission regulations, and we are actively stocking products that meet more stringentemission regulations. In recent years, the Company has accelerated the layout and development of new energybusinesses such as green hydrogen energy and intelligent electric power, which will help achieve the goals of peakcarbon dioxide emissions and carbon neutrality.

Reasons for not disclosing other environmental informationNot applicableII. Social responsibilityFor details, please refer to the Social Responsibility Report for Year of 2021 released by the Company on the same day on JuchaoWebsite (www.cninfo.com.cn)

III. Consolidating and expanding the achievements of poverty alleviation and ruralrevitalization

During the reporting period, the Company actively fulfilled its social responsibilities, demonstrated its corporateaccountability for the era, established a good corporate image, and made positive contributions to promotingsustainable and high-quality development of economic society.In the action of “ten thousand enterprises unite with ten thousand to take the road of revitalization together”, theCompany joined with Maohua Village, Taihua Town, Yixing for co-construction. The Company combined theprocurement of agricultural products for employee welfare and the employees’ team building activities with thesupport for the development and revitalization of Maohua Village, and organized employees to go to MaohuaVillage for team building activities. The Company’s party committee signed a contract with the party buildingalliance of the party general branch of Baita Village, Xizhu Town, Yixing, so as to deepen the cooperationconnotation, expand the cooperation results, and achieve mutual benefit. The visit and study of party members andkey members and the cultural construction of staff team were combined with the development and revitalizationof Baita Village. The Company has successively organized 6 batches of party members and employees to visitBaita Village for team building and cultural visits, and purchased some agricultural products from Baita Village.

Section VI. Important MattersI. Implementation of undertakings

1. Undertakings that the actual controller, shareholders, related party, buyers and the Company havefulfilled during the reporting period and have not yet fulfilled by the end of reporting period

□ Applicable √ Not applicable

No undertakings that the actual controller, shareholders, related party, buyers and the Company have fulfilled during the reportingperiod and have not yet fulfilled by the end of the period

2. Concerning assets or project of the Company, which has profit forecast, and reporting period still inforecasting period, explain reasons of reaching the original profit forecast

□ Applicable √ Not applicable

II. Non-operational fund occupation from controlling shareholders and its related party

□ Applicable √ Not applicable

No non-operational fund occupation from controlling shareholders and its related party in period.III. External guarantee out of the regulations

□ Applicable √ Not applicable

No external guarantee out of the regulations occurred in the period.IV. Statement on the latest “modified audit report” by BOD

□ Applicable √ Not applicable

V. Explanation from Board of Directors, Supervisory Committee and Independent Directors(if applicable) for “Qualified Opinion” that issued by CPA

□ Applicable √ Not applicable

VI. Explanation of the changes in accounting polices, accounting estimates or correction ofsignificant accounting errors compared with the financial report of the previous year

√ Applicable □ Not applicable

Implemented the new lease standards: The Ministry of Finance issued the revised Accounting Standards for Business EnterpriseNo.21- Lease in December 2018. the Company has implemented the new leasing standards from January 1, 2021. For the contracts

existing prior to the date of first implementation, the Company has chosen not to re-assess whether they are leases or contains aleases. The Company adjusted the amount of retained earnings and other related items in financial statements at the beginning of theyear of initial implementation based on the cumulative effect of initial implementation, without adjusting the information forcomparable period. For details, please refer to “Note V.37. Changes in Significant Accounting Policies and Accounting Estimates” inSection X of the Financial Report.VII. Compare with last year’s financial report; explain changes in consolidation statement’sscope

□ Applicable √ Not applicable

No changes in consolidation statement scope in the reporting periodVIII. Appointment and non-reappointment (dismissal) of CPA

Accounting firm appointed

Name of domestic accounting firmGongzheng Tianye Certified Public Accountants (Special General Partnership)
Remuneration for domestic accounting firm (in 10 thousand yuan)166
Continuous life of auditing service for domestic accounting firm30
Name of domestic CPAGu Zhi, Zhang Qianqian
Continuous life of auditing service for domestic accounting firmGu Zhi (1 year), Zhang Qianqian (2 year)

Re-appointed accounting firms in this period

□Yes √No

Appointment of internal control auditing accounting firm, financial consultant or sponsor

√ Applicable □ Not applicable

Being deliberated in Annual Shareholders General Meeting of 2020, Gongzheng Tianye was appointed as audit accounting firm forinternal control of the Company for year of 2021. In the Period, auditing charge for internal control amounting to 220,000 yuan.IX. Particular about delisting after annual report disclosed

□ Applicable √ Not applicable

X. Bankruptcy reorganization

□ Applicable √ Not applicable

No bankruptcy reorganization for the Company in reporting periodXI. Major litigation and arbitration

√ Applicable □ Not applicable

Basic Situation of Litigation (Arbitration)Amount Related to the Case ( yuan)Whether Formed Accrued LiabilitiesProgress of Litigation (Arbitration)Trial Results and Effects of Litigation (Arbitration)Judgment Implementation of Litigation (Arbitration)Disclosure DateDisclosure Index
On March 6, 2017, the company received the civil ruling No.(2016)Y03MC2490 and No.(2016) Y03MC2492 from Shenzhen Intermediate People's Court about the dispute case that the plaintiff applicant China Cinda Asset Management Co., Ltd. Shenzhen Branch (hereinafter referred to as “Cinda Company”) appealed the respondent Weifu High Technology and other seven respondents and the shareholders of the third party Hejun Company damaged the interests of corporate creditors, which adopted the mandatory measures to freeze the assets with value of RMB 217 million under the name of the Company and other seven respondents and Hejun Company. Freeze 4.71 million shares of Miracle Automation and 15.3 million shares of SDEC Stock held by the company.21,703NBy the company’s application for reconsideration, Shenzhen Intermediate People's Court deemed the total assets that Cinda Company applied for preservation to be RMB 217,027,697.23. The total value of 15.3 million shares of SDEC Stock and 4.71 million shares of Miracle Automation held by the company has exceeded the total assets that Cinda Company applied for preservation, therefore, 3,560,898 shares of SDEC Stock held by the company was unfrozen. Up to the end of the reporting period, the company’s frozen assets were as follows: 4.71 million shares of Miracles Automation held by the company and its fruits, and 11,739,102 shares of SDEC Stock held by the company and its fruits. At present, this litigation is in the first instance (the first trial held on 24 Sept. 2017, and follow trial will wait for notice by the court).This litigation will not affect the company’s daily operating activities for the time beingNot yet implemented8 March 2017(Announcement No.: 2017-002) published on Juchao Website (www.cninfo.com.cn)
The Company has applied to Futian People's Court of Shenzhen for compulsory liquidation with Hejun Company3,300NThe Company has applied to Futian People's Court of Shenzhen for compulsory liquidation with Hejun Company. The civil ruling paper (Yue (0304) QS [2017] No. 5) made by Shenzhen Futian District People’s Court ruled that Hejun Company should be made compulsory liquidation. The Company will actively cooperate with the court to work on the liquidation to protect its legitimate rights and interests.There is no impact on daily operation activities of the CompanyRelevant works are in process6 Dec. 2017(Announcement No.: 2017-023) published on Juchao Website (www.cninfo.com.cn)

XII. Penalty and rectification

□ Applicable √ Not applicable

No penalty and rectification for the Company in reporting period.XIII. Integrity of the company and its controlling shareholders and actual controllers

□ Applicable √ Not applicable

XIV. Major related party transaction

1. Day-to-day related party transaction

√ Applicable □ Not applicable

Related partyRelationshipType of related transactionContent of related party transactionPricing principleRelated party transaction priceRelated party transaction amount (in 10 thousand yuan)Proportion in similar transactionsTrading limit approved (in 10 thousand yuan)Whether over the approved limited or not (Y/N)Clearing form for related transactionAvailable similar market priceDate of disclosureIndex of disclosure
WFPMAssociated enterpriseProcurement of goods and servicesProcurement of goods and servicesFair market pricingMarket price4,983.990.39%4,200YAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
RBCDAssociated enterprise, controlling subsidiary of Robert BoschProcurement of goods and servicesProcurement of goods and servicesFair market pricingMarket price35,990.312.85%33,500YAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
WFECJoint venture of WFLDProcurement of goodsProcurement of goodsFair market pricingMarket price82,396.296.52%165,000NAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
Robert Bosch CompanySecond largest shareholder of the CompanyProcurement of goods and servicesProcurement of goods and servicesFair market pricingMarket price21,657.661.71%21,500YAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
Guokai MetalHolding subsidiary of Wuxi Industry GroupProcurement of goods and servicesProcurement of goods and servicesFair market pricingMarket price5,799.120.46%YAccording to the contractMarket price
Changchun XuyangJOINT VENTURE OF WFLDProcurement of goodsProcurement of goodsFair market pricingMarket price171.260.01%YAccording to the contractMarket price
Shinwell AutomobileAssociated enterpriseProcurement of goodsProcurement of goodsFair market pricingMarket price0.00%100NAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
WFPMAssociated enterpriseSales of goods and servicesSales of goods and servicesFair market pricingMarket price2,950.160.22%4,500NAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
RBCDAssociated enterprise, controlling subsidiary of Robert BoschSales of goods and servicesSales of goods and servicesFair market pricingMarket price313,724.5422.93%320,000NAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
WFECJOINT VENTURE OF WFLDSales of goods and servicesSales of goods and servicesFair market pricingMarket price763.020.06%2,500NAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
Robert Bosch CompanySecond largest shareholder of the CompanySales of goods and servicesSales of goods and servicesFair market pricingMarket price122,435.028.95%122,000YAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
Changchun XuyangJOINT VENTURE OF WFLDSales of goodsSales of goodsFair market pricingMarket price2,143.620.16%YAccording to the contractMarket price
Shinwell AutomobileAssociated enterpriseSales of goodsSales of goodsFair market pricingMarket price2.930.00%100NAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
RBCDAssociated enterprise, controlling subsidiary of Robert BoschOtherTechnical service fee payableFair market pricingMarket price45.56100NAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
RBCDAssociated enterprise, controlling subsidiary of Robert BoschOtherPayment of technical commission fee etc.Fair market pricingMarket price233.23300NAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
RBCDAssociated enterprise, controlling subsidiary of Robert BoschOtherPurchase of fixed assetsFair market pricingMarket price52.84YAccording to the contractMarket price
Robert Bosch CompanySecond largest shareholder ofOtherTechnical commissionFair market pricingMarket price557.75700NAccording to the contrMarket priceApril 20, 2021Notice No:2021-012
the Companypayableact
Robert Bosch CompanySecond largest shareholder of the CompanyOtherPurchase of fixed assetsFair market pricingMarket price92.79YAccording to the contractMarket price
WFECJOINT VENTURE OF WFLDOtherRental fees receivableFair market pricingMarket price168.31300NAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
WFECJOINT VENTURE OF WFLDOtherPurchase of fixed assetsFair market pricingMarket price2.04YAccording to the contractMarket price
WFECJOINT VENTURE OF WFLDOtherTechnical service fees payable etc.Fair market pricingMarket price45200NAccording to the contractMarket priceApril 20, 2021Notice No:2021-012
WFECJOINT VENTURE OF WFLDOtherProvide technical services, etc.Fair market pricingMarket price87.34YAccording to the contractMarket price
Total----594,302.78--675,000----------
Detail of sales return with major amount involvedNot applicable
Report the actual implementation of the day-to-day related transactions which were projected about their total amount by types during the reporting period (if applicable)Being deliberated and approved by AGM of 2020, total day-to-day related party transaction for year of 2021 predicted as 6750 million yuan, actually 5943.0278 million yuan occurred in the Period, the related transaction classified according to types are as: 1. it estimated that procurement of goods and labor service from related party in 2021 will up to 2243 million yuan, while 1509.9863 million yuan occurred actually in the Period; 2. it estimated that sales of goods and labor service to related party in 2021 will up to 4491 million yuan, while 4420.1929 million yuan actually occurred. 3. it estimated that other related transactions with related party for year of 2021 will up to 16 million yuan while 12.8486 million yuan actually occurred.
Reasons for major differences between trading price and market reference price (if applicable)Not applicable

2. Related party transactions of assets acquisition and sold

□ Applicable √ Not applicable

No related party transactions of assets acquisition and sold occurred during the reporting period

3. Related party transactions of mutual investment outside

□ Applicable √ Not applicable

No related party transactions of mutual investment outside occurred during the reporting period.

4. Contact of related party credit and debt

□ Applicable √ Not applicable

The Company had no contact of related party credit and debt in the reporting period.

5. Contact with the related finance companies

□ Applicable √ Not applicable

There are no deposits, loans, credits or other financial business between the finance companies with associated relationship andrelated parties

6. Transactions between the finance company controlled by the Company and related parties

□ Applicable √ Not applicable

There are no deposits, loans, credits or other financial business between the finance companies controlled by the Company andrelated parties

7. Other material related party transactions

√ Applicable □ Not applicable

(1) On September 17, 2021, the Proposal of Intended to Participated in the Investment and Establishment of a Partnership Enterpriseand Related Transactions was deliberated and approved by 4

th session of 10

thBOD.

Disclosure website for inquires to the notice regarding material related transactions

Interim reportDisclosure dateWebsite for disclosure
Intended to Participated in the Investment and Establishment of a Partnership Enterprise and Related TransactionsSeptember 18, 2021Juchao Website(http://www.cninfo.com.cn)

XV. Significant contract and implementations

1. Trusteeship, contract and leasing

(1) Trusteeship

□ Applicable √ Not applicable

No trusteeship occurred during the reporting period

(2) Contract

□ Applicable √ Not applicable

No contract occurred during the reporting period

(3) Leasing

□ Applicable √ Not applicable

No leasing occurred during the reporting period

2. Material guarantees

□ Applicable √ Not applicable

No material guarantees occurred during the reporting period

3. Entrust others to cash asset management

(1) Trust financing

√ Applicable □ Not applicable

Trust financing during the period

In 10 thousand yuan

TypeCapital sourcesAmount occurredOutstanding balanceOverdue amountAmount with impairment accrual for the overdue financial products which has not been recovered
Financing productsOwn funds299,30091,91600
Financial products of securities firmsOwn funds111,50096,51200
Trust financial productsOwn funds345,653345,65300
Other typeOwn funds141,573141,57300
Total898,026675,65400

Details of the single major amount, or high-risk trust investment with low security, poor fluidity

√ Applicable □ Not applicable

In 10 thousand yuan

Trustee institution r nameTrustee typeTypeAmountSource of fundsStart dateEnd dateCapital investment purposeCriteria for fixing rewardReference annual rate of returnAnticipated income (if applicable)Actual gains/losses in periodActual collected gains/losses in periodAmount of reserve for devaluation of withdrawing (if applicable)Whether approved by legal procedure (Y/N)Whether has entrust finance plan in the futureSummary of the items and related query index (if applicable)
BankBankNon-guaranteed floating income1,235,985.77Own funds2021-01-052022-04-08Bank financial productsReference annual rate of return by the contract2.50%-4%609.996,300.99Collected according to the0YYApril 20, 2021 (Announcement No.
contract2021-014)

Securities

SecuritiesSecuritiesNon-guaranteed floating income158,500Own funds2021-01-122022-12-13Asset Management PlanReference annual rate of return by the contract4.20%-10%5,322.483,845.03Collected according to the contract0YY
TrustTrustNon-guaranteed floating income297,780Own funds2021-01-082023-12-24Collection trust planReference annual rate of return by the contract3.30%-8%20,900.7619,289.32Collected according to the contract0YY
OthehrOther professional financial institutionsNon-guaranteed floating income104,480Own funds2021-02-082023-08-13Private Equity ProductsReference annual rate of return by the contract5.30%-10%9,242.961,534.73Collected according to the contract0YY
Total1,796,745.77------------36,076.1930,970.07--0------

Entrust financial expected to be unable to recover the principal or impairment might be occurred

□ Applicable √ Not applicable

(2) Entrusted loans

□ Applicable √ Not applicable

The company had no entrusted loans in the reporting period.

4. Other significant contract

□ Applicable √ Not applicable

The company had no other significant contract in the reporting period.XVI. Explanation on other material matters

□Applicable √ Not applicable

There are no explanation on other material matters in the periodXVII. Material matters of subsidiary of the Company

□ Applicable √ Not applicable

Section VII. Changes in Shares and Particulars about ShareholdersI. Changes in Share Capital

1. Changes in Share Capital

In Share

Before the ChangeIncrease/Decrease in the Change (+, -)After the Change
AmountProportionNew shares issuedBonus sharesPublic reserve transfer into share capitalOthersSubtotalAmountProportion
I. Restricted shares19,620,8301.94%-331,494-331,49419,289,3361.91%
1. State-owned shares
2. State-owned legal person’s shares
3. Other domestic shares19,620,8301.94%-331,494-331,49419,289,3361.91%
Including: Domestic legal person’s shares
Domestic natural person’s shares19,620,8301.94%-331,494-331,49419,289,3361.91%
4. Foreign shares
Including: Foreign legal person’s shares
Foreign natural person’s shares
II. Unrestricted shares989,329,74098.06%40,49440,494989,370,23498.09%
1. RMB ordinary shares816,949,74080.97%40,49440,494816,990,23481.00%
2. Domestically listed foreign shares172,380,00017.09%172,380,00017.09%
3. Overseas listed foreign shares
4. Others
III. Total shares1,008,950,570100.00%-291,000-291,0001,008,659,570100.00%

Reasons for share changed

√ Applicable □ Not applicable

1.During the reporting period, restricted shares changed due to the buy-back and canceled of some restricted shares granted withoutcirculation for year of 2020;

2. During the reporting period, change of lock-up shares held by senior executives are resulting by the change of directors,supervisors and senior executives.Approval of share changed

√ Applicable □ Not applicable

On October 22, 2021, the Company held the 5

th session of 10

th

BOD to deliberated and approved relevant proposals as Adjustment ofthe Buy-back Price on Restricted Stock Incentive Plan for year of 2020 and Buy-back and Cancellation of the Restricted StocksPartially Granted without Circulation for year of 2020, and decided to buy-back and cancel 291,000 restricted shares held by 11incentive recipients that had been granted but not yet unlocked.Ownership transfer of share changed

□ Applicable √ Not applicable

Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in latest year and period

□ Applicable √ Not applicable

Other information necessary to disclose or need to disclosed under requirement from security regulators

□ Applicable √ Not applicable

2. Changes of lock-up stocks

√ Applicable □ Not applicable

In Share

ShareholdersOpening shares restrictedShares increased in the PeriodShares released in PeriodEnding shares restrictedRestricted reasonsDate for released
Shi Xing yuan9,5059,5050Lock-up shares held by senior executivesAs required by the rules
Zhou Weixing122,6742,674120,000Lock-up shares held by senior executives and Restricted Stock Incentive Plan for year of 2020As required by the rules
Dai Lizhong1,5001,5000Lock-up shares held by senior executivesAs required by the rules
Chen Xuejun26,06526,0650Lock-up shares held by senior executivesAs required by the rules
Chen Ran7507500Lock-up shares held by senior executivesAs required by the rules
Middle management staff, other core staff (11 people in total)291,000291,0000Restricted Stock Incentive Plan for year of 2020As required by the rules
Total451,4940331,494120,000----

II. Securities issuance and listing

1. Security offering (without preferred stock) in Reporting Period

□ Applicable √ Not applicable

2. Changes of total shares and shareholders structure as well as explanation on changes of assets andliability structure

√ Applicable □ Not applicable

During the reporting period, the restricted shares for year of 2020 which has granted without circulation have repurchased andcanceled partially by the Company, that is 291,000 shares, total share capital of the Company comes to 1,008,659,570 shares from1,008,950,570 shares.

3. Current internal staff shares

□ Applicable √ Not applicable

III. Particulars about shareholder and actual controller of the Company

1. Amount of shareholders of the Company and particulars about shares holding

In Share

Total common stock shareholders in reporting period-end72,648Total common stock shareholders at end of last month before annual report disclosed70,740Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (See Note 8)0Total preference shareholders with voting rights recovered at end of last month before annual report disclosed (if applicable) (See Note 8)0
Particulars about shares held above 5% by shareholders or top ten shareholders
Full name of ShareholdersNature of shareholderProportion of shares heldTotal shareholders at the end of report periodChanges in report periodNumber of lock-up stocks heldAmount of un-lock up stock heldInformation of shares pledged, tagged or frozen
State of shareAmount
Wuxi Industry Development Group Co., Ltd.State-owned corporate20.23%204,059,39800204,059,398
ROBERT BOSCH GMBHForeign corporate14.16%142,841,40000142,841,400
Hong Kong Securities Clearing CompanyForeign corporate2.45%24,709,421-40293651024,709,421
BBH BOS S/A FIDELITY FD - CHINA FOCUS FDForeign corporate1.53%15,444,715-648800015,444,715
Basic Pension Insurance Fund- 1003Other0.76%7,715,656-344765007,715,656
FIDELITY INVMT TRT FIDELITY INTL SMALL CAP FUNDForeign corporate0.70%7,043,386-29620007,043,386
NSSF - 413Other0.53%5,340,000-51000005,340,000
Haitong Securities Company LimitedState-owned corporate0.46%4,635,900-327,70104,635,900
Qian HaoDomestic nature person0.41%4,150,300334,70004,150,300
Industrial and Commercial Bank of China Limited - Fullgoal CSI Bonus Enhanced Securities Investment FundOther0.37%3,706,5821,391,10003,706,582
Strategy investor or general legal person becoming the top 10 shareholders by placing new shares (if applicable)N/A
Explanation on associated relationship among the aforesaid shareholdersAmong the aforesaid shareholders, there has no associated relationship between Wuxi Industry Development Croup Co., Ltd. and other shareholders, the first largest shareholder of the Company; and they do not belong to the persons acting in concert regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Company.
Description of the above shareholders in relation to delegate/entrusted voting rights and abstention from voting rights.N/A
Special note on the repurchase account among the top 10 shareholders (if applicable)N/A
Particular about top ten shareholders with un-lock up stocks held
Shareholders’ nameAmount of un-lock up stocks held at Period-endType of shares
TypeAmount
Wuxi Industry Development Group Co., Ltd.204,059,398RMB common shares204,059,398
ROBERT BOSCH GMBH142,841,400RMB common shares115,260,600
Domestically listed foreign shares27,580,800
Hong Kong Securities Clearing Company24,709,421RMB common shares24,709,421
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD15,444,715Domestically listed foreign shares15,444,715
Basic Pension Insurance Fund- 10037,715,656RMB common shares7,715,656
FIDELITY INVMT TRT FIDELITY INTL SMALL CAP FUND7,043,386Domestically listed foreign shares7,043,386
NSSF - 4135,340,000RMB common shares5,340,000
Haitong Securities Company Limited4,635,900RMB common shares4,635,900
Qian Hao4,150,300RMB common shares4,150,300
Industrial and Commercial Bank of China Limited - Fullgoal CSI Bonus Enhanced Securities Investment Fund3,706,582RMB common shares3,706,582
Expiation on associated relationship or consistent actors within the top 10 un-lock up shareholders and between top 10 un-lock up shareholders and top 10 shareholdersAmong the aforesaid shareholders, there has no associated relationship between Wuxi Industry Development Croup Co., Ltd. and other shareholders, the first largest shareholder of the Company; and they do not belong to the persons acting in concert regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Company.
Explanation on top 10 shareholders involving margin business (if applicable) (See Note 4)N/A

Whether top ten common stock shareholders or top ten common stock shareholders with un-lock up shares held have a buy-backagreement dealing in reporting period

□ Yes √ No

The top ten common stock shareholders or top ten common stock shareholders with un-lock up shares held of the Company have nobuy-back agreement dealing in reporting period.

2. Controlling shareholder of the Company

Nature of controlling shareholders: local state-owned holdingType of controlling shareholders: legal person

Changes of controlling shareholders in reporting period

□ Applicable √ Not applicable

The Company had no changes of controlling shareholders in reporting period

3. Actual controller and person acting in concert of the Company

Nature of actual controller: local state-owned assets managementType of actual controller: legal person

Actual controlling shareholdersLegal person/person in charge of the unitDate of foundationOrganization codeMain operation business
State-owned Assets Supervision & Administration Commission of Wuxi Municipality of Jiangsu ProvinceZhang Jianchun~State-owned Assets management
Equity of domestic/oversea listed company control by actual controller in report periodNot applicable

Changes of actual controller in reporting period

□ Applicable √ Not applicable

No changes of actual controllers for the Company in reporting period.Property right and controlling relationship between the actual controller and the Company is as follow

Controlling shareholdersLegal person/person in charge of the unitDate of foundationOrganization codeMain operation business
Wuxi Industry Development Group Co., Ltd.Yao Zhiyong1995-10-05913202001360026543External investment with own funds; housing rental services; self-operation and acting as an agent for the import & export of various commodities and technologies (except for commodities and technologies that restricted or prohibited for import & export by the State), domestic trading (restricted and prohibited projects by the State excluded)
Equity of other domestic/oversea listed company control by controlling shareholder as well as stock-joint in report period2. The majority shareholder of the Company Industry Group holds 2,3185,000 circulating shares (15.65% of total shares of New Hongtai) of Wuxi New Hongtai Electrical Technology Co., Ltd. (Short name: New Hongtai, Stock Code: 603016).

Actual controller controlling the Company by entrust or other assets management

□ Applicable √ Not applicable

4.The total number of shares pledged by controlling shareholders or the first majority shareholder and itspersons acting in concert accounts for 80% of the shares held by them

□ Applicable √ Not applicable

5. Particulars about other legal person shareholders with over 10% shares held

√ Applicable □ Not applicable

Corporate shareholdersLegal rep./person in charge of unitDated foundedRegister capitalMain business or management activity
ROBERT BOSCH GMBHBettina Holzwarth, Nora Kristin Klug1886-11-151200 million eurosThe Company may directly or indirectly enter into various business transactions to achieve this goal. In order to achieve the goal, the Company can establish, acquire and participate in business activities in any form permitted by

Wuxi State-owned Assets Supervision &

Administration Commission of State

Council

Wuxi Guofa Capital Operation

Co., Ltd.

Department of Finance of

Wuxi Guofa Capital Operation

Co., Ltd.Jiangsu province

Jiangsu provinceWuxi Industry Development Group Co., Ltd.

Wuxi Industry Development Group Co., Ltd.

27.3081%

27.3081%

68.1518%

68.1518%4.5401%

100%

100%

20.23%

20.23%

Weifu High-Technology Group Co., Ltd..

6. Restriction on shares reduction for controlling shareholders, actual controllers, restructuring side andother undertakings entity

□ Applicable √ Not applicable

IV. The specific implementation of shares buy-back during the reporting periodImplementation progress of shares buy-back

□ Applicable √ Not applicable

Implementation progress of the reduction of repurchases shares by centralized bidding

□ Applicable √ Not applicable

Section VIII. Preferred Stock

□ Applicable √ Not applicable

The Company had no preferred stock in the Period.

Section IX. Corporate Bonds

□ Applicable √ Not applicable

Section X. Financial ReportI. Audit report

Type of audit opinionStandard unqualified opinion
Signing date of audit report15 April, 2022
Name of audit instituteGongzheng Tianye Certified Public Accountants (Special General Partnership)
Serial of Auditing ReportSu Gong W【2022】No. A385
Name of CPAGu Zhi, Zhang Qianqian

Auditor’s Report

Su Gong W【2022】No. A385

To the Shareholders of Weifu High-Technology Group Co., Ltd.:

I. Auditing opinionsWe have audited the financial statement under the name of Weifu High-Technology Group Co., Ltd. (hereinafterreferred to as WFHT), including the consolidated and parent Company’s balance sheet of 31 December 2021 andprofit statement, and cash flow statement, and statement on changes of shareholders’ equity for the year ended,and notes to the financial statements for the year ended.

In our opinion, the Company’s financial statements have been prepared in accordance with the EnterprisesAccounting Standards and Enterprises Accounting System, and they fairly present the financial status of theCompany and of its parent company as of 31 December 2021 and its operation results and cash flows for the yearended.

II. Basis of opinionWe conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Ourresponsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of theFinancial Statements” section of the auditor’s report. We are independent of the Company in accordance with theCertified Public Accountants of China’s Code of Ethics for Professional Accountants, and we have fulfilled ourother ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.

III. Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of

the financial statements of the current period. These matters were addressed in the context of our audit of thefinancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion onthese matters.Revenue recognition is the key audit matter that we identified in auditing.

1. Matter description

As described in the 32. Revenue in Note V and 42. Operation revenue and operation cost in Note VII carried inthe financial statement, WFHT achieved an operation revenue of 13,682,426,700 yuan for year of 2021. As one ofthe biggest source of profits for WFHT, operating revenue has a significant effect on the general financialstatement, in which there are certain of inherent risks existed for the reason that the management manipulate thetiming of recognition so as to achieve specific objectives or anticipations. Therefore, we will take the Revenuerecognition as the key auditing matter.

2. The solution to the matter in auditing

(1)The Company has tested the design and execution of key internal control related to revenue recycling so as toconfirm the validity of internal control;(2) The Company should make sure whether the recognition condition andmethod of major operating revenue are compliance with the accounting standards for business enterprise; it alsoshould pay an attention to that whether the cyclical and occasional revenue is compliance with the decidedrevenue recognition principle and methods;(3) Combining with status and data of the industry where WFHT islocated, the Company should make a judgment on the rationality of fluctuation of the revenue composition;(4)The Company should carry out the procedure of account receivable and revenue letter of confirmation, and makea judgment on the rationality of the timing of revenue recognition; (5) Combining with the procedure of letter ofconfirmation, the Company should make a random inspection on sales contracts or orders, delivery lists, logisticsbills, customs declaration, sales invoices, signing-off sheet and other documents related to revenue to verify theauthenticity of revenue;(6) Referring to the recorded revenue before and after the Balance Sheet Date, theCompany should select some samples and check out the supportive documents such as delivery lists, customsdeclaration and receipt forms to make a judgment on whether the income has been recorded at the appropriateaccounting period.IV. Other informationThe management of WFHT is responsible for other information which includes the information covered in theCompany’s 2021 annual report excluding the financial statement and our audit report.

Our audit opinions on the financial statements do not cover other information, and we do not issue any form ofauthentication conclusions on other information.

In combination with our audit of the financial statements, it is our responsibility to read other information and, in

the process, consider whether there is material inconsistency or material misstatement between the otherinformation and the financial statements or what we learned during the audit.

Based on the work we have carried out, if we determine that there is a material misstatement of other information,we should report that fact and i this regard we have noting to report.

V. Responsibilities of management and those charged with governance for the financial statementsThe management is responsible for the preparation of the financial statements in accordance with the AccountingStandards for Enterprise to secure a fair presentation, and for the design, establishment and maintenance of theinternal control necessary to enable the preparation of financial statements that are free from materialmisstatement, whether due to fraud or error.

In preparing the financial statements, the management is responsible for assessing the Company’s ability tocontinue as a going concern, disclosing matters related to going concern (if applicable) and using the goingconcern assumption unless the management either intends to liquidate the Company or to cease operations, or hasno realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

VI. Responsibilities of the auditor for the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an audit report that includes our audit opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordancewith the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud orerror and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of the financial statements.As part of an audit in accordance with the CAS, we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:

(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.

(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances.

(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by the management.

(4) Conclude on the appropriateness of the management’s use of the going concern assumption and, based on the

audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company’s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required by the CAS to draw users’ attention in audit report to the related disclosures inthe financial statements or, if such disclosures are inadequate, to modify audit opinion. Our conclusions are basedon the information obtained up to the date of audit report. However, future events or conditions may cause theCompany to cease to continue as a going concern.

(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financialstatements represent the underlying transactions and events in a manner that achieves fair presentation.

(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Company to express audit opinion on the financial statements. We are responsible for thedirection, supervision and performance of the group audit. We remain solely responsible for audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that weidentify during our audit.

We also provide the governance with a statement of our compliance with the ethical requirements relating to ourindependence and communicate with the governance on all relationships and other matters that may reasonably beconsidered to affect our independence, as well we the relevant precautions (if applicable).

From the matters communicated with those charged with governance, we determine those matters that were ofmost significance in the audit of the financial statements of the current period and are therefore the key auditmatters. We describe these matters in the auditor’s report unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances, we determine that a matter should not becommunicated in the auditor’s report because of the adverse consequences of doing so would reasonably beexpected to outweigh the public interest benefits of such communication.Jiangsu Gongzheng Tianye CPA Chinese CPA: Gu Zhi(Special General Partnership) (engagement partner)Wuxi China Chinese CPA: Zhang Qianqian

15 April, 2022

II. Financial Statement

Statement in Financial Notes are carried Unit: RMB/CNY

1. Consolidated Balance Sheet

Prepared by Weifu High-Technology Group Co., Ltd.

December 31, 2021

In RMB

ItemDecember 31, 2021December 31, 2020
Current assets:
Monetary funds1,896,063,265.691,963,289,832.33
Settlement provisions
Capital lent
Trading financial assets6,076,436,069.423,518,432,939.10
Derivative financial assets
Note receivable1,116,550,186.211,657,315,723.56
Account receivable2,053,800,293.772,824,780,352.41
Receivable financing713,017,014.501,005,524,477.88
Accounts paid in advance178,059,249.99151,873,357.76
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other account receivable17,908,078.5454,209,580.88
Including: Interest receivable
Dividend receivable49,000,000.00
Buying back the sale of financial assets
Inventories3,445,396,375.092,877,182,174.64
Contract assets
Assets held for sale
Non-current asset due within one year
Other current assets220,320,922.502,137,921,113.61
Total current assets15,717,551,455.7116,190,529,552.17
Non-current assets:
Loans and payments on behalf
Debt investment
Other debt investment
Long-term account receivable
Long-term equity investment5,717,944,788.124,801,488,290.97
Investment in other equity instrument285,048,000.00285,048,000.00
Other non-current financial assets1,690,795,178.001,805,788,421.00
Investment real estate19,387,746.5620,886,681.62
Fixed assets2,932,210,452.512,882,230,191.08
Construction in progress387,429,933.08243,795,493.04
Productive biological asset
Oil and gas asset
Right-of-use assets23,148,405.58
Intangible assets440,593,119.82454,412,947.69
Expense on Research and Development
Goodwill231,255,015.75257,800,696.32
Long-term expenses to be apportioned15,304,783.5715,062,171.09
Deferred income tax asset242,248,194.57198,393,501.50
Other non-current asset267,941,354.57195,259,441.73
Total non-current asset12,253,306,972.1311,160,165,836.04
Total assets27,970,858,427.8427,350,695,388.21
Current liabilities:
Short-term loans1,437,958,206.55302,238,600.05
Loan from central bank
Capital borrowed
Trading financial liability
Derivative financial liability
Note payable1,760,032,216.302,462,592,372.82
Account payable3,206,653,702.594,100,984,240.39
Accounts received in advance2,854,518.964,071,236.87
Contractual liability136,427,636.3981,717,387.25
Selling financial asset of repurchase
Absorbing deposit and interbank deposit
Security trading of agency
Security sales of agency
Wage payable339,888,502.70332,421,811.82
Taxes payable40,105,648.8867,493,690.29
Other account payable359,905,317.46361,556,257.42
Including: Interest payable6,184.144,862.22
Dividend payable25,671,100.00
Commission charge and commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due within one year34,088,773.6836,914,242.02
Other current liabilities212,969,271.55222,871,087.33
Total current liabilities7,530,883,795.067,972,860,926.26
Non-current liabilities:
Insurance contract reserve
Long-term loans3,050,640.97
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability15,795,469.25
Long-term account payable32,015,082.1139,479,218.17
Long-term wages payable108,311,923.19181,980,293.94
Accrual liability
Deferred income298,052,867.56328,204,476.73
Deferred income tax liabilities23,097,535.2030,653,933.12
Other non-current liabilities
Total non-current liabilities477,272,877.31583,368,562.93
Total liabilities8,008,156,672.378,556,229,489.19
Owner’s equity:
Share capital1,008,659,570.001,008,950,570.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve3,371,344,172.823,294,242,368.28
Less: Inventory shares270,249,797.74303,627,977.74
Other comprehensive income-36,746,344.6013,916,619.47
Reasonable reserve712,215.312,333,490.03
Surplus public reserve510,100,496.00510,100,496.00
Provision of general risk
Retained profit14,814,787,377.8613,756,102,424.62
Total owner’ s equity attributable to parent company19,398,607,689.6518,282,017,990.66
Minority interests564,094,065.82512,447,908.36
Total owner’ s equity19,962,701,755.4718,794,465,899.02
Total liabilities and owner’ s equity27,970,858,427.8427,350,695,388.21

Legal Representative: Wang XiaodongPerson in charge of accounting works: Ou JianbinPerson in charge of accounting institute: Ou Jianbin

2. Balance Sheet of Parent Company

In RMB

ItemDecember 31, 2021December 31, 2020
Current assets:
Monetary funds1,002,808,546.461,157,684,053.05
Trading financial assets5,493,703,374.823,452,348,980.19
Derivative financial assets
Note receivable303,726,372.69422,246,979.39
Account receivable536,957,890.22982,782,279.22
Receivable financing
Accounts paid in advance93,419,268.8275,650,090.49
Other account receivable204,125,517.63197,335,714.63
Including: Interest receivable113,055.56897,777.78
Dividend receivable26,718,900.00
Inventories1,076,094,722.15725,276,241.43
Contract assets
Assets held for sale
Non-current assets maturing within one year
Other current assets149,352,872.772,057,772,839.50
Total current assets8,860,188,565.569,071,097,177.90
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments6,867,282,228.565,978,128,303.88
Investment in other equity instrument209,108,000.00209,108,000.00
Other non-current financial assets1,690,795,178.001,805,788,421.00
Investment real estate
Fixed assets1,786,089,596.761,758,198,856.53
Construction in progress239,183,999.25154,741,266.85
Productive biological assets
Oil and natural gas assets
Right-of-use assets1,240,879.96
Intangible assets209,952,168.75208,112,706.57
Research and development costs
Goodwill
Long-term deferred expenses348,970.34
Deferred income tax assets85,012,991.2476,508,392.85
Other non-current assets185,646,711.53117,013,906.01
Total non-current assets11,274,660,724.3910,307,599,853.69
Total assets20,134,849,289.9519,378,697,031.59
Current liabilities
Short-term borrowings272,578,883.63102,088,888.89
Trading financial liability
Derivative financial liability
Notes payable569,405,391.94448,901,718.36
Account payable1,012,390,712.801,265,845,068.26
Accounts received in advance
Contract liability7,879,319.156,209,575.73
Wage payable220,719,432.58216,870,819.60
Taxes payable12,427,327.6132,974,322.59
Other accounts payable392,455,373.80339,096,991.12
Including: Interest payable117,777.78
Dividend payable
Liability held for sale
Non-current liabilities due within one year462,484.41
Other current liabilities143,935,332.78182,611,991.54
Total current liabilities2,632,254,258.702,594,599,376.09
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual capital securities
Lease liability1,003,106.55
Long-term account payable
Long term employee compensation payable103,482,333.50176,245,345.03
Accrued liabilities
Deferred income265,509,545.34285,714,239.98
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities369,994,985.39461,959,585.01
Total liabilities3,002,249,244.093,056,558,961.10
Owners’ equity:
Share capital1,008,659,570.001,008,950,570.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital public reserve3,487,154,855.593,407,732,016.61
Less: Inventory shares270,249,797.74303,627,977.74
Other comprehensive income
Special reserve
Surplus reserve510,100,496.00510,100,496.00
Retained profit12,396,934,922.0111,698,982,965.62
Total owner’s equity17,132,600,045.8616,322,138,070.49
Total liabilities and owner’s equity20,134,849,289.9519,378,697,031.59

3. Consolidated Profit Statement

In RMB

Item20212020
I. Total operating income13,682,426,710.9512,883,826,306.60
Including: Operating income13,682,426,710.9512,883,826,306.60
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost12,772,618,230.5812,193,088,999.51
Including: Operating cost11,220,367,713.5710,429,284,441.97
Interest expense
Commission charge and commission expense
Cash surrender value
Net amount of expense of compensation
Net amount of withdrawal of insurance contract reserve
Bonus expense of guarantee slip
Reinsurance expense
Tax and extras60,256,733.7365,323,781.87
Sales expense264,651,432.56406,353,445.10
Administrative expense611,872,150.24782,824,422.63
R&D expense595,406,951.64532,581,209.78
Financial expense20,063,248.84-23,278,301.84
Including: Interest expenses38,698,621.0911,466,886.33
Interest income41,478,845.3251,622,216.58
Add: other income71,276,971.6880,342,497.11
Investment income (Loss is listed with “-”)1,954,523,836.591,964,805,688.57
Including: Investment income on affiliated company and joint venture1,632,117,748.781,659,752,704.14
The termination of income recognition for financial assets measured by amortized cost(Loss is listed with “-”)-959,296.18-946,468.33
Exchange income (Loss is listed with “-”)
Net exposure hedging income (Loss is listed with “-”)
Income from change of fair value (Loss is listed with “-”)-40,270,333.81383,325,765.19
Loss of credit impairment (Loss is listed with “-”)4,059,750.80-11,184,647.60
Losses of devaluation of asset (Loss is listed with “-”)-138,117,315.80-178,837,472.85
Income from assets disposal (Loss is listed with “-”)3,932,344.0711,454,408.60
III. Operating profit (Loss is listed with “-”)2,765,213,733.902,940,643,546.11
Add: Non-operating income656,202.0766,467,021.62
Less: Non-operating expense25,509,569.874,158,888.17
IV. Total profit (Loss is listed with “-”)2,740,360,366.103,002,951,679.56
Less: Income tax expense90,995,689.95180,215,749.00
V. Net profit (Net loss is listed with “-”)2,649,364,676.152,822,735,930.56
(i) Classify by business continuity
1.continuous operating net profit (net loss listed with ‘-”)2,649,364,676.152,822,735,930.56
2.termination of net profit (net loss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to owner’s of parent company2,575,371,419.802,772,769,377.96
2.Minority shareholders’ gains and losses73,993,256.3549,966,552.60
VI. Net after-tax of other comprehensive income-50,662,087.7313,839,596.07
Net after-tax of other comprehensive income attributable to owners of parent company-50,662,964.0713,781,747.80
(I) Other comprehensive income items which will not be reclassified subsequently to profit of loss16,008.80
1.Changes of the defined benefit plans that re-measured
2.Other comprehensive income under equity method that cannot be transfer to gain/loss16,008.80
3.Change of fair value of investment in other equity instrument
4.Fair value change of enterprise's credit risk
5. Other
(ii) Other comprehensive income items which will be reclassified subsequently to profit or loss-50,678,972.8713,781,747.80
1.Other comprehensive income under equity method that can transfer to gain/loss
2.Change of fair value of other debt investment
3.Amount of financial assets re-classify to other comprehensive income
4.Credit impairment provision for other debt investment
5.Cash flow hedging reserve
6.Translation differences arising on translation of foreign currency financial statements-50,678,972.8713,781,747.80
7.Other
Net after-tax of other comprehensive income attributable to minority shareholders876.3457,848.27
VII. Total comprehensive income2,598,702,588.422,836,575,526.63
Total comprehensive income attributable to owners of parent Company2,524,708,455.732,786,551,125.76
Total comprehensive income attributable to minority shareholders73,994,132.6950,024,400.87
VIII. Earnings per share:
(i) Basic earnings per share2.572.79
(ii) Diluted earnings per share2.572.79

As for the enterprise combined under the same control, net profit of 0 yuan achieved by the merged party before combination while 0yuan achieved last periodLegal Representative: Wang XiaodongPerson in charge of accounting works: Ou JianbinPerson in charge of accounting institute: Ou Jianbin

4. Profit Statement of Parent Company

In RMB

Item20212020
I. Operating income4,832,340,790.454,536,417,803.79
Less: Operating cost3,605,342,507.483,236,311,612.73
Taxes and surcharge29,689,175.8238,086,034.27
Sales expenses44,807,972.25126,442,956.05
Administration expenses324,244,883.74533,649,297.97
R&D expenses225,949,431.82205,001,982.50
Financial expenses-15,417,294.04-34,275,071.44
Including: interest expenses7,427,980.884,163,923.00
Interest income26,881,455.1940,948,820.72
Add: other income41,029,454.0158,782,085.85
Investment income (Loss is listed with “-”)1,758,393,772.541,816,759,403.42
Including: Investment income on affiliated Company and joint venture1,366,704,678.231,457,471,604.06
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 “-”)-40,747,662.86383,241,806.28
Loss of credit impairment (Loss is listed with “-”)-654,218.492,076,529.99
Losses of devaluation of asset (Loss is listed with “-”)-40,950,682.53-82,232,381.43
Income on disposal of assets (Loss is listed with “-”)850,642.47-520,470.69
II. Operating profit (Loss is listed with “-”)2,335,645,418.522,609,307,965.13
Add: Non-operating income527,726.3630,937,706.44
Less: Non-operating expense24,178,368.733,493,103.39
III. Total Profit (Loss is listed with “-”)2,311,994,776.152,636,752,568.18
Less: Income tax101,437,713.12162,713,161.17
IV. Net profit (Net loss is listed with “-”)2,210,557,063.032,474,039,407.01
(i)continuous operating net profit (net loss listed with ‘-”)2,210,557,063.032,474,039,407.01
(ii) termination of net profit (net loss listed with ‘-”)
V. Net after-tax of other comprehensive income
(I) Other comprehensive income items which will not be reclassified subsequently to profit of loss
1.Changes of the defined benefit plans that re-measured
2.Other comprehensive income under equity method that cannot be transfer to gain/loss
3.Change of fair value of investment in other equity instrument
4.Fair value change of enterprise's credit risk
5. Other
(II) Other comprehensive income items which will be reclassified subsequently to profit or loss
1.Other comprehensive income under equity method that can transfer to gain/loss
2.Change of fair value of other debt investment
3.Amount of financial assets re-classify to other comprehensive income
4.Credit impairment provision for other debt investment
5.Cash flow hedging reserve
6.Translation differences arising on translation of foreign currency financial statements
7.Other
VI. Total comprehensive income2,210,557,063.032,474,039,407.01
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share

5. Consolidated Cash Flow Statement

In RMB

Item20212020
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services15,555,511,937.1611,908,396,653.71
Net increase of customer deposit and interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Net increase of insured savings and investment
Cash received from interest, commission charge and commission
Net increase of capital borrowed
Net increase of returned business capital
Net cash received by agents in sale and purchase of securities
Write-back of tax received50,070,441.0032,138,413.08
Other cash received concerning operating activities86,168,562.99102,573,818.52
Subtotal of cash inflow arising from operating activities15,691,750,941.1512,043,108,885.31
Cash paid for purchasing commodities and receiving labor service12,479,791,466.708,277,296,527.38
Net increase of customer loans and advances
Net increase of deposits in central bank and interbank
Cash paid for original insurance contract compensation
Net increase of capital lent
Cash paid for interest, commission charge and commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers1,436,357,958.291,295,921,487.63
Taxes paid499,681,099.37788,150,479.38
Other cash paid concerning operating activities648,207,823.38899,929,156.91
Subtotal of cash outflow arising from operating activities15,064,038,347.7411,261,297,651.30
Net cash flows arising from operating activities627,712,593.41781,811,234.01
II. Cash flows arising from investing activities:
Cash received from recovering investment18,129,191,548.438,051,178,224.52
Cash received from investment income1,238,803,864.712,462,910,424.30
Net cash received from disposal of fixed, intangible and other long-term15,303,195.0442,851,678.36
assets
Net cash received from disposal of subsidiaries and other units9,000,000.00
Other cash received concerning investing activities1,680,766.9165,102,250.70
Subtotal of cash inflow from investing activities19,393,979,375.0910,622,042,577.88
Cash paid for purchasing fixed, intangible and other long-term assets753,581,993.49492,683,539.12
Cash paid for investment18,668,448,932.909,246,030,000.00
Net increase of mortgaged loans
Net cash received from subsidiaries and other units obtained297,302,758.31
Other cash paid concerning investing activities14,579,308.94
Subtotal of cash outflow from investing activities19,422,030,926.3910,050,595,606.37
Net cash flows arising from investing activities-28,051,551.30571,446,971.51
III. Cash flows arising from financing activities
Cash received from absorbing investment312,640,853.85
Including: Cash received from absorbing minority shareholders’ investment by subsidiaries10,161,653.85
Cash received from loans1,711,808,897.47395,691,406.43
Other cash received concerning financing activities5,470,000.005,730,135.13
Subtotal of cash inflow from financing activities1,717,278,897.47714,062,395.41
Cash paid for settling debts575,619,575.18371,154,665.80
Cash paid for dividend and profit distributing or interest paying1,561,591,089.991,120,464,009.41
Including: Dividend and profit of minority shareholder paid by subsidiaries13,970,282.3115,748,768.80
Other cash paid concerning financing activities17,596,686.60449,251,421.46
Subtotal of cash outflow from financing activities2,154,807,351.771,940,870,096.67
Net cash flows arising from financing activities-437,528,454.30-1,226,807,701.26
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate-13,059,669.78-2,003,139.41
V. Net increase of cash and cash equivalents149,072,918.03124,447,364.85
Add: Balance of cash and cash equivalents at the period -begin944,946,018.70820,498,653.85
VI. Balance of cash and cash equivalents at the period -end1,094,018,936.73944,946,018.70

6. Cash Flow Statement of Parent Company

In RMB

Item20212020
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services5,563,589,299.474,470,039,778.75
Write-back of tax received
Other cash received concerning operating activities42,028,025.8661,033,856.80
Subtotal of cash inflow arising from operating activities5,605,617,325.334,531,073,635.55
Cash paid for purchasing commodities and receiving labor service3,605,626,128.992,312,159,843.14
Cash paid to/for staff and workers788,560,324.22730,528,257.00
Taxes paid283,285,319.76562,371,147.42
Other cash paid concerning operating activities172,424,308.24341,484,021.47
Subtotal of cash outflow arising from operating activities4,849,896,081.213,946,543,269.03
Net cash flows arising from operating activities755,721,244.12584,530,366.52
II. Cash flows arising from investing activities:
Cash received from recovering investment14,660,350,548.437,324,178,224.52
Cash received from investment income1,117,355,887.532,434,385,770.96
Net cash received from disposal of fixed, intangible and other long-term assets675,341.73810,004.53
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities32,072,638.81214,831,510.69
Subtotal of cash inflow from investing activities15,810,454,416.509,974,205,510.70
Cash paid for purchasing fixed, intangible and other long-term assets466,841,006.41262,442,259.33
Cash paid for investment15,006,974,321.578,853,827,446.85
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities112,342,336.68
Subtotal of cash outflow from investing activities15,473,815,327.989,228,612,042.86
Net cash flows arising from investing activities336,639,088.52745,593,467.84
III. Cash flows arising from financing activities
Cash received from absorbing investment302,479,200.00
Cash received from loans376,524,000.00102,000,000.00
Other cash received concerning financing activities100,000,000.00
Subtotal of cash inflow from financing activities476,524,000.00404,479,200.00
Cash paid for settling debts202,000,000.00116,000,000.00
Cash paid for dividend and profit distributing or interest paying1,520,286,898.731,097,442,763.44
Other cash paid concerning financing activities4,385,823.06400,017,180.33
Subtotal of cash outflow from financing activities1,726,672,721.791,613,459,943.77
Net cash flows arising from financing activities-1,250,148,721.79-1,208,980,743.77
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate-4,982,656.55-2,070,408.32
V. Net increase of cash and cash equivalents-162,771,045.70119,072,682.27
Add: Balance of cash and cash equivalents at the period -begin651,188,544.53532,115,862.26
VI. Balance of cash and cash equivalents at the period -end488,417,498.83651,188,544.53

7. Statement of Changes in Owners’ Equity (Consolidated)

Current Period

In RMB

Item2021
Owners’ equity attributable to the parent CompanyMinority interestsTotal owners’ equity
Share capitalequity instrumentCapital reserveLess: Inventory sharesOther comprehensive incomeReasonable reserveSurplus reserveProvision of general riskRetained profitOtherSubtotal
Preferred stockPerpetual capital securitiesOther
I. Balance at the end of the last year1,008,950,570.003,294,242,368.28303,627,977.7413,916,619.472,333,490.03510,100,496.0013,756,102,424.6218,282,017,990.66512,447,908.3618,794,465,899.02
Add: Changes of accounting policy
Error correction of the last period
Enterprise combine under the same control
Other
II. Balance at the beginning of this year1,008,950,570.003,294,242,368.28303,627,977.7413,916,619.472,333,490.03510,100,496.0013,756,102,424.6218,282,017,990.66512,447,908.3618,794,465,899.02
III. Increase/ Decrease in this year (Decrease is listed with “-”)-291,000.0077,101,804.54-33,378,180.00-50,662,964.07-1,621,274.721,058,684,953.241,116,589,698.9951,646,157.461,168,235,856.45
(i) Total comprehensive income-50,662,964.072,575,371,419.802,524,708,455.7373,994,132.692,598,702,588.42
(ii) Owners’ devoted and decreased capital-291,000.0070,463,804.54-33,378,180.00103,550,984.5417,321,034.44120,872,018.98
1.Common shares invested by shareholders-291,000.00-291,000.0015,000,000.0014,709,000.00
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity74,241,533.6074,241,533.602,321,034.4476,562,568.04
with share-based payment
4. Other-3,777,729.06-33,378,180.0029,600,450.9429,600,450.94
(III) Profit distribution-1,517,422,799.42-1,517,422,799.42-39,641,382.31-1,557,064,181.73
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provisions
3. Distribution for owners (or shareholders)-1,513,341,439.50-1,513,341,439.50-39,641,382.31-1,552,982,821.81
4. Other-4,081,359.92-4,081,359.92-4,081,359.92
(IV) Carrying forward internal owners’ equity
1. Capital reserves conversed to capital (share capital)
2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserve
4.Carry-over retained earnings from the defined benefit plans
5.Carry-over retained earnings from other comprehensive income
6. Other
(V) Reasonable reserve-1,621,274.72-1,621,274.72-27,627.36-1,648,902.08
1. Withdrawal in the report period22,714,778.2722,714,778.272,284,337.8524,999,116.12
2. Usage in the report period24,336,052.9924,336,052.992,311,965.2126,648,018.20
(VI)Others6,638,000.00736,332.867,374,332.867,374,332.86
IV. Balance at the end of the report period1,008,659,570.003,371,344,172.82270,249,797.74-36,746,344.60712,215.31510,100,496.0014,814,787,377.8619,398,607,689.65564,094,065.8219,962,701,755.47

Last Period

In RMB

Item2020
Owners’ equity attributable to the parent CompanyMinority interestsTotal owners’ equity
Share capitalequity instrumentCapital reserveLess: Inventory sharesOther comprehensive incomeReasonable reserveSurplus reserveProvision of general riskRetained profitOtherSubtotal
Preferred stockPerpetual capital securitiesOther
I. Balance at the end of the last year1,008,950,570.003,391,527,806.33134,871.673,247,757.06510,100,496.0012,076,443,635.5616,990,405,136.62494,248,174.0517,484,653,310.67
Add: Changes of accounting policy
Error correction of the last period
Enterprise combine under the same control
Other
II. Balance at the beginning of this year1,008,950,570.003,391,527,806.33134,871.673,247,757.06510,100,496.0012,076,443,635.5616,990,405,136.62494,248,174.0517,484,653,310.67
III. Increase/ Decrease in this year (Decrease is listed with “-”)-97,285,438.05303,627,977.7413,781,747.80-914,267.031,679,658,789.061,291,612,854.0418,199,734.311,309,812,588.35
(i) Total comprehensive income13,781,747.802,772,769,377.962,786,551,125.7650,024,400.872,836,575,526.63
(ii) Owners’ devoted and decreased capital-97,285,438.05303,627,977.74-400,913,415.79-16,046,487.85-416,959,903.64
1.Common shares invested by shareholders-96,389,202.59302,479,200.00-398,868,402.5925,079,496.04-373,788,906.55
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity with share-based payment6,280,461.586,280,461.58204,375.926,484,837.50
4. Other-7,176,697.041,148,777.74-8,325,474.78-41,330,359.81-49,655,834.59
(III) Profit distribution-1,095,767,216.49-1,095,767,216.49-15,748,768.80-1,111,515,985.29
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provisions
3. Distribution for owners (or shareholders)-1,093,241,270.00-1,093,241,270.00-15,748,768.80-1,108,990,038.80
4. Other-2,525,946.49-2,525,946.49-2,525,946.49
(IV) Carrying forward internal owners’ equity
1. Capital reserves conversed to capital (share capital)
2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserve
4.Carry-over retained earnings from the defined benefit plans
5.Carry-over retained earnings from other comprehensive income
6. Other
(V) Reasonable reserve-914,267.03-914,267.03-29,409.91-943,676.94
1. Withdrawal in the report period21,673,368.0921,673,368.092,158,529.3823,831,897.47
2. Usage in the report period22,587,635.1222,587,635.122,187,939.2924,775,574.41
(VI)Others2,656,627.592,656,627.592,656,627.59
IV. Balance at the end of the report period1,008,950,570.003,294,242,368.28303,627,977.7413,916,619.472,333,490.03510,100,496.0013,756,102,424.6218,282,017,990.66512,447,908.3618,794,465,899.02

8. Statement of Changes in Owners’ Equity (Parent Company)

Current Period

In RMB

Item2021
Share capitalOther equity instrumentCapital public reserveLess: Inventory sharesOther comprehensive incomeReasonable reserveSurplus reserveRetained profitOtherTotal owners’ equity
Preferred stockPerpetual capital securitiesOther
I. Balance at the end of the last year1,008,950,570.003,407,732,016.61303,627,977.74510,100,496.0011,698,982,965.6216,322,138,070.49
Add: Changes of accounting policy
Error correction of the last period
Other
II. Balance at the beginning of this year1,008,950,570.003,407,732,016.61303,627,977.74510,100,496.0011,698,982,965.6216,322,138,070.49
III. Increase/ Decrease in this year (Decrease is listed with “-”)-291,000.0079,422,838.98-33,378,180.00697,951,956.39810,461,975.37
(i) Total comprehensive income2,210,557,063.032,210,557,063.03
(ii) Owners’ devoted and decreased capital-291,000.0072,784,838.98-33,378,180.00105,872,018.98
1.Common shares invested by shareholders
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity with share-based payment76,562,568.0476,562,568.04
4. Other-291,000.00-3,777,729.06-33,378,180.0029,309,450.94
(III) Profit distribution-1,513,341,439.50-1,513,341,439.50
1. Withdrawal of surplus reserves
2. Distribution for owners (or shareholders)-1,513,341,439.50-1,513,341,439.50
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 report period6,436,417.806,436,417.80
2. Usage in the report period6,436,417.806,436,417.80
(VI)Others6,638,000.00736,332.867,374,332.86
IV. Balance at the end of the report period1,008,659,570.003,487,154,855.59270,249,797.74510,100,496.0012,396,934,922.0117,132,600,045.86

Last period

In RMB

Item2020
Share capitalOther equity instrumentCapital public reserveLess: Inventory sharesOther comprehensive incomeReasonable reserveSurplus reserveRetained profitOtherTotal owners’ equity
Preferred stockPerpetual capital securitiesOther
I. Balance at the end of the last year1,008,950,570.003,488,221,286.39510,100,496.0010,381,863,816.2915,389,136,168.68
Add: Changes of accounting policy
Error correction of the last period
Other
II. Balance at the beginning of this year1,008,950,570.003,488,221,286.39510,100,496.0010,381,863,816.2915,389,136,168.68
III. Increase/ Decrease in this year (Decrease is listed with “-”)-80,489,269.78303,627,977.741,317,119,149.33933,001,901.81
(i) Total comprehensive income2,474,039,407.012,474,039,407.01
(ii) Owners’ devoted and decreased capital-80,489,269.78303,627,977.74-384,117,247.52
1.Common shares invested by shareholders-96,389,202.59302,479,200.00-398,868,402.59
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity with share-based payment6,484,837.506,484,837.50
4. Other9,415,095.311,148,777.748,266,317.57
(III) Profit distribution-1,093,241,270.00-1,093,241,270.00
1. Withdrawal of surplus reserves
2. Distribution for owners (or shareholders)-1,093,241,270.00-1,093,241,270.00
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-1,177,442.02-1,177,442.02
1. Withdrawal in the report period5,849,756.555,849,756.55
2. Usage in the report period7,027,198.577,027,198.57
(VI)Others1,177,442.02-63,678,987.68-62,501,545.66
IV. Balance at the end of the report period1,008,950,570.003,407,732,016.61303,627,977.74510,100,496.0011,698,982,965.6216,322,138,070.49

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, WeifuHigh-Technology Group Co., Ltd. (hereinafter referred to “the Company” or “Company”) was established as acompany of limited liability with funds raised from targeted sources, and registered at Wuxi Administration forIndustry & Commerce in October 1992. The original share capital of the Company totaled 115.4355 million yuan,including state-owned share capital amounting to 92.4355 million yuan, public corporate share capital amountingto 8 million yuan and inner employee share capital amounting to 15 million yuan.Between year of 1994 and 1995, the Company was restructured and became a holding subsidiary of Wuxi WeifuGroup Co., Ltd (hereinafter referred to as “Weifu Group”).By the approval of Jiangsu ERC and Shenzhen Securities Administration Office in August 1995, the Companyissued 68 million special ordinary shares (B-share) with value of 1.00 yuan for each, and the total value of thoseshares amounted to 68 million yuan. After the issuance, the Company’s total share capital increased to 183.4355million yuan.By the approval of CSRC in June 1998, the Company issued 120 million RMB ordinary shares (A-share) atShenzhen Stock Exchange through on-line pricing and issuing. After the issuance, the total share capital of theCompany amounted to 303.4355 million yuan.In the middle of 1999, deliberated and approved by the Board and Shareholders’ General Meeting, the Companyimplemented the plan of granting 3 bonus shares for each 10 shares. After that, the total share capital of theCompany amounted to 394.46615 million yuan, of which state-owned shares amounted to 120.16615 million yuan,public corporate shares 10.4 million yuan, foreign-funded shares (B-share) 88.40 million yuan, RMB ordinaryshares (A-share) 156 million yuan and inner employee shares 19.5 million yuan.In the year 2000, by the approval of the CSRC and based upon the total share capital of 303.4355 million sharesafter the issuance of A-share in June 1998, the Company allotted 3 shares for each 10 shares, with a price of 10yuan for each allotted share. Actually 41.9 million shares was allotted, and the total share capital after theallotment increased to 436.36615 million yuan, of which state-owned corporate shares amounted to 121.56615million yuan, public corporate shares 10.4 million yuan, foreign-funded shares (B-share) 88.4 million yuan andRMB ordinary shares (A-share) 216 million yuan.In April 2005, Board of Directors of the Company has examined and approved 2004 Profit Pre-distribution Plan,and examined and approved by 2004 Shareholders’ General Meeting , the Company distributed 3 shares for each10 shares to the whole shareholders totaling to 130,909,845 shares in 2005.According to the Share Merger Reform Scheme of the Company that passed by related shareholders’ meeting ofShare Merger Reform and SGZF [2006] No.61 Reply on Questions about State-owned Equity Management inShare 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 arrangedpricing with granting 1.7 shares for each 10 shares to circulating A-share shareholders (totally granted 47,736,000shares), so as to realize the originally non-circulating shares can be traded on market when satisfied certainconditions, 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 10shares based on the number of circulating A share as prior to Share Merger Reform, according to the aforesaidShare Merger Reform, with an aggregate of 14,039,979 shares dispatched. Subsequent to implementation ofdispatch of consideration shares, Weifu Group then held 100,021,999 shares of the Company, representing 17.63%of the total share capital of the Company.Pursuant to the document (XGZQ(2009)No.46) about Approval for Merger of Wuxi Weifu Group Co., Ltd. byWuxi Industry Development Group Co., Ltd. issued by the State-owned Assets Supervision and AdministrationCommission of Wuxi City Government, Wuxi Industry Development Group Co., Ltd. (hereinafter referred to asWuxi Industry Group) acquired Weifu Group. After the merger, Weifu Group was then revoked, and its assets andcredits & debts were transferred to be under the name of Wuxi Industry Group. Accordingly, Wuxi IndustryGroup became the first largest shareholder of the Company since then.In accordance with the resolutions of shareholders' meeting and provisions of amended constitution, and approvedby [2012] No. 109 document of China Securities Regulatory Commission, in February 2012, the Company issuedRMB ordinary shares (A-share) of 112,858,000 shares to Wuxi Industry Groups and overseas strategic investorprivately, Robert Bosch Co., Ltd. (ROBERT BOSCHGMBH) (hereinafter referred to as Robert Bosch Company),face value was ONE yuan per share, added registered capital of 112,858,000 yuan, and the registered capital afterchange was 680,133,995 yuan. Wuxi Industry Group is the first majority shareholder of the Company, and RobertBosch 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, andalso passed in Annual General Meeting 2012 of the Company in May 2013. On basis of total share capital680,133,995 shares, distribute 5-share for every 10 shares held by whole shareholders, 340,066,997 shares in totalare distributed. Total share capital of the Company amounting 1,020,200,992 yuan up to 31 December 2013.Deliberated and approved by the company’s first extraordinary general meeting in 2015, the company hasrepurchased 11,250,422 shares of A shares from August 26, 2015 to September 8, 2015, and has finished thecancellation procedures for above repurchase shares in China Securities Depository and Clearing CorporationLimited Shenzhen Branch on September 16, 2015; after the cancellation of repurchase shares, the company’spaid-up capital (share capital) becomes 1,008,950,570 yuan after the change.After deliberation and approved by the 5

th session of 10

th

BOD for year of 2021, the 291,000 restricted shares arebuy-back and canceled by the Company initially granted under the 2020 Restricted Share Incentive Plan. Thecancellation of the above mentioned buy-back shares are completed at the Shenzhen Branch of CSDC on December20, 2021; the paid-in capital (equity) of the Company comes to 1,008,659,570.00 yuan after changed.

2. Registered place, organization structure and head office of the Company

Registered place and head office of the Company: No.5 Huashan Road, Xinwu District, WuxiUnified social credit code: 91320200250456967NThe Company sets up Shareholders’ General Meeting, the Board of Directors (BOD) and the Board of Supervisors(BOS)The Company sets up Administration Department, Technology Centre, organization & personnel department,Office of the Board, compliance department, IT department, Strategy & new business Department, market

development department, Party-masses Department, Finance Department, Purchase Department,ManufacturingQuality Department, MS (Mechanical System) division, AC(Automotive Components) division and DS (DieselSystem ) division, etc. and subsidiaries such as WUXI WEIFU LIDA CATALYTIC CONVERTER CO., LTD,NANJING WFJN CO., LTD, IRD Fuel Cells A/S and Borit NV, etc.

3. Business nature and major operation activities of the Company

Operation scope of parent company: Technology development and consulting service in the machinery industry;manufacture of engine fuel oil system products, fuel oil system testers and equipment, manufacturing of autoelectronic parts, automotive electrical components, non-standard equipment, non-standard knife tool and exhaustafter-treatment system; sales of the general machinery, hardware & electrical equipment, chemical products & rawmaterials (excluding hazardous chemicals), automotive components and vehicles (excluding nine-seat passengercar); internal combustion engine maintenance; leasing of the own houses; import and export business in respect ofdiversified commodities and technologies (other than those commodities and technologies limited or forbidden bythe State for import and export) by self-operation and works as agent for such business. Research and testdevelopment of engineering and technical; R&D of the energy recovery system; manufacture of auto componentsand accessories; general equipment manufacturing (excluding special equipment manufacturing), (any projectsthat needs to be approved by laws can only be carried out after getting approval by relevant authorities) Generalitems: engage in investment activities with self-owned funds (except for items subject to approval according to thelaw, independently carry out business activities according to laws with business licenses )Major subsidiaries respectively activate in production and sales of engine accessories, automotive components,mufflers, purifiers and fuel cell components etc.

4. Authorized reporting parties and reporting dates for the financial reportFinancial report of the Company were approved by the Board of Directors for reporting dated April 15, 2022.

5. Scope of consolidate financial statement

Name of subsidiaryShort name of subsidiaryShareholding ratio (%)Proportion of votes (%)(in 10 thousand yuan)Business scopeStatement consolidate (Y/N)
DirectlyIndirectly
NANJING WFJN CO., LTD.WFJN80.00--80.0034,628.70Internal-combustion engine accessoriesY
WUXI WEIFU LIDA CATALYTIC CONVERTER CO., LTD.WFLD94.81--94.8150,259.63Purifier and mufflerY

WUXI WEIFU MASHAN FUEL INJECTIONEQUIPMENT CO., LTD.

WUXI WEIFU MASHAN FUEL INJECTION EQUIPMENT CO., LTD.WFMA100.00--100.0016,500Internal-combustion engine accessoriesY
WUXI WEIFU CHANG?AN CO.,LTD.WFCA100.00--100.0021,000Internal-combustion engine accessoriesY

WUXI WEIFU INTERNATIONAL TRADECO.,LTD.

WUXI WEIFU INTERNATIONAL TRADE CO.,LTD.WFTR100.00--100.003,000TradeY
WUXI WEIFU SCHMITTER POWERTRAIN COMPONENTS CO.,LTD.WFSC66.00--66.007,600Internal-combustion engine accessoriesY
NINGBO WFTT TURBOCHARGING TECHNOLOGY CO.,LTD.WFTT98.831.17100.0011,136Internal-combustion engine accessoriesY
WUXI WFAM PRECISION MACHINERY CO.,LTD.WFAM51.00--51.00USD2,110Automotive componentsY

WUXI WEIFU LIDA CATALYTICCONVERTER (WUHAN) CO., LTD.

WUXI WEIFU LIDA CATALYTIC CONVERTER (WUHAN) CO., LTD.(WUHAN)--60.0060.001,000Purifier and mufflerY
Weifu Lida (Chongqing) Automotive components Co., Ltd.(Chongqing)--100.00100.005,000Purifier and mufflerY
Nanchang Weifu Lida Automotive Components Co., Ltd.(Nanchang)--100.00100.005,000Purifier and mufflerY
WUXI WEIFU AUTOSMART SEATING SYSTEM CO., LTD.WFAS--66.0066.0010,000Smart car deviceY
WUXI WEIFU E-DRIVE TECHNOLOGIES CO., LTD.WFDT80.00--80.00USD2,000Wheel motorY
Weifu Holding ApSSPV100.00--100.00DKK238InvestmentY

IRD Fuel Cells A/S

IRD Fuel Cells A/SIRD--100.00100.00DKK8,660Fuel cell componentsY
IRD FUEL CELLS LLCIRD America--100.00100.00USD300Fuel cell componentsY
Borit NVBorit--100.00100.00EUR315.59Fuel cell componentsY
Borit Inc.Borit America--100.00100.00USD0.1Fuel cell componentsY

IV. Basis of preparation of financial statements

1. Preparation base

The financial statement were stated in compliance with Accounting Standard for Business Enterprises –BasicNorms issued by Ministry of Finance, the specific 42 accounting rules revised and issued dated 15 February 2006and later, the Application Instruments of Accounting Standards and interpretation on Accounting standards andother relevant regulations (together as “Accounting Standards for Business Enterprise”), as well as theCompilation Rules for Information Disclosure by Companies Offering Securities to the Public No.15 – GeneralProvision of Financial Report (Amended in 2014) issued by CSRC in respect of the actual transactions andproceedings, on a basis of ongoing operation.In line with relevant regulations of Accounting Standards of Business Enterprise, accounting of the Company ison 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 impactsustainable operation ability of the Company within 12 months since end of the reporting period.V. Major Accounting Policies and EstimationSpecific accounting policies and estimation attention:

The Company and its subsidiaries are mainly engaged in the manufacture and sales of engine fuel oil systemproducts, automotive components, mufflers, purifiers and fuel cell components etc., in line with the actual

operational characteristics and relevant accounting standards, many specific accounting policies and estimationhave been formulated for the transactions and events with revenue recognized concerned. As for the explanationon major accounting judgment and estimation, found more in Note V- 36. Other major accounting policy andestimation

1. Statement on observation of Accounting Standard for Business EnterprisesFinancial statements prepared by the Company were in accordance with requirements of Accounting Standard forBusiness Enterprises, which truly and completely reflected the financial information of the Company dated 31December 2021, such as financial status, operation achievements and cash flow for the year of 2021.

2. Accounting period

Accounting period of the Company consist of annual and mid-term, mid-term refers to the reporting period shorterthan one annual accounting year. The company adopts Gregorian calendar as accounting period, namely form each1 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 cashequivalent achieved. The Company’s normal business cycle was one-year (12 months).

4. Recording currency

The Company’s reporting currency is the RMB yuan.

5. Accounting Treatment Method for Business Combinations under the same/different controlBusiness combination is the transaction or events that two or two above independent enterprises combined as areporting entity. Business combination including enterprise combined under the same control and businesscombined 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 thesame ultimate controller or under the same controller, the control is not temporary. The assets and liabilityacquired by combining party are measured by book value of the combined party on combination date. Balance ofnet asset’s book value acquired by combining party and combine consideration paid (or total book value of theshares issued), shall adjusted capital reserve (share premium); if the capital reserves (share premium) is notenough 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 whencombining 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 thecombining entities are not ultimately controlled by the same party or parties both before and after thecombination.As a purchaser, fair value of the assets (equity of purchaser held before the date of purchasingincluded) for purchasing controlling right from the purchaser, the liability occurred or undertake on purchasingdate less the fair value of identifiable net assets of the purchaser obtained in combination, recognized as goodwillif the results is positive; if the number is negative, the acquirer shall firstly review the measurement of the fairvalue of the identifiable assets obtained, liabilities incurred and contingent liabilities incurred, as well as thecombination costs.After that, if the combination costs are still lower than the fair value of the identifiable netassets obtained, the acquirer shall recognize the difference as the profit or loss in the current period.Other directlyexpenses cost for combination shall be reckoned into current gains/losses. Difference of the fair value of assetspaid and its book values, reckoned into current gains/losses. On purchasing date, the identifiable assets, liability orcontingency of the purchaser obtained by the Company recognized by fair value, that required identificationconditions; 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 consolidatedstatement in line with relevant information. The scope of consolidation of consolidated financial statements isascertained on the basis of effective control. Once certain elements involved in the above definition of controlchange 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 investedparty.Relevant activates refers to activates have major influence on return of the invested party’s.

(3) Consolidation process

Subsidiaries are consolidated from the date on which the company obtains their actual control, and arede-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 beingdisposed, the operating results and cash flows prior to the date of disposal are included in the consolidated incomestatement and consolidated cash flow statement; for subsidiaries disposed during the period, the opening balancesof the consolidated balance sheet would not be restated. For subsidiaries acquired from a business combinationnot under common control, their operating results and cash flows subsequent to the acquisition date are includedin the consolidated income statement and consolidated cash flow statement, and the opening balances andcomparative figures of the consolidated balance sheet would not be restated. For subsidiaries acquired from abusiness combination under common control, their operating results and cash flows from the date ofcommencement 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 figuresof the consolidated balance sheet would be restated.In preparing the consolidated financial statements, where the accounting policies or the accounting periods areinconsistent between the company and subsidiaries, the financial statements of subsidiaries are adjusted inaccordance with the accounting policies and accounting period of the company.Concerning the subsidiary obtained under combination with different control, adjusted several financial statementof the subsidiary based on the fair value of recognizable net assets on purchased day while financial statementconsolidation; concerning the subsidiary obtained under combination with same control, considered current statusof 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 thesubsidiaries fully offset "the net profit attributable to the owners of the parent company". The unrealized gains andlosses from the internal transactions occurred in the assets the subsidiaries sold to the Company are distributed andoffset between "the net profit attributable to the owners of the parent company" and "minority interest" accordingto the distribution ratio of the Company to the subsidiary. The unrealized gains and losses from the internaltransactions occurred in the assets sold among the subsidiaries are distributed and offset between "the net profitattributable to the owners of the parent company" and "minority interest" according to the distribution ratio of theCompany to the subsidiary of the seller.The share of the subsidiary’s ownership interest not attributable to the Company is listed as “minority interest”item under the ownership interest in the consolidated balance sheet. The share of the subsidiary’s current profit orloss attributable to the minority interests is listed as "minority interest" item under the net profit item in theconsolidated income statement. The share of the subsidiary’s current consolidated income attributable to theminority interests is listed as the “total consolidated income attributable to the minority shareholders” item underthe total consolidated income item in the consolidated income statement. If there are minority shareholders, addthe "minority interests" item in the consolidated statement of change in equity to reflect the changes of theminority interests. If the losses of the current period shared by a subsidiary’s minority shareholders exceed theshare that the minority shareholders hold in the subsidiary ownership interest in the beginning of the period, thebalance 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 fairvalue of the remaining equity interest is re-measured on the date when the control ceased. The difference betweenthe sum of the consideration received from disposal of equity interest and the fair value of the remaining equityinterest, less the net assets attributable to the company since the acquisition date, is recognized as the investmentincome from the loss of control. Other comprehensive income relating to original equity investment insubsidiaries shall be treated on the same basis as if the relevant assets or liabilities were disposed of by thepurchaser directly when the control is lost, namely be transferred to current investment income other than therelevant part of the movement arising from re-measuring net liabilities or net assets under defined benefit schemeby the original subsidiary. Subsequent measurement of the remaining equity interests shall be in accordance withrelevant accounting standards such as Accounting Standards for business Enterprises 2 – Long-term EquityInvestments 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 beregarded as a bundle of transactions. When the economic effects and terms and conditions of the disposaltransactions met one or more of the following situations, the transactions shall normally be accounted for as abundle of transactions: ①The transactions are entered into after considering the mutual consequences of eachindividual transaction; ② The transactions need to be considered as a whole in order to achieve a deal incommercial sense;③The occurrence of an individual transaction depends on the occurrence of one or moreindividual transactions in the series; ④ The result of an individual transaction is not economical, but it would beeconomical after taking into account of other transactions in the series. When the transactions are not regarded asa bundle of transactions, the individual transactions shall be accounted as “disposal of a portion of an interest in asubsidiary which does not lead to loss of control” and “disposal of a portion of an interest in a subsidiary whichlead to loss of control”. When the transactions are regarded as a bundle of transactions, the transactions shall beaccounted as a single disposal transaction; however, the difference between the consideration received fromdisposal and the share of net assets disposed in each individual transactions before loss of control shall berecognized as other comprehensive income, and reclassified as profit or loss arising from the loss of control whencontrol is lost.

7. Joint arrangement classification and accounting treatment for joint operationsIn accordance with the Company’s rights and obligation under a joint arrangement, the Company classifies jointarrangements into: joint ventures and joint operations.The Company confirms the following items related to the share of interests in its joint operations, and inaccordance 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 inappropriation to the share of the Company;

(2) Recognize the obligations assumed solely by the Company, and recognize obligations assumed jointly by theCompany in appropriation to the share of the Company;

(3) Recognize revenue from disposal of the share of joint operations of the Company;

(4) Recognize fees solely occurred by Company;

(5) Recognize fees from joint operations in appropriation to the share of the Company.

8. Recognition standards for cash and cash equivalent

Cash refers to stock cash, savings available for paid at any time; cash and cash equivalent refers to the cash heldby the Company with short terms(expired within 3 months since purchased), and liquid and easy to transfer asknown 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 themiddle rate of the market exchange rate published by the People's Bank of China on the transaction date. There into,the occurred foreign currency exchange or transactions involved in the foreign currency exchange are converted inaccordance 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 convertedinto the recording currency amount in accordance with the middle rate of the market exchange rate published bythe People's Bank of China on the transaction date. The balance between the recording currency amount convertedaccording to exchange rate at the balance sheet date and the original recording currency amount is disposed as theexchange gains or losses. There into, the exchange gains or losses occurred in the foreign currency loans related tothe purchase and construction of fixed assets are disposed according to the principle of capitalization of borrowingcosts; the exchange gains and losses occurred during the start-up are included in the start-up costs; the rest isincluded in the current financial expenses.At the balance sheet date, the foreign currency non-monetary items measured with the historical costs areconverted in accordance with the middle rate of the market exchange rate published by the People's Bank of Chinaon the transaction date without changing its original recording currency amount; the foreign currency non-monetaryitems measured with the fair value are converted in accordance with the middle rate of the market exchange ratepublished by the People's Bank of China on the fair value date,and the generated exchange gains and losses areincluded 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 thestatements in RMB: The asset and liability items in the balance sheets for overseas operations are translated at thespot exchange rates on the balance sheet date. Among the owners’ equity items, the items other than“undistributed profits” are translated at the spot exchange rates of the transaction dates. The income and expenseitems in the income statements of overseas operations are translated at the average exchange rates of thetransaction dates.The exchange difference arising from the above mentioned translation are recognized in othercomprehensive income and is shown separately under owner’ equity in the balance sheet; such exchangedifference will be reclassified to profit or loss in current year when the foreign operation is disposed according tothe 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 financialliability or equity instrument for other units.

(1) Recognition and termination of financial instrument

A financial asset or liability is recognized when the group becomes a party to a financial instrument contract.

The recognition of a financial assets shall be terminated if it meets one of the following conditions:

① the contractual right to receive the cash flow of the financial assets terminates; and

② the financial assets is transferred and the company transfers substantially all the risks and rewards of ownershipof the financial asset to the transferring party;

③the financial asset was transferred and control, although the company has neither transferred nor retained almostall the risks and rewards of the ownership of a financial asset, it relinquishes control over the financial asset.If all or part of the current obligations of a financial liability has been discharged, the financial liability or part of itis terminated for recognition. When the Company (debtor) and the creditor sign an agreement to replace the existingfinancial liabilities with new financial liabilities, and the new financial liabilities and the existing financial liabilitiesare substantially different from the contract terms, terminated the recognition of the existing financial liabilities andrecognize the new financial liabilities at the same time.Financial assets are traded in the normal way and their accounting recognition and terminated the recognition ofproceed 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 cashflow characteristics of financial assets, the Company classifies the financial assets into the financial assetsmeasured at amortized cost, the financial assets measured at fair value and whose changes are included in othercomprehensive income, and the financial assets measured at fair value and whose changes are included in currentprofit or loss. Financial assets are measured at fair value at initial recognition, but if the receivables or receivablesfinancing arising from the sale of goods or the provision of services do not include a significant financingcomponent or do not consider a financing component that does not exceed one year, it shall be initially measuredin accordance with the transaction value. For financial assets measured at fair value and whose changes areincluded in the current profit or loss, related transaction costs are directly included in the current profit and loss;for other types of financial assets, related transaction costs are included in the initially recognized amount.The business model for managing financial assets refers to how the Company manages financial assets to generatecash flows. The business model determines whether the cash flow of financial assets managed by the Company isbased on contract cash flow, selling financial assets or both. The Company determines the business model formanaging financial assets based on objective facts and based on the specific business objectives of financial assetsmanagement determined by key management personnel.The Company evaluates the contractual cash flow characteristics of financial assets to determine whether thecontractual cash flows generated by the relevant financial assets on a specific date are only payments for theprincipal and the interest based on the outstanding principal amount. The principal is the fair value of the financialassets at initial recognition; the interest includes the time value of money, the credit risk associated with theoutstanding 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 theamount of contractual cash flows of the financial assets to determine whether they meet the requirements of theabove contractual cash flow characteristics.

Only when the Company changes its business model of managing financial assets, all affected financial assets arereclassified on the first day of the first reporting period after the business model changes, otherwise the financialassets are not allowed to be reclassified after initial recognition.

① Financial assets measured at amortized cost

The Company classifies the financial assets that meet the following conditions and haven’t been designated asfinancial assets measured at fair value and whose changes are included in current profit or loss as financial assetsmeasured at amortized cost:

A. the group's business model for managing the financial assets is to collect contractual cash flows; andB. the contractual terms of the financial assets stipulate that cash flow generated on a specific date is only paid forthe 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 anyhedging relationship are included in current profit or loss when being terminated for recognition, amortized byeffective interest method, or impaired.

② Financial assets measured at fair value and whose changes are included in other comprehensive incomeThe Company classifies the financial assets that meet the following conditions and haven’t been designated asfinancial assets measured at fair value and whose changes are included in current profit or loss as financial assetsmeasured 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 contractualcash flows and the sale of financial assets; andB. the contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only thepayment 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 lossesor gains and exchange gains and losses calculated by using the effective interest method are included in profit or lossfor the period, and other gains or losses are included in other comprehensive income. When being terminate forrecognition, the accumulated gains or losses previously included in other comprehensive income are transferredfrom other comprehensive income and included in current profit or loss.

③Financial assets measured at fair value and whose changes are included in current profit or lossExcept for the above financial assets measured at amortized cost and measured at fair value and whose changes areincluded in other comprehensive income, the Company classifies all other financial assets as financial assetsmeasured at fair value and whose changes are included in current profit or loss. In the initial recognition, in order toeliminate or significantly reduce accounting mismatch, the Company irreversibly designates part of the financialassets that should be measured at amortized cost or measured at fair value and whose changes are included in theother comprehensive income as the financial assets measured at fair value and whose changes are included incurrent 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 financialassets that are measured at fair value and whose changes are included in other comprehensive income in the initialrecognition. The designation is made based on a single investment and the relevant investment is in line with thedefinition of equity instruments from the issuer's perspective. After initial recognition, such financial assets aresubsequently measured at fair value. Dividend income that meets the conditions is included in profit or loss, andother gains or losses and changes in fair value are included in other comprehensive income. When it is terminatedfor recognition, the accumulated gains or losses previously included in other comprehensive income are transferredfrom other comprehensive income and included in retained earnings.

(3) Classification and measurement of financial liabilities

The financial liabilities of the Company are classified as financial liabilities measured at fair value and whosechanges are included in current profit or loss and financial liabilities measured at amortized cost at the initialrecognition. For financial liabilities that are not classified as financial liabilities measured at fair value and whosechanges are included in current profit or loss, the related transaction expenses are included in the initial recognitionamount.

①Financial liability measured by fair value and with variation reckoned into current gains/lossesFinancial liability measured by fair value and with variation reckoned into current gains/losses including tradablefinancial liability and the financial liabilities that are designated as fair value in the initial recognition and whosechanges are included in current profit or loss. For such financial liabilities, the subsequent measurement is based onfair value, and the gains or losses arising from changes in fair value and the dividends and interest expenses relatedto 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. Thegain or loss arising from recognition termination or amortization is included in current profit or loss.

③Distinctions between financial liabilities and equity instruments

Financial liabilities are liabilities that meet one of the following conditions:

A. Contractual obligations to deliver cash or other financial assets to other parties.B. Contractual obligations to exchange financial assets or financial liabilities with other parties under potentiallyadverse conditions.C. Non-derivative contracts that must be settled or that can be settled by the company's own equity instruments inthe 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 thefuture, except for derivatives contracts that exchange a fixed amount of cash or other financial assets with a fixedamount 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 allliabilities.

If the Company cannot unconditionally avoid performing a contractual obligation by delivering cash or otherfinancial 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 isnecessary to consider whether the Company's own equity instruments used to settle the instrument are a substitutefor cash or other financial assets, or to make the instrument holder enjoy the residual equity in the assets of the issuerafter 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 sufficientavailable data and other information support to determine the fair value of related financial assets and financialliabilities. The company divides the input values used by valuation techniques into the following levels and usesthem in sequence:

① The first-level input value is the unadjusted quotation of the same assets or liabilities that can be obtained on themeasurement date in the active market;

② The second-level input value is the direct or indirect observable input value of the relevant assets or liabilitiesother 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 thanquotations, 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 theinterest rate that cannot be directly observed or cannot be verified by observable market data, stock volatility, futurecash flow of the retirement obligation assumed in the business combination, and financial forecasting made by itsown data, etc.

(5) Impairment of financial assets

On the basis of expected credit losses, the Company performs impairment treatment on financial assets measuredat amortized cost and creditors’ investment etc. measured at fair value and whose changes are included in othercomprehensive 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 ofdefault. Credit loss refers to the difference between all contractual cash flows that the Company discounts at theoriginal actual interest rate and are receivable in accordance with contract and all cash flows expected to bereceived, that is, the present value of all cash shortages. Among them, for the purchase or source of financialassets that have suffered credit impairment, the Company discounts the financial assets at the actual interest rateadjusted by credit.When measuring expected credit losses, the Company individually evaluates credit risk for financial assets withsignificantly different credit risks, such as receivables involving litigation and arbitration with the other party, orreceivables having obvious indications that the debtor is likely to be unable to fulfill its repayment obligations,

and so on.Except for the financial assets that separately assess the credit risks, the Company classified the accountreceivable according to their characteristic of risks, calculated the expected credit losses on basis of portfolio.Basis for determining the portfolio as follow:

A - Note receivableNote receivable 1: bank acceptanceNote receivable 2: trade acceptanceB - Account receivableAccount receivable 1: receivable from clientsAccount receivable 2: receivable from internal related partyC- Receivable financingReceivable financing 1: bank acceptanceReceivable financing 2: trade acceptanceD - Other account receivablesOther account receivables 1: receivable from internal related partyOther account receivables 2: receivable from othersAs for the note receivable, account receivable, receivable financing and other account receivable classified inportfolio, by referring to the experience of historical credit loss, the expected credit loss is calculated bycombining the current situation and the forecast of future economic conditions.Except for the financial assets adopting simplified metering method, the Company assesses at each balance sheetdate whether its credit risk has increased significantly since initial recognition. If credit risk has not increasedsignificantly since initial recognition, it is in the first stage, the Company measures the loss provisions based onthe amount equivalent to the expected credit loss in the next 12 months; if the credit risk has increasedsignificantly since initial recognition but no credit impairment has occurred, it is in the second stage, the Companymeasures the loss provisions based on the amount equivalent to the expected credit loss for the entire duration; ifcredit impairment occurs after initial recognition, it is in the third stage, the Company measures the lossprovisions based on the amount equivalent to the expected credit loss for the entire duration.For financialinstruments with low credit risks at the balance sheet date, the Company assumes that their credit risks have notincreased significantly since initial recognition.The Company evaluates the expected credit losses of financial instruments based on individual items andportfolios. When assessing expected credit losses, the Company considers reasonable and evidence-basedinformation about past events, current conditions, and forecasts of future economic conditions.When the Company no longer reasonably expects to be able to fully or partially recover the contractual cash flowof a financial asset, the Company directly writes down the book balance of the financial asset.

②Assessment of a significant increase in credit risk:

The Company determines the relative changes in default risk of the financial instrument occurred in the expected

duration and assess whether the credit risks of financial instrument has increased significantly since the initialrecognition by comparing the risk of default of the financial instrument on the balance sheet date with the risk ofdefault of financial instrument on the initial recognition date. When determining whether the credit risk hasincreased significantly since the initial recognition, the Company considers reasonable and evidence-basedinformation that can be obtained without unnecessary additional costs or effort, including forward-lookinginformation. 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 orare expected;C. Serious deterioration of the debtor’s operating results that have occurred or are expected;D. Changes in existing or anticipated technical, market, economic or legal circumstances that will have a materialadverse 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 significantlyon the basis of a single financial instrument or combination of financial instruments. When conducting anassessment based on a combination of financial instruments, the Company can classify financial instruments basedon 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 totake 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 costand the credit of debt investments measured at fair value and whose changes are included in other comprehensiveincome has been impaired. When one or more events that adversely affect the expected future cash flows of afinancial asset occur, the financial asset becomes a financial asset that has suffered credit impairment. Evidence thatcredit 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 orcontractual 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 todisappear.

④Presentation of expected credit loss provisions

In order to reflect the changes in the credit risk of financial instruments since the initial recognition, the Companyre-measures the expected credit losses on each balance sheet date, and the resulting increase or reversal of the lossprovisions shall be included in current profit and loss as impairment losses or gains. For financial assets measured atamortized 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 ofthe financial asset.

⑤Write-off

If the Company no longer reasonably expects that the financial asset contract cash flow can be fully or partiallyrecovered, directly write down the book balance of the financial asset. Such write-downs constitute the terminationof recognition for related financial assets. This usually occurs when the Company determines that the debtor has noassets 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 writtendown 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 orloss 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 tothe transferee, terminate the recognition of the financial assets; if almost all the risks and rewards of ownership offinancial assets have been retained, do not terminate the recognition of the financial assets.If the Company has neither transferred nor retained almost all the risks and rewards of ownership of financial assets,dispose as following situations: If the control of the financial assets is abandoned, terminate the recognition of thefinancial assets and determine the resulting assets and liabilities. If the control of the financial assets is notabandoned, determine the relevant financial assets according to the extent to which they continue to be involved inthe 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 financialassets, 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

Note receivable 1: bank acceptanceNote receivable 2: trade acceptanceThe Company calculates expected credit losses by referring to historical credit loss experience, taking intoaccount current conditions and forecasts of the future economic situation.

12.Account receivable

Account receivable 1: receivable from clients

Account receivable 2: receivable from internal related partyThe Company calculates expected credit losses by referring to historical credit loss experience, taking intoaccount current conditions and forecasts of the future economic situation.

13. Receivable financing

The note receivable and account receivable which are measured at fair value and whose changes are included inother comprehensive income are classified as receivables financing within one year(including one year) from thedate of acquisition. Relevant accounting policy found more in 10. Financial Instrument in Note V.

14.Other account receivables

Determination method of expected credit loss and accounting treatmentOther account receivables 1: receivable from internal related partyOther account receivables 2: receivable from othersThe Company calculates expected credit losses by referring to historical credit loss experience, taking intoaccount current conditions and forecasts of the future economic situation.

15.Inventory

(1) Classification of inventories

The Company’s inventories are categorized into stock materials, product in process and stock goods etc.

(2) Pricing for delivered inventories

The cost of inventory at the time of acquisition and delivery is calculated according to the standard cost method,and the difference in cost that it should bear is carried forward at the end of the period, and the standard cost isadjusted to the actual cost.

(3) Recognition evidence for net realizable value of inventories and withdrawal method for inventory impairmentprovisionInventories as at period-end are priced at the lower of costs and net realizable values; at period end, on the basis ofoverall clearance about inventories, inventory impairment provision is withdrew for uncollectible part of costs ofinventories which result from destroy of inventories, out-of-time of all and part inventories, or sales pricelowering than cost. Inventory impairment provision for stock goods and quantity of raw materials is subject to thedifference between costs of single inventory item over its net realizable value. As for other raw materials withlarge quantity and comparatively low unit prices, inventory impairment provision is withdrawn pursuant tocategories.As for finished goods, commodities and materials available for direct sales, their net realizable values aredetermined by their estimated selling prices less estimated sales expenses and relevant taxes. For materialinventories 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 tillcompletion of production. As for inventories held for implementation of sales contracts or service contracts, theirnet realizable values are calculated on the basis of contract prices. In the event that inventories held by a companyexceed order amount as agreed in sales contracts, net realizable values of the surplus part are calculated on thebasis 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.

16.Contract assets

The Company presents the contract assets or contract liabilities in the balance sheet based on the relationshipbetween the performance obligation and the customer’s payment.Recognition method and standard of contract assets: contract assets refer to the right of a company to receiveconsideration after transferring goods or providing services to customers, and this right depends on other factorsbesides the passage of time. The company's unconditional (that is, only depending on the passage of time) right tocollect consideration from customers are separately listed as receivables.Method for determining expected credit losses of contract assets: the method for determining expected creditlosses of contract assets is consistent with the method for determining expected credit losses of accountsreceivable.Accounting treatment method of expected credit losses of contract assets: if the contract assets are impaired, thecompany shall debit the "asset impairment loss" subject and credit the "contract asset impairment provision"subject according to the amount that should be written down. When reversing the provision for asset impairmentthat has already been withdrawn, make opposite accounting entries.

17.Assets held for sale

The Company classifies non-current assets or disposal groups that meet all of the following conditions asheld-for-sale: according to the practice of selling this type of assets or disposal groups in a similar transaction, thenon-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, theselling is estimated to be completed within one year. Those assets whose disposal is subject to approval fromrelevant 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 ornot the Company retains part equity investment after such disposal, investment in the subsidiary shall be classifiedin its entirety as held for sale in the separate financial statement of the parent company subject to that theinvestment 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 financialstatement.The purchase commitment identified refers to the legally binding purchase agreement entered into between theCompany and other parties, which sets out certain major terms relating to transaction price, time and adequatelystringent punishment for default, which render an extremely minor possibility for material adjustment orrevocation of the agreement.Assets held for sale are measured at the lower of heir carrying value and fair value less selling expense. If thecarrying value is higher than fair value less selling expense, the excess shall be recognized as impairment loss andrecorded in profit or loss for the period, and allowance for impairment shall be provided for in respect of theassets. In respect of impairment loss recognized for disposal group held for sale, carrying value of the goodwill inthe disposal group shall be deducted first, and then deduct the carrying value of the non-current assets within thedisposal group applicable to this measurement standard on a pro rata basis according to the proportion taken bytheir carrying value.If the net amount of fair value of non-current assets held for sale less sales expense on subsequent balance sheetdate increases, the amount previously reduced for accounting shall be recovered and reverted from the impairmentloss recognized after the asset is classified under the category of held for sale, with the amount reverted recordedin profit or loss for the period. Impairment loss recognized before the asset is classified under the category of heldfor sale shall not be reverted.If the net amount of fair value of the disposal group held for sale on the subsequentbalance sheet date less sales expenses increases, the amount reduced for accounting in previous periods shall berestored, and shall be reverted in the impairment loss recognized in respect of the non-current assets which areapplicable to relevant measurement provisions after classification into the category of held for sale, with thereverted amount charged in profit or loss for the current period. The written-off carrying value of goodwill shallnot 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 thecondition of being classified as held for sale or the non-current assets are removed from the disposal group heldfor 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 thedepreciation, amortization or impairment that should have been recognized given they are not classified as heldfor sale;(ii) The recoverable amount.

18. Long-term equity investment

Long-term equity investments refer to long-term equity investments in which the Company has control, jointcontrol or significant influence over the invested party. Long-term equity investment without control or jointcontrol or significant influence of the Group is accounted for as available-for-sale financial assets or financialassets measured by fair value and with variation reckoned into current gains/losses. As for other accountingpolicies found more in “10. Financial instrument” in Note V.

(1) Determination of initial investment cost

Investment costs of the long-term equity investment are recognized by the follow according to different way ofacquirement:

①For a long-term equity investment acquired through a business combination involving enterprises undercommon control, the initial investment cost of the long-term equity investment shall be the absorbing party’sshare of the carrying amount of the owner’s equity under the consolidated financial statements of the ultimatecontrolling party on the date of combination. The difference between the initial cost of the long-term equityinvestment and the cash paid, non-cash assets transferred as well as the book value of the debts borne by theabsorbing party shall offset against the capital reserve. If the capital reserve is insufficient to offset, the retainedearnings shall be adjusted. If the consideration of the merger is satisfied by issue of equity securities, the initialinvestment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount ofthe owner’s equity under the consolidated financial statements of the ultimate controlling party on the date ofcombination. With the total face value of the shares issued as share capital, the difference between the initial costof the long-term equity investment and total face value of the shares issued shall be used to offset against thecapital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. For businesscombination resulted in an enterprise under common control by acquiring equity of the absorbing party undercommon control through a stage-up approach with several transactions, these transactions will be judged whetherthey shall be treat as “transactions in a basket”. If they belong to “transactions in a basket”, these transactions willbe accounted for a transaction in obtaining control. If they are not belong to “transactions in a basket”, the initialinvestment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount ofthe owner’s equity under the consolidated financial statements of the ultimate controlling party on the date ofcombination. The difference between the initial cost of the long-term equity investment and the aggregate of thecarrying amount of the long-term equity investment before merging and the carrying amount the additionalconsideration 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 incomerecognized as a result of the previously held equity investment accounted for using equity method on the date ofcombination or recognized for available-for-sale financial assets will not be accounted for.

② For the long-term equity investment obtained by business combination not under the same control, the fairvalue of the assets involved, the equity instruments issued and the liabilities incurred or assumed on thetransaction date, plus the combined cost directly related to the acquisition is used as the initial investment cost ofthe long-term equity investment. The identifiable assets of the combined party and the liabilities (including

contingent liabilities) assumed by the combined party on the combining date are all measured at fair value,regardless of the amount of minority shareholders’ equity. The amount of the combined cost exceeding the fairvalue of the identifiable net assets of the combined party obtained by the Company is recorded as goodwill, andthe amount below the fair value of the identifiable net assets of the combining party is directly recognized in theconsolidated income statement.(For business combination resulted in an enterprise not under common control byacquiring 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 arenot belong to “transactions in a basket”, the initial investment cost of the long-term equity investment accountedfor using cost method shall be the aggregate of the carrying amount of equity investment previously held by theacquire and the additional investment cost. For previously held equity accounted for using equity method, relevantother comprehensive income will not be accounted for. For previously held equity investment classified asavailable-for-sale financial asset, the difference between its fair value and carrying amount, as well as theaccumulated movement in fair value previously included in the other comprehensive income shall be transferredto profit or loss for the current period.)

③Long-term investments obtained through other ways:

A. Initial investment cost of long-term equity investment obtained through cash payment is determined accordingto actual payment for purchase;B. Initial investment cost of long-term equity investment obtained through issuance of equity securities isdetermined at fair value of such securities;C. Initial investment cost of long-term equity investment (exchanged-in) obtained through exchange withnon-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 atfair 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 significantinfluence 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 invested party’s identifiable net assets at the acquisition date, noadjustment shall be made to the initial investment cost. Where the initial investment cost is less than the investor’sinterest in the fair value of the invested party’s identifiable net assets at the acquisition date, the difference shall becharged to profit or loss for the current period, and the cost of the long term equity investment shall be adjustedaccordingly.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 carryingamount of long-term equity investment shall be reduced based on the Group’s share of profit or cash dividenddistributed by the invested party. In respect of the other movement of net profit or loss, other comprehensiveincome and profit distribution of invested party, the carrying value of long-term equity investment shall beadjusted and included in the capital reserves. The Group shall recognize its share of the invested party’s net profitsor losses based on the fair values of the invested party’s individual separately identifiable assets at the time ofacquisition, after making appropriate adjustments thereto. In the event of in-conformity between the accountingpolicies and accounting periods of the invested party and the Company, the financial statements of the investedparty 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 transactionsbetween the Group and its associates and joint ventures in which the assets disposed of or sold are not classified asoperation, the share of unrealized gain or loss arising from inter-group transactions shall be eliminated by theportion attributable to the Company. Investment gain shall be recognized accordingly. However, any unrealizedloss arising from inter-group transactions between the Group and an invested party is not eliminated to the extentthat the loss is impairment loss of the transferred assets. In the event that the Group disposed of an asset classifiedas operation to its joint ventures or associates, which resulted in acquisition of long-term equity investment by theinvestor without obtaining control, the initial investment cost of additional long-term equity investment shall bethe fair value of disposed operation. The difference between initial investment cost and the carrying value ofdisposed operation will be fully included in profit or loss for the current period. In the event that the Group sold anasset classified as operation to its associates or joint ventures, the difference between the carrying value ofconsideration received and operation shall be fully included in profit or loss for the current period. In the eventthat the Company acquired an asset which formed an operation from its associates or joint ventures, relevanttransaction shall be accounted for in accordance with “Accounting Standards for Business Enterprises No. 20“Business combination”. All profit or loss related to the transaction shall be accounted for.The Group’s share of net losses of the invested party shall be recognized to the extent that the carrying amount ofthe long-term equity investment together with any long-term interests that in substance form part of the investor’snet investment in the invested party are reduced to zero. If the Group has to assume additional obligations, theestimated obligation assumed shall be provided for and charged to the profit or loss as investment loss for theperiod. Where the invested party is making profits in subsequent periods, the Group shall resume recognizing itsshare 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 oflong-term equity investment which was compared to fair value of identifiable net assets recognized which aremeasured based on the continuous measurement since the acquisition date (or combination date) of subsidiariesattributable to the Group calculated according to the proportion of newly acquired shares, the difference of whichrecognized as adjusted capital surplus, capital surplus insufficient to set off impairment and adjusted retainedearnings.

④Disposal of long-term equity investments

In these consolidated financial statements, for disposal of a portion of the long-term equity investments in asubsidiary without loss of control, the difference between disposal cost and disposal of long-term equityinvestments relative to the net assets of the subsidiary is charged to the owners’ equity. If disposal of a portion ofthe long-term equity investments in a subsidiary by the parent company results in a change in control, it shall beaccounted for in accordance with the relevant accounting policies as described in Note V.-6 “Preparation Methodof the Consolidated Financial Statements”.On disposal of a long-term equity investment otherwise, the difference between the carrying amount of theinvestment 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 interestafter disposal also accounted for using equity method, other comprehensive income previously under owners’equity shall be accounted for in accordance with the same accounting treatment for direct disposal of relevantasset or liability by invested party on pro rata basis at the time of disposal. The owners’ equity recognized for themovement of other owners’ equity (excluding net profit or loss, other comprehensive income and profitdistribution 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 afterdisposal also accounted for cost equity method, other comprehensive income measured and reckoned under equitymethod or financial instrument before control of the invested party unit acquired shall be accounted for inaccordance with the same accounting treatment for direct disposal of relevant asset or liability by invested partyon pro rata basis at the time of disposal and shall be transferred to profit or loss for the current period on pro ratabasis; among the net assets of invested party unit recognized by equity method (excluding net profit or loss, othercomprehensive income and profit distribution of invested party) shall be transferred to profit or loss for the currentperiod on pro rata basis.In the event of loss of control over invested party due to partial disposal of equity investment by the Group, inpreparing separate financial statements, the remaining equity interest which can apply common control or imposesignificant influence over the invested party after disposal shall be accounted for using equity method. Suchremaining equity interest shall be treated as accounting for using equity method since it is obtained andadjustment was made accordingly. For remaining equity interest which cannot apply common control or imposesignificant influence over the invested party after disposal, it shall be accounted for using the recognition andmeasurement standard of financial instruments. The difference between its fair value and carrying amount as atthe date of losing control shall be included in profit or loss for the current period. In respect of othercomprehensive income recognized using equity method or the recognition and measurement standard of financialinstruments before the Group obtained control over the invested party, it shall be accounted for in accordance withthe same accounting treatment for direct disposal of relevant asset or liability by invested party at the time whenthe control over invested party is lost. Movement of other owners’ equity (excluding net profit or loss, othercomprehensive income and profit distribution under net asset of invested party accounted for and recognizedusing equity method) shall be transferred to profit or loss for the current period at the time when the control overinvested party is lost. Of which, for the remaining equity interest after disposal accounted for using equity method,

other comprehensive income and other owners’ equity shall be transferred on pro rata basis. For the remainingequity interest after disposal accounted for using the recognition and measurement standard of financialinstruments, other comprehensive income and other owners’ equity shall be fully transferred.In the event of loss of common control or significant influence over invested party due to partial disposal of equityinvestment by the Group, the remaining equity interest after disposal shall be accounted for using the recognitionand measurement standard of financial instruments. The difference between its fair value and carrying amount asat the date of losing common control or significant influence shall be included in profit or loss for the currentperiod. In respect of other comprehensive income recognized under previous equity investment using equitymethod, it shall be accounted for in accordance with the same accounting treatment for direct disposal of relevantasset 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 ofinvested party accounted for and recognized using equity method) shall be transferred to profit or loss for thecurrent 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 thecontrol over the subsidiary is lost. If the said transactions belong to “transactions in a basket”, each transactionshall be accounted for as a single transaction of disposing equity investment of subsidiary and loss of control. Thedifference between the disposal consideration for each transaction and the carrying amount of the correspondinglong-term equity investment of disposed equity interest before loss of control shall initially recognized as othercomprehensive income, and subsequently transferred to profit or loss arising from loss of control for the currentperiod upon loss of control.

(3) Impairment test method and withdrawal method for impairment provision

Found more in Note V-25.”impairment of long-term assets”

(4) Criteria of Joint control and significant influence

Joint control is the Company’s contractually agreed sharing of control over an arrangement, which relevantactivities of such arrangement must be decided by unanimously agreement from parties who share control. All theparticipants or participant group whether have controlling over such arrangement as a group or not shall be judgefirstly, than judge that whether the decision-making for such arrangement are agreed unanimity by the participantsor not.Significant influence is the power of the Company to participate in the financial and operating policy decisions ofan invested party, but to fail to control or joint control the formulation of such policies together with otherparties.While recognizing whether have significant influence by invested party, the potential factors of votingpower as current convertible bonds and current executable warrant of the invested party held by investors andother parties shall be thank over.

19.Investment real estate

Measurement model of investment real estateCost measurement

Depreciation or amortizationInvestment real estate is stated at cost. During which, the cost of externally purchased propertiesheld-for-investment includes purchasing price, relevant taxes and surcharges and other expenses which aredirectly attributable to the asset. Cost of self construction of properties held for investment is composed ofnecessary expenses occurred for constructing those assets to a state expected to be available for use. Propertiesheld for investment by investors are stated at the value agreed in an investment contract or agreement, but thoseunder contract or agreement without fair value are stated at fair value.The Company adopts cost methodology amid subsequent measurement of properties held for investment, whiledepreciation and amortization is calculated using the straight-line method according to their estimated useful lives.The basis of provision for impairment of properties held for investment is referred to Note V- “25.Impairment oflong-term assets”

20. Fixed assets

(1) Recognition conditions

Fixed assets refer to the tangible assets for production of products, provision of labor, lease or operation, with aservice life excess one year and has more unit value.

(2) Depreciation methods

CategoryDepreciation methodYears of depreciationScrap value rateYearly depreciation rate
House and BuildingStraight-line depreciation20~3552.71~4.75
Machinery equipmentStraight-line depreciation1059.50
Transportation equipmentStraight-line depreciation4~5519.00~23.75
Electronic and other equipmentStraight-line depreciation3~1059.50~31.67

For the fixed assets with impairment provision, the depreciation amount shall be calculated after deducting theaccumulated amount of impairment provision for fixed assets

(3) Recognition basis, valuation and depreciation method for financial lease assets 【For year 2020】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 leasecommencement date), the ownership of lease fixed assets can be transferred to the Company after the expiry ofthe lease period;

② The Company has the option to purchase or lease the fixed assets, and the purchase price is estimated to bemuch less than the fair value of the lease of fixed assets when exercises the options, so whether the Company will

exercise the option can be reasonably determined on the lease commencement date;

③ Even though the fixed asset ownership is not transferred, the lease term accounts for 75% of the service life ofthe lease fixed assets;

④ The present value of the Company’s of minimum lease payment on the lease commencement date is equivalentto 90% or more of the fair value of the lease fixed assets on the lease commencement date; the present value of theleaser’s of minimum lease payment on the lease commencement date is equivalent to 90% or more of the fairvalue 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. Thefixed assets rented by finance leases is calculated as the book value according to the lower one between the fairvalue of leased assets on the lease commencement date and the present value of the minimum lease payments.

(4) The impairment test method and provision for impairment of fixed assets

The impairment test method and provision for impairment of fixed assets found more in Note V-25.“Impairmentof long-term assets”.

21.Construction in progress

From the date on which the fixed assets built by the Company come into an expected usable state, the projectsunder construction are converted into fixed assets on the basis of the estimated value of project estimates orpricing or project actual costs, etc. Depreciation is calculated from the next month. Further adjustments are madeto the difference of the original value of fixed assets after final accounting is completed upon completion ofprojects.The basis of provision for impairment of properties held for construction in process is referred to Note V-“25.Impairment of long-term assets”

22. Borrowing costs

(1) Recognition of capitalization of borrowing costs

Borrowing costs comprise interest occurred, amortization of discounts or premiums, ancillary costs and exchangedifferences in connection with foreign currency borrowings. The borrowing costs of the Company, which incurfrom the special borrowings occupied by the fixed assets that need more than one year (including one year) forconstruction, development of investment properties or inventories or from general borrowings, are capitalized andrecorded in relevant assets costs; other borrowing costs are recognized as expenses and recorded in the profit orloss in the period when they are occurred. Relevant borrowing costs start to be capitalized when all of thefollowing three conditions are met:

①Capital expenditure has been occurred;

②Borrowing costs have been occurred;

③ Acquisition or construction necessary for the assets to come into an expected usable state has been carried out.

(2) Period of capitalization of borrowing costs

Borrowing costs arising from purchasing fixed asset, investment real estate and inventory, and occurred after suchassets reached to its intended use of status or sales, than reckoned into assets costs while satisfy the abovementioned capitalization condition; capitalization of borrowing costs shall be suspended and recognized as currentexpenditure during periods in which construction of fixed assets, investment real estate and inventory areinterrupted abnormally, when the interruption is for a continuous period of more than 3 months, until theacquisition, construction or production of the qualifying asset is resumed; capitalization shall discontinue whenthe qualifying asset is ready for its intended use or sale, the borrowing costs occurred subsequently shall reckonedinto 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 theassets qualified for capitalization, the amount of interests expenses of the special borrowings actually occurred inthe period less interest income derived from unused borrowings deposited in banks or less investment incomederived from provisional investment, are recognized.With respect to the general borrowings occupied for acquisition, construction or production and development ofthe assets qualified for capitalization, the capitalized interest amount for general borrowings is calculated andrecognized by multiplying a weighted average of the accumulated expenditure on the assets in excess of theexpenditure on the some assets of the special borrowings, by a capitalization rate for general borrowings. Thecapitalization rate is determined by calculation of the weighted average interest rate of the general borrowings.

23. Right-of-use assets

The right-of-use asset refers to the right of the Company, as the lessee, to use the leased asset during the leaseterm.On the commencement date of the lease term, the Company recognizes the right-of-use assets for leases other thanshort-term leases and leases of low-value assets. Right-of-use assets are initially measured at cost. The costincludes the initial measurement amount of the lease liability; the lease payments made on or before thecommencement date of the lease term, deduct the relevant amount of the lease incentive already enjoyed if there isa lease incentive; the initial direct expenses incurred by the lessee; the cost expected to be incurred by the lessee todismantle and remove the leased assets, restore the site where the leased assets locate, or restore the leased assetsto the condition agreed upon in the lease terms, but this does not include the cost attributable to the production ofinventory.The Company subsequently uses the straight-line method to depreciate the right-of-use assets. If it can bereasonably determined that the ownership of the leased asset can be obtained at the expiration of the lease term,the Company shall accrue depreciation over the remaining useful life of the leased asset. If it cannot be reasonablydetermined that the ownership of the leased asset can be obtained at the expiration of the lease term, the Companyshall accrue depreciation within the shorter of the lease term and the remaining useful life of the leased asset.When the recoverable amount is lower than the book value of the right-of-use asset, the Company shall writedown its book value to the recoverable amount.

24. 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 technologyetc.The cost of a purchased intangible asset shall be determined by the expenditure actually occurred and other relatedcosts.The cost of an intangible asset contributed by an investor shall be determined in accordance with the valuestipulated in the investment contract or agreement, except where the value stipulated in the contract or agreementis not fair.The intangible assets acquired through exchange of non-monetary assets, which is commercial in substance, iscarried at the fair value of the assets exchanged out; for those not commercial in substance, they are carried at thecarrying 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 theCompany are amortized by straight-line method with the shortest terms among expected useful life, benefit yearsregulated in the contract and effective age regulated by the laws. The amortization amount shall count in relevantassets 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 NoteV-“25.Impairment of long-term assets”.

(2)Internal accounting policies relating to research and development expendituresExpenses incurred during the research phase are recognized as profit or loss in the current period; expensesincurred during the development phase that satisfy the following conditions are recognized as intangible assets(patented technology and non-patents technology):

①It is technically feasible that the intangible asset can be used or sold upon completion;

②there is intention to complete the intangible asset for use or sale;

③ The products produced using the intangible asset has a market or the intangible asset itself has a market;

④there is sufficient support in terms of technology, financial resources and other resources in order to completethe 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, suchexpenses incurred are accounted for in the profit or loss for the current period.The development expenditurereckoned in gains/losses previously shall not be recognized as assets in later period. The capitalized expenses indevelopment stage listed as development expenditure in balance sheet, and shall be transfer as intangible assetssince such item reached its expected conditions for service.

25. Impairment of long-term assets

The Company will judge if there is any indication of impairment as at the balance sheet date in respect ofnon-current non-financial assets such as fixed assets, construction in progress, intangible assets with a finite usefullife, investment properties measured at cost, and long-term equity investments in subsidiaries, joint controlledentities and associates. If there is any evidence indicating that an asset may be impaired, recoverable amount shallbe estimated for impairment test. Goodwill, intangible assets with an indefinite useful life and intangible assetsbeyond working conditions will be tested for impairment annually, regardless of whether there is any indication ofimpairment.If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount, theimpairment provision will be made according to the difference and recognized as an impairment loss. Therecoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of thefuture cash flows expected to be derived from the asset. An asset’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 bedetermined based on the bid price. If there is neither sale agreement nor active market for an asset, fair value shallbe 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 theasset for its intended sale. The present value of the future cash flows expected to be derived from the asset overthe course of continued use and final disposal is determined as the amount discounted using an appropriatelyselected discount rate. Provisions for assets impairment shall be made and recognized for the individual asset. If itis not possible to estimate the recoverable amount of the individual asset, the Group shall determine therecoverable amount of the asset group to which the asset belongs. The asset group is the smallest group of assetscapable of generating cash flows independently.For the purpose of impairment testing, the carrying amount of goodwill presented separately in the financialstatements shall be allocated to the asset groups or group of assets benefiting from synergy of businesscombination. If the recoverable amount is less than the carrying amount, the Group shall recognize an impairmentloss. The amount of impairment loss shall first reduce the carrying amount of any goodwill allocated to the assetgroup or set of asset groups, and then reduce the carrying amount of other assets (other than goodwill) within theasset 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 ofthe part whose value can be recovered.

26. Long-term deferred expenses

Long-term expenses to be amortized of the Company the expenses that are already charged and with the beneficialterm of more than one year are evenly amortized over the beneficial term. For the long-term deferred expenseitems cannot benefit the subsequent accounting periods, the amortized value of such items is all recorded in theprofit or loss during recognition.

27. Contract liability

The Company lists the obligation to transfer goods or provide labor services to customers for the considerationreceived or receivable from customers as contractual liabilities, such as the amount that the company has receivedbefore the transfer of the promissory goods.

28. 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 actualoccurred shall recognized as liability and reckoned into current gains/losses. During the accounting period whenstaff providing service to the Company, the actual short-term compensation occurred shall recognized as liabilitiesand reckoned into current gains/losses, except for those in line with accounting standards or allow to reckonedinto capital costs; the welfare occurred shall reckoned into current gains/losses or relevant asses costs whileactually occurred. The employee compensation shall recognize as liabilities and reckoned into current gains/lossesor relevant assets costs while actually occurred. The employee benefits that belong to non-monetary benefits aremeasured in accordance with the fair value; the social insurances including the medical insurance, work-injuryinsurance and maternity insurance and the housing fund that the enterprise pays for the employees as well as thelabor union expenditure and employee education funds withdrawn by rule should be calculated and determined asthe corresponding compensation amount and determined the corresponding liabilities in accordance with thespecified withdrawing basis and proportion, and reckoned in the current profits and losses or relevant asset costsin 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-employmentbenefits plan refers to the agreement about the post-employment benefits between the enterprise and employees,or the regulations or measures the enterprise established for providing post-employment benefits to employees.Thereinto, the defined contribution plan refers to the post-employment benefits plan that the enterprise doesn’tundertake the obligation of payment after depositing the fixed charges to the independent fund; the defined benefitplans refers to post-employment benefits plans except the defined contribution plan.

(3)Accounting treatment for retirement benefits

When the Company terminates the employment relationship with employees before the end of the employmentcontracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, theCompany shall recognize employee compensation liabilities arising from compensation for staff dismissal andincluded in profit or loss for the current period, when the Company cannot revoke unilaterally compensation fordismissal due to the cancellation of labor relationship plans and employee redundant proposals; and the Companyrecognize cost and expenses related to payment of compensation for dismissal and restructuring, whichever isearlier.The early retirement plan shall be accounted for in accordance with the accounting principles forcompensation for termination of employment. The salaries or wages and the social contributions to be paid for theemployees who retire before schedule from the date on which the employees stop rendering services to thescheduled retirement date, shall be recognized (as compensation for termination of employment) in the currentprofit or loss by the Group if the recognition principles for provisions are satisfied.

(4)Accounting treatment for other long-term employee benefits

Except for the compulsory insurance, the Company provides the supplementary retirement benefits to theemployees satisfying some conditions, the supplementary retirement benefits belong to the defined benefit plans,and the defined benefitliability confirmed on the balance sheet is the value by subtracting the fair value of planassets from the present value of defined benefit obligation. The defined benefit obligation is annually calculated inaccordance with the expected accumulated welfare unit method by the independent actuary by adopting thetreasury bond rate with similar obligation term and currency. The service charges related to the supplementaryretirement benefits (including the service costs of the current period, the previous service costs, and the settlementgains or losses) and the net interest are reckoned in the current profits and losses or other asset costs, the changesgenerated by recalculating the net liabilities of defined benefit plans or net assets should be reckoned in otherconsolidated income.

29. Lease liability

Substantial On the commencement date of the lease term, the Company recognizes the present value of the unpaidlease payments as lease liabilities. Lease payments include the following five items: fixed payments andin-substance fixed payments, if there is a lease incentive, deduct the amount related to the lease incentive; variablelease payments that depend on an index or ratio, which are determined at the initial measurement according to theindex or ratio determination on the commencement date of lease term; exercise price for a purchase optionprovided that the lessee is reasonably certain that the option shall be exercised; payments for exercising the optionto terminate the lease provided that the lease term reflects that the lessee shall exercise the option to terminate thelease option; estimated payments due based on guaranteed residual value provided by the lessee.When calculating the present value of lease payments, the interest rate implicit in the lease is used as the discountrate. If the interest rate implicit in the lease cannot be determined, the company’s incremental borrowing rate is

used as the discount rate. The Company calculates the interest expense of the lease liability in each period of thelease term according to the fixed periodic interest rate, and includes it in the current profit and loss, unless it isotherwise stipulated to be included in the cost of the relevant assets. Variable lease payments that are not includedin the measurement of lease liabilities are included in the current profit and loss when they are actually incurred,unless otherwise stipulated to be included in the cost of the relevant assets. After the commencement date of thelease term, when there is a change in the in-substance fixed payment, or a change in the estimated amount payablefor the guaranteed residual value, or a change in the index or ratio used to determine the lease payment, or achange in the evaluation results of the purchase option, renewal option or termination option or when the actualexercise situation changes, the Company shall re-measure the lease liability according to the present value of thechanged lease payments.

30. Accrual liability

(1) Recognition principle

An obligation related to a contingency, such as guarantees provided to outsiders, pending litigation or arbitration,product warranties, redundancy plans, onerous contracts, reconstructing, expected disposal of fixed assets, etc.shall be recognized as an estimated liability when all of the following conditions are satisfied:

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 thecontingencies

31. Share-based payment

The Company’s share-based payment is a transaction that grants equity instruments or assumes liabilitiesdetermined on the basis of equity instruments in order to obtain services provided by employees or other parties.The Company’s share-based payment is classified as equity-settled share-based payment and cash-settledshare-based payment.

(1) Equity-settled share-based payment and equity instruments

Equity-settled share-based payment in exchange for services provided by employees shall be measured at the fairvalue of the equity instruments granted to employees. If the Company uses restricted stocks for share-basedpayment, employees contribute capital to subscribe for stocks, and the stocks shall not be listed for circulation ortransfer until the unlocking conditions are met and unlocked; if the unlocking conditions specified in the finalequity incentive plan are not met, the Company shall repurchase the stocks at the pre-agreed price. When theCompany obtains the payment for the employees to subscribe for restricted stocks, it shall confirm the sharecapital and capital reserve (share capital premium) according to the obtained subscription money, and at the sametime recognize a liability in full for the repurchase obligation and recognize treasury shares. On each balance sheetdate during the waiting period, the Company makes the best estimate of the number of vesting equity instruments

based on the changes in the latest obtained number of vested employees, whether they meet the specifiedperformance conditions, and other follow-up information. On this basis, the services obtained in the current periodare included in related costs or expenses based on the fair value on the grant date, and the capital reserve shall beincreased accordingly.For share-based payments that cannot be vested in the end, costs or expenses shall not be recognized, unless thevesting conditions are market conditions or non-vesting conditions. At this time, regardless of whether the marketconditions or the non-vesting conditions are met, as long as all non-market conditions in the vesting conditions aremet, it is deemed as vesting.If the terms of equity-settled share-based payment are modified, at least the services obtained should be confirmedin accordance with the unmodified terms. In addition, any modification that increases the fair value of the equityinstruments granted, or a change that is beneficial to employees on the modification date, is recognized as anincrease in services received.If the equity-settled share payment is canceled, it will be treated as an accelerated vesting on the cancellation day,and the unconfirmed amount will be confirmed immediately. If an employee or other party can choose to meet thenon-vesting conditions but fails to meet within the waiting period, it shall be treated as cancellation ofequity-settled share-based payment. However, if a new equity instrument is granted and it is determined on thedate of grant of the new equity instrument that the new equity instrument granted is used to replace the cancelledequity instrument, the granted substitute equity instruments shall be treated in the same way as the modification ofthe original equity instrument terms and conditions.

(2) Cash-settled share-based payment and equity instruments

Cash-settled share-based payments are measured at the fair value of the liabilities calculated and determined onthe basis of shares or other equity instruments undertaken by the Company. If it’s vested immediately after thegrant, the fair value of the liabilities assumed on the date of the grant is included in the cost or expense, and theliability is increased accordingly. If the service within the waiting period is completed or the specifiedperformance conditions are met, the service obtained in the current period shall be included in the relevant costsor expenses based on the best estimate of the vesting situation within the waiting periodand the fair value of theliabilities assumed to increase the corresponding liabilities. On each balance sheet date and settlement date beforethe settlement of the relevant liabilities, the fair value of the liabilities is remeasured, and the changes are includedin the current profit and loss.

32. Revenue

Accounting policies used in revenue recognition and measurement

1)Revenue recognition principle

On the starting date of the contract, the company evaluates the contract, identifies each individual performanceobligation contained in the contract, and determines whether each individual performance obligation is performedwithin a certain period of time or at a certain point in time.

When one of the following conditions is met, it belongs to the performance obligation within a certain period oftime, otherwise, it belongs to the performance obligation at a certain point in time: ① The customer obtains andconsumes the economic benefits brought by the company's performance while the company performs the contract;

②The customer can control the goods or services under construction during the company’s performance; ③Thegoods or services produced during the company’s performance have irreplaceable uses, and the company has theright to collect payment for the performance part that has been completed so far during the entire contract period.For performance obligations performed within a certain period of time, the company recognizes revenue inaccordance with the performance progress during that period. When the performance progress cannot bereasonably determined, if the cost incurred is expected to be compensated, the revenue shall be recognizedaccording to the amount of the cost incurred until the performance progress can be reasonably determined.Forperformance obligations performed at a certain point in time, revenue is recognized at the point when thecustomer obtains control of the relevant goods or services. When judging whether the customer has obtainedcontrol of the goods, the company considers the following signs:① The company has the current right to receivepayment for the goods, that is, the customer has the current payment obligation for the goods; ②The company hastransferred the legal ownership of the goods to the customer, that is, the customer has the legal ownership of thegoods; ③The company has transferred the goods to the customer in kind, that is, the customer has physicallytaken possession of the goods; ④ The company has transferred the main risks and rewards of the ownership of thegoods to the customer, that is, the customer has obtained the main risks and rewards of the ownership of the goods;

⑤ The customer has accepted the goods; ⑥Other signs that the customer has obtained control of the goods.

2)Revenue measurement principle

①The company measures revenue based on the transaction price allocated to each individual performanceobligation. The transaction price is the amount of consideration that the company expects to be entitled to receivedue to the transfer of goods or services to customers, and does not include payments collected on behalf of thirdparties and payments expected to be returned to customers.

②If there is variable consideration in the contract, the company shall determine the best estimate of the variableconsideration according to the expected value or the most likely amount, but the transaction price including thevariable consideration shall not exceed the amount of cumulatively recognized revenue that is unlikely to besignificantly turned back when the relevant uncertainty is eliminated.

③ If there is a significant financing component in the contract, the company shall determine the transaction pricebased on the amount payable that the customer is assumed to pay in cash when obtaining the control of the goodsor services. The difference between the transaction price and the contract consideration shall be amortized by theeffective interest method during the contract period. On the starting date of the contract, if the company expectsthat the customer pays the price within one year after obtaining control of the goods or services, the significantfinancing components in the contract shall not be considered.

④If the contract contains two or more performance obligations, the company will allocate the transaction price toeach individual performance obligation based on the relative proportion of the stand-alone selling price of thegoods promised by each individual performance obligation on the starting date of the contract.

Differences in accounting policies for revenue recognition due to different operating models for the same type ofbusinessN/A

33. Government grants

(1) Types

Government grants are transfer of monetary assets or non-monetary assets from the government to the Group atno consideration. Government grants are classified into government grants related to assets and government grantsrelated to income.As for the assistance object not well-defined in government’s documents, the classification criteria forassets-related or income-related grants are as: whether the grants turn to long-term assets due to purchasing forconstruction or other means.

(2) Recognition and measure

The government grants shall be recognized while meet the additional conditions of the grants and amount isactually can be obtained.If a government grant is in the form of a transfer of monetary asset, the item shall be measured at the amountreceived or receivable. If a government grant is in the form of a transfer of non-monetary asset, the item shall bemeasured 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 currentgains/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, thanrecognized deferred income, and should reckoned into current gain/loss during the period while relevant expensesare recognized; if they making up relevant expenses and losses that occurred, than reckoned into currentgains/losses.A government grant related to daily operation activity of the Company should reckoned into other income; thosewithout 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.

34. 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 thecarrying values of assets and liabilities and their taxation bases (as for the ones did not recognized as assets andliability and with taxation basis recognized in line with tax regulations, different between tax base and its bookvalue) 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 isused 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 infuture 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 futureperiods, then the carrying value of deferred income tax assets shall be reduced accordingly. If it is probable toobtain 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 intocurrent gains/losses, excluding the follow income tax:

①Enterprise combination;

②Transactions or events recognized in owner’s equity directly

35. Lease

(1)Accounting for operating lease

Accounting policies applicable from January 1, 2021Lease refers to a contract in which the lessor transfers the right to use assets to the lessee for consideration withina certain period of time. On the commencement date of the contract, the company evaluates whether the contractis a lease or includes a lease. If one party in the contract transfers the right to control the use of one or moreidentified assets within a certain period in exchange for consideration, the contract is a lease or includes a lease. Ifthe contract includes multiple separate leases at the same time, the company will split the contract and conductaccounting treatment for each separate lease. If the contract includes both the leased and non leased parts, thelessee and the lessor shall separate the leased and non leased parts.

(1) The company as lessee

For the general accounting treatment of the company as the lessee, see note V, 23 "right to use assets" and note V,29 "lease liabilities".For short-term leases with a lease term of no more than 12 months and low value asset leases with a lower valuewhen a single asset is new, the company chooses not to recognize the right to use assets and lease liabilities, andthe relevant rental expenses are included in the current profit and loss or the cost of relevant assets according tothe straight-line method in each period of the lease term.If the lease changes and meets the following conditions at the same time, the company will treat the lease changeas a separate lease for Accounting: the lease change expands the lease scope by adding the right to use one ormore leased assets; The increased consideration is equivalent to the amount adjusted according to the conditionsof the contract at the separate price for most of the expansion of the lease scope. If the lease change is notaccounted for as a separate lease, on the effective date of the lease change, the company will re allocate theconsideration of the contract after the change, re determine the lease term, and re measure the lease liabilityaccording to the present value calculated by the lease payment after the change and the revised discount rate.

(2) The company as lessor

On the lease commencement date, the company classifies leases that have substantially transferred almost all the

risks and rewards related to the ownership of the leased assets as financial leases, and all other leases are operatingleases.

1) Operating lease

During each period of the lease term, the company recognizes the lease receipts as rental income according to thestraight-line method, and the initial direct expenses incurred are capitalized, amortized on the same basis as therecognition of rental income, and included in the current profit and loss by stages. The variable lease paymentsobtained by the company related to operating leases that are not included in the lease receipts are included in thecurrent profits and losses when actually incurred.

2) Finance lease

On the beginning date of the lease term, the company recognizes the financial lease receivables according to thenet amount of the lease investment (the sum of the unsecured residual value and the present value of the leasecollection not received on the beginning date of the lease term discounted according to the embedded interest rateof the lease), and terminates the recognition of the financial lease assets. During each period of the lease term, thecompany calculates and recognizes the interest income according to the interest rate embedded in the lease. Theamount of variable lease payments obtained by the company that are not included in the measurement of net leaseinvestment shall be included in the current profit and loss when actually incurred.

(3) Sale leaseback

The company evaluates and determines whether the asset transfer in the sale and leaseback transaction is a sale inaccordance with the accounting standards for Business Enterprises No. 14 - revenue.

1) The company as lessee

If the asset transfer in the sale and leaseback transaction is sales, the company measures the right to use assetsformed by the sale and leaseback according to the part of the book value of the original assets related to the rightto use obtained by the leaseback, and only recognizes the relevant gains or losses on the rights transferred to thelessor.If the asset transfer in the sale and leaseback transaction does not belong to sales, the company will continue torecognize the transferred asset, recognize a financial liability equal to the transfer income, and carry outaccounting treatment for the financial liability in accordance with the accounting standards for BusinessEnterprises No. 22 - recognition and measurement of financial instruments.

2) The company as lessor

If the asset transfer in the sale and leaseback transaction belongs to sales, the company will conduct accountingtreatment for asset purchase in accordance with other applicable accounting standards for business enterprises,and accounting treatment for asset lease in accordance with accounting standards for Business Enterprises No. 21- leasing.If the asset transfer in the sale and leaseback transaction does not belong to sales, the company does not recognizethe transferred asset, but recognizes a financial asset equal to the transfer income, and carries out accountingtreatment for the financial asset in accordance with the accounting standards for Business Enterprises No. 22 -recognition and measurement of financial instruments.Accounting policy applied in 2020

Accounting for operating leaseThe rental fee paid for renting the properties by the Company are amortized by the straight-line method andreckoned in the current expenses throughout the lease term without deducting rent-free period. The initial directcosts 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, theCompany shall deduct the expenses from the total rental costs, share by the deducted rental costs during the leaseterm, and reckon in the current expenses.Rental obtained from assets leasing, during the whole leasing period without rent-free period excluded, shall beamortized by straight-line method and recognized as leasing revenue. The initial direct costs paid with leasingtransaction 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 theentire lease period.When the Company undertakes the expenses related to the lease that should be undertaken by the lessor, thecompany shall deduct the expenses from the total rental income, and distribute by the deducted rental costs duringthe lease term.

(2) Accounting treatment for financing lease

Accounting policy applied in 2020Accounting for financing leaseAssets lease-in by financing: On the beginning date of the lease, the entry value of leased asset shall be at thelower of the fair value of the leased asset and the present value of minimum lease payment at the beginning dateof the lease. Minimum lease payment shall be the entry value of long-term accounts payable, with differencerecognized as unrecognized financing expenses.Unrecognized financing expenses shall be reckoned in financialexpenses and amortized and using effective interest method during the leasing period. The initial direct costsincurred 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 leasereceivables, the sum of unguaranteed residual value and its present value as the unrealized financing income, andrecognizes it as the rental income during the period of receiving the rent. For the initial direct costs related to therental transaction, the company reckons in the initial measurement of the finance lease receivables, and reducesthe amount of income confirmed in the lease term.

36. Other major accounting policy and 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 accuratelymeasured. 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 ofincome, 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 currentestimates of the Company so as to carry out the significant adjustments to the book value of the assets or liabilitiesto be affected.The Company regularly reviews the aforementioned judgments, estimates and assumptions on the basis ofcontinuing operations, the changes in accounting estimates only affect the current period, of which the impacts arerecognized in the current period; the changes in accounting estimates not only affect the current period but also thefuture 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, estimateand assume are as follows:

(1) Provision for bad debts

The Company has used the expected credit loss model to assess the impairment of financial instruments. Theapplication of the expected credit loss model requires significant judgement and estimates, and must consider allreasonable and evidence-based information, including forward-looking information.In making such judgmentsand estimates, the Company infers the expected changes in debtors’ credit risks based on historical repayment datacombined with economic policies, macroeconomic indicators, industry risks and other factors.

(2) Inventory falling price reserves

According to the inventory accounting policies, the Company measures by the comparison between the cost andthe net realizable value, if the cost is higher than the net realizable value and the old and unsalable inventories, theCompany calculates and withdraws the inventory impairment. The inventory devalues to the net realizable valueby evaluating the inventory’s vendibility and net realizable value. To identify the inventory impairment, themanagement needs to obtain the unambiguous evidences, and consider the purpose to hold the inventory, andjudge and estimate the impacts of events after the balance sheet date. The actual results and the differencesbetween the previously estimated results shall affect the book value of inventory and the provision or return of theinventory impairment during the period estimated to be changed.

(3) Preparation for the impairment of non-financial & non-current assets

The Company checks whether the non-current assets except for the financial assets may decrease in value at thebalance 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 forthe 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 netamount by subtracting the disposal costs from the fair value and the present value of expected future cash flows, itindicates the impairment.As for the net amount by subtracting the disposal costs from the fair value, refer to the sales agreement pricesimilar to the assets in the fair trade or the observable market price, and subtract the incremental costsdetermination 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 tothe 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 relevantinformation can be obtained, including the prediction related to the output, price, and related operating expensesbased on the reasonable and supportable assumptions.The Company tests whether its business reputation decreases in value every year, which requires to estimating thepresent 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 flowsgenerated by the asset group or the combination of asset group, and select the proper discount rate to determine thepresent value of the future cash flows.

(4) Depreciation and amortization

The Company depreciates and amortizes the investment property, fixed assets and intangible assets according tothe straight-line method in the service life after considering the residual value. The Companyregularly reviews theservice 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 expectedtechnological updating. If the previous estimates have significant changes, the depreciation and amortizationexpense shall be adjusted in future periods.

(5) Fair value of financial instrument

Financial instruments that do not have active markets to provide quotes need to use valuation techniques todetermine fair value.Valuation techniques include the latest transaction information, discounted cash flow methods,and option pricing models.The Company has established a set of work processes to ensure that qualified personnelare responsible for the calculation, verification and review of fair value.The valuation model used by theCompany uses the market information as much as possible and uses the Company-specific information as little aspossible.It should be noted that part of the information used in the valuation model requires management’sestimation (such as discount rate, target exchange rate volatility, etc.).The Company regularly reviews the aboveestimates and assumptions and makes adjustments if necessary.

(6) Income tax

In the Company’s normal business activities, the final tax treatment and calculation of some transactions havesome uncertainties. Whether some projects can be disbursed from the cost and expenses before taxes requiresneeds to get approval from the tax authorities. If the final affirmation of these tax matters differs from the initiallyestimated amount, the difference shall have an impact on its current and deferred income taxes during the finalidentification period.

37.Changes of important accounting policy and estimation

(1)Changes of important accounting policies

√Applicable □Not applicable

Content and reasons for changes in accounting policiesApproval processNote
Implementation of new leasing standardDeliberated and approved by AGM of 2020

Implementation of new leasing standard:

The Ministry of Finance issued the revised Accounting Standards for Business Enterprise No.21- Lease in December 2018. theCompany has implemented the new leasing standards from January 1, 2021. For the contracts existing prior to the date of firstimplementation, the Company has chosen not to re-assess whether they are leases or contains a leases. The Company adjusted theamount of retained earnings and other related items in financial statements at the beginning of the year of initial implementationbased on the cumulative effect of initial implementation, without adjusting the information for comparable period.Main effects of implementing the new leasing standard on financial statement as of January 1, 2021 are as follows:

Consolidated financial statement: In RMB

Item2020-12-31Impact amount2021-1-1

Fixed assets

Fixed assets2,882,230,191.08-11,878,720.712,870,351,470.37
Right-of-use assets--33,192,094.1433,192,094.14
Non-current liability due within one year36,914,242.024,570,870.7941,485,112.81
Lease liability--22,604,755.7022,604,755.70
Long-term payable39,479,218.17-5,862,253.0633,616,965.11

Financial statement of parent company: In RMB

Item2020-12-31Impact amount2021-1-1
Right-of-use assets--1,710,935.831,710,935.83
Lease liability--1,269,864.481,269,864.48
Non-current liability due within one year--441,071.35441,071.35

(2) Changes of important accounting estimations

□ Applicable √ Not applicable

(3) Adjustment the financial statements at the beginning of the first year of implementation of new leasingstandards since 2021

√Applicable □Not applicable

Whether need to adjust the items in balance sheet at the beginning of the year

√Yes □No

Consolidate balance sheet

In RMB

Item2020-12-312021-01-01Adjustments
Current assets:
Monetary funds1,963,289,832.331,963,289,832.33
Settlement provisions
Capital lent
Trading financial asset3,518,432,939.103,518,432,939.10
Derivative financial assets
Note receivable1,657,315,723.561,657,315,723.56
Account receivable2,824,780,352.412,824,780,352.41
Receivable financing1,005,524,477.881,005,524,477.88
Account paid in advance151,873,357.76151,873,357.76
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other account receivables54,209,580.8854,209,580.88
Including: Interest receivable
Dividend receivable49,000,000.0049,000,000.00
Buying back the sale of financial assets
Inventory2,877,182,174.642,877,182,174.64
Contract assets
Assets held for sale
Non-current asset due within one year
Other current assets2,137,921,113.612,137,921,113.61
Total current assets16,190,529,552.1716,190,529,552.17
Non-current assets:
Loans and payments on behalf
Debt investment
Other debt investment
Long-term account receivables
Long-term equity investment4,801,488,290.974,801,488,290.97
Other equity instrument investment285,048,000.00285,048,000.00
Other non-current financial assets1,805,788,421.001,805,788,421.00
Investment real estate20,886,681.6220,886,681.62
Fixed assets2,882,230,191.082,870,351,470.37-11,878,720.71
Construction in progress243,795,493.04243,795,493.04
Productive biological assets
Oil and gas assets
Right-of-use assets33,192,094.1433,192,094.14
Intangible assets454,412,947.69454,412,947.69
Development expenses
Goodwill257,800,696.32257,800,696.32
Long-term deferred expenses15,062,171.0915,062,171.09
Deferred income tax assets198,393,501.50198,393,501.50
Other non-current assets195,259,441.73195,259,441.73
Total non-current assets11,160,165,836.0411,181,479,209.4721,313,373.43
Total assets27,350,695,388.2127,372,008,761.6421,313,373.43
Current liabilities:
Short-term borrowings302,238,600.05302,238,600.05
Loan from central bank
Capital borrowed
Trading financial liability
Derivative financial liability
Note payable2,462,592,372.822,462,592,372.82
Account payable4,100,984,240.394,100,984,240.39
Account received in advance4,071,236.874,071,236.87
Contract liability81,717,387.2581,717,387.25
Selling financial asset of repurchase
Absorbing deposit and interbank deposit
Security trading of agency
Security sales of agency
Wage payable332,421,811.82332,421,811.82
Taxes payable67,493,690.2967,493,690.29
Other account payable361,556,257.42361,556,257.42
Including: Interest payable4,862.224,862.22
Dividend payable
Commission charge and commission payable
Reinsurance payable
Liability held for sale
Non-current liability due within one year36,914,242.0241,485,112.814,570,870.79
Other current liabilities222,871,087.33222,871,087.33
Total current liabilities7,972,860,926.267,977,431,797.054,570,870.79
Non-current liabilities:
Insurance contract reserve
Long-term loans3,050,640.973,050,640.97
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability22,604,755.7022,604,755.70
Long-term account payable39,479,218.1733,616,965.11-5,862,253.06
Long-term wages payable181,980,293.94181,980,293.94
Accrual liability
Deferred income328,204,476.73328,204,476.73
Deferred income tax liabilities30,653,933.1230,653,933.12
Other non-current liabilities
Total non-current liabilities583,368,562.93600,111,065.5716,742,502.64
Total liabilities8,556,229,489.198,577,542,862.6221,313,373.43
Owner’s equity:
Share capital1,008,950,570.001,008,950,570.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve3,294,242,368.283,294,242,368.28
Less: Inventory shares303,627,977.74303,627,977.74
Other comprehensive income13,916,619.4713,916,619.47
Reasonable reserve2,333,490.032,333,490.03
Surplus public reserve510,100,496.00510,100,496.00
Provision of general risk
Retained profit13,756,102,424.6213,756,102,424.62
Total owner’ s equity attributable to parent company18,282,017,990.6618,282,017,990.66
Minority interests512,447,908.36512,447,908.36
Total owner’ s equity18,794,465,899.0218,794,465,899.02
Total liabilities and owner’ s equity27,350,695,388.2127,372,008,761.6421,313,373.43

Explanation on adjustmentThe Ministry of Finance issued the revised Accounting Standards for Business Enterprise No.21- Lease in December 2018. theCompany has implemented the new leasing standards from January 1, 2021. For the contracts existing prior to the date of firstimplementation, the Company has chosen not to re-assess whether they are leases or contains a leases. The Company adjusted theamount of retained earnings and other related items in financial statements at the beginning of the year of initial implementationbased on the cumulative effect of initial implementation, without adjusting the information for comparable period.Balance sheet of parent company

In RMB

Item2020-12-312021-01-01Adjustments
Current assets:
Monetary funds1,157,684,053.051,157,684,053.05
Trading financial asset3,452,348,980.193,452,348,980.19
Derivative financial assets
Note receivable422,246,979.39422,246,979.39
Account receivable982,782,279.22982,782,279.22
Receivable financing
Account paid in advance75,650,090.4975,650,090.49
Other account receivable197,335,714.63197,335,714.63
Including: Interest receivable897,777.78897,777.78
Dividend receivable
Inventories725,276,241.43725,276,241.43
Contract assets
Assets held for sale
Non-current assets maturing within one year
Other current assets2,057,772,839.502,057,772,839.50
Total current assets9,071,097,177.909,071,097,177.90
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments5,978,128,303.885,978,128,303.88
Investment in other equity instrument209,108,000.00209,108,000.00
Other non-current financial assets1,805,788,421.001,805,788,421.00
Investment real estate
Fixed assets1,758,198,856.531,758,198,856.53
Construction in progress154,741,266.85154,741,266.85
Productive biological assets
Oil and gas assets
Right-of-use assets1,710,935.831,710,935.83
Intangible assets208,112,706.57208,112,706.57
Research and development costs
Goodwill
Long-term deferred expenses
Deferred income tax assets76,508,392.8576,508,392.85
Other non-current assets117,013,906.01117,013,906.01
Total non-current assets10,307,599,853.6910,309,310,789.521,710,935.83
Total assets19,378,697,031.5919,380,407,967.421,710,935.83
Current liabilities:
Short-term borrowings102,088,888.89102,088,888.89
Trading financial liability
Derivative financial liability
Notes payable448,901,718.36448,901,718.36
Account payable1,265,845,068.261,265,845,068.26
Accounts received in advance
Contract liability6,209,575.736,209,575.73
Wage payable216,870,819.60216,870,819.60
Taxes payable32,974,322.5932,974,322.59
Other accounts payable339,096,991.12339,096,991.12
Including: Interest payable
Dividend payable
Liability held for sale
Non-current liability due within one year441,071.35441,071.35
Other current liabilities182,611,991.54182,611,991.54
Total current liabilities2,594,599,376.092,595,040,447.44441,071.35
Non-current liabilities:
Long-term loans
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability1,269,864.481,269,864.48
Long-term payable
Long term employee compensation payable176,245,345.03176,245,345.03
Accrued liabilities
Deferred income285,714,239.98285,714,239.98
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities461,959,585.01463,229,449.491,269,864.48
Total liabilities3,056,558,961.103,058,269,896.931,710,935.83
Owners’ equity:
Share capital1,008,950,570.001,008,950,570.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve3,407,732,016.613,407,732,016.61
Less: Inventory shares303,627,977.74303,627,977.74
Other comprehensive income
Special reserve
Surplus reserve510,100,496.00510,100,496.00
Retained profit11,698,982,965.6211,698,982,965.62
Total owner’s equity16,322,138,070.4916,322,138,070.49
Total liabilities and owner’s equity19,378,697,031.5919,380,407,967.421,710,935.83

Explanation on adjustmentThe Ministry of Finance issued the revised Accounting Standards for Business Enterprise No.21- Lease in December 2018. theCompany has implemented the new leasing standards from January 1, 2021. For the contracts existing prior to the date of firstimplementation, the Company has chosen not to re-assess whether they are leases or contains a leases. The Company adjusted theamount of retained earnings and other related items in financial statements at the beginning of the year of initial implementationbased on the cumulative effect of initial implementation, without adjusting the information for comparable period.

(4) Retrospective adjustment of early comparison data description when initially implemented the newleasing standards since 2021

□ Applicable √ Not applicable

38. Other

Nil

VI. Taxation

1. Major taxes and tax rates

TaxBasisTax rate
VATThe output tax is calculated based on the taxable income, and VAT is calculated based on the difference after deducting the input tax available for deduction for the current period25%(IRD,Denmark), 21%(Borit,Belgium), 13%, 9%, 6%, Collection rate 5%
City maintaining & construction taxTurnover tax payable7%、5%
Corporation income taxTaxable income15%, 20%、21%(IRD America、Borit America), 22%(IRD,Denmark), 25%(Borit,Belgium)
Educational surtaxTurnover tax payable5%

Disclose reasons for different taxpaying body

Taxpaying bodyIncome tax rate
WFMA, WFCA, WFTR, WFSC, WFAS, WFLD(Nanchang), WFDT, Borit25%
The Company, WFJN, WFLD, WFTT, WFLD(Chongqing), WFAM15%
WFLD(Wuhan)20%
IRD America, Borit America21%
SPV、IRD22%

2. Tax incentives

The Company, WFJN, WFLD and WFTT are accredited as a high-tech enterprise in 2020, and enjoy a preferentialincome tax rate of 15% from 1 January 2020 to 31 December 2022. WFAM is accredited as a high-tech enterprisein 2021, and enjoy a preferential income tax rate of 15% from 1 January 2021 to 31 December 2023.According to the “Continuation of the Enterprise Income Tax Policies for Western Development ” No.23 (Year of2020) issued together by Ministry of Finance, SAT and NDRC, from January 1, 2011 to December 31, 2030, theenterprises located in the west region and mainly engaged in the industrial projects stipulated in the Catalogue ofEncouragement Industries in Western China, and whose main business income accounting for more than 60% ofthe total income of the enterprise in the current year can pay the corporate income tax at the tax rate of 15%. In2021, WFLD (Chongqing) paid its corporate income tax at the tax rate of 15%.In 2021, Weifu Leader (Wuhan) met the standards of small and low-profit enterprises, and the part of taxableincome that did not exceed 1 million Yuan was included in the taxable incomeat a reduced rate of 12.5%, and thecorporate income tax was paid at the tax rate of 20%; while the part of the taxable income exceeding 1 millionYuan but not exceeding 3 million Yuan was included in the taxable income at a reduced rate of 50%, and thecorporate income tax was paid at the tax rate of 20%.

3. Other

VII. Notes to major items in consolidated financial statements

1. Monetary funds

Unit: RMB/CNY

ItemEnding balanceOpening balance
Cash on hand150,438.79507.66
Cash in bank1,864,868,497.941,905,945,511.04
Other Monetary funds31,044,328.9657,343,813.63
Total1,896,063,265.691,963,289,832.33
Including: Total amount saving aboard69,969,414.2533,723,245.25
Total amount with restriction on use for mortgage, pledge or freeze31,044,328.9657,343,813.63

Other explanationThe ending balance of other monetary funds includes bank acceptance bill deposit 17,459,061.33 yuan, Mastercard deposit194,220.00 yuan, frozen dividends 4,044,016.40 yuan and the foreign exchange contract margin is 9,347,031.23 yuan. The frozendividend of 4,044,016.40 yuan represents the part of dividends distributed by SDEC (stock code:600841) and Miracle Automation(stock code:002009) from 2017 to 2021 held by the Company as financial assets available for sale. According to the noticesnumbered Yue 03MC [2016]2490 and Yue 03MC [2016]2492 served by Guangdong Shenzhen Intermediate People’s Court, thesedividends were frozen.

2. Trading financial asset

Unit: RMB/CNY

ItemEnding balanceOpening balance
Financial assets measured at fair value and whose changes are included in current profit or loss6,076,436,069.423,518,432,939.10
Including:
SDEC153,643,308.00140,395,956.00
Miracle Automation113,793,600.0047,712,300.00
Lifan Technology77,802.11
Financial products03,330,324,683.10
Foreign exchange contract74,734,940.30
Other debt instruments and equity instruments investment5,734,186,419.01
Including:
Total6,076,436,069.423,518,432,939.10

3. Note receivable

(1) Classification of notes receivable

Unit: RMB/CNY

ItemEnding balanceOpening balance
Bank acceptance bill968,022,652.081,312,571,695.46
Trade acceptance bill148,527,534.13344,744,028.10
Total1,116,550,186.211,657,315,723.56

Unit: RMB/CNY

CategoryEnding balanceOpening balance
Book balanceBad debt reserveBook valueBook balanceBad debt reserveBook value
AmountRatioAmountAccrual ratioAmountRatioAmountAccrual ratio
Including:
Note receivable with bad debt provision accrual on portfolio1,116,550,186.21100.00%1,116,550,186.211,657,315,723.56100.00%1,657,315,723.56
Including:
Portfolio 1: bank acceptance bill968,022,652.0886.70%968,022,652.081,312,571,695.4679.20%1,312,571,695.46
Portfolio 2: trade acceptance bill148,527,534.1313.30%148,527,534.13344,744,028.1020.80%344,744,028.10
Total1,116,550,186.21100.00%1,116,550,186.211,657,315,723.56100.00%1,657,315,723.56

Statement of the basis for determining the combination:

On December 31, 2020, the company accrued bad debt provisions according to the expected credit losses for the entire duration, bankacceptance bills and trade acceptance bill do not need to accrue bad debt provisions.The company believed that the bank acceptancebills held did not have significant credit risk and would not cause significant losses due to bank defaults.The trade acceptance billheld by the Company did not have significant credit risk, because these bills were mainly issued by large state-owned enterprises andlisted companies with good reputation, and based on historical experience, there had been no major defaults, so they did not accruebad debt provisions for the receivable bank acceptance bills and trade acceptance bill.If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses, please refer tothe disclosure of other receivables to disclose related information about bad-debt provisions:

□ Applicable √ Not applicable

(2) Bad debt provision accrual collected or switch back

Provision for bad debts in the current period:

□ Applicable √ Not applicable

(3) Notes receivable already pledged by the Company at the end of the period

Unit: RMB/CNY

ItemAmount pledge at period-end
Bank acceptance bill655,932,358.60
Trade acceptance bill71,998,451.45
Total727,930,810.05

(4) Notes endorsement or discount and undue on balance sheet date

Unit: RMB/CNY

ItemAmount derecognition at period-endAmount not derecognition at period-end
Bank acceptance bill209,012,512.01
Trade acceptance bill299,864.89
Total209,312,376.90

(5) Notes transfer to account receivable due for failure implementation by drawer at period-end

Unit: RMB/CNY

ItemAmount transfer to account receivable at period-end
Trade acceptance bill7,300,000.00
Total7,300,000.00

Other explanationThe trade acceptance bill that the company transferred to the accounts receivable due to in 2018 the failure of the drawer to perform theagreement at the end of the period were the bills of the subsidiaries controlled by Baota Petrochemical Group Co., Ltd. and the billsaccepted by Baota Petrochemical Group Finance Co., Ltd. (hereinafter referred to as “BDbills”); In 2018, the amount transferred toaccount receivable was 7 million yuan, and 1.7 million yuan has been recovered in 2019, and an increase of 2 million yuan wasadded in 2020.

(6) Note receivable actually written-off in the period

Nil

4. Account receivable

(1) Classification of account receivable

Unit: RMB/CNY

CategoryEnding balanceOpening balance
Book balanceBad debt reserveBook valueBook balanceBad debt reserveBook value
AmountRatioAmountAccrual ratioAmountRatioAmountAccrual ratio
Account receivable with bad debt provision accrual on a single basis61,361,142.442.87%61,361,142.44100.00%80,362,095.352.74%80,362,095.35100.00%
Including:
Account receivable with bad debt provision accrual on portfolio2,076,986,857.8297.13%23,186,564.051.12%2,053,800,293.772,847,529,398.1197.26%22,749,045.700.80%2,824,780,352.41
Including:
Total2,138,348,000.26100.00%84,547,706.493.95%2,053,800,293.772,927,891,493.46100.00%103,111,141.053.52%2,824,780,352.41

Bad debt provision accrual on single basis: RMB 61,361,142.44

Unit: RMB/CNY

NameEnding balance
Book balanceBad debt reserveAccrual ratioAccrual causes
Hubei Meiyang Auto Industry Co., Ltd.20,139,669.4520,139,669.45100.00%Have difficulty in collection
Hunan Leopaard Auto Co., Ltd.8,910,778.548,910,778.54100.00%Have difficulty in collection
BD bills7,300,000.007,300,000.00100.00%Have difficulty in collection
Linyi Zotye Automobile components Manufacturing Co., Ltd.6,193,466.776,193,466.77100.00%Have difficulty in collection
Tongling Ruineng Purchasing Co., Ltd.4,320,454.344,320,454.34100.00%Have difficulty in collection
Brilliance Automotive Group Holdings Co., Ltd.3,469,091.333,469,091.33100.00%Have difficulty in collection
Zhejiang Zotye Auto Manufacturing Co., Ltd.3,217,763.273,217,763.27100.00%Have difficulty in collection
Dongfeng Chaoyang Diesel Co., Ltd.1,951,447.021,951,447.02100.00%Have difficulty in collection
Jiangsu Kawei Auto Industrial Group Co., Ltd.1,932,476.261,932,476.26100.00%Have difficulty in collection
Jiangsu Jintan Automobile Industry Co., Ltd.1,059,798.431,059,798.43100.00%Have difficulty in collection
Tianjin Leiwo Engine Co., Ltd.1,018,054.891,018,054.89100.00%Have difficulty in collection
Other custom1,848,142.141,848,142.14100.00%Have difficulty in collection
Total61,361,142.4461,361,142.44----

Bad debt provision accrual on portfolio: RMB 23,186,564.05

Unit: RMB/CNY

NameEnding balance
Book balanceBad debt reserveAccrual ratio
Within 6 months1,931,412,052.09
6 months to one year119,054,169.5911,905,416.9410.00%
1-2 years16,418,405.743,283,681.1520.00%
2-3 years3,507,940.741,403,176.3040.00%
Over 3 years6,594,289.666,594,289.66100.00%
Total2,076,986,857.8223,186,564.05--

If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please referto the disclosure of other receivables to disclose related information about bad-debt provisions:

□ Applicable √ Not applicable

By account age

Unit: RMB/CNY

Account ageBook balance
Within one year (One year included)2,050,737,706.77
Including: within 6 months1,931,412,052.09
6 months to one year119,325,654.68
1-2 years18,459,228.41
2-3 years25,770,931.96
Over 3 years43,380,133.12
3-4 years43,380,133.12
Total2,138,348,000.26

(2) Bad debt provision accrual collected or switch back

Bad debt provision accrual in the period:

Unit: RMB/CNY

CategoryOpening balanceAmount changed in the periodEnding balance
AccrualCollected or reversalWritten-offOther
Bad debt provision103,111,141.051,857,333.456,229,404.6214,157,037.63-34,325.7684,547,706.49
Total103,111,141.051,857,333.456,229,404.6214,157,037.63-34,325.7684,547,706.49

Important bad debt provision collected or switch back: Nil

(3) Account receivable actual charge off in the Period

Unit: RMB/CNY

ItemAmount charge off
Jiangxi Dorcen Automobile Industry Co., Ltd.3,867,632.16
Changchun FAW Sihuan Engine Manufacturing Co., Ltd1,755,724.70
Wuxi Kaipu Machinery Co., Ltd.1,713,322.55
Jiangxi Dorcen Automobile Co., Ltd.1,338,959.01
Mianyang Xinchen Power Machinery Co., Ltd.1,268,437.72
Fujian Zhao’an Country Minyue Bianjie Agricultural Machinery Automobile Components Co., Ltd.1,111,007.12
Penglai Branch of Beiben Truck Group Co., Ltd.678,390.63
Guangxi Nanning Kai yuan Auto Parts Co., Ltd.666,203.00
Changzhou Borui Oil Pump & Nozzle Co., Ltd.646,437.00
Retail enterprise1,110,923.74
Total14,157,037.63

Major charge-off for the major receivable: Nil

(4) Top 5 receivables at ending balance by arrears party

Unit: RMB/CNY

NameEnding balance of account receivableRatio in total ending balance of account receivablesEnding balance of bad debt reserve
Custom 1289,459,996.1913.54%80,832.31
Robert Bosch Company236,685,486.1711.07%426,203.85
Custom 3140,266,272.686.56%599,358.62
Custom 4133,236,949.336.23%7,142,200.43
Custom 5131,705,063.696.16%1,141,038.44
Total931,353,768.0643.56%

(5) Account receivable derecognition due to financial assets transfer

Nil

(6) Assets and liabilities resulted by account receivable transfer and continues involvementNil

5. Receivable financing

Unit: RMB/CNY

ItemEnding balanceOpening balance
Bill receivable- bank acceptance bill713,017,014.501,005,524,477.88
Total713,017,014.501,005,524,477.88

Increase and decrease in current period and changes in fair value of receivables financing

□ Applicable √ Not applicable

If the bad debt provision for account receivable is calculated and withdrawn according to the general model of expected credit loss,please refer to the disclosure method of other account receivables in aspect of impairment provision:

□ Applicable √ Not applicable

Other explanation:

During the management of enterprise liquidity, the company will discount or endorse transfers before the maturity of some bills, thebusiness model for managing bills receivable is to collect contractual cash flows and sell the financial asset, so it is classified asfinancial assets measured at fair value and whose changes are included in other comprehensive income, which is listed in receivablesfinancing.

6. Account paid in advance

(1) Account age of account paid in advance

Unit: RMB/CNY

Account ageEnding balanceOpening balance
AmountRatioAmountRatio
Within one year172,019,278.7296.61%146,877,271.3796.71%
1-2 years3,318,636.201.86%2,799,827.491.84%
2-3 years1,140,843.340.64%1,254,109.330.83%
Over 3 years1,580,491.730.89%942,149.570.62%
Total178,059,249.99--151,873,357.76--

Explanation on reasons of failure to settle on important advance payment with age over one year:

Nil

(2) Top 5 account paid in advance at ending balance by prepayment objectTotal year-end balance of top five account paid in advance by prepayment object amounted to 88,572,262.16 yuan, takes 49.74percent of the total advance payment at year-end.

7. Other account receivables

Unit: RMB/CNY

ItemEnding balanceOpening balance
Dividend receivable49,000,000.00
Other account receivables17,908,078.545,209,580.88
Total17,908,078.5454,209,580.88

(1) Interest receivable

1) Category of interest receivable

Nil

2) Significant overdue interest

Nil

3) Accrual of bad debt provision

□ Applicable √ Not applicable

(2) Dividend receivable

1) Category of dividend receivable

Unit: RMB/CNY

Item (or invested enterprise)Ending balanceOpening balance
Wuxi WFEC Catalyst Co., Ltd.49,000,000.00
Total49,000,000.00

2) Important dividend receivable with account age over one year

Nil

(3) Other account receivables

1) Other account receivables classification by nature

Unit: RMB/CNY

NatureEnding book balanceOpening book balance
Intercourse funds from units1,991,247.85
Cash deposit6,212,842.615,650,143.62
Staff loans and petty cash555,076.61766,301.05
Social security and provident fund paid10,547,050.70
Other1,952,403.171,651,737.93
Total21,258,620.948,068,182.60

2) Accrual of bad debt provision

Unit: RMB/CNY

Bad debt reservePhase IPhase IIPhase IIITotal
Expected credit losses over next 12 monthsExpected credit losses for the entire duration (without credit impairment occurred)Expected credit losses for the entire duration (with credit impairment occurred)
Balance on Jan. 1, 20212,826,778.3231,823.402,858,601.72
Balance of Jan. 1, 2021 in the period————————
Current accrual493,305.68493,305.68
Current written-off1,365.001,365.00
Balance on Dec. 31, 20213,318,719.0031,823.403,350,542.40

Change of book balance of loss provision with amount has major changes in the period

□ Applicable √ Not applicable

By account age

Unit: RMB/CNY

Account ageBook balance
Within one year (One year included)15,539,862.54
Within 6 months15,439,862.54
6 months to one year100,000.00
1-2 years3,004,533.40
2-3 years80.00
Over 3 years2,714,145.00
3-4 years2,714,145.00
Total21,258,620.94

3) Bad debt provision accrual, collected or switch back

Bad debt provision accrual in the period:

Unit: RMB/CNY

CategoryOpening balanceAmount changed in the periodEnding balance
AccrualCollected or reversalWritten-offOther
Bad debt provision2,858,601.72493,305.681,365.003,350,542.40
Total2,858,601.72493,305.681,365.003,350,542.40

Including the important bad debt provision switch back or collected in the period: nil

4) Other receivables actually written-off during the reporting period

Unit: RMB/CNY

ItemAmount charge off
Other sporadic1,365.00

Note of important other receivables of written-off: Nil

5) Top 5 other receivables at ending balance by arrears party

Unit: RMB/CNY

EnterpriseNatureEnding balanceAccount ageRatio in total ending balance of other receivablesEnding balance of bad debt reserve
Ningbo Jiangbei High-Tech Industry Park Development Construction Co., Ltd.Deposit margin1,767,000.00Over 3 years8.31%1,767,000.00
Wuxi China Resources Gas Co., Ltd.Deposit margin1,346,300.00Within 6 months, 1-2 years6.33%205,200.00
Autocam (China) Auto Parts Co., Ltd.Current accounts1,298,252.55Within 6 months6.11%
Zhenkunxing Industrial Supermarket (Shanghai) Co., Ltd.Deposit margin1,000,000.001-2 years4.70%200,000.00
Robert Bosch CompanyCurrent accounts692,995.30Within 6 months3.26%
Total--6,104,547.85--28.71%2,172,200.00

6) Other account receivables related to government grants

Nil

7) Other receivable for termination of confirmation due to the transfer of financial assetsNil

8) The amount of assets and liabilities that are transferred other receivable and continued to be involvedNil

8. Inventory

(1) Category of inventory

Unit: RMB/CNY

ItemEnding balanceOpening balance
Book balanceInventory depreciation reserve or Provision for impairment of contract performance costsBook valueBook balanceInventory depreciation reserve or Provision for impairment of contract performance costsBook value
Stock materials693,636,748.6184,791,307.00608,845,441.61584,188,987.8673,833,368.32510,355,619.54
Goods in process406,224,039.1418,593,866.28387,630,172.86415,445,852.8614,589,096.65400,856,756.21
Finished goods2,578,635,721.74129,714,961.122,448,920,760.622,124,817,656.18158,847,857.291,965,969,798.89
Total3,678,496,509.49233,100,134.403,445,396,375.093,124,452,496.90247,270,322.262,877,182,174.64

(2) Inventory depreciation reserve or provision for impairment of contract performance costs

Unit: RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balance
AccrualOtherSwitch back or write-offOther
Stock materials73,833,368.3240,167,342.95-468,345.5128,741,058.7684,791,307.00
Goods in process14,589,096.6512,204,540.068,199,770.4318,593,866.28
Finished goods158,847,857.2982,062,784.53-269,665.42110,926,015.28129,714,961.12
Total247,270,322.26134,434,667.54-738,010.93147,866,844.47233,100,134.40

① Net realizable value of the inventory refers to: during the day-to-day activities, results of the estimated sale price less costs whichare going to happen by estimation till works completed, sales price estimated and relevant taxes.

② Accrual basis for inventory depreciation reserve:

Cash on handAccrual basis for inventory impairmentSpecific basis for recognition

provisionMaterials in stock

Materials in stockThe materials sold due to finished goods manufactured, its net realizable value is lower than the book valueResults from the estimated sale price of such inventory less the cost what will happen, estimated sales expenses and relevant taxes till the goods completed
Goods in processThe goods in process sold due to finished goods manufactured, its net realizable value is lower than the book valueResults from the estimated sale price of such inventory less the cost what will happen, estimated sales expenses and relevant taxes till the goods completed
Cash on handAccrual basis for inventory impairment provisionSpecific basis for recognition

③ Reasons of write-off for inventory falling price reserves:

Cash on handReasons of write-off
Materials in stockUsed for production and the finished goods are realized sales
Goods in processGoods in process completed in the Period and corresponding finished goods are realized sales in the Period

Finished goods

Finished goodsSales in the Period

(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

9. Other current assets

Unit: RMB/CNY

ItemEnding balanceOpening balance
Structured deposits1,925,000,000.00
Receivable export tax rebates6,457,803.725,286,965.71
VAT refund receivable3,985,115.26
Prepaid taxes and VAT retained204,700,549.12200,524,304.70
Input tax to be deducted and certification6,274.43178,073.42
Other5,171,179.976,931,769.78
Total220,320,922.502,137,921,113.61

10. Long-term equity investments

Unit: RMB/CNY

TheOpeningCurrent changes (+, -)EndingEnding
invested entitybalance (book value)Additional investmentCapital reductionInvestment gain/loss recognized under equityOther comprehensive income adjustmentOther equity changeCash dividend or profit announced to issuedImpairment accrualOtherbalance (book value)balance of depreciation reserves
I. Joint venture
II. Associated enterprise
Wuxi WFEC Catalyst Co., Ltd.677,317,176.28215,155,778.6816,885.1498,000,000.00794,489,840.10
Robert Bosch Powertrain Ltd.2,800,589,709.401,097,650,070.35558,125,544.303,340,114,235.45
Zhonglian Automobile Electronic Co., Ltd.1,237,548,856.31339,826,929.46198,800,000.001,378,575,785.77
Wuxi Weifu Precision Machinery Manufacturing Co., Ltd.74,854,070.65-5,477,798.386,638,000.0030,000,000.0046,014,272.27
Shinwell Automobile Technology (Wuxi) Co., Ltd.982,750.11298,865.01-683,885.10
Changchun Xuyang Weifu Automobile components Technology Co., Ltd.10,195,728.22153,091.7110,348,819.93
Precors GmbH5,901,794.22-87,249.63-468,665.615,345,878.98
Wuxi Chelian Tianxia Information Technology Co., Ltd.150,000,000.00-6,944,044.38143,055,955.62
Subtotal4,801,488,290.97155,901,794.22298,865.011,639,592,892.7116,885.146,638,000.00884,925,544.30-468,665.615,717,944,788.12
Total4,801,488,290.97155,901,794.22298,865.011,639,592,892.7116,885.146,638,000.00884,925,544.30-468,665.615,717,944,788.12

Other explanationExplanation on those holding less than 20% of the voting rights but with significant influence:

(1) Precors GmbH:

Wholly-owned subsidiary of the Company - Borit, holds 8.11% equity of Precors GmbH, Borit appointed a director to Precors GmbH.Though the representative, Borit can participate in the operation policies formulation of Precors GmbH, and thus exercise asignificant influence over Precors GmbH.

(2) Wuxi Chelian Tianxia Information Technology Co., Ltd. (Hereinafter referred to as "Chelian Tianxia"):

The Company holds 8.8295% equity of Chelian Tianxia, and appointed a director to Chelian Tianxia. Though the representative, theCompany can participate in the operation policies formulation of Chelian Tianxi, and thus exercise a significant influence overChelian Tianxi.

11. Other equity instrument investment

Unit: RMB/CNY

ItemEnding balanceOpening balance
Wuxi Xidong Science & Technology Industrial Park5,000,000.005,000,000.00
Beijing Zhike Industry Investment Holding Group Co., Ltd.75,940,000.0075,940,000.00
Rare earth Catalysis Innovation Research Institute (Dongying) Co., Ltd.4,108,000.004,108,000.00
Wuxi Xichang Microchip Semi-Conductor200,000,000.00200,000,000.00
Total285,048,000.00285,048,000.00

Disclosure of the non-trading equity instrument investment item by itemNil

12. Other non-current financial assets

Unit: RMB/CNY

ItemEnding balanceOpening balance
Guolian Securities208,795,178.00326,848,122.00
Tradable financial assets holding for over one year01,467,000,000.00
Investments in other debt instruments and equity instruments held for more than one year1,482,000,000.0011,940,299.00
Total1,690,795,178.001,805,788,421.00

13. Investment real estate

(1) Investment real estate measured by cost

√ Applicable □ Not applicable

Unit: RMB/CNY

ItemHouse and BuildingLand use rightConstruction in progressTotal
I. original book value
1.Opening balance65,524,052.6165,524,052.61
2.Current increased
(1) outsourcing
(2) Inventory\fixed assets\construction in process transfer-in
(3) increased by combination
3.Current decreased
(1) disposal
(2) other transfer-out
4.Ending balance65,524,052.6165,524,052.61
II. Accumulated depreciation and accumulated amortization
1.Opening balance44,637,370.9944,637,370.99
2.Current increased1,498,935.061,498,935.06
(1) accrual or amortization1,498,935.061,498,935.06
3.Current decreased
(1) disposal
(2) other transfer-out
4.Ending balance46,136,306.0546,136,306.05
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 value19,387,746.5619,387,746.56
2.Opening Book value20,886,681.6220,886,681.62

(2) Investment real estate measured at fair value

□ Applicable √ Not applicable

(3) Investment real estate without property certification held

Nil

14. Fixed assets

Unit: RMB/CNY

ItemEnding balanceOpening balance
Fixed assets2,932,210,452.512,870,351,470.37
Total2,932,210,452.512,870,351,470.37

(1) Fixed assets

Unit: RMB/CNY

ItemHouse and BuildingMachinery equipmentTransportation equipmentElectronic and other equipmentTotal
I. original book value:
1.Opening balance1,584,594,589.533,331,362,060.1630,281,281.50532,011,701.705,478,249,632.89
2.Current increased34,390,390.58272,796,414.416,970,031.67195,616,134.81509,772,971.47
(1) Purchase10,668,713.03833,555.1111,502,268.14
(2) Construction in progress transfer-in34,390,390.58254,759,762.246,970,031.67194,782,579.70490,902,764.19
(3) increased by combination
(4) Financial lease transfer in7,367,939.147,367,939.14
3.Current decreased48,746,495.6755,051,289.674,478,807.1012,149,268.75120,425,861.19
(1) disposal or scrapping48,746,495.6755,051,289.674,478,807.1012,149,268.75120,425,861.19
4.Conversion of foreign currency financial statement-8,818,494.71-1,150,246.45-9,968,741.16
5.Ending balance1,570,238,484.443,540,288,690.1932,772,506.07714,328,321.315,857,628,002.01
II. Accumulated depreciation
1.Opening balance420,143,043.641,785,173,380.7622,602,310.15291,068,729.122,518,987,463.67
2.Current increased47,866,276.19213,842,643.952,036,120.68141,308,325.34405,053,366.16
(1) accrual47,866,276.19206,474,704.812,036,120.68141,308,325.34397,685,427.02
(2) Financial lease transfer in7,367,939.147,367,939.14
3.Current decreased28,184,090.5441,378,900.854,234,247.049,021,470.4582,818,708.88
(1) disposal or scrapping28,184,090.5441,378,900.854,234,247.049,021,470.4582,818,708.88
4.Conversion of foreign currency financial statement-5,554,362.21-977,399.51-6,531,761.72
5.Ending balance439,825,229.291,952,082,761.6520,404,183.79422,378,184.502,834,690,359.23
III. Depreciation reserves
1.Opening balance81,771,072.4073,319.907,066,306.5588,910,698.85
2.Current increased3,682,648.263,682,648.26
(1) accrual3,682,648.263,682,648.26
3.Current decreased911,787.05954,369.791,866,156.84
(1) disposal or scrapping911,787.05954,369.791,866,156.84
4.Ending balance84,541,933.6173,319.906,111,936.7690,727,190.27
IV. Book value
1.Ending Book value1,130,413,255.151,503,663,994.9312,295,002.38285,838,200.052,932,210,452.51
2.Opening Book value1,164,451,545.891,464,417,607.007,605,651.45233,876,666.032,870,351,470.37

(2) Temporarily idle fixed assets

Nil

(3) Fixed assets acquired by operating lease

Nil

(4) Fixed assets without property certification held

Unit: RMB/CNY

ItemBook valueReasons for without the property certification
Plant and office building of Weifu Chang’an32,262,206.56Still in process of relevant property procedures

Other explanationDecreased in the Period including the scrap reduction (original value: 47,038,726.49 yuan, accumulated depreciation 27,155,173.49yuan) from WFHT Xinan Branch Plant No.1 Workshop (XI Fang Quan Zheng Zi No.WX1000475970-1 ). Due to the businessdevelopment requirement, according to the investment filing certificate (Xi Xing Xing Shen Tou Bei No.: [2021]961) issued byAdministrative Approval Bureau of Wuxi Xinwu District and the Granted Administrative License Decision Letter (Xi Gong (Zhi)Zhun Jue Zi No.: [2022]001) issued by Wuxi Municipal Public Security Bureau, the Company intends to demolish the building byexplosives and rebuild to a R&D building, the building was scrapped in the current period.

(5) Disposal of fixed assets

Nil

15. Construction in progress

Unit: RMB/CNY

ItemEnding balanceOpening balance
Construction in progress387,429,933.08243,795,493.04
Total387,429,933.08243,795,493.04

(1) Construction in progress

Unit: RMB/CNY

ItemEnding balanceOpening balance
Book balanceDepreciation reservesBook valueBook balanceDepreciation reservesBook value
Technical transformation of parent company88,688,772.8588,688,772.85123,249,079.40123,249,079.40
Lot 103 phase V of the parent company89,599,174.4289,599,174.426,892,365.506,892,365.50
WFMS rebuilding of the parent company12,185,858.7412,185,858.74
Technical transformation of WFAM72,318,870.7972,318,870.7920,720,304.9720,720,304.97
Technical transformation of WFLD13,368,288.8113,368,288.8127,031,547.2527,031,547.25
Technical transformation of Denmark RID23,293,601.3923,293,601.399,649,568.919,649,568.91
Other project87,975,366.0887,975,366.0856,252,627.0156,252,627.01
Total387,429,933.08387,429,933.08243,795,493.04243,795,493.04

(2) Changes of major projects under construction

Unit: RMB/CNY

ItemBudgetOpening balanceCurrent increasedFixed assets transfer-in in the PeriodOther decreased in the PeriodEnding balanceProportion of project investment in budgetProgressAccumulated amount of interest capitalizationincluding: interest capitalized amount of the yearInterest capitalization rate of the yearSource of funds
Technical transformation of parent company123,249,079.40221,500,314.38256,060,620.9388,688,772.85The company accumulates funds
Lot 103 phase V of the parent company6,892,365.5082,706,808.9289,599,174.42The company accumulates funds
WFMS rebuilding of the parent company12,185,858.7412,185,858.74The company accumulates funds
Technical transformation of WFAM20,720,304.9786,720,543.6635,121,977.8472,318,870.79The company accumulates funds
Technical transformation of WFLD27,031,547.2563,771,039.5277,434,297.9613,368,288.81The company accumulates funds
Technical transformation of Denmark RID9,649,568.9113,883,069.18239,036.7023,293,601.39The company accumulates funds
Total187,542,480,767,368,855,299,454,------
866.03634.40933.43567.00

(3) The provision for impairment of construction projects

Nil

(4) Engineering materials

Nil

16. Right-of-use assets

Unit: RMB/CNY

ItemBuildingMechanical equipmentTotal
I. Original book value:
1.Opening balance18,125,393.0231,516,312.2449,641,705.26
2.Current increased76,187.9776,187.97
3.Current decreased7,367,939.147,367,939.14
(1) Transfer to own assets7,367,939.147,367,939.14
4. Conversion of foreign currency financial statement-520,709.01-2,460,648.22-2,981,357.23
5.Ending balance17,604,684.0121,763,912.8539,368,596.86
II. Accumulated depreciation
1.Opening balance16,449,611.1216,449,611.12
2.Current increased4,210,378.534,462,084.238,672,462.76
(1) Accrual4,210,378.534,462,084.238,672,462.76
3.Current decreased7,367,939.147,367,939.14
(1) Disposal
(2) Transfer to own assets7,367,939.147,367,939.14
4. Conversion of foreign currency financial statement-69,622.12-1,464,321.34-1,533,943.46
5.Ending balance4,140,756.4112,079,434.8716,220,191.28
III. Depreciation reserves
1.Opening balance
2.Current increased
(1) Accrual
3.Current decreased
(1) Disposal
4.Ending balance
IV. Book value
1.Ending Book value13,463,927.609,684,477.9823,148,405.58
2.Opening Book value18,125,393.0215,066,701.1233,192,094.14

17. Intangible assets

(1) Intangible assets

Unit: RMB/CNY

ItemLand use rightPatentNon-patent technologyComputer softwareTrademark and trademark licenseTotal
I. original book value
1.Opening balance381,012,520.44185,079,328.1297,684,862.7641,597,126.47705,373,837.79
2.Current increased15,000,000.0025,984,798.3640,984,798.36
(1) Purchase25,984,798.3625,984,798.36
(2) internal R&D
(3) increased by combination
(4) Shareholders' capital contribution15,000,000.0015,000,000.00
3.Current decreased369,011.14245,278.06614,289.20
(1) disposal369,011.14245,278.06614,289.20
4.Conversion of foreign currency financial statement-17,820,986.51-272,175.84-18,093,162.35
5.Ending balance381,012,520.44181,889,330.47123,152,207.2241,597,126.47727,651,184.60
II. accumulated amortization
1.Opening balance95,252,939.0655,078,092.6774,273,958.379,709,000.00234,313,990.10
2.Current increased8,364,798.9715,043,622.4019,051,784.9842,460,206.35
(1) accrual8,364,798.9715,043,622.4019,051,784.9842,460,206.35
3.Current decreased245,278.06245,278.06
(1) disposal245,278.06245,278.06
4.Conversion of foreign currency financial statement-5,917,361.13-200,392.48-6,117,753.61
5.Ending balance103,617,738.0364,204,353.9492,880,072.819,709,000.00270,411,164.78
III. Depreciation reserves
1.Opening balance16,646,900.0016,646,900.00
2.Current increased
(1) accrual
3.Current decreased
(1) disposal
4.Ending balance16,646,900.0016,646,900.00
IV. Book value
1.Ending Book value277,394,782.41117,684,976.5330,272,134.4115,241,226.47440,593,119.82
2.Opening Book value285,759,581.38130,001,235.4523,410,904.3915,241,226.47454,412,947.69

(2) Land use right without property certification held

Nil

18. Goodwill

(1) Original book value of goodwill

Unit: RMB/CNY

The invested entity or matters forming goodwillOpening balanceCurrent increasedCurrent decreasedEnding balance
Formed by business combinationPurchase price recovered in the current periodTranslation of foreign currency statementsDisposal
Merged with WFTT1,784,086.791,784,086.79
Merged with Borit256,016,609.53-1,136,214.91-25,409,465.66229,470,928.96
Total257,800,696.32-1,136,214.91-25,409,465.66231,255,015.75

(2) Goodwill depreciation reserves

Other explanation

1) Goodwill formed by the merger of WFTT:

In 2010, the Company controlling and combine WFTT by increasing the capital, the goodwill is the number that combination costgreater than the fair value of identical net assets of WFTT. At the end of the period, the company conducted an impairment test ongoodwill to estimate the present value of future cash flows and the recoverable amount of the goodwill-related asset group, that is toestimate the present value of future cash flow based on the management's financial budget for the next five years and the discount rateof 14.78%, the cash flow of the year after the five years of financial budget has remained stable. The asset group identified during thegoodwill 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 ofthe asset group related to goodwill is measured by using 20%~24% of gross profit margin and 4%~14% of the operating income growthrate in the forecast period as key parameters. The management determines these parameters based on historical conditions prior to theforecast period and forecasts of market development. After the above tests, the company's goodwill does not need to make provisionsfor impairment.

2) Goodwill formed by the merger of Borit:

In 2020, the company acquired 100.00% equity of Borit in the form of cash purchase, the goodwill was the part that the cost of themerger was greater than the fair value share of the identifiable net assets of Borit.According to the “Assets Appraisal Report”(Wanlong PBZi (2022) No. 40016) issued by Wanlong (Shanghai) Assets Appraisal Co., Ltd, appointed by the Company, therecoverable value of the assets group where the goodwill of the merged with Borit is 423,300,000 yuan, higher than the carryingvalue of 288,969,900 yuan, and there is no impairment loss of goodwill.

19. Long-term deferred expenses

Unit: RMB/CNY

ItemOpening balanceCurrent increasedAmortized in the PeriodOther decreaseEnding balance
Remodeling costs etc.15,062,171.095,043,070.274,800,457.7915,304,783.57
Total15,062,171.095,043,070.274,800,457.7915,304,783.57

20. Deferred income tax assets/Deferred income tax liabilities

(1) Deferred income tax assets that are not offset

Unit: RMB/CNY

ItemEnding balanceOpening balance
Deductible temporary differenceDeferred income tax assetsDeductible temporary differenceDeferred income tax assets
Unrealized profit from insider transactions65,251,129.5510,531,677.1919,551,845.383,457,610.51
Bad debt provision87,681,266.1713,383,420.21104,259,030.3815,779,756.63
Inventory depreciation224,955,223.9437,688,819.01225,684,043.1435,799,261.60
reserve
Depreciation reserves of fixed assets57,218,038.148,677,481.5055,397,599.688,523,566.97
Depreciation reserves of intangible assets16,646,900.002,497,035.0016,646,900.002,497,035.00
Other equity instrument investment10,000,000.001,500,000.00
Deferred income295,502,674.1244,620,545.44323,924,836.1848,935,725.44
Payable salary, accrued expenses etc.1,236,037,621.62188,472,847.67981,477,549.10151,813,641.23
Depreciation assets, amortization difference54,047,597.498,868,412.3489,867,140.2314,608,530.41
Deductible loss of subsidiary53,658,338.0511,465,129.699,703,095.172,425,773.79
Equity incentive80,742,533.7312,498,678.306,330,515.63987,908.92
Fiscal and tax differences for leasing business378,997.8472,554.36
Total2,172,120,320.65338,776,600.711,842,842,554.89286,328,810.50

(2) Deferred income tax liabilities that are not offset

Unit: RMB/CNY

ItemEnding balanceOpening balance
Taxable temporary differencesDeferred income tax liabilitiesTaxable temporary differencesDeferred income tax liabilities
The difference between the fair value and taxation basis of WFTT assets in a merger not under the same control10,660,027.751,599,004.1411,271,189.481,690,678.40
The difference between the fair value and taxation basis of IRD assets in a merger not under the same control68,854,748.7815,148,044.7386,905,585.0819,119,228.72
The difference between the fair value and taxation basis of Borit assets in a merger not under the same control25,246,551.706,311,637.9139,376,104.109,844,026.00
Change of fair value of transaction financial asset318,337,329.7447,794,985.96366,808,362.1955,023,506.38
Accelerated depreciation of fixed assets294,934,456.0848,772,268.60211,571,729.7632,911,802.62
Total718,033,114.05119,625,941.34715,932,970.61118,589,242.12

(3) Deferred income tax assets and deferred income tax liabilities listed after off-set

Unit: RMB/CNY

ItemTrade-off between the deferred income tax assets and liabilitiesEnding balance of deferred income tax assets or liabilities after off-setTrade-off between the deferred income tax assets and liabilities at period-beginOpening balance of deferred income tax assets or liabilities after off-set
Deferred income tax assets-96,528,406.14242,248,194.57-87,935,309.00198,393,501.50
Deferred income tax liabilities-96,528,406.1423,097,535.20-87,935,309.0030,653,933.12

(4) Details of unrecognized deferred income tax assets

Unit: RMB/CNY

ItemEnding balanceOpening balance
Bad debt reserve216,982.721,710,712.39
Inventory depreciation reserve8,144,910.4621,586,279.12
Loss from subsidiary279,247,744.04193,713,240.35
Depreciation reserves of fixed assets33,509,152.1333,513,099.17
Other equity instrument investment13,600,000.0046,600,000.00
Equity incentive2,304,871.81154,321.87
Total337,023,661.16297,277,652.90

(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year

Unit: RMB/CNY

Maturity yearEnding amountOpening amountNote
202112,343,844.69Subsidiaries have operating losses
20223,781,066.933,781,066.93Subsidiaries have operating losses
20231,171,973.531,171,973.53Subsidiaries have operating losses
202418,520,699.7118,520,699.71Subsidiaries have operating losses
202512,151,503.8012,151,503.80Subsidiaries have operating losses
202622,596,818.84Subsidiaries have operating losses
No expiration period221,025,681.23145,744,151.69Overseas subsidiaries have operating losses
Total279,247,744.04193,713,240.35--

21. Other non-current assets

Unit: RMB/CNY

ItemEnding balanceOpening balance
Book balanceProvision for impairmentBook valueBook balanceProvision for impairmentBook value
Engineering equipment paid in advance267,941,354.57267,941,354.57195,259,441.73195,259,441.73
Total267,941,354.57267,941,354.57195,259,441.73195,259,441.73

22. Short-term borrowings

(1) Category of short-term borrowings

Unit: RMB/CNY

ItemEnding balanceOpening balance
Guaranteed Loan72,197,000.00
Credit loan1,264,241,086.57301,958,184.49
Bill financing100,000,000.00
Accrued interest1,520,119.98280,415.56
Total1,437,958,206.55302,238,600.05

Explanation of short-term loan classification:

Nil

(2) Overdue short-term loans without payment

Nil

23. Note payable

Unit: RMB/CNY

CategoryEnding balanceOpening balance
Bank acceptance bill1,760,032,216.302,462,592,372.82
Total1,760,032,216.302,462,592,372.82

Notes expired at year-end without paid was 0.00 yuan.Other notes::

RMB 17,459,061.33 was paid as margin for issuing the above bank acceptance draft, and RMB 919,286,331.63 was pledged as notesreceivable.

24. Account payable

(1) Account payable

Unit: RMB/CNY

ItemEnding balanceOpening balance
Within 1 year3,066,299,727.363,986,993,867.21
1-2 years64,962,570.1887,605,077.14
2-3 years52,067,026.4913,824,720.43
Over three years23,324,378.5612,560,575.61
Total3,206,653,702.594,100,984,240.39

(2) Important account payable with account age over one year

Nil

25. Accounts received in advance

(1) Accounts received in advance

Unit: RMB/CNY

ItemEnding balanceOpening balance
Within 1 year2,854,518.964,071,236.87
Total2,854,518.964,071,236.87

(2) Important accounts received in advance with account age over one yearNil

26. Contract liabilities

Unit: RMB/CNY

ItemEnding balanceOpening balance
Within 1 year132,406,102.5677,554,320.04
1-2 years2,681,086.392,763,605.96
2-3 years132,196.85255,602.59
Over three years1,208,250.591,143,858.66
Total136,427,636.3981,717,387.25

27. Wage payable

(1) Wage payable

Unit: RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balance
I. Short-term compensation184,226,322.311,229,954,965.301,206,358,955.94207,822,331.67
II. Post-employment welfare- defined contribution plans49,931,097.42150,090,291.23179,742,081.3420,279,307.31
III. Dismissed welfare1,645,271.322,676,526.083,076,470.311,245,327.09
IV. Incentive funds paid within a year84,150,000.0057,021,506.6447,291,506.6493,880,000.00
V. Other short-term welfare-Housing subsidies, employee benefits and welfare funds12,469,120.774,081,359.92-111,055.9416,661,536.63
Total332,421,811.821,443,824,649.171,436,357,958.29339,888,502.70

(2) Short-term compensation

Unit: RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balance
1. Wages, bonuses, allowances and subsidies155,323,190.62994,247,266.99952,393,522.71197,176,934.90
2. Welfare for workers and staff112.3580,637,346.7180,565,400.1472,058.92
3. Social insurance17,498,085.6858,614,929.3475,920,323.29192,691.73
Including: Medical insurance14,251,442.1548,718,750.9462,797,587.59172,605.50
Work injury insurance1,661,670.585,184,089.016,829,106.2916,653.30
Maternity insurance1,584,972.954,712,089.396,293,629.413,432.93
4. Housing accumulation fund1,016,187.0076,572,294.0176,931,607.01656,874.00
5. Labor union expenditure and personnel education expense10,367,089.5618,254,550.9519,010,410.589,611,229.93
6. Other short-term compensation - social security21,657.101,628,577.301,537,692.21112,542.19
Total184,226,322.311,229,954,965.301,206,358,955.94207,822,331.67

(3) Defined contribution plans

Unit: RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balance
1. Basic endowment premium29,844,835.64101,322,089.03130,750,479.61416,445.06
2. Unemployment insurance912,529.163,441,267.284,328,263.0025,533.44
3. Enterprise annuity19,173,732.6245,326,934.9244,663,338.7319,837,328.81
Total49,931,097.42150,090,291.23179,742,081.3420,279,307.31

Other explanation:

1. Reclassification of long-term staff remuneration payable:

An amount of 72,763,011.53 yuan is recorded in post office benefits - defined benefit plan and incentive fund payable within oneyear, which represents the difference between the incentive fund of 111,770,000.00 yuan expected to be paid in 2022 and thebeginning balance of incentive fund payable within one year, post office benefits-defined benefit plan and the actual amount paid inthis period.

2. Other short-term benefits- housing allowance, employee incentive and welfare fund: have -111,055.94 yuan paid in the period,mainly because the amount of housing allowance refunded from employees received by the enterprise during the period was greaterthan the amount of housing allowance paid during the period.

3. Post-employment welfare- defined contribution plans:

The Company participates in the pension insurance and unemployment insurance plans established by government authorities bylaws, a certain percentage of the social security fee regulated by the government will pay by the Company monthly for the plans.Other than the aforesaid monthly contribution, the Company takes no further payment obligation. The relevant expenditure isincluded in current profit or loss or cost of relevant assets when occurs. Found more of enterprise annuity in Note XVI-4.” Annuityplan”

4. Dismiss welfare

The wages payable resulted from the implementation of inner retirement plan, the amount paid in the year 905,359.22 yuanre-classified into the wage payable from long-term wages payable.

28. Taxes payable

Unit: RMB/CNY

ItemEnding balanceOpening balance
Value-added tax24,533,584.8028,744,351.90
Corporation income tax2,317,331.8121,458,320.79
Individual income tax3,528,037.227,184,934.79
City maintaining & construction tax1,750,188.231,983,996.80
Educational surtax1,250,134.441,417,140.56
Other (including stamp tax and local funds)6,726,372.386,704,945.45
Total40,105,648.8867,493,690.29

29. Other account payable

Unit: RMB/CNY

ItemEnding balanceOpening balance
Interest payable6,184.144,862.22
Dividends payable25,671,100.00
Other accounts payable334,228,033.32361,551,395.20
Total359,905,317.46361,556,257.42

(1) Interest payable

Unit: RMB/CNY

ItemEnding balanceOpening balance
Other6,184.144,862.22
Total6,184.144,862.22

Major overdue interest: Nil

(2) Dividend payable

Unit: RMB/CNY

ItemEnding balanceOpening balance
Common stock dividend25,671,100.00
Total25,671,100.00

(3) Other account payable

1) Classification of other accounts payable according to nature of account

Unit: RMB/CNY

ItemEnding balanceOpening balance
Deposit and margin24,601,774.8912,759,592.29
Social insurance and reserves funds that withholding1,695,074.098,853,543.93
Intercourse funds of unit33,562,145.9830,982,145.98
Restricted stock repurchase obligations269,101,020.00302,479,200.00
Other5,268,018.366,476,913.00
Total334,228,033.32361,551,395.20

2) Significant other payable with over one year age

Unit: RMB/CNY

ItemEnding balanceReasons for non-repayment or carry-over
Nanjing Jidian Industrial Group Co., Ltd.4,500,000.00Intercourse funds
Restricted stock repurchase business269,101,020.00Restricted stock repurchase business
Total273,601,020.00--

30. Non-current liabilities due within one year

Unit: RMB/CNY

ItemEnding balanceOpening balance
Long-term borrowings due within one year27,744,527.8033,271,589.84
Lease payments due within one year6,318,273.668,186,856.30
Interest payable25,972.2226,666.67
Total34,088,773.6841,485,112.81

31. Other current liabilities

Unit: RMB/CNY

ItemEnding balanceOpening balance
Rebate payable198,936,922.68213,477,951.00
Pending sales tax14,032,348.879,393,136.33
Total212,969,271.55222,871,087.33

Changes in short-term bonds payable: Nil

32. Long-term borrowings

(1) Category of Long-term borrowings

Unit: RMB/CNY

ItemEnding balanceOpening balance
Guaranteed loan3,050,640.97
Total3,050,640.97

Explanation of long-term loan classification: Nil

33. Lease liability

Unit: RMB/CNY

ItemEnding balanceOpening balance
Lease Payments15,795,469.2522,604,755.70
Total15,795,469.2522,604,755.70

34. Long-term account payable

Unit: RMB/CNY

ItemEnding balanceOpening balance
Long-term account payable13,750,000.0015,351,883.00
Special accounts payable18,265,082.1118,265,082.11
Total32,015,082.1133,616,965.11

(1) Long-term account payable listed by nature

Unit: RMB/CNY

ItemEnding balanceOpening balance
Hi-tech Branch of Nanjing Finance Bureau (note ①) Financial support funds (2006)1,250,000.00
Hi-tech Branch of Nanjing Finance Bureau (note ②) Financial support funds (2007)1,230,000.001,230,000.00
Loan transferred from treasury bond (note ③)339,090.00
Hi-tech Branch of Nanjing Finance Bureau (note ④) Financial support funds (2008)2,750,000.002,750,000.00
Hi-tech Branch of Nanjing Finance Bureau (note ⑤) Financial support funds (2009)1,030,000.001,030,000.00
Hi-tech Branch of Nanjing Finance Bureau (note ⑥) Financial support funds (2010)960,000.00960,000.00
Hi-tech Branch of Nanjing Finance Bureau (note ⑦) Financial support funds (2011)5,040,000.005,040,000.00
Hi-tech Branch of Nanjing Finance Bureau (note ⑧) Financial support funds (2013)2,740,000.002,740,000.00
Total13,750,000.0015,339,090.00

Other explanation:

Note ①: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 20 July 2006 to 20 July 2021.Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.This support fundhas expired fifteen years in the current period, so it is transferred to other income.

Note ②: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 17 September 2007 to 17September 2022. Provided that the operation period in the zone is less than 15 years, financial supporting capital will bereimbursed.Note ③: Loan transferred from treasury bond: WFJN received 1.87 million yuan of special funds from budget of the centralgovernment, and 3.73 million yuan of special funds from budget of the local government. The non-operating income transferred inwas 1.87 million yuan in 2011 which was confirmed not to return, the Company paid back special funds of 3.73 million yuan to thelocal government in 11 years since 2012, the Company paid the principal of 339,090.00 yuan the year, fully repaid as of theperiod-end.Note ④: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 10 November 2008 to 10 November2023. Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.Note ⑤: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 27 October 2009 to 27 October 2024.Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.Note ⑥: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 27 December 2010 to 27 December2025. Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.Note ⑦: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 28 December 2011 to 28 December2026. Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.Note ⑧: To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone, financial supporting capital isallotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term is from 18 December 2013 to 18 December2028. Provided that the operation period in the zone is less than 15 years, financial supporting capital will be reimbursed.

(2) Special accounts payable

Unit: RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balanceCause of formation
Removal compensation of subsidiary WFJN18,265,082.1118,265,082.11
Total18,265,082.1118,265,082.11--

Other explanation:

In line with regulation of the house acquisition decision of People’s government of Xuanwu District, Nanjing City, Ning Xuan FuZheng Zi (2012) No.001, part of the lands and property of WFJN needs expropriation in order to carry out the comprehensivelyimprovement of Ming Great Wall. According to the house expropriation and compensation agreement in state-owned lands signedbetween WFJN and House Expropriation Management Office of Xuanwu District, Nanjing City, 19.7067 million yuan in total arecompensate, including operation losses from lessee 1.4416 million yuan in total. The above compensation was received in last periodand is making up for the losses from lessee, and the above lands and property have not been collected up to 31 December 2021.

35. Long-term wages payable

(1) Long-term wages payable

Unit: RMB/CNY

ItemEnding balanceOpening balance
I.Post-employment benefits - Defined benefit plan net liabilities
II. Dismiss welfare4,829,589.695,734,948.91
III. Other long-term welfare103,482,333.50176,245,345.03
Total108,311,923.19181,980,293.94

36. Deferred income

Unit: RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balanceCause of formation
Government grand328,204,476.7321,400,035.1851,551,644.35298,052,867.56
Total328,204,476.7321,400,035.1851,551,644.35298,052,867.56--

Item with government grants involved:

Unit: RMB/CNY

ItemOpening balanceNew grants in the PeriodAmount reckoned in non-operation revenueAmount reckoned into other income in the periodCost reduction in the periodOther changesEnding balanceAssets related/Income related
Industrialization project for injection VE pump system with electronically controlled high pressure for less-emission diesel used1,442,000.56721,000.30721,000.26Assets related/Income related
Appropriation on reforming of production line technology and R&D ability of common rail system for diesel by distributive high-voltage7,100,000.00781,651.386,318,348.62Assets related
Fund of industry upgrade (2012)642,169.73642,169.73Income related
Fund of industry upgrade (2013)60,520,000.0060,520,000.00Income related
Appropriation on central basic construction investment714,285.73714,285.73Assets related
R&D and industrialization of the high-pressure variable pump of the common rail system of diesel engine for automobile5,327,618.881,510,144.213,817,474.67Assets related
Research institute of motor vehicle exhaust1,213,727.21565,067.04648,660.17Assets related
after-treatment technology
Fund of industry upgrade (2014)36,831,000.0036,831,000.00Income related
New-built assets compensation after the removal of parent company104,085,274.4020,950,845.4683,134,428.94Assets related
Fund of industry upgrade (2016)40,000,000.0040,000,000.00Income related
Guiding capital for the technical reform from State Hi-Tech Technical Commission6,595,319.831,537,652.505,057,667.33Assets related
Implementation of the variable cross-section turbocharger for diesel engine7,362,788.751,480,000.045,882,788.71Assets related
Demonstration project for intelligent manufacturing849,099.60196,718.10652,381.50Assets related
The 2nd batch of provincial special funds for industry transformation of industrial and information in 20195,000,000.001,553,649.883,446,350.12Assets related
Municipal technological reform fund allocation in 20204,770,000.00626,593.934,143,406.07Assets related
Strategic cooperation agreement funding for key enterprise of smart manufacturing in high-tech zone4,060,000.00700,000.00309,130.414,450,869.59Assets related
The 3rd batch of provincial special funds for industry transformation of industrial and information in 202113,500,000.0013,500,000.00Assets related
Other41,691,192.047,445,481.1519,962,735.64-245,445.9728,928,491.58Assets related/Income related
Total328,204,476.7321,645,481.1551,551,644.35-245,445.97298,052,867.56

Other explanation:

(1) Appropriation on industrialization project of electrical control and high voltage jet VE system of low emissions diesel: inSeptember 2009, WFJN signed “Project Contract of Technology Outcome Transferring Special Capital in Jiangsu Province” withNanjing Technical Bureau, according to which WFJN received appropriation 6.35 million yuan in 2009, 4.775 million yuan receivedin 2010 and 0.875 million yuan received in 2011. According to the contract, the attendance date of this project was: from October of2009 to March of 2012. This contract agreed 62% of newly increased investment in project would be spent in fixed assets investmentwhich are belongs to the government grand with assets/income concerned. In 2013, accepted by the science & technology agency ofJiangsu Province, and 4,789,997.04 yuan with income related was reckoned into current operation revenue directly; the 7,210,002.96yuan with assets related was amortized during the predicted service period of the assets, and 721,000.30 yuan amortized in thePeriod.

(2) The appropriation for research and development ability of distributive high-pressure common rail system for diesel engine useand production line technological transformation project: according to XCJ No. [2010] 59, the Company has received special fundsof 7.1 million yuan appropriated by Finance Bureau of Wuxi New District in 2011 and used for the Company’s research and

development ability of distributive high-pressure common rail system for diesel engine use and production line technologicaltransformation project; this appropriation belongs to government grants related to assets, amount of 781,651.38 yuan was reversedbased on the depreciation schedule of the related assets during the period.

(3) Industry upgrading funds (2012): In accordance with the document Xi Xin Guanjing Fa [2012] No.216 and Document Xi XinGuancai Fa [2012] No. 85, the Company received funds of 60.4 million yuan appropriated for industry upgrading this year. Currentwrite off: 642,169.73 yuan.

(4) Industry upgrading funds (2013): In accordance with the document Xi Xin Guan Jing Fa [2013] No.379, Xi Xin Guan Jing Fa[2013] No.455, Xi Xin Guan Cai Fa [2013] No.128 and Xi Xin Guan Cai Fa [2013] No.153, the Company received funds of 60.52million 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 centralgovernment in 2012. The project has passed the acceptance check in current period, this appropriation should be amortized within thesurplus service life of current assets, and amortization amount of current period is 714,285.73 yuan.

(6) R&D and industrialization of the high pressure variable pump of the common rail system of diesel engine for automobile: theCompany received appropriated for the project in 2013 with 8.05 million yuan in line with documents of Xi Ke Ji [2013] No.186, XiKe 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 GongMao [2014] No.58, Xi Ke Ji [2014] No. 246 and Xi Cai Gong Mao [2014] No.162. Received 3 million yuan in 2014 and 0.45 millionyuan in 2015; and belongs to government grant with assets concerned, and shall be amortized according to the depreciation process,amount of 1,510,144.21 yuan amortizes in the year.

(7) Vehicle exhaust after-treatment technology research institute project: in 2012, the subsidiary WFLD has applied for equipmentpurchase assisting funds to Wuxi Huishan Science and Technology Bureau and Wuxi Science and Technology Bureau for the vehicleexhaust after-treatment technology research institute project. This declaration has been approved by Wuxi Huishan Science andTechnology Bureau and Wuxi Science and Technology Bureau in 2012, and the company has received appropriation of 2.4 millionyuan in 2012, and received appropriation of 1.6 million yuan in 2013. This appropriation belongs to government grants related toassets and will be amortized according to the depreciation process, amount of 565,067.04 yuan amortizes in the year.

(8) Industry upgrading funds (2014): In accordance with the document Xi Xin Guan Jing Fa [2014] No.427 and Xi Xin Guan Cai Fa[2014] No.143, the Company received funds of 36.831 million yuan appropriated for industry upgrading in 2014.

(9) New-built assets compensation after the removal of parent company: policy relocation compensation received by the Company,and will be amortized according to the depreciation of new-built assets, amount of 20,950,845.46 yuan amortizes in the year.

(10) Fund of industry upgrade (2016): In accordance with the document Xi Xin Guan Jing Fa [2016] No.585 and Xi Xin Fa [2016]No.70, the Company received funds of 40 million yuan appropriated for industry upgrading in 2016.

(11) Guiding capital for the technical reform from State Hi-Tech Technical Commission: In accordance with the document Xi JingXin ZH [2016] No.9 and Xi Cai GM [2016] No.56, the Company received a 9.74 million yuan for the guiding capital of technicalreform (1st batch) from Wuxi for year of 2016, and belongs to government grant with assets concerned, and shall be amortizedaccording to the depreciation process, amount of 1,537,652.50 yuan amortize in the year.

(12) Implementation of the variable cross-section turbocharger for diesel engine: In accordance with the document YCZ Fa[2016]NO.623 and “Strong Industrial Base Project Contract for year of 2016”, subsidiary WFTT received a specific subsidy of 16.97million yuan (760,000 yuan received in the period), the fund supporting strong industrial base project (made-in-China 2025) ofcentral industrial transformation and upgrading 2016 from Ministry of Industry and Information Technology; and belongs togovernment grant with assets concerned, and shall be amortized according to the depreciation process, amount of 1,480,000.04 yuanamortize in the year.

(13) Demonstration project for intelligent manufacturing: under the Notice Relating to Selection of the Intelligent ManufacturingModel Project in Huishan District in 2016 (HJXF[2016]No.36), a fiscal subsidy of 3,000,000 yuan was granted by relevantgovernment authority in Huishan district to our subsidiary WFLD in 2017 to be utilized for transformation and upgrade of WFLD’s

intelligent manufacturing facilities. This subsidy belongs to government grant related to assets which shall be amortized based on thedepreciation progress of the assets. Amortization for the year amounts to 196,718.10 yuan.

(14) The 2

ndbatch of provincial special funds for industry transformation of industrial and information in 2019: according to XCGM[2019] No. 121, the Company received a special fund of 5 million yuan in 2020, this subsidy was related to the "WeifuHigh-Technology New Factory Internet Construction" projects, and belonged to government grants related to assets. and shall beamortized according to the depreciation process, amount of 1,553,649.88 yuan amortize in the year.

(15) Municipal technological reform fund allocation in 2020: according to XGXZH [2020] No. 16, the Company received 4.77million yuan of municipal technological transformation fund project allocation in 2020, which was related to key technologicaltransformation projects and belonged to government grants related to assets. and shall be amortized according to the depreciationprocess, amount of 626,593.93 yuan amortize in the year.

(16) Strategic cooperation agreement funding for key enterprise of smart manufacturing in high-tech zone: according to XXGXF[2020] No. 61, the Company received a related grant of 4.06 million yuan in 2020, 0.7 million yuan received in the Period, this grantwas related to the intelligent transformation project and belonged to the government grants related to assets. and shall be amortizedaccording to the depreciation process, amount of 309,130.41 yuan amortize in the year.

(17) The 3

rdbatch of provincial special funds for industry transformation of industrial and information in 2021: according to theSCGM [2021] No.92, the government grant 13.5 million yuan received in the Period was for the research, development andindustrialization of membrane electrodes for high-performance automotive proton exchange membrane fuel cells, which was anassets related government grants.

37. Share capital

In RMB

Opening balanceChange during the year (+, -)Ending balance
New shares issuedBonus shareShares transferred from capital reserveOtherSubtotal
Total shares1,008,950,570.00-291,000.00-291,000.001,008,659,570.00

Other explanation:

Decreased in share capital was due to the buy-back and cancellation of 291,000 restricted shares initially granted underthe Restricted Shares Incentive Plan for year of 2020.

38. Capital reserve

Unit: RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balance
Capital premium (Share capital premium)3,242,767,917.783,777,729.063,238,990,188.72
Other Capital reserve51,474,450.5080,879,533.60132,353,984.10
Total3,294,242,368.2880,879,533.603,777,729.063,371,344,172.82

Other explanation, including changes in the period and reasons for changes;

(1) Share capital premium has 3,777,729.06 yuan decreased in the Period, mainly because the 291,000 shares for restricted shares

incentive plan were repurchased and cancellation by the Company, the difference between repurchase costs of 4,068,180.00 yuan andshare capital of 291,000.00 yuan amounted to 3,777,180.00 yuan, and handling fee for repurchase of 549.06 yuan.

(2) Other Capital reserve has 80,879,533.60 yuan increased in the Period, mainly including two parts: ① the 74,241,533.60 yuanafter deducted 2,321,034.44 yuan attributable to minority from 76,562,568.04 yuan, the expenses of share-based payment settled byequity; and ②for the equity incentive implemented by associate of the Company -- Wuxi Weifu Precision Machinery ManufacturingCo., Ltd., the Company is entitled to 6,638,000.00 yuan in proportion to the shareholdings.

39. Treasury stock

Unit: RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balance
Stock repurchases1,148,777.741,148,777.74
Repurchase obligation of restricted stock incentive plan302,479,200.0033,378,180.00269,101,020.00
Total303,627,977.7433,378,180.00270,249,797.74

Other explanations, including changes in the current period and explanations of the reasons for the changes:

Repurchase obligation of restricted stock incentive plan: has 33,378,180.00 yuan decreased in the Period, mainly including two parts:

① the 29,310,000.00 yuan cash dividends received by restricted stock incentive recipients during the period; and ② 4,068,180.00yuan is the repurchase and cancellation of 291,000 restricted shares granted but not yet unlocked by the Company as treasury stockforfeited due to the departure and health of employee’s .

40. Other comprehensive income

Unit: RMB/CNY

ItemOpening balanceCurrent periodEnding balance
Account before income tax in the yearLess: written in other comprehensive income in previous period and carried forward to gains and losses in current periodLess: written in other comprehensive income in previous period and carried forward to retained earnings in current periodLess: income tax expenseBelong to parent company after taxBelong to minority shareholders after tax
I. Other comprehensive income that cannot be reclassified to profit or loss16,885.1416,008.80876.3416,008.80
Other comprehensive income that cannot be transferred to profit or loss under the equity method16,885.1416,008.80876.3416,008.80
II. Other comprehensive income items which will be reclassified subsequently to profit or loss13,916,619.47-50,678,972.87-50,678,972.87-36,762,353.40
Conversion difference of foreign currency financial statement13,916,619.47-50,678,972.87-50,678,972.87-36,762,353.40
Total other comprehensive income13,916,619.47-50,662,087.73-50,662,964.07876.34-36,746,344.60

Other explanation, including the adjustment on initial recognition for arbitrage items that transfer from the effective part of cash flowhedge profit/loss: Nil

41. Reasonable reserve

Unit: RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balance
Safety production costs2,333,490.0322,714,778.2724,336,052.99712,215.31
Total2,333,490.0322,714,778.2724,336,052.99712,215.31

Other explanation, including changes and reasons for changes:

(1) Instructions for the withdrawing of special reserves (safe production cost): According to the CQ [2012] No. 16 - AdministrativeMeasures on the Withdrawing and Use of Enterprise Safety Production Expenses jointly issued by the Ministry of Finance and theState Administration of Work Safety, in the current period, the Company adopted excess retreat method for quarterly withdrawal bytaking the actual operating income of the previous period as the withdrawing basis.

(2) Among the above safety production costs, including the safety production costs accrual by the Company in line with regulationsand the parts enjoy by shareholders of the Company in safety production costs accrual by subsidiary in line with regulations.

42. Surplus reserve

Unit: RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balance
Statutory surplus reserves510,100,496.00510,100,496.00
Total510,100,496.00510,100,496.00

Other explanation, including changes and reasons for changes:

Withdrawal of the statutory surplus reserves: Pursuit to the Company Law and Article of Association, the Company extractedstatutory surplus reserve on 10 percent of the net profit. No more amounts shall be withdrawal if the accumulated statutory surplusreserve takes over 50 percent of the registered capital.

43. Retained profit

Unit: RMB/CNY

ItemCurrent periodLast period
Retained profits at the end of last year before adjustment13,756,102,424.6212,076,443,635.56
Retained profits at the beginning of the year after adjustment13,756,102,424.6212,076,443,635.56
Add: The net profits belong to owners of patent company of this period2,575,371,419.802,772,769,377.96
Less: Common dividend payable1,513,341,439.501,093,241,270.00
Less: Withdraw employee rewards and welfare funds4,081,359.922,525,946.49
Add: Net effect of disposal other equity instrument investment736,332.862,656,627.59
Retained profit at period-end14,814,787,377.8613,756,102,424.62

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 retainedprofits 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 0 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

44. Operating income and cost

Unit: RMB/CNY

ItemCurrent periodLast Period
IncomeCostIncomeCost
Main operating13,184,138,129.8810,822,600,520.9012,430,431,489.9010,124,574,480.95
Other business498,288,581.07397,767,192.67453,394,816.70304,709,961.02
Total13,682,426,710.9511,220,367,713.5712,883,826,306.6010,429,284,441.97

Whether the lower of the audited net profit before and after deduction of non-recurring gains and losses is negative

□Yes √No

45. Operating tax and extras

Unit: RMB/CNY

ItemCurrent periodLast Period
City maintaining & construction tax19,681,944.1722,768,800.74
Educational surtax14,058,531.5716,259,673.98
Property tax17,669,096.0616,993,056.48
Land use tax4,507,402.144,516,628.41
Vehicle use tax27,218.5229,923.52
Stamp duty3,834,974.654,508,905.03
Other taxes477,566.62246,793.71
Total60,256,733.7365,323,781.87

46. Sales expenses

Unit: RMB/CNY

ItemCurrent periodLast Period
Salary and fringe benefit56,098,840.9758,727,035.03
Consumption of office materials and business travel charge9,301,927.429,260,423.14
Warehouse charge17,101,049.1324,982,242.41
Three guarantees and quality cost138,960,972.56272,364,223.21
Business entertainment fee28,210,881.0725,842,735.05
Other14,977,761.4115,176,786.26
Total264,651,432.56406,353,445.10

47. Administration expenses

Unit: RMB/CNY

ItemCurrent periodLast Period
Salary and fringe benefit322,167,980.30295,394,722.09
Depreciation charger and long-term assets amortization71,899,617.4965,638,800.42
Consumption of office materials and business travel charge24,870,963.2116,772,265.23
Incentive fund187,658,444.76
Share-based payment48,352,297.073,878,656.31
Other144,581,292.17213,481,533.82
Total611,872,150.24782,824,422.63

46. R&D expenses

Unit: RMB/CNY

ItemCurrent periodLast Period
Technological development expenses595,406,951.64532,581,209.78
Total595,406,951.64532,581,209.78

49. Financial expenses

Unit: RMB/CNY

ItemCurrent periodLast Period
Interest expenses38,698,621.0911,466,886.33
Note discount interest expenses19,837,754.678,075,178.10
Less: interest income41,478,845.3251,622,216.58
Gains/losses from exchange-1,982,034.195,138,503.01
Handling charges4,987,752.593,663,347.30
Total20,063,248.84-23,278,301.84

50. Other income

Unit: RMB/CNY

Sources of income generatedCurrent periodLast Period
Government grants with routine operation activity concerned71,274,511.6780,342,497.11
VAT instant refund2,460.01
Total71,276,971.6880,342,497.11

51. Investment income

Unit: RMB/CNY

ItemCurrent periodLast Period
Income of long-term equity investment calculated based on equity1,632,117,748.781,659,752,704.14
Investment income from disposal of long-term equity investments8,701,134.99
Investment income from holding financial assets available for sales314,664,249.00683,211.60
Income from financial products0263,460,954.90
Other-959,296.1840,908,817.93
Total1,954,523,836.591,964,805,688.57

52. Income from change of fair value

Unit: RMB/CNY

SourcesCurrent periodLast Period
Changes in the fair value of wealth management products-380,318.888,223,219.19
Changes in the fair value of the stocks of listed companies held-excluding the stocks of listed companies that are included in other equity instrument investments-38,709,334.89375,102,546.00
Changes in fair value of foreign exchange contracts-1,180,680.04
Total-40,270,333.81383,325,765.19

53. Credit impairment loss

Unit: RMB/CNY

ItemCurrent periodLast Period
Bad debt loss4,059,750.80-11,184,647.60
Total4,059,750.80-11,184,647.60

54. Assets impairment loss

Unit: RMB/CNY

ItemCurrent periodLast Period
I. Loss of inventory falling price and loss of contract performance cost impairment-134,434,667.54-142,400,798.47
II. Impairment loss of fixed assets-3,682,648.26-36,436,674.38
Total-138,117,315.80-178,837,472.85

55. Income from assets disposal

Unit: RMB/CNY

SourcesCurrent periodLast Period
Income from disposal of non-current assets6,580,346.4112,962,146.98
Losses from disposal of non-current assets-2,648,002.34-1,507,738.38
Total3,932,344.0711,454,408.60

56. Non-operating income

Unit: RMB/CNY

ItemCurrent periodLast PeriodAmount reckoned into current non-recurring gains/losses
Periodic reduction or exemption of part of social insurance premiums60,373,772.69
Periodic reduction of kinetic energy costs5,759,525.46
Liquidated damages and compensation income397,361.84397,361.84
Other258,840.23333,723.47258,840.23
Total656,202.0766,467,021.62656,202.07

government grants included in the current profit and loss: Nil

57. Non-operating expense

Unit: RMB/CNY

ItemCurrent periodLast PeriodAmount reckoned into current non-recurring gains/losses
Donation237,041.063,107,003.70237,041.06
Non-current assets disposal losses24,984,204.92738,248.8324,984,204.92
Including: loss of fixed assets scrap24,615,193.78738,248.8324,615,193.78
Loss on scrapping of intangible assets369,011.14369,011.14
Other288,323.89313,635.64288,323.89
Total25,509,569.874,158,888.1725,509,569.87

Other notes: The loss of fixed assets scrapped in this period includes the reduction of workshop No. 1 of WFHT Xinan Branch. (No.WX1000475970-1). Due to the business development needs of the company, according to the investment project record certificateissued by the Administrative Examination and Approval Bureau of Xinwu District of Wuxi city (Xi Xinhang Review and InvestmentPreparation [2021] no. 961) and the decision of administrative Approval issued by the Public Security Bureau of Wuxi City (Xi Gong(Zhi) Zhunjuezi [2022]001), the company plans to demolish the house in the form of blasting and rebuild it into a RESEARCH anddevelopment building, so the house will be scrapped in this period.

58. Income tax expense

(1) Income tax expense

Unit: RMB/CNY

ItemCurrent periodLast Period
Payable tax in current period140,397,942.05170,925,337.68
Adjusted the previous income tax941,390.84-2,349,322.00
Increase/decrease of deferred income tax assets-54,019,435.84-54,432,577.63
Increase/decrease of deferred income tax liability3,675,792.9066,072,310.95
Total90,995,689.95180,215,749.00

(2) Adjustment on accounting profit and income tax expenses

Unit: RMB/CNY

ItemCurrent period
Total profit2,740,360,366.10
Income tax measured by statutory/applicable tax rate411,054,054.92
Impact by different tax rate applied by subsidies-4,538,497.57
Adjusted the previous income tax941,390.84
Impact by non-taxable revenue-246,008,927.64
Impact on cost, expenses and losses that unable to deducted6,100,407.95
Impact by the deductible losses of the un-recognized previous deferred income tax-28,736,658.75
The deductible temporary differences or deductible losses of the un-recognized deferred income tax assets in the Period18,038,494.97
Impact on additional deduction-63,047,657.53
Other-2,806,917.24
Income tax expense90,995,689.95

59. Other comprehensive income

See Note VII. 40 “Other comprehensive income”

60. Items of ash flow statement

(1) Other cash received in relation to operation activities

Unit: RMB/CNY

ItemCurrent periodLast Period
Interest income41,478,845.3252,277,269.56
Government grants40,118,348.4741,044,012.67
Margin on operation bill3,237,920.90
Other1,333,448.309,252,536.29
Total86,168,562.99102,573,818.52

(2) Other cash paid in relation to operation activities

Unit: RMB/CNY

ItemCurrent periodLast Period
Cash cost628,017,019.32840,363,837.09
Other20,190,804.0659,565,319.82
Total648,207,823.38899,929,156.91

(3) Cash received from other investment activities

Unit: RMB/CNY

ItemCurrent periodLast Period
Received the disposal payment10,654,092.89
Received investment funds in transit at the end of 201930,448,157.81
Intercourse funds of unit24,000,000.00
The contingent consideration received for the purchase of Borit’s equity1,136,214.91
Other544,552.00
Total1,680,766.9165,102,250.70

(4) Cash paid related with investment activities

Unit: RMB/CNY

ItemCurrent periodLast Period
Margin paid by L/C for purchase of equipment587,241.00
Intercourse funds of unit13,992,067.94
Total14,579,308.94

(5) Other cash received in relation to financing activities

Unit: RMB/CNY

ItemCurrent periodLast Period
Borrowings received by WFLD5,470,000.005,470,000.00
Borrowings received by IRD260,135.13
Total5,470,000.005,730,135.13

(6) Cash paid related with financing activities

Unit: RMB/CNY

ItemCurrent periodLast Period
Account paid for purchasing minority equity of IRD48,507,056.85
National debt paid transfer to loans339,090.00351,298.00
Borrowing return by WFLD5,470,000.00
Lease payments7,718,867.54375,886.28
Repurchase of A shares400,017,180.33
Shares repurchase and cancellation for restricted stock incentive plan and handling charge4,068,729.06
Total17,596,686.60449,251,421.46

61. Supplementary information to statement of cash flow

(1) Supplementary information to statement of cash flow

Unit: RMB/CNY

Supplementary informationCurrent periodLast Period
1. Net profit adjusted to cash flow of operation activities:----
Net profit2,649,364,676.152,822,735,930.56
Add: Assets impairment provision134,057,565.00190,022,120.45
Depreciation of fixed assets, consumption of oil assets and depreciation of productive biology assets399,184,362.08390,748,987.16
Depreciation of right-of-use assets8,672,462.76
Amortization of intangible assets42,460,206.3537,146,026.79
Amortization of long-term deferred expenses4,800,457.7912,637,958.88
Loss from disposal of fixed assets, intangible assets and other long-term assets (gain is listed with “-”)-3,932,344.07-11,454,408.60
Losses on scrapping of fixed assets (gain is listed with “-”)24,984,204.92738,248.83
Gain/loss of fair value changes (gain is listed with “-”)40,270,333.81-383,325,765.19
Financial expenses (gain is listed with “-”)31,368,748.2017,798,991.04
Investment loss (gain is listed with “-”)-1,944,475,801.41-1,957,024,490.66
Decrease of deferred income tax asset ((increase is listed with “-”)-54,019,435.84-54,432,577.63
Increase of deferred income tax liability (decrease is listed with “-”)3,675,792.9066,072,310.95
Decrease of inventory (increase is listed with “-”)-723,297,146.60-591,321,045.44
Decrease of operating receivable accounts (increase is listed with “-”)1,615,814,968.48-1,326,286,166.68
Increase of operating payable accounts (decrease is listed with “-”)-1,676,121,153.691,562,204,812.18
Other74,904,696.585,550,301.37
Net cash flows arising from operating activities627,712,593.41781,811,234.01
2. Material investment and financing not involved in cash flow----
Conversion of debt into capital
Switching Company bonds due within one year
financing lease of fixed assets
3. Net change of cash and cash equivalents:----
Balance of cash at period end1,094,018,936.73944,946,018.70
Less: Balance of cash equivalent at year-begin944,946,018.70820,498,653.85
Add: Balance at year-end of cash equivalents
Less: Balance at year-begin of cash equivalents
Net increase of cash and cash equivalents149,072,918.03124,447,364.85

(2) Net cash payment for the acquisition of a subsidiary in the period

Nil

(3) Net cash received from the disposal of subsidiaries

Nil

(4) Constitution of cash and cash equivalent

Unit: RMB/CNY

ItemEnding balanceOpening balance
I. Cash1,094,018,936.73944,946,018.70
Including: Cash on hand150,438.79507.66
Bank deposit available for payment at any time1,093,868,497.94944,945,511.04
II. Balance of cash and cash equivalents at the period-end1,094,018,936.73944,946,018.70

Other explanation:

The difference between bank deposits available for payment at any time and the bank deposits in Note VII. 1 "Monetary Funds" is thecompany's fixed deposits in the bank.

62. Note of the changes of owners’ equity

Explain the items and amount at period-end adjusted for “Other” at end of the last year: nil

63. Assets with ownership or use right restricted

Unit: RMB/CNY

ItemEnding Book valueRestriction reason
Note receivable727,930,810.05Notes pledge for bank acceptance
Monetary funds9,347,031.23Forex Contracts USD Margin
Monetary funds17,459,061.33Cash deposit paid for bank acceptance
Monetary funds4,044,016.40Court freeze
Monetary funds194,220.00Mastercard deposit
Receivables financing191,355,521.58Notes pledge for bank acceptance
Trading financial asset252,667,176.66In accordance with the civil ruling No.(2016)Y03MC2490 and No.(2016) Y03MC2492 of Guangdong Shenzhen Intermediate People's Court, the property with the value of 217 million yuan under the name of the Company and other seven respondents and the third party Shenzhen Hejun Chuangye Holdings Co., Ltd. (Hereinafter referred to as Hejun Company) was frozen. As of the end of the reporting period, 4.71 million shares of Miracle Automation and 11,739,102 shares of SDEC held by the Company were frozen.
Total1,202,997,837.25--

64. Item of foreign currency

(1) Item of foreign currency

Unit: RMB/CNY

ItemClosing balance of foreign currencyRate of conversionEnding RMB balance converted
Monetary funds----
Including: USD4,635,313.916.375729,553,370.90
EUR3,523,091.487.219725,435,663.56
HKD16,665,233.070.817613,625,494.56
DKK47,357,072.540.971145,988,453.14
Account receivable----
Including: USD3,189,026.926.375720,332,278.93
EUR1,194,637.247.21978,624,922.48
HKD
JPY6,317,177.000.0554349,971.61
DKK11,962,185.670.971111,616,478.50
Long-term borrowings----
Including: USD
EUR
HKD
Other account receivables
Including: DKK1,930,131.180.97111,874,350.39
Short-term borrowings
Including: USD1,213,620.006.37577,737,677.03
EUR26,679,517.797.2197192,618,114.59
Account payable
Including: USD454,364.116.37572,896,889.26
EUR2,144,276.327.219715,481,031.74
JPY31,215,120.000.05541,729,317.65
DKK9,175,001.100.97118,909,843.57
Other account payable
Including: DKK76,815.400.971174,595.43
Non-current liabilities due within one year
Including: EUR380,142.197.21972,744,512.57

(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-keepingcurrency changed, explain reasons

√ Applicable □ Not applicable

Subsidiary of the Company IRD was established in Denmark in 1996. The 66% equity of IRD were required by the Company in cashin April 2019, and in October 2020, increasing the shareholding to 34.00% by cash purchase. After the increase in holdings, thecompany acquired 100.00% of the company's equity. Book-keeping currency of IRD was Danish krone, and IRD mainly engaged inthe R&D, production and sales of fuel cell components.Subsidiary Borit was established in Belgium in 2010. the Company acquired 100% equity of Borit by cash acquisition in November2020. Borit is denominated in Euro and engaged in the R&D, production and sales of fuel cell components.

65. Government grants

(1) Government grants

Unit: RMB/CNY

CategoryAmountItemAmount reckoned in current gain/loss
Annual output of 150,000 gasoline engine turbochargers200,000.00Deferred income, other income416,105.36
Strategic cooperation agreement funding for key enterprise of smart manufacturing in high-tech zone700,000.00Deferred income, other income309,130.41
Borit R&D grants822,830.04Deferred income, other income1,411,156.80
Wind2H425,268.54Deferred income, other income425,268.54
FIT-4-AMANDA723,598.73Deferred income, other income723,598.73
Anione191,020.47Deferred income, other income897,126.79
3 R526,428.36Deferred income, other income526,428.36
ECOethylene2,666,335.01Deferred income, other income1,322,854.33
The third batch of provincial-level industrial and information industry transformation special funds in 202113,500,000.00Deferred income
2020 District Modernization Industry Development Fund1,890,000.00Deferred income, other income177,548.52
2020 Financial Support Fund for Investment Promotion Enterprises3,740,400.00Other income3,740,400.00
Special subsidy for provincial business development in 20212,551,200.00Other income2,551,200.00
Service charge for three agencies1,540,317.23Other income1,540,317.23
Jiangbei District People's Government on Commending the 2020 Economic Innovation and Development Award1,450,000.00Other income1,450,000.00
Guiding funds for intelligent transformation and technological transformation1,500,000.00Other income1,500,000.00
Job stabilization subsidy1,297,349.42Other income1,297,349.42
BORIT withholding refund991,481.10Other income991,481.10
Special funds to subsidize municipal enterprises after R&D investment401,200.00Other income401,200.00
2021 Enterprise New Apprenticeship Work Subsidy573,000.00Other income573,000.00
2019 "Taihu Talent Program" project support fund allocation390,000.00Other income390,000.00
Subsidy funds for manufacturing individual champions, specializing in new small giants300,000.00Other income300,000.00
subsidy for protype250,000.00Other income250,000.00
Patent grant220,000.00Other income220,000.00
District-level rewards for smart workshops200,000.00Other income200,000.00
Nanjing Jiangbei New District High-tech Enterprise Cultivation Award200,000.00Other income200,000.00
Wuxi Binhu District Innovation Award Fund160,000.00Other income160,000.00
2021 Science and Technology Innovation Fund150,000.00Other income150,000.00
Jiangsu Postdoctoral Innovation Practice Base was selected for funding in 2020150,000.00Other income150,000.00
To honor Nanchang's 2019 annual work incentive funds for cultivating industrial enterprises above designated size150,000.00Other income150,000.00
Nanchang Newly-added corporate subsidies in 2019150,000.00Other income150,000.00
2018-2020 Development Zone Talent Policy Continuous Subsidy241,000.00Other income241,000.00
Special funds for high-quality provinces and high-quality districts in 2019110,000.00Other income110,000.00
Postdoctoral pit-stop funding100,000.00Other income100,000.00
Other1,656,919.57Other income1,656,919.57
Total40,118,348.47

(2) Government grants rebate

□ Applicable√ Not applicable

66. Other

Nil

VIII. Changes of consolidation scope

1. Enterprise combine not under the same control

(1) Enterprise combines not under the same control occurred in the period

Nil

(2) Combination cost and goodwill

Nil

(3) Identifiable assets and liability on purchasing date under the purchaserNil

(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing dateWhether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control rights inthe Period or not

□ Yes √ No

(5) Notes relating to the purchase date or the end of the period in which the merger consideration or thefair value of the purchasee’s identifiable assets and liabilities cannot be reasonable determinedNil

(6) Other explanations

Nil

2. Enterprise combine under the same control

(1) Business combinations under the same control that occurred in the current periodNil

(2) Consolidation cost

Nil

(3) Book value of assets and liabilities of the merged party on the merger dateNil

3. Reverse purchase

Nil

4. Disposal of subsidiaries

Whether there is a single disposal of an investment in a subsidiary that resulted in a loss of control

□ Yes √ No

Whether there is a step-by-step disposal of investment in a subsidiary through multiple transactions and loss of control during theperiod

□ Yes √ No

5. Other reasons for consolidation range changed

Nil

6. Other

NilIX. Equity in other entity

1. Equity in subsidiary

(1) Constitute of enterprise group

SubsidiaryMain operation placeRegistered placeBusiness natureShare-holding ratioAcquired way
DirectlyIndirectly
WFJNNanjingNanjingSpare parts of internal-combustion engine80.00%Enterprise combines under the same control
WFLDWuxiWuxiAutomobile exhaust purifier, muffler94.81%Enterprise combines under the same control
WFMAWuxiWuxiSpare parts of internal-combustion engine100.00%Investment
WFCAWuxiWuxiSpare parts of internal-combustion engine100.00%Investment
WFTRWuxiWuxiTrading100.00%Enterprise combines under the same control
WFSCWuxiWuxiSpare parts of internal-combustion engine66.00%Investment
WFTTNingboNingboSpare parts of98.83%1.17%Enterprise combines not
internal-combustion engineunder the same control
WFAMWuxiWuxiSpare parts of internal-combustion engine51.00%Enterprise combines not under the same control
WFLD (Wuhan)WuhanWuhanAutomobile exhaust purifier, muffler60.00%Investment
WFLD (Chongqing)ChongqingChongqingAutomobile exhaust purifier, muffler100.00%Investment
WFLD (Nanchang)NanchangNanchangAutomobile exhaust purifier, muffler100.00%Investment
WFASWuxiWuxiSmart car equipment66.00%Investment
WFDTWuxiWuxiHub Motor80.00%Enterprise combines not under the same control
SPVDenmarkDenmarkInvestment100.00%Investment
IRDDenmarkDenmarkFuel cell components100.00%Enterprise combines not under the same control
IRD AmericaAmericaAmericaFuel cell components100.00%Enterprise combines not under the same control
BoritBelgiumBelgiumFuel cell components100.00%Enterprise combines not under the same control
Borit AmericaAmericaAmericaFuel cell components100.00%Enterprise combines not under the same control

Explanation on share-holding ratio in subsidiary different from ratio of voting right: NilBasis for holding half or less of the voting rights but still controlling the investee, and holding more than half of the voting rights butnot controlling the investee: NilBasis for inclusion in the scope of consolidation of significant structured entities, control: nilBasis for determining whether a company is an agent or a principal: nil

(2) Important non-wholly-owned subsidiary

Unit: RMB/CNY

SubsidiaryShare-holding ratio of minorityGains/losses attributable to minority in the PeriodDividend announced to distribute for minority in the PeriodEnding equity of minority
WFJN20.00%19,273,102.6313,970,282.31205,874,656.33
WFSC34.00%4,363,973.1720,911,190.87
WFLD5.19%12,062,050.43134,688,907.88
WFAM49.00%38,432,716.5425,671,100.00190,028,914.77
Total74,131,842.7739,641,382.31551,503,669.85

Explanation on holding ratio different from the voting right ratio for minority shareholders: nil

(3) Main finance of the important non-wholly-owned subsidiary

Unit: RMB/CNY

SubsidiaryEnding balanceOpening balance
Current assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilitiesCurrent assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilities
WFJN1,163,244,507.43312,639,160.971,475,883,668.40403,140,636.2239,065,672.06442,206,308.281,182,876,680.02293,436,809.971,476,313,489.99433,667,329.3442,293,914.58475,961,243.92
WFSC216,066,879.2446,302,741.60262,369,620.84200,467,446.49200,467,446.49213,435,154.5947,533,838.59260,968,993.18212,812,487.33212,812,487.33
WFLD4,503,223,903.301,354,614,615.105,857,838,518.403,558,321,743.4121,480,042.253,579,801,785.664,942,039,786.721,210,907,784.806,152,947,571.524,206,722,685.6328,424,930.254,235,147,615.88
WFAM413,380,063.83483,832,825.41897,212,889.24450,194,211.9059,932,162.99510,126,374.89323,378,083.30427,175,823.65750,553,906.95325,074,838.8163,548,392.29388,623,231.10
Total6,295,915,353.802,197,389,343.088,493,304,696.884,612,124,038.02120,477,877.304,732,601,915.326,661,729,704.631,979,054,257.018,640,783,961.645,178,277,341.11134,267,237.125,312,544,578.23

Unit: RMB/CNY

SubsidiaryCurrent periodLast Period
Operation IncomeNet profitTotal comprehensive incomeCash flow from operation activityOperation IncomeNet profitTotal comprehensive incomeCash flow from operation activity
WFJN825,822,469.0696,549,390.5496,549,390.5479,645,579.97685,608,389.43110,875,256.44110,875,256.4442,395,588.51
WFSC350,165,714.1012,839,649.7612,839,649.7638,135,056.28252,434,907.6514,694,274.8914,694,274.89-2,270,586.10
WFLD6,527,268,564.43337,097,184.96337,114,070.10-323,189,683.236,427,844,701.00245,276,849.88245,276,849.8841,415,937.03
WFAM641,120,626.6181,627,198.4281,627,198.4253,533,412.73485,081,038.0950,518,929.7550,518,929.7586,836,060.40
Total8,344,377,374.20528,113,423.68528,130,308.82-151,875,634.257,850,969,036.17421,365,310.96421,365,310.96168,376,999.84

(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 statementrangeNil

2. Transaction that has owners’ equity shares changed in subsidiary but still with controlling rights

(1) Owners’ equity shares changed in subsidiary

Nil

(2) Impact on minority’s interest and owners’ equity attributable to parent companyNil

3. Equity in joint venture and associated enterprise

(1) Important joint venture and associated enterprise

Joint venture or associated enterpriseMain operation placeRegistered placeBusiness natureShare-holding ratioAccounting treatment on investment for joint venture and associated enterprise
DirectlyIndirectly
Wuxi WFECal Catalysts. Co., Ltd.WuxiWuxiCatalyst49.00%Equity method
Robert Bosch Powertrain Ltd.WuxiWuxiInternal-combustion engine accessories32.50%1.50%Equity method
Zhonglian Automobile Electronics Co., Ltd.ShanghaiShanghaiInternal-combustion engine accessories20.00%Equity method
Wuxi Weifu Precision Machinery Manufacturing Co., Ltd.WuxiWuxiInternal-combustion engine accessories20.00%Equity method
Shinwell Automobile Technology (Wuxi) Co., Ltd.WuxiWuxiAutomobile components45.00%Equity method
Changchun Xuyang Weifu Automobile components Technology Co., Ltd.ChangchunChangchunAutomobile components34.00%Equity method
Precors GmbHGermanyGermanyFuel cell parts8.11%Equity method
Wuxi Chelian Tianxia Information Technology Co., Ltd.WuxiWuxiTelematics services8.83%Equity method

Holding shares ratio different from the voting right ratio:

Nil

Has major influence with less 20% voting rights hold, or has minor influence with over 20% (20% included) voting rights hold:

(1) Precors GmbH:

Wholly-owned subsidiary of the Company - Borit, holds 8.11% equity of Precors, Borit appointed a director to Precors. Though therepresentative, Borit can participate in the operation policies formulation of Precors, and thus exercise a significant influence overPrecors.

(2) Chelian Tianxia:

The Company holds 8.8295% equity of Chelian Tianxia, and appointed a director to Chelian Tianxia. Though the representative, theCompany can participate in the operation policies formulation of Chelian Tianxi, and thus exercise a significant influence overChelian Tianxi.

(2) Main financial information of the important joint venture

Nil

(3) Main financial information of the important associated enterprise

Unit: RMB/CNY

Ending balance/Current periodOpening balance/Last Period
WFECRBCDZhonglian AutomobileWFECRBCDZhonglian Automobile
Current assets4,359,756,878.8814,697,384,325.8771,871,241.064,446,438,334.1011,965,249,225.12201,344,601.39
Non -current assets344,385,727.943,080,929,311.516,819,520,183.89363,513,166.842,995,027,302.845,985,689,857.38
Total assets4,704,142,606.8217,778,313,637.386,891,391,424.954,809,951,500.9414,960,276,527.966,187,034,458.77
Current liabilities2,858,118,635.518,623,318,592.842,970,685.683,251,776,146.447,423,648,562.763,687,897.36
Non-current liabilities224,616,134.382,578,140.19175,895,402.90