万丰奥威：2020年年度报告（英文版）

ZHEJIANG WANFENG AUTO WHEEL CO. LTD
2020 Annual Report
April 2021
Section I: Important Notes Contents and Definitions
The Board of Directors Board of Supervisors Directors Supervisors and
Senior Management of Zhejiang Wanfeng Auto Wheel Co. Ltd. (hereinafter
referred to as the “Company”) hereby guarantee that the information presented
in this report shall be authentic accurate complete and free from material
misstatement whether due to false record misleading statement or significant
omission and they will bear both individual and joint legal liabilities.Chen Bin the Company's legal representative Dong Ruiping the person in
charge of accounting work and Chen Shanfu the person in charge of the
accounting department (accounting officer) hereby declare that the financial
statements in the annual report are true accurate and complete.All directors attended the board meeting to review this report.The information pertaining to future plans and performance forecasts in this
report is uncertain and does not constitute a substantial commitment to
investors. The Company are exposed to risks of macroeconomic and industry
conditions fluctuations in the RMB exchange rate raw material prices rising
labor costs trade barriers and the impact of COVID 19. Investors are advised
to pay attention to investment risks.Pre-arranged profit distribution plan approved by the Board of Directors:
distribute 1.0 Yuan cash dividends per 10 common stocks (tax inclusive) and 0
stock dividend to all shareholders on the basis of 2072107520 shares (total
issued shares of 2186879678 minus repurchased shares of 114772158).If there is no specific explanation or otherwise stated in tables the currency in
this report is RMB or yuan used interchangeably.This report and its abstract have been prepared in both Chinese and English.Should there be any discrepancies or misunderstandings between the two
versions the Chinese version shall prevail.CONTENTS
Section I: Important Notes Contents and Definitions .............................................................. 2
Section II: Corporate Profile and Key Financial Indicators ...................................................... 6
Section III: Corporate Business Overview ............................................................................... 12
Section IV: Management’s Discussion and Analysis ............................................................. 21
Section V: Significant Events ................................................................................................... 47
Section VI: Changes in Shares and Information about Shareholders .................................. 88
Section VII: Information of Preferred Shares .......................................................................... 99
Section VIII: Information about Convertible Bonds .............................................................. 100
Section IX: Information about Directors Supervisors Senior Management...................... 101
Section X: Corporate Governance ......................................................................................... 113
Section XI: Corporate Bonds .................................................................................................. 123
Section XII: Financial Statements .......................................................................................... 124
Section XIII: Documents Available for Reference ................................................................. 348
Definitions
Items Refers to Definition
Company the Company
Refers to Zhejiang Wanfeng Auto Wheel Co. Ltd
Wanfeng Auto Wheel We
Group the Group Refers to The Company and its subsidiaries
Wanfeng Group Refers to Wanfeng Auto Holding Group Co. Ltd.Wanfeng Motorcycle Wheel Refers to Zhejiang Wanfeng Motorcycle Wheel Co. Ltd.Ningbo Aoweier Refers to Ningbo Aoweier Wheel Co. Ltd.Guangdong Motorcycle Wheel Refers to Guangdong Motor Wheel Co. Ltd.Weihai Wanfeng Magnesium Technology
Weihai Magnesium Refers to
Development Co. Ltd.Weihai Wanfeng Refers to Weihai Wanfeng Auto Wheel Co. Ltd.Jilin Wanfeng Refers to Jilin Wanfeng Auto Wheel Co. Ltd.Wanfeng Aluminum Wheel (India) Pty. Co.India Wanfeng Refers to
Ltd
Chongqing Wanfeng Refers to Chongqing Wanfeng Auto Wheel Co. Ltd
Shanghai Dacromet Refers to Shanghai Dacromet Coating Industry Co. Ltd
Ningbo Economic and Technological
Ningbo Dacromet Refers to Development Zone Dacromet Coating Industry
Co. Ltd
Zhejiang Wanfeng Shangda Coating
Shangda Tu Fu Refers to
Technology Co. Ltd.Wanfeng Meridian Refers to Wanfeng MLTH Holdings Co. Ltd
Wanfeng Meridian New Material Technology
Meridian New Material Refers to
Co. Ltd.Shandong Weiwan Ke Chuanglian
Weiwan Lianchuang Refers to
Engineering Technology Co. Ltd.Shanghai Fengtu Automobile Technology Co.Shanghai Fengtu Refers to
Ltd.Wuxi Xiongwei Refers to Wuxi Xiongwei Precision Technology Co. Ltd.Wuxi Geoff Refers to Wuxi Geoff Machinery Technology Co. Ltd.Yancheng Xiongwei Refers to Yancheng Xiongwei Auto Parts Co. Ltd.Yizheng Xiongwei Machinery Technology Co.Yizheng Xiongwei Refers to
Ltd.Changchun Xiongwei Refers to Changchun Xiongwei Auto Parts Co. Ltd.Shanghai Meridian Magnesium Products
Shanghai Meridian Refers to
Company Limited
Suzhou Yucuiyuan Trading Enterprise
Suzhou Yucuiyuan Refers to
(General Partnership)
Aviation Industry or Wanfeng
Refers to Wanfeng Aviation Industry Co. Ltd.Aviation
Aircraft Industry or Wanfeng
Refers to Wanfeng Aircraft Industry Co. Ltd.Aircraft
Wanfeng Jinyuan Refers to Wanfeng Jinyuan Holdings Group Co. Ltd.Articles of Association of Zhejiang Wanfeng
Articles of Association Refers to
Auto Wheel Co. Ltd.the General Meeting of shareholders of
General Meeting Refers to
Zhejiang Wanfeng Auto Wheel Co. Ltd.The Board of Directors of Zhejiang Wanfeng
The Board of Directors Refers to
Auto Wheel Co. Ltd.the Board of Supervisors of Zhejiang Wanfeng
The Board of Supervisors Refers to
Auto Wheel Co. Ltd.The CSRC Refers to the China Securities Regulatory Commission
SZSE Refers to the Shenzhen Stock Exchange
Yuan Refers to RMB
Company Law of the People's Republic of
Company Law Refers to
China
Securities Law of the People's Republic of
Securities Law Refers to
China
Section II: Corporate Profile and Key Financial Indicators
I. Corporate Information
Stock Abbreviation Wanfeng Auto Wheel Ticker 002085
Listed Security Exchange Shenzhen Stock Exchange
Company Name in Chinese 浙江万丰奥威汽轮股份有限公司
Abbr. Company Name in Chinese 万丰奥威
Company Name in English Zhejiang Wanfeng Auto Wheel Co. Ltd
Legal Representative Chen Bin
Registered Address Xinchang County Industrial Park Zhejiang China
Registered Address Post code 312500
Office Address Xinchang County Industrial Park Zhejiang China
Office Address Post code 312500
Official website http://www.wfaw.com.cn
E-mail wfirm@wfjt.com
II. Contact Information
Securities Affairs Board Secretary
Representative
Name Zhang Yinfeng Li Ya
Xinchang County Industrial Park Xinchang County Industrial Park
Address
Zhejiang China Zhejiang China
Tel. 0575-86298339 0575-86298339
Fax 0575-86298339 0575-86298339
E-mail yinfeng.zhang@wfjt.com ya.li@wfjt.com
III. Information Disclosure and Place of the Report
Information Disclosure Media Securities Times
Annual Report Publishment Website
Designated by China Securities http://www.cninfo.com.cn
Regulatory Commission
Office of the Board of Directors Zhejiang Wanfeng
Company's Annual Report Prepared Place Auto Wheel Co. Ltd. Xinchang County Industrial
Park Zhejiang China
IV. Registration Changes
Institution Code 913300007324065674
1. In June 2011 with the approval of the CSRC (CSRC issued
the "Approval of the Zhejiang Wanfeng Auto Wheel Co. Ltd. to
issue shares and purchase assets from Wanfeng Auto Holding
Group Co. Ltd." (CSRC Permit [2011] No. 1005) the Company
acquired 75% of Wanfeng Motorcycle Wheels and thereby
added motorcycle wheel to its principal business.2. In November 2013 the Company’s General Meeting of
Shareholders approved the acquisition of Shanghai Dacromet
Coating Industry Co. Ltd. The Company thereby added
environmental coating to its principal business.3. In December 2015 with the approval of the CSRC the
Changes in the Company’s Company acquired 100% shares of Wanfeng Meridian for RMB
principal business since its 1.35 billion in cash raised from a private placement. The
listing Company thereby added lightweight magnesium alloy auto
parts to its principal business.4. In June 2018 with the approval of the Company’s
Extraordinary General Meeting of Shareholders the company
acquired 95% shares of Wuxi Xiongwei Precision Technology
Co. Ltd. for 1.254 billion yuan in cash and added the die
stamping auto parts to its principal business.5. In April 2020 with the approval of the Company’s
Extraordinary General Meeting of Shareholders the Company
acquired 55% shares of Wanfeng Aircraft Industry Co. Ltd and
added general aviation aircraft manufacturing to its principal
busin ess.Previous changes in
No Change
controlling shareholders
V. Other Relevant Information
Accounting firm hired by the Company
Ernst & Young Hua Ming Certified Public Accountants
Accounting Firm Name
(Special General Partnership)
50th Floor Shanghai World Financial Center 100
Accounting Firm Address
Century Avenue Pudong New Area Shanghai
Signing Accountant Yin Guowei; Zhou Hao
Sponsor institutions engaged by the Company to perform duties of continuous
supervision during the reporting period
□ Applicable √ Not applicable
Financial advisors engaged by the Company to perform duties of continuous
supervision during the reporting period
□ Applicable √ Not applicable
VI. Key Accounting Data and Financial Indicators
Whether the Company performed a retrospective adjustment or restatement of
previous accounting data
√Yes □No
Retrospective adjustment or restatement reason:
Business combination under the same control
Unit: RMB unless otherwise
2019 YoY % 20182020
Before After After Before After
Operating
10699224904.57 10787734491.15 12635131976.26 -15.32% 11005069692.59 12558190252.99
Revenue
Net Income
Attributable to
Shareholders 565820630.75 769318977.36 895769920.83 -36.83% 958699967.31 1086024287.66
of the Listed
Company
Net Income
Attributable to
Shareholders
of the Listed
Company after 415879097.84 578267116.50 578267116.45 -28.08% 733675219.16 733675219.16
Deducting
Non-recurring
Gains and
Losses
Net Cash Flow
Generated by
1735780906.42 1362402127.06 1420368879.77 22.21% 1316448423.97 1548633356.11
Operating
Activities
Basic EPS
0.27 0.36 0.41 -34.15% 0.44 0.50
(RMB/ share)
Diluted EPS
0.27 0.36 0.41 -34.15% 0.44 0.50
(RMB/ share)
Weighted
10.27% 12.58% 9.19% 1.08% 13.93% 14.11%
Average ROE
2019 Year End YoY% 2018 Year End
2020 Year End
Before After After Before Before
Total Assets 15973225900.87 13988933546.56 18487249917.89 -13.60% 13392895948.68 17560462236.85
Net assets
attributable to
shareholders 5353609030.21 6150821541.43 7992455452.51 -33.02% 6330544402.36 7963848565.52
of the Listed
Company
The Company's net profit before and after deducting non-recurring profit and loss in
the last three fiscal years whichever is lower is negative and the audit report of the
last year shows that the Company's ability to continue as a going concern is uncertain
□ Yes √ No
The lower of the net profit before and after deducting the non-recurring profit and loss
is negative
□ Yes √ No
VII. Differences in Accounting Data between Domestic and Overseas
Accounting Standards
1. Difference in the financial report of net profits and net assets
according to the disclosure of International Financial Reporting
Standards and China Accounting Standards
□ Applicable √ Not applicable
There is no difference in the financial report of net profits and net assets
according to the disclosure of International Financial Reporting Standards
(IFRS) and China Accounting Standards in the reporting period.2. Difference in the financial report of net profits and net assets
according to the disclosure of Overseas Accounting Standards and
China Accounting Standards
□ Applicable √ Not applicable
There is no difference in the financial report of net profits and net assets
according to the disclosure of Overseas Accounting Standards and China
Accounting Standards in the reporting period.VIII. Key Quarterly Financial Indicators
Unit: RMB
Q1 Q2 Q3 Q4
Operating
2383781671.83 2038517384.94 2935425929.77 3341499918.03
Revenue
Net Income
Attributable to
Shareholders 122641051.81 129902429.25 157903363.82 155373785.87
of the Listed
Company
Net Income
Attributable to
Shareholders of
the Listed
77712897.01 57744665.34 136961688.75 143459846.74
Company after
Deducting Non-
recurring Gains
and Losses
Net Cash Flow
Generated by
346389316.54 243417393.50 207968461.35 938005735.03
Operating
Activities
Indicate by check mark if any material difference between the above financial
indicators or their summations and those disclosed in the Company’s Quarterly
or Interim report.√Yes □No
The Company's operating revenue from January to March 2020 disclosed in
the Full Text of the First Quarter Report of 2020 on April 29 2020 was
2000161246.07 yuan. On April 16th 2020 the Company acquired 55% equity
of Wanfeng Aircraft Industry Co. Ltd. a company under common control and
retrospectively adjusted the same period financial data in the previous year in
accordance with "Accounting Standards for Business Enterprises No. 33-
Consolidated Financial Statements" to 2383781671.83 yuan.IX. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Items 2020FY 2019FY 2018FY
Gains or Losses from Disposal of Non-
current Assets (Including the Write-off for 501156.94 -3277757.06 -33114832.31
the Accrued Impairment of Assets)
The Government Subsidies Included in the
Current Gains and Losses (Excluding the
Government Subsidies Closely Related
104562193.16 91209395.45 97537996.40
to Regular Businesses of the Company and
Issued in the Quota or Quantity Based on
the National Standards)
Net Profit and Loss for the Current Period
from the Beginning of the Period to the Date
74836418.19 229910806.40 231498764.28
of the Merger Arising from a Business
Combination under the Same Control
Gains or Losses Attributed to the Changes
in Fair Value of Held-for-trading financial
assets Derivative Financial Assets Trading
Financial Liabilities Derivative Financial
Liabilities and Investment Income from
Disposal of Held-for-trading financial
2859105.21 -1714863.22 78609340.40
assets Derivative Financial Assets Trading
Financial Liabilities Derivative Financial
Liabilities and Other Debt Investment
Excluding Hedging Businesses Related to
the Regular Business Operation of the
Company
Reversal of provision for impairment of
4653372.07 1917307.35
Account Receivables and Contract Assets
Non-operating Income and Expenditures
33063841.71 161174464.09 141604258.09
Other Than the Above
Less: Impact of Income Tax 27235065.43 50675826.88 56040011.85
Impact of Minority Equity (after tax) 43299488.94 109123414.40 109663753.86
Total 149941532.91 317502804.38 352349068.50
The reasons for the non-recurring gains and losses items defined or listed in
the Explanatory Announcement No.1 of Information Disclosure of Listed
Companies – Non-recurring Gains and Losses are defined as recurring gains
and losses items
□Applicable √ Not applicable
In the reporting period the Company did not define any non-recurring gains
and losses items defined and listed in the Explanatory Announcement No. 1 of
Information Disclosure of Listed Companies – Non-recurring Gains and Losses
as recurring gains and losses items.Section III: Corporate Business Overview
I. The Principal Business of the Company during the Reporting
Period
The Company is required to comply with the disclosure requirements of the
Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 16-
Listed Companies Engaged in Automobile Manufacturing Related Business.The Company is an international conglomerate dedicated to advanced
manufacturing with R&D centers and plants in ten countries (regions). Growing
over the past two decades the Company has established a growth strategy
propelled by “dual-engine”: lightweight auto parts and general aviation aircraft
featured by the "Diamond" brand. The company has become a leader in the
automotive parts sector specialized in lightweight applications of metal
materials "magnesium alloys aluminum alloys and high-strength steels". It’s
subsidiary Meridian a global leading supplier of magnesium alloy parts has
cutting-edge technology of magnesium alloy design development and
manufacturing. The Company also operates the world-leading aluminum alloy
wheels manufacturing business. Besides Wuxi Xiongwei another subsidiary
is a leading manufacturer of high-strength steel sheet stamping auto parts in
China. In addition the Company has a domestically leading environmental
Dacromet coating business.The Company’s general aviation aircraft business has three manufacturing
bases (Austria Canada China) three R&D centers (Austria Canada Czech
Republic) and one provincial engineering center (China). Its subsidiary
Diamond Aircraft owns the complete intellectual property (IP) of 4 series 8
basic types and 16 models of aircraft as well as multiple engines and flight
simulators. Main aircraft models include DA20 DA40 DA42 DA50 and DART
series. Diamond ranks the first for the market share of twin-engine piston
aircraft and the third for the market share of piston-engine aircraft. It is the first
in the world to adopt the composite material design of general aviation aircraft.Its aircraft is the only in the industry equipped with in-house designed and
manufactured engines. The economy of operation and flight range have greater
advantages in similar aircraft and it has the safest flight record among peers.
(1) Lightweight metal auto parts business
The Company's lightweight metal parts business mainly serves the automobile
market. Lightweight has become an inevitable trend during the advancement of
the automobile industry and an important means of automobile energy saving
and emission reduction. In October 2020 the Ministry of Industry and
Information Technology of China released the Energy-saving and New Energy
Vehicle Technology Roadmap 2.0 further confirming the "low-carbon
informatization and intelligent" direction of global automotive technology. It also
proposed the development goal for China’s automotive industry to reduce total
carbon emissions by more than 20% from the peak by 2035 with new energy
vehicles gradually becoming mainstream products. Automotive light-weighting
is the primary vehicle to meet national emission standards and reduce energy
consumption and pollutant emissions. Aluminum and magnesium alloys are
currently the most ideal materials for automotive light-weighting. The Company
has fully entered the supply chain of core customers and established an
addressable market that is based on traditional ICE automobiles with new
energy automobiles as a fulcrum focusing on both foreign and domestic and
coordinating OEMs and aftermarket. The Company gives full play to the
advantages of lightweight applications of metal materials "magnesium alloy-aluminum alloy-high strength steel” and is committed to becoming a global
promoter and leader of lightweight automotive metal parts.· Magnesium Alloy
Magnesium alloy products are mainly supplied to renowned automakers
globally as well as customers operating in aerospace transportation and 5G
telecommunication sectors. As a global leader in the advanced treatment of
lightweight magnesium alloy materials the Company has strong integration
capabilities of value chain and has marketed its products to transportation 5G
and other fields. The Company has 7 production bases in the United States
Canada the United Kingdom Mexico and China (Shandong Shanghai and
Zhejiang) and 4 R&D centers. Our main products include powertrain parts
front-end carriers cross car beams brackets rear lift door inner panels etc. Our
customers are mainly top-notch global brands such as Ford GM Porsche
Tesla Audi Mercedes Benz and BMW.· Aluminum Alloy Wheels
Since its establishment the Company has committed itself to R&D
manufacturing service of high-end aluminum alloy wheels serving the world-
known OEMs through superior product design a sound manufacturing
management system and after-sales service network. With an annual output
capacity of more than 40 million sets of aluminum alloy wheels (including
Aluminum Alloy Motorcycle Wheels) it has become a global leader in the
respective industry segments. In the "Industry 4.0" era the Company has built
a smart factory the first among its peers and has explored an innovative model
featured by digital intelligence and care to environment. The Company’s has 5
production bases for aluminum alloy wheels in Xinchang and Ningbo of
Zhejiang Province Weihai of Shandong Province Jilin of Jilin Province and
Chongqing. The Company continues to implement the "26313+N" marketing
strategy (US pedigree: GM Ford; European pedigree: Volkswagen BMW
Mercedes-Benz Stellantis (Fiat Chrysler & Peugeot) Land Rover; Japanese
pedigree: Toyota Honda Nissan; Korean pedigree: Hyundai-Kia; Chinese
pedigree Chery BYD JAC; + N new energy vehicle customers) advocate
intelligent manufacturing in the wheel industry and enhance the Company's
international influence in product quality R&D and design.In the motorcycle wheel segment the Company has always been centering on
"India Indonesia Pakistan Brazil and China" markets with "Honda and
Yamaha" as the long-term strategic partners Dachangjiang Suzuki and HERO
as major customers complemented by BMW Harley-Davidson and Ducati in
the premium market.In recent years the automotive industry has undergone some challenges. The
Company has increased investment in nimble production capacity against
those challenges. Under the new cycle of recovery in the automotive industry
the Company's ready-to-use production capacity is expected to drive aluminum
alloy wheel business to bottom out. As the chair unit of the National Motorcycle
Wheel Committee we are entering a new era of informatization scientific and
intelligentization for advanced manufacturing. The Company is well positioned
to benefit from the high-end trend of the motorcycle industry and the upgrading
of product structure through its global production network and technological
advantage.· High-strength Steel Die Stamping Parts
Wuxi Xiongwei’s main products are automotive stamping parts and molds
focusing on automotive body systems which includes seat parts and body
accessories such as seat frames and adjustment structures seat belt buckles
airbags stamping parts door hinges etc. It has 4 production bases in Wuxi
Yizheng and Yancheng of Jiangsu Province and Changchun of Jilin Province
with an annual capacity of 350 million parts. With leading R&D design and
manufacturing capabilities in mold it has become a core supplier of globally
renowned manufacturers such as Faurecia Brose Autoliv Adient and
Johnson Controls. By continuously optimizing the design of products
introducing advanced mold design system and adopting the world's advanced
automated continuous stamping for all products it has improved product quality
and reduced costs. It has been awarded the "Best Supplier" and "Excellent
Supplier" from customers such as Yanfeng Adient and Faurecia. It also has
synergistic coordination with the Company’s magnesium and aluminum alloy
business segments through mold R&D stamping process linkage production
base collaboration and customer interaction.· Environmentally Friendly Dacromet Coating
The Company’s environmentally friendly Dacromet coating business includes
metal bolt manufacturing and processing mechanical parts coating treatment
coating equipment manufacturing etc. With production and technical
application capabilities of Chromium-free Dacromet coating processing
solution manufacturing and coating equipment production throughout the
industrial chain the Company has 3 production bases in Shanghai Ningbo and
Jiaxing of Zhejiang Province and an annual capacity over 70000 tons taking a
leading position in China and synergizing well with other business segments.The Company has taken the lead in the application of digitalization and
Chromium-free coating technology and has the world’s advanced chromium-
free coating production line to ensure that the product quality meets the "EU
ROHS Directive" standards. The multifunctional composite coating developed
by the Company has been awarded the honor of "National Key New Product"
"Shanghai Key New Product" and " Quality Trusted Key Brand of China's
Environmentally Friendly Product" several times. The Company has
established strategic partnerships with globally recognized brands such as
Delta Geomet and Zintech. Customers widely spread in industries such as
automobile rail transit wind power mechanical engineering and construction.The Company has completed the order delivery of the core components of the
Shenzhou spacecraft for many times.
(2) General aviation aircraft manufacturing business
In April 2020 the Company acquired 55% equity of Wanfeng Aircraft Industry
which thereby became a Company’s controlling subsidiary. Wanfeng Aircraft
Industry is a specialized general aviation aircraft manufacturer integrating
independent R&D top-level design advanced manufacturing and sales
services. Its main revenue sources from aircraft sales after-sales services
aircraft manufacturing licensing and other revenues. Its subsidiary Diamond
Aircraft has the cutting-edge IPs new material technology and advanced
manufacturing with three design and R&D centers (Austria Canada Czech
Republic) one provincial engineering center (China) and three manufacturing
bases (Austria Canada China). Customers include flight academies airlines
aviation clubs and private pilots and they are supported by 192 service centers
in 90+ countries.In February 2021 Wanfeng Aircraft Industry introduced Qingdao Wansheng
Chengfeng Equity Investment Partnership (Limited Partnership) controlled by
Qingdao City Construction Investment Group Co. Ltd as a strategic investor.Post transaction the Company retains 55% of the shares of the Aircraft Industry
with Qingdao Wansheng Chengfeng Equity Investment Partnership (limited
partnership) holding 35% and Wanfeng Aviation Industry holding 10% of the
shares in Aircraft Industry respectively. The Company will work closely with its
partners to accelerate the growth of and tap the trillion-dollar domestic general
aviation market and strive to build Wanfeng Aircraft Industry into a global leader
of innovative manufacturing. With the promulgation of supportive national
policies such as the Overall Plan for Building The Low-altitude Flight Service
Guarantee System and the China Civil Aviation Four Features Airport
Construction Action Plan (2020-2035) China’s general aviation industry has
begun to accelerate. The aircraft manufacturing business will become a new
growth engine for the Company in near future.II. Significant Changes in Main Assets
1. Significant changes in main assets
Main assets Explanation on Major Changes
At the end of 2020 equity decreased by RMB 12253800 compared with
the beginning of the year a decrease of 69.8% mainly due to the
Equity withdrawal of the Aircraft Industry from the original 20% equity of China
Electronics Technology Group Wuhu General Aviation Industry Research
Institute Co. Ltd.At the end of 2020 fixed assets decreased by RMB 241196200
Fixed assets compared with the beginning of the year down 4.72% mainly due to the
depreciation of fixed assets.At the end of 2020 intangible assets decreased by RMB 112746600 or
Intangible assets 6.34% from the beginning of the year mainly due to the amortization of
intangible assets.Construction in progress at the end of 2020 decreased by RMB
167378700 compared with the beginning of the year a decrease of
Construction in progress
39.26% which was mainly due to the fact that the assets of the Meridian
US plant reached a usable state and transferred to fixed assets.At the end of 2020 cash & cash equivalents decreased by RMB
Cash & cash equivalents 777775100 or 31.71% from the beginning of the year mainly due to the
payment of acquiring 55% of equity in the Aircraft Industry.At the end of 2020 other receivables decreased by RMB 848007500
Other receivables from the beginning of the year or 92.54% mainly due to the recovery of
financial assistance from controlling shareholders and related parties.The development expenditure in 2020 is RMB 70537900 at the end of the
Development expenditure year mainly due to the capitalization of the Aircraft Industry's research and
development expenses.The deferred income tax assets at the end of 2020 increased by RMB
74732200 over the beginning of the year an increase of 39.60% which
Deferred tax assets was mainly due to the steady growth of the aircraft manufacturing
business without compensating the recognition of deferred income tax
assets for losses.in the current period
At the end of 2020 other non-current assets decreased by RMB
43194500 compared with the beginning of the year a decrease of
Other non-current assets
85.27% which was mainly due to the decrease in prepayments for
equipment during the period.2. Major overseas assets
□Applicable √Not applicable
III. Core Competencies Analysis
The Company is required to comply with the disclosure requirements of the
Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 16-
Listed Companies Engaged in Automobile Manufacturing Related Business.By the acquisition of Aircraft Industry the Company has established the “dual-engine” growth strategy in lightweight auto parts and general aviation aircraft
manufacturing. Whether in the auto parts industry or the general aviation
aircraft industry the Company has competitive advantages in terms of leading
industry position brand customers global bases R&D technology global
enterprise management and unique corporate culture. During the reporting
period the Company did not experience any serious impact on its core
competitiveness due to equipment or technology upgrades and the departure
of core management teams or key technical personnel.1. Global leader advantage
Growing over the past two decades the Company has become a leader in the
automotive parts sector specialized in lightweight applications of metal
materials "magnesium alloys aluminum alloys and high-strength steels". It’s
subsidiary Meridian a global leading supplier of magnesium alloy parts has
cutting-edge technology of magnesium alloy design development and
manufacturing. The Company also operates the world-leading aluminum alloy
wheels manufacturing business. Besides Wuxi Xiongwei another subsidiary
is a leading manufacturer of high-strength steel sheet stamping auto parts in
China.As the world’s top 3 general aviation aircraft manufacturer Aircraft Industry has
a high reputation leading in this field. According to GAMA (General Aviation
Manufacturers Association) data the aircraft delivered by Diamond Aircraft in
2019 accounted for 15.4% of the global piston general aviation aircraft delivered
that year. It has three major aircraft manufacturing bases in Austria Canada
and China (Zhejiang Xinchang). Its subsidiary Diamond Aircraft company has
the competitive advantages in engine manufacturing new material technology
and advanced manufacturing. Our customers are in Europe North America
Asia-Pacific Middle East and other regions.2. Intelligent manufacturing advantage
The intelligent manufacturing system focuses on Industry 4.0 and
transformation & upgrading reflecting efficiency improvements. By
procurement of cutting-edge intelligent manufacturing equipment automation
of existing production lines and construction of new smart factories the
Company has transformed and upgraded production improved labor efficiency.At present the company has 8 proprietary core technologies including fully
automatic casting system large-scale thin-wall magnesium alloy die-casting
technology dynamic balance control technology casting lightweight casting
technology etc. which have been all commercialized.3. Top-notch customer advantageFollowing “26313+N" customer strategy the auto parts business has beenintegrated into the supply chain of core customers forming a market pattern of
"traditional ICE cars + new energy vehicles" and "OEMs + aftermarket". The
Company has long-term cooperation with top-notch brands— Porsche BMW
Mercedes-Benz. Land Rover Tesla Volkswagen Audi Toyota GM Ford
Volvo Nissan Hyundai and other top international automakers while providing
service to emerging new energy vehicles brands. In terms of motorcycle
aluminum alloy wheels business the Company has established a global
customer base with "Honda and Yamaha" as strategic partners Dachangjiang
Suzuki and HERO as major customers complemented by BMW Harley-
Davidson and Ducati in the premium market.Diamond Aircraft holds a total of 39 trademarks and has obtained the Design
Organization Approval (DOA) and the DUA Aeronautical R&D Organization
Certification issued by the European Aviation Safety Agency (EASA). It’s one
of the few companies in the industry to obtain these certificates.4. Global scale production advantage
The Company's auto parts and aircraft manufacturing businesses have
established manufacturing bases and R&D centers in 10 countries around the
world including 18 plants in 7 provinces of China. Meridian has formed a global
network with full production processes in 7 physical factories across 5 countries
in America Europe and Asia. The Company’s motorcycle wheel subsidiary has
built production facilities in India. Aircraft Industry has established main
production bases in Austria Canada and China with 192 sales & service
centers in more than 90 countries around the world. The Company's global
network has complementary advantages by resource sharing and interactive
development.5. R&D technological advantage
Aiming to "grow stronger by science and technology" the Company always
takes technological innovation as an important measure to improve core
competitiveness. Making full use of the resources offered by its controlling
shareholder Wanfeng Group such as academician workstation and doctoral
workstation and relying on the national technology center of China the
Company has long-term industry-university-research cooperation with China
Automotive Technology Research Center Beijing Machinery Research Institute
and Zhejiang University. The Company has a global R&D center for lightweight
magnesium alloy in Canada as well as aircraft R&D centers in Austria
Canada and Czech. This promotes the advancement of new projects and
increases the added value of products in high-end markets. The Company has
accumulated over 1400 patents. Relying on accumulated production
experience and enriched R&D capabilities the Company has participated in the
drafting and revision of national (industry) standards for the wheel industry for
several times. The Company presided over or participated in the formulation of
3 international standards 27 national and industry standards of which 9 were
drafted. The continuous R&D investment has enabled the Company to seize
the opportunity in China's aluminum wheel field and gradually become the
forefront in international wheel industry. Meridian won the 2020 Automotive
Magnesium Casting Product Design Award issued by the International
Magnesium Association (IMA) and the new diamond DA50 model won the
German aviation magazine Aerokurier 2020 Most Innovative Award in 2020.The Company reserves a large number of general aviation R&D and design
talents and has general aircraft R&D and design technologies featuring aero
engines composite materials and new piston fixed-wing aircraft design. To
comply with the requirements of the European Aviation Safety Agency on the
roadmap of green energy aviation technology development the Company
pioneered the design and development of hybrid aircraft and has successfully
test flighted the first gasoline-electric hybrid aircraft achieving a breakthrough
in the general aviation industry.6. International management advantage
From serving international customers in early stage to the subsequent cross-
border M&A and integration the Company successfully explored its own path
forming Wanfeng's unique management solution and team. By integrating
Wanfeng's philosophy with local culture the Company has achieved
remarkable success among its Chinese peers.Through the existing integrated management cost control management and
quality and safety management system advantages of listed companies the
Company has strengthened building international and professional teams
provided core personnel with competitive salaries and related benefits. The
Company fully promoted exchanges between excellent domestic and cross-
board management and R&D technical personnel. Through the promotion of an
effective performance management system the establishment and
improvement of a talent training system the Company creates a good
atmosphere for rapid growth and development of talents enhances team
cohesion and ensures the stability of core personnel.7. Corporate culture advantage
As an international conglomerate in the advanced manufacturing field for nearly
20 years the Company has always adhered to the values of "eternal value
enhancement and continuous dedication to society" advocating the business
philosophy of "people-oriented governing the enterprise according to law and
driving success with innovation" and creating a "work happily and live joyfully"
atmosphere for employees. The Company has always focused on the real
economy promoting the spirit of craftsmanship. By introducing international
talents the Company has laid a solid foundation for achieving the vision of "
being recognized globally and becoming a long-standing enterprise" and the
goal of “being strong reputable and sustainable”.Section IV: Management’s Discussion and Analysis
I. Business review for the reporting period
In 2020 the Company booked total revenue of 10.699 billion yuan a decrease
of 0.82% and 15.32% from before and after retrospective adjustment
respectively. The Company realized total net profit of 566 million yuan
attributable to shareholders of listed company a decrease of 26.45% and 36.83%
from before and after retrospective adjustment respectively.In April 2020 the Company acquired 55% of the shares in Wanfeng Aircraft
Industry and established a growth strategy driven by the "dual-engine". The
automotive metal lightweight parts business has been negatively affected by
the Covid-19 pandemic and China-US trade frictions. The Company actively
and orderly resumed work and strengthened staff training and protection and
implemented cost reduction and efficiency enhancement initiatives while
actively responding to trade tariff issues. The Company reviewed its business
strategies improved customer communication adjusted business structure
effectively reduced the decline in operating performance and generated follow-
up growth momentum. The general aviation aircraft business has also been
affected to a certain extent by the Covid-19 pandemic which is mainly reflected
in the delays in the acceptance and delivery of foreign aircraft orders and
revenue recognition. The Company strengthened collaborations with
government agencies of countries where it has operations resumed factory
production in an orderly manner and launching of new aircraft models.Meanwhile the Company actively carried out licensing and technology transfer
business for aircraft and components achieving mass production and sales
from Chinese aircraft market. There efforts have reduced the impact of foreign
delivery delays on operating performance and contributed to a substantial
increase in operating performance. The Company exceeded the first-year
performance guarantee and is well-positioned for sustainable development.
(1) Enhance internal control system
The Company optimized the organizational structure and management process
comprehensively enhanced the supervision of internal audit department to
improve the depth and breadth of internal audit work improved the internal
control procedures strengthened internal financial management and
monitoring to prevent financial risks and internal control risks.
(2) Focus on resumption of operations and advance market development
steadily
From January 2020 the Covid-19 started to spread in China and other
countries. Governments across the globe have introduced a series of restrictive
quarantine measures to prevent the spread of COVID 19 pandemic. The
Company took swift action in response to these restrictions by ensuring the
health and safety of our employees and our domestic factories resumed
production in mid-February 2020. Due to the evolving pandemic and
government policies the resumption of overseas factories was delayed to May
2020. Based on the current global economic and industry situation the
Company actively made efforts to acquire new energy vehicles (NEVs)
customers in the domestic market and accelerate the development of new
products. The Company’s magnesium alloy and stamping business units have
been awarded designated projects by Faurecia China (Tesla Tier one supplier)
and Yanfeng Adient Evergrande New Energy Vehicle. The aluminum alloy
wheel business obtained new projects from Toyota in Japan and FAW Toyota
FAW Hongqi and BMW Brilliance. The motorcycle aluminum alloy wheel
business has developed steadily as a whole. As the demand for large-
displacement personalized motorcycles increases the Company optimized
product structure and production network upgraded technologies and
successfully increased supplies to Qianjiang Suzuki Indian Honda Yamaha
and Baijiajie. In terms of the coating business the Company increased the
incremental orders from existing customers advanced the localization of the
supplier systems of Mercedes-Benz BMW and Geely and expanded into wind
power and 5G markets.
(3) A clear pathway to develop automotive lightweight parts business
As a lightweight magnesium alloy large-scale casting structure design process
and mold designer the Company focuses on lightweight application of metal
materials "magnesium alloy-aluminum alloy-high strength steel" providing
customers with low-cost optimization and turn-key solution. At present the
Company's mature magnesium alloy products such as cross-car beam tailgate
inner panel front-end frame etc. total about 100Kg. It has become the first
choice for OEMs to cooperate in automotive magnesium alloy lightweight fields.In 2020 the Company established a T3+1 strategic cooperation mechanism
with T3 (China FAW Group Co. Ltd. Dongfeng Automobile Co. Ltd. and
Chongqing Changan Automobile Co. Ltd. "T3"). The Company is responsible
for design manufacturing and service for large-scale magnesium alloy castings.The first batch of R&D products under the T3+1 mechanism focused on cross
car beam brackets wheels front-end modules and gearbox housings etc.involving nearly ten vehicle models of which products under development or
quotation include cross car beam brackets front-end modules display case
screen lifter bracket and other magnesium products. With the continuous
advancement of T3+1 alliance technology R&D it will greatly promote the
application and development of magnesium alloy parts in China's automobile
industry and form a market-driven demonstration effect.In 2020 new energy vehicles have shown strong resilience and endogenous
power. The annual production and sales of 1.367 million and 1.336 million
vehicles in Chinese market were completed representing an increase of 10.9%
and 7.5% year-on-year respectively maintaining a good growth trend. With its
mature applications in new energy vehicles OEMs such as Tesla NIO
Xiaopeng and its advantages in product and technology innovation global
resource synergy and cost leadership Meridian provides lightweight solutions
for new energy vehicles and opens up a new era for magnesium alloys
application in China.
(4) Acquired 55% shares from Aircraft Industry and established “dual-engine” growth strategy
With advanced manufacturing as its core the Company has become a global
leader in aluminum alloy wheels and lightweight magnesium alloy parts and a
domestic leader in environmentally friendly Dacromet coating and high-strength
steel die stamping parts. To diversify and expand in the “broad transportation”
sector the Company acquired a controlling stake in general aviation aircraft
manufacturing business leaping from auto parts to aircraft and aero parts
manufacturing field. This strategic move will widen our market access profit
avenues and improve the asset quality and risk tolerance ability of the Company
ensuring the long-term sustainable growth. The establishment of “dual-engine”
growth strategy i.e. automotive lightweight parts and general aviation aircraft
sets a clear direction for the Company to grow in the long run.With the vision of “becoming a advocate in automotive light-weighting trend”
the Company’s auto parts business has shifted from multiple sub-leading silos
model to comprehensive synergistic development. The Company will capitalize
on its leading market positions in "magnesium alloy aluminum alloy high-
strength steel metal parts" and strengthen collaboration in brand customers
R&D global network and management. Besides the Company has treated
NEVs as an important market development focusing on key customers and
continuously increasing the value per customers per brand and per vehicle to
achieve the "1+1>2" synergy goal.Capitalizing on the leading technological advantage of Diamond brand the
Company will expand the domestic flight training market develop short-
distance transportation Air Taxi government public services business travel
flights aviation sports and competition markets while strengthening the aircraft
after-sales market to achieve rapid growth in domestic market. Meanwhile it
will consolidate and enhance aircraft sales in overseas market actively expand
licensing business to ensure the sustained and steady growth of overseas
market and build the aircraft manufacturing business into a leader in this field.The Company is required to comply with the disclosure requirements of the
Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 16-
Listed Companies Engaged in Automobile Manufacturing Related Business.Production and operation of vehicle manufacturing during the reporting period
□ Applicable √ Not applicable
Production and operation of auto parts during the reporting period
√ Applicable □Not applicable
Production Volume Sales Volume
Same period Same period Current
of previous YoY % Current period of previous YoY %
period
year year
Classified by types of parts
Automotive
aluminum alloy 14174994.00 16932994.00 -16.29% 14087508.00 17180720.00 -18.00%
wheels (set)
Stamping parts
230722938.00 261183567.00 -11.66% 228255135.00 271869402.00 -16.04%
(set)
Magnesium
alloy die
14869805.00 18511085.00 -19.67% 13138601.00 16303410.00 -19.41%
casting parts
(set)
Classified by aftermarket
Automotive
aluminum alloy
2104207.00 1734183.00 21.34% 1774347.00 1491868.00 18.93%
wheels AM（set）
Classified by region
Other classification
Reasons for a year-on-year change of more than 30%
□ Applicable √ Not applicable
Parts sales model
The Company's auto parts sales are mainly OEM-based.The Company operates auto finance business
□ Applicable √ Not applicable
The Company operates new energy vehicle related business
√ Applicable □ Not applicable
Production and operation of new energy vehicles and parts
Unit: RMB unless otherwise stated
Production Production Volume
Product Category Sales Volume Sales Revenue
Capacity (set) (set)
Automotive aluminum
-- 648094 677321 167711492.15
alloy wheels
Stamping parts -- 3138575 2867775 14089208.52
Magnesium alloy die
-- 84193 58834 19972503.69
casting parts
New energy vehicle subsidy income
None
II. Main Business Analysis
1. Overview
Please refer to details in “I. Overview” of “Section IV Management Discussionand Analysis”
2. Revenue and cost
(1) Operating Revenue structure
Unit: RMB
2020 2019
% of % of Operating YoY %
Amount Amount Operating
Revenue
Revenue
Total operating
10699224904.57 100% 12635131976.26 100% -15.32%
revenue
By industries
Automotive metal
lightweight parts 9068833929.89 84.76% 10787734491.15 85.38% -15.93%
manufacturing
Aircraft
1630390974.68 15.24% 1847397485.11 14.62% -11.75%
manufacturing
By products
Automotive metal
9068833929.89 84.76% 10787734491.15 85.38% -15.93%
lightweight parts
General aviation
1630390974.68 15.24% 1847397485.11 14.62% -11.75%
aircraft
By region
Mainland China 4686803547.58 43.81% 5250462160.15 41.55% -10.74%
Overseas 6012421356.99 56.19% 7384669816.11 58.45% -18.58%
(2) Industries products or regions accounting for more than 10% of the
Company’s operating revenue or operating profit.√ Applicable □ Not applicable
Unit: RMB
YoY %
Gross YoY % of YoY % of of
Operating Operating Cost Profit Operating
revenue Operating Gross
Margin Revenue Cost Profit
Margin
Classified by Industry
Automotive
metal
lightweight 9068833929.89 7392811290.04 18.48% -15.93% -14.09% -1.75%
parts
manufacturing
Aircraft
1630390974.68 1146598775.38 29.67% -11.75% -11.31% -0.35%
manufacturing
Total 10699224904.57 8539410065.42 20.19% -15.32% -13.73% -1.47%
Classified by Products
Automotive
metal
9068833929.89 7392811290.04 18.48% -15.93% -14.09% -1.75%
lightweight
parts
General
aviation 1630390974.68 1146598775.38 29.67% -11.75% -11.31% -0.35%
aircraft
Total 10699224904.57 8539410065.42 20.19% -15.32% -13.73% -1.47%
Classified by Region
Mainland
4686803547.58 3838683119.22 18.10% -10.74% -1.61% -7.59%
China
Overseas 6012421356.99 4700726946.20 21.82% -18.58% -21.61% 3.02%
Total 10699224904.57 8539410065.42 20.19% -15.32% -13.73% -1.47%
If the company’s principal business data caliber is adjusted during the reporting
period the company’s principal business data after caliber adjusted at the end
of the reporting period of last year
□ Applicable √ Not applicable
(3) If revenue from physical products sales greater than revenue from
providing services
√ Yes □ No
Industry
Items Unit 2020 FY 2019 FY YoY %
classification
sales
10295928707.36 12240494250.98 -15.89%
volume
Manufacturing production
RMB 8140569295.3 9297765650.22 -12.45%
industry volume
inventory
745299986.77 779307046.36 -4.36%
volume
Explanations on relevant data changed for more than 30% on a year-over-year
base.□Applicable √Not applicable
(4) The implementation of the major sales contracts that the Company has
signed up to the reporting period.□Applicable √Not applicable
(5) Composition of operating costs
Classified by industry
Unit: RMB
2020 FY 2019 FY
Cost
Industries % of % of YoY %
items Amount operating Amount operating
cost cost
Direct material 4576690709.14 64.34% 5192093268.87 62.39% -11.85%
Labor 868846427.62 12.21% 1082744369.16 13.01% -19.76%
Auto parts
manufacturing
Depreciation &
1117423142.42 15.71% 1334103265.83 16.03% -16.24%
consumables
Fuel power 420297291.69 5.91% 542357997.58 6.52% -22.51%
Outsourcing
processing 130458718.16 1.83% 170920400.82 2.05% -23.67%
cost
Sub total 7113716289.03 100% 8322219302.26 100% -14.52%
Direct material 805804284.12 70.50% 838066207.84 64.86% -3.85%
Labor 209858641.99 18.36% 316241746.51 24.47% -33.64%
Depreciation &
112309518.91 9.83% 121485027.07 9.40% -7.55%
consumables
Aircraft
manufacturing
Fuel power 9075584.32 0.79% 10441846.95 0.81% -13.08%
Outsourcing
5858073.54 0.51% 5911463.12 0.46% -0.90%
processing
Sub total 1142906102.88 100% 1292146291.49 100% -11.55%
Notes
None
(6) Whether the consolidation scope has changed during the reporting
period
√Yes □No
During the reporting period the Company acquired 55% of the equity of
Wanfeng Aircraft Industry Co. Ltd. for RMB 2418075000 and completed the
industrial and commercial change registration of the equity transfer on April 16
2020 and the consolidated scope of the Company's statements added
Wanfeng Aircraft Industry Co. Ltd.
(7) Significant changes or adjustments to the Company’s business
products or services during the reporting period
√Applicable □ Not applicable
During the reporting period the consolidated scope of the Company's
statements added Wanfeng Aircraft Industry Co. Ltd. The Company’s principal
business scope includes general aviation aircraft.
(8) Main customers and main suppliers
The Company's main customers
Total sales amount of the top five customers (RMB) 2921615150.81
Total sales amount of the top five customers as a % of total
28.38%
annual sales
Sales from related parties among the top five customers as a %
0.00%
total annual sales
Profile of the Company's top 5 customers
% of total
No. Customer Name Sales (RMB)
sales
1 First 1156533240.24 11.23%
2 Second 805714890.04 7.83%
3 Third 422130318.19 4.10%
4 Fourth 323931853.67 3.15%
5 Fifth 213304848.67 2.07%
Total - 2921615150.81 28.38%
Other information about Company’s customers
□Applicable √Not applicable
The Company's main suppliers
Total sales amount of the top five suppliers (RMB) 1830796702.40
Total sales amount of the top five suppliers as a % of total annual
23.65%
sales
Sales from related parties among the top five suppliers as a %
0.00%
total annual sales
Profile of the Company's top 5 suppliers
% of total
No. Supplier Name Purchase (RMB)
purchase
1 First 632766433.08 8.17%
2 Second 403054824.11 5.21%
3 Third 344790054.40 4.45%
4 Fourth 238938716.18 3.09%
5 Fifth 211246674.62 2.73%
Total 1830796702.40 23.65%
Other information about Company’s suppliers
□Applicable √Not applicable
3. Expense
Unit: RMB
Notes to significant 2020 FY 2019 FY YoY %
changes
Mainly due to the
adjustment of the
transportation expenses
that were originally
Sales expense 202937418.90 326373313.10 -37.82% collected as sales
expenses to the
fulfillment costs
according to the new
revenue standards
Administration
590837746.38 669461795.85 -11.74%
expense
Financial expense 269122000.97 219013198.53 22.88%
R&D expense 337448870.68 446102958.85 -24.36%
4. Research and development investment
Percentage 2020 FY 2019 FY
change
Number of R&D personnel (person) 1576 1603 -1.68%
Proportion of R & D personnel 13.35% 14.49% -1.14%
R&D investment (RMB) 407986763.68 446102958.85 -8.54%
R&D investment as a percentage of
3.81% 3.53% 0.28%
operating revenue
Capitalized amount of R&D
70537893.00 0.00
investment (RMB)
Capitalized R&D expense as a
17.29% 0.00% 17.29%
percentage of R&D investment
Reasons for the significant change of total R&D investment as a percentage of
operating revenue as compared to last year
□Applicable √Not applicable
Reasons for the substantial changes in the capitalization rate of R&D
investment and its rationality
√Applicable □Not applicable
The capitalization rate of R&D investment in 2020 is 17.29% which is mainly
due to the capitalization of R&D expenses of the controlling subsidiary Aircraft
Industry.5. Cash flow
Unit: RMB
Items 2020 FY 2019 FY YoY %
Cash inflow from operating
11092029864.02 12823629497.66 -13.50%
activities
Cash outflow from operating
9356248957.60 11403260617.89 -17.95%
activities
Net cash flow from operating
1735780906.42 1420368879.77 22.21%
activities
Cash inflow from investment
1673233118.74 2492182608.25 -32.86%
activities
Cash outflow from investment
598702345.98 3109509375.99 -80.75%
activities
Net cash flow from investment
1074530772.76 -617326767.74 274.06%
activities
Cash inflow from financing
4747409710.84 5210444193.61 -8.89%
activities
Cash outflow from financing
7578184122.46 5786693748.16 30.96%
activities
Net cash flow from financing
-2830774411.62 -576249554.55 -391.24%
activities
Net increase in cash and cash
-14281113.87 258679854.07 -105.52%
equivalents
Explanation of the main influencing factors of significant year-on-year changes
in relevant data
√Applicable □Not applicable
1. The net cash flow from operating activities increased by 22.21% over the
same period last year mainly due to the decrease in the payment of taxes
employee compensation and benefits and related expenses during the
reporting period due to the impact of the epidemic.2. Cash inflow from investment activities decreased by 32.86% from the same
period last year mainly due to the year-on-year decrease in other cash
received related to investment activities which was due to the return of
funds and interest from related parties in the same period last year.3. Cash outflow from investment activities decreased by 80.75% compared
with the same period last year which was mainly due to the borrowing of
funds from related parties in the same period last year.4. Net cash flow from investment activities increased by 274.06% compared
with the same period last year which was mainly due to the significant
decrease in cash outflow from investment activities compared with the same
period last year.5. Cash outflow from financing activities increased by 30.96% year-on-year
which was mainly due to the payment for the acquisition of 55% of the equity
in the aircraft industry during the reporting period.6. The net cash flow from financing activities decreased by 391.24% over the
same period of the year mainly due to the impact of cash outflows from
financing activities.7. The net increase in cash and cash equivalents decreased by RMB 273
million compared with the same period last year which was mainly due to
the decrease in net cash flow from investment activities compared with the
same period last year.Explanation of the reason for the significant difference between the Company’s
net cash flow generated from operating activities during the reporting period
and the current year’s net profit.□Applicable √Not applicable
III. Non-Core Business Analysis
√Applicable □Not applicable
Unit: RMB
Proportion to
Amount Notes to Changes Sustainability
Net Income
Investment Income 612550.85 0.07% no
Gains or Losses
from Change in Fair 2246554.36 0.27% no
Value
Mainly for the
provision of asset
Asset Impairment -10179361.63 -1.23% impairment losses no
after the inventory
valuation
Mainly for this
reporting period
Non-operating Meridian’s US
43050711.82 5.19% no
Revenue factory received
insurance claims
Mainly for public
welfare donation
Non-operating Cost 9986870.11 1.20% expenditure and no
asset destruction
and scrapping
Mainly government
Other Gains 104562193.16 12.61% no
subsidies
Mainly accrued for
Credit Impairment bad debt losses of
-7223519.05 -0.87% no
Loss accounts
receivable
IV. Assets and Liabilities Analysis
1. Material Changes of Assets
The Company will implement the new revenue standards or new lease
standards for the first time since 2020 and adjust the implementation of relevant
items in the financial statements at the beginning of the year.√Applicable □Not applicable
Unit: 10000 RMB
2020 Year
2020 Year End
Beginning
Notes to Significant
YoY %
% of % of Changes
Amount Total Amount Total
Assets Assets
Mainly due to payment
Cash and for acquiring 55% equity
Cash 167498 10.49% 245275 13.27% -2.78% of Aircraft Industry
Equivalents during the reporting
period
Account
231498 14.49% 255570 13.82% 0.67%
Receivables
Inventory 230991 14.46% 239395 12.95% 1.51%
Investment
0.00
Property
Mainly due to the
withdrawal of the Aircraft
Industry from the original
Long-term 20% equity of China
Equity 57 0.00% 1261 0.07% -0.07% Electronics Technology
Investment Group Wuhu General
Aviation Industry
Research Institute Co.Ltd.Fixed Asset 487246 30.50% 511366 27.66% 2.84%
Mainly because the
Construction assets reach the usable
25897 1.62% 42635 2.31% -0.69%
in Progress state and turn into fixed
assets
Mainly due to the needs
of operation and
Short-term acquisition projects
354430 22.19% 307012 16.61% 5.58%
Borrowings during the reporting
period which increased
bank loans
Mainly due to the needs
of operation and
Long-term acquisition projects
117920 7.38% 116522 6.30% 1.08%
Borrowings during the reporting
period which increased
bank loans
Mainly due to the needs
of operation and
Non-current
acquisition projects
Liabilities due 69443 4.35% 57197 3.09% 1.26%
during the reporting
within one year
period which increased
bank loans
Prepaid
15814 0.99% 17360 0.94% 0.05%
Payments
Mainly due to the
recovery of financial
assistance from
Other Account
6832 0.43% 91633 4.96% -4.53% controlling shareholders
Receivables
and related parties
during the reporting
period
Other Current
9560 0.60% 11701 0.63% -0.03%
Asset
Intangible
166543 10.43% 177818 9.62% 0.81%
Asset
Goodwill 166299 10.41% 170116 9.20% 1.21%
Deferred tax
26344 1.65% 18871 1.02% 0.63%
asset
Other current
9560 0.60% 11701 0.63% -0.03%
Asset
Notes
19287 1.21% 21860 1.18% 0.03%
Payables
Contract
51284 3.21% 64857 3.51% -0.30%
Liabilities
Mainly due to the
decrease in the amount
of engineering
Other Account equipment payable
38422 2.41% 72729 3.93% -1.52%
Payables during the reporting
period and the payment
of Suzhou Yucuiyuan's
investment
Mainly due to the steady
growth in the
performance of the
aircraft manufacturing
Differed Tax
26863 1.68% 26823 1.45% 0.23% business the deferred
Liabilities
income tax assets are
recognized in the current
period without making
up for losses
2. Assets and liabilities Measured at Fair Value
√ Applicable □ Not applicable
Unit: 10000 RMB
Chang
e in
Profit
Cumulati
and
ve Accrual Curre
Openin Loss Current Closin
Change Impairmen nt Other
g throug Purcha g
Items in Equity ts in the Sale Chang
Balanc h Fair se Balanc
through Current Amou es
e Value Amount e
Fair Period nt
in the
Value
Curre
nt
Period
Financial
Assets
1. Held-
for-
trading
financial
assets
6303 196 5997 503
(Excludin
g
Derivative
Financial
Assets)
2.Derivati
ve
29 29
Financial
Assets
Subtotal
of
6303 225 5997 531
financial
assets
Total 6303 225 5997 531
Financial
0.00 0.00
Liabilities
Whether there were any material changes on the measurement attributes of
major assets of the Company
During the reporting period:
□ Yes √ No
3. Assets right restrictions as of the end of reporting period
Details are disclosed in "Section XII Item 7 81: Assets with Restricted
Ownership or Use Right" of this report
V. Investment Analysis
1. Overview
√Applicable □ Not applicable
Investment during the Reporting Investment over the
Period Corresponding Period YOY %
(RMB) of Last Year (RMB)
2769704594.31 1031209167.78 168.59%
2. Significant equity investment during the reporting period
√Applicable □ Not applicable
Unit: Million RMB
Current
If
Invested period
Main Investment Invested Funds Expected involved Disclosure Disclosure
company Shareholding Progress investment
business method amount source income in date reference
name profit or
lawsuit
loss
"Announcement on
the Acquisition of
55% Equity and
Related
Completed
Aircraft Transactions of
Aircraft Self- 55% Feb 25
manufacturing Acquisition 2418 55.00% 290 340 Yes Wanfeng Aircraft
Industry funded equity 2020
and sales Industry Co. Ltd."
transfer
disclosed in
"Securities Times"
and
www.cninfo.com.cn
Total -- -- 2418 -- -- -- 290 340 -- -- --
3. Significant non-equity investment during the reporting period
□ Applicable √ Not applicable
4. Financial asset portfolio
(1) Securities Investments
□ Applicable √ Not applicable
No securities investment during the reporting period
(2) Derivatives Investments
□ Applicable √ Not applicable
No derivatives investments during the reporting period
5. Usage of raised funds
□ Applicable √ Not applicable
No usage of raised funds during the reporting period
VI. Disposal of Significant Assets and Equity
1. Disposal of significant assets
□ Applicable √ Not applicable
During the reporting period there was no disposal of significant assets.2. Sales of significant equity
□ Applicable √ Not applicable
VII. Major Subsidiaries and Investees Analysis
√ Applicable □ Not applicable
Information about major subsidiaries and investees that contribute above 10% of the Company’s net Profit.Unit: RMB
Company Company Registered Operating Operating
Principal business Total assets Net assets Net profit
name Type capital revenue profit
Mainly engaged in the design
Wanfeng research and development
MLTH manufacturing and sales of USD
Subsidiary 3435371228.62 2076513724.18 2557650411.18 228875241.33 176910509.14
Holdings lightweight magnesium materials 76001900
Co. Ltd and components for automobiles
and motorcycles
Wuxi Mainly engaged in the design
Xiongwei manufacture and sales of
RMB
Precision Subsidiary automotive stamping parts and their 1192080356.54 914479480.16 753572627.73 135228963.33 117389834.0679000000
Technology automated stamping dies and
Co. Ltd. precision molds
Mainly engaged in the design
experiment production sales and
Wanfeng
maintenance of general aircraft
Aircraft RMB
Subsidiary helicopters aviation engines 4690103855.76 3645828950.31 1630390974.68 293762210.43 340429883.23
Industry 60000000
avionics and mechanical systems;
Co. Ltd.technology development and
consulting services.Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
Company name Method of acquisition and disposal of subsidiaries Impact on performance
The company acquired 55% of the shares of Wanfeng Aircraft The net profit of the Aircraft Industry in 2020 is
Wanfeng Aircraft Industry Co. Ltd. Industry Co. Ltd. and completed the industrial and commercial 340429900 yuan and the contribution goes to the
change registration of the equity transfer on April 16 2020 parent net profit of 187236400 yuan.Explanation on main shareholding companies
1. Wholly owned subsidiary: Wanfeng MLTH Holdings Co. Ltd
Wanfeng MLTH Holdings Co. Ltd was established in the United Kingdom on
November 6 2013 with its management headquarter in Ontario Canada.Wanfeng Meridian is a global leader in the magnesium alloy die-casting
business. It has cutting-edge core technology in the industry. Its production
bases are located in the United States Canada the United Kingdom Mexico
China and other places. It’s in the business of design R&D manufacturing
and sales of lightweight magnesium materials and automobiles and
motorcycles components. The registered capital is 76001900 US dollars and
the Company holds 100% of the shares.As of December 31 2020 total assets were 3345371200 yuan net assets
were 2076513700 yuan; operating revenue in 2020 was 2576504000 yuan;
net profit was 176910500 yuan a decrease of 25.89% from the same period
last year mainly due to the impact of the epidemic and orders decrease.2. Controlling subsidiary: Wuxi Xiongwei Precision Technology Co. Ltd.Wuxi Xiongwei Precision Technology Co. Ltd. was established in June 2003.The main business is design manufacture and sales of automotive stamping
parts automated stamping dies and precision molds. The registered capital is
RMB 79 million and the Company holds 95% of the shares.As of December 31 2020 total assets of 1190080400 yuan net assets of
914479500 yuan; operating revenue of 753572600 yuan in 2020; net profit
of 117389800 yuan a decrease of 19.85% from the previous year mainly due
to the decrease in gross profit affected by the epidemic.3. Controlling subsidiary: Wanfeng Aircraft Industry Co. Ltd.Wanfeng Aircraft Industry Co. Ltd. was established in March 2018. Aircraft
Industry is a professional general aircraft manufacturer integrating independent
R&D top-level design advanced manufacturing and sales services. It is one
of the world’s top three fixed-wing general aircraft manufacturers. With 600
million yuan registered capital the Company holds 55% of the shares.As of December 31 2020 the total assets were 46901039 00 yuan and the
net assets were 3645829900 yuan; the operating revenue in 2020 was
1630391000 yuan; the net profit was 340429900 yuan an increase of 48.07%
over the same period of the previous year mainly due to the optimization of
product structure and gross margin improvement and the release of domestic
production capacity.VIII. Structural Entities Controlled by the Company
□ Applicable √ Not applicable
IX. Outlook for the Future Development of the Company
In 2021 the Company will adhere to the general keynote of "seeking progress
while maintaining stability" focusing on the real economy promoting the spirit
of craftsmanship positioning in the big transportation taking the two-wheel
drive of industry and capital as the starting point and relying on the ability to
obtain and apply information and the system for a global enterprise. It
endeavors to become a differentiated and innovative enterprise from
competition build a corporate where each member can participate become a
global all-around leader in its segments realize the high-quality development
of the enterprise and maximize the value of the enterprise and become the
creator of the world’s advanced productivity.1. Optimize the business structure of automotive metal lightweight parts
and components vigorously promote the expansion of the
magnesium alloy business in the Asia-Pacific market realize the
defensive recovery growth of the aluminum alloy business and
conduct long-term strategic reassessment and arrangements for the
high-strength steel business
The Company's automotive metal parts industry focuses on the lightweight
application of "magnesium alloy-aluminum alloy-high strength steel" metal
materials with the vision of "becoming a global automotive metal parts light-
weighting promoter". The Company grasps global market trends aligns various
business units continuously optimizes the business structure and promote the
Company's growth through technology.
(1) The automotive wheel business in the aluminum alloy business may face
strong threats from China-US trade policies and domestic competitors for a
long time in the future. In the short term it will be affected by the increase
in upstream raw material prices and the shortage of downstream automotive
chips and the overall business will be on defensive-offense state. The
Company will adopt a differentiated strategy give full play to the Company's
forging process advantages increase the proportion of business in the
aftermarket and special-purpose fields and increase profitability; continue
to promote the "26313+N" customer target consolidate traditional
automobiles and actively expand new energy automobile business ;
Accelerate the establishment of international factories build a global
production and sales network and effectively avoid the ongoing and
possible future trade conflicts. The overall development of the Company's
motorcycle business is smooth and it will maintain its strategy of seizing
increments integrating stocks and developing mid-to-high end market
rapidly. The northern plant in India has made a good start and is
accelerating its deployment in the southern plant to seize the world’s largest
incremental market; integrating domestic production capacity transforming
smart factory production lines increasing the Company’s automated
production capacity and increasing its domestic market share; the
Company’s high-end motorcycle products continue to sell in the market. In
the future we will continue to increase cooperation with high-end
motorcycle manufacturers to build a technology-led moat. The high-strength
steel stamping parts business has reached long-term strategic cooperation
with the world’s top first- and second-tier suppliers Yanfeng Faurecia
Brose Autoliv etc. In the future it will focus on cultivating new projects such
as Japanese European and American customers and develop new energy
vehicle market. In 2021 the Company will pay more attention to the
advantages and disadvantages of high-strength steel in the field of auto
parts molding and re-evaluate and arrange its positioning in the "automotive
lightweight parts" industry.
(2) The magnesium alloy business continues to maintain a double-digit R&D
expense ratio and maintains an absolute lead in magnesium alloy
application technology. The total amount of applied products will reach
180Kg from the current 100Kg to 2025 and single vehicle usage will
increase from the current 1.5Kg Increase to 15Kg in 2025. The Company
will maintain a 65% market share in the North American market promote
the rapid development of the Asian market and gradually return to the
European market. In the North American market through in-depth on-site
cooperation with automobile OEMs the original business share is
maintained and the existing needs of customers are met. At the same time
the application of magnesium alloy components in the entire vehicle is
improved from the design side. In the Asian market especially in the
Chinese market the application of magnesium alloy components is
promoted. On the one hand the “T3+1” platform promotes the application
of state-owned platforms and traditional automotive magnesium alloycomponents On the other hand in new energy vehicle market use “NIOBusiness” template strengthen the research and development source
cooperation with the top 5 new energy vehicle manufacturers grasp the
opportunities of lightweight application in new energy vehicles. In the
European market strengthen cooperation with European OEMs and
increase the current capacity utilization rate of Asian plants.2. Build a global leader in the innovative manufacturing of general
aviation aircraft
The Company will focus on the vision of "becoming a global leader in the
innovative manufacturing of general aviation aircraft" aim to achieve the top
general aircraft manufacturing technology and sales volume in the world. The
Company will adopt the circular progressive model of "Leading R&D—
Licensing/technology transfer—Aircraft Manufacturing and Sales". High R&D
investment is to maintain the world's “leading” position “Licensing/technologytransfer” is to support R&D and profits “Manufacturing and sales" is to capturethe market share of mature markets. By matching the applicable scenarios of
various general aviation in developing countries the Company aims to
gradually realize the promotion and application of general aviation aircraft in
different countries and regions and becomes the "unicorn" in general aviation
sector.
(1) Research and development business. The Company acquired the
"Diamond" aircraft and successfully secured the "Crown" position of the
general aviation aircraft. From its entry in the general aviation field it has
achieved a world-class leading advantage. In the future it will continue to
invest in R&D and maintain its world leading position.· With the top R&D platform of Diamond brand aircraft we will continue
to develop the future general aviation aircraft EVTOL through self-
research and cooperation with top customers.· Continuously introduce competitive and leading new models in
accordance with the pace of aircraft development and certification.· From a global perspective focus on the "Laboratory Test Flight" project
and when the time is ripe assist it in transforming technology into
products and markets.
(2) Licensing/technology transfer business. Through planned "licensing"
business we will strengthen monetization of the Company's current and
future aircraft technology. For developing countries including China we will
carry out whole-aircraft licensing /technology transfer business to quickly
recoup funds to meet the Company's technology R&D funding needs and
at the same time increase the Company's basic profitability.· Through the licensing model build a domestic "production base" and
promote the industrialization of domestic general aviation aircraft.· Through the technology transfer model gradually realize the production
of parts in the country where the production base is located and form
a general aviation industry ecosystem.
(3) Aircraft manufacturing and sales business.
· Strongly launch new models head on to seize the market in mature
countries for general aviation and increase the market share of
Diamond aircraft.· Exploration and promotion of application scenarios of general aviation
aircraft in developing countries. In 2020 the Company capitalized on
the domestic trainer application scenarios and successfully achieved
mass production sales. In the future new application scenarios will be
continuously explored and piloted based on actual conditions to
promote the advancement of the domestic general aviation market. At
the same time it will seek application scenarios and promotion models
for the general aviation industry in other developing countries.3. Give full play to the functions of the capital market and optimize the
Company's financial structure
According to the Company's strategic thinking of "industry and capital flying
together" in 2021 we will give more consideration and make use of capital
market tools to optimize the Company's financial structure and enhance the
Company's profitability.Risk analysis and countermeasures
(1) Macroeconomic and industry risks and countermeasures
In 2020 the global economy was affected by the epidemics in stages and the
automobile industry took a hit. From January to December 2020 China's
automobile production and sales completed 25.225 million vehicles and 25.311
million vehicles a year-on-year decrease of 2.0% and 1.9% respectively. The
total sales of light vehicles in the United States were 14.6 million units down
14% year-on-year and the lowest level since 14.49 million units in 2012.Affected by Covid-19 and the overall decline in the automotive industry the
industry will still face greater pressure. If the economy continues to slow down
it will lead to a continued decline in demand in the automotive industry which
will in turn have a certain impact on the Company's market structure and
profitability.In response to this risk on the one hand the Company closely monitors the
trend of the industry strengthens the integration and coordination of sub-
leading auto parts industry continuously strengthens collaboration of brand
customer global bases R&D design and management enhances the overall
competitiveness of auto parts and increases new energy vehicles business
the value of single brand single customer and single vehicle. on the other hand
it has increased the transformation and upgrading of enterprises took
advantage of the global competitiveness of general aviation aircraft
manufacturing further optimized the industrial layout and improved the
Company’s asset quality and anti-risk capabilities.
(2) International trade barrier risks and countermeasures
In recent years a series of overseas trade protectionist measures have had a
certain impact on China’s exports and the Company is facing certain risks of
export trade barriers. Especially since 2018 China-US trade frictions have
continued. As a result the tariffs on imports from China’s automobiles and parts
have risen. If the trade frictions continue to escalate it will be possible to affect
the Company's revenue and profitability.In response to this risk on the one hand the Company launched the overseas
plant project for automotive aluminum alloy wheels and leveraged the synergy
of the global bases of various segments to realize global production refined
management convenient supply and reduce risk of trade barriers. On the other
hand it will increase the development of the Asia-Pacific market especially
increase the market share of high-end customers promote the development
production and delivery of Audi and Mercedes-Benz projects; take advantage
of the development opportunities in the new energy vehicle market fully cut into
the supply chain of core customers and increase market share.
(3) Rising energy and labor costs risks and countermeasures
The main costs of the products are raw materials energy and labor costs.Since the fluctuation of raw material prices has a greater impact on the
Company’s operating performance the Company has signed a price linkage
mechanism with most customers to adjust product prices with fluctuations in
raw material market prices. However due to the lagging nature of the
Company's product sales settlement fluctuations in energy prices and rising
labor costs have a certain impact on the Company's performance.In response to this risk the Company will strengthen global management
coordination reduce management costs improve management efficiency
enhance raw material inventory management optimize supplier management
system and increase bargaining power for raw materials. And the Company will
also increase its global scientific and technological research and development
collaboration reduce costs through process improvement technological
innovation and increased automation enhancing the Company’s
competitiveness.
(4) Currency exchange rate risks and countermeasures
In recent years the Company's products have been exported to the United
States India Europe and other countries and regions. The overseas business
income accounted for about 50% of the Company's main business income in
the same period. The fluctuation of the RMB exchange rate will have a material
impact on the Company's operating performance.In response to this risk the Company will reduce the exchange rate risk through
global business layout. The Company will increase the development of the
domestic market and increase the proportion of product sales in addition to
choose cross-border RMB settlement. The financial department will strictly
implement the Internal Control Management System for Forward Foreign
Exchange Settlement Business and use tools such as forward FX settlement
and sale to carry out FX hedging business in a planned way to control exchange
rate risks to the greatest extent.
(5) Domestic aviation openness policy risks and countermeasures
The domestic low-altitude airspace opening policy is the most important factor
in the advancement of domestic general aviation industry. The degree of
openness has a decisive effect on the development of the domestic general
aviation industry to a certain extent and it also has a significant impact on the
growth of the Company's general aviation business.In response to this risk the Company will continuously and effectively
communicate with the National Air Traffic Management Bureau and relevant
management departments. Currently Wanfeng Aviation has been selected to
conduct pilot projects. The low-altitude opening has also been substantially
expanded. As Wanfeng Aviation actively strives to obtain the support from
relevant management departments Wanfeng’s aviation business has not been
restrained in this slow opening process but has accumulated more development
opportunities and advantages.
(6) Impact of pandemic risks and countermeasures
At the beginning of January 2020 the COVID 19 pandemic has spread in China
and other countries. Governments of various countries have introduced a series
of restrictive quarantine measures. The resumption of overseas factories has
been delayed than originally planned and short-term order delivery has been
affected.In response to this risk the Company puts the health and safety of its
employees at the highest priority actively enforced the local governments’
requirements strictly performs normal epidemic prevention and control work
and assume social responsibilities. The Company will strengthen raw material
price cost control and customer demand tracking rely on the Company's global
information technology to improve efficiency and efficiency ensure stable
production and operation meet customer requirements and minimize the
adverse impact of the epidemic on production and operation.X. Reception of activities including research communication and
interviews during the report period
Registration form for reception of research communication interviews
and other activities during the reporting period
√Applicable □ Not applicable
Reception Venue Reception Visitor
Visitor name Discussion Index of the basic situation of the survey
date method type
The Company’s main
"Record of Investor Relations Activities on
business lightweight
September 2 2020" published by the Company on
Company’s Institution Shanghai Shenjiu magnesium alloy
2020.09.02 Site visit the website
conference room investor Asset Management business and the
http://irm.p5w.net/ssgs/S002085/?code=002085 on
synergy of various
September 3 2020.business lines.Shanghai The Company's main
"Record of Investor Relations Activities on
Meridian China International business the
September 3 2020" published by the Company on
Magnesium Institutional Capital Corporation competitive
2020.09.03 Site visit the website
Products Co. investor Foresight Fund advantages and future
http://irm.p5w.net/ssgs/S002085/?code=002085 on
Ltd conference Management prospects of Meridian
September 4 2020.room products.Shanghai Jingjing The Company's main "Record of Investor Relations Activities on
Investment business magnesium September 21 2020" published by the Company
Company’s Institutional
2020.09.21 Site visit Management alloy and general on the website
conference room investor
Jingsheng Investment aviation aircraft http://irm.p5w.net/ssgs/S002085/?code=002085 on
(Beijing) manufacturing business September 22 2020.
The Company's
"Record of Investor Relations Activities on
China International lightweight business
November 9 2020" published by the Company on
Company’s Conference Institutional Capital Corporation automotive lightweight
2020.11.09 the website
conference room call investor and other 30 strategy and
http://irm.p5w.net/ssgs/S002085/?code=002085 on
institutions magnesium alloy
November 11 2020."T3+1" progress
The Company's main
"Record of Investor Relations Activities on
business lightweight
November 10 2020" published by the Company on
Company’s Institutional China Knowledge strategy general
2020.11.10 Site visit the website
conference room investor (Singapore) aviation market and
http://irm.p5w.net/ssgs/S002085/?code=002085 on
aircraft manufacturing
November 11 2020.business
The Company's main
Shanghai business the
"Record of Investor Relations Activities on
Meridian competitive advantages
December 17 2020" published by the Company on
Magnesium Institutional Shenwan Hongyuan and future development
2020.12.17 Site visit the website
Products Co. investor and other 9 institutions prospects of
http://irm.p5w.net/ssgs/S002085/?code=002085 on
Ltd conference magnesium products
December 18 2020.room and magnesium alloy
"T3+1"
Section V: Significant Events
I. Common Share Profit Distribution and Conversion of Capital
Reserve to Share Capital
During the reporting period the common stock profit distribution policy
especially the formulation implementation or adjustment of the cash dividend
policy
√ Applicable □ Not applicable
The 2018 Second Extraordinary General Meeting of Shareholders was held on
June 1 2018. In accordance with the China Securities Regulatory
Commission’s Listed Companies Supervision Guidelines No. 3-Listed
Companies Cash Dividends (China Securities Regulatory Commission
Announcement [2013] No. 43) Regarding Further Implementation The Notice
on Matters Concerning the Cash Dividend Distribution of Listed Companies
(Zheng Jian Fa [2012] No. 37) and the relevant provisions of the Articles of
Association the Company’s shareholder return plan for the next three years
(2018-2020) was formulated. The form of profit distribution the conditions that
should be met at the same time when implementing cash dividends the
proportion of cash dividends and the decision-making procedures and
mechanisms for profit distribution have been clarified.According to the "Company’s Shareholder Return Plan for the Next Three
Years (2018-2020)" the Company’s board of directors consulted the opinions
of independent directors and Company shareholders and considered the
Company’s profitability and actual operations. According to the 2020 Semi-
Annual Profit Distribution Proposal approved on the Company’s fourth
extraordinary shareholder meeting in 2020 on September 10 2020 the
Company implemented the 2020 semi-annual equity distribution plan. Taking
the Company's total share capital of 2186879678 shares after excluding
78431058 shares that have been repurchased using 2108448620 shares
as the base number RMB 2.00 in cash (tax included) was distributed to all
shareholders for every 10 shares no bonus shares and no capital reserve
converted into share capital.Special Notes on Cash Dividend Policies
Whether they comply with the requirements of the Company's Articles of
Incorporation or the resolutions of the General Meeting of Shareholders Yes
Whether the dividend standards and proportions are distinct and clear
Yes
Whether the relevant decision-making procedures and mechanisms are complete
Yes
Whether the independent directors performed their duties and played their due role Yes
Whether the minority shareholders have the opportunity to fully express their
opinions and appeals and whether their legitimate rights and interests have been
Yes
fully protected:
Whether relevant conditions and procedures are compliant and transparent when
the cash dividend policies are being adjusted or changes Yes
The Company’s common stock dividend distribution plan (proposal) and the
capital reserve conversion plan (proposal) for the past 3 years (including this
reporting period):
2018 profit distribution plan: On June 12 2019 the Company based on a total
share capital of 2186879678 shares distributed a cash dividend of 3.0 yuan
(tax included) for every 10 shares of undistributed profit to all shareholders.2019 profit distribution plan: The Company did not distribute cash dividends in
its profit distribution for 2019 no bonus shares and no capital reserve
conversion into share capital.2020 semi-annual profit distribution plan: On September 10 2020 taking the
total share capital of 2186879678 shares after excluding the 78431058
shares that have been repurchased using 2108448620 shares as the base
RMB 2.00 (tax included) was distributed to all shareholders for every 10 shares.No bonus shares and no capital reserve converted into share capital.2020 profit distribution plan: The eighth meeting of the Company's seventh
board of directors approved the "2020 Profit Distribution Proposal." The
company plans to use 2072107520 shares (total share capital of
2186879678 shares minus 114772158 shares that have been repurchased)
as the base and distribute cash dividends of RMB 1.0 (tax included) to all
shareholders for every 10 shares. No bonus shares will be given or capital
reserve will be converted into share capital. The above plan still needs to be
approved by the shareholders' meeting.The Company’s cash dividends of common shares in the past three years
(including this reporting period)
Unit: 10000 RMB
The
Net profit The ratio of The ratio of total
proportion
attributable to cash amount of cash
The amount of cash Total
common dividends to dividends
Cash of cash dividends in amount of
stock the net profit (including other
dividend dividends in other ways cash
shareholders attributable to ways) to the net
amount other ways to the net dividends
Year in the ordinary profit (tax (such as profit (including
consolidated shareholders attributable to
included) share attributable other
financial in the ordinary
repurchase) to ordinary ways) statement of consolidated shareholders in
shareholder
the year for statements the
s in the
dividend consolidated consolidated
distribution statements
statements
2020 42169 56582 74.53% 42169 74.53%
2019 65606 89577 73.24% 65606 73.24%
2018 65606 108602 60.41% 65606 60.41%
During the reporting period the company was profitable and the distributable
profits to ordinary shareholders of the parent company was positive but the
Company did not propose a cash dividend distribution plan of ordinary shares.□ Applicable √ Not applicable
II. Profit Distribution and Conversion of Capital Reserve to Share
Capital During the Reporting Period
√Applicable □ Not applicable
Bonus share issued per 10 shares0
(share)
Cash dividend per 10 shares (RMB)1
(tax inclusive)
Total capital share basis for the2072107520
distribution proposal (share)
Total cash dividend (RMB) (tax
207210752.00
inclusive)
Cash dividend amount in other ways0
(such as share repurchase) (RMB)
Total cash dividends (including other
207210752.00
ways) (RMB)
Distributable profits (RMB) 482774473.27
Percentage of cash dividends of the
100%
total distributed profit (%)
Cash dividends
If the Company's development stage is in a mature period and there is no major capital expenditure
arrangement when the profit distribution is carried out the proportion of cash dividends in this profit
distribution should be at least 80%
Detailed description of profit distribution or capital reserves conversion plan
The eighth meeting of the Company's seventh board of directors deliberated and passed the "Proposal
for Profit Distribution in 2020." The Company intends to use 2072107520 shares (total share capital of
2186879678 shares minus 114772158 shares repurchased) as the base and distribute cash
dividends of RMB 1.0 (tax included) to all shareholders for every 10 shares. No bonus shares will be
given or capital reserve will be converted into share capital. The above plan still needs to be approved
by the shareholders meeting.III. Performance of Commitments
1. Complete and incomplete commitments of the Company and its actual controller shareholders related parties acquirers
and other related parties for the commitments by the end of the reporting period.√Applicable □ Not applicable
Giver of Date of Term of
Commitments Nature Details of commitments Performance
commitments commitments commitments
Commitment from
reformation of N/A N/A N/A N/A N/A N/A
shareholding
Commitment from
M&A announcement
N/A N/A N/A N/A N/A
or equity change
announcement
1. The controlling shareholder Wanfeng Group’s
commitment to avoid horizontal competition: After the
completion of this reorganization Wanfeng Group’s
motorcycle aluminum alloy wheel business has been
incorporated into the listed company. In order to avoid
horizontal competition with listed companies Wanfeng
Group has issued the "A Letter of Commitment to Avoid
Horizontal Competition and Regulate Related Party
Transactions" making the following commitment: "The
company and its wholly-owned subsidiaries holding
subsidiaries and other companies that the company has
actual control or significant influence (referred to "The
company and controlled company") will not engage in
any business that occurs or may compete with Wanfeng
Auto Wheel’s business after the completion of this
Chen Ailian and reorganization in the future. If the company and the
Wu Liangding controlled company compete with Wanfeng Auto Wheel
family the or have conflict interest with Wanfeng Auto Wheel in
actual Commitment business activities the company and the controlled
Commitment from controllers of to avoid company will exercise the right of veto or urge the Strict
21-Jul-11 long-term
asset restructuring the controlling horizontal controlled company abandons the business that may performance
shareholder competition cause horizontal competition to ensure that it does not
Wanfeng Auto directly or indirectly compete with the Wanfeng Auto
Holding Group Wheel in the same industry or be injected into Wanfeng
Co. Ltd. Auto Wheel at a fair market price. If there is a business
opportunity within the business scope of Wanfeng Auto
the company will give priority to Wanfeng Auto Wheel.For projects that Wanfeng Auto Wheel has constructed
or planned to invest in our company will avoid the same
or similar business as Wanfeng Auto Wheels in terms of
investment direction and project selection and will not
compete with Wanfeng Auto Wheel in the same industry
in order to protect Wanfeng Auto Wheel's interests. "
2. In order to avoid horizontal competition Wanfeng
Auto's actual controllers Chen Ailian and Wu Liangding's
family issued the "Letter of Commitment on Avoiding
Horizontal Competition and Regulating Related Party
Transactions". Making the following commitments: "The
companies and units we control will not engage in any
business that will or may compete with Wanfeng Auto
Wheel after the completion of this transaction or in the
future. If the companies and units we control compete
with Wanfeng Auto Wheel or conflict interest with
Wanfeng Auto Wheel in business activities we will
exercise the right of veto or we will give up or prompt the
company or unit we control to give up the possibility in
direct or indirect horizontal competition with Wanfeng
Auto Wheel in the same industry or inject all the
businesses of companies or units under our control that
generate horizontal competition into Wanfeng Auto
Wheel at a fair market price. If there is a business
opportunity within the business scope of Wanfeng Auto
Wheel we will give priority to Wanfeng Auto Wheel. For
the projects that Wanfeng Auto Wheel has constructed
or intends to invest in we will avoid the same or similar
to Wanfeng Auto Wheel in terms of investment direction
and project selection and will not compete with Wanfeng
Auto Wheel in the same industry in order to maintain
Wanfeng Auto Wheel's interests.Chen Ailian and
Wu Liangding
family the
actual Commitment During the period of being the Company's largest
Commitment from controllers of to avoid shareholder and actual controller no subsidiary Strict
28-Nov-06 long-term
IPO or refinancing the controlling horizontal companies will engage in the same or similar business performance
shareholder competition as Zhejiang Wanfeng Auto Wheel Co. Ltd.Wanfeng Auto
Holding Group
Co. Ltd.Commitment from
N/A N/A N/A N/A N/A N/A
stock incentive
1. Do not directly or indirectly engage in the same or
similar business as the listed company to avoid possible
direct or indirect business competition with the
production and operation of the listed company.Guarantee to take the legal and effective measures to
urge other companies (excluding companies controlled
by the listed company) not to engage in or participate in
any activities or businesses that compete with the
production and operation of the listed company.2.If the business activities of the promise party and its
close relatives (if the promise party is a natural person)
having control rights may compete with the listed
Chen Ailian and company’s business in the same industry in the future
Wu Liangding the promise party will urge the promise party and the
family the enterprises that the promise party's close relatives have
Other commitment actual Commitment control rights to abandon the business that may cause
to Company's small controllers of to avoid competition in the same industry and are willing to take Strict
22-Feb-20 long-term
and medium the controlling horizontal all the responsibilities. performance
shareholders shareholder competition 3. If the promise party or other enterprises that the
Wanfeng Auto promise party has control have any business opportunity
Holding Group to engage in or participate in any activity that may
Co. Ltd. compete with the production and operation of the listed
company the listed company shall be notified in a written
form about the business opportunity immediately. If the
listed company gives a written affirmative reply that it is
willing to take advantage of the business opportunity
within the reasonable time limit specified in the notice
we will try our best to provide the listed company with the
business opportunity in priority.4. If the listed company has suffered losses due to the
breach of the above-mentioned commitments by the
promise party the operating profit obtained shall belong
to the listed company and shall be compensated for all
losses.Are the
commitments Yes
fulfilled on time
Details in unfulfilled
commitments and N/A
work plan
2. Where any profit forecast was made for any of the Company’s assets
or projects and the current reporting period is still within the forecast
period the Company shall explain whether the performance of the asset
or project reaches the profit forecast and why:
√ Applicable □ Not applicable
Forecast Actual
Reason for Original
Profit performanc performan
not forecas Original
forecast e for the ce for the
Forecast Forecast reaching t forecast
asset or current current
start time end time the forecast disclos disclosure
project period period
(if ure index
name (10000 (10000
applicable) date
RMB) RMB)
"Announcement
on the
Acquisition of
55% Equity of
Wanfeng Aircraft
Industry Co.Aircraft Dec 31 Feb 25
Jan 1 2020 28980 33034 N/A Ltd. and related
Industry 2022 2020
party
transaction"
disclosed on
www.cninfo.com
and "Securities
Times"
Commitments made by the Company’s shareholders and counterparties in the
reporting year’s operating performance
√ Applicable □ Not applicable
In 2020 the Company acquired 55% of the equity in Aircraft Industry and the
transferor Aviation Industry promised to realize the net profit attributable to the
parent company in the consolidated statements of the Aircraft Industry in 2020
2021 and 2022 (referring to the net profit after deducting non-recurring gains
and losses) no less than 289.8 million yuan 303.5 million yuan and 366.6
million yuan respectively. If the net profit realized by Wanfeng Aircraft at the
end of 2020 2021 and 2022 fails to reach the cumulative committed net profit
as of the end of the year as agreed in the profit commitment the amount of
cash that should be compensated = (accumulated commitment net profit as of
the end of the current period - the accumulated realized net profit as of the end
of the current period) × (the transfer price of the underlying equity / the sum of
the committed net profit of each year during the profit compensation period)-
the amount of compensation
The completion of performance commitments and its impact on the
impairment test of goodwill
The transferor promises that the net profit attributable to the parent company in
the consolidated statement realized by the Aircraft Industry in 2020 (net profit
after deducting non-recurring gains and losses) shall not be less than 289.8
million yuan and the figure actually realized by Aircraft Industry in 2020 was
330.34 million yuan. The management has conducted impairment tests on the
goodwill of Aircraft Industry. The approved five-year financial budget has
considered the impact of actual performance lower than the promised
performance on future expected cash flows. Aircraft Industry has no impairment
as of December 31 2020.IV. The Company’s funds used by the controlling shareholder or its
related parties for non-operating purposes.√ Applicable □ Not applicable
Unit: 10000 RMB
Ending
Expe Expe
New Repaid balance
Name of cted cted
Period of Beginni amount amount as of Expected
shareholder repay repay
time for Reason ng during during disclosur repayme
or related ment ment
funds used balance reporting reporting e date of nt date
party meth amou
period period annual
od nt
report
Wanfeng
2019-12-5 to
Group (note Lending 12000 0 12000 0 -
2020-3-24
1)
Wanfeng
2019-12-5 to
Group (note Lending 26070 0 26070 0 -
2020-3-25
1)
Shaoxing
Jiajing 2019-10-10 to
Lending 4200 0 4200 0 -
Trading Co. 2020-3-27
Ltd (note 2)
Shaoxing
Jiajing 2019-10-15 to
Lending 800 0 800 0 -
Trading Co. 2020-3-27
Ltd (note 2)
Shaoxing
Jiajing 2019-10-17 to
Lending 2000 0 2000 0 -
Trading Co. 2020-3-27
Ltd (note 2)
Shaoxing
Jiajing 2019-10-21 to
Lending 3000 0 3000 0 -
Trading Co. 2020-3-27
Ltd (note 2)
Shaoxing 2019-10-11 to Lending 5000 0 5000 0 -
Jiajing 2020-3-27
Trading Co.Ltd (note 2)
Wanfeng
2020.4.16 to
Group (note Lending 7200 7200 0
2020.8.17
1)
Aircraft
2020.4.16 to
Industry Lending 31262 31262 0
2020.8.17
(note 4)
Total 84332 7200 91532 0 -- 0 --
The total amount at the end of the
period as % of the most recent 0.00%
audited net assets
Note 1 Note 2: The relevant decision-making procedures have
Related decision-making
not been fulfilled and the principal and interest of the funds used
procedures
have been repaid before June 2020.The "Balance of Used Funds at the Beginning of 2020" and "The
Balance of Funds at the Beginning of 2020" were restated.The reasons for the use of non- Note 3: Prior to January 1 2020 Diamond Aircrafts Industries
operating funds of the new major GMBH a subsidiary of Aircraft Industry had borrowed funds from
shareholders and their affiliated Wanfeng Group's subsidiary Aviation Industry of RMB 312.62
companies in the current period the million and the Aviation Industry had repaid the principal in
accountability of the responsible August 2020. And interest of RMB 316.18 million. On December
persons and the explanation of the 31 2020 the principal and interest have been fully repaid.measures taken by the board of
directors Note 4: On April 16 2020 Wanfeng Aircraft has lent RMB 72
million to Wanfeng Group. Wanfeng Group has repaid all
outstanding balance and interest of RMB 73.51 million from April
to August 2020.The reasons for the failure to repay
the non-operating funds use as
planned the accountability situation N/A
and the explanation of the measures
taken by the board of directors
Disclosure index of CPA's special
April 30 2021
review opinions on funds used
V. Explanation Given by the Board of Directors SupervisoryCommittee independent directors (if any) Regarding the “Non-standard Auditor’s Report” Issued by the CPA Firm for the
Reporting Period
□Applicable √Not applicable
VI. Explanation on the changes in accounting policy accounting
estimates and accounting methods as compared to the financial
report for the prior year
√ Applicable □Not applicable
New policy on revenue
In 2017 the Ministry of Finance promulgated the revised "Accounting
Standards for Business Enterprises No. 14-Revenue" (Cai Kuai [2017] No. 22).The Company began accounting treatment in accordance with the newly
revised standards from January 1 2020. According to the convergence rules
the comparable period information will not be adjusted. The difference between
the implementation of the new standards and the current standards on the first
day will be retrospectively adjusted for retained earnings at the beginning of the
reporting period.The new revenue standard establishes a new revenue recognition model for
standardizing revenue generated from contracts with customers. According to
the new revenue standards the method of revenue recognition should reflect
the entity's transfer of goods or services to customers and the amount of
revenue should reflect the amount of consideration that the entity expects to be
entitled to because of the transfer of these goods or services to customers. At
the same time the new revenue standard also regulates the judgments and
estimates required for each step of revenue recognition. The Company only
adjusts the cumulative impact of contracts that have not yet been completed on
January 1 2020. For contract changes that occurred before January 1 2020
the Company adopts a simplified method to deal with the final results of all
contracts based on contract changes identify fulfilled and unfulfilled
performance obligations determine transaction prices and apportion
transaction prices between fulfilled and unfulfilled performance obligations.VII. Explanation for retrospective restatement of major accounting
errors during the reporting period
□Applicable √Not applicable
During the reporting period the Company had no major accounting error
corrections requiring retrospective restatement.VIII. Explanation for changes in scope of the consolidated financial
statements as compared to the financial report for the prior year
√Applicable □Not applicable
During the reporting period the Company acquired 55% equity of Wanfeng
Aircraft Industry Co. Ltd. for RMB 2418.0750 million in cash. The equity
transfer was completed on April 16 2020. Wanfeng Aircraft Industry Co. Ltd.was added to the consolidated scope of the company's statements.IX. Engagement and disengagement of the CPA firm
CPA firm engaged at present
Name of the domestic CPA firm Ernst & Young Hua Ming LLP
Remuneration of domestic accounting firms
443.8
(in 10000 RMB)
Consecutive years of the audit service
18 years
provided by the domestic CPA firm
Name of the certified public accountants from
Yin Guowei Zhou Hao
the domestic CPA firm
Consecutive years of the audit service
provided by the certified public accountants Yin Guowei (1 year) Zhou Hao (5 years)
from the domestic CPA firm
Ernst & Young LLP
Name of overseas accounting firm (if any) Ernst & Young Wirtschaftsprüfungsgesellschaft
m.b.H.Remuneration of overseas accounting firm
620.28
(10000 RMB) (if any)
Ernst & Young LLP (8 years)
Consecutive years of audit services of
Ernst & Young Wirtschaftsprüfungsgesellschaft
overseas accounting firms (if any)
m.b.H. (1 year)
Name of the certified public accountant of the Elizabeth Maccabe
overseas accounting firm (if any) Severin Eisl
Whether the CPA firm was changed in the current period
□ Yes √ No
Engagement of internal control audit CPA firm financial advisor or sponsor
□Applicable √Not applicable
X. Listing suspension and termination after disclosure of this annual
report
□Applicable √Not applicable
XI. Bankruptcy and Restructuring
□Applicable √Not applicable
No bankruptcy and restructuring happened during the reporting period.XII. Material Litigation and Arbitration
Significant material litigation and arbitration
□Applicable √Not applicable
No such case during the reporting period.XIII. Punishment and Rectification
□Applicable √Not applicable
No punishment and rectification during the reporting period
XIV. The Integrity of the Company and Its Controlling Shareholders and
Actual Controllers
□Applicable √Not applicable
XV. The Implementation of an Equity Incentive Plan Employee Stock
Incentive Plan or Other Incentive Plans
√Applicable □ Not applicable
The Company held the first extraordinary 2018 general meeting of shareholders
on January 29 2018. The Company approved the "Company's Phase One
Employee Stock Ownership Plan (Draft) and its summary" and related
proposals agreeing to implement the first phase employee’s stock ownership
plan. The duration of the first phase employee stock ownership plan is 24
months starting from the date of approval of the Company's first extraordinary
shareholders general meeting in 2018 i.e. from January 29 2018 to January
28 2020. The lock-up period is 12 months. The first phase employee stock
ownership plan purchased 45429282 shares of Wanfeng Auto Wheel (002085)
through centralized bidding in the secondary market trading system of the
Shenzhen Stock Exchange accounting for 2.08% of the Company’s total share
capital. The purchase has been completed within 6 months from the date of
approval.The Company approved the "Proposal on the Extension of the Company's
Phase One Employee Stock Ownership Plan" on the first phase of employee
stock ownership plan holders' meeting on November 20 2019. On November
25 2019 the Company held the sixth session of the board of directors meeting
during which the "Proposal on the Extension of the Company's Phase One
Employee Stock Ownership Plan" was approved agreeing to extend the
duration of the Company's employee stock ownership plan for 12 months that
is until January 28 2021. During the extension period the lock-up period will
no longer be set. The employee stock ownership plan management committee
can choose the opportunity to sell stocks according to the Company's stock
price. If all the Company stocks held by the employee stock ownership plan are
sold the employee stock ownership plan can be terminated early.As of the end of the reporting period the first phase of the employee stock
ownership plan has reduced its holdings by 44200782 shares. As of January
28 2021 all the company stocks held by the first phase of the employee stock
ownership plan have been sold and the liquidation and distribution work has been completed.XVI. Significant Related-party Transaction
1. Significant related-party transactions arising from routine operation
√Applicable □ Not applicable
Pricing Amount Approve Wheth Settleme Available
Percenta
Principle of d er it nt Market
Related Related ge in the
Related s for Related Transact Excee Method Prices Disclos
Related Relation Transacti Transact Amount Disclosure
Transact Related Transact ion ds the of for ure
Party ship on ion of Similar Index
ion Type Party ion Quota Appro Related Similar Date
Content Price Transacti
Transacti (10000 (10000 ved Transact Transacti
ons
ons RMB) RMB) Quota ion ons
The
"Announce
ment on
the
Estimates
Compani
Xinchang of Daily
es
Fangqi Related
controlled
Investme House Market 26-Jun- Party
by the Lease N/A 42.5 1.88% 70 No Transfer N/A
nt Fund lease price 20 Transaction
same
Associati s in 2020"
actual
on disclosed
controller
on
cninfo.com.cn and
Securities
Times.Compani
Shengzh es
ou controlled
Sale of Market
Hechuan by the Sale N/A 199.57 0.02% No Transfer N/A
molds price
g Trading same
Co. Ltd. actual
controller
Compani
Wanfeng es
Jinyuan controlled
House Market
Holding by the Lease N/A 119.27 5.28% No Transfer N/A
lease price
Group same
Co. Ltd actual
controller8480
Compani
Shengzh es purchase
ou controlled of molds
Purchas Market
Hechuan by the and N/A 413.29 0.08% No Transfer N/A
e price
g Trading same accessori
Co. Ltd. actual es
controller
Zhejiang Compani Purchase
Wanfeng es raw
Technolo controlled materials
Purchas Market
gy by the equipmen N/A 126.85 0.03% No Transfer N/A
e price
Develop same t
ment Co. actual accessori
Ltd. controller es
Zhejiang Compani
Wanfeng es Equipmen
Technolo controlled t
Accept Market
gy by the maintena N/A 96.45 73.36% No Transfer N/A
Service price
Develop same nce
ment Co. actual service
Ltd. controller
Zhejiang Compani
Wanfeng es
machiner
Technolo controlled
Purchas y Market
gy by the N/A 896.23 1.03% No Transfer N/A
e equipmen price
Develop same
t
ment Co. actual
Ltd. controller
Compani
Zhejiang
es
Rifa machiner
controlled
Precision Purchas y Market
by the N/A 33.25 0.01% No Transfer N/A
Machiner e equipmen price
same
y Co. t
actual
Ltd.controller
Compani
raw
Zhejiang es
materials
Rifa controlled
and
Precision by Market
purchase equipmen N/A 0.68 0.00% 3500 No Transfer N/A
Machiner controllin price
t
y Co. g
accessori
Ltd. sharehold
es
ers
Compani
es
Zhejiang
controlled measure
Wanfeng
by Provide ment Market
Precision N/A 5.19 0.85% No Transfer N/A
controllin Service repair price
Machiner
g service
y Co. Ltd
sharehold
ers
Compani
Zhejiang es
Rifa controlled equipmen
Precision by Accept t Market
N/A 39.14 29.77% No Transfer N/A
Machiner controllin Service maintena price
y Co. g nce
Ltd. sharehold
ers
Compani
es
Zhejiang
controlled
Wanfeng
by Equipmen Market
Precision purchase N/A 312.48 0.36% No Transfer N/A
controllin t price
Machiner
g
y Co. Ltd
sharehold
ers
Compani
es
Zhejiang
controlled
Wanfeng
by Equipmen Market
Precision purchase N/A 86.73 0.10% No Transfer N/A
controllin t price
Machiner
g
y Co. Ltd
sharehold
ers
internet
and
equipmen
Wanfeng parent accept Market
t N/A 367.84 18.81% No Transfer N/A
Group company service price
maintena
nce
service
Compani
es aircraft
Wanfeng
controlled and
Aviation Market
by the purchase aviation N/A 451.32 0.09% No Transfer N/A
Industry price
same equipmen
Co. Ltd
actual t
controller
Compani
es
Wanfeng
controlled Flight
General Accept Market
by the chartering N/A 1390.84 11.01% No Transfer N/A
Aviation service price
same service
Co. Ltd
actual
controller
Compani
Zhejiang es
Wanfeng controlled
Property
Property by Accept Market
managem N/A 371.77 27.10% 8030 No Transfer N/A
Manage controllin service price
ent
ment Co. g
Ltd sharehold
ers
Compani
internet
es
and
Wanfeng controlled
equipmen
Aviation by accept Market
t N/A 48.83 2.50% No Transfer N/A
Industry controllin service price
maintena
Co. Ltd g
nce
sharehold
service
ers
Compani
Zhejiang es
Wanfeng controlled
Accept Airport Market
General by the N/A 25.75 0.02% No Transfer N/A
service service price
Aviation same
Co. Ltd actual
controller
Compani
es Aircraft
Wanfeng
controlled taking off
General Accept Market
by the and N/A 6.07 0.00% No Transfer N/A
Aviation service price
same landing
Co. Ltd
actual service
controller
Compani
Xinchang
es
County
controlled
Chitong
by House Market
Intelligent Lease N/A 460.84 20.40% No Transfer N/A
controllin lease price
Equipme
g
nt Co.sharehold
Ltd
ers
Compani
es
Zhejiang controlled
House
Wanfeng by Market
Lease land N/A 588.57 26.05% No Transfer N/A
Industry controllin price
lease
Co. Ltd g
sharehold
ers
Compani
es
Wanfeng controlled
Aviation by House Market
Lease N/A 192.95 8.54% No Transfer N/A
Industry controllin lease price
Co. Ltd g
sharehold
ers
Compani
Zhejiang es Aircraft
Wanfeng controlled and
Market
General by the Sale aviation N/A 373.47 0.04% No Transfer N/A
price
Aviation same equipmen
Co. Ltd actual t
controller
Compani
Shanghai es
Wanfeng controlled
House Market
Aviation by the Lease N/A 252.29 49.06% No Transfer N/A
lease price
Club Co. same
Ltd actual
controller
Compani
es
Wanfeng controlled
General by Market
Lease Aircraft N/A 8.85 100.00% No Transfer N/A
Aviation controllin price
Co. Ltd g
sharehold
ers
Total -- -- 6911.02 -- 20080 -- -- -- -- --
Details of returns of large sales None
The actual performance during the reporting
period (if any) is estimated by category for
The related parties performed the purchase and sale business in accordance with the signed contract and the execution
the total amount of daily related
of the contract met expectations.transactions that will occur in the current
period
Reasons for the large difference between
the transaction price and the market N/A
reference price (if applicable)
2. Related-party transactions regarding purchase and disposal of assets or equity
√Applicable □ Not applicable
Pricing Book Settleme
Appraised Transactio
Principle Value of nt
Value of Transfer n Gains
Related Related s for Transferr Method
Transferre Price and Disclosur Disclosure
Party Relationship Transactio Description Related ed of d Assets (10000 Losses e Date Index
n Type Party Assets Related
(10000 RMB) (10000
Transact (10000R Transacti
RMB) RMB)
ions MB) on
"Announcement
on the Acquisition
of 55% Equity
and Related
Companies Acquire 55% Transactions of
Appraisal
Wanfeng controlled by Equity equity of Wanfeng Aircraft
income 330098.72 488500 241807.50 Transfer 0 25-Feb-20
Aviation controlling acquisition Aircraft Industry Co.method
shareholders Industry Ltd." disclosed in
"Securities
Times" and
www.cninfo.com.cn
According to the income method assessment the value of all shareholders' equity of the Aircraft Industry on the
assessment base date (September 30 2019) is RMB 4885 million with an appreciation amount of RMB
Reasons for the large difference between the transfer 1584112800 and an appreciation rate of 47.99%. The evaluation is based on the Aircraft Industry’s expected
price and the book value or appraised value (if any) net income which not only includes the income that can be generated by tangible assets but also includes the
intangible assets owned by the company (such as customer resources technical assets etc.). Therefore the
income method results in appreciation.The general aviation aircraft industry has broad prospects for downstream demand with a relatively high market
competitive position and good sustained profitability. At the same time Wanfeng Aviation promises that the net
profit attributable to the parent company after deducting non-recurring gains and losses from the consolidated
Impact on the Company’s operating results and
statements realized by the Aircraft Industry in 2020 2021 and 2022 shall not be less than 289.8 million yuan
financial status
303.5 million yuan and 366.6 million yuan respectively. After the completion of this transaction it will further
enhance the business scale of the listed company and build new profit growth points which will help increase
the value of the listed company and bring better returns to the shareholders of the listed company.If the relevant transaction involves performance
In 2020 the Aircraft Industry realized net profit of 330.34 million yuan attributable to the parent company after
agreement the performance achieved during the
deducting non-recurring gains and losses.reporting period
3. Significant related-party transactions arising from joint investments on external parties
□Applicable √Not applicable
No such case in the reporting period.4. Related credit and debt transactions
√Applicable □ Not applicable
Whether there are non-operating related credit and debt transactions
√Yes □No
Account receivable from related parties:
Whether there Interest of Balance at
Beginning New Amount Amount
is Non- the Current the end of
Related Party Balance of the Current Recovered in Interest
Relationship Reasons operating Period the Period
(10000 Period this Period Rate
Capital (10000 (10000
RMB) (10000 RMB) (10000 RMB)
Occupation RMB) RMB)
Wanfeng Group Controlling
Lending Yes 38070 0 38070 N/A N/A 0
(note 1) shareholder
A legal person
Shaoxing Jiajing
controlled by an
Trading Co. Ltd. Lending Yes 15000 0 15000 N/A N/A 0
associated natural
(note 2)
person
Wanfeng Group Controlling
Lending Yes 31262 0 31262 N/A N/A 0
(note 3) shareholder
Controlling
Aviation Industry
shareholder's Lending Yes 0 7200 7200 N/A N/A 0
(note 4)
subsidiary
The impact of related creditor's rights Note 1 Note 2: As of March 31 2020 all non-operating funds occupied have been returned. With reference to the benchmark
on the Company's operating results loan interest rate of 4.35% the accumulative interest has been repaid RMB 12973600 based on the actual occupied time.and financial status
Note 3 Note 4: In April 2020 the Company acquired 55% of the equity in the Aircraft Industry held by the Aviation Industry
through a business combination under common control. The Company's audited financial statements for 2020 have
consolidated Wanfeng Aircraft in accordance with the requirements of "Business Combinations Under Common Control" in the
Accounting Standards for Business Enterprises-Business Combinations and restated the comparative data of the previous
year. The capital occupation of the controlling shareholders and other related parties mentioned in Note 3. and Note 4 has
been restated on the "Balance of Occupied Funds at the Beginning of 2020" and "The Balance of Funds at the Beginning of
2020" in accordance with the principle of business combination under common control.Note 3: Prior to January 1 2020 Diamond Aircrafts Industries GMBH a subsidiary of Aircraft Industry had borrowed funds
from Wanfeng Group's subsidiary Aviation Industry of RMB 312.62 million and the Aviation Industry had repaid the principal in
August 2020. And interest of RMB 316.18 million. On December 31 2020 the principal and interest have been fully repaid.Note 4: From January to April of 2020 prior to business combination under common control Wanfeng Aircraft has lent RMB 72
million to Wanfeng Group. Wanfeng Group has repaid all outstanding balance and interest of RMB 73.51 million from April to
August 2020.Account payable to related parties:
New
Amo
Whethe unt Amoun
Balance
r there Beginn of t Interest
at the
is Non- ing the Recove of the
Relat Inter end of
Relation Reas operati Balanc Curr red in Current
ed est the
ship ons ng e ent this Period
Party Rate Period
Capital (10000 Perio Period (10000R
(10000R
Occupa RMB) d (10000 MB)
MB)
tion (100 RMB)00
RMB)
5. Other significant related party transactions
□Applicable √Not applicable
No such case in the reporting period.XVII. Significant Contracts and Execution
1. Matters on trusteeship contracting and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No such case in the reporting period.
(2) Contracting
□ Applicable √ Not applicable
No such case in the reporting period
(3) Leasing
□ Applicable √ Not applicable
No such case in the reporting period
2. Significant guarantees
√Applicable □ Not applicable
(1) Guarantees
Unit: 10000 RMB
External Guarantees from the Company and its Subsidiaries (Excluding Guarantees to the Subsidiaries)
Announcement Guarantee
Actual Actual
Date of Disclosure Guarantee Type of Term of Due or for Related
Guaranteed Party Occurrence Guarantee
of the Guarantee Amount Guarantee Guarantee Not Parties or
Date Amount
Amount Not
Joint liability
2020-11-18 to
Wanfeng Group 2020-06-24 150000 2020-11-19 52199.2 and several No Yes
2024-12-31
guarantee
Total amount of external guarantee Total actual amount of external
approved during the reporting period 150000 guarantees during the reporting 52199.2
(A1) period (A2)
The total amount of external guarantees Total balance of actual external
approved at the end of the reporting 150000 guarantees at the end of the 52199.2
period (A3) reporting period (A4)
Announcement Guarantee
Actual Actual
Date of Disclosure Guarantee Type of Term of Due or for Related
Guaranteed Party Occurrence Guarantee
of the Guarantee Amount Guarantee Guarantee Not Parties or
Date Amount
Amount Not
2020.4.8 -
Ningbo Orwell 24-June-20 4000 2020.05.20 2300 Joint liability No Yes
2025.4.7
and several
2020.5.29 -
Ningbo Orwell 24-June-20 6000 2020.05.29 5500 guarantee No Yes
2021.5.28
2020.2.28 -
Weihai Wanfeng 24-June-20 4400 2020.02.28 4000 No Yes
2021.2.27
Joint liability
2019.5.10 -
Weihai Wanfeng 24-June-20 5600 2019.05.10 3000 and several No Yes
2022.5.10
guarantee
2018.11.1 -
Weihai Wanfeng 24-June-20 10000 2018.11.01 5000 No Yes
2021.10.31
2019.5.16 -
Weihai Magnesium 24-June-20 5000 2019.05.16 2000 No Yes
2020.5.16
Joint liability
2020.6.4 -
Weihai Magnesium 24-June-20 4500 2020.06.04 3500 and several No Yes
2021.6.4
guarantee
2020.10.16 -
Weihai Magnesium 24-June-20 20000 2020.10.16 2000 No Yes
2023.10.16
2018.1.31 -
Jilin Wanfeng 24-June-20 25500 2018.01.31 18200 No Yes
2023.11.20
2020.11.27 -
Jilin Wanfeng 24-June-20 12000 2020.11.27 8000 No Yes
Joint liability 2022.11.26
2020.05.22 -
Jilin Wanfeng 24-June-20 10000 2020.05.22 5000 and several No Yes
guarantee 2021.05.21
2020.10.22 -
Jilin Wanfeng 24-June-20 2020.10.22 4000 No Yes
2021.10.21
Jilin Wanfeng 24-June-20 8000 Yes Yes
Wanfeng
24-June-20 16000 Yes Yes
Motorcycle Wheel
Wanfeng 2019.1.11 -
24-June-20 48500 2019.01.11 30600 No Yes
Motorcycle Wheel 2021.1.11
Wanfeng 2020.4.10 -
24-June-20 15000 2020.04.10 15000 No Yes
Motorcycle Wheel 2021.4.9
Joint liability
Wanfeng 2020.3.9 -
24-June-20 5000 2020.03.09 5000 and several No Yes
Motorcycle Wheel 2021.3.5
guarantee
Wanfeng 2020.3.20-
24-June-20 5000 2020.03.20 5000 No Yes
Motorcycle Wheel 2021.3.18
Wanfeng 2020.10.19-
24-June-20 10000 2020.10.19 8000 No Yes
Motorcycle Wheel 2023.10.19
Wanfeng
24-June-20 5000 Yes Yes
Motorcycle Wheel
2015.5.8 -
India Wanfeng 24-June-20 21000 2015.05.08 11412 No Yes
2023.5.14
India Wanfeng 24-June-20 Joint liability Yes Yes
and several
India Wanfeng 24-June-20 7000 guarantee Yes Yes
2020.2.18 -
India Wanfeng 24-June-20 7000 2020.02.18 2669 No Yes
2025.2.18
Chongqing 2020.1.16 -
24-June-20 10000 2020.01.16 10000 Yes Yes
Wanfeng 2022.1.16
Joint liability
Chongqing
24-June-20 9000 and several
Wanfeng
guarantee
Chongqing 2020.7.1 -
24-June-20 5680 2020.07.01 5680 No Yes
Wanfeng 2023.7.1
2020.11.13 -
Shanghai Dacromet 24-June-20 2500 2020.11.13 2500 No Yes
Joint liability 2021.11.12
Shanghai Dacromet 24-June-20 8000 and several Yes Yes
guarantee
Shanghai Dacromet 24-June-20 5000 Yes Yes
Joint liability
Meridian New 2017.6.23 -
24-June-20 18000 2017.06.23 8227 and several No Yes
Material 2023.12.25
guarantee
Joint liability
Guangdong 2020.6.22 -
24-June-20 15000 2020.06.22 12835 and several No Yes
Motorcycle Wheel 2021.6.20
guarantee
Joint liability
Ningbo Dacromet 24-June-20 2000 and several Yes Yes
guarantee
Joint liability
Shangda Tu Fu 24-June-20 2000 and several Yes Yes
guarantee
Wuxi Xiongwei 24-June-20 15000 2020.12.02 10000 Joint liability
2020.12.02 -
No Yes
and several 2021.03.23
Wuxi Xiongwei 24-June-20 10000 guarantee Yes Yes
Total Amount of Guarantees
Total Amount of Guarantees to
Towards Subsidiaries Actually
Subsidiaries Approved during the 356680 110984.18
Occurred during the Reporting
Reporting Period (B1)
Period (B2)
Total Outstanding Guarantee
Total Amount of Guarantees to
Balance Towards Subsidiaries at
Subsidiaries Approved by the End of the 356680 189423.04
Reporting Period (B3) the End of the Reporting Period
(B4)
Subsidiaries' Guarantees to Subsidiaries
Announcement Guarantee
Actual Actual
Date of Disclosure Guarantee Type of Term of Due or for Related
Guaranteed Party Occurrence Guarantee
of the Guarantee Amount Guarantee Guarantee Not Parties or
Date Amount
Amount Not
The total amount of the Company's guarantees (the total of the above three items)
Total Amount of Guarantees
Total Amount of Guarantees Approved
506680 Actually Occurred during the 163183.38
during the Reporting Period (A1+B1+C1)
Reporting Period (A2+B2+C2)
Total Amount of Guarantees Approved Total Outstanding Guarantees
by the End of the Reporting Period 506680 Balance at the End of the 241622.24
(A3+B3+C3) Reporting Period (A4+B4+C4)
Total Amount of Actual Guarantees (A4+B4+C4) as a
45.13%
Percentage of the Company's Net Assets
Of which：
The balance of guarantees provided for shareholders actual controllers and
52199.2
their related parties (D)
Balance of Debt Guarantees Directly or Indirectly Offered to Guaranteed0
Objects with Asset-liability Ratio Exceeding 70% (E)
The amount of the total guarantee exceeding 50% of the net assets (F) 112881.43
Total Amount of the Above Three Guarantees (D+E+F) 165080.63
For unexpired guarantees the guarantee liability has occurred during the
none
reporting period or may bear joint liability for repayment (if any)
Instructions for providing external guarantees in violation of prescribed
none
procedures (if any)
Description of the specific circumstances of the use of composite guarantees
No
(2) Non-compliance external guarantees
√Applicable □ Not applicable
Unit: 10000 RMB
Balance of
Percentag Non- Percentag
Amount of
e of the complianc e of the Estimate
Non- Expecte Estimate
most e most d
Guarantee Relationship with complianc Type of Term of d d
Recent Guarantee Recent Release
d Party Listed Company e Guarantee Guarantee Release Release
Audited s at the Audited Time
Guarantee Method Amount
Net End of Net (Month)
s
Assets Reporting Assets
Period
Wanfeng Controlling 2019.01.15-
31350 5.10% 0 0% Released Released
Group shareholder 2020.01.15
Pledge guarantee
Wanfeng Controlling 2019.10.24-
31600 5.14% 0 0% Released Released
Group shareholder 2020.10.23
Wanfeng Controlling Joint liability and 2019.07.19-
69762 11.34% 0 0% Released Released
Group shareholder several guarantee 2024.07.18
Total 132712 21.58% 0 0%
3. Entrust others to manage cash assets
(1) Entrusted wealth management
√Applicable □ Not applicable
Unit: 10000 RMB
Balance Overdue
Specific types Capital source Amount before uncollected
maturity amount
Bank financial products The Company’s owned funds 267.44 0 0
Total 267.44 0 0
Specific situation of high-risk entrusted financial management with large single
amount or low security poor liquidity and without guarantee of principal.□ Applicable √ Not applicable
Entrusted financial management expected to be unable to recover the principal
or other situations that may lead to impairment.□ Applicable √ Not applicable
(2) Entrusted loans
□ Applicable √ Not applicable
No such case in the reporting period.4. Significant contracts in operation
□ Applicable √ Not applicable
5. Other significant contracts
□ Applicable √ Not applicable
No such case in the reporting period.XVIII. Social Responsibility
1. Fulfillment of social responsibilities
The Company has always been adhering to the values of "eternal value
enhancement and continuous dedication to society" and following the business
philosophy of "green Wanfeng digital Wanfeng and credible Wanfeng". The
Company aims to build the best-in-class enterprise leading in the industry withstrong R&D capability career development and “Safety Green Health"practices. The Company will advance towards the vision of "becoming globally
recognized and long-standing enterprise” and the goal of “being strongreputable and sustainable”.The Company strictly follows the Company Law Shenzhen Stock Exchange
Listed Companies Stock Listing Rules Shenzhen Stock Exchange Listed
Companies Standard Operation Guidelines and other relevant laws and
regulations continuously improves the corporate governance optimizes the
internal control system and standardizes operations. The Company actively
fulfills information disclosure obligations holds performance briefings in
accordance with regulations and answers questions related to periodic reports
and company operations within the scope of the rules. The Company actively
maintains effective communication with investors accepts institutional research
and releases the "Investor Relations Activity Record Sheet" in a timely manner
and communicates with investors through various methods such as investor
telephone calls faxes company websites and investor relations interactive
platforms which has improved the Company’s transparency and integrity.With the responsibility and mission of "providing customers with high-quality
products and satisfactory services" while continuously creating value for
shareholders the Company also actively assumes responsibilities to
employees customers suppliers society and other related parties and
adheres to the equal emphasis on economic social and environmental benefits
to achieve the Company's sustainable development.The Company implements five major projects including the "Caring Project
Democracy Project Quality Project Housing Project and Health Project"
strictly abides by the Labor Law and Labor Contract Law establishes a care
and rights protection organization implements collective contracts and
protects the legal rights of employees in accordance with the law; improve the
labor safety and health system improve the labor environment ensure the
safety of employees reduce the rate of work-related accidents and ensure the
physical and mental health of employees; conduct education and training and
various recreational and sports activities to cultivate employee sentiment
created the corporate spirit of "efficiency excellence service dedication"
further enhance corporate cohesion and build a harmonious win-win
relationship between labor and capital; focus on the career development of
employees actively carry out employee training encourage and support
employees to participate in external training and improve their comprehensive
ability provide more opportunities for employee development.For shareholders the Company improves corporate governance strictly
enforces the decisions of the shareholders meeting accepts the supervision of
the shareholders meeting and discloses information according to law. While
protecting the legitimate rights and interests of shareholders the Company
attaches importance to the return to shareholders. The Company has
formulated a shareholder dividend return plan implemented a relatively stable
profit distribution plan and provided investors with stable and reasonable
returns on the premise of ensuring the Company's normal operation and long-
term development. For creditors the Company formulates strict and feasible
borrowing and repayment plans every year and all due debts can be paid off
in time to establish a good corporate image for creditors and keep the debt
financing channels open.While pursuing economic benefits the Company attaches great importance to
environmental protection energy conservation and consumption reduction and
regards building a green enterprise as an important part of its sustainable
development strategy. The Company pays attention to social impact and social
benefits to ensure that production activities meet the requirements of
environmental management and reduce the impact on the environment. The
environmental policy formulated by the Company is: focus on energy
conservation and emission reduction create a green environment and build a
happy home. On the one hand comply with the laws regulations and standards
related to the ecological and environmental protection of the country (region)
where it operates and formulate and implement effective air wastewater
waste management and energy and water use goals plans and measures
reduce the adverse impact on the environment; on the other hand establish an
effective information communication and consultation mechanism with the
Company’s internal and external stakeholders and accept the supervision of
investors and the public.Adhering to the value of "eternally enhance value and continue to contribute to
society" while the Company is growing it actively contributes to the society.The Company focuses on four public welfare themes of "charitable donations
education cultural and sports community development ". After the outbreak of
Covid-19 the Company immediately donated 1 million yuan to the Zhejiang
Charity Federation. In the future the Company will continue to take the initiative
to assume social responsibility support public welfare undertakings with its own
actions benefit the society and make contributions to the construction of a
harmonious and beautiful society contribution.2. Fulfillment of the social responsibility of targeted poverty alleviation
In the reporting year the Company has not carried out targeted poverty
alleviation work and there is no follow-up targeted poverty alleviation plan for
the time being.3. Environmental protection
Whether the Company or the Company’s subsidiaries are critical pollutant
enterprises disclosed by environmental protection authorities
Yes
Name of main
Name of Numb Distribution Emission Total Approved Over
pollutants and Emission
Company or Emission mode er of of emission concentrati emissio total standard
characteristic standards
subsidiary outlets outlets on ns emission emission
pollutants
After being treated by the
Wanfeng Inside the GB8978-1996- 13.59 33.26 Reach the
CODcr sewage station it will be 1 86mg/l
Auto Wheel factory level 3 ton T/year standard
discharged through nanotube
After being treated by the
Wanfeng Ammonia Inside the GB8978-1996- Reach the
sewage station it will be 1 4.93mg/l 0.95 ton 3.33 T/year
Auto Wheel nitrogen factory level 3 standard
discharged through nanotube
After treatment it is discharged
Wanfeng Inside the GB16297-1996- 34.93 83.03 Reach the
VOCs through a 15-meter pipeline to 5 17.8mg/m3
Auto Wheel factory level 2 ton T/year standard
high altitude
After treatment it is discharged
Wanfeng Inside the GB16297-1996- Reach the
SO2 through a 15-meter pipeline to 3 3 mg/m3 3.26 ton 16.5 T/ year
Auto Wheel factory level 2 standard
high altitude
After treatment it is discharged
Wanfeng Inside the GB16297-1996- 23.36 Reach the
Nox through a 15-meter pipeline to 3 1.34mg/m3 75 T/year
Auto Wheel factory level 2 ton standard
high altitude
Wanfeng After being treated by the
Inside the GB8978-1996- 24.62 T/ Reach the
Motorcycle CODcr sewage station it will be 2 86mg/l 8.25 ton
factory level 3 year standard
Wheel discharged through nanotube
Wanfeng After being treated by the
Ammonia Inside the GB8978-1996- 0.825 2.462 T/ Reach the
Motorcycle sewage station it will be 2 4.93mg/l
nitrogen factory level 3 ton year standard
Wheel discharged through nanotube
Wanfeng After treatment it is discharged
Inside the GB16297-1996- 16.74 164.94 T/ Reach the
Motorcycle VOCs through a 15-meter pipeline to 6 28.54mg/ m3
factory level 2 ton year standard
Wheel high altitude
Wanfeng After treatment it is discharged
Inside the GB16297-1996- 13.32 T/ Reach the
Motorcycle SO2 through a 15-meter pipeline to 7 1.5mg/ m3 1.91 ton
factory level 2 year standard
Wheel high altitude
Wanfeng After treatment it is discharged
Inside the GB16297-1996- 20.05 Reach the
Motorcycle NOx through a 15-meter pipeline to 7 24mg/ m3 63.2 T/ year
factory level 2 ton standard
Wheel high altitude
After treatment it is discharged
Shanghai Inside the Reach the
VOCs through a 15-meter pipeline to 2 32.7mg/m3 DB31/933-2015 / /
Dacromet factory standard
high altitude
After being treated by the Northwest
Weihai GB8978-1996- Reach the
CODcr sewage station it will be 1 corner of the 28mg/l 5.88 ton 6.22 T/year
Wanfeng level 3 standard
discharged through nanotube factory
After being treated by the Northwest
Weihai Ammonia GB8978-1996- Reach the
sewage station it will be 1 corner of the 0.92 mg/l 0.59 ton 0.62 T/year
Wanfeng nitrogen level 3 standard
discharged through nanotube factory
After treatment it is discharged
Weihai Inside the DB37/2801.5- 9.295 T/ Reach the
VOCs through a 15-meter pipeline to 2 2.25mg/m3 7.12 ton
Wanfeng factory 2018 year standard
high altitude
After treatment it is discharged GB16297-1996-
Weihai Inside the 6.134 Reach the
NOx through a 15-meter pipeline to 3 148mg/m3 level 2； 6.02 ton
Wanfeng factory T/year standard
high altitude DB37/2376-2013
After treatment it is discharged GB16297-1996-
Weihai Inside the Reach the
SO2 through a 15-meter pipeline to 3 7.5mg/m3 level 2； 1.12 ton 1.87 T/year
Wanfeng factory standard
high altitude DB37/2376-2013
After treatment it is discharged
Jilin Inside the GB16297-1996- Reach the
SO2 through a 15-meter pipeline to 18 9mg/ m3 5.1ton 16.3 T/year
Wanfeng factory level 2 standard
high altitude
After treatment it is discharged
Jilin Inside the GB16297-1996- Reach the
NOx through a 15-meter pipeline to 18 31mg/ m3 15.7 ton 47.7 T/year
Wanfeng factory level 2 standard
high altitude
After treatment it is discharged
Jilin Inside the GB16297-1996- 124.8 Reach the
VOCs through a 15-meter pipeline to 2 12.56mg/ m3 48.2 ton
Wanfeng factory level 2 T/year standard
high altitude
After being treated by the
Jilin Inside the GB8979-1996- Reach the
CODcr sewage station it will be 1 110mg/L 18.2 ton 62 T/year
Wanfeng factory level 3 standard
discharged through nanotube
After being treated by the
Jilin Ammonia Inside the GB8979-1996- Reach the
sewage station it will be 1 2.05 mg/L 0.34 ton 0.9 T/year
Wanfeng nitrogen factory level 3 standard
discharged through nanotube
After treatment it is discharged
Weihai Inside the DB37/2801.5- Reach the
VOCs through a 15-meter pipeline to 2 4.4mg/l 1.6 ton /
Magnesium factory 2018 standard
high altitude
After treatment it is discharged GB16297-1996-
Weihai Inside the Reach the
NOx through a 15-meter pipeline to 1 20mg/l level 2； 0.86 ton /
Magnesium factory standard
high altitude DB37/2376-2013
Guangdong After treatment it is discharged
Inside the DB-44/816-2010- 26.68 Reach the
Motorcycle VOCs through a 15-meter pipeline to 2 25.7mg/l 8.41 ton
factory Second period T/year standard
Wheel high altitude
Construction and operation of pollution control facilities
The Company and its subsidiaries strictly adhere to the Environmental Protection Law of the People's Republic of China Water
Pollution Prevention Law of the People's Republic of China Air Pollution Prevention Law of the People's Republic of China
Environmental Noise Pollution Prevention Law of the People's Republic of China Solid Waste Pollution Prevention Law of the
People's Republic of China and other laws and regulations actively adopting high-efficiency and environmentally-friendly new
technologies to promote clean production in an all-round way and meet environmental protection requirements for all emission
indicators.
(1) Wastewater treatment
The Company and its subsidiaries all have built sewage treatment stations. After pretreatment all wastewater meets the national or
local standards and discharged through nanotube.
(2) Waste gas treatment
Coating exhaust gas is purified and discharged through exhaust gas treatment device (zeolite runner concentration + RTO dry
filtration + activated carbon adsorption + catalytic combustion etc.). The smelting exhaust gas is purified before discharge (bag dust
removal three-stage water shower etc.). All emissions meet national or local regulations. At present waste gas and wastewater
treatment equipment are operating normally and all pollutant indicators are within the specified standard range.Shanghai Dacromet has established VOC adsorption odor removal and particulate matter spraying and dust removal. All three
exhaust gas treatment facilities have passed the inspection and are in good operation. After the exhaust gas treatment the emissions
have reached the Shanghai air emission standard.(3) Solid waste treatment
In order to strengthen environmental management raise awareness of
environmental protection and control the storage and disposal of hazardous
waste the Company supervises its subsidiaries to build standardized
hazardous waste storage sites in strict accordance with the Hazardous Waste
Storage Pollution Control Standard" (GB18597-2001) and entrust relevant
qualified institutions to regulate the disposal. The relevant formalities are
complete. As for general industrial solid wastes temporarily unused or unusable
our company set up storage sites or adopt harmless disposal measures.Environmental Impact Assessment (EIA) of construction projects and
other administrative permits for environmental protection
The environmental impact assessment and acceptance of construction projects
of the Company and its subsidiaries are declared and approved in accordance
with relevant regulations and the procedures and corresponding documents
are complete.Environmental Contingency Plan
In accordance with the requirements of relevant regulations the Company and
its subsidiaries have prepared and filed "Contingency Plan for Sudden
Environmental Incidents". Combined with the implementation of environmental
emergency plans the Company evaluates environmental risks drafts plan and
conducts drills annually.Environmental self-monitoring program
The Company and its subsidiaries are equipped with automatic wastewater
monitors for 7*24. The monitoring indicators monitoring methods
implementation of emission standards and standard limits for pollutants have
been clearly specified and strictly implemented. At the same time a third-party
testing agency is regularly entrusted to conduct wastewater and exhaust gas
testing and issue testing reports annually.Other environmental information that should be disclosed
Not applicable
Other environmental information
Not applicable
4. Fulfillment of the social responsibility of targeted poverty alleviation
Not applicable
XIX. Other Significant Events
□ Applicable √ Not applicable
There were no other significant issues that need to be explained during the
current reporting period.XX. Significant Events of the Company’s Subsidiaries
□ Applicable √ Not applicable
Section VI: Changes in Shares and Information about Shareholders
I. Changes in shares
1. Changes in shares
Unit: Share
Before Changes in the period (+ -) After
Share
New Bonus transferred
Shares Ratio Shares Others Subtotal Shares Ratio
share from capital
Issued
reserve
1. Shares with
73144170 3.34% 24381390 24381390 97525560 4.46%
restriction
1) Shares held by
state
2) Shares held by
state-owned legal person
3) Other domestic
73144170 3.34% 24381390 24381390 97525560
shares
Of which: Shares held by
domestic legal person
Shares held by domestic natural 73144170 3.34% 24381390 24381390 97525560
person
4) Foreign shares
Of which: Shares held by
foreign legal person
Shares held by foreign natural
person
2. Shares without restriction 2113735508 96.66% -24381390 -24381390 2089354118 95.54%
1) RMB ordinary 2113735508 96.66% -24381390 -24381390 2089354118 95.54%
shares
2) Domestically
listed foreign shares
3) Overseas listed
foreign shares
4) Others
3. Total 2186879678 100.00% 2186879678 100.00%
Reason for the changes in share capital
□Applicable √Not applicable
Approval for changes in share capital
□Applicable √Not applicable
Transfer of shares
□Applicable √Not applicable
Information about the implementation of share repurchase
√Applicable □Not applicable
1) The Company held the 24th meeting of the sixth Board of Directors on
December 25 2018 and approved the "Proposal on the Repurchase of
Company Shares". As of December 24 2019 the Company share
repurchase plan has expired. Accumulatively through the repurchase
special securities account 45312250 shares were repurchased through
centralized auction trading with a total transaction amount of
332172772.73 yuan. The Company's share repurchase plan has been
implemented.2) The Company held the 32nd meeting of the sixth Board of Directors on
December 26 2019 and approved the "Proposal on the Repurchase of
Company Shares". As of December 25 2020 the Company share
repurchase plan has expired. Accumulatively through the repurchase
special securities account 35501808 shares were repurchased through a
centralized bidding transaction accounting for 1.62% of the company's total
share capital and the total transaction amount was 239640478.46 yuan.The Company's share repurchase plan has been implemented.3) The Company held the sixth meeting of the seventh Board of Directors on
December 30 2020 and Approved the "Proposal on the Repurchase of
Company Shares". The repurchase is to trade through the Shenzhen Stock
Exchange with its own funds or self-raised funds through centralized bidding.The total amount of the repurchased shares is not less than RMB 100 million
and not more than RMB 200 million. The repurchase price does not exceed
RMB 11 per share (inclusive). The repurchase period is no more than 12
months from the date of approval of this repurchase plan by board of
directors.As of December 31 2020 the Company's share repurchase plan has not yet
been implemented. As of February 5 2021 33958100 shares were
repurchased through a centralized bidding transaction through a special
security repurchase account accounting for 1.55% of the company’s total share
capital. The highest transaction price was RMB 6.91 per share and the lowest
transaction price was RMB 5.25 per share with a total transaction amount of
199999589.41 yuan. The Company's share repurchase plan has been
implemented.As of the disclosure date of this report the Company has cumulatively
repurchased 114772158 shares through centralized bidding transactions
through special securities repurchase accounts accounting for 5.25% of the
company's total share capital and the total transaction amount is
771812840.60 yuan.The progress on reduction of re-purchase shares by means of centralized
bidding
□Applicable √Not applicable
Effects of changes in share capital on the basic earnings per share (EPS)
diluted EPS net assets per share attributable to common shareholders of the
Company and other financial metrics over the last year and last period
□Applicable √Not applicable
Other contents that the Company considers necessary or required by the
security’s regulatory authorities to disclose
□ Applicable √ Not applicable
2. Changes in restricted shares
□ Applicable √ Not applicable
Unit: Share
Opening Unlock Closing
Name of Vested in
balance of shares in balance of Note for restricted Date of
sharehold current
restricted current restricted shares unlocking
er period
shares period shares
During the reporting
period Ms. Chen Ailian
ceased to be a director
Ms. Chen
73144170 24381390 0 97525560 of the Company and all Jan 2021
Ailian
the shares she held
became restricted
shares.Total 73144170 24381390 0 97525560 -- --
II. Issuance and Listing of Securities
1. Securities (exclude preferred share) issued during the reporting
period
□ Applicable √ Not applicable
2. Explanation on changes in share capital & the structure of
shareholders the structure of assets and liabilities
□ Applicable √ Not applicable
3. Existent shares held by internal staff of the Company
□ Applicable √ Not applicable
III. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholdings
Unit: Share
Total number of Total number of Total number of
Total number of
shareholders of shareholders of shareholders of preferred
shareholders of
common stocks at preferred stock with stock with resumed voting
common stocks at 53208 48790 0 0
previous month-end resumed voting right at rights at previous month-
the end of the
of this report’s the end of the reporting end of this report’s
reporting period
disclosure period disclosure
Shareholding status of shareholders holding more than 5% or the top 10 shareholders.Unit: Share
Quantity of stocks Quantity of Pledged or frozen stocks
Name Nature Ownership at the reporting restricted
period end stocks held Status Quantity
Domestic non-
Wanfeng Auto Holding Group state-owned 33.37% 729697747 Pledged 575419088
corporate
Aeon Life Insurance Company Limited – traditional insurance
Other 6.28% 137414138
products
Domestic
Chen Ailian 4.46% 97525560 97525560 Pledged 79380000
natural person
Zhejiang Wanfeng Auto Wheel Co. Ltd - Dedicated Securities
Other 3.70% 80814058
Account for Repurchase
Shanghai Perseverance Asset Management L.L.P - Gaoyi
Other 2.03% 44500000
Linshan No. 1 Yuanwang Fund
Aeon Life Insurance Company Limited – participating
1.94% 42329493
insurance products
Domestic non-
Shanghai Raas Blood Products Co. Ltd
state-owned 1.83% 39960800
corporate
Shaanxi Intl Trust-Shan Guo Tou- Jixiang Ruyi No.2 Targeted
trust plan of assembled funds Other 1.68% 36700000
CCB Principal Asset Management- Industrial Bank- China
Fortune Trust- China Fortune Trust·Huizhi Investments No.54 Other 1.67% 36523687
Structural trust plan of assembled funds
Chang’An International Trust Co. Ltd. – Chang’An Trust-
Chang’An Investment No.633 Securities Investments trust Other 1.67% 36420000
plan of assembled funds
Among the above-mentioned top ten shareholders Wanfeng Auto Holding Group holds 33.37% of the
Company’s shares and is the controlling shareholder. Ms. Ailian Chen holds 4.46% of the Company’s shares
and owns 39.6% of Wanfeng Auto Holding Group therefore the actual controller of the Company. Among
other shareholders CCB Principal Asset Management- Industrial Bank- China Fortune Trust- China Fortune
Explanation on the above-mentioned shareholders’ affiliated
Trust · Huizhi Investments No.54 Structural Pooled Funds Trust Plan became a shareholder through private
relationship or concerted action
placement in 2015. Aeon Life Insurance Company Limited – traditional insurance products and Aeon Life
Insurance Company Limited – participating insurance products are persons acting in concert. The Company
is not made aware whether there is any affiliated relationship between the other shareholders or whether they
are persons acting in concert.Explanation on the above-mentioned top ten shareholders Not applicable
that are engaged in margin trading business (if any)
Shareholding status of the top 10 non-restricted shareholders
Unit: Share
Number of Common Type of shares
Shares Held without
Name of Shareholder Restrictions at the
End of the Type Amount
Reporting Period
Wanfeng Auto Holding Group 729697747 RMB common stock 729697747
Aeon Life Insurance Company Limited – traditional insurance products 137414138 RMB common stock 137414138
Zhejiang Wanfeng Auto Wheel Co. Ltd - Dedicated Securities Account for Repurchase 80814058 RMB common stock 80814058
Shanghai Perseverance Asset Management L.L.P - Gaoyi Linshan No. 1 Yuanwang Fund 44500000 RMB common stock 44500000
Aeon Life Insurance Company Limited – participating insurance products 42329493 RMB common stock 42329493
Shanghai Raas Blood Products Co. Ltd 39960800 RMB common stock 39960800
Shaanxi Intl Trust-Shan Guo Tou- Jixiang Ruyi No.2 Targeted trust plan of assembled funds 36700000 RMB common stock 36700000
CCB Principal Asset Management- Industrial Bank- China Fortune Trust- China Fortune
36523687 RMB common stock 36523687
Trust·Huizhi Investments No.54 Structural trust plan of assembled funds
Chang’An International Trust Co. Ltd. – Chang’An Trust- Chang’An Investment No.633 Securities
36420000 RMB common stock 36420000
Investments trust plan of assembled funds
Chang’An International Trust Co. Ltd. – Chang’An Trust- Chang’An Investment No.669 Securities
34720374 RMB common stock 34720374
Investments trust plan of assembled funds
Among the above-mentioned top ten shareholders Wanfeng Auto Holding
Explanation of Associated Relationship or Concerted Actions among Top Ten Common Group holds 33.37% of the Company’s shares and is the controlling
Shareholders without Trading Restrictions and between Top Ten Common Shareholders shareholder. Ms. Ailian Chen holds 4.46% of the Company’s shares and
without Trading Restrictions and Top Ten Common Shareholders owns 39.6% of Wanfeng Auto Holding Group therefore the actual controller
of the Company. Among other shareholders CCB Principal Asset
Management- Industrial Bank- China Fortune Trust- China Fortune
Trust · Huizhi Investments No.54 Structural Pooled Funds Trust Plan became
a shareholder through private placement in 2015. Aeon Life Insurance
Company Limited – traditional insurance products and Aeon Life Insurance
Company Limited – participating insurance products are persons acting in
concert. The Company is not made aware whether there is any affiliated
relationship between the other shareholders or whether they are persons
acting in concert.Explanation of Top Ten Common Shareholders’ Participation in Securities Margin
Not applicable
Trading (If Any) (Refer to Note 4)
Any of the Company’s top 10 common shareholders or top 10 non-restricted common shareholders conducted any agreed buy-back
in the reporting period
□ Yes √ No
No such cases during the current reporting period.2. Particulars about controlling shareholder of the Company
Nature of the controlling shareholder: Natural person holding
Type of controlling shareholder: Legal person
Legal
Representative Date of
Name Organization code Business scope
/People in establishment
charge
Industrial
investment;
production and
sales:
automobile and
motorcycle parts
machinery and
Wanfeng Auto
electronic
Holding Group Chen Ailian 4-Mar-98 91330624704501065X
products; civil
Co. Ltd.aircraft import
and export;
goods import
and export;
technology
import and
export.Shares held by the controlling shareholder in
other listed companies through controlling or No
holding during the reporting period
Change of the controlling shareholder during the reporting period
□ Applicable √ Not applicable
The Company’s controlling shareholder has not changed during the reporting
period.3. Particulars about the Company’s actual controller & concerted parties
Nature of the actual controller: Domestic natural person
Type of the actual controller: Natural person
Relationship
with the Whether he/she has obtained the right of
Name Nationality
actual residence in another country or region
controller
Ms. Chen Ailian Herself China No
Wu Liangding family
(Mr. Wu Liangding Themselves China No
and Mr. Wu Jie)
Ms. Chen Ailian: Chinese nationality no permanent residency abroad born in
January 1958 postgraduate degree senior economics professional
qualification; Chair of the Board of Directors of Wanfeng Auto Holding Group
Co. Ltd. And Chair of Wanfeng Jinyuan Holding Group Co. Ltd.;
successively won honors and titles of Chinese Business Master National
Outstanding Entrepreneur National Outstanding Builder of Socialist Society
with Chinese Characteristics National “March 8th” Red Flag Bearer “China’sTop Ten Outstanding Women” “Zhejiang Merchants” China’s most influential“Business Women Diamond Mulan” “Hu Run Top 100 RichestEntrepreneurs”; elected as a representative of the 17th National Congress of
the Communist Party of China a representative of the 12th and 13th National
People’s Congress a member of the Non-Public Special Committee of the
National Party Building Research Association a party representative of the
11th 12th 13th 14th of the Zhejiang Provincial Committee of the Communist
Party of China; served as Vice President of China Enterprise Confederation
Vice President of Zhejiang Chamber of Commerce Vice President of
Zhejiang Federation of Industry and Commerce President of Zhejiang
Women Entrepreneurs Association Secretary of Party Committee of Zhejiang
Main occupation
Chamber of Commerce in Shanghai etc.and position
Mr. Wu Liangding: Chinese nationality no permanent residency abroad bornin September 1946 senior economics professional qualification “NationalLight Industry Labor Model” founder of Zhejiang Zhongbao Industrial Holding
Co. Ltd. And Zhejiang Rifa Holding Group Co. Ltd.Mr. Wu Jie: Chinese nationality no permanent residency abroad born in
October 1967 Master Degree of Law economist currently Chair CEO and
President of Zhejiang Rifa Holding Group Co. Ltd. Chair of Zhejiang Rifa
Precision Machinery Co. Ltd. He won the second prize of the National
Science and Technology Progress Award the National 863 Program CIMS
Theme Work Advanced Worker Zhejiang Outstanding Private Entrepreneur
the 3rd Zhejiang Youth Science and Technology Gold Award Shaoxing City
Youth Construction Hero the third price of Zhejiang Textile Industry Science
and Technology Progress Award. He is the Vice-Chair of Zhejiang Private
Economic Research Association Standing Director of China Economic
Development Forum Standing Director of Zhejiang Enterprise Confederation
5th Standing Director 7th Shaoxing Municipal People's Congress and many
others honorary titles.Domestic and Ms. Chen Ailian Mr. Wu Liangding and Mr. Wu Jie are the actual controllers
foreign listed of Rifa Precision Machinery (002520.SZ).companies
controlled in the Ms. Chen Ailian is one of the actual controllers of Changchun Jingkai
past 10 years (600215.SH).Change of the actual controller during the reporting period
□ Applicable √ Not applicable
No such change during the reporting period.The ownership and controlling relationship between the actual controller and
the Company is detailed as follows:
Ailian Chen Liangding Wu’s Family
39.60% 26.26%
Wanfeng Auto Holding Co. Ltd
4.46% 0.57%
33.37%
Wanfeng Auto Wheel Co. Ltd
The actual controller controls the Company via trust or other ways of asset
management
□ Applicable √ Not applicable
4. Particulars about other corporate shareholders with shareholding
proportion over 10%
□ Applicable √ Not applicable
5. Particulars on shareholding reduction restrictions for the controlling
shareholders actual controller restructurer or other committing
parties
□ Applicable √ Not applicable
Section VII: Information of Preferred Shares
□ Applicable √ Not applicable
No existing preferred shares for the Company during the current reporting
period.Section VIII: Information about Convertible Bonds
□ Applicable √ Not applicable
No existed Convertible bonds for the Company during the current reporting period.Section IX: Information about Directors Supervisors Senior Management
I. Shareholding Changes of Directors Supervisors Senior Management
Shares held
Shares Shares Shares held
at the
Termination increased decreased Other at the end
Tenure Commencement beginning
Name Title Gender Age of term of during the during the changes of the
status of term of office of the
office Period Period (Shares) Period
Period
(Shares) (Shares) (Shares)
(Shares)
Chen
Director Resigned Female 63 2017.02.28 2020.06.08 97525560 0 0 0 97525560
Ailian
Chen Bin Chair Incumbent Male 41 2019.03.25 2023.06.07
Chen
Director Incumbent Female 50 2020.06.08 2023.06.07
Hanxia
Director
Dong
General Incumbent Male 50 2017.02.28 2023.06.07
Ruiping
Manager
Li Yun Director Incumbent Male 43 2017.02.28 2023.06.07
Wu
Director Incumbent Male 52 2020.06.08 2023.06.07
Xingzhong
Deputy
General
Manager
Zhang
Director Incumbent Female 47 2020.06.08 2023.06.07
Yinfeng
Secretary to
Board of
Directors
Bu Yong Director Resigned Male 50 2017.02.28 2020.06.08
He
Director Incumbent Female 48 2020.06.08 2023.06.07
Qiongwen
Yang Independent
Resigned Male 50 2017.02.28 2020.06.08
Haifeng Director
Chu Independent
Incumbent Male 45 2017.02.28 2023.06.07
Minhong Director
Wang Independent
Resigned Male 45 2017.02.28 2020.06.08
Xiao Director
Independent
Xie Tao Incumbent Male 57 2020.06.08 2023.06.07
Director
Guan Independent
Incumbent Male 47 2020.06.08 2023.06.07
Zheng Director
Chair of
Yang
Board of Resigned Female 52 2017.02.28 2020.06.08
Huihui
Supervisors
Chair of
Xu
Board of Resigned Male 42 2020.06.08 2020.08.16
Zhenyu
Supervisors
Chair of
Xu
Board of Incumbent Male 50 2020.06.08 2023.06.07
Zhiliang
Supervisors
Yu
Supervisor Incumbent Male 49 2017.02.28 2023.06.07
Guangyao
Tong
Supervisor Incumbent Male 50 2017.02.28 2023.06.07
Shengkun
Yu
Supervisor Resigned Female 41 2017.05.22 2020.06.08
Tingting
Hu
Supervisor Incumbent Female 34 2020.09.07 2023.06.07
Xingxing
Chen
Supervisor Incumbent Male 44 2020.06.08 2023.06.07
Weidong
Deputy
Yang
General Incumbent Male 50 2019.01.10 2023.06.07
Huasheng
Manager
Deputy
Wu
General Incumbent Male 46 2017.05.22 2023.06.07
Shaoying
Manager
Chen
CFO Incumbent Male 45 2017.02.28 2023.06.07
Shanfu
Total -- -- -- -- -- -- 97525560 0 0 0 97525560
II. Changes of Directors Supervisors and Senior Management
√ Applicable □ Not applicable
Name Position Type Date Reason
Leave the position when term of
Chen Ailian Director 2020.06.08 --
office expires
Leave the position when term of
Zhang Yinfeng Director 2020.06.08 --
office expires
Leave the position when term of
Bu Yong Director 2020.06.08 --
office expires
Leave the position when term of
Yang Haifeng Independent Director 2020.06.08 --
office expires
Leave the position when term of
Wang Xiao Independent Director 2020.06.08 --
office expires
Leave the position when term of
Yang Huihui Chair of Board of Supervisors 2020.06.08 --
office expires
Xu Zhenyu Chair of Board of Supervisors Resigned 2020.08.16 Passed away on 2020.08.16
Leave the position when term of
Yu Tingting Supervisor 2020.06.08 --
office expires
III. Positions and Incumbency
Professional background work experience and main responsibilities of the
Company's current directors supervisors and senior management personnel.1. Mr. Chen Bin: Male born in 1979 MBA University of Hull. He is the Chair
of Zhejiang Wanfeng Auto Wheel Co. Ltd. Director and President of
Wanfeng Auto Holding Group Chair of Wanfeng Aviation Industry Co. Ltd.Chair of Wanfeng Aircraft Industry Co. Ltd. He has successively won the
awards and honors of “Chinese Master of Business Management” “ChineseSenior Economist” “Person of Year Zhejiang Provincial Economy”“Provincial Outstanding Entrepreneur” “Provincial Outstanding Youth”
“Provincial Top Ten Rising Star Zhejiang Entrepreneurs Award” “ProvincialTop Ten Innovative Zhejiang Entrepreneurs” “Provincial New ZhejiangEntrepreneurs” “Provincial New Generation Entrepreneur” “ProvincialYouth Entrepreneurship Award” Zhejiang "Ten Thousand Talents Program"
talents etc. He was elected as the representative of the 12th and 13th
People's Congress of Jilin Province member of the 7th and 8th Standing
Committee of the Shaoxing City of the CPPCC and served as the Chair of
the Wheel Committee of the China Automobile Manufacturers Association
the first Chair of the Zhejiang General Aviation Industry Association
(Alliance) and the vice-Chair of the Zhejiang New Generation
Entrepreneurs Association.2. Mr. Dong Ruiping: Male born in July 1970 EMBA of Fudan University
senior economics professional qualification. He is the Director and General
Manager of Zhejiang Wanfeng Auto Wheel Co. Ltd. Chair of Weihai
Wanfeng Auto Wheel Co. Ltd. Chair of Zhejiang Wanfeng Motorcycle
Wheel Co. Ltd. Chair of Shanghai Fengtu Automobile Technology Co. Ltd.Chair of Chongqing Wanfeng Auto Aluminum Wheel Co. Ltd. Director of
Wanfeng Auto Holding Group Co. Ltd.; Concurrently served as a
representative of the Xinchang County People's Congress of Shaoxing City;
Won the Top Ten Outstanding Youth of Weihai City and the Top Ten
Outstanding Professional Managers of Zhejiang Province in 2018; He used
to be the general manager and deputy general manager of Weihai Wanfeng
Auto Wheel Co. Ltd.3. Mr. Li Yun: Male born in September 1977 EMBA of Fudan University. He
is the Director of Zhejiang Wanfeng Auto Wheel Co. Ltd. Director of Ningbo
Aoweier Wheel Co. Ltd. and General Manager of Jilin Wanfeng Auto
Wheel Co. Ltd. He used to be the general manager of Jilin Wanfeng Auto
Wheel Co. Ltd general manager of Ningbo Aoweier Wheel Co. Ltd. the
director of the president office of Wanfeng Auto Holding Group Co. Ltd. the
Office Director Party Group Member and Office Director of the Xinchang
County Chengdong New District Management Committee and the Deputy
Mayor of Shaxi Town Government of Xinchang County.4. Mr. Wu Xingzhong: Male born in October 1968 university graduate senior
engineer. He is the Director of Zhejiang Wanfeng Auto Wheel Co. Ltd. and
the General Manager of Wuxi Xiongwei Precision Technology Co. Ltd. He
used to be the Director of the technology center of Wanfeng Auto Holding
Group the General Manager of the coating department of Zhejiang
Wanfeng Technology Development Co. Ltd. and the Assistant General
Manager and Deputy General Manager (in charge of marketing) of Zhejiang
Wanfeng Auto Wheel Co. Ltd.5. Ms. Chen Hanxia: Female born in September 1971 EMBA student. She
is the Director of Zhejiang Wanfeng Auto Wheel Co. Ltd. the Director and
Vice president of Wanfeng Auto Holding Group Co. Ltd. She used to be the
Chief Financial Officer Assistant and Deputy Chief Financial Officer of
Wanfeng Auto Holding Group Co. Ltd. and the Financial Manager of
Zhejiang Wanfeng Auto Wheel Co. Ltd.6. Ms. He Qiongwen: Female born in October 1972 Master Degree in Real
Estate Finance University of Cambridge. She is Director of Zhejiang
Wanfeng Auto Wheel Co. Ltd. the Deputy General Manager of Aeon Life
Insurance Asset Management Co. Ltd. She successively held relevant
management and investment positions in Ping An Insurance Company and
Xinhua Asset Management Co. Ltd. She joined Aeon Life Insurance Co.Ltd. in May 2011 and successively served as Deputy General Manager of
the investment department and Deputy General Manager of the asset
management center of Aeon Life Insurance Co. Ltd.7. Mr. Chu Minhong: Male born in June 1975 master’s degree. He is the
Independent Director of Zhejiang Wanfeng Auto Wheel Co. Ltd. Vice
President Secretary of the Board and Chief Financial Officer of Shanghai
Plite Composite Materials Co. Ltd. He used to serve as Executive Director
of Shenwan Hongyuan Securities Underwriting Sponsor Co. Ltd.8. Mr. Xie Tao: born in August 1963 bachelor’s degree member of ACCA
Singapore nationality. He is the Independent Director of Zhejiang Wanfeng
Auto Wheel Co. Ltd. an Independent Director of China Yuchai International
Limited and an Independent Director of Bull Group Co. Ltd. He used to be
a former partner of PricewaterhouseCoopers CEO of Agria Corporation
partner of Ernst & Young partner of Housheng Investment Fund CEO of
Hunan Dakang International Agri-Food Co. Ltd.9. Mr. Guan Zheng: Male born in December 1973 MBA of Oxford University
Chair of Invest industrial Asia Former Chair of Deutsche Bank North Asia
Managing Director Edmund Rothschild.10. Mr. Xu Zhiliang: Male born in March 1971 undergraduate Chair of Board
of Supervisors of Zhejiang Wanfeng Auto Wheel Co. Ltd. Director and
Deputy Secretary of the party committee and Director of the president's
office of Wanfeng Auto Holding Group Co. Ltd. Zhejiang General Aviation
Industry Association ( Alliance) Deputy Secretary-General member of the
10th Xinchang County Committee of the Chinese People's Political
Consultative Conference and the 13th Party Representative of Xinchang
County of the Communist Party of China; formerly Deputy Director
Organization Section Chief Director of the Office Member of the
Departmental Conference of Shaoxing Yuecheng District Organization
Department Office Xinjiang Deputy principal of Yutian No. 2 Middle School
in Hetian District (Aid Xinjiang) and vice-principal of Gaobu Town Middle
School in Yuecheng District Shaoxing City.11. Mr. Chen Weidong: Male born in December 1976 bachelor’s degree
statistician International Certified Internal Auditor. He is the supervisor
manager of the audit department of Zhejiang Wanfeng Auto Wheel Co. Ltd.and once served in the marketing department assistant of comprehensive
statistics manufacturing manager Assistant of Weihai Wanfeng Auto Wheel
Co. Ltd audit manager of Wanfeng Holding Group Co. Ltd. He has won
the recognition from provincial and departmental level and prefecture (city)
level once each.12. Mr. Tong Shengkun: Male born in August 1970 university degree
Supervisor and Chief Engineer of Zhejiang Wanfeng Auto Wheel Co. Ltd.He has presided over the development of more than 1600 aluminum wheels
passed 22 provincial new product appraisals and is responsible for the
implementation of 2 national innovation projects and 3 provincial innovation
projects. 2 national standards and 2 industry standards have been
formulated and released. He is the Company's technical expert talent andhas received the following honors: “The Top Ten Best New Xinchang Peoplein 2005” “The Seventh Batch of Top-notch Professional and TechnicalTalents in Xinchang County in 2007" the third-level training personnel of
the "New Century 151 Talent Project" in Zhejiang Province in 2007 the Top
Ten Enterprises Innovative Talents in Xinchang County in 2009，Excellent
Enterprise Manager of Zhejiang Machinery Industry in 2016 Chief Engineer
of Outstanding Project of China Transportation Association in 2019
13. Mr. Yu Guangyao: Male born in October 1971 college degree Supervisor
of Zhejiang Wanfeng Auto Wheel Co. Ltd. and Manager of safety and
environmental protection department. He used to serve as Director of
General Manager Office and Chair of Labor Union Manager of Internal
Affairs Department of Manufacturing Center Manager of Outsourcing
Department Factory Directorof Zhejiang Wanfeng Auto Wheel. Ltd.Director of Party Committee Office Head of Discipline Inspection and
Supervision Department of Wanfeng Auto Holding Group Co. Ltd. He has
received the following honors: Excellent Trade Union Worker of Xinchang
County Federation of Trade Unions in 2002 Outstanding Trade Union
Worker of Xinchang County Federation of Trade Unions in 2005 Active
Worker of Shaoxing City Trade Union in 2011 Outstanding Individual
Production Safety of Xinchang County in 2020.14. Hu Xingxing: Female born in January 1987 bachelor’s degree Supervisor
of Zhejiang Wanfeng Auto Wheel Co. Ltd. a supervisor of Wanfeng Auto
Holding Group Co. Ltd. and deputy director of the Legal Affairs Center;
formerly she has served as the head of the Risk Management and Control
Department of the Legal Center Chief of the Compliance Management
Department Deputy Head of Risk Management and Control Department of
Wanfeng Auto Holding Group Co. Ltd.15. Ms. Zhang Yinfeng: Female born in February 1974 bachelor degree
Deputy General Manager and Secretary of the Board of Directors of
Zhejiang Wanfeng Auto Wheel Co. Ltd. Secretary of the Board of Directors
of Weihai Wanfeng Auto Wheel Co. Ltd. Secretary of the Board of Directors
of Ningbo Wanfeng Aoweier Wheel Co. Ltd. Secretary of the Board of
Directors of Weihai Wanfeng Magnesium Technology Development Co.Ltd. Secretary of the Board of Directors of Jilin Wanfeng Auto Wheel Co.Ltd. Secretary of the Board of Directors of Chongqing Wanfeng Auto
Aluminum Wheel Co. Ltd. Secretary of the Board of Directors of Zhejiang
Wanfeng Motorcycle Wheel Co. Ltd. Secretary of the Board of Directors of
Shanghai Dacromet Coating Industry Co. Ltd; She used to serve as
Securities Affairs Representative of Zhejiang Wanfeng Auto Wheel Co. Ltd.and Assistant General Manager of Zhejiang Wanfeng Technology
Development Co. Ltd.16. Mr. Wu Shaoying: Male born in November 1974 college degree Deputy
General Manager of Zhejiang Wanfeng Auto Wheel Co. Ltd. in charge of
production. He used to be the Supervisor the Director of the third plant and
Manager of the manufacturing department of Zhejiang Wanfeng Auto Wheel
Co. Ltd. Deputy General Manager and General Manager of Ningbo
Aoweier Wheel Co. Ltd. and Deputy General Manager of Jilin Wanfeng
Auto Wheel Co. Ltd.17. Mr. Yang Huasheng: Male born in August 1970 master’s degree Deputy
General Manager of Zhejiang Wanfeng Auto Wheel Co. Ltd. He used to be
the General Manager Assistant the Manager of the first international
department the Manager of the OEM department the Deputy Manager of
the second marketing center of Zhejiang Wanfeng Auto Wheel Co. Ltd.and the Business Director of the German SCHOTT Group.18. Mr. Chen Shanfu: Male born in April 1976 university degree professional
talent in corporate management. He is the CFO of Zhejiang Wanfeng Auto
Wheel Co. Ltd. He used to be the Financial Manager of Shanghai Wanfeng
Aluminum and Chongqing Wanfeng Motorcycle Wheel Co. Ltd and the
Director of capital management and the Deputy Financial Director of
Wanfeng Auto Holding Group Co. Ltd.Position held in shareholders’ entities
√Applicable □ Not applicable
Compensation
Position in and allowance
Shareholder's Commencement Termination
Name shareholders’ from the
entity of the term of the term
entities shareholders'
entity
Wanfeng Auto
President
Chen Bin Holding Group 6-Feb-15 No
Director
Co. Ltd.Wanfeng Auto
Chen
Holding Group Vice President 1-Jan-17 Yes
Hanxia
Co. Ltd.Aeon Life
Insurance Deputy
He
Asset General 1-Jan-17 Yes
Qiongwen
Management Manager
Co. Ltd.Wanfeng Auto
Xu
Holding Group Director 26-Jul-18 Yes
Zhiliang
Co. Ltd.Wanfeng Auto
Dong
Holding Group Director 26-Jul-18 No
Ruiping
Co. Ltd.Wanfeng Auto
Hu
Holding Group Supervisor 29-Sept-20 Yes
Xingxing
Co. Ltd.Description of the
position in shareholders’ N/A
entities
Positions held in other entities
√Applicable □ Not applicable
Compensation
Position in and allowance
Name of Commencement Termination
Name other from the
other entities of the term of the term
entities shareholders'
entity
Vice
President
Shanghai Plite Chief
Chu Composite Financial
26-Feb-16 Yes
Minhong Materials Co. Officer and
Ltd. Secretary of
the Board of
Directors
China Yuchai
Independent
Xie Tao International 1-Apr-19 Yes
Director
Limited
Bull Group Independent
Xie Tao 23-Dec-17 Yes
Co. Ltd. Director
Guan Chair of
Investindustrial 1-Mar-20 Yes
Zheng Asia Region
Description
of the
position in N/A
other
entities
Incumbent and resigned directors supervisors and senior management
personnel during the reporting period that have been imposed administrative
penalties by the CSRC during the last three years.□ Applicable √ Not applicable
IV. Remuneration of Directors Supervisors and Senior Management
Decision-making procedures determination basis and actual payment of
directors supervisors and senior executives' remuneration
The work group under Remuneration Committee proposes data and
calculation basis and the Committee puts forward a salary appraisal
plan. This remuneration plan of directors and supervisors will be
Decision-making approved by the Board of directors and implement after the general
procedures for the meeting of shareholders. The remuneration plan for senior management
remuneration of will be approved by the board of directors. Directors supervisors and
directors supervisors senior management submit reports and self-assessments of the annual
and senior executives appraisal and the Committee conducts appraisal based on the standards
and completed performance (performance indicators are subject to
external audit data) the appraisal results are submitted to the Board of
Directors for approval by procedures.Remuneration is determined based on job responsibilities of directors
and supervisors the scope of the position the Company’s profit growth
The basis for
and the remuneration level of comparable companies. The monthly
determining the
salary is assessed by the Company's human resources department and
remuneration of
the Company's actual completion indicators (subject to the external audit
directors supervisors
data) will be evaluated in accordance with the standards. The actual
and senior managers
annual salary will be determined after the evaluation results are
submitted for approval in accordance with regulations.Actual payment of
remuneration for During the reporting period a total of RMB 8555300 paid to directors
directors supervisors supervisors and senior management..and senior executives
Remuneration of directors supervisors and senior management personnel
Unit: 10000 RMB
Total
Remuneration
Tenure remuneration
Name Title Gender Age from related
status from the
parties (Y/N)
Company
Chen Ailian Director Female 63 Resigned Yes
Chen Bin Chair Male 41 Incumbent 346.03
Chen
Director Female 50 Incumbent Yes
Hanxia
Director
Dong
General Male 50 Incumbent 75.03
Ruiping
Manager
Li Yun Director Male 43 Incumbent 63.96
Wu
Director Male 52 Incumbent 68.67
Xingzhong
Deputy
General
Manager
Zhang
Director Female 47 Incumbent 44.34
Yinfeng
Secretary to
Board of
Directors
Bu Yong Director Male 50 Resigned
He
Director Female 48 Incumbent Yes
Qiongwen
Yang Independent
Male 50 Resigned 5
Haifeng Director
Chu Independent
Male 45 Incumbent 6
Minhong Director
Independent
Wang Xiao Male 45 Resigned 3
Director
Independent
Xie Tao Male 57 Incumbent 5
Director
Guan Independent
Male 47 Incumbent 3
Zheng Director
Chair of Board
Yang Huihui Female 52 Resigned
of Supervisors
Chair of Board
Xu Zhenyu Male 42 Resigned
of Supervisors
Chair of Board
Xu Zhiliang Male 50 Incumbent Yes
of Supervisors
Yu
Supervisor Male 49 Incumbent 30.6
Guangyao
Tong
Supervisor Male 50 Incumbent 53.45
Shengkun
Yu Tingting Supervisor Female 41 Resigned 7.25
Hu Xingxing Supervisor Female 34 Incumbent Yes
Chen
Supervisor Male 44 Incumbent 9.01
Weidong
Deputy
Yang
General Male 50 Incumbent 48.48
Huasheng
Manager
Deputy
Wu
General Male 46 Incumbent 53.43
Shaoying
Manager
Chen
CFO Male 45 Incumbent 33.28
Shanfu
Total -- -- -- -- 855.53
Share incentives for directors supervisors and senior executives in the
Reporting Period
□Applicable √Not applicable
V. Company’s Employee
1． Statistics of employees professional structure of the staff and
educational background
Number of incumbent employees in the parent 1487
company
Number of incumbent employees in major 10319
subsidiaries
Number of incumbent employees 11806
Number of employees receiving salaries in 11806
current period
Number of retired employees requiring the0
parent Company and
its subsidiaries to bear costs
Professional structure
Tier Number of employees8827
Production staff172
Sales staff1576
Technical staff135
Financial staff
Administrative Staff 1096
Total 11806
Educational background
Education background Number of employees
Master and/or doctor/or above 159
Bachelor 1143
College 2206
High school and below 8298
Total 11806
2． Staff remuneration policy
The salary includes basic salary performance bonus overtime salary other
bonuses and deductions seniority allowance and other benefits. The wage of
production personnel is determined according to the piece rate qualification
rate seniority allowance skill allowance and other relevant indicators. The
salaries of sales staff consist of basic salary performance bonus overtime
salary bonuses and deductions seniority subsidies and benefits. Their
performance salary is related to indicators such as sales completion rate return
completion rate gross profit margin and accounts receivable management.Administrative staff salaries are assessed according to the key performance
indicators specified for different job functions.3． Staff training plans
To improve the overall quality and work efficiency of employees the Company's
human resources department prepare a training plan for the next year which
will include training content schedule participants training methods cost etc.The training plan includes policies and cultural training employee skills training
professional technical training manager quality training executive training etc.4． Labor outsourcing
□Applicable √ Not applicable
Section X: Corporate Governance
I. Corporate Governance Overview
During the reporting period the Company strictly followed the requirements of
the Company Law Securities Law and relevant laws and regulations of the
China Securities Regulatory Commission to continuously improve the corporate
governance of the Company and establish and improve internal management
and control systems. As of the end of the reporting period the Company's
operations information disclosure practices and the actual status of corporate
governance basically met the requirements of the regulatory documents on
listed company governance issued by the China Securities Regulatory
Commission. In the future work the Company will continue to improve the
corporate governance structure of the Company in accordance with relevant
laws and regulations and the requirements of the Shenzhen Stock Exchange
further standardize the operation of the company and improve the level of
corporate governance.1. About shareholders and general meeting of shareholders
The Company convenes a general meeting of shareholders in strict accordance
with the Articles of Association and Rules of Procedure of the General Meeting
of Shareholders to ensure that all shareholders especially small and medium
shareholders enjoy equal status and fully exercise their rights.2. About the Company and its controlling shareholders
The Company has independent businesses and autonomous operating
capabilities separate from controlling shareholder in terms of business
personnel assets organizations and finances. The controlling shareholder of
the Company strictly regulates their own behavior and does not directly or
indirectly interfere with the Company’s decision-making and business activities
beyond the Company’s general meeting of shareholders. The Company's board
of directors board of supervisors and internal units operate independently.3. About directors and the board of directors
The Company elects directors in strict accordance with the selection and
appointment procedures stipulated in the Articles of Incorporation; the
Company currently has 3 independent directors accounting for one third of all
directors. The number and composition of the board of directors comply with
the requirements of laws and regulations and the Articles of Association. All
directors of the Company carry out their duty in accordance with the Rules of
Procedure of the Board of Directors Guidance Note on Independent Directors
Conduct Code of Directors of Listed Companies in the SME Board attend the
board meetings and general meeting of shareholders on time actively
participate in relevant knowledge training and are familiar with relevant laws
and regulations.4. About the supervisors and the board of supervisors
The Company’s board of supervisors has 5 supervisors including 2 employee
representatives. The number and composition of the board of supervisors meet
the requirements of relevant laws and regulations; the board of supervisors
convenes meetings in strict accordance with the Articles of Association
and Rules of Procedures for the Board of Supervisors; Supervisors can
earnestly perform their duties and effectively supervise the Company's major
investment and financing decisions financial status and performance of
directors and senior management.5. About performance evaluation and incentive restraint mechanism
The Company has gradually established fair and transparent performance
evaluation standards and incentive restraint mechanisms for directors
supervisors and managers. The remuneration of senior managers is linked to
the Company’s business performance indicators and the recruitment
procedure of managerial level employees is open and transparent in line with
laws and regulations.6. About relevant stakeholders
The Company fully respects and safeguards the legitimate rights and interests
of relevant stakeholders balances the interests of society shareholders
employees and the Company and jointly promotes the Company's sustainable
development.7. About information disclosure and transparency
The Company has designated the secretary of the board of directors to oversee
information disclosure investor relations management and reception of visits
and inquiries from shareholders; designated Securities Times and
CNINFO.COM as the Company’s information disclosure newspapers and the
website. The Company ensures that all shareholders have a fair opportunity to
obtain information by disclosing information truthfully accurately and in a timely
manner in strict accordance with relevant laws and regulations
8. About the internal audit system
The Company has established an audit department with three auditors. Under
the leadership of the audit committee of the board of directors the internal audit
function supervises the Company and its subsidiaries’ business activities and
results internal control system and implementation usage of various expenses
and asset update-to-date status to ensure compliance with corporate
governance standards.II. Independence of Business Personnel Assets Organizations
Finances from Controlling Shareholder
The Company is independent of its controlling shareholders in terms of
business personnel assets organization and finance. The Company has
independent and complete business and independent management capabilities.1. Business
The Company's business is independent of the controlling shareholder and its
subsidiaries has an independent and complete supply production and sales
system and conducts business independently without relying on shareholders
or any other related parties.2. Personnel
The Company’s personnel labor human resources management and wages
are completely independent. The Company’s Chair general manager deputy
general managers secretary of the board of directors chief financial officer and
other senior management personnel all work in the Company and receive
salaries and there is no part-time job prohibited by relevant laws and
regulations.3. Assets
Except for some of the office buildings used by the Company which are leased
from related parties the Company has a production and operation site
independent of the controlling shareholder an independent and complete asset
structure an independent production system auxiliary production system and
supporting facilities and land use rights property ownership right independent
procurement and sales systems.4. Organization
The Company has established a sound organizational system operates
independently and has no affiliation with controlling shareholders or other
functional departments.5. Finance
The Company has an independent financial department has established an
independent accounting system and financial management system and
independently makes financial decisions. The Company opens bank accounts
and pays taxes independently.III. Horizontal Competition
□ Applicable √ Not applicable
IV. Information about the Annual General Meeting and Extraordinary
General Meeting held During the Reporting Period
1. Annual General Meeting convened during the reporting period
Proportion of
Disclosure
Meeting Type participating Convened Date Disclosure Index
date
investors
Announcement of
the 1st
st Extraordinary 2020 1 extraordinary
General Meeting of
extraordinary general 60.52% 2020.01.13 2020.01.14
Shareholders in
general meeting meeting 2020 (2020-002)
published in the
Securities Times
and CNINFO
Announcement of
the 2nd
Extraordinary
nd General Meeting of 2020 2 extraordinary
Shareholders in
extraordinary general 71.57% 2020.03.20 2020.03.21
2020 (2020-002)
general meeting meeting published in the
Securities Times
and CNINFO
Announcement of
the 3rd
Extraordinary
rd General Meeting of 2020 3 extraordinary
Shareholders in
extraordinary general 61.29% 2020.06.08 2020.06.09
2020 (2020-038)
general meeting meeting published in the
Securities Times
and CNINFO
Announcement of
2019 Annual
General Meeting of
annual Shareholders
2019 annual
general 64.58% 2020.07.15 2020.07.16 (2020-059)
general meeting
meeting published in the
Securities Times
and CNINFO
Announcement of
the 4th
Extraordinary
2020 4th extraordinary
General Meeting of
extraordinary general 51.79% 2020.08.19 2020.08.20
Shareholders in
general meeting meeting 2020 (2020-079)
published in the
Securities Times
and CNINFO
Announcement of
the 5th
Extraordinary
th General Meeting of 2020 5 extraordinary
Shareholders in
extraordinary general 43.71% 2020.09.07 2020.09.08
2020 (2020-086)
general meeting meeting published in the
Securities Times
and CNINFO
Announcement of
the 6th
Extraordinary
th General Meeting of 2020 6 extraordinary
Shareholders in
extraordinary general 42.61% 2020.11.02 2020.11.03
2020 (2020-098)
general meeting meeting published in the
Securities Times
and CNINFO
2. Extraordinary general meetings convened at the request of preferred
shareholders with resumed voting rights:
□ Applicable √ Not applicable
V. Performance of duties by Independent Directors During the
Reporting Period
1. Attendance of independent directors in board meetings and general
meetings
Attendance of independent directors in board meetings and general meetings
Presence
Board Board Board
of
meeting meeting Board meeting
Board independe
presence presence meeting Board not
Name of meeting nt
required in by presence meeting attended
Independent presence directors
the telecom- through a absence in person
Director on site in general
reporting communic proxy (times) for two
(times) meetings
period ation (times) consecutiv
(times)
(times) (times) e times
Yang Haifeng 4 0 4 0 0 No 2
Chu Minhong 10 1 9 0 0 No 7
Wang Xiao 4 0 4 0 0 No 1
Xie Tao 6 0 6 0 0 No 4
Guan Zhen 6 0 6 0 0 No 2
2. Objections from independent directors on related issues of the
Company
Were there any objections on related issues of the Company from independent
directors?
□ Yes √ No
3. Other details about the performance of duties by independent directors
Were there any suggestions from independent directors accepted by the
Company?
√ Yes □ No
During the reporting period the independent directors of the Company followed
the Company Law Guiding Opinions on Establishing an Independent Director
System in Listed Companies Guidelines for the Normative Operation of Listed
Companies on the Shenzhen Stock Exchange Articles of Association and
Independent Director Work System and other relevant laws regulations and
rules and regulations. They were diligent responsible and independently
performed their duties; pay close attention to the industry trends and the
opportunities and challenges in the Company’s business and promptly alert
risks; review the regular reports and temporary announcements provided by the
Company; carefully review each proposal and play a positive role in the
decision-making management and operation of the board of directors; pay
close attention to the Company's internal control operation status and put
forward constructive opinions which effectively safeguard the interests of the
small and medium shareholders. The Company accepted reasonable
suggestions raised by independent directors.VI. Performance of Special Committees under the Board of Directors
During the Reporting Period
1. Performance of the duties of the Strategy Committee
The Strategy Committee of the Board of Directors performs its duties in
accordance with the Articles of Association and Working Rules of the Strategy
Committee. It is mainly responsible for conducting feasibility studies on
important issues such as the Company's strategic planning investment and
financing plans and making reasonable suggestions. During the reporting
period the Strategy Committee mainly carried out the following tasks: (1)
Provided guiding suggestions for the Company's entry into general aviation
aircraft manufacturing business and the transformation from solo auto parts to
dual-engine strategy. (2) In-depth analysis of the Company's industry prospects
and operating conditions in various business areas exchanges with company
directors and senior management and putting forward constructive opinions
and playing an important role in the decision-making of the board of directors
and the Company's high-quality development.2. The performance of the duties of the Audit Committee
The Audit Committee of the Board of Directors performs its duties in
accordance with the Articles of Association and Working Rules of the Audit
Committee. It is mainly responsible for supervising the implementation of the
Company's internal audit reviewing internal control external guarantees etc.and making reasonable suggestions; strengthening the communication
between internal and external auditing; reviewing the Company’s financial
information and its disclosure and proposing to hire an audit agency. During
the reporting period the audit committee carefully reviewed the Company’s
periodic reports of financial information and its disclosure reviewed the routine
audit reports with internal audit department and put forward constructive
suggestions on the effective implementation of internal control the selection
and appointment of external audit institutions and the annual audit work. In the
annual report audit in accordance with the relevant requirements of the China
Securities Regulatory Commission it fully communicated with the Company’s
audit department finance department and annual audit accountants
reasonably determined the annual audit work plan proposed reasonable
solutions to the problems in the audit process and timely reviewed the
Company’s the unaudited financial statements and draft of accountants' audit
report and earnestly performed the duties of the audit committee.3. Performance of the duties of the Remuneration and Appraisal
Committee
The Remuneration and Appraisal Committee of the Board of Directors
performs its duties in accordance with the Articles of Association and the
Working Rules of the Remuneration and Appraisal Committee. It is mainly
responsible for formulating the remuneration plan for directors and senior
management personnel of the Company reviewing their performance carrying
out annual performance appraisal and supervising the implementation of the
Company's remuneration system. During the reporting period the
Remuneration and Appraisal Committee conducted a serious review of the
remuneration appraisal methods of the Company’s directors and senior
management personnel and believed that the Company could strictly follow the
remuneration and relevant incentive appraisal system and the remuneration
payment complied with provisions of relevant laws regulations and the Articles
of Association.4. Performance of the duties of Nomination Committee
The Nomination Committee of the Board of Directors performs its duties in
accordance with the Articles of Association and Working Rules of the
Nomination Committee. It is mainly responsible for formulating the selection
criteria and procedures for directors and senior managers searching for
qualified directors and senior managers conducting reviews and making
recommendations. During the reporting period the term of office of the sixth
board of directors and senior executives expired. The Nomination Committee
reviewed the qualifications and capabilities of the new directors senior
executives and other personnel. It believed that the nominated persons are
capable of fulfilling the responsibilities of the corresponding positions which will
further promote the stability of the Company’s management team and benefit
the development of the Company.VII. Performance of Supervisors Board
Were there any risks to the Company identified by Supervisory Committee
when performing its duties during the Reporting Period?
□ Yes √ No
The Board of Supervisors has no objection to the supervision matters during
the reporting period.VIII. Assessment and incentive mechanism for the senior management
According to the remuneration appraisal plan for senior executives approved
by the Remuneration and Appraisal Committee of the Board of Directors a dual
appraisal system of operating and management task indicators was
implemented for senior executives and the business and management
objectives were quantified. 2020 Responsibilities Authority and Performance
Targets was signed. The annual task indicators are broken down to each month
monthly and annual performance evaluations are implemented according to the
completion of business and management indicators and salary ratings job
arrangements and hiring are determined based on the results of the evaluation.The Company will continue to improve the assessment and incentive
mechanism for senior managers to maximize the potential of senior managers.IX. Internal Control evaluation Report
1. Any significant internal control deficiencies during the reporting period
□ Yes √ No
2. Self-evaluation report on internal control
Disclosure date of full text
of self-evaluation report on April 30 2021
internal control
Disclosure index of full text
of self-evaluation report on Self-evaluation Report on Internal Control of the Company in 2020 http://www.cninfo.com.cn
internal control
Proportion of assets
evaluated in total assets 100.00%
per consolidated financial
statement
Proportion of revenue
evaluated in total revenue 99.6%
per consolidated financial
statement
Recognition standard of deficiencies
Nature Financial report Non-financial report
The determination of non-financial report deficiencies is mainly
Major deficiencies: Single deficiencies or in combination with other deficiencies
based on the degree of influence of the deficiencies on the
lead to failure to prevent or detect and correct major misstatements in financial
effectiveness of the business process and the possibility of
reports in a timely manner. If the following circumstances occur it is deemed as
occurrence. If the probability of occurrence of a defect is ow or
a major defect: ①The control environment is invalid; ②The fraudulent
it will reduce work efficiency or effectiveness or increase the
behavior of directors supervisors and senior management; ③Major
uncertainty of the effect or make it deviate from the expected
deficiencies that have been discovered and reported to the management have
Qualitative criteria target it is deemed as a general defect; if the probability of
not been corrected after a reasonable time; ④The supervision of internal
occurrence of a defect is high or it will significantly reduce work
control by the company’s audit committee and the audit department is invalid;
efficiency or effectiveness or significantly increase the
⑤Other defects that may affect the correct judgment of the report users.uncertainty of the effect or make it significantly deviate from
Important defects: Individual defects or other defects that cannot be prevented
the expected target it is deemed as an material defect; if the
or detected and corrected in a timely manner in the financial report although
probability of occurrence of the defect is high or it will seriously
the level of importance is not reached or exceeded the misstatement should
reduce the work efficiency or effectiveness or seriously
still be paid attention to by management. General defects: other internal control increase the uncertainty of the effect or make it seriously
defects that do not constitute major defects or important defects. deviate from the expected target it is deemed as a major
defect.Losses that may be caused by internal control defects and related to the
income statement are measured by the total profit indicator. If this defect alone
or in combination with other defects may cause the financial report
The quantitative standards for the determination of defects in
misstatement amount to exceed 10% of the total profit it is deemed a major
non-financial reports are mainly determined based on the
defect; if it is less than 10% of the total profit more than 5% is deemed a major
absolute amount of direct property losses that the defects may
defect; if it is less than 5% of the total profit it is regarded as a general defect.cause. If the amount of direct property loss exceeds 10% of the
Quantitative criteria Losses that may be caused by internal control deficiencies are related to asset
total profit it is deemed a major defect; if it is less than 10% of
management are measured by the total assets indicator. If the financial report
the total profit more than 5% it is deemed a major defect; if it
misstatement amount caused by the defect alone or in combination with other
is less than 5% of the total profit it is deemed a general defect.defects exceeds 1% of the total assets it is considered a major defect; if it is
less than 1% of the total assets and more than 0.5% it is considered a major
defect; if it is less than the total assets 0.5% is regarded as a general defect.Number of significant0
deficiencies in financial
report
Number of significant0
deficiencies in non-
financial report
Number of important0
deficiencies in financial
report
Number of important0
deficiencies in non-
financial report level
3. Internal Control Audit or Assurance Report
Not applicable
Section XI: Corporate Bonds
Whether the Company has publicly issued corporate bonds on Stock Exchange
which has not terminated or terminated but fail to collect the full payment before
annual report authorized disclosure date.□Yes √No
Section XII: Financial Statements
I. Auditor Report
Type of audit opinion Standard Unqualified opinion
Date of signing of audit report April 28 2021
Name of audit firm Ernst & Young Hua Ming LLP
Ernst & Young Huaming (2021) Audit No.Document number of audit report
60468741_B01
Name of the certified accountants Yin Guowei Zhou Hao
Auditor’s Report
1. Audit opinion
We have audited the financial statements of Zhejiang Wanfeng Auto Wheel
Co. Ltd. (the “Company”) including the consolidated and parent company
balance sheets as of December 31 2020 the consolidated and parent
company income statements cash flow statements and statements of
changes in equity for the year ended in 2020 as well as notes to financial
statements.In our opinion the attached financial statements of Zhejiang Wanfeng Auto
Wheel Co. Ltd. present fairly in all material respects the financial position
of the Company as of December 31 2020 its financial performance and its
cash flows for the year ended in accordance with China Accounting
Standards for Business Enterprises.2. Basis for Audit Opinion
We conducted our audit in accordance with Chinese Standards on Audit.Our responsibilities under those standards are further described in the
Certified Public Accountant’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of Zhejiang Wanfeng
Auto Wheel Co. Ltd. in accordance with the China Code of Ethics for
Certified Public Accountants and we have fulfilled other ethical
responsibilities. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.3. Key Audit Matters
Key audit matters are those matters that in our professional judgment were
of most significance in our audit of the financial statements of the current
period. These matters were addressed in the context of our audit of the
financial statements and in forming our opinion thereon and we do not
express a separate opinion on these matters.We have fulfilled the responsibilities described in the "Certified Accountants'
Responsibilities for the Audit of Financial Statements" section of this report
including those related to these key audit matters. Correspondingly our
audit work includes the implementation of audit procedures designed to deal
with the risk of material misstatement of assessed financial statements. The
results of our audit procedures including the procedures performed in
response to the following key audit matters provide a basis for the overall
audit opinion of the financial statements.Key audit matters How the matter was dealt with in the audit
Goodwill impairment
As of December 31 2020 the book value of goodwill During the audit process we assessed the
of Zhejiang Wanfeng Auto Wheel Co. Ltd. and its Group management’s identification of CGUs and
subsidiaries (hereinafter referred to as "the Group") group of CGUs and the goodwill allocated to
totaled RMB 1662.99 million. The Accounting CGUs and group of CGUs. With the assistance
Standards for Business Enterprises require the Group of internal valuation experts we evaluated the
to conduct a goodwill impairment test at least annually. rationality of the major assumptions and
The assessment of goodwill impairment is based on evaluation methods used by the Group
the recoverable amount of each cash-generating unit management in predicting the recoverable
(CGU) or group of CGUs to which the goodwill amount of the CGU including the discount rate
belongs. We identified the impairment of goodwill as a and long-term growth rate etc. In addition we
key audit matter because of the importance of the evaluated the rationales of the estimated sales
Group’s goodwill balance to financial reporting and the revenue and operating performance in the future
complexity of the assessment process of goodwill and compared it with its historical operating
impairment. The management involves the use of performance. We also reviewed the sensitivity
significant judgments when determining whether analysis on the recoverable amount of the CGU
goodwill is impaired and there is inherent uncertainty and assessed whether the possible reasonable
in estimating future cash flows. changes in key assumptions would cause the
book value of the CGU to exceed its recoverable
The disclosure of the impairment of goodwill is amount. In addition we have checked the
included in notes V 31 43 and notes VII and 28 of the adequacy of the relevant disclosures of the
financial statements respectively. Group in the notes to the financial statements.Non-current asset impairment
Meridian Technologies Mexico S. de R.L. de C.V. a
subsidiary of the Group is in a state of continuous
loss and the corresponding fixed assets and non- During the audit process with the assistance of
current assets such as long-term deferred expenses internal valuation experts we assessed the
have signs of impairment. According to the rationality of the management’s method of
requirements of the Accounting Standards for estimating the recoverable amount.Business Enterprises the Group is required to conduct Communicating with the management on the
an impairment test on the non-current assets. The estimation process methods and important
recoverable amount of the non-current assets shall be assumptions we also conducted a sensitivity
determined based on the higher of the net value of the analysis on the net value of the fair value of non-
fair value of the assets minus the disposal expenses current assets minus disposal expenses. In
and the present value of the expected future cash addition we have checked the adequacy of the
flows of the assets. In 2020 the book value of the non- relevant disclosures of the Group in the notes to
current assets of Meridian Technologies Mexico S. de the financial statements.R.L. de C.V. totaled RMB 88.44 million. The
recoverable amount is determined based on the net
amount of the fair value of the asset minus the
disposal expenses and the non-current assets have
not been impaired. The Group's estimation of the
recoverable amount of non-current assets involves the
use of significant judgments and assumptions
including fair value assessment and disposal cost
forecasts. Given the importance and complexity of the
estimation of the recoverable amount of non-current
assets we have identified it as a key audit matter.The disclosure of the above-mentioned non-current
asset impairment provision is included in the financial
statement notes V 24 and 31 and notes VII 21 and
29.4. Other Information
The management of Zhejiang Wanfeng Auto Wheel Co. Ltd. is responsible for
other information. Other information includes the information covered in the
annual report but does not include the financial statements and our audit report.Our audit opinions on the financial statements do not cover other information
and we do not issue any form of assurance conclusions on other information.In conjunction with our audit of the financial statements our responsibility is to
read other information. In this process consider whether the other information
is materially inconsistent with the financial statements or what we have learned
during the audit or there seems to be a material misstatement.Based on the work we have performed if we determine that there is a material
misstatement of other information we should report that fact. In this regard we
have nothing to report.5. Responsibilities of the Management Board of Directors and
Supervisory BoardThe management is responsible for preparing and
presenting fairly the financial statements in accordance with the
provisions of China Accounting Standards for Business Enterprises
and designing implementing and maintaining necessary internal
controls so that there are no major misstatements due to fraud or
errors in the financial statements.When preparing the financial statements the management is responsible for
assessing Zhejiang Wanfeng Auto Wheel Co. Ltd.’s ability to continue as a
going concern disclosing matters related to going concern (if applicable) and
using the going concern basis of accounting unless the Management intends to
liquidate the Company or to cease operations or has no realistic alternative but
to do so.Those charged with governance are responsible for overseeing the financial
reporting process of Zhejiang Wanfeng Auto Wheel Co. Ltd.6. Certified Public Accountant’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement whether due to
fraud or error and to issue an auditor’s report that includes our opinion.Reasonable assurance is a high level of assurance but it is not a guarantee
that we will always detect a material misstatement even though our auditing
work conducted in accordance with Chinese Standards on Auditing.Misstatement can arise from fraud or error and are considered material if
individually or in the aggregate they could reasonably be expected to influence
the economic decisions of users relying on these financial statements.We exercise professional judgment and maintain professional skepticism
throughout the audit performed in accordance with Chinese Standards on
Auditing. We also:
(1) Identify and assess the risks of material misstatement of the financial
statements whether due to fraud or error design and perform audit procedures
responsive to those risks and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from
error as fraud may involve collusion forgery intentional omissions
misrepresentations or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit to design
audit procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness of the Company’s
internal control.
(3) Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by the
Management.
(4) Conclude on the appropriateness of the Management’s use of the going
concern basis of accounting and based on the audit evidence obtained
whether a material uncertainty exists related to events or conditions that may
cast significant doubt on Zhejiang Wanfeng Auto Wheel Co. Ltd.’s ability to
continue as a going concern. If we conclude that a material uncertainty exists
we are required to draw attention in our auditor’s report to the related
disclosures in the financial statement or if such disclosures are inadequate to
modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However future events or conditions may
cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation (including disclosure) structure and
content of the financial statements and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
(6) Obtain sufficient and appropriate audit evidence regarding the financial
information of the entities or business activities within the Company to express
an opinion on the financial statements. We are responsible for the direction
supervision and performance of the Group audit. We remain sole responsibility
for our audit opinion.We communicate with those charged with governance regarding the planned
audit scope time schedule and significant audit findings including any
deficiencies in internal control of concern that we identify during our audit.We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence and to
communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence and where applicable related
safeguards. (if applicable)
From the matters communicated with those charged with governance we
determine those matters of most significance in the audit of the financial
statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when in extremely rare circumstances
we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.II. Financial Statements
1. Consolidated Balance Sheet
Prepared by: Zhejiang Wanfeng Auto Wheel Co. Ltd.December 31 2020
Unit: RMB
Items December 31 2020 December 31 2019
Current Assets:
Cash and cash equivalents 1674978958.17 2452754083.38
Provision of settlement fund
Loans to other banks
Held-for-trading financial assets 5312974.87 63034283.90
Derivative financial assets
Notes receivable 0.00 0.00
Accounts receivable 2314980882.28 2555697203.97
Accounts receivable Financing 382204743.00 378904590.58
Advances paid 158136290.24 173597304.56
Premium receivable
Reinsurance accounts receivable
Reinsurance reserves receivable
Other receivables 68318081.18 916325582.02
Including: Interest receivable 0.00 0.00
Dividend receivable 0.00 0.00
Financial assets under reverse repo
Inventories 2309913390.26 2393951480.24
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets 95604249.64 117007873.14
Total current assets 7009449569.64 9051272401.79
Non-current assets:
Loans and advances paid
Debt investments
Other debt investments
Long-term receivable
Long-term equity investments 567810.84 12612542.86
Other equity instrument investments 4733395.22 4942489.56
Other non-current financial assets
Investment property 0.00 0.00
Fixed assets 4872464413.48 5113660627.42
Construction in progress 258966481.11 426345202.99
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 1665433876.04 1778179906.06
Development expenditures 70537893.00 0.00
Goodwill 1662994509.32 1701158115.52
Long-term prepayments 157174258.10 159712622.07
Deferred tax assets 263442276.75 188710115.07
Other non-current assets 7461417.37 50655894.55
Total non-current assets 8963776331.23 9435977516.10
Total assets 15973225900.87 18487249917.89
Current liabilities:
Short-term borrowings 3544296670.02 3070118768.19
Central bank loans
Loans from other banks
Held-for-trading financial liabilities 0.00 1324581.60
Derivative financial liabilities
Notes payable 192867169.90 218601865.08
Accounts payable 935542222.20 1083181883.19
Unearned revenue 0.00 653874136.71
Contract liabilities 512836059.89 0.00
Financial liabilities under repo
Absorbing deposit and interbank deposit
Deposit for agency security transaction
Deposit for agency security underwriting
Employee benefits payable 231516785.37 238740090.73
Tax payable 113185854.56 71472056.11
Other payables 384220500.31 759261155.63
Including: Interest Payable 0.00 0.00
Dividends Payable 0.00 0.00
Handling fee and commission payable
Reinsurance accounts payable
Held-for-sale liabilities
Non-current liabilities due within one year 694425998.19 571968504.83
Other current liabilities 4192272.05 0.00
Total current liabilities 6613083532.49 6668543042.07
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 1179201272.08 1165220492.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions 189197618.87 174680866.90
Deferred income 214274852.58 202630087.75
Deferred tax liabilities 268634907.53 268233346.43
Other non-current liabilities
Total non-current liabilities 1851308651.06 1810764793.08
Total liabilities 8464392183.55 8479307835.15
Equity:
Share capital 2186879678.00 2186879678.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 0.00 1691289940.77
Less: Treasury shares 571813251.19 333092868.42
Other comprehensive income -54828527.62 74589529.22
Special reserve 13513057.42 10261018.12
Surplus reserve 47015012.60 427043757.25
General risk reserve
Undistributed profit 3732843061.00 3935484397.57
Total equity attributable to the parent
5353609030.21 7992455452.51
Company
Non-controlling interest 2155224687.11 2015486630.23
Total equity 7508833717.32 10007942082.74
Total liabilities & equity 15973225900.87 18487249917.89
Legal representative: Chen Bin Officer in charge of accounting: Dong Ruiping Head of accounting department: Chen Shanfu
2. Balance Sheet of the Parent Company
Unit: RMB
Items December 31 2020 December 31 2019
Current Assets:
Cash and cash equivalents 173973126.72 1004904910.05
Held-for-trading financial assets 0.00 60034900.00
Derivative financial assets
Notes receivable 0.00 0.00
Accounts receivable 512371249.54 678186227.12
Accounts receivable Financing 188767363.39 159939620.65
Advances paid 31624593.38 28429672.81
Other receivables 241713997.31 494780887.10
Including: Interest receivable 0.00 0.00
Dividend receivable 0.00 129600000.00
Inventories 182348341.74 243049665.85
Contract assets
Assets classified as held for sale
Non-current assets due within one
year
Other current assets 17591154.73 17910061.89
Total current assets 1348389826.81 2687235945.47
Non-current assets:
Debt investments
Other debt investments
Long-term receivable
Long-term equity investments 6104568111.43 4198711501.05
Other equity instrument
investments
Other non-current financial assets
Investment property
Fixed assets 334702051.77 364884432.10
Construction in progress 44769695.54 57506951.74
Productive biological assets
Oil & gas assets
Right-of-use assets
Intangible assets 51462555.18 53332915.40
Development expenditures
Goodwill
Long-term prepayments 7921595.36 9208148.95
Deferred tax assets 19218317.44 2777151.86
Other non-current assets 2731215.11 38683336.01
Total non-current assets 6565373541.83 4725104437.11
Total assets 7913763368.64 7412340382.58
Current liabilities:
Short-term borrowings 1772075155.81 1282185084.02
Held-for-trading financial liabilities
Derivative financial liabilities
Note payable 105954728.08 290920548.28
Account payable 295956510.99 417556226.11
Unearned revenue 0.00 3103027.57
Contract liabilities 4359811.90 0.00
Employee benefits payable 28661855.99 35028390.32
Tax payable 3133619.85 3998075.37
Other payables 1630748176.80 891820777.91
Including: Interest Payable 0.00 0.00
Dividends Payable 0.00 0.00
Held-for-sale liabilities
Non-current liabilities due within
409189611.17 265717562.36
one year
Other current liabilities
Total current liabilities 4250079470.59 3190329691.94
Non-current liabilities:
Long-term borrowings 540000000.00 396962631.92
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 1361000.00 1872600.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 541361000.00 398835231.92
Total liabilities 4791440470.59 3589164923.86
Equity:
Share capital 2186879678.00 2186879678.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 546877912.39 1059096302.01
Less: Treasury shares 571813251.19 333092868.42
Other comprehensive income
Special reserve 3545315.73 1919506.02
Surplus reserve 474058769.85 427043757.25
Undistributed profit 482774473.27 481329083.86
Total equity 3122322898.05 3823175458.72
Total liabilities & equity 7913763368.64 7412340382.58
3. Consolidated Income Statement
Unit: RMB
Items 2020 FY 2019 FY
I. Total operating revenue 10699224904.57 12635131976.26
Including: Operating revenue 10699224904.57 12635131976.26
Interest income
Premium earned
Revenue from handling charges and
commission
II. Total operating cost 9993785587.88 11625527060.84
Including: Operating cost 8539410065.42 9898549079.42
Interest expenses
Handling charges and commission
expenditures
Surrender value
Net payment of insurance claims
Net provision of insurance policy
reserve
Premium bonus expenditures
Reinsurance expenses
Taxes and surcharges 54029485.53 66026715.09
Selling expenses 202937418.90 326373313.10
Administrative expenses 590837746.38 669461795.85
R&D expenses 337448870.68 446102958.85
Financial expenses 269122000.97 219013198.53
Including: Interest expenses 245818075.95 241813490.17
Interest income 34003395.60 46585659.98
Add: Other income 104562193.16 91765417.17
Investment income (loss) 612550.85 2020850.00
Including: Investment income from
-876459.23 633198.02
associates and joint ventures
Gains from derecognition of financial
assets at amortized cost
Gains (Losses) on foreign exchange
Gains (Losses) on net exposure to
hedging risk
Gains (Losses) on changes in fair value 2246554.36 -255950.82
Credit impairment loss -7223519.05 -32936944.78
Asset impairment loss -10179361.63 -18650416.29
Gains (Losses) on asset disposal 501156.94 -783226.18
III. Operating profit (Loss) 795958891.32 1050764644.52
Add: Non-operating revenue 43050711.82 170199098.05
Less: Non-operating expenditures 9986870.11 6935181.29
IV. Profit before tax (Loss) 829022733.03 1214028561.28
Less: Income tax expense 64146512.15 172794219.07
V. Net profit (Loss) 764876220.88 1041234342.21
(I) Categorized by the continuity of operations
1. Net profit (loss) from continuing operations 764876220.88 1041234342.21
2. Net profit (loss) from discontinued
operations
(II) Categorized by the portion of equity
ownership
1. Net profit (loss) attributable to owners of
565820630.75 895769920.83
parent Company
2. Net profit (loss) attributable to non-
199055590.13 145464421.38
controlling shareholders
VI. Other comprehensive income after tax -148446465.82 129200209.01
Items attributable to the owners of the parent
-129418056.84 98544238.16
Company
(I) Not to be reclassified subsequently to
0.00 0.00
profit and loss
1.Changes in remeasurement on the net
defined benefit plan
2. Items under equity method that will not
be reclassified to profit and loss
3. Changes in fair value of other equity
instrument investments
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit
-129418056.84 98544238.16
and loss
1. Items under equity method that may
be reclassified to profit and loss
2. Changes in fair value of other debt
investments
3. Profit and loss from reclassification of
financial assets into other comprehensive income
4. Provision for credit impairment of other
debt investments
5. Cash flow hedging reserve
6. Translation reserve -129418056.84 98544238.16
7. Others
Items attributable to non-controlling
-19028408.98 30655970.85
shareholders
VII. Total comprehensive income 616429755.06 1170434551.22
Items attributable to the owners of the parent
436402573.91 994314158.99
Company
Items attributable to non-controlling
180027181.15 176120392.23
shareholders
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 0.27 0.41
(II) Diluted EPS (yuan per share) 0.27 0.41
In the current period of business combination under the common control the
net profit realized by the merged party before the combination was
74836418.19 yuan and the net profit realized by the merged party in the
previous period was 229910806.31 yuan.Legal representative: Chen Bin Officer in charge of accounting: Dong Ruiping Head of accounting department: Chen Shanfu
4. Income Statement of Parent Company
Unit: RMB
Items 2020 FY 2019 FY
I. Total operating revenue 2349143663.22 3139659207.59
Less: Operating cost 2036931290.14 2605922606.23
Taxes and surcharges 10520889.86 13383767.86
Selling expenses 30034081.55 45416077.55
Administrative expenses 73910484.22 75155827.27
R&D expenses 97470913.47 116425011.43
Financial expenses 152395765.07 90542907.65
Including: Interest expenses 168222674.30 111391522.53
Interest income 37369509.04 19909734.18
Add: Other income 7015547.09 13610933.42
Investment income (loss) 501406627.81 116260000.00
Including: Investment income from
0.00 0.00
associates and joint ventures
Gains from derecognition of financial
assets at amortized cost
Gains (Losses) on foreign exchange
Gains (Losses) on changes in fair value 0.00 -1305.00
Credit impairment loss 4341633.88 -4167701.30
Asset impairment loss -1396874.52 -4172696.45
Gains (Losses) on asset disposal -581524.59 -634061.65
II. Operating profit (Loss) 458665648.58 313708178.62
Add: Non-operating revenue 2493796.90 35452610.95
Less: Non-operating expenditures 2022804.87 108064.92
III. Profit before tax (Loss) 459136640.61 349052724.65
Less: Income tax expense -11013485.40 17526555.12
IV. Net profit (Loss) 470150126.01 331526169.53
(I) Net profit (Loss) from the continuity of
470150126.01 331526169.53
operations
(II) Net profit (Loss) from the discontinuity of
operations
V. Other comprehensive income after tax
(I) Not to be reclassified subsequently to profit
and loss
1.Changes in remeasurement on the net
defined benefit plan
2. Items under equity method that will not
be reclassified to profit and loss
3. Changes in fair value of other equity
instrument investments
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit
and loss
1. Items under equity method that may be
reclassified to profit and loss
2. Changes in fair value of other debt
investments
3. Profit and loss from reclassification of
financial assets into other comprehensive income
4. Provision for credit impairment of other
debt investments
5. Cash flow hedging reserve
6. Translation reserve
7. Others
VI. Total comprehensive income 470150126.01 331526169.53
VII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 0.22 0.15
(II) Diluted EPS (yuan per share) 0.22 0.15
5. Consolidated Cash Flow Statement
Unit: RMB
Items 2020 FY 2019 FY
I. Cash flows from operating
activities:
Cash receipts from sale of goods
10748387602.66 12425185321.70
or rendering of services
Net increase of client deposit and
interbank deposit
Net increase of central bank
loans
Net increase of loans from other
financial institutions
Cash receipts from original
insurance contract premium
Net cash receipts from
reinsurance
Net increase of policy-holder
deposit and investment
Cash receipts from interest
handling charges and commission
Net increase of loans from others
Net increase of repurchase
Net cash receipts from agency
security transaction
Cash receipts of tax and fee
135380632.65 230368027.14
refund
Other cash receipts related to
208261628.71 168076148.82
operating activities
Subtotal of cash inflows from
11092029864.02 12823629497.66
operating activities
Cash payments for goods
6504776125.54 8010207900.09
purchased and services received
Net increase of loans and
advances to clients
Net increase of central bank
deposit and interbank deposit
Cash payments for insurance
indemnities of original insurance
contracts
Net increase of loans to others
Cash payments for interest
handling charges and commission
Cash payments for policy bonus
Cash paid to and on behalf of
1786434955.90 1982012404.38
employees
Cash payments for tax and fee 345568987.48 480299957.07
Other cash payments related to
719468888.68 930740356.35
operating activities
Subtotal of cash outflows from
9356248957.60 11403260617.89
operating activities
Net cash flows from operating
1735780906.42 1420368879.77
activities
II. Cash flows from investing
activities:
Cash receipts from withdrawal of
37264900.00 369821633.24
investments
Cash receipts from investment
0.00 2826628.60
income
Net cash receipts from the
disposal of fixed assets intangible 48807553.01 5744155.38
asset and other long-term asset
Net cash receipts from the
disposal of subsidiaries & other 10461733.98 0.00
business units
Other cash receipts related to
1576698931.75 2113790191.03
investing activities
Subtotal of cash inflows from
1673233118.74 2492182608.25
investing activities
Cash payments for the
acquisition of fixed assets intangible 470883605.98 980086310.09
asset and other long-term asset
Cash payments for investments 37230000.00 244525588.90
Net increase of pledged
borrowings
Net cash payments for the
acquisition of subsidiaries & other 0.00 0.00
business units
Other cash payments related to
90588740.00 1884897477.00
investing activities
Subtotal of cash outflows from
598702345.98 3109509375.99
investing activities
Net cash flows from investing
1074530772.76 -617326767.74
activities
III. Cash flows from financing
activities:
Cash receipts from absorbing
0.00 91500000.00
investments
Including: Cash received by
subsidiaries from non-controlling 0.00 0.00
shareholders as investments
Cash receipts from borrowings 4528609710.84 5060014993.61
Other cash receipts related to
218800000.00 58929200.00
financing activities
Subtotal of cash inflows from
4747409710.84 5210444193.61
financing activities
Cash payments for the
3978582138.60 4211260285.60
repayment of borrowings
Cash payments for distribution of
dividends or profits and for interest 712806601.09 973540594.14
expenses
Including: Cash paid by
subsidiaries to non-controlling 39905253.01 62801879.35
shareholders as dividend or profit
Other cash payments related to
2886795382.77 601892868.42
financing activities
Subtotal of cash outflows from
7578184122.46 5786693748.16
financing activities
Net cash flows from financing
-2830774411.62 -576249554.55
activities
IV. Effect of foreign exchange rate
changes on cash & cash 6181618.57 31887296.59
equivalents
V. Net increase in cash and cash
-14281113.87 258679854.07
equivalents
Add: Opening balance of cash
1426647961.41 1167968107.34
and cash equivalents
VI. Closing balance of cash and
1412366847.54 1426647961.41
cash equivalents
6. Cash Flow Statement of Parent Company
Unit: RMB
Items 2020 FY 2019 FY
I. Cash flows from operating
activities:
Cash receipts from sale of goods
2733114976.71 3051573302.62
or rendering of services
Cash receipts of tax and fee
66559713.45 126777169.39
refund
Other cash receipts related to
80694298.23 29607387.39
operating activities
Subtotal of cash inflows from
2880368988.39 3207957859.40
operating activities
Cash payments for goods
1814822275.21 2361560613.29
purchased and services received
Cash paid to and on behalf of
185943926.44 206274202.85
employees
Cash payments for tax and fee 9654062.38 53332603.08
Other cash payments related to
106169002.16 205178776.90
operating activities
Subtotal of cash outflows from
2116589266.19 2826346196.12
operating activities
Net cash flows from operating
763779722.20 381611663.28
activities
II. Cash flows from investing
activities:
Cash receipts from withdrawal of
34900.00 97885700.00
investments
Cash receipts from investment
608727020.93 106291097.13
income
Net cash receipts from the
disposal of fixed assets intangible 585896.09 584336.51
assets and other long-term assets
Net cash receipts from the
disposal of subsidiaries & other 0.00 0.00
business units
Other cash receipts related to
1211313748.92 1523450378.58
investing activities
Subtotal of cash inflows from
1820661565.94 1728211512.22
investing activities
Cash payments for the
acquisition of fixed assets intangible 12712815.29 91123117.31
assets and other long-term assets
Cash payments for investments 2418075000.00 36205.00
Net cash payments for the
acquisition of subsidiaries & other 0.00 0.00
business units
Other cash payments related to
403015284.50 1188643952.79
investing activities
Subtotal of cash outflows from
2833803099.79 1279803275.10
investing activities
Net cash flows from investing
-1013141533.85 448408237.12
activities
III. Cash flows from financing
activities:
Cash receipts from absorbing
0.00 0.00
investments
Cash receipts from borrowings 4491107248.30 3049613485.16
Other cash receipts related to
161000000.00
financing activities
Subtotal of cash inflows from
4652107248.30 3049613485.16
financing activities
Cash payments for the
3641165775.06 2484507491.30
repayment of borrowings
Cash payments for distribution of
dividends or profits and for interest 590335992.12 770757962.38
expenses
Other cash payments related to
238720382.77 531892868.42
financing activities
Subtotal of cash outflows from
4470222149.95 3787158322.10
financing activities
Net cash flows from financing
181885098.35 -737544836.94
activities
IV. Effect of foreign exchange rate
changes on cash & cash -942299.26 580136.64
equivalents
V. Net increase in cash and cash
-68419012.56 93055200.10
equivalents
Add: Opening balance of cash
185112728.92 92057528.82
and cash equivalents
VI. Closing balance of cash and
116693716.36 185112728.92
cash equivalents
7. Consolidated Statement of Changes in Owner’s Equity
Amount in the current period
Unit: 10000 RMB
2020 FY
Equity Attributable to parent Company
Non-
Items Other equity instruments Other
Less: General Undistri controlli Total
Share Preferre Perpetu Capital compre Special Surplus treasury risk buted Others Subtotal ng equity
Capital d al Others reserve hensive reserve reserve shares reserve profit interest
shares bonds income
I.Balanc
e at the
218688 11496 33309 5568 1026 42704 368909 615082 51001 666083
end of
prior
year
Add:
Cumula
tive
change
s of
account
ing
policies
Error
correcti
on of
prior
period
Busines
s
combin 157633 1891 24639 184163 150548 334711
ation
under
commo
n
control
Others
II.Balanc
e at the
beginni 218688 169129 33309 7459 1026 42704 393548 799246 201549 1000794
ng of
current
year
III.Current
period
increas -169129 23872 -12941 325 -38003 -20264 -263885 13974 -249911
e (or "-
"
decrea
se)
(I) Total
compre -12942 56582 43640 18003 61643
hensive
income
(II)
Capital
contribu
ted or -169129 23872 -42704 -29976 -265681 -38387 -265720
withdra
wn by
owners
1.Ordinar
y
shares
contribu
ted by
owners
2.Capital
contribu
ted by
holders
of other
equity
instrum
ents
3.Amount
of
share-
based
paymen
t
include
d in
equity
4. -169129 23872 -42704 -29976 -265681 -38387 -265720
Others
(III)
Profit 4702 -46870 -42169 -3991 -46159
distribut
ion
1.Appropr
iation of 4702 -4702
surplus
reserve
2.Appropr
iation of
general
risk
reserve
3.Appropr -42169 -42169 -3991 -46159
iation of
profit to
owners
4.Others
(IV)
Internal
carry-
over
within
equity
1.Transfe
r of
capital
reserve
to
capital
2.Transfe
r of
surplus
reserve
to
capital
3.Surplus
reserve
to cover
losses
4.Change
s in
defined
benefit
plan
carried
over to
retained
earning
s
5. Other
compre
hensive
income
carried
over to
retained
earning
s
6.Others
(V)
Special 325 325 325
reserve
1.Appropr
iation of 2098 2098 2098
current
period
2.Applicat
ion of -1773 -1773 -1773
current
period
(VI)
Others
IV.Balanc
e at the
218688 57181 -5483 1351 4702 373284 535361 215522 750883
end of
current
period
Amount in the pervious period
Unit:10000 RMB
2019 FY
Equity Attributable to parent Company
Non-
Items Other equity instruments Other
Less: General Undistri controll Total
Share Preferre Perpetu Capital compre Special Surplus Subtottreasury risk buted Others ing equity
Capital d al Others reserve hensive reserve reserve al shares reserve profit interest
shares bonds income
I.Balanc
e at the
218688 11496 670 690 39389 362122 633054 50859 683913
end of
prior
year
Add:
Cumula
tive
change -1223 -1223 -63 -1286
s of
account
ing
policies
Error
correcti
on of
prior
period
Busines
s
combin
ation 157633 -3066 11994 166562 137136 303698
under
commo
n
control
Others
II.Balanc 218688 169129 -2395 690 39389 372893 798393 187932 986325
e at the
beginni
ng of
current
year
III.Current
period
increas 33309 9854 337 3315 20655 852 13617 14469
e (or
“-”
decrea
se)
(I) Total
compre 9854 89577 99431 17612 117043
hensive
income
(II)
Capital
contribu
ted or 33309 -33309 40 -33269
withdra
wn by
owners
1.Ordinar
y
shares 40 40
contribu
ted by
owners
2.Capital
contribu
ted by
holders
of other
equity
instrum
ents
3.Amount
of
share-
based
paymen
t
include
d in
equity
4. 33309 -33309 -33309
Others
(III)
Profit 3315 -68922 -65606 -4035 -69642
distribut
ion
1.Appropr
iation of 3315 -3315
surplus
reserve
2.Appropr
iation of
general
risk
reserve
3.Appropr
iation of -65606 -65606 -4035 -69642
profit to
owners
4.Others
(IV)
Internal
carry-
over
within
equity
1.Transfe
r of
capital
reserve
to
capital
2.Transfe
r of
surplus
reserve
to
capital
3.Surplus
reserve
to cover
losses
4.Change
s in
defined
benefit
plan
carried
over to
retained
earning
s
5. Other
compre
hensive
income
carried
over to
retained
earning
s
6.Others
(V)
Special 337 337 337
reserve
1.Appropr
iation of 2773 2773 2773
current
period
2.Applicat
ion of -2436 -2436 -2436
current
period
(VI)
Others
IV.Balanc
e at the
218688 169129 33309 7459 1026 42704 393548 799246 201549 1000794
end of
current
period
8. Statement of Changes in Owner’s Equity of the Parent Company
Amount in the current period
Unit:10000 RMB
2020 FY
Other equity instruments
Items Other Share Capital Less: treasury Special Surplus Undistributed Total
comprehensive Others
Capital Preferred Perpetual Others reserve shares reserve reserve profit equity
shares bonds income
I. Balance at
the end of 218688 105910 333092868.42 192 42704 48133 382318
prior year
Add:
Cumulative
changes of
accounting
policies
Error correction
of prior period
Others
II. Balance at
the beginning 218688 105910 33310 192 42704 48133 382318
of current year
III. Current
period -51222 23872 162581 4702 145 -70085
increase (or
“-”decrease)
(I) Total
comprehensive 47015 47015
income
(II) Capital
contributed or -51222 23872 -75094
withdrawn by
owners
1. Ordinary
shares
contributed by
owners
2. Capital
contributed by
holders of other
equity
instruments
3. Amount of
share-based
payment
included in
equity
4. Others -51222 23872 -75094
(III) Profit 4702 -46870 -42169
distribution
1. Appropriation
of surplus 4702 -4702
reserve
2. Appropriation
of profit to -42169 -42169
owners
3. Others
(IV) Internal
carry-over
within equity
1. Transfer of
capital reserve
to capital
2. Transfer of
surplus reserve
to capital
3. Surplus
reserve to
cover losses
4. Changes in
defined benefit
plan carried
over to retained
earnings
5. Other
comprehensive
income carried
over to retained
earnings
6. Others
(V) Special 163 163
reserve
1. Appropriation
of current 456 456
period
2. Application of -294 -294
current period
(VI) Others
IV. Balance at
the end of 218688 54688 57181 355 47406 48277 312232
current period
Amount in the previous period
Unit:10000 RMB
2019 FY
Other equity instruments
Less: Other
Items Share Capital Special Surplus Undistributed Total
Capital Preferred Perpetual
treasury comprehensive Others
Others reserve reserve reserve profit equity
shares bonds shares income
I. Balance at
the end of 218688 105910 39389 84460 448447
prior year
Add:
Cumulative
changes of -558 -558
accounting
policies
Error
correction of
prior period
Others
II. Balance at
the beginning
218688 105910 39389 83902 447889
of current
year
III. Current
period 33309 192 3315 -35769 -65571
increase (or
“-” decrease)
(I) Total
comprehensive 33153 33153
income
(II) Capital
contributed or 33309 -33309
withdrawn by
owners
1. Ordinary
shares
contributed by
owners
2. Capital
contributed by
holders of
other equity
instruments
3. Amount of
share-based
payment
included in
equity
4. Others 33309 -33309
(III) Profit 3315 -68922 -65606
distribution
1.Appropriation 3315 -3315
of surplus
reserve
2.Appropriation -65606 -65606
of profit to
owners
3. Others
(IV) Internal
carry-over
within equity
1. Transfer of
capital reserve
to capital
2. Transfer of
surplus
reserve to
capital
3. Surplus
reserve to
cover losses
4. Changes in
defined benefit
plan carried
over to
retained
earnings
5. Other
comprehensive
income carried
over to
retained
earnings
6. Others
(V) Special 192 192
reserve
1.Appropriation 468 468
of current
period
2. Application
of current -276 -276
period
(VI) Others
IV. Balance at
the end of 218688 105910 33309 192 42704 48133 382318
current period
III. Basic information of the Company
Zhejiang Wanfeng Auto Wheel Co. Ltd. ("the Company" or "Wanfeng Auto
Wheel") is a joint-stock limited company registered in Zhejiang China and was
established in September 30 2001. The ordinary A shares denominated in
RMB issued by the Company have been listed on the Shenzhen Stock
Exchange. The Company is headquartered in Xinchang County Industrial Zone
(Houxi) Zhejiang China. The principal business of the Company includes:
production sales and technical consultation service of automobile aluminum
alloy wheels motorcycle aluminum alloy wheels and other parts; Design
research and development manufacturing and sales of lightweight magnesium
materials and components for automobiles and motorcycles; Research
development manufacturing sales and related technical services of metal
non-metallic materials and their products karts and environmental protection
equipment; Manufacturing and processing of metal bolts coating treatment of
mechanical parts coating equipment manufacturing of coating solvents
coating technology services; Manufacturing of textile machinery and parts
(excluding cotton spinning frames and accessories); Manufacturing and
processing of molds mechanical parts and auto parts; operating imports and
exports business; Design test production sales maintenance and repair of
general aviation aircraft helicopters aero engines and avionics electrical and
mechanical systems; Technology development and consulting services for the
general aviation industry; Import and export of goods and technology.The parent and ultimate parent of the Company is Wanfeng Auto Holding Group
Co. Ltd. (hereinafter referred to as "Wanfeng Group") established in the
People's Republic of China.As of December 31 2020 Wanfeng Group currently holds 33.37% shares of
the Company and is the Company’s controlling shareholder. Ms. Chen Ailian
and Mr. Wu Liangding hold 4.46% and 0.57% shares of the Company
respectively. Ms. Chen Ailian Mr. Wu Liangding and Mr. Wu Jie hold 39.60%
22.50% and 3.76% shares of Wanfeng Group respectively. Ms. Chen Ailian
and Mr. Wu Liangding are in a husband-wife relationship. Mr. Wu Liangding
and Mr. Wu Jie are a father-son relationship. Ms. Chen Ailian and the Wu
Liangding family (Mr. Wu Liangding and Mr. Wu Jie) are jointly the actual
controllers of the Company.This financial statement was approved by the Company's Board of Directors on
April 28 2021. According to the Articles of Association of the Company this
financial statement will be submitted to the general meeting of shareholders for
deliberation.The consolidation scope of the consolidated financial statements is determined
on the basis of control. Please refer to Note VIII for changes in this year.IV. Preparation Basis of the Financial Statements
1. Preparation basis
The financial statements are prepared according to the Accounting Standards
for Business Enterprises-Basic Standards promulgated by the Ministry of
Finance and specific accounting standards application guidelines
interpretations and other relevant regulations (collectively referred to as
"Accounting Standards for Business Enterprises") promulgated and revised
thereafter.This financial statement is presented based on going concern basis.When preparing these financial statements except for certain financial
instruments historical cost is used as the pricing principle. If an asset is
impaired the corresponding provision for impairment shall be made according
to relevant regulations.The influence of business combination under the common control on the
preparation basis of financial statements:
Wanfeng Aircraft Industry Co. Ltd. was established on March 16 2018
(hereinafter referred to as "Aircraft Industry") as a limited company registered
in Zhejiang China.The parent company of the Aircraft Industry is Wanfeng Aviation Industry Co.Ltd. and the ultimate controlling shareholder is Wanfeng Group.The Company held the 33rd meeting of the sixth board of directors on February
22 2020 and the second extraordinary general meeting of shareholders in
2020 on March 20 2020 and passed the resolutions of using its own and self-
raised funds purchased a 55% stake in Wanfeng Aircraft Industry Co. Ltd. from
Wanfeng Aviation Industry Co. Ltd.On April 16 2020 the Company acquired a 55% equity interest in the Aircraft
Industry from Wanfeng Aviation Industry Co. Ltd. for RMB 2418075000.00 in
cash.As before and after the combination the Company and Aircraft Industry are
ultimately controlled by Wanfeng Group and the control is not temporary.Therefore the assets and liabilities of the Aircraft Industry acquired by the
Company in accordance with the relevant requirements for business
combinations under the common control are measured based on the book
value of the Aircraft Industry on the combination date.In accordance with the relevant requirements for business combinations under
the common control the operating results and cash flows of the Aircraft Industry
have been included in the consolidated financial statements from the date when
Aircraft Industry and the Company are under the control of the ultimate
controlling party. And the transactions balance and amount between the two
shall be offset at the time of the combination. The reporting entity formed after
the combination is deemed to have always existed since the ultimate controlling
party began to exercise control. Therefore when the Company prepared the
2020 financial statements it restated the consolidated balance sheet on
December 31 2019 the consolidated income statement the consolidated cash
flow statement and the consolidated statement of changes in owner’s equity in
2019. (Hereinafter referred to as "restatement").2. Going concern
The Company has no events or conditions that may cast significant doubts upon
the Company’s ability to continue as a going concern within the 12 months after
the balance sheet date.V. Significant Accounting Polices and Accounting Estimates
Notes to specific accounting policies and accounting estimates:
The Group has formulated specific accounting policies and accounting
estimates based on actual production and operation characteristics reflected
in the allowance of doubtful debt receivables inventory valuation methods
fixed asset depreciation intangible asset amortization and revenue recognition
and measurement.1. Statement of compliance with China Accounting Standards for
Business Enterprises
The financial statements have been prepared in accordance with the
requirements of China Accounting Standards for Business Enterprises
(CASBEs) and present truly and completely the financial position on December
31 2020 results of operations and cash flows of the Company of 2020.2. Accounting period
The accounting period of the Company is from 1 January to 31 December of
each calendar year.3. Operating cycle
The Company has a relatively short operating cycle for its business and an
asset or a liability is classified as current if it is expected to be realized or due
within 12 months.4. Functional currency
The Company's functional currency and the currency used in the financial
statements are both RMB. Unless otherwise specified they are all expressed
in RMB or yuan.Subsidiaries of the Group determine their accounting currency based on the
economic environment in which they operate and convert them into RMB in
accordance with the policies described in Note V. 9 when preparing financial
statements.5. Accounting treatments of business combination under and not under
common control
Business combinations are divided into business combinations under common
control and business combinations not under common control.Accounting treatment of business combination under common control
The enterprises participating in the combination are ultimately controlled by the
same party or the same multiple parties before and after the combination. The
control is not temporary and is a business combination under common control.In a business combination under common control the party that obtains control
of other participating companies on the combination date is the combining party .The other companies participating in the merger are the combined parties. The
combination date refers to the date on which the combining party obtains control
of the combined party.The assets and liabilities obtained by the combining party in a business
combination under a common control (including the goodwill formed by the
ultimate controlling party’s acquisition of the combined party) shall be
accounted for based on the book value in the ultimate controlling party’s
financial statements on the combination date. The difference between the book
value of the net assets obtained by the combining party and the book value of
the actual paid (or the total par value of the issued shares) shall be adjusted for
the equity premium in the capital reserve and the balance transferred from the
capital reserve of the original system. If it is insufficient to offset the retained
earnings will be adjusted.Accounting treatment of business combination not under common control
If the enterprises participating in the combination are not ultimately controlled
by the same party or the same multiple parties before and after the combination
it is a business combination not under common control. In a business
combination not under common control the party that obtains control of other
participating companies on the purchase date is the acquirer. The other
companies participating in the combination are the acquiree. The purchase date
refers to the date on which the acquirer obtains control of the acquiree.The identifiable assets liabilities and contingent liabilities of the acquiree
obtained in a business combination not under common control are measured
at their fair value on the acquisition date.The difference between combination cost and the fair value of identifiable net
assets obtained from the acquiree at the acquisition date is recognized as
goodwill. Otherwise the fair value of identifiable assets liabilities and
contingent liabilities and the measurement of the combination cost are
reviewed then the difference is recognized in profit and loss. The subsequent
measurement is made based on cost minus accumulated impairment loss.6. Compilation method of consolidated financial statements
The scope of the consolidated financial statements is based on control
including the financial statements of the Company and all its subsidiaries.Subsidiary refers to the entity controlled by the Company (including the divisible
part of the enterprise and the invested unit and the structured entity controlled
by the Company etc.).When preparing consolidated financial statements the subsidiary adopts the
same fiscal year and accounting policies as the Company. All assets liabilities
equity income expenses and cash flows arising from transactions between
companies within the group are fully offset at the time of consolidation.If the current loss shared by the minority shareholders of a subsidiary exceeds
the initial shareholders’ equity of the subsidiary the balance shall still be offset
against the minority shareholders’ equity.For subsidiaries not under common control the operating results and cash
flows of the acquiree will be included in the consolidated financial statements
from obtaining the control of the acquiree. When preparing consolidated
financial statements the financial statements of subsidiaries are adjusted
based on the fair value of the identifiable assets liabilities and contingent
liabilities on the purchase date.For subsidiaries under common control the operating results and cash flows of
the combined party are included in the consolidated financial statements from
the beginning of the combination. When preparing the consolidated financial
statements the relevant items of the previous financial statements are adjusted.The reporting entity formed after the combination is deemed to have always
existed since the ultimate controlling party began to exercise control.If changes in relevant facts and circumstances lead to changes in one or more
of the control elements the Company will reassess whether to control the
investee.7. Classification of joint arrangement and accounting treatment method
of joint operation
Joint arrangements can be classified into joint operations and joint ventures.Joint operation refers to the arrangement in which a joint party party has rights
to the related assets of such arrangement and assumes the related liabilities of
such arrangement. A joint venture refers to the arrangement that the joint
venture party only has rights to the net asset’s of such arrangement.8. Recognition criteria of cash and cash equivalents
Cash refers to cash on hand and deposit on demand for payment. Cash
equivalents refer to short-term highly liquid investments that can be readily
converted to cash and that are subject to an insignificant risk of changes in
value.9. Foreign currency translation
The Group converts foreign currency amounts into functional currency amounts
for foreign currency transactions.Transactions denominated in foreign currency are translated into functional
currency amounts at the spot exchange rate at the transaction date at initial
recognition. Monetary items denominated in foreign currency are translated at
the spot exchange rate at the balance sheet date. The difference will be
recognized through profit and loss except for those arising from the principal
and interest of exclusive borrowings eligible for capitalization. Non-monetary
items carried at historical costs in foreign currency are translated at the spot
exchange rate at the transaction date with its functional currency amounts
unchanged. Non-monetary items carried at fair value in foreign currency are
translated at the spot exchange rate at the date when the fair value was
determined. The difference will be recognized through profit and loss or other
comprehensive income depending on the nature of those non-monetary items.For overseas operations the Group converts its functional currency amounts
into RMB when preparing financial statements: The assets and liabilities in the
balance sheet are translated into RMB at the spot rate at the balance sheet
date; the equity items other than undistributed profit are translated at the spot
rate at the transaction date; the revenues and expenses in the income
statement are translated into RMB at the average exchange rate during the
transaction period. The difference arising from the aforementioned foreign
currency translation is recognized in other comprehensive income. In terms of
disposal of an overseas operation the other comprehensive income related to
the overseas operation is transferred to the current profit and loss. The partial
disposal is calculated according to the disposal ratio.Foreign currency cash flows and cash flows of overseas subsidiaries are
translated using the average exchange rate. The impact of exchange rate
changes on cash is treated as an adjustment item and presented separately in
the cash flow statement.10. Financial instruments
Financial instruments refer to contracts that form one party’s financial assets
into other parties’ financial liabilities or equity instruments.Recognition and derecognition of financial instruments
When the Company becomes a party to a financial instrument it is recognized
as a financial asset or financial liability.If the following conditions are met the derecognition of a financial asset (or part
of a financial asset or part of a group of similar financial assets) shall be written
off from its account and balance sheet:
(1) The right to receive cash flows of financial assets expires.
(2) The right to collect the cash flow of financial assets is transferred or the
obligation to fully pay the collected cash flow to a third party on time under the
"pass-through agreement" and satisfied one of the following criteria:
(a) all the risks and rewards related to the ownership of the financial assets
have been transferred.(b) Although all the risks and rewards of the ownership financial assets are
neither transferred nor retained the control of the financial assets has been
abandoned.If the responsibility of the financial liability has been fulfilled canceled or
expired the financial liability shall be derecognized. If an existing financial
liability is replaced by the same creditor with another financial liability with
almost completely different terms or almost all the terms of the existing liability
are substantially modified such replacement or modification shall be regarded
as the derecognition of the original liability and the recognition of the new liability.For debt treatment the difference is included in the current profit and loss.The purchase and sale of financial assets in a conventional manner shall be
recognized and derecognized according to the transaction day. The
conventional way of buying and selling financial assets refers to the receipt or
delivery of financial assets within the time limit stipulated by laws and
regulations or common practices in accordance with the terms of the contract.Transaction date refers to the date on which the Group promises to buy or sell
financial assets.Classification and measurement of financial assets
The Company’s financial assets are classified according to the business model
of the Group’s corporate management of financial assets and the contractual
cash flow characteristics of financial assets at initial recognition. It can be
classified into financial assets measured at fair value through profit and loss
financial assets measured at amortized cost and financial assets measured at
fair value through other comprehensive income.Financial assets initially recognized by the Company and measured at fair value.hHowever for accounts receivable as a result of selling goods or providing
services that do not contain a significant financing component or not consider
financing components with an associated period less than one year the
Company measures at their transaction price.For the financial assets measured at fair value and the changes recognized
through the current profit and loss the transaction expenses thereof are directly
included in profit and loss. For other categories of financial assets and financial
liabilities the transaction expenses thereof are included in the initially
recognized amount.The subsequent measurement of financial assets depends on their
classification:
Debt investments measured at amortized cost
Financial assets that meet the following conditions are classified as financial
assets measured at amortized cost: The financial assets aim to collect contract
cash flow; The contract terms of the financial asset stipulate that the cash flow
generated on a specific date is only used to pay for the principal and interest.Such financial assets use the effective interest rate method to recognize
interest income. The gains and losses arising from the derecognition
modification or impairment are included in the current profit and loss.Debt Investment measured at fair value and the changes recognized through
other comprehensive income
Financial assets that meet the following conditions are classified as financial
assets measured at fair value and the changes recognized through other
comprehensive income: The financial assets aim to collect contractual cash
flow and to sell financial assets. The contract terms of the financial assets
stipulate that the cash flow generated on a specific date is only used to pay for
the principal and interest. Such financial assets use the effective interest
method to recognize interest income. Except for interest income impairment
losses and exchange differences recognized as current profits and losses the
other fair value changes are recognized in other comprehensive income. When
financial assets are derecognized the accumulated gains and losses previously
included in other comprehensive income are transferred to current profit and
loss.Equity instrument investment measured at fair value and the changes
recognized through other comprehensive income
The Group irrevocably chooses to designate some non-trading equity
instrument investments as financial assets measured at fair value and the
changes recognized through other comprehensive income. Only the relevant
dividend income (except for the dividend income that is clearly recovered as
part of the investment cost) is included in the current profit and loss and
subsequent changes in the fair value are included in other comprehensive
income and no impairment provision is required. When financial assets are
derecognized the accumulated gains and losses previously included in other
comprehensive income are transferred from other comprehensive income to
retained earnings.Financial assets measured at fair value and the changes recognized through
current profit and loss
Other financial assets except for financial assets measured at amortized cost
and other than financial assets measured at amortized cost and financial assets
measured at fair value and the changes recognized through other
comprehensive are classified as financial assets measured at fair value
through current profits and losses. Such financial assets fair value is used for
subsequent measurement and all changes in fair value are recognized in the
current profit and loss.Classification and measurement of financial liabilities
The Company’s financial liabilities are classified at initial recognition: financial
liabilities measured at fair value through current profits and losses and other
financial liabilities. For financial liabilities measured at fair value through current
profit and loss the related transaction costs are directly included in the current
profit and loss. For other financial liabilities the related transaction costs are
included in the initial recognition amount.The subsequent measurement of financial liabilities depends on its
classification:
Financial liabilities measured at fair value and the changes recognized through
current profit and loss
Financial liabilities measured at fair value and the changes recognized through
current profits and losses include trading financial liabilities (including
derivatives that are financial liabilities) and financial liabilities measured at fair
value through current profits and losses designated at the initial recognition.Trading financial liabilities (including derivatives that are financial liabilities) are
subsequently measured at fair value and all changes in fair value are
recognized in the current profit and loss. For financial liabilities measured at fair
value through current profit and loss subsequent measurement is carried out
at fair value. Except for changes in fair value caused by the Group’s own credit
risk are recognized through other comprehensive income other changes in fair
value are included in the current profit and loss. If changes in fair value through
other comprehensive income caused by Group's credit risk cause or enlarge
the accounting mismatch in profit and loss the Group will include all changes
in fair value (including the amount affected by changes in its own credit risk) in
current profit and loss.Other financial liabilities
For such financial liabilities the effective interest rate method is adopted and
subsequent measurement is carried out in accordance with amortized cost.Impairment of financial instruments
Based on expected credit losses the Company recognized the impairment of
financial assets measured at amortized cost and debt instrument investments
measured at fair value and the changes recognized through other
comprehensive income.For receivables that do not contain significant financing provisions the
Company simplified measurement methods to measure the loss provision
equivalent to the expected credit loss during the entire duration.For financial assets other than the above-mentioned simplified measurement
methods the Company separately measures the expected credit losses of
financial instruments at different stages on the balance sheet date. In the first
stage if the credit risk of a financial instrument has not increased significantly
since the initial recognition the loss provision is measured according to the
expected credit loss in the next 12 months. The interest income is calculated
based on the book balance and the effective interest rate. In the second stage
if the credit risk of a financial instrument has increased significantly since its
initial recognition but no credit impairment has occurred the loss provision is
measured based on the expected credit loss for the entire duration. The interest
income is calculated based on the book balance and the effective interest rate.In the third stage if a financial instrument has been credit-impaired since its
initial recognition the loss provision is measured based on the expected credit
loss for the entire duration. The interest income is based on amortized cost and
effective interest rate. For financial instruments with relatively low credit risk on
the balance sheet date the Company assumes that their credit risk has not
increased significantly since the initial recognition.The Company assesses the expected credit losses of financial instruments
based on individual items and portfolios. The Company considers the credit risk
characteristics of different customers and evaluates the expected credit loss of
the accounts receivable based on the aging combination.Please refer to Note X. 4 for the disclosure of the Company's criteria for
determining a significant increase in credit risk the definition of credit-impaired
assets and the assumptions for the measurement of expected credit losses.When the Company no longer reasonably expects to recover all or part of the
contractual cash flow of a financial asset the Company directly writes down the
book value of the financial asset.Offsetting financial instrument
If the following conditions are all met the financial assets and financial liabilities
are listed in the balance sheet as the net amount after offsetting each other:
Financial assets have the statutory right to offset the confirmed amount and
this statutory right is currently enforceable. The plan is to settle on a net basis
or to realize the financial assets and pay off the financial liabilities at the same
time.Financial asset transfer
If the Group has transferred almost all the risks and rewards of financial assets
to the transferee it shall terminate the recognition of the financial assets. If the
Group retains almost all the risks and rewards of financial assets it shall not
terminate the recognition of the financial assets.If the Group neither transfers nor retains almost all the risks and rewards of
financial assets it shall be dealt with as follows:
If the control of the financial assets is abandoned the financial assets shall be
derecognized and the assets and liabilities shall be confirmed. If the financial
asset is in control the relevant financial assets shall be recognized according
to the extent of its continued involvement in the transferred financial assets and
the relevant liabilities shall be recognized accordingly.Financial assets that are involved through the provision of financial guarantees
the value of the assets will be the lower of financial assets book value and
financial guarantees. The financial guarantee amount refers to the highest
amount required to be repaid among the consideration received.11. Notes receivable
Refers to note v.10 “Financial instrument”.12. Accounts receivable
Refers to note v.10 “Financial instrument”.13. Accounts receivable financing
Refers to note v.10 “Financial instrument”.14. Other receivables
The determination method and accounting treatment method of the expected
credit loss of other receivables
Refers to note v.10 “Financial instrument”.15. Inventories
Inventories include raw material work in process product semi-product low-
value consumables and finished goods.Inventories are initially measured at historical cost. Inventory costs include
purchase costs processing costs and other costs. The weighted average
method is used to determine the actual cost when inventory is sold. Low-value
consumables are amortized with the one-shot write-off method.The perpetual inventory system is adopted here.On the balance sheet date inventories are measured at the lower of cost or net
realizable value. Provisions for inventory write-down are made on the excess
of its cost over the net realizable value. The difference will be included in the
profit and loss. If the factors influencing the previous provision for inventory
depreciation have disappeared making the net realizable value of the inventory
higher than its book value the previously deducted amount of the inventory
depreciation reserve amount will be restored and the amount transferred back
in the current profit and loss.The net realizable value refers to the amount of the estimated selling price of
the inventory minus the estimated cost estimated selling expenses and related
taxes and fees at the time of completion in daily activities. When making
provision for inventory depreciation raw materials are accrued by category and
finished products are accrued according to individual inventory items.16. Contract assets
The Company presents contract assets or contract liabilities in the balance
sheet based on the relationship between its performance obligations and
customers’ payments. Contract assets and contract liabilities under the same
contract shall offset each other and be presented on a net basis.Contract assets refer to the right to receive consideration for the transfer of
goods or services to customers and this right depends on factors other than
the passage of time.17. Contract cost
No
18. Assets classified as held for sale
No
19. Debt investments
No
20. Other debt investments
No
21. Long-term receivable
No
22. Long-term equity investments
Long-term equity investments include equity investments in subsidiaries joint
ventures and associates.Long-term equity investment is initially measured at the initial investment cost
when it is acquired. For business combination under common control on the
date of combination it regards the share of the carrying amount of the equity of
the combined party included the consolidated financial statements of the
ultimate controlling party as the initial cost of the investment. The difference
between the initial cost of the long-term equity investments and the carrying
amount of the combination consideration paid or the par value of shares issued
offsets capital reserve. (If the balance of capital reserve is insufficient to offset
any excess is adjusted to retained earnings.)
Other comprehensive income before the combination date shall be accounted
for on the same basis as the investee’s direct disposal of related assets or
liabilities. Shareholders’ equity recognized through changes in shareholders’
equity other than net profit and loss other comprehensive income and profit
distribution of the investee shall be transferred to the current profit and loss
when disposing of the investment.Among them those that are still long-term equity investments after disposal are
carried forward in proportion and those that are converted into financial
instruments after disposal are carried forward in full amount. For business
combinations not under common control the combination cost is used as the
initial investment cost. The combination cost includes the sum of the assets
paid by the purchaser the liabilities incurred or assumed and the fair value of
the issued equity securities. For the other comprehensive income that is held
before the purchase date using the equity method when disposing of the
investment the same basis as the direct disposal of related assets or liabilities
by the investee is used for accounting treatment. Shareholders’ equity
recognized due to changes in shareholders’ equity other than net profit and loss
other comprehensive income and profit distribution of the investee shall be
transferred to the current profit and loss. Among them those that are still long-
term equity investments after disposal are carried forward in proportion and
those that are converted into financial instruments after disposal are carried
forward in full amount. The equity investment held before the purchase date as
a financial instrument is included in other comprehensive income and the
cumulative fair value changes are all transferred to retained earnings when the
cost method is changed. For long-term equity investments except the long-term
equity investment formed by business combinations the initial investment cost
shall be determined as follows: for the long-term investment obtained through
paying cash the actual purchase price paid and the expenses taxes and other
necessary expenses directly related to the acquisition of long-term equity
investment shall be the initial investment cost; for the long-term investment
obtained through the issuance of equity securities the fair value of the equity
securities shall be the initial investment cost.The long-term equity investment that the Company is able to exercise control
over the investee is accounted for by the cost method in the Company's
individual financial statements. Control refers to having the power over the
investee enjoying variable returns by participating in the relevant activities of
the investee and having the ability to use the power over the investee to affect
the amount of return.When the cost method is adopted long-term equity investments are priced at
the initial investment cost. In case of additional or recovery of investment the
cost of long-term equity investment shall be adjusted. The cash dividends or
profits declared to be distributed shall be recognized as investment income for
the current period.Long-term equity investments with joint control or significant influence
relationship are accounted for with the equity method. Joint control refers to the
common control of an arrangement in accordance with relevant agreements
and the relevant activities of the arrangement must be agreed by the
participants who share control rights before making decisions. Significant
influence refers to the power to participate in decision-making on the financial
and operating policies of the investee but not the ability to control or jointly
control the formulation of these policies with other parties.When the equity method is adopted if the initial investment cost is greater than
the fair value of the investee's identifiable net assets at the time of investment
it shall be included in the initial investment cost of the long-term equity
investment. Otherwise the difference shall be included in the current profit and
loss and the cost of the long-term equity investment shall be adjusted at the
same time.When using the equity method the investment profits and losses and other
comprehensive income shall be recognized according to the share of the net
profits and losses and other comprehensive income realized by the invested
entity and the book value of the long-term equity investment shall be adjusted.When confirming the share of the net profit and loss of the investee it is based
on the fair value of the investee’s identifiable assets at the time the investment
is obtained. In accordance with the Group’s accounting policies and accounting
period and offsetting the share of the investment with associates and joint
ventures the internal transaction gains and losses that occur between the two
parties are calculated according to the proportion that should be enjoyed by the
investor (if the internal transaction loss is an asset impairment loss it should be
recognized in full amount) and the net profit of the investee is adjusted and
confirmed unless the invested or sold assets constitute a business. Calculate
the portion that should be enjoyed based on the declared profit or cash
dividends of the invested entity and reduce the book value of the long-term
equity investment accordingly. The Group recognizes the net loss incurred by
the investee and the book value of the long-term equity investment and other
long-term equity that constitutes the net investment in the investee is written
down to zero unless the group is liable for additional loss obligations. For other
changes in shareholders' equity in addition to net profit and loss other
comprehensive income and profit distribution of the investee the book value of
long-term equity investment is adjusted and included in shareholders' equity.When disposing of a long-term equity investment the difference between its
book value and the actual purchase price shall be included in the current profit
and loss. For long-term equity investments accounted for using the equity
method if the equity method is terminated due to disposal the relevant other
comprehensive income accounted for by the original equity method shall be
accounted for on the same basis as the investee’s direct disposal of related
assets or liabilities. Shareholders’ equity confirmed by changes in other
shareholders’ equity other than profit and loss other comprehensive income
and profit distribution shall be transferred to current profits and losses. If the
equity method is still adopted the relevant other comprehensive income
calculated by the original equity method shall be accounted for on the same
basis as the investee’s direct disposal of related assets or liabilities and
transferred to the current profit and loss on a pro rata basis. Shareholders’
equity confirmed by changes in other shareholder’s equity other than the
distribution of income and profits shall be transferred to the current profit and
loss according to the corresponding proportion.23. Investment property
Investment property measurement model
Not applicable
24. Fixed assets
(1) Recognition principles of fixed assets
Fixed assets are only recognized when the economic benefits associated with
assets are likely to flow into the Group and the costs can be measured reliably.Subsequent expenditures related to fixed assets that meet the recognition
conditions shall be included in the cost of fixed assets and derecognise the
book value of the replaced part. Otherwise it shall be included in the current
profit and loss when incurred.Fixed assets are initially measured at historical cost considering the impact of
expected abandonment cost factors. The cost of purchasing a fixed asset
includes the purchase price relevant taxes and other expenditures directly
attributed to the asset that occurs before the fixed asset reaches its intended
useable state.The depreciation of fixed assets is calculated using the average life method.The depreciation life estimated net residual value rate and annual depreciation
rate of various fixed assets are as follows:
(2) Depreciation method of different categories of fixed assets
Estimated Annual
Depreciation Useful life
Categories residual value depreciation rate
method (years)
proportion (%) (%)
Buildings and
Straight-line method 5-35 years 3-10% 2.57-19.40%
structures
Specialized
Straight-line method 3-17 years 3-10% 5.29-32.33%
equipment
Vehicle Straight-line method 4-10 years 3-10% 9.00-24.25%
General tools Straight-line method 3-10 years 3-10% 9.00-32.33%
Decoration Straight-line method 5 years 20%
The Group reviews the useful life estimated net residual value and depreciation
method of fixed assets at least at the end of each year and adjusts them if
necessary.
(3) Recognition basis valuation and depreciation method of financial leased
fixed assets
During the reporting period the Group did not have finance leased fixed assets.25. Construction in progress
The cost of construction in progress is determined based on actual project
expenditures including various necessary project expenditures incurred during
the construction period capitalized borrowing costs before the project reaches
its intended use status and other related expenses.Construction in progress is transferred to fixed assets when it reaches the
expected usable state.26. Borrowing costs
Borrowing costs refer to the interest and other related costs incurred by the
Group due to borrowings including borrowing interest amortization of
discounts or premiums auxiliary expenses and exchange differences arising
from foreign currency borrowings. Borrowing costs that can be directly
attributable to the acquisition construction or production of assets that meet the
capitalization conditions shall be capitalized and other borrowing costs shall be
recognized in the current profit and loss. Assets that meet the conditions for
capitalization refer to fixed assets investment property inventory and other
assets that require a long period of acquisition construction or production
activities to reach the intended usable or saleable state.Borrowing costs can be capitalized only if the following conditions are met
simultaneously:
(1) Asset expenditure has occurred.
(2) Borrowing costs have been incurred.
(3) The purchase construction or production activities necessary for the asset
to reach the intended usable or saleable state have begun.When the acquisition construction or production of assets that meet the
capitalization conditions reaches the intended usable or saleable state the
capitalization of borrowing costs shall cease. Borrowing costs incurred
thereafter are included in the current profit and loss.During the capitalization period the amount of interest capitalization in each
accounting period is determined in accordance with the following methods:
(1) Special borrowings are determined by the amount of interest expenses
actually incurred in the current period minus temporary deposit interest income
or investment income.
(2) General borrowings are calculated and determined based on the weighted
average number of asset expenditures of the accumulated asset expenditure
exceeding the portion of special borrowings multiplied by the weighted average
interest rate of the occupied general borrowings.During the acquisition construction or production process of assets that meet
the conditions for capitalization the capitalization of borrowing costs shall be
suspended if there is an abnormal interruption other than the procedures
necessary to reach the intended usable or saleable state and the interruption
lasts for more than 3 months. The borrowing costs incurred during the
interruption period are recognized as expenses and included in the current
profit and loss until the acquisition construction or production activities of the
asset restart.27. Productive biological assets
No
28. Oil & gas assets
No
29. Right-of-use assets
No
30. Intangible assets
(1) Valuation method service life impairment test
Intangible assets are recognized only if the economic benefits are likely to flow
into the Group and the costs can be measured reliably. The initial
measurement of intangible assets is based on its cost. However if the fair value
of an intangible asset obtained in a business combination not under common
control can be reliably measured it is separately recognized as an intangible
asset and measured at its fair value.The useful life of intangible assets is determined according to the period during
which it can bring economic benefits to the Group. If it is impossible to foresee
the period of time that it will bring economic benefits to the Group it is regarded
as an intangible asset with an indefinite useful life.The useful life of each intangible asset is as follows:
Useful Life
292-600 months or
Land use right
perpetual
Application software 3-10 years
Customer relations 20 years
Patented technology 7-40 years
10 years or
Trademark
uncertain
Technology
21 years
authorization
The land use rights obtained by the Group are usually accounted for as
intangible assets. For self-development and construction of buildings such as
workshops relevant land use rights and buildings are accounted for as
intangible assets and fixed assets respectively. The price paid for the
purchased land and buildings is allocated to the land use rights and the
buildings. If it is difficult to allocate them reasonably they shall all be treated as
fixed assets.Intangible assets with a definite service life are amortized using the straight-line
method during their service life. The Group reviews the useful life and
amortization method of intangible assets with a definite useful life at the end of
each year and adjusts it if necessary.For intangible assets with uncertain service life regardless of whether there are
signs of impairment an impairment test is carried out every year. Such
intangible assets are not amortized and their useful lives are reviewed in each
accounting period. If there is evidence that the service life is limited the
accounting treatment shall be carried out according to the abovementioned
policy for intangible assets with definite service life.
(2) Accounting policy for internal R&D expenditure
The Group divides R&D expenditures into research phase expenditures and
development phase expenditures. Expenditures in the research phase are
included in the current profit and loss. Expenditures in the development stage
can be capitalized only when the following conditions are met at the same time:
it is technically feasible to complete the intangible asset so that it can be used
or sold; it has the intention to complete the intangible asset and use or sell it;
Intangible assets generate economic benefits including the ability to prove that
the products produced by the intangible assets exist in the market or the
intangible assets themselves exist in the market or intangible assets will be
used internally and can prove their usefulness; The Group has sufficient
technology financial resources and other resource support to complete the
development of the intangible asset and can use or sell the intangible asset;
The expenditure attributable to the development of the intangible asset can be
measured reliably. Development expenditures that do not meet the above
conditions are included in the current profits and losses when incurred.31. Impairment of long-term assets
The Group determines the impairment of assets excluding inventories deferred
income tax and financial assets according to the following methods: The Group
judges on the balance sheet date whether there are signs of possible
impairment of assets. If there are signs of impairment the Group will estimate
its recoverable amount and conduct impairment tests. No matter whether there
are signs of impairment the goodwill recognized as a result of business
combination shall be tested for impairment at least once a year. Intangible
assets that have not yet reached the usable state an impairment test is also
carried out annually.The recoverable amount is determined based on the higher of the net value of
the asset’s fair value minus the disposal expenses and the present value of the
asset’s expected future cash flow. The Group estimates its recoverable amount
on the basis of a single asset. If it is difficult to estimate the recoverable amount
of a single asset the recoverable amount of the CGU is determined based on
the CGU to which the asset belongs. The identification of an CGU is based on
whether the main cash inflow generated by the CGU is independent of the cash
inflows of other assets or CGUs.When the recoverable amount of an asset or CGU is lower than its book value
the Group writes down its book value to the recoverable amount. The reduced
amount is included in the current profit and loss and the corresponding asset
impairment provision is made simultaneously.As for the impairment test of goodwill the book value of goodwill shall be
allocated to the relevant CGU according to a reasonable method from the date
of purchase. If it is difficult to allocate to the relevant CGU it shall be allocated
to a group of CGUs. The related CGU or group of CGUs is the CGU or group
of CGUs that can benefit from the synergies of the business combination and
is not larger than the reporting segment determined by the Group. When
performing an impairment test on a related CGU or group of CGUs that contains
goodwill if there are signs of impairment an impairment test will be performed
first on the CGU or group of CGUs that do not contain goodwill determining
recoverable amount and impairment losses. Then conduct an impairment test
on the CGU or group of CGUs containing goodwill and compare its book value
with the recoverable amount. If the recoverable amount is lower than the book
value the amount of impairment loss is first offset and allocated to the book
value of the goodwill in the CGU or group of CGUs. Then according to the
proportion of the book value of each asset other than goodwill in the CGU or
group of CGUs the book value of other assets is deducted proportionally.Once the aforementioned asset impairment loss is confirmed it will not be
reversed in the subsequent accounting periods.32. Long-term prepayments
Long-term prepayments are mainly for molds which are amortized using the
production method or the straight-line method.33. Contract liabilities
The Group lists contract assets or contract liabilities in the balance sheet based
on the relationship between performance obligations and customer payments.The Group offsets the contract assets and contract liabilities under the same
contract as the net amount.Contract liabilities refer to the obligation to transfer goods or services to
customers for the consideration received or receivable from customers such
as the amount that an enterprise has received before the transfer of promised
goods or services.34. Employee benefits
(1) Short-term employee benefits
Employee remuneration refers to the various forms of remuneration or
compensation provided by the Group to obtain services provided by employees
or terminate the labor relationship. Employee compensation includes short-term
compensation and post-employment benefits. The benefits provided by the
Group to employee spouses children dependents survivors of deceased
employees and other beneficiaries are also employee compensation.Short-term salary
During the accounting period when employees provide services the actual
short-term compensation is recognized as a liability and included in the current
profit and loss or the cost of related assets.
(2) Post-employment benefits
Post-employment benefits (set a deposit plan)
The Group employees participate in pension and unemployment insurance
managed by the local government and the corresponding expenditures are
included in the current profits and losses when incurred.Other long-term employee benefits
For other long-term employee benefits provided to employees the relevant
regulations on post-employment benefits shall be applied to confirm and
measure the net liabilities or net assets of other long-term employee benefits
but the changes are included in the current profit and loss or the cost of related
assets.
(3) Termination benefits
No
(4) Other long-term employee benefits
No
35. Lease liabilities
No
36. Provisions
Except for the contingent consideration and the contingent liabilities assumed
in the business combination not under the common control when the
obligations related to the contingent events meet the following conditions at the
same time the Group recognizes them as provisions:
(1) The obligation is the current obligation assumed by the Group.
(2) The performance of this obligation is likely to cause economic benefits
outflow.
(3) The amount of the obligation can be measured reliably.
The provisions are initially measured in accordance with the best estimate of
the expenditure required to perform the relevant current obligations and
comprehensively consider factors such as risks uncertainties and time value of
money related to contingencies. The book value of provisions is reviewed on
each balance sheet date. If there is conclusive evidence that the book value
cannot reflect the current best estimate the book value shall be adjusted
according to the current best estimate.The contingent liabilities of the acquiree obtained in a business combination not
under the common control are measured at fair value initially. After the initial
recognition the amount recognized in accordance with the provisions and the
balance of the initially recognized amount after deducting the accumulated
amortization determined by the revenue recognition principle shall be
subsequently measured at the higher of the two.37. Share-based payment
No
38. Preferred shares Perpetual bonds and Other financial instrument
No
39. Revenue
Accounting policies used in revenue recognition and measurement
The Group has fulfilled the performance obligations in the contract that is
revenue is recognized when the customer obtains control of the relevant goods
or services. Obtaining control over related goods or services means being able
to lead the use of the goods or the provision of the service and obtaining almost
all of the economic benefits from it.Sales contract
Goods sales contracts between the Group and customers usually only include
performance obligations for the transferred goods. The Group generally
considers the following factors and recognizes revenue when the customer
obtains control of the relevant product: the current right to receive payment for
the product the transfer of major risks and rewards in the ownership of the
product the transfer of legal ownership of the product the transfer of the
physical assets of the product and the customer's acceptance of the product.Service contract
Service provision contracts between the Group and customers usually include
performance obligations for services to customers. The performance
obligations of the service provided by the Group do not meet the conditions for
fulfilling the performance obligations within a period. The Group usually
recognizes revenue at the time when the customer obtains the service or the
control of the service-related asset based on comprehensive consideration of
the following factors: Obtain the current right of collection of assets the transfer
of major risks and rewards of asset ownership the transfer of legal ownership
of assets the transfer of physical assets and the customer's acceptance of the
asset.Consideration payable to customers
For the consideration payable to customers the Group offsets it against the
transaction price. And at the time when the relevant income is recognized and
customer consideration is paid (or promised) whichever is later the current
income is offset unless the consideration payable is to obtain other
distinguishable goods or services from the customer.Warranty obligations
In accordance with contractual agreements and legal provisions the Group
provides quality assurance for the products sold. For guaranteed quality
assurance to ensure that the products sold meet the established standards the
Group conducts accounting treatment in accordance with Note V. 43. For the
service quality assurance that provides a separate service in addition to the
established standards to ensure that the goods sold meet the established
standards the Group regards it as a single performance obligation and
allocates part of the transaction price to the service quality assurance based on
the relative proportion of the stand-alone selling price of the goods and services
quality assurance provided and recognizes revenue when the customer
obtains the control of the service. When assessing whether the quality
assurance provides a separate service in addition to ensuring that the products
sold meet the established standards the Group considers whether the quality
assurance is a legal requirement the quality assurance period and the nature
of the Group's commitment to performing tasks.Differences in accounting policies for revenue recognition caused by the
adoption of different business models for similar businesses
No
40. Government grants
Government grants are recognized when they can meet the attached conditions
and can be received. Monetary government grants are measured at the amount
received or receivable. Non-monetary government grants are measured at fair
value and can be measured at the nominal amount in the circumstance that
fair value can’t be assessed.Government grants related to assets are government grants with which the
Group construct or otherwise acquire long-term assets under requirements of
government. In the circumstances that there is no specific government
requirement the Group shall determine based on the primary condition to
acquire the grants and government grants related to assets are government
grants whose primary condition is to construct or otherwise acquire long-term
assets. Other government grants are recognized as income.Government grants are calculated using the gross method.For government grants related to income used for compensating the related
future cost expenses or losses of the Group are recognized as deferred income
and are included in profit and loss during the period in which the relevant cost
expenses or losses are recognized. For government grants related to income
used for compensating the related cost expenses or losses already incurred to
the Group they are directly included in profit and loss.Government subsidies related to assets are recognized as deferred income
and are included in profit and loss according to a reasonable and systematic
method within the useful life of the relevant asset. For assets sold transferred
disposed or damaged within the useful lives the balance of unamortized
deferred income is transferred into profit and loss of the year in which the
disposal occurred.41. Deferred tax assets/Deferred tax liabilities
Income tax includes current income tax and deferred income tax. Except for the
adjusted goodwill arising from a business combination or the transactions or
events directly included in the shareholders' equity all of them are included in
the current profit and loss as income tax expenses or income.The Group's current income tax liabilities or assets formed in the current and
previous periods are measured in accordance with the expected amount of
income tax to be paid or returned as calculated in accordance with the tax law.Based on the temporary difference between the book value of assets and
liabilities on the balance sheet date and the tax basis as well as temporary
differences arising from the difference between the book value of items that are
not recognized as assets and liabilities but whose tax base can be determined
in accordance with the tax law and the tax base the Group uses the balance
sheet debt method to accrue deferred income tax.Various taxable temporary differences are used to recognize deferred income
tax liabilities unless:
1. The temporary differences are generated in the following transactions: upon
the initial recognition of goodwill or the initial recognition of assets or liabilities
arising from transactions with the following characteristics: the transaction is
not a business combination and neither affects accounting profits nor taxable
income or deductible losses when the transaction occurs.2. For temporary differences related to investments in subsidiaries joint
ventures and associates the time for the reversal of the temporary differences
can be controlled and the temporary differences may not be reversed in the
foreseeable future.For deductible temporary differences deductible losses and tax deductions that
can be carried forward to future years the Group recognizes the deferred
income tax assets within the limit of the future taxable income that is likely to
be used to deduct deductible temporary differences deductible losses and tax
deductions unless:
1. The deductible temporary difference is generated in the following transaction:
the transaction is not a business combination and when the transaction occurs
it neither affects accounting profits nor taxable income or deductible losses.2. For the investment of subsidiaries joint ventures and associates the
corresponding deferred income tax assets are recognized when the following
conditions are met at the same time: Temporary differences are likely to be
reversed in the foreseeable future and the taxable income that can be used to
deduct temporary differences is likely to be obtained in the future.The Group calculates deferred income tax assets and deferred income tax
liabilities in accordance with the provisions of the tax law and applicable tax rate
on the balance sheet date. It also reflects the income tax impact of the expected
return of assets or settlement of liabilities on the balance sheet date.On the balance sheet date the Group reviews the book value of deferred
income tax assets. If it is probable that sufficient taxable income cannot be
obtained in the future period to deduct the benefits of deferred income tax
assets the amount of deferred income tax assets shall be reduced. On the
balance sheet date the Group reassess the unrecognized deferred income tax
assets and recognizes the deferred income tax assets to the extent that it is
likely to obtain sufficient taxable income for the reversal of all or part of the
deferred income tax assets.Deferred income tax assets and deferred income tax liabilities are listed as the
net amount after offset if the following conditions are met simultaneously: the
Group has the legal right to settle current income tax assets and current income
tax liabilities on a net basis. Deferred income tax assets and deferred income
tax liabilities are related to the same tax administration department or to
different taxation entities but in the future period of reversal of each important
deferred income tax asset and deferred income tax liability the taxpayer
intends to settle the current income tax assets and current income tax liabilities
on a net basis or obtain assets and pay off debts at the same time.42. Leases
(1) Accounting of operating lease
Leases that have substantially transferred all the risks and rewards related to
asset ownership are finance leases and all other leases are operating leases.As an operating lease lessee
The rental expenses are included in the relevant asset cost or current profit and
loss according to the straight-line method during each lease term and the
contingent rent is included in the current profit and loss when it actually occurs.As an operating lease lessor
The rental income is recognized as current profit and loss on a straight-line
basis during each lease term and contingent rent is included in current profit
and loss when it actually occurs.
(2) Accounting of finance lease
No
43. Other significant accounting policies and estimates
The preparation of financial statements requires management to make
judgments estimates and assumptions which will affect the reported amounts
and disclosures of income expenses assets and liabilities and the disclosure
of contingent liabilities on the balance sheet date. The results of these uncertain
assumptions and estimates may cause significant adjustments to the carrying
amount of assets or liabilities in the future.Judgment
In the process of applying the Group’s accounting policies the management
team has made the following judgments that have a significant impact on the
amounts recognized in the financial statements:
Business model
The classification of financial assets at initial recognition depends on the
business model of the Group’s management of financial assets. When judging
the business model the Group considers corporate evaluation and financial
asset performance reporting to key management personnel risks affecting
financial asset performance and its management method and the way relevant
business managers get paid etc. When evaluating whether to collect
contractual cash flow as the goal the Group needs to analyze and judge the
reasons time frequency and value of the financial assets sold before the expiry
date.Contract cash flow characteristics
The classification of financial assets at initial recognition depends on the
contractual cash flow characteristics of financial assets. It is necessary to
determine whether the contractual cash flow is only the payment of principal
and interest based on the outstanding principal including the correction of the
time value of money. In the assessment it is necessary to judge whether there
is a significant difference compared with the benchmark cash flow. For financial
assets that include prepayment characteristics it is necessary to judge whether
the fair value of the prepayment characteristics is insignificant etc.Uncertainty of estimates
The following are the key assumptions about the future and other key sources
of estimation uncertainty at the balance sheet date which may cause significant
adjustments to the carrying amounts of assets and liabilities in future
accounting periods.Impairment of financial instruments
The Group uses the expected credit loss model to evaluate the impairment of
financial instruments. The application of the expected credit loss model requires
significant judgments and estimates and all reasonable and supportive
information including forward-looking information. In making these judgments
and estimates the Group infers the expected changes in the owing party's
credit risk based on historical repayment data combined with economic policies
macroeconomic indicators industry risks and other factors. Different estimates
may affect the provision for impairment and the provision for impairment that
has been made may not be equal to the actual amount of impairment losses in
the future.Impairment of non-current assets other than financial assets (except goodwill)
On the balance sheet date the Group judges whether non-current assets other
than financial assets are likely to be impaired. For intangible assets with
uncertain service life in addition to the annual impairment test an impairment
test is also performed when there are signs of impairment. Other non-current
assets except financial assets are tested for impairment when there are signs
that the carrying value is not recoverable. An impairment has occurred when
the book value of an asset or CGU is higher than the recoverable amount that
is the higher of the net value of the fair value minus the disposal expenses and
the present value of the expected future cash flow. The net amount of fair value
minus disposal expenses is determined by the sale agreement price of similar
assets in a fair transaction or the observable market price minus the
incremental cost directly attributable to the disposal of the asset. When
predicting the present value of future cash flows the management team must
estimate the expected future cash flow of the asset or CGU and select an
appropriate discount rate to determine the present value of future cash flows.Goodwill impairment
The Group takes goodwill impairment tests at least annually. This requires an
estimation of the present value of the future cash flow of the CGU or group of
CGUs that goodwill has been allocated. When estimating the present value of
future cash flows the Group needs to estimate the cash flow generated by the
future CGU or group of CGUs and select an appropriate discount rate to
determine the present value of future cash flows. See Note V 31.Development expenditure
When determining the amount of capitalization management must make
assumptions about the expected future cash flow of the asset the applicable
discount rate and the expected benefit period.Deferred tax assets
Deferred income tax assets should be recognized for all unused deductible
losses if there is likely to be sufficient taxable income to reduce deductible
losses. This requires the management team to use a lot of judgment to estimate
the time and amount of taxable income in the future combined with tax planning
strategies to determine the amount of deferred income tax assets.Quality assurance
For a combination of contracts with similar characteristics the Group makes
reasonable estimates of the warranty rates based on historical warranty data
current warranty conditions and after considering all relevant information such
as product improvements and market changes. The estimated warranty rate
may not be equal to the actual future warranty rate. The Group re-evaluates the
warranty rate at least on each balance sheet date and determines the estimated
liabilities based on the re-evaluated warranty rate.44. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√ Applicable □ Not applicable
Contents and reasons of
changes in accounting approval procedure Note
policies
It has been approved at the 35th
Changes and adjustments to Meeting of the sixth Board of
the new revenue standards Directors of the Company on
April 27 2020
In accordance with the relevant requirements of the Accounting Standards for
Business Enterprises No. 14-Revenue(Cai Kuai [2017] No. 22) issued by the
Ministry of Finance the Company made corresponding changes and
adjustments since January 1 2020. According to the convergence regulations
the comparable period information will not be adjusted. The difference between
the implementation of the new standards and the current standards on the first
day will be retrospectively adjusted for retained earnings at the beginning of the
reporting period.The new revenue standard establishes a new revenue recognition model for
regulating revenue generated from contracts with customers. According to the
new revenue standards the method of recognizing revenue should reflect the
entity's transfer of goods or services to customers and the amount of the
revenue should reflect the amount of consideration that the entity expects to be
entitled to because of the transfer of these goods or services to customers. At
the same time the new revenue standard also regulates the judgments and
estimates required for each cycle of revenue recognition. The Group only
adjusts the cumulative impact of contracts that have not been completed on
January 1 2020. For contract changes that occurred before January 1 2020
the Group adopts a simplified treatment method: for all contracts according to
the final arrangement of contract changes identify the performed and unfulfilled
performance obligations determine the transaction price and allocate the
transaction price between the performed and unfulfilled performance
obligations.Based on the inspection of sales contracts that have not been executed as of
December 31 2019 the Group believes that the use of simplified processing
methods will not have a significant impact on the Group’s financial statements.The main reason is that the revenue recognized by the Group based on the
transfer of risk rewards is synchronized with the realization of the performance
obligations of the sales contract.The impact of the implementation of the new revenue standard on the 2020
financial statements is as follows:
Consolidated balance sheet
Unit: RMB
According to
Carrying value Impact
original strandard
Contract liabilities 512836059.89 - 512836059.89
Unearned revenue - 517028331.94 （517028331.94）
Other current liabilities 4192272.05 - 4192272.05
Account payable 935542222.20 911952560.39 23589661.81
Other account payable 384220500.31 407810162.12 （23589661.81）
Parent Company’s balance sheet
Unit: RMB
According to
Carrying value Impact
original strandard
Contract liabilities 4359811.90 - 4359811.90
Unearned revenue - 4359811.90 （4359811.90）
Account payable 295956510.99 290542172.86 5414338.13
Other account payable 1630748176.80 1636162514.93 （5414338.13）
Consolidated income statement
Unit: RMB
According to
Carrying value Impact
original strandard
Operating cost 8539410065.42 8413058402.91 126351662.51
Sales cost 202937418.90 329289081.41 （126351662.51）
Parent Company’s income statement
Unit: RMB
According to
Carrying value Impact
original strandard
Operating cost 2036931290.14 2026747323.25 10183966.89
Sales cost 30034081.55 40218048.44 （10183966.89）
The main effects of retrospective adjustments caused by the above
accounting policy changes on the financial statements are as follows:
The Group
2020 FY
Consolidated balance sheet
Unit: RMB
Carrying value according Carrying value according to
to orignal standard Reclassification new standard
Decemeber 31 2019 January 1 2020
Contract liabilities - 648572264.26 648572264.26
Unearned revenue 653874136.71 （653874136.71） -
Other current
- 5301872.45 5301872.45
liabilities
Account payable 1083181883.19 31968469.81 1115150353.00
Other account
759261155.63 （31968469.81） 727292685.82
payable
Parent Company’s balance sheet
Unit: RMB
Carrying value according Carrying value according to
to original standard Reclassification new standard
Decemeber 31 2019 January 1 2020
Contract liabilities - 3103027.57 3103027.57
Unearned revenue 3103027.57 （3103027.57） -
Account payable 417556226.11 1273036.85 418829262.96
Other account
891820777.91 （1273036.85） 890547741.06
payable
(2) Changes in significant accounting estimates
□ Applicable √Not applicable
(3) Since 2020 Adjustments to the relevant items of financial statements at the
beginning of the year at the first implementation of new revenue and lease
standards
Applicable
Whether it is necessary to adjust the balance sheet accounts at the beginning
of the year
√ Yes □ No
Consolidated balance sheet
Unit: RMB
Items December 31 2019 January 1 2020 Adjustments
Current Assets:
Cash and cash
2452754083.38 2452754083.38
equivalents
Settlement funds
Loans to other banks
Held-for-trading financial
63034283.90 63034283.90
assets
Derivative financial
assets
Notes receivable 0.00
Accounts receivable 2555697203.97 2555697203.97
Accounts receivable
378904590.58 378904590.58
financing
Advances paid 173597304.56 173597304.56
Premium receivable
Reinsurance accounts
receivable
Reinsurance reserves
receivable
Other receivables 916325582.02 916325582.02
Including: Interest
0.00
receivable
Dividend receivable 0.00
Financial assets under
reverse repo
Inventories 2393951480.24 2393951480.24
Contract assets
Assets classified as held
for sale
Non-current assets due
within one year
Other current assets 117007873.14 117007873.14
Total current assets 9051272401.79 9051272401.79
Non-current assets:
Loans and advances
paid
Debt investments
Other debt investments
Long-term receivable
Long-term equity
12612542.86 12612542.86
investments
Other equity instrument
4942489.56 4942489.56
investments
Other non-current
financial assets
Investment property 0.00
Fixed assets 5113660627.42 5113660627.42
Construction in progress 426345202.99 426345202.99
Productive biological
assets
Oil & gas assets
Right-of-use assets
Intangible assets 1778179906.06 1778179906.06
Development
0.00
expenditures
Goodwill 1701158115.52 1701158115.52
Long-term prepayments 159712622.07 159712622.07
Deferred tax assets 188710115.07 188710115.07
Other non-current
50655894.55 50655894.55
assets
Total non-current assets 9435977516.10 9435977516.10
Total assets 18487249917.89 18487249917.89
Current liabilities:
Short-term borrowings 3070118768.19 3070118768.19
Central bank loans
Loans from other banks
Held-for-trading financial
1324581.60 1324581.60
liabilities
Derivative financial
liabilities
Notes payable 218601865.08 218601865.08
Accounts payable 1083181883.19 1115150353.00 -31968469.81
Unearned revenue 653874136.71 653874136.71
Contract liabilities 0.00 648572264.26 -648572264.26
Financial liabilities under
repo
Absorbing deposit and
interbank deposit
Deposit for agency
security transaction
Deposit for agency
security underwriting
Employee benefits
238740090.73 238740090.73
payable
Tax payable 71472056.11 71472056.11
Other payables 759261155.63 727292685.82 31968469.81
Including: Interest Payable 0.00
Dividends Payable 0.00
Handling fee and
commission payable
Reinsurance accounts
payable
Held-for-sale liabilities
Non-current liabilities
571968504.83 571968504.83
due within one year
Other current liabilities 0.00 5301872.45 -5301872.45
Total current liabilities 6668543042.07 6668543042.07
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 1165220492.00 1165220492.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee
benefits payable
Provisions 174680866.90 174680866.90
Deferred income 202630087.75 202630087.75
Deferred tax liabilities 268233346.43 268233346.43
Other non-current
liabilities
Total non-current liabilities 1810764793.08 1810764793.08
Total liabilities 8479307835.15 8479307835.15
Equity:
Share capital 2186879678.00 2186879678.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 1691289940.77 1691289940.77
Less: Treasury shares 333092868.42 333092868.42
Other comprehensive
74589529.22 74589529.22
income
Special reserve 10261018.12 10261018.12
Surplus reserve 427043757.25 427043757.25
General risk reserve
Undistributed profit 3935484397.57 3935484397.57
Total equity attributable to
7992455452.51 7992455452.51
the parent Company
Non-controlling interest 2015486630.23 2015486630.23
Total equity 10007942082.74 10007942082.74
Total liabilities & equity 18487249917.89 18487249917.89
Adjustment statement
No
Balance Sheet of the Parent Company
Unit: RMB
Items December 31 2019 January 1 2020 Adjustments
Current Assets:
Cash and cash
1004904910.05 1004904910.05
equivalents
Held-for-trading financial
60034900.00 60034900.00
assets
Derivative financial assets
Notes receivable 0.00
Accounts receivable 678186227.12 678186227.12
Accounts receivable
159939620.65 159939620.65
financing
Advances paid 28429672.81 28429672.81
Other receivables 494780887.10 494780887.10
Including: Interest receivable 0.00
Dividend receivable 129600000.00 129600000.00
Inventories 243049665.85 243049665.85
Contract assets
Assets classified as held
for sale
Non-current assets due
within one year
Other current assets 17910061.89 17910061.89
Total current assets 2687235945.47 2687235945.47
Non-current assets:
Debt investments
Other debt investments
Long-term receivable
Long-term equity
4198711501.05 4198711501.05
investments
Other equity instrument
investments
Other non-current financial
assets
Investment property
Fixed assets 364884432.10 364884432.10
Construction in progress 57506951.74 57506951.74
Productive biological
assets
Oil & gas assets
Right-of-use assets
Intangible assets 53332915.40 53332915.40
Development expenditures
Goodwill
Long-term prepayments 9208148.95 9208148.95
Deferred tax assets 2777151.86 2777151.86
Other non-current assets 38683336.01 38683336.01
Total non-current assets 4725104437.11 4725104437.11
Total assets 7412340382.58 7412340382.58
Current liabilities:
Short-term borrowings 1282185084.02 1282185084.02
Held-for-trading financial
liabilities
Derivative financial
liabilities
Note payable 290920548.28 290920548.28
Account payable 417556226.11 418829262.96 -1273036.85
Unearned revenue 3103027.57 3103027.57
Contract liabilities 0.00 3103027.57 -3103027.57
Employee benefits
35028390.32 35028390.32
payable
Tax payable 3998075.37 3998075.37
Other payables 891820777.91 890547741.06 1273036.85
Including: Interest Payable 0.00
Dividends Payable 0.00
Held-for-sale liabilities
Non-current liabilities due
265717562.36 265717562.36
within one year
Other current liabilities
Total current liabilities 3190329691.94 3190329691.94
Non-current liabilities:
Long-term borrowings 396962631.92 396962631.92
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee
benefits payable
Provisions
Deferred income 1872600.00 1872600.00
Deferred tax liabilities
Other non-current
liabilities
Total non-current liabilities 398835231.92 398835231.92
Total liabilities 3589164923.86 3589164923.86
Equity:
Share capital 2186879678.00 2186879678.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 1059096302.01 1059096302.01
Less: Treasury shares 333092868.42 333092868.42
Other comprehensive
income
Special reserve 1919506.02 1919506.02
Surplus reserve 427043757.25 427043757.25
Undistributed profit 481329083.86 481329083.86
Total equity 3823175458.72 3823175458.72
Total liabilities & equity 7412340382.58 7412340382.58
Adjustment statement
No
(4) Since 2020 the statements of first implementation of new revenue and
lease standards to trace and adjust previous comparative data.□ Applicable √Not applicable
45. Others
(1) Stock repurchase
The consideration and transaction costs paid for repurchasing own equity
instruments to reduce shareholders’ equity. Except for share-based payment
the issuance (including refinancing) repurchase sale or cancellation of own
equity instruments shall be treated as changes in equity.
(2) Profit distribution
The Company's cash dividends are recognized as liabilities after approval by
the General Meeting of Shareholders.
(3) Safety production fee
The safety production fee withdrawn in accordance with the regulations shall
be included in the cost of the relevant product or the current profit and loss
meanwhile included in the special reserve. Distinguish whether fixed assets
are formed and deal with them separately: if it is an expense it will directly offset
the special reserve; If it is a fixed asset the fixed asset is recognized when they
reach the intended usable state. Meanwhile the equivalent special reserve is
deducted and the equivalent accumulated depreciation is recognized.
(4) Fair value measurement
The Group measures derivative financial instruments and equity instrument
investments at fair value on each balance sheet date. Fair value refers to the
price that market participants can receive an asset or pay for the transfer of a
liability in an orderly transaction on the measurement date. The Group
measures related assets or liabilities at fair value assuming that the orderly
transaction of selling assets or transferring liabilities takes place in the main
market of the relevant assets or liabilities. If there is no main market the Group
assumes that the transaction proceeds in the most beneficial market to the
relevant assets or liabilities. The main market (or the most favorable market) is
the trading market that the Group can enter on the measurement date. The
Group adopts the assumptions used by market participants to maximize their
economic benefits when pricing the asset or liability.When measuring non-financial assets at fair value the Group considers the
ability of market participants to use the asset for the best purpose to generate
economic benefits or to sell the asset to other market participants who can be
used for the best purpose to generate economic benefits.The Group adopts valuation techniques that are applicable under current
circumstances and have sufficient available data and other information to
support. Priority is given to the use of relevant observable input values and
unobservable input values are used only when observable input values cannot
be obtained or are not practicable.For assets and liabilities that are measured or disclosed at fair value in financial
statements determine the fair value level to which they belong based on the
lowest level of input value that is important for fair value measurement as a
whole: The input value of the first level refers to the unadjusted quotation of the
same asset or liability that can be obtained in the active market on the
measurement date; The second-level input value refers to the directly or
indirectly observable input value of related assets or liabilities except for the
first-level input value; The third level input value refers to the unobservable input
value of related assets or liabilities.On each balance sheet date the Group re-evaluates the assets and liabilities
recognized in the financial statements that are continuously measured at fair
value to determine whether there is a switch between the fair value
measurement levels.VI. Taxes
1. Major categories of taxes and tax rates
Tax Type Taxation basis Tax rate
The taxable revenue of general taxpayers of Chinese coporate
calculates output tax at a tax rate of 13% and pays value-
added tax on the difference after deducting the input tax that is
allowed to be deducted in the current period.The Mexican subsidiary Meridian Technologies Mexico S. de
R.L. de C.V. calculates output tax at 16% of taxable revenue
and pays VAT based on the difference after deducting the input
tax allowed to be deducted in the current period.Wanfeng MLTH Holdings Co. LTD (Hereinafter referred to as
"Wanfeng Meridian") and its British subsidiary Meridian
Lightweight Technology UK Limited calculate the output tax at
20% of the taxable revenue and pay the VAT on the difference 13%、16%、VAT
after deducting the input tax allowed to be deducted in the 20%
current period.The Wanfeng Aluminum Wheels (India) Pty. Co. Ltd applies to
the taxation regulations of Delhi Haryana India where it is
registered calculates output tax and pays VAT based on the
difference after deducting the input tax allowed to be deducted
in the current period.The Austrian subsidiary Diamond Verwaltungs GmbH and its
local subsidiary Austro Engine GmbH calculate the output tax
at 20% of the taxable revenue and pay VAT based on the
difference after deducting the input tax allowed to be deducted
i n the current period.Urban
Chinese corporate pays 5% 7%or 0% of the turnover tax 5%、7%、maintenance and
actually paid.construction tax 0%
Chinese corporate income tax is paid at 15% or 25% of the
taxable income. Please refer to Note vi 2.Wanfeng MLTH Holdings Co. Ltd is subject to the income tax
regulations of Nottinghamshire Ashfield England where it is
registered and the tax rate is 19%. Meridian Lightweight
Technology UK Limited are subject to income tax laws and
regulations in its place of registration and the tax rate is 19%.15%、19%、The American subsidiary Wanfeng North America Co. Ltd. is
subject to the income tax regulations of the state of Michigan 23.35%、Corporate
where it is registered. Magnesium Products of America Inc. is
income tax 22%、30%、subject to the income tax regulations of its place of registration.The tax rate for 2019 and 2020 was 23.35%. 25%、26.50%
The Indian subsidiary Wanfeng Aluminum Wheels (India) Pty
Co. Ltd. is subject to the income tax regulations of Delhi
Haryana India where it is registered and the tax rate is 22%.The Mexican subsidiary Meridian Technologies Mexico S. de
R.L. de C.V. is subject to the income tax regulations of its
place of registration and the tax rate is 30%
The Canadian subsidiaries Meridian Lightweight Technologies
Inc. Meridian Lightweight Technologies Holdings Inc. Meridian
Canada Inc. and Diamond Aircraft Industries Inc. are subject
to the income tax regulations of their registered places. Tax
rates are 25% 26.5% 26.5% and 25% respectively.The Austrian subsidiary Diamond Verwaltungs GmbH and its
subsidiaries Diamond Aircraft Industries GmbH (Austria) and
Austro Engine GmbH are subject to the income tax regulations
of their registered places and the tax rate is 25%.The Canadian subsidiaries Meridian Lightweight Technologies
Inc. Meridian Lightweight Technologies Holdings Inc. Meridian
Sales tax Canada Inc. and Diamond Aircraft Industries Inc. are taxed at 13%
13% of taxable revenue and pay sales tax based on the
difference after deducting the current allowable tax deduction.The Group’s sales revenue in Ohio the United States is
Business activity
subject to local tax regulations for calculating business activity
tax
tax.The Indian subsidiary Wanfeng Aluminum Wheels (India) Pty
Withhold income Co. Ltd. is subject to the taxation regulations of Delhi
tax Haryana India where it is registered to calculate and pay
withholding income tax.Education Chinese corporate pays 5% or0% of the turnover tax actually
5%、0%supplementary tax paid.Water
Chinese corporate pays 1% 0.1% or 0% of their operating 1%、0.1%、conservancy
revenue.construction fund 0%
Different corporate income tax rates applicable to different taxpayers:
Taxpayers Income tax rate
The Company Weihai Wanfeng Chongqing
Wanfeng Weihai Magnesium Wanfeng
Motorcycle Wheel Guangdong Motorcycle
Wheel Shanghai Dacromet Shanghai Meridian 15%
Meridian New Material Wuxi Xiongwei
Yancheng Xiongwei Changchun Xiongwei
Wuxi Geoff Yizheng Xiongwei
Ningbo Aoweier Jilin Wanfeng Shanghai
Fengtu Ningbo Dacromet Aircraft Industry
25%
Diamond Verwaltungs GmbH and local Austrian
subsidiary
Subject to income tax regulations in
Wanfeng MLTH Holdings Co. Ltd Nottinghamshire Ashfield England where it was
registered and the tax rate is 19%.Subject to income tax regulations in its place of
Meridian Lightweight Technology UK Limited
registration and the tax rate is 19%.American subsidiary: Wanfeng North America Subject to income tax regulations in the state of
Co. Ltd. Michigan where it was registered.Subject to income tax regulations in its place of
Magnesium Products of America Inc. registration and the tax rate for 2019 and 2020
was 23.35%.Subject to income tax regulations in the city of
Indian subsidiary: Wanfeng Aluminum Wheels
Delhi Haryana India where it was registered the
(India) Pty
tax rate is 22%.Mexican subsidiary: Meridian Technologies Subject to income tax regulations in its place of
Mexico S. de R.L. de C.V. registration and the tax rate is 30%
Canadian subsidiaries Meridian Lightweight
Subject to income tax regulations in the place of
Technologies Inc. Meridian Lightweight
registration. Tax rates are 25% 26.5% 26.5%
Technologies Holdings Inc. Meridian Canada
and 25% respectively.Inc. and Diamond Aircraft Industries Inc.Austrian subsidiar Diamond Verwaltungs GmbH
Subject to income tax regulations in their place of
and its subsidiaries Diamond Aircraft Industries
registration at a rate of 25%.GmbH (Austria) and Austro Engine GmbH
2. Tax preferential policies
The Company received the High-tech Enterprise Certificate (Certificate No.GR202033005649) jointly issued by Zhejiang Provincial Department of Science
and Technology Zhejiang Provincial Department of Finance Zhejiang
Provincial State Taxation Bureau and Local Taxation Bureau on December 1
2020. The Company is recognized as a high-tech enterprise and the
certification is valid for 3 years. According to Chinese relevant tax policies for
high-tech enterprises the income tax will be 15% within three years (from 2020
to 2022) after the Company is recognized as a high-tech enterprise.The subsidiary Weihai Wanfeng Auto Wheel Co. Ltd. received the High-tech
Enterprise Certificate (Certificate No. GR202037002645) jointly issued by
Shandong Provincial Department of Science and Technology Shandong
Provincial Department of Finance Shandong Provincial Bureau of Taxation and
Local Taxation Bureau on December 8 2020. The company is recognized as a
high-tech enterprise and the certification is valid for 3 years. According to
Chinese relevant tax policies for high-tech enterprises the income tax will be
15% within three years (from 2020 to 2022) after the company is recognized as
a high-tech enterprise.The subsidiary Weihai Wanfeng Magnesium Technology Development Co. Ltd.received the High-tech Enterprise Certificate (Certificate No. GR202037000108)
jointly issued by Shandong Provincial Department of Science and Technology
Shandong Provincial Department of Finance Shandong Provincial Bureau of
Taxation and Local Taxation Bureau on August 17 2020. The company is
recognized as a high-tech enterprise and the certification is valid for 3 years.According to Chinese relevant tax policies for high-tech enterprises the income
tax will be 15% within three years (from 2020 to 2022) after the company is
recognized as a high-tech enterprise.The subsidiary Chongqing Wanfeng Aolun Aluminum Wheel Co. Ltd. is an
encouraged enterprise located in the western region. According to the Notice
on the Taxation Policy Issues Concerning the Further Implementation of the
Western Development Strategy jointly issued by the Ministry of Finance the
General Administration of Customs and the State Administration of Taxation
on July 27 2011 it was registered as an encouraged industrial enterprise in the
western region by filing records to Qingxi Taxation Office State Taxation
Bureau Fuling District Chongqing each year and the income tax was paid at
a tax rate of 15% in 2016. According to Chinese relevant tax policies for
encouraged industrial enterprises in the western region the company does not
need to file special records from 2018 and the income tax will still be paid at
the tax rate of 15% in 2020.The subsidiary Zhejiang Wanfeng Motorcycle Wheel Co. Ltd. received the
High-tech Enterprise Certificate (Certificate No. GR201833001613) jointly
issued by Zhejiang Provincial Department of Science and Technology Zhejiang
Provincial Department of Finance and Zhejiang Provincial Taxation Bureau of
the State Administration of Taxation on November 30 2018. The company is
recognized as a high-tech enterprise and the certification is valid for 3 years.According to Chinese relevant tax policies for high-tech enterprises the income
tax will be 15% within three years (from 2018 to 2020) after the company is
recognized as a high-tech enterprise.The subsidiary Guangdong Wanfeng Motorcycle Wheel Co. Ltd. received the
High-tech Enterprise Certificate (Certificate No. GR201844002073) jointly
issued by Guangdong Provincial Department of Science and Technology
Guangdong Provincial Department of Finance Guangdong Provincial State
Taxation Bureau and Guangdong Provincial Local Taxation Bureau on
November 28 2018. The company is recognized as a high-tech enterprise and
the certification is valid for 3 years. According to Chinese relevant tax policies
for high-tech enterprises the income tax will be 15% within three years (from
2018 to 2020) after the company is recognized as a high-tech enterprise.The subsidiary Shanghai Dacromet Coating Industry Co. Ltd. received the
High-tech Enterprise Certificate (Certificate No. GR201831000793) jointly
issued by Shanghai Science and Technology Commission Shanghai Finance
Bureau Shanghai State Taxation Bureau and Shanghai Local Taxation Bureau
on November 2 2018. The company is recognized as a high-tech enterprise
and the certification is valid for 3 years. According to Chinese relevant tax
policies for high-tech enterprises the income tax will be 15% within three years
(from 2018 to 2020) after the company is recognized as a high-tech enterprise.The subsidiary Shanghai Meridian Magnesium Products Co. Ltd. received the
"High-tech Enterprise Certificate (Certificate No. GR201931000323) jointly
issued by Shanghai Science and Technology Commission Shanghai Finance
Bureau Shanghai State Taxation Bureau and Shanghai Local Taxation Bureau
on October 8 2019. The company is recognized as a high-tech enterprise and
the certification is valid for 3 years. According to Chinese relevant tax policies
for high-tech enterprises the income tax will be 15% within three years (from
2019 to 2021) after the company is recognized as a high-tech enterprise.The subsidiary Wanfeng Meridian New Material Technology Co. Ltd. received
the High-tech Enterprise Certificate (Certificate No. GR201833001014) jointly
issued by Zhejiang Provincial Department of Science and Technology Zhejiang
Provincial Department of Finance and Zhejiang Provincial Taxation Bureau of
the State Administration of Taxation on November 30 2018. The company is
recognized as a high-tech enterprise and the certification is valid for 3 years.According to Chinese relevant tax policies for high-tech enterprises the income
tax will be 15% within three years (from 2018 to 2020) after the company is
recognized as a high-tech enterprise.The subsidiary Wuxi Xiongwei Precision Technology Co. Ltd. received the
High-tech Enterprise Certificate (Certificate No. GR202032006479) jointly
issued by Jiangsu Provincial Department of Science and Technology Jiangsu
Provincial Department of Finance Jiangsu Provincial State Taxation Bureau
and Jiangsu Provincial Local Taxation Bureau on December 2 2020. The
company is recognized as a high-tech enterprise and the certification is valid
for 3 years. According to Chinese relevant tax policies for high-tech enterprises
the income tax will be 15% within three years (from 2020 to 2022) after the
company is recognized as a high-tech enterprise.The subsidiary Changchun Xiongwei Auto Parts Co. Ltd. received the High-
tech Enterprise Certificate (Certificate No. GR202022000006) jointly issued by
Jilin Provincial Department of Science and Technology Jilin Provincial
Department of Finance Jilin Provincial State Taxation Bureau and Jilin
Provincial Local Taxation Bureau on September 10 2020. The company is
recognized as a high-tech enterprise and the certification is valid for 3 years.According to Chinese relevant tax policies for high-tech enterprises the income
tax will be 15% within three years (from 2020 to 2022) after the company is
recognized as a high-tech enterprise.The subsidiary Wuxi Geoff Machinery Technology Co. Ltd. received the High-
tech Enterprise Certificate (Certificate No. GR201832004062) jointly issued by
Jiangsu Provincial Department of Science and Technology Jiangsu Provincial
Department of Finance and Jiangsu Provincial Taxation Bureau of the State
Administration of Taxation on November 28 2018. The company is recognized
as a high-tech enterprise and the certification is valid for 3 years. According to
Chinese relevant tax policies for high-tech enterprises the income tax will be
15% within three years (from 2018 to 2020) after the company is recognized as
a high-tech enterprise.The subsidiary Yancheng Xiongwei Auto Parts Co. Ltd. received the High-tech
Enterprise Certificate (Certificate No. GR202032007938) jointly issued by
Jiangsu Provincial Department of Science and Technology Jiangsu Provincial
Department of Finance Jiangsu Provincial State Taxation Bureau and Jiangsu
Provincial Local Taxation Bureau on December 2 2020. The company is
recognized as a high-tech enterprise and the certification is valid for 3 years.According to Chinese relevant tax policies for high-tech enterprises the income
tax will be 15% within three years (from 2020 to 2022) after the company is
recognized as a high-tech enterprise.The subsidiary Yizheng Xiongwei Machinery Technology Co. Ltd. received the
High-tech Enterprise Certificate (Certificate No. GR202032002099) jointly
issued by Jiangsu Provincial Department of Science and Technology Jiangsu
Provincial Department of Finance Jiangsu Provincial State Taxation Bureau
and Jiangsu Provincial Local Taxation Bureau on December 2 2020. The
company is recognized as a high-tech enterprise and the certification is valid
for 3 years. According to Chinese relevant tax policies for high-tech enterprises
the income tax will be 15% within three years (from 2020 to 2022) after the
company is recognized as a high-tech enterprise.3. Others
No
VII. Notes to Consolidated Financial Statements Items
1. Cash and bank balances
1. Cash and cash equivalents
Unit: RMB
Items Closing balance Opening balance
Cash on hand 928560.58 1007340.38
Deposits in bank 1463778286.96 2200640621.03
Other cash equivalents 210272110.63 251106121.97
Total 1674978958.17 2452754083.38
Other remarks:
As of December 31 2020 the Group’s cash and cash equivalents in foreign
currencies were 74120174.94 U.S. dollars 4236852.60 British pounds
488563163.81 Indian rupees 12610625.22 Canadian dollars 6143754.32
Mexican pesos 35301672.42 Euros and 45849364.00 Japanese yen and
3230720.62 Czech Koruna (As of December 31 2019 the Group’s cash and
cash equivalents in foreign currencies were 50607978.18 U.S. dollars
2355972.53 British pounds 26803013.93 Indian rupees 15188698.3
Canadian dollars 938794.62 Mexican pesos 25946195.26 Euros
46472557.00 Japanese yen and 4343738.02 Czech Koruna).As of December 31 2020 please refer to Note VII. 81 for cash and cash
equivalents with restricted ownership of the Group.Bank demand deposits earn interest income in accordance with the bank
demand deposit interest rate.2. Held-for-trading financial assets
Unit: RMB
Items Closing balance Opening balance
Financial assets measured at fair
value and changes recognized 5312974.87 63034283.90
through profit and loss
Including:
Foreign exchange forward contract 2474818.46 440000.00
Foreign exchange option contract 207581.54
Structured deposits 60000000.00
Stock 2630574.87 2594283.90
Including:
Total 5312974.87 63034283.90
Other remarks:
Please refer to Note VII. 81 for details of the above-mentioned structured
deposits whose ownership or use rights are restricted.3. Derivative Financial Assets
Unit: RMB
Items Closing balance Opening balance
Other remarks:
No
4. Notes receivable
(1) Categories of notes receivable
Unit: RMB
Items Closing balance Opening balance
Total 0.00
Unit: RMB
Closing balance Opening balance
Provision for Provision for
Book balance Book balance
doubtful debt Carryi doubtful debt Carryin
Categories ng g
Provisi Provisi
Amou Propor Amou on amoun Amou Propor on amoun
Amount
nt tion nt propor t nt tion propor t
tion tion
Including：
Including：
Provision for doubtful debts made on individual basis:
Unit: RMB
Closing balance
Items Provision for Provision proportion
Book balance Reasons
doubtful debt (%)
Provision for doubtful debts made on collective basis:
Unit: RMB
Closing balance
Items Provision for doubtful
Book balance Provision proportion (%)
debt
Description of determining the collective basis:
None
Provision for doubtful debts made on collective basis:
Unit: RMB
Closing balance
Items Provision for doubtful
Book balance Provision proportion (%)
debt
Description of determining the collective basis:
If the provision for doubtful debts of bills receivable is made according to the
general model of expected credit losses please refer to the disclosure of the
doubtful debt provision for other receivables:
□ Applicable √ Not applicable
(2) Provision for doubtful debt accrued recovered or reversed in current period
Doubtful debt provision in the current period
Unit: RMB
Changed amount of this period
Opening Closing
Categories
balance Recovered or Written Accrual Others balance
reversed off
The amount of doubtful debt provision for the current period to be recovered or
reversed is significant:
□ Applicable √ Not applicable
(3) Pledged notes at the balance sheet date
Unit: RMB
Items Closing balance of pledged notes
(4) Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB
Closing balance Closing balance not yet
Items
derecognized derecognized
(5) Notes transferred to accounts receivable by the drawer without performance
at the end of reporting period
Unit: RMB
Closing balance of amount transferred to
Items
accounts receivable
Other remarks:
No
(6) Notes receivable actually written off in the current period
Unit: RMB
Items Amount of write-off
Significant notes receivable written off:
Unit: RMB
Whether the
Nature of payment is
Amount of Reasons for Write-off
Company notes generated by
write-off written-off procedures
receivable related party
transactions
Remarks on notes receivable written off:
No
5. Accounts receivable
(1) Disclosure of accounts receivable by categories
Unit:RMB
Closing balance Opening balance
Provision for doubtful
Book balance Book balance Provision for doubtful debt
debt
Categories Carrying Carrying
Proporti Provision amount Provision amount
Amount Amount Amount Proportion Amount
on proportion proportion
Receivables with
provision made 46054287 3015850 15895785.6 41352651.8 25154998.7 16197653.0
1.93% 65.48% 1.58% 60.83%
on an individual .07 1.41 6 4 5 9
basis
Including:
Receivables with
provision made 2342524 4343947 229908509 258399184 44492290.2 253949955
98.07% 1.85% 98.42% 1.72%
on a collective 568.18 1.56 6.62 1.13 5 0.88
basis
Including:
2388578 7359797 231498088 262534449 69647289.0 255569720
Total 100.00% 3.08% 100.00% 2.65%
855.25 2.97 2.28 2.97 0 3.97
Provision for doubtful debts on individual basis: 30158501
Unit: RMB
Closing balance
Items Provision for Provision proportion
Book balance Reasons
doubtful debt (%)
Estimated
No.1 10619046.44 10619046.44 100.00% collection
risk
Estimated
No.2 8280910.13 2781910.13 33.59% collection
risk
Product
No.3 6625061.06 1414787.38 21.36% quality
disputes
Estimated
No.4 4055686.16 4055686.16 100.00% collection
risk
Estimated
No.5 3751626.02 1875813.01 50.00% collection
risk
Estimated
Others 12721957.26 9411258.29 73.98% collection
risk
Total 46054287.07 30158501.41 -- --
Doubtful debt provisions made on individual basis:
Unit: RMB
Closing balance
Items Provision for Provision proportion
Book balance Reasons
doubtful debt (%)
Doubtful debt provisions made on collective basis:
Unit: RMB
Closing balance
Items Provision for doubtful
Book balance Provision proportion (%)
debt
Description of determining the collective basis:
No
Provision for doubtful debts on collective basis: 43439471.56
Unit: RMB
Closing balance
Items Provision for doubtful Provision proportion
Book balance
debt (%)
Within 1 year 2246198613.39 23656329.43 1.05%
1 to 2 years 66051391.45 2793506.98 4.23%
2 to 3 years 24766755.78 11670494.43 47.12%
Over 3 years 5507807.56 5319140.72 96.57%
Total 2342524568.18 43439471.56 --
Description of determining the collective basis:
In 2020 a provision for doubtful debts of RMB 11932332.85 (2019: RMB
37296124.07) was made and a provision for doubtful debts of RMB
5304843.83 was recovered or transferred back (2019: RMB
2502676.39). The actual written-off of accounts receivable in 2020 is
RMB 2676805.05 (2019: RMB 1102659.64).Provision for doubtful debts by on collective basis:
Unit: RMB
Closing balance
Items Provision for doubtful Provision proportion
Book balance
debt (%)
Description of determining the collective basis:
If the provision for doubtful debts of accounts receivable is accrued in
accordance with the general model of expected credit losses please refer
to the disclosure of the doubtful debt provision for other accounts
receivable:
□ Applicable √ Not applicable
Disclosure by age
Aging Book balance
Within 1 year (inclusive) 2254965619.41
1 to 2 years 74785286.02
2 to 3 years 51938480.19
Over 3 years 6889469.63
3 to 4 years 6889469.63
Total 2388578855.25
(2) Provision for doubtful debt accrued recovered or reversed in current period
Provision for doubtful debts accrued in the current period:
Unit: RMB
Changed amount of this period
Opening Closing
Categories
balance Recovered Accrual Written off Others balance
or reversed
2020FY 69647289.00 11932332.85 5304843.83 2676805.05 73597972.97
Total 69647289.00 11932332.85 5304843.83 2676805.05 73597972.97
Significant provision for doubtful debts reversed or recovered in the current
period
Unit: RMB
Company Amount recovered or reversed Recovery method
None
(3) Accounts receivable actually written off in the current period
Unit: RMB
Items Amount of written-off
Significant account receivable written off:
Unit: RMB
Whether the
payment is
Nature of Reasons
Amount of Write-off generated
Company account for written
written- off procedures by related
receivable off
party
transactions
Remarks on account receivable written off:
None
(4) Details of the top 5 owning parties with largest balances
Unit: RMB
Proportion to total Closing balance of
Closing balance of
Company closing balance of doubtful debt
account receivables
account receivables provision
No.1 145883190.32 6.11% 723764.42
No.2 84570249.81 3.54% 422851.24
No.3 73059587.54 3.06% 365297.94
No.4 72086733.75 3.02% 360433.67
No.5 67556464.43 2.83% 337782.32
Total 443156225.85 18.56%
(5) Accounts receivable derecognized due to the transfer of financial assets
None
(6) The amount of assets and liabilities formed by transferring and continuing
to be involved in accounts receivable
None
Other remarks:
None
6. Accounts receivable financing
Unit: RMB
Items Closing balance Opening balance
Bank acceptance 338736142.63 350320590.58
Trade acceptance 43468600.37 28584000.00
Total 382204743.00 378904590.58
Changes in accounts receivable financing during the current period and
changes in fair value
□Applicable √Not Applicable
If the provision for financing impairment of receivables is accrued in accordance
with the general expected credit loss model please refer to the disclosure
methods of other receivables to disclose the relevant information of the
impairment provision:
□Applicable √Not Applicable
Other remarks:
The accounts receivables financing pledged is as follows:
Unit: RMB
Categories 2020FY 2019FY
Bank acceptance 186082811.84 132911797.58
Trade acceptance 1000000.00 14960000.00
Total 187082811.84 147871797.58
(1) The notes receivable that has been endorsed or discounted but are not yet
due on the balance sheet date are as follows:
Unit: RMB
2020FY 2019FY
Categories
Derecognized Not Derecognized Derecognized Not derecognized
Bank acceptance 706520717.60 60264049.38 586953297.41 52584811.00
Trade acceptance - 1000000.00 - 10960000.00
Total 706520717.60 61264049.38 586953297.41 63544811.00
(2) The drawer failed to perform the contract and converted the notes to the
account receivable as follows:
No
7. Advances paid
(1) Advances paid by aging
Unit: RMB
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year 152570939.60 96.49% 168067208.16 96.82%
1 to 2 years 1018291.92 0.64% 1183585.18 0.68%
2 to 3 years 225922.70 0.14% 4151292.61 2.39%
Over 3 years 4321136.02 2.73% 195218.61 0.11%
Total 158136290.24 -- 173597304.56 --
Remarks on reasons for unsettled significant advances paid with aging over
one year:
No
(2) Top 5 owing parties with the largest advances paid
Unit: RMB
Percentage to
Relationship total
Company Amount Age Reasons
with the Group advances
paid (%)
Within 1 Goods not
No. 1 third party 27005328.32 17.08
year received
Within 1 Goods not
No. 2 third party 23621431.84 14.94
year received
Within 1 Goods not
No. 3 third party 16181548.86 10.23
year received
Within 1 Goods not
No. 4 third party 12477187.30 7.89
year received
Within 1 Goods not
No. 5 third party 6781193.40 4.29
year received
Total 86066689.72 54.43
Other remarks:
None
8. Other receivables
Unit: RMB
Items Closing balance Opening balance
Interest receivables 0.00
Dividend
0.00
receivables
Other receivables 68318081.18 916325582.02
Total 68318081.18 916325582.02
(1) Interest receivables
1) Interest receivables categories
Unit: RMB
Items Closing balance Opening balance
Total
2) Significant overdue interest
Unit: RMB
Whether the
Overdue interest receivable
Borrower Closing balance Overdue time
reasons impaired and its
criteria
Other remarks:
None
3) Provision of doubtful debt
□Applicable √Not Applicable
(2) Dividend receivables
1) Dividend receivables categories
Unit: RMB
Items (or investee) Closing balance Opening balance
Total
2) Significant dividend receivables more than 1 year
Unit: RMB
Whether it has
Items (or
Closing balance Age Reasons impaired and its
investee)
criteria
3) Provision of doubtful debt
□ Applicable √ Not applicable
Other remarks:
None
(3) Other receivables
1) Other receivables categorized by nature
Unit: RMB
Items Closing balance Opening balance
Related parties occupy
0.00 843320000.00
funds
Guarantee deposit 7622075.86 11930507.11
Stock repurchase payment 866935.63 6913835.11
Petty Cash for employee 3849343.39 4304279.29
Reimbursed expenses 3551863.38 1211041.51
Compensation receivable 2558050.02 2730734.57
Export tax refund 215930.22 28828.35
Tax refund receivable 20904450.90 24350645.18
Employee compensation
11700450.00
receivable
Others 20816494.34 24707193.43
Total 72085593.74 919497064.55
2) Provision of doubtful debt
Unit: RMB
Phase I Phase II Phase III
Provision for Lifetime Lifetime 12-month
expected credit expected credit Total doubtful debt expected credit
losses (credit losses (credit
losses
not impaired) impaired)
Balance on
84280.54 1126401.99 1960800.00 3171482.53
January 1 2020
The balance as of
January 1 2020 is
—— —— —— ——
in the current
period
Transferred to
-84280.54 84280.54
Phase II
Transferred to
-128015.35 128015.35
Phase III
Provision made in
348067.87 678287.91 1026355.78
the current period
Provision
recovered in 173874.15 151924.25 104527.35 430325.75
current period
Balance on
December 31 174193.72 1609030.84 1984288.00 3767512.562020
Loss provisions for significant changes in book balances in current period
□ Applicable √ Not Applicable
Disclose by aging
Unit: RMB
Aging Closing balance
Within 1 year （including 1 year） 56351143.02
1 to 2 years 1005658.62
2 to 3 years 4259072.47
Over 3 years 10469719.63
3 to 4 years 10469719.63
Total 72085593.74
3) Provision for doubtful debt accrued recovered or reversed in current period
Provision for doubtful debt accrued in current period:
Unit: RMB
Changed amount of the current period
Opening Closing
Categories
balance Recovered Written Accrued Others balance
or reversed off
2020 FY 3171482.53 1026355.78 430325.75 3767512.56
Total 3171482.53 1026355.78 430325.75 3767512.56
None
Significant doubtful debt provisions recovered or reversed in the current period
Unit: RMB
Company Amount reversed or recovered Recovery Method
4) The actual other account receivables written off
Unit: RMB
Items Amount written off after verification
Significant doubtful debt recovered or reversed in the current period
Unit: RMB
Whether
the amount
Nature of other is generate
Amount Procedure for
Company account Reason by related
written off written-off
receivables party
transaction
s
Other remarks:
No
5) Details of the top 5 owning parties with largest balances
Unit: RMB
Proportion to Provision
the total for doubtful
Nature of Closing
Company Age balance of debt at the
receivables balance
other end of the
receivables period
Austrian Tax
Tax refund Within 1
and Finance 20904450.90 29.00%
receivable year
Bureau
Employee
Austrian Labor Within 1
compensation 11700450.00 16.23%
Bureau year
receivable
Xinchang
County Land 2-3
Guarantee deposit 2879575.00 3.99% 287957.50
and Resources years
Bureau
Gates Canada Compensation over 3
2558050.02 3.55%
Inc receivable years
Dongguan
Huawei Coating Advance payment Within 1
2000000.00 2.77%
Equipment Co. for equipment year
Ltd.Total 40042525.92 55.54% 287957.50
6) Other receivables related to government grants
Unit: RMB
Estimated receipt
Company Government grant Closing balance Aging time amount and
basis
7) Other receivables derecognized due to the transfer of financial assets
None
8) The amount of assets and liabilities formed by transferring and continuing
to be involved in other account receivables
None
Other remarks:
None
9. Inventories
Whether the Company needs to comply with the disclosure requirements of the
real estate industry
No
(1) Categories of inventories
Unit: RMB
Closing balance Opening balance
Provision for decline in Provision for decline in
Items value of inventories or value of inventories or
Book balance provision for Carrying amount Book balance provision for Carrying amount
impairment of contract impairment of contract
performance costs performance costs
Raw materials 1021336904.37 93791188.32 927545716.05 1050945010.87 95480390.87 955464620.00
Work-in-progress 656710134.88 4790661.33 651919473.55 680658858.81 3694539.11 676964319.70
Finished goods 745299986.77 14851786.11 730448200.66 779307046.36 17784505.82 761522540.54
Total 2423347026.02 113433635.76 2309913390.26 2510910916.04 116959435.80 2393951480.24
(2) Provision for decline in value of inventories and provision for impairment of contract performance costs
Unit: RMB
Increase in current period Decrease in current period
Items Opening balance Closing balance
Accrued Others Reversal or write-off Others
Raw materials 95480390.87 2042644.70 3731847.25 93791188.32
Work-in-progress 3694539.11 1105500.72 9378.50 4790661.33
Finished goods 17784505.82 5323533.33 8256253.04 14851786.11
Total 116959435.80 8471678.75 11997478.79 113433635.76
(3) Explanation on inventory closing balance including capitalized borrowing
costs
None
(4) Explanation on amortization of contract cost in the current period
None
10. Contract assets
Unit: RMB
Closing balance Opening balance
Items Book Provision for Carrying Book Provision for Carrying
balance impairment amount balance impairment amount
The significant change in carrying amount of contract assets and reasons:
Unit: RMB
Items Amount changed Reasons
If the provision for doubtful debts of contract assets is accrued in accordance
with the general expected credit loss model please refer to the disclosure of
doubtful debts provision for other receivables:
□ Applicable √ Not applicable
Provision for impairment of contract assets
Unit: RMB
Write- off in
Provisions in Reversal in
Items current Reasons
current period current period
period
Other remarks:
None
11. Assets classified as held for sale
Unit: RMB
Carrying
Estimated Estimated
Closing Provisions for value at the Fair
Items disposal disposal
balance impairment end of value
cost time
period
Other remarks:
None
12. Non-current assets due within one year
Unit: RMB
Items Closing balance Opening balance
Significant debt investment/ other debt investment
Unit: RMB
Closing balance Opening balance
Time
Items Book Coupo Effecti Time to Book Coupon Effective to
balanc
n rate ve rate maturity balance rate rate maturit
e
y
Other remarks:
None
13. Other current assets
Unit: RMB
Items Closing balance Opening balance
Deductible VAT
Sales tax and
69003341.08 69837690.54
consumption tax/
pending tax
Prepaid corporate
26600908.56 47170182.60
income tax
Total 95604249.64 117007873.14
Other remarks:
As of December 31 2020 the Group had no other current assets with restricted
ownership.14. Debt investments
Unit: RMB
Closing balance Opening balance
Items Provisions Provisions Book Carrying Book Carrying
for for
balance amount balance amount
impairment impairment
Significant debt investment
Unit: RMB
Closing balance Opening balance
Debt
investment Face Coupon Effective Time to Face Coupon Effective Time to
items value rate rate maturity value rate rate maturity
Provisions for impairment
Unit: RMB
Phase I Phase II Phase III
Lifetime
Provision for Lifetime 12-month expected Total
doubtful debt expected credit expected credit credit losses
losses (credit
losses (credit
not impaired)
impaired)
Balance on
January 1 2020
The significant change of book value of provisions impairment in the current
period
□ Applicable √ Not Applicable
Other remarks:
None
15. Other debt investments
Unit: RMB
Accumulative
Chang
impairment
e of fair
Openin Accrue Closing Accumulativ provisions
Ite value Cos Not
g d balanc e change in recognized in
m in the t e
balance interest e fair value other
current
comprehensiv
period
e income
Significant other debt investment
Unit: RMB
Closing balance Opening balance
Other debt
investmen Face Time to Face Coupo Effectiv Coupo Effective Time to
t items valu maturit valun rate e rate n rate rate maturity
e y e
Provision for impairment
Unit: RMB
Phase I Phase II Phase III
Lifetime Lifetime
expected expected
Provision for 12-month
credit credit Total
doubtful debt expected
losses losses
credit losses
(credit not (credit
impaired) impaired)
Balance on
January 12020
The significant change of carrying value of provisions impairment in the current
period
□ Applicable √ Not Applicable
Other remarks:
None
16. Long-term receivables
(1) Long-term receivables
Unit: RMB
Closing balance Opening balance
Range of
Items
discount rate
Provisions Provisions
Book Carrying Book Carrying
for for
balance amount balance amount
impairment impairment
Provisions for doubtful debt
Unit: RMB
Phase I Phase II Phase III
Lifetime
Provision for Lifetime 12-month expected Total
doubtful debt expected credit expected credit credit losses
losses (credit
losses (credit
not impaired)
impaired)
Balance on
January 1 2020
The significant change of carrying value of provisions impairment in the current
period
□ Applicable √ Not Applicable
(2) Long-term receivables derecognized due to the transfer of financial assets
None
(3) The amount of assets and liabilities formed by transferring long-term
receivables and continuing to be involved
None
Other remarks
None
17. Long-term equity investments
Unit: RMB
Percentage change in the current period
Investment Closing
Change in Closing Opening gain or loss Cash balance of
Investee balance other Change in Provision
balance
Increased Decreased recognized dividend provisions
comprehe other for Other (Carrying (book value) investment investment under paid or for
nsive equity impairment value)
equity profit impairment
income
method
I. Joint ventures
II. Associates
Diamond
Flight
Centre 765855.96 -166729.89 -31315.23 567810.84
London
INC.CETC
Wuhu
General
Aviation
Industry 11846686.90 -11136957.56 -709729.34
Technology
Research
Institute
Co. Ltd.Subtotal 12612542.86 -11136957.56 -876459.23 -31315.23 567810.84
Total 12612542.86 -11136957.56 -876459.23 -31315.23 567810.84
Other remarks:
No
18. Other equity instrument investments
Unit: RMB
Items Closing balance Opening balance
Diamond Flight Centre London INC. 4733395.22 4942489.56
Total 4733395.22 4942489.56
Disclosure of investment in non-trading equity instruments for the current period by items
Unit: RMB
Reason for
the
designation
Amount of Reasons for
as being
other transferring
Recogniz measured at
comprehensi other
Item ed Accumulati Accumulati fair value
ve income comprehensi
s dividend ve gain ve loss and the
transferred ve income to
income changes
to retained retained
recognized
earnings earnings
in other
comprehensi
ve income
Other remarks:
None
19. Other non-current financial assets
Unit: RMB
Items Closing balance Opening balance
Other remarks:
None
20. Investment property
(1) Investment property with cost measurement model
□ Applicable √ Not Applicable
(2) Investment property with fair value measurement model
□ Applicable √ Not Applicable
(3) The situation of investment property without property ownership certificate
Unit: RMB
Reasons for not having property
Items Book value
ownership certificate
Other remarks:
None
21. Fixed assets
Unit: RMB
Items Closing balance Opening balance
Fixed asset 4872464413.48 5113660627.42
Total 4872464413.48 5113660627.42
(1) Fixed assets overview
Unit: RMB
Specialized
Items Buildings Vehicle General tools Decoration Total
Equipment
I. Original book value
1. Opening balance 3055868712.55 4614959380.24 107869598.56 222244427.42 2340060.98 8003282179.75
2. Increase in the current
78285305.98 327433341.47 37357047.62 15323963.50 26045.31 458425703.88
period
(1) Purchase 2548119.90 52422104.25 37246428.15 11353851.31 26045.31 103596548.92
(1) Transferred from
construction in 75737186.08 275011237.22 110619.47 3970112.19 354829154.96
progress
(2) Increase in business
combination
3. Decrease in the current
45788527.40 181865263.50 10678267.39 29282107.74 30000.00 267644166.03
period
(1). Disposal or scrap 2007506.37 106547352.57 12719051.08 29331275.10 30000.00 150635185.12
Foreign currency
43781021.03 75317910.93 -2040783.69 -49167.36 117008980.91
translation
4. Closing balance 3088365491.13 4760527458.21 134548378.79 208286283.18 2336106.29 8194063717.60
II. Accumulative
depreciation
1. Opening balance 635660456.18 2034215012.89 25637002.03 135638742.07 1966060.72 2833117273.89
2. Increase in the current
122374683.92 430016646.04 9676594.26 20621205.24 164681.37 582853810.83
period
(1). Accrual 122374683.92 430016646.04 9676594.26 20621205.24 164681.37 582853810.83
3. Decrease in the current
12152116.67 108472830.22 1392883.95 28403855.69 28500.00 150450186.53
period
(1). Disposal or scrap 2006459.67 86392170.99 1607875.14 29157095.90 28500.00 119192101.70
(2). Foreign currency
10145657.00 22080659.23 -214991.19 -753240.21 31258084.83
translation
4. Closing balance 745883023.43 2355758828.71 33920712.34 127856091.62 2102242.09 3265520898.19
III. Provisions for
impairment
1. Opening balance 2266776.28 53832251.62 405250.54 56504278.44
2. Increase in the current 2675523.03 10234.45 2685757.48
period
(1). Accrual 2675523.03 10234.45 2685757.48
3. Decrease in the current
98956.02 2964488.23 48185.74 3111629.99
period
(1). Disposal or scrap 1017453.06 32050.46 1049503.52
4. Closing balance 98956.02 1947035.17 16135.28 2062126.47
IV. Book value 2167820.26 53543286.42 367299.25 56078405.93
1. Book value at the end of
the period
2. Book value at the
2340314647.44 2351225343.08 100627666.45 80062892.31 233864.20 4872464413.48
beginning of the period
2417941480.09 2526912115.73 82232596.53 86200434.81 374000.26 5113660627.42
(2) Temporarily idle fixed assets
Unit: RMB
Provisions for
Items Historical book value Accumulative depreciation Book value Note
impairment
Building 1520714.68 1520714.68
Specialized equipment 89315237.07 62104530.92 5037016.50 22173689.65
General equipment 6023171.77 5472894.78 28516.04 521760.95
Total 96859123.52 69098140.38 5065532.54 22695450.60
(3) Fixed assets acquired under finance lease
Unit: RMB
Items Historical book value Accumulative depreciation Provisions for impairment Carrying value
(4) Fixed assets rented in through operating lease
Unit: RMB
Items Closing book value
Buildings 145679914.15
(5) Fixed assets without title certificate
Unit: RMB
Reasons for without property
Items Book value
ownership certificate
The property ownership certificate is
Buildings 98395904.63
being processed
Other remarks:
None
(6) Fixed assets liquidation
Unit: RMB
Items Closing balance Opening balance
Other remarks:
None
22. Construction in progress
Unit: RMB
Items Closing balance Opening balance
Construction in
258966481.11 426345202.99
progress
Total 258966481.11 426345202.99
(1) Construction in progress overview
Unit: RMB
Closing balance Opening balance
Items Provisions for Provisions for
Book balance Book value Book balance Book value
impairment impairment
Construction in
258966481.11 258966481.11 426345202.99 426345202.99
progress
Total 258966481.11 258966481.11 426345202.99 426345202.99
(2) Significant change in construction in progress during the reporting period
Unit: 10000 RMB
Amount Accumulativ Including:
Amount Other Accumulativ Interest
transferre Closin e project interest
Budget Openin increase reduction Project e amount of capitalizatio Capital
d to fixed g investment capitalize
Items amoun g d in the s in the progres interest n rate in the resource
assets in balanc as a d in the
t balance current current s capitalizatio current s
current e percentage current
period period n period
period of budget period.Aluminum
Alloy
Wheels
Smart
Factory 53193 3139 299 3438 7.00% 7% Others
with 2.2
million
sets
capacity
Auto
Wheel
Smart
Factory in
38157 1450 1298 2410 338 85.00% 85% Others
Jilin with 3
million
sets
capacity
Aluminum
Alloy
Motorcycl
e Wheels
44873 1311 64 1003 371 95.00% 95% Others
Smart
Factory
with 6
million
sets
capacity
Equipmen
t to be 0.00 321 422 421 322 Others
installed
Aluminum
alloy
wheels
project in
11696 3161 969 2224 343 1563 86.00% 86% Others
India with
3 million
sets
capacity
Meridian
America 0.00 6136 2680 8594 221 Others
Factory
Other
equipmen 0.00 19623 11223 15325 412 15108 Others
t
Other
0.00 7495 2932 5506 164 4756 Others
project
Total 147919 42635 19886 35483 1141 25897 -- -- --
(3) Provisions for impairment of accrual construction in progress
Unit: RMB
Accrual amount in the current
Items Reasons
period
Other remarks:
None
(4) Construction material
Unit: RMB
Closing balance Opening balance
Provision
Items Provisions Book Book s for Book
Book balance for
value balance impairme value
impairment
nt
Other remarks:
None
23. Productive biological assets
(1) Productive biological assets measured at cost method
□ Applicable √ Not Applicable
(2) Productive biological assets measured at fair value method
□ Applicable √ Not Applicable
24. Oil & gas assets
□ Applicable √ Not Applicable
25. Right-of-use assets
Unit :RMB
Items Total
Other remarks
None
26. Intangible assets
(1) Intangible assets overview
Unit: RMB
Non-
Customer Technology
Items Land use rights Patent rights patent Trademark Software Total
relations authorization
rights
I. Original book
value
1. Opening
762797808.37 1003206595.05 175900000.00 92486670.23 60433833.20 70393236.48 2165218143.33
balance
2. Increase in the
3105331.75 395336.71 4309852.51 135773.61 7946294.58
current period
(1). Purchase 3105331.75 395336.71 4309852.51 135773.61 7946294.58
(2). Internal R&D
(3). Increase in
business
combination
3. Decrease in
the current -10558394.96 -33672741.74 0.00 0.00 -2464147.14 -1435490.87 -463906.67 -48594681.38
period
(1). Disposal -2315733.43 -1291236.67 -2315733.43 -3606970.10
Foreign currency
-10558394.96 -33672741.74 -2464147.14 -144254.20 1851826.76 -44987711.28
translation
4. Closing
755344745.16 969929190.02 175900000.00 90022523.09 63308194.84 70065103.42 2124569756.53
balance
II. Accumulative
depreciation
1. Opening
85690815.72 182071752.28 50941250.00 5421352.27 45605736.27 17307330.73 387038237.27
balance
2. Increase in the
12937886.67 48697542.55 8795000.00 3424011.96 2215715.49 4552713.21 80622869.88
current period
(1). Accrual 12937886.67 48697542.55 8795000.00 3424011.96 2215715.49 4552713.21 80622869.88
3. Decrease in
the current -0.03 -5067260.35 0.00 0.00 0.00 -1694250.37 -1763715.91 -8525226.66
period
(1). Disposal -1287210.78 -2264508.38 -3551719.16
Foreign currency
-0.03 -5067260.35 -407039.59 500792.47 -4973507.50
translation
4. Closing
98628702.36 225702034.48 59736250.00 8845364.23 46127201.39 20096328.03 459135880.49
balance
III. Provisions for
impairment
1. Opening
balance
2. Increase in the
current period
(1). Accrual
3. Decrease in
the current
period
(1). Disposal
4. Closing
balance
IV. Book value
1. Closing book
656716042.80 744227155.54 116163750.00 81177158.86 17180993.45 49968775.39 1665433876.04
value
2. Opening book
677106992.65 821134842.77 124958750.00 87065317.96 14828096.93 53085905.75 1778179906.06
value
The proportion of intangible assets formed through the company's internal research and development at the end of the period to the
balance of intangible assets is 0%.
(2) Land use rights without property ownership certificate
Unit: RMB
Items Book value Reasons for without property ownership certificate
Other remarks:
As of December 31 2020 please refer to Note VII. 81 for intangible assets with restricted ownership of the Group.On December 31 2020 and December 31 2019 the management conducted an impairment test on trademarks with uncertain
service life and no impairment was found.27. Development expenditures
Unit: RMB
Increase in the current period Decrease in the current period
Opening
Items Transferred to
balance Internal development Recognized as Foreign currency
Closing balance
Others current profit and
expenditures intangible assets translation
loss
General
Aviation 69419211.82 1118681.18 70537893.00
Aircraft R&D
Project
Total 69419211.82 1118681.18 70537893.00
Other remarks:
None
28. Goodwill
(1) Original book value of goodwill
Unit: RMB
Increase in the current period Decrease in the current period
Investee or event
Opening balance
forming goodwill Formed by business Foreign currency
Closing balance
Disposal
combination translation
Goodwill 1701158115.52 38163606.20 1662994509.32
Total 1701158115.52 38163606.20 1662994509.32
(2) Provisions for impairment of goodwill
Unit: RMB
Investee or Increase in the current Decrease in the
event Opening period current period
Closing balance
forming balance
Accrual Disposal
goodwill
Total
Information about the CGU or group of CGUs
The Group acquired Shanghai Dacromet Coating Industry Co. Ltd. in
December 2013 forming goodwill of RMB 235709395.09. In December 2014
it acquired Ningbo Economic and Technological Development Zone Dacromet
Co. Ltd. forming goodwill of RMB 15021635.69. In June 2018 it acquired
Wuxi Xiongwei Precision Technology Co. Ltd. and formed goodwill of RMB
290891792.51. In April 2020 the Group acquired Wanfeng Aircraft Industry
Co. Ltd. through business combination under the common control and
obtained a goodwill of RMB 1121371686.03.Explanation on the process of goodwill impairment testing key parameters
(such as the growth rate in the growing period and stable period profit margin
discount rate forecast period etc. when predicting the present value of future
cash flows) and the recognition method of the impairment loss of goodwill:
The goodwill obtained from a business combination has been allocated to the
following CGUs or groups of CGUs for impairment testing:
· Group of CGUs of Shanghai Dacromet Coating Industry Co. Ltd. and its
subsidiary Zhejiang Wanfeng Shangda Coating Technology Co. Ltd
· CGU of Ningbo Economic and Technological Development Zone Dacromet
Coating Co. Ltd.· Group of CGUs of Wuxi Xiongwei Precision Technology Co. Ltd. and its
subsidiaries
· Group of CGUs of Wanfeng Aircraft Industry Co. Ltd and its subsidiaries
The CGU of Shanghai Dacromet Coating Industry Co. Ltd. and its subsidiary
Zhejiang Wanfeng Shangda Coating Technology Co. Ltd. is mainly composed
of long-term assets of these two companies (excluding the long-term equity
investment in Ningbo Economic and Technological Development Zone
Dacromet Co. Ltd.). The value is consistent with the CGU determined during
the previous year's impairment test. The book value of the group of CGUs is
RMB 275210978.70 (excluding goodwill). The recoverable amount adopts the
present value of the expected future cash flow of the group of CGUs and is
determined according to the cash flow forecast based on the five-year financial
budget approved by the management. The discount rate used in the cash flow
forecast is 18% (2019: 18%). The growth rate of revenue is 3% in 5 years (2019:
3%). This growth rate is similar to the long-term average growth rate of the
industry in which the CGU is located.The CGU of Ningbo Economic and Technological Development Zone Dacromet
Co. Ltd. mainly consists of the long-term assets of the company. The value is
consistent with the CGU determined during the impairment test on the purchase
date and previous years. The book value of this CGU is RMB 41466389.36
(excluding goodwill). The recoverable amount adopts the present value of the
expected future cash flow of the CGU and is determined according to the cash
flow forecast based on the five-year financial budget approved by the
management. The discount rate used in the cash flow forecast is 21% (2019:
22%). The growth rate used to forecast income five years from now is 3% (2019:
3%). This growth rate is similar to the long-term average growth rate of the
industry in which the CGU is located.The cash inflows generated by Wuxi Xiongwei Precision Technology Co. Ltd.and its subsidiaries are independent of the cash inflows of other assets or CGUs
of the Group. The operating and production activities of Wuxi Xiongwei
Precision Technology Co. Ltd and its subsidiaries are managed by the
management team of Wuxi Xiongwei Precision Technology Co. Ltd. Therefore
the goodwill is allocated to the group of CGUs of Wuxi Xiongwei Precision
Technology Co. Ltd. and its subsidiaries. The group of CGUs is mainly
composed of the long-term assets of Wuxi Xiongwei Precision Technology Co.Ltd. and its subsidiaries and is consistent with the group of CGUs determined
on the purchase date. The book value of the group of CGUs is RMB
457751993.48 (excluding goodwill). The recoverable amount adopts the
present value of the expected future cash flow of the group of CGUs and is
determined according to the cash flow forecast based on the five-year financial
budget approved by the management. The discount rate used in the cash flow
forecast is 17% (2019: 17%). The growth rate used to forecast income five
years from now is 3% (2019: 3%). This growth rate is similar to the long-term
average growth rate of the industry in which the group of CGUs is located.The cash inflows generated by Wanfeng Aircraft Industry Co. Ltd. and its
subsidiaries are independent of the cash inflows of other assets or CGUs of the
Group. At the same time the management of Wanfeng Aircraft Industry Co.Ltd. manages the overall production and operation activities of Wanfeng Aircraft
Industry Co. Ltd. and its subsidiaries so the goodwill is allocated to the group
of CGUs of Wanfeng Aircraft Industry Co. Ltd. and its subsidiaries. The group
of CGUs is mainly composed of the long-term assets of Wanfeng Aircraft
Industry Co. Ltd. and its subsidiaries and the value is consistent with the group
of CGUs determined on the combination date. The book value of the group of
CGUs is RMB 1189116794.64 (excluding goodwill). The recoverable amount
adopts the present value of the expected future cash flow of the group of CGUs
and is determined according to the cash flow forecast based on the five-year
financial budget approved by the management. The discount rate used for cash
flow forecasting is 15%. The growth rate of income in five years is 0%. This
growth rate is similar to the long-term average growth rate of the industry in
which the group of CGUs is located.The impact of goodwill impairment testing
Assumptions are used to calculate the present value of the estimated future
cash flows of the CGU on December 31 2020 and December 31 2019. The
key assumptions made by the management in determining the cash flow
forecast to conduct the impairment test of goodwill are as follows:
The budgeted gross profit- is based on the average gross profit margin
achieved in the year before the budget year and appropriate adjustments to
the average gross profit margin based on the expected improvement in
efficiency and the expected market development.Discount rate—The discount rate used is the pre-tax discount rate that reflects
the specific risks of the relevant CGU.The amount of key assumptions allocated to the aforementioned CGU or group
of CGUs is consistent with the historical experience of the Group and external
information.Other remarks：
None
29. Long-term prepayments
Unit: RMB
Amortization
Increase in Other
Opening amount in Closing
Items the current decreased
balance the current balance
period amount
period
Mold cost 155574404.91 120403888.58 117296286.89 6539051.40 152142955.20
Others 4138217.16 3426357.10 2533271.36 5031302.90
Total 159712622.07 123830245.68 119829558.25 6539051.40 157174258.10
Other remarks:
None
30. Deferred tax assets/Deferred tax liabilities
(1) Deferred tax assets before offset
Unit: RMB
Closing balance Opening balance
Items Deductible Deductible Deferred tax Deferred tax
temporary temporary
assets assets
difference difference
Impairment of
103197497.76 19454818.29 101571717.56 18733041.43
assets
Unrealized
profit from
28403632.18 6513020.37 38452198.52 9139506.41
internal
transactions
Deductible
887572565.95 207165175.85 539284651.54 134364475.53
losses
Held for trading
financial 0.00 1324581.60 198687.24
liabilities
Deferred income 34991981.94 5234028.07 19743547.14 2961532.07
Differences in
depreciation life 46415580.39 7635453.22 50651033.40 8202838.28
of fixed assets
Accrued costs 88400965.39 17439780.95 75946109.24 15110034.11
Total 1188982223.61 263442276.75 826973839.00 188710115.07
(2) Deferred tax liabilities before offset
Unit: RMB
Closing balance Opening balance
Items Taxable Taxable Deferred tax Deferred tax
temporary temporary
liabilities liabilities
difference difference
Appraisal and
appreciation of
combined assets
618572990.33 128998950.89 695954080.47 143940380.48
of companies
under the
uncommon control
Differences in
depreciation life of 449463686.72 105621790.35 460724738.47 107779719.37
fixed assets
Mold amortization 64905823.19 15977333.04 67576409.18 16513246.58
Held-for-trading
2682400.00 402360.00 0.00
financial assets
Capitalized R&D
70537893.00 17634473.25
expense
Total 1206162793.24 268634907.53 1224255228.12 268233346.43
(3) Deferred tax assets or liabilities shown on a net offsetting basis
Unit: RMB
Deferred tax Deferred tax Opening
Closing balance
assets and assets and balance of
of deferred tax
liabilities offset liabilities offset deferred tax
Items assets or
amount at the amount at the assets or
liabilities after
end of the beginning of the liabilities after
offset
balance amount balance amount offset
Deferred tax
1188982223.61 263442276.75 826973839.00 188710115.07
assets
Deferred tax
1206162793.24 268634907.53 1224255228.12 268233346.43
liabilities
(4) Details of unrecognized deferred tax assets
Unit: RMB
Items Closing balance Opening balance
Deductible temporary
64892971.32 58123373.93
difference
Deductible loss 709064668.42 1121656110.65
Total 773957639.74 1179779484.58
(5) Deductible losses of unrecognized deferred tax assets will expire in the
following years
Unit: RMB
Maturity years Closing balance Opening balance Note
2020 0.00 14462870.02
2021 0.00 29923131.64
2022 14107939.28 33953830.77
2023 0.00 1503643.11
2024 19874937.50 57734101.04
2025 and onwards 675081791.64 984078534.07
Total 709064668.42 1121656110.65 --
Other remarks:
None
31. Other non-current assets
Unit: RMB
Closing balance Opening balance
Items Provisions Provisions Book Book
for Book value for Book value
balance balance
impairment impairment
Prepayment
for
equipment 7461417.37 7461417.37 50655894.55 50655894.55
purchase
(note 1)
Total 7461417.37 7461417.37 50655894.55 50655894.55
Other remarks:
Note 1: The Company held the seventh meeting of the sixth board of directors
in December 2017 and approved the Proposal on the Company's investment in
a smart factory project with an annual output of 2.2 million aluminum alloy
wheels agreeing to invest in a smart factory project with an annual output of
2.2 million aluminum alloy wheels. In July 2019 the Company prepaid RMB
36.23 million to Zhejiang Wanfeng Technology Development Co. Ltd. to
purchase equipment required for the smart factory project. Since then due to
market changes in the automotive industry the Company decided to suspend
the smart factory project. As of December 31 2019 the payment was still
prepaid for equipment. The Company recovered the payment in June 2020.32. Short-term borrowings
(1) Categories of short-term borrowings
Unit: RMB
Items Closing balance Opening balance
Pledge borrowings 350971345.88 318825376.00
Mortgage borrowings 466584522.23 198476192.23
Guaranteed borrowings 261912928.58 300287468.95
Credit borrowings 1621761545.54 2007220560.05
Mortgage and Guaranteed
843066327.79 245309170.96
Loan
Total 3544296670.02 3070118768.19
Remarks on short-term borrowings categories:
As of December 31 2020 the annual interest rate of the above-mentioned
borrowings was 2.85%-8.00% (December 31 2019: 2.54%-8.00%).
(2) Overdue or unpaid short-term borrowings
The total amount of short-term loans that have been overdue and not repaid at
the end of the period is RMB 0.00. The significant short-term loans that have
been overdue and have not been repaid are as follows:
Unit: RMB
Overdue interest
Borrower Closing balance Borrowing rate Overdue time
rate
Other remarks:
None
33. Held-for-trading financial liabilities
Unit: RMB
Items Closing balance Opening balance
Held-for-trading financial 1324581.60
liabilities
Including:
Foreign exchange option 1155357.75
contract
Interest swap contract 169223.85
Including:
Total 0.00 1324581.60
Other remarks:
None
34. Derivative financial liabilities
Unit: RMB
Items Closing balance Opening balance
Other remarks:
None
35. Notes payable
Unit: RMB
Categories Closing balance Opening balance
Bank acceptance bill 192867169.90 218601865.08
Total 192867169.90 218601865.08
At the balance sheet date balances due but unpaid totaled RMB 0.00
36. Accounts payable
(1) Accounts payable overview
Unit: RMB
Items Closing balance Opening balance
Accounts payable 935542222.20 1115150353.00
Total 935542222.20 1115150353.00
(2) Significant accounts payable with age more than 1 year
Unit: RMB
Reasons for outstanding or carry-
Items Closing balance
over
Other remarks:
None
37. Unearned revenue
(1) Unearned revenue overview
Unit: RMB
Items Closing balance Opening balance
0.00
(2) Significant unearned revenue with age more than 1 year
Unit: RMB
Reasons for outstanding or carry-
Items Closing balance
over
38. Contract liabilities
Unit: RMB
Items Closing balance Opening balance
Unearned revenue
from merchandise 512836059.89 648572264.26
sales
Total 512836059.89 648572264.26
The amount and reason for the significant change in the book value during the
reporting period
Unit: RMB
Items Amount Change Reasons for change
39. Employee benefits payable
(1) Employee benefits payable overview
Unit: RMB
Opening Increase in the Decrease in the Closing
Items
balance current period current period balance
I. Short-term
employee 233205108.09 1576879887.52 1586451269.92 223633725.69
benefits
II. Post-
employment
benefits -
5534982.64 140553760.87 138205683.83 7883059.68
defined
contribution
plan
Total 238740090.73 1717433648.39 1724656953.75 231516785.37
(2) Short-term employee benefits payable overview
Unit: RMB
Opening Increase in the Decrease in the
Items Closing balance
balance current period current period
1. Wage
bonus
222730889.11 1391851569.01 1400543318.63 214039139.49
allowances
and subsidy
2. Employee
6312197.09 56801256.61 58032387.97 5081065.73
welfare fund
3. Social
insurance 2570817.85 78445371.51 77984675.41 3031513.95
premium
Including:
medical care 1661616.35 73236052.08 73008266.24 1889402.19
premium
Occupational
injuries 784818.06 4167349.33 4013894.55 938272.84
premium
Maternity
124383.44 1041970.10 962514.62 203838.92
premium
4. Housing
644019.62 28896668.58 28923149.42 617538.78
provident fund
5. Trade union
fund and
947184.42 10050223.65 10132940.33 864467.74
employee
education fund
Others 10834798.16 10834798.16
Total 233205108.09 1576879887.52 1586451269.92 223633725.69
(3) Defined contribution plan overview
Unit: RMB
Decrease in
Increase in the Closing
Items Opening balance the current
current period balance
period
1. Basic pension
5137086.26 137737516.10 135435334.63 7439267.73
premium
2. Unemployment
397896.38 2816244.77 2770349.20 443791.95
insurance premium
Total 5534982.64 140553760.87 138205683.83 7883059.68
Other remarks:
None
40. Tax payable
Unit: RMB
Items Closing balance Opening balance
VAT 26542927.11 34206653.17
Corporate income tax 39186672.93 22371143.85
Individual income tax 5102080.09 4256244.53
Urban maintenance and
1899576.31 2221116.30
construction tax
Land use tax 4254745.36 2209282.12
Housing property tax 4852646.95 2451938.91
Stamp tax 124470.71 71666.17
Education surcharge 1266995.16 1786125.57
Vehicle and vessel usage fee 2940.00 2940.00
Local foundation for water works 289400.82 517649.20
Property tax 4176660.14 398994.34
Withholding income tax 837889.76 957925.19
Withholding and paying income
19869554.00
tax
Business activity tax 14956.76
Others 4779295.22 5420.00
Total 113185854.56 71472056.11
Other remarks:
None
41. Other payables
Unit: RMB
Items Closing balance Opening balance
Interest payable 0.00
Dividend payable 0.00
Other payable 384220500.31 727292685.82
Total 384220500.31 727292685.82
(1) Interest payable
Unit: RMB
Items Closing balance Opening balance
Total
Significant overdue interest payment:
Unit: RMB
Borrower Overdue amount Overdue reasons
Other remarks:
None
(2) Dividend payable
Unit: RMB
Items Closing balance Opening balance
Total 0.00
Other remarks: the reasons for non-payment of significant dividends payable
that have not been paid for more than one year
None
(3) Other payables
1) Other payables listed by nature
Unit: RMB
Items Closing balance Opening balance
Investment payable (note) 250875527.78
Engineering equipment
payable 123040085.71 195544451.22
Contract deposit 20506005.21 18438067.14
Freight and storage fees
payable 21188614.05 26534374.31
Other payables 169154774.77 170461805.20
Others 50331020.57 65438460.17
Total 384220500.31 727292685.82
2) Significant other payables with age more than 1 year
Unit: RMB
Reasons for outstanding or
Items Closing balance
carry-over
Huawei Coating Equipment
5394029.63 Project to be accepted
HK CO.LTD
Wanfeng Group 5000000.00 Deposit for intended cooperation
Shenyang Dongda Sanjian
Industrial Furnace 4834285.70 Project to be accepted
Manufacturing Co. Ltd.Zhejiang Huali Intelligent
2710274.01 Project to be accepted
Equipment Co. Ltd.Zhejiang Wanfeng
Technology Development 1390249.94 Warranty period
Co. Ltd.Nanjing Changjiang
Industrial Furnace 1301914.60 Project to be accepted
Technology Co. Ltd.Shenzhen Yuandong
Machinery Development 1085394.10 Project to be accepted
Co. Ltd.Total 21716147.98 --
Other remarks:
Note: On January 31 2019 Ningbo Aoweier Wheel Co. Ltd. a subsidiary of
the group and Wanfeng Aviation Industry Co. Ltd. acquired 100% partnership
share from Horgos Changsheng Equity Investment Co. Ltd. and Shanghai
Shouxin Investment Management Center (Limited Partnership) former
shareholders of Suzhou Yucuiyuan Trading Company (general partnership) at
a consideration of RMB 399.8 million of which Ningbo Aoweier Wheel Co. Ltd.funded 99.9%. Ningbo Aoweier Wheel Co. Ltd. paid RMB 200 million in
advance in 2018. According to the agreement on the share transfer of the
partnership the remaining consideration of RMB 199800000 was paid by
Suzhou Yucuiyuan Trading Enterprise (General Partnership) on their behalf.On January 2 2019 Suzhou Yucuiyuan Trading Enterprise (General
Partnership) signed a one-year loan agreement of RMB 50 million with
Shoushan (Zhangjiagang) Enterprise Management Co. Ltd. a related party of
its former shareholders aforementioned. The annual interest rate was 5%. On
January 31 2019 Suzhou Yucuiyuan Trading Enterprise (General Partnership)
signed a one-year loan agreement with Shanghai Boyu Investment
Management Center (Limited Partnership) and Suzhou Tajian Trading Co. Ltd.related parties of its former shareholders aforementioned. The equity purchase
payment of RMB 199400000 paid by Yucuiyuan Trading Enterprise (General
Partnership) on behalf of Ningbo Aoweier Wheel Co. Ltd. was converted into a
loan to former shareholder's related party. The annual interest was 5%. The
loan contract stipulates that Suzhou Yucuiyuan Trading Enterprise (general
partnership) provides a mortgage guarantee for the above-mentioned loan with
a real estate (total construction area of 10616.50 square meters) located in
Huamu Road Pudong New District Shanghai. The property has not been
registered with the Shanghai Real Estate Registration Affairs Center for related
mortgage. As of December 31 2019 the unpaid interest was RMB 1.48 million.Suzhou Yucuiyuan Trading Enterprise (General Partnership) has paid the
above-mentioned payables totaling RMB 250.88 million in full in January 2020.42. Held-for-sale liabilities
Unit: RMB
Items Closing balance Opening balance
Other remarks:
None
43. Non-current liabilities due within one year
Unit: RMB
Items Closing balance Opening balance
Long-term loan due
694425998.19 571968504.83
within one year
Total 694425998.19 571968504.83
Other remarks:
As of December 31 2020 there are no overdue principal and interest
(December 31 2019: None) and the annual interest rate of long-term loans
due within one year is 3.50%-5.22% (December 31 2019: 3.50%-6.52%).Among them please refer to Note VII. 81 for information on mortgage assets
related to mortgage loans.44. Other current liabilities
Unit: RMB
Items Closing balance Opening balance
Output VAT to be
4192272.05 5301872.45
transferred
Total 4192272.05 5301872.45
Changes in short-term bonds payable:
Unit: RMB
Ope Amortizati
Issuan Interest Repaymen
Par Issu nin on of
Bon Ter ce Current accrued t in the Closing
valu e g premium
d m amou issue at face current balance
e date bala and
nt value period
nce discount
--
Other remarks:
None
45. Long-term borrowings
(1) Long-term borrowings categories
Unit: RMB
Items Closing balance Opening balance
Pledge borrowings 396962631.92
Mortgage borrowings 500503566.56 553895193.84
Guaranteed borrowings 408697705.52
Credit borrowings 80000000.00 214362666.24
Mortgage and Guaranteed
190000000.00
Loan
Total 1179201272.08 1165220492.00
Remarks on classification of long-term borrowings:
None
Other remarks including interest rate range:
As of December 31 2020 the annual interest rate of the above-mentioned
borrowings was 3.50%-5.22% (December 31 2019: 3.50%-6.52%). Among
them please refer to Note VII. 81 for information on mortgaged loans and
mortgaged assets related to pledged loans.46. Bonds payable
(1) Bonds payable
Unit: RMB
Items Closing balance Opening balance
(2) Changes in bonds payable (Excluding other financial instruments such as
preferred stocks and perpetual bonds classified as financial liabilities)
Unit: RMB
Interest Amortiza Repaym
Issua Openi
accrue tion of ent in
Par Issue nce ng Curren Closing
Bond Term d at premium the
value date amou balan t issue balance
face and current
nt ce
value discount period
--
Total -- -- --
(3) Description of conversion conditions and conversion time of convertible
corporate bonds
None
(4) Description of other financial instruments classified as financial liabilities
Summary of other financial instruments such as preferred stocks and perpetual
bonds issued at the end of the period
None
Changes in financial instruments such as preferred stocks and perpetual bonds
issued at the end of the period
Unit: RMB
Outstandi Increase in the Decrease in the
Opening balance Closing balance
ng current period current period
financial
instrumen Book Book Book Book
Amount Amount Amount Amount
t value value value value
Remarks on the basis for classifying other financial instruments as financial
liabilities
None
Other remarks:
No
47. Lease liabilities
Unit: RMB
Items Closing balance Opening balance
Other remarks:
None
48. Long-term payables
Unit: RMB
Items Closing balance Opening balance
(1) Long-term payables according to the nature of the payment
Unit: RMB
Items Closing balance Opening balance
Other remarks:
None
(2) Special payables
Unit: RMB
Opening Increase in the Decrease in the Closing
Items Reasons
balance current period current period balance
--
Other remarks:
None
49. Long-term employee benefits payable
(1) Long-term employee benefits
Unit: RMB
Items Closing balance Opening balance
(2) Changes in defined benefit plans
Present value of defined benefit plans:
Unit: RMB
Items Amount in current period Amount in prior period
Plann assets:
Unit: RMB
Items Amount in current period Amount in prior period
Defined benefit plan net liabilities (net assets)
Unit: RMB
Items Amount in current period Amount in prior period
Description of the content of the defined benefit plan and related risks the
impact on the company's future cash flow time and uncertainty:
No
Explanation of major actuarial assumptions and sensitivity analysis results of
defined benefit plans:
None
other remarks:
None
50. Provisions
Unit: RMB
Items Closing balance Opening balance Reasons
Pending litigation
157323343.91 151393866.81
(Note 1)
Product quality
27389011.22 19118430.88
assurance
Fixed asset disposal
3538805.35 3646570.77
costs
Employee compensation
946458.39 521998.44
(Note 2)
Total 189197618.87 174680866.90 --
Other explanations including significant assumptions and estimation
explanations related to significant provisions:
Note 1: Shandong Bin’ao Aircraft Manufacturing Co. Ltd. litigated the
Company’s subsidiary Austria Diamond Aircraft Industry Co. Ltd. in a dispute
over model production license authorization and the litigation is still in the
arbitration process. As of December 31 2020 Austria Diamond Aircraft Industry Co. Ltd. accumulatively accrued provisions of RMB
157323343.91 based on estimates (December 31 2019: RMB 151393866.81).Note 2: Wanfeng Meridian and its subsidiaries (hereinafter referred to as “Wanfeng Meridian Group”) hired CMI A York Risk Services
Company Inc. (hereinafter referred to as CMI) a third-party employee compensation risk management agency to handle employee
compensation claim. CMI provides estimates to the Company after evaluating all outstanding claims each year. As of December 31
2020 there were several outstanding claims (2019: multiple outstanding claims) and Wanfeng Meridian Group recognized contingent
liabilities based on the estimated amount.51. Deferred income
Unit: RMB
Increase in the current Decrease in the current
Items Opening balance Closing balance Reasons
period period
Government grants 202630087.75 69496834.32 57852069.49 214274852.58
Total 202630087.75 69496834.32 57852069.49 214274852.58 --
Projects related to government grants:
Unit: RMB
Amount
included in Amount Amount of
New subsidy non- included in cost Related to
Other
Liability projects Opening balance amount for the operating other income in reduction in Closing balance assets/related
changes
current period revenue in the current the current to income
the current period period
period
Technical transformation project
of intelligent production line for 1262775.16 164724.84 1098050.32 Related to assets
auto parts
Industrialization and
Informatization Development 200000.00 150000.00 50000.00 Related to assets
Fund
Fiscal subsidies for energy
saving and consumption 30000.00 30000.00 Related to assets
reduction projects
National Industrial
Transformation and Upgrade 7200000.00 900000.00 6300000.00 Related to assets
Fund
Intelligent Casting
Technological Transformation
6300000.00 900000.00 5400000.00 Related to assets
Project for Annual Production of
3 Million Motorcycle Wheels
National Intelligent
Manufacturing New Model 11000000.00 1571429.00 9428571.00 Related to assets
Application Project
Industrialization project of ultra-
light and high-strength digital Related to
960000.00 960000.00
forming aluminum-magnesium income
alloy sub-frame
Complete sets of technology
and industrialization of
engineering preparation and
Related to
processing of high thermal 149999.96 50000.04 99999.92
income
/electric conductivity
magnesium alloy materials and
their products-1
Preparation processing and
industrialization of high thermal Related to
147368.44 147368.44
conductivity magnesium alloy income
materials and products
Weihai Lightweight Material Related to
1000000.04 1000000.04
Technology Innovation Center income
Related to
Multi-function data logger rack 214285.76 214285.76
income
Complete sets of technology
and industrialization of
engineering preparation and
Related to
processing of high thermal 153191.48 51063.84 102127.64
income
/electric conductivity
magnesium alloy materials and
their products-2
Key technologies for plastic
processing manufacturing and
Related to
application of high-strength and 1010526.29 1010526.29
income
tough magnesium alloys for
load-bearing applications
Digital visual management Related to
531600.00 531600.00
processing workshop project income
High strength and toughness Al-
Related to
Cu rare earth casting alloy and 91200.00 91200.00
income
its lightweight application
R&D and industrialization of
high-strength and high-
Related to
toughness magnesium- 1920000.00 960000.00 960000.00
income
aluminum alloy bulletproof
support
Magnesium alloy materials for
communication equipment and Related to
600000.00 399999.96 200000.04
their application technology income
R&D projects
High thermal conductivity
magnesium alloy body Related to
4800000.00 4800000.00
component industry chain income
construction project
Undertake international service
Related to
outsourcing business (service 367600.00 367600.00
income
outsourcing enterprise)
Complete sets of technology
and industrialization projects for
the engineering preparation and
Related to
processing of high thermal / 300000.00 65217.40 234782.60
income
electric conductivity magnesium
alloy materials and their
products
High-strength low-heat-
cracking susceptibility
magnesium alloy materials and Related to
500000.00 108695.70 391304.30
compact forming technology income
and lightweight application
projects
Large-scale thin-wall casting Related to
250000.00 250000.00
technology R&D project income
Foundry sand core unorganized Related to
1500000.00 1500000.00
waste gas treatment project income
Large-displacement motorcycle
racing aluminum-magnesium
Related to
alloy sub-frame (rocker arm) 200000.00 200000.00
income
technology patented navigation
project
Application of high thermal
Related to
conductivity magnesium alloy in 3000000.00 214285.71 2785714.29
income
5G communication base station
Development and
industrialization of a composite
Related to
integrated framework of carbon 100000.00 9090.91 90909.09
income
fiber and magnesium alloy for
communications
Study on Atomic Cluster
Structure Spectrum and Atomic Related to
70000.00 2258.06 67741.94
Diffusion Behavior of Aluminum- income
Cu Alloy Melt
Complete sets of technology
and industrialization of
engineering preparation and
Related to
processing of high thermal / 300000.00 54545.44 245454.56
income
electric conductivity magnesium
alloy materials and their
products -3
Complete sets of technology
and industrialization of
engineering preparation and
Related to
processing of high thermal / 2000000.00 363636.40 1636363.60
income
electric conductivity magnesium
alloy materials and their
products-4
Complete set technology and
industrialization of engineering
preparation and processing of Related to
600000.00 97674.43 502325.57
high thermal / electric income
conductivity magnesium alloy
materials and their products -5
High-strength low-heat-
cracking susceptibility
Related to
magnesium alloy materials and 600000.00 119999.96 480000.04
income
compact forming technology
and lightweight applications-1
High-strength low-heat-
cracking sensitivity magnesium
Related to
alloy material and compact 500000.00 90909.12 409090.88
income
forming technology and
lightweight application-2
High strength and toughness
low thermal cracking
susceptibility magnesium alloy Related to
2000000.00 153846.15 1846153.85
material and compact forming income
technology and lightweight
application-3
Research on Key Processes of
Preparation of Diamond/Copper Related to
160000.00 12307.69 147692.31
Matrix Composites for Heat income
Dissipation
OME Aluminum Alloy Wheel
65254418.06 11951636.28 53302781.78 Related to asset
Project
New Energy Automobile Wheel
Smart Factory Construction 7971632.71 5000000.00 921632.71 12050000.00 Related to asset
Project
Support funds for the
construction of aluminum alloy 82732248.52 13745354.92 68986893.60 Related to asset
wheel projects
Support funds for industrial
transformation and upgrading 16433102.81 2690737.93 13742364.88 Related to asset
projects
Special funds for private
3452542.57 561975.34 2890567.23 Related to asset
economic development
Rewards for the construction of
smart factories and digital 473362.40 56197.55 417164.85 Related to asset
workshops
2020 energy optimization
project subsidy transferred to 1872600.00 511600.00 1361000.00 Related to asset
deferral
Industrial Strong Base Project 28820000.00 9334217.84 19485782.16 Related to asset
Museum subsidy 363504.17 91831.69 8263.76 279936.24 Related to asset
Photovoltaic project subsidy 2204098.71 479011.30 148687.23 64406.78 2598829.56 Related to asset
Housing and equipment
6801630.67 295932.82 177552.48 6683250.33 Related to asset
subsidies
Total 202630087.75 69246611.30 57852069.49 250223.02 214274852.58
Other remarks:
None
52. Other non-current liabilities
Unit: RMB
Items Closing balance Opening balance
--
Other remarks:
None
53. Share capital
Unit:10000 RMB
Change in the current period（+、-）Opening Provident Closing
balance New Bonus Fund balance
Others Subtotal
issuance shares Conversio
n
Total
number of 218688 218688
shares
Other remarks:
None
54. Other equity instruments
(1) Other financial instruments such as preferred stocks and perpetual bonds
outstanding at the end of the period
None
(2) Changes in other financial instruments such as preferred stocks and
perpetual bonds outstanding at the end of the period
Unit: RMB
Outstandi Increase in the Decrease in the
Opening balance Closing balance
ng current period current period
financial
instrumen Book Book Book Book
Amount Amount Amount Amount
t value value value value
Other equity instruments' changes in the current period explanations of the
reasons for the changes and the basis for related accounting treatments:
None
Other remarks:
None
55. Capital reserve
Unit: RMB
Increase in the Decrease in the
Items Opening balance Closing balance
current period current period
Capital premium
（Share 110790013.13 110790013.13premium）
Other capital
2747500.00 2747500.00
reserve
Combination under
1576333004.32 1576333004.32
the common control
Original system
1419423.32 1419423.32
capital reserve
Total 1691289940.77 1691289940.77 0.00
Other explanations including changes in the current period and the reasons:
On July 6 2020 Zhejiang Wanfeng Motor Wheel Co. Ltd. a subsidiary of the
Company signed an equity transfer agreement with Wanfeng Aviation Industry
Co. Ltd. (hereinafter referred to as "Wanfeng Aviation") to invest RMB
399800.00 in cash to acquire 0.1% partnership share of Suzhou Yucuiyuan
Trading Enterprise (General Partnership) held by Wanfeng Aviation. The
acquisition was completed on July 6 2020. The acquisition was completed on
July 6 2020. The acquisition of minority shareholders’ equity resulted in a
decrease of RMB 15928.74 in capital reserve.As mentioned in Note 4 in April 2020 the Company acquired 55% of Wanfeng
Aircraft for RMB 2418075000.00 in cash forming a business combination
under common control. Capital reserve surplus reserve and undistributed
profit decreased by RMB 1691274012.03 RMB 427043757.25 and RMB
299757230.72 respectively.56. Treasury shares
Unit: RMB
Increase in the Decrease in the
Items Opening balance Closing balance
current period current period
Treasury stock 333092868.42 238720382.77 571813251.19
Total 333092868.42 238720382.77 571813251.19
Other explanations including changes in the current period and the reasons:
Note: The Company held the 32nd meeting of the sixth board of directors on
December 26 2019 approved the Proposal on the Repurchase of Company
Shares and disclosed the Report on Repurchase of Company Shares on
December 28 2019. The decision was made to repurchase the Company’s
shares by means of a centralized bidding method through the Shenzhen Stock
Exchange trading system with its own funds or self-raised funds. These shares
will be used for subsequent employee stock ownership plans or equity
incentives. The total amount of funds for the repurchase of shares shall not be
less than RMB 150 million and not more than RMB 300 million and the
repurchase price shall not exceed RMB 10 per share (inclusive). The
repurchase period is no more than 12 months from the approval date of the
repurchase plan by the board of directors. As of December 25 2020 the
Company's share repurchase period has expired. During the repurchase period
the Company accumulatively repurchased 35501808 shares by means of a
centralized bidding transaction through the special securities account for
repurchase accounting for 1.62% of the Company's total share capital and the
total transaction amount was RMB 239640478.46 (including transaction costs).The Company's share repurchase plan has been completed.The Company held the sixth meeting of the seventh board of directors on
December 30 2020 approved the Proposal on the Repurchase of Company
Shares disclosed the Report on Repurchase of Company Shares on January
4 2021. The decision was made to repurchase the Company’s shares by
means of centralized bidding through the Shenzhen Stock Exchange trading
system with its own funds or self-raised funds. These shares will be used for
subsequent employee stock ownership plans or equity incentives. The total
amount of funds for the repurchase of shares shall not be less than RMB 100
million and not more than RMB 200 million and the repurchase price shall not
exceed RMB 11 per share (inclusive) and the repurchase period is no more
than 12 months from the approval date of the repurchase plan by the board of
directors . As of December 31 2020 the Company's share repurchase plan
has not yet been implemented.57. Other comprehensive income (OCI)
Unit: RMB
Current period
Less: OCI
Less: OCI Attributable to Attributable to Closing
Items Opening balance Amount before carried forward Less: carried forward the parent non-controlling
income tax in transferred to income tax balance
transferred to company after interest after
current period retained expense
profit and loss tax tax
earnings
II. Items to be reclassified
subsequently to profit and 74589529.22 -148446465.82 -129418056.84 -19028408.98 -54828527.62
loss
Foreign currency
74589529.22 -148446465.82 -129418056.84 -19028408.98 -54828527.62
translation reserves
Other comprehensive
74589529.22 -148446465.82 -129418056.84 -19028408.98 -54828527.62
income in total
Other explanations including the adjustment of the effective part of the cash flow hedge gains and losses into the initial recognition
amount of the hedged item:
None
58. Special reserve
Unit: RMB
Items Opening balance Increase in the current period Decrease in the current period Closing balance
Safety production fee 10261018.12 20979159.41 17727120.11 13513057.42
Total 10261018.12 20979159.41 17727120.11 13513057.42
Other remarks including changes in the current period and reasons:
None
59. Surplus reserve
Unit: RMB
Increase in the Decrease in the
Items Opening balance Closing balance
current period current period
Statutory surplus
427043757.25 47015012.60 427043757.25 47015012.60
reserve
Total 427043757.25 47015012.60 427043757.25 47015012.60
The explanation of the surplus reserve including the changes in the current
period and the reasons:
According to the Company Law and the Company's Articles of Association the
Company draws a statutory surplus reserve fund at 10% of net profit. If the
statutory surplus reserve is more than 50% of the Company's registered capital
it can no longer be drawn.The Company can withdraw any surplus reserve after drawing the statutory
surplus reserve. Upon approval the discretionary surplus reserve can be used
to make up for previous years' losses or increase share capital.60. Undistributed profit
Unit: RMB
Items Current period Previous period
Balance of undistributed profit at the
end of the previous period before 3935484397.57 3621219587.26
adjustment
Total amount of undistributed profits
at the beginning of the period before 107711409.83
adjustment (increase + decrease -)
Undistributed profit at the beginning
3935484397.57 3728930997.09
of the period after adjustment
Add: Net profit attributable to
shareholders of the parent company 565820630.75 895769920.83
for current year
Less: Appropriation of statutory 47015012.60 33152616.95
surplus reserve
Payable dividends on ordinary
421689724.00 656063903.40
shares
Business combination under the
299757230.72
common control
Closing balance 3732843061.00 3935484397.57
Adjust the details of the undistributed profit at the beginning of the period:
1). Due to the retrospective adjustment according to the Accounting Standards
for Business Enterprises and related new regulations the undistributed profit at
the beginning of the period was affected by RMB 0.00.2). Due to changes in accounting policies the undistributed profit at the
beginning of the period was affected by RMB-12227868.01.3) Due to the correction of major accounting errors the undistributed profit at
the beginning of the period was affected by RMB 0.00.4) The change in the scope of consolidation caused by the same control
affected the undistributed profit at the beginning of the period by RMB
119939277.84.5) Other adjustments affected the undistributed profit at the beginning of the
period by RMB 0.00.61. Operating revenue and Operating cost
Unit: RMB
Current period Prior period
Items
Revenue Cost Revenue Cost
Main operations 10295928707.36 8256622391.91 12240494250.98 9614365593.75
Other operations 403296197.21 282787673.51 394637725.28 284183485.67
Total 10699224904.57 8539410065.42 12635131976.26 9898549079.42
Audited net profit before and after deducting non-recurring profit and loss
whichever is lower is negative or not
□ Applicable √ Not Applicable
Revenue related information:
Unit: RMB
Contract
Section 1 Section 2 Total
classification
Including:
Information related to performance obligations:
None
Information related to the transaction price allocated to the remaining
performance obligations:
At the end of the reporting period the amount of revenue corresponding to the
performance obligations that have been signed but not yet fulfilled or in the
process of fulfillment is RMB 0.00. Among them RMB 0.00 is expected to
recognize revenue in the year.Other remarks
None
62. Taxes and surcharges
Unit: RMB
Items Current period Prior period
Urban maintenance and
13816638.45 19745602.24
construction tax
Education surcharge 11840055.90 17805728.34
Housing property tax 11769148.28 10896560.51
Land use tax 9848384.13 11197338.30
Vehicle usage tax 22272.08 107075.05
Stamp duty 3556512.48 3646380.92
Environmental protection tax 334797.31 298447.98
Chamber of Commerce Tax 444915.02 648072.21
Business tax 1746705.49 1210761.06
Others 650056.39 470748.48
Total 54029485.53 66026715.09
Other remarks:
None
63. Selling expenses
Unit: RMB
Items Current period Prior period
Transportation fee 98999575.96
Rental costs 32639223.39 33427814.50
Employee compensation and
57286444.90 49507270.00
labor insurance premiums
Commission 80144914.92 98764600.84
Travel expense 2917023.59 8112411.21
Business hospitality 2280016.25 5135790.26
Rework and repair fee 1314888.29 1021698.74
Other 26354907.56 31404151.59
Total 202937418.90 326373313.10
Other remarks:
None
64. Administrative expenses
Unit: RMB
Items Current period Prior period
Employee compensation and
253974877.57 336547102.49
labor insurance premiums
Depreciation expense 81012763.39 84928773.17
Professional service fee 67268386.40 68386119.76
Amortization of intangible assets 28081645.11 27377486.81
Business hospitality 24918655.72 24112594.31
Office expense 20034195.34 22860054.00
Property rental fee 14777427.27 16925824.89
Computer and software
13717008.33 13242229.66
maintenance fee
Travel expense 5196486.24 13022022.58
Insurance 4654956.23 1953097.69
Employee education funds and
2914839.77 2497355.21
labor union funds
Others 74286505.01 57609135.28
Total 590837746.38 669461795.85
Other remarks:
None
65. R&D expenses
Unit: RMB
Items Current period Prior period
Trial production and material cost 120631171.97 165239150.69
Depreciation expenses 35023658.55 34559098.29
Fuel and power 37037593.92 57391913.63
Mold expenses 14064645.28 14567653.35
Employee compensation and labor
121930108.10 155149369.13
insurance premiums
Others 8761692.86 19195773.76
Total 337448870.68 446102958.85
Other remarks:
None
66. Financial expenses
Unit: RMB
Items Current period Prior period
Interest expense 245818075.95 241813490.17
Less: Interest income 34003395.60 46585659.98
Translation losses 49782761.54 14505478.58
Bank fees 7524559.08 9279889.76
Total 269122000.97 219013198.53
Other remarks:
None
67. Other income
Unit: RMB
Source of the other income Current period Prior period
Government grants related to
104562193.16 91765417.17
operating activities
68. Investment income
Unit: RMB
Items Current period Prior period
Investment income from long-
-876459.23 633198.02
term equity investments under
equity method
Investment income from
disposal of long-term equity -675223.58
investments
Investment income from
disposal of held-for-trading -4600.00
financial assets
Gains and losses on settlement of
foreign exchange forward 2077790.82 -1037330.00
contracts
Investment income of short-term
1485.24 2834421.98
financial products
Gains and losses on settlement of
-1235024.00
futures contracts
Gains and losses on settlement of
1324581.60 -409440.00
foreign exchange option
Total 612550.85 2020850.00
Other remarks:
None
69. Gains and losses on net exposure to hedging risk
Unit: RMB
Items Current period Prior period
Other remarks:
None
70. Gains and losses on changes in fair value
Unit: RMB
Sources of income from Current period Prior period
changes in fair value
Held-for-trading financial
4154.36 18630.78
assets
Foreign exchange forward
1960000.00 1050000.00
contract
Gains and losses on settlement
282400.00 -1155357.75
of foreign exchange option
Gains and losses on settlement
-169223.85
of interest rate swap
Total 2246554.36 -255950.82
Other remarks:
None
71. Credit impairment loss
Unit: RMB
Items Current period Prior period
Impairment losses on other
-596030.03 1856502.90
receivables
Impairment losses on accounts
-6627489.02 -34793447.68
receivable
Total -7223519.05 -32936944.78
Other remarks:
None
72. Assets impairment loss
Unit: RMB
Items Current period Prior period
Ⅱ. Inventory write-down loss
and contract performance cost -7493604.15 -16367780.12
impairment loss
VI. Fixed assets impairment
-2685757.48 -2282636.17
loss
Total -10179361.63 -18650416.29
Other remarks:
None
73. Gains on disposal of asset
Unit: RMB
Sources of gains on disposal
Current period Prior period
of asset
Gains from disposal of non-
2913955.21 2114706.06
current assets
Losses from disposal of non- -2412798.27 -2897932.24
current assets
Total 501156.94 -783226.18
74. Non-operating revenue
Unit: RMB
Amount recorded into
the current non-
Items Current period Prior period
recurring profit and
loss
Confiscated income 1046034.81 6659158.22 1046034.81
Compensation income
28071500.00
(Note 1)
Net income from
production accidents in 35106031.66 126048046.71 35106031.66
U.S. factories (Note 2)
Others 6898645.35 9420393.12 6898645.35
Total 43050711.82 170199098.05 43050711.82
Government grants recorded in current profit and loss:
Unit: RMB
Whether
the
Related
subsidy Whether
to
Subsidy affect the it is a Current Prior
Issuer Reasons Type assets/rel
items current special period period
ated to
year's subsidy
income
profit and
loss
--
Other remarks:
Note 1: On January 22 2019 Shenzhen Kelu Electronic Technology Co. Ltd.paid the Group RMB 23199000.00 for the remaining equity transfer of
Shanghai Kanai. Since the payment was later than the agreed date in the
contract Shenzhen Kelu Electronic Technology Co. Ltd. paid a penalty of RMB
3611000.00 to the Group on the same day.On April 8 2019 the Group received a compensation payment of RMB
24460500.00 from the original shareholders of Wuxi Xiongwei Precision
Technology Co. Ltd. including Ma Leiquan Xiang Yuyu Yan Yidong and
Zhao Weijun for unfulfilled performance commitments.Note 2: On May 2 2018 a production accident occurred in the US Meridian
Lightweight Technology Co. Ltd. a subsidiary of the Group which caused
damage to some buildings and production equipment. In 2020 US Meridian
Lightweight Technology Co. Ltd. received a follow-up compensation of RMB
35106031.66 from the insurance company which was recognized as non-
operating revenue.75. Non-operating expenditures
Unit: RMB
Amount recorded into
the current non-
Items Current period Prior period
recurring profit and
loss
External donation 1362874.02 80410.61 1362874.02
Losses from production
accidents in U.S. and 3539343.31 3539343.31
Canadian factories
Special Fund for Water
Conservancy 752950.97 693492.19 752950.97
Construction
Loss from scrap of non-
1599934.06
current assets
Others 4331701.81 4561344.43 4331701.81
Total 9986870.11 6935181.29 9986870.11
Other remarks:
None
76. Income tax expenses
(1) Income tax expenses
Unit: RMB
Items Current period Prior period
Current period income tax
124485676.11 138277717.78
expenses
Deferred income tax expenses -60339163.96 34516501.29
Total 64146512.15 172794219.07
(2) Reconciliation of accounting profit to income tax expenses
Unit: RMB
Items Current period
Profit before tax 829022733.03
Income tax expense based on statutory/applicable
124353409.98
tax rate
The impact of different tax rates applied to
54621522.03
subsidiaries
The impact of income tax before adjustment -2088886.95
The impact of non-taxable income -7407788.55
The impact of non-deductible cost expense and
13225300.77
losses
The impact of change in tax rate -1097562.36
Use of deductible losses of the previous years and
recognize the deductible losses that have not been -106350989.94
recognized in the previous years
Effect of deducible temporary differences or 13851320.32
deductible losses not recognized
Deductible expenses not included in the total profit -160134.66
Extra deduction of expenses -46749493.17
Cross-border profit distribution withholding income tax 21949814.68
Tax expenses calculated according to the company's
64146512.15
effective tax rate
Income tax expenses 64146512.15
Other remarks:
As mentioned in Note vi the Company and its internal subsidiaries enjoy tax
incentives for high-tech enterprises and their income tax is accrued based on
the estimated taxable income obtained in China with the applicable tax rate of
15%. Except for these subsidiaries the income tax of other subsidiaries in
China is accrued based on the estimated taxable income obtained in China and
the applicable tax rate of 25%. Taxes on taxable income derived from other
regions are calculated at the applicable tax rate in accordance with the current
laws interpretations and practices of the country where the company operates.77. Other comprehensive income
See Note VII. 57 for details.78. Notes to items of the consolidated cash flow statement
(1) Other cash receipts related to operating activities
Unit: RMB
Items Current period Prior period
Insurance indemnities received in
a production accident in the
United States except for the 35106031.66 72873856.18
purchase and construction of
assets
Government grants related to
92987587.09 61362644.82
income
Government grants related to
22779011.30 500000.00
assets
Changes in other cash and cash
10408322.61 297656.27
equivalents
Others 46980676.05 33041991.55
Total 208261628.71 168076148.82
Description of other cash receipts related to operating activities:
No
(2) Other cash payments related to operating activities
Unit: RMB
Items Current period Prior period
Selling expenses 148403947.53 277559152.72
Administrative and R&D
427832236.32 589436025.60
expenses
Expenditures related to
production accidents in the 3539343.30 36144970.27
United States and Canada
Changes in other cash and cash
-4097276.75 -
equivalents
Bank fees 8022755.63 9510528.79
Cash paid for operating costs 126351662.51
Others 9416220.14 18089678.97
Total 719468888.68 930740356.35
Remarks on other cash payments related to operating activities
No
(3) Other cash receipts related to investing activities
Unit: RMB
Items Current period Prior period
Related parties return funds and
944235315.71 1360423532.78
interest
Wuxi Precision Acquisition
24460500.00
Performance Compensation
Receipt of payment for default on
3611000.00
disposal of equity
Insurance compensation received
for the purchase and construction
89319160.80
of assets in a production accident
in a US factory
Gains from disposal of held-for-
2962130.80
trading financial assets
Settlement income of other
1485.24 7793.38
financial products
Changes in restricted cash and
cash equivalents guaranteed for 629500000.00 635893602.05
Wanfeng Group
Others 74602.02
Total 1576698931.75 2113790191.03
Remarks on other cash receipts related to investing activities:
None
(4) Other cash payments related to investing activities
Unit: RMB
Items Current period Prior period
Cash lent to related parties 76650000.00 1883450707.00
Disposal of held-for-trading
888940.00 1446770.00
financial assets
Changes in restricted cash and
cash equivalents guaranteed for 13049800.00 -
Wanfeng Group
Total 90588740.00 1884897477.00
Remarks on other cash payments related to investing activities
No
(5) Other cash receipts related to financing activities
Unit: RMB
Items Current period Prior period
Recover the deposit paid to
218800000.00 58929200.00
obtain loan
Total 218800000.00 58929200.00
Other remarks on other cash receipts related to financing activities
None
(6) Other cash payments related to financing activities
Unit: RMB
Items Current period Prior period
Stock repurchases 238720382.77 333092868.42
Deposit paid to obtain loan 230000000.00 268800000.00
Cash paid to acquire subsidiary 2418075000.00
Total 2886795382.77 601892868.42
Other remarks on other cash payments related to financing activities
None
79. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Unit: RMB
Supplement information Current period Prior period
1. Reconciliation of net profit to cash flow from
-- --
operating activities:
Net profit 764876220.88 1041234342.21
Add：Provisions for assets impairment loss 17402880.68 51587361.07Depreciation of fixed assets oil and gas
582853810.83 551655806.11
assets productive biological assets
Amortization of right-of-use assets
Amortization of intangible assets 80622869.88 91458733.96
Amortization of long-term deferred
119829558.25 118705736.28
expenses
Loss on disposal of fixed assets
intangible assets and other long-term assets -501156.94 783226.18
(Less:gains)
Loss on scrap of fixed assets (Less:
1599934.06
gains)
Losses on changes in fair value (Less:
-2246554.36 255950.82
gains)
Financial expenses (Less: gains) 248850044.00 237169394.08
Investment losses (Less: gains) -612550.85 -2020850.00
Decrease of deferred tax assets (Less:
-75400834.00 20468783.72
increase)
Increase of deferred tax liabilities (Less:
8208840.54 16116037.21
decrease)
Decrease of inventories (Less: increase) 69482782.06 -131522140.63
Decrease of operating receivables
-181446594.32 -404474923.83
(Less: increase)
Increase of operating payables (Less:
102038205.77 -53092585.55
decrease)
Others 1823384.00 -119555925.92
Net cash flows generated from operating
1735780906.42 1420368879.77
activities
2．Significant investing and financing activities
-- --
not related to cash receipts and payments:
Conversion of debt into capital
Convertible bonds due within one year
Fixed assets leased in under finance leases
3．Net changes in cash and cash equivalents: -- --
Cash at the end of the period 1412366847.54 1426647961.41
Less: Cash at the beginning of the period
Add: Cash equivalents at the end of the
period
Less: Cash equivalents at the beginning of
1426647961.41 1167968107.34
the period
Net increase of cash and cash equivalents -14281113.87 258679854.07
(2) Net cash paid for acquiring subsidiaries in current period
Unit: RMB
Amount
Cash and cash equivalents paid in current period
2418075000.00
for business combination
Including: --
Acquired subsidiaries 2418075000.00
Including: --
Including: --
Net cash paid to acquire subsidiaries 2418075000.00
Other remarks:
None
(3) Net cash receipts from disposal of subsidiaries in current period
Unit: RMB
Amount
Net cash of cash equivalents receipts from
10461733.98
disposal of subsidiaries in current period
Net cash receipts from disposal of subsidiaries 10461733.98
Other remarks:
Disposal of a 20% equity in the joint venture CETC Wuhu General Aviation
Industry Technology Research Institute Co. Ltd.
(4) Composition of cash and cash equivalents
Unit: RMB
Items Closing balance Opening balance
I. Cash 1412366847.54 1426647961.41
Including: Cash on hand 928560.58 1007340.38
Cash in bank that can be
1411438286.96 1425640621.03
readily drawn on demand
II. Cash equivalents
Ⅲ. Cash and cash equivalents at 1412366847.54 1426647961.41
end of year
Other remarks:
None
80. Notes to Statement of Changes in Owner’s Equity
Remarks on the "other" items and the amount of adjustment to adjust the
balance at the end of the previous year:
No
81. Assets with restriction on ownership or use rights
Unit: RMB
Carrying amount at the end of
Items Reasons for restriction
the period
Cash and cash equivalents 262612110.63 Note 1
Fixed assets 756254109.17 Note 3
Intangible assets 317431152.87 Note 3
Accounts receivable financing 187082811.84 Note 2
Total 1523380184.51 --
Other remarks:
Note 1: As of December 31 2020 the cash and cash equivalent for which the
ownership of the Group is restricted is RMB 262612110.63 (December 31
2019: RMB 1026106121.97) including: 1) The guarantee deposit for issuing
a letter of guarantee to provide guarantee for Wanfeng Group’s loans is RMB
13049800 (December 31 2019: The deposit certificate pledged for Wanfeng
Group’s loan guarantee is RMB 629500000.00); 2) The deposit for issuing
bank acceptance bills is RMB 52834578.20 (December 31 2019: RMB
95615428.67); 3) Issuing bank acceptance drafts with a pledge of RMB
20000000.00 in term deposits (December 31 2019: None); 4) The deposit for
issuing a letter of credit is RMB 19567430.00 (December 31 2019: RMB
4883340.00); 5) The deposit for issuing a bank guarantee is RMB
16760000.00 (December 31 2019: RMB 19728406.08); 6) The deposit for
issuing forward foreign exchange settlement is RMB 943992.47 (December 31
2019: RMB 2537790.28); 7) The guarantee deposit for obtaining loans is RMB
50000000.00 (December 31 2019: RMB 218800000.00); 8) The pledged
term deposit of RMB 30000000.00 is the guarantee for the Group’s borrowings
(December 31 2019: None); 9) Issue a guarantee deposit of RMB 1114223.59
for the quality of construction project (December 31 2019: RMB 1114223.59);
10) Issue a sales performance bond of RMB 159004141.44 (December 31
2019: RMB 142231939.85) with a deposit of RMB 56002086.37 (December
31 2019: RMB 53926933.35) as a guarantee; 11) Bank deposits of RMB
2340000 were frozen due to equipment contract disputes (December 31 2019:
None).Note 2: As of December 31 2019 the Group’s held-for-trading financial assets
with restricted ownership were RMB 60000000.00. Including 1) Pledge of
structured deposits of RMB 50000000.00 to obtain loans; 2) Pledge of
structured deposits of RMB 10000000.00 to obtain bank acceptance bills.Note 3: As of December 31 2020 the Group’s restricted ownership of accounts
receivable financing was RMB 187082811.84 (December 31 2019:
147871797.58). Including: 1) Pledge of RMB 95818762.46 of accounts
receivable financing (December 31 2019: RMB 63456986.58 of bills
receivable) to issue bank acceptance drafts; 2) Pledge of RMB 30000000.00
of accounts receivable financing to obtain loans from China Construction Bank
Fuling Branch (December 31 2019: Pledge of RMB 20870000.00 of bills
receivable to obtain loans from China Construction Bank Fuling Branch); 3)
Financing of RMB 58264049.38 yuan (December 31 2019: RMB
53544811.00 of bills receivable) endorsed to pay the supplier purchase price;
4) Financing of RMB 3000000.00 with accounts receivable (December 31
2019: RMB 10000000.00 of bills receivable) and discounted to obtain bank
loans.Note 4: As of December 31 2020 except for the assets guaranteed or
mortgaged by Wanfeng Meridian disclosed below the fixed assets and
intangible assets with restricted ownership of the Group were RMB
756254109.17 and RMB 317431152.87 respectively (December 31 2019:
RMB 529912312.56 and RMB 184362853.26) including:
1) Fixed assets of RMB 17056994.90 and intangible assets of RMB
6820428.00 were pledged to obtain a loan line of RMB 164.12 million from
Jiangmen Rural Commercial Bank Co. Ltd Tangxia Branch. On December 31
2020 under the agreement the balance of short-term loan was RMB 128.35
million;
2) Fixed assets of RMB 103453918.66 and intangible assets of RMB
138628139.83 were collateralized to obtain a loan line of RMB 200 million from
Export-Import Bank of China Jilin Branch. On December 31 2020 under the
agreement the balance of short-term loans obtained was RMB 40 million and
the balance of long-term loans obtained was RMB 102.16 million of which RMB
34.16 million was due within one year;
3) Intangible assets of RMB 71927645.22 were collateralized to obtain a loan
line of Indian rupees 800 million from HDFC Bank . On December 31 2020
under the agreement the balance of short-term loan obtained was Indian
rupees 200 million (Equivalent to RMB 17.82 million);
4) Fixed assets of RMB 82973199.73 were collateralized to obtain a loan line
of EUR 10 million from Oberbank AG. As of December 31 2020 under the
agreement there was no loan balance;
5) With fixed assets of RMB 54198682.69 as collateral on December 31 2020
under the agreement Wanfeng Auto Wheel obtained a short-term loan of RMB
60 million from Agricultural Bank of China Xinchang Branch;
6) With Wanfeng Auto Wheel’s fixed assets of RMB 22953031.39 and
intangible assets of RMB 49928224.40 as collateral on December 31 2020
under the agreement Wanfeng Auto Wheel obtained a short-term loan of RMB
230 million from Agricultural Bank of China Xinchang Branch;
7) With Fengzeyuan’s fixed assets of RMB 399001519.62 as collateral on
December 31 2020 under the agreement the Company obtained a short-term
loan of RMB 30 million from Agricultural Bank of China Xinchang Branch ;
8) With the residual value of fixed assets of Fengzeyuan and the residual value
of fixed assets and intangible assets of Wanfeng Auto Wheel as collateral on
December 31 2020 under the agreement Wanfeng Auto Wheel obtained a
short-term loan of RMB 80 million from Agricultural Bank of China Xinchang
Branch;
9) With the residual value of fixed assets of Fengzeyuan and the residual value
of fixed assets and intangible assets of Wanfeng Auto Wheel as collateral and
guarantee from Zhejiang Rifa Holding Group Co. Ltd. on December 31 2020
under the agreement the Company obtained a short-term loan of RMB 260
million from Agricultural Bank of China Xinchang Branch;
10) With the residual value of fixed assets and intangible assets of Wanfeng
Auto Wheel as collateral and guarantee from Zhejiang Rifa Holding Group Co.on December 31 2020 under the agreement the Company obtained a long-
term loan of RMB 190 million from Agricultural Bank of China Xinchang Branch;
11) With its fixed assets of RMB 13842308.28 and intangible assets of RMB
22813328.69 as collateral and joint liability guarantee from Zhejiang Rifa
Holding Group Co. Ltd. on December 31 2020 under the agreement the
Company obtained a short-term loan of RMB 1.82 million from Export-Import
Bank of China Zhejiang Branch;
12) With fixed assets of RMB 62774453.90 and intangible assets of RMB
27313386.73 as collateral and 95% equity of the subsidiary Wuxi Xiongwei
Precision Technology Co. Ltd. pledged to Minsheng Bank Hangzhou Branch
the Company obtained a credit line of RMB 750000000.00. Please refer to the
following " Pledge of long-term equity investment in subsidiaries" for details.The above 5 to 11 loans are all supplemented with Chen Ailian's personal joint
liability guarantee.Other situations where ownership or use rights are restricted
Wanfeng Meridian Guarantee
Wanfeng Meridian Group is a subsidiary group controlled by the Company. On
August 27 2014 Meridian Lightweight Technologies UK Limited Magnesium
Products of America Inc. and Magnesium Meridian Lightweight Technologies
Inc. signed a term and revolving credit loan agreement with Comerica
Incorporated (as the lead bank) with a revolving loan amount of up to USD 65
million and a term loan amount of up to USD 81.6 million. The maturity date for
revolving loans and term loans is September 20 2023. On December 31 2020
under the agreement long-term loans of USD 74987847.79 (equivalent to
RMB 489288208.06) and GBP 10865111.00 (equivalent to RMB
96594096.32) were obtained of which USD 20333218.77 (equivalent to
RMB 132672219.18) and GBP 2329113.60 RMB (equivalent to RMB
20706518.64) will mature within one year (December 31 2019: Long-term
borrowings of USD 74497542.43 (equivalent to RMB 517983727.20) and
GBP 7571361.52 (equivalent to RMB 69556654.95) of which USD 17.2
million (equivalent to RMB 123370484.51) and GBP 1336122.62 (equivalent
to RMB 12274703.80) will be due within one year).As of December 31 2020 and December 31 2019 the assets of Wanfeng
Meridian Group have the following guarantees:
a. Meridian Lightweight Technologies UK Limited took Comerica Bank (as the
lead bank) as the beneficiary and set fixed and floating charges on all its land
goodwill accounts investments intellectual property rights and licenses to
guarantee debts under the credit agreement.b. Wanfeng Meridian took Comerica Bank (as the lead bank) as the beneficiary
and set all the property rights interests and other rights it enjoys in any land
equipment goodwill accounts shares and intellectual property as mortgage to
guarantee the debts under the credit agreement. In addition Wanfeng Meridian
have also pledged its shares of its subsidiary companies Meridian Lightweight
Technologies UK Limited Meridian Lightweight Technologies Deutschland
GmbH Mexico Meridian Technologies Mexico S. de RL de CV.c. Meridian Lightweight Technologies Inc. pledged all its shares and assets to
Comerica Bank (as the lead bank) as the beneficiary at the same time for debts
assumed by Comerica Incorporated (as the lead bank) and subject to the risks
of credit agreements and related guarantees.d. Meridian Lightweight Technologies Holdings Inc. pledged all its shares and
assets to Comerica Bank (as the lead bank) as the beneficiary at the same time
for debts assumed by Comerica Incorporated (as the lead bank) and subject
to the risks of credit agreements and related guarantees.e. Magnesium Products of America Inc. pledged all its shares assets and
equipment to Comerica Incorporated (as the lead bank) as the beneficiary as
a guarantee for the debts of its and/or affiliated companies under the credit
agreement.f. Mexico Meridian Technologies Mexico S. de RL de CV. pledged its assets
(equipment machinery accessories and movable property used to implement
the company's main business activities) to Comerica Bank (as the lead bank)
as the pledgee in a non-possessive way.The 2-A and 2-B plots and buildings
owned by Meridian Technologies Mexico S. de R.L. de C.V. have all been
mortgaged to Comerica Incorporated (as the lead bank).Pledge of long-term equity investment in subsidiaries
As of December 31 2020 the Company's long-term equity investment with
restricted ownership was RMB 1.254 billion (December 31 2019: RMB 1.254
billion). The Company pledged 95% equity of Wuxi Xiongwei Precision
Technology Co. Ltd. to Minsheng Bank Hangzhou Branch to obtain a credit
line of RMB 750000000.00.On December 31 2020 under this line of credit the Company obtained a
financing guarantee letter of EUR 85000000.00 issued by the Minsheng Bank
Hangzhou Branch against which the Company borrowed EUR 18531816.60
(equivalent to RMB 148717828.22) and Euro 32259896.27 (equivalent to
RMB 258885667.48) for long-term loans from Minsheng Bank Hong Kong
Branch and China Merchants Bank Hong Kong Branch. Loans from Minsheng
Bank Hong Kong Branch Euro 18631799.84 (equivalent to RMB
149520193.69 yuan) and China Merchants Bank Hong Kong Branch Euro
32259896.27 (equivalent to RMB 258885667.48 yuan) will mature within one
year.82. Monetary items in foreign currencies
(1) Monetary items in foreign currencies
Unit: RMB
Closing balance in
Items Exchange rate RMB equivalent
foreign currencies
Cash and cash
-- --
equivalents
Including: USD 93819960.95 6.5249 612165863.19
EUR 35301672.42 8 .0250 283295921.17
HKD
CAD 12610915.22 5.1161 64518703.37
MXN 6143754.32 0.3280 2015151.42
YEN 153044536.00 0.0632 9677924.28
GBP 4405086.45 8.8903 39162540.06
INR 488563163.81 0.0891 43532932.15
CZK 3230720.63 0.3046 984077.50
Accounts receivable -- --
Including: USD 83057055.28 6.5249 541938980.00
EUR 10316741.45 8.0250 82791850.17
HKD
CAD 13801351.24 5.1161 70609093.10
MXN 401652.66 0.3280 131742.07
YEN 344785275.06 0.0632 21802841.65
GBP 1392790.53 8.8903 12382325.65
INR 801918585.01 0.0891 71454153.60
CZK 9648899.10 0.3046 2939054.67
Other accounts
receivable
USD 1198098.08 6.5249 7817470.16
CAD 1557272.36 5 .1161 7967161.10
YEN 1326000.06 0.0632 83850.94
EUR 5480137.04 8.0250 43978099.75
GBP 28827.37 8.8903 256283.97
INR 17581895.62 0.0891 1566617.23
CZK 1489.96 0.3046 453.84
Short-term borrowings
USD 6.5249
EUR 1637487.80 8.0250 13140839.60
INR 500000000.00 0.0891 44552000.00
Accounts payable
USD 19433367.90 6.5249 126800782.19
CAD 11492117.79 5.1161 58794823.84
MXN 7711898.90 0.3280 2529502.84
YEN 0.0632
EUR 14350423.29 8.0250 115162146.88
GBP 783794.99 8.8903 6968172.60
INR 243396199.16 0.0891 21687574.93
CZK 998.19 0.3046 304.05
Other accounts payable
USD 630060.27 6.5249 4111080.27
CAD 345315.59 5.1161 1766669.09
MXN 1294.67 0.3280 424.65
YEN 6416792.02 0.0632 405772.26
EUR 8076552.28 8.0250 64814332.05
GBP 986.66 8.8903 8771.68
INR 615007123.06 0.0891 54799594.69
Non-current liabilities
due within one year
USD 26083218.77 6.5249 170190394.15
EUR 50791712.87 8.0250 407603495.77
GBP 2329113.60 8.8903 20706518.64
Long-term borrowings -- --
Including: USD 63654629.02 6.5249 415340088.89
EUR 8.0250
HKD
GBP 8535997.40 8.8903 75887577.69
Other remarks:
No
(2) Notes on overseas operating entities including for the significant overseas
operating entities its main operating locations reporting currency and the
basis for selection should be disclosed and the reason for changes in
functional currency should also be disclosed.√ Applicable □ Not Applicable
Conversion rate of the main statement items of overseas operating entities
Currency exchange on Currency exchange on
December 31 2020 December 31 2019
USD 6.5249 6.9762
GBP 8.8903 9.1501
CAD 5.1161 5.3421
INR 0.0891 0.1021
EUR 8.0250 7.8155
The functional currency information of significant overseas business entities is
as follows:
Principle place of Reporting Currency
business
Wanfeng Meridain UK USD
Holdings Co. Ltd.Meridian Lightweight Canada CAD
Technologies Holdings
Inc.Meridian Lightweight Germany CAD
Technologies
Deutschland GmbH
Meridian Lightweight UK GBP
Technologies UK
Limited
Meridian Technologies Mexico USD
Mexico S. de R.L. de
C.V.Magnesium Products of America USD
America Inc.Meridian Lightweight Canada CAD
Technologies Inc.Wanfeng Aluminum India INR
Wheels (India) Pty Co.Ltd.Diamond Aircraft Austria EUR
Industries GmbH
Austro Engine GmbH Austria EUR
Diamond Aircraft Canada CAD
Industries Inc.The reasons for the overseas business entity to determine the functional
currency for bookkeeping are: Commodities and services are usually priced and
settled in this currency; this currency is used for the valuation and settlement of
commodities and required service labor materials and other expenses; It is the
currency obtained from financing activities and used to save the money
received from operating activities.83. Hedging
Disclosure of qualitative and quantitative information about hedged items
related hedging tools and hedged risks according to the types of hedges:
None
84. Government grants
(1) Government grants overview
Unit: RMB
Amount recognized
Category Amount Listed project
through profit and loss
--
(2) Refund of government grants
□ Applicable √Not Applicable
Other remarks:
None
85. Others
None
VIII. Changes in Scope of Consolidation
1. Business combinations not under the common control
(1) Business combinations not under the common control occurred in the
current period
Unit: RMB
Revenue Net profit
The basis of of
Proportio
Date of Cost of Method of for acquiree acquiree
n of
equity equity equity Purchase determini from the from the
Acquiree equity
acquisitio acquisitio acquisitio date ng the purchase purchase
acquisitio
n n n purchase date to date to
n
date the end of the end of
the period the period
--
Other remarks:
None
(2) Combination cost and goodwill
Unit: RMB
Combination cost
--
Explanation on the determination method of combination cost at fair value and
contingent consideration and its changes:
None
The main reasons of large amounts of goodwill:
None
Other remarks:
None
(3) Identifiable assets and liabilities on the purchase date
Unit: RMB
Carrying value at purchase
Fair value at purchase date
date
Determination method of identifiable assets and liabilities at fair value:
None
Contingent liabilities of the acquiree assumed in a business combination
None
Other remarks:
None
(4) Gains and losses arising from the remeasurement of equity held before the
purchase date at fair value
Whether there is a transaction that realizes a business combination step by
step through multiple transactions and obtains control during the reporting
period
□ Yes √ No
(5) Explanations on failure to reasonably determine the combination
consideration or the fair value of the identifiable assets and liabilities of the
acquiree on the purchase date or at the end of the current period
None
(6) Others
None
2. Business combinations under the common control
(1) Business combinations under the common control occurred in the current
period
Unit: RMB
Revenue of the Net profit of the
The basis for a combined party combined party Revenue of the Net profit of the
Proportion of business The basis for from the from the combined party combined party
Combination
Combined party equity combination under determining the beginning of the beginning of the during the during the
date
acquisition the common combination date current period to current period to comparison comparison
control the combination the combination period period
date date
The parent company
of the Aircraft
Industry is the Aviation Industry
Aviation Industry completed the
and the ultimate industrial and
controlling commercial
shareholder is change
Wanfeng Group. registration on
Since both parties April 16 and
Wanfeng Aircraft
55.00% are controlled by April 16 2020 transferred all the 438319818.56 74836418.19 1847397485.11 229910806.41
Industry Co. Ltd.Wanfeng Group shares of the
before and after the Aircraft Industry to
combination and the the Company so
control is not the combination
temporary the date was
transaction is a determined to be
business April 16.combination under
the common control.Other remarks:
In September 2019 Wanfeng Group passed a resolution to increase the capital of Wanfeng Aircraft by injection of 100% equity of
Wanfeng (UK) Aviation Co. Ltd. held by Wanfeng Aviation Industry Co. Ltd. Since Wanfeng Aircraft and Wanfeng (UK) Aviation
Co. Ltd. are both under the ultimate control of Wanfeng Group and the control is not temporary the transaction is a business
combination under the common control. The industrial and commercial
change registration for this equity transfer was completed on September 11
2019 so the combination date was determined as of September 11. In
accordance with the relevant accounting requirements for business
combinations under the common control the financial position operating
results and cash flow of Wanfeng (UK) Aviation Co. Ltd in the consolidated
financial statements of its ultimate controlling party will be included in
Wanfeng Aircraft’s consolidated financial statements since January 1 2019.And the balance and transactions occurred between the two parties will be
offset at the time of the combination. The reporting entity formed after the
combination is deemed to have always existed since the ultimate controlling
party began to exercise control.In April 2020 the Company acquired a 55% equity interest in Wanfeng
Aircraft for RMB 2418075000.00 in cash. Wanfeng Aviation Industry Co.Ltd. completed the industrial and commercial change registration on April 16
and transferred all the shares of Wanfeng Aviation to the Company.Therefore the combination date is determined to be April 16.The above-mentioned business combination under the common control
constitutes a related transaction.
(2) Combination cost
Unit: RMB
Combination cost
--Cash 2418075000.00
Explanation on contingent consideration and its changes
None
Other remarks:
None
(3) Book value of assets and liabilities of the combined party on the combination
date
Unit: RMB
Balance at the combination Balance at the end of the
Items
date previous period
Assets： 4440614324.41 4498316371.34Cash and cash equivalents 217109673.96 398090569.07
Account receivables 155575659.38 131640062.99
Inventory 1213468662.16 1079583549.14
Fixed assets 330606218.74 276904814.44
Intangible assets 833140588.89 839189958.47
Held- for-trading financial 2559383.90 2559383.90
assets
Advances paid 9524841.32 46082520.69
Other account receivables 384336723.38 356043582.32
Other current assets 19073647.50 26832125.14
Long-term equity investments 567810.84 12612542.86
Other equity instrument
4733395.22 4942489.56
investments
Construction in progress 20429169.40 19760466.37
Intangible assets 833140588.89 839189958.47
R&D expenses 12869539.70
Goodwill 1104898547.65 1159535292.23
Long-term prepayments 240934.87 247818.70
Deferred tax assets 131479527.50 143803981.04
Liabilities： 976780258.18 1151205028.35Account payables 128081891.74 175358430.08
Unearned revenue 606781571.25
Contract liabilities 474698284.16
Employee benefits payable 66313543.82 74491858.24
Tax payable 10903698.95 9945612.55
Other payable 59694052.74 68309049.34
Provisions 188391712.74 170512297.69
Deferred income 9296944.93 9369233.55
Deferred tax liabilities 39400129.10 36436975.65
Net assets 3463834066.23 3347111342.99
Less：Minority interest 1557977455.85 1505477431.91Net assets acquired 1905856610.38 1841633911.08
The contingent liabilities of the combined party assumed in the business
combination:
None
Other remarks:
None
3. Reverse purchase
Basic information of the transaction the basis for the reverse purchase of the
transaction whether the assets and liabilities retained by the listed company
constitute a business and its basis the determination of the combination cost
the amount of equity adjustment and its calculation when processing the equity
transaction:
None
4. Disposal of subsidiaries
Whether single disposal of the investment in the subsidiary will lose control of
the investment
□ Yes √ No
Whether the investment in the subsidiary is disposed of step by step through
multiple transactions and the control is lost in the current period
□ Yes √ No
5. Changes in consolidation scope due to other reasons
Explain the changes in the scope of consolidation caused by other reasons
(such as the establishment of a new subsidiary a liquidation subsidiary etc.)
and related conditions:
WNS Grundstücksverwertungsgesellschaft M.B.H. to simplify the group
structure the board of directors of the company decided to dissolve the
company. Related assets and liabilities were absorbed by its parent company
Diamond Verwaltungs GmbH. The company has been liquidated and canceled
in 2019.Diamond Maintenance GmbH to simplify the group structure the board of
directors of the company decided to dissolve the company. Related assets and
liabilities were absorbed by its parent company Diamond Verwaltungs GmbH.The company has been liquidated and cancelled in 2019.Diamond Star Engines GmbH to simplify the group structure the board of
directors of the company decided to dissolve the company. Related assets and
liabilities were absorbed by its parent company Austro Engine GmbH. The
company has been liquidated and cancelled in 2019.Diamond Simulation Holding GmbH to simplify the group structure the board
of directors of the company decided to dissolve the company. Related assets
and liabilities were absorbed by its parent company Diamond Aircraft Industries
GmbH. The company has been liquidated and cancelled in 2019.Diamond Simulation Holding GmbH & Co. KG to simplify the group structure
the board of directors of the company decided to dissolve the company. Related
assets and liabilities were absorbed by its parent company Diamond Aircraft
Industries GmbH. The company has been liquidated and cancelled in 2019.Diamond Aircraft Holdings Inc. to simplify the group structure the company's
board of directors decided to dissolve the company. Related assets and
liabilities were absorbed by Diamond Aircraft Industries Inc. The company has
been liquidated and cancelled in 2020.Diamond D-Jet Corporation to simplify the group structure the board of
directors of the company decided to dissolve the company. Related assets and
liabilities were absorbed by Diamond Aircraft Industries Inc. The company has
been liquidated and cancelled in 2020.6. Others
None
IX. Interest in Other Entities
1. Interest in subsidiaries
(1) The composition of the Group
Main Holding proportion
Place of Business Inclusion
Subsidy operating
registration nature Direct Indirect method place
Weihai Wanfeng
Establish
Auto Wheel Co. Shandong Shandong Manufacture 65.00%
ment
Ltd.Ningbo Aoweier Establish
Zhejiang Zhejiang Manufacture 75.00%
Wheel Co. Ltd. ment
Jilin Wanfeng Auto Establish
Jilin Jilin Manufacture 100.00%
Wheel Co. Ltd. ment
Chongqing
Wanfeng Aolun Establish
Chongqing Chongqing Manufacture 100.00%
Aluminum Wheel ment
Co. Ltd
Wanfeng North Establish
America America Service 100.00%
America Co. Ltd. ment
Wanfeng
Aluminum Wheels Establish
India India Manufacture 100.00%
(India) Pty. Co. ment
Ltd
Shandong Weiwan
Ke Chuanglian
Establish
Engineering Shandong Shandong Manufacture 68.80%
ment
Technology Co.Ltd.Shanghai Fengtu
Automobile Establish
Shanghai Shanghai Commerce 55.00%
Technology Co. ment
Ltd.Wanfeng Meridian
New Material Establish
Zhejiang Zhejiang Manufacture 100.00%
Technology Co. ment
Ltd.Zhejiang Wanfeng
Shangda Coating Establish
Zhejiang Zhejiang Manufacture 100.00%
Technology Co. ment
Ltd.Wanfeng Japan Establish
Japan Japan Service 100.00%
Co. Ltd. ment
Zhejiang Wanfeng Business
Motorcycle Wheel Zhejiang Zhejiang Manufacture 100.00% combinati
Co. Ltd. on
Guangdong Business
Motorcycle Wheel Guangdong Guangdong Manufacture 100.00% combinati
Co. Ltd. on
Weihai Wanfeng
Magnesium Business
Technology Shandong Shandong Manufacture 68.80% combinati
Development Co. on
Ltd.Business
Wanfeng MLTH
UK UK Investment 100.00% combinati
Holdings CO.Ltd.on
Meridian
Business
Lightweight
Canada Canada Investment 100.00% combinati
Technologies
on
Holdings Inc.Meridian
Lightweight Business
Technologies Germany Germany Office 100.00% combinati
Deutschland on
GmbH
Meridian
Business
Lightweight
UK UK Manufacture 100.00% combinati
Technologies UK
on
Limited
Meridian
Business
Technologies
Mexico Mexico Manufacture 100.00% combinati
MexicoS.de R.L
on
de C.V.Magnesium Business
Products of America America Manufacture 100.00% combinati
America Inc. on
Meridian Business
Lightweight Canada Canada Manufacture 100.00% combinati
Technologies Inc. on
Business
Meridian Canada
Canada Canada Investment 100.00% combinati
Inc.on
Shanghai Meridian
Business
Magnesium
Shanghai Shanghai Manufacture 60.00% combinati
Products Company
on
Limited
Business
Wanfeng Aircraft
Zhejiang Zhejiang Manufacture 55.00% combinati
Industry Co. Ltd.on
Business
Wanfeng （UK）
UK UK Investment 55.00% combinati
Aviation Co. Ltd.on
Business
Wanfeng Aircraft Czech Czech
Service 55.00% combinati
Industries s.r.o Republic Republic
on
Diamond Business
Verwaltungs Austria Austria Manufacture 55.00% combinati
GmbH on
Wanfeng Business
（Canada） Canada Canada Investment 55.00% combinati
Aviation Co. Inc. on
Diamond SFCA Business
Flugplatzbetriebs Austria Austria Service 54.40% combinati
GmbH on
Business
Diamond
Austria Austria Manufacture 55.00% combinati
Informatics GmbH
on
Business
2542112 Ontario
Canada Canada Investment 55.00% combinati
Inc.on
Business
Diamond finance-
Austria Austria Finance 55.00% combinati
Services GmbH
on
Diamond Business
Development Austria Austria Manufacture 55.00% combinati
GmbH on
Business
Diamond Aircraft
Austria Austria Manufacture 55.00% combinati
Industries GmbH
on
Business
Austro Engine
Austria Austria Manufacture 55.00% combinati
GmbH
on钻石飞机工业有限
Business
公司（DiamondCanada Canada Manufacture 55.00% combinati
Aircraft Industries
onInc.）
Business
Diamond Airborne
Austria Austria Commerce 55.00% combinati
Sensing GmbH
on
Diamond Aircraft Germany Germany Service 55.00% Business
Industries combinati
Deutschland on
GmbH
Business
Diamond Aviation
Croatia Croatia Service 49.50% combinati
Center d.o.o
on
Business
Diamond Financial
America America Service 55.00% combinati
USA Inc.on
Business
Diamond Aircraft
America America Commerce 55.00% combinati
Sales USA Inc.on
Business
DK café Inc. Canada Canada Service 55.00% combinati
on
Shanghai Business
Dacromet Coating Shanghai Shanghai Manufacture 100.00% combinati
Industry Co. Ltd on
Ningbo Economic
and Technological Business
Development Zone Ningbo Ningbo Manufacture 100.00% combinati
Dacromet Coating on
Industry Co. Ltd
Wuxi Xiongwei
Business
Precision
Jiangsu Jiangsu Manufacture 95.00% combinati
Technology Co.on
Ltd.Changchun Business
Xiongwei Auto Jilin Jilin Manufacture 95.00% combinati
Parts Co. Ltd. on
Wuxi Geoff
Business
Machinery
Jiangsu Jiangsu Manufacture 95.00% combinati
Technology Co.on
Ltd.Yancheng Business
Xiongwei Auto Jiangsu Jiangsu Manufacture 95.00% combinati
Parts Co. Ltd. on
Yizheng Xiongwei
Business
Machinery
Jiangsu Jiangsu Manufacture 95.00% combinati
Technology Co.on
Ltd.Suzhou Yucuiyuan
Business
Trading Enterprise
Shanghai Jiangsu Service 75.03% combinati
(General
on
Partnership)
Explanation on the proportion of shares held in the subsidiary differing from the
proportion of voting rights:
None
Basis for holding half or less of the voting rights but still controlling the investee
and holding more than half of the voting rights but not controlling the investee:
None
Basis for significant structured entities included in the scope of consolidation
and control:
None
Basis for determining whether the company is an agent or a principal:
None
other remarks:
None
(2) Significant but not wholly owned subsidiaries
Unit: RMB
Dividends
Profit and loss Balance of
Minority declared to
attributable to minority
shareholders' minority
Subsidy minority shareholders'
shareholding shareholders in
shareholders in equity at the end
ratio the current
the current period of the period
period
Weihai Wanfeng Auto
35.00% 4834605.90 17500000.00 262479382.40
Wheel Co. Ltd.Ningbo Aoweier Wheel
Co. Ltd. and its 25.00% -645141.19 46732996.94
subsidiaries
Weihai Wanfeng
Magnesium
Technology 31.20% 14498760.18 3744000.00 65621607.55
Development Co. Ltd.and its subsidiaries
Shanghai Meridian
Magnesium Products 40.00% 20533316.47 12736253.01 78187737.82
Co. Ltd
Shanghai Fengtu
Automobile Technology 45.00% 1549586.01 11730384.21
Co. Ltd.Wuxi Xiongwei
Precision Technology 5.00% 5091015.31 5925000.00 50830107.81
Co. Ltd.Wanfeng Aircraft
Industry Co. Ltd. and 45.00% 153193447.38 1639642470.39
its subsidiaries
Total 199055590.06 39905253.01 2155224687.12
Explanation on minority shareholder’s shareholding ratio differing from the
voting rights ratio:
None
Other remarks:
None
(3) Financial information of significant not wholly-owned subsidiaries
Unit: RMB
Closing balance Opening balance
Subsidy Non- Non- Non- Non-Current Current Total Current Current Total
current Total asset current current Total asset current
asset liability liability asset liability liability
asset liability asset liability
Weihai
Wanfeng 794177416 280815017 10749924 324551341 324551341 808518137 301520710 11100388 323910915 323910915
Auto Wheel .41 .83 34.24 .62 .62 .56 .34 47.90 .00 .00
Co. Ltd.Ningbo
Aoweier
108400523 501063987 609464510 414903052 414903052 205810706 514724296 720535003 523713810 523713810
Wheel Co..31 .27 .58 .71 .71 .91 .75 .66 .62 .62
Ltd. and its
subsidiaries
Weihai
Wanfeng
Magnesium
Technology 273765767 119207910 392973678 161488352 10559660. 172048012 208648418 111403926 320052345 128527561 14858171. 143385733
Developmen .21 .91 .12 .27 63 .90 .99 .15 .14 .80 97 .77
t Co. Ltd.and its
subsidiaries
Shanghai 221587127 108619121 330206248 162327657 162327657 164243712 120312891 284556604 133048491 133048491
Meridian .07 .84 .91 .61 .61 .93 .65 .58 .26 .26
Magnesium
Products
Co. Ltd
Shanghai
Fengtu
27006853. 1191624.0 28198477. 2130957.3 2130957.3 23841008. 2048613.9 25889621. 3265625.9 3265625.9
Automobile
75 4 79 3 3 04 4 98 8 8
Technology
Co. Ltd.Wuxi
Xiongwei
837836401 354243955 11920803 273601668 3999207.8 277600876 701692373 383143929 10848363 165215556 4917614.0 170133170
Precision.05 .49 56.54 .54 4 .38 .22 .06 02.28 .54 4 .58
Technology
Co. Ltd.Wanfeng
Aircraft
Industry 21851095 25049942 46901038 798502880 245772024 10442749 20408317 24574845 44983163 934886521 216318506 11512050
Co. Ltd. 76.62 79.14 55.76 .59 .86 05.45 93.25 78.09 71.34 .45 .89 28.34
and its
subsidiaries
Unit: RMB
Current period Prior period
Cash flow Cash flow
Subsidy Other Other Operating generate by Operating generate by
Net profit comprehensive Net profit comprehensive
revenue operating revenue operating
income income
activities activities
Weihai Wanfeng
Auto Wheel Co. 558754738.19 13813159.72 13813159.72 12764916.42 774637527.87 37182310.51 37182310.51 30282570.93
Ltd.Ningbo Aoweier
Wheel Co. Ltd. 299608751.12 -2588674.19 -2588674.19 45138682.32 245254508.45 -28986937.83 -28986937.83 43878947.19
and its
subsidiaries
Weihai Wanfeng
Magnesium
Technology
337661298.68 48590385.18 48590385.18 43609591.42 335979824.72 46985561.24 46985561.24 33067452.70
Development Co.Ltd. and its
subsidiaries
Shanghai
Meridian
323295619.36 50219906.78 50219906.78 80207783.88 332422363.18 35378480.58 35378480.58 45802503.40
Magnesium
Products Co. Ltd
Shanghai Fengtu
Automobile
56541260.51 3443524.46 3443524.46 6678598.10 40693342.65 2329133.92 2329133.92 -6185631.51
Technology Co.Ltd.Wuxi Xiongwei
Precision
753572627.73 117389834.06 117389834.06 77175260.06 823033014.32 146459146.34 146459146.34 233554648.19
Technology Co.Ltd.Wanfeng Aircraft
Industry Co. Ltd.1630390974.68 340429883.23 298543578.19 152598936.24 1847397485.11 229910806.40 294949841.61 57966752.80
and its
subsidiaries
Other remarks:
Main financial information of the above-mentioned subsidiaries. This information is the amount before offsetting between the
companies in the Group (excluding the goodwill obtained due to business combinations not under the common control).
(4) Significant restrictions on the use of the Group assets and the settlement of the Group debts
None
(5) Financial support or other support provided to structured entities included in
the scope of consolidated financial statements
None
Other remarks:
None
2. Transactions resulting in changes in subsidiaries’ equity but without
losing control
(1) Changes in subsidiaries’ equity
As stated in Note VII. 55 in 2020 Zhejiang Wanfeng Motorcycle Wheel Co.Ltd. a subsidiary of the Company invested RMB 399800.00 in cash to acquire
the 0.1% partnership share of Suzhou Yucuiyuan Trading Enterprise (General
Partnership) held by Wanfeng Aviation. The net asset share of Suzhou
Yucuiyuan Trading Enterprise (general partnership) obtained in this acquisition
is RMB 383871.26 based on the proportion of the partnership share. The
difference between the purchase cost and the net asset share calculated
according to the proportion of the partnership share obtained was RMB
15928.74 to offset the share premium of the capital reserve.
(2) Effect of transactions on non-controlling interest and equity attributable to
parent company
Unit: RMB
Other remarks:
None
3. Interest in significant joint venture or associate
(1) Significant joint venture or associate
Holding proportion Accounting
treatment of
Principal
Joint venture or Place of Business investment
place of
associates registration nature in joint
business Direct Indirect
ventures or
associaes
Diamond Flight Equity
Canada Canada Service 25.00%
Centre London INC. method
CETC Wuhu
General Aviation
Equity
Industry Technology Anhui Wuhu Anhui Wuhu Manufacture 20.00%
method
Research Institute
Co. Ltd.Explanation on shareholding ratio in a joint venture or associate differing from
the voting rights ratio:
None
Basis for holding less than 20% of the voting rights but having significant
influence or holding 20% or more of the voting rights but not having significant
influence:
None
(2) Financial information of significant joint venture
Unit: RMB
Closing balance/ Current period Opening balance / Prior period
Other remarks:
None
(3) Financial information of significant associate
Unit: RMB
Closing balance/ Current
Opening balance / Prior period
period
Other remarks:
None
(4) Financial information of non-significant joint venture and associate
Unit: RMB
Closing balance/ Current
Opening balance / Prior period
period
Joint venture： -- --The total of the following items
calculated according to the -- --
shareholding ratio
Associate： -- --The total of the following items
calculated according to the -- --
shareholding ratio
Other remarks:
None
(5) Explanation of significant restrictions on the ability of joint ventures or
associates to transfer funds to the company
None
(6) Excess losses incurred by joint ventures or associates
Unit: RMB
Cumulative Unrecognized loss in
Accumulated
Joint venture or unrecognized loss the current period (or
unrecognized loss at
associate accumulated in the net profit shared in the
the end of the period
previous period current period)
--
Other remarks:
None
(7) Unrecognized commitments related to joint venture investment
No
(8) Contingent liabilities related to investment in joint ventures or associates
None
4. Significant joint operation
Principal Holding proportion
Place of Business
Joint operation place of
registration nature
business Direct Indirect
Explanation of the shareholding ratio or the share entitled in the joint operation
differing from the voting rights ratio:
No
If a joint operation is a separate entity the basis for classification as a joint
operation:
None
other remarks
None
5. Interest in the structured entities that are not included in the
consolidated financial statements
Relevant explanations for structured entities not included in the scope of the
consolidated financial statements:
None
6. Others
No
X. Financial Instrument Related Risk
1. Financial instruments classification
The book values of various financial instruments on the balance sheet date are
as follows:
2020 FY
Financial asset
Unit: RMB
Financial assets
Financial assets Financial measured at fair value
measured at fair value assets and changes
Total
and changes recognized measured at recognized through
through profit and loss amortized cost other comprehensive
income
Standards Designati Standards Designati
requirement on requirement on
Cash - - 1674978958.17 - - 1674978958.17
Held-for-
trading
5312974.87 - - - - 5312974.87
financial
assets
Account
- - 2314980882.28 - - 2314980882.28
receivalbe
Account
receivable - - - 382204743.00 - 382204743.00
financing
Other account
- - 68318081.18 - - 68318081.18
receivable
Investment in
other equity - - - 4733395.22 - 4733395.22
instruments
Total 5312974.87 - 4058277921.63 386938138.22 - 4450529034.72
Financial liability
Unit: RMB
Financial liability measured at Financial
fair value and changes liabilities
Total
recognized through profit and measured at
loss amortized cost
Standards
Designation
requirement
Short-term borrowings - - 3544296670.02
3544296670.02
Notes payable - - 192867169.90 192867169.90
Account payable - - 935542222.20 935542222.20
Other account payable - - 384220500.31 384220500.31
Non-current liability due
- - 694425998.19 694425998.19
within one year
Long-term borrowings - - 1179201272.08
1179201272.08
Total - - 6930553832.70
6930553832.70
2019 FY
Financial asset
Unit: RMB
Financial assets
Financial assets Financial measured at fair value
measured at fair value assets and changes
Total
and changes recognized measured at recognized through
through profit and loss amortized cost other comprehensive
income
Standards Designati Standards Designati
requirement on requirement on
Cash - - 2 452754083.38 - - 2 452754083.38
Held-for-
trading
63034283.90 - - - - 63034283.90
financial
assets
Account
- - 2 555697203.97 - - 2 555697203.97
receivalbe
Account
receivable - - - 3 7 8904590.58 - 378904590.58
financing
Other account
- - 916325582.02 - - 916325582.02
receivable
Investment in
other equity - - - 4942489.56 - 4942489.56
instruments
Total 63034283.90 - 5 924776869.37 383847080.14 - 6 371658233.41
Financial liability
Unit: RMB
Financial liability measured at Financial
fair value and changes liability
Total
recognized through profit and measured at
loss amortized cost
Standards
Designation
requirement
Short-term borrowing - - 3070118768.19
3070118768.19
Held-for-trading
1324581.60 - - 1324581.60
financial liability
Notes payable - - 218601865.08 218601865.08
Account payable - - 1083181883.19
1083181883.19
Other account payable - - 759261155.63 759261155.63
Non-current liability due
- - 571968504.83 571968504.83
within one year
Long-term borrowings - - 1165220492.00
1165220492.00
Total 1324581.60 - 6869677250.52
6868352668.92
2. Financial instrument offset
None
3. Financial instrument transfer
Financial assets that have been transferred but not fully derecognized
As stated in Note vii 6 (1) as of December 31 2020 to settle accounts payable
and other account payables the book value of bank acceptance bill that the
Group has endorsed to suppliers but not fully derecognized is RMB
57264049.38. The book value of the commercial acceptance bill is RMB
1000000.00. The book value of the bank acceptance bill that the Group has
discounted to the bank but not fully derecognized is RMB 3000000.00. On
December 31 2020 its maturity is from 1 to 11 months. The Group believes
that the Group retains almost all its risks and rewards including the associated
default risk. Therefore it continues to fully recognize it and its related settled
accounts payable and other payables as well as short-term borrowings. After
endorsement or discounting the Group no longer reserves the right to use it
including the right to sell transfer or pledge it to other third parties.The transferred financial assets that have been fully derecognized but continue
to be involved
As of December 31 2020 to settle accounts payable and other account
payables the book value of bank acceptance bill that the Group has endorsed
to suppliers and fully derecognized is RMB 706520717.60. (As of December
31 2019: to settle accounts payable and other account payables the book
value of bank acceptance bill that the Group has endorsed to suppliers and fully
derecognized is RMB 586953297.41). On December 31 2020 its maturity
date is 1 to 12 months. According to the relevant provisions of the Negotiable
Instruments Law if the accepting bank refuses to pay its holder has the right
to recourse against the Group ("continued involvement "). The Group believes
that the Group has transferred almost all of its risks and rewards. Therefore it
has derecognized its book value and related settled accounts payable and other
payables. The maximum loss and undiscounted cash flow of continuing
involvement and repurchase are equal to its book value. The Group believes
that continued involvement in fair value is not significant.In 2020 the Group did not recognize gains and losses on the transfer date. The
Group did not continue to be involved in the derecognized financial assets for
the current year and accumulatively recognized income or expenses.Endorsements occurred roughly evenly this year.4. Financial instrument risk
The Group faces various financial instrument risks in its daily activities mainly
including credit risk liquidity risk and market risk (including exchange rate risk
interest rate risk and commodity price risk). The main financial instruments of
the Group include monetary funds equity investment loans notes receivable
and accounts receivable notes payable and accounts payable etc. The risks
associated with these financial instruments and the risk management strategies
adopted by the Group to reduce these risks are as follows. The Group mitigates
the risks of financial instruments through appropriately diversified investment
and business portfolios and formulates risk management policies to reduce the
risks concentrated in any single industry specific region or specific counterparty.Credit risk
The Group only conducts transactions with recognized and reputable third
parties and related parties. According to the Group's policy all customers who
require credit-based transactions are subject to credit review. In addition the
Group continuously monitors the balance of accounts receivable to ensure that
the Group does not face significant risks of doubtful debts. For transactions that
are not settled in the functional currency of the relevant business unit the Group
does not provide credit transaction conditions unless specifically approved by
the credit control department of the Group.Since the counterparties of monetary funds bank acceptance bills receivable
and derivative financial instruments are banks with good reputations and high
credit ratings these financial instruments have relatively low credit risks.Other financial assets of the Group include accounts receivable and other
receivables. The credit risk of these financial assets originates from the default
of the counterparty and the maximum risk exposure is equal to the book value
of these instruments.The maximum credit risk exposure that the Group faces on each balance sheet
date is the total amount received from customers minus the amount of doubtful
debt provision.Since the Group only conducts transactions with recognized and reputable third
parties and related parties there is no need for collateral. Credit risk is
centralized and managed according to customers. As of December 31 2020
the Group has a specific concentration of credit risk. 6.11% (2019: 5.93%) and
18.56% (2019: 19.08%) of the Group’s accounts receivable are derived from
accounts receivable of the largest and the top five customers respectively. The
Group does not hold any collateral or other credit enhancements for the balance
of accounts receivable.For quantitative data on the credit risk exposure of the Group due to accounts
receivable and other receivables please refer to Notes VII 5 and 8.Standards to judge the significant increase of credit risk
The Group assesses on each balance sheet date whether the credit risk of
relevant financial instruments has increased significantly since the initial
recognition. When determining whether the credit risk has increased
significantly since the initial recognition The Group considers reasonable and
well-founded information obtained without unnecessary additional cost or effort
including qualitative analysis based on historical data of the Group external
credit risk ratings and forward-looking information. Based on a single financial
instrument or a combination of financial instruments with similar credit risk
characteristics the Group compares the risk of default on the balance sheet
date and the risk of default on the initial recognition date to determine the
changes in the risk of default during expected life of the financial instrument.When the following qualitative standards are triggered the Group believes that
the credit risk of financial instruments has increased significantly:
The qualitative standards are mainly the major adverse changes in the owing
party’s business or financial situation the list of early warning customers etc.Definition of credit-impaired assets
In order to determine whether credit impairment has occurred the standard
used by the Group is consistent with the internal credit risk management
objectives for relevant financial instruments and qualitative indicators are also
considered. When the Group assesses whether an owing party has credit
impairment it mainly considers the following factors:
(1) The issuer or owing party has major financial difficulties;
(2) The owing party breached the contract such as defaulting or overdue
payment of interest or principal;
(3) The creditor out of economic or contractual considerations related to the
owing party’s financial difficulties gives the owing party a concession that the
creditor would not make under any other circumstances;
(4) The owing party is likely to go bankrupt or other financial reorganization;
(5) The issuer or owing party’s financial difficulties lead to the disappearance of
the active market for the financial asset;
(6) A financial asset is purchased or originated at a steep discount and the
discount reflects the fact that credit losses have occurred.The credit impairment of financial assets may be caused by a combination of
multiple events and may not be caused by a separately identifiable event.Parameters of expected credit loss measurement
According to whether there has been a significant increase in credit risk and
whether credit impairment has occurred the Group measures impairment
provisions for different assets with 12-month or entire duration expected credit
losses. The key parameters of expected credit loss measurement include
default probability loss given default and default risk exposure. The Group
considers the quantitative analysis and forward-looking information of historical
statistical data (such as counterparty ratings guarantee methods and types of
collaterals repayment methods etc.) to establish models of default probability
loss given default and default risk exposure.The relevant definitions are as follows:
(1) The probability of default refers to the possibility that the owing party will not
be able to perform its payment obligations in the next 12 months or throughout
the remaining duration. The Group’s default probability is adjusted based on
the expected credit impairment model results. And forward-looking information
is added to reflect the default probability of owing parties under the current
macroeconomic environment;
(2) The loss given default refers to the Group's expectations of the extent of
losses incurred by default risk exposures. The loss given defaulty varies
according to the type of counterparty the method and priority of recourse and
the collateral. The loss given default is the percentage of the risk exposure loss
at the time of the default calculated based on the next 12 months or the entire
duration;
(3) Default risk exposure refers to the amount that the Group should be repaid
when default occurs in the next 12 months or throughout the remaining duration.The assessment of a significant increase in credit risk and the calculation of
expected credit losses involve forward-looking information. Through historical
data analysis the Group has identified key economic indicators that affect the
credit risks and expected credit losses of various business types.The impact of these economic indicators on the probability of default and loss
given default vary by different types of businesses. In this process the Group
referred to authoritative forecasts. Based on the results the Group predicted
these economic indicators and determined the impact of these economic
indicators on the probability of default and loss given default.2020 FY
The maximum risk exposure of the Group's financial assets and the
classification according to the credit risk level at the end of the year are as
follows:
Unit: RMB
Expected credit
loss in the next Lifetime expected credit loss
Total
12 months
Phase I Phase II Phase III Simple method
Cash and
cash
1674978958.17 - - - 1674978958.17
equivalent
s
Account
receivable - - - 382204743.00 382204743.00
financing
Account
- - - 2314980882.28 2314980882.28
receivable
Other
account 55724863.72 6810285.82 5782931.64 - 68318081.18
receivable
Total 1730703821.89 6810285.82 5782931.64 2697185625.28 4440482664.63
2019 FY
Unit: RMB
Expected
credit loss in
Lifetime expected credit loss
the next 12 Total
months
Phase I Phase II Phase III Simple method
Cash and
cash 2452754083.38 - - - 2452754083.38
equivalents
Account
receivable - - - 378904590.58 378904590.58
financing
Account - - - 2555697203.97 2555697203.97
receivable
Other
account 570392006.87 342677517.73 3256057.42 916325582.02
receivable
Total 3023146090.25 342677517.73 3256057.42 2934601794.55 6303681459.95
Liquidity risk
The Group uses circular liquidity planning tools to manage the risk of shortage
of funds. This tool considers both the maturity date of its financial instruments
and the estimated cash flows generated by the Group's operations.The Group’s goal is to use bank borrowings notes payable bonds payable and
other financing methods to maintain a balance between continuity and flexibility
of financing. In 2020 81.70% (2019: 81.40%) of the Group's debt will mature in
less than one year.The following table summarizes the maturity analysis of financial liabilities
based on undiscounted contractual cash flows:
2020 FY
Unit: RMB
More
Less than 3 3 months to 1 1 year to 5
Spot than 5 Total
months year years
years
Short-term
- 492747376.81 3117045843.55 - - 3 609793220.36
borrowings
Notes payable - 111693820.23 81173349.67 - - 192867169.90
Account 134192679.9
800394943.15 954599.08 - - 935542222.20
payable 7
Other account 157657562.9
154861277.46 71701659.88 - - 384220500.31
payable 7
Non-current
liability due 33930384.46 159019310.94 520711222.10 - - 713660917.50
within 1 year
Long-term 1307099209.2
- - - - 1307099209.23
borrowings 3
325780627.4 1718716728.5
Total 3791586674.28 1 307099209.2 - 7 143183239.50
0 93
Shor-term
- 4 92747376.81 3117045843.55 - - 3 609793220.36
borrowings
2019 FY
Unit: RMB
More
Less than 3 3 months to 1 1 year to 5
Spot than 5 Total
months year years
years
Short-term
- 418136596.22 - - 3 128291894.30
borrowings 2710155298.08
Held-for-
trading - 852989.70 471591.90 - - 1324581.60
financial
liability
Notes
- 107274147.22 111327717.86 - - 218601865.08
payable
Account
200124368.72 883057514.47 - - - 1 083181883.19
payable
Other
account 196397643.81 508620199.87 54243311.95 - - 759261155.63
payable
Non-current
liability due - 254361971.74 333471823.50 - - 587833795.24
within 1 year
Long-term
- - - 1320050160.04 - 1 320050160.04
borrowings
Total 396522012.53 1320050160.04 - 7 098545335.08
2172303419.22 3209669743.29
Market risk
Interest rate risk
The risk of changes in market interest rates faced by the Group is mainly related
to the Group's long-term liabilities with floating interest rates.The following table shows the sensitivity analysis of interest rate risk reflecting
the impact on net profit and loss (through the impact on floating-rate borrowing)
and the net after-tax impact of other comprehensive income under the
assumption that all other variables remain unchanged.Unit: RMB
Net after tax other
Basis point Net profit and Total shareholders'
comprehensive
increase/ loss increase/ equity increase/
income increase/（decrease） （decrease） （decrease）（decrease）
December 31 2020 0.50% （2182169.15） - （2182169.15）
USD borrowings （0.50%） 2182169.15 - 2182169.15
December 31 2019 0.50% （1996573.70） - （1996573.70）
USD borrowings （0.50%） 1996573.70 - 1996573.70
Currency exchange risk
The Group faces transactional exchange rate risks. Such risks are caused by
business units' sales or purchases in currencies other than their functional
currency. Approximately 52% (2019: 59%) of the Group’s sales are
denominated in currencies other than the functional currency and about 100%
(2019: 100%) of the cost is priced in the operating unit’s functional currency.
The following table shows the sensitivity analysis of exchange rate risk
reflecting the impact on net profit and loss (due to changes in the fair value of
monetary assets and liabilities) and net after-tax other comprehensive income
under the assumption that all other variables remain unchanged when the
exchange rate changes reasonably.2020 FY
Unit: RMB
Exchange Net after tax other
Net profit and loss
rate comprehensive Equity
increase/(decreas
increase/(d income increase/(decrease)
e)
ecrease) increase/(decrease)
RMB depreciaiton against
5% 15834638.29 - 15834638.29
USD
RMB appreciation against
（5%） （15834638.29） - （15834638.29）USD
CAD depreciaiton against
5% （3456879.75） - （3456879.75）
USD
CAD appreciation against
（5%） 3456879.75 - 3456879.75
USD
INR depreciaiton against
5% （4624522.88） - （4624522.88）
USD
INR appreciation against
（5%） 4624522.88 - 4624522.88
USD
RMB depreciaiton against
5% （16653106.66） - （16653106.66）
EUR
RMB appreciation against
（5%） 16653106.66 - 16653106.66
EUR
2019 FY
Unit: RMB
Net after tax other
Exchange
Net profit and loss comprehensive Equity
rate
increase/(decrease income increase/(decrease
increase/(
) increase/(decrease )
decrease)
)
RMB depreciaiton against
5% 13224707.73 - 13224707.73
USD
RMB appreciation against
（5%） （13224707.73） - （13224707.73）USD
CAD depreciaiton against
5% （8709300.19） - （8709300.19）
USD
CAD appreciation against
（5%） 8709300.19 - 8709300.19
USD
INR depreciaiton against
5% （4944381.75） - （4944381.75）
USD
INR appreciation against
（5%） 4944381.75 - 4944381.75
USD
RMB depreciaiton against
5% （27396053.18） - （27396053.18）
EUR
RMB appreciation against
（5%） 27396053.18 - 27396053.18
EUR
5. Capital management
The main objective of the Group's capital management is to ensure continuing
operations and maintaining a healthy capital ratio to support business
development and maximize shareholder value.The Group manages the capital structure and adjusts it according to changes
in the economic situation and the risk characteristics of related assets. To
maintain or adjust the capital structure the Group may adjust the distribution
of profits to shareholders return capital to shareholders or issue new shares.In 2020 and 2019 there is no change in capital management objectives
policies or procedures.The Group uses a leverage ratio to manage capital. The leverage ratio refers
to the ratio of net debt to shareholders’ equity plus net debt. Net debt refers to
the net amount of short-term loans long-term loans due within one year long-
term loans and bonds payable after deducting cash and cash equivalents.The Group’s leverage ratio at the balance sheet date is as follows:
Unit: RMB
Items 2020FY 2019FY
Short-term borrowings 3544296670.02 3070118768.19
Long-term borrowings due within one
694425998.19 571968504.83
year
Long-term borrowings 1179201272.08 1165220492.00
Less: Cash and cash equivalents 1674978958.17 2452754083.38
Net debt 3742944982.12 2354553681.64
Shareholder’s equity 7508833717.32 10007942082.74
Net debt and shareholder’s equity 11251778699.44 12362495764.38
Leverage ratio 33.27% 19.05%
XI. Disclosure of Fair Values
1. Fair values of the assets and liabilities at the end of the period
Unit: RMB
Fair value as of the balance sheet date
Items
Level 1 Level 2 Level 3 Total
I. Constant fair
value -- -- -- --
measurement
i. Held-for-trading
5312974.87 381704743.00 387017717.87
financial assets
1. Financial assets
measured at fair
value and changes
5312974.87 381704743.00 387017717.87
recognized
through profit and
loss
（1）Debt
instrument 381704743.00 381704743.00
investments
（2）equity
instrument 2630574.87 2630574.87
investments
（3）Derivative
2682400.00 2682400.00
financial assets
iii.Other equity
4733395.22 4733395.22
investments
II. Non-constant
measurement at -- -- -- --
fair values
2. Basis for determining the market price of items under first level
constant and non-constant measurement at fair value.Not applicable
3. Items under second level constant and non-constant measurement at
fair value valuation technique adopted and qualitative and
quantitative information of significant parameters
Not applicable
4. Items under third level constant and non-constant measurement at fair
value valuation technique adopted and qualitative and quantitative
information of significant parameters.Not applicable
5. Items under third level constant measurement at fair value sensitivity
analysis of adjusted beginning and ending book value information and
unobservable parameters.Not applicable
6. Items under constant measurement at fair value switched levels in the
reporting period reasons and policy for switch timing
Not applicable
7. Change of valuation techniques and reasons
Not applicable
8. The fair value of financial assets and financial liabilities not measured
at fair value
Not applicable
9. Others
Fair value valuation
The following are the book values and fair values of various types of financial
instruments of the Group except for financial instruments with little difference
between book value and fair value and equity instruments without quotation in
an active market and can not reliably be measured.Unit: RMB
2020 FY 2019 FY
Carrying value Fair value Carrying value Fair value
Long-term
1179201272.08 1143282342.39 1165220492.00 1149530944.40
borrowings
The management has evaluated cash and cash equivalents notes receivable
accounts receivable notes payable other receivables other current assets
short-term loans accounts payable other payables and non-current liabilities
due within one year etc. Since the remaining period is not long the fair value
is similar to the book value.The fair value of financial assets and financial liabilities is determined by the
amount of voluntary asset exchange or debt settlement by both parties familiar
with the situation in a fair transaction rather than the amount under forced sale
or liquidation.Long-term borrowings are measured at amortized cost. The fair value is
determined by the discounted future cash flow method and the market rate of
return of other financial instruments with similar contractual terms credit risks
and remaining maturities is used as the discount rate which belongs to the third
level. The significant unobservable inputs for the fair value measurement of
long-term borrowings are the prepayment rate and the loss given default. The
higher the prepayment rate and loss given default the lower the fair value. On
December 31 2020 the non-performance risk such as long-term loans was
assessed as not significant.The Group has entered foreign exchange forward contracts with multiple
counterparties. Foreign exchange forward contracts are measured using the
discounted cash flow model and option pricing model which belong to the
second level. The model covers observable input values in multiple markets
including spot and forward exchange rates. The book value of a foreign
exchange forward contract is the same as the fair value.The financial instruments measured at fair value by the Group and the
Company in this year and last year did not have significant transfers between
various levels.XII. Related Party Relationships and Transactions
1. Parent Company
Unit: RMB
Shareholding Voting right
Parent Place of Business Registered proportion proportion
Company registration nature capital over the over the
Company Company
Wanfeng
Holding Group Zhejiang China Manufacture RMB 120 million 33.37% 33.37%
Co. Ltd
Description of the Company’s parent company
Please refer to Note III. Basic information of the Group.The ultimate controlling parties of the Company are Ms. Chen Ailian and Wu
Liangding's family.other remarks:
None
2. Information about the Company's subsidiaries
For details of the Company's subsidiaries please refer to Note IX. 1.3. Joint ventures and associates of the Company
For details of the significant joint ventures or associates of the Company please
refer to Note IX and 3.The situation of other joint ventures or associates that have related party
transactions with the Company during the current period or the balance of the
related party transactions with the Company in the previous period is as follows:
Joint venture or associates Relationship with the Company
--
Other remarks:
No
4. Other related parties of the Company
Other related parties Relationship with the Company
Wanfeng Jinyuan Holding Group Co. Ltd. Company controlled by Chen Ailian
Zhejiang Wanfeng Technology Development Co. Subsidiary of Wanfeng Jinyuan Holding Group Co.Ltd. Ltd
Zhejiang Rifa Holding Group Co. Ltd. Company controlled by Wu Liangding
Zhejiang Rifa Precision Machinery Co. Ltd. Subsidiary of Zhejiang Rifa Holding Group Co. Ltd.Xinchang Textile Investment Fund Association Wu Liangding Director of the Association
Beijing Wanfeng Innovation Investment Co. Ltd. Subsidiary of Wanfeng Jinyuan Holding Group Co.Ltd.Zhejiang Wanfeng Industrial Co. Ltd. Company controlled by the parent company
Zhejiang Wanfeng Real Estate Co. Ltd. Company s controlled by the parent company
Zhejiang Wanfeng General Aviation Co. Ltd. Company controlled by the parent company
Zhejiang Wanfeng Property Management Co. Ltd. Company controlled by the parent company
Wanfeng Aviation Industry Co. Ltd. Company controlled by the parent company
Shanghai Wanfeng Aviation Club Co. Ltd. Company controlled by the parent company
Shengzhou Hechuang Trading Co. Ltd. Subsidiary of Wanfeng Jinyuan Holding Group Co.Ltd.Wanfeng General Airport Management Co. Ltd. Company controlled by the parent company
Zhejiang Wanfeng New Energy Automobile Company controlled by the parent company
Technology Co. Ltd.Wanfeng General Aviation Co. Ltd. Company controlled by the parent company
Shaoxing Jiajing Trading Co. Ltd. Company controlled by Zhang Linglin an employee
of the parent company
Wanfeng Financial Leasing Co. Ltd. Subsidiary of Wanfeng Jinyuan Holding Group Co.Ltd.Xinchang County Chitong Intelligent Equipment Co. Company controlled by the parent company
Ltd.Zhejiang Rifa Precision Machine Tool Co. Ltd. Subsidiary of Zhejiang Rifa Holding Group Co. Ltd.Zhejiang Wanfeng Precision Manufacturing Co. Ltd. Subsidiary of Wanfeng Jinyuan Holding Group Co.Ltd.Wanfeng General Airport Management Co. Ltd. Subsidiary of Wanfeng Aviation Industry Co. Ltd.Other remarks:
Zhang Linglin an employee of the parent company belongs to other natural
persons who have a special relationship with the listed company and may
cause the listed company to tilt its interests based on the principle of substance
over form.5. Related party transactions
(1) Purchase and sale of goods rendering and receiving services
Purchase of goods and receiving of services
Unit: RMB
Approved Over the
Related Content of
Current period Transaction Transaction Prior period
parties transaction
Limit Limit or No
Wanfeng Purchase
Aviation aircraft and
4513168.35 No 2903871.79
Industry Co. aviation
Ltd. materials
Shengzhou
Purchase molds
Hechuang
and equipment 4132865.14 No 6385194.83
Trading Co.accessories
Ltd.Zhejiang
Purchase raw
Wanfeng
materials molds
Technology 1268509.02 No 3178959.25
and equipment
Development
accessories
Co. Ltd.Zhejiang Rifa
Purchase
Precision
equipment 332458.38 No 39668.15
Machine Tool
accessories
Co. Ltd.Zhejiang Rifa Purchase raw
Precision materials and
6796.46 No 383784.63
Machinery Co. equipment
Ltd. accessories
Wanfeng
General
Purchase goods No 6792.45
Aviation Co.Ltd.Wanfeng
General Air charter
13908446.06 No 3524382.29
Aviation Co. service
Ltd.Zhejiang
Wanfeng Property
Property Management 3717673.85 No 6805275.94
Management Service
Co. Ltd.Network and
equipment
Wanfeng Group 3678420.37 No 5195743.42
maintenance
services
Zhejiang
Wanfeng Equipment
Technology maintenance 964543.62 No 238244.40
Development service
Co. Ltd.Wanfeng Network and
Aviation equipment
488304.32 No
Industry Co. maintenance
Ltd. services
Zhejiang Rifa
Equipment
Precision
maintenance 391407.07 No
Machine Tool
service
Co. Ltd.Zhejiang
Wanfeng
Airport service
General 257477.10 No 280476.98
fee
Aviation Co.Ltd.Wanfeng
Airport aircraft
General Airport
take-off and 60687.93 No 12877.36
Management
landing service
Co. Ltd.Sale of goods and rendering of services
Unit: RMB
Content of
Related parties Current period Prior period
transaction
Zhejiang Wanfeng
Sales of aircraft and
General Aviation Co. 3734690.02 24292.04
aviation materials
Ltd.Shengzhou Hechuang
Sales of mold 1995689.49 4614862.09
Trading Co. Ltd.Wanfeng Aviation
Sales of parts 5183717.63
Industry Co. Ltd.Diamond Flight Centre
Sales of repair parts 1627441.28
London INC.Zhejiang Wanfeng Sales of finished
Technology products raw materials 863469.44
Development Co. Ltd. and molds
Zhejiang Wanfeng
For metrological
Precision Manufacturing 51880.00
maintenance service
Co. Ltd.Diamond Flight Centre
Training Services 1231000.08
London INC.Wanfeng Aviation Providing labor
619539.05
Industry Co. Ltd. services
Remarks of related transactions related to the purchase and sale of goods and
the provision and acceptance of services
None
(2) Related entrusted management/contracting and entrusted
management/outsourcing situation
The Company's entrusted management/contracting
Unit: RMB
Entrustment
Pricing basis /contracting
Types of
Principal/Out Entrustment/ Entrustment/ for income
Name of entrusted/co
sourcer's contracting contracting entrustment recognized
contractor ntracted
Name start date end date /contracting in the
assets
income current
period
--
Description of related entrustment /contracting situation
None
The Company's entrusted management / outsourcing
Unit: RMB
Entrustment
Pricing basis
Types of End of /outsourcing
Principal/Out Entrustment/ for
Name of entrusted/ou entrustment/ fees
sourcer's outsourcing entrustment
contractor tsourced outsourcing recognized
Name start date /outsourcing
assets end date in the current
fees
period
--
Description of related entrustment /outsourcing situation
No
(3) Related party leases
The Company as lessor
Unit: RMB
Lease income for Lease income for the
Lessees Types of asset leased
current period prior period
Suzhou Yucuiyuan
Trading Enterprise Real estate 2522935.83 1225000.00
(General Partnership)
Aircraft industry Real estate 512841.60
Aircraft industry Aircraft 406407.74
Aircraft industry Aircraft 88495.58
The Company as lessee
Unit: RMB
Lease expenses for Lease expenses for the
Lessors Types of asset leased
current period prior period
Xinchang Textile
Investment Fund Real estate 290537.80 290537.80
Association
Xinchang Textile
Investment Fund Real estate 134497.40 134497.40
Association
Wanfeng Jinyuan
Real estate 1192660.55 1183165.14
Holding Group Co. Ltd.Xinchang County
Chitong Intelligent Real estate 2100000.00 2100000.00
Equipment Co. Ltd.Xinchang County
Chitong Intelligent Real estate 2508400.00 2508400.00
Equipment Co. Ltd.Zhejiang Wanfeng
Real estate 1333333.32
Industrial Co. Ltd.Zhejiang Wanfeng
Real estate land etc. 5885714.29 5777460.10
Industrial Co. Ltd.Wanfeng Aviation
Real estate 1929524.49 1929524.49
Industry Co. Ltd.Wanfeng General
Aircraft 2551778.76
Aviation Co. Ltd.Remarks on related party leases
None
(4) Related party guarantees
The Company as guarantor
Unit: RMB
Whether the
Amount Commencement
Guaranteed party Maturity date guarantee is
guaranteed date
mature
Wanfeng Group u 313500000.00 January 15 2019 January 15 2020 Yes
Wanfeng Group u 316000000.00 October 24 2019 October 23 2020 Yes
Wanfeng Group v USD100000000.00 July 19 2019 July 18 2024 Yes
Wanfeng Group w USD100000000.00 November 18 2020 December 31 2024 No
The Company as guaranteed party
Unit: RMB
Whether the
Amount Commencement
Guarantor Maturity date guarantee is
guaranteed date
mature
Wanfeng Group a 10000000.00 May 10 2019 May 07 2022 No
Wanfeng Group b 100000000.00 August 05 2019 May 03 2020 Yes
Wanfeng Group c 250000000.00 February 15 2019 February 15 2021 No
Wanfeng Group d 100000000.00 December 23 2019 March 19 2022 No
Zhejiang Rifa
September 10
Holding Group Co. 245000000.00 December 05 2019 No2022
Ltd. e
Zhejiang Rifa
Holding Group Co. USD30000000.00 May 15 2015 May 15 2025 No
Ltd. f
Wanfeng Group g 100000000.00 April 27 2020 March 19 2022 No
Wanfeng Group h 33000000.00 October 13 2020 October 13 2023 No
Wanfeng Group i 65000000.00 March 20 2020 June 19 2020 Yes
Wanfeng Group j 35000000.00 March 25 2020 November 09 2020 Yes
Wanfeng Group
and Wanfeng
132000000.00 October 14 2020 October 13 2022 No
Jinyuan Holdings
Group Co. Ltd. k
Zhejiang Rifa
September 21 September 17
Holding Group Co. 240000000.00 No
2020 2021
Ltd. l
Zhejiang Rifa
Holding Group Co. 960000000.00 April 16 2020 April 23 2023 No
Ltd. m
Chen Ailian n 1200000000.00 April 16 2020 April 23 2023 No
Remarks on related party guarantees
a. From May 10 2019 to May 7 2022 Wanfeng Group provided a free
guarantee for Wanfeng Auto Wheel’s loan from the Agricultural Bank of China
with a guaranteed amount of RMB 10000000.b. From August 5 2019 to May 3 2020 Wanfeng Group provided a free
guarantee for Wanfeng Auto Wheel’s loan from China Merchants Bank with a
guaranteed amount of RMB 100000000.00. The guarantee has expired and
been released.c. From February 15 2019 to February 15 2021 Wanfeng Group provided a
free guarantee for Wanfeng Auto Wheel’s loan from the Bank of China with a
guaranteed amount of RMB 250000000.00.d. From December 23 2019 to March 19 2022 Wanfeng Group provided a
free guarantee for Wanfeng Auto Wheel’s loan from the Bank of Hangzhou
with a guarantee amount of RMB 100000000.00.e. From December 5 2019 to September 10 2022 Zhejiang Rifa Holding
Group Co. Ltd. provided a free guarantee for Wanfeng Auto Wheel’s loan from
the Export-Import Bank of China with a guaranteed amount of RMB
245000000.00.f. From May 15th 2015 to May 15th 2025 Zhejiang Rifa Holding Group Co.Ltd. provided a free guarantee for Wanfeng Aluminum Wheels (India)’s loan
from China Development Bank with a guaranteed amount of USD
30000000.00.g. From April 27 2020 to March 19 2022 Wanfeng Group provided a free
guarantee for Wanfeng Auto Wheel’s loan from China Merchants Bank
Shaoxing Branch with a guaranteed amount of RMB 100000000.00.h. From October 13 2020 to October 13 2023 Wanfeng Group provided a free
guarantee for Wanfeng Auto Wheel’s loan to Shanghai Pudong Development
Bank Shengzhou Branch with a guaranteed amount of RMB 33000000.00.i. From March 20 2020 to June 19 2020 Wanfeng Group provided a free
guarantee for Wanfeng Auto Wheel’s loan from the Bank of Hangzhou
Xinchang Branch with a guaranteed amount of RMB 65000000. The
guarantee has expired and been released.j. From March 25 2020 to November 9 2020 Wanfeng Group provided a free
guarantee for Wanfeng Auto Wheel’s loan from Bank of Hangzhou Shaoxing
Branch with a guaranteed amount of RMB 35000000. The guarantee has
expired and been released.k. From October 14 2020 to October 13 2022 Wanfeng Group and Wanfeng
Jinyuan Holding Group Co. Ltd. provided free guarantees for Wanfeng Auto
Wheel’s loans from Bank of Hangzhou Shaoxing Branch with a guaranteed
amount of RMB 132000000.l. From September 21 2020 to September 17 2021 Zhejiang Rifa Holding
Group Co. Ltd. provided a free guarantee for Wanfeng Auto Wheel’s loan from
the Export-Import Bank Zhejiang Branch with a guaranteed amount of RMB
240 million.m. From April 16 2020 to April 23 2023 Zhejiang Rifa Holding Group Co. Ltd.provided a free guarantee for Wanfeng Aowei’s loan from Agricultural Bank of
China Xinchang Branch with a guaranteed amount of RMB 960000000.n. From April 16 2020 to April 23 2023 Chen Ailian provided a free guarantee
for Wanfeng Auto Wheel’s loan from Agricultural Bank of China Xinchang
Branch with a guaranteed amount of RMB 1200000000.u. From July 2018 to October 2019 Wanfeng Auto Wheel provided a guarantee
to Wanfeng Group through pledge and re-pledge after release of its bank
deposit certificates deposited in the Baoji Branch of Changan Bank Co. Ltd.Under these guarantees Wanfeng Group obtained a total of RMB 1.530 million
in loans from the Baoji Branch of Chang'an Bank Co. Ltd. from 2018 to 2019
and Wanfeng Auto Wheel provided guarantees to Wanfeng Group for a total of
RMB 1.594 billion.As of December 31 2019 Wanfeng Group's outstanding loan amount was
RMB 60 million and Wanfeng Auto Wheel's outstanding guarantee amount was
RMB 629500000.In March and April 2020 Wanfeng Group has repaid the remaining RMB 60
million of the loan to the Baoji Branch of Chang'an Bank Co. Ltd. and Wanfeng
Auto Wheel released the guarantee of RMB 629.5 million accordingly.v. Meridian Lightweight Technologies Inc. provided a free credit guarantee for
Wanfeng Group’s loan from Export Development Canada (EDC). The
guarantee period is from July 19 2019 to July 18 2024. The guaranteed
amount is USD 100000000.00. At the same time Wanfeng Auto Wheel
provides liquidity support for the loan. According to the guarantee agreement
and the liquidity support agreement if Wanfeng Group is unable to perform its
repayment obligations as required by the loan agreement Meridian Lightweight
Technologies Inc. shall assume joint and several repayment liabilities.Wanfeng Auto Wheel shall provide liquidity support to Wanfeng Group or the
guarantor of the loan to ensure that Wanfeng Group or the guarantor of the loan
performs its obligations following the requirements of the loan agreement.In January and May 2020 Wanfeng Group has repaid US$20 million in
borrowings and the remaining US$80 million has not been repaid. The
aforementioned guarantees and liquidity support have subsequently been
released.w. Wanfeng Auto Wheel held the 2019 Annual General Meeting of
Shareholders on July 15 2020 and approved the Proposal on Providing
External Guarantees in 2020. In 2020 it will provide a guarantee plan of RMB
150 million for controlling shareholders. On November 19 2020 Wanfeng Auto
Wheel and Meridian have signed the Liquidity Support Contract Exemption
Letter and Regarding the Termination and Disclaimer Agreement of the
Guarantee of Meridian Lightweight Technologies Inc. with EDC respectively.The liquidity support and joint liability guarantee provided by Wanfeng Auto
Wheel and its subsidiary Meridian respectively to Wanfeng Group’s remaining
US$80 million borrowings from EDC has been released.On the same day Wanfeng Group and EDC signed the Revised and Restated
Loan Agreement with a loan balance of US$80 million. Wanfeng Auto Wheel
and its controlling subsidiary Ontario 2542112 Co. Ltd. provided joint liability
guarantees for the above loans. The guarantee period is from November 19
2020 to July 18 2024. The Company’s controlling subsidiary Wanfeng (Canada)
Aviation Co. Ltd. will issue a US$2 million letter of guarantee. The guarantee
period is from November 18 2020 to December 31 2024. The amount of the
guarantee is within the total amount of RMB 1.5 billion in guarantee for the
controlling shareholder Wanfeng Group approved by Wanfeng Auto Wheel at
the 2019 Annual General Meeting of Shareholders on July 15 2020. At the
same time Wanfeng Group pledged its 40% equity of Wanfeng Aviation
Industry Co. Ltd. to Wanfeng Auto Wheel as a counter-guarantee measure for
the guarantee. As of December 31 2020 Wanfeng Group's outstanding loan
balance under this guarantee was US$80 million.
(5) Related party lending
Unit: RMB
Commenc
Related Maturity
Loan amount ement Description
parties date
date
Borrowed from
Lent to
Prior to January 1 2020 Diamond Aircrafts
Industries GMBH a subsidiary of Wanfeng
Wanfeng Aircraft had borrowed funds from Wanfeng
Aviation April 16 August 17 Aviation Industry Co. Ltd. with a balance of
312620000.00
Industry 2020 2020 RMB 312.62 million which Wanfeng Aviation
Co. Ltd. Industry Co. Ltd. had repaid in August 2020.The total principal and interest were RMB
316.18 million.From January to April 2020 prior to business
combination under the same control Wanfeng
Aircraft had lent RMB 76.65 million to
Wanfeng January August 14 Wanfeng Group and Wanfeng Group had
76650000.00
Group 02 2020 2020 repaid RMB 4.65 million and the remaining
amount was RMB 72 million. Wanfeng Group
has repaid all principal and interest of RMB
73.51 million from April to August 2020.On December 5 2019 Chongqing Wanfeng
repaid the principal and interest of the loan
RMB 380.70 million on behalf of Wanfeng
Group due to the overdue payment of the
remaining loans of RMB 376 million. On
Wanfeng December March 25 December 31 2019 the balance formed
380700000.00
Group 05 2019 2020 Wanfeng Group's capital occupation of
Wanfeng Auto Wheel. Wanfeng Group has
repaid RMB 120 million and RMB 260.7
million to Chongqing Wanfeng on March 24
2020 and March 25 2020 respectively and
the capital occupation has been settled.In 2019 the Group lent RMB 740 million to
Wanfeng Group through Shaoxing Jiajing
Wanfeng
Trading Co. Ltd. and recovered RMB 590
Group
million. As of December 31 2019 the balance
(through
January March 26 was RMB 150 million. The above-mentioned
Shaoxing 740000000.00
02 2019 2020 lent funds formed Wanfeng Group's capital
Jiajing
occupation of Wanfeng Auto Wheel. On
Trading
March 26 2020 the amount was repaid to the
Co. Ltd.)
Group by Wanfeng Group through Shaoxing
Jiajing Trading Co. Ltd.
(6) Assets transfer and debt restructuring of the related parties
Unit: RMB
Content of related
Related parties Current period Prior period
party transactions
--
(7) Key management’s emoluments
Unit: RMB
Items Current period Prior period
Key management’s emoluments 8555298.00 5864537.00
(8) Other related party transactions
Wanfeng Group received two government grants totaling RMB 38.82 million
from the 2018 National Industrial Transformation and Upgrade Fund and the
2017 Second Batch of Provincial Technology-based Small and Medium-sized
Enterprises Support and Technology Development Special Fund. Wanfeng
Group intended to cooperate with Wanfeng Meridian New Material Technology
Co. Ltd. a subsidiary of the Group to complete the government subsidy project
and paid RMB 35.82 million as deposit for the intended cooperation to Wanfeng
Meridian New Material Technology Co. Ltd.In 2019 Wanfeng Meridian New Material Technology Co. Ltd. returned to
Wanfeng Group RMB 2 million of 2017 Second Batch of Provincial Technology-
based Small and Medium-sized Enterprises Support and Technology
Development Special Fund in accordance with the requirements of the
government subsidy grantor. As of the end of 2020 RMB 28.82 million from
the 2018 National Industrial Transformation and Upgrading Fund has been
checked and accepted and transferred to deferred income. The balance of RMB
5 million of 2017 Second Batch of Provincial Technology-based Small and
Medium-sized Enterprises Support and Technology Development Special Fund
has not yet been checked and accepted this year. The Group will list the deposit
for intended cooperation received as other payables.6. Account receivable and payable of related parties
(1) Receivables
Unit: RMB
Closing balance Beginning balance
Provis
Items Related parties Provision ion for
Book balance for doubtful Book balance doubtf
debts ul
debts
Account Wanfeng Aviation Industry
7349781.19 7157908.40
receivable Co. Ltd.Account Zhejiang Wanfeng General
4089187.56 1011549.00
receivable Aviation Co. Ltd.Account Shanghai Wanfeng Aviation
900000.00
receivable Club Co. Ltd.Account Diamond Flight Centre
439969.35
receivable London INC.Account Shengzhou Hechuang
100000.00 5214794.16
receivable Trading Co. Ltd.Zhejiang Wanfeng
Advances paid Technology Development 24000.00 189462.00
Co. Ltd.Wanfeng General Aviation
Advances paid 1339952.92
Co. Ltd.Other account Zhejiang Rifa Precision
176000.00
receivable Machinery Co. Ltd.Other account Wanfeng Auto Holding
380700000.00
receivable Group Co. Ltd.Other account Wanfeng Aviation Industry
312620000.00
receivable Co. Ltd.Other account Shaoxing Jiajing Trading
150000000.00
receivable Co. Ltd.Zhejiang Wanfeng
Other account
Technology Development 91538.50
receivable
Co. Ltd.Other account Zhejiang Wanfeng Property
25037.62
receivable Management Co. Ltd.Zhejiang Wanfeng New
Other account
Energy Automobile 2040.61
receivable
Technology Co. Ltd.Zhejiang Wanfeng
Other non-
Technology Development 49771.65 38271052.25
current assets
Co. Ltd.
(2) Payables
Unit: RMB
Items Related parties Closing balance Beginning balance
Account payable Wanfeng Aviation Industry Co. Ltd. 4518937.15 29875732.07
Zhejiang Wanfeng Technology
Account payable 1082569.09 1380818.37
Development Co. Ltd.Zhejiang Rifa Precision Machinery
Account payable 1062394.00 207044.08
Co. Ltd.Zhejiang Rifa Precision Machine Tool
Account payable 264822.00 75072.00
Co. Ltd.Shengzhou Hechuang Trading Co.Account payable 5409.14 2442228.10
Ltd.Account payable Wanfeng General Aviation Co. Ltd. 505023.91
Account payable Wanfeng Group 29266.73
Wanfeng General Airport
Account payable 6975.50
Management Co. Ltd.Other account Zhejiang Rifa Precision Machinery
16115519.05 4928580.19
payable Co. Ltd.Other account
Wanfeng Group 5000000.00 33820000.00
payable
Other account Zhejiang Wanfeng Technology
4938304.35 8995287.32
payable Development Co. Ltd.Other account Zhejiang Rifa Precision Machine Tool
1924001.84
payable Co. Ltd.Other account Shengzhou Hechuang Trading Co.253862.98 452369.32
payable Ltd.Other account
Wanfeng Finance Leasing Co. Ltd. 2000000.00
payable
7. Related party commitments
(1) On December 31 2020 the Group and Zhejiang Wanfeng Technology
Development Co. Ltd. signed an unfulfilled equipment procurement
contract totaling RMB 4674400.00 (RMB 4136637.17 excluding tax) and
purchase production machinery and equipment from the latter. As of
December 31 2020 the purchase amount paid by the Group was RMB
1547820.00 and the contracted and unprovided amount was RMB
3126580.
(2) On December 31 2020 the Group and Zhejiang Rifa Precision Machine
Tool Co. Ltd. signed an unfulfilled equipment procurement contract totaling
RMB 2071473.05 (RMB 1833161.99 excluding tax) to purchase
machinery and equipment from the latter for production. As of December 31
2020 the purchase amount paid by the Group was RMB 414292.00 and
the contracted and unprovided amount was RMB 1657181.05.
(3) On December 31 2020 according to the lease contract signed between the
Group and Zhejiang Wanfeng Industrial Co. Ltd. the minimum lease
payment for an irrevocable lease was RMB 33697452.86. The lease term
is from August 1 2016 to July 31 2026. The factory and land are leased for
production and operation.
(4) On December 31 2020 according to the lease contract signed between the
Group and Xinchang County Chitong Intelligent Equipment Co. Ltd. the
minimum lease payment for an irrevocable lease was RMB 9216800.00.The lease term is from January 1 2019 to December 31 2022. The factory
are leased for production and operation.8. Others
None
XIII. Share-based Payment
1. Overall information of share-based payment
□Applicable √Not applicable
2. Equity-settled share-based payment
□Applicable √Not applicable
3. Cash-settled share-based payment
□Applicable √Not applicable
4. Amendment and termination of share-based payment
None
5. Others
None
XIV. Commitments and Contingencies
1. Significant commitments
Important commitment on the balance sheet date
(1) Important commitments
As of December 31 2020 the amount of capital commitments that the Group
has signed but not provided for is RMB 67753615.41 (December 31 2019:
RMB 73700139.92). As of December 31 2020 the Group has no investment
commitments that have been signed but not provided for (December 31 2019:
None).
(2) Pending litigation
As stated in Note VII 50 Shandong Bin'ao Aircraft Manufacturing Co. Ltd.litigated a dispute over the authorization of model production licenses by the
Company's subsidiary Austria Diamond Aircraft Industries GmbH. As of
December 31 2020 the litigation is still in the process of arbitration. Austria
Diamond Aircraft Industries GmbH made provisions based on estimates.(3) Outstanding claims
As stated in Note VII 50 the Group had a number of outstanding employee
claims on December 31 2020. The Group has hired a third-party risk
management company to handle employee compensation claims and made
provisions based on its estimated amount after evaluating all outstanding
claims.2. Contingencies
(1) Significant contingencies existing on the balance sheet date
①Environmental testing deposit
In April 2001 Canada Meridian Technology Holdings Inc. divested its business
activities related to its primary aluminum business unit. As one of the steps in
divestiture the Company disposed of all the net assets of Jutras Die Casting
Ltd. except for real estate which is located in Toronto Ontario. According to
the terms of the divestiture Canadian Meridian Technology Holdings Inc.continues to retain the rights to the real estate mainly because the real estate
is undergoing environmental investigations related to legal proceedings at that
time. The lawsuit was filed by a company adjacent to Jutras Die Casting Ltd.and a financial institution that provided financing services for the company. In
December 2001 the lawsuit ended. According to the results of the lawsuit the
real estate will be transferred to the adjacent company of Jutras Die Casting
Ltd. after completing a series of administrative procedures and environmental
investigations in accordance with Ontario’s legal requirements. Canada
Meridian Technology Holding Inc. is obliged to monitor the environmental level
of the real estate within 10 years and the monitoring results must show that the
pollution level of the transferred real estate has been gradually degraded
according to the model predictions displayed at the time of the lawsuit. In 2004
the relevant administrative procedures were completed including the provision
of a CAD 2100000.00 guarantee to the Ministry of Environment in the form of
a letter of credit. The relevant real estate was transferred on December 14
2004. In 2014 before the expiration of the monitoring obligation Canadian
Meridian Technology Holdings Inc. agreed to continue to extend the monitoring
obligation to 2017. In 2020 the company has completed the above-mentioned
environmental testing obligations and is waiting for the final certification result
of the government's Ministry of Environment.②Pay taxes
On April 16 2013 Meridian Lightweight Technologies Holding Inc. was
informed that after completing the audit the Italian customs department had
filed with the liquidator Magnesium Products of Italy S.r.L (formerly known as
Magnesium Products of America Inc.) during the 2009 tax period. It is claimed
that its unpaid value-added tax amounted to EUR 138000 and demanded a
fine of EUR 141640. Magnesium Products of Italy has been liquidated and has
no assets to repay. As of the date of issuance of this report none of the above
taxes and fines have been paid. After consulting with legal counsel the
management believes that Magnesium Products of America Inc. and Wanfeng
Meridian Group as independent entities have no legal obligation to pay such
taxes and fines. In 2015 Wanfeng Group issued a commitment and it agreed
that if Wanfeng Meridian Group would eventually have to bear corresponding
taxes and/or penalties due to these matters the resulting losses (including but
not limited to taxes fines and litigation costs) will be compensated by Wanfeng
Group or its designated third party (excluding Wanfeng Meridian Group and
Wanfeng Auto Wheel and its companies within the scope of its consolidated
financial statements).③Customer compensation
Magnesium Products of America Inc. and Meridian Lightweight Technologies
Inc. had multiple production accidents in 2018 that affected daily production.One or more customers may request Magnesium Products of America Inc. and
Meridian Lightweight Technologies Inc. to compensate for the losses caused
by the interruption of their supply chain. In October 2020 Ford Motor Company
filed a lawsuit against Meridian Lightweight Technologies Inc. through its agent
insurance company. Since the specific compensation amount will be formally
proposed in the discovery stage several months later the future compensation
obligations and compensation amount are highly uncertain. Therefore on
December 31 2020 the Group did not make relevant provisions.
(2) If no significant contingent matter to be disclosed by the Company it should
also be noted accordingly
No important contingent matter needs to be disclosed by the Company.
(3) Other information required by the Guidelines for Information Disclosure of
Automobile Manufacturing Related Industries
Mortgage sales finance leasing and other models of sales accounted for more
than 10% of operating revenue
□ Applicable √ Not applicable
The Company's guarantee to the dealer
□ Applicable √ Not applicable
3. Others
No
XV. Events after the Balance Sheet Date
1. Significant non-adjustment items
Unit: RMB
Impact on financial
Items Content position and operating Reasons
results
2. Profit distribution
Unit: RMB
Proposed profits or dividends 207210752.00
Profits or dividends declared to be paid after
207210752.00
approval
3. Sales return
None
4. Other explanation on events after the balance sheet date
(1) Share repurchase
On December 30 2020 the Company held the sixth meeting of the seventh
board of directors and approved the Proposal on the Repurchase of Company
Shares. On January 4 2021 it disclosed the Report on the Repurchase of
Company Shares decided to repurchase the Company’s shares by means of
centralized bidding through the Shenzhen Stock Exchange trading system with
own funds or self-raised funds. These shares will be used for subsequent
employee stock ownership plans or equity incentives. The total amount of funds
for the repurchase of shares shall not be less than RMB 100 million and not
more than RMB 200 million and the repurchase price shall not exceed RMB 11
per share (inclusive) and the repurchase period shall be no more than 12
months from the date of approval of the repurchase plan by the board of
directors. Starting from January 2021 the Company has successively
implemented share repurchases.
(2) Subsidiary establishment
The Company held the seventh meeting of the seventh board of directors on
January 12 2021 and approved the Proposal on the Establishment of a Wholly
Owned Subsidiary of by Subsidiary Aircraft Industry agreeing that Wanfeng
Aircraft Industry Co. Ltd. a subsidiary of the Company shall invest in the
establishment of a wholly-owned subsidiary Zhejiang Wanfeng Aircraft
Manufacturing Co. Ltd. in the form of assets and cash. Zhejiang Wanfeng
Aircraft Manufacturing Co. Ltd. was established on January 15 2021 with a
registered capital of RMB 100 million of which RMB 39.9 million was
contributed by assets and RMB 60.1 million was contributed by cash. The
address is located at No. 1 Aofeng Road Xinchang Industrial Park Zhejiang
China. The scope of business includes design testing production sales
maintenance and repair of general aviation aircraft helicopters aero engines
avionics electrical and mechanical systems; technology development and
consulting services for the general aviation industry; bonded warehouse
operations; goods import and export; technology import and export.XVI. Other Significant Events
1. Prior accounting error correction
(1) Retrospective restatement method
Unit: RMB
Items in each
Correction of
Processing procedure comparison period Cumulative influence
accounting error
affected
--
(2) Prospective adjustment method
Unit: RMB
Reasons for adopting
Correction of accounting error Approval procedure prospective adjustment
method
--
2. Debt restructuring
No
3. Asset replacement
(1) Non-monetary asset exchange
None
(2) Replacement of other assets
None
4. Annuity plan
None
5. Discontinued business
Unit: RMB
Items Revenue Expenses Total profit Income tax Net profit Discontinue
expense d operating
profit
attributable
to owners of
the parent
company
--
Other remarks:
None
6. Segment information
(1) Basis for reportable segments and the accounting policy
Operating Segments
For management purposes the Group divides its business units based on
products. The Group has the following 6 reporting segments:
(1) The Automobile Wheel segment produces automobile wheels;
(2) The Motorcycle Wheels segment produces motorcycle wheels;
(3) The Coating segment is engaged in the coating treatment of mechanical
parts;
(4) The Magnesium Alloy Die-Casting Products segment produces magnesium
alloy die-casting products;
(5) Stamping Parts segment produces stamping parts for automobiles;
(6) The General Aviation Aircraft segment produces general aviation aircraft.
For the decision-making purposes of resource allocation and performance
evaluation the management separately manages the operating results of each
segment. Division performance is evaluated based on the reported segment
profit. This indicator is an adjusted indicator of the total profit from continuing
operations and is consistent with the total profit from continuing operations of
the Group.
(2) Financial information of the reporting segment
Unit: RMB
Magnesium alloy
Automobile Motorcycle Coating General Aviation Inter-segment
Item die casting Stamping Total
wheel wheel processing Aircraft elimination
products
External
transaction 3861538493.07 1623157538.62 272914859.29 2557650411.18 753572627.73 1630390974.68 10699224904.57
revenue
Inter-segment
transaction 2825131.19 -2825131.19
revenue
Investment
income from -876459.23
associates
Asset
-3988474.85 -3036182.07 509471.83 -2983670.52 -680506.02 -10179361.63
impairment loss
Depreciation and
258899027.39 122648411.78 32815327.54 225733598.51 68442088.67 74767785.07 783306238.96
amortization
The total profit 532939773.63 33621660.30 46252586.15 263278982.96 117676362.71 294305214.27 -459051846.99 829022733.03
Income tax
6795013.66 -2853684.21 9345321.42 82128473.82 14856056.42 -46124668.96 64146512.15
expense
Total assets 10089670942.84 1971970108.80 463180113.04 3435371228.62 1192080356.54 4690103855.76 -5869150704.73 15973225900.87
Total liabilities 5596204167.89 1285425861.89 75421685.39 1358857504.44 277600876.38 1044274905.45 -1173392817.89 8464392183.55
Long-term equity
investment in 567810.84 567810.84
associates
(3) Reasons on no reportable segment or the total assets and total liabilities of each reportable segment that cannot be disclosed
None
(4) Other remarks
None
7. Other significant events influencing investor’s investment decision
None
8. Others
None
XVII. Notes to Parent Company Financial Statements Items
1. Accounts receivable
(1) Account receivable disclosed by category
Unit: RMB
Closing balance Opening balance
Doubtful debt
Category Book balance Book balance Doubtful debt provisions
provisions Carrying value Carrying value
Amount % Amount % Amount % Amount %
Accounts receivable
provided for doubtful 17923454.32 3.44% 5305626.69 29.60% 12617827.63 16558335.50 2.40% 7689685.14 46.44% 8868650.36
debts on individual basis
Including:
Accounts receivable
provided for doubtful 502413199.87 96.56% 2659777.96 0.53% 499753421.91 673934882.91 97.60% 4617306.15 0.69% 669317576.76
debts on collective basis
Including:
Total 520336654.19 100.00% 7965404.65 1.53% 512371249.54 690493218.41 100.00% 12306991.29 1.78% 678186227.12
Provision for doubtful debts on individual basis: 5305626.69
Unit: RMB
Closing balance
Company
Book balance Provisions for doubtful debt % Reasons
Hunan Leopard Automobile Co. Ltd. 8280910.13 2781910.13 33.59% Estimated collection risk
CIA WHEEL GROUP 6625061.06 1414787.38 21.36% Product quality disputes
CPC WHEELS CORPORATION 3017483.13 1108929.18 36.75% Estimated collection risk
Total 17923454.32 5305626.69 -- --
Provision for doubtful debts on individual basis:
Unit: RMB
Closing balance
Company Provisions for
Book balance % Reasons
doubtful debt
Provision for doubtful debts on collective basis: 2659777.96
Unit: RMB
Closing balance
Company Provisions for doubtful
Book balance %
debt
Within 1 year 499501004.84 2296548.48 0.46%
1 year to 2 years 372690.38 79459.12 21.32%
2 years to 3 years 438033.11 131409.93 30.00%
More than 3 years 2101471.54 152360.43 7.25%
Total 502413199.87 2659777.96 --
Description of determining the collective basis:
None
Provision for doubtful debts on collective basis:
Unit: RMB
Closing balance
Company Provisions for doubtful
Book balance %
debt
Description of determining the collective basis:
If the provision for doubtful debts of accounts receivable is accrued in
accordance with the general model of expected credit losses please refer to
the disclosure of other accounts receivable:
□ Applicable √ Not applicable
Disclosure by age
Unit: RMB
Aging Book balance
Within 1 year (including 1 year) 505726693.22
1 year to 2 years 2407884.12
2 years to 3 years 8718943.24
More than 3 years 3483133.61
3 years to 4 years 3483133.61
Total 520336654.19
(2) Provision for doubtful debts accrued recovered or reversed in the current
period
Doubtful debt provisions in the current reporting period
Unit: RMB
Change in current reporting period
Opening Closing
Category
balance Recovery or balance
Accrual Write-off Others
reversal
2020FY 12306991.29 4341586.64 7965404.65
Total 12306991.29 4341586.64 7965404.65
Significant reversal of doubtful debt provisions in the current reporting period
Unit: RMB
Company Recovery or reversal amount Recovery method
--
No provision for doubtful debts was made in 2020 and the recovery of provision
for doubtful debts was RMB 4341586.64 (with provision for doubtful debts of
RMB 6888847.81 in 2019 no recovery or reversal of provision for doubtful
debts).
(3) Accounts receivable written off in the current period
Unit: RMB
Items Written off amount
--
Significant account receivable written off
Unit: RMB
Whether the
Nature of payment is
Written off Reasons for Write-off
Company account generated by
amount write- off procedure
receivable related party
transactions
--
Explanation on account receivable written off
There are no accounts receivable actually written off in 2020 (2019: none).
(4) The top five accounts receivable at the end of the period aggregated by the
owing party
Unit: RMB
% of the total balance Closing balance of
Account receivable
Company of accounts receivable provisions for doubtful
closing balance
at the end of the period debt
No. 1 72086733.75 13.85% 360433.67
No. 2 58758771.03 11.29% 282042.10
No. 3 57723960.86 11.09% 277075.01
No. 4 37786187.75 7.26% 181373.70
No. 5 31414819.00 6.04% 150791.13
Total 257770472.39 49.53%
(5) Accounts receivable derecognized due to the transfer of financial assets
None
(6) The amount of assets and liabilities formed by transferring accounts
receivable and continuing to be involved
None
Other remarks:
None
2. Other receivables
Unit: RMB
Items Closing balance Opening balance
Interest receivables 0.00
Dividend receivables 0.00 129600000.00
Other receivables 241713997.31 365180887.10
Total 241713997.31 494780887.10
(1) Interest receivables
1) Interest receivables by category
Unit: RMB
Items Closing balance Opening balance
Total 0.00
2) Significant overdue interest
Unit: RMB
Whether
Reasons for impairment
Borrower Closing balance Overdue time
overdue occurred and its
judgment basis
--
Other remarks:
None
3) Doubtful debt provisions
□ Applicable √ Not applicable
(2) Dividend receivables
1) Dividend receivables by category
Unit: RMB
Items (or investee) Closing balance Opening balance
Zhejiang Wanfeng Motorcycle
0.00 129600000.00
Wheel Co. Ltd.Total 0.00 129600000.00
2) Significant dividends receivable with an aging of more than 1 year
Unit: RMB
Whether
Reasons for not impairment
Items (or investee) Closing balance Age
received occurred and its
judgment basis
--
3) Provision for doubtful debts
□ Applicable √ Not applicable
Other remarks:
None
(3) Other receivables
1) Other receivables categorized by nature
Unit: RMB
Other receivables categorized
Closing balance Opening balance
by nature
Subsidiary financial aid 229800000.00 247700000.00
Amounts due from related parties 100000000.00
Stock repurchases deposit and
866935.63 6913835.11
withdrawal
Employee petty cash 173368.21 198110.62
Disbursement fee 10157307.66 10157307.66
Other 716385.81 211680.95
Total 241713997.31 365180934.34
2) Doubtful debt provisions
Unit: RMB
Phase I Phase II Phase III
Doubtful debt Next 12?month Lifetime expected Lifetime expected Total
provisions expected credit credit losses (credit credit losses (credit
losses not impaired) impaired)
Balance on
47.24 47.24
January 1 2020
Balance in current
period on January —— —— —— ——
1 2020
Provision
reversed in 47.24 47.24
current period
Balance on
December 31 0.00 0.002020
Loss provisions for significant changes in book balances in current period
□ Applicable √ Not Applicable
Disclosure by aging
Unit: RMB
Aging Closing balance
Within 1 year (including 1 year) 231356452.61
1 to 2 years 38650.56
Over 3 years 10318894.14
3 to 4 years 10318894.14
Total 241713997.31
3) Provision for doubtful debt accrued recovered or reversed in current period
Provision for doubtful debt accrued in current period:
Unit: RMB
Changes in the current period
Opening Closing
Category
balance Recovered balance
Accrued Write- off Others
or reversed
2020FY 47.24 47.24 0.00
Total 47.24 47.24 0.00
Including significant provision for doubtful debt recovered or reversed amount:
Unit: RMB
Owing parties Recovered or reversed Way of collection
--
4) Other accounts receivable actually written off in the current period
Unit: RMB
Items Amount written off
--
Significant other account receivable written off:
Unit: RMB
Whether the
Nature of payment is
Amount Reasons for Write-off
Owing parties other account generated by
written off write-off procedures
receivable related party
transactions
--
Remarks on other account receivable written off:
None
5) Top 5 owing parties with the largest other receivables balances
Unit: RMB
Proportion to
Provision for
the total
Nature of Closing doubtful debt
Owing parties Aging balance of
receivables balance at the end of
other
the period
receivables
--
6) Other receivables related to government grants
Unit: RMB
Estimated time
Government
Company Closing balance Aging amount and basis
subsidy project
of receipt
--
7) Other receivables derecognized due to the transfer of financial assets
None
8) The amount of assets and liabilities formed by transferring other
receivables and continuing to be involved
None
Other remarks:
None
3. Long-term equity investments
Unit: RMB
Closing balance Opening balance
Provisio Provisi
Items n for Carrying on for Carrying
Book balance Book balance
impairm amount impair amount
ent ment
Investments
in 6104568111.43 6104568111.43 4198711501.05 4198711501.05
subsidiaries
Total 6104568111.43 6104568111.43 4198711501.05 4198711501.05
(1) Investment in subsidiaries
Unit: RMB
Changes in the current period Closi
ng
bala
nce
Opening balance Closing balance of
Invest Provisi
Investees (Carrying (Carrying proviInvestment ments on for Other
amount) amount) sion
increased decrea impair s
for
sed ment
impa
irme
nt
Weihai
Wanfeng
78600024.75 78600024.75
Auto Wheel
Co. Ltd.Ningbo
Aoweier
118269148.42 118269148.42
Wheel Co.Ltd.Jilin
Wanfeng
250000000.00 250000000.00
Auto Wheel
Co. Ltd.Chongqing
Wanfeng
Aolun 200000000.00 200000000.00
Aluminum
Wheel Co.Ltd
Wanfeng
North
797300.00 797300.00
America Co.Ltd.Zhejiang
Wanfeng
Motorcycle 587585877.60 587585877.60
Wheel Co.Ltd.Weihai
Wanfeng
Magnesium
32647399.88 32647399.88
Technology
Developmen
t Co. Ltd.Shanghai
Dacromet
Coating 508163547.00 508163547.00
Industry Co.Ltd.Wanfeng
Meridian
1151962857.40 1151962857.40
Holdings
Co. Ltd.Shanghai
Fengtu
Automobile 16500000.00 16500000.00
Technology
Co. Ltd.Wuxi
Xiongwei
Precision 1254000000.00 1254000000.00
Technology
Co. Ltd.Wanfeng
Japan Co. 185346.00 185346.00
Ltd.Wanfeng
Aircraft
1905856610.38 1905856610.38
Industry Co.Ltd.Total 4198711501.05 1905856610.38 6104568111.43
(2) Investments in associates and joint ventures
Unit: RMB
Openin Changes in the current period Closin Closin
Investe g g g
es balanc Invest Invest Invest Adjust Chang Cash Provisi Others balanc balanc
e ments ments ment ment es in dividen on for e e of
(Carryi increas decrea gains in other d/profit impair (Carryi provisi
ng ed sed and other equity declare ment ng on for
amoun losses compr d for amoun impair
t) recogn ehensi distrib t) ment
ized ve ution
under income
equity
metho
d
I. Joint ventures
II. Associates
(3) Other remarks
4. Operating revenue and Operating cost
Unit: RMB
Current period Prior period
Items
Revenue Cost Revenue Cost
Main operations 2294509596.18 1994367230.96 3076231080.13 2559457625.21
Other operations 54634067.04 42564059.18 63428127.46 46464981.02
Total 2349143663.22 2036931290.14 3139659207.59 2605922606.23
Information related to revenue:
Unit: RMB
Contract
Segment 1 Segment 2 Total
classification
Including：
Information related to performance obligations:
No
Information related to the transaction price allocated to the remaining
performance obligations:
At the end of the reporting period the amount of revenue corresponding to the
performance obligations that have been signed but not yet performed or not
yet completed is 0.00 yuan.Other remarks:
None
5. Investment income
Unit: RMB
Items Current period Prior period
Investment income from long- 499807846.99 116260000.00
term equity investments under
cost method
Gains on disposal of held-for-
-4600.00
trading financial products
Gains on settlement of foreign
1603380.82
exchange forward contract
Total 501406627.81 116260000.00
6. Others
XVIII. Supplementary Information
1. Non-recurring profit and loss in current period
√ Applicable □ Not applicable
Unit: RMB
Items Amount Note
Gains or loss on disposal of non-current assets 501156.94
Government grants included in profit and loss
(excluding those closely related to operating
104562193.16
activities of the Company with quantity/quota based
on certain standards)
Net profit and loss in the current period from the
beginning of the period to the date of the
74836418.19
combination arising from a business combination
under the common control
Gains on changes in fair value of held-for-trading
financial assets derivative financial assets held-for-
trading financial liabilities and derivative financial
liabilities and investment income from disposal of
held-for-trading financial assets derivative financial 2859105.21
assets held-for-trading financial liabilities derivative
financial liabilities and other investment excluding
those arising from hedging business related to
operating activities
Reversal of provision for impairment of receivables
and contract assets that have been tested for 4653372.07
impairment on individual basis
Other non-operating revenue or expenditures except
33063841.71
the above items
Less: Corporate income tax affected 27235065.43
Non-controlling interest affected 43299488.94
Total 149941532.91 --
For items defined as non-recurring profit and loss according to the No. 1
Explanatory Announcement on Information Disclosure for Companies Offering
Their Securities to Public - Non-recurring Profit and loss non-recurring profit
and loss items listed in the said document defined as recurring profit and loss
items specify the reason
□ Applicable √ Not Applicable
2. ROE and EPS
EPS
Profit of the reporting
Weighted average ROE
period Basic EPS Diluted EPS
(RMB/share) (RMB/share)
Net profit attributable to
ordinary shareholders of 10.27% 0.27 0.27
the Company
Net profit attributable to
ordinary shareholders of
the Company after 7.21% 0.20 0.20
deducting non-recurring
profit and loss
3. Accounting data differences under domestic and abroad accounting
standards
(1) Differences of net profits and net assets in the financial reports disclosed
according to the IFRS and Chinese Accounting Standards
□ Applicable √ Not Applicable
(2) Differences of net profits and net assets in the financial reports disclosed
according to the overseas accounting standards and Chinese Accounting
Standards
□ Applicable √ Not Applicable
(3) Reasons for accounting data differences under domestic and international
accounting standards and for the difference adjustment on the data already
audited by an overseas audit institution the name of the audit institution
should be noted.None
4. Others
None
Section XIII: Documents Available for Reference
I. Financial statements signed and sealed by the legal
representative the person in charge of the accounting work and
the person in charge of the accounting department.II. The original audit report with the seal of the accounting firm and
the signature and seal of the certified public accountant.III. The original copies of all Company documents and
announcements publicly disclosed in newspapers designated by
the CSRC during the reporting period.IV. The original documents of the 2020 Annual Report with the
signature of the legal representative.V. The place where the above reference documents are prepared: the
office of the Company's Board of Directors.Zhejiang Wanfeng Auto Wheel Co. Ltd
Legal Representative: Chen Bin
April 30 2021