Year 2021
audit report
Index page number
Audit report financial report of the company
– consolidated balance sheet 1-2
– balance sheet 3-4
– consolidated income statement 5
– income statement 6
– consolidated cash flow statement 7
– cash flow statement 8
– Consolidated Statement of changes in shareholders’ equity 9-10
– statement of changes in shareholders’ equity 11-12
– Notes to financial statements 13-127
Beijing Institute of Certified Public Accountants
Business report unified coding reporting system
Unified business reporting code: 110101362022675009340
Loncin Motor Co.Ltd(603766) 2021 annual audit report name:
report
Report No.: xyzh / 2022cdaa60547
Name of audited (inspected) unit: Loncin Motor Co.Ltd(603766)
Name of accounting firm: ShineWing Certified Public Accountants (special general partnership)
Business type: financial statement audit
Report opinion type: unqualified opinion
Report date: April 28, 2022
Filing date: April 28, 2022
Guo Dongchao (51010 Zhejiang Weixing Industrial Development Co.Ltd(002003) 9),
Signed by:
Shi Hui (11 Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) 0506)
(information can be queried by scanning QR code or logging into the official website of Beijing injection Association)
Note: this filing information only proves that the report has been filed with the Beijing Institute of certified public accountants, and does not mean that the Beijing Institute of Certified Public Accountants makes any form of guarantee for the content of the report in any sense.
1、 Basic information of the company
Loncin Motor Co.Ltd(603766) (hereinafter referred to as the company or the company, and collectively referred to as the group when including subsidiaries) is a joint stock limited company established by Longxin Industry Co., Ltd. on October 18, 2010. The company has obtained the business license issued by Jiulongpo District branch of Chongqing Administration for Industry and commerce, the unified social credit code is 915001076608997871, the legal representative of the company is Tu Jianhua, the registered address of the company is No. 99 Hualong Avenue, Jiulongpo District, Chongqing, and the headquarters office is No. 116 Juye Road, Zone C, Jiulongpo Industrial Park, Jiulongpo District, Chongqing.
After the approval of the CSRC, the company publicly issued 80000 ordinary shares (hereinafter referred to as “ordinary shares”) on January 2012, and was listed in Shanghai Securities Regulatory Commission with the approval of the CSRC.
As of December 31, 2021, the total share capital of the company was 2053541850 shares after the exercise of the employee stock option incentive plan, the repurchase and cancellation of unlimited shares, the issuance of shares to purchase the equity of Guangzhou wina electromechanical Co., Ltd. (hereinafter referred to as Guangzhou wina), the distribution of bonus shares and the conversion of capital reserve into share capital. Among them, 205354185 million shares are subject to non sale conditions, accounting for 100% of the total share capital.
The company belongs to the machinery manufacturing industry, and its business scope mainly includes: development, production and sales: internal combustion engine (operating within the approved scope and validity period of the license); Development and sales: motorcycles and parts, gasoline engines and parts, auto parts; Development, production and sales: agricultural machinery, forestry machinery, garden machinery, off-road vehicles, general machinery and electrical products; Wholesale and retail import and export of metal materials, rubber and plastic products, goods and technologies (excluding import and export projects prohibited or restricted by the state); Business information consultation. (those prohibited by laws and administrative regulations shall not be operated; those requiring permission and approval according to laws and administrative regulations shall be operated after obtaining permission and approval).
The main products of the group include engines (road engines and non road engines), motorcycles, generator sets (small household generators and large commercial generator sets), UAVs, auto parts, etc.
2、 Scope of consolidated financial statements
The scope of the group’s consolidated financial statements this year includes Chongqing Longxin Locomotive Co., Ltd. (hereinafter referred to as Longxin locomotive), Chongqing Longxin Engine Co., Ltd. (hereinafter referred to as Longxin engine) and costruzioni motor diesel s p. A. (hereinafter referred to as Italian CMD) and other 22 subsidiaries. Compared with the previous year, one subsidiary of Chongqing Longxin New Energy Technology Co., Ltd. (hereinafter referred to as Longxin new energy) was added due to the new establishment, and one subsidiary of Guangzhou Houde logistics and warehousing Co., Ltd. (hereinafter referred to as Guangzhou Houde) was reduced due to the transfer.
See “VII. Changes in the scope of consolidation” and “VIII. Interests in other entities” in this note for details.
3、 Preparation basis of financial statements
(1) Preparation basis
The financial statements of the group are prepared on the basis of going concern, according to the actual transactions and events, in accordance with the accounting standards for business enterprises and relevant regulations issued by the Ministry of finance, and based on the accounting policies and accounting estimates described in “IV. important accounting policies and accounting estimates” in this note.
(2) Going concern
The group has the ability of sustainable operation for at least 12 months since the end of the reporting period, and there are no major events affecting the ability of sustainable operation.
4、 Important accounting policies and accounting estimates
Tips on specific accounting policies and accounting estimates: the specific accounting policies and accounting estimates formulated by the group according to the actual production and operation characteristics include business cycle, recognition and measurement of bad debt reserves of accounts receivable, measurement of issued inventory, classification and depreciation method of fixed assets, amortization of intangible assets, capitalization conditions of R & D expenses, revenue recognition and measurement, etc.
1. Statement of compliance with accounting standards for business enterprises
The financial statements prepared by the company comply with the requirements of the accounting standards for business enterprises and truly and completely reflect the financial status, operating results, cash flow and other relevant information of the company and the group.
2. Accounting period
The accounting period of the group is from January 1 to December 31 of the Gregorian calendar.
3. Business cycle
The group takes 12 months as an operating cycle and takes this as the liquidity division standard of assets and liabilities.
4. Recording currency
The group takes RMB as the recording currency.
5. Accounting treatment methods for business combinations under the same control and not under the same control
The assets and liabilities obtained by the group as the combining party in business combination under the same control shall be measured at the book value of the combined party in the consolidated statements of the final controller on the combination date. The difference between the book value of the net assets obtained and the book value of the merger consideration paid shall be adjusted to the capital reserve; If the capital reserve is insufficient to offset, the retained earnings shall be adjusted.
The identifiable assets, liabilities and contingent liabilities of the acquiree obtained in the business combination not under the same control shall be measured at fair value on the acquisition date. The combination cost is the sum of the fair value of cash or non cash assets, liabilities issued or assumed, equity securities issued, etc. paid by the group to obtain the control over the acquiree on the acquisition date and all directly related expenses incurred in the business combination (for the business combination realized step by step through multiple transactions, the combination cost is the sum of the costs of each single transaction). The difference between the combination cost and the fair value of the identifiable net assets of the acquiree obtained in the combination is recognized as goodwill; If the merger cost is less than the fair value share of the identifiable net assets of the acquiree obtained in the merger, the fair value of all identifiable assets, liabilities and contingent liabilities obtained in the merger, as well as the fair value of non cash assets or equity securities issued for the merger consideration shall be reviewed first. After review, if the merger cost is still less than the fair value share of the identifiable net assets of the acquiree obtained in the merger, The difference shall be included in the non operating income of the current period of consolidation.
6. Preparation method of consolidated financial statements
The group includes all controlled subsidiaries in the scope of consolidated financial statements.
When preparing the consolidated financial statements, if the accounting policies or accounting periods adopted by the subsidiary are inconsistent with those adopted by the company, the financial statements of the subsidiary shall be adjusted as necessary according to the accounting policies or accounting periods of the company.
All major internal transactions, current balances and unrealized profits within the consolidation scope shall be offset during the preparation of the consolidated statements. The shares in the owner’s equity of subsidiaries that do not belong to the parent company and the shares in the current net profit and loss, other comprehensive income and total comprehensive income that belong to minority shareholders’ equity are listed in the items of “minority shareholders’ equity, minority shareholders’ profit and loss, other comprehensive income attributable to minority shareholders and total comprehensive income attributable to minority shareholders” in the consolidated financial statements respectively.
For the subsidiaries obtained through business combination under the same control, their operating results and cash flows shall be included in the consolidated financial statements from the beginning of the current period. When preparing and comparing the consolidated financial statements, the relevant items of the financial statements of the previous year are adjusted, which is deemed that the reporting entity formed after the merger has existed since the time point when the final controller began to control.
The equity of the investee under the same control is acquired step by step through multiple transactions, and the business combination is finally formed. When preparing the consolidated statements, it is deemed that the adjustment exists in the current state when the final controller begins to control. When preparing the comparative statements, the relevant assets, assets and Liabilities are incorporated into the comparative statements of the group’s consolidated financial statements, and the net assets increased due to the consolidation are adjusted to the relevant items under the owner’s equity in the comparative statements. In order to avoid double calculation of the value of the combined party’s net assets, for the long-term equity investment held by the group before the merger, the relevant losses, other comprehensive income and other changes in net assets recognized between the later of the date of obtaining the original equity and the date when the group and the combined party are under the final control of the same party and the merger date shall offset the opening retained earnings and current profits and losses during the comparative statement period respectively.
For subsidiaries acquired through business combination not under the same control, the operating results and cash flows shall be included in the consolidated financial statements from the date when the group obtains control. When preparing the consolidated financial statements, the financial statements of subsidiaries shall be adjusted on the basis of the fair value of all identifiable assets, liabilities and contingent liabilities determined on the acquisition date.
Obtain the equity of the investee not under the same control step by step through multiple transactions, and finally form a business combination. When preparing the consolidated statements, the equity of the acquiree held before the acquisition date shall be re measured according to the fair value of the equity on the acquisition date, and the difference between the fair value and its book value shall be included in the current investment income; The equity of the acquiree held before the relevant acquisition date involves other comprehensive income calculated by the equity method and other changes in owner’s equity other than net profit and loss, other comprehensive income and profit distribution, which are transferred to investment profit and loss in the current period of the acquisition date, except for other comprehensive income arising from the change of net liabilities or net assets due to the re measurement and setting of benefit plan by the investee.
The group partially disposes of long-term equity investments in subsidiaries without losing control. In the consolidated financial statements, the difference between the disposal price and the share of net assets of subsidiaries continuously calculated from the purchase date or consolidation date corresponding to the disposal of long-term equity investments shall be adjusted to adjust the capital premium or share capital premium. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted.
If the group loses control over the investee due to the disposal of some equity investments, the remaining equity shall be re measured according to its fair value on the date of loss of control when preparing the consolidated financial statements. The difference between the sum of the consideration obtained from the disposal of equity and the fair value of the remaining equity minus the share of the net assets of the original subsidiary continuously calculated from the purchase date or the merger date calculated according to the original shareholding ratio shall be included in the investment profit and loss of the current period when the control right is lost, and the goodwill shall be offset at the same time. Other comprehensive income related to the equity investment of the original subsidiary is transferred to the current investment profit and loss when the control right is lost.
If the group disposes the equity investment in subsidiaries step by step through multiple transactions until it loses control, if the transactions of disposing the equity investment in subsidiaries until it loses control belong to a package deal, each transaction shall be accounted for as a transaction of disposing subsidiaries and losing control; However, before the loss of control, the difference between each disposal price and the share of the subsidiary’s net assets corresponding to the disposal of the investment is recognized as other comprehensive income in the consolidated financial statements, and is transferred to the investment profit and loss of the current period when the control is lost.
7. Cash and cash equivalents
Cash in the group’s cash flow statement refers to cash on hand and deposits that can be used for payment at any time. Cash equivalents in the cash flow statement refer to investments with a holding period of no more than 3 months, strong liquidity, easy to convert into known amount of cash and little risk of value change.
8. Foreign currency business and translation of foreign currency financial statements
(1) Foreign currency transactions
The foreign currency transactions of the group are translated into RMB at the spot exchange rate on the transaction date. The difference arising from the conversion of foreign currency into foreign currency on the balance sheet date is the difference arising from the capitalization of foreign currency on the balance sheet date, except for the spot exchange rate
