无锡威孚高科技股份有限公司
二00 九年半年度报告
WEIFU HIGH-TECHNOLOGY CO., LTD.
2009 SEMI-ANNUAL REPORT
Dated August 29, 20092
Contents
Section I. Important Notice …………………………………………………………………….…….3
Section II. Company Information …………………………………………………………………....4
Section III. Changes in Share Capital and Particulars about Shares Held by Main Shareholder…….6
Section IV. Directors, Supervisors and senior Executives ……………………………………..…….9
Section V. Disscuss and Analysis of the Management …………………………………….…….…...9
Section VI. Significant Events ……………………………………………………………...………13
Section VII. Financial Report ………………………………………………………………...…….19
Section VIII. Document for References …………………………………………………………….193
Section I. Important Notice
Board of Directors and Supervisory Committee of Weifu High-Technology Co., Ltd. (hereinafter
referred to as the Company) and its directors, supervisors and senior executives hereby confirm that
there are no any important omissions, fictitious statements or serious misleading information carried
in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and
completion of the whole contents.
This summary is abstracted from the full text of Semi-annual Report 2009 and is published on
website www.cninfo.com.cn. And the investors are suggested to read the full text of semi-annual
report to understand more details.
No director, supervisor and senior executive stated that they couldn’t ensure the correctness,
accuracy and completeness of the contents of the Semi-annual Report or have objection for this
report.
Other directors attended the meeting on discussing the Semi-annual Report except for the following
directors:
Absent director Reason for absence Entrusted
Gao Guoyuan Absent due to be on business Chen Xuejun
Ge Songping Absent due to be on business Wang Weiliang
Du Fangci Absent due to be on business Yu Xiaoli
2009 Semi-annual Financial Report of the Company has not been audited.
Chairman the Company Wang Weiliang; General Manager Chen Xuejun; and Deputy General
Manager as well as Person in Charge of Financing Sun Qingxian hereby confirm that the financial
report in the Semi-annual Report 2009 is true and complete.4
Section II. Company Information
I. Basic information
(I) Company Name:
Name in Chinese: 无锡威孚高科技股份有限公司
Name in English: WEIFU HIGH-TECHNOLOGY CO., LTD.
(II) Stock Listing and Trading: Shenzhen Stock Exchange
Short Form of the Stock: Weifu High-tech, Su Weifu-B
Stock Code: 000581, 200581
(III) Registered Address: No.5 of Huashan Road, National Hi-Tech Industry Development Zone,
Wuxi
Head Office: No.107, Renmin Road (W), Wuxi City
Postal Code: 214031
The Company’s Internet Website: http://www. weifu.com.cn
E-Mail: web@ weifu.com.cn
(IV) Legal Representative: Mr. Wang Weiliang
(V) Secretary of the Board of the Company: Mr. Zhou Weixing
Representative of Securities Affairs: Ms. Yan Guohong
Mailing Address: No.107, Renmin Road (W), Wuxi City
Tel.: 86-510-2719579
Fax: 86-510-2751025
E-Mail: wfjt @ public1.wx.js.cn
(VI) Names of Newspapers designated by CSRC and chosen by the Company:
Securities Times, China Securities Journal, Hong Kong Wen Wei Po
Internet Website chosen by the Company: http://www.cninfo.com.cn
Semi-annual Report for reference: Office of the Board of the Company
(VII) Other Related Information of the Company
1. Initial registration date: Oct. 22, 1988
Address: No.107, Renmin West Road, Wuxi
Date of Change: August 28, 2008
Address: No.5 of Huashan Road, National Hi-Tech Industry Development Zone, Wuxi
2. Registration Number of enterprise legal person’s business license: 320200000014926
3. Registration Number of taxation: 320208250456967
4. Certified Public Accountants engaged by the Company:
Domestic: Jiangsu Gongzheng Certified Public Accountants Co., Ltd.
Address: No.28, Liangxi Road, Wuxi5
II. Key Financial Data and Indexes
(I) Key accounting data and financial indexes
(Unit: RMB)
At the end of this
report period
At the period-end
of last year
Increase/decrease at
the end of this
report period
compared with that
in period-end of last
year (%)
Total assets 4,616,475,654.07 4,597,901,224.38 0.40%
Owners’ equity attributable to shareholders of
the listed company 2,502,288,751.02 2,506,344,515.41 -0.16%
Share capital 567,275,995.00 567,275,995.00 0.00%
Net assets per share attributable to shareholders
of the listed company(RMB/Share) 4.4111 4.4182 -0.16%
This report period
(Jan. to Jun.)
The same period of
last year
Increase/decrease in
this report period
year-on-year (%)
Total operating income 1,261,148,413.32 1,875,096,458.14 -32.74%
Operating profit 102,537,218.59 158,606,992.16 -35.35%
Total profit 102,454,208.99 150,256,804.35 -31.81%
Net profit attributable to shareholders of the
listed company 87,842,946.80 127,253,068.96 -30.97%
Net profit attributable to shareholders of the
listed company after deducting non-recurring
gains and losses
85,878,606.53 128,639,017.07 -33.24%
Basic earnings per share (RMB/Share) 0.15 0.22 -31.82%
Diluted earnings per share (RMB/Share) 0.15 0.22 -31.82%
Return on equity (%) 3.51% 5.04% -1.53%
Net cash flow arising from operating activities 117,808,937.15 273,469,642.20 -56.92%
Net cash flow per share arising from operating
activities (RMB/Share) 0.21 0.48 -56.25%
(II) Items of non-recurring gains and losses and amount involved: (Unit: RMB)
Items of non-recurring gains and losses Amount
Gains and losses from the disposal of non-current asset 832,313.58
Governmental subsidy calculated into current gains and losses, while closely related
with the business of the Company, excluding the fixed-amount or fixed-proportion
governmental subsidy according to the unified national standard
2,303,276.88
Other non-operating income and expenditure beside for the aforementioned items -395,273.40
Impact on income tax -633,418.87
Influenced amount of minority shareholders’ equity -142,557.92
Total 1,964,340.276
(III) Difference in accounting statement prepared under CAS and IAS and explanation:
Unit: RMB
Net profit attributable to
shareholders of listed company
Owners’ equity attributable to
Amount in the shareholders of listed company
report period
Amount in last
period
Amount in
period-end
Amount in
period-begin
IAS 87,842,946.80 127,253,068.96 2,502,288,751.02 2,506,344,515.41
CAS 87,842,946.80 127,253,068.96 2,502,288,751.02 2,506,344,515.41
Sub-items and total adjusted based on IAS:
Total amount of differences
between CAS and IAS 0.00 0.00 0.00 0.00
Explanations on differences
between CAS and IAS No differences
Section III. Changes in Share Capital and Particulars about Shares Held by Main
Shareholders
I. Statement of change in shares
Unit: Share
Before the change Increase/decrease in this time
(+, -) After the change
Amount Proportion
New
shares
offering
Bonus
share
Capitalizat
ion of
Public
reserve
Other Subtotal Amount Proportion
I. Restricted shares 114,113,512 20.12% -14,038,286 -14,038,286 100,075,226 17.64%
1. State-owned shares
2.State-owned legal person’s
shares 114,061,978 20.11% -14,039,979 -14,039,979 100,021,999 17.63%
3. Other domestic shares 51,534 0.01% 1,693 1,693 53,227 0.01%
Including: Domestic
non-state-owned legal
person’s shares
Domestic natural person’s
shares 51,534 0.01% 1,693 1,693 53,227 0.01%
4. Foreign shares
Including: Foreign legal
person’s shares
Foreign natural person’s
shares
5. Senior executives’ shares
II. Unrestricted shares 453,162,483 79.88% 14,038,286 14,038,286 467,200,769 82.36%
1. RMB Ordinary shares 338,242,483 59.63% 14,038,286 14,038,286 352,280,769 62.10%
2.Domestically listed foreign
shares 114,920,000 20.26% 0 0 114,920,000 20.26%
3.Overseas listed foreign
shares
4. Others
III. Total shares 567,275,995 100.00% 0 0 567,275,995 100.00%
II. About shareholders and shares held
Unit: Share7
Total shareholders at the
end of report period 58,908
Particulars about shares held by the top ten shareholders
Names of shareholders Nature of
shareholder
Proportio
n of share
held
Amount of
share held
Amount of
restricted shares
held
Shares
pledged or
frozen
WUXI INDUSTRY DEVELOPMENT GROUP
CO., LTD.
State-owned
legal person 17.63% 100,021,999 100,021,999 0
ROBERT BOSCH GMBH B-share
shareholder 3.24% 18,387,200 0 0
GUOTAI JUNAN SECURITIES
（HONGKONG） LIMITED
B-share
shareholder 2.42% 13,726,969 0 0
INDUSTRIAL AND COMMERCIAL BANK
OF CHINA- E FUND VALUE SELECTED
STOCK FUND
A-share
shareholder 1.84% 10,415,023 0 0
China Galaxy Securities Co., Ltd. A-share
shareholder 1.73% 9,808,355 0 0
ORIENT SECURITIES COMPANY LIMITED A-share
shareholder 0.88% 5,016,106 0 0
China construction Bank- Credit Suisse
Sustaining Growth Stock Fund
A-share
shareholder 0.74% 4,200,000 0 0
INDUSTRIAL AND COMMERCIAL BANK
OF CHINA-RONGTONG SHENZHEN
STOCK EXCHANGE 100 INDEX FUND
A-share
shareholder 0.65% 3,704,248 0 0
INDUSTRIAL AND COMMERCIAL BANK
OF CHINA-E FUND VALUE GROWTH
MIXED STOCK FUND
A-share
shareholder 0.63% 3,600,000 0 0
INDUSTRIAL AND COMMERCIAL BANK
OF CHINA- China Southern Sustaining Growth
Fund 2
A-share
shareholder 0.63% 3,558,628 0 0
Particulars about shares held by the top ten unrestricted shareholders
Name of shareholder Amount of unrestricted
shares held Type of share
ROBERT BOSCH GMBH 18,387,200 Domestically listed foreign share
GUOTAI JUNAN SECURITIES（HONGKONG）
LIMITED 13,726,969 Domestically listed foreign share
INDUSTRIAL AND COMMERCIAL BANK OF
CHINA- E FUND VALUE SELECTED STOCK
FUND
10,415,023 RMB common share
China Galaxy Securities Co., Ltd. 9,808,355 RMB common share
ORIENT SECURITIES COMPANY LIMITED 5,016,106 RMB common share
China construction Bank- Credit Suisse Sustaining
Growth Stock Fund 4,200,000 RMB common share
INDUSTRIAL AND COMMERCIAL BANK OF
CHINA-RONGTONG SHENZHEN STOCK
EXCHANGE 100 INDEX FUND
3,704,248 RMB common share
INDUSTRIAL AND COMMERCIAL BANK OF
CHINA-E FUND VALUE GROWTH MIXED
STOCK FUND
3,600,000 RMB common share
INDUSTRIAL AND COMMERCIAL BANK OF
CHINA- China Southern Sustaining Growth Fund 2 3,558,628 RMB common share
Sun Xuefeng 3,268,449 RMB common share
Explanation on associated
relationship or consistent
actions among the above
Among the top ten shareholders, there exists no associated relationship between WUXI
INDUSTRY DEVELOPMENT GROUP CO., LTD., the first largest shareholder of the
Company, and other shareholders, and they do not belong to the consistent actionist8
shareholders regulated by the Management Measure of Information Disclosure on Change of
Shareholding for Listed Company. The Company was unknown whether there exists
associated relationship among the other shareholders.
Shares held by the shareholders with restricted tradable conditons and restricted conditions
No.
Name of the
restricted
shareholders
Amount of
the
restricted
shares held
Date when
could be
listed for
trade
Amount of
additional
shares
Restricted condition
April 5, 2011 28,363,800
April 5, 2012 28,363,800
1 WUXI INDUSTRY
DEVELOPMENT
GROUP CO., LTD.
100,021,999
April 5, 2013 43,294,399
Non-circulating shares of Weifu Hi-tech
held by Wuxi Industry Development
Group Co., Ltd. could not listed or
transferred within 60 months since
possessing of listing right. After the
expiry of the commitment period,
original non-circulating shares would be
listed for sale in Shenzhen Stock
Exchange, the proportion of sales volume
to total share equity of Weifu Hi-tech
could not exceed 5% within 12 months as
well as 10% within 24 months, and sales
price ought not to less than RMB 10 per
share (the lowest impairment price of
shares holding would be calculated
ex-right at the same time if share price
ought to ex-right according to
regulation).
III. In the report period, there were changes in the controlling shareholder of the Company
In accordance with Reply on Agree Wuxi Industry Development Group Co., Ltd. to Merger Wuxi
Weifu Group Co., Ltd. from State-owned Assets Supervision & Administration Commission of
Wuxi Municipality stated with document No. XGZQi(2009) 46. The Company received the notice
from largest shareholder Wuxi Weifu Group Co., Ltd. on June 3, 2009 in which Wuxi Weifu Group
Co., Ltd. signed Merger Agreement with Wuxi Industry Development Group Co., Ltd.; after
mergered, Wuxi Weifu Group Co., Ltd. was cancelled and Wuxi Industry Development Group Co.,
Ltd. holds 100,021,999 shares of the Company (accounting for 17.63 percent in total shares of the
Company) and becomes the first largest shareholder of the Company.(for details, please refer to the
Simplified Report on Equity Change and the notice with No. 2009-018 dated June 26, 2009)9
Section IV. Particulars about Directors, Supervisors and Senior Executives
I. Alteration in shares held by directors, supervisors and senior executives of the Company
Unit: share
Name Position
Shares
held at
year
begin
Shares
increased
to hold in
the period
Shares
decreased
to hold in
the period
Shares
held at
period end
Including:
restricted
shares held
Stock option
held at
period end
Reason for
change
Wang
Weiliang Chairman of the Board 12,168 505 0 12,673 9,505 0
Additional
bonus by large
shareholders
Chen
Xuejun
Vice Chairman of the Board &
General Manager 3,042 127 0 3,169 2,376 0
Additional
bonus by large
shareholders
Shi
Xingyuan Director 1,711 71 0 1,782 1,336 0
Additional
bonus by large
shareholders
Gao
Guoyuan Director 9,886 411 0 10,297 7,722 0
Additional
bonus by large
shareholders
Ge
Songping Director 24,453 1,051 0 25,468 19,101 0
Additional
bonus by large
shareholders
Rudolf
Maier Director 0 0 0 0 0 0
Du Fangci Independent director 0 0 0 0 0 0
Ma Huilan Independent director 0 0 0 0 0 0
Yu Xiaoli Independent director 0 0 0 0 0 0
Han
Jiangming
Chairman of Supervisory
Committee 14,602 606 0 15,208 11,405 0
Additional
bonus by large
shareholders
Wang
Xiaodong Supervisor 500 20 0 520 0 0
Additional
bonus by large
shareholders
Yang
Weiliang Supervisor 0 0 0 0 0 0
Sun
Qingxian
Deputy General Manager &
Person in Charge of Finance 0 0 0 0 0 0
Miao
Yuming Deputy General Manager 0 0 0 0 0 0
Wang
Yawei Deputy General Manager 0 0 0 0 0 0
Zhou
Weixing Secretary of the Board 2,282 95 0 2,377 1,782 0
Additional
bonus by large
shareholders
II. There is no change in directors, supervisors and senior executives of the Company during the
report period
III. The Company held the 2008 Shareholders’ General Meeting in the report period
Section V. Discussion and Analysis of the Management
I. Analysis on financial condition and operation results of the Company in the report period
1. Analysis on operation achievement
Compared to the same period of last year, no change has happened to the main business scope pf the
Company which is still engaging in manufacture of other currency spare parts and auto
behind-disposal products (fuel injection system of diesel engines affiliated to autos, and automobile1 0
exhaust catalyze-purify device)
In the first half year, favored by the powerful measures of the state responding to financial crisis,
and various promoting policies implemented for auto industry, good developing tendency occurred
in auto industry with the growth over 15%. As for saloon cars with displacement under 1.6 litre and
crossovers, it performed very well in production and sales both; as for commercial-use autos, it
almost kept the same and tendency for better situation appeared; while for heavy trucks, market was
still depressed with declining rate over 38.3% year-on-year. Affected by commercial-use auto
market, the main business of the Company had declined greatly year-on-year. However, market
warmed back since the second quarter. In the first half year, the Company totally realized operation
income of RMB 1,261,148,400, net profit of RMB 87,842,900, which respectively declined by
32.74% and 30.97% year-on-year.
2. Analysis on financial condition
Unit: RMB
Items Jan.-Jun., 2009 Jan.-Jun., 2008 Increase/decrease %
Total operation income 1,261,148,413.32 1,875,096,458.14 -32.74
Operation profit 102,537,218.59 158,606,992.16 -35.35
Net profit 87,842,946.80 127,253,068.96 -30.97
Amount at period-end Amount at period-begin
Total assets 4,616,475,654.07 4,597,901,224.38 0.40
Shareholder’s equity 2,502,288,751.02 2,506,344,515.41 -0.16
Notes:
(1) Total operation income decreased by 32.74% year-on-year, mainly due to decline of business
income because the main products of the Company were influenced by the depression of
commercial-use auto market, especially pump PW2000 and PS7100.
(2) Operation profit decreased by 35.35% year-on-year, mainly due to decline in investment
income.
(3) Net profit decreased by 30.97% year-on-year, mainly due to decline in investment income.
(4) Total assets increased by 0.40% over the period-begin mainly due to increase of account
receivable.
(5) Shareholders’ equity decreased by 0.16% over the period-begin mainly due to that profit
distribution for 2008 was implemented in the report period.
3. Analysis on financial index
Unit: RMB
Items Jan.-Jun., 2009 Jan.-Jun., 2008 Increase/decrease %
Operating expenses 27,190,285.68 66,548,547.22 -59.14
Administration expenses 120,479,784.86 194,225,958.88 -37.97
Financial expenses 15,186,243.79 62,692,577.06 -75.78
(1) Operating expenses decreased by 59.14% year-on-year mainly due to decrease of salary expense
for salesman and three-guarantees expense.
(2) Administration expenses decreased by 37.97% year-on-year mainly due to decrease of salary
expense for administration staffs, decrease of depreciation, and that the Company strengthened
control for various administrative expense thus administrative expense declined fully.
(3) Financial expenses decreased by 75.78% year-on-year mainly due to that the Company
implemented centralized management for capital and loans declined greatly year-on-year.1 1
4. Main operation classified according to industries
Unit: RMB’0000
Classified according
to industries or
products
Income
from
operations
Cost of
operations
Gross
profit
ratio (%)
Increase/decrease
in income from
operations over
the same period of
last year (%)
Increase/decrease
in cost of
operations over
over the same
period of last year
(%)
Increase/decrea
se in gross
profit ratio
over over the
same period of
last year (%)
Manufacture of other
standard components
and parts
126,114.84 103,720.18 17.76% -32.74% -30.21% -2.98%
5. Main operation classified according to products
Unit: RMB’0000
Classified according to
industries
Total
operating
income
Total
operating
cost
Gross
profit
ratio
(%)
Increase/de
crease in
income
from
operations
over the
same period
of last year
(±%)
Increase/de
crease in
cost of
operations
over over
the same
period of
last year
(±%)
Increase/de
crease in
gross profit
ratio over
over the
same
period of
last year
(±%)
1.Fittings and accessories
of internal combustion
engine
107,567.03 87,925.05 18.26% -39.04% -36.58% -3.16%
2. Muffler & catalytic
converter 18,547.81 15,795.13 14.84% 67.58% 58.17% 5.07%
6. Main operations and areas
Unit: RMB’0000
Area Operating income Increase/decrease of operating income
over the previous period (%)
Inside the province 26,987.60 -40.55%
Outside the province 99,127.24 -30.10%
7. Operations of main share-holding company
(1) Zhonglian Automobile Electronics Co., 20% equity held by the Company, mainly engaged in
producing automobile electronics control system, and realized net profit amounting to RMB 195
million in the 1st half year of 2009.
(2) Bosch Automotive Diesel System Co., Ltd., 31.50% equity held by the Company and
consolidated statement subsidiary, mainly engaged in producing diesel automotive electronic control
system, and realized net profit amounting to RMB -16.89 million in the first half year of 2009.
II. Problems and difficulties in operation
1. Market of commercial-use autos, especially middle and heavy trucks, stepped out from recession1 2
since the 2nd quarter, but it was still uncertain whether this warming tendency could continue.
2. Uncertainty of price fluctuation for raw materials, particularly that price of steel, aluminum and
oil has already risen.
3. As the market got warmed, industry competition would be intensified, and pressure from cutting
down price for sale also increased.
III. Investment of the Company in the report period
During the report period, the Company totally took RMB 64.5 million for projects in technique
reforms and external investments.
1. There was no application of raised proceeds in the report period
2. Investments with non-raised proceeds
(1) For high pressure common rail project, the total investment amounted to RMB 49.95 million,
and RMB 5.76 million was accumulatively invested in the report period.
(2) For localization of fuel system spare parts project, the total investment amounted to RMB 49.97
million, and RMB 40,000 was accumulatively invested in the report period.
(3) For phase-II project of Weifu Jinjing High-tech Zone, the total investment amounted to RMB
173.32 million, and RMB 5.48 million was accumulatively invested in the report period.
(4) For project of Wuxi Huishan Development Zone, the total investment amounted to RMB 36.58
million, and RMB 1.11 million was accumulatively invested in the report period.
(5) For capacity expansion project of fuel injector available for diesel, the total investment
amounted to RMB 35 million, and RMB 15.37 million was accumulatively invested in the report
period.
(6) For the project that Weifu Automobile Diesel purchasing fuel injector assembly from Bosch
Automobile Diesel, the total investment amounted to RMB 64,222,800, and RMB 20 million was
accumulatively invested in the report period.
(7)For other spare projects, RMB 16.74 million was accumulatively invested in the report period.1 3
Section VI. Significant Events
I. Corporation governance
In the report period, according to requirements of the Company Law, Securities Law and related
laws and regulations promulgated by CSRC, the Company unceasingly perfected its governance
structure and various systems combined with the development of special governance activities of
listed companies, and basically conform to the governance requirement of CSRC.
II. Profit Distribution
1. The Company did not distribute bonus or implement capitalization of reserves in the interim of
2009.
2. The Company completed the implementation of the profit distribution plan of 2008 in May, 2009.
The distribution plan was: distributing cash bonus of RMB 1.62 per 10 shares (including tax).
III. Significant lawsuits and arbitrations
The Company had no significant lawsuit or arbitration occurred in the report period or occurred in
previous period and sustained in the report period.
IV. Significant assets purchased, sold or assets reconstruction.
The Company held the 6th meeting of the 6th Board on May 12, 2009. Proposal on Wuxi Weifu
Automobile Diesel Oil System Co., Ltd. Purchasing Assets Concerning Injector Business from
Bosch Automobile Diesel Oil System Co., Ltd. and Related Transaction was discussed and
approved in this meeting.
Being a controlling subsidiary of the Company (70% shares held by the Company), Wuxi Weifu
Automobile Diesel Oil System Co., Ltd., planned to purchase equipments and assets concerning
manufacture of injector assembly from Bosch Automobile Diesel Oil System Co., Ltd.. The transfer
price was estimated to be RMB 70 million. And the two parties reached the following agreements:
○1 to transfer the fixed assets (equipments), referred to their book value as of Dec. 31st of 2008, and
depreciation accumulatively occurred before transaction day was deducted; ○2 till Dec. 31st of
2008, the appraisal value of intangible assets (productive technique, craftwork, sales network, client
relation, market position and purchasing channel related to business) was RMB 17,040,800, and the
final transfer price was RMB 17 million; ○3 as for inventories, they were appraised according to
their book value as of Dec. 31st of 2008, and meanwhile, some inventories which had slow current
period were converted into money which approximately amounted to RMB 31 million after this
disposal. However, due to that inventories are still turning over at present, the final transfer price1 4
would be confirmed according to variety and quantity on the transaction day.
Wuxi Weifu Automobile Diesel Oil System Co., Ltd. officially signed transfer agreement with
Bosch Automobile Diesel Oil System Co., Ltd. dated May 22nd of 2009. The final price for this
transaction was confirmed as RMB 64,222,800. Till the end of this report period, Wuxi Weifu
Automobile Diesel Oil System Co., Ltd. has already paid off RMB 20 million for this transfer.
V. Related Transaction
Unit: RMB’0000
Type of
related
transaction
Contents of
transaction Related units The 1st half
year of 2009
The 1st half
year of 2008
Wuxi Weifu Precision Machinery Manufacturing
Co., Ltd. 3,614.6 6,639.2
Wuxi Industry Development Group Co., Ltd. 0.0 1,828.2
Bosch Automotive Diesel Oil Systems Co., Ltd. 2,431.5 1,740.4
Wuxi Weifu Trade Co., Ltd. 61.0 90.2
Wuxi Longsheng Technology Co., Ltd. 331.3 124.2
Wuxi Weifu Autocam Co., Ltd. 0.0 5.1
Wuxi Weifu Environmental Catalyst Co., Ltd. 9,051.0 6,842.4
Purchase of
goods and
labor service
Purchase of
components
Chaoyang Weifu Jialin Co., Ltd. 10.0 1.3
Wuxi Weifu Precision Machinery Manufacturing
Co., Ltd. 545.1 793.8
Bosch Automotive Diesel Oil Systems Co., Ltd. 10,973.2 6,840.6
Wuxi Industry Development Group Co., Ltd. 0.0 5930.7
Chaoyang Weifu Jialin Co., Ltd. 2,408.9 2,174.5
Wuxi Weifu Trade Co., Ltd. 287.8 183.1
Kunming Xitong Machinery Co., Ltd. 4,833.4 2,958.9
Sales of oil
pump and oil
mouth
products and
components
produced by
the Company
Wuxi Weifu Autocam Co., Ltd. 76.7 0.8
Sales of
goods and
labor service
Sales of raw
material Wuxi Weifu Environmental Catalyst Co., Ltd. 177.7 160.5
Use of trade
mark and
land lease
Paying fees for
using trade
mark and land
lease
Wuxi Industry Development Group Co., Ltd. 298.0 375.5
Total 35,100.2 36,689.4
VI. Significant contracts and the implementation
1. In the report period, the Company had never kept as custodian, contracted or leased any other
company’s assets and vice versa.
2. Ended the report period, the Company provided guarantee amounting to RMB 77.5 million for
consolidated controlling subsidiary Weifu Chang’an Oil Pump & Nozzle Co., Ltd.; guarantee
amounting to RMB 5 million for consolidated controlling subsidiary Wuxi Weifu Mashan Oil Pump
& Nozzle Co., Ltd; guarantee amounting to RMB 31 million for consolidated controlling subsidiary
Wuxi Weifu Leader Catalytic Converter Co., Ltd.
3. The controlling subsidiary Wuxi Weifu Leader Catalytic Converter Co., Ltd. provided guarantee
amounting to RMB 40 million for its subsidiary Wuxi Weifu Environmental Catalysts Co., Ltd.
4. Creditor’s rights and debt intercourse with related party
Unit: RMB1 5
Large shareholders and affiliated
enterprises
Balance at the
year-begin of
2009
Occurred Amount
of debtor in the
first half year
Occurred Amount
of debtee in the
first half year
Balance at the
period-end
Wuxi Weifu Trade Co., Ltd. -192,080.83 3,879,812.43 3,287,786.30 399,945.30
Kunming Xitong Machinery Co., Ltd. 10,306,903.98 56,550,293.35 51,000,000.00 15,857,197.33
Wuxi Weixin Machinery Co., Ltd. -13,813.60 - - -13,813.60
Total 10,101,009.55 60,430,105.78 54,287,786.30 16,243,329.03
5. In the report period, the Company did not entrust others to do cash management.
VII. In the report period, the Company and its Board of Directors received no inspection, legislative
punishment, a criticism by circulating a notice from CSRC, or public condemnation from Shenzhen
Stock Exchange.
VIII. Special commitments made by original non-circulating shareholders in process of Share
Merger Reform and its implementation
Name of
shareholders Special commitment Implementation
Wuxi
Industry
Development
Group Co.,
Ltd.
I. Commitment on additional deliver shares
Weifu Group which participated the Share Merger Reform has committed: after
implementation of share reform, if its operation performance could not reach to
the planned target, Weifu Hi-tech would additionally deliver shares one time to
A-share circulating shareholders (the said commitment would cease to be in
force till additional-deliver ended).
i. Activating condition of additional deliver shares: 1. according to audited
annual financial report of Weifu Hi-tech, its total net profit realized in 2006 and
2008 is less than RMB 0.85 billion (because in 2006 and 2007 automotive
effluent standards exists in turning zone as well as Bosch Automotive Diesel
System Co., Ltd. exists in losses turning into profit in input period, it is
difficult to predict the large margin growth point of the Company’s
performance, and operation performance in 2006 exists uncertainty); or 2. Weifu
Hi-tech’s net profit realized in 2008 would be less than RMB 0.34 billion; or 3.
Any annual financial report from 2006 to 2008 of Weifu Hi-tech would be
issued auditing opinion except Qualified Opinion.
ii. Amount of shares additional delivered: based on circulating A shares before
the share reform, arranging value of delivering 0.5 shares per 10 shares,
additionally deliver totaled 14,040,000 shares. If there exist bonus,
capitalization of share equity or share impairment in Weifu Hi-tech, deliver
shares volume comparably increase or decrease; if the Company’s share equity
changed due to additional deliver, allot, convertible bonds and certificate, etc. so
as to comparably change in share equity of original non-circulating and
circulating shareholder, so additional arranged value totaling 14,040,000 shares
remained unchanged.
iii. Date of shares additional delivered: within 20 days after approval of Weifu
Hi-tech Annual Report in the year of activating condition of additional deliver
shares by shareholders’ general meeting, Weifu Group would implement
commitment of additional deliver according to related process.
iv. Target of shares additional delivered: all unrestricted circulating A-share
shareholders of the Companies registered in the registration date of additional
deliver share and equity after Weifu Hi-tech Annual Report in the year of
activating condition of additional deliver shares is disclosed.
v. implementing guarantee for commitment of shares additional delivered:
within expiry date of the said commitment of shares additional delivered, Weifu
Group would authorize Shenzhen Stock Exchange and Registering & Clearing
Corp. to provisionally safekeep non-circulating shares amounting to 14,040,000
shares which used to implement guarantee for commitment of shares additional
delivered and held from Weifu Hi-tech since the date of implementation of
Share Merger Reform, and technically guarantee perform the above
commitment.
According to the
special commitment
the Company made in
share merger reform
of 2006: the total
realized net profit of
the Company from
2006 to 2008 is not
less than RMB 0.85
billion, and that in
2008 is not less than
RMB 0.34 billion.
The total realized net
profit of the Company
from 2006 to 2008
was RMB 0.6 billion,
and the realized net
profit in 2008 was
RMB 0.207 billion,
which both did not
reach the requirement
of the commitment,
so it activated the
additional-deliver
condition. The
Company additionally
delivered 0.415023
shares for each 10
circulating A shares to
all A-share circulating
shareholders
registered in
Shenzhen branch of
the CSDC Co., Ltd.
after closing of
Shenzhen Stock
Exchange on the
afternoon of May 26,
2009, which totally
delivered 14,039,979
shares.1 6
II. Commitment on restricted period and the lowest price for shares held
impairment
Non-circulating shares of Weifu Hi-tech held by Weifu Group could not listed or
transferred within 60 months since possessing of listing right. After the expiry
of the commitment period, original non-circulating shares would be listed for
sale in Shenzhen Stock Exchange, the proportion of sales volume to total share
equity of Weifu Hi-tech could not exceed 5% within 12 months as well as 10%
within 24 months, and sales price ought not to less than RMB 10 per share (the
lowest impairment price of shares holding would be calculated ex-right at the
same time if share price ought to ex-right according to regulation).
The said commitment
is being implemented
and no share is
reduced to hold.
III. Commitment on Bonus Plan
After the implementation of Share Merger Reform of the Company, Wuxi
Industry Development Group Co., Ltd. would make a proposal and vote for it:
cash dividend of Weifu High-tech in 2005 is not less than RMB 4 for each 10
shares, proportion of cash dividend from 2006 to 2008 is not less than 50% of
distributable profit for investors realized by the Company in current years.
The said commitment
is being implemented.
“Wuxi Industry
Development Group
Co., Ltd. would make
a proposal and vote
for it: Weifu
High-tech has
implemented in years
2005, 2006, 2007 and
2008.The
implementation of
2008 was completed
on May 26, 2009.
IV. Commitment on arrangement of governance encouragement system
In order to promote the listed company’s steady and healthy development, fully
mobilize senior executives so as to ensure to combine the interests of the
governance and shareholders of the Company, Weifu Industry Group
committed: after Weifu High-tech finishing Share Merger Reform, under related
regulations of the state and Wuxi government in terms of governance
encouragement system of listed company, the Group would the stock incentive
plan for management level of Weifu High-tech.
The said commitment
is being implemented,
and would be
performed since
related policy is
released.
IX. Other significant events
The shareholders holding over 5% shares of the Company had no commitment in the period or
carried down from the previous period except for special commitment for Share Merger Reform.
X. Capital occupied by the controlling shareholder and subsidiaries and independent opinion:
According to SZJGSZ No. 325 (2008) document released by Jiangsu Supervisory Bureau, CSRC on
Further Standardizing Capital Current Between Listed Company, Big Shareholder as well as Other
Related Parties, as independent directors of Weifu High-Technology Co., Ltd., we examined
relevant resolution of Prediction on Daily Related Transaction Amount of 2009 of the Company and
checked the Semi-Annual Report 2009, then we presented the following opinions:
1. Capital current and occupancy do exist between the Company, its large shareholder-Wuxi Weifu
Industry Development Group Co., Ltd. as well as other related parties, which mainly belongs to the
daily related transactions occurred from the daily production and operation activities of the
Company. The daily related transactions amount is in line with the normal business development of
the Company. The daily related transaction of the Company are examined and approved in board
meeting and shareholder’s meeting and such legal procedure, and disclosed in the periodic reports
and resolution notices of the Board and shareholders’ meeting.
2. After inspection, it is not found that the Company has capital current and occupancy which are
not disclosed.1 7
3. With inspection, it is clear that except the normal operation capital current and occupancy, the
Company, its large shareholder as well as other related parties have no other non-operation capital
current and occupancy.
XI. Special explanation and independent opinion issued by independent directors on the external
guarantee
According to relevant regulations of document [2005] No.120 issued by CSRC, we verified the
relevant financial information of the Company for 2009; according to our independent judgment, we
made the following explanations on the external guarantee of the Company:
1. The Company didn’t provide guarantee for controlling shareholders, their subsidiaries, any
non-legal units or individuals.
2. In the first half year of 2009, the total amount of external guarantee amounted to RMB 153.5
million, including:
(1) The Company, as a legal entity, totally provided external guarantee amounting to RMB 113.5
million, mainly including guarantee amounting to RMB 77.5 million for its wholly-owned
subsidiary-Wuxi Weifu Chang’an Oil Pump & Nozzle Co., Ltd.; guarantee amounting to RMB 5
million for its wholly-owned subsidiary-Wuxi Weifu Mashan Oil Pump & Nozzle Co., Ltd., and
guarantee amounting to RMB 31 million for Wuxi Weifu Leader Catalytic Converter Co., Ltd.
(2) The controlling subsidiary Wuxi Weifu Leader Catalytic Converter Co., Ltd. provided guarantee
amounting to RMB 40 million for its subsidiary Wuxi Weifu Environmental Catalysts Co., Ltd.
3. The Company had no direct or indirect guarantee for objects whose assets liability rate was over
70%.
4. The Company’s guarantee did not reach the requirement of Item 41 in Articles of Association.
5. The amount of single guarantee did not exceed 10% of the net profit latest audited.
6. We would timely supervise the Company to fulfill the obligation of information disclosure for
external guarantee according to relevant regulations of Listed Rules and Articles of Association.
XII. Equity of non-listed financial enterprises and planned listed companies held
Name of the company held
Initial
investment
amount
Amount held
(Share)
Proportion
in equity
of the
company
Book value at
period-end
Gains
and
losses in
report
period
Changes
on owners’
equity in
the report
period
Guolian Securities Co., Ltd. 12,000,000.00 18,000,000.00 1.20% 12,000,000.00 0.00 0.00
Nanjing Hengtai Insurance
and Broker Securities Co.,
Ltd.
1,000,000.00 1,000,000.00 1.85% 1,000,000.00 0.00 0.00
Jiangsu HSBC Insurance
Agents Limited 500,000.00 500,000.00 10.00% 500,000.00 0.00 0.00
Total 13,500,000.00 19,500,000.00 - 13,500,000.00 0.00 0.001 8
XIII. Periodical reports and provisional reports of the Company in the report period are as follows:
Order of
notice Contents of notice Date of notice Name of
newspapers
2009-001 Resolution Notice on Extraordinary Meeting of the Board of Directors Mar. 4, 2009
2009-002 Notice on Investing Xidong Technology Industrial Park Mar. 4, 2009
2009-003 Summary of Annual Report 2008 Apr. 18, 2009
2009-004 Resolution Notice on the 4th Meeting of the 6th Board of Directors Apr. 18, 2009
2009-005 Resolution Notice on the 3rd Meeting of the 6th Supervisory Committee Apr. 18, 2009
2009-006 Notice on Daily Related Transaction in 2009 Apr. 18, 2009
2009-007 Notice on Providing Guarantee for Others Apr. 18, 2009
2009-008 Notice on Holding Shareholders’ General Meeting 2008 Apr. 18, 2009
2009-009 Notice on Shares Additional-deliver Apr. 25, 2009
2009-010 The First Quarterly Report of 2009 Apr. 25, 2009
2009-011 Resolution Notice on Shareholders’ General Meeting 2008 May 13, 2009
2009-013 Notice on Dividend Distribution of 2008 May 16, 2009
2009-014 Notice on Implementing Shares Additional-deliver in Share Merger
Reform May 22, 2009
2009-015 Notice on Being Tradable of Additionally Delivered Shares in Share
Merger Reform May 27, 2009
2009-017
Notice on Related Transaction that Weifu Automotive Diesel Oil System
Co., Ltd. Purchasing Relevant Assets of Fuel Oil Injection Business of
Bosch Automotive Diesel Oil Systems Co., Ltd.
Jun. 3, 2009
2009-018 Simplified Report of Equity Change of Wuxi Industry Development Group
Co., Ltd. Jun.26, 2009
China
Securities
Securities
Times
Hong Kong
Wen Wei Po
XIV. Registration form for receiving research, communication and interview in the report period.
Date Place Way The received parties Contents discussed and
materials supplied
Jan. 8, 2009 Reception room
of the Company
Spot
research
Taikang Life Assets Management Co.,
Ltd.
Operation status and future
development of the Company
Jan. 15, 2009 Reception room
of the Company
Spot
research Guotai Jun’an Securities Co., Ltd. Operation status and future
development of the Company
Jan. 16, 2009 Reception room
of the Company
Spot
research Schroder Fund Management Co., Ltd. Operation status and future
development of the Company
Feb. 4, 2009 Reception room
of the Company
Spot
research
Haitong Securities Co., Ltd., Fortune
SGAM Fund Management Co., Ltd.
Operation status and future
development of the Company
Feb. 9, 2009 Reception room
of the Company
Spot
research Guolian Securities Co., Ltd. Operation status and future
development of the Company
Feb. 12, 2009 Reception room
of the Company
Spot
research Huatai Securities Co., Ltd. Operation status and future
development of the Company
Feb. 24, 2009 Reception room
of the Company
Spot
research 8 persons of CJIS Securities Co., Ltd. Operation status and future
development of the Company
Mar. 6, 2009 Reception room
of the Company
Spot
research Bohai Securities Co., Ltd. Operation status and future
development of the Company
Mar. 23, 2009 Reception room
of the Company
Spot
research China Life Insurance Company Operation status and future
development of the Company
Apr. 21, 2009 Reception room
of the Company
Spot
research
Martin Currie Investment
Management Ltd.
Operation status and future
development of the Company
Apr. 22, 2009 Reception room
of the Company
Spot
research
UBS SDIC FUND MANAGEMENT
CO.LTD., Changsheng Fund
Operation status and future
development of the Company1 9
Management Co., Ltd.,
CITIC-Prudential Fund Management
Company Ltd.
May 7, 2009 Reception room
of the Company
Spot
research
19 persons of Guoxin Fund
management Co., Ltd.
Operation status and future
development of the Company
May 18, 2009 Reception room
of the Company
Spot
research
2 persons of Guolian Securities Co.,
Ltd.
Operation status and future
development of the Company
The abovementioned documents were all published in website appointed by CSRC:
http//www.cninfo.com.cn.
Section VII. Financial Statement
I. The Interim 2009 Financial Statements of the Company was not audited.
II. Financial Report (Supplementary I)
III. Notes to financial statement (Supplementary II)
Section VIII. Document for Reference
I. The text of Interim Report bearing the signature of Chairman of the Board;
II. The Accounting Statement bearing signatures and seals of legal representative, financial charger
and accounting organ officer;
III. All text documents disclosed in China Securities Journal, Securities Times, and Hong Kong Wen
Wei Po during the report period;
IV. The text of Articles of Association of the Company.
Chairman of the Board: Wang Weiliang
Board of Directors of
Weifu High-technology Co., Ltd.
August 29, 20092 0
Supplementary I. Financial Report
BALANCE SHEET
Prepared by Weifu High-Technology Co., Ltd. Jun.30, 2009 Unit: RMB
Items Amount at period-end Amount at year-begin
Consolidation Parent Company Consolidation Parent Company
Current assets:
Monetary funds 497,701,965.88 204,860,476.28 633,818,074.23 228,735,378.18
Settlement provisions
Capital lent
Transaction finance asset
Notes receivable 388,782,806.32 206,466,001.80 388,733,826.26 197,129,578.52
Accounts receivable 619,808,638.87 306,064,755.62 468,041,533.70 243,063,549.71
Accounts paid in advance 44,657,785.97 15,643,295.91 33,595,448.26 20,937,261.75
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance
receivable
Interest receivable
Dividend receivable
Other receivables 6,313,479.41 1,414,957.29 6,611,679.75 1,913,035.12
Purchase restituted finance asset
Inventories 445,238,845.27 172,888,165.25 507,375,789.63 194,914,308.68
Non-current asset due within
one year
Other current assets 3,347,543.00 22,659,848.52 4,913,524.44
Total current assets 2,005,851,064.72 929,997,500.67 2,043,089,876.27 886,693,111.96
Non-current assets:
Granted loans and advances
Finance asset available for sales
Held-to-maturity investment
Long-term account receivable
Long-term equity investment 1,270,454,155.86 1,821,192,524.55 1,216,336,268.93 1,775,737,750.20
Investment property
Fixed assets 1,085,854,738.45 617,034,051.64 1,047,314,144.93 621,566,379.00
Construction in progress 136,962,934.93 120,562,504.93 171,144,058.98 126,462,367.06
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas asset
Intangible assets 76,239,521.31 27,739,084.89 78,229,946.20 28,074,191.73
Expense on Research and
Development
Goodwill
Long-term expenses to be
apportioned 2,100,194.53 2,372,655.75
Deferred income tax asset 39,013,044.27 8,677,818.82 39,414,273.32 8,643,664.77
Other non-current asset
Total non-current asset 2,610,624,589.35 2,595,205,984.83 2,554,811,348.11 2,560,484,352.76
Total assets 4,616,475,654.07 3,525,203,485.50 4,597,901,224.38 3,447,177,464.722 1
BALANCE SHEET (CON.)
Prepared by Weifu High-Technology Co., Ltd. Jun.30, 2009 Unit: RMB
Items Amount at period-end Amount at year-begin
Consolidation Parent Company Consolidation Parent Company
Short-term loans 748,000,000.00 520,000,000.00 843,036,725.49 615,000,000.00
Loan from central bank
Absorbing deposit and interbank
deposit
Capital borrowed
Transaction financial liabilities
Notes payable 212,670,000.00 158,040,000.00 231,760,209.02 192,450,209.02
Accounts payable 588,966,815.16 489,381,614.75 502,090,202.96 300,072,484.51
Accounts received in advance 20,710,336.86 8,995,864.54 19,023,738.35 1,795,586.83
Selling financial asset of repurchase
Commission charge and
commission payable
Wage payable 119,365,740.79 55,277,240.12 135,485,636.96 62,362,525.91
Taxes payable 26,038,570.06 5,879,565.43 11,436,759.32 -2,482,224.39
Interest payable
Dividend payable
Other accounts payable 117,910,765.57 82,243,199.08 99,693,552.47 83,506,503.70
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Non-current liabilities due within 1
year
Other current liabilities 43,998,068.96 22,184,362.29 10,683,370.14 1,250,000.00
Total current liabilities 1,877,660,297.40 1,342,001,846.21 1,853,210,194.71 1,253,955,085.58
Non-current liabilities:
Long-term loans
Bonds payable
Long-term account payable 15,700,000.00 15,700,000.00
Special accounts payable
Projected liabilities 1,604,658.96 1,604,658.96
Deferred income tax liabilities
Other non-current liabilities 2,142,300.00 2,090,000.00
Total non-current liabilities 17,842,300.00 1,604,658.96 17,790,000.00 1,604,658.96
Total liabilities 1,895,502,597.40 1,343,606,505.17 1,871,000,194.71 1,255,559,744.54
Owner’s equity (or shareholders’
equity):
Paid-in capital (or share capital) 567,275,995.00 567,275,995.00 567,275,995.00 567,275,995.00
Capital public reserve 907,580,308.28 923,981,806.57 907,580,308.28 923,981,806.57
Less: Inventory shares
Reasonable reserve
Surplus public reserve 262,439,505.87 262,439,505.87 262,439,505.87 262,439,505.87
Provision of general risk
Retained profit 764,992,941.87 427,899,672.89 769,048,706.26 437,920,412.74
Balance difference of foreign
currency translation
Total owner’s equity attributable to
parent company 2,502,288,751.02 2,181,596,980.33 2,506,344,515.41 2,191,617,720.18
Minority interests 218,684,305.65 220,556,514.26
Total owner’s equity 2,720,973,056.67 2,181,596,980.33 2,726,901,029.67 2,191,617,720.18
Total liabilities and owner’s equity 4,616,475,654.07 3,525,203,485.50 4,597,901,224.38 3,447,177,464.722 2
PROFIT STATEMENT
Prepared by Weifu High-Technology Co., Ltd. Jan.-Jun., 2009 Unit: RMB
Amount in this period Amount in last period
Items Consolidation Parent
Company Consolidation Parent
Company
I. Total operating income 1,261,148,413.32 734,105,546.26 1,875,096,458.14 1,029,925,413.95
Including: Operating income 1,261,148,413.32 734,105,546.26 1,875,096,458.14 1,029,925,413.95
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 1,208,849,081.68 724,823,765.42 1,823,884,005.73 1,034,682,190.29
Including: Operating cost 1,037,201,767.49 656,684,631.88 1,486,259,237.49 890,751,246.33
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expense of
compensation
Net amount of withdrawal of
insurance contract reserve
Bonus expense of guarantee slip
Reinsurance expense
Operating tax and extras 8,644,301.39 3,439,770.72 11,253,112.71 4,781,241.87
Sales expenses 27,190,285.68 16,713,941.58 66,548,547.22 45,457,244.79
Administration expenses 120,479,784.86 35,503,558.94 194,225,958.88 56,389,947.38
Financial expenses 15,186,243.79 13,007,373.51 62,692,577.06 32,913,021.24
Losses of devaluation of asset 146,698.47 -525,511.21 2,904,572.37 4,389,488.68
Add: Changing income of fair
value(Loss is listed with “-”)
Investment income (Loss is listed
with “-”) 50,237,886.95 74,864,946.23 107,394,539.75 169,639,086.50
Including: Investment income on
affiliated company and joint venture 49,337,886.95 40,454,774.35 106,811,931.46 100,034,663.72
Exchange income (Loss is listed
with “-”)
III. Operating profit (Loss is listed
with “-”) 102,537,218.59 84,146,727.07 158,606,992.16 164,882,310.16
Add: Non-operating income 3,432,978.71 104,569.88 184,767.42 19,900.79
Less: Non-operating expense 3,515,988.31 2,407,479.66 8,534,955.23 5,388,167.38
Including: Disposal loss of
non-current asset 1,578,073.93 1,418,046.11 1,055,928.33 888,829.32
IV. Total Profit (Loss is listed with “-”) 102,454,208.99 81,843,817.29 150,256,804.35 159,514,043.57
Less: Income tax expense 8,248,563.39 -34,154.05 12,672,759.36 51,096.20
V. Net profit (Net loss is listed with “-”) 94,205,645.60 81,877,971.34 137,584,044.99 159,462,947.37
Net profit attributable to owner’s of
parent company 87,842,946.80 81,877,971.34 127,253,068.96 159,462,947.37
Minority shareholders’ gains and
losses 6,362,698.80 10,330,976.03
VI. Earnings per share
i. Basic earnings per share 0.15 0.14 0.22 0.28
ii. Diluted earnings per share 0.15 0.14 0.22 0.282 3
CASH FLOW STATEMENT
Prepared by Weifu High-Technology Co., Ltd. Jan.-Jun., 2009 Unit: RMB
Amount in this period Amount in last period
Items
Consolidation Parent Company Consolidation Parent Company
I. Cash flows arising from operating activities:
Cash received from selling commodities and
providing labor services 1,215,432,954.86 781,653,438.71 1,789,740,882.62 967,411,232.13
Net increase of customer deposit and
interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other
financial institution
Cash received from original insurance
contract fee
Net cash received from reinsurance business
Insured savings and net increase of
investment
Net increase of disposal of transaction
financial asset
Cash received from interest, commission
charge and commission
Net increase of capital borrowed
Net increase of returned business capital
Write-back of tax received 12,041,064.74 9,978,444.61
Other cash received concerning operating
activities 13,949,605.17 12,089,232.02 7,800,915.32 26,153,073.56
Subtotal of cash inflow arising from
operating activities 1,241,423,624.77 793,742,670.73 1,807,520,242.55 993,564,305.69
Cash paid for purchasing commodities and
receiving labor service 830,438,191.11 493,572,114.75 1,169,385,020.46 697,028,470.73
Net increase of customer loans and
advances
Net increase of deposits in central bank and
interbank
Cash paid for original insurance contract
compensation
Cash paid for interest, commission charge
and commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers 145,799,411.44 66,598,030.34 161,936,611.53 75,240,577.33
Taxes paid 96,388,954.92 34,265,879.71 135,867,847.65 41,212,293.81
Other cash paid concerning operating activities 50,988,130.15 22,741,901.90 66,861,120.71 41,683,641.47
Subtotal of cash outflow arising from
operating activities 1,123,614,687.62 617,177,926.70 1,534,050,600.35 855,164,983.34
Net cash flows arising from operating
activities 117,808,937.15 176,564,744.03 273,469,642.20 138,399,322.35
II. Cash flows arising from investing activities:
Cash received from recovering investment 3,438,430.002 4
Cash received from investment income 900,000.00 11,750,323.36 69,417,379.75
Net cash received from disposal of fixed,
intangible and other long-term assets 4,275,129.34 1,605,612.50 435,950.00 396,400.00
Net cash received from disposal of
subsidiaries and other units
Other cash received concerning investing
activities
Subtotal of cash inflow from investing
activities 5,175,129.34 13,355,935.86 3,874,380.00 69,813,779.75
Cash paid for purchasing fixed, intangible
and other long-term assets 55,635,824.60 25,412,480.15 92,712,668.28 54,004,123.13
Cash paid for investment 5,000,000.00 5,000,000.00 14,294,800.00 39,294,800.00
Net increase of mortgaged loans
Net cash received from subsidiaries and
other units
Other cash paid concerning investing
activities
Subtotal of cash outflow from investing
activities 60,635,824.60 30,412,480.15 107,007,468.28 93,298,923.13
Net cash flows arising from investing
activities -55,460,695.26 -17,056,544.29 -103,133,088.28 -23,485,143.38
III. Cash flows arising from financing activities
Cash received from absorbing investment
Including: Cash received from absorbing
minority shareholders’ investment by subsidiaries
Cash received from loans 711,000,000.00 510,000,000.00 993,515,395.75 500,000,000.00
Cash received from issuing bonds
Other cash received concerning financing
activities
Subtotal of cash inflow from financing
activities 711,000,000.00 510,000,000.00 993,515,395.75 500,000,000.00
Cash paid for settling debts 806,036,725.49 605,000,000.00 1,057,830,151.06 589,413,800.00
Cash paid for dividend and profit
distributing or interest paying 94,163,324.75 88,418,801.64 70,363,734.50 27,493,756.60
Including: Dividend and profit of minority
shareholder paid by subsidiaries 20,150,015.39
Other cash paid concerning financing
activities
Subtotal of cash outflow from financing
activities 900,200,050.24 693,418,801.64 1,128,193,885.56 616,907,556.60
Net cash flows arising from financing
activities -189,200,050.24 -183,418,801.64 -134,678,489.81 -116,907,556.60
IV. Influence on cash due to fluctuation in
exchange rate
V. Net increase of cash and cash equivalents -126,851,808.35 -23,910,601.90 35,658,064.11 -1,993,377.63
Add: Balance of cash and cash equivalents
at the period -begin 495,284,817.23 141,771,078.18 678,013,454.68 131,564,251.25
VI. Balance of cash and cash equivalents at the
period–end 368,433,008.88 117,860,476.28 713,671,518.79 129,570,873.622 5
STATEMENT ON CHANGES OF OWNERS’ EQUITY
Prepared by Weifu High-Technology Co., Ltd. Jun. 30, 2009 Unit: RMB
Amount in this report period
Owners' equity attributable to the parent company
Items
Paid-up capital
(Share capital)
Capital reserves
Less:
Treasur
y Stock
Reason
able
reserve
Surplus reserves
General
risk
provision
Retained profit Others
Minority’s equity Total owners’ equity
I. Balance at the end of last year 567,275,995.00 907,580,308.28 262,439,505.87 769,048,706.26 220,556,514.26 2,726,901,029.67
Add: Changes of accounting policy
Error correction of the last period
Others
II. Balance at the beginning of this year 567,275,995.00 907,580,308.28 262,439,505.87 769,048,706.26 220,556,514.26 2,726,901,029.67
III. Increase/ Decrease in this year (Decrease is listed
with "-")
-4,055,764.39 -1,872,208.61 -5,927,973.00
(I) Net profit 87,842,946.80 6,362,698.80 94,205,645.60
(II) Profits and losses calculating into owners' equity
1. Net changing amount of fair value of financial assets
available for sale
2. Effect of changes of other owners' equity of invested
units under equity method
3. Effect of income tax related to owners' equity
4. Others
Subtotal of (I) and (II) 87,842,946.80 6,362,698.80 94,205,645.60
(III) Owners' devoted and decreased capital
1. Owners' devoted capital
2. Amount calculated into owners' equity paid in shares
3. Others
(IV) Profit distribution -91,898,711.19 -8,234,907.41 -100,133,618.60
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provisions
3. Distribution for owners (shareholders) -91,898,711.19 -8,234,907.41 -100,133,618.60
(V) Carrying forward internal owners' equity
1. Capital reserves conversed to capital (share capital)
2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserve
IV. Balance at the end of the report period 567,275,995.00 907,580,308.28 262,439,505.87 764,992,941.87 218,684,305.65 2,720,973,056.672 6
STATEMENT ON CHANGES OF OWNERS’ EQUITY(CON.)
Prepared by Weifu High-Technology Co., Ltd. Jun. 30, 2009 Unit: RMB
Amount in last year
Owners' equity attributable to the parent company
Items
Paid-up capital
(Share capital)
Capital reserves
Less:
Treasur
y Stock
Reason
able
reserve
Surplus reserves
General
risk
provision
Retained profit Others
Minority’s equity Total owners’ equity
I. Balance at the end of last year 567,275,995.00 909,301,329.46 241,970,463.58 682,892,683.40 227,889,871.62 2,629,330,343.06
Add: Changes of accounting policy
Error correction of the last period
Others
II. Balance at the beginning of this year 567,275,995.00 909,301,329.46 241,970,463.58 682,892,683.40 227,889,871.62 2,629,330,343.06
III. Increase/ Decrease in this year (Decrease is listed
with "-")
-1,687,529.42 127,253,068.96 -10,424,757.62 115,140,781.92
(I) Net profit 127,253,068.96 10,330,976.03 137,584,044.99
(II) Profits and losses calculating into owners' equity -1,687,529.42 1,687,529.42
1. Net changing amount of fair value of financial assets
available for sale
2. Effect of changes of other owners' equity of invested
units under equity method
3. Effect of income tax related to owners' equity
4. Others -1,687,529.42 1,687,529.42
Subtotal of (I) and (II) -1,687,529.42 127,253,068.96 12,018,505.45 137,584,044.99
(III) Owners' devoted and decreased capital
1. Owners' devoted capital
2. Amount calculated into owners' equity paid in
shares
3. Others
(IV) Profit distribution -22,443,263.07 -22,443,263.07
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provisions
3. Distribution for owners (shareholders) -22,443,263.07 -22,443,263.07
(V) Carrying forward internal owners' equity
1. Capital reserves conversed to capital (share capital)
2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserve
IV. Balance at the end of the report period 567,275,995.00 907,613,800.04 241,970,463.58 810,145,752.36 217,465,114.00 2,744,471,124.982 7
STATEMENT ON CHANGES OF OWNERS’ EQUITY OF PARENT COMPANY
Prepared by Weifu High-Technology Co., Ltd. Jan.-Jun., 2009 Unit: RMB
Amount in this report period
Items Paid-up capital
(Share capital)
Capital reserves
Less:
Treasury
Stock
Reason
able
reserve
Surplus reserves Retained profit Total owners’ equity
I. Balance at the end of last year 567,275,995.00 923,981,806.57 262,439,505.87 437,920,412.74 2,191,617,720.18
Add: Changes of accounting policy
Error correction of the last period
Others
II. Balance at the beginning of this year 567,275,995.00 923,981,806.57 262,439,505.87 437,920,412.74 2,191,617,720.18
III. Increase/ Decrease in this year (Decrease is listed with "-") -10,020,739.85 -10,020,739.85
(I) Net profit 81,877,971.34 81,877,971.34
(II) Profits and losses calculating into owners' equity
1. Net changing amount of fair value of financial assets available for sale
2. Effect of changes of other owners' equity of invested units under equity
method
3. Effect of income tax related to owners' equity
4. Others
Subtotal of (I) and (II) 81,877,971.34 81,877,971.34
(III) Owners' devoted and decreased capital
1. Owners' devoted capital
2. Amount calculated into owners' equity paid in shares
3. Others
(IV) Profit distribution -91,898,711.19 -91,898,711.19
1. Withdrawal of surplus reserves
2. Distribution for owners (shareholders) -91,898,711.19 -91,898,711.19
3. Others
(V) Carrying forward internal owners' equity
1. Capital reserves conversed to capital (share capital)
2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserves
4. Others
IV. Balance at the end of the report period 567,275,995.00 923,981,806.57 262,439,505.87 427,899,672.89 2,181,596,980.332 8
STATEMENT ON CHANGES OF OWNERS’ EQUITY OF PARENT COMPANY (CON.)
Prepared by Weifu High-Technology Co., Ltd. Jan.-Jun., 2009 Unit: RMB
Amount in last year
Items Paid-up capital
(Share capital)
Capital reserves
Less:
Treasur
y Stock
Reason
able
reserve
Surplus reserves Retained profit Total owners’ equity
I. Balance at the end of last year 567,275,995.00 922,196,148.96 241,970,463.58 340,492,259.39 2,071,934,866.93
Add: Changes of accounting policy
Error correction of the last period
Others
II. Balance at the beginning of this year 567,275,995.00 922,196,148.96 241,970,463.58 340,492,259.39 2,071,934,866.93
III. Increase/ Decrease in this year (Decrease is listed with "-") 1,785,657.61 159,462,947.37 161,248,604.98
(I) Net profit 159,462,947.37 159,462,947.37
(II) Profits and losses calculating into owners' equity 1,785,657.61 1,785,657.61
1. Net changing amount of fair value of financial assets available for sale
2. Effect of changes of other owners' equity of invested units under equity
method
3. Effect of income tax related to owners' equity
4. Others 1,785,657.61 1,785,657.61
Subtotal of (I) and (II) 1,785,657.61 159,462,947.37 161,248,604.98
(III) Owners' devoted and decreased capital
1. Owners' devoted capital
2. Amount calculated into owners' equity paid in shares
3. Others
(IV) Profit distribution
1. Withdrawal of surplus reserves
2. Distribution for owners (shareholders)
3. Others
(V) Carrying forward internal owners' equity
1. Capital reserves conversed to capital (share capital)
2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserves
4. Others
IV. Balance at the end of the report period 567,275,995.00 923,981,806.57 241,970,463.58 499,955,206.76 2,233,183,471.912 9
Supplementary II. Notes to financial statements
Notes to Financial Statement
Note 1. Basic information of the Company
By the approval of STGS (1992) No. 130 issued by Jiangsu Economic Restructuring Committee
(hereinafter referred to as Jiangsu ERC), Weifu High-Technology Co., Ltd. was established as a
company of limited liability with funds raised from targeted sources, and registered at Wuxi
Administration for Industry & Commerce in October 1992. The original share capital of the
Company totaled RMB 115.4355 million, including state-owned share capital amounting to RMB
92.4355 million, public corporate share capital amounting to RMB 8 million and inner employee
share capital amounting to RMB 15 million.
In the year 1994 and 1995, the Company was restructured and became a holding subsidiary of Wuxi
Weifu Group Co., Ltd (hereinafter referred to as “Weifu Group”). The ultimate owner of Wuxi
Weifu Group Co., Ltd. is State-owned Assets Supervision & Administration Commission of Wuxi
People’s Government.
By the approval of Jiangsu ERC and Shenzhen Securities Administration Office in August 1995, the
Company issued 68 million special ordinary shares, with a face value of RMB 1 for each share, and
the total value of those shares amounted to RMB 68 million. After the issuance, the Company’s total
share capital increased to RMB 183.4355 million.
By the approval of CSRC in June 1998, the Company issued 120 million RMB ordinary shares
(A-share) at Shenzhen Stock Exchange through on-line pricing and issuing. After the issuance, the
total share capital of the Company amounted to RMB 303.4355 million.
In the middle of 1999, deliberated and approved by the Board and Shareholders’ General Meeting,
the Company implemented the plan of granting 3 bonus shares for each 10 shares. After that, the
total share capital of the Company amounted to RMB 394.46615 million, of which state-owned
shares amounted to RMB 120.16615 million, public corporate shares RMB 10.4 million,
foreign-funded shares (B-share) RMB 88.40 million, RMB ordinary shares (A-share) RMB 156
million and inner employee shares RMB 19.5 million.
In the year 2000, by the approval of the CSRC and based upon the total share capital of 303.4355
million shares after the issuance of A-share in June 1998, the Company allotted 3 shares for each 10
shares, with a price of RMB 10 for each allotted share. Actually 41.9 million shares was allotted,
and the total share capital after the allotment increased to RMB 436.36615 million, of which
state-owned corporate shares amounted to RMB 121.56615 million, public corporate shares RMB
10.4 million, foreign-funded shares (B-share) RMB 88.4 million and RMB ordinary shares (A-share)
RMB 216 million.
In April 2005, Board of Directors of the Company has examined and approved 2004 Profit
Pre-distribution Plan, and examined and approved by 2004 Shareholders’ General Meeting , the
Company distributed 3 shares for each 10 shares to the whole shareholders totaling to 130,909,845
shares in 2005.
The Company registered at the Wuxi High and New Technology Development Zone and the
registration number was 3200000014926. The Company belongs to the mechanical industry and
mainly engages in the production and sales of fuel injection pump of the diesel internal combustion
engine as well as the fuel injector and other matching parts used in the fuel injection pump.
According to the Share Merger Reform Scheme of the Company that passed by related
shareholders’ meeting of Share Merger Reform and SGZF [2006] No.61 Reply on Questions about
State-owned Equity Management in Share Merger Reform of Weifu High-Technology Co., Ltd.
issued by State-owned Assets Supervision & Administration Commission of Jiangsu Province, the
Weifu Group etc. 8 non-circulating shareholders arranged pricing with granting 1.7 shares for each
10 shares to circulating A-share shareholders (totally granted 47,736,000 shares), so as to realize the3 0
originally non-circulating shares can be traded on market when satisfied certain conditions, the
scheme has been implemented on Apr. 5, 2006.
The total number of net profit of the Company audited from year 2006 to year 2008 did not reach
the performance target set during share merger reform. Thus, Wuxi Weifu Group sent additional
shares amounted to 14,039,979 shares to all the A-circulating shareholders with unrestricted
conditions on May 26, 2009 pursuant to commitment made in share merger reform. After that, the
restricted shares of the Company held by Weifu Group were 100,021,999 with accounting for 17.63
percent in total shares of the Company.
On June 3, 2009, Wuxi Weifu Group Co., Ltd. signed Merger Agreement with Wuxi Industry
Development Group Co., Ltd. and the matters involved were approved by State-owned Assets
Supervision & Administration Commission of Wuxi Municipality stated with document No.
XGZQi(2009) 46. Wuxi Industry Development Group Co., Ltd. merged with Wuxi Weifu Group
Co., Ltd. with taking 31st May 2009 as the merger base day, meanwhile, the business registration of
Wuxi Weifu Group Co., Ltd. was cancelled. After mergerd, Wuxi Industry Development Group Co.,
Ltd. holds 100,021,999 shares of the Company (accounting for 17.63 percent in total shares of the
Company) and becomes the first largest shareholder of the Company.
Note 2. The compiling basis of financial statement
This financial statement is presented based on continous operations and actual occurred transactions
and matters, and in according to the Accounting Standards for Business Enterprises and its
applications guidance issued by Ministry of Finance to confirm and measure, and according to the
regulations of Accounting Standards for Business Enterprises No.30—Presentation of Financial
Statemen whose information carried were prepared in conformity with the Company’s accounting
policy and accounting estimate, and these accounting policy and accounting estimate are established
according to the Accounting Standards for Business Enterprises as well as the Company’s practical
circumstance.
Note 3. Declaration in accordance with the Accounting Standards for Business Enterprises
The Company declares that the financial statement prepared is accorded with the requirement of
Accounting Standards for Enterprises, which truly and completely reflects the financial information
of the Company such as financial status, operational results and cash flow etc.
Note 4. Significant accounting policy and accounting estimates, and making method of
consolidated financial statements
(I) Accounting period
Adopt the Gregorian calendar system, that is, from Jan. 1 to Dec. 31 of Gregorian calendar is an
accounting period.
(II) Recording currency
Accounting calculation takes RMB as the recording currency.
(III) Attribute of measurement
The Company measures in accordance with regulated accounting measurement attribute, the
attribute of measurement of items in statement hasn’t changed in the report period. The Company
generally adopts historical cost when measuring accounting factors, for those adopting replacement
cost, changeable net present value, present value, and fair value to measure, take the confirmed
amount of accounting factors can be acquired and dependably measured as the basis.
(IV) Cash Equivalent
Cash Equivalent refers to short-term (be at term within 3 months since purchase date) investment
held by the Company with strong fluidity and easy to be converted into known amount of cash
which has slight changes in value.3 1
(V) Calculation method of foreign currency business
When originally confirming, the occurred foreign currency transaction adopt spot exchange rate of
transaction date to convert foreign currency amount into recording standard currency amount. At the
end of the period, the monetary items of foreign currency adopt period-end spot exchange rate to
convert, the exchange balance resulting from the difference of spot exchange rate between
period-end and original confirmation or the previous one should calculate into profit and loss of
current period; and the exchange balance resulting from foreign currency loans that related with
purchasing or constructing asset that accorded with capitalization conditions should be dealt in
accordance with the principle of loans expense capitalization. The non-monetary items of foreign
currency that measured with historical cost in period-end still adopt spot exchange rate of
transaction date, not change its recording currency amount.
(VI) The calculation method of financial assets and financial debts
1. Classification of financial assets and financial debts
Financial assets including tradable financial assets, financial assets that designated fair value to
calculate its changes and calculate into profit and loss of current period, investment held till at term,
receivable account, and financial assets for sale etc.. Financial debts including tradable financial
debts, and financial debts designated fair value to calculate its changes and calculate into profit and
loss of current period.
2. Confirmation evidence and measuring method of financial tools
i. When the Company becomes a party of financial tools contract, confirm an item of financial
assets or financial debts. The financial assets that accord with following terminating confirmation
conditions should terminate confirmation: the contract right of acquiring cash flow amount of
financial assets terminates, the financial assets has already transferred which is conformed to
regulation. And terminate confirming the financial debt or its one part that totally or partially
released its current obligation.
ii. The financial assets or financial debts originally confirmed by the Company are measured
according to fair value. For financial assets or financial debts that measured with fair value whose
changes are calculated into profit and loss of current period, relevant transaction expenses directly
calculate into profit and loss of current period; for other kinds of financial assets or financial debts,
relevant transaction expenses calculate into original confirmation amount.
iii. The Company implements subsequent measurement on financial assets according to fair value,
and not deduct the transaction expenses that may occurred in future disposal for the financial assets.
But except following situations:
A. The investments held till at term and receivable accounts adopt actual interest rate method, and
measure according to amortized cost;
B. The equity tool investments that haven’t quoted price on active market and its fair value can’t be
dependably measured, and derivative financial assets that linked to equity tools and balance through
delivering this equity tool, measure according to cost;
C. When the financial assets no longer suit to measure according to fair value resulting from the
changes in holding purpose or ability, or its fair value can no longer be measured dependably etc.,
the Company alternated to measure according to cost, the cost is fair value of the financial asset on
reclassification date.
iv. The Company adopts actual interest rate method, implement subsequent measure on financial
debts according to amortized cost. But except the following situations:
A. The financial debt measured with fair value whose changes are calculated into profit and loss of
current period, measure according to fair value, and not deduct future transaction expenses probably
occur for its settling;
B. When financial debt no longer suit to measure according to fair value resulting from changes
occurred in holding purpose or ability, or its fair value can’t be dependably measured etc., the
Company alternated to measure according to cost, the cost is book value of the financial debt on
reclassification date;3 2
C. The financial debt derivatives linked to equity tool that has no quoted price on active market
whose fair value can’t be dependably measured and should balance through delivering this equity
tool, measure according to cost;
D. The financial guarantee contract that not belonging to designated for financial debt that measured
with fair value and its changes are calculated into profit and loss of current period, or loan
commitment not designating to measure with fair value, whose changes are calculated into profit
and loss of current period, and will borrow with interest rate that less than the market, should
implement subsequent measurement according to the higher one of the following two price amounts
after initial confirmation:
a. The amount confirmed according to contingency standards;
b. The balance after initial confirmation amount deducting accumulated amortization that confirmed
according to income standards.
v. Except those related with hedge, the Company deal with gains or losses formed in the fair value
changes of financial assets or financial debts according to following regulations:
A. For the financial assets or financial debts measured with fair value whose changes are calculated
into profit and loss of current period, the gains and losses resulted from fair value changes, calculate
into profit and loss of current period;
B. The gains and losses result from fair value changes of tradable financial assets, excluding the
depreciation loss and exchange balance resulting from foreign currency financial asset, calculate
into capital public reserve, transfer out when the financial asset terminate confirmation, calculate
into profit and loss of current period.
vi. The financial assets or financial debts that the Company measured with amortized cost,
excluding related with the hedge, the gains or losses resulting from confirmation determination,
depreciation or amortization calculate into profit and loss of current period.
vii. The Company calculates the offset result of fair value changes of hedge tool and hedged item in
the same accounting period into profit and loss of current period.
3. Confirmation of fair value of financial assets and financial debts
The financial assets or financial debts that existing active market confirm its fair value with the
quoted price on active market, the quoted price on active market including prices easy to be
acquired from Exchange, broker, industry association, pricing service organization etc. termly,
which represents the price of market transaction that actually occurred in a fair shake; the financial
assets or financial debts not exist active market, adopt value estimation skill to confirm its fair value.
The value estimation skill include refer to price used in recent market deals carried through by the
parties that familiar with situation and deal by freewill, current fair value of other financial assets or
financial debts that are essentially the same, discounted cash flow method, and option pricing model
etc.
4. Depreciation provision for financial asset
At the end of the period, the Company checks the book value of financial asset beyond those
measures with fair values whose changes are calculated into profit and loss of current period, and
draw depreciation provision for the financial asset that has objective evidence to show its
depreciation. When drawing the depreciation provision, implement single depreciation test on those
has material single amount; and implement depreciation test in financial assets group that has
characteristic of similar with credit risk on those hasn’t material single amount. The detail method
of drawing depreciation provision for main financial asset is as follows:
i. For tradable financial assets that can be measured dependably with fair value, draw depreciation
provision for the part that fair value lowered than book value, and calculate into profit and loss of
current period; for tradable financial asset that can not be dependably measured with fair value,
draw depreciation provision with the part that present value of estimated future cash flow
(excluding not yet occurred future credit loss) lowered than book value, and calculate into profit and
loss of current period. When the tradable financial asset occurring depreciation, even though the
financial asset hasn’t terminating confirmation, the accumulated loss that originally calculating into3 3
the owners’ equity resulting from the decrease in fair value should be transferred out, and calculate
into profit and loss of current period.
ii. Draw depreciation provision for investment held till at term with the part that present value of its
estimated future cash flow (excluding not yet occurred future credit loss) lowered than book value,
and calculate into profit and loss of current period.
5. The confirmation and measurement of financial asset transfer
i. The confirmation of financial asset transfer
When transferring almost all risk and reward of financial asset ownership to transferee in following
situations, the enterprise confirm transfer of the financial asset, terminate confirmation of the
financial asset.
A. The enterprise sell financial asset without recourse attachment;
B. Sell the financial asset, meanwhile sign agreement with the purchaser, and repurchase it
according to fair value of the financial asset on the promised time limit day;
C. Sell the financial asset, meanwhile sign put option contract with purchaser, but judging from
articles of the contract, this put option is a material out of the money option.
ii. Measurement of financial asset transfer
A. Confirmation of financial asset whole transfer: confirm according to balance of book value of
transferred financial asset and accumulated changing amount of received consideration and fair
value that originally directly calculated into owner’s equity, calculate into profit and loss of current
period;
B. Confirmation of partial transfer of financial asset: financial asset partially transferring, should
amortize book value of whole financial asset which is between the terminating confirmation part
and not terminating confirmation part according to each relative fair value, and calculate into profit
and loss of current period according to book value of terminating confirmation part and balance of
received consideration of terminating confirmation part with the amount of corresponding
terminating confirmation part in accumulated changes of fair value that originally directly
calculating into owner’s equity. The amount of terminating confirmation part in accumulated
changes of fair value that originally calculating into owner’s equity, should confirm after amortizing
the accumulated amount according to relative fair value of terminating confirmation part and not
terminating confirmation part of financial asset.
6. Confirmation standards of bad debt of receivable account and withdrawal method of bad debt
provision
1) Confirmation standards of bad debt: for the receivable account that still can’t be reclaimed after
discharging with its bankrupt property or heritage due to the debtor go bankruptcy or die, and that
the debtor hasn’t performed the repaying obligation while exceeding the time limit, and there’s
obvious characteristic showing it can’t be reclaimed, confirm as bad debt.
2) Calculation method of bad debt loss: adopt allowance method.
3) It takes singly devaluation test for receivable account with odd significant amount (including
receivable account and other receivables). Withdrawing the provision for bad debt in accordance
with the balance between the present value of predicated expected cash flow of account receiavable
is lower than its book value; receivable account with odd significant amount which did not occur
devaluation should consolidated into the account receivable of deducting odd significant amount of
account receivable, and withdrawing the provision for bad debt according to analysis to account age
in period-end account.
The withdrawal proportion of bad debt provision for various aging mix is as follows:
Account age Withdrawal proportion
Within 6 months Don’t draw
6 months to 1 year 10%
1 year to 2 years 20%3 4
2 years to 3 years 40%
Above 3 years 100%
(VII) Calculation method of inventory and confirmation standard and withdrawing method of the
provision for depreciation of inventory
Inventory classification: Classified mainly as inventory material, low-value consumption goods,
product in process, and finished goods etc..
Inventory pricing: The inventory material daily adopt planned cost to calculate, fix the differences
of material cost separately according to first grade, carry forward material cost difference that
should undertake at the end of the period according to planned cost of the raw material drawn or
sent, adjust the planned cost to actual cost; pricing the finished product according to actual cost, and
adopt weighted average method to carry forward sales cost when sending.
Amortization of low-value consumption goods: Pricing the low-value consumption goods according
to actual cost when acquired, adopt one-off amortization method to calculate when drawing, while
the amount is relatively large, amortize it within one year.
Inventory system: Adopt perpetual inventory system.
Provision for inventory depreciation: At the end of the period, estimate price of the inventory
according to the lower one between cost and net realizable value, draw depreciation provision and
calculate into profit and loss of current period according to the balance of net realizable value
lowered than the book cost of single material for the inventory with various quantity and low single
price. .
(VIII) Calculation method of long-term equity investment
1. Confirmation of initial investment cost of long-term equity investment
For the consolidation of enterprises that under the same control, take the book value proportion of
the owner’s equity of consolidated party on consolidation date as initial investment cost of
long-term equity investment. The balance of initial investment cost of long-term equity investment
and paid cash, transferred non-cash asset, and book value of debt taken, should adjust capital public
reserve; and adjust retained earning while the capital public reserve isn’t enough to offset.
For the consolidation of enterprises that under different control, take assets paid out in order to
acquire the control right of purchased party on purchase date, occurred or undertaken debt and fair
value of issued equity securities as initial investment cost of long-term equity investment.
The long-term equity investment acquired in other manners except from the enterprise consolidation,
should confirm its initial investment cost according to following regulations:
A. The long-term equity investment acquired by paying cash, should take purchasing price that
actually paid as initial investment cost. Initial investment cost including expense, tax and other
necessary payout that directly related with acquiring the long-term equity investment.
B. The long-term equity investment acquired by issuing equity securities, should take fair value of
the issued equity securities as initial investment cost.
C. The long-term equity investment invested by investors, should take the promised value in
investment contract or agreement as initial investment cost, excluding those promised in the
contract or agreement that the value is not fair.
D. The long-term equity investment acquired by non-monetary asset exchange, its initial investment
cost should be confirmed according to Accounting Standards of Business Enterprise
No.7—Non-monetary Asset Exchange.
E. The long-term equity investment acquired by debt reorganization, its initial investment cost
should be confirmed according to Accounting Standards No.12—Debt Restructuring.
2. Subsequent measurement of long-term equity investment
i. The following long-term equity investments adopt cost calculation method:
A. The long-term equity investment on the invested units controlled by the Company.
The investment of the Company on the subsidiaries and calculated on cost method and adjusted
according to equity method while compiling the consolidated financial statements.3 5
B. The long-term investment that the Company hasn’t together control or material influence on
invested party, and hasn’t quoted price on active market so its fair value can’t be dependably
measured.
ii. The long-term equity investment that the Company has together control or material influence on
the invested party, adopt equity method to calculated.
(IX) The fixed assets pricing and depreciation method
1. Definition of fixed assets
The fixed assets refer to housing, buildings, machinery and equipment, means of transportation and
other equipment, instrument and tools etc. related to production and operation that has over 1 year
lifetime and unit value amounting to more than RMB 2 thousand as well as other assets not in
connection with production and operation with a unit value amounting to more than RMB 2,000 and
over 2 years lifetime.
2. Pricing of fixed assets
The fixed assets are recorded in account according to actual cost upon its acquisition (including
purchasing payment, relevant tax, and attributable to the transportation charge, discharging expense,
installing expense and service fee for professional persons occurred before the fixed asset reached
the predicated usage conditions.
3. Classification and deprecation method of fixed assets
Depreciation of fixed assets adopts average lifetime method to draw with classification according to
estimated lifetime after original value of fixed asset deducting residual value (5%).
The fixed asset classification, the estimated lifetime and annual depreciation rate of various fixed
assets iare as follows:
The fixed asst withdrew the provision for devaluation; dedcutting the provision for the devaluation
of fixed asset withdrawn accumulated the depreciation amount.
(X) The calculation method of construction in pogress and the confirmation standard and the
withdrawing method of provision for the devaluation of construction in pogress
1. The confirmation of construction in pogress carring forward into fixed asset
When consruction engneering in process has reached the scheduled state in commission, and has
proceeded the final accounts of completing, validate all the actual expenses as the fixed asset; if the
fixed asset has reached the scheduled state in commission without proceeding the final accounts of
completing, validate the cost and provide the devaluation, and adjust the original provisional
estimated value according to the actual costs after finishing the final accounts of completing,
without adjusting the original withdrwal devaluation.
2. Devaluation provision of construction in pogress
Completely check over the construction in pogress at the end of the period. If some evidence show
that the construction in pogress has depreciated, the provision of devaluation preparation of the
Fixed assets Estimated lifetime Annual
depreciation rates
Housings 35 years 2.71%
Buildings and constructions 20 years 4.75%
Imported equipments 12 years 7.92%
Machinery Equipment
Domestic equipments 10 years 9.50%
Transportation equipments 10 years 9.50%
Office equipments 5 years 19.00%
Decoration expenses of houses 5 years 19.00%3 6
construction in pogress will be calculated into the losses and gains in current period. In general,
provide the devaluation provision of the construction in pogress when existing one or several
situations as follows:
i. The construction in pogress ceased for a long time and will not start working again in the
following 3 years;
ii. The construction in pogresshas dropped behind either in performance or in technology, and its
economic benefits have much uncertainty;
iii. Other situations which shows that the construction in progress had happened devaluation.
(XI) Intangible assets pricing and amortization policy, the confirmation standard and withdrawing
method of the provision for the devaluation of intangible asset
1. Intangible assets pricing:
The intangible asset is initially measured according to cost:
i. The cost of purchased intangible asset include purchase amount, related taxes and other payout
occurred directly attributed to help this asset reaching its estimated purpose.
ii. The cost of self developed intangible asset include total payout amount that occurred after
satisfying asset confirmation condition and meanwhile satisfying the following conditions before
reaching its estimated purpose, but exclude the payout that has already been expenses in previous
period:
① Completing this intangible asset to make it workable or tradable is technically feasible;
② Have the intention of completing this intangible asset and using or selling it;
③ The manner of intangible asset producing economic interest include be able to verify the product
produced by this intangible asset or the intangible asset itself exist market, the intangible asset that
will be used interiorly should verify its usefulness;
④ Have enough technique, financial resource and other resources to support, so as to complete the
development of this intangible asset, and have ability to use or sell this intangible asset;
⑤ The payout attributed to development phase of this intangible asset can be measured dependably.
iii. The cost of intangible asset that investors invested is confirmed according to promised value in
the investment contract or agreement.
iv. The cost of intangible asset acquired from non-monetary asset exchange, debt restructuring,
government grants and enterprise consolidation, should be confirmed respectively according to
Accounting Standards for Business Enterprises No.7—Non-monetary Asset Exchange, Accounting
Standards for Business Enterprises No.12—Debt Restructuring, Accounting Standards for Business
Enterprises No.16—Government Grants and Accounting Standards for Business Enterprises
No.20—Business Combinations.
2. Amortization of intangible assets
i. The intangible asset that has a limited lifetime adopt straight-line method to amortize averagely
within lifetime since it’s workable, and be calculated into profit and loss of current period, the
Company recheck the lifetime and amortization method of intangible asset that has limited lifetime
at least at each end of the year, once discovering the lifetime and amortization method is different
from previous estimation, should change the years of amortization and amortization method;
ii. The intangible asset that has an uncertain lifetime doesn’t amortize, the Company recheck the
lifetime of intangible asset with uncertain lifetime in each accounting period, but if there’s evidence
shows the lifetime of intangible asset is limited, then should estimate its lifetime and amortize
according to the aforesaid method i.
iii. The land use right of the Company and subsidiaries take average amortization in accordance
with residual usage years.
iv. The trademark use right of Nanjing Weifu Jinning Co., Ltd. (shareholding subsidiary, hereinafter
referred to as “Weifu Jinning”) would be amortized over 30 years on average; computer software
would be amortized as per 5 years.
v. The franchise of Wuxi Weifu Automotive Diesel System Co., Ltd. (shareholding subsidiary,3 7
hereinafter referred to as “Weifu Diesel System”) would be amortized over 10 years; administrative
software would be amortized as per 5 years.
(XII) Confirmation method of the provision for long-term assets depreciation
1. On the balance sheet day, the Company made an examination on the long-term assets; when the
following sign existed in assets which showed that depreciation may occur in the assets, estimate its
reclaimable amount, and withdraw the provision for assets depreciation and losses and gains in
current period according to the balance of reclaimable amount of the asset lowered than the book
value. These signs include:
i The Market price of assets decreased sharply in current period, and the fall was obviously greater
than the pre-estimated fall due to time process or normal use.
ii. There are or will be significant changes happening to the economic, technical or legal
environment etc. of the Company’s operations as well as the assets’ market in current period and it
causes or will cause unfavorable influence to the Company.
iii. The market interest rate or other market remuneration rate has raised in current period and it
influences the Company’s calculating the discount rate of future cash flow’s present value of assets
pre-estimation, resulting in the sharp decrease in the assets’ receivable amount.
iv. There were evidences showing that the asset had been old and out of date or its entity had been
damaged.
v. The assets have been or will be left unused, terminated or planed to be disposed in advance.
vi. The internal report’s evidence shows that the economic performance has been or will be lower
than that of anticipation, e.g. the net cash flow that the Company has created or the realized
operating profit (or loss) is far below (or above) the pre-estimated amount.
vii. Other signs showing that depreciation may have occurred to the assets
2. For the intangible assets whose goodwill and utilization life-span were uncertain formed by
enterprise consolidation, they needed to be tested every year no matter whether there are
depreciation signs in existence.
3. For the goodwill formed by enterprise consolidation, it should be distributed to relevant asset
group or asset group combination at the end of every year; then, it is needed to make a depreciation
test on the asset group or asset group combination which includes goodwill, calculate the receivable
amount and compare it with its book value. If the receivable amount of asset group or asset group
combination is below its book value, the balance should firstly be reduced and distributed to the
book value of the goodwill in the asset group or asset group combination; if the book value of
goodwill is not enough to offset and reduce the balance, the balance which is not offset and reduced
will be distributed by other assets according to their book value.
4. Basis for withdrawal of provision for long-term investment depreciation, provision for fixed
assets depreciation, provision for project under construction depreciation and provision for
intangible assets depreciation: the Company withdraws provision for assets depreciation according
to the balance of the receivable amount of single asset below book value at period-end; the
receivable amount is confirmed based on the higher one of asset pre-estimation future cash flow’s
present value and the net amount left by fair value of assets minus disposal expenses. If it is difficult
to estimate the receivable amount of single asset, its receivable amount will be confirmed based on
the asset group which the asset belongs to.
5. Cognizance of the asset group during the depreciation test: the relevant minimum asset group
which can share the coordination benefit from consolidation pre-estimated in internal company. 6.
Once the loss on long-term investment depreciation is confirmed, it can not be switching back.
(XIII) Amortization method of long-term expenses to be apportioned
The long-term expenses to be apportioned occurred to the Company is priced on actual cost, and
equally amortized according to the pre-estimated benefiting term; for the long-term items to be
apportioned with no benefits in the later accounting period, it is needed to totally calculate their3 8
amortization balance value into losses and gains in current period when confirming them.
(XIV) Calculation method of loan expenses
(1) The loan expenses occurred to the Company includes loan interest, amortization of reduction
price and premium price, assistant expenses and the exchange balance from foreign currency loan.
The amortization of the interest, discount or premium and exchange difference from,the specific
loan from purchasing fixed assets, if meeting the following three conditions, loan expenses should
be capitalized.
① Asset disburse has been occurred.
②The borrowing costs has already incurred.
③Purchase construction activity for achieving the asset utility condition has started.
Other loan interest, amortization of reduction price and premium price and the exchange balance
from foreign currency loan should be deemed as expenses of the period while they occur.
(2)Where a general borrowing is used for the acquisition and construction or production of assets
eligible for capitalization, the enterprise shall calculate and determine the to-be-capitalized amount
of interests on the general borrowing by multiplying the weighted average asset disbursement of the
part of the accumulative asset disbursements minus the general borrowing by the capitalization rate
of the general borrowing used. Auxiliary expense of general loan should be counted into current loss
and interest.
(3)To determine capitalized amount：Capitalized interest for purchasing fixed asset at the end of the
current period is the accumulated expense and weight average asset multiplied capitalization rate.
And the capitalization rate is determined by following principles：
①Interest of the specialized loan for purchasing fixed assets is the capitalization rate；
②Above single specialized loan for purchasing fixed assets, the capitalization rate is the weighted
average interest rate of these general borrowings.
(4)Temporary stop of capitalization: If the purchase and building activities for fixed assets stop abno
rmally and the interruption interval exceeds three months, the capitalization of borrowing cost shoul
d be stopped temporarily and deemed as the expenses of current period until the re-start of purchasi
ng and building activities for assets.
(5)Stop of capitalization: When the purchased fixed assets have reached the expected
serviceable condition, stop the capitalization of borrowing cost.
(XV)Confirmation evidence of deferred income tax assets and deferred income tax liabilities
1. If there is the temporary difference that can be offset and deducted between the book value of
assets and liabilities and the tax calculating basis, it is needed to confirm the deferred income tax
assets from temporary difference that can be offset and deducted, with the income amount that
should be paid taxes for and that it is likely to obtain to offset and deduct the temporary difference
that can be offset and deducted as the limit.Yet, these deferred income tax assets generated due to
the initial confirmation of assets or liabilities in the transactions simultaneously bearing the
following features can not be confirmed:
i. This transaction is not an enterprise consolidation;
ii. The transaction affects neither accounting profit nor income amount payable (or it can offset or
deduct the losses) when it happened;
2. With regard to the temporary difference that can be offset and deducted and is relating to
subsidiaries, associated enterprises and joint ventures’ investment, if it can simultaneously satisfy
the following terms, the relevant deferred income tax assets can be confirmed:
i. The temporary difference is likely to be switched back in the foreseeable future.
ii. It is likely to gain the income amount that should be paid taxes for and can be used for offsetting
and deducting the temporary difference that can be offset and deducted.
3. For the losses that can be offset and deducted and taxes offset and reduction, which can carry
forward in the latter years, it is needed to confirm relevant deferred income tax assets with the3 9
future tax-payable income amount that is likely to be obtained to offset and deduct the losses that
can be offset and deducted and taxes offset and reduction as the limit.
4. On the balance sheet day, it is needed to make a recheck on the book value of deferred income tax
assets. If it is likely to be unable to obtain enough tax-payable income amount for offsetting and
deducting the benefit of deferred income tax assets in future, it is needed to decrease and calculate
the book value of deferred income tax assets. When it is likely to obtain enough tax-payable income
amounts, the decreased and calculated amount can be switched back.
(XVI) Calculating method on salary payable to staff
The staff’ salary means that the enterprise gives various remunerations for obtaining services
providing by the employees or other relevant expenses. It includes:
i. Staff’s salary, bonus, allowance and subsidy;
ii. Staff’s welfare;
iii. Hospitalization insurance, endowment insurance, unemployment insurance, occupational injury
insurance and childbirth insurance, etc. social insurances;
iv. Housing public reserve;
v. Labor union expenditure and personnel education expense;
vi. Non-monetary welfare;
vii. Compensation for rescinding the labor relationship with employee;
viii. Other expenses related with the services the employee supply.
During the accounting period of an employee' providing services to an enterprise, the Company
shall recognize the compensation payable as liabilities. Except for the compensations for the
cancellation of the labor relationship with the employee, the enterprise shall, in accordance with
beneficiaries of the services offered by the employee, treat the following circumstances
respectively:
(1)The compensation for the employee for producing products or providing services shall be
recorded as the product costs and service costs;
(2)The compensation for the employee for any on-going construction project or for any intangible
asset shall be recorded as the costs of fixed asset or intangible assets;
(3)The compensation for the employee other than those as mentioned in Items (1) and (2) shall be
recorded as profit or loss for the current period.
The social insurance such as hospitalization insurance, endowment insurance, unemployment
insurance, occupational injury insurance and childbirth insurance; and housing public reserve
handed by the company for the staff should be calculated in proportion of total salary according to
the relevant regulations of local government during the accounting period of the services the
employee supply to the company.
Before the expiration of the contract, the company rescinds the labor relationship between the
company and the staff or encourage staff accept the suggestion on compensation for accepting
reduction at will, at the same time satisfy the following conditions, projected liabilities occurs for
confirming rescinding the labor relationship with employee and giving compensation and is
reckoned into current gains and losses:
i. The company officially established the plan on rescinding the labor relationship or brings forward
the suggestions on reduction at will, and will be implemented;
ii. The company could not singly withdraw rescinding the labor relationship or suggestions of
reduction.
(XVII) Projected liabilities
If the obligations relevant to contingencies conform to following conditions, the company will
confirm it as projected liabilities:
1. The obligation is the current one born by the company;
2. The implementation of the obligation possibly resulted in outflow of economic profit from the4 0
company;
3. The amount of the obligation could rely on calculation.
The estimated debts shall be initially measured in accordance with the best estimate of the necessary
expenses for the performance of the current obligation. To determine the best estimate, an enterprise
shall take into full consideration of the risks, uncertainty, time value of money, and other factors
pertinent to the Contingencies.
The company shall check the book value of the estimated debts on the balance sheet date. If there is
any exact evidence indicating that the book value cannot really reflect the current best estimate, the
enterprise shall adjust the book value in accordance with the current best estimate.
(XVIII)Calculation method of government grants
The government grants related to the proceeds, if those used for compensating the relevant future
expenses or losses of the enterprise shall be recognized as deferred income and shall, during the
period when the relevant expenses are recognized, recorded in the current profits and losses; or if
those used for compensating the relevant expenses or losses that have been incurred to the enterprise
shall be directly recorded in the current profits and losses.
The government grants related to the assets shall be recognized as deferred income and shall be
distributed averagely in the related asset using period, then counted into current loss and interest.
However, government subsidiary according to nominated amount shall be counted into current loss
and interest directly.
(XIX) Confirmation method of income
1. Selling merchandise
Main risks or remuneration in ownership of commodity are transferred to purchaser, and did not
implement continuous management or actual control on that commodity; relevant income has
gained or obtained receipt of gathering, the income and cost from selling that commodity could be
reliably measured which is confirmed as the realization of operating income.
2. Supplying labor force
The total labor force income and cost can be reliably measured, the economic profit relevant with
transaction possibly flows into enterprise, for the labor force which is begun and finished within
same accounting year, the company confirms as income when accomplish the labor force; for the
labor force which is begun and finished in different accounting years, under the circumstances that
the results of supplying labor force transaction could be reliably estimated, the company confirms as
income on the date of asset liabilities statement in percentage method.
3. Transferring the asset usage right
Economic profit relevant to transfer of asset usage right could flow into and the income amount
could be reliably estimated, while the company confirms as the realization of income from transfer
the asset usage right.
(XX) Confirmation principle of income tax
The accounting management of income tax adopts debt method of asset liabilities. Current income
tax payable and deferred income tax is reckoned into current gains and losses as income tax, but
except for the followings:
i. Enterprise merger
ii. Transaction or matters confirmed in owners’ equity directly.
(XXI) Determining principle and compile method for financial report consolidation scope
(1)Determining principle on consolidation scope
The consolidating scope of consolidated financial report of the Company was made on the basis of
control. Control refers to the determined financial and operation policies of invested companies of
the Company, and the profit obtain right from the operation of invested companies. On determining4 1
controlling invested companies, current transferable company liability and current implemented
equity and other potential voting factors should all be considered.
Investments to other companies occupying above 50% voting capital total amount (not included
50%) or not above 50% but having factual controlling right, should be counted into consolidating
scope.
(2)Methods carried in consolidated financial report
Consolidated financial report is in accordance with regulations of Accounting Standard for Business
Enterprises No. 33 - Consolidated financial statements. On the basis of financial reports of the
parent company and subsidiaries of the consolidating scope, according to other related documents
and long term equity investment of equity law, it was made by offsetting parent company’s right
capital investment and subsidiaries ‘s right of owning shares amount and internal significant
transaction.
(3)Financial policies for its subsidiaries：Holding subsidiaries’ financial policy should keep in line
with the Company.
(4) Right amount of minority shareholders should be determined by parent companies’ belonging
amount subtracted belonging right amount of parent company’s subsidiaries. Income of minority
shareholders should be determined by remaining amount of parent company’s investment income
divided by current year loss and interest of the parent company’s belonging subsidiaries.
Note 5. Taxes
1. Turnover tax
Value-added tax: sales of commodities would be taxed value-added tax and the tax rate is 17%.
Business tax: 5% of the incomes such as lease income; etc would be taxed as business tax.
2. Circulation tax addition
The Company and the subsidiaries pay urban maintenance and construction taxes, which are 7% of
the total sum of value-added tax and business tax payable, and education additional charges, which
are 4% of the total sum of value-added tax and business tax payable.
3. Income tax
The Company, its subsidiaries Weifu Jinning, Weifu Diesel System and Wuxi Weifu Leader
Catalytic Converter Co., Ltd. are all high-tech enterprises, and enjoy a preferential tax rate of 15%
according to relevant state regulations on income taxation.
Income tax rates of other shareholding subsidiaries are all 25%.
Note 6. Enterprise merger and consolidated financial report
1. Shareholding subsidiaries
Shareholding subsidiaries refer to investees for which the Company’s investments take up over 50%
of their total registered capital (excluding 50%), or which have actually been controlled by the
Company even though the Company’s investments take up less than 50% of their total registered
capital.
By June. 30, 2009, the Company’s shareholding subsidiaries are as follows:
Investee Registration
place
Registered
capital
(RMB’0000
)
Equity held
(%)
Business scope
Weifu Jinning Nanjing City
34,628.70 80.00
Accessories and
matching parts of
internal combustion
engine
Wuxi Weifu Mashan Oil Pump and Oil
Nozzle Co., Ltd.
Mashan,
Wuxi
4,500.00 100.00
Accessories and
matching parts of
internal combustion
engine4 2
Wuxi Weifu-Jilin University New Material
Application and Development Co., Ltd.
Development
zone, Wuxi
500.00 70.00 Metal nano powder
Wuxi Weifu Chang’an Oil Pump and Oil
Nozzle Co., Ltd.
Chang’an,
Wuxi
6,000.00 100.00
Accessories and
matching parts of
internal combustion
engine
Jiangsu Weifu Nano-Science and Technology
Co., Ltd.
Huishan
District,
Wuxi
3,000.00 80.00
Nano materials
Weifu Leader Catalytic Converter Co., Ltd. New District,
Wuxi
26,000.00 94.81 Muffle, purifier
Weifu Diesel System New District,
Wuxi
30,000.00 70.00
Accessories and
matching parts of
internal combustion
engine
Wuxi Weifu International Trade Co. Ltd. New District,
Wuxi
3,000.00 90.83 International
trade
Wuxi Weifu Mashan Oil Pump and Oil Nozzle Co., Ltd. hereinafter referred to as “Weifu Mashan”;
Wuxi Weifu-Jilin University New Material Application and Development Co., Ltd. hereinafter
referred to as “Weifu Jida”;
Wuxi Weifu Chang’an Oil Pump and Oil Nozzle Co., Ltd. hereinafter referred to as “Weifu
Chang’an”;
Jiangsu Weifu Nano-Science and Technology Co., Ltd hereinafter referred to as “Weifu Nano”.
2. Change of the consolidation scope of the financial statements
Investee
Consolidation
scope
of last year
Consolidation scope of
this year Reasons for
the change
Weifu Jinning Yes Yes No change
Weifu Mashan Yes Yes No change
Weifu Jida Yes Yes No change
Weifu Chang’an Yes Yes No change
Weifu Nano Yes Yes No change
Weifu Leader Yes Yes No change
Weifu Diesel
System
Yes Yes No change
Weifu International
Trade
Yes Yes No change
3. Joint venture
Joint venture refers to enterprises whose operating activities are controlled by 2 investors or more
according to articles of a contract.
By June 30, 2009, the Company’ joint venture companies are as follows:
Investee Registration
place
Registered
capital
(RMB’0000)
Equity held (%)
Business scope
Weifu Environmental Protection
Catalyst Co., Ltd.
New
District,
Wuxi
5,000.00 49.00
Catalyst4 3
Wuxi Weifu-Autocam Fine Machinery
Co. LTD.
New
District,
Wuxi
USD1,000.00 50.00
Accessory of
automobiles
Chaoyang Weifu-Jialin Machinery
Manufacturing Co. LTD
Chaoyang,
Liaoning 800.00 50.00
Fittings and
accessories of
internal
combustion
engine
Weifu Environmental Protection: founded collectively by Weifu Leader, which is the Company’s
subsidiary; Huawei (Shanghai) Nano-Technology Co., Ltd and BVI Yingdong Holdings Co., Ltd in
May 2004. According to the Company’s Articles of Association, Weifu Leader, Huawei (Shanghai)
Nano-Technology Co., Ltd etc. would jointly control this company.
Wuxi Weifu-Autocam Fine Machinery Co., Ltd. (hereinafter referred to as Weifu-Autocam): a
Sino-Foreign joint venture company founded by the Company and American Autocam in August
2005. Each of the two parties holds a stake of 50% in Weifu-Jialin and control the company jointly.
Chaoyang Weifu-Jialin Machinery Manufacturing Co., Ltd. (hereinafter referred to as Weifu-Jialin):
a limited company founded by the Company and Chaoyang Jialin Machinery Manufacturing Co.
LTD in June 2006. Each of the two parties holds a stake of 50% in Weifu-Jialin and control the
company jointly.
Note 7. Commentary on main items of consolidated financial statements
(The amount for items is taking RMB thousand as unit, excluded the specific ones with special
explanation)
1. Monetary capital
June 30, 2009 Dec. 31, 2008
Cash 756 402
Demand deposit – deposit in RMB 232,396 378,683
Demand deposit– deposit in EURO（EURO 131,000） 1,261 9
Fixed deposit 133,600 107,719
Other monetary capital 420 8,472
Other monetary capital(guarantee money) 129,269 138,533
497,702 633,818
[Note]Amount of guarantee money in fixed deposit and other monetary capital
June 30, 2009 Dec. 31, 2008
Guarantee money for
bank’s acceptance bill
129,269 138,533
Excluded the aforesaid guarantee, the monetary fund in period-end had no such restricted items as
other pledge, frozen; or risks of potential taking back.
2. Notes receivable
June 30, 2009 Dec. 31, 20084 4
June 30, 2009 Dec. 31, 2008
Commercial acceptance bill 81,246 84,330
Bank acceptance bill 307,537 304,404
Total 388,783 388,734
The due date of notes receivable at period-end is before Dec. 31, 2009.
Of the total notes receivable as of period-end, bank acceptance bill of RMB 14,230,000 was issued
as mortgage for opening notes payable.
3. Accounts receivable
(1) Analysis of the account age
June 30, 2009
Amount Proportion
(%)
Provision for
bad debts
Proportion of
provision
(%)
Net amount
Within 6 months 569,697 82.34 - 569,697
6 months to 1
year
42,748 6.17 4,275 10 38,473
1 to 2 years 13,264 1.92 2,653 20 10,611
2 to 3 years 1,713 0.25 685 40 1,028
Above 3 years 4,307 0.62 4,307 100 -
Individual
cognizance
60,179 8.70 60,179 100 -
691,908 100.00 72,099 619,809
Dec. 31, 2008
Amount Proportion
(%)
Provision for
bad debts
Proportion of
provision
(%)
Net amount
Within 6 months 432,924 80.77 - 432,924
6 months to 1
year
27,650 5.16 2,765 10 24,885
1 to 2 years 11,300 2.11 2,259 20 9,041
2 to 3 years 1,987 0.37 795 40 1,192
Above 3 years 3,133 0.58 3,133 100 -
Individual
cognizance
59,012 11.01 59,012 100 -
536,006 100.00 67,964 468,042
(2)Account receivable in foreign currency
Type of June 30, 2009 Dec. 31, 2008
foreign
currency
Sum in
original
currency
Exchange
rate
Converted
to RMB
Sum in
original
currency
Exchange
rate Converted
to RMB4 5
USD 1,428 6.8319 9,758 2,263 6.8346 15,467
EURO 233 9.6408 2,245 545 9.6590 5,263
12,003 20,730
(3) Classified according to account nature
June 30, 2009 Dec. 31, 2008
Item
Amount Proportion
(%)
Provision
for bad
debts
Amount Proportion
(%)
Provision
for bad
debts
Account
receivable
with
significant
amount in
single item
571,340 82.57 4,110 415,001 77.42 2,505
Account
receivable
with no
significant
amount in
single item
60,389 8.73 7,810 61,993 11.57 6,447
Individual
cognizance 60,179 8.70 60,179 59,012 11.01 59,012
691,908 100.00 72,099 536,006 100.00 67,964
Notes: Account receivable with significant amount in single item indicated the one which is above
RMB 1 million; account receivable with no significant amount in single item indicated the one
which is less than RMB 1 million.
For those accounts receivable with significant amount in single item, the Company made separate
devaluation test. Due to that no objective evidence had been found showing that devaluation had
already happened to the accounts, the Company had to respectively withdraw provision for bad debt
for the accounts receivable which were still in credit period according to aging analysis of accounts.
(4) The balance of accounts receivable at period-end does not include accounts owned by major
shareholders holding more than 5% (including 5%) shares of the Company. Arrearage owned by
related units could be found in 9, Note 9.
(5) The total amount owed by the top five units in accounts receivable amounted to RMB
327,840,000, accounting for 47.38% of the balance of accounts receivable as of period-end.
4. Account paid in advance
June 30, 2009 Dec. 31, 2008
Within 1 year 40,898 32,152
1 to 2 years 2,717 1,196
2 to 3 years 878 51
Above 3 years 165 196
44,658 33,595
5. Other accounts receivable
(1) Analysis of the account age4 6
June 30, 2009
Amount Proportion
(%)
Provision for
bad debts
Proportion of
provision (%) Net amount
Within 6 months 5,876 54.04 - - 5,876
6 months to 1
year
17 0.16 2 10.00 15
1 to 2 years 123 1.13 13 10.53 110
2 to 3 years 31 0.28 8 25.81 23
Above 3 years 323 2.97 34 10.59 289
Individual
cognizance
4,504 41.42 4,504 100.00 -
10,874 100.00 4,561 6,313
Dec. 31, 2008
Amount Proportion
(%)
Provision for
bad debts
Proportion of
Provision
(%)
Net amount
Within 6 months 5,809 51.81 - - 5,809
6 months to 1
year
322 2.87 18 5.45 304
1 to 2 years 224 2.00 14 6.62 210
2 to 3 years 277 2.47 18 6.62 259
Above 3 years 78 0.69 48 61.36 30
Individual
cognizance
4,504 40.16 4,504 100.00 -
11,214 100.00 4,602 6,612
(2) The balance of other accounts receivable at period-end does not include accounts owned by
major shareholders holding more than 5% (including 5%) shares of the Company. Arrearage owned
by related units could be found in 9, Note 9.
(3) Except for the debts owned by related companies and reserve fund for employees in other
accounts receivable that were not withdrawn with the provision for bad debts, others were all
withdrawn with provision for bad debts according to relevant proportions.
(4)The of total amount owed by the top five units in balance of other accounts receivable as of
periodr-end amounted to RMB 4,400,000, accounting for 40.46% of the total other accounts
receivable.in the period-end.
(5)Main units owing arrearage and specific amount of arrearage:
Nature or content June 30, 2009
Nanjing University, etc. [Note] Amount paid on its 4,400
[Note] Nanjing University, Southeast University, Nanjing University of Science and Technology as
well as Nanjing University of Technology owed arrearage of RMB 2,400,000 to the Company, since
the Company paid RMB 600,000 for each of the four universities on their behalf when the Company
and the four aforesaid universities started to establish Weifu Nonotechnology Co., Ltd. According to
the cooperation agreement, the universities would take the bonus distributed from Weifu
Nonotechnology since it established to repay the investment amount initially paid by the Company4 7
year by year. As the arrearage of RMB 2,000,000 owed by Jiangsu Science and Technology Center,
it was also the amount paid by the Company on its behalf. Whereas some difficulty existed in taking
back the aforesaid arrearage through annual bonus from Weifu Nonotechnology, the Company so
withdrew provision for bad debt in sum according to cautious principle.
6. Inventory
June 30, 2009 Dec. 31, 2008
Inventory
Inventory
falling price
reserves
Inventory
Inventory
falling price
reserves
Inventory
materials
147,335 44,961 151,614 44,961
Goods in
production
142,387 389 130,516 -
Finished
products
304,855 104,095 375,306 108,140
Inventory
goods
107 - 3,040 -
594,684 149,445 660,476 153,101
[Note] The net realizable value of the inventories refers to the estimated price for sales of
inventories after deducting the estimated cost occurred till the inventories finished, estimated sales
expenses and relevant tax expense.
7. Other current assets
June 30, 2009 Dec. 31, 2008
Receivable export tax rebates 3,348 4,891
Others - 23
3,348 4,914
8. Long-term equity investment
Dec. 31, 2008
Increase in
this period
Decrease in
this period June 30, 2009
Investment to
joint venture and
associated
enterprise
1,150,940 54,657 5,319 1,200,278
Investment to
other enterprises 114,285 5,000 - 119,285
Provision for
devaluation of
long-term
investment
-48,889 -220 - -49,109
1,216,336 59,437 5,319 1,270,454
(1) Long-term equity investment calculated by equity method4 8
Units invested
Invest
ment
proport
ion
Initial
investm
ent cost
Amount at
period-beg
in
Increas
e or
decreas
e in
invest
ment in
this
period
Increase
or
decrease
in equity
in this
period
Divi
den
ds
rece
ived
Increase
or
decrease
in
accumul
ated
equity
Amount at
period-end
Bosch Auto Diesel
System [Note 1] 31.50% 549,557 760,447 - -5,319 - 205,571 755,128
Zhonglian
Automobile
Electronic Co. 20.03% 120,124 258,892 - 39,000 - 177,768 297,892
Weifu Precision
Machinery 20.00% 2,000 9,310 - 936 - 8,246 10,246
Weifu Environmental
Protection [Note 2] 49.00% 24,500 71,716 - 8,883 - 56,099 80,599
Wuxi Longsheng
Technology Co., Ltd. 20.00% 600 1,752 - - - 1,152 1,752
Weifu-Autocam
[Note 3] 50.00% 37,842 43,677 - 5,513 - 11,348 49,190
Weifu-Jialin 50.00% 4,000 5,146 - 325 - 1,471 5,471
738,623 1,150,940 - 49,338 - 461,655 1,200,278
[Note 1] Bosch Auto Diesel System: The registered capital is USD 200,000,000, in which the
Company funded USD 60,000,000, accounting for 30% of registered capital, and Weifu Jinning
funded USD 3,000,000, accounting for 1.5% of registered capital.
[Note 2] Weifu Environmental Protection: founded collectively by Weifu Leader-the Company’s
subsidiary; and Huawei (Shanghai) Nano-Technology Co., Ltd, etc in May 2004. According to the
Company’s Articles of Association, Weifu Leader, Huawei (Shanghai) Nano-Technology Co., Ltd
and so on would jointly control this company.
[Note 3] Weifu-Autocam is a joint venture founded by the Company and American Autocam in Aug.
2005. The Company funded USD 5,000,000, accounting for 50% of the registered capital USD
10,000,000 of the company.
(2) Long-term equity investment calculated by cost method
Units invested Investment
proportion
Amount at
period-begi
n
Increase/D
ecrease in
this period
Amount at
period-end
Wuxi Guolian Securities Corporation [Note 1] 1.20 12,000 - 12,000
Guangxi Liufa Co., Ltd. 1.22 1,600 - 1,600
Changchai Group, Financing Company 800 - 800
H&J Vanguard Investment Co., Ltd. 11.72 33,000 - 33,000
Nanjing Hengtai insurance brokers Limited 1.85 1,000 - 1,000
Jiangsu Huifeng Insurance Agency Co. , Ltd. 10.00 500 - 500
Yangdong Co., Ltd. 1.18 2,356 - 2,356
Henan Gushi Weining Oil Pump & Nozzle
Co., Ltd. etc. [Note 2]
2,033 - 2,0334 9
Changzhou Diesel Engine Group Corporation,
etc. [Note 3]
1,056 - 1,056
Wuxi Capital Investment Co., Ltd. 1.875 3,000 - 3,000
Beijing Futian Environmental Power Holding
Co., Ltd.
12.95 56,940 - 56,940
Wuxi Xidong Technology Industrial Park
Holding Co., Ltd. [Note 4]
10.00 - 5,000 5,000
114,285 5,000 119,285
[Note 1] Guolian Securities Corporation: originally referred to Guolian Securities Co., Ltd., and
changed to the present name in 2008. The Company invested with cost of RMB 12 million, holding
18 million shares which accounted for 1.20% of the total shares.
[Note 2] Henan Province Gushi Weining Oil Pump & Nozzle Co. fully appropriated provision for
devaluation amounting to RMB 2.03 million in 2001.
[Note 3] The 3 units including Changzhou Diesel Engine Group Corporation were invested by
Nanjing Weifu Jinning Co., Ltd. with investment amount totaling to RMB 1,056,000. Details of
those companies were not separately listed here in consideration that their scales were too small.
[Note 4] In March 2009，The Company and Wuxi Industry Development Group Co., Ltd. and Wuxi
Taiji Industry Co., Ltd., etc. started to establish Wuxi Xidong Technology Industrial Park \ Co., Ltd.
together, the Company invested RMB 5,000,000 Which accounted for 10% of registered capital
RMB 50,000,000 of the Company.
(3) Provision for devaluation of long-term investment
Dec. 31, 2008
Increase in
this period
Decrease in
this period June 30, 2009
H&J Vanguard Investment Co., Ltd. 33,000 - - 33,000
Henan Gushi Weining Oil Pump &
Nozzle Co., Ltd. etc. 2,033 - - 2,033
Beijing Futian Environmental Power
Holding Co., Ltd. 11,000 - - 11,000
Jiangsu Huifeng Insurance Agency
Co. , Ltd. 500 - - 500
Yangdong Co., Ltd. 2,356 2,356
Changzhou Diesel Engine
Group Corporation, etc. [Note] - 220 - 220
48,889 220 - 49,109
[Note] The 3 units including Changzhou Diesel Engine Group Corporation were invested by
Nanjing Weifu Jinning Co., Ltd., among which, Changzhou Diesel Engine Group Corporation and
Yangdong Co., Ltd. fully appropriated provision for devaluation amounting to RMB 220,000 in this
period which was due to that they received successive losses in operation and their financial
condition deteriorated.
9. Fixed assets and accumulated depreciation
Item Dec. 31, 2008
Increase in
this period
Decrease in this
period June 30, 2009
(1)Original value of
fixed assets5 0
Houses &
Buildings 578,899 51,509 - 630,408
General equipment 160,582 6,977 244 167,315
Special equipment 848,047 38,931 11,867 875,111
Transportation
equipment 19,105 952 713 19,344
Other equipment 191,169 4,051 353 194,867
1,797,802 102,420 13,177 1,887,045
(2)Accumulated
depreciation
Item Dec. 31, 2008
Increase in
this period
Decrease in this
period June 30, 2009
Houses &
Buildings
126,508 8,779 - 135,287
General equipment 76,078 4,599 216 80,461
Special equipment 379,906 33,888 6,627 407,167
Transportation
equipment
8,574 1,193 385 9,382
Other equipment 101,685 11,050 283 112,452
692,751 59,509 7,511 744,749
(3)Provision for fixed assets devaluation
Item Dec. 31, 2008
Increase in
this period
Decrease in this
period June 30, 2009
General equipment 9,101 - - 9,101
Special equipment 43,962 - 1,296 42,666
Other equipment 4,674 - - 4,674
57,737 - 1,296 56,441
(4)Book value
Items Dec. 31, 2008 June 30, 2009
Houses &
Buildings
452,391 495,121
General equipment 75,403 77,753
Special equipment 424,179 425,278
Transportation
equipment
10,531 9,962
Other equipment 84,810 77,741
1,047,314 1,085,855
[Note 1] Original value of fixed assets increased RMB 102,420,000 in this period, among which
RMB 78,680,000 came from conversion of construction in process and others came from external
purchase.
[Note 2] Decrease of original value of fixed assets in this period mainly came from sales and
discarding as useless.
[Note 3] Fixed assets as of period-end did not include ones hired-in through financing and ones used
as mortgage.
[Note 4] Fixed assets as of period-end included some general, special and other equipments sealed5 1
up for keeping. The Company had already withdrawn devaluation reserve for these equipments
referring to the balance between the amounts receivable and their book values. Devaluation reserve
for fixed assets decreased in this report period due to that some fixed assets had been disposed as
useless and corresponding devaluation reserve for fixed assets were written-off.
10. Project in construction
Dec. 31,
2008
Increase in
this period
Amount of
projects
transferred
to fixed assets
June 30,
2009
Project of High Pressure Track
Joint 36,284 5,757 20,559 21,482
Project of Technology Reform on
Nationalizing Parts of Fuel
System
1,171 44 14
1,201
The second period project in
Weifu Jinning Hi-tech Zone 33,726 5,486 39,212 -
Project of No.103 Plot in Wuxi
New District 22,928 - - 22,928
Wuxi Huishan Development
Zone Project 33,964 1,106 - 35,070
Capacity-expansion of oil injector
available for diesel engine 9,049 15,366 - 24,415
Miscellaneous Projects 34,022 16,744 18,899 31,867
171,144 44,503 78,684 136,963
Devaluation reserve for projects
in construction - -
171,144 136,963
[Note 1] Capital used for projects in construction all came from self-raised proceeds.
[Note 2] Capitalized borrowing interests in Wuxi Huishan Development Zone Project reached at
RMB 1,300,247.
11. Intangible assets
Items
Dec. 31,
2008
Increase in
this period
Decrease in
this period June 30, 2009
(1)Original value of the
intangible assets
Land use right of parent
company
30,452 - - 30,452
Trademark permit use right
Weifu Jinning
26,356 - - 26,356
Land use right of Weifu
Jinning
28,752 - - 28,752
Software of Weifu Jinning 346 - - 3465 2
Land use right of Weifu
Diesel oil System
13,232 - - 13,232
Chartered right of Weifu
Diesel oil System
37,109 - - 37,109
Software of Weifu Diesel oil
System
5,592 - - 5,592
141,839 - - 141,839
(2)Accumulative
amortization
Items
Dec. 31,
2008
Increase in
this period
Decrease in
this period June 30, 2009
Land use right of parent
company
2,378 335 - 2,713
Trademark permit use right
Weifu Jinning
8,833 438 - 9,271
Land use right of Weifu
Jinning
10,302 479 - 10,781
Software of Weifu Jinning 242 35 - 277
Land use right of Weifu
Diesel oil System
1,243 141 - 1,384
Chartered right of Weifu
Diesel oil System
37,109 - - 37,109
Software of Weifu Diesel oil
System
3,502 562 - 4,064
63,609 1,990 - 65,599
(3)Book value
Items
Dec. 31,
2008
June 30, 2009
Land use right of parent
company
28,074 27,739
Trademark permit use right
Weifu Jinning
17,523 17,085
Land use right of Weifu
Jinning
18,450 17,971
Software of Weifu Jinning 104 69
Land use right of Weifu
Diesel oil System
11,989 11,848
Chartered right of Weifu
Diesel oil System
- -
Software of Weifu Diesel oil
System
2,090 1,528
78,230 76,240
[Note] Because the situation had not happened that recyclable amount of intangible asset is less than5 3
its book value, the Company did not withdraw devaluation reserve for intangible assets.
12. Deferred income tax asset
June 30, 2009 Dec. 31, 2008
Items Deferred
income tax
asset
Temporary
difference
Deferred
income tax
asset
Temporary
difference
Formation of provision
for bad debts
2,360 76,659 1,844 72,566
Formation of provision
for depreciation of
inventory
22,700 149,445 23,248 153,101
Formation of provision
for devaluation of fixed
asset
8,634 56,441 8,828 57,737
Formation of others 5,319 35,462 5,494 36,625
39,013 318,007 39,414 320,029
13. Provision for devaluation of asset
Decrease in
this period
Items
Dec. 31,
2008
Amount
withdrawn
in this
period Switching
back Written off
June 30,
2009
Provision for bad debts 72,566 4,159 41 25 76,659
Provision for
depreciation of
inventory
153,101 389 3,284 761 149,445
Provision for
devaluation of
long-term investment
48,889 220 - - 49,109
Provision for
devaluation of fixed
assts
57,737 - - 1,296 56,441
332,293 4,768 3,325 2,082 331,654
[Note] Provision for devaluation of fixed assts was written off in this period due to that fixed assets
had been discarded as useless thus the Company wrote off relevant provision for devaluation of
fixed assets.
14. Short-term loans
Type June 30, 2009 Dec. 31, 2008
Guaranteed loan 138,000 82,0005 4
Mortgage loan - 26,037
Credit loan (RMB) 610,000 735,000
748,000 843,037
[Note 1] No short-term loans which have fallen due but not been repaid occurred in this account.
[Note 2] Guaranteed loans in the short-term loans of period-end included guarantee loan of RMB 32
million provided by the Company for Weifu Mashan, RMB 75 million for Weifu Chang’an and
RMB 31 million for Weifu Leader
15. Notes payable
Type of notes June 30, 2009 Dec. 31, 2008
Bank acceptance bill 212,670 231,760
16. Account payable
June 30, 2009 Dec. 31, 2008
Account age
Proportion
(%) Account payable Proportion
(%) Account payable
within a year 97.31 573,120 94.94 476,655
One to two years 1.01 5,953 2.93 14,720
Two to three
years 0.25 1,472 0.74 3,723
Above three
years 1.43 8,422 1.39 6,992
100.00 588,967 100.00 502,090
[Note 1] There was no huge account payable with debt age above three years.
[Note 2] No accounts payable to shareholders holding over 5% shares (5% included) of the
Company
17. Account received in advance
[Note] No account of shareholders units holding over 5% shares (5% included) of the Company
18. Employees’ salary payable
Items Dec. 31, 2008 Increase in this
period
Decrease in
this period
June 30, 2009
Salary, bonus,
allowance and
subsidy
28,897 79,787 93,109 15,575
Employees’ welfare - 7,423 7,423 -
Social insurance,
etc. 24,455 34,117 34,612 23,960
Housing Fund Social
Insurance 1,686 8,490 8,620 1,556
Housing allowance
for old employees 38,515 23 3,439 35,099
Labor union
expenditure and 10,514 3,135 2,740 10,9095 5
Others (internal
insurance etc.) 31,419 936 88 32,267
135,486 133,911 150,031 119,366
19. Taxes payable
Taxes June 30, 2009 Dec. 31, 2008
VAT 14,533 -241
Tax for city
construction
1,351 -4
Income tax of
enterprise
7,376 9,865
Extras of education
expense
772 -2
Others 2,007 1,819
26,039 11,437
Tax payable of period-end increased RMB 14,600,000 over that of year-begin, which was mainly
due to that VAT payable increased and the tax for city construction and extras of education expense payable
correspondingly increased.
20. Other account payable
(1) No accounts payable to shareholders holding over 5% shares (5% included) of the Company
(2) Other huge accounts payable are listed as follows:
Character or
content Account age June 30,
2009
Bosch Group Trademark using
expense, etc. Within a year 8,989
Nanjing High-tech Developing
Corporation Land expense Above 3 years
13,913
Nanjing Electromechanical
Industry (Group) Co., Ltd.
Current account,
etc.
Mainly within 2
year
7,088
Jiangsu Hanjian (Group) Co., Ltd. Project account
of Weifu Jinning
Within a year
11,930
Expenses paid for employees
leaving their posts or retired Within 2 years
45,586
Nanjing High-tech Developing Corporation: The account payable amounting to RMB 19,500,000 to
Nanjing High-tech Development Corp. is for land use right of 200,000 square meters in High-tech
District, Nanjing Weifu Jinning got in Dec. 2002. Balance of period-end is the account payable for
this proceeding.
Nanjing Electromechanical Industry (Group) Co., Ltd.: Weifu Jinning borrowed capital of RMB
8,000,000 from Nanjing Steamer Machine Group Co., Ltd. in August of 1997. The two parties
agreed to amortize, till now, RMB 4,000,000 had been repaid. With agreement from Nanjing
Steamer Machine Group Co., Ltd., the rest borrowing transferred to repay to Nanjing
Electromechanical Industry (Group) Co., Ltd.5 6
21. Other current liabilities
Item June 30, 2009 Dec. 31, 2008
Interest occurred from bank loans - 2,994
Dividends payable 26,713 -
Others 17,285 7,689
43,998 10,683
22. Long-term accounts payable
Item June 30, 2009
Nanjing Finance Bureau Hi-tech
Branch [Note 1]
Financial
upporting fund (year 2001)
1,880
Nanjing Finance Bureau Hi-tech
Branch [Note 2]
Financial
upporting fund ( year 2003)
140
Nanjing Finance Bureau Hi-tech
Branch [Note 3]
Financial
upporting fund ( year 2004)
1,710
Nanjing Finance Bureau Hi-tech
Branch [Note 4]
Financial
upporting fund ( year 2005)
1,140
Nanjing Finance Bureau Hi-tech
Branch [Note 5]
Financial
pporting fund ( year 2006)
1,250
Nanjing Finance Bureau Hi-tech
Branch [Note 6]
Financial
supporting fund ( year
2007)
1,230
National debt transferred to loan
[Note 7] 5,600
Nanjing Finance Bureau Hi-tech
Branch [Note 8]
Financial
supporting fund ( year
2008)
2,750
15,700
[Note 1] To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development
Zone, financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for
supporting use, the term is from Dec. 20, 2001 to Aug. 18, 2007. Provided that the operation period
in the zone is less than 10 years, financial supporting capital will be reimbursed.
[Note 2] To encourage the Company to enter Nanjing High-tech Technology Industry Development
Zone, financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for
supporting use, the term is from Dec. 24, 2003 to Dec. 24, 2007. Provided that the operation period
in the zone is less than 10 years, financial supporting capital will be reimbursed. The original
calculating into the other account payable should be transferred to long-term account payable.
[Note 3] To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development
Zone, financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for
supporting use, the term is from Aug. 5, 2004 to Aug. 4, 2012. Provided that the operation period in
the zone is less than 15 years, financial supporting capital will be reimbursed.
[Note 4] To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development
Zone, financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for
supporting use, the term is from Oct. 20, 2005 to Oct. 20, 2020. Provided that the operation period
in the zone is less than 15 years, financial supporting capital will be reimbursed.5 7
[Note 5] To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development
Zone, financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for
supporting use, the term is from Jul. 20, 2006 to Jul. 20, 2021. Provided that the operation period in
the zone is less than 15 years, financial supporting capital will be reimbursed.
[Note 6] To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development
Zone, financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for
supporting use, the term is from Sep. 17, 2007 to Sep. 17, 2022. Provided that the operation period
in the zone is less than 15 years, financial supporting capital will be reimbursed.
[Note7] National debt transferred to loan: is the transferred national debt capital received by Weifu
Jinning in 2007.
[Note 8] To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development
Zone, financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for
supporting use, the term is from Nov. 10, 2008 to Nov. 10, 2023. Provided that the operation period
in the zone is less than 15 years, financial supporting capital will be reimbursed.
23. Share capital
Dec. 31, 2008
Increase and
decrease in the
period
June 30, 2009
Non-circulating share capital with
restricted trade conditions
-Domestic legal person shares 114,062 -14,040 100,022
-Other domestic shares 52 2 54
Including: Shares by senior
executors 52 2 54
114,114 -14,038 100,076
Circulating share capital
-Domestically listed foreign shares
(B-share) 114,920 - 114,920
-Domestically listed ordinary shares
(A-share) 338,242 14,038 352,280
453,162 14,038 467,200
567,276 - 567,276
24. Capital Reserves
Dec. 31, 2008
Increase and
decrease in the
period
June 30, 2009
Capital premium [Note 1] 888,497 - 888,497
Other capital reserve [Note 2] 17,943 - 17,943
Other capital reserve 1,140 - 1,140
907,580 - 907,580
[Note 1] Capital premium refers to the part of exceeding share capital when the Company issues
B-shares and A-shares;
[Note 2] Other capital reserve refers to the donation that the Company accepts non-cash assets. The5 8
assets have been coped with. And capital reserve identified by its subsidiaries in proportion and
affiliated companies in equity method.
25. Surplus Public Reserve
Item Dec. 31, 2008 Increase in the
period
Decrease in
the period June 30, 2009
Statutory surplus
public reserve
262,440 - - 262,440
26. Undistributed profit
Item June 30, 2009 Dec. 31, 2008
Undistributed profit at the beginning 769,049 682,893
Add: Net profit in this year 87,843 193,418
Less: Statutory surplus public
reserve withdraw - 20,469
Dividends of ordinary shares payable 91,899 86,793
Undistributed profit in the period end 764,993 769,049
[Note 2] On April 16, 2009, the 4th Meeting of the Sixth Board of Directors of the Company
examined and passed the 2008 Profit Distribution Plan and sent RMB 1.62 (including tax) per 10
shares to all shareholders, and there were in total RMB 91,898,711.19 interest of shares. The above
distribution plan was examined, passed and implemented Shareholders’ General Meeting of 2008.
27. Operating income
Item Jan. – Jun., 2009 Jan. – Jun., 2008
Income of diesel oil
internal-combustion engine pump
and accessory
1,130,187 1,842,196
Income of catalyze purifier and
accessory 174,712 89,256
Income of other products 2,925 29,495
Import & export trade 52,740 72,357
Income of other business 123,050 123,488
Combination offset -222,466 -281,696
1,261,148 1,875,096
Total sales income to the top 5 clients in the operating income is RMB 425,840,000, which was
33.77% of the main operation income.
28. Operating cost
Item Jan. – Jun., 2009 Jan. – Jun., 2008
Income of diesel oil
internal-combustion engine pump
and accessory
948,452 1,457,4015 9
Income of catalyze purifier and
accessory 149,106 81,212
Income of other products 3,734 26,591
Import & export trade 50,117 69,049
Income of other business 105,259 133,702
Combination offset -219,466 -281,696
1,037,202 1,486,259
29. Operating tax and extras
Jan. – Jun., 2009 Jan. – Jun., 2008
City maintenance and
construction tax
5,491 7,139
Education associate charge 3,138 4,083
Business tax 15 31
8,644 11,253
30. Financial expenses
Jan. – Jun., 2009 Jan. – Jun., 2008
Loan interest expenses 20,743 50,214
Bill discount interest 1,947 9,227
Commission expenses 744 962
Exchange losses -1,771 8,059
Interest income of bank deposit
(Note)
-6,477 -5,769
15,186 62,693
[Note] Income of bank deposit includes income of fixed deposit interest.
31. Losses from devaluation of asset
Item Jan. – Jun., 2009 Jan. – Jun., 2008
Losses of bad debts 4,118 4,669
Losses of depreciation of
inventory
-2,895 -580
Losses of devaluation of fixed
asset
-1,296 -51
Losses of devaluation of
long-term equity investment
220 -1,133
147 2,905
32. Investment income6 0
Jan. – Jun., 2009 Jan. – Jun., 2008
Income of joint-venture companies and
affiliated companies [Note] 49,338 106,812
Other long-term equity investment income 900 -
Income from transfer of equity - 583
50,238 107,395
There was no significant limitation of investment income returns.
[Note] Income of joint venture companies and affiliated companies
Jan. – Jun., 2009 Jan. – Jun., 2008
Weifu Autocam 5,513 4,968
Weifu Jialin 325 637
Weifu Environmental Protection 8,883 6,777
Zhonglian Auto Electronic Co., Ltd. 39,000 30,000
Weifu Precision Machinery 936 1,430
Bosch Auto Diesel System -5,319 63,000
49,338 106,812
33. Non-operating income
Item Jan. – Jun., 2009 Jan. – Jun., 2008
Income of the dispoal of fixed
assets 1,115 48
Government subsidiary [Note] 2,303 -
Other 15 137
3,433 185
[Note] Details of government subsidiary
Item Jan. - Jun., 2009
Return of value added tax 2,263
Other 40
2,303
34. Non-operating expense
Item Jan. - Jun., 2009 Jan. - Jun., 2008
Income of the dispoal of fixed
assets
1,578 1,056
Expenses of donation - 1,2506 1
Market commodity adjusting
fund etc.
1,527 5,983
Other expenses 411 246
3,516 8,535
[Note] According to Notice on Abolish and Discontinue Imposing Partial Admistrative and
Utilities Charges and Government Foundation Project (No. 78, SZF [2008]), grain risk funds were
abolished and regulating funds of market price of commodities were discontinued imposing from
Sep. 1, 2008..
35. Expense of income tax
Item Jan. - Jun., 2009 Jan. - Jun., 2008
Income tax payable 7,848 12,515
Added loan of deferred income
tax 401 158
Expense of income tax 8,249 12,673
36. Related item explanation for cash flow statement
(1) Received other cash RMB 13,949,605.17 related to operation activity are mainly the income of
the bank deposit interest and government grants etc.
(2) Paid other cash RMB 50,988,130.15 related to operation activity are mainly the operation
expense and three guaratee expenses of management expense, travelling expenses, transport
expenses, warehouse leasing expenses, scientific research expenses, business entertainment
expenses, water and electricity expenses etc.
(3) Supplementary materials of cash flow statement
Item
Jan. - Jun.,
2009
Jan. - Jun., 2008
I. Net profit subject to cash flow arising from operating
activities
Net profit 94,206 137,584
Add: Provision for fixed assets devaluation 147 2,905
Fixed assets depreciation 59,138 60,198
Amortization of intangible assets 1,990 3,847
Allocations of long-term expenses to be amortized 341 161
Losses from disposal of fixed, intangible and other long-term
assets(Income is listed with “-”) 464 1,008
Losses from obsolete fixed assets(Income is listed with “-”) - -
Losses from changes of fair value(Income is listed with “-”) - -
Financial expenses 20,743 50,214
Losses from investment(Income is listed with “-”) -50,238 -107,395
Decrease of deferred income tax(Increase is listed with “-”) 401 158
Increase of deferred income tax( (Decrease is listed with “-”) - -6 2
Decrease of inventory(Increase is listed with “-”) 65,793 157,465
Decrease of operating receivables(Increase is listed with “-”) -156,130 -240,594
Increase of operating payables(Decrease is listed with “-”) 80,954 207,919
Other - -
Net cash generated from operations 117,809 273,470
II. Significant investment and financial activities not related to
cash flows
Capital transferred from debts
Convertible company bonds due within one year
Fixed assets leasing for financing
III. Net increase in cash /cash equivalent
Balance of cash at period-end 368,433 713,671
Less: Balance of cash at period-beginning 495,285 678,013
Add: Balance of cash at period-beginning for affiliated
enterprises mergerd in proportion method in first half year - -
Add: Balance of cash equivalent at period-end - -
Less: Balance of cash equivalent at period-beginning - -
Net increase in cash /cash equivalent -126,852 35,658
(4) Constitution of cash and cash equivalents
Item June 30, 2009 June 30, 2008
Cash balance listed in balance sheet 497,702 831,951
Less: Guarantee of bank acceptance bill not conforming to the
definition of cash 129,269 118,280
Balance of cash and cash equivalents listed in cash flow
statement 368,433 713,671
Note 8. Notes to the main items in the financial statements of the parent company (The
amount is taking RMB thousand as unit excluded the specific explanations)
1. Accounts receivable
(1) Analysis of account age
June 30, 2009
Amount Proportion
(%)
Provision
for bad debts
Proportion of
provision (%) Net amount
Within six months
295,775 81.24 - - 295,775
Between 6 months
to 1 year
7,801 2.14 780 10 7,021
Between 1-2 years
4,071 1.12 814 20 3,257
Between 2-3 years
20 0.01 8 40 126 3
Above three years
365 0.10 365 100 -
Individual
cognizance
56,020 15.39 56,020 100 -
364,052 100.00 57,987 306,065
Dec. 31, 2008
Amount Proportion
(%)
Provision
for bad debts
Proportion of
provision (%) Net amount
Within six
months
238,456 79.30 - - 238,456
Between 6
months to 1
4,837 1.61 484 10 4,353
Between 1-2
years
67 0.02 13 20 54
Between 2-3
years
334 0.11 133 40 201
Above three
years
201 0.07 201 100 -
Individual
cognizance
56,808 18.89 56,808 100 -
300,703 100.00 57,639 243,064
(2) Classified by character of account
June 30, 2009 Dec. 31, 2008
Item
Amount
Pro
portion
(%)
Provision
for bad
debts
Amount
Pro
portion
(%)
Provision
for bad
debts
Account
receivable with
significant single
amount
291,875 80.17 1,316 232,713 77.39 467
Account
receivable with not
significant single
amount
16,157 4.44 651 11,182 3.72 364
Individual
cognizance 56,020 15.39 56,020 56,808 18.89 56,808
364,052 100.00 57,987 300,703 100.00 57,639
Note: Account receivable with significant single amount refers to account receivable with amount
over 1 million; account receivable with not significant single amount refers to account receivable
with amount less than 1 million.
To account receivable with significant single amount, the Company independently make
depreciation test. Because there is no objective proof to show it has depreciated, the account6 4
receivable in ctedit term is still respectively withdrew as bad debt provision as analysis of account
age.
(3) There is no debt of shareholders who held over 5% equity of the Company in the balance of
account receivable, and details of debt of relevant units could be found in Note 9 (9).
(4) The total amount of the top 5 debt units in the period-end balance of account receivable is RMB
163,950,000, which is 45.03% of in the period-end balance of account receivable.
2. Other accounts receivable
June 30, 2009
Amount Proportion
(%) Provision
for bad debts
Within six months 1,350 23.21 -
Between 6 months to 1 year
-
- -
Between 1-2 years 40 0.69 -
Between 2-3 years 11 0.19 -
Above three years 14 0.24 -
Individual cognizance 4,400 75.67 4,400
5,815 100.00 4,400
Dec. 31, 2009
Amount Proportion
(%) Provision
for bad debts
Within six months 1,692 26.80 -
Between 6 months to 1 year 146 2.31 -
Between 2-3 years 45 0.71 -
Above three years 30 0.48 -
Individual cognizance 4,400 69.70 4,400
6,313 100.00 4,400
[Note] The balance of other account receivable at the end of the period is mainly the money reserve
borrowed by employees, investment account incurred for other shareholders of Weifu Nano etc. The
investment withdrawn 100% bad debts reserve incurred for other shareholders of Weifu Nano by the
Company amounting to RMB 4,400,000.
3. Long-term equity investment
June 30, 2009 Dec. 31, 2009
Consolidated subsidiaries 723,770 723,770
Joint venture companies and affiliated
companies 1,082,023 1,041,568
Other long-term equity investment 56,256 51,256
Provision for devaluation of long-term
investment -40,856 -40,8566 5
1,821,193 1,775,738
(1) Investment on subsidiaries calculated based on cost method
Name of the investee Investment
proportion
Amount at the
period-begin
Increase
in the period
Decrease in the
period
Amount at
the
period-end
Weifu Jinning 80.00% 178,640 - - 178,640
Weifu Leader 94.81% 230,114 - - 230,114
Weifu Nano 80.00% 24,000 - - 24,000
Weifu Diesel Oil
System
70.00% 140,000 - - 140,000
Weifu Mashan 100.00% 48,695 - - 48,695
Weifu Chang’an 100.00% 70,899 - - 70,899
Weifu Jida 70.00% 3,500 - - 3,500
Weifu
International
Trade
85.83% 27,922 - - 27,922
723,770 - - 723,770
(2) Long-term equity investment calculated based on equity method
Name of the
investee
Investme
nt
proportio
n
Initi a l
investme
nt cost
Amount at
period-begin
Increase
/decreas
e
in
investme
nt in the
period
Increase
/decrease
in equity
in the
period
Bonus
gained
Increas
e/decre
ase
amount
of
accumu
lative
equity
Amount at
period-end
Weifu Autocam 50.00% 37,842 43,677 - 5,513 - 11,348 49,190
Weifu Jial in 50.00% 4,000 5,146 - 325 - 1,471 5,471
Bosch
Automobile
Diesel Oil
System Co.,
Ltd.
30.00% 523,695 724,542 - -5,318 - 195,529 719,224
Zhonglian
Automobile
Electronic
Company
Limi ted
20.03% 120,124 258,892 - 39,000 - 177,768 297,892
Wuxi Weifu
Preci sion
Machinery
Manufacturing
Co., Ltd.
20.00% 2,000 9,311 - 935 - 8,246 10,246
687,661 1,041,568 - 40,455 - 394,362 1,082,023
(3) Other long-term equity investment calculated based on cost method6 6
Name of investee
Investm
ent
proporti
on
Amount in
period-beg
in
Increase/dec
rease in the
period
Amount in
period-end
Gulian Securities Co., Ltd. 1.20 12,000 - 12,000
Guangxi Liufa Co., Ltd. 1.22 1,600 - 1,600
Finance Company of Changchai
Group 800 - 800
Hejun Venture Capital Co., Ltd. 11.72 33,000 - 33,000
Nanjing Hengtai Insurance and Broker
Securities Co., Ltd. 1.85 1,000 - 1,000
Jiangsu HSBC Insurance Agents
Limited 10.00 500 - 500
Yangdong Co., Ltd. 2,356 - 2,356
Wuxi Xidong Technology Industrial
Park Holdings Co., Ltd.
10.00 - 5,000 5,000
51,256 5,000 56,256
(4) Provision for devaluation of long-term investment
Amount in
period-begin
Increase in the
period
Decrease in
the period Amount in
period-end
Hejun Venture Capital Co., Ltd. 33,000 - - 33,000
Weifu Nano 1,500 - - 1,500
Weifu Jida 3,500 - - 3,500
Yangdong Co., Ltd. 2,356 - - 2,356
Jiangsu HSBC Insurance Agents
Limited
500 - - 500
40,856 - - 40,856
4. Operating income
Item Jan. – Jun., 2009 Jan. – Jun., 2008
Oil pump, nozzel and fittings 635,562 918,840
Income from other products 2,926 13,392
Other business income 95,618 97,693
734,106 1,029,925
5. Operating cost
Item Jan. – Jun., 2009 Jan. – Jun., 2008
Oil pump, nozzel and fittings 569,862 767,995
Income from other products 3,734 13,2006 7
Other business income 83,089 109,556
656,685 890,751
6. Investment income
Item Jan. – Jun., 2009 Jan. – Jun., 2008
Investment income calculated
based on equity method 40,455 100,035
Bonus of subsidiaries calculated
based on cost method 33,510 69,417
Other bonus calculated based on
cost method 900 -
Other - 187
74,865 169,639
7. Explanations on cash flow statement
(1) Cash received arising from other operating activities amounted to RMB 12,089,232.02 which
was the interest income of bank deposit and income of technology trade.
(2) Cash paid for other operating activities amounted to RMB 22,741,901.90 which was the
operation expense and three guaratee expenses of management expense, travelling expenses,
transport expenses, warehouse leasing expenses, scientific research expenses, business
entertainment expenses, water and electricity expenses etc.
(3) Supplementary materials of cash flow statement
Item Jan. – Jun., 2009 Jan. – Jun., 2008
I. Net profit subject to cash flow arising from operating
activities
Net profit 81,878 159,463
Add: Provision for fixed assets devaluation -526 4,389
Fixed assets depreciation 34,162 36,241
Amortization of intangible assets 335 341
Allocations of long-term expenses to be amortized - -
Losses from disposal of fixed, intangible and other long-term
assets(Income is listed with “-”) 1,314 884
Losses from obsolete fixed assets(Income is listed with “-”) - -
Losses from changes of fair value(Income is listed with “-”) - -
Financial expenses 14,998 27,494
Losses from investment(Income is listed with “-”) -74,865 -169,639
Decrease of deferred income tax(Increase is listed with “-”) -34 -543
Increase of deferred income tax( (Decrease is listed with “-”) - -
Decrease of inventory(Increase is listed with “-”) 21,638 56,447
Decrease of operating receivables(Increase is listed with “-”) -64,987 -204,7476 8
Increase of operating payables(Decrease is listed with “-”) 162,652 228,069
Other - -
Net cash generated from operations 176,565 138,399
II. Significant investment and financial activities not related to
cash income and expense
Capital transferred from debts
Convertible company bonds due within one year
Fixed assets leasing for financing
III. Net increase in cash /cash equivalent
Balance of cash at period-end 117,860 129,571
Less: Balance of cash at period-beginning 141,771 131,564
Add: Balance of cash equivalent at period-end - -
Less: Balance of cash equivalent at period-beginning - -
Net increase in cash /cash equivalent -23,911 -1,993
(4) Constitution of cash and cash equivalents
Item June 30, 2009 June 30, 2008
Cash balance listed in balance sheet 204,860 234,571
Less: Guarantee of bank acceptance bill not conforming to the
definition of cash 87,000 105,000
Balance of cash and cash equivalents listed in cash flow
statement 117,860 129,571
Note 9. The relationship of the related parties and transactions (Unit: RMB’ 000)
1. The related parties existing controlling relationship
Name of enterprise
Registered
address Core business
Relationship
with the
Company
Economic type
Legal
representative
Industrial Group Wuxi city Operation of
state-owned property Parent Company Wholly owned by
the state Jiang
Guoxiong
Weifu Mashan Mashan,Wuxi
Accessories and
fittings of internal
engine components
Subsidiary Company Limited
Gao
Guoyuan
Weifu Jida Development
District, Wuxi Metal Nano-material Subsidiary Company Limited Xu
Liangfei
Weifu Chang’an Chang’an,
Xishan
Accessories and
fittings of internal
engine components
Subsidiary Company Limited
Han
Jiangming
Weifu Leader New District,
Wuxi Silencer,
Catalytic converter Subsidiary Company Limited Wang
Weiliang
Weifu Nano Huishan
District, Wuxi Nanometer Materials Subsidiary Company Limited Xu Liangfei
Weifu Jingning
Nanjing
Development
District
Oil pump and oil
mouth Subsidiary Company Limited Wang
Weiliang6 9
Weifu Diesel
Oil System New District,
Wuxi
Accessories and
fittings of internal
engine components
Subsidiary Company Limited Wang
Weiliang
Weifu International
Trade Wuxi City Subsidiary Company Limited Gao
Guoyuan
2. Registered capital of the related parties existing controlling relationship and the changes
Name of
enterprise
Amount in
the period
beginning
Increase in
the period
Decrease in
the period
Amount in
the period
end
Industrial Group 134,830 - - 134,830
Weifu Mashan 45,000 - - 45,000
Weifu Jida 5,000 - - 5,000
Weifu Chang’an 60,000 - - 60,000
Weifu Leader 260,000 - - 260,000
Weifu Nano 30,000 - - 30,000
Weifu Jingning 346,287 - - 346,287
Weifu Diesel
Oil System 300,000 - - 300,000
Weifu International Trade 30,000 - -
30,000
3. Share capital of the related parties existing controlling relationship and the changes
Amount in the period
beginning
Amount in the period
Name of End
enterprises
Amount %
Increase in the
period
Decrease in
the
period Amount %
Industrial Group 114,062 20.11 - 14,040 100,022 17.63
Weifu Mashan 45,000 100.00 - - 45,000 100.00
Weifu Jida 3,500 70.00 - - 3,500 70.00
Weifu Chang’an 60,000 100.00 - - 60,000 100.00
Weifu Leader 246,500 94.81 - - 246,500 94.81
Weifu Nano 24,000 80.00 - - 24,000 80.00
Weifu Jingning 277,029 80.00 - - 277,029 80.00
Weifu Diesel
Oil System 210,000 70.00 - - 210,000 70.00
Weifu
International
Trade 27,250 90.83 - - 27,250 90.83
4. The related parties existing joint controlling relationship7 0
5. Registered capital of the related parties existing joint controlling relationship and the
changes
Name of enterprise
Amount in the period
beginning
Increase in the
period
Decrease in
the period
Amount in the
period end
Weifu Environmental
Protection 50,000 - - 50,000
Weifu Autocam USD10,000 - - USD10,000
weifu Jianlin 8,000 - - 8,000
6. Share capital of the related parties existing joint controlling relationship and the changes
Amount in the period
beginning
Amount in the period
Name of End
enterprises
Amount %
Increase
in the
period
Decrease in
the
period Amount %
Weifu
Environmental
Protection
24,500 49.00 - - 24,500 49.00
Weifu Autocam USD5,000 50.00 - - USD5,000 50.00
weifu Jianlin 4,000 50.00 - - 4,000 50.00
7. Type of the related parties without existing joint controlling relationship
Name of enterprises Relationship with the Company
Bosch Auto Diesel System Affiliated company
Weifu Precision Machinery Affiliated company
Wuxi Weifu Trade Co., Ltd. The same parent company
Wuxi Weixin Machinery Co., Ltd. The same parent company
Kunming Xitong Machinery Co., Ltd. Joint venture company of
Industrial Group
Wuxi Longsheng Technology Co., Ltd. Affiliated company of Weifu
Leader
8. The transactions between the Company and the related parties
(1) Purchase of commodities or labor force
Name of enterprises Jan. – Jun., 2009 Jan. – Jun., 2008
Industrial Group - 18,282
Name of
enterprise
Registered
address Main business Relationship with the
Company Economic type
Legal
representativ
Weifu
Environmental
Protection
New district of
Wuxi Catalyst Joint venture company
of Weifu Leader
Sino-foreign joint
venture enterprise Ou Jianneng
Weifu Autocam
New district of
Wuxi
Spare parts of
automobiles
Joint venture
enterprise
Sino-foreign joint
venture enterprise
Gao
Guoyuan
Weifu Jialin Zhaoyang,
Liaoning
Accessories and
fittings of
internal
i
Joint venture
enterprise
Limited
company
Li
Xiaofeng7 1
Weifu Precision Machinery 36,146 66,392
Bosch Auto Diesel System 24,315 17,404
Wuxi Weifu Trade Co., Ltd. 610 902
Weifu Jialin 100 13
Weifu Environmental Protection 90,510 68,424
Wuxi Longsheng Technology Co.,
Ltd. 3,313 1,242
Weifu Autocam - 51
The prices of related transactions between the Company and the related parties would be transacted
according to the ordinary commercial price; there were no significant situations that are higher or
lower than the normal transaction price.
(2) Sale of commodities or labor forces, etc.
Name of enterprises Jan. – Jun., 2009 Jan. – Jun., 2008
Industrial Group - 59,307
Weifu Precision Machinery 5,451 7,938
Bosch Auto Diesel System 109,732 68,406
Weifu Jialin 24,089 21,745
Wuxi Weifu Trade Co., Ltd. 2,878 1,831
Kunming Xitong Machinery Co.,
Ltd. 48,334 29,589
Weifu Environmental Protection 1,777 1,605
Weifu Autocam 767 8
The prices of related transactions between the Company and the related parties would be transacted
according to the ordinary commercial price; there were no significant situations that are higher or
lower than the normal transaction price.
(3) Technological service fee, and commission fees
Jan. – Jun., 2009 Jan. – Jun., 2008
Technological service fees for Bosch
Diesel Oil System payable 1,236 3,023
Interest income of Weifu Autocam
receivable - 118
House rental fees of Weifu
Environmental Protection receivable 540 -
The prices of related transactions between the Company and the related parties would be transacted
according to the contract price.
(4) Purchase of fixed assets
Name of enterprises Jan. – Jun., 2009 Jan. – Jun., 2008
Industrial Group - 4,777
Wuxi Weixin Machinery Co., Ltd. - 2,972
(5) Other transaction of the Company and Weifu Group
The following agreements with Industrial Group:
The agreement of using trademark7 2
The Company sells products using the trademark of Industrial Group, and pays 0.3% of the total
sales amount for using trademark. The amount every year would be no less than RMB 1,200,000.
The agreement takes effect from May 1, 1995 with the duration of 10 years. Due to that the duration
was expired, the two parties concerned signed the following supplementary agreement on April 19,
2005: the original contract will be prolonged for ten years till April 30, 2015 and other articles of
original contract will continuously take effect.
The leasing agreement of land using right
The Company paid the first rent fees amounting to RMB 327,285 to Industrial Group in order to
obtain use right for land, with an increase of 10% year by year. The agreement takes effect from
March 1, 1995 with the duration of 50 years. In according to the relevant regulations in Law of the
People’s Republic of China on Urban Real Estate Administration, Method on The Management of
Land Asset Leasing of National Supervision Enterprise (WXGZIQ [2007] No 24 and on Printing
and Distributing the Notice the Lowest Standard for Selling the Industrial Using Land from Jiangsu
Proovincial Government Office (SZBF [2007] No.21),, the Company and Industrial Group reached
the agreement on land leasing dated August 8, 2007. The Company leased the industrial using land
of Industrial with the acre of 100,000 kilometers Jan 1, 2007 to Dec. 31, 2009 and the annual rent
was RMB 2,600,000.
The significant transactions of the Company and Industrial Group are as follows:
Jan. – Jun., 2009 Jan. – Jun., 2008
Expenses for using land and trademark 2,980 3,755
Amount of guarantee for loans of the
Company and subsidiaries - 50,000
9. The Balance of accounts receivable and payable of the related parties
June 30, 2009 Dec. 31, 2009
Accounts receivable:
Bosch Auto Diesel System 67,605 22,956
Wuxi Weifu Trade Co., Ltd. 828 264
Weifu Jialin 18,767 13,670
Kunming Xitong Machinery Co.,
Ltd.
15,857 10,307
Weifu Precision Machinery － 211
Payment in advance:
Bosch Auto Diesel System 20,000 －
Bills payable:
Weifu Environmental Protection － 10,800
Accounts payable:
Weifu Precision Machinery 15,544 2,513
Weifu Environmental Protection 63,463 39,947
Bosch Auto Diesel System 8,720 22,997
Weifu International Trade Co.,
Ltd.
428 4567 3
Wuxi Weixin Machinery Co., Ltd. 14 14
Wuxi Longsheng Technology Co.,
Ltd.
2,024 －
Note 10. Contingencies
Ended June 30, 2009, the Company and its subsidiaries have no significant contingent debts and
losses except for the following matters:
1. The Company and its subsidiaries took the bank deposit of RMB 129,270,000 as the bails or
pledges to obtain the bank acceptance bill or get bank loans, etc.
2. The Company and its subsidiaries took the bank deposit of RMB 14,230,000 as the pledges to
obtain the bank acceptance bill.
Note 11. Commitments
Ended June 30, 2009, the Company and its subsidiaries have the following significant commitment:
1. The Company and its subsidiaries need to pay RMB 19,700,000 for workshop building and
equipment purchasing (contract has been made).
2. The subsidiary Weifu Auto Diesel System will pay the remaining transferring amount of fuel
injector shifting project of RMB 6,422,300 to Bosch Auto Diesel System on Oct. 30, 2009.
Note 12. Subsequent Non-adjustment Event on the Balance Sheet Date
Except the followings, there existed no other significant after date non-adjusted events in balance
sheet.
1. Ended as August 27, 2009, totally RMB 99,800,000 of bills payable of the Company at the end of
June, 2009 has been cashed.
2. For the business development of the Company, Bosch Auto Diesel System transferred its
equipment for manufacturing fuel injector assembly and the relevant assets amounting to RMB
64,222,800 to Weifu Auto Diesel System, among which the equipment of RMB 24,074,500,
inventory of RMB 23,148,300 and intangible assets of RMB 17,000,000. Under the terms of the
agreement, Weifu Auto Diesel System has paid the asset transferring amount of RMB 20,000,000
and RMB 37,800,500 respectively on June 1, 2009 and August 14, 2009.
Note 13. Non-recurring gains and losses (Gains listed with “+”, Losses listed with “-”;
Unit:’000)
Item Jan. – Jun., 2009 Jan. – Jun., 2008
1. Gains and losses arising from disposal of
non-circulating assets 832 -425
2. Governmental subsidy written into current gains
and losses 2,303 -
3. Other non-operating net amount of income and
expense except for the aforesaid items -395 -1,360
Total nonrecurring gains/losses 2,740 -1,785
Amount influenced by the income tax on the above
gains and losses -633 406
Net amount of non-recurring gains/losses 2,107 -1,379
Including: Non-recurring gains/losses attributable to
minority shareholders’ gains/losses 143 77 4
Non-recurring gains/losses attributable to
shareholders of parent company’s gains/losses 1,964 -1,386
Note 14. Supplementary information
Earnings per share and return on equity
Item Jan. – Jun., 2009 Jan. – Jun., 2008
Net profit attributable to the shareholders of
the common share of the Company(Unit:
RMB) 87,842,946.80 127,253,068.96
Common shares issued by the parent
company 567,275,995.00 567,275,995.00
Equity converted to share capital
during the report period － －
Weighted average of the common
shares of the parent company 567,275,995.00 567,275,995.00
Basic earnings per share 0.15 0.22
Diluted proceedings － －
Diluted earnings per share 0.15 0.22
Fully diluted return on equity 3.51% 5.04%
Weighted average return on equity 3.49% 5.16%
Earnings per share and return on equity after deducting non-recurring
gains and losses
Basic earnings per share 0.15 0.23
Diluted earnings per share 0.15 0.23
Fully diluted return on equity 3.43% 5.09%
Weighted average return on equity 3.41% 5.22%
Note 15. Other significant proceedings
The Board of the Directors of the Company agrees to hand out the 2009 Semi-Annual Financial
Report of the Company on August 27, 2009.
