无锡威孚高科技股份有限公司
WEIFU HIGH-TECHNOLOGY CO., LTD.
2010 SEMI-ANNUAL REPORT
August 11, 20102
Contents
Section I. Important Notice .............................................................................3
Section II. Company Profile …………………………………………………4
Section II. Changes in Share Capital and Particulars about Shares held by
Main Shareholder…….. …………………………………………………….7
Section IV. Directors, Supervisors and Senior Executives ………………….10
Section V. Report of the Board .......................................................................11
Section VI. Significant Events ………………………………………………15
Section VII. Financial Report ……………………………………………….22
Section VIII. Document Available for References ………………………….223
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 2010 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.
2010 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 2010 is true and complete.4
Section II. Company profile
I. Basic information
(I) Legal Company Name:
Name in Chinese: 无锡威孚高科技股份有限公司
Abbreviation in Chinese: 威孚高科、苏威孚B
Name in English: WEIFU HIGH-TECHNOLOGY CO., LTD.
Abbreviation in English: WFHT
(II) Legal Representative: Mr. Wang Weiliang
(III) 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.: 0510-82719579
Fax: 0510-82751025
E-Mail: wfjt @ public1.wx.js.cn
(IV)Registered Address: No.5 of Huashan Road, National Hi-Tech Industry Development Zone,
Wuxi
Postal Code of Registered Address: 214028
Head Office: No.107, Renmin Road (W), Wuxi City
Postal Code of Head Office: 214031
The Company’s Internet Website: http://www. weifu.com.cn
E-Mail: web@ weifu.com.cn
(V) Names of Newspapers designated by CSRC and chosen by the Company:
Securities Times, China Securities Journal, Hong Kong Commercial Daily
Internet Website chosen by the Company: http://www.cninfo.com.cn
Semi-annual Report for reference: Office of the Board of the Company
(VI)Stock Listing and Trading: Shenzhen Stock Exchange
Short Form of the Stock: Weifu High-tech, Su Weifu-B
Stock Code: 000581, 200581
(VII) Other Related Information of the Company
Initial registration date: Oct. 22, 1988
Address: No.107, Renmin West Road, Wuxi
Date of Change: Dec. 9th , 2008
Address: No.5 of Huashan Road, National Hi-Tech Industry Development Zone, Wuxi
Registration Number of enterprise legal person’s business license: 320200000014926
Registration Number of taxation: 320208250456967
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 6,057,194,805.19 5,035,871,583.02 20.28%
Owners’ equity attributable to
shareholders of the listed company 3,175,700,963.70 2,862,670,558.77 10.93%
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)
5.5982 5.0463 10.94%
This report period
(Jan. to Jun.)
The same period
of last year
Increase/decrease
in this report
period
year-on-year (%)
Total operating income 2,650,687,135.98 1,261,148,413.32 110.18%
Operating profit 368,480,236.61 102,537,218.59 259.36%
Total profit 361,549,291.43 102,454,208.99 252.89%
Net profit attributable to shareholders
of the listed company 319,107,461.52 87,842,946.80 263.27%
Net profit attributable to shareholders
of the listed company after deducting
non-recurring gains and losses
316,146,898.70 85,878,606.53 268.13%
Basic earnings per share (RMB/Share) 0.56 0.15 273.33%
Diluted earnings per share
(RMB/Share) 0.56 0.15 273.33%
Return on equity (%) 10.57% 3.49% 7.08%
Net cash flow arising from operating
activities -13,935,415.91 117,808,937.15 -111.83%
Net cash flow per share arising from
operating activities (RMB/Share) -0.0246 0.2077 -111.84%
(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 3,987,322.38
Other non-operating income and expenditure beside for the
aforementioned items -564,223.22
Influenced amount of minority shareholders’ equity 86,691.46
Impact on income tax -549,227.80
Total 2,960,562.826
(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
shareholders of listed company
Amount in the
report period
Amount in last
period
Amount in the
report period
Amount in last
period
IAS 319,107,461.52 87,842,946.80 3,175,700,963.70 2,862,670,558.77
CAS 319,107,461.52 87,842,946.80 3,175,700,963.70 2,862,670,558.77
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 differences7
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 Proport
ion
New
shares
offering
Bonus
share
Capitali
zation
of
Public
reserve
Other Subtotal Amount Proport
ion
I. Restricted shares 100,075,226 17.64% 100,075,226 17.64%
1.State-owned shares
2. State-owned legal
person’s shares 100,021,999 17.63% 100,021,999 17.63%
3. Other domestic
shares
Including: Domestic
non-state-owned
legal person’s shares
Domestic natural
person’s shares
4. Foreign shares
Including: Foreign
legal person’s shares
Foreign natural
person’s shares
5. Senior executives’
shares 53,227 0.01% 53,227 0.01%
II. Unrestricted
shares 467,200,769 82.36% 467,200,769 82.36%
1. RMB Ordinary
shares 352,280,769 62.10% 352,280,769 62.10%
2. Domestically
listed foreign shares 114,920,000 20.26% 114,920,000 20.26%
3. Overseas listed
foreign shares
4. Others
III. Total shares 567,275,995 100.00% 567,275,995 100.00%
II. About shareholders and shares held
Unit: Share
Total shareholders at
the end of report period 39,766
Particulars about shares held by the top ten shareholders
Names of shareholders Nature of
shareholder
Proporti
on of
Amount of
share held
Amount of
restricted
Shares
pledged or8
share
held
shares held frozen
WUXI INDUSTRY
DEVELOPMENT CROUP 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 1.944% 11,029,285 0 0
Construction Bank of China－
FUGUO TIANBO INNOVATION
THEME STOCK FUND
A-share
shareholder 1.942% 11,017,502 0 0
DRAGON BILLION CHINA
MASTER FUND
B-share
shareholder 1.939% 11,000,527 0 0
HuaXia Growth STOCK FUND A-share
shareholder 1.72% 9,765,521 0 0
Bank of China－Huaxia Repay
Stock Fund
A-share
shareholder 1.67% 9,496,776 0 0
Industrial and Commercial Bank of
China－E-FANG DA VALUE
SELECTED STOCK FUND
A-share
shareholder 1.59% 9,009,908 0 0
Bank of China－E FANG DA
POSITIVE GROWTH STOCK
FUND
A-share
shareholder 1.32% 7,509,606 0 0
Construction Bank of China－
HUAXIA BONUS COMBINATION
OPEN STOCK FUND
A-share
shareholder 1.20% 6,835,378 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 11,029,285 Domestically listed
foreign share
Construction Bank of China－FUGUO TIANBO
INNOVATION THEME STOCK FUND 11,017,502 RMB common share
DRAGON BILLION CHINA MASTER FUND 11,000,527 Domestically listed
foreign share
HuaXia Growth STOCK FUND 9,765,521 RMB common share
Bank of China－Huaxia Repay Stock Fund 9,496,776 RMB common share
Industrial and Commercial Bank of China－E-FANG
DA VALUE SELECTED STOCK FUND 9,009,908 RMB common share
Bank of China－E FANG DA POSITIVE GROWTH
STOCK FUND 7,509,606 RMB common share
Construction Bank of China－HUAXIA BONUS 6,835,378 RMB common share9
COMBINATION OPEN STOCK FUND
Bank of Communications－HUAAN INNOVATION
STOCK FUND 6,504,638 RMB common share
Explanation
on associated
relationship
or consistent
actions
among the
above
shareholders
INDUSTRY DEVELOPMENT CROUP CO., LTD., the first largest shareholder of the
Company, and other shareholders, and they do not belong to the consistent actionist
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.HuaXia Growth, Huaxia Repay
and HUAXIA BONUS COMBINATION OPEN STOCK FUND belong to consistent
actionist. E- FANG DA VALUE SELECTED STOCK FUND and E FANG DA
POSITIVE GROWTH STOCK FUND belong to consistent actionist.
III. 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
5 April 2011 28,363,800
5 April 2012 28,363,800
1 WUXI
INDUSTRY
DEVELOPMENT
CROUP CO.,
LTD.
100,021,999
5 April 2013 43,294,399
Non-circulating shares of Weifu
Hi-tech held by Wuxi Industry
Development Croup 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).
IV. In the report period, there were no change in the controlling shareholder of the Company1 0
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 12,673 0 0 12,673 9,505 0
Chen Xuejun
Vice Chairman
of the Board &
General
Manager
3,169 0 0 3,169 2,376 0
Shi Xingyuan Director 1,782 0 0 1,782 1,336 0
Gao Guoyuan Director 10,297 0 0 10,297 7,722 0
Ge Songping Director 25,468 0 0 25,468 19,101 0
Rudolf Maier Dire
ctor 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
15,208 0 0 15,208 11,405 0
Wang Xiaodong Supervisor 521 0 0 521 0 0
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 2,377 0 0 2,377 1,782 0
II. There is no change in directors, supervisors and senior executives of the Company
during the report period
III. The Company held the first 2010 Extraordinary Shareholders Meeting and 2009
Shareholders’ General Meeting in the report period1 1
Section V.Report of the Board
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 of 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 automobile
exhaust catalyze-purify device).
In the first half year, the overall situation of national economy performed well and developed
continuously in the predicted direction of macro-control. Auto industry extended the flourishing
tendency of 2009 owing to stimulation policy. The sales amount of automobile around the country
was beyond 9 million in the first half year and accumulated increase speed reached 47.67%.
Meanwhile commercial vehicle increased at high speed respectively with 2.2435 million and 2.2953
million in production and sales, 35.05% and 36.59% respectively up compared to the same period of
last year.
Favored by rapid progress in auto industry, the Company actively grasped market and achieved
historical promotion in both sales income and profit, realizing operation income of 2.65 billion
which was 110.18% up compared to the same periof of last year; realizing net profit (attributing to
shareholders of listed companies) 0.319 billion which was 263.27% up compared to the same period
of last year.
2. Analysis on financial condition
Unit: RMB
Items Jan.-Jun., 2010 Jan.-Jun., 2009 Increase/decrease
%
Total operation income 2,650,687,135.98 1,261,148,413.32 110.18
Operation profit 368,480,236.61 102,537,218.59 259.36
Net profit(Attributable to
shareholders of the listed
company)
319,107,461.52 87,842,946.80 263.27
Amount at
period-end
Amount at
period-begin
Total assets 6,057,194,805.19 5,035,871,583.02 20.28
Shareholder’s equity
(attributing to
shareholders of the listed
companies)
3,175,700,963.70 2,862,670,558.77 10.93
(1) Total operation income increased by 110.18% year-on-year, mainly due to huge growth of
main products of the Company favored by speedy increase of commercial-use auto, especially
pump PW2000 and pump VE.
(2) Operation profit increased by 259.36% year-on-year, mainly due to rapid growth of operation
income and investment income.
(3) Net profit （attributable to shareholders of the listed company）increased by 263.27% year
–on-year,mainly due to the rapid growth of operating revenue and income increased by investment
returns.
(4) Total assets have a 20.28% growth than the beginning, major is receivable accounts and notes1 2
receivable increase.
(5) Shareholders' equity (attributable to shareholders of the listed company) has a 10.93% growth
than the beginning, mainly for the rapid growth of net profit during the report period.
3. Analysis on financial index
Unit: RMB
Items Jan.-Jun., 2010 Jan.-Jun., 2009 Increase/decrease
%
Operating
expenses
75,256,111.83 27,190,285.68 176.78
Administration
expenses
291,306,504.33 120,479,784.86 141.79
Financial expenses 17,439,278.30 15,186,243.79 14.84
(1) Operating expenses increased by 176.78% year-on-year, is mainly due to the growth of the
total cost of the salary increase.
(2) Administration expenses increased by141.79% year-on-year, mainly due to the
development cost and salary increase
(3) Financial expenses increased by14.84% year-on-year, mainly due to the company’s
centralized fund management, the growth rate of which is faster than the operating revenue growth.
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/decrea
se in income
from operations
over the same
period of last
year (%)
Increase/decrea
se in cost of
operations over
over the same
period of last
year (%)
Increase/decr
ease in gross
profit ratio
over over the
same period
of last year
(%)
Manufacture of
other standard
components and
parts
243,621.33 188,499.51 22.63% 114.06% 102.27% 4.52%
5. Main operation classified according to products
Unit: RMB’0000
Classified
according to
industries
Total
operating
income
Total
operating
cost
Gross
profit
ratio
(%)
Increase/d
ecrease in
income
from
operations
over the
Increase/d
ecrease in
cost of
operations
over over
the same
Increase/d
ecrease in
gross
profit ratio
over over
the same1 3
same
period of
last year
(±%)
period of
last year
(±%)
period of
last year
(±%)
Diesel engine oil
pump cherries
and accessories
197,971.49 148,625.74 24.93% 117.40% 102.84% 5.39%
Automobile
exhaust catalytic
converter and
accessories
34,466.14 29,565.41 14.22% 97.27% 98.28% -0.44%
Import and export 9,163.58 8,705.30 5.00% 73.75% 73.70% 0.03%
Turbocharger 1,133.52 893.70 21.16%
Other products 886.60 709.36 19.99%
6. Main operations and areas
Unit: RMB’0000
Area Operating income
Increase/decrease of
operating income over the
previous period (%)
Inside the country 234,418.75 116.34%
Outside the country 9,202.58 68.70%
7. Operations of main share-holding company
(1) 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 116.047 million in the first half year of 2010,
and it was -5.319 million year-on-year.
(2) 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 48
million in the 1st half year of 2010,and it was RMB 39 million year-on-year
II. Problems and difficulties in operation
During the first half year, the commercial automobile market growth momentum appears. But in
the second half year,the macroeconomic faces many uncertain factors, mainly displays in:whether
the automobile market can keep the rapid growth like the first half year, the uncertainty of the raw
material's price, the increasing cost of labor,and the increasing pressure of marketingcompetitive.
Therefor, except actively exploring the market, the company will also make full use of these
advantages:promoting the lean large-scale comprehensive cost management, further reducing the
comprehensive cost, continuing to increase the research and development extent , and enhancing the
ability to resist risk of market, consolidating and enhancing corporate core competitive power1 4
III. Investment of the Company in the report period
During the report period, the Company totally took RMB 198.5903 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 annual 200,000 diesel electrical control and common rail injector nozzle project, the total
investment amounted to RMB 49.96 million, and RMB 12.775 million was accumulatively invested
in the report period.
(2) For purchasing Wuxi industry group Co., LTD and related stock equity project, the total
investment amounted to RMB 127.5009 million, and RMB 123.2659 million was accumulatively
invested in the report period.
(3) For other spare projects, RMB 62.5494 million was accumulatively invested in the report period.
IV. The Board of Directors of the Company didn’t recify the operation plan of the second half
year.1 5
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
2010.
2. The Company completed the implementation of the profit distribution plan of 2009 in july, 2009.
The distribution plan was: distributing cash bonus of RMB 1.5 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 9th meeting of the 6th Board on Jan. 25th , 2010, follow purchases were
discussed and approved in this meeting:
(1) Wuxi industry group Co., LTD. (the former wuxi weifu group Co., LTD.) hold "weifu
automotive diesel systems Co., LTD” 30% equity.
(2) wuxi industry group Co., LTD. (the former wuxi weifu group Co., LTD.) hold "weifu
international trade Co., LTD." 9.17% equity,
(3) Wuxi industry group Co., LTD. (the former wuxi weifu group Co., LTD.) hold "kunming xitong
machinery Co., LTD" 50% equity,
The purchase has already passed by stock-holder’s meeting on 3th March 2010. At the end of report
period , the company has completed the "weifu automotive diesel system Co., LTD." and "weifu
international trading Co., LTD" stock equity acquisitions.
The transfer price of the acquisition is RMB 127,500,900.00. At the end of report period, the
company has already paid RMB 123,265,900.00.1 6
V. Related Transaction
Unit: RMB’0000
Type of
related
transaction
Contents of
transaction Related units
The 1st
half year
of 2010
The 1st
half year
of 2009
Wuxi Weifu Environmental Catalyst Co.,
Ltd. 22738.2 9051.0
Bosch Automotive Diesel Oil Systems
Co., Ltd. 14398.6 2431.5
Wuxi Weifu Precision Machinery
Manufacturing Co., Ltd. 6092.0 3614.6
Wuxi Longsheng Technology Co., Ltd. 1645.1 331.3
Kunming Xitong Machinery Co., Ltd 268.2 0
Wuxi Weifu Trade Co., Ltd. 102.1 61.0
British Temai Engine Co., Ltd. Wuxi 41.5 0
Wuxi Weifu Autocam Fine instruments
Co., Ltd. 3.7 0.0
Purchase
of goods
and labor
service
Purchase of
components
Chaoyang Weifu Jialin Co., Ltd. 2.0 10.0
Bosch Automotive Diesel Oil Systems
Co., Ltd. 20705.6 10973.2
Chaoyang Weifu Jialin Co., Ltd. 3912.1 2408.9
Wuxi Weifu Precision Machinery
Manufacturing Co., Ltd. 1042.3 545.1
Wuxi Weifu Trade Co., Ltd 176.8 287.8
Wuxi Weifu Autocam Fine instruments
Co., Ltd 110.9 76.7
Sales of oil
pump and oil
mouth products
and
components
produced by the
Company
Kunming Xitong Machinery Co., Ltd 26.6 4833.4
Sales of raw
material
Wuxi Weifu Environmental Catalyst Co.,
Ltd. 976.9 177.7
Sales of
goods and
labor
service
Sales of fixed
assets
Wuxi Weifu Precision Machinery
Manufacturing Co., Ltd. 3.8 0
Use of
trade mark
and land
lease
Paying fees for
using trade
mark and land
lease
Wuxi Industry Development Group Co.,
Ltd. 405.4 298.0
Technical
service
fees and
services
Technical
service fees and
services
payable
Bosch Automotive Diesel Oil Systems
Co., Ltd. 220.7 123.6
Rental fees
receivable
Rents
receivable
Wuxi Weifu Environmental Catalyst Co.,
Ltd. 0 54.0
Total 72872.5 35277.81 7
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.Till the reporting period ended, The Company provided guarantee amounting to RMB 7 million
for its wholly-owned subsidiary-Wuxi Weifu Chang’an Co., Ltd.; guarantee amounting to RMB
8.75 million for Weifu Lida Catalytic Converter Co., Ltd.
3. The controlling subsidiary Wuxi Weifu Leader Catalytic Converter Co., Ltd. provided guarantee
amounting to RMB 135 million for its subsidiary Wuxi Weifu Environmental Catalysts Co., Ltd.
4.Creditor’s rights and debt intercourse with related party
Unit: RMB
Related parties
Balance at the
year-begin of
2010
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 Autocam
Precision Machinery Co.,
Ltd.
- 1,341,059.91 1,341,059.91 -
Bosch Automotive Diesel
Oil Systems Co., Ltd. 7,346,561.49 283,131,672.31 259,127,019.26 31,351,214.54
Wuxi Weifu Environmental
Catalyst Co., Ltd. -51,652,972.78 249,806,002.72 273,986,325.06 -75,833,295.12
Chaoyang Weifu Jialin Co.,
Ltd. 24,867,075.32 45,771,140.76 46,027,617.99 24,610,598.09
Wuxi Weifu Trade Co., Ltd. -314,666.54 3,258,962.30 3,231,117.15 -286,821.39
Wuxi Weifu Precision
Machinery Manufacturing
Co., Ltd.
-23,535,824.53 68,182,331.61 71,590,400.59 -26,943,893.51
Wuxi Longsheng
Technology Co., Ltd. -2,556,607.00 19,005,840.00 19,247,987.00 -2,798,754.00
Kunming Xitong
Machinery Co., Ltd. -8,144,096.98 2,810,680.84 3,227,189.80 -8,560,605.94
British Temai Engine Co.,
Ltd. Wuxi 436,108.98 - 1,408,256.53 -972,147.55
Total -53,554,422.04 673,307,690.45 679,186,973.29 -59,433,704.88
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 implementation1 8
Comm
itted
events
Acceptor Committed contents
Particulars
of
implementat
ion
Share
reform
Comm
itment
Wuxi
Industry
Group
Co., Ltd.
Net profit amounted to 0.85 billion yuan from 2006-2008, the
one in 2008 was 0.34 billion yuan. According to the rule of
issuing 0.5 share per 10 shares aming at share A before share
reform, the cash dividend from 2006 to 2008 was not lower than
the 50% of the realized profit which can be distributed by
investors.
Implementat
ion has been
completed
Comm
itment
to limit
sales
of
shares
Wuxi
Industry
Group
Co., Ltd.
Non-tradable shares of Weifu High-tech held by Industry Group
can’t be listed or transferred in 60 months after the day when it
got 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).
Implementat
ion in
process, no
holdings of
shares
Other
commi
tments
(includ
ing
additio
nal
commi
tments
)
Wuxi
Industry
Group
Co., Ltd.
In order to promote healthy development of listed companies,
fully motivate the enthusiasm of supervisors, make sure to
combine the interest of shareholders and supervisors of the
Company, Industry Group makes a pledge: After Weifu
High-tech finishes the equity allocation reform, the Company
will actively promote equity motivation plan in high-tech
supervisors of Weifu according to related rules made by the
country and Wuxi Government for the motivation mechanism of
the supervisors.
Commitmen
t arranged
by
motivation
mechanism
of
supervisors
is being
carrying out
and will bge
implemented
after related
policies
were issued.
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 2010 of the Company and
checked the Semi-Annual Report 2010, 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 the1 9
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.
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 the first half year of 2010; 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 2010, the total amount of external guarantee amounted to RMB 150.75
million, including:
(1) The Company, as a legal entity, totally provided external guarantee amounting to RMB 150.75
million, mainly including guarantee amounting to RMB 7 million for its wholly-owned
subsidiary-Wuxi Weifu Chang’an Co., Ltd.; guarantee amounting to RMB 8.75 million for Weifu
Lida Catalytic Converter Co., Ltd.
(2) The controlling subsidiary Wuxi Weifu Leader Catalytic Converter Co., Ltd. provided guarantee
amounting to RMB 135 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
Unit: RMB ‘000000
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. 1,200.00 1,800.00 1.20% 1,200.00 180.00 0.00
Nanjing Hengtai Insurance
and Broker Securities Co.,
Ltd.
100.00 100.00 1.85% 100.00 1.00 0.00
Jiangsu HSBC Insurance
Agents Limited 50.00 50.00 10.00% 50.00 0.00 0.00
Total 1,350.00 1,950.00 - 1,350.00 181.00 0.002 0
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
2010-001 Bulletin prescribed by the sixth of the 9th
Board of directors 27 January 2010
2010-002 Acquisition of shares and associated
transactions Notice 27 January 2010
2010-003 Notice for 2009 expected performance 29 January 2010
2010-004 Notice for 2010 the first Extraordinary
General Meeting 10 Feburary 2010
2010-005 Referred bulletin for the first Extraordinary
General Meeting 24 Feburary 2010
2010-006 Notice for 2010 decision of the first
Extraordinary General Meeting 4 March 2010
2010-007 Notice for performance of the first season of
2010 2 April 2010
2010-008 Summary of Annual Report 2009 22 April 2010
2010-009 Notice for the decision of 10th of the 6th board
of Directors 22 April 2010
2010-010 Notice for the decision of the 5th of 6th Board
of Supervisors 22 April 2010
2010-011 Notice for estimation of 2010 daily related
transaction 22 April 2010
2010-012 Notice for 2010 guarantee for others 22 April 2010
2010-013 Notice for helding 2009 AGM 22 April 2010
2010-014 Report of 2010 the first season 27April 2010
2010-015 Performance report of the first half year of
2010 27April 2010
2010-016 Referred bulletin for helding 2009 AGM 21 May 2010
2010-017 Notice for decision of 2009 AGM 28 May 2010
China
Securities,
Securities
Times, Hong
Kong
Commercial
Daily
All the above documents were published on www.cninfo.com.cn which granted by Ahina
Securities Regulatory Commission.
XIV. Registration form for receiving research,communication and interview in the report
period.
Date Place Way The received
parties
Contents discussed and
materials supplied
7 January 2010 Reception room
of the Company Spot research China Fund Operation status and future
development of the Company
8 January 2010 Reception room
of the Company Spot research Jingying Fund Operation status and future
development of the Company
12 January 2010 Reception room
of the Company Spot research Zhongxin Fund Operation status and future
development of the Company2 1
20 January 2010 Reception room
of the Company Spot research Jiashi Fund Operation status and future
development of the Company
3 Feburary 2010 Reception room
of the Company Spot research
Huaan Fund、
Huanshang 、
Huitianfu、Unit
Securities
Operation status and future
development of the Company
24 Feburary 2010 Reception room
of the Company Spot research
East Securities、
Huaxia Fund、
Guolian
Securities
Operation status and future
development of the Company
12 March 2010 Reception room
of the Company Spot research XinchengFund Operation status and future
development of the Company
3 June 2010 Reception room
of the Company Spot research Dahe Capital Operation status and future
development of the Company
17 June 2010 Reception room
of the Company Spot research
Everbright
Prudential、
AnxinSecurities
Operation status and future
development of the Company
24June 2010 Reception room
of the Company Spot research
Zhongyin
International、
Huatai Securities
Operation status and future
development of the Company2 2
Section VII. Financial Statement
I. The Interim 2010 Financial Statements of the Company has not been audited.
II. Financial Report (Supplementary I)
III. Notes to financial statement (Supplementary II)
Section VIII. Document Available 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
Commercial Daily 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.
11 August 20102 3
Supplementary I. Financial Report (un-audited)
Balance Sheet
Prepared by Weifu High-Technology Co., Ltd. Jun.30, 2010 Unit: RMB
Items Amount at period-end Amount at year-begin
Consolidation Parent Company Consolidation Parent Company
Current assets:
Monetary funds 489,271,309.87 149,671,137.24 425,495,172.94 147,690,609.19
Settlement provisions
Capital lent
Transaction finance
asset
Notes receivable 852,885,922.75 377,564,496.44 453,653,565.32 213,409,328.00
Accounts receivable 1,033,649,178.02 615,165,148.12 746,386,907.24 551,362,144.36
Accounts paid in advance 51,380,415.61 37,194,159.27 40,727,577.69 22,923,823.09
Insurance receivable
Reinsurance
receivables
Contract reserve of
reinsurance receivable
Interest receivable
Dividend receivable 118,714,302.34 118,714,302.34 118,953,514.59 118,953,514.59
Other receivables 8,377,518.41 127,265,548.69 5,035,076.41 25,346,449.28
Purchase restituted
finance asset
Inventories 637,830,911.20 219,711,074.04 588,559,021.47 190,091,308.65
Non-current asset due
within one year
Other current assets 8,556,150.34 4,410,577.10
Total current assets 3,200,665,708.54 1,645,285,866.14 2,383,221,412.76 1,269,777,177.16
Non-current assets:
Granted loans and
advances
Finance asset
available for sales
Held-to-maturity
investment
Long-term account
receivable
Long-term equity
investment 1,536,586,485.20 2,148,245,750.65 1,347,808,607.78 1,856,146,852.35
Investment property 5,234,888.86 480,226.64
Fixed assets 1,112,297,423.92 602,724,252.79 1,152,721,081.59 636,153,023.49
Construction in
progress 80,221,856.50 48,396,707.13 32,064,910.42 11,592,432.05
Engineering material
Disposal of fixed
asset
Productive biological2 4
asset
Oil and gas asset
Intangible assets 70,960,358.06 27,068,871.21 72,512,044.82 27,403,978.05
Expense on Research
and Development
Goodwill
Long-term expenses
to be apportioned 6,359,119.34 1,246,567.09
Deferred income tax
asset 44,868,964.77 10,487,411.96 45,816,731.92 11,960,179.88
Other non-current
asset
Total non-current asset 2,856,529,096.65 2,836,922,993.74 2,652,650,170.26 2,543,256,465.82
Total assets 6,057,194,805.19 4,482,208,859.88 5,035,871,583.02 3,813,033,642.98
Balance Sheet (CON.)
Prepared by Weifu High-Technology Co., Ltd. Jun.30, 2010 Unit: RMB
Current liabilities:
Short-term loans 792,251,906.78 740,000,000.00 532,985,925.72 466,985,925.72
Loan from central
bank
Absorbing deposit and
interbank deposit
Capital borrowed
Transaction financial
liabilities
Notes payable 228,782,620.64 119,470,000.00 179,890,364.39 137,630,000.00
Accounts payable 1,309,568,584.62 747,337,718.52 861,714,156.40 556,506,677.80
Accounts received in
advance 47,886,996.00 28,833,945.55 27,104,569.77 13,403,217.65
Selling financial asset
of repurchase
Commission charge
and commission payable
Wage payable 201,081,219.77 104,687,573.47 179,549,521.47 97,631,080.36
Taxes payable 49,394,117.42 11,909,259.89 30,359,533.71 6,972,875.05
Interest payable 170,000.00 807,622.50 620,000.00
Dividend payable
Other accounts
payable 85,135,173.96 57,087,033.61 95,854,679.34 57,502,685.46
Reinsurance payables
Insurance contract
reserve
Security trading of
agency
Security sales of
agency
Non-current liabilities
due within 1 year2 5
Other current liabilities 4,009,891.63 314,046.33 3,946,860.41
Total current liabilities 2,718,280,510.82 1,809,639,577.37 1,912,213,233.71 1,337,252,462.04
Non-current liabilities:
Long-term loans 3,000,000.00 3,000,000.00
Bonds payable
Long-term account
payable 16,730,000.00 16,730,000.00
Special accounts
payable
Projected liabilities 1,481,745.84 1,481,745.84
Deferred income tax
liabilities
Other non-current
liabilities 12,213,100.00 4,060,000.00 11,675,000.00 4,060,000.00
Total non-current liabilities 31,943,100.00 5,541,745.84 31,405,000.00 5,541,745.84
Total liabilities 2,750,223,610.82 1,815,181,323.21 1,943,618,233.71 1,342,794,207.88
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 901,503,251.69 923,981,806.57 907,580,308.28 923,981,806.57
Less: Inventory shares
Reasonable reserve
Surplus public reserve 283,637,997.50 283,637,997.50 283,637,997.50 283,637,997.50
Provision of general
risk
Retained profit 1,423,283,719.51 892,131,737.60 1,104,176,257.99 695,343,636.03
Balance difference of
foreign currency translation
Total owner’s equity
attributable to parent
company
3,175,700,963.70 2,667,027,536.67 2,862,670,558.77 2,470,239,435.10
Minority interests 131,270,230.67 229,582,790.54
Total owner’s equity 3,306,971,194.37 2,667,027,536.67 3,092,253,349.31 2,470,239,435.10
Total liabilities and owner’s
equity 6,057,194,805.19 4,482,208,859.88 5,035,871,583.02 3,813,033,642.98
Profit Statement
Prepared by Weifu High-Technology Co., Ltd. Jan.-Jun., 2010 Unit: RMB
Amount in this period Amount in last period
Items Consolidation Parent
Company Consolidation Parent
Company
I. Total operating income 2,650,687,135.98 1,327,925,009.23 1,261,148,413.32 734,105,546.26
Including: Operating income 2,650,687,135.98 1,327,925,009.23 1,261,148,413.32 734,105,546.26
Interest income
Insurance gained
Commission charge
and commission income2 6
II. Total operating cost 2,484,124,898.09 1,301,797,886.46 1,208,849,081.68 724,823,765.42
Including: Operating cost 2,093,055,787.60 1,170,004,402.17 1,037,201,767.49 656,684,631.88
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 16,291,617.38 6,433,506.73 8,644,301.39 3,439,770.72
Sales expenses 75,256,111.83 37,610,680.96 27,190,285.68 16,713,941.58
Administration
expenses 291,306,504.33 85,142,336.99 120,479,784.86 35,503,558.94
Financial expenses 17,439,278.30 12,598,125.00 15,186,243.79 13,007,373.51
Losses of devaluation
of asset -9,224,401.35 -9,991,165.39 146,698.47 -525,511.21
Add: Changing income
of fair value(Loss is listed
with “-”)
Investment income
(Loss is listed with “-”) 201,917,998.72 178,193,119.57 50,237,886.95 74,864,946.23
Including: Investment
income on affiliated
company and joint venture
200,107,998.72 176,383,119.57 49,337,886.95 40,454,774.35
Exchange income
(Loss is listed with “-”)
III. Operating profit (Loss
is listed with “-”) 368,480,236.61 204,320,242.34 102,537,218.59 84,146,727.07
Add: Non-operating
income 672,941.34 385,891.83 3,432,978.71 104,569.88
Less: Non-operating
expense 7,603,886.52 4,973,495.20 3,515,988.31 2,407,479.66
Including: Disposal
loss of non-current asset 3,955,948.67 3,136,382.19 1,578,073.93 1,418,046.11
IV. Total Profit (Loss is
listed with “-”) 361,549,291.43 199,732,638.97 102,454,208.99 81,843,817.29
Less: Income tax
expense 25,056,036.34 2,944,537.40 8,248,563.39 -34,154.05
V. Net profit (Net loss is
listed with “-”) 336,493,255.09 196,788,101.57 94,205,645.60 81,877,971.34
Net profit attributable
to owner’s of parent
company
319,107,461.52 196,788,101.57 87,842,946.80 81,877,971.34
Minority shareholders’ 17,385,793.57 6,362,698.802 7
gains and losses
VI. Earnings per share
i. Basic earnings per share 0.56 0.35 0.15 0.14
ii. Diluted earnings per share 0.56 0.35 0.15 0.14
VII、Other comprehensive
income
VIII、Total comprehensive
income 336,493,255.09 196,788,101.57 94,205,645.60 81,877,971.34
Total comprehensive
income attributable to
owners of parent company
319,107,461.52 196,788,101.57 87,842,946.80 81,877,971.34
Total comprehensive
income attributable to a few
shareholders
17,385,793.57 6,362,698.80
Cash Flow Statement
Prepared by Weifu High-Technology Co., Ltd. Jan.-Jun., 2010 Unit: RMB
Items ConsAolmidoautinotn i n tPhaisr epnetr Cioodm pany ConsoAlmidoatuinotn i n lPaastr epnetr iCoodm pany
I. Cash flows arising from
operating activities:
Cash received from
selling commodities and
providing labor services
1,846,936,620.16 1,234,026,176.66 1,215,432,954.86 781,653,438.71
Net increase of customer
deposit and interbank deposit
Net increase of loan from
central bank
Net increase of capital
borrowed from other financial
institution
Cash received from
original insurance contract
fee
Net cash received from
reinsurance business
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 8,782,547.76 12,041,064.74
Other cash received 8,590,049.83 4,854,255.88 13,949,605.17 12,089,232.022 8
concerning operating activities
Subtotal of cash inflow
arising from operating
activities
1,864,309,217.75 1,238,880,432.54 1,241,423,624.77 793,742,670.73
Cash paid for purchasing
commodities and receiving
labor service
1,376,818,187.49 1,138,742,380.50 830,438,191.11 493,572,114.75
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 218,927,995.72 98,598,556.63 145,799,411.44 66,598,030.34
Taxes paid 189,330,563.69 68,043,762.87 96,388,954.92 34,265,879.71
Other cash paid concerning
operating activities 93,167,886.76 38,660,315.63 50,988,130.15 22,741,901.90
Subtotal of cash outflow
arising from operating
activities
1,878,244,633.66 1,344,045,015.63 1,123,614,687.62 617,177,926.70
Net cash flows arising
from operating activities -13,935,415.91 -105,164,583.09 117,808,937.15 176,564,744.03
II. Cash flows arising from
investing activities:
Cash received from
recovering investment
Cash received from
investment income 13,379,333.52 13,379,333.52 900,000.00 11,750,323.36
Net cash received from
disposal of fixed, intangible
and other long-term assets
12,123,918.21 7,665,524.53 4,275,129.34 1,605,612.50
Net cash received from
disposal of subsidiaries and
other units
Other cash received
concerning investing activities
Subtotal of cash inflow
from investing activities 25,503,251.73 21,044,858.05 5,175,129.34 13,355,935.86
Cash paid for purchasing
fixed, intangible and other
long-term assets
100,113,353.54 47,833,488.20 55,635,824.60 25,412,480.15
Cash paid for investment 123,265,900.00 127,045,900.00 5,000,000.00 5,000,000.00
Net increase of2 9
mortgaged loans
Net cash received from
subsidiaries and other units
Other cash paid
concerning investing activities
Subtotal of cash outflow
from investing activities 223,379,253.54 174,879,388.20 60,635,824.60 30,412,480.15
Net cash flows arising
from investing activities -197,876,001.81 -153,834,530.15 -55,460,695.26 -17,056,544.29
III. Cash flows arising from
financing activities
Cash received from
absorbing investment 1,490,490.00
Including: Cash received
from absorbing minority
shareholders’ investment by
subsidiaries
1,490,490.00
Cash received from loans 1,069,864,006.14 1,017,612,099.36 711,000,000.00 510,000,000.00
Cash received from
issuing bonds
Other cash received
concerning financing activities
Subtotal of cash inflow
from financing activities 1,071,354,496.14 1,017,612,099.36 711,000,000.00 510,000,000.00
Cash paid for settling
debts 810,598,025.08 744,598,025.08 806,036,725.49 605,000,000.00
Cash paid for dividend
and profit distributing or
interest paying
15,613,973.26 14,134,432.99 94,163,324.75 88,418,801.64
Including: Dividend and
profit of minority shareholder
paid by subsidiaries
Other cash paid
concerning financing activities 2,265,668.46
Subtotal of cash outflow
from financing activities 828,477,666.80 758,732,458.07 900,200,050.24 693,418,801.64
Net cash flows arising
from financing activities 242,876,829.34 258,879,641.29 -189,200,050.24 -183,418,801.64
IV. Influence on cash due to
fluctuation in exchange rate
V. Net increase of cash and
cash equivalents 31,065,411.62 -119,471.95 -126,851,808.35 -23,910,601.90
Add: Balance of cash and
cash equivalents at the period
-begin
327,527,351.45 85,790,609.19 495,284,817.23 141,771,078.18
VI. Balance of cash and cash
equivalents at the period–end 358,592,763.07 85,671,137.24 368,433,008.88 117,860,476.28Consolidated Statement on Changes of Owners’ Equity
Prepared by Weifu High-Technology Co., Ltd. Jun. 30, 2010 Unit: RMB
Amount in this report period
Owners' equity attributable to the parent company
Items Paid-up capital
(Share capital) Capital reserves
Less:
Treas
ury
Stock
Reas
onab
le
reser
ve
Surplus
reserves
General
risk
provision
Retained profit Oth
ers
Minority’s
equity
Total owners’
equity
I. Balance at the end of
last year 567,275,995.00 907,580,308.28 283,637,997.50 1,104,176,257.99 229,582,790.54 3,092,253,349.31
Add: Changes of
accounting policy
Error correction of the
last period
Others
II. Balance at the
beginning of this year 567,275,995.00 907,580,308.28 283,637,997.50 1,104,176,257.99 229,582,790.54 3,092,253,349.31
III. Increase/ Decrease
in this year (Decrease
is listed with "-")
-6,077,056.59 319,107,461.52 -98,312,559.87 214,717,845.06
(I) Net profit 319,107,461.52 17,385,793.57 336,493,255.09
(II)Other
comprehensive income
Subtotal of the
above (I) and (II) 319,107,461.52 17,385,793.57 336,493,255.09
(III) Owners' devoted
and decreased capital -6,077,056.59 -115,698,353.44 -121,775,410.03
1. Owners' devoted
capital
2. Amount calculated
into owners' equity3 1
paid in shares
3. Others -6,077,056.59 -115,698,353.44 -121,775,410.03
(IV) Profit distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk provisions
3. Distribution for
owners (shareholders)
4．Other
(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
4．Other
（VI）Special
reserve
1．Withdrawal in
this period
2．Usage in this
period
IV. Balance at the end
of the report period 567,275,995.00 901,503,251.69 283,637,997.50 1,423,283,719.51 131,270,230.67 3,306,971,194.373 2
Consolidated Statement on Changes of Owners’ Equity(CON.)
Prepared by Weifu High-Technology Co., Ltd. Jun. 30, 2010 Unit: RMB
Amount in last year
Owners' equity attributable to the parent company
Items Paid-up capital
(Share capital) Capital reserves
Less:
Treas
ury
Stock
Reas
onab
le
reser
ve
Surplus
reserves
Genera
l risk
provisi
on
Retained profit
Ot
he
rs
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）Other general
revenue
Sub-total of the above
(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 calculated3 3
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
4. Other
(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
4. Other
(VI)Reasonable
reserve
1．Withdrwal in this
period
2.Usage in this
period
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 2,720,973,056.673 4
Statement on Changes of Owners' Equity of Parent Company
Prepared by Weifu High-Technology Co., Ltd. Jan.-Jun., 2010 Unit: RMB
Amount in this report period
Items Paid-up capital
(Share capital) Capital reserves
Less:
Treas
ury
Stock
Reas
onab
le
reser
ve
Surplus reserves
General
risk
reserve
Retained profit Total owners’
equity
I. Balance at the end of last year 567,275,995.00 923,981,806.57 283,637,997.50 695,343,636.03 2,470,239,435.10
Add: Changes of accounting policy
Error correction of the last period
Others
II. Balance at the beginning of this
year 567,275,995.00 923,981,806.57 283,637,997.50 695,343,636.03 2,470,239,435.10
III. Increase/ Decrease in this year
(Decrease is listed with "-") 196,788,101.57 196,788,101.57
(I) Net profit 196,788,101.57 196,788,101.57
（2）Other comprehensive income
Subtotal of the above (1)and (2) 196,788,101.57 196,788,101.57
(III) Owners' devoted and decreased
capital
1. Owners' devoted capital
2. Amount calculated into owners'
equity paid in shares
3. Others
(IV) Profit distribution3 5
1. Withdrawal of surplus reserves
2．Withdrawal of general risk
reserve
3. Distribution for owners
(shareholders)
4. 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
（VI）Special reserve
1．Withdrawal in this period
2．Usage in this period
IV. Balance at the end of the report
period 567,275,995.00 923,981,806.57 283,637,997.50 892,131,737.60 2,667,027,536.673 6
Statement on Changes of Owners' Equity of Parent Company(CON.)
Prepared by Weifu High-Technology Co., Ltd. Jan.-Jun., 2010 Unit: RMB
Amount in the first half year
Items Paid-up capital
(Share capital)
Paid-u
p
capital
(Share
capital
)
Paid-up capital
(Share capital) Paid-up capital
(Share capital)
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
（2）Other comprehensive income
Subtotal of the above (1)and (2) 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. Others3 7
(IV) Profit distribution -91,898,711.19 -91,898,711.19
1. Withdrawal of surplus reserves
2．Withdrawal of general risk
reserve
3. Distribution for owners
(shareholders) -91,898,711.19 -91,898,711.19
4. 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
（VI）Special reserve
1．Withdrawal in this period
2．Usage in this period
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 2,181,596,980.33Supplementary II. Notes to Financial Statements
Note 1: Basic information of the Company
1. Historical Evolution 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 3200001103404. 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 the originally non-circulating shares can be traded on market when
satisfied certain conditions, the scheme has been implemented on Apr. 5, 2006.
On 27th May 2009, Weifu Group, complying with the above Share Merger Reform and taking the A shares
before the Reform as the basic, arranged the distribution of 0.5 share per 10 shares by valuable consideration,
with the actual additional distribution of 14,039,979 shares. After the additional distribution, the Weifu Group
held 100,021,999 shares, namely 17.63% of the Company’s total share capital.
Pursuant to of State-owned Assets Supervision and Administration Commission of Wuxi Municipality of People
(Wuxi SASAC Corporate No. 46 [2009]), Wuxi Industry Development Group C o., Ltd. (hereafter referred as
‘Wuxi Industry Group’) absorbed and merged Weifu Group; upon the merge and then the cancellation of
Weifu Group, Wuxi Industry Group inherited Weifu Group’s assets and liabilities and debts and became the
first largest shareholder of the Company.3 9
2. Registered address, organization structure and headquarter of the Company
Registered address and headquarter: Wuxi City, Jiangsu Province
Boards of shareholders, directors and supervisors are set up.
Subordinately set up were departments and subsidiaries as departments of executive, personnel, operation
& sales, accounting control, project procurement, and divisions of MS (precision machine), AC (auto
parts) and institution of project technology research, and subsidiaries as Wuxi Fleed Purifier and Catalytic
Converter Co., Ltd., (hereafter referred as Fleed), Nanjing Weifu Jinning Co., Ltd. (hereafter referred as
Weifu Jinning), Wuxi Weifu Diesel System Co., Ltd. (hereafter referred as Weifu Diesel System).
3.Business nature and main business of the Company
Business scope of the Parent Company: production of internal combustion engine (I. C. engine) fuel
system products, testing instrument and equipment; sales of energy utility machine, hardware power and
chemical products and material (dangerous chemical products excluded), auto parts, autos (9-seat-below
passenger car excluded), service of I.C. engine, technology development and consultation in machine
industry; self-support and agency of import and export of all products and technology (products and
technology restricted or forbidden by the state excluded).
Production and sales of the I.C. engine parts, auto parts, muffler, purifier, respectively by the main
subsidiaries.
4. Approval entity and date of presentation of Financial Statements
The Financial Report was approved to present by the Company’s Board of Directors on 9th August 2010.
Note2: Main accounting policies, estimation and previous errors
1. Preparation basis of Financial Statements
Recognitions and measurements of the Financial Statements are based on continual
operations, in line with actual transactions and events, and pursuant to the corporate
accounting principles and application guidance promulgated by the Treasury Ministry on 15th
February 2010, while presentation of the Statements pursuant to Corporate Accounting
Principle No. 30—Presentation of Financial Statements.
2. Declaration of obedience to corporate accounting principles
The Financial Statements are up to requirements of corporate accounting principle, a true and thorough
reflection to the Company’s financial information as financial position, operation results, and cash flow.
3. Accounting period
The accounting period is divided as the annual and interim ones, .with the former from 1st January to 31st
December of Gregorian calendar, the latter as monthly, quarterly and semi-annual.
4. Bookkeeping standard currency
The RMB is taken as the bookkeeping standard money.
5. Accounting methods for consolidation of enterprises under the same control or
otherwise
(1)Consolidation of enterprises under the same control
Consolidation of enterprises under the same control: Measured by the book value are
consolidation consideration value paid by and net assets received by the consolidating party.
The difference between the book value of the net assets and the consideration value with
total book value of stock is used for reserve adjustment while it is used for retained earnings
adjustment as not sufficient for eat up part of reserve. Directly related expenses for corporate
combination are reckoned into the current loss/gain as service charge and brokerage of
equity shares or bonds offering are into initial measurement of shareholders’ equity/liability.4 0
(2) Consolidation of enterprises not under the same control
Consolidation of enterprises not under the same control: Measured by fair value is
consolidation cost and recognized assets of the purchaser. The plus difference between fair
values of the consolidation cost and the recognized net assets is recognized as business fame
while the minus one is reckoned into current loss/gain. Directly related expenses for
corporate combination are reckoned into cost as service charge and brokerage of equity
shares or bonds offering are into initial measurement of shareholders’ equity/liability.
6. Preparation methods for corporate consolidated statements
Consolidation scope in consolidated financial statements includes the Company and
subsidiaries.
The Company starts to consolidate subsidiaries from the day of obtaining the actual control over them;
and the Company ceases consolidation from the day of loss of the control. Balance and profit of all
substantive intra-group dealings and transactions are set off in preparation of consolidated financial
statements. Shareholders’ equity in subsidiaries not attributable to the Company, is listed specifically in
minority shareholders’ equity in the consolidated financial statement.
As for inconsistency in accounting policies and periods between the Company and subsidiaries, the
subsidiaries’ financial statements are adjusted and consolidated according to the Company’s.
As for subsidiaries obtained by consolidation of enterprises not under the same control,
several statements are adjusted on the basis of fair value of the recognized net assets on that
purchasing day. As for subsidiaries obtained by consolidation of enterprises under the same
control, the participants in consolidation are taken existent in the present state, namely time
of the actual control.
7. Determination criteria of cash equivalent in cash flow statements
Cash equivalents are investment of short-term (generally due within 3 months from the
purchase day), strong mobility and easy transfer to known sum cash, and slight risk of value
vibration.
8. Foreign currency exchange
Upon foreign currency exchange, the accounts are kept on the basis of the current rate of the
trading day. The actual foreign currency exchange or related transaction is converted at the
actual exchange rate (namely bank buy-in or sell-out one).
Principles of differentiation of foreign monetary items and non-monetary items on the
assets/liabilities statements’ day, are as follows:
Foreign monetary items are converted at the current rate on the assets/liabilities statements’
day, and items in the normal business period reckoned into the current loss/gain. Exchange
loss/gain from borrowing related to constitution of capital assets, is based upon the principle
of borrowing expense capitalization. Monetary items are currency capital held by the
Company or assets taken or liabilities paid at fixed or certain sum, composed of inventory
cash, bank deposit, account receivable, other account receivable, long-term account
receivable, short-term borrowing, account payable, other account payable, long-term
borrowing, bond payable and long-term payable.
Foreign non-monetary items are converted at current rate of the trading day without the
change of the bookkeeping standard currency. Non- monetary items are items to exclusion of
monetary items.
Foreign non-monetary items are converted at current exchange rate on the day of recognition
by fair value; upon conversion, the difference between the converted sum and the original
sum is taken as fair value vibration (exchange rate included) and reckoned into the current
loss/gain.
9. Financial instruments
(1)Recognition of financial assets
When the Company becomes a party of financial instrument contract, confirm an item of
financial assets or financial liabilities. The termination of the contract has to be up to one of
the following conditions:4 1
①termination of the contract right of acquiring cash flow of financial assets;
②the financial assets already transferred and up to the conditions of transfer of financial assets stipulated
in the Corporate Accounting Standards No. 23--Transfer of Financial Assets.
Upon the termination of all or part of the current obligation, termination of recognition of all
or part of the financial liabilities is available. .
(2)Categories and measurement of financial assets and liabilities
According to the investment purpose and economy substance, financial assets are divided into four
categories as tradable financial assets, financial assets available for sale, account receivable, and
investment held due. Among that, financial assets are measured at fair value and the changes reckoned
into current gain factor/loss; financial assets available for sale measured at fair value and changes in fair
value into shareholders’ equity; account receivable and investment held due measured by diluted cost.
According to the economy substance, the financial liabilities responsible for are divided into two
categories as ones measured at fair value and reckoned into the current loss/gain, and measured by diluted
cost.
(3)Recognition of fair value of financial assets and liabilities
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) Recognition and measurement of transfer of financial assets
Transfer o f the financial assets is that the Company gives out to the third party besides the
offering party of financial assets. The transferred part can be part or all of the financial
assets. That is composed of two forms:
①Transfer of the right to take the financial assets cash flow;
②Transfer of financial assets but retaining of right to take the financial assets cash flow and
take the duty of taking the cash flow to pay for the final receiver.
As the Company has transferred to the transferring-in part nearly all risk and compensation
of all or part of the financial assets, termination of recognition of all or part of the financial
parts is available, and difference between consideration value received and book value of the
transferred financial assets is recognized as loss/gain, and originally recognized accumulated
profit/loss of financial assets in the owners’ equity transferred into gain/loss. As nearly all
risk and compensation are retained, the recognition of all or part of the financial assets
continues, and received consideration value were recognized as financial liabilities.
As for financial assets of almost all risk and compensation neither transferred nor retained,
and without the give-up of the control over the financial assets, it was recognized according
to the extension of the continual entry into the transferred financial assets and relevant
liabilities are correspondingly recognized.
(5) Termination of recognition of financial assets and liabilities
Termination of financial assets recognition is up to the one of the following conditions:
①Termination of the contract right to take the cash flow of the financial assets;
② Transfer of the financial assets up to the conditions of termination of recognition of
financial assets stipulated in Corporate Accounting Principles No.23—Transfer of Financial
Assets.
Only is released all or part of actual duties of financial liabilities, termination of recognition
of all or part of financial liabilities is available.
(6) Impairment of financial assets4 2
On the asset/liabilities day, besides check on book value of financial asset to exclusion of
tradable financial assets, preparation for assets impairment is made if there is objective
evidence to prove impairment. There is need for impairment test for single substantive
financial assets. As for single small financial assets or financial assets with the test results of
no occasion of impairment, the Company may make impairment test in credit portfolio
according to the customer’s credit and actual state of bad debits in the previous years to
recognize the impairment.
The objective evidence for occurrence of financial assets impairment is events which
actually occurred after the initial recognition of financial assets, impacted the future
expected cash flow, and influence of which can be measured reliably by the
Company.Objective evidence includes:
A. Sever financial difficulties of offering part or debtor;
B. Breach of the contract, as in payment of interest or principal or payment overdue
Recession making for debtors by creditors inconsideration of economic or legal factors;
Probable bankruptcy or other financial restructuring of debtors;
Incapability of trading the financial assets in the market as the offering party’s substantive
financial difficulties;
Incapability of recognize whether cash flow of certain assets decreases or not but the
discovery after the general evaluation that as can be measured, the expected future cash flow
surely decreases since the initial recognition;
Material unfavorable changes in the debtor’s operation environment of technology, market,
economy and law;
Severe or permanent fall-down in fair value of equity instrument investment
Other objective evidence to prove the impairment
Loss of impairment of financial assets measured by diluted cost is measured by the
difference between the book value and value of expected future cash flow discounted at
actual original rate.
After the recognition of impairment of the above assets, if there is objective evidence to
show that the asset has recovered, which is related to events following up the loss, the
previous impairment loss is taken back.
As for impairment of financial assets available for sale, accumulated loss from decrease of fair value,
which was directly reckoned into owners’ equity, is transferred out into the current gain/loss.
10. Account receivable
(1)Recognition standards and accrual methods of bad account preparation for single substantive
account receivable:
Recognition
standards of bad
account preparation
for single
substantive account
receivable
The single account receivable above100million is recognized as single
substantive account receivable. The single substantive account receivable
with the debtor bankrupt or dead, can not be taken back even with the
bankruptcy or remained assets or of over-3-year over-due payment is
recognized as bad debt.
Recognition
standards and
accrual methods of
bad account
preparation for
single substantive
account receivable
The single substantive account receivable which cannot be directly
recognized as bad debt, is accrued as provision for bad debt according to the
book aging analysis. The single substantive account receivable which can be
directly recognized as bad debt, is accrued as provision for bad debt at
100% proportion.4 3
(2)Recognition standards and accrual methods of bad account preparation for account
receivables as not substantive singly but rather risky portfolio
Recognition criteria of
credit risk portfolio
Account receivable which is singly not substantive receivable with the
debtor bankrupt or dead, can not be taken back even with the bankruptcy or
remained assets or of over-3-year over-due payment is recognized as bad
debt.
Accrual methods for credit portfolio
Accrual percentage
proportion of account
receivable（%）
100%
Accrual percentage
proportion of other account
receivable（%）
100%
(3)Aging analysis of accounts
Aging Accrual proportion of account
receivable
Accrual proportion of other
account receivable
Within 6 months Not accrued Not accrued
6 months—1 year 10% 10%
1 year—2 years 20% 20%
2 year—3 years 40% 40%
Above 3 years 100% 100%
Explanation
The loss of bad debts is audited by allowance. The single substantive account receivable is
tested singly. The singly small account receivables of high risk portfolio are accrued based
on the difference between the book value and value of expected future cash flow. Accounts
singly not substantive and without impairment, Accounts singly not substantive, without
credit risk portfolio are accrued by period-end aging. Accrued bad debt provisions are
reckoned into the current loss/gain.
11. Inventory
(1)Categories of inventory
Classified mainly as inventory material, low-value consumption goods, product in process, and
finished goods etc.
(2)Valuation method of inventory delivered
A. 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.
B. Being products is measured at the actual cost while being transferred into the products
upon transfer.
C. Self –support products are measured by the actual cost; goods foreign purchased
(import-export trade) is transferred into sales cost individually.
(3)Recognition basis of net realizable value of inventory, and accrual methods of preparation
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.
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. 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 the4 4
finished product according to actual cost, and adopt weighted average method to carry forward sales cost
when sending
(4)Inventory system
Adopt perpetual inventory system.
(5)Dilution methods of low-value consumables
One-time dilution as utilization.
12. Long-term stock investment
(1)Recognition of initial investment cost
The long-term equity investment includes: the Company’s equity investment in subsidiaries,
joint enterprises, affiliated enterprises as well as equity investment in invested units without
control or common control over or significant impact which is not quoted in the active
market and fair value of which cannot be reliably measured.
Methods of the initial investment cost of the long-term stock investment are different according to ways of
reception.
①For 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.
②For 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.
3) 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）Follow-up measurement and gain/loss recognition
① Investment in subsidiaries audited in cost
Subsidiaries are equity investment held by the Company able to executive control over the
invested units. If the Company has over 50% stock in certain entity or less than 50% but the
Company can control the entity, the entity is the Company’s subsidiaries.
② Investment in joint or affiliated enterprises audited in equity
The joint enterprise is equity investment held by the Company and able to execute common
control over the invested units with the other joint parts. The affiliated enterprise is equity
investment held by the Company and able to executive significant impact on the invested
units. If the company has the 20%-50% stock and with no substantial control over the entity,
or less than 20% stock and with significant impact on it, the entity is the Company’s joint or
affiliated enterprise.
③ Equity investment without control, common control or significant impact
Long-term equity investment with no quotation in the active market or reliable measurement4 5
of the fair value, is audited in cost.
Long-term equity investment with no quotation in the active market but reliable
measurement of the fair value, is presented in items of sales of financial assets, audited at
fair value, and the fair value is reckoned into shareholders’ equity.
(3)Recognition basis of common control over and significant impact on invested unit
The common control over the invested units is the common control over certain economic
activity according to the contract.
(4)Method of impairment test and accrual
As there are clues of impairment of long-term equity investment after the Company’s Period-end
check, it is necessary to estimate the sum that can be taken back. As the sum is lower than the
book value, the provision for the impairment of the long-term is accrued.
As for the long-term stock investment without quotation in the active market or a reliable
measurement, if the book value is lower than the sum of discount of the future cash flow
according to the market return similar to the financial assets, the difference is recognized as loss
of impairment and reckoned into the current loss/gain.
As for long-term equity investment besides financial assets available for sale, once the
impairment provision is accrued, it is not transferred back in the asset duration period; however,
loss of impairment of financial assets available for sale is able to be transferred back by equity.
13. Investment property
Investment property was included in entry value according to its cost. Including, the costs of
external investment property comprise purchase price, relevant taxes and other expense
directly attributable to this asset; the cost of self-built investment property consists of
necessary expense for construction of this asset before it reaches a state of being predicted
usable; investment property the investors invested was included in entry value according to
the agreed value on investment contract or term, but it will be included in accounts if the
agreed value is not fair.
The Company adopts cost model to make subsequent valuation of investment property, the
depreciation and amortization will be calculated in line way according to predicted life
expectancy of assets.
Provision for accrue of investment property devaluation should conform to method of
provision for accrue of relevant fixed assets.
14.Fixed assets
（1）Confirmation terms of fixed assets
Fixed assets refer to housing and building, machinery appliance, transport equipment and
other equipments relevant to administration which were held for over one year for goods
production, labors offers, leasing or administration. Economic interests related to this fixed
asset have possibility to flow into the Company, and it will be confirmed as fixed asset if
the cost of this fixed asset can be calculated accountably.
(2)Depreciation method of varius fixed assets
Fixed assets
Depreciation age
limit
Residual
values
Annual depreciation
rates
Housings 35 years 5% 2.71%
Buildings and 20 years 5% 4.75%4 6
constructions
Machinery Equipment 10 years 5% 9.50%
Transportation equipments 4 years 5% 23.75%
Electronic Equipment 3 years 5% 31.67%
Other Equipment 5-10 years 5% 9.50%-19.00%
（3）Impairment testing, impairment provisioning methodology of fixed assets
At the end of the fixed assets of the company to check if the following conditions are found,
then the calculation of the recoverable amount of fixed assets to determine whether the asset is
impaired. The recoverable amount is lower than its book value of fixed assets, the recoverable
amount of the asset below its book value of the difference between impaired. Provision for
accrued time according to the individual assets, individual assets is difficult to estimate the
recoverable amount, the assets owned by the group of assets based on accrual. Provision for
impairment upon, the duration of the assets is not reversed.
① substantially fixed price has declined significantly higher than that due to the passage of
time or normal use is expected to decline
② the obsolescence of fixed assets have been damaged or its physical
③ Fixed assets is expected to use the material adverse change in the way, such as the fixed
assets have been or will be idle, business plan termination or restructuring of business which the
asset belongs, ahead of situations such as disposal of assets, which have a negative impact on
the enterprise;c
④ business in their economic, technical or legal environment and market in which the
fixed assets in the current period or significant change in the near future to have a negative
impact on the enterprise;
⑤ the same period in market interest rates or other market rates of return in the current
period has increased, thus affecting the enterprise computing assets, the present value of
expected future cash flows discount rate, resulting in a significant reduction in the recoverable
amount of assets;
⑥ internal report evidence that the economic performance has been lower than fixed or
will be lower than expected, such as the fixed assets created by the realization of net cash flow
or operating profit (or loss) is far below (or above) the estimated amount of ;
⑦ Other signs
（4）Identification basis and the valuation method of fixed assets financed by leasing,
The Company will comply with the following one or more standards, as a finance lease of fixed
assets
① has been agreed in the lease contract (or the inception of the lease to make reasonable
judgments under the relevant conditions), the lease expires, ownership of leased fixed assets can
be transferred to the Company;
② The company has option to buy leasing of fixed assets, the established purchase price
will be much Diyuxingshi Yuji right choice of the fair value of leased fixed assets, thus
inception of the lease it is reasonably certain the company will exercise the option ;;4 7
③ not even transfer the ownership of fixed assets, but the lease on the life of the leased
fixed assets of 75% or more;
④ the company's inception of the lease the present value of minimum lease payments, the
equivalent of leased fixed assets fair value of 90% or more; the lessor at the inception of the
lease the present value of minimum lease receipts, equivalent to inception of the lease the fair
rental value of fixed assets 90% or more;
⑤ the special nature of the leased asset, if not for a larger transformation, only the
company can use.
⑥ finance lease rental income of the fixed assets, leased assets, fair value and present
value of minimum lease payments, whichever is lower, as the recorded value.
15. Projects in construction
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 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.
16.loan expenses
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 weighted4 8
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 a
bnormally and the interruption interval exceeds three months, the capitalization of borrowing co
st should be stopped temporarily and deemed as the expenses of current period until the re-start
of purchasing 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.
17.Intangible assets
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 that4 9
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, hereinafter referred to as “Weifu Diesel System”) would be amortized over 10
years; administrative software would be amortized as per 5 years.
18.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 their amortization balance value into losses and gains in current period when
confirming them.
19.Projected liabilities
（1）Confirmation principle：
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
the 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.
20.Income
The company's operating revenues include sales of merchandise revenue.
（1）Confirmation principle of sales of merchandise revenue：
① Main risks or remuneration in ownership of commodity are transferred to purchaser,
② No reservations are usually associated with ownership to management, The Company
did not implement continuous management or actual control on that commodity;
③ the income and cost from selling that commodity could be reliably measured
④ related economic benefits are likely to flow to the enterprise;
⑤Related costs occurred or which will occur can be measured reliably.
（2）. Confirmation principle of Supplying labor force5 0
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）Confirmation principle of 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.
21. Government subsidy
Government subsidy concerning the income, if compensating the relevant expenses or
losses in later periods, than recognized as deferred income and reckoned into current gains and
loss; if compensating the relevant expenses or losses that the Company had been occurred, than
reckoned into current gains and losses directly.
Government subsidy concerning the assets recognized as deferred income and distributed
aversge in the assets’ use life recoked into current gains and losses. But the government
subsidy measured base on the notional sum will accounted into current gains and losses
directly.
22. Deferred income tax asssets and deferred income tax liabilities
The difference between the book value of assets/liabilities and the calculated taxes, the
proper tax rate of the predict recoverable assets or predict liabilities payment will calculated
recognized the deferred income tax or deferred income liabilities.
The recognized deferred income tax assets has the limitation on the payable taxes of
deductable provisional difference. At balance sheet day, if the provisional differences may
neither be written back in an expectable future, or may not possible obtain taxable income used
ot deduct the provisional difference, are not recognized as relative diferred income tax assets.
At the balance sheet day, verification will be performed on the book value of diferred
incometax assets. If it is no possible to obtain enough taxable income to neutralize the benefit
of deferred income tax assets, then the book value of the deferred income tax assets shall be
reduced. Whenever obtaining of taxable income became possible, the reduced amount shall be
restored.
23.Rental
Financing rental refers to the renting of whether the ownership have been transferred
but in material, transferring all risk and rewards of the assets.
The finaning assets will be accounted by the lower amount in the fair value of rental
assets at leasing day and the minimum rental. The minimum rental was the book vcalue of
long-term payables, the defference between them are recognized as un-decided financing
expenses. The initial expenses from financing rental will calculated directly into value of
rented assest. The assets from financing rental will withdrawal the depreciation and5 1
impairment provisions under the regulation of the Company.
If there are reasonable ways to obtaining the ownership of the rental assets in renting
terms, the rental assets will withdraw the depreciation in predict life. Otherwise, withdrawl
the depreciation based on the shorter tems between the rental term and rental predict life.
Concerning the un-recognized financial expenses, the Company will allocate it based on
actual reate during every reantal terms, and handle accordance with eth loan expenses.
At balance sheet day, financing-related long-tern payable less the difeerence of
unrecognized financial expenses, and listed respectively under the items of financing renatal
payables and non-current liabilities due within oen year.
Operational rental refers to the rental except the financing rental. The rental expense
ofoperational renatal in the rentalling period will recognized as relevant assets cost or
expensed based on the direct line method.
24. other major accounting policy, accounting estimation and preparation of financial
statement
(1) Goodwill
Concerning the enterprise merger under with differenct common control, the difference between
the merger cost and recognizable net assets’ fair value of the purchasee will recognized as
goodwill, and practice impairment testing according to relevant regulations.
（2）Wages
Wages including: salary, bonus, subsidy and warefare; employee welfare; old-age insurance,
job-less insurance, job-related injured insurance etc social insurance; residential public reserve;
labor unin expenses and employee’s educational expense; non-currency welfare; compensation
from the labor contract determination and other expense that as the recuturn of receiving service
form employees.
In the accounting period where the employee providing services in the Company, the wages
payable recognized as liabilities. Except for the compensation paid for labor contract
termination, based on the beneficiary of the service providing respectively accounted into fixed
assets cost, intangible assts cost, production cost or labor cost. Except the abovementioned
wages reckoned into current gains and losses.
Before the expiry of labor contract, the compensation to the employes with contract termination
or volunery resignation, will recognized as projected liabilities accounted into current gains and
losses.
（3）accounting method on the income tax expenses
The income tax expense calculated as the debt method of balance sheet. The current income tax
and deferred income tax consider as the income tax expense or income reckoned into current
gains and losses, excluding the income tax from the following:
①enterprise merger;
②ansactional items that recognized in owners’ equity directly.
（4）preparation of the financial statements5 2
1. recognition principle of the consolidate statements
The consolidated rage mainly based on the theory confirmation of the Parent company,
detail merger rage are as followed:
①the Parent company held over half of the equity capial of the invested enterprise by the way of
directly, indirectly or both directly and indirectly owned;
②other invested enterprise that controlled by the Parent company:
A. agreements with other investor of the invested enterprise, holding over 50% voting
rights of the invested enterprise;
B. according the Article of Association and Agreements, has the rights to controlled
enterpses’ financial and operational strategy;
C. has the rights to nominated the members in Board of Directors;
D. has the over 50% voting rights in Board of Direcors or other powerfull institution.
2. method of consolidation
1) base on the relevant materials from the Company and its subsidiaries that collected into the
consolidated financial statement, adujted the long-term euity investment towards the subsidiaries
based on equity method, counterpart the investment and transaction between the Company and
other subsidiaries than calculated the minority’s gains and losses and equity of minority’s before
consolidated preparation.
2) while consolidated, where there has a different accounting policies between the Company and
its subsidiaries, the policy of the subsidiaries will adjusted accordance with the Paren company.
Note 3: Taxes
Main taxes and rates (41)
Tax Tax Basis Tax rate
VAT Sales of goods
Sales tax rate of goods is 17%, exports by state
regulations Declaration of export tax rebate rate
of tax or "exemption, credit, retirement."
Business tax Rental income 5%
Urban maintenance
and construction tax
Exchange transfer
tax payable 7%
Education Surtax Exchange transfer
tax payable 4%
Corporate Income
Tax
Taxable Income
Parent company15%
Corporate Income Tax of Subsidiary:
The Company and its subsidiaries Weifu Jinning, Weifu diesel system, Weifu Leader
a l l are high-tech enterprises. They enjoy 15% of the income tax preferent i al polici e s
according to the national rules about income t ax .
The income t ax rate of the following enterprises is 25%. They are Weifu Masan Fue l5 3
Inject ion Equipment Co., Ltd. (Hereinafter referred to as "Weifu Masan" ), Weifu
Changan Co. , L td. (formerly known as "Chang Wei fu Fuel Inject ion Equipment Co. ,
Ltd.", hereinafter referred to as "Wei Fu Chang"), Weifu Internat ional Trade Co., Ltd.
(hereinafter referred to as "Fu Wei International Trade"), Dah Sing Ji Weifu
Mater ials Technology Development Co. , Ltd. (hereinaf ter referred to as "Wei Fu Ji
big") , J iangsu Province, Wei Fu Nano Technology Co., Ltd. (hereinaf t e r referred to
"Weifu nano"), Weifu British Temai Informa t ion Machinery Development Co., Ltd.
(hereinafter referred to as "British Temai Machine"), Weifu Schmidt Power Systems
Parts Co., Ltd. (hereinafter referred to as "Schmi d t Wei f u " ) .
Note 4. Enterprise merger and consolidated financial report
1. Shareholding subsidiaries
（1） Subsidiaries obtained through foundation and investment and other ways
Companies
Types of
compani
es
Regist
ration
place
Nature of
business
Registra
tion
capital
(Million
)
Administration
scope
Final actual
investment
(Million)
Other
projects
balance
essentially
forming the
net
investment
for
subsidiaries
Shar
ehol
ding
prop
ortio
n
(%)
Voting
rights
Proporti
on
(%)
Cons
olidati
ng
report
or not
Weifu
Mashan
Limited
company
Wuxi Manufact
ure
4,500
Engine
accessories
4,869
--
100.00 100.00 Yes
Weifu
Changan
Limited
company
Wuxi Manufact
ure
6,000
Engine
accessories
7,090
--
100.00 100.00 Yes
Weifu
Jida
Limited
company
Wuxi Manufact
ure
500
metallic
nanoparticles
350
--
70.00 70.00 Yes
Weifu
Nano
Limited
company
Wuxi Manufact
ure
3,000
nano-compo
site material
2,400
--
80.00 80.00 Yes
Weifu
diesel
system
Limited
company
Wuxi Manufact
ure
30,000
Engine
accessories
26,018.75
--
100.00 100.00 Yes
Weifu
Schmidt
Sino-fore
ign joint
ventures
Wuxi Manufact
ure
1,800 Engine
accessories
648
--
45.00 45.00 Yes
（2） Subsidiaries obtained through consolidating enterprises under the same control
Companies Types of
companies
Regist
ration
place
Nature of
busine
ss
Registrat
ion capita
l(Million)
Administratio
n scope
Final
actual
investme
nt
(Million
Other
projects
balance
essentially
forming
Share
holdin
g
propor
tion(%)
Voting
rights
Proporti
on(%)
Consoli
dating
report
or not5 4
the net
investment
for
subsidiaries
Weifu
Jinning
Limited
company Nanjing Manufacture 34,628.70
Engine
accessories 17,864 -- 80.00 80.00 Yes
Weifu
Leader
Limited
company Wuxi Manufacture 26,000
Purifier,
silencer 23,011 -- 94.81 94.81 Yes
Wei Fu
Internation
al Trade
Limited
company Wuxi Trade 3,000
International
trade 3,032.84 -- 100.00 100.00 Yes
（3）Subsidiaries obtained through consolidating enterprises under different control
Companie
s
Types
of
compan
ies
Regis
tratio
n
place
Natur
e of
busin
ess
Registra
tion
capital(
Million)
Administratio
n scope
Final
actual
invest
ment
(Millio
n)
Other
projects
balance
essentially
forming
the net
investmen
t for
subsidiarie
s
Share
holdi
ng
propo
rtion(
%)
Voting
rights
proport
ion(%)
Cons
olida
ting
rep
Itma
Machanic
al
Limited
company Wuxi
Manufa
cture 1,000
Engine
accessories 1,700 -- 100.00 100.00 Yes
2. Change of the consolidation scope of the financial statements
Companies
Consolidation scope of
this year
Consolidation scope
of last year
Weifu Mashan Yes Yes
Weifu Changan Yes Yes
Weifu Jidaa Yes Yes
Weifu Nano Yes Yes
Weifu Diesel System Yes Yes
Weifu Jinning Yes Yes
Weifu Leader Yes Yes
Weifu International Trade Yes Yes
Weifu Shimite Yes Yes
Itma Machanical Yes Yes
Note 5： Notes to consolidated Fianncial Statements
(The following items based on the RMB’000 as the calculation if there are no other explation)5 5
5-01Monetary Fund
2010-6-30 2009-12-31
Items Amount
of foreign
currency
Exchang
rate
Amount of
RMB
Amount
of foreign
currency
Excha
ng rate
Amount of
RMB
Cash：
RMB 618 372
Bank deposit：
RMB 352,513 325,559
EUR 651 8.27 5,381 100 9.75 975
USD 3 6.79 20
Other monetary
capital:
RMB 130,739 98,589
Total 489,271 425,495
Accounts with restricted usage, offshore deposit and potential risks of takig back resulting from
mortgage, mortgaged or freezing and so on:
Items 2010-6-30 2009-12-31
Bank acceptance, letter of credit and 130,679 97,968
5-02 Notes receivable
（1）Classification of notes receivable
Type 2010-6-30 2009-12-31
Trade acceptance 99,700 31,700
Bank acceptance 753,186 421,954
Total 852,886 453,654
（2）Particulars about notes receivable mortgaged by the Company at end-period (Top 5)
Issue units Issue date Due date Amount Memo
chengdu wangpai motor group co.,
ltd 2010-2-26 2010-8-26 5,000
ANHUI JIANGHUAI
AUTOMOTIVE CO.,LTD 2010-3-26 2010-9-26 4,000
Dongfeng Chaoyang Engine co.,
ltd 2010-1-27 2010-7-27 3,600
Shandong Tangjun Ouling car
manufacturing co., ltd 2010-1-20 2010-7-20 2,000
Harbin Haoye Auto Distribution
co., ltd 2010-2-24 2010-8-23 2,000
Total 16,600
RMB 52,465,500.00 of bank acceptance in notes receivable at end-period is used as mortgage
for issuing note payable.
（3）Notes the Company has endorsed to the peer and which still didn’t expire (Top 5)
Issue units Issue date Due date Amount
Dongfeng automobile co., ltd Jan-Jun of 2010 Jul-Dec of 2010 29,520
Weichai power co., ltd Jan-Jun of 2010 Jul-Dec of 2010 15,000
Dongfeng Kangweisi engine Co., ltd Jan-Jun of 2010 Jul-Dec of 2010 13,000
Zhengzhou Nissan Automobile co., ltd Jan-Jun of 2010 Jul-Dec of 2010 10,420
ANHUI JIANGHUAI AUTOMOTIVE Jan-Jun of 2010 Jul-Dec of 2010 9,0005 6
CO.,LTD
Total 76,940
5-03 Accounts receivable
（1）Classified according to account nature:
2010-6-30
Items Book balance Provision for bad debts
Amount Proportion(%) Amount Proportion(%)
Account receivable with
significant amount in
single item 1,010,327 91.58 49,732 71.47
Account receivable with
no significant amount in
single item but with
larger risk after
combination according to
trait of credit risk 17,516 1.59 17,516 25.17
Other non-siginificant
accounts receivable 75,389 6.83 2,335 3.36
Total 1,103,232 100.00 69,583 100.00
2009-12-31
Items Book balance Provision for bad debts
Amount Proportion(%) Amount 比例(%)
Account receivable with
significant amount in
single item 698,542 85.86 48,897 72.74
Account receivable with no
significant amount in
single item but with larger
risk after combination
according to trait of credit
risk 15,271 1.88 15,271 22.72
Other non-siginificant
accounts receivable 99,791 12.26 3,049 4.54
Total 813,604 100.00 67,217 100.00
Notes: Account receivable with significant amount in single item indicated the one which is
above RMB 1 million; account receivable with significant amount in single item was still
accrued in aging analysis method because no objective evidence can prove that the probable
devaluation may be beyond the provision for bad debts accrued in aging analysis method.
（2）Provision for bad debts of account receivable with significant single amount or which was
still offered single devaluation test with no significant single amount:
Contents of account
receivable
Book
balance
Amount
of bad
debts
Accrue
proportion(%)
Reason
Yangdong Co., Ltd 28,793 28,793 100.00
Insolvency happened, the
court ruled restructure
Hunan motors plant
4,297 4,297 100.00
Long account age,
difficult withdrawal
Jiangxi Diesel Plant
3,561 3,561 100.00
Long account age,
difficult withdrawal
Fengbang Diesel Plant 3,318 3,318 100.00 Long account age,5 7
difficult withdrawal
Changchai Wanzhou
Diesel Company 2,432 2,432 100.00
Long account age,
difficult withdrawal
Liuzhou Specific Diesel
Plant 1,612 1,612 100.00
Long account age,
difficult withdrawal
Shaoyang Shenfeng Power
Limited Company
1,590 1,590 100.00
Long account age; and
they were still withdrawn
after the lawsuit
Yuejin light-duty vehicle
co.,ltd 1,218 1,218 100.00
Long account age,
difficult withdrawal
Wuxi Sidaxingxing Diesel
limited company 1,191 1,191 100.00
Long account age,
difficult withdrawal
Henan agricultural
machinery company
1,000 1,000 100.00
Long account age; and
they were still withdrawn
after the lawsuit
Hubei Duoling power
machinery co ltd 776 776 100.00
Long account age,
difficult withdrawal
Henan Xingxiang Engine
Plant 754 754 100.00
Long account age,
difficult withdrawal
Zhejiang Haofeng power
manufacturing co., ltd 625 625 100.00
Long account age,
difficult withdrawal
Yunnan Jinma Diesel Plant
579 579 100.00
Long account age,
difficult withdrawal
Dongfeng Nanchong Auto
Co., Ltd 570 570 100.00
Long account age,
difficult withdrawal
Jintan Shunfeng
Argricultural Machinery
accessories limited
company 567 567 100.00
Long account age,
difficult withdrawal
Nantong IronCow Engine
Plant 556 556 100.00
Long account age,
difficult withdrawal
Changzhou Changfeng
Engine Limited Company 700 700 100.00
Long account age,
difficult withdrawal
Wuxi Car Body Limited
Company 850 850 100.00
Long account age,
difficult withdrawal
Retails（Amounted to 240）
10,606 10,606 100.00
Long account age,
difficult withdrawal
Total 65,595 65,595 -- --
Analysis of the account age
2010-6-30
Account age
Amount Proportion
Proportion
of bad debts
(%)
Provision for
bad debts
Net amount
of account
receivable
Within 6 months 1,017,175 92.19 -- - 1,017,175
6 months to 1
year 10,979 1.00 10 1,098 9,881
1 to 2 years 7,441 0.67 20 1,488 5,953
2 to 3 years 1,067 0.10 40 427 6405 8
Above 3 years 975 0.09 100 975 -
Individual
cognizance 65,595 5.95 100 65,595 -
Total 1,103,232 100.00 -- 69,583 1,033,649
2009-12-31
Account age
Amount Proportion
Proportion
of bad debts
(%)
Provision
for bad debts
Net amount
of account
receivable
Within 6 months 732,660 90.05 -- -- 732,660
6 months to 1 year 10,990 1.35 10 1,099 9,891
1 to 2 years 4,189 0.51 20 838 3,351
2 to 3 years 808 0.10 40 323 485
Above 3 years 1,606 0.20 100 1,606 --
Individual
cognizance 63,351 7.79 100 63,351 --
Total 813,604 100.00 -- 67,217 746,387
Individual cognizance refers to those account receivable with significant single amount or
un-significant single amount
（3）Particulars about shareholder units holding more than 5% (including 5%) voting right
shares of the Company in accounts receivable at this period.
√ Not applicable
（4）Top 5 units holding amount of accounts receivable
Units
Relationship
with the
Company
Amount Age limit
Proportion in
total amounts
of accounts
reveiable (%)
Dongfeng Kangmingsi
EngineLimited Company Clients 184,998
Within 1
year 16.77
Zhejiang Jili Auto Purchase
Limited Company Clients 110,958
Within 1
year 10.06
Weichai Power (weifang) Supplies
Resources Limited Company Clients 101,377
Within 1
year 9.19
Jiangling Auto Co., Ltd
Clients 50,399
Within 1
year 4.57
FAW Jiefang Automotive Co., Ltd.
Wuxi Diesel Plant Clients 43,454
Within 1
year 3.94
Total -- 491,186 -- 44.53
(5) Particulars about accounts receivable of rerated party
Units Relationship with the
Company Amount
Proportion in
total amounts
of accounts
reveiable (%)
Boshi Auto Diesel System Co.,Ltd Affiliated company 36,974 3.35
Wuxi Weifu Economic and Trade Subsidiary of Wuxi 116 0.015 9
Limited Company Industry Group
Zhaoyang Weifu Jialin Machinery
Manufacture Limited Company
Joint venture 24,611 2.23
Wuxi Weifu Fine Machinery
Manufacture Limited Compamy
Affiliated company 96 0.01
Total -- 61,797 5.60
Boshi Auto Diesel System Co.,Ltd: Boshi Diesel System for short later.
（6）Accounts receivable essentially cancelled after verification in this period.
√ Not appliable
5-04Accounts paid in advance
（1）Accounts paid in advance listed according to accounts aging
Accounts age 2010-6-30 2009-12-31
Amount Proportion(%) Amount Proportion(%)
Within 1 year 49,813 96.94 37,062 91.00
1-2 years 1,261 2.46 3,363 8.26
2-3 years 260 0.51 44 0.11
Over 3 years 46 0.09 259 0.63
Total 51,380 100.00 40,728 100.00
（2）Particulars about top 5 units holding amounts of accounts paid in advance
Units
Relationship
with the
Company
Amount Time Reason for
uncalculated
LANEXX GMBH
Non-related
party 9,030
Within 1
year
Goods accounts paid
in advance, goods
undelivered
EZMDEELSTAAHLZIEHEREI
MARK
Non-related
party
4,110
Within 1
year
Goods accounts paid
in advance, goods
undelivered
Shanghai Baosteel particular
metal materials Limited
Company
Non-related
party
3,979
Within 1
year
Goods accounts paid
in advance, goods
undelivered
Wuxi Zhongshe International
Freight Agency Limited
Company
Non-related
party
3,972
Within 1
year
Agency fees paid in
advance, unfinished
business
Jiangsu Power Companies Wuxi
Power company
Non-related
party 3,935
Within 1
year
Electric charge paid in
advance
Total -- 25,026
Particulars about shareholder units holding more than 5% (including 5%) voting right shares of
the Company in accounts paid in advance at this period.
√ Not applicable
(3)Particulars about accounts paid in advance for related party
Units Relationship with the
Company Amount
Proportion in
total amounts
of accounts
paid in
advance (%)6 0
Wuxi Weifu Environmental
Catalyst Limited Company
Affiliated company with
Weifu Lida
122 0.24
Wuxi Weifu Economy and Trade
Limited Company
Subsidiary of Wuxi
Industry Group
86 0.17
Total -- 208 0.41
5-05 Dividend receivable
Item Amount at
period-beginning
Increase
in this
period
Decrease
in this
period
Amount at
period-end
Reason for
unwithdrawal
Devaluation
happened to
relevant
accounts or
not
Zhonglian
Automobile
Electrical
Limited
Company
118,714 - - 118,714
Undistribution
in 2009,
unpaid still
No
Chaoyang
Weifu Jialin
Machinery
Manufacturing
Co., Ltd
240 - 240 -
Total 118,954 - 240 118,714 -- --
5-06Other accounts receivable
（1）Disclosure of other accounts receivable according to types：
2010-6-30
Types Book balance Provision for bad debts
Amount Proportion(%) Amount Proportion(%)
Other account receivable with
significant amount in single
item 2,000 15.45 2,000 43.75
Other account receivable with
no significant amount in single
item but with larger risk after
combination according to trait
of credit risk 2,400 18.53 2,400 52.50
Other unsignificant account
receivable 8,550 66.02 172 3.75
Total 12,950 100.00 4,572 100.00
2009-12-31
Types Book balance Provision for bad debts
Amount Proportion(%) Amount Proportion(%)
Other account receivable with
significant amount in single
item 2,000 20.13 2,000 43.31
Other account receivable with
no significant amount in single
item but with larger risk after
combination according to trait
of credit risk 2,400 24.15 2,400 51.976 1
Other unsignificant account
receivable 5,253 55.72 218 4.72
Total 9,653 100.00 4,618 100.00
Notes: Other account receivable with significant amount in single item indicated the one which
is above RMB 1 million; other account receivable with significant amount in single item was
still accrued in aging analysis method because no objective evidence can prove that the probable
devaluation may be beyond the provision for bad debts accrued in aging analysis method.
(2) Particulars about shareholder units holding more than 5% (including 5%) voting right shares
of the Company in other accounts receivable at this period.
√ Not applicable
（3）Top 5 units holding other accounts receivable
Units Amount Age limit
Proportion in
other accounts
receivable (%)
Memo
Jiangsu Provincial
Science and Technology
Centre
2,000 Above 3
years 15.46
Total amount of
provision for bad
debts has been
accrued
Nanjing University 600
Above 3
years 4.63
Total amount of
provision for bad
debts has been
accrued
Dongnan University 600
Above 3
years
4.63 Total amount of
provision for bad
debts has been
accrued
Nanjing University of
Science and Technology 600
Above 3
years
4.63 Total amount of
provision for bad
debts has been
accrued
Nanjing University of
Technology 600
Above 3
years
4.63 Total amount of
provision for bad
debts has been
accrued
4,400 -- 33.98
(4) Particulars about accounts receivable for related party
√ Not appliable
5-07 Inventory
（1）Inventory category
2010-6-30 2009-12-31
Item Book
balance
Falling price
reserves Book value
Book
balance
Falling price
reserves Book value
Inventory
materials 218,574 74,298 144,276 227,728 74,298 153,430
Goods in
production 119,251 843 118,408 108,493 843 107,650
Inventory
goods 451,997 76,850 375,147 408,559 81,080 327,4796 2
Total 789,822 151,991 637,831 744,780 156,221 588,559
（2）Inventory falling price reserves
Inventory Decrease in this period
category
2009-12-31
Amount of
accrue in this
period Restitution Write-off
2010-6-30
Inventory
materials 74,298 74,298
Goods in
production 843 843
Inventory
goods 81,080 4,230 76,850
Total 156,221 4,230 151,991
（3）Particulars about inventory falling price reserves
Item
Basis of accruing inventory falling
price reserves
Reasons for
current reversal,
decline in value
of resale
inventory
Proportion about
reveral amountnin
of this period in
period-end balance
of this inventory
Inventory
goods
Compare the cost of period-end inventory
with net realizable value in single
comparison way and accrue it accoding to
the difference between net realizable
value and cost. The Company accrued
price decline reverses of products and
materials against the new emission
standard correspondingly because the
country raised the standard of gas
emission of automobiles.
Reversal refers to
ones which have
been externally
sold
0.94%
5-08 Other current assets
Item 2010-6-30 2009-12-31
Export tax refund receivable 8,556 4,411
Total 8,556 4,411
5-09 Investment in joint venture and affiliated company
Units invested Business
Type
Registration
place
Legal
representative
Nature of
business
1. Joint venture
Weifu Aotekaimu Precision
Machinery Co., Ltd
Joint venture Wuxi Gao Guoyuan Auto Parts
Chaoyang Wei Fu Jialin
Machinery Manufacture Co.,
Ltd
Co., Ltd.
Liaoning
Zhaoyang
Li Xiaofeng
Internal
combustion
engine with
accessories
Weifu Environmental Joint venture Wuxi Ou Jianbin Catalyst6 3
Protection Catalyst Co., Ltd.
Suzhou British Te Mai Hung
Yi Real Estate Development
Co., Ltd.
Co., Ltd. Suzhou
Ynag
Xiaodong
Real estate
development
2. Affiliated company
Bosch Diesel Systems Joint venture Wuxi
BOHLER
KLAUS
Internal
combustion
engine with
accessories
Zhonglian Automotive
Electronic Co., Ltd.
Co., Ltd. Shanghai Chen Hong
Internal
combustion
engine with
accessories
Weifu Precision Machinery
Manufacturing Co., Ltd.
Co., Ltd. Wuxi Chen Haojun
Internal
combustion
engine with
accessories
Wuxi Longsheng Co., Ltd. Co., Ltd. Wuxi Ni Maosheng Auto Parts
British Temai Engine Co.,
Ltd. Wuxi
Co., Ltd. Wuxi
Wang
Weiliang
Internal
combustion
engine with
accessories
Invested units
Registration
capital
(RMB’ 0000)
Proportion of
shareholding
（%）
Proportion
of voting
right（%）
2010-6-30, total
amount of assets
(RMB’ 0000)
1. Joint venture
Weifu Aotekaimu Precision
Machinery Co., Ltd USD1,000 50.00 50.00 11,898
Chaoyang Wei Fu Jialin
Machinery Manufacture
Co., Ltd 800 50.00 50.00 4,366
Weifu Environmental
Protection Catalyst Co.,
Ltd. 5,000 49.00 49.00 56,365
Suzhou British Te Mai
Hung Yi Real Estate
Development Co., Ltd. 6,000 50.00 50.00 7,494
2. Affiliated company
Bosch Diesel Systems USD20,000 31.50 31.50 427,879
Zhonglian Automotive
Electronic Co., Ltd. 60,062 20.03 20.03 215,2046 4
Weifu Precision Machinery
Manufacturing Co., Ltd. 1,200 20.00 20.00 20,676
Wuxi Longsheng Co., Ltd. 2,000 20.00 20.00 4,681
British Temai Engine Co.,
Ltd. Wuxi 1,000 40.00 40.00 872
Note: The registration capital of Wuxi Longsheng Co., Ltd is RMB 20 million, till Jun. 30th,
2010, the paid-in capital was RMB 5 million.
Invested units
2010-6-30,
total amount
of liabilities
(RMB’
0000)
2010-6-30,
total amount
net assets
(RMB’
0000)
Jan-Jun of
2010,total
amount of
ooperation
income
(RMB’ 0000)
Jan-Jun of
2010, net
profit (RMB’
0000)
1. Joint venture
Weifu Aotekaimu Precision
Machinery Co., Ltd 1,739 10,159 6,473 1,721
Chaoyang Wei Fu Jialin
Machinery Manufacture Co.,
Ltd 3,453 913 4,480 128
Weifu Environmental
Protection Catalyst Co., Ltd. 30,410 25,955 43,806 5,217
Suzhou British Te Mai Hung
Yi Real Estate Development
Co., Ltd. 194 7,300 188 -91
2. Affiliated company
Bosch Diesel Systems 129,732 298,147 231,515 36,840
Zhonglian Automotive
Electronic Co., Ltd. 67,010 148,194 6,228 24,344
Weifu Precision Machinery
Manufacturing Co., Ltd. 12,884 7,792 11,873 1,545
Wuxi Longsheng Co., Ltd. 2,422 2,259 3,949 610
British Temai Engine Co.,
Ltd. Wuxi 37 835 127 -26
5-10 Long-term equity investment
（1）Particulars about long-term equity investment
Invested units Calculating
method
Initial
investment
cos
2009-12-31
Balance
Increase
or
decrease
2010-6-30
Balance
Cash
dividend
Weifu Aotekaimu
Precision
Machinery Co.,
Equity
method 37,840 52,086 -645 51,441 92506 5
Ltd.
Chaoyang Wei Fu
Jialin Machinery
Manufacture Co.,
Ltd
Equity
method 4,000 6,007 -1,441 4,566 2,080
Weifu
Environmental
Protection Catalyst
Co., Ltd.
Equity
method 24,500 101,616 24,288 125,904
Suzhou British Te
Mai Hung Yi Real
Estate
Development Co.,
Ltd.
Equity
method 30,000 37,037 -458 36,579
Sun-total of joint
venture
96,340 196,746 21,744 218,490 11,330
Bosch Diesel
Systems
Equity
method
549,557 829,566 116,047 945,613
Zhonglian
Automotive
Electronic Co.,
Ltd.
Equity
method
120,124 240,209 48,000 288,209
Weifu Precision
Machinery
Manufacturing
Co., Ltd.
Equity
method
2,000 12,005 3,091 15,096
Wuxi Longsheng
Co., Ltd.
Equity
method
1,000 3,358 3,358
British Temai
Engine Co., Ltd.
Wuxi
Equity
method
4,000 3,485 -105 3,380
Sub-total of
affiliated
venture
676,681 1,088,623 167,033 1,255,656 -
League of
Nations
Securities Co.,
Ltd.
Cost
method
12,000 12,000 12,000 1,800
Guangxi Liu
Fat Co., Ltd.
Cost
method
1,600 1,600 1,600
Chang Chai Cost 800 800 8006 6
Group Finance
Company
method
HeJun Venture
Capital Co.,
Ltd.
Cost
method 33,000 33,000 33,000
Hengtai
Insurance
Brokers Co.,
Ltd. Nanjing
Cost
method 1,000 1,000 1,000 10
HSBC
Insurance
Agency Co.,
Ltd. Jiangsu
Cost
method 500 500 500
Flapping Inc
Cost
method
2,356 2,356 2,356
Weining Fuel
Injection
Equipment Co.,
Ltd. of Henan
Province Gushi
Cost
method
2,033 2,033 2,033
Flapping, Inc.
(Weifu Kim)
Cost
method
200 200 200
Wuxi Venture
Capital Co.,
Ltd.
Cost
method 3,000 3,000 3,000
Beijing Foton
Environmental
Protection Power
Co., Ltd.
Cost
method 56,940 56,940 56,940
Eastern Tech
Industrial Park
Wuxi tin Inc
Cost
method
5,000 5,000 5,000
Sub-total of
other investment 119,285
118,429 118,429 1,810
Total of
long-term equity
investment 892,306
1,403,798 188,777 1,592,575 13,140
Invested units
Proportion of
shareholding
（%）
Proportion
of voting
right（%）
Notes on that
proportion of
shareholding
was different
proportion of
voting right
2010-6-30
Provision for
devaluation
Current
provision
for
impairment
League of
Nations
Securities
Co., Ltd. 1.20 1.20 -- --6 7
Guangxi Liu
Fat Co., Ltd. 1.22 1.22 -- 1,600
Chang Chai
Group
Finance
Company -- 800
HeJun
Venture
Capital Co.,
Ltd. 11.72 11.72 -- 33,000
Hengtai
Insurance
Brokers Co.,
Ltd. Nanjing 1.85 1.85 -- 1,000
HSBC
Insurance
Agency Co.,
Ltd. Jiangsu 10.00 10.00 -- 500
Flapping Inc 1.18 1.18 -- 2,556
Weining Fuel
Injection
Equipment
Co., Ltd. of
Henan
Province
Gushi -- 2,033
Flapping, Inc.
(Weifu Kim) 1.4118 1.4118 -- --
Wuxi Venture
Capital Co.,
Ltd. 12.95 12.95 -- 11,000
Beijing Foton
Environmental
Protection
Power Co., Ltd. 10.00 10.00 -- --
Suzhou British
Te Mai Hung
Italian Real
Estate
Development
Co., Ltd 50.00 50.00 -- 3,500
Total -- -- -- 55,989 -
（2）Relevant condition of that the ability of transferring funds to the Company was restricted
向本
√ Not applicable
（3）Relevant statement on long-term equity investment
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, and6 8
Weifu Jinning funded USD 3,000,000, accounting for 1.5% of registered capital.
Note 2: Suzhou British Te Mai Hung Italian Real Estate Development Co., Ltd.: A
corporation which was founded by common investment from E-Te Mai machinery
and Hung Yi Properties Ltd. Which respectively took share of 50%. The Company
planned to transfer this investment in 2010, and in 2009 has accrued RMB 3.5
million of impairment for long-term equity investment.
Note 3: E-Temai Engine Co., Ltd. Wuxi：A corporation which was founded by common
investment from E-Temai Machinery, Wuxi Industrial Group (formerly Weifu
Group Co., Ltd.) and Lee Yun Industrial Co., Ltd. Chengdu, E-Temai Machinery
invested 4 million, taking 40% share of registration capital of the Company.
Note 4: Eastern Tech Industrial Park Wuxi tin Inc: The Company, Wuxi Industry Group
and Wuxi Taiji Industry Co., Ltd co-sponsored the establishment of this Co., Ltd.
The Company invested 5 million, taking 10% of the registration capital which was
RMB 50 million.
5-11 Investment property
2009-12-31
Book balance
Current
increase
Current
decrease
2010-6-30
Book balance
1. Book original value
Buildings 4,002 20,379 -- 24,381
2. Accumulated
depreciation
Buildings 3,522 15,624 -- 19,146
3. Book value of
investment property
Buildings 480 4,755 5,235
Current investment property was increased due to that a part of idle plant of Weifu Jinning was
transferred to be leased externally. Investment property was calculated in cost method. The
above property all haven’t handled property warrants.
5-12 Fixed assets
(1) Particulars about fixed assets
2009-12-31
Book balance
Current
increase
Current
decrease
2010-6-30
Book balance
(1)Original value of
fixed assets
Houses & Buildings 688,734 133 20,481 668,386
General equipment 165,495 5,949 1,422 170,022
Special equipment 953,863 23,307 9,671 967,499
Transportation 21,715 447 560 21,602
Other equipment 209,729 9,012 20,110 198,631
Total original value
of fixed assets 2,039,536 38,848 52,244 2,026,140
(2)Accumulated
depreciation
Houses & Buildings 145,124 10,570 15,527 140,1676 9
General equipment 88,657 7,067 362 95,362
Special equipment 446,200 41,106 6,332 480,974
Transportation
equipment 14,613 452 394 14,671
Other equipment 118,532 7,664 9,912 116,284
Total accumulated
depreciation 813,126 66,859 32,527 847,458
(3)Provision for fixed
assets devaluation
General equipment 20,768 565 20,203
Special equipment 37,700 64 37,636
Transportation
equipment 104 104
Other equipment 15,117 6,675 8,442
Total provision for
fixed assets 73,689 7,304 66,385
(4)Book value of
fixed assets
Houses & Buildings 543,610 528,219
General equipment 56,070 54,457
Special equipment 469,963 448,889
Transportation 6,998 6,827
Other equipment 76,080 73,906
Total book value of
fixed assets 1,152,721 1,112,297
Original value of fixed assets increased RMB 38,848,351.48 in this period, among which RMB
23,652,760.75 came from conversion of construction in process and RMB 15,195,590.73 came
from external purchase. Accumulated depreciation increased RMB 66,859,063.55 of
depreciation which were accrued fully in this period.
（2）Particulars about fixed assets through finance lease rental income
√ Not appliable
（3）Particulars about mortgaged fixed assets
√ Not appliable
（4）Particulars about fixed assets which didn’t complete property certificate
Item
Original value
of fixed assets
Reason for
completing property
certificate
Expected time
of completion
of property
certificate
Plant and office space for Wei
Fu Jinning
116,445
Plant and office space for
Weifu Changan
57,224
Plant and office space for
Weifu Diesel system
49,072
Related property
procedures is being
arranged
Year 2010 to
Year 2011
5-13 Project in construction7 0
(1) Project Details
2010-6-30 2009-12-31
Item
Book
balance
Provision
for falling
price Book value
Book
balance
Provision
for
falling
price
Book
value
Electronically
controlled common
rail injector with
yearly production of
20 diesels 12,775 12,775 -- -- --
High-pressure
common-rail project 683 683 1,052 -- 1,052
Piecemeal projects 66,964 200 66,764 31,213 200 31,013
Total 80,422 200 80,222 32,265 200 32,065
（2）Changes of significant projects in construction
Item 2009-12-31
Increase
in this
period
Amounts of
projects
transferred
to fixed
assets
2010-6-30 Progress Resource
of capital
Electronically
controlled
common rail
injector with
yearly
production of
20 diesels
-- 12,775 12,775 25% Self-raised
capital
High-pressure
common-rail
project
1,052 360 729 683 100% Self-raised
capital
Total 1,052 13,135 729 13,458
There was no capitalized interest over the above project.
5-14 Intangible assets
（1）Particulars of intangible assets
Item 2009-12-31
Book balance
Current
increase
Current
decrease
2010-6-30
Book balance
(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 28,752 28,7527 1
Jinning
Software of Weifu Jinning 346 346
Land use right of Weifu
Diesel oil System 13,232 13,232
Computer Software of
Weifu Diesel oil System 5,624 158 5,782
Land use right of
E-Temai Machinery 17,136 17,136
Total 121,898 158 122,056
2. Accumulated
amortization
Land use right of parent
company 3,048 336 3,384
Trademark permit use
right Weifu Jinning 9,709 - 9,709
Land use right of Weifu
Jinning 11,261 478 11,739
Software of Weifu Jinning 311 35 346
Land use right of Weifu
Diesel oil System 1,525 141 1,666
Computer Software of
Weifu Diesel oil System 4,629 548 5,177
Land use right of
E-Temai Machinery 2,256 172 2,428
Total 32,739 1,710 34,449
3. Provision for
impairment of
intangible assets
Trademark permit use
right Weifu Jinning 16,647 16,647
4. Book value of
intangible assets
Land use right of parent
company 27,404 27,068
Land use right of Weifu
Jinning 17,491 17,013
Software of Weifu Jinning 35 -
Land use right of Weifu
Diesel oil System 11,707 11,566
Computer Software of
Weifu Diesel oil System 995 605
Land use right of
E-Temai Machinery 14,880 14,708
Total 72,512 70,9607 2
Accumulated amortization increased RMB 1,709,891.89, all of them are current amortization.
Statement of intangible assets:
1. Land use right of E-Temai Machinery: refers to the land use right purchased by E-temai
Machinery from new zone of Wuxi in 2003.
2. Trademark permit use right Weifu Jinning: was the trademark of previous Weifu Group.
Presently because the country implements new emission standard, relevant products
basicly have no market, the whole book value have been accrued provision for
devaluation.
5-15 Deferred income tax asset
（1）Confirmed deferred income tax asset
Item 2010-6-30 2009-12-31
Provision for assets devaluation 38,848 40,133
Others 4,966 4,629
Operation loss of subsidiaries 1,055 1,055
Subtotal 44,869 45,817
（2）Temporary difference corresponding with assets or liabilities leading temporary difference
Item Amount of temporary difference
Provision for bad debts 74,155
Provision for falling price of inventory 151,991
Provision for devaluation of fixed assets 66,385
Provision for devaluation of projects in construction 200
Provision for devaluation of intangible assets 16,647
Operation loss of Weifu Mashan 1,789
Operation loss of Weifu Schmidt 2,429
Other 33,105
Total 346,701
(3)Particulars about un-confirmed deferred income tax asset
Item 2010-6-30 2009-12-31 Memo
Deductible temporary differences
-provision for bad debts （ Parent
Company） 58,149 58,298
It will be hard to be listed
before tax because it’s hard
to get evidence the tax
authorities acquires
Deductible loss–E-Temai
Machinery 18,506 18,506
It is unsure to get enough
taxable income
Total 76,655 76,804
（4）Deductible loss for un-confirmed deferred income tax asset will expire in the following
year
Year 2010-6-30 2009-12-31 Memo
2013 18,506 18,506 E-Temai Machinery made a loss in
20087 3
Total 18,506 18,506
5-16 Provision for devaluation of assets
Decrease in this period
Item
2009-12-31
Book balance
Increase in
this period Reserve Resellers
2010-6-30
Book balance
Provision for bad
debts 71,835 2,366 46 74,155
Provision for
falling price of
inventory 156,221 4,230 151,991
Provision for
impairment of
long-term
investments 55,989 55,989
Provision for
devaluation of
fixed assets 73,689 7,304 66,385
Provision for
devaluation of
projects in
construction 200 200
Provision for
devaluation of
intangible assets 16,647 16.647
Total 374,581 2,366 4,276 7,304 365,367
5-17 Short loan
（1）Classification of short-term loan：
Item 2010-6-30 2009-12-31
Credit loan 790,000 496,986
Guarantee loan 36,000
Mortgage loan 2,252 --
Total 792,252 532,986
Statement of classification of short-term loan:
Mortgage loan：Mortgage loan in period-end came from USD loan got through Weifu Diesel
mortgaging certificates of deposit.
5-18 Notes payable
Category 2010-6-30 2009-12-31
Bank acceptance 228,783 179,890
Total 228,783 179,890
Statement of notes payable：7 4
Margin deposits of notes payable in period-end was RMB 12.261 million and mortgaged
notes payable was RMB 5.247 million for issuing the bank acceptance.
5-19 Account payable
（1）Account age of account payable
Item 2010-6-30 2009-12-31
Within 1 year 1,295,540 833,708
1-2 years 11,798 23,011
2-3 years 387 2,374
Above 3 years 1,844 2,621
Total 1,309,569 861,714
（2）Accounts payable for shareholder units taking 5% (including 5%) voting right hares of the
Company in this reporting period
√ Not appliable
（3）Accounts payable for other related units in this reporting period
Units 2010-6-30 2009-12-31
Weifu Trade Co., Ltd 430 894
Weifu Precision Machinery Manufacturing Co.,
Ltd. 27,040 23,536
Bosch Diesel Systems 5,623 38,355
Wuxi Longsheng Technology Co., Ltd. 2,799 2,557
Weifu Environmental Protection Catalyst Co., Ltd 75,955 51,653
Total 111,847 116,993
(4) Statement on significant accounts payable with over 1 year account age
No account payable has over 1 year account age.
5-20 Account received in advance
（1）Account age of account received in advance
Item 2010-6-30 2009-12-31
Within 1 year 34,402 20,680
1-2 years 9,210 3,549
2-3 years 1,837 966
Above 3 years 2,438 1,910
Total 47,887 27,105
（2）Particulars about account received in advance for the shareholder units or related parties
taking 5% (including 5%) voting right shares of the Company in this reporting period
√ Not appliable7 5
（3）Acccounts received in advance for other related partiea in this reporting period
Units Related relationship 2010-6-30 2009-12-31
Tin Tong Machinery Co., Ltd.
Kunming
Joint Venture of Wuxi
Industrial Group
（Previous Weifu
Group）
8,561 8,144
Weifu Trade Co., Ltd
Subsidiary of Wuxi Ind
ustrial Group (Previous
Weifu Group)
59 -
British Temai Engine Co., Ltd.
Wuxi
Affiliated company of
E-Temai Machinery 972 -
Total 9,592 8,144
（4）Statement on significant account received in advance with over 1 yeara account age
No significant account received in advance has over 1 year account age.
5-21 Employees’ salary payable
Item Book balance in
period-beginning
Current
increase
Current
decrease
Book
balance in
period-end
Salary, bonus, allowance and
subsidy 76,989 181,058 169,841 88,206
Employees’ welfare -- 13,387 13,387 -
Social insurance, etc. 33,520 52,226 44,862 40,884
Housing Fund Social
Insurance 1,615 8,600 8,625 1,590
Housing allowance for
employees 34,609 38 23 34,624
Labor union expenditure and
Personnel education 11,632 4,980 3,285 13,327
Others 21,185 1,271 6 22,450
TTotal 179,550 261,560 240,029 201,081
Amount owed in employees’ salaries payable: None
Arrangement of expected issue time and amount of employees’ salaries payable
Staff bonuses of Jun of 2010 will was issued in July of 2010, the other aAnnual Performance
Awards will be issued after annual performance appraisal. Bonus es fund the parent company
accrued according to the agreement of AGM were included in salary, bonunses, allowance and
subsidy programs. RMB 10 million, RMB 22 million, RMB 17 million were respectively
accrued in 2008, 2009, the first half year of 2010. They will be used by the Company according
to the arrangement of the Board, the accumulated usage was RMB 0.852 million.
5-22. Taxes payable
Item 2010-6-30 2009-12-31
VAT 24,740 8,557
Tax for city construction 1,974 1,2677 6
Income tax of enterprise 16,392 16,507
Extras of education expense 1,128 724
Personal Income Tax 1,772 430
Other 3,388 2,875
Total 49,394 30,360
5-23 Other account payable
（1）Account age of other account payable
Item 2010-6-30 2009-12-31
Within 1 year 43,655 47,102
1-2 years 1,834 24,986
2-3 years 24,012 3,906
Above 3 years 15,634 19,861
Total 85,135 95,855
Particulars about other account payable for the shareholder units taking 5% (including 5%)
voting right shares of the Company in this reporting period
√ Not appliable
（3）Statement on significant account received in advance with over 1 yeara account age
Item 2010-6-30 Memo
Nanjing High-Tech Development
Corporation 9,000
Land account of Nanjing
High-tech Zone
Mechanical & Electrical Industry Group
Co., Ltd. Nanjing 4,500 Incoming account
Suzhou E-Te Mai Hung Italian Real Estate
Development Co., Ltd. 20,000
Account received
temporarily by E-Temai
Machinery
Total 33,500
5-24 Long-term accounts
（1）Classification of long-term accounts
Item 2010-6-30 2009-12-31
Credit loan 3,000 3,000
Total 3,000 3,000
（2）Top 5 long-term loan
Credit units Commencement
date of loan
Ending date
of loan Currency Rate 2010-6-30 2009-12-31
Jiangsu
International
Trust Co., Ltd.
2009-11-27 2012-5-27 RMB 0.3% 3,000 3,000
Total -- -- -- -- 3,000 3,000
Statement on long-term loan:7 7
According to the loan contract signed with Jiangsu International Trust Co., Ltd., Weifu
Jinning borrowed RMB 3 million for Industrialization of Low-emission Diesel Electric
Controlled High Pressure Injection VE Pump System.
5-25 Long-term accounts payable
Item 2010-6-30 2009-12-31
Nanjing Finance Bureau
Hi-tech Branch [Note 1]
Financial
supporting fund (year 2001) 1,880 1,880
Nanjing Finance Bureau
Hi-tech Branch [Note 2]
Financial
supporting fund ( year 2003) 140 140
Nanjing Finance Bureau
Hi-tech Branch [Note 3]
Financial
supporting fund ( year 2004) 1,710 1,710
Nanjing Finance Bureau
Hi-tech Branch [Note 4]
Financial
supporting fund ( year 2005) 1,140 1,140
Nanjing Finance Bureau
Hi-tech Branch [Note 5]
Financial
supporting fund ( year 2006) 1,250 1,250
Nanjing Finance Bureau
Hi-tech Branch [Note 6]
Financial
supporting fund ( year 2007) 1,230 1,230
National debt transferred to
loan [Note 7] 5,600 5,600
Nanjing Finance Bureau
Hi-tech Branch [Note 8]
Financial
supporting fund ( year 2008) 2,750 2,750
Nanjing Finance Bureau
Hi-tech Branch [Note 9]
Financial
supporting fund ( year 2009) 1,030 1,030
Total 16,730 16,730
[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.7 8
[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.
[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.
[Note 7]
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.
[Note 9]
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. 27, 2009 to Oct. 27, 2024. Provided that
the operation period in the zone is less than 15 years, financial supporting capital will be
reimbursed.
5-26 Other non-current liabilities
Item 2010-6-30 2009-12-31
Funds for High Pressure Common Rail
Diesel Injector project 4,060 4,060
Funds for Industrialization of Low-emission diesel
electric controlled high pressure injection VE pump
system 6,325 6,325
Other 1,828 1,290
Total 12,213 11,675
Statement on other non-current liabilities, including various government subsidies and its
period-end amount obtained in this period which were relevant to assets or income:
1. Funding for High Pressure Common Rail Diesel Injector project：According to Notice
(the first phase) On Special Guide Fund for 2009 Provincial Important Industrial Restructuring7 9
and Revitalization issued by Wuxi Municipal Bureau of Finance, the Company received RMB
4.06 million for High Pressure Common Rail Diesel Injector Project. The term of this project
was from Oct of 2008 to Dec of 2010. 77% of budget total investment about this program was
used as fixed assets.
2、Funds for Industrialization of Low-emission diesel electric controlled high pressure injection
VE pump system：In Sep. of 2009, Weifu Jinning and Nanjing Science and Technology
Agency signed Project Contract of Special Funds For the Conversion of Results of Jiangsu
Technology, according to this contract, Weifu Jinning received RMB 6.325 million of funds
in 2009. The term of this contract is from Oct of 2009 to Mar of 2012. 62% of newly
increased investment expense for the project agreed in this contract will be used as fixed
assets.
5-27 Share capital
（1）Change of share capital in reporting perid
Increase and decrease in this period（+、一）
2009-12-31 Issue
of new
shares
bonus
issue
Conversion
Fund Other Subtotal
2010-6-30
Share capital
with
restricted
trade
conditions
-Domestic
legal person
shares
100,022
-
100,022
- Shares by
senior
executors
53
-
53
Circulating
share capital
Tradable
Shares (A
shares)
352,281
-
352,281
Tradable
Shares (B
shares)
114,920
-
114,920
Total 567,276 - 567,276
5-28 Capital Reserves
Item 2009-12-31
Increase in this
period
Decrease in
this period 2010-6-30
Other capital reserve 19,083 - 6,077 13,006
Capital premium 888,497 - - 888,4978 0
Total 907,580 - 6,077 901,503
Other capital surplus decreased due to that 30% and 9.17% equity the Company purchased
respectively from Weifu diesel system and Weifu International trade formed new long-term
equity investment, and the owned net capital of Weifu diesel system and Weifu International
trade formed a difference calculated by proportion of newly increased holding shares, These
long-term equity investment and difference are taken offset against capital surplus (Share
premium) according to requirements of Introduction of Accounting Policy (2008).
5-29 Surplus Public Reserve
(1) Increase and decrease of surplus public reserve in the period
Item
2009-12-31
Increase in the
period
Decrease in
the period 2010-6-30
Statutory surplus
public reserve 283,638 -- -- 283,638
Total 283,638 -- -- 283,638
5-30 Undistributed profit
Item Amount
Undistributed profit at the end of last year before
adjustment 1,104,176
Undistributed profit at the beginning of last year
when being adjusted (Increase+, decrease-) --
Undistributed profit at the beginning of last year
after adjustment 1,104,176
Add：Net profit attributable to parents company in
the period 319,108
Undistributed profit at the end of the year 1,423,284
5-31 Operation income, operation cost
（1）Operation income
Item Jan-Jun of 2010 Jan-Jun of 2009
Main business income 2,436,213 1,138,098
Other business income 214,474 123,050
Operation cost 2,093,056 1,037,202
（2）Main business（Sub-sectors）
Jan-Jun of 2010 Jan-Jun of 2009
Name of sectors Operation
income
Operation cost Operation income Operation cost
Diesel Engine Parts 1,999,916 1,502,288 910,646 732,7208 1
Purifier and silencer of
automobile exhaust 344,661 295,654 174,712 149,106
Import and export 91,636 87,053 52,740 50,117
Total 2,436,213 1,884,995 1,138,098 931,943
（3）Main business（Sub-products）
Name of products Jan-Jun of 2010 Jan-Jun of 2009
Operation income Operation cost Operation income Operation cost
Diesel engine oil
pump and accessories 1,979,715 1,486,257 910,646 732,720
Purifier and silencer
of automobile exhaust 344,661 295,654 174,712 149,106
Turbocharger 11,335 8,937 -- --
Other products 8,866 7,094
Import and export 91,636 87,053 52,740 50,117
Total 2,436,213 1,884,995 1,138,098 931,943
（4）Main business（Sub-region）
Jan-Jun of 2010 Jan-Jun of 2009
Name of region Operation income Operation cost Operation
income
Operation cost
Domestic sales 2,344,187 1,798,640 1,083,548 879,927
Overseas sales 92,026 86,355 54,550 52,016
Total 2,436,213 1,884,995 1,138,098 931,943
（5） Operation income of top 5 clients of the Company
Name of clients Operation income
Proportion in
operation in come (%)
Dongfeng Cummins Engine Co., Ltd. 326,410 12.31%
Weichai Power (Weifang) spare resources Co.,
Ltd. 230,091 8.68%
Bosch Automotive Diesel Systems Co., Ltd 207,056 7.81%
FAW Automobile Co., Ltd. Wuxi Diesel Engine
Factory 135,791 5.12%
Jiangling Motors Co., Ltd. 132,087 4.98%
Total 1,031,435 38.90%
5-32 Operating tax and extras
Item Jan-Jun of 2010 Jan-Jun of 2009
City maintenance and construction tax 10,352 5,491
Education associate charge 5,930 3,138
Business tax 10 15
Total 16,292 8,6448 2
5-33 Financial expenses
Item Jan-Jun of 2010 Jan-Jun of 2009
Interest expense 20,200 20,743
Bills discounted interest 3,114 1,947
Interest income on deposits -3,975 -6,477
Exchange gains and losses -2,252 -1,771
Handling charges, etc. 352 744
Total 17,439 15,186
5-34 Losses from devaluation of asset
Item Jan-Jun of 2010 Jan-Jun of 2009
Losses of bad debts 2,309 4,118
Losses of depreciation of inventory -4,230 -2,895
Losses of devaluation of fixed asset -7,303 -1,296
Losses of devaluation of projects in
construction
Losses of devaluation of intangible assets
Losses of devaluation of long-term equity
investment
220
Total -9,224 147
5-35 Investment income
（1）Particulars about investment income
Item Jan-Jun of 2010 Jan-Jun of 2009
Long-term equity investment income acuculated in
cost method 1,810 900
Long-term equity investment income acuculated in
equity method 200,108 49,338
Total 201,918 50,238
（2）Long-term equity investment income acuculated in equity method (Top 5)
Invested units
Jan-Jun of
2010
Jan-Jun of
2009
Reason for increase
and decrease
comparing this period
with last period
Bosch Automotive Diesel Systems
Co., Ltd. 116,047 -5,319 Due to increase of auto
industry
Zhonglian Automotive Electronic
Co., Ltd. 48,000 39,000 Due to increase of auto
industry
Weifu Environmental Protection
Catalyst Co., Ltd. 24,287 8,883 Due to increase of auto
industry
Weifu Aotekaimu Precision 8,606 5,512 Due to increase of auto8 3
Machinery Co., Ltd. industry
Weifu Precision Machinery
Manufacturing Co., Ltd
3,091 936 Due to increase of auto
industry
Total 200,031 49,012 --
（3）Statement on investment income:
There is no significant restriction on repatriation of investment income.
5-36 Non-operating income
（1）Particulars about non-operating income
Item Jan-Jun of 2010 Jan-Jun of 2009
Income of the dispoal of fixed assets 640 1,115
Government subsidiary 2,303
Other 33 15
Total 673 3,433
5-37 Non-operating expense
（1）Particulars about non-operating expense
Item Jan-Jun of 2010 Jan-Jun of 2009
Income of the dispoal of fixed assets 3,956 1,578
Expenses of donation 200 --
Flood Control and Security Fund 3,051 1,527
Other expense 397 411
Total 7,604 3,516
5-38 Expense of income tax
Item Jan-Jun of 2010 Jan-Jun of 2009
Income tax payable 24,108 7,848
Added loan of deferred income tax 948 401
Expense of income tax 25,056 8,249
5-39 Calculation process of basic earnings per share and diluted earnings per share
Basic earnings per share =P0÷S
S= S0＋S1＋Si×Mi÷M0– Sj×Mj÷M0-Sk
Including: P0 refers to net profit attributable to general shareholders or net profit deducting
non-recurring gains and losses attributable to general shareholders; S refers to weighted average
of externally issued common shares; S0 refers to the total number of shares in the beginning; S1
refers to increased shares arising from provident fund transferring shares or distribution of8 4
stocks and equity in reporting period; Si refers to increased shares arising from newly issued
stocks or bonds transferring stocks in reporting period; Sj refers to decreased shares arising from
repurchase in reporting period; Sk refers to shrunk shares in reporting period; M0 refers to
amounts of months of reporting; Mi refers to amounts of accumulated months from the next
month to the end of reporting period for increasing shares ; Mj refers to amounts of accumulated
months from the next month to the end of reporting period for reducing shares
Diluted earnings per share =P1/(S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ Warrants、Stock
Options、Weighted average of increased shares arising from convertible bonds)
Including: P1 refers to net profit attributable to general shareholders or net profit deducting
non-recurring gains and losses attributable to general shareholders, and it will be adjusted
according to some rules of Accounting Regulation of Enterprises, considering influence from
diluted potential general stocks. The Company should consider influence on net profit
attributable to general shareholders or net profit deducting non-recurring gains and losses
attributable to general shareholders along with weighted average from diluted potential general
stocks when it calculates diluted earnings per share. Include them in diluted earnings per
share according to the diluted degree in sequence till the diluted earnings per share
reaches the minimum.
5-40 Related item explanation for cash flow statement
（1）Received cash relevant to other operating activities
Item Amount
Interest income on deposit 3,975
Other 4,615
Total 8,590
（2）Paid other cash related to operation activity
Item Amount
Operating costs paid in cash 23,468
Management costs paid in cash 67,280
Other 2,420
Total 93,168
5-41 Supplementary materials of consolidated cash flow statement
（1）Supplementary materials of cash flow statement
Item Jan. - Jun., 2010 Jan. - Jun., 2009
I. Net profit subject to cash flow arising from
operating activities
Net profit 336,493 94,206
Add: Provision for fixed assets devaluation -9,224 147
Fixed assets depreciation , depletion of oil
and gas assets, depletion of production of
biological assets 66,859 59,1388 5
Amortization of intangible assets 1,710 1,990
Allocations of long-term expenses to be
amortized 467 341
Losses from disposal of fixed, intangible and
other long-term assets 3,316 464
Losses from obsolete fixed assets
Losses from changes of fair value
Financial expenses 15,614 20,743
Losses from investment -201,918 -50,238
Decrease of deferred income tax 948 401
Increase of deferred income tax
Decrease of inventory -45,042 65,793
Decrease of operating receivables -766,802 -156,130
Increase of operating payables 583,644 80,954
Other
Net cash generated from operations -13,935 117,809
III. Net increase in cash /cash equivalent
Balance of cash at period-end 358,592 368,433
Less: Balance of cash at period-beginning 327,527 495,285
Add: Balance of cash equivalent at period-end -- --
Less: Balance of cash equivalent at
period-beginning -- --
Net increase in cash /cash equivalent 31,065 -126,852
（2）Constitution of cash and cash equivalents
Item 2010-6-30 2009-12-31
1. Cash
Including: Inventory cash 618 372
Bank deposit readily available for payment 357,914 326,534
Other currency capital readily available for
payment 60 621
2. Cash equivalents -- --
Including: bond investment due in 3 months -- --
3. Cash in the end of the year and balance of
cash equivalents 358,592 327,527
Note 6: Related party relationships and related transactions (Monetary unit: 1000 yuan)
6-01 Particulars about parent company of the Company
Parent
company
Related
party
relationships
Category of
enterprise
Registration
place
Legal
representatives
Business
nature
Registration
capital8 6
Wuxi
Industry
Group
Parent
company State-owned Wuxi
Jiang
Guoxiong
Operation
of
state-owned
assets 3,009,570
Parent
company
Shareholding
proportion
parents company
take up of the
Company (%)
Voting right
proportion parents
company take up
of the Company
(%)
Terminal controller of
the Company Code of
orgnization
Wuxi
Industry
Group
17.63 17.63
Wuxi State-owned
Assets Management
Committee
13600265-4
6-02 Particulars of subsidiaries of the Company
Full name of
subsidiaries
Type of
subidiaries
Type of
enterprises
Registration
place
Legal
representative
Business
nature
Weifu Diesel
System
Wholly
owned
subsidiary
Limited
company Wuxi Wang
Weiliang Engine parts
Weifu
International
Trade
Wholly
owned
subsidiary
Limited
company Wuxi Gao Guoyuan International
trade
Weifu Jinning
Holding
company
Limited
company Nanjing Wang
Weiliang Engine parts
Weifu Lida
Holding
company
Limited
company Wuxi Wang
Weiliang
Purifier for
automobile
exhaust and
silencer
Weifu Mashan
Wholly
owned
subsidiary
Limited
company Wuxi Wang
Weiliang Engine parts
Weifu Chanan
Wholly
owned
subsidiary
Limited
company Wuxi Han
Jiangming Engine parts
Weifu Jida
Holding
company
Limited
company Wuxi Xu Liangfei Metallic
Nanoparticles
Weifu Nano
Holding
company
Limited
company Wuxi Xu Liangfei Nanomaterials
E-Temai
Machinery
Wholly
owned
subsidiary
Limited
company Wuxi Wang
Weiliang
Engine parts
Weifu Schmidt
Holding
company
Limited
company Wuxi Wang
Weiliang
Engine parts
Full name of
subsidiaries
Registration
capital
Shareholing
proportion (%)
Voting right
proportion (%) Code of orgnization
Weifu Diesel
System 300,000 100.00 100.00 76418029-1
Weifu 30,000 100.00 100.00 76103151-48 7
International
Trade
Weifu Jinning 346,280 80.00 80.00 13497754-6
Weifu Lida 260,000 94.81 94.81 13600159-8
Weifu Mashan 45,000 100.00 100.00 13625011-3
Weifu Chanan 60,000 100.00 100.00 70354868-9
Weifu Jida 5,000 70.00 70.00 72223147-6
Weifu Nano 30,000 80.00 80.00 74066428-3
E-Temai
Machinery 10,000 100.00 100.00 72418270-0
Weifu Schmidt 18,000 45.00 45.00 69449050-9
6-03. Particulars about other related parties of the Company
Other related parties Relationship between other
related parties and the
Company
Code of
orgnization
Weifu Trade Co., Ltd.
Subsidiary of Wuxi
Industry Group
72740487-4
Tin Tong Machinery Co., Ltd. Kunming Joint venture of Wuxi
Industry Group
77554741-5
Weifu Aotekaimu Precision Machinery
Co., Ltd.
Joint venture 77540714-8
Chaoyang Wei Fu Jialin Machinery
Manufacture Co., Ltd.
Joint venture 78877120-5
Weifu Environmental Protection Catalyst
Co., Ltd.
Joint venture of Weifu Lida 75969849-1
Suzhou E-Te Mai Machinery and
HungYi Real Estate Development Co.,
Ltd
Joint venture of E-Te Mai
Machinery
74940373-3
Bosch Diesel Systems Affiliated company 60791796-6
Weifu Precision Machinery
Manufacturing Co., Ltd.
Affiliated company 73944370-7
Wuxi Longsheng Co., Ltd. Affiliated company of
Weifu Lida
76355192-7
E-Temai Engine Co., Ltd. Wuxi Affiliated company of E-Te
Mai Machinery
77540703-3
6-04. Particulars of related transaction
（1）Related transaction of purchase and sales of goods, offer and acceptance of labors
Particulars about purchased goods of the Company from related parties8 8
Jan-Jun of 2010 Jan-Jun of 2009
Enterprise Amount
Proportion in
amount of
similar
transaction
(%)
Amou
nt
Proportion
in amount
of similar
transaction
(%)
Weifu Precision Machinery
Manufacturing Co., Ltd.
60,920 3.73 36,146 3.93
Bosch Diesel Systems 143,986 8.82 24,315 2.64
Weifu Trade Co., Ltd. 1,021 0.06 610 0.07
Weifu Environmental Protection
Catalyst Co., Ltd.
227,382 13.93 90,510 9.83
Wuxi Longsheng Co., Ltd. 16,451 1.01 3,313 0.36
Weifu Aotekaimu Precision
Machinery Co., Ltd.
37 0.002 -- --
Chaoyang Wei Fu Jialin Machinery
Manufacture Co., Ltd.
20 0.001 100 0.01
British Temai Engine Co., Ltd. Wuxi 415 0.03 -- --
Tin Tong Machinery Co., Ltd. 2,682 0.16 -- --
Particulars about sold goods of the Company from related parties
Jan-Jun of 2010 Jan-Jun of 2009
Enterprise Amount
Proportion
in amount
of similar
transaction
(%)
Amount
Proportion
in amount
of similar
transaction
(%)
Weifu Precision Machinery
Manufacturing Co., Ltd.
10,423 0.39 5,451 0.43
Bosch Diesel Systems 207,056 7.81 109,73 8.70
Chaoyang Wei Fu Jialin Machinery
Manufacture Co., Ltd.
39,121 1.48 24,089 1.91
Weifu Trade Co., Ltd. 1,768 0.07 2,878 0.23
Tin Tong Machinery Co., Ltd. 266 0.01 48,334 3.83
Weifu Environmental Protection
Catalyst Co., Ltd. 9,769 0.37 1,777 0.14
Weifu Aotekaimu Precision
Machinery Co., Ltd. 1,109 0.04 767 0.06
(2) Associated security situation in the end8 9
Assured
party Secured party Secured
amount
Warranty start
date
Warranty ending
date
Warranty
has been
completed
or not
Memo
Weifu
Lida
Weifu
Environmental
Protection
Catalyst Co.,
Ltd.
135,000 May 19th of
2010 Sep 18th of 2010 No Bank loan
Parent
company Weifu Lida 8,750 Jan 21st of 2010 July 21st of 2010 No Bank
acceptance
Parent
company
Weifu
Changan 7,000 Jun 11th of 2010 Dec 11th of 2010 No Bank
acceptance
（3）Other related transaction
Project Related party
Jan-Jun of
2010
Jan-Jun of
2009
Service and technical
service fees payable
Bosch Diesel Systems 2,207 1,236
Rents receivable
Weifu Environmental Protection
Catalyst Co., Ltd. -- 540
Fees payable about
usage of trade mark
and land use
Wuxi Industry Group (previous
Weifu Group)
4,054 2,980
Sales of fixed assets Weifu Precision Machinery
Manufacturing Co., Ltd. 38 --
6-05. Accounts receivable and accounts payable of related parties
Item Related party Balance at the
end of the
period
Balance at
the beginning
of the period
Accounts
receivable
Bosch Diesel Systems 36,974 45,702
Weifu Trade Co., Ltd. 116 458
Chaoyang Wei Fu Jialin Machinery
Manufacture Co., Ltd. 24,611 24,867
Weifu Precision Machinery Manufacturing
Co., Ltd. 96 --
British Temai Engine Co., Ltd. Wuxi -- 436
Accounts
paid in
advance
Weifu Environmental Protection Catalyst 122 --9 0
Co., Ltd.
Weifu Trade Co., Ltd. 86 --
Other
accounts
receivable
Weifu Trade Co., Ltd. -- 122
Notes
payable
Weifu Environmental Protection Catalyst
Co., Ltd. 3,100 --
Accounts
payable
Weifu Precision Machinery Manufacturing
Co., Ltd. 27,040 23,536
Weifu Environmental Protection Catalyst
Co., Ltd. 75,955 51,653
Bosch Diesel Systems 5,623 38,355
Weifu Trade Co., Ltd. 430 894
Wuxi Longsheng Co., Ltd. 2,799 2,557
Account
received in
advance
Tin Tong Machinery Co., Ltd. Kunming 8,561 8,144
Weifu Trade Co., Ltd. 59 --
British Temai Engine Co., Ltd. Wuxi 972 --
Note 7: Contingencies
7-01. Unexpected liabilities and the financial influence arising from pending
litigation and arbitration
Till Jun 30th of 2010, no significant unexpected liabilities arising from pending litigation and
arbitration has taken place in the Company.
7-02. Unexpected liabilities and the financial influence arising from debt guarantees offered for
other units
Besides parent company offered 8.75 million yuan of guarantees for bank acceptance to Weifu
Lida and 7 million yuan to Weifu Changan, Weifu Lida offered 135 million yuan of guarantee
for loan to its subsidiary Weifu Environmental Protection Catalyst Co., Ltd.. Weifu Lida and
Weifu Changan are holding subsidiaries of the Company, Weifu Environmental Protection
Catalyst Co. is joint venture of its holding subsidiary Weifu Lida, and the three companies
operate well, which won’t make significant impact on finance of the Company.
7-03. Other contingencies Mortgage or pledge of assets
Till Jun 30th of 2010, the particulars of mortgage or pledge of assets9 1
1、The Company offered RMB 129.1485 million of bank loan as security deposit for letters
of credit or bank acceptance.
2、The Company mortgaged receivable bank acceptance 52.4655 million yuan to bank as a
guarantee for leeters of bank acceptance.
Note 8：Commitments
8-01. Significant commitments
The Company has no significant commitments.
8-02. Fulfillment of early commitment
The Company has no significant commitments.
Note 9：Subsequent Event on the Balance Sheet Date
9-01 Statement on profit distribution after balance sheet day
According to agreement of shareholders’ meeting of the Company in 2009, implementation
of plan for 2009 profit distribution has been completed on July 21st of 2010. This profit
distribution plan was: issue 1.5 yuan share equity (tax included) per 10 shares to every
shareholder. The total amount of issued cash equity reached 8509.14 yuan (tax included).
9-02 Statement on other profit distribution after balance sheet day
According to agreement of the ninth session of the sixth board of directors of the
Company and the first general meeting of shareholders, the Company has purchased 50% share
equity of Tin Tong Machinery Co., Ltd. Kunming held by Wuxi Industry Group (previous
Weifu Group) in July of 2010, 4.235 million was paid for it.
According to the approval passed on the 12th of the 6th Board of Directors, the Company
plans to purchase 51％ equity of Ningbo Tianli. Turbocharger Co., Ltd. The purchase predicted
amounting to RMB 90 million.
According to the approval passed on the 12th of the 6th Board of Directors, Weifu Leader
plans to invest additional RMB 30 million inBeijing Foton Environmental Protection Power Co.,
Ltd. Share proportion changed from 12.95% to 14.4％, still is the second large shareholder of
Beijing Foton Environmental Protection Power Co., Ltd.
Note 10：Other significant events
There is no significant event.
Note 11：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)
11-01 Accounts receivable
（1）Classified by character of account
2010-6-30
Category Book balance Provision for bad debts
Amount Proportion(%) Amount Proportion(%)
Account receivable with
significant single amount 645,856 96.26 48,540 86.99
Account receivable with no
significant single amount 6,861 1.02 6,861 12.309 2
but with large risk after
combination according to
trait of credit risk
Other un-sognificant
accpunts receivable 18,245 2.72 396 0.71
Total 670,962 100.00 55,797 100.00
Category 2009-12-31
Book balance Provision for bad debts
Amount Proportion(%) Amount Proportion(%)
Account receivable with
significant single amount 590,684 97.44 47,411 86.48
Account receivable with no
significant single amount
but with large risk after
combination according to
trait of credit risk 7,009 1.16 7,009 12.79
Other un-sognificant
accpunts receivable 8,489 1.40 400 0.73
Total 606,182 100.00 54,820 100.00
Statement on category of accounts receivable:
Account receivable with significant single amount refers to account receivable with amount
over 1 million. To account receivable with significant single amount, because there is no
objective proof to show the possibledevaluation will exceed provision for bad debts
accrued in analisis od account age, so provision foe bad debts of it will still be accrued in
analysis of account age.
Analysis of account age of account receivable
2010-6-30
Account age
Amount Proportion
(%)
Proportion
of provision
(%)
Provision
for bad
debts
Net amount
receivable
Within six
months 606,750 90.44 -- - 606,750
Between 6
months to 1
year 3,920 0.58 10 392 3,528
Between 1-2
years 5,892 0.88 20 1,178 4,714
Between 2-3
years 288 0.04 40 115 173
Above three
years 362 0.05 100 362 -
Individual
cognizance 53,750 8.01 100 53,750 -
Total 670,962 100.00 -- 55,797 615,165
Account age 2009-12-319 3
Amount Proportion
(%)
Proportion
of provision
(%)
Provision
for bad
debts
Net amount
receivable
Within six
months 547,103 90.26 -- -- 547,103
Between 6
months to 1
year 3,800 0.63 10 380 3,420
Between 1-2
years 1,036 0.17 20 207 829
Between 2-3
years 16 -- 40 6 10
Above three
years 329 0.05 100 329 --
Individual
cognizance 53,898 8.89 100 53,898 --
Total 606,182 100.00 -- 54,820 551,362
Individual cognizance: accounts receivable with significant or un-siofnificant amount but big
risk.
（2）Amounts of shares held by shareholder units in accounts receivable of this period who take
over 5% (5% included) voting right shares of the Company
√ Not appliable
（3）Particulars about top5 units who owns accounts receivable
Unit
Relationship
with the
Company
Amount Age
limited
Proportion in
total account
receivable (%)
Dongfeng Cummins Engine Co.,
Ltd. Clients 141,351
Within 1
year 21.07
Weichai Power (Weifang) Co.,
spare resources Clients 71,762
Within 1
year 10.70
Bosch Automotive Diesel Systems
Co., Ltd. Clients 29,044
Within 1
year 4.33
Flapping Inc. Clients 28,793
Within 1
year 4.29
FAW Automobile Co., Ltd. Wuxi
Diesel Engine Factory Clients 27,259
Within 1
year 4.06
Total -- 298,209 -- 44.45
11-02 Other accounts receivable
（1）Classification according to category
2010-6-30
category Book balance Provision for bad debt
Amount Proportion(%) Amount Proportion(%)
Other account receivable
with significant single
amount 127,000 96.46 2,000 45.45
Other account receivable
with no significant single 2,400 1.82 2,400 54.559 4
amount but with large risk
after combination according
to trait of credit risk
Other un-sognificant
accpunts receivable 2,266 1.72 -
Total 131,666 100.00 4,400 100.00
category 2009-12-31
Book balance Provision for bad debt
Amount Proportion(%) Amount Proportion(%)
Other account receivable
with significant single
amount 26,000 87.41 2,000 45.45
Other account receivable
with no significant single
amount but with large risk
after combination according
to trait of credit risk 2,400 8.06 2,400 54.55
Other un-sognificant
accpunts receivable 1,346 4.53 -- --
Total 29,746 100.00 4,400 100.00
Statement on category of other accounts receivable:
Other account receivable with significant single amount refers to account receivable with
amount over 1 million. To other account receivable with significant single amount, because
there is no objective proof to show the possibledevaluation will exceed provision for bad
debts accrued in analisis od account age, so provision foe bad debts of it will still be
accrued in analysis of account age. The Company won’t accrue provision for bad debts of
related division of government.
（2）Amounts of shares held by shareholder units in other accounts receivable of this period
who take over 5% (5% included) voting right shares of the Company
√ Not appliable
（3）Particulars about top5 units who owns accounts receivable
Unit Amount Age
limited
Proportion in
total other
account
receivable (%)
Memo
Weifu Lida 125,000 Within 1
year 94.94 Subsidiary
Technology center in
Jiangsu Province 2,000 Above 3
years 1.52
Has been totally
accrued provision
for bad debts
Nanjing University 600
Above 3
years 0.46
Has been totally
accrued provision
for bad debts
Southeast University 600
Above 3
years
0.46 Has been totally
accrued provision
for bad debts9 5
Nanjing University of
Science 600
Above 3
years
0.46 Has been totally
accrued provision
for bad debts
Nanjing University of
Science of Industry 600
Above 3
years
0.46 Has been totally
accrued provision
for bad debts
129,400 -- 98.30
11-03 Long-term equity investment
Invested units Calculation
method
Initial
investment
cost
Balance at the
period-beginning
Increase
and
decrease
Balance at
period-end
Weifu Jinning
Cost
method 178,640 178,640 178,640
WWeifu Leader
Cost
method 230,114 230,114 230,114
WWeifu Nano
Cost
method 24,000 24,000 24,000
Weifu Jida
Cost
method 3,500 3,500 3,500
Weifu Diesel
System
Cost
method 260,188 140,000 120,188 260,188
Weifu Mashan
Cost
method 48,693 48,693 48,693
Weifu Changan
Cost
method 70,902 70,902 70,902
Weifu
International
Trade
Cost
method 28,828 27,922 3,078 31,000
E-Temai
Machinery
Cost
method 17,000 17,000 17,000
Weifu Schmidt
Cost
method 6,480 2,700 3,780 6,480
Weifu Aotekaimu Equity
method 37,842 52,085 -644 51,441
Weifu Jialin Equity
method 4,000 6,006 -1,440 4,566
Bosch Diesel
Systems
Equity
method 523,695 790,370 116,047 906,417
Zhonglian
Automotive
Electronic Co.,
Ltd.
Equity
method 120,124 240,209
48,000
288,209
Weifu Precision
Machinery
Manufacturing
Co., Ltd.
Equity
method 2,000 12,005 3,091 15,096
League of Nations
Securities Co.,
Ltd.
Cost
method 12,000 12,000
12,0009 6
Guangxi Liu Fat
Co., Ltd.
Cost
method 1,600 1,600 1,600
Chang Chai
Group Finance
Company
Cost
method 800 800
800
And Jun Venture
Capital Co., Ltd.
Cost
method 33,000 33,000 33,000
Hengtai Insurance
Brokers Co., Ltd.
Nanjing
Cost
method 1,000 1,000
1,000
HSBC Insurance
Agency Co., Ltd.
Jiangsu
Cost
method 500 500
500
Flapping Inc
Cost
method 2,356 2,356 2,356
East Technology
Park Wuxi tin
Industry Co., Ltd.
Cost
method 5,000 5,000 5,000
Total -- 1,612,262 1,900,402 292,100 2,192,502
Invested units
Proportion
of share in
invested
units (%)
Proportion
of voting
right in
invested
units (%)
Statement
on
difference
between
proportion
of shares
and
proportion
of voting
right
Accrued
provision
for
devaluation
in this
period
Accumulated
accrued
provision for
devaluation
Cash
dividend
Weifu Jinning 80.00 80.00 -- -- -- --
Weifu Leader 94.81 94.81 -- -- -- --
WWeifu Nano 80.00 80.00 -- -- 1,500 --
Weifu Jida 70.00 70.00 -- -- 3,500 --
Weifu Diesel
System 100.00 100.00
--
-- -- --
Weifu Mashan 100.00 100.00 -- -- -- --
Weifu
Changan 100.00 100.00
--
-- -- --
Weifu
International
Trade 100.00 100.00
--
-- -- --
E-Temai
Machinery 100.00 100.00 -- -- -- --
Weifu
Schmidt 45.00 45.00 -- -- -- --
Weifu
Aotekaimu 50.00 50.00
--
-- -- 9,250
Weifu Jialin 50.00 50.00 -- -- -- 2,0809 7
Bosch Diesel
Systems 30.00 30.00 -- -- -- --
Zhonglian
Automotive
Electronic
Co., Ltd.
20.03 20.03 --
-- -- --
Weifu
Precision
Machinery
Manufacturing
Co., Ltd.
20.00 20.00 -- -- -- --
League of
Nations
Securities Co.,
Ltd.
1.20 1.20 -- -- -- 1,800
Guangxi Liu
Fat Co., Ltd. 1.22 1.22 -- -- 1,600 --
Chang Chai
Group
Finance
Company
-- -- 800 --
And Jun
Venture
Capital Co.,
Ltd. 11.72 11.72
-- -- 33,000 --
Hengtai
Insurance
Brokers Co.,
Ltd. Nanjing 1.85 1.85 -- -- 1,000 10
HSBC
Insurance
Agency Co.,
Ltd. Jiangsu 10.00 10.00 -- -- 500 --
Flapping Inc -- -- 2,356 --
East
Technology
Park Wuxi tin
Industry Co.,
Ltd. 10.00 10.00 -- -- -- --
Total -- -- -- -- 44,256 13,140
Statement on long-term equity investment
1. According to decision on the 9th session of the 6th meeting of the Board of Directors, the
Company purchased 30% equity of Weifu Diesel System held by Wuxi Industry Group
(previous Weifu Group) and 9.17% equity of Weifu International Trade. After the purchase,
Weifu Diesel System and Weifu International Trade became wholly owned subsidiaries of
the Company.
2. Weifu Schmidt: is a joint venture founded through investments of the Company, German
Schmitter Group Aktiengesellschaft and Shanghai Weishi Automotive Technology
Development Co., Ltd., and got Business License NO. 320200400033433 from Wuxi,9 8
Jiangsu Province, Industry and Commerce Administration ON 17th of 2009. Its registration
capital was 18 milliom yuan, 8.1 million taking up 45% of registration capital was from the
Company; 7.2 million yuan from German Schmitter Group Aktiengesellschaft takes up
40%; 2.7 million from Shanghai Weishi Automotive Technology Development Co., Ltd.
Takes up 15%. In this period the Company newly increased 3.78 million yuan. The
Company is the first biggist shareholder, owning most voting right of the Board. The
Company will be included in consolidation sheet scope as subsidiary since the foundation
day.
11-04 Operating income
（1）Operating income
Item Jan. – Jun., 2010 Jan. – Jun., 2009
Main business income 1,156,900 638,488
Other business income 171,025 95,618
Operating cost 1,170,004 656,685
（2）Main business（sub-division）
Division OperatingJ iannc.o –m Jeun.,O 2p0e1r0at ing cost OperatingJ iannc. o–m Jeu n.,O 2p0e0r9at ing cost
Diesel parts 1,156,900 1,000,967 638,488 573,596
Total 1,156,900 1,000,967 638,488 573,596
（3）Main business（sub-products）
Product Jan. – Jun., 2010 Jan. – Jun., 2009
Operating income Operating cost Operating income Operating cost
Diesel parts 1,156,900 1,000,967 638,488 573,596
Total 1,156,900 1,000,967 638,488 573,596
（4）Main business（sub-region）
Region Jan. – Jun., 2010 Jan. – Jun., 2009
Operating income Operating cost Operating income Operating cost
Domestic sales 1,152,131 997,375 631,973 566,920
Overseas sales 4,769 3,592 6,515 6,676
Total 1,156,900 1,000,967 638,488 573,596
（5）Operating income of top 5 clients of the Company
Client Operating income Proportion in operating
income (%)
Dongfeng Cummins Engine Co., Ltd. 225,980 17.02
Weichai Power (Weifang) Co., spare
resources 104,377
7.86
FAW Automobile Co., Ltd. Wuxi Diesel
Engine Factory 100,557
7.57
Bosch Automotive Diesel Systems Co., 63,023 4.759 9
Ltd.
Beijing Foton Environmental Protection
Power Co., Ltd. 45,993
3.46
Total 539,930 40.66
11-05 Investment income
（1）Particulars about investment income
Item Jan. – Jun., 2010 Jan. – Jun., 2009
Investment income calculated based on cost method 1,810 34,410
Investment income calculated based on equity method 176,383 40,455
Total 178,193 74,865
（2）Investment income calculated based on cost method（Top 5）
Invested unit Jan. – Jun.,
2010
Jan. – Jun.,
2009
Reason for increase or decrease
League of Nations
Securities Co., Ltd. 1,800 900
Increased cash dividend arising
from raised profit of security
market
Hengtai Insurance
Brokers Co., Ltd. 10 --
Increased cash dividend arising
from raised benefit
Weifu Jinning -- 22,660 Undistributed profit in this period
Weifu Diesel System -- 5,197 Undistributed profit in this period
Weifu Leader -- 4,738 Undistributed profit in this period
Total 1,810 33,495 --
Note: Only investment units whose investment income takes up above 5% of total
amountofprofit, or top 5 investment units are listed here.
（3）Investment income calculated based on equity method
Invested unit Jan. – Jun.,
2010
Jan. – Jun.,
2009
Reason for increase or
decrease
Bosch Diesel Systems 116,047 -5,318
Due to increase of auto
industry
Zhonglian Automotive
Electronic Co., Ltd. 48,000 39,000
Due to increase of auto
industry
Weifu Aotekaimu Precision
Machinery Co., Ltd. 8,606 5,512 Due to increase of auto
industry
Weifu Precision Machinery
Manufacturing Co., Ltd. 3,091 936
Due to increase of auto
industry
Chaoyang Wei Fu Jialin
Machinery Manufacture Co.,
Ltd. 639 325
Due to increase of auto
industry
Total 176,383 40,455 --
Note: Only investment units whose investment income takes up above 5% of total
amountofprofit, or top 5 investment units are listed here.1 0 0
11-06 Supplementary materials of cash flow statement
Item Jan. – Jun.,
2010
Jan. – Jun.,
2009
I. Net profit subject to cash flow arising from
operating activities
Net profit 196,788 81,878
Add: Provision for fixed assets devaluation -9,991 -526
Fixed assets depreciation、depletion of oil and gas
assets, production and biological assets 38,314 34,162
Amortization of intangible assets 335 335
Allocations of long-term expenses to be amortized -- --
Losses from disposal of fixed, intangible and other
long-term assets(Income is listed with “-”) 2,750 1,314
Losses from obsolete fixed assets(Income is listed
with “-”) -- --
Losses from changes of fair value(Income is listed
with “-”) -- --
Financial expenses (Income is listed with “-”) 14,134 14,998
Losses from investment(Income is listed with “-”) -178,193 -74,865
Decrease of deferred income tax(Increase is listed
with “-”) 1,473 -34
Increase of deferred income tax( (Decrease is listed
with “-”) -- --
Decrease of inventory(Increase is listed with “-”) -25,390 21,638
Decrease of operating receivables(Increase is listed
with “-”) -315,184 -64,987
Increase of operating payables(Decrease is listed with
“-”) 169,799 162,652
Other -- --
Net cash generated from operations -105,165 176,565
2. Increase of cash and cash equivalents
Balance of cash at period-end 85,671 117,860
Less: Balance of cash at period-beginning 85,791 141,771
Add: Balance of cash equivalent at period-end -- --
Less: Balance of cash equivalent at period-beginning -- --
Net increase in cash /cash equivalent -120 -23,911
Constitution of cash and cash equivalents
Item 2010-6-30 2009-12-31
Cash balance listed in balance sheet 149,671 147,691
Less: Guarantee of bank acceptance bill not
conforming to the definition of cash 64,000 61,9001 0 1
Balance of cash and cash equivalents listed in cash
flow statement 85,671 85,791
Note 12：Supplementary information
12-01 Non-recurring gains and losses
Item
Jan. – Jun.,
2010
Jan. – Jun.,
2009
Gains and losses arising from disposal of
non-circulating assets 3,987 832
Governmental subsidy written into current gains and
losses（Excluding government subsidies related to
business of enterprise and those enjoyed according to
fixed amount in national standard） -- 2,303
Other non-operating net amount of income and
expense except for the aforesaid items -564 -395
subtotal 3,423 2,740
Less：Amount influenced by the income tax 549 633
Net amount of non-recurring gains/losses 2,874 2,107
Non-recurring gains/losses attributable to minority
shareholders’ gains/losses -87 143
Non-recurring gains/losses attributable to
shareholders of parent company’s gains/losses 2,961 1,964
Net profit attributable to shareholders deducting
non-recurring gains and losses 316,147 85,879
Influence of net amount of non-recurring gains and
losses on net profit (%) 0.93 2.24
Note: Numbers with “+” refer to income and interest, “-” refers to losses or expenses.
12-02 Return on equity and earnings per share
earnings per share
Profit in reporting period
Weighted
average return
on equity（%）
Basic earnings
per share
Diluted earnings
per share
Net profit attributable
toshareholders of the Company 10.57 0.56 0.56
Net profit attributable to
shareholders deducting
non-recurring gains and losses 10.47 0.56 0.56
12-03Statement on abnormal situation of main accounting sheet item and the reasons for
them
1.Notes receivable
Notes receivable at the end of Jun of 2010 increased 399.2324 million yuan compared with
the one at the end of 2009, up 88%, mainly due to that sales in the first half year of 2010
perfomed better. Till Jun 30th of 2010, Notes receivable are not due.
2.Accounts receivable1 0 2
Accounts receivable at the end of Jun of 2010 increased 287.2623 million yuan compared
with the one at the end of 2009, up 38.49%, mainly due to that sales in the first half year of
2010 perfomed better. Till Jun 30th of 2010, payment period of clients was not due.
3.Other accounts receivable
Other accounts receivable at the end of Jun of 2010 increased 3.3424 million yuan compared
with the one at the end of 2009, up 66.38%, mainly due to that parent company increased
0.9191 million yuan, Weifu Leader increased 0.9552 million yuan.
4.Other current assets
Other current assets at the end of Jun of 2010 increased 4.1456 million yuan compared with
the one at the end of 2009, up 93.99%, mainly due to that the return on export tax receivable
of Weifu International Trade increased.
5. Investment Property
Investment property at the end of Jun of 2010 increased 4.7547 million yuan compared with
the one at the end of 2009, up 990.09%, mainly due to that Weifu Jinning transferred partial
housing plant to external lease.
6.Project in construction
Project in construction at the end of Jun of 2010 increased 48.1569 million yuan compared
with the one at the end of 2009, up 150.19%, mainly due to that parent company increased
36.8043 million yuan, Weifu Jinning increased 10.8973 million yuan.
7. Long-term prepaid expenses
long-term prepaid expenses at the end of Jun of 2010 increased 5.1126 million yuan compared
with the one at the end of 2009, up 410.13%, mainly due to that Weifu Leader increased
5.3158 million yuan.
8. Short-term loan
Short-term loan at the end of Jun of 2010 increased 259.266 million yuan compared with the
one at the end of 2009, up 48.64%, mainly due to that the Company made a bank loan for
tense self-own capital arising from increased sales business.
9. Accounts payable
Accounts payable at the end of Jun of 2010 increased 447.8544 million yuan compared with
the one at the end of 2009, up 51.97%, mainly due to that sales in the first half year of 2010
performed better, correspondingly the Company raised purchase. Till Jun 30th of 2010, the
payment period didn’t arrived.
10. Accounts received in advance
at the end of Jun of 2010 increased 20.7824 million yuan compared with the one at the end of
2009, up 76.67%, mainly due to that parent company increased 15.4307 million yuan, Weifu
International Trade increased 3.5664 million yuan.
11. Tax payable
Tax payable at the end of Jun of 2010 increased 19.0346 million yuan compared with the one
at the end of 2009, up 62.70%, mainly due to that tax payable increased 16.1831 million yuan,
personal income tax payable increased 13.415 million yuan.
12. Operating income
at the end of Jun of 2010 increased 1389.5387 million yuan compared with the one at the end
of 2009, up 110.18%, mainly due to that the sales business was drawn by dramatically
increased commercial cars market.
13. Operating cost
Operating cost at the end of Jun of 2010 increased 1055.854 million yuan compared with the
one at the end of 2009, up 101.8%, mainly due to the increased operating income.
14. Business tax and surcharges
Business tax and surcharges at the end of Jun of 2010 increased 7.6473 million yuan
compared with the one at the end of 2009, up 88.47%, mainly due to that urban maintenance
and construction tax increased 4.861 million yuan, education surtax increased 2.792 million1 0 3
yuan.
15. Sales expense
Sales expense at the end of Jun of 2010 increased 48.0658 million yuan compared with the
one at the end of 2009, up 176.78%, mainly due to that parent company increased 20.8967
million yuan, Weifu Diesel System increased 18.6958 million yuan, Weifu Jinning increased
5.8306 million yuan.
16. Administration expense
Administration expense at the end of Jun of 2010 increased 170.8267 million yuan compared
with the one at the end of 2009, up 141.79%, mainly due to that parent company increased
49.6388 million yuan, Weifu Diesel System increased 59.3372 million yuan, Weifu Jinning
increased 27.6324 million yuan.
17. Losses of assets devaluation
Losses of assets devaluation in the first half year of Jun of 2010 decreased 9.3711 million
yuan compared with the one in the first half year of 2009, down 6388%, mainly due to that
provision for bad debts decreased 1.8088 million, losses of falling price of inventory
decreased 1.3348 million, losses of fixed assets devaluation decreased 6.0075 million, losses
of long-term equity investment devaluation decreased 0.22 millon yuan.
18. Investment income
Investment income in the first half year of Jun of 2010 increased 151.6801 million yuan
compared with the one in the first half year of 2009, up 301.92%, mainly due to that the
interest of joint venture and affiliated company both grew, correspondingly the long-term
equity investment calculated by equity method increased.
19. Non-operating income
Non-operating income in the first half year of Jun of 2010 decreased 2.76 million yuan
compared with the one in the first half year of 2009, down 80.40%, mainly due to that net
income of disposal of fixed assets decreased 0.4747 million yuan, government subsidy
decreased 2.3033 million yuan.
20. Non-operating expense
Non-operating expense in the first half year of Jun of 2010 increased 4.0879 million yuan
compared with the one in the first half year of 2009, up 116.27%, mainly due to that net
losses of sales of fixed assets increased 2.3779 million yuan, flood control fund increased
1.5231 million yuan because of increased operating income.
21. Tax expense
Tax expense in the first half year of Jun of 2010 increased 16.8075 million yuan compared
with the one in the first half year of 2009, up 203.76%, mainly due to that interest of parent
company, Weifu Jinning, Weifu Lida, Weifu diesel system all increased, correspondingly
income tax payable increased.
