WEIFU HIGH-TECHNOLOGY GROUP CO., LTD.
SEMI-ANNUAL REPORT 2011
(Full-Text)
August 25, 2011
Contents
Section I. Important Notice ………………………………………………….…3
Section II. Company Profile ……………………………………………………4
Section III. 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 …………………………………………………21
Section VIII. Document Available for References ……………………………21
2
WEIFU HIGH-TECHNOLOGY GROUP CO., LTD.
SEMI-ANNUAL REPORT 2011
Section I. Important Notice
Board of Directors and Supervisory Committee of Weifu High-Technology Group 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.
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.
All the directors attended meeting of board of directors and reviewed 2011 semi-annual report.
Chairman of the Company Wang Weiliang; General Manager Chen Xuejun; and Deputy General
Manager (person in charge of Financing) Sun Qingxian hereby confirm that the financial report in
the Semi-annual Report 2011 is true and complete.
The Semi-annual Financial Report of the Company has not been audited.
3
Section II. Company profile
I. Basic information
1. 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
2. Name in English: WEIFU HIGH-TECHNOLOGY GROUP 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 and 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
1. 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
2. Registration Number of enterprise legal person’s business license: 320200000014926
3. Registration Number of taxation: 320208250456967
4. Certified Public Accountants engaged by the Company:
Name: Jiangsu Gongzheng Certified Public Accountants Co., Ltd.
Address: No.28, Liangxi Road, Wuxi
4
II. Key Financial Data and Indexes
(I) Key accounting data and financial indexes
(Unit: RMB)
Increase/dec
rease at the
end of this
report period
At the end of this At the period-end
compared
report period of last year
with that in
period-end
of last year
(%)
Total assets(RMB) 7,626,179,666.94 6,761,622,809.90 12.79
Owners’ equity attributable to shareholders of the
4,504,106,955.29 4,106,208,383.62 9.69
listed company(RMB)
Share capital(Share) 567,275,995.00 567,275,995.00 0.00
Net assets per share attributable to shareholders of the
7.9399 7.2385 9.69
listed company(RMB/Share)
Increase/dec
rease in this
This report period The same period of
report period
(Jan. to Jun.) last year
year-on-year
(%)
Total operating income(RMB) 3,277,559,746.96 2,650,687,135.98 23.65
Operating profit (RMB) 766,609,381.92 368,480,236.61 108.05
Total profit(RMB) 769,696,904.66 361,549,291.43 112.89
Net profit attributable to shareholders of the listed
644,663,629.50 319,107,461.52 102.02
company(RMB)
Net profit attributable to shareholders of the listed
company after deducting non-recurring gains and 639,380,620.02 316,146,898.70 102.24
losses(RMB)
Basic earnings per share (RMB/Share) 1.14 0.56 103.57
Diluted earnings per share (RMB/Share) 1.14 0.56 103.57
Return on weighted average net asset (%) 14.56% 10.57% 3.99
Return on weighted average net asset deducting
14.44% 10.47% 3.97
non-recurring gains and losses (%)
Net cash flow arising from operating activities(RMB) 53,803,389.19 -13,935,415.91
Net cash flow per share arising from operating
0.095 -0.0246
activities (RMB/Share)
(II)Items of non-recurring gains and losses and concerning amounts
(Unit: RMB)
Items of non-recurring gains and losses Amount
Gains and losses from the disposal of non-current asset 3,621,087.57
Governmental subsidy calculated into current gains and losses, while closely
related with the business of the Company, excluding the fixed-amount or
1,815,300.00
fixed-proportion governmental subsidy according to the unified national
standard
Cost invested for getting subsidiaries, affiliated corporation and joint 1,240,984.11
5
corporation is more than income arising from fair value of recognizable net
asset of invested units when getting investment income
Other non-operating income and expenditure beside for the aforementioned
-56,776.35
items
Influenced amount of minority shareholders’ equity -424,436.83
Impact on income tax -913,149.02
Total 5,283,009.48
(III) Difference in accounting statement prepared under CAS and IAS and explanation:
(Unit: RMB)
Net profit attributable to Owners’ equity attributable to
shareholders of listed company shareholders of listed company
Amount in the Amount in last Amount at Amount at
report period period period-end period-begin
IAS 644,663,629.50 319,107,461.52 4,504,106,955.29 4,106,208,383.62
CAS 644,663,629.50 319,107,461.52 4,504,106,955.29 4,106,208,383.62
Sub-items and total adjusted based on IAS:
Total amount of differences
0.00 0.00 0.00 0.00
between CAS and IAS
Explanations on differences
No differences
between CAS and IAS
6
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
Capital
New Bo
ization
Proporti shares nus Proport
Amount of Other Subtotal Amount
on offerin sha ion
Public
g re
reserve
I. Restricted shares 100,075,226 17.64% -28,366,651 -28,366,651 71,708,575 12.64%
1.State-owned shares
2. State-owned legal
100,021,999 17.63% -28,363,800 -28,363,800 71,658,199 12.63%
person’s shares
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’
53,227 0.01% -2,851 -2,851 50,376 0.01%
shares
II. Unrestricted shares 467,200,769 82.36% 28,366,651 28,366,651 495,567,420 87.36%
1. RMB Ordinary
352,280,769 62.10% 28,366,651 28,366,651 380,647,420 67.10%
shares
2. Domestically listed
114,920,000 20.26% 114,920,000 20.26%
foreign shares
3. Overseas listed
foreign shares
4. Others
100.00 100.00
III. Total shares 567,275,995 567,275,995
% %
Based on promise of share split reform, reviewed and approved by Shenzhen Stock Exchange and
China Securities Depository and Clearing Co., Ltd Shenzhen Branch, on 12 April 2011, China
Securities Depository and Clearing Co., Ltd Shenzhen Branch listed the restricted circulating shares
(part of the shares held by Industry Group). The amount of actual restricted shares available for
listing was 28,363,800 shares, taking up 5% of total shares.
II. About shareholders and shares held
Unit: Share
Total shareholders at the
37,230
end of report period
Particulars about shares held by the top ten shareholders
Nature of Proportio Amount of Amount of Shares
Names of shareholders
sharehold n of share share held restricted shares pledged or
7
er held held frozen
State-ow
WUXI INDUSTRY DEVELOPMENT CROUP ned
17.63% 100,021,999 71,658,199
CO., LTD. legal
person
Domestic
Construction Bank of China－FUGUO non-state-
TIANBO INNOVATION THEME STOCK owned 3.33% 18,870,901
FUND legal
person
Foreign
ROBERT BOSCH GMBH legal 3.24% 18,387,200
person
Foreign
GAOLING FUND,L.P. legal 2.20% 12,502,715
person
Foreign
GUOTAI JUNAN
legal 2.16% 12,249,786
SECURITIES(HONGKONG) LIMITED
person
Foreign
DRAGON BILLION CHINA MASTER FUND legal 1.95% 11,066,646
person
Domestic
non-state-
China Construction Bank—China Priority
owned 1.92% 10,884,194
Growth Stock Fund
legal
person
Domestic
China Construction Bank－Chinese non-state-
Commercial Shengshi Growth Stock Securities owned 1.76% 10,000,000
Investment Fund legal
person
Domestic
non-state-
Bank of communication----Yifangda Kexun
owned 1.68% 9,516,077
Stock Securities Investment Fund
legal
person
Domestic
China Minsheng Bank－Chinese Commercial non-state-
Strategy Selection Flexible Allocation Hybrid owned 1.59% 9,000,000
Securities Investment Fund legal
person
Particulars about shares held by the top ten unrestricted shareholders
Amount of
Name of shareholder unrestricted shares Type of share
held
WUXI INDUSTRY DEVELOPMENT CROUP CO., LTD. 28,363,800 RMB common share
Construction Bank of China－FUGUO TIANBO INNOVATION
18,870,901 RMB common share
THEME STOCK FUND
Domestically listed
ROBERT BOSCH GMBH 18,387,200
foreign share
Domestically listed
GAOLING FUND,L.P. 12,502,715
foreign share
Domestically listed
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 12,249,786
foreign share
DRAGON BILLION CHINA MASTER FUND 11,066,646 Domestically listed
8
foreign share
China Construction Bank—China Priority Growth Stock Fund 10,884,194 RMB common share
China Construction Bank－Chinese Commercial Shengshi Growth
10,000,000 RMB common share
Stock Securities Investment Fund
Bank of Communication----E-fund Kexun Stock Securities
9,516,077 RMB common share
Investment Fund
China Minsheng Bank－Chinese Commercial Strategy Selection
9,000,000 RMB common share
Flexible Allocation Hybrid Securities Investment Fund
INDUSTRY DEVELOPMENT CROUP CO., LTD., the first largest shareholder of the
Company, and other shareholders, and they do not belong to the consistent actionist
Explanation on associated
regulated by the Management Measure of Information Disclosure on Change of
relationship or consistent
Shareholding for Listed Company. The Company was unknown whether there exists
actions among the above
associated relationship among the other shareholders. Chinese Commercial Shengshi
shareholders
Growth and Chinese Commercial Strategy Selection Flexible Allocation Hybrid
Securities Investment Fund belong to consistent actionist.
III. Shares held by the shareholders with restricted tradable conditions and restricted
conditions
Name of
the
Amount of the Date when could Amount of
No restricte
restricted be listed for additional Restricted condition
. d
shares held trade shares
sharehol
ders
2012--4--5 28,363,800 Non-circulating shares of Weifu Hi-tech
held by Wuxi Industry Development Croup
2013--4--5 43,294,399 Co., Ltd. could not listed or transferred
within 60 months since possessing of listing
WUXI
right. After the expiry of the commitment
INDUST
period, original non-circulating shares
RY
would be listed for sale in Shenzhen Stock
DEVEL
Exchange, the proportion of sales volume to
1 OPMEN 71,658,199
total share equity of Weifu Hi-tech could
T
not exceed 5% within 12 months as well as
CROUP
10% within 24 months, and sales price
CO.,
ought not to less than RMB 10 per share
LTD.
(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).
Based on promise of share split reform, reviewed and approved by Shenzhen Stock Exchange and
China Securities Depository and Clearing Co., Ltd Shenzhen Branch, on Apr. 12 of 2011, China
Securities Depository and Clearing Co., Ltd Shenzhen Branch listed the restricted circulating shares
(part of the shares held by Industry Group). The amount of actual restricted shares available for
listing was 28,363,800 shares, taking up 5% of total shares.
IV. Particulars about controlling shareholder and actual controller
No change on controlling shareholder and actual controller occurred in reporting period.
9
Section IV. Particulars about Directors, Supervisors and Senior Executives
I. Alteration in shares held by directors, supervisors and senior executives of the Company
Unit: share
Shares Shares Including Stock
Shares Shares Reaso
increased decreased restricted option
Name Position held at held at n for
to hold in to hold in shares held at
year begin period end change
the period the period held period end
Wang
Chairman of the Board 12,673 0 0 12,673 9,505 0
Weiliang
Chen Vice Chairman of the
3,169 0 0 3,169 2,376 0
Xuejun Board & General Manager
Shi
Director 1,782 0 0 1,782 1,336 0
Xingyuan
Gao
Director & Deputy GM 10,297 0 0 10,297 7,722 0
Guoyuan
Ge
Director 25,468 0 0 25,468 19,101 0
Songping
Rudolf
Director 0 0 0 0 0 0
Maier
Du
Independent director 0 0 0 0 0 0
Fangci
Ma
Independent director 0 0 0 0 0 0
Huilan
Yu Xiaoli Independent director 0 0 0 0 0 0
Han
Chairman of Supervisory
Jiangmin 11,405 0 0 11,405 8,554 0
Committee
g
Wang
Supervisor 521 0 0 521 0 0
Xiaodong
Yang
Supervisor 0 0 0 0 0 0
Weiliang
Deputy General Manager
Sun
& Person in Charge of 0 0 0 0 0 0
Qingxian
Finance
Miao
Deputy General Manager 0 0 0 0 0 0
Yuming
Wang
Deputy General Manager 0 0 0 0 0 0
Yawei
Zhou
Secretary of the Board 2,377 0 0 2,377 1,782 0
Weixing
II. There is no change in directors, supervisors and senior executives of the Company during
the report period
III. The Company held 2010 Shareholders’ General Meeting in the report period
10
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
In reporting period, main business of the Company still belonged to range of industry of automobile
parts, mainly engaging in development, manufacturing and sales of products such as automotive
fuel injection systems, automotive after-treatment system, the engine intake system.
In the 1st half year of 2011, situation of national economy was complicated. Since year-begin the
incentive of automobile industry withdrew, and owing to unfavorable factors such as
block-governance and purchase-limitation in big cities and earthquake in Japan, and fuel price
constantly promoted, demands of automobile fell back and increase range decreased after
flourishing demands since 2009. In the first half of 2011, amounts of accumulative production and
sale of automobile industry respectively were 9,156,000 and 9,325,200, increasing by 2.4% and
3.35% over last period, including, the ones of business automobile were respectively 2,111,100 and
2,214,900, decreasing by 6.07% and 3.67%.
In reporting period, the Company insisted goal of building an image of leader in domestic industry
of core parts of automobile (power project), firmed development direction of 3 systems of products,
vigorously enhanced self-innovation ability, feasibly promoted industry structure adjustment and
arrangement, accelerated construction of key and new items, comprehensively promoted developing
ability, cost control ability, quality assurance ability and system assembly ability. Thus we overcame
pressure of falling of automobile industry and kept growth of economic income.
(1) Deepened fine management and enhanced cost control. We deepened the constant cost-reducing,
promoted cost management based on techniques optimization and technology improvement.
Deepened capital management and enhanced control management on capital risk based on capital
turnover and languishment prevention.
(2) Perfected quality management and strengthened quality control. We intensified measurements
for important problems, decreased internal and external losses, built quality improvement system,
constructed a firewall, enhanced internal and external quality appraisal and implementation of
quality accountability, thus quality loss decreased.
(3) We controlled risk, enhanced scientific judgment and prediction on market surrounding market.
And at the same time, we took the market chance, enhanced anti-risk ability.
(4) Strengthened talent incentive mechanism and enhanced bringing and construction of strategic
and key talents.
in reporting period, the Company realized RMB 3.278 billion, increasing by 23.65% over last
period, and RMB 0.645 billion of net profit (attributable to shareholders of listed companies),
increasing by 102.02% over last period.
2. Analysis on financial condition
Unit: RMB
Increase/decrease
Items Jan.-Jun., 2011 Jan.-Jun., 2010
%
Total operation income 3,277,559,746.96 2,650,687,135.98 23.65
Operation profit 766,609,381.92 368,480,236.61 108.05
Total profit 769,696,904.66 361,549,291.43 112.89
11
Net profit attributable to
shareholders of listed 644,663,629.50 319,107,461.52 102.02
companies
Amount at Amount at
period-end period-begin
Total assets 7,626,179,666.94 6,761,622,809.90 12.79
Owners’ equity attributable
to shareholders of listed 4,504,106,955.29 4,106,208,383.62 9.69
companies
(1) Total operating income increased by 23.65% over last period mainly due to rapid promotion of
products structure adjustment and timely satisfying demands of clients.
(2) Operating profit increased by 108.05% over last period mainly due to operating income and
investment income increased thus investment income in reporting period increased by 45.41% over
last period.
(3) net profit (attributable to shareholders of listed companies) increased by 102.02% over last
period mainly due to operating income and investment income increased thus investment income
increased by 45.41% over last period.
3. Analysis on financial index
(1) Accounts receivable: accounts receivable at end of Jun. of 2011 increased by RMB 455,750,200
with 45.58 percents over year-end of 2010, mainly due to sale of the first half year of 2011
increased along with increase of operating income.
(2) Accounts prepaid: The one at June-end of 2011 increased by RMB 31,807,200 with 30.24
percents over year-end of 2010, mainly due to Weifu Jinning and Weifu Yingtemai added accounts
prepaid for equipments for renewal and restructure of fixed assets.
(3) Receivable equity: The one at June-end of 2011 was received in the 2nd half year of 2011.
(4) Other current asset: the one of June-end of 2011 increased by RMB 7,201,500 with 78.19
percents over year-end of last year, mainly due to receivable refund on export tax of Weifu Guomao
increased.
(5) Projects in construction: the one at June-end of 2011 increased by RMB 236,883,600 with
166.52 percents over year-end of 2010, mainly due to parent company increased construction of
industry park and invested more in technology reform.
(6) Short loan: the one of June-end of 2011 increased by RMB 2,350,000 with 87.04 percents over
year-end of 2010, mainly due to the Company borrowed bank loan for solving capital tension
arising from increased operation business.
(7) Payable notes: the one of June-end of 2011 decreased by RMB 134,547,200 with 34.5 percents
over year-end of 2010, mainly due to payable notes was due.
(8) Accounts received in advance: the one of June-end of 2011 increased by RMB 20,094,900 with
47.54 percents over year-end of 2010, mainly due to goods accounts received in advance.
(9) Payable equity: Cash payable of parent company at June-end of 2011 wad paid on August 17.
(10) Sales expense: Sales expenses of the 1st half year of 2011 decreased by RMB 24,746,200 with
32.88 percents over same period of 2010, mainly due to three guarantees expenses decreased.
(11) Assets impairment losses: Losses of assets disposal at first half year of 2011 increase 100.57%
over that of last year. Mainly because being restructuring the use of sluggish inventory and realizing
the sluggish fixed assts that disposed in first half year of 2010, the impairment provision reversal
correspondingly.
(12) Investment income: The one of the 1st half year of 2011 increased by RMB 91,693,100 with
45.41 percents over same period of last year, mainly due to profit of invested units increased.
(13) Non-operating income: the one of the 1st half year of 2011 increased by RMB 6,611,900 with
982.54 percents over same period of 2010, mainly due to the Company increased RMB 3,485,000
12
of net income for disposing fixed assets, government subsidies was increased by RMB 1,815,000.
And in 2011 we transferred equity of Kunming Xitong thus produced RMB 1,241,000 of income.
(14) Non-operating expenses: the one of the 1st half year of 2011 decreased by RMB 3,406,500 with
44.8 percents over same period of 2010, mainly due to the Company sold fixed assets thus net
losses decreased by RMB 3,453,000.
(15) Income tax expense: the one of the 1st half year of 2011 increased by RMB 70,288,600 with
280.53 percents, mainly due to profit of this period increased thus corresponding income tax
increased.
4. Main operation classified according to industries
Unit: RMB’0000
Increase/decrea
Increase/decrease Increase/decrease
se in gross
Classified according Income Gross in income from in cost of
Cost of profit ratio
to industries or from profit operations over operations over
operations over the same
products operations ratio (%) the same period of the same period
period of last
last year (%) of last year (%)
year (%)
Automobile
299,120.65 215,173.37 28.06 22.78 14.15 5.43
components
5. Main operation classified according to products
Unit: RMB’0000
Increase/dec
Increase/dec Increase/dec
rease in
rease in cost rease in
income
of gross profit
Total Total Gross from
Classified according to operations ratio over
operating operating profit ratio operations
industries over the the same
income cost (%) over the
same period period of
same period
of last year last year
of last year
(± %) (±%)
(±%)
Automotive fuel
244,663.57 170,554.38 30.29 17.62 7.92 6.26
injection system
Automotive
46,668.34 40,044.15 14.19 35.40 35.44 -0.02
after-treatment system
induction system 7,788.73 4,574.84 41.26 587.14 411.89 20.11
6. Main operations and areas
Unit: RMB’0000
Increase/decrease of operating
Area Operating income income over the previous
period (%)
Inside the country 286,930.11 22.40
Outside the country 12,190.54 32.47
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， Total operating income increased by 30% over last period。
(2) Zhonglian Automobile Electronics Co., 20% equity held by the Company, mainly engaged in
producing automobile electronics control system, Total operating income increased by 83% over
last period。
13
II. Problems and difficulties in operation
Affected by unfavorable factors such as withdrawal of incentive policy on automobile industry, total
production and sale as well as increase range of automobile industry obviously fell, especially the
decrease range of business automobiles. The unfavorable market influenced operation of the
Company.
Macro economic situation and market demands of the 2nd half year were still faced with uncertainty
which mainly shows in:
1. CPI kept high, prices of production factors were growing, inflation was constant, increase of
interest existed and financing cost ascended.
2. Logistic transportation cost operated highly thus uncertainty remained in market demands and
competitiveness further enlarged.
The above factors will take a certain influence on operation performance of the Company in the 2nd
half year.
Measurements:
1. Accelerate products structure adjustment, speed up development and developing progress on new
products while produce correct products. Ensure marketing share of important products unchanged
and increased marketing share of new products.
2. Enhance control on internal cost, continuously deepen fine management, reduce comprehensive
cost; initially work out, balance factors of cost-increase and profit-decrease, reduce labor expense,
compress non-operational expense and strengthen projects management.
3. Further enhance capital management, reduce capital occupation and reduce operation risk.
4. Improve quality, strictly pay attention to compliance of products based on requirements of quality
system, focus on quality of materials and conduct quality responsibility.
III. Investment of the Company in the report period
1. There was no application of raised proceeds in the report period
2. Investments with non-raised proceeds
In reporting period, total investment in main items such as technology reform and external
investment amounted to RMB 325,288,800.
(1) RMB 48,370,000 was invested in WAPS research and development as well as industrialization
and productivity improvement of parts of diesel common rail system in reporting period.
(2) RMB 7,890,000 was invested in project research institution in reporting period.
(3) RMB 163,720,000 was invested in construction of Weifu Industry Park in reporting period.
(4) RMB 98,640,000 was invested in fragmentary projects in reporting period.
(5) RMB 1,468,800 was invested in purchasing 20% equity of Kunming Xitong Machinery Co., Ltd
previously held by Kunming Jinlida Co., Ltd in reporting period.
(6) The Company set up Anhui Weifu Tianshi Machinery Co., Ltd together with Anhui Quanchai
Power Holding Co., Ltd. RMB 5,200,000 was invested in it I reporting period.
IV. The Board of Directors of the Company didn’t rectify the operation plan of the second half
year.
14
Section VI. Significant Events
I. Corporation governance
In reporting period, the Company strictly complied with requirements of Company Law, Securities
Law, Governance Rules of Listed Companies, Administration Method for Information Disclosure of
Listed Companies, Guidance for Normalized Operation of Listed Companies in Main Board of
Shenzhen Securities Exchange as well as relevant laws and rules issued by CSRC. And we
continuously perfected governance structure of the Company as well as various systems. The
Company enhanced administration of information disclosure, standardized corporation operation.
Thus there was no difference between actual governance situation and requirements on normalized
documents relevant to governance of listed companies issued by CSRC.
II. Profit Distribution
1. The Company did not distribute bonus or implement capitalization of reserves in the interim of
2011.
2. The Company completed the implementation of the profit distribution plan of 2010 in August,
2011. The distribution plan was: distributing cash bonus of RMB 4.35 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.
In reporting period, the Company had no significant assets purchase, selling or capital restructure.
V. Related Transaction
Related transaction relevant to daily operation
Proposal of Predicted Total Amount of 2011 Daily Related Transaction reviewed on the 16th
meeting of the 6th session of board of directors and approved on 2010 annual shareholders’ meeting
was respectively published on Securities Times, China Securities Journal, Hong Kong Commercial
Daily and Juchao website （http://www.cninfo.com.cn）on March 19, 2011 and on July 1 of 2011.
In reporting period, implementation of daily related transaction: Unit: RMB’0000
Type of
related The 1st half The 1st half
transaction Contents of transaction Related units
year of 2011 year of 2010
Wuxi Weifu Environmental Catalyst Co.,
29,674.80 22,738.2
Ltd.
Bosch Automotive Diesel Oil Systems
15,864.47 14,398.6
Co., Ltd.
Purchase of
Purchase of components Wuxi Weifu Precision Machinery 7,908.69 6,092.0
goods, labor Manufacturing Co., Ltd.
service and Wuxi Weifu Autocam Fine instruments
fixed asset 708.22 3.7
Co., Ltd.
British Temai Engine Co., Ltd. Wuxi 0 41.5
Bosch Automotive Diesel Oil Systems
Purchase fixed assets 5.96 0
Co., Ltd.
15
Bosch Automotive Diesel Oil Systems
21,393.31 20,705.6
Sales of oil pump and oil Co., Ltd.
mouth products and Wuxi Weifu Precision Machinery
1,409.17 1,042.3
Sales of components produced by Manufacturing Co., Ltd.
goods, labor the Company Wuxi Weifu Autocam Fine instruments
service and 289.7 110.9
Co., Ltd.
fixed assets Wuxi Weifu Environmental Catalyst Co.,
Sales of raw material 736.66 976.9
Ltd.
Wuxi Weifu Precision Machinery
Sales of fixed assets 14.90 3.8
Manufacturing Co., Ltd.
Use of trade
Paying fees for using Wuxi Industry Development Group Co.,
mark and 514.95 405.4
trade mark and land lease Ltd.
land lease
Technical
Technical service fees Bosch Automotive Diesel Oil Systems
service fees 0 220.7
and services payable Co., Ltd.
and services
Total 78,520.83 66,739.6
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 end of reporting period, the Company had no external guarantee.
3. In reporting period, the Company had no non-operating liability and debts contact with related
parties.
4. Creditor’s rights and debt intercourse with related party
Unit: RMB
Occurred
Balance at the Occurred Amount
Amount of Balance at the
Related parties year-begin of of debt in the first
debtor in the first period-end
2011 half year
half year
Wuxi Weifu Autocam Precision
775,162.08 9,717,513.35 10,036,151.47 456,523.96
Machinery Co., Ltd.
Bosch Automotive Diesel Oil Systems
49,756,368.32 308,742,713.24 305,448,279.45 53,050,802.11
Co., Ltd.
Wuxi Weifu Environmental Catalyst
-17,361,199.37 306,122,241.58 352,755,420.61 -63,994,378.40
Co., Ltd.
Wuxi Weifu Precision Machinery
-31,598,559.71 110,581,487.98 94,718,132.11 -15,735,203.84
Manufacturing Co., Ltd.
Total 1,571,771.32 735,163,956.15 762,957,983.64 -26,222,256.17
5. In the report period, the Company did not entrust others to do cash management.
VII. In the report period, the Company and its Board of Directors received no inspection,
legislative punishment, a criticism by circulating a notice from CSRC, or public condemnation
from Shenzhen Stock Exchange.
VIII. Special commitments made by original non-circulating shareholders in process of Share
Merger Reform and its implementation
Comm
Particulars of
itted Acceptor Committed contents
implementation
events
Share Wuxi Net profit amounted to 0.85 billion yuan from Implementation has
16
reform Industry 2006-2008, the one in 2008 was 0.34 billion yuan. been completed
Comm Group According to the rule of issuing 0.5 shares per 10 shares
itment Co., Ltd. aiming 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.
Based on promise of
share split reform,
Non-tradable shares of Weifu High-tech held by Industry Group had
Industry Group can’t be listed or transferred in 60 handled listing
months after the day when it got listing right. After the procedure of
Comm expiry of the commitment period, original restricted circulating
itment Wuxi non-circulating shares would be listed for sale in shares available for
to limit Industry Shenzhen Stock Exchange, the proportion of sales listing. Actual
sales Group volume to total share equity of Weifu Hi-tech could not amount of these
of Co., Ltd. exceed 5% within 12 months as well as 10% within 24 shares was
shares months, and sales price ought not to less than RMB 10 28,363,800 shares,
per share (the lowest impairment price of shares holding taking up 5% of total
would be calculated ex-right at the same time if share share capital. Till end
price ought to ex-right according to regulation). of reporting period,
holding-decrease had
not occurred.
Other In order to promote healthy development of listed
Commitment
commi companies, fully motivate the enthusiasm of
arranged by
tments supervisors, make sure to combine the interest of
motivation
(includ Wuxi shareholders and supervisors of the Company, Industry
mechanism of
ing Industry Group makes a pledge: After Weifu High-tech finishes
supervisors is being
additio Group the equity allocation reform, the Company will actively
carrying out and will
nal Co., Ltd. promote equity motivation plan in high-tech supervisors
be implemented after
commi of Weifu according to related rules made by the country
related policies were
tments and Wuxi Government for the motivation mechanism of
issued.
) the supervisors.
IX. Other significant events
1. 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.
2. That the Company issued non-public RMB ordinary share (A share) to major shareholder Wuxi
Industry Development Co., Ltd (hereinafter referred to as Industry Group) and foreign strategic
investor Germany Robert Bosch Co., Ltd (hereinafter referred to as Bosch Company) which was
reviewed and passed on the 14th and 15th meeting of the 6th session of board of directors as well as
2010 secondary extraordinary shareholders’ meeting. On Jun. 29 of 2011, event about bringing
foreign strategic investor in this non-public issue program had obtained principle reply from
national commerce department (SZP [2011] No. 678 Reply to that Commerce Department Agreed
that German Robert Bosch Co., Ltd Strategically Invests Wuxi Weifu High-Tech Group Holding
Co., Ltd). Commerce Department agreed in principle that German Robert Bosch Co., Ltd subscribes
non-public RMB ordinary shares (A share) issued by Wuxi Weifu High-Tech Group Holding Co.,
Ltd in cash. Presently the program about the non-public issue had been reported to CSRC.
Implementation could be only when CSRC approved it. And the approval finally depends on the
decision of China Securities Supervision Administration Commission.
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
17
Further Standardizing Capital Current Between Listed Company, Big Shareholder as well as Other
Related Parties, as independent directors of Weifu High-Technology Group Co., Ltd., we examined
relevant resolution of Prediction on Daily Related Transaction Amount of 2011 of the Company and
checked the Semi-Annual Report 2011, then we presented the following opinions:
1. Capital current and occupancy do exist between the Company, its large shareholder-Wuxi Weifu
Industry Development Group Co., Ltd. as well as other related parties, which mainly belongs to the
daily related transactions occurred from the daily production and operation activities of the
Company. The daily related transactions amount is in line with the normal business development of
the Company. The daily related transaction of the Company are examined and approved in board
meeting and shareholder’s meeting and such legal procedure, and disclosed in the periodic reports
and resolution notices of the Board and shareholders’ meeting.
2. After inspection, it is not found that the Company has capital current and occupancy which are
not disclosed.
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 2011; 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. Till period-end, amount of external guarantee of the Company was zero.
3. 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 ’0000
Changes on
Initial Proportion in Gains and
Amount held Book value owners’
Name of the company held investment equity of the losses in
(Share) at period-end equity in the
amount company report period
report period
Guolian Securities Co., Ltd. 1,200.00 1,800.00 1.20% 1,200.00 0.00 0.00
Nanjing Hengtai Insurance and
100.00 100.00 1.85% 100.00 0.00 0.00
Broker Securities Co., Ltd.
Jiangsu HSBC Insurance
50.00 50.00 10.00% 50.00 0.00 0.00
Agents Limited
Total 1,350.00 1,950.00 - 1,350.00 0.00 0.00
XIII. Periodical reports and provisional reports of the Company in the report period are as
follows:
Order of Name of
Contents of notice Date of notice
notice newspapers
China
2011-001 Notice to 2010 performance 2011-1-26 Securities
Journal
Notice to decisions made on the 16th meeting of the Securities
2011-002 2011-3-19
6th session of board of directors Times
18
Notice to decisions made on the 7th meeting of the Hong Kong
2011-003 2011-3-19
7th session of board of supervisors Commercial
2011-004 Summary of 2010 annual report 2011-3-19 Daily
2011-005 Daily related transaction 2011-3-19
2011-006 Offering guarantee for others 2011-3-19
2011-007 Notice to more investment in Yingtemai 2011-3-19
2011-008 Notice to listing of restricted shares 2011-4-11
2011-009 Notice to 2011 the 1st seasonal performance 2011-4-15
2011-010 Text of 2011 the 1st seasonal report 2011-4-23
th
Notice to decision made on the 18 meeting of the
2011-011 2011-6-9
6th session of board of directors
Notice to decisions made on the 9th meeting of the
2011-012 2011-6-9
6th session of board of supervisors
2011-013 Notice to holding 2010 annual shareholders’ meeting 2011-6-9
Reference notice to holding 2010 annual
2011-014 2011-6-23
shareholders’ meeting
Notice to decisions made on the 2010 annual
2011-015 2011-7-1
shareholders’ meeting
2011-016 Notice to particulars about non-public issue 2011-7-1
All the above documents were published on www.cninfo.com.cn which granted by China
Securities Regulatory Commission.
XIV. Registration form for receiving research, communication and interview in the report
period.
Contents discussed and
Date Place Way The received parties
materials supplied
Reception
Bank of Communication, Operation status and future
2011-01-06 room of the Spot research
Schroeder development of the Company
Company
Reception
Operation status and future
2011-01-07 room of the Spot research Life, Franklin
development of the Company
Company
Reception
China Merchants Operation status and future
2011-02-16 room of the Spot research
Securities development of the Company
Company
Reception
Operation status and future
2011-05-06 room of the Spot research Huili Fund
development of the Company
Company
Reception
Operation status and future
2011-05-10 room of the Spot research Tiger Fund
development of the Company
Company
Reception
Operation status and future
2011-05-12 room of the Spot research Bosera Fund
development of the Company
Company
Reception
Operation status and future
2011-05-20 room of the Spot research Deutsche Bank
development of the Company
Company
Reception
Operation status and future
2011-05-25 room of the Spot research Hongli
development of the Company
Company
Reception
Baling, Zhongxin Operation status and future
2011-05-26 room of the Spot research
Construction Investment development of the Company
Company
2011-05-27 Reception Spot research Yanfu Operation status and future
19
room of the development of the Company
Company
Reception
Operation status and future
2011-06-01 room of the Spot research Fubang Securities
development of the Company
Company
Reception
Changjiang Securities, Operation status and future
2011-06-09 room of the Spot research
Zhongyou Fund development of the Company
Company
Reception
China Merchants Operation status and future
2011-06-22 room of the Spot research
Securities development of the Company
Company
20
Section VII. Financial Statement
I. The Interim 2011 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 2011 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 Group Co., Ltd.
25 August 2011
21
Supplementary I. Financial Report (un-audited)
Balance Sheet
Prepared by Weifu High-Technology Group Co., Ltd. Jun.30, 2011 Unit: RMB
Amount at period-end Amount at year-begin
Items
Consolidation Parent Company Consolidation Parent Company
Current assets:
Monetary funds 650,755,776.12 230,304,728.14 596,958,764.21 149,943,763.55
Settlement provisions
Capital lent
Transaction finance asset
Notes receivable 806,727,432.41 238,093,231.72 835,266,266.32 291,611,147.00
Accounts receivable 1,455,548,616.22 787,170,455.11 999,798,439.30 567,607,398.18
Accounts paid in advance 136,984,003.56 39,733,401.66 105,176,780.11 42,468,803.76
Insurance receivable
Reinsurance receivables
Contract reserve of
reinsurance receivable
Interest receivable
Dividend receivable 411,763,187.98 403,474,013.55 8,496,690.22
Other receivables 6,937,631.88 170,381,031.94 6,892,216.92 137,067,355.21
Purchase restituted finance
asset
Inventories 892,581,046.39 286,208,383.69 917,694,296.54 277,723,002.78
Non-current asset due
within one year
Other current assets 16,412,254.88 9,210,782.24
Total current assets 4,377,709,949.44 2,155,365,245.81 3,470,997,545.64 1,474,918,160.70
Non-current assets:
Granted loans and advances
Finance asset available for
sales
Held-to-maturity
investment
Long-term account
receivable
Long-term equity
1,595,884,372.95 2,413,386,990.76 1,892,112,152.46 2,558,225,582.62
investment
Investment property 4,705,325.58 4,965,879.52
Fixed assets 1,129,106,174.81 544,921,148.93 1,110,068,115.28 538,628,218.28
Construction in progress 379,140,376.53 326,782,044.17 142,256,732.63 125,932,175.31
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas asset
Intangible assets 84,003,591.27 26,398,657.53 85,655,823.12 26,733,764.37
Expense on Research and
Development
Goodwill 1,784,086.79 1,784,086.79
Long-term expenses to be
7,225,632.48 7,473,629.75
apportioned
22
Deferred income tax asset 46,620,157.09 15,994,688.34 46,308,844.71 16,198,870.70
Other non-current asset
Total non-current asset 3,248,469,717.50 3,327,483,529.73 3,290,625,264.26 3,265,718,611.28
Total assets 7,626,179,666.94 5,482,848,775.54 6,761,622,809.90 4,740,636,771.98
Current liabilities:
Short-term loans 505,000,000.00 475,000,000.00 270,000,000.00 240,000,000.00
Loan from central bank
Absorbing deposit and
interbank deposit
Capital borrowed
Transaction financial
liabilities
Notes payable 255,438,331.48 147,760,000.00 389,985,533.69 200,278,487.00
Accounts payable 1,282,039,231.68 798,944,758.50 1,195,053,077.84 766,617,178.72
Accounts received in
62,366,779.80 31,660,297.45 42,271,899.15 20,438,892.15
advance
Selling financial asset of
repurchase
Commission charge and
commission payable
Wage payable 296,748,447.80 202,960,229.57 269,751,945.96 168,133,427.32
Taxes payable 51,119,679.83 12,873,131.08 107,903,963.31 28,582,184.41
Interest payable 794,885.00 720,000.00 490,000.00 320,000.00
Dividend payable 246,765,057.83 246,765,057.83 18,696,539.18
Other accounts payable 79,199,455.69 184,158,024.61 62,501,613.74 56,125,853.06
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Non-current liabilities due
within 1 year
Other current liabilities 28,321,914.82 425,794.18 24,330,259.35
Total current liabilities 2,807,793,783.93 2,101,267,293.22 2,380,984,832.22 1,480,496,022.66
Non-current liabilities:
Long-term loans 3,000,000.00 3,000,000.00
Bonds payable
Long-term account payable 15,670,000.00 15,670,000.00
Special accounts payable
Projected liabilities 1,481,745.84 1,481,745.84
Deferred income tax liabilities 2,719,799.76 2,801,008.40
Other non-current liabilities 15,105,000.00 13,350,000.00
Total non-current liabilities 36,494,799.76 1,481,745.84 34,821,008.40 1,481,745.84
Total liabilities 2,844,288,583.69 2,102,749,039.06 2,415,805,840.62 1,481,977,768.50
Owner’s equity (or shareholders’
equity):
Paid-in capital (or share
567,275,995.00 567,275,995.00 567,275,995.00 567,275,995.00
capital)
Capital public reserve 895,918,416.59 923,981,806.57 895,918,416.59 923,981,806.57
Less: Inventory shares
Reasonable reserve
Surplus public reserve 283,637,997.50 283,637,997.50 283,637,997.50 283,637,997.50
23
Provision of general risk
Retained profit 2,757,274,546.20 1,605,203,937.41 2,359,375,974.53 1,483,763,204.41
Balance difference of
foreign currency translation
Total owner’s equity attributable
4,504,106,955.29 3,380,099,736.48 4,106,208,383.62 3,258,659,003.48
to parent company
Minority interests 277,784,127.96 239,608,585.66
Total owner’s equity 4,781,891,083.25 3,380,099,736.48 4,345,816,969.28 3,258,659,003.48
Total liabilities and owner’s
7,626,179,666.94 5,482,848,775.54 6,761,622,809.90 4,740,636,771.98
equity
Profit Statement
Prepared by Weifu High-Technology Group Co., Ltd. Jan.-Jun., 2011 Unit: RMB
Amount in this period Amount in last period
Items Parent Parent
Consolidation Consolidation
Company Company
I. Total operating income 3,277,559,746.96 1,572,144,387.25 2,650,687,135.98 1,327,925,009.23
Including: Operating income 3,277,559,746.96 1,572,144,387.25 2,650,687,135.98 1,327,925,009.23
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 2,804,561,429.66 1,426,981,752.27 2,484,124,898.09 1,301,797,886.46
Including: Operating cost 2,426,221,608.75 1,276,037,593.43 2,093,055,787.60 1,170,004,402.17
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 18,420,616.07 4,627,595.77 16,291,617.38 6,433,506.73
Sales expenses 50,509,950.62 19,702,447.44 75,256,111.83 37,610,680.96
Administration expenses 289,086,649.01 114,319,388.36 291,306,504.33 85,142,336.99
Financial expenses 20,270,250.56 12,074,003.65 17,439,278.30 12,598,125.00
Losses of devaluation of
52,354.65 220,723.62 -9,224,401.35 -9,991,165.39
asset
Add: Changing income of
fair value(Loss is listed with
“-”)
Investment income (Loss
293,611,064.62 267,750,110.24 201,917,998.72 178,193,119.57
is listed with “-”)
Including: Investment
income on affiliated company 293,611,064.62 267,750,110.24 200,107,998.72 176,383,119.57
and joint venture
Exchange income (Loss is
listed with “-”)
III. Operating profit (Loss is
766,609,381.92 412,912,745.22 368,480,236.61 204,320,242.34
listed with “-”)
Add: Non-operating
7,284,862.92 3,643,945.37 672,941.34 385,891.83
income
24
Less: Non-operating
4,197,340.18 1,863,915.93 7,603,886.52 4,973,495.20
expense
Including: Disposal loss of
503,436.27 205,040.54 3,955,948.67 3,136,382.19
non-current asset
IV. Total Profit (Loss is listed
769,696,904.66 414,692,774.66 361,549,291.43 199,732,638.97
with “-”)
Less: Income tax expense 95,344,637.40 46,486,983.83 25,056,036.34 2,944,537.40
V. Net profit (Net loss is listed
674,352,267.26 368,205,790.83 336,493,255.09 196,788,101.57
with “-”)
Net profit attributable to
644,663,629.50 368,205,790.83 319,107,461.52 196,788,101.57
owner’s of parent company
Minority shareholders’
29,688,637.76 17,385,793.57
gains and losses
VI. Earnings per share
i. Basic earnings per share 1.14 0.65 0.56 0.35
ii. Diluted earnings per share 1.14 0.65 0.56 0.35
VII、Other comprehensive
income
VIII、Total comprehensive
674,352,267.26 368,205,790.83 336,493,255.09 196,788,101.57
income
Total comprehensive
income attributable to owners 644,663,629.50 368,205,790.83 319,107,461.52 196,788,101.57
of parent company
Total comprehensive
income attributable to a few 29,688,637.76 17,385,793.57
shareholders
As for enterprise merger under same control in this period, the merging party realized net profit of RMB 0.00
before consolidation.
Cash Flow Statement
Prepared by Weifu High-Technology Co., Ltd. Jan.-Jun., 2011 Unit: RMB
Amount in this period Amount in last period
Items
Consolidation Parent Company Consolidation Parent Company
I. Cash flows arising from
operating activities:
Cash received from selling
commodities and providing labor 3,103,973,047.42 1,646,992,101.70 1,846,936,620.16 1,234,026,176.66
services
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
25
Net increase of capital
borrowed
Net increase of returned
business capital
Write-back of tax received 12,117,457.27 8,782,547.76
Other cash received
13,351,259.84 576,527.71 8,590,049.83 4,854,255.88
concerning operating activities
Subtotal of cash inflow
3,129,441,764.53 1,647,568,629.41 1,864,309,217.75 1,238,880,432.54
arising from operating activities
Cash paid for purchasing
commodities and receiving labor 2,372,737,792.86 1,190,501,330.49 1,376,818,187.49 1,138,742,380.50
service
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 250,024,693.71 100,967,959.62 218,927,995.72 98,598,556.63
Taxes paid 337,795,130.93 108,357,907.68 189,330,563.69 68,043,762.87
Other cash paid concerning
115,080,757.84 144,846,109.46 93,167,886.76 38,660,315.63
operating activities
Subtotal of cash outflow
3,075,638,375.34 1,544,673,307.25 1,878,244,633.66 1,344,045,015.63
arising from operating activities
Net cash flows arising from
53,803,389.19 102,895,322.16 -13,935,415.91 -105,164,583.09
operating activities
II. Cash flows arising from
investing activities:
Cash received from
recovering investment
Cash received from
174,072,662.98 174,280,178.77 13,379,333.52 13,379,333.52
investment income
Net cash received from
disposal of fixed, intangible and 7,126,366.00 6,187,577.12 12,123,918.21 7,665,524.53
other long-term assets
Net cash received from
disposal of subsidiaries and other
units
Other cash received
1,138,436.51
concerning investing activities
Subtotal of cash inflow from
182,337,465.49 180,467,755.89 25,503,251.73 21,044,858.05
investing activities
Cash paid for purchasing
fixed, intangible and other 377,850,266.49 263,273,961.57 100,113,353.54 47,833,488.20
long-term assets
Cash paid for investment 156,668,800.00 123,265,900.00 127,045,900.00
Net increase of mortgaged
loans
Net cash received from
subsidiaries and other units
Other cash paid concerning
investing activities
Subtotal of cash outflow from 377,850,266.49 419,942,761.57 223,379,253.54 174,879,388.20
26
investing activities
Net cash flows arising from
-195,512,801.00 -239,475,005.68 -197,876,001.81 -153,834,530.15
investing activities
III. Cash flows arising from
financing activities
Cash received from absorbing
5,610,000.00 1,490,490.00
investment
Including: Cash received from
absorbing minority shareholders’ 5,610,000.00 1,490,490.00
investment by subsidiaries
Cash received from loans 586,512,141.78 556,512,141.78 1,069,864,006.14 1,017,612,099.36
Cash received from issuing
bonds
Other cash received
concerning financing activities
Subtotal of cash inflow from
592,122,141.78 556,512,141.78 1,071,354,496.14 1,017,612,099.36
financing activities
Cash paid for settling debts 351,512,141.78 321,512,141.78 810,598,025.08 744,598,025.08
Cash paid for dividend and
profit distributing or interest 29,491,293.22 10,794,754.04 15,613,973.26 14,134,432.99
paying
Including: Dividend and profit
of minority shareholder paid by 18,696,539.18
subsidiaries
Other cash paid concerning
2,265,668.46
financing activities
Subtotal of cash outflow from
381,003,435.00 332,306,895.82 828,477,666.80 758,732,458.07
financing activities
Net cash flows arising from
211,118,706.78 224,205,245.96 242,876,829.34 258,879,641.29
financing activities
IV. Influence on cash due to
fluctuation in exchange rate
V. Net increase of cash and cash
69,409,294.97 87,625,562.44 31,065,411.62 -119,471.95
equivalents
Add: Balance of cash and cash
465,219,784.67 85,169,165.70 327,527,351.45 85,790,609.19
equivalents at the period -begin
VI. Balance of cash and cash
534,629,079.64 172,794,728.14 358,592,763.07 85,671,137.24
equivalents at the period–end
27
Consolidated Statement on Changes of Owners’ Equity
Prepared by Weifu High-Technology Co., Ltd. Jun. 30, 2011 Unit: RMB
Amount in this report period
Owners' equity attributable to the parent company
Items Minority’s Total owners’
Less: General
Paid-up capital Capital Reasonable Surplus equity equity
Treasury risk Retained profit Others
(Share capital) reserves reserve reserves
Stock provision
I. Balance at the
567,275,995.00 895,918,416.59 283,637,997.50 2,359,375,974.53 239,608,585.66 4,345,816,969.28
end of last year
Add: Changes of
accounting policy
Error correction of
the last period
Others
II. Balance at the
beginning of this 567,275,995.00 895,918,416.59 283,637,997.50 2,359,375,974.53 239,608,585.66 4,345,816,969.28
year
III. Increase/
Decrease in this
397,898,571.67 38,175,542.30 436,074,113.97
year (Decrease is
listed with "-")
(I) Net profit 644,663,629.50 29,688,637.76 674,352,267.26
(II)Other
comprehensive
28
income
Subtotal of the
644,663,629.50 29,688,637.76 674,352,267.26
above (I) and (II)
(III) Owners'
devoted and 8,486,904.54 8,486,904.54
decreased capital
1. Owners' devoted
8,486,904.54 8,486,904.54
capital
2. Amount
calculated into
owners' equity paid
in shares
3. Others
(IV) Profit
-246,765,057.83 -246,765,057.83
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk
provisions
3. Distribution for
owners -246,765,057.83 -246,765,057.83
(shareholders)
4．Other
(V) Carrying
forward internal
29
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
I. Balance at the
567,275,995.00 895,918,416.59 283,637,997.50 2,757,274,546.20 277,784,127.96 4,781,891,083.25
end of last year
30
Consolidated Statement on Changes of Owners’ Equity (CONT.)
Prepared by Weifu High-Technology Co., Ltd. Jun. 30, 2011 Unit: RMB
Amount in last year
Owners' equity attributable to the parent company
Items Less: Minority’s Total owners’
Paid-up capital Capital Reasonable Surplus General risk
Treasury Retained profit Others equity equity
(Share capital) reserves reserve reserves provision
Stock
I. Balance at
the end of last 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
year
Add: Changes
of accounting
policy
Error
correction of
the last period
Others
II. Balance at
the beginning 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
of this year
III. Increase/
Decrease in
this year -11,661,891.69 1,255,199,716.54 10,025,795.12 1,253,563,619.97
(Decrease is
listed with "-")
31
(I) Net profit 1,340,291,115.79 41,069,497.35 1,381,360,613.14
（II）Other
general
revenue
Sub-total of
the above (I) 1,340,291,115.79 41,069,497.35 1,381,360,613.14
and (II)
(III) Owners'
devoted and
-11,661,891.69 -19,165,166.10 -30,827,057.79
decreased
capital
1. Owners'
-19,165,166.10 -19,165,166.10
devoted capital
2. Amount
calculated into
owners' equity
paid in shares
3. Others -11,661,891.69 -11,661,891.69
(IV) Profit
-85,091,399.25 -11,878,536.13 -96,969,935.38
distribution
1. Withdrawal
of surplus
reserves
2. Withdrawal
of general risk
provisions
32
3. Distribution
for owners -85,091,399.25 -11,878,536.13 -96,969,935.38
(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)Reasonable
reserve
33
1．Withdrawal
in this period
2.Usage in
this period
(VII) Other
IV. Balance at
the end of the 567,275,995.00 895,918,416.59 283,637,997.50 2,359,375,974.53 239,608,585.66 4,345,816,969.28
report period
Statement on Changes of Owners' Equity of Parent Company
Prepared by Weifu High-Technology Co., Ltd. Jan.-Jun., 2011 Unit: RMB
Amount in this report period
Items Less:
Paid-up capital Capital Reasonable Surplus General risk Total owners’
Treasury Retained profit
(Share capital) reserves reserve reserves reserve equity
Stock
I. Balance at the end of last
567,275,995.00 923,981,806.57 283,637,997.50 1,483,763,204.41 3,258,659,003.48
year
Add: Changes of accounting
policy
Error correction of the last
period
34
Others
II. Balance at the beginning
567,275,995.00 923,981,806.57 283,637,997.50 1,483,763,204.41 3,258,659,003.48
of this year
III. Increase/ Decrease in this
121,440,733.00 121,440,733.00
year (Decrease is listed with "-")
(I) Net profit 368,205,790.83 368,205,790.83
（2）Other comprehensive
income
Subtotal of the above (1)and
368,205,790.83 368,205,790.83
(2)
(III) Owners' devoted and
decreased capital
1. Owners' devoted capital
2. Amount calculated into
owners' equity paid in shares
3. Others
(IV) Profit distribution -246,765,057.83 -246,765,057.83
1. Withdrawal of surplus
reserves
2．Withdrawal of general
risk reserve
3. Distribution for owners
-246,765,057.83 -246,765,057.83
(shareholders)
4. Others
(V) Carrying forward
35
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
(VII) Other
IV. Balance at the end of the
567,275,995.00 923,981,806.57 283,637,997.50 1,605,203,937.41 3,380,099,736.48
report period
Statement on Changes of Owners' Equity of Parent Company (CONT.)
Prepared by Weifu High-Technology Co., Ltd. Jan.-Jun., 2011 Unit: RMB
Amount in this period
Items Paid-up capital (Share Less: treasury Special General risk Total owners’
Capital reserve Surplus reserve Retained profit
capital) stock reserve reserve equity
I. Balance at the
567,275,995.00 923,981,806.57 283,637,997.50 695,343,636.03 2,470,239,435.10
end of last year
36
Add: Changes of
accounting policy
Error correction of
the last period
Others
II. Balance at the
beginning of this 567,275,995.00 923,981,806.57 283,637,997.50 695,343,636.03 2,470,239,435.10
year
III. Increase/
Decrease in this
788,419,568.38 788,419,568.38
year (Decrease is
listed with "-")
(I) Net profit 873,510,967.63 873,510,967.63
（2）Other
comprehensive
income
Subtotal of the
873,510,967.63 873,510,967.63
above (1)and (2)
(III) Owners'
devoted and
decreased capital
1. Owners'
devoted capital
2. Amount
calculated into
37
owners' equity paid
in shares
3. Others
(IV) Profit
-85,091,399.25 -85,091,399.25
distribution
1. Withdrawal
of surplus reserves
2．Withdrawal
of general risk
reserve
3. Distribution
for owners -85,091,399.25 -85,091,399.25
(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)
38
3. Remedying
loss with surplus
reserves
4. Others
（VI）Special
reserve
1．Withdrawal
in this period
2．Usage in
this period
(VII) Other
IV. Balance at the
end of the report 567,275,995.00 923,981,806.57 283,637,997.50 1,483,763,204.41 3,258,659,003.48
period
39
Supplementary II:
Notes to Financial Statement
No t e 1 . Basic information of the Company
1. History development 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 Group Co., Ltd. (original Weifu
High-Technology Co., Ltd., hereinafter referred to the Company or Company) 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”).
By the approval of Jiangsu ERC and Shenzhen Securities Administration Office in August 1995, the
Company issued 68 million special ordinary shares (B-share) with value of RMB 1.00 for each, 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 320200000014926. The Company belongs to the mechanical industry and
mainly engages in the production and sales of the system of fuel injection and oil blowout.
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 April 5, 2006.
As on 27 May 2009, Weifu Group satisfied the consideration arrangement by dispatching 0.5 shares
for each 10 shares based on the number of circulating A shares as prior to Share Merger Reform,
according to the aforesaid Share Merger Reform, with an aggregate of 14,039,979 shares
dispatched. Subsequent to implementation of dispatch of consideration shares, Weifu Group then
held 100,021,999 shares of the Company, representing 17.63% of the total share capital of the
Company.
Pursuant to the document (XGZQ(2009)No.46) about “Approval for Merger of Wuxi Weifu Group
Co., Ltd. by Wuxi Industry Development Group Co., Ltd.” issued by the State-owned Assets
Supervision and Administration Commission of Wuxi City Government, Wuxi Industry
Development Group Co., Ltd. (hereinafter referred to as Wuxi Industry Group) acquired Weifu
Group. After the merger, Weifu Group was then revoked, and its assets and credits & debts were
transferred to be under the name of Wuxi Industry Group. Accordingly, Wuxi Industry Group
became the first largest shareholder of the Company since then.
2. Registered place, organization structure and head office of the Company
Registered place and head office of the Company: Wuxi, Jiangsu.
The Company sets up Shareholders’ General Meeting, the Board of Directors and the
Supervisory Committee.
The Company sets up Administration Department, Engineering Technology Research
Institution, Human Resources Department, Marketing Department, Finance Control
Department, Project Purchase Department, MS Business Segment, AC Business Segment,
and subsidiaries such as Wuxi Weifu Leader Catalytic Converter Co., Ltd. (referred to as
Weifu Leader), Nanjing Weifu Jinning Co., Ltd. (referred to as Weifu Jinning), and Wuxi
Weifu Diesel System Co., Ltd. (referred to as Weifu Diesel System).
3. Business nature and major operation activities of the Company
Operation scope of parent company: manufacture of engine fuel oil system products, fuel oil
system testers and equipments; sales of energy-oriented machinery, hardware & electric
materials, chemical products and raw materials (other than chemical dangerous). Auto spare
parts, autos (other than autos under-9 seats); repair of engine, technological development and
consultancy service of machinery industry; import and export business in respect of
diversified commodities and technologies (other than those commodities and technologies
limited or forbidden by the State for import and export) by self-operation and works as agent
for such business
Major subsidiaries respectively activate in production and sales of engine accessories, auto
spare parts, mufflers, and purifiers.
4. Relevant party offering approval reporting of financial statements and date thereof
Financial statements of the Company were approved by the Board of Directors for reporting
dated August 23, 2011.
Note 2: Major Accounting Policies, Accounting Estimation and Previous Errors of the
Company
1. Basis of preparation of financial statements
The financial statement were stated in compliance with Accounting Standard for Enterprises
No.30-Presentation of Financial Statement, with recognitions and measurements made by
reference to Accounting Standard for Enterprises and Application Instruments thereof
promulgated by the Ministry of Finance dated 15 February 2006 in respect of the actual
transactions and proceedings, on a basis of ongoing operation.
2. Statement on observation of Accounting Standard for Enterprises
Financial statements prepared by the Company were in accordance with requirements of
Accounting Standard for Enterprises, which truly and completely reflected the financial
information of the Company, such as financial position, operation achievements and cash
41
flow.
3. Accounting period
The accounting period of the Company comprises of annual period and interim period,
among which, the annual period commences from 1 January to 31 December, and interim
period includes monthly, quarterly and half-year.
4. Standard currency for accounting
The Company takes Renminbi (RMB) as its standard currency for accounting.
5. Accounting treatment methods for business combination under and not under the
same control
(1)Business combination under the same control
Business combination under the same control: consideration paid by acquirer for
combination and net assets acquired by him shall all be measured with carrying value.
Difference between carrying values of net assets and combination consideration respectively
obtained and paid by acquirer over total par value of shares in issue shall be used to adjust
capital reserve; when capital reserve is insufficient for offset, then retained profit shall be
adjusted. All direct related expenses arising from business combination, including auditing
expenses paid for combination, evaluation expenses and law service expenses, shall be
recorded in current gains and losses upon occurrence; while procedure charge and
commission arising from issuance of equity securities or bonds in relation to business
combination shall be accounted in initial measurement amount of shareholders’ equity or
liabilities.
(2) Business combination not under the same control
Business combination not under the same control: combination cost paid by acquirer and net
recognizable assets obtained from combination shall be measured at fair value. In the event
that difference between combination costs over fair value of net recognizable assets obtained
from combination is positive, thus such difference shall be recognized as goodwill; if
negative, and then shall be accounted in current gains and losses. All direct related expenses
arising from business combination including auditing expenses paid for combination,
evaluation expenses and law service expenses shall be recorded in business combination
cost; while procedure charge and commission arising from issuance of equity securities or
bonds in relation to business combination shall be accounted in initial measurement amount
of shareholders’ equity or liabilities.
6. Preparation method for consolidated statements
(1) Confirmation principle of consolidation scope
Preparation of the consolidation financial statement of the Company mainly complied with
the consolidation scope recognized by Parent Company Theory, details consolidation scope
as:
①More than half of the equity capital of the investee enterprise that owned by Parent
company, directly/indirectly and jointly owned more than half of the equity capital by
indirectly and directly included;
②Other investee enterprises control by Parent company including:
A. Holding more than half of voting right of the investee through agreement with other
investors of the investee enterprises; ；
B. Having the rights of financial and operation strategy controlled according to Article of
Association of Agreement;
C. Having the rights of appointment and dismissal on majority personnel’s in Board or in
similar power institution of the enterprise; ；
D. Having more than half of the rights to vote in Board or similar power institution of the
42
enterprise.
(2) measures used in consolidation
①The Company consolidations permit since the day of actual control right obtained; cease
consolidation since the day of control right lost. Consolidation financial statement based on
the financial statement of the Company and other relevant information of vary subsidiaries
that joint in the consolidation scope, adjusted long-term equity investment to subsidiaries
according to equity method, off-setting the investment, transaction and contacts between the
Company and vary subsidiaries that in the consolidation scope, consolidated for preparation
after minority shareholders’ gains/loss and minority shareholders’ equity calculation.
②Concerning the different accounting policy or accounting period between the Company
and subsidiaries, consolidating after adjustment on subsidiaries’ financial statement based on
the Company’s accounting policy or accounting period.
③Concerning the subsidiary obtained under combination with different control, adjusted
several financial statement of the subsidiary based on the fair value of recognizable net
assets on purchased day while financial statement consolidation; concerning the subsidiary
obtained under combination with same control, considered current status of being control by
ultimate controller for consolidation while financial statement consolidation.
7. Standard for recognition of cash equivalents when preparing cash flow statement
Cash equivalent represents such kind of investment featuring with short term (generally due
within 3 months since purchase day), active liquidity, being easy for converting to cash with
already-known amount, as well as tiny exposure to value change risks.
8. Foreign currency business
Foreign currency business is accounted with amount denominated in RMB as translated at
the spot exchange rate as of the occurrence day of such business. The occurred foreign
currency exchange business or transactions with foreign currency exchange involved shall be
translated at the effective exchange rate (i.e. exchange rate adopted by banks for such
transactions) adopted by such transaction. As at balance sheet date, division between foreign
currency monetary items and foreign currency non-monetary items are dealt with according
the to following principles:
Foreign currency monetary items are translated at spot exchange rate as of balance sheet
date, and then recorded in current gains and losses when happening during normal operation
period; exchange gains and losses related to borrowings for purchasing fixed assets are
disposed with principle of capitalization of borrowing expense. Monetary item represents the
monetary capital, and assets or liabilities respectively received or paid at fixed or insurable
amount, among other things, stock cash, bank deposit, account receivables, other
receivables, long-term receivables, short-term loans, account payables, other payables,
long-term loans, bond payables and long-term payables, etc.
Foreign currency non-monetary items are translated at spot exchange rate as of transaction
date, with no change in its amount accounted in standard currency. Non-monetary items
represent items except for monetary items.
As for foreign currency non-monetary items measured at fair value, translation is subject to
the spot exchange rate as of the date when fair value is recognized. Difference between the
accounted standard currency amount subsequent to translation and its original accounted
standard currency amount is dealt with as movement in fair value (movement in exchange
rate included), and then recorded in current gains and losses.
9. Financial instruments
(1)Recognition of financial assets
In the case that when a company constitutes one party to financial instrument agreement, one
43
item of financial asset or financial liability shall then be recognized.
(2)Division and measurement for financial assets and financial liabilities
In terms of investment purposes and economic natures, the Company divides its financial
assets into transactional financial assets, financial assets available for sale, account
receivables and held-to-maturity investments, among which, transactional financial asset is
measured at fair value and movement of its fair value is recorded in current gains and losses;
financial asset available for sale is measured at fair value and movement of its fair value is
recorded in shareholders’ equity; account receivables and held-to-maturity investments are
measured at amortized cost.
In terms of economic nature, the Company divides its financial liabilities into two groups,
namely financial liabilities at fair value through gains and losses and other financial
liabilities at amortized cost.
(3)Recognition of fair values of financial assets and financial liabilities
1 In case of an active market, financial assets or financial liabilities which are respectively
held and proposed to be undertaken by the Company are subject to the prevailing offer price
of such market, and financial assets or financial liabilities which are respectively proposed to
be held and undertaken by the Company are subject to the prevailing asked price of such
market. In case of absence of such prevailing offer or asked prices, market quotation of the
latest transaction or adjusted market quotation of the latest transaction shall be adopted,
except that there is clear evidence showing that such market quotation is not fair value.
○ In case of absence of an active market, the Company recognizes fair value by reference to
valuation technology which includes reference to the price adopted by parties who are
willing to make business and knowing conditions quite well in their latest transactions,
reference to prevailing fair values of other financial instruments with similar essence,
discount cash flow method and option pricing pattern.
(4)Recognition and measurement of financial assets transfer
That the Company grants or delivers financial assets to party other than the issuer of such
financial assets equals transfer of financial assets. Financial assets transferred could be the
entire or part of such financial assets. Two forms are listed as follows:
1 Transfer of right for collecting cash flow of financial assets to another party;
○Transfer financial assets to another party, while the aforementioned right is retained, with
obligation of paying such cash flow to final collector.
In the even that the Company has transferred almost all risks and remunerations arising from
ownership of all or part financial assets to another party, accordingly, recognition for such
entire or part financial assets shall be ceased. Gains and losses are determined by the
received consideration less the carrying value of the transferred financial assets. Meanwhile,
the original accumulated gains or losses of financial assets recognized in the owners’ equity
shall transferred to gains and losses; when all risks and remunerations attached to ownership
are retained, recognition for such entire or part financial assets shall continue, and the
consideration received shall be viewed as financial liabilities.
As for the financial assets which the Company has neither transferred nor retained all risks
and remunerations attached to ownership of such financial assets, while control upon such
financial assets still exists, recognition shall be conducted in light of the degree of its
continuous involvement in the transferred financial assets. Accordingly, relevant liabilities
shall be recognized.
(5)Discontinued recognition of financial assets and financial liabilities
Upon satisfaction of one of the following condition, financial assets will immediately
experience discontinued recognition:
①Right entitled by contract in respect of collection of cash flow from such financial asset
terminates.
②Such financial assets have been transferred and meet discontinued recognition condition
44
for financial assets as regulated by Accounting Standard for Enterprise No.23-Transfer of
Financial Assets.
Only when present obligations under financial liability have been released entirely or partly,
could cease recognition of such financial liability or part thereof.
(6) Impairment of financial assets
The Company conducts inspection on carrying values of financial assets, except for
transactional financial assets, as at balance sheet date. If there is objective evidence
indicating that impairment has happened to financial assets, impairment reserve then shall be
provided. Financial asset with great amount in single item is subject to separate impairment
test. In case of any objective evidence indicating that impairment has happened to such
financial asset, impairment loss shall be recognized and recorded in current gains and losses.
As for the financial assets with no great amount in single item and those which prove to be
not impaired after separate test, the Company will conduct impairment test on basis of credit
portfolio which is determined in light of customers’ credit records and historical bad debts,
so as to recognize impairment loss.
Objective evidence indicating impairment happens to financial assets means the proceedings
meeting the three characteristics: actually occurred subsequent to initial recognition of such
financial assets, bring influence over the estimated future cash flow of such financial assets,
and such influence could be reliably measured by the Company.
The followings are included in objective evidences indicating impairment happens to
financial assets:
A: Serious financial difficulty happens to issuer or debtor;
B: Breach of terms of contract by debtor, such as breach or overdue in repaying interest or
principal;
C: Creditor makes concession for debtors who experience financial trouble in light of
consideration for economy or laws;
D: Debtor is very likely to experience bankrupt or financial reorganization;
E: Financial assets are not able to be traded in active market since material financial
difficulty happens to issuer;
F: It is unable to judge whether cash flow from certain asset in a group of financial assets has
decreased, while it is finally found that the estimated future cash flow of such financial asset
has actually decreased since its initial recognition and the decrease can be reliably measured
by reference to the general valuation based on open data. For example, payment capacity of
debtor of such financial assets portfolio gradually worsens, or unemployment in country or
region where the debtor locates risen, price of guaranty falls greatly in the place where it
locate, and the industry in which it belongs to is unpromising;
G: Material negative changes happen to technologies, markets, economy or law environment
in which debtor operates, which leads to that equity instrument investor is not likely to be
able to recover investment cost;
H: Fair value of equity instrument investment experiences severe or non-temporary falling;
I: Other objective evidence indicating impairment happens to financial assets.
In the event of impairment in financial asset at amortized cost, impairment loss is calculated
based on the difference between carrying value and present value of estimated future cash
flow discounted at effective interest rate.
After impairment loss is recognized for financial asset at amortized cost, if there is objective
evidence indicating value of such financial asset has recovered, which is objectively related
to proceedings occurred after recognition of such loss, the original impairment loss shall be
reversed and recorded in current gains and losses. However, the carrying value subsequent to
such reversal shall not exceed the amortized cost of such financial asset as at the reversal
date on assumption that such impairment loss had not been provided.
For impairment in financial assets available for sale, the original accumulated loss through
45
owners’ equity directly arising from falling fair value shall be reversed to current gains and
losses.
10. Account receivables
(1)Recognition standard and provision method for bad debt provision of account receivables
with significant amount in single item:
The Company’s account receivables with above RMB 1 million in
single item is defined as account receivables with significant
Recognition standard
amount in single item. Such kind of account receivables are
for bad debt provision
recognized as bad debts in case of impossible collection though
of account receivables
with bankrupt properties or heritages of debtors due to their
with significant
bankrupt or death, or in the even that debtors haven’t implemented
amount in single item
their repayment obligations over 3 years upon expiration and there
are obvious evidences indicating impossible collection.
As for account receivables with significant amount in single item
Provision method for
which can not be directly recognized as bad debts, debt provision
bad debt provision of
shall be provided according to the Company’s policies by aged
account receivables
analysis method. 100% bad debt provision shall be provided for
with significant
those account receivables with great amount in single item which
amount in single item
can be directly recognized as bad debts
(2)Recognition standard and provision method for bad debt provision of account receivables
whose single amount are not significant, but the portfolio risk is significant after grouped by
credit risk feature
Account receivable meeting the following conditions: account
receivable whose single amount is not significant, impossible
Recognition evidence
collection though with bankrupt properties or heritages of debtors
for group by credit risk
due to their bankrupt or death, debtors haven’t implemented their
feature
repayment obligations over 3 years upon expiration and there are
obvious evidences indicating impossible collection.
Provision method confirmed by portfolio of credit risk feature
Provision percentage Provision percentage
for percentage of total for percentage of total
100% 100%
accounts receivable other receivable
outstanding (%) outstanding (%)
(3)Aged analysis method
Provision percentage for Provision percentage for
Age
accounts receivable other receivable
Within 6 months No withdrawal No withdrawal
6 months to 1 year 10% 10%
1 year to 2 years 20% 20%
2 years to 3 years 40% 40%
Over 3 years 100% 100%
Bad debt loss is calculated by allowance method. Separate impairment test is
provided for account receivable whose single amount is significant, its bad debt
provision is subject to the difference between the present value of estimated future
Explanation cash flow and carrying value of such account receivable; bad debt provision is
for provision fully provided for account receivables whose single amount are not significant, but
for bad debt the portfolio risk is significant after grouped by credit risk feature; provision is
offered on the basis of period-end balances by aged analysis method for account
receivables whose single amounts are significant and not impaired and account
receivable whose single amount is not significant, and which is not grouped by
46
credit risk feature to the portfolio whose risk is significant. Bad debt provision
withdrew is accounted in current gains and losses.
11. Inventories
(1)Classification of inventories
The Company’s inventories are categorized into stock materials, product in process and stock goods
ect.
(2)Pricing for delivered inventories
A. Generally, stock materials are calculated at planned cost. Material cost difference is individually
set according to classification of grant types. Pursuant to the difference between the planned cost of
the received or delivered raw materials and the material cost the aforesaid cost should share after
carrying forward at period-end, the Company adjusts the planned cost to effective cost; finished
products are priced at effective costs, and carried forward to operating cost by weighted average
method when being delivered;
B. Products in process are priced at effective costs, and carried forward to finished products at
actually occurred cost;
C. Finished self-produced products are priced at effective costs, and carried forward to operating
cost by weighted average method; external purchase goods (from import and export trades) are
carried forward to sales cost by individual pricing method.
(3)Recognition evidence for net realizable value of inventories and withdrawal method for
inventory impairment provision
Inventories as at period-end are priced at the lower of costs and net realizable values; at period end,
on the basis of overall clearance about inventories, inventory impairment provision is withdrew for
uncollectible part of costs of inventories which result from destroy of inventories, out-of-time of all
and part inventories, or sales price lowering than cost. Inventory impairment provision for stock
goods and quantity of raw materials is subject to the difference between costs of single inventory
item over its net realizable value. As for other raw materials with large quantity and comparatively
low unit prices, inventory impairment provision is withdrawn pursuant to categories.
As for inventories such as stock goods and materials available for direct sales, their net realizable
values are determined by their estimated selling prices less estimated sales expenses and relevant
taxes. For material inventories held for purpose of production, their net realizable values are
determined by the estimated selling prices of finished products less estimated costs, estimated sales
expenses and relevant taxes accumulated till completion of production. As for inventories held for
implementation of sales contracts or service contracts, their net realizable values are calculated on
the basis of contract prices. In the event that inventories held by a company exceed order amount as
agreed in sales contracts, net realizable values of the surplus part are calculated on the basis of
normal sale price.
(4)Inventory system
Inventory system is perpetual inventory system.
(5)Amortization method for low value consumables
Low value consumables are subject to one-off amortization when being received.
12. Long-term equity investment
(1)Recognition of investment cost
Long-term equity investment mainly includes the equity investments made to subsidiaries,
joint ventures and associates, and the equity investment which couldn’t entitle the Company
to conduct control, common control or significant influence over the invested units and
which have no quotation price in active market and whose fair value could not be able to
measured surely.
Initial investment cost of long-term equity investment of the Company is recognized by the
following ways based on different acquisition ways:
47
①In situation of a long-term equity investment acquired through business combination
under common control, the carrying value of the owners’ equity of the acquired company as
at the combination date is deemed as initial investment cost for this long-term equity
investment; difference between acquisition cost and initial investment cost is used to adjust
capital reserve. In case of insufficient capital reserve for offset, retained profit shall be then
adjusted.
②In situation of a long-term equity investment acquired through business combination not
under common control, the initial investment cost of long-term equity investment is
determined at the combination cost calculated by reference to the fair value of assets, equity
instruments issued and liabilities occurred or undertaken, plus any direct cost related to
acquisition. Realizable assets and liabilities undertaken by such assets (include contingent
liabilities) of the party being combined as at the combination date are all measured at fair
values, without consideration to amount of minority interests. The surplus of combination
cost less fair value net realizable assets of the party being combined is recorded as goodwill,
and the deficit is directly recognized in the consolidated statement of gains and losses.
③Long-term investments obtained through other ways
A. Initial investment cost of long-term equity investment obtained through cash payment is
determined according to actual payment for purchase.
B. Initial investment cost of long-term equity investment obtained through issuance of equity
securities is determined at fair value of such securities.
C. Initial investment cost of long-term equity investment injected by investor is determined
at the agreed value in investment contract or agreement. In case of an unfair contract or
agreement value, measurement shall be conducted at fair value.
D. Initial investment cost of long-term equity investment (exchanged-in) obtained through
exchange with non-monetary assets, which is of commercial nature, is determined at fair
value of the assets exchanged-out; otherwise determined at carrying value of the assets
exchanged-out if it is not of commercial nature.
E. Initial investment cost of long-term equity investment obtained through debt
reorganization is determined at fair value of such investment.
(2)Recognition method for subsequent measurement and gains and losses
○Investment to subsidiaries is calculated under cost method
It is referred to the equity investment made to subsidiaries held by the Company which can
conduct control upon invested unit. If the Company holds over 50% equities of an entity or
has control power in such entity though equity holding is fewer than 50%, such entity
comprises a subsidiary of the Company.
2 Investment to joint ventures or associates is calculated under equity method
It is referred to the equity investment made to joint ventures held by the Company which can
conduct common control upon the joint venture with other joint parties; It is referred to the
equity investment made to associates held by the Company which has material influence
upon such associates. In the event that the Company holds equities of an entity from 20% to
50% and no essential control exists in such entity meanwhile or that though the Company
holds equities of an entity fewer than 20% while it has material influence upon such entity,
then the entity shall be deemed as a joint venture or associate of the Company.
When recognizing its share in net gains and losses of the invested unit, the Company shall
achieve recognition based on fair values of various realizable assets of such invested unit
upon obtaining such investment after adjustment in net profit of such invested unit.
In case of any inconsistency of the accounting policies and accounting periods adopted by
invested unit and the Company, financial statements of such invested unit shall be subject to
adjustment in compliance with accounting policies and accounting periods adopted by the
Company, so as to recognize investment gains and losses on that basis.
As for treatment for other movement of owners’ equity other than net gains and losses of
48
invested unit, carrying value of long-term equity investment shall be subject to adjustment
which shall be then recorded in owners’ equity.
3 Long-term equity investment to entities where the Company has no control, common
control or material influence
Long-term equity investment which has no quotation in active market and whose fair value
could not be reliably measured is calculated under cost method.
Long-term equity investment which has quotation in active market or whose fair value could
be reliably measured is presented under item of financial asset available for sale, and is
measured at fair value, and fair value movement thereof shall be recorded in shareholders’
equity.
(3)Reference for confirmation of common control and material influence in invested unit
Common control over invested unit means common control over certain economic activity
pursuant to contract agreement, and only exists when investors who need to share control
power on material financial and operation decisions related to such economic activity make
unanimous agreement. That a party has material influence upon invested unit means that such
party has power to join decision-making related to finance and operation decisions of the
invested unit, while no ability of control or joint control with other parties upon
establishement of such decisions.
(4)Impairment test method and withdrawal method for impairment provision
If any impairment indication is found in long-term equity investment by the Company in its
period-end inspection, the recoverable amount shall be estimated. In case of such recoverable
amount lowering than its carrying value, impairment provision shall be withdrawn for
long-term investment by reference to the difference of the aforesaid two items.
As for long-term equity investment which has no quotation in active market and whose fair
value could not be reliably measured, its impairment loss is determined by reference to its
carrying value less the amount recognized through discounting future cash flow at the
prevailing market yield ratio of similar financial assets, and then recorded in current gains and
losses.
As for long-term equity investment except for financial assets available for sale, its
impairment provision will not be reversed during asset permanent period once it is withdrawn.
Impairment loss of financial assets available for sale can be reversed through equities.
13. Investment real estate
Investment real estate is stated at cost. During which, the cost of externally purchased
properties held-for-investment includes purchasing price, relevant taxes and surcharges and
other expenses which are directly attributable to the asset. Cost of self construction of
properties held for investment is composed of necessary expenses occurred for constructing
those assets to a state expected to be available for use. Properties held for investment by
investors are stated at the value agreed in an investment contract or agreement, but those
under contract or agreement without fair value are stated at fair value.
The Company adopts cost methodology amid subsequent measurement of properties held for
investment, while depreciation and amortization is calculated using the straight-line method
according to their estimated useful lives.
The basis of provision for impairment of properties held for investment is referred to the
provision for impairment of relevant fixed assets.
14. Fixed assets
(1) Recognition of fixed assets
Fixed assets refer to the buildings, machinery and equipment, transportation vehicle and
other equipments related to operation with useful lives of more than one year and held for
production of products, provision of labor, lease or operation. A fixed asset is recognized
49
when it is Contingent that the relevant economic benefits flow into the enterprise and the
cost of the fixed assets can be reliably measured.
(2) Depreciation of fixed assets
Classification Depreciation time Residual Annual depreciation
House and Building 20 to 35 years 5% 2.71% to 4.75%
Machinery equipment 10 years 5% 9.50%
Transportation vehicle 4 years 5% 23.75%
Electronic equipment 3 years 5% 31.67%
Other equipment 5 to 10 years 5% 9.50% to 19.00%
(3) Impairment testing of fixed assets and provision for impairment
At the end of the Reporting Period, the Company carries out a review on fixed assets. If the
following conditions exist, the Company shall value the recoverable amount of fixed assets in order
to determine whether there is any impairment of fixed assets. For fixed assets with recoverable
amount falling below the carrying amount, the Company will make a provision for impairment loss
on fixed asset equals to an amount of the difference between the recoverable amount and the
carrying amount. Provision is made based on a single item basis, and based on a group of assets to
which the assets belong to if it is hard to estimate the recoverable amount of the single assets. The
impairment provision cannot be reversed in the period of duration of the assets once it is provided.
(a) There is a significant decrease in the market price of fixed assets. Such decrease is beyond any
decrease to the large extent in the market price as time goes by or any expected decrease from
normal use of fixed assets;
(b)Fixed assets are obsolete and damaged;
(c) There is a significant negative change to the intended use of fixed assets, such as idleness or
forthcoming idleness of the fixed assets, termination or restructuring of the operating business to
which the fixed assets belong to and disposal of fixed assets earlier than the end of its useful life,
thereby resulting in negative influence on the Company;
(d) There is a significant current or recent change in the economic, technological and legal
environment in which the Company operates and in the market in which fixed assets are, thereby
resulting in negative influence on the Company;
(e) There is a significant increase in the market interest rate or return on investment in other
markets, posing a potential impact on the discount rate on the calculation of the present value of the
estimated future cash flows, thereby resulting in significant decrease in recoverable amount of fixed
assets;
(f) There is evidence from internal reports of the enterprise that the economic benefits of the fixed
assets have been lower or will be lower than expected, for example, the net cash flows or operating
profits (or losses) of the fixed assets are far lower (or higher) than the expected amount;
) Other circumstances showing an indication of impairment of fixed assets.
(4) Basis of recognition and method of measurement of fixed assets by financing lease
The assets will be classified as fixed assets by financing lease if the Company satisfies one or more
of the following conditions:
(a) As stipulated in the lease agreement (or a reasonable judgment made pursuant to relevant
conditions at the commencement date of the lease), the ownership of fixed assets by financing lease
can be passed to the Company when the lease expires;
(b) As the Company has a option to acquire the leased fixed assets and the agreed price of purchase
is far below the fair value of leased fixed assets at the time of exercise of the option, it is certain that
the Company will exercise the option at the commencement date of the lease;
(c) Despite that the ownership of fixed assets is not transferable, the lease period represents 75% or
more of the useful life of leased fixed assets;
(d) The present value of the minimum lease payment by the Company at the commencement date of
50
lease is equal to 90% or more of the fair value of leased fixed assets at the commencement date of
lease. The present value of the minimum lease payment received by the lesser at the commencement
date of lease is equal to 90% or more of the fair value of leased fixed assets at the commencement
date of lease;
(e) Due to the special nature of the leased assets, those assets can be used only by the Company if
without any substantial renovation;
(f) The fixed assets by financing lease is carried at the lower of the fair value of the leased fixed
assets at the commencement date of lease and the present value of the minimum lease payment.
15. Projects under construction
(1) Calculation of construction prices of projects under construction:
Project costs are determined on the basis of the expenses actually occurred. Projects for own
account are measured on the basis of direct materials, direct wages, direct work commencement
expenses, etc. Subcontracted projects are measured on the basis of project prices payable. Costs of
equipment installation projects are determined on the basis of the value of the equipment installed,
installation fees, and expenses occurred by project debugging, etc. The costs of projects under
construction also include the capitalized borrowing expenses and exchange gains and losses.
(2) Standard and timing of converting projects under construction into fixed assets: From the date
on which the fixed assets built by the Company come into an expected usable state, the projects
under construction are converted into fixed assets on the basis of the estimated value of project
estimates or pricing or project actual costs, etc. Depreciation is calculated from the next month.
Further adjustments are made to the difference of the original value of fixed assets after final
accounting is completed upon completion of projects; however, the original depreciation is not
adjusted.
(3) Recognition and provision for impairment of projects under construction:
The Company carries out a comprehensive inspection of projects under construction at the
conclusion of each year. Where there is an indication of impairment, the recoverable amount is
estimated and impairment is provided on the basis of the difference between the amount
recoverable by a project and the carrying amount of such project. Impairment provision is not
reversed during the period of duration of the assets once it is provided.
16. Borrowing costs
(1) Recognition of capitalization of borrowing costs
Borrowing costs comprise interest occurred, amortization of discounts or premiums, ancillary costs
and exchange differences in connection with foreign currency borrowings. The borrowing costs of
the Company, which incur from the special borrowings occupied by the fixed assets that need more
than one year (including one year) for construction, development of investment properties or
inventories or from general borrowings, are capitalized and recorded in relevant assets costs; other
borrowing costs are recognized as expenses and recorded in the profit or loss in the period when
they are occurred. Relevant borrowing costs start to be capitalized when all of the following three
conditions are met:
(a) Capital expenditure has been occurred;
(b) Borrowing costs have been occurred;
(c) Acquisition or construction necessary for the assets to come into an expected usable state has
been carried out.
(2) Period of capitalization of borrowing costs:
The borrowing costs in relation to acquisition or construction of fixed assets, investment properties
and inventories, incurring before the assets reach an expected usable state or saleable state, are
recorded in the costs of the assets when the above conditions of capitalization are met. When
acquisition or construction of fixed assets undergo abnormal suspension, and the suspension lasts
for more than 3 months consecutively, then the capitalization of suspension borrowing ceases and
51
will be recognized as current expenses, until the acquisition or construction of assets start again.
When the expected usable state or saleable state is achieved, capitalization of borrowing costs
ceases, and the borrowing costs incurring subsequently are directly recorded into financial expenses
in the period when they are occurred.
(3) Calculation of capitalized amounts of borrowing costs:
In respect of the special borrowings borrowed for acquisition, construction or production and
development of the assets qualified for capitalization, the amount of interests expenses of the
special borrowings actually occurred in the period less interest income derived from unused
borrowings deposited in banks or less investment income derived from provisional investment, are
recognized.
With respect to the general borrowings occupied for acquisition, construction or production and
development of the assets qualified for capitalization, the capitalized interest amount for general
borrowings is calculated and recognized by multiplying a weighted average of the accumulated
expenditure on the assets in excess of the expenditure on the some assets of the special borrowings,
by a capitalization rate for general borrowings. The capitalization rate is determined by calculation
of the weighted average interest rate of the general borrowings.
17. Intangible assets
(1) Measurement of intangible assets:
The intangible assets of the Company include land use rights etc.
The cost of a purchased intangible asset shall be determined by the expenditure actually occurred
and other related costs.
The cost of an intangible asset contributed by an investor shall be determined in accordance with the
value stipulated in the investment contract or agreement, except where the value stipulated in the
contract or agreement is not fair.
The intangible assets acquired through exchange of non-monetary assets, which is commercial in
substance, is carried at the fair value of the assets exchanged out; for those not commercial in
substance, they are carried at the carrying amount of the assets exchanged out.
The intangible assets acquired through debt reorganization, are recognized at the fair value.
Expenditure in the research stage of the intangible assets with independent research and
development should be included in the profit or loss for the current period in which they are
occurred; expenditure in the development stage should be recognized as intangible assets (patent
technologies and non-patent technologies) when all of the following conditions are met:
(a) It is technically feasible that the intangible assets are completed for the purpose of their uses or
sales;
(b) The Company has an intention to complete the intangible assets for their uses or the sale;
(c) Ways of creating economic benefits by intangible assets include proof of existing market of the
products manufactured by use of intangible assets or the existing market of intangible assets and the
proof of the use if the intangible assets are only for the Company’s internal use;
(d) The Company has sufficient technical and financial resources and other supporting resources to
complete the research and development of such intangible assets and are capable of using or selling
such intangible assets;
(e) Expenditure occurred in the development stage of such intangible assets can be accurately
calculated;
(f) The cycle of the product produced with the intangible assets is above one year.
(2) Amortization and duration of intangible assets:
The land use rights of the Company are amortized evenly over the period of the grant since the date
of commencement of the grant (the date of acquisition of the land use rights).
(3) Recognition and provision of impairment of intangible assets:
The Company tests impairment of the intangible assets with indefinite benefit years such as
goodwill annually and estimates their recoverable amounts and impairment of the intangible asset is
52
provided at the difference between the estimated recoverable amount and the carrying amount of
such intangible assets.
A year-end review is conducted to other intangible assets. When there is an indication of
impairment, the recoverable amount is estimated and impairment of the intangible asset is provided
at the difference between the estimated recoverable amount and the carrying amount of such
intangible assets. The impairment provision is not reversed during the duration of the assets once it
is provided.
(a)The intangible assets have been replaced by other new technology so that there is a material
adverse effect on their capacity to generate economic benefits for the Company;
(b) The market value has fallen substantially in the current period and is not expected to recover in
the remaining amortization period;
(c) The intangible assets have exceeded the term protected by laws but some of them can still be
used;
(d)Other circumstances sufficient to prove that impairment has been made actually.
18. Long-term expenses to be amortized
Long-term expenses to be amortized of the Company the expenses that are already charged and
with the beneficial term of more than one year are evenly amortized over the beneficial term. For
the long-term deferred expense items cannot benefit the subsequent accounting periods, the
amortized value of such items is all recorded in the profit or loss during recognition.
19. Estimated liabilities
(1) Principles of recognition:
An obligation related to a contingency, such as guarantees provided to outsiders, pending
litigations or arbitrations, product warranties, redundancy plans, onerous contracts,
reconstructing, expected disposal of fixed assets, etc. shall be recognized as an estimated liability
when all of the following conditions are satisfied:
(a) the obligation is a present obligation of the Company;
(b) it is Contingent that an outflow of economic benefits will be required to settle the obligation;
(c) The amount of the obligation can be measured reliably.
(2) Measurement: to measure on the basis of the best estimates of the expenses necessary for
paying off the contingencies.
On the balance sheet date, the carrying amount of estimated liabilities is reviewed. If there is
obvious evidence that the carrying amount cannot actually reflect the current best estimates, then
the carrying amount is adjusted according to the current best estimates.
20. Revenue
The Company’s revenue is mainly from sale of goods.
(1) Principles of recognition of revenue from sale of goods:
(a) the Company has transferred to the buyer the significant risks and rewards of ownership of the
goods;
(b) the Company retains neither continuing managerial involvement to the degree usually associated
with ownership nor effective control over the goods sold;
(c) the amount of revenue can be measured reliably;
(d) it is Contingent that the associated economic benefits will flow into the Company;
(e) The associated costs occurred or to be occurred can be measured reliably.
(2) Principles of recognition of revenue from the rendering of services:
Revenue from the rendering of services shall be recognized only when all of the following
conditions are satisfied: the amount of revenue and costs occurred or to be occurred for the
transaction involving the rendering of services can be measured reliably; the associated economic
benefits can flow into the Company; the stage of completion of the transaction can be measured
53
reliably.
(3) Principles of recognition of assignment of asset use rights:
Revenue from use by others of enterprise assets shall be recognized only when the associated
economic benefit can flow into the Company, and the amount of revenue can be measured reliably.
21. Government grants
The government grants related to earnings are recognized as deferred earnings if they are used for
compensating the relevant expenses or losses of the Company in subsequent periods, and are
recorded in the profit or loss in the period of recognition of relevant expenses; if they are used to
compensate the relevant expenses or losses occurred of the Company, they are directly recorded in
the profit or loss.
Asset-related government grants are recognized as deferred income, and are allocated evenly over
the useful life of related assets and are included in the current profit and loss. However, the
government grants measured at the nominal amount is recorded directly in the profit or loss.
22. Deferred income tax assets and deferred income tax liabilities
A deferred tax asset and deferred tax liability shall be determined by a difference between the
carrying amount of an asset or liability and its tax base at the tax rates that are expected to apply to
the period when the asset is realized or the liability is settled.
The Company recognizes deferred tax assets to the extent that the taxable income that the Company
can possibly obtain to deduct the deductible temporary differences. On the balance sheet date, when
there is obvious evidence that it is Contingent that sufficient taxable income can be obtained in the
future to deduct the deductible temporary differences, the deferred income tax assets not recognized
in previous accounting periods are recognized.
On the balance sheet date, the Company reviews the carrying amount of deferred tax assets. If the
Company cannot possibly obtain sufficient taxable income in future to deduct the benefits of
deferred tax assets, the carrying amount of deferred tax assets is written down accordingly. When it
is Contingent that sufficient taxable income is obtained, then the written-down amount is reversed.
23. Lease
Finance lease refers to a lease that has transferred in substance all the risks and rewards related to
the ownership of an asset, no matter whether the ownership of it has been transferred eventually.
The finance lease assets are carried at the lower of the fair value of the leased assets and the present
value of the minimum lease payments on the lease beginning date, and the minimum lease payments
are recorded in long-term payables, with the difference as unrecognized finance expenses. The
initial direct costs arising from finance lease of the Company are recorded in the value of the leased
assets. Depreciation and impairment are provided for the finance lease assets according to the
policies of the Company.
Where there is reasonable assurance that the ownership of the leased assets can be obtained when
the lease term expires, depreciation is provided for the leased assets over the estimated useful life.
Otherwise, depreciation is provided for the leased assets at the lower of the lease term and the
estimated useful life of the leased assets.
The Company allocates the unrecognized financing expenses over the lease term by using the
effective interest rate method and in accordance with the principles of borrowing costs.
On the balance sheet date, the Company lists the difference of the long-term payables related to
finance lease less unrecognized financing expenses as finance lease payable and non-current
liabilities due within one year respectively.
Operating lease refers to other lease other than finance lease. The rental expenses of the operating
leased assets are recognized as relevant assets costs or expenses over the lease term on a
straight-line basis.
54
24. Other significant accounting policies, accounting estimates and preparation of financial
statements
(1) Goodwill
In the business combination not under the same control, the difference of the merger cost in excess
of the fair value of net identifiable assets of the acquired party is recognized as the goodwill.
Goodwill, listed independently in financial statement, while conducting impairment test, amortized
book value to the assets unit or assets combination that benefit from synergistic effect, enterprise
consolidation prediction. Relevant impairment losses should be recognized while the recoverable
amount lower its book value, the recoverable amount was contained within the assets unit or assets
combination with goodwill amortized that resulted from testing; The impairment losses, firstly,
deducted to the book value of goodwill of this assets units or assets combination, then deducted
other vary book value of the assts by proportion in assts except the goodwill of assets units or assts
combination.
(2) Employees’ remuneration
Employees’ remuneration includes: employees’ salaries, bonus, allowance and subsidies; welfare
provision; social insurance such as pension insurance, unemployment insurance and work injury
insurance etc.; housing reserve fund, labor union expenditures and staff education expenditures;
benefits not in monetary value; compensation paid for the termination of employment contracts
with employees; relevant expenditures relating to the provision of other services by employees.
In the accounting period in which employees provide service to the Company, payable employees’
remuneration is recognized as liabilities. Other than the compensation for termination of the labor
relationship with employees, the employees’ remuneration is recorded in fixed assets costs,
intangible assets costs, product costs or labor costs respectively according to the beneficiaries of the
services provided by employees. The employees’ remuneration other than the above is directly
recorded in the profit or loss.
Prior to the expiry of the labor contracts of employees, the compensation for termination of the
labor relationship with employees or encouraging employees to accept to be laid off is recognized
as estimated liabilities and recorded in the profit or loss.
(3) Accounting treatment for income tax
The Company applies the balance sheet liability method for accounting of income tax. Current
income tax and deferred income tax is recorded in the profit or loss as income tax expenses or
gains, but the income tax arising from the following conditions is excluded:
1) Business combination;
2) The transaction events directly recognized in the owner’s equity.
Note 3: Taxation
Major taxes and tax rates
Tax Basis Tax rate
Tax rate for sale of goods is 17%; rate for
exported commodities is stipulated by the state
VAT Sale of goods
with declaration of export tax rebate, rate of tax
may be “exempted, credited and refunded”
Business tax Revenue from lease 5%
Urban maintenance
Turnover tax payable
and construction tax 7%
Education fee
Turnover tax payable
surcharges 5%
Corporate income
Taxable income
tax 15% for the parent company
Corporate income taxes of subsidiaries:
55
The Company and its subsidiaries Weifu Jinning, Weifu Diesel System, Weifu Leader and Ningbo
Weifu Tianli Pressurized Technology Co., Ltd. (Weifu Tianli for short) are all high-tech
enterprises, and enjoy a preferential tax rate of 15% according to relevant state regulations on
income taxation.
The income tax of Wuxi Weifu Mashan Oil Pump and Oil Nozzle Co., Ltd. (hereinafter referred
to as “Weifu Mashan”), Wuxi Weifu Chang’an Fuel Co., Ltd. (formerly known as “Wuxi Weifu
Chang’an Oil Pump and Oil Nozzle Co., Ltd.”, hereinafter referred to as “Weifu Chang’an), Wuxi
Weifu International Trade Co., Ltd. (hereinafter referred to as “Weifu International Trade”), Wuxi
Weifu Jida New Material Technology Development Co., Ltd. (hereinafter referred to as “Weifu
Jida”), Jiangsu Weifu Nano Technology Co., Ltd. (hereinafter referred to as “Weifu Nano”), Wuxi
Weifu ITM Information Machinery Development Co., Ltd. (hereinafter referred to as “ITM
Machinery”) ,Wuxi Weifu Schmitter Power System Parts and Components Co., Ltd. (hereinafter
referred to as “Weifu Schmitter”) , Chaoyang Weifu Jialin Machinery Manufactures Co., Ltd.
(hereinafter referred to as “Weifu Jialin”) , Anhui Weifu Tianshi Machinery Co., Ltd. (hereinafter
referred to as “Weifu Tianshi”) and Kunming Xitong Machinery Co., Ltd.(hereinafter referred to
as “Kunming Xitong”) is 25%.
56
Note IV: Enterprise merger and consolidation financial reports
1. Particulars about subsidiaries
(1) Subsidiaries acquired by means of establishment or investment
Actual Balances of other
Registered investment projects actually Whether
Type of Registration Nature of Equity held Proportion of
Name of company capital Business scope amount at the constituting net consolidated
company Place business (%) vote right (%)
(RMB’0000) period amount of investment report or not
end(RMB’0000) in subsidiaries
Accessories and matching
Limited Wuxi Manufacturing parts of internal
Weifu Mashan company 4,500.00 combustion engine 4,869 -- 100.00 100.00 Yes
Accessories and matching
Limited Wuxi Manufacturing parts of internal
Weifu Chang’ an company 6,000.00 combustion engine 7,090 -- 100.00 100.00 Yes
Limited
Wuxi Manufacturing
Weifu Jida company 500.00 Metal nano powder 350.00 -- 70.00 70.00 Yes
Limited
Wuxi Manufacturing
Weifu Nano company 3,000.00 Nano material 2,400.00 -- 80.00 80.00 Yes
Accessories and matching
Limited Wuxi Manufacturing parts of internal
Weifu Diesel System company 30,000.00 combustion engine 26,019.00 -- 100.00 100.00 Yes
Accessories and matching
Sino-foreign Wuxi Manufacturing parts of internal
Weifu Schmitter joint venture 1,800.00 combustion engine 810.00 -- 45.00 45.00 Yes
Accessories and matching
Limited Manufacturing parts of internal
Weifu Tianshi company Quanjiao 1,000.00 combustion engine 520.00 -- 52.00 52.00 Yes
(2) Subsidiaries acquired by means of enterprise merger under common control
Balances of other
Actual investment projects actually
Registered Whether c
Type of Registration Nature of amount at the constituting net Equity held Proportion of
Company name capital Business scope consolidated
company Place business period amount of (%) vote right (%)
(RMB’0000) report or not
end(RMB’0000) investment in
subsidiaries
Accessories and matching
Limited
Weifu Jinning Nanjing Manufacturing parts of internal combustion
company
34,628.70 engine 17,864 -- 80.00 80.00 Yes
Limited
Weifu Leader Wuxi Manufacturing Cleaner, muffler
company 26,000.00 23,011 -- 94.81 94.81 Yes
Weifu
Limited
International Wuxi Trade International trade
company
Trade 3,000.00 3,033 -- 100.00 100.00 Yes
(3) Subsidiaries acquired by means of enterprise merger under different controls
Actual Balances of other
Registered investment projects actually Whether
Type of Registration Nature of Equity held Proportion of
Company name capital Business scope amount at the constituting net consolidated
company Place business (%) vote right (%)
(RMB’0000) period amount of investment report or not
end(RMB’0000) in subsidiaries
Limited Accessories and matching
Wuxi Manufacturing
ITM Machinery company 16,000.00 parts of internal combustion 16,700.00 -- 100.00 100.00 Yes
Limited Accessories and matching
Weifu Tianli company Ningbo Manufacturing 10,469.00 parts of internal combustion 9,023.00 -- 51.00 51.00 Yes
Limited Accessories and matching
Manufacturing
Weifu Jialin company Chaoyang 800.00 parts of internal combustion 400.00 -- 51.00 51.00 Yes
Limited Accessories and matching
Kunming Xitong company Kunming Manufacturing 400.00 parts of internal combustion 570.38 -- 70.00 70.00 Yes
58
2. Explanation on the change in the consolidated range
Whether it is consolidated in Whether it was consolidatedin
Name of company
this year or not last year or not
Weifu Mashan Yes Yes
Weifu Chang’an Yes Yes
Weifu Jida Yes Yes
Weifu Nano Yes Yes
Weifu Diesel System Yes Yes
Weifu Jinning Yes Yes
Weifu Leader Yes Yes
Weifu Internal Trade Yes Yes
Weifu Schmitter[Note 1] Yes Yes
ITM Machinery [Note 2] Yes Yes
Weifu Tianli [Note 3] Yes Yes
Weifu Jialin [Note 4] Yes Yes
Weifu Tianshi [Note 5] Yes No
Kunming Xitong[Note 6] Yes No
Note 1
Weifu Schmitter -- Sino-foreign equity joint venture jointly funded and established by
the Company, Germany Schmitter Group Aktiengesellschaft and Shanghai Weishi
Automobile Technology Development Co., Ltd. obtained Business License for Legal
Entity (No. 320200400033433) granted by Jiangsu Wuxi Industrial and Commercial
Administration Bureau on Sep. 17th, 2009. The registered capital of the Company was
RMB 18 million, among which, Company funded RMB 7.2 million, accounting for
40% of the total capital , and Shanghai Weishi Automobile Technology Development
Co., Ltd. funded RMB 2.7 million, accounting for 15% of the total capital. During this
year, the Company invested RMB 2.7 million as the investment fund for the first time.
As the biggest shareholder owning a majority of vote rights of the Board of Directors
of Weifu Schmitter, the Company had taken it into consolidated range as a subsidiary
since its establishment.
Note 2
Weifu ITM: changed its name from “Wuxi ITM Information Machinery Development
Co., Ltd.” to “Wuxi Weifu ITM Pressure Technology Co., Ltd.”. Relevant changes for
Industrial and Commerce have been completed on 14 March 2011. Capital increase of
0.15 billion yuan was invested by the Company without equity proportion changed.
After capital increased, the company owns register capital of 0.16 billion yuan.
Relevant changes for Industrial and Commerce have been completed on 3 June 2011.
Note 3
Weifu Tianli-- The Company invested with cash in Ningbo Tianli Supercharger Co., Ltd, the
Company occupied 51% of the total register capital of the company after capital increased. Relevant
re-registration of Industry and Commerce were finished in end of October 2010 with new name of
59
Ningbo Weifu Tianli Supercharge Technology Co., Ltd. The company considered as the controlling
subsidiary of the Company for statement consolidation since November 2010.
Note 4
Weifu Jialin-- According to the Equity Transfer Agreement between the Company and
Chaoyang Jialin Machinery Manufacture Co., Ltd., 1% equity of Weifu Jialin owned
by Chaoyang Jialin Machinery Manufacture Co., Ltd. has been transferred by the
Company. Relevant Industry and Commerce re-registration finished in October 2010.
Fifty-one percent equity of the company was held the Company and became as the
controlling subsidiary of the company, joint in the statement consolidation since
October 2010.
Note 5
Weifu Tianshi: a company limited jointly invested by the Company and Anhui
Quanchai Power Co., Ltd., the Business License for Legal Entity (No.
341124000024350(1-1)) granted by Quanjiao County Industrial and Commercial
Administration Bureau was obtained on 13 April 2011. Register capital amounting to
10 million yuan, 5.2 million yuan invested by the Company, 52% of the total register
capital take; Anhui Quanchai Power Co., Ltd. invested 4.8 million yuan with 48% in
total register capital. The company considered as the subsidiary of the Company for
statement consolidation since date of establishment.
Note 6
Kunming Xitong: In March of 2011, the Company entered into an equity transfer
agreement with Kunming Jinlida Machinery Co., ltd. Twenty percent equity of
Kunming Xitong held by Kunming Jinlida Machinery Co., ltd was agreed to transfer by
the Company with price of 1.4688 million yuan. Relevant changes for Industrial and
Commerce have been completed on 12 May 2011. After equity transfer, the Company
holds 70% equity of the company, controlling subsidiary of the Company thereinafter.
And consolidated into range of consolidation for statement since May of 2011.
3. Subsidiaries newly taken into consolidated range during this period
Unit: RMB’000
Net assets at Net profit in this
Name
period-end period
Weifu Tianshi 9,867 -133
Kunming Xitong 10,405 815
Note 5: Commentary on items of consolidated financial statements
(There is no specific explanation for the following items and the amount for items
is taking RMB thousand as unit.)
5-01 Momentary capital
2011-6-30 2010-12-31
Item Amount Converting Amount Amount Converting Amount
in foreign rate in RMB in rate in RMB
60
currency foreign
currency
Cash: 605 544
RMB -- -- 605 -- -- 544
Bank
deposit: 534,024 450,166
RMB -- -- 504,930 -- -- 441,693
Euro 3,108 9.3612 29,094 962 8.8065 8,473
Other 116,127 146,249
currency
capitals:
RMB -- -- 116,127 -- -- 145,314
Euro -- -- -- 106 8.8065 935
Total 650,756 596,959
Funds with limited application, funds deposited abroad and funds with latent recovery
risks due to mortgage, pledge or freezing:
Item 2011-6-30 2010-12-31
Bank acceptance bill, L/C and other
116,127 131,739
collateral
5-02 Notes receivable
(1) Classification of notes receivable
Category 2011-6-30 2010-12-31
Commercial acceptance bill 78,000 68,900
Bank acceptance bill 728,727 766,366
Total 806,727 835,266
(2) Notes receivable already pledged by the Company at the end of the period (top
five)
Drawer Expiration date Amount
2011-7-20
Anhui Jianghui Automobile Co., Ltd. 12,000
2011-9-8
Dongfeng Automobile Co., Ltd. 2011-9-29 10,000
Shanxi Heavy Duty Truck Co., Ltd. 2011-7-1 10,000
Weichai Power Co., Ltd. 2011-10-26 10,000
Hubei Changtong Economy & Trading 2011-7-13
7,000
Development Co., Ltd. 2011-10-20
Total 49,000
Among the note receivable at the end of the period, bank acceptance bill of RMB
96.95 million served as pledge for drawing payable bills.
(3) Undue notes already endorsed by the Company to other parties at the end of
61
period (top five)
Drawer Expiration date Amount
Before end of
Weichai Power Co., Ltd. 130,456
December 2011
Zhejiang Yuanjing Auto Parts Co., Ltd. Before end of
80,944
December 2011
Mianyang Xincheng Power Machinery Before end of
26,597
Co., Ltd. December 2011
Dongfeng Wealth Motor Co., Ltd. Before end of
21,190
December 2011
Chongqing Branch of Dongfeng Wealth Before end of
21,180
Motor Co., Ltd. December 2011
Total 280,367
5-03 Accounts receivable
(1) Accounts receivable disclosed according to account nature:
2011-6-30
Book balance Bad debt provision
Category
Proportion Proportion
Amount Amount
(%) (%)
Significant single amount and
withdrawal bad debt provision
single 47,077 3.09 47,077 100.00
Withdrawal bad debt provision
based on age combination 1,460,417 95.83 4,868 0.33
Including: significant single 1,382,458 90.71 1,390 0.10
Minor single amount 77,959 5.12 3,478 4.46
Minor single amount but
withdrawal bad debt provision 16,469 1.08 16,469 100.00
Total 1,523,963 100.00 68,414 4.49
2010-12-31
Book balance Bad debt provision
Category
Proportion Proportion
Amount Amount
(%) (%)
Significant single amount and
withdrawal bad debt provision
single 47,077 4.41 47,077 100.00
Withdrawal bad debt provision
based on age combination 1,003,974 94.00 4,176 0.42
Including: significant single 942,294 88.22 1,092 0.12
62
amount
Minor single amount 61,680 5.78 3,084 5.00
Minor single amount but
withdrawal bad debt provision
single 17,017 1.59 17,017 100.00
Total 1,068,068 100.00 68,270 6.40
Explanation on categories of accounts receivable:
Account receivable with significant amount in single item indicated account with single
item amount above RMB one million. For account receivable with significant amount in
single item, as no objective evidence showing that the potential devaluation would exceed
the provision for bad debts withdrawn by aging analysis was found, so the provision was
still withdrawn in the same way.
(2) Account receivable with significant single amount and withdrawal bad debt
provision single at period end:
Bad
Book Withdrawal
Account receivable debt Reasons
balance ratio (%)
amount
Insolvency,
Yangdong Co., Ltd. re-construction by
27,790 27,790 100.00 the Court
Hunan Power Difficult in recover
Machine Plant 4,297 4,297 100.00 due to long age
Jiangxi Diesel Engine Difficult in recover
Plant 3,561 3,561 100.00 due to long age
Bengbu Diesel Engine Difficult in recover
Plant 3,318 3,318 100.00 due to long age
Liuzhou Special Difficult in recover
Diesel Engine Plant 1,612 1,612 100.00 due to long age
Shaoyang Shenfeng Long age, un-recover
Power Manufacture after suit
Co., Ltd. 1,590 1,590 100.00
Changchai Wanchou Difficult in recover
Diesel Engine Co., 1,500 1,500 100.00 due to long age
Yuejin Light Difficult in recover
Automobile Co., Ltd. 1,218 1,218 100.00 due to long age
Wuxi Sida Xingxing Difficult in recover
Diesel Engine Co., due to long age
Ltd. 1,191 1,191 100.00
Henan Agricultural Long age, un-recover
Machinery Co., 1,000 1,000 100.00 after suit
Total 47,077 47,077 100.00
63
(3) Account receivable with minor single amount but withdrawal bad debt provision
single at period end:
Bad
Book Withdrawal
Account receivable debt Reasons
balance ratio (%)
amount
Difficult in
Changchai Wanzhou Diesel
843 843 100.00 recover due to
Co., Ltd.
long age
Difficult in
Hubei Duoling Power
776 776 100.00 recover due to
Machinery Co., Ltd.
long age
Henna Xinxiang Difficult in
Internal-Combustion Engine 754 754 100.00 recover due to
Plant long age
Difficult in
Urumqi Xinhengchang
672 672 100.00 recover due to
Pump Equipment Co., Ltd.
long age
Difficult in
Zhejiang Haofeng Power
625 625 100.00 recover due to
Manufacture Co., Ltd.
long age
Difficult in
Yunnan Jinma Diesel
579 579 100.00 recover due to
Machine General Plant
long age
Difficult in
Dongfeng Nanchon Motor
570 570 100.00 recover due to
Co., Ltd.
long age
Jintan Shunfeng Difficult in
Agricultural Machinery 567 567 100.00 recover due to
Accessory Co., Ltd. long age
Difficult in
Nantong Tieniu Power Plant 556 556 100.00 recover due to
long age
Difficult in
Jiangsu Changjia Jingfeng
545 545 100.00 recover due to
Power Machinery Co., Ltd.
long age
Difficult in
Guangxi Liuzhou
475 475 100.00 recover due to
Zhongxing Power Plant
long age
Difficult in
Zhejiang Agricultural
458 458 100.00 recover due to
Machinery Accessory Co.,
long age
Difficult in
Weichai Power Co., ltd. 450 450 100.00
recover due to
64
long age
Difficult in
Jiangmen Zhongyu Material
412 412 100.00 recover due to
Supply Co.,Ltd.
long age
Jiangsu Changtong Difficult in
High-Tech Heavy-Duty 376 376 100.00 recover due to
Co., Ltd. long age
Difficult in
Changchai Group Jintan
375 375 100.00 recover due to
Diesel General Plant
long age
Fujian Longma Agricultural Difficult in
Vechicle Manufacture Co., 365 365 100.00 recover due to
Ltd. long age
Difficult in
Kunming Zhongantong
328 328 100.00 recover due to
Technology-Trade Co., Ltd.
long age
Difficult in
Tianjin Lovol Engines Co.,
321 321 100.00 recover due to
Ltd.
long age
Difficult in
Beijing Pinyang Highway
309 309 100.00 recover due to
Traffic Equipment Co., Ltd.
long age
Difficult in
Scattered companies 6,114 6,114 100.00 recover due to
long age
Total 16,470 16,470 -- --
(4) Account receivable withdrawal bad debt provision based on age combination:
2011-6-30
Withdrawal ratio
Account age Proportion Bad debt Net account
Amount of bad debt
(%) provision receivable
provision (%)
Within 6
months 1,438,419 98.50 -- 1,438,419
6 months-
10.00
1year 9,542 0.65 954 8,588
1-2 years 9,400 0.64 1,880 20.00 7,520
2-3 years 1,703 0.12 681 40.00 1,022
Over 3
100.00
years 1,353 0.09 1,353 --
Total 1,460,417 100.00 4,868 0.33 1,455,549
Account age 2010-12-31
65
Withdrawal ratio
Proportion Bad debt Net account
Amount of bad debt
(%) provision receivable
provision (%)
Within 6
months 984,880 98.10 -- 984,880
6 months-
10.00
1year 7,893 0.79 789 7,104
1-2 years 9,200 0.92 1,840 20.00 7,360
2-3 years 827 0.08 373 40.00 454
Over 3
100.00
years 1,174 0.11 1,174 --
Total 1,003,974 100.00 4,176 0.42 999,798
(5) No arrears of shareholders (units) holding over 5% (include 5%) vote-right share
of the Company in accounts receivable at period-end.
(6) The top five units in term of amount of account receivable
Relationship Proportion to the total
Time
Name of Unit with the Amount amount of account
limit
Company receivable (%)
Weichai Power (Weifan) Spare within
Resource Co., Ltd. Client 292,402 1 year 19.19
Dongfeng Cummins Engine within
Co., Ltd. Client 133,864 1 year 8.78
Wuxi Diesel Engine Factory of
Faw Jiefang Automobile Co., within
Ltd. Client 111,078 1 year 7.29
Zhejiang Yuanjing Auto Parts within
Co., Ltd. Client 107,479 1 year 7.05
Bosch Automobile Diesel within
System Co., Ltd Client 58,674 1 year 3.85
Total 703,497 46.16
Bosch Automobile Diesel System Co., Ltd. is hereafter referred to as Bosch Diesel
System.
(7) Related party’s account in accounts receivable
Relationship with Proportion in total
Name Amount
the Company account receivable (%)
Associated 58,674 3.85
Bosch Diesel System
company
Wuxi Weifu-Autocam Fine Joint-venture 1,764 0.12
Machinery Co. LTD.
66
Wuxi Weifu Fine Machinery Associated 450 0.03
Manufacture Limited Liability company
Total 60,888 4.00
(8) Actual write-off of account receivable in this report period
Nature
write-off Caused by related
Name of Unit of Reason for write-off
amount transaction or not
account
Account
Yangdong Co., Ltd. for 64 Unrecoverable Not
goods
5-04 Accounts paid in advance
(1) Accounts paid in advance listed according to account age
2011-6-30 2010-12-31
Account age
Amount Proportion (%) Amount Proportion (%)
Within 1 year 124,337 90.77 101,673 96.67
1 to 2 years 11,519 8.40 2,514 2.39
2 to 3 years 449 0.33 866 0.82
above 3 years 679 0.50 124 0.12
Total 136,984 100.00 105,177 100.00
(2) The top five units in term of amount of account paid in advance
Relationship
Reason for not
Name of Unit with the Amount Terms
settling account
Company
Prepaid goods
High Hope Int’l Group Jiangsu Native Non-related Within
16,636 payment, goods had
Produce Imp&Exp Corp. Ltd. party 1 year
not been delivered
Prepaid goods
Jiangsu Overseas Group International Non-related Within
14,305 payment, goods had
Technology Engineer Co., Ltd. party 1 year
not been delivered
Nantong Construction Group Prepaid goods
Non-related Within
Joint-Stock Co., Ltd. 10,076 payment, goods had
party 1 year
not been delivered
Shanghai Baosteel Special Metal Prepaid goods
Non-related Within
Material Co., Ltd 9,289 payment, goods had
party 1 year
not been delivered
SUNLAY (HONG KONG) Prepaid goods
Non-related Within
DEVELOPMENT TRADING 7,400 payment, goods had
party 1 year
LIMITED not been delivered
Total 57,706
(3) No accounts paid in advance in this report period involved no shareholder (unit)
holding more than 5% vote right share (include 5%) of the Company at period-end
67
5-05 Dividend receivable
Whether
Increase Decrease related
Reason for not
Item 2010-12-31 in this in this 2011-6-30 account
collecting
period period depreciated
or not
Dividend receivable with account age
within 1 year
Zhonglian
Distributed in
Automobile
-- 235,651 -- 235,651 2011 and haven’t Not
Electronic
been paid yet
Co., Ltd.
Distributed in
Bosch Diesel March of 2011
-- 348,145 174,073 174,072 Not
System and paid
un-completely
Wuxi Weifu
Fine Distributed in
Machinery June of 2011 and
-- 2,040 -- 2,040 Not
Manufacture haven’t been paid
Limited yet
Liability
Total -- 585,836 174,073 411,763 --
5-06 Other accounts receivable
(1) Other accounts receivable disclosed according to category
2011-6-30
Book balance Bad debt Provision
Category Withdrawal
Proportion
Amount Amount proportion
(%)
(%)
Significant single amount and
withdrawal bad debt provision
single 2,000 17.52 2,000 100.00
Withdrawal bad debt provision
based on age combination 7,014 61.45 76 1.08
Including: significant single amount -- -- -- --
Minor single amount 7,014 61.45 76 1.08
Minor single amount but withdrawal
bad debt provision single 2,400 21.03 2,400 100.00
Total 11,414 100.00 4,476 39.21
Category 2010-12-31
68
Book balance Bad debt Provision
Withdrawal
Proportion
Amount Amount proportion
(%)
(%)
Significant single amount and
withdrawal bad debt provision
single 2,000 17.57 2,000 100.00
Withdrawal bad debt provision
based on age combination 6,984 61.35 92 1.31
Including: significant single amount 3,099 27.22 -- --
Minor single amount 3,885 34.13 92 2.36
Minor single amount but withdrawal
bad debt provision single 2,400 21.08 2,400 100.00
Total 11,384 100.00 4,492 39.46
Explanation on categories of other accounts receivable:
Other accounts receivable with amount in single item above RMB one million indicated
other accounts receivable with significant amount in single item from which provision for
bad debt was still drawn based on account age analysis method, as no objective evidence
showed that the potential depreciation would exceed provision for bad debt drawn by age
analysis.
(2) No arrears held by shareholder (unit) holding more than 5% vote right share
(include 5%) of the Company at period-end
(3) The top five units in term of amount of other accounts receivable
Proportion to
total amount
Name of unit 2011-6-30 Time limit of other Remark
accounts
receivable (%)
Provision for bad
Jiangsu Techniques and
2,000 Above 3 17.52 debt had been
Technology Center
years withdrawn in full
Nanjing Jinning Machinery No bad debt
966 Within 6 8.46
Plant provision
months
withdrawal
Above 3 Provision for bad
Nanjing University 600 5.26
years debt had been
Above 3 Provision for bad
Southeast University 600 5.26
years debt had been
Nanjing University of Above 3 Provision for bad
600 5.26
Science and Technology years debt had been
Nanjing University of Above 3 Provision for bad
600 5.26
Technology years debt had been
Total 5,366 47.02
69
5-07 Inventories
(1) Classification for inventories
2011-6-30 2010-12-31
Item Book Provision for Book Provision for
Book value Book value
balance devaluation balance devaluation
Inventory
materials 243,398 59,135 184,263 230,607 59,437 171,170
Goods in
production 300,868 894 299,974 141,356 894 140,462
Inventory
goods 468,887 60,543 408,344 666,605 60,543 606,062
Total 1,013,153 120,572 892,581 1,038,568 120,874 917,694
(2) Provision for depreciation of inventory price
Inventory Increase in this Decrease in this period
2010-12-31 2011-6-30
category period Transfer-in Transfer-out
Inventory
materials 59,437 -- -- 302 59,135
Goods in
production -- -- --
894 894
Inventory
goods
60,543 -- -- -- 60,543
Total 120,874 -- -- 302 120,572
(3) Provision for inventory devaluation
Reason for Proportion of
return and charge-off amount
charge- offs of in this period to the
Basis for withdrawing provision for inventory
Item provision for period-end amount
devaluation
inventory of inventory in this
devaluation in item (%)
this period
Inventory Compared cost of inventory at period-end
0.12%
goods with its net realizable value by single item
Goods in comparison method and withdrew provision
--
production for price drop according to the balance Charge-off
between the net realizable value and cost. As mainly due to
the country improved standard for vehicle the sales for
Stock exhaust emission, the Company had external
--
products correspondingly withdrawn provision for
devaluation for products and relevant raw
materials failing to meet new standard.。
70
5-08 Other current assets
Item 2011-6-30 2010-12-31
Receivable export tax rebates 16,412 9,127
Others -- 84
Total 16,412 9,211
5-09 Investment in joint ventures and associated ventures
Type of Registration legal person Nature of
Investee
enterprise place representative business
I. Joint venture
Sino-foreign
Wuxi Weifu-Autocam Fine Automotive
joint equity Wuxi Gao Guoyuan
Machinery Co. LTD. spare parts
venture
Sino-foreign
Weifu Environmental
joint equity Wuxi Ou Jianbin Catalyst
Protection Catalyst Co., Ltd.
venture
II. Associated company
Accessories
and matching
Sino-foreign
BOHLER parts of
Bosch Diesel System joint equity Wuxi
KLAUS internal
venture
combustion
engine
Accessories
and matching
Zhonglian Automobile Limited parts of
Shanghai Chen Hong
Electronic Co., Ltd. company internal
combustion
engine
Accessories
and matching
Wuxi Weifu Precision
Limited parts of
Machinery Manufacturing Co., Wuxi Chen Haojun
company internal
Ltd.
combustion
engine
Limited Wang Accessories
Wuxi ITM Engine Co., Ltd. Wuxi
company Weiliang and matching
Net assets
Registered
value at
capital( in Equity Proportion of
Investee period-end(in
ten thousand held (%) vote right (%)
thousand
yuan)
yuan )
71
I. Joint venture
Wuxi Weifu-Autocam Fine
Machinery Co. LTD. US$1,000 50.00 50.00 156,388
Weifu Environmental Protection
Catalyst Co., Ltd. 5,000 49.00 49.00 694,777
II. Associated company
Bosch Diesel System US$20,000 31.50 31.50 5,383,680
Zhonglian Automobile Electronic
Co., Ltd. 60,062 20.03 20.03 2,725,060
Wuxi Weifu Precision Machinery
Manufacturing Co., Ltd. 1,200 20.00 20.00 250,370
Wuxi ITM Engine Co., Ltd. 1,000 40.00 40.00 9,133
Total Net profit
Total value Total value
operating of this
of liability at of net assets
value of this period
Investee period-end(in at period-end
period(in (in
thousand (in thousand
thousand thousand
yuan ) yuan )
yuan ) yuan )
I. Joint venture
Wuxi Weifu-Autocam Fine
Machinery Co. LTD. 19,161 137,227 89,710 20,128
Weifu Environmental Protection
Catalyst Co., Ltd. 331,307 363,470 566,321 55,856
II. Associated company
Bosch Diesel System 2,459,517 2,924,163 3,001,751 530,458
Zhonglian Automobile Electronic
Co., Ltd. 1,236,118 1,488,942 113,761 420,842
Wuxi Weifu Precision Machinery
Manufacturing Co., Ltd. 130,698 119,672 159,749 33,496
Wuxi ITM Engine Co., Ltd. 96 9,037 -- -350
5-10 Long-term equity investment
(1) Detail List of long-term equity investment
calculatin Investmen 2010-12-3 Increase/ Cash
Investee 2011-6-30
g method t cost 1 decrease bonus
Wuxi
Weifu-Autoca
m Fine Equity 37,842 60,057 10,063 70,120 --
Machinery Co.
LTD.
Weifu Equity 24,500 150,731 26,001 176,732 --
72
Environmental
Protection
Catalyst Co.,
Ltd.
Kunming
Xitong
Equity 5704 4,278 -4,278 -- --
Machinery
Co., Ltd.
Subtotal of
215,066 31,786 246,852 --
joint ventures
Bosch Diesel
Equity 1,108,776 -181,051 927,725 348,145
System 549,557
Zhonglian
Automobile
Equity 439,767 -151,482 288,285 235,651
Electronic Co.,
Ltd. 120,124
Wuxi Weifu
Precision
Machinery Equity 18,788 4,659 23,447 2,040
Manufacturing
Co., Ltd. 2,000
Wuxi ITM
Engine Co., Equity 3,775 -140 3,635 --
Ltd. 4,000
Subtotal of
associated
ventures 1,571,106 -328,014 1,243,092 585,836
Guolian
Securities 12,000 12,000 -- 12,000 -
Co., Ltd. Cost
Cost
Guangxi
Liufa Co., 1,600 1,600 -- 1,600 --
Ltd.
Cost
Financial
Compan y of
800 800 -- 800 --
Changchai
Co., Ltd.
Cost
H&J
Vanguard
33,000 33,000 -- 33,000 --
Investment
Co., Ltd.
73
Cost
Nanjing
Hengtai
Insurance 1,000 1,000 -- 1,000 --
Brokers Co.,
Ltd.
Cost
Jiangsu
Huifeng
Insurance 500 500 -- 500 --
Agency Co.,
Ltd.
Cost
Yangdong
2,356 2,356 -- 2,356 --
Co., Ltd.
Cost
Henan Gushi
Weining Oil
Pump & 2,033 2,033 -- 2,033 --
Nozzle Co.,
Ltd. etc.
Yangdong Co., Cost
Ltd.(Weifu 200 200 -- 200 --
Jinning)
Cost
Wuxi
Venture
Capital 3,000 3,000 -- 3,000 --
Limited
Comp an y
Beijing Foton Cost
Environmental
86,940 86,940 -- 86,940 --
Engine Co.,
Ltd.
Wuxi Xidong Cost
Technological
5,000 5,000 -- 5,000 --
Industry Park
Co., Ltd.
Shanghai IMS Cost
Automotive
Electronic 10,000 10,000 -- 10,000 --
System Co.,
Ltd.
Subtotal of 158,429 -- 158,429 --
other
investments
74
Total of 1,944,601 -296,228 1,648,373 585,836
long-term
equity
investment
Explanation for
discrepancy Depreciatio
Depreciatio
Proportion between n provision
Equity n provision
Investee of vote equity-holding withdrawn
held (%) at
right (%) proportion and in this
period-end
vote right period
proportion
Guolian
Securities Co.,
Ltd. 1.20 1.20 -- -- --
Guangxi Liu fa
Co., Ltd. 1.22 1.22 -- 1,600 --
Financial
Compan y of
Changchai Co.,
Ltd. -- 800 --
H&J Vanguard
Investment Co.,
Ltd. 11.72 11.72 -- 33,000 --
Nanjing
Hengtai
Insurance
Brokers Co.,
Ltd. 1.85 1.85 -- 1,000 --
Jiangsu
Huifeng
Insurance
Agency Co.,
Ltd. 10.00 10.00 -- 500 --
Yangdong Co.,
Ltd. 1.18 1.18 -- 2,556 --
Henan Gushi
Weining Oil
Pump & Nozzle
Co., Ltd. etc. -- 2,033 --
75
Wuxi Ventu re
Capital Limited
Comp an y 1.4118 1.4118 -- -- --
Beijing Foton
Environmental
Engine Co., Ltd. 14.40 14.40 -- 11,000 --
Wuxi Xidong
Technological
Industry Park Co.,
Ltd. 1 .43 1.43 -- -- --
Shanghai IMS
Automotive
Electronic System
Co., Ltd. 18 .52 18.52 -- -- --
Total 52,489 --
(2) No significant limited on the wired investment income of investee
(3) Commentary on long-term equity investment
[Note 1] Kunming Xitong: In accordance with the equity transfer agreement signed between the
Company and Kunming Jinlida Machinery Co., ltd. Twenty percent equity of Kunming Xitong held by
Kunming Jinlida Machinery Co., ltd was agreed to transfer by the Company. Relevant changes for
Industrial and Commerce have been completed on 12 May 2011. After equity transfer, the Company
hold 70% equity of the company, then Kunming Xitong turns to be the controlling subsidiary of the
Company.
[Note 2] Bosch Diesel System – with register capital of US$ 0.2 billion while US$ 60 million invested
from the Company, thirty percent in total register capital; US$ 3 million invested from Weifu Jinning,
one point five percent of total register capital.
5-11 Investment real estate
Book balance at Increase in this Decrease in Book balance at
period-begin period this period period-end
I. The original book value
House and building 24,381 -- -- 24,381
II. Accumulated
depreciation
House and building 19,415 261 -- 19,676
III. Book value of
investment real estate
House and building 4,966 261 -- 4,705
Investment real estate of the Company calculated based on cost method. Totaled RMB 260,553.94
was withdrawal for depreciation in the period.
76
5-12 Fixed assets
(1) Particulars about fixed assets
Increase in this Decrease in this
2010-12-31 2011-6-30
period period
I. The original book value
Include: buildings 701,361 250 -- 701,611
General equipment 164,859 3,347 1,604 166,602
Special equipment 1,033,811 68,283 9,285 1,092,809
Transportation equipment 23,286 2,259 3,641 21,904
Other equipment 206,116 16,664 8,456 214,324
Original book value in total 2,129,433 90,803 22,986 2,197,250
II. Accumulated depreciation
Include: buildings 153,236 10,642 -- 163,878
General equipment 95,546 7,573 1,257 101,862
Special equipment 527,714 41,190 5,668 563,236
Transportation equipment 15,981 1,289 3,141 14,129
Other equipment 120,555 6,951 7,477 120,029
Accumulated depreciation in
total 913,032 67,645 17,543 963,134
III. Provision for fixed assets
devaluation
Include: General equipment 20,414 161 1,305 19,270
Special equipment 77,318 -- -- 77,318
Transportation equipment 134 -- -- 134
Other equipment 8,467 -- 179 8,288
Total provision for fixed assets
devaluation 106,333 161 1,484 105,010
IV. Book value of fixed assets
Include: buildings 548,125 537,733
General equipment 48,899 45,470
Special equipment 428,779 452,255
Transportation equipment 7,171 7,641
Other equipment 77,094 86,007
Total book value of fixed
assets 1,110,068 1,129,106
The accumulated depreciation value increased RMB67,645,317.38 in this period, among which,
accumulated depreciation value of RMB 780,418.13 from Kunming Xitong at the beginning of
merger period was included, and depreciation value withdrawal in this period amounted to RMB
66,864,899.25.
Original fixed assets value in the period including RMB 2,523,557.78 original fixed assets value
77
from Kunming Xitong at begging of the merger. Construction in process transferred RMB
80,101,570.65 into original value of fixed assets; others were referring to purchase directly.
(2) No fixed assets rented by means of financing lease at period-end
(3)No pledged fixed assets at period-end
(4) Property right certificate of fixed assets that had not been received
Original Estimated time to
Reasons why property right
Item value of obtain property right
certificate had not been issued
fixed assets certificate
Plants and office buildings 118,736
In the progress of fulfilling
of Weifu Jinning
relevant property right 2011
Plants and office buildings 59,586
formalities
of Weifu Chang’an
Plants in Huishan
Development Zone of parent 32,450 Newly-built plant, and in the 2011
company process of handling
5-13 Project in construction
(1)Specific projects
2011-6-30 2010-12-31
Project Book Depreciation Net book Book Depreciation Net
balance provision value balance provision book
Project of High Pressure
Common Rail -- -- -- 500 -- 500
R & D of WAPS;
productively promotion for
parts of diesel common rail
79,329 -- 79,329 33,326 -- 33,326
t
Project of Engineering 44,710 -- 44,710 39,316 -- 39,316
Construction project of Weifu
Industrial Zone 163,719 -- 163,719 -- -- --
Miscellaneous Projects
96,051 4,669 91,382 73,784 4,669 69,115
Total 383,809 4,669 379,140 146,926 4,669 142,257
(2) Changes in significant projects in construction
Fixed assets
Increase
Amount at converted Amount at Project fund
Project in this
period-begin in this period-end process resource
period
period
Project of
Self-raised
High Pressure 500 -- 500 -- 100%
funds
Common Rail
R & D of
WAPS; Self-raised
33,326 48,371 2,368 79,329 13%
productively funds
promotion for
78
parts of diesel
common rail
system
Project of
Self-raised
Engineering 39,316 7,891 2,497 44,710 72%
funds
in stitution
Construction
project of
Self-raised
Weifu -- 163,719 -- 163,719 25%
funds
Industrial
Zone
Total 73,142 219,981 5,365 287,758
The aforesaid projects all contained no capitalized interest.
5-14 Intangible assets
(1) Particulars about intangible assets
Increase in Decrease in
Item 2010-12-31 2011-6-30
this period this period
I. Original book value
Land use right of the
parent company 30,452 -- -- 30,452
Permitted trademark use
right of Weifu Jinning 26,356 -- -- 26,356
Land use right of Weifu
Jinning 28,752 -- -- 28,752
Software of Weifu Jinning 346 -- -- 346
Land use right of Weifu
Diesel System 13,232 -- -- 13,232
Software of Weifu
6,282 -- -- 6,282
Diesel oil System
Land use right of ITM
Machinery 17,136 -- -- 17,136
Land use right of the
WeifuTianli 13,969 -- -- 13,969
Non-patent technology of
WeifuTianli 2,640 -- -- 2,640
Software of WeifuTianli 861 -- -- 861
Land use right of Weifu
Jialin 1,172 -- -- 1,172
Weifu Leader computer -- 128 -- 128
Total 141,198 128 -- 141,326
79
II. Accumulative
Land use right of the
parent company 3,718 336 -- 4,054
Permitted trademark use
right of Weifu Jinning 9,709 -- -- 9,709
Land use right of Weifu
Jinning 12,219 479 --- 12,698
Software of Weifu Jinning 346 -- -- 346
Land use right of Weifu
Diesel oil System 1,807 141 -- 1,948
Software of Weifu
Diesel oil System 5,532 134 -- 5,666
Land use right of ITM
Machinery 2,599 171 -- 2,770
Land use right of Weifu 227 164 -- 391
Non-patent technology of
WeifuTianli 2,327 209 -- 2,536
Software of WeifuTianli 278 82 -- 360
Land use right of Weifu 133 57 -- 190
Weifu Leader computer -- 7 -- 7
Total 38,895 1,780 -- 40,675
III. Devaluation provision
for intangible assets
Permitted trademark use
right of Weifu Jinning 16,647 -- -- 16,647
IV. Book value of
intangible assets
Land use right of the
parent company 26,734 26,398
Permitted trademark
use right of Weifu Jinning -- --
Land use right of Weifu
Jinning 16,533 16,054
Software of Weifu Jinning -- --
Land use right of Weifu
Diesel oil System 11,425 11,284
Software of Weifu
Diesel oil System 750 616
Land use right of ITM
Machinery 14,537 14,366
Land use right of Weifu 13,742 13,578
Non-patent technology of
WeifuTianli 313 104
80
Software of WeifuTianli 583 501
Land use right of Weifu 1,039 982
Weifu Leader computer -- 121
Total 85,656 84,004
Increase amount of accumulated amortization at this period was the same as amortizing amount.
Commentary on intangible assets:
1. Permitted trademark use right of Weifu Jinning: referred the permitted trademark
use right of the original Weifu Group. At present, as the country had implemented new
emission standard and relevant products were hardly marketable, so provision for
book value was withdrawn in full amount in 2009.
5-15 Goodwill
Item 2011-6-30 2010-12-31
Weifu Tianli 1,784 1,784
Good will of Weifu Tianli: the Company combined Weifu Tianli by controlling with
capital increased. Exceed part from combination cost of the Company to fair value of
recognizable net assets of Weifu Tianli.
5-16 Deferred income tax assets
(1) Confirmed deferred income tax assets
Item 2011-6-30 2010-12-31
Provision for assets devaluation 40,434 40,718
Others 4,526 4,191
Operating losses of subsidiaries 1,660 1,400
Subtotal 46,620 46,309
(2) Assets causing temporary difference or temporary difference of liabilities items
Item 2011-6-30 2010-12-31
Provision for bad debt 72,890 72,762
Devaluation provision for inventory 120,572 120,874
Devaluation provision for fixed assets 105,010 106,333
Devaluation provision for projects in
construction 4,669 4,669
Devaluation provision for intangible assets 16,647 16,647
Operating losses of Weifu Schmitter 6,643 5,599
Others 30,170 27,939
Total 356,601 354,823
(3) Specific deferred income tax assets unconfirmed
Item 2011-6-30 2010-12-31 Note
81
It would be difficult to list
Deductible temporary expense before taxation in the
difference--provision for bad debt 57,156 57,027 future as evidence required by
(parent company) tax authority was difficult to
obtain.
There were uncertainties in the
Deductible losses--ITM Machinery 16,642 17,742 potential of generating enough
taxable income.
Total 73,798 74,769
(4) The deductible losses of unconfirmed deferred income tax assets would fall due in
the year as follow
Expire year 2011-6-30 2010-12-31 Note
Weifu ITM Machinery have un-recover
2013 16,642 17,742
losses in 2008
5-17 Provision for assets devaluation
Increase in Decrease in this period
Item 2010-12-31 2011-6-30
this period Transfer-in Transfer-out
Provision for bad
debt 72,762 192 -- 64 72,890
Devaluation
provision for
inventory 120,874 -- -- 302 120,572
Devaluation
provision for
long-term
investment 52,489 -- -- -- 52,489
Devaluation
provision for fixed
assets 106,333 161 -- 1,484 105,010
Devaluation
provision for
projects in
construction 4,669 -- -- -- 4,669
Devaluation
provision for
intangible assets 16,647 -- -- -- 16,647
Total 373,774 353 -- 1,850 372,277
5-18 Short-term loans
82
Item 2011-6-30 2010-12-31
Credit loan 505,000 270,000
5-19 Notes payable
Type 2011-6-30 2010-12-31
Bank acceptance bill 255,438 309,986
Commercial acceptance bill -- 80,000
Total 255,438 389,986
Commentary on notes payable:
For the purpose of issuing bank acceptance bill, guaranty deposits for notes payable at period-end
should sum up to RMB 115.38 million and pledged notes receivable should be worth RMB 96.95
million.
5-20 Accounts payable
(1) Account age of account payable
Item 2011-6-30 2010-12-31
Within 1 year 1,268,497 1,177,029
1 to 2 years 2,483 7,745
2 to 3 years 8,495 5,539
Above 3 years 2,564 4,740
Total 1,282,039 1,195,053
(2) No accounts should pay for shareholders holding more than 5% (include 5%) vote
right share of the Company among accounts payable in this report period
(3) Accounts of other related parties among accounts payable in this report period
Name of Unit Related relationship 2011-6-30 2010-12-31
Wuxi Weifu Precision
Machinery Manufacturing Co., Affiliated enterprise 17,723 32,123
Ltd.
Bosch Diesel System Affiliated enterprise 5,623 5,623
Wuxi Weifu Environmental
Joint-venture 65,131 17,532
Protection Catalyst Co., Ltd.
Weifu Autocam Precision
Machinery Co., Ltd. Joint-venture 1,307 205
Total 89,784 55,483
(4) Commentary on huge accounts payable with account age above one year
There was no huge account payable with account age above one year.
5-21 Account received in advance
83
(1) Account age of account received in advance
Item 2011-6-30 2010-12-31
Within 1 year 56,034 32,915
1 to 2 years 1,695 5,058
2 to 3 years 2,508 2,339
Above 3 years 2,130 1,960
Total 62,367 42,272
(2) No accounts of shareholders (units) holding more than 5% (include 5%) vote right
share of the Company among other accounts received in advance in this report period.
(3) Accounts of other related unites among accounts received in advance in this report
period
Name of Unit Related relationship 2011-6-30 2010-12-31
Kunming Xitong Machinery Co., Controlling subsidiary of the
Company at period-end -- 9,067
Ltd.
Weifu Precision Machinery
Associated enterprise -- 319
Manufacturing Co., Ltd.
Commentary on huge accounts received in advance with account age above one year:
There were no huge accounts received in advance with account age exceeding one
year.
5-22 Employees’ wage payable
Increase in Decrease in
Item 2010-12-31 2011-6-30
this period this period
I. Salary, bonus, allowance and
subsidy 164,242 190,508 165,192 189,558
II. Employees’ welfare -- 16,486 16,486 --
III. Social insurance 37,355 51,888 50,674 38,569
IV. Housing Fund Social
Insurance 3,446 15,785 15,791 3,440
V. Housing allowance for
employees 28,202 -- 2 28,200
VI. Labor union expenditure
and Personnel education
expenditure 15,326 3,727 3,416 15,637
VII. Others 21,181 176 13 21,344
Total 269,752 278,570 251,574 296,748
No payment of arrears among employees' salary payable.
Arrangements about the estimated distribution time and amount, etc. for employees'
salary payable
The reward fund withdrawn by parent company according to resolutions of
84
Shareholders’ General Meeting was contained in salary, bonus, allowance and
subsidy. The Company withdrew RMB 10.50 million in 2008, RMB 22 million in
2009, RMB 73 million in 2010 respectively for the reward fund in conformity with
the arrangement of the Board of Directors.
5-23 Taxes payable
Item 2011-6-30 2010-12-31
Value-added tax 5,523 7,490
Tax for city construction 1,209 1,197
Enterprise income tax 39,040 92,570
Extras of education expense 769 684
Individual income tax 757 1,491
Others 3,822 4,472
Total 51,120 107,904
5-24Dividend payable
Item 2011-6-30 2010-12-31
Minority shareholders’
dividend of Weifu Diesel
System -- 3,406
Minority shareholders’
dividend of Weifu
International Trade -- 59
Minority shareholders’
dividend of Weifu Tianli -- 15,232
Dividend payable for parent
company 246,765 --
Total 246,765 18,697
5-25 Other accounts payable
(1) Account age of other account payable
Item 2011-6-30 2010-12-31
Within 1 year 67,394 50,119
1 to 2 years 2,279 3,420
2 to 3 years 2,415 3,629
Above 3 years 7,111 5,334
Total 79,199 62,502
(2) No accounts of shareholders (units) holding more than 5% (include 5%) vote right
share of the Company among other accounts payable in this report period.
(3) Commentary on other accounts payable with account age exceeding one year:
Item 2011-6-30 Remark
Nanjing Electromechanical Industry (Group) Co., 4,500 Current accounts
85
5-26 Long-term loans
(1) Classification of long-term loans
Item 2011-6-30 2010-12-31
Credit loan 3,000 3,000
(2) The top five long- term loans in term of amount
Taking-effect date Expiration date of Interest
Creditor Currency 2011-6-30 2010-12-31
of the loan the loan rate
Jiangsu
International
Trust 2009-11-27 2012-5-27 RMB 0.3% 3,000 3,000
Corporation
Limited
Commentary on long-term loan:
According to Loan Contract signed with Jiangsu International Trust Corporation Limited, Weifu
Jinning borrowed RMB 3 million for the project "Industrialization of Electricity-controlled
High-pressure VE Jetting Pump System of Low-emission Diesel Engine".
5-27 Long-term accounts payable
Item 2011-6-30 2010-12-31
Nanjing Finance Bureau Hi-tech Financial supporting fund
1,710 1,710
Branch [Note 1] (year 2004)
Nanjing Finance Bureau Hi-tech Financial supporting fund
1,140 1,140
Branch [Note 2] (year 2005)
Nanjing Finance Bureau Hi-tech Financial supporting fund
1,250 1,250
Branch [Note 3] (year 2006)
Nanjing Finance Bureau Hi-tech Financial supporting fund
1,230 1,230
Branch [Note 4] (year 2007)
Loan transferred from treasury
5,600 5,600
bond[Note 5]
Nanjing Finance Bureau Hi-tech Financial supporting fund
2,750 2,750
Branch [Note 6] (year 2008)
Nanjing Finance Bureau Hi-tech Financial supporting fund
1,030 1,030
Branch [Note 7] (year 2009)
Nanjing Finance Bureau Hi-tech Financial supporting fund
960 960
Branch [Note 8] (year 2010)
Total 15,670 15,670
[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
86
supporting use, the term is from August 5, 2004 to August 4, 2012. Provided that the operation period in
the zone is less than 15 years, financial supporting capital will be reimbursed.
[Note 2] 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 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 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 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 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 5] National debt transferred to loan: is the transferred national debt capital received by Weifu
Jinning in 2007.
[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 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 7] 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.
[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 Dec. 27, 2010 to Dec. 27, 2025. Provided that the operation period in
the zone is less than 15 years, financial supporting capital will be reimbursed.
5-28Deferred income tax liability
(1) Recognized deferred income tax liability
Item 2011-6-30 2010-12-31
The evaluation of Weifu Tianli appreciated 2,720 2,801
(2) Corresponding temporary difference arising from assets or liabilities
Item 2011-6-30 2010-12-31
The evaluation of Weifu Tianli appreciated 18,132 18,673
5-29 Other non-current liabilities
Item 2011-6-30 2010-12-31
Appropriation on industrialization project of electrical
control and high voltage jet VE system of low emissions
diesel 11,125 11,125
Others 3,980 2,225
Total 15,105 13,350
Explanation on other non-current liabilities, including various obtained government
subsidies and end amounts related to assets and incomes in this period:
87
1. Appropriation on industrialization project of electrical control and high voltage jet VE
system of low emissions diesel: in Sep of 2009, Weifu Jinning signed “Project Contract of
Technology Outcome Transferring Special Capital in Jiangsu Province” with Nanjing
Technical Bureau, according to which Weifu Jinning received appropriation RMB 6.35
million in 2009, and RMB 4.775 million received in 2010. According to the contract, the
attendance date of this project was: from October of 2009 to March of 2012. This contract
agreed 62% of newly increased investment in project would be spent in fixed assets
investment.
5-30 Share capital
(1) Change of share capital in the report period
Increase and decrease in the period(+, 一)
New Capitalized
2010-12-31 Bonus 2011-6-30
issued surplus Others Subtotal
issue
share reserves
Restricted
100,075 71,708
equity -- -- -- -28,367 -28,367
-Domestic legal
100,022 71,658
person shares -- -- -- -28,364 -28,364
Shares by senior
53 50
executors -- -- -- -3 -3
Circulating
467,201 495,568
share capital -- -- -- 28,367 28,367
Circulating
share capital (A 352,281 380,648
Shares) -- -- -- 28,367 28,367
Circulating
share capital (B 114,920 114,920
Shares) -- -- -- -- --
Total 567,276 -- -- -- -- -- 567,276
(2) Explanation on relevant particulars of share capitals
Wuxi Industry Group was the first largest shareholder of the Company with
100,021,999 shares held, which accounting 17.63% of total share capital of the
Company.
5-31 Capital reserve
Increase in the Decrease in
Items 2010-12-31 2011-6-30
period the period
Other capital reserve 19,083 -- -- 19,083
Capital premium 876,835 -- -- 876,835
Total 895,918 -- -- 895,918
88
5-32 Surplus public reserve
Increase in the Decrease in the
Items 2010-12-31 2011-6-30
period period
Statutory surplus
public reserve 283,638 -- -- 283,638
5-33 Retained profit
Item 2011-6-30 2010-12-31
Pre-adjustment undistributed profit of the end
of last year 2,359,376 1,104,176
Adjusting total amount of undistributed profit
of beginning of the year (increase+, decrease-) -- --
Post-adjustment undistributed profit at the
beginning of the year 2,359,376 1,104,176
Add: profit attributable to owners of parent
company in this period 644,664 1,340,291
Subtract: extract statutory surplus public
reserve -- --
Payable cash dividend 246,765 85,091
Retained profit in the period-end 2,757,275 2,359,376
Explanation on distributing profit:
According to preplan of profit distribution of 2010 issued by the Board of Directors in
March 2011, the general meeting of shareholders of 2010 decided that the Company
would distribute cash dividend RMB 4.35 (tax included) per 10 shares based on share
capital on Dec 31st of 2010, total distributed share capital of common stock was RMB
246,765,057.83.
5-34 Operating income, operating cost
(1) Operating income, operating cost
Item January – June 2011 January – June 2010
Income arising from main business 2,991,207 2,436,213
Income from other business 286,353 214,474
Total business income 3,277,560 2,650,687
operating cost 2,426,222 2,093,056
(2) Main business (Sub-sectors)
January – June 2011 January – June 2010
Sectors Operating Operating
Operating cost Operating cost
income income
Vehicle components 2,991,207 2,151,734 2,436,213 1,884,995
89
(3) Main business (Sub-products)
January – June 2011 January – June 2010
Products Operating Operating
Operating cost Operating cost
income income
Fuel injection system 2,446,636 1,705,544 2,080,217 1,580,404
Intake system 77,887 45,748 11,335 8,937
Tail treatment system 466,684 400,442 344,661 295,654
Total 2,991,207 2,151,734 2,436,213 1,884,995
(4) Main business (Sub-region)
January – June 2011 January – June 2010
Region
Operating income Operating cost Operating income Operating cost
Domestic sales 2,869,301 2,032,796 2,344,187 1,798,640
Overseas sales 121,906 118,938 92,026 86,355
Total 2,991,207 2,151,734 2,436,213 1,884,995
(5) Particulars of operating income of top five clients of the Company
Proportion in
Clients Operating income
operating income (%)
Weichai Power (Weifang) spare resources Co.,
Ltd 427,093 13.03
Dongfeng Cummins Engine Co., Ltd. 285,097 8.70
Bosch Diesel Systems 213,933 6.53
Jiangling Motor Co., Ltd. 193,006 5.89
FAW Jiefang Automatic Co., Ltd. Wuxi Diesel
Engine Plant 143,126 4.37
Total 1,262,255 38.52
5-35busines tax and extra
Item January – June 2011 January – June 2010
Urban maintenance and construction tax 10,709 10,352
Educational surcharge 7,205 5,930
Business tax 507 10
Total 18,421 16,292
5-36 sales expense
Item January – June 2011 January – June 2010
Salary and expense related to salary 12,051 11,211
Consumption of office materials and business 4,240 2,991
Transportation 7,632 5,429
Warehouse 3,854 1,874
90
Three-guarantee 17,324 35,096
Other 5,409 18,655
Total 50,510 75,256
5-37 Administrative expense
Item January – June 2011 January – June 2010
Salary and expense related to salary 81,613 103,094
Depreciation expense and long-term assets amortized 14,363 13,193
Consumption of office materials and business 12,973 11,798
Taxes 6,378 5,978
Other 173,760 157,244
Total 289,087 291,307
5-38 Financial expense
Item January – June 2011 January – June 2010
Interest expense 16,540 20,200
Interest expense of notes discounted 5,238 3,114
Interest expense of deposit -3,245 -3,975
Exchange gains and losses 1,342 -2,252
Commission expense 395 352
Total 20,270 17,439
5-39 Losses from impairment of assets
Item January – June 2011 January – June 2010
Bad debt losses 193 2,309
Loss on depreciation of inventories -302 -4,230
Impairment losses on fixed assets 161 -7,303
Total 52 -9,224
5-40 Investment income
(1) Details situation of investment income
Item January – June 2011 January – June 2010
Long term equity investment income of cost
accounting method -- 1,810
Long term equity investment income of equity
accounting method 293,611 200,108
Total 293,611 201,918
(2) Long term equity investment income of equity accounting method (Top 5)
Invested units January – June 2011 January – June 2010
Bosch Diesel Systems 167,094 116,047
91
Zhonglian Automotive Electronic Co., Ltd. 84,169 48,000
Weifu Environmental Protection Catalyst Co., 26,001 24,287
Ltd.
Weifu Autocam Precision Machinery Co., Ltd. 10,064 8,606
Weifu Precision Machinery Manufacturing Co., 6,699 3,091
Ltd.
Total 294,027 200,031
(3) Explanation on investment income
There was no significant restriction on investment income of the Company.
5-41 Non-operating income
(1) Details of non-operating income
Item January – June 2011 January – June 2010
Net income from disposal of fixed assets 4,125 640
Government grants 1,815 --
Others 104 33
The difference between owned interest and
consolidated costs with different control 1,241 --
Total 7,285 673
(2) Details of government grants:
Item January – June 2011 Note
Funds for Technology, North District, Ningbo City [2011] No.
1,030
technology projects 13
Other 785
Total 1,815
Relevant explanation on non-operating income:
The difference between owned interest and consolidated costs with different control: income
arising from equity transfer of Kunming Xitong in 2011.
5-42 Non-operating expense
Item January – June 2011 January – June 2010
Net loss from disposal of fixed assets 503 3,956
Donation expenditure -- 200
Flood protection Security Fund ect 3,533 3,051
Other expense 161 397
Total 4,197 7,604
5-43 Income tax expense
Item January – June 2011 January – June 2010
92
Income tax payable 95,737 24,108
Increased assets from deferred income tax -311 948
Increased of deferred income tax liability -81
Income tax expense 95,345 25,056
5-44 Calculation 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
Among which: P0 is the net profit attributable to the shareholders of ordinary shares of
the Company or the net profit attributable to the shareholders of ordinary shares after
the deduction of non-recurring gains and losses; S is the weighted average number of
ordinary shares outstanding; S0 is the total number of shares at the beginning of the
period; S1 is the number of increased shares due to reserve’s conversion into share
capital or distribution of dividends in the reporting period; Si is the number of
increased shares due to issue of new shares or debt-to-equity in the reporting period;
Sj is the number of decreased shares due to repurchase in the reporting period; Sk is
the number of contraction of shares in the reporting period; M0 is the number of
months in the reporting period; Mi is the number of accumulated months from the
next month of shares increase to the end of the reporting period; Mj is the number of
accumulated months from the next month of shares decrease to the end of the
reporting period.
Diluted earnings per share=P1/(S0 ＋S1 ＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ The weighted
average number of ordinary shares increased due to call warrants, share options and
convertible bonds etc.)
Among which, P1 is the net profit attributable to the shareholders of ordinary shares of
the Company or the net profit attributable to the shareholders of ordinary shares after
the deduction of non-recurring gains and losses, as adjusted according to Enterprise
Accounting Standards and relevant regulations after the effect of diluted potential
ordinary shares is taken into account. In the calculation of diluted earnings per share,
the Company shall taken the effect of all diluted potential ordinary shares on the net
profit attributable to the shareholders of ordinary shares of the Company or the net
profit attributable to the shareholders of ordinary shares after the deduction of
non-recurring gains and losses and the weighted average number of shares and into
account of the diluted earnings per share according to the extent of dilution in
sequence until the diluted earnings per share reaches the minimum.
5-45 Notes of cash flow statement
(1) Tax returned received
Item January – June 2011 January – June 2010
Export tax refund received by
12,117 8,783
Weifu International Trade
(2) Received other cash related to operating activities
Item January – June 2011 January – June 2010
Interest income on bank deposits 3,245 3,975
Government subsidy 3,800 --
Others 6,306 4,615
93
Total 13,351 8,590
(3) Other cash paid related to operating activities
Item January – June 2011 January – June 2010
Operating expense for cash 45,264 23,468
Management expense for cash 67,518 67,280
Others 2,299 2,420
Total 115,081 93,168
5-46 Additional information of consolidated cash flow statement
(1) Additional information of consolidated cash flow statement
January – June January – June
Item
2011 2010
1. Net profit subject to cash flow arising from operating
activities
Net profit 674,352 336,493
Add: Provision for assets devaluation 52 -9,224
Depreciation of fixed assets, oil and gas assets, and productive
biological assets 66,865 66,859
Amortization of intangible assets 1,780 1,710
Allocations of long-term expenses to be amortized 963 467
Losses from disposal of fixed, intangible and other long-term
assets -3,621 3,316
Losses from obsolete fixed assets -- --
Losses from changes of fair value -- --
Financial expenses 10,795 15,614
Losses from investment -293,611 -201,918
Decrease of deferred income tax -311 948
Increase of deferred income tax -81 --
Decrease of inventory 61,219 -45,042
Decrease of operating receivables -465,429 -766,802
Increase of operating payables 830 583,644
Net cash generated from operations 53,803 -13,935
2. Net increase in cash /cash equivalent
Balance of cash at period-end 534,629 358,592
Less: Balance of cash at period-beginning 465,220 327,527
Add: Balance of cash equivalent at period-end
Less: Balance of cash equivalent at period-beginning
Net increase in cash /cash equivalent 69,409 31,065
(2) The composition of cash and cash equivalents
Item 2011-6-30 2010-12-31
I. Cash
Including: cash in treasury 605 544
94
Bank deposit for payment at any time 534,024 450,166
Other monetary capital for pay at any time -- 14,510
II. Cash equivalents
Including: investment on bonds due in 3 months
III. Balance of cash and cash equivalents in period-end 534,629 465,220
Note 6: Related party relationships and related transactions (Amount unit:
RMB’000)
6-01 Particulars about parent company of the Company
Parent Related Legal
Business Registratio Nature of Registere
compan relationship representativ
type n area business d capital
y s e
Operation
State-owne
Wuxi Parent Jiang of
d Wuxi 3,239,202
Industry company Guoxiong state-owne
exclusively
Group d assets
Parent
Proportion of
company's
Parent parent company’s Ultimate controlling Organization
shareholding
company voting rights of party of the enterprise code
ratio of the
the company (%)
Company (%)
Wuxi State-owned
Wuxi Assets Supervision &
Industry 17.63 17.63 Administration 13600265-4
Group Commission of State
Council
Explanation on particulars of parent company
Wuxi Industry Group was solely state-owned enterprise funded and established by Wuxi
Municipal People’s Government which mainly took responsibility of authorizing the
state-owned assets operation within a certain areas, investment management of significant
project, investment and development of manufacturing and services and venture capital in
high-tech achievement transformation.
6-02 Particulars of subsidiaries of the Company
Full name of Subsidiary Enterprise Registration Legal Nature of
subsidiaries type type area representative business
Holding Limited Wang
Weifu Jinning Nanjing Engine parts
subsidiary company Weiliang
Holding Automobile
subsidiary Limited Wang exhaust
Weifu Leader Wuxi
company Weiliang purifier,
muffler
Wholly Limited
Weifu Mashan Wuxi Gao Guoyuan Engine parts
owned company
95
subsidiary
Wholly
Limited Han
Weifu Changan owned Wuxi Engine parts
company Jiangming
subsidiary
Holding Limited Metallic
Weifu Jida Wuxi Xu Liangfei
subsidiary company Nanoparticles
Holding Limited
Weifu Nano Wuxi Xu Liangfei Nano materials
subsidiary company
Wholly
Weifu Diesel Limited Wang
owned Wuxi Engine parts
System company Weiliang
subsidiary
Weifu Wholly
Limited International
International owned Wuxi Gao Guoyuan
company trade
Trade subsidiary
Wholly Engine parts
Limited Wang
Weifu ITM owned Wuxi
company Weiliang
subsidiary
Weifu Holding Limited Wang Engine parts
Wuxi
Schmitter subsidiary company Weiliang
Holding Limited Wang Engine parts
Weifu Tianli Ningbo
subsidiary company Weiliang
Holding Limited Engine parts
Weifu Jialin Chaoyang Miao Yuming
subsidiary company
Holding Limited Wang Engine parts
Weifu Tianshi Quanjiao
subsidiary company Weiliang
Kunming Holding Limited Engine parts
Kunming Chen Xuejun
Xitong subsidiary company
Full name of Registered Equity ratio Voting rights
Organization code
subsidiaries capital (%) ratio (%)
Weifu Jinning 346,287 80.00 80.00 13497754-6
Weifu Leader 260,000 94.81 94.81 13600159-8
Weifu Mashan 45,000 100.00 100.00 13625011-3
Weifu Changan 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
Weifu Diesel
System 300,000 100.00 100.00 76418029-1
Weifu
International
Trade 30,000 100.00 100.00 76103151-4
Weifu ITM 160,000 100.00 100.00 72418270-0
Weifu Schmitter 18,000 45.00 45.00 69449050-9
96
Weifu Tianli 104,690 51.00 51.00 73424810-1
Weifu Jialin 8,000 51.00 51.00 78877120-5
Weifu Tianshi 10,000 52.00 52.00 57301523-4
Kunming Xitong 4,000 70.00 70.00 77554741-5
6-03 Particulars of other related parties of this enterprise
Relationship between other related parties Organization
Name of other related parties
and the Company code
Weifu Autocam Precision Machinery
Joint Venture 77540714-8
Co., Ltd.
Weifu Environmental Protection Catalyst
Joint Venture of Weifu Leader 75969849-1
Co., Ltd.
Bosch Diesel Systems Associated companies 60791796-6
Weifu Precision Machinery
Associated companies 73944370-7
Manufacturing Co., Ltd.
Wuxi ITM Engine Co., Ltd. Associated company of ITM Machinery 77540703-3
6-04 Particulars of related transactions
(1) Related transactions of purchasing goods, providing and accepting service
Related detailed situation of goods purchasing of the Company from related party was
as follows:
January – June 2011 January – June 2010
Proportion in Proportion
amount of in amount of
Enterprises
Amounts similar Amounts similar
transaction transaction
(%) (%)
Weifu Precision Machinery 79,087 4.02 60,920 3.73
Manufacturing Co., Ltd.
Bosch Diesel Systems 158,645 8.06 143,986 8.82
Weifu Trade Co., Ltd. -- -- 1,021 0.06
Weifu Environmental Protection Catalyst 296,748 15.08 227,382 13.93
Co., Ltd.
Wuxi Longsheng Technology Co., Ltd. -- -- 16,451 1.01
Weifu Autocam Precision Machinery Co., 7,082 0.36 37 0.002
Ltd Jialin
Weifu -- 20 0.001
--
Wuxi ITM Engine Co., Ltd. -- -- 415 0.03
Kunming Xitong[Note] 863 0.04 2,682 0.16
[Note] Kunming Xitong consolidated into the range of consolidation since May of 2011,
related purchasing from January 2011 to April 2011 amounting to RMB 0.8627 million.
Related detailed situation of goods selling of the Company from related party was as
follows:
Enterprises January – June 2011 January – June 2010
97
Proportion in Proportion in
amount of amount of
Amounts Amounts
similar similar
transaction transaction
Weifu Precision Machinery Manufacturing
Co., Ltd.
14,092 0.43 10,423 0.39
Bosch Diesel Systems 213,933 6.53 207,056 7.81
Weifu Jialin -- -- 39,121 1.48
Weifu Trade Co., Ltd. -- -- 1,768 0.07
Kunming Xitong[Note] 37,758 1.15 266 0.01
Weifu Environmental Protection Catalyst
Co., Ltd.
7,367 0.22 9,769 0.37
Weifu Autocam Precision Machinery Co.,
Ltd. 2,897 0.09 1,109 0.04
[Note] Kunming Xitong consolidated into the range of consolidation since May of 2011, related
purchasing from January 2011 to April 2011 amounting to RMB 37.7583 million.
(2) Other Related transactions
January – June January –
Project Related parties
2011 June 2010
Service and technical Bosch Diesel Systems
-- 2,207
service fees payable
Purchase of fixed assets Bosch Diesel Systems 60 --
Weifu Precision Machinery
Sales of fixed assets
Manufacturing Co., Ltd. 149 38
Land and trademark fees
Wuxi Industry Group
payable 5,149 4,054
6-05 Receivables and payables of related party
Project Related parties 2011-6-30 2010-12-31
Accounts
receivable
Bosch Diesel Systems 58,674 55,380
Weifu Autocam Precision Machinery Co., Ltd. 1,764 980
Weifu Precision Machinery Manufacturing Co.,
Ltd. 450 --
Kunming Xitong -- 5
Account paid
in advance
Weifu Precision Machinery Manufacturing Co.,
Ltd. 1,538 843
Weifu Environmental Protection Catalyst Co.,
Ltd. 1,137 171
98
Accounts
payable
Weifu Precision Machinery Manufacturing Co.,
Ltd. 17,723 32,123
Weifu Environmental Protection Catalyst Co.,
Ltd. 65,131 17,532
Bosch Diesel Systems 5,623 5,623
Weifu Autocam Precision Machinery Co., Ltd. 1,307 205
Account
received in
advance
Kunming Xitong -- 9,067
Weifu Precision Machinery Manufacturing Co.,
Ltd. -- 319
Note 7: Contingent matters
7-01 There was no significant contingent liability and its financial influence
arising from pending litigation and arbitration till 30 June 2011
7-02 Contingent liability and its financial influence arising from provision of debt
guarantees for other units:
As at 30 June 2011, the Company has no contingency that formed by liability
guarantee received from other units.
7-03 Other contingent events
Till 30 June 2011, situation of assets mortgage or pledge were as follows:
1. The Company offered RMB 116,127,000 of bank deposit as margin for issuing bank
acceptance and letter of credit.
2. The Company pledged bank acceptance bills receivable RMB 96,950,000 to bank as
margin for issuing bank acceptance.
Note 8: Commitments
8-01 Significant commitments
1. Privately share offering
Being deliberated and approved by 14th Meeting and 15th Meeting of the 6th Session of the Board
and 2nd Extraordinary Shareholders’ General Meeting 2010, the Company plan to offering RMB
common share(A-stock) privately to Wuxi Industrial Development Group Co., Ltd. (“Industrial
Group”), largest shareholder of the Company, and German Bosch Co., ltd. (“Bosch Company”),
foreign strategy investor.
(1) The shares will on price of 25.83 yuan per share for privately offering. The Company will
adjust the relevant ex-right and ex-dividend of issued price if events of ex-right and ex-dividend as
dividend payout, bonus share, capitalizing from reserves occurred during the period from price
based date to issued date.
(2) The Company plans to issue no more than 112,858,000 shares (including 112,858,000) in this
99
private placement. Wuxi Industry Group plans to secondary holding 36,017,600 shares of A-stock
of the Company with 20% of proportion held after secondary holding; ROBERT BOSCH GMBH
(short for “German Bosch”) plans to secondary holding 76,840,400 shares of Weifu High-Tech
A-share of the Company with 14% of proportion held after secondary holding. The Company will
adjust the issued quantity correspondingly if events of ex-right and ex-dividend as dividend
payout, bonus share, capitalizing from reserves occurred during the period from price based date
to issued date.
(3) After the private placement, shares purchased by largest shareholder—Wuxi Industry Group
and German Bosch should no be transferred with 36 months since the date of issued closed. The
target placement will trade in Shenzhen Stock Exchange after the lock-in period.
(4) Shareholders before/after private placement should enjoy the accumulated retained profit
before placement after the placement finished.
(5) The share placing this time was purchased by cash.
(6) The effective term will within 12 months since the approval date of 2nd Extraordinary
Shareholders’ General Meeting of 2010 for Private Placement. The Company will adjust the
private placement if there have updated regulations or rules concerning the private placement.
(7) Fund raising by this offering will invest in:
R & D of the WAPS and industrialization; project of productively promotion for parts of
diesel common trail system
project of industrialization for tail treatment
project of engineering institution
construction project for industrial zone
R & D project of electrokinetic cell and electrokinetic cell materials
Project of equity acquisition: plans to purchased 1% equity of Bosch Auto Diesel System Co.,
Ltd. (“Bosch Diesel”) held by Bosch Company; plans to purchased 1.5% equity of Bosch Diesel
held by Industrial Group.
Supplement current capital
2. Progress
On 29 June 2011, the event of introduction of foreign strategy investor contained in plan of
privately offering, obtained the “Principal Agreement on Approval of German Bosch Co., ltd.
strategically invested Wuxi Weifu High-Tech Group Co., ltd.” from Ministry of Commerce.
German Bosch purchasing RMB common shares (A-stock) by privately offering from Wuxi Weifu
High-Tech Group Co., ltd. in cash, principal agreed by Ministry of Commerce.
Recently, the privately offering plan has been submitted to CSRC, and implementation plan will
base on the approval plan from CSRC.
3. The Company will change to Foreign owned Co., Ltd. by plan of privately offering.
8-02 Particulars of previous commitments
There were no significant commitments of the Company.
Note 9: Future events of balance sheet
9-01 Explanation on particulars of profit distribution of balance sheet
According to decisions of the 16th Meeting of the 6th Board of Directors of the Company held on March
17, 2011 the Company planed to dispatch cash dividend RMB 4.35 (tax included) per 10 shares to all
shareholders based on RMB 567,275,995 of total shares of Dec 31st of 2010, amounting to dividends
100
RMB 246,765,057.83 would be totally dispatched (tax included). This dispatch plan has been ratified by
Shareholders’ General Meeting dated 30th June 2011 and cash dividend was paid on 17 August 2011.
Note10: Explanation about main projects on financial sheet of parent company
(No special explanation on the following projects, unit: RMB’000)
10-01 Accounts receivable
(1) Disclose accounts receivable by type
2011-6-30
Type Book balance Bad debt provision
Amount Ratio (%) Amount Ratio (%)
Significant single amount and
withdrawal bad debt provision singly 45,886 5.46 45,886 100.00
Bad debt provision withdrawal by age
combination 788,401 93.72 1,231 0.16
Including: significant single amount 771,817 91.75 361 0.05
Minor single amount 16,584 1.97 870 5.25
Minor single amount but withdrawal
bad debt provision singly 6,870 0.82 6,870 100.00
Total 841,157 100.00 53,987 6.42
2010-12-31
Type Book balance Bad debt provision
Amount Ratio (%) Amount Ratio (%)
Significant single amount and
withdrawal bad debt provision singly 45,886 7.38 45,886 100.00
Bad debt provision withdrawal by age
combination 568,908 91.53 1,301 0.23
Including: significant single amount 560,363 90.16 655 0.12
Minor single amount 8,545 1.37 646 7.56
Minor single amount but withdrawal
bad debt provision singly 6,741 1.09 6,741 100.00
Total 621,535 100.00 53,928 8.68
Explanation on types of accounts receivable
Accounts receivable with over RMB 1 million of single amounts is accounts receivable of
significant single amount. To accounts receivable of significant single amount, provision
for bad debts is still made by aging analysis method because no objective evidence can
manifest that Contingent depreciation will exceed provision for bad debts by aging analysis
method.
(2)Bad debt provision of account receivable withdrawal by age combination
Aging 2011-6-30 2010-12-31
101
Bad debt Bad debt
Amount Ratio (%) Amount Ratio (%)
provision provision
Within 6
784,388 99.50 -- 563,142 98.99 --
months
6 months to 1
702 0.09 70 1,775 0.31 178
year
1 to 2 years 1,841 0.23 368 3,417 0.60 683
2 to 3 years 1,128 0.14 451 223 0.04 89
Over 3 years 342 0.04 342 351 0.06 351
Total 788,401 100.00 1,231 568,908 100.00 1,301
(3) There are no arrears from shareholders holding over 5% (5% included) of voting
shares of the Company.
(4) Particulars about accounts receivable of top 5 units
Relationship Proportion in
Unit with the Amount Service life total accounts
Company receivables (%)
Weichai Power spare Within 1
Client 172,696 20.53
resources(Weifang) Co., Ltd. year
Dongfeng Cummins Engine Co., Within 1
Client 98,987 11.77
Ltd. year
Within 1
Weifu Chang’an Subsidiary 80,115 9.52
year
FAW Jiefang Automotive Co., Ltd. Within 1
Client 71,926 8.55
Wuxi Diesel Engine Factory year
Within 1
Kunming Xitong Subsidiary 39,695 4.72
year
Total 463,419 55.09
10-02 Other account receivables
(1) Disclose other account receivables by types:
2011-6-30
Types Book balance Bad debt provision
Amount Ratio (%) Amount Ratio (%)
Significant single amount and
withdrawal bad debt provision
singly 2,000 1.14 2,000 100.00
Bad debt provision withdrawal by
age combination 170,381 97.49 -- --
Including: significant single amount 169,553 97.02 -- --
Minor single amount 828 0.47 -- --
Minor single amount but withdrawal 2,400 1.37 2,400 100.00
102
bad debt provision singly
Total 174,781 100.00 4,400 2.52
2010-12-31
Types Book balance Bad debt provision
Amount Ratio (%) Amount Ratio (%)
Significant single amount and
withdrawal bad debt provision
singly 2,000 1.41 2,000 100.00
Bad debt provision withdrawal by
age combination 137,067 96.89 -- --
Including: significant single amount 135,686 95.91 -- --
Minor single amount 1,381 0.98 -- --
Minor single amount but withdrawal
bad debt provision singly 2,400 1.70 2,400 100.00
Total 141,467 100.00 4,400 3.11
Explanation on types of other account receivables:
Other accounts receivable with over RMB one million of single amount is other
receivables of significant single amount. To other receivables of significant single amount,
provision for bad debts is still made by aging analysis method because no objective
evidence can manifest that Contingent depreciation will exceed provision for bad debts by
aging analysis method.
(2) There are no arrears from shareholders holding over 5% (5% included) of voting share
of the Company in the report period
(3) Particulars of amount of other receivables of top 5 units
Proportion in
total amount
Service
Unit 2011-6-30 of other Note
year
receivables
(%)
Within one
Weifu Leader 169,553 97.01 Subsidiary
year
Technology and Full provision for
Over 3 bad debts had been
technology center in 2,000 1.14
years made
Jiangsu Province
Over 3 Full provision for
Nanjing University 600 0.34
years bad debts had been
Over 3 Full provision for
Southeast University 600 0.34
years bad debts had been
103
Nanjing University of Over 3 Full provision for
600 0.34
Science years bad debts had been
Nanjing Polytechnic Over 3 Full provision for
600 0.34
University years bad debts had been
Total 173,953 99.51
10-03 Long-term equity investments
Accounting Investment Increase or
Invested unit 2010-12-31 2011-6-30
Method cost decrease
Weifu Jinning Cost 178,640 178,640 -- 178,640
Weifu Leader Cost 230,114 230,114 -- 230,114
Weifu Nano Cost 24,000 24,000 -- 24,000
Weifu Jida Cost 3,500 3,500 -- 3,500
Weifu Diesel System Cost 260,188 260,188 -- 260,188
Weifu Masan Cost 48,693 48,693 -- 48,693
Wei-Fu Changan Cost 70,902 70,902 -- 70,902
Weifu International Trade Cost 31,000 31,000 -- 31,000
Weifu ITM Cost 167,000 17,000 150,000 167,000
Weifu Schmitter Cost 8,100 8,100 -- 8,100
Weifu Tianli Cost 90,229 90,229 -- 90,229
Weifu Jialin Cost 4,000 4,686 -- 4,686
Weifu Tianshi Cost 5,200 -- 5,200 5,200
Kunming Xitong Cost 5,704 4,279 1,193 5,472
Weifu Autocam Equity 37,842 60,057 10,063 70,120
Bosch Diesel System Equity 523,695 1,056,283 -164,472 891,811
Zhonglian Automotive Electronic Co.,
Equity 120,124 439,767 288,285
Ltd. -151,482
Weifu Precision Machinery
Equity 2,000 18,788 4,659 23,447
Manufacturing Co., Ltd.
Guolian Securities Co., Ltd. Cost 12,000 12,000 -- 12,000
Guangxi Liufa Co., Ltd. Cost 1,600 1,600 -- 1,600
Chang Chai Group Finance Company Cost 800 800 -- 800
H&J VANGUARD Co., Ltd. Cost 33,000 33,000 -- 33,000
Nanjing Hengtai Insurance Brokers Co., Cost 1,000 1,000 1,000
Ltd. --
Jiangsu HSBC Insurance Agency Co., Cost 500 500 500
Ltd. --
Yangdong Co., Ltd. Cost 2,356 2,356 -- 2,356
Wuxi Xindong Technology Park Industry
Cost 5,000 5,000 -- 5,000
Co., Ltd.
Total 2,602,482 -144,839 2,457,643
Invested unit Equity Voting Explanation on Provision Accumulated Cash
104
ratio in rights ratio difference for provision for dividend
invested in invested between equity impairment impairment
unit (%) unit (%) ratio and in this
voting rights period
ratio in
invested unit
Weifu Jinning 80.00 80.00 -- -- -- --
Weifu Leader 94.81 94.81 -- -- -- --
Weifu Nano 80.00 80.00 -- -- 1,500 --
Weifu Jida 70.00 70.00 -- -- 3,500 --
Weifu Diesel --
System 100.00 100.00 -- -- --
Weifu Masan 100.00 100.00 -- -- -- --
Weifu Chang’an 100.00 100.00 -- -- -- --
Weifu
International --
Trade 100.00 100.00 -- -- --
Weifu ITM 100.00 100.00 -- -- -- --
Weifu Schmitter 45.00 45.00 -- -- -- --
Weifu Jialin 51.00 51.00 -- -- -- --
Weifu Tianli 51.00 51.00 -- -- -- --
Weifu Tianshi 52.00 52.00 -- -- -- --
Kunming 70.00 70.00 -- -- -- --
Xit
Weifu Autocam 50.00 50.00 -- -- -- --
Bosch Diesel
30.00 30.00 --
System -- -- 331,567
Zhonglian
Automotive
20.03 20.03 --
Electronic Co.,
Ltd. -- -- 235,651
Weifu Precision
Machinery
20.00 20.00 -- -- -- 2,040
Manufacturing
Co., Ltd.
Guolian
Securities Co., 1.20 1.20 -- -- -- --
Ltd.
Guangxi Liufa 1.22 1.22 -- -- 1,600 --
Co., Ltd.
Chang Chai
Group Finance -- -- 800 --
Company
H&J
VANGUARD
-- -- 33,000 --
Capital Co.,
Ltd. 11.72 11.72
Nanjing Hengtai
Insurance
Brokers Co., 1.85 1.85 -- -- 1,000 --
105
Ltd.
Jiangsu HSBC
Insurance
Agency Co.,
Ltd. 10.00 10.00 -- -- 500 --
Yangdong Co., -- -- 2,356 --
d
LWuxi Xidong
Technology
Park Industry
Co., Ltd. 1.43 1.43 -- -- -- --
Total -- 44,256 569,258
Explanation on long-term equity investment:
1. Weifu Schmitter: Weifu Schmitter is a Sino-foreign joint venture jointly set up by the Company,
Germany-based Schmitter Group Aktiengesellschaft and Shanghai Weishi Automobile
Technology Development Co., Ltd., which obtained the No. 320200400033433 Corporate
Business License issued by Wuxi Administration for Industry and Commerce, Jiangsu Province
on Sept. 17, 2009. The registered capital of this company was RMB 18 million, where the
Company invested RMB 8.10 million, representing 45% of the registered capital; Germany-based
Schmitter Group Aktiengesellschaft invested RMB 7.20 million, representing 40% of the
registered capital; Shanghai Weishi Automobile Technology Development Co., Ltd. invested
RMB 2.70 million, representing 15% of the registered capital. The RMB 2.70 million
contributions from the Company during the year was the first contribution. The Company was the
first largest shareholder of this company and held majority of voting rights in its board of
directors; therefore, the Company consolidated it into the consolidated financial statements as a
subsidiary since the date of its inception.
2. Weifu ITM: changed its name from “Wuxi ITM Information Machinery Development Co.,
Ltd.” to “Wuxi Weifu ITM Pressure Technology Co., Ltd.”. Relevant changes for Industrial and
Commerce have been completed on 14 March 2011. Capital increase of 0.15 billion yuan was
invested by the Company without equity proportion changed. After capital increased, the
company owns register capital of 0.16 billion yuan. Relevant changes for Industrial and
Commerce have been completed on 3 June 2011.
3. Weifu Tianshi: a company limited jointly invested by the Company and Anhui Quanchai Power
Co., Ltd., the Business License for Legal Entity (No. 341124000024350(1-1)) granted by
Quanjiao County Industrial and Commercial Administration Bureau was obtained on 13 April
2011. Register capital amounting to 10 million yuan, 5.2 million yuan invested by the Company,
52% of the total register capital take; Anhui Quanchai Power Co., Ltd. invested 4.8 million yuan
with 48% in total register capital. The company turns to be a subsidiary of the Company.
4. Kunming Xitong: In March of 2011, the Company entered into an equity transfer agreement
with Kunming Jinlida Machinery Co., ltd. Twenty percent equity of Kunming Xitong held by
Kunming Jinlida Machinery Co., ltd was agreed to transfer by the Company with price of 1.4688
million yuan. Relevant changes for Industrial and Commerce have been completed on 12 May
2011. After equity transfer, the Company holds 70% equity of the company. The company turns
to be a controlling subsidiary of the Company.
10-04 Operating income
(1) Operating income
106
Item January –June 2011 January –June 2010
Main business income 1,337,063 1,156,900
Other business income 235,081 171,025
Total operating income 1,572,144 1,327,925
Operating cost 1,276,038 1,170,004
(2) Main business (classified by business)
January –June 2011 January –June 2010
Industry
Operating income Operating cost Operating income Operating cost
Auto parts 1,337,063 1,058,761 1,156,900 1,000,967
(3) Main business (classified by product)
January –June 2011 January –June 2010
Product
Operating income Operating cost Operating income Operating cost
Auto system of fuel
injection 1,337,063 1,058,761 1,156,900 1,000,967
(4) Main business (classified by area)
January –June 2011 January –June 2010
Area
Operating income Operating cost Operating income Operating cost
Domestic sales 1,337,063 1,058,761 1,152,131 997,375
Overseas sales -- -- 4,769 3,592
Total 1,337,063 1,058,761 1,156,900 1,000,967
(5) Particulars about operating income of top 5 clients
Proportion in operating
Client Operating income
income (%)
Weichai Power (Weifang) spare Resources 13.09
Co., Ltd. 205,841
Dongfeng Cummins Engine Co., Ltd. 203,895 12.97
Weifu Diesel System 152,579 9.71
FAW Jiefang Automotive Co., Ltd. Wuxi 5.74
Diesel Plant 90,252
Bosch Diesel System 82,290 5.23
Total 734,857 46.74
10-05 Investment income
(1) Details of investment income
Item January –June January –June
2011 2010
Long-term equity investment income in cost method -- 1,810
Long-term equity investment income in equity method 267,750 176,383
Total 267,750 178,193
(2) Long-term equity investment income in cost method (Top 5)
107
Invested unit January –June 2011 January –June 2010
Guolian Securities Co., Ltd. -- 1,800
Hengtai Insurance Agency Co.,
ltd. -- 10
Total -- 1,810
(3) Long-term equity investment income in equity method (Top 5)
Invested unit January –June 2011 January –June 2010
Bosch Diesel System 167,094 116,047
Zhonglian Automotive Electronic
Co., Ltd. 84,168 48,000
Weifu Autocam Precision Machinery
10,064 8,606
Co., Ltd.
Weifu Precision Machinery
Manufacturing Co., Ltd. 6,699 3,091
Kunming Xitong -275 --
Total 267,750 175,744
Note: Only show invested units whose investment income takes over 5% of total
amount of profit, or top 5 invested units whose ratio of total amount of profit is
biggest.
10-06 Supplementary materials of cash flow statement
January –June January –June
Item
2011 2010
1. Net profit subject to cash flow arising from operating
activities
Net profit 368,206 196,788
Add: Provision for assets devaluation 221 -9,991
Depreciation of fixed assets, oil assets and productive
biological assets 33,897 38,314
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 “-”) -3,439 2,750
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 “-”) 10,795 14,134
Losses from investment(Income is listed with “-”) -267,750 -178,193
Decrease of deferred income tax(Increase is listed with “-”) 204 1,473
Increase of deferred income tax( (Decrease is listed with “-”) -- --
Decrease of inventory(Increase is listed with “-”) -8,485 -25,390
Decrease of operating receivables(Increase is listed with “-”) -196,683 -315,184
Increase of operating payables(Decrease is listed with “-”) 165,594 169,799
108
Other -- --
Net cash generated from operations 102,895 -105,165
2. Net increase in cash /cash equivalent
Balance of cash at period-end 172,796 85,671
Less: Balance of cash at period-beginning 85,170 85,791
Add: Balance of cash equivalent at period-end
Less: Balance of cash equivalent at period-beginning
Net increase in cash /cash equivalent 87,626 -120
2011-6-30 2010-12-31
3. Constitution of cash and cash equivalents
Cash balance listed in balance sheet 230,305 149,944
Less: Guarantee of bank acceptance bill not conforming to
the definition of cash 57,510 64,774
Balance of cash and cash equivalents listed in cash flow
statement 172,795 85,170
Note 11: Supplementary information
11-01 Non-recurring gains and losses
Unit: RMB’000
January –June January –June
Items
2011 2010
Gains and losses from the disposal of non-current assets 3,621 3,987
Governmental subsidy reckoned into current gains and
losses, but closely relevant to the Company’s business except
for the governmental subsidy enjoyed in quota or ration
according to the national general standards 1,815 --
Gains from fair value of net assets recognizable by the
investee enjoyed while the investment costs of subsidiaries,
affiliated enterprise and joint-stock enterprises of the
company were smaller than the obtained investment 1,241 --
Net amount of other non-operating income and expenditure
beside for the above items -56 -564
Sub total 6,621 3,423
Less: Impact on income tax 913 549
Net non-recurring gains and losses 5,708 2,874
The net non-recurring gains and losses attributable to
minority shareholders 425 -87
The net non-recurring gains and losses attributable to
common stockholders 5,283 2,961
Net profit attributable to common shareholders deducting
non-recurring gain or loss 639,381 316,147
Impact on net profit from net non-recurring profit and loss
(%) 0.82 0.93
Note: The "+" in table means the revenue and income, "-" indicates losses or
109
expenses.
11-02 Return on equity and earnings per share
Net asset yield Earnings per share
Profit in the report period based on weighted Basic earnings per Diluted earnings
average (%) share per share
Net profit attributable to common
shareholders of the Company 14.56 1.14 1.14
Net profit attributable to common
stockholders of the Company
deducting non-recurring gains and loss 14.44 1.13 1.13
11-03 Exception of major accounting statements items and explanation on reasons
1. Account receivable:
Account receivable at end of June 2011 increased RMB 455,750,200 over end of 2010 with
45.58% up mainly due to the favorable sales in first half year of 2011, the business income
correspondingly increased.
2. Account paid in advance:
Account paid in advance at end of June 2011 increased RMB 31,807,200 over end of 2010 with
30.24% up. Mainly because the fixed assets renewal of Weifu Jinning and Weifu ITM was
increase he equipment account that paid in advance.
3. Dividend receivable:
Dividend receivable at end of June 2011 will recover in 2nd half year of 2011.
4. Other current assts:
Other current assets at end of June 2011 increased RMB 7,201,500 over end of 2010 with
78.19% up. Mainly because the export tax refund receivable for Weifu International Trading
was increased.
5. Construction in progress:
Construction in progress at end of June 2011 increased RMB 236,883,600 over end of 2010
with 166.52% up. Mainly because construction for industrial zone and technology reforming
were invested by parent company.
6. Short-term borrowings:
Short-term borrowings at end of June 2011 increased RMB 235,000,000 over end of 2010 with
87.04% up. Mainly because the Company borrowing from bank for insufficient self-owned
capital that resulted from resolving the business operation.
7. Note payable:
Note payable at end of June 2011 decreased RMB 134,547,200 over end of 2010 with 34.50%
down. Mainly because the notes have due for payment.
8. Account received in advance:
Account received in advance at end of June 2011 increased RMB 20,094,900 over end of 2010
with 47.54% up. Mainly refers to the amount for goods received in advance.
9. Dividend payable:
Cash dividend payable at end of June 2011 has been paid on 17 August.
10.Sales expenses:
110
Sales expenses at first half year of 2011 decreased RMB 24,746,200 over same period of last
year with 32.88% down. Mainly due to the decrease of expense for “three guarantee”.
11. Assets impairment losses:
Losses of assets disposal at first half year of 2011 increase 100.57% over that of last
year. Mainly because being restructuring the use of sluggish inventory and realizing
the sluggish fixed assts that disposed in first half year of 2010, the impairment
provision reversal correspondingly.
12. Investment income:
Investment income at first half year of 2011 increased RMB 91,693,100 over same period of
last year with 45.41% up. Mainly due to the investment income increased in invested
company. .
13. Non-operating income:
Non-operating income at first half year of 2011 increased RMB 6,611,900 over same period of
last year with 982.54% up. Mainly because the Company gains net income from fixed assets
disposal of RMB 3,485,000, government granted of RMB 1,815,000 was increased and equity
transfer of Kunming Xitong in 2011 was generated income of RMB 1,241,000.
14. Non-operating expenses:
Non-operating expenses at first half year of 2011 decreased RMB3, 406,500 over same period
of last year with 44.80% down. Mainly because the Company net losses from fixed assets sales
decreased RMB 3,453,000.
15.Income tax:
Income tax at first half year of 2011 increased RMB70, 288,600 over same period of last year
with 280.53% up. Mainly because the Company gains a benefit in this period, then the income
tax gains a correspondingly growth.
111
