无锡威孚高科技集团股份有限公司
Weifu High-Technology Group Co. Ltd.ANNUAL REPORT 2018
April 2019
Section I. Important Notice Contents and Paraphrase
Board of Directors Supervisory Committee all directors supervisors and senior executives of
Weifu High-Technology Group Co. Ltd. (hereinafter referred to as the Company) hereby
confirm that there are no any fictitious statements misleading statements or important
omissions carried in this report and shall take all responsibilities individual and/or joint for
the reality accuracy and completion of the whole contents.
Chen Xuejun Principal of the Company Ou Jianbin person in charger of accounting works
and Ou Jianbin person in charge of accounting organ (accounting principal) hereby confirm
that the Financial Report of 2018 Annual Report is authentic accurate and complete.Other directors attending the Meeting for annual report deliberation except for the followed
Name of director absent Title for absent director Reasons for absent Attorney
Zhang Xiaogeng Director Travel for business Hua Wanrong
Concerning the forward-looking statements with future planning involved in the Report they
do not constitute a substantial commitment for investors. Investors should be cautious with
investment risks. The Company described the risks that might occurred in the operation in
the report “IX- The Company’s future development prospects” of “Section IV- Discussion and
Analysis of the Operation” and “X. Risks with financial instrument concerned” in Section XI.
Financial Report as well as the risk management policy the Company will take in order to
reduce those risks. Investors should pay attention to relevant content.The China Securities Journal Securities Times Hong Kong Commercial Daily and Juchao
Website are the information disclosure media appointed by the Company all information
should be prevail on the above mentioned media investors are advice to pay attention on
investment risks.The profit distribution plan that deliberated and approved by the Board is: based on total
stock issue of 1008950570 distributed 12.00 Yuan (tax included) bonus in cash for every
10-share hold by all shareholders 0 shares bonus issued (tax included) and no capitalizing of
common reserves carried out.
Contents
Section I Important Notice Contents and Paraphrase ................................................................ 2
Section II Company Profile and Main Finnaical Indexes ............................................................ 5
Section III Summary of Business .................................................................................................... 9
Section IV Discussion and Analysis of Operation ....................................................................... 12
Section V Important Events .......................................................................................................... 26
Section VI Changes in shares and particular about shareholders ............................................... 40
Section VII Preferred Stock ………………………………………………………………………25
Section VIII Particulars about Directors SupervisorsSenior Executives and Employees ...... 46
Section IX Corporate Governance ................................................................................................. 56
Section X Corporate Bond .............................................................................................................. 62
Section XI Financial Report ............................................................................................................ 63
Section XII Documents Available for Reference ......................................................................... 194
Paraphrase
Items Refers to Contents
Company The Company Weifu High-technology Refers to Weifu High-Technology Group Co. Ltd.
Weifu Group Refers to Wuxi Weifu Group Co. Ltd.Industry Group Refers to Wuxi Industry Development Group Co. Ltd.Robert Bosch Robert Bosch Company Refers to Robert Bosch Co. Ltd. ROBERT BOSCH GMBH
Bosch Automobile Diesel Bosch Diesel System Refers to Bosch Automobile Diesel System Co. Ltd.
Weifu Leader Refers to Wuxi Weifu Leader Catalytic Converter Co. Ltd.Weifu Jinning Refers to Nanjing Weifu Jinning Co. Ltd.Weifu Chang’an Refers to Wuxi Weifu Chang’an Co. Ltd.Weifu Mashan Refers to Weifu Mashan Pump Glib Co. Ltd.Weifu ITM Refers to Wuxi Weifu ITM Supercharging Technique Co. Ltd.Weifu Tianli Refers to Ningbo Weifu Tianli Supercharging Technique Co. Ltd.Weifu Schmidt Refers to Wuxi Weifu Schmidt Power System Spare Parts Co. Ltd.Weifu International Trade Refers to Wuxi Weifu International Trade Co. Ltd.Weifu Autocam Refers to Wuxi Weifu-Autocam Fine Machinery Co. Ltd.Weifu Environment Refers to Wuxi Weifu Environment Catalyst Co. Ltd.Weifu Precision Machinery Refers to Weifu Precision Machinery Manufacturing Co. Ltd.Zhonglian Electronic Refers to Zhonglian Automobile Electronic Co. Ltd.Taiji Industry Refers to Wuxi Taiji Industry Corporation Limited
CSRC Refers to China Securities Regulatory Commission
SZ Stock Exchange Refers to Shenzhen Stock Exchange
Jiangsu Gongzheng Refers to
Jiangsu Gongzheng Tianye Certified Public Accountants
(Special General Partnership)
The reporting period Refers to From 1 Jan. 2018 to 31 Dec. 2018
Section II Company Profile and Main Financial Indexes
I. Company information
Short form of the stock Weifu High- Tech Su Weifu-B Stock code 000581 200581
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in Chinese) 无锡威孚高科技集团股份有限公司
Short form of the Company (in Chinese) 威孚高科
Foreign name of the Company (if applicable) WEIFU HIGH-TECHNOLOGY GROUP CO.LTD.
Short form of foreign name of the Company (if
applicable)
WFHT
Legal representative Chen Xuejun
Registrations add. No.5 Huashan Rd. New District Wuxi City
Code for registrations add 214028
Offices add. No.5 Huashan Rd. New District Wuxi City
Codes for office add. 214028
Company’s Internet Web Site http://www.weifu.com.cn
E-mail Web @ weifu.com.cn
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Zhou Weixing Yan Guohong
Contact add. No.5 Huashan Road New District Wuxi City No.5 Huashan Road New District Wuxi City
Tel. 0510-80505999 0510-80505999
Fax. 0510-80505199 0510-80505199
E-mail wfjt@public1.wx.js.cn wfjt@public1.wx.js.cn
III. Information disclosure and preparation place
Newspaper appointed for information disclosure China Securities Journal; Securities Times; Hong Kong Commercial Daily
Website for annual report publish appointed by CSRC http://www.cninfo.com.cn
Preparation place for annual report Office of the Board of Directors
IV. Registration changes of the Company
Organization code 91320200250456967N
Changes of main business since
listing (if applicable)
No change
Previous changes for controlling
shareholders (if applicable)
Controlling shareholder of the Company was Weifu Group before 2009. and in 2019
controlling shareholder changed to Industry Group since 31 May 2009 due to the merged of
Industry Group and Weifu Group. Weifu Group and Industry Group were wholly state-owned
companies of Wuxi State-owned Assets Supervision & Administration Commission of State
Council therefore actual controller of the Company turns to Wuxi State-owned Assets
Supervision & Administration Commission of State Council.V. Other relevant information
CPA engaged by the Company
Name of CPA Jiangsu Gongzheng Tianye Certified Public Accountants (Special General Partnership)
Offices add. for CPA
10/F No.5 Building Jiakaicheng Fortune Center Jingrong 3rd Street Taihu Xincheng Binghu District
Wuxi Jiangsu Province
Signing Accountants Bo Lingjing Meng Yin
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
□ Yes √ No
2018 2017
Changes over
last year
2016
Operating income (RMB) 8721674671.18 9017280159.80 -3.28% 6422700399.27
Net profit attributable to shareholders of the listed
company(RMB)
2396077415.21 2571339490.04 -6.82% 1672224317.05
Net profit attributable to shareholders of the listed
company after deducting non-recurring gains and
losses(RMB)
2014800714.20 2322218596.99 -13.24% 1435963836.76
Net cash flows arising from operating activities
(RMB)
874381526.63 957697901.07 -8.70% 527344364.04
Basic earnings per share (RMB/Share) 2.37 2.55 -7.06% 1.66
Diluted earnings per share (RMB/Share) 2.37 2.55 -7.06% 1.66
Weighted average ROE 15.48% 18.52% -3.04% 13.53%
End of 2018 End of 2017
Changes over
end of last
year
End of 2016
Total assets (RMB) 20892041460.30 20231006224.36 3.27% 17263771897.78
Net assets attributable to shareholder of listed
company (RMB)
15913828778.82 14835673669.75 7.27% 12927344292.47
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.
VIII. Quarterly main financial index
In RMB
1st Q 2nd Q 3rd Q 4th Q
Operating income 2391982640.39 2568819250.60 1898914219.62 1861958560.57
Net profit attributable to shareholders of the
listed company
784228178.43 761014526.49 510387493.91 340447216.38
Net profit attributable to shareholders of the
listed company after deducting
non-recurring gains and losses
691078505.55 687786996.02 452953425.86 182981786.77
Net cash flows arising from operating
activities
86416705.11 292506985.37 127146119.98 368311716.17
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the company’s quarterly report and semi-annual report
□Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item 2018 2017 2016 Note
Gains/losses from the disposal of non-current asset
(including the write-off that accrued for impairment
of assets)
96162222.57 -3233320.26 -6229604.16
Including gains from
the compensation
of expropriation of
housing and land
of Weifu Jinning
Governmental subsidy reckoned into current
gains/losses (not including the subsidy enjoyed in
quota or ration according to national standards
which are closely relevant to enterprise’s business)
48811314.99 48162140.65 43963942.28
Profit and loss of assets delegation on others’
investment or management
311261918.65 221705034.02 205047032.68
Held transaction financial asset gains/losses of
changes of fair values from transaction financial
liabilities and investment gains from disposal of
transaction financial asset transaction financial
liabilities and financial asset available for sales
exclude the effective hedging business relevant with
normal operations of the Company
16880487.62 24625516.88 31650057.18
Including the
gain/loss of fair value
changes from
derivative financial
liability
Switch back of provision for depreciation of
account receivable which was singly taken
depreciation test
466200.00 1756052.60 2338453.69
Other non-operating income and expenditure except
for the aforementioned items
-597126.12 4479807.85 4481317.09
Other gain/loss qualify the definition of
non-recurring gains/losses
353111.39
The amount collected
in the period while
has been charged-off
previous
Relocation expenses -57116.41
Less: Impact on income tax 70234077.14 43481221.93 42191376.78
Impact on minority shareholders’ equity
(post-tax)
21827350.95 4893116.76 2742225.28
Total 381276701.01 249120893.05 236260480.29 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss explain reasons
□ Applicable √ Not applicable
In reporting period the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss
Section III Summary of Business
I. Main businesses of the company in the reporting period
(i) Main business of the Company
1. The Company belongs to auto parts industry and its main business products include diesel fuel injection system
products exhaust after-treatment system products and air management system products.
2. Main uses of the Company's products
(1) The diesel fuel injection system products are widely used in different power diesel engines supporting all types
of trucks passenger cars buses construction machinery marine and generator sets. The company not only makes
products matching with the main engines used at home but also exports some products to the Americas Southeast
Asia and the Middle East. The products meet the needs of national emission standards.
(2) The auto exhaust after-treatment system products: mainly support the major manufacturers of automobile
motorcycle and general machinery at home which meet the national emission standards.
(3) The Air management system products (supercharger): matches with most of the domestic small-bore diesel
engine plants and some six-cylinder diesel engine manufacturers and meet the needs of the light and heavy
commercial vehicles and some passenger cars and meets the national emission standards.
3. Business model of the Company
The Company follows the operating philosophy of making competitive products creating famous brands striving
for first choices and creating value for the users implements the business model that parent company unifies the
management and subsidiaries decentralize the production. Namely the group company is responsible for making
strategic development planning and operation targets and making the unified management instruction and
assessment for the finance significant personnel management core raw materials quality control and technology
of the subsidiaries. The subsidiaries arrange production based on the order management model of market which
makes the subsidiaries keep the consistent quality with the company helps keep abreast of customer needs and
saving logistics costs maintain the timeliness of products production and supply and improve the company’s
economic benefits.
During the reporting period the Company’s main business and business model have no significant changes.
(ii) Development stage and periodic characteristics of the industry the Company involves and the Company's
In the past 40 years of reform and opening up China’s economy has shifted from a high-speed growth stage to a
high-quality development stage. Although the market may continue to show unexpected changes in the future we
believe that the fundamentals of China’s healthy and stable economic development will not change and the
Chinese economy is fully capable of maintaining a reasonable growth range. At the same time the Chinese
automobile market has entered a period of steady growth since 2010 in order to solve the increasingly severe
traffic jams environmental pollution energy conservation and consumption reduction the automobile industry
has accelerated the technology upgrades and the automobile new energy applications are rapidly advancing
nowadays the artificial intelligence internet of things and other technologies develop rapidly and accelerate the
penetration into various fields it has reached a consensus on the development of intelligent networked
automobiles which promotes the development environment of intelligent networked automobiles to become
increasingly perfect.
After 60 years of hard work the company has become a backbone enterprise of core parts of domestic auto
(power engineering) 80% products of the existing Automobile components core business are matched with the
electronic control systems and electronically controlled. The company will actively respond to the national new
energy and intelligent network strategy take the Automobile components industry chain as the core and other
related fields as supplements lay out new energy auto drive technology and promote the hydrogen fuel cell
technology and intelligent network technology research and development capacity building. Market objectives:
consolidate the existing business market position and take a position in the new business potential market.Technical objectives: strengthen the technical strength of the pillar business lay out the new business frontier
technology and actively expand new areas based on the existing business. Strive to achieve the goal of becoming
a leader in the auto core parts enterprises.II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Equity assets No major change
Fixed assets No major change
Intangible assets No major change
Construction in progress
Construction in progress at period-end has major growth over that of year-begin mainly
because the equipment for technical innovation and expansion increased
2. Main overseas assets
√Applicable □Not applicable
Content of
assets
Reason for the formation Asset size Location
Operation
mode
Control
measure to
ensure the
security of
assets
Income
(RMB)
Foreign
assets
accounted
for net
assets of the
Company
Whether
exist
significant
impairment
risk (Y/N)
The Company
paid
investment of
24 million US
dollars on May
21 2018 to
become a
shareholder of
Protean
E-round
For the overall
arrangement of the
company’s future
development the 15th
meeting of the eighth
board of directors of the
company reviewed and
approved the Proposal on
Foreign Investment. The
company will invest 30
The Company
invested US$24
million and
obtained the
stock right of
subscribing
10212765
shares of
E-round
preferred stock
the
United
States
Equity
of
preferred
stock
The Company
will pay full
attention to
changes in the
industry and the
market give
play to its own
advantages and
actively prevent
and resolve
No 0.04% Yes
preferred stock. million US dollars in the
E-round preferred stock
issued by Protean and the
two parties will establish a
Sino-foreign joint venture
in China. According to the
investment cooperation
agreement the company
paid the initial investment
of 24 million US dollars on
May 21 2018. The
company obtained the
equity certificate of
subscribing 10212765
shares of E-round
preferred stock issued by
Protean and became a
shareholder of the Protean
E-round preferred stock
with the equity certificate
number of Number E-1.issued by
Protean.various risks.III. Core Competitiveness Analysis
The Company is a high technology enterprise with a number of patented technologies. For years based on the
scientific research as National Enterprise Technical Center Post-doctor Scientific Research Station Jiangsu
Provincial Engineering and Technology Research Center and Industrialization Base of National Hi-Tech Research
and Development Achievement we have became the backbone enterprise of the core parts of domestic
automobile (power engineering) after 60 years of cultivation. 80% of the current core business of auto parts are
matching with electronic control system and with electronic control realized which owes a leading position in
self-owned brand.The company lays emphasis on the manufacturing quality management relies on WPS (Weifu production system)
and manufacturing information platform with Weifu characteristics to continuously improve the production
system structure personnel organization operation mode and market supply and demand relationship and
continues to carry out the process quality indicator quantitative management and process management and
improve production efficiency product quality and product delivery capabilities and the company’s
manufacturing quality control capabilities are further improved.The company pays attention to the business operation quality of and lays emphasis on the resource integration. At
present the company has established a high-speed stable and reliable network environment and an efficient data
center successfully built the ERP platform opened up the value chain and realized the integration of financial
services which made the information resources fully shared and the company’s comprehensive operational
management level has been further improved.The company pays attention to the construction of core talent system. At present it has built a relatively complete
human resource management platform to strive to build a high-quality core talent team which provides a strong
human resource guarantee for the long-term development of the company.
During the reporting period the company’s core competitiveness (in terms of product manufacturing quality
improvement personnel quality improvement resource utilization etc.) has been improved.
Section IV Discussion and Analysis of the Operation
1. Introduction
(i) Overall situation
In 2018 the macroeconomic growth rate declined. China’s automobile production and sales growth rate was
lower than that estimated at the beginning of the year the total quantity showed the first negative growth in 28
years. According to the data released by the China Association of Automobile Manufacturers the annual
production and sales volume of automobiles were 27.809 million and 28.081 million respectively declined by
4.2% and 2.8% on a year-on-year basis and the annual production and sales volume of passenger vehicles were
respectively 23.529 million and 23.71 million respectively declined by 5.2% and 4.1% over the same period of
the previous year while the annual production and sales volume of commercial vehicles were respectively 4.28
million and 4.371 million respectively increased by 1.7% and 5.1% over the same period of the previous year
and the growth rate declined.
Facing the complicated market environment the company worked hard to overcome difficulties and maintain the
overall stability of comprehensive economic operation. During the reporting period the company achieved
operating income of 8.722 billion yuan a decline of 3.28% on a year-on-year basis realized total profit of 2.602
billion yuan a decline of 8.06% on a year-on-year basis; total assets were 20.892 billion yuan an increase of
3.27% on a year-on-year basis; the owner’s equity attributable to the parent company was 15.914 billion yuan an
increase of 7.27% on a year-on-year basis.(ii) Main work carried out
1. Actively responded to the severe market challenges and fully guaranteed the stability of main business
Under the influence of the decline in automobile market and engine market the company responded positively
focused on the core market continuously improved the manufacturing system strengthened the process control
capability improved the delivery capability of leading products improved the physical quality of key products
and ensured the total amount of main business products. The market share of fuel injection system related
products and supercharger products remained relatively stable and had a certain growth throughout the year the
production and sales volume of multiple-piston pumps for fuel injection systems still exceeded 2 million units
and the sales of supercharger products increased by 10% on a year-on-year basis. Due to market fluctuations the
market share of post-processing system business has slightly declined.
2. Took advantage of information technology means to gradually establish an operation management system to
further enhance the company’s operating efficiency
The company continuously promoted the optimization and upgrading of management actively sorted out the
management duties standardized and optimized the existing system processes planned and designed the
company’s financial reform and transformation built the company’s financial sharing center established the
company’s procurement and sharing platform project further improved the human resource management system
strengthened the security construction of the Group’s information system thus the comprehensive management
capability of the enterprise has been further improved.
3. Started the future layout established the “double-engine-driven” strategic model of “new business becomes along-term new engine and traditional businesses guarantee the enterprise forward again” and took the auto parts
industry chain as the core and other related fields as supplements to further improve the R&D system promote the
research and development of platform products quickly deploy the forward-looking projects and actively
promote the investment cooperation of new business.II. Main business analysis
1. Introduction
See the “I-Introduction” in “Discussion and Analysis of the Operation”
2. Revenue and cost
(1) Constitute of operation revenue
In RMB
2018 2017
Increase/decrease
y-o-y Amount
Ratio in operation
revenue
Amount
Ratio in operation
revenue
Total operation
revenue
8721674671.18 100% 9017280159.80 100% -3.28%
According to industries
Automobile
components
8262954878.87 94.74% 8535599504.73 94.66% -3.19%
Other business 458719792.31 5.26% 481680655.07 5.34% -4.77%
According to products
Automobile fuel
injection system
5027966298.51 57.65% 5588110745.38 61.97% -10.02%
Air management
system
440331903.61 5.05% 380600452.78 4.22% 15.69%
Automotive post
processing system
2794656676.75 32.04% 2566888306.57 28.47% 8.87%
Other business 458719792.31 5.26% 481680655.07 5.34% -4.77%
According to region
Domestic sales 8337832868.65 95.60% 8698826555.01 96.47% -4.15%
Foreign sales 383841802.53 4.40% 318453604.79 3.53% 20.53%
(2) The industries products or regions accounting for over 10% of the company’s operating income or
operating profit
√Applicable □ Not applicable
In RMB
Operating
revenue
Operating cost Gross profit ratio
Increase/decrease
of operating
revenue y-o-y
Increase/decrease
of operating cost
y-o-y
Increase/decrease
of gross profit
ratio y-o-y
According to industries
Automobile
components
8262954878.87 6334140163.43 23.34% -3.19% -1.35% -1.43%
According to products
Automobile fuel
injection system
5027966298.51 3558735397.17 29.22% -10.02% -8.36% -1.29%
Air management
system
440331903.61 316694283.37 28.08% 15.69% 10.93% 3.09%
Automotive post
processing
system
2794656676.75 2458710482.89 12.02% 8.87% 9.17% -0.24%
According to region
Domestic sales 8337832868.65 5968730399.02 28.41% -4.15% -2.40% -1.28%
Foreign sales 383841802.53 365409764.41 4.80% 20.53% 19.71% 0.66%
Under circumstances of adjustment in reporting period for statistic scope of main business data adjusted main business based on
latest one year’s scope of period-end
□ Applicable √ Not applicable
(3) Income from physical sales larger than income from labors
√ Yes □ No
Industries Item Unit 2018 2017
Increase/decrease
y-o-y
Fuel injection
system—multiple-piston
pump
Sales volume In 10 thousand units 244 266 -8.27%
Output In 10 thousand units 245 262 -6.49%
Storage In 10 thousand units 17 16 6.25%
Fuel injection
system—injector
Sales volume In 10 thousand sets 227 227
Output In 10 thousand sets 223 209 6.70%
Storage In 10 thousand sets 12 16 -25.00%
After-treatment
system—purifier
Sales volume In 10 thousand pieces 270 293 -7.85%
Output In 10 thousand pieces 220 286 -23.08%
Storage In 10 thousand pieces 28 78 -64.10%
Air management
system—turbocharger
Sales volume In 10 thousand units 72 65 10.77%
Output In 10 thousand units 73 68 7.35%
Storage In 10 thousand units 14 13 7.69%
Reasons for y-o-y relevant data with over 30% changes
□Applicable √Not applicable
(4) Fulfillment of the company’s signed significant sales contracts up to this reporting period
□ Applicable √ Not applicable
(5) Constitute of operation cost
Classification of industries and products
In RMB
Industries Item
2018 2017
Increase/decrease
y-o-y Amount
Ratio in operation
cost
Amount
Ratio in operation
cost
Automobile
components
Direct material 4879991330.39 77.04% 5014924816.81 78.10% -2.69%
Automobile
components
Labor cost 601322359.87 9.49% 548188077.87 8.54% 9.69%
Automobile
components
Depreciation 171085221.37 2.70% 165645016.82 2.58% 3.28%
Automobile
components
Varieties of
consumption
681741251.80 10.76% 692224373.76 10.78% -1.51%
In RMB
Products Item
2018 2017
Increase/decrease
y-o-y Amount
Ratio in
operation cost
Amount
Ratio in
operation cost
Fuel injection system
Direct
material
2306305694.10 64.81% 2661656663.54 68.54% -13.35%
Fuel injection system Labor cost 483559687.15 13.59% 459976070.97 11.84% 5.13%
Fuel injection system Depreciation 136068633.86 3.82% 134028364.58 3.45% 1.52%
Fuel injection system
Varieties of
consumption
632801382.06 17.78% 627703331.82 16.16% 0.81%
Air management system
Direct
material
270908557.76 85.54% 235640433.48 82.54% 14.97%
Air management system Labor cost 20768561.86 6.56% 23813534.44 8.34% -12.79%
Air management system Depreciation 14081316.71 4.45% 13761987.24 4.82% 2.32%
Air management system
Varieties of
consumption
10935847.04 3.45% 12265632.65 4.30% -10.84%
Exhaust after-treatment
system
Direct
material
2302777078.53 93.66% 2094875783.60 93.02% 9.92%
Exhaust after-treatment
system
Labor cost 96994110.86 3.94% 88220371.79 3.92% 9.95%
Exhaust after-treatment
system
Depreciation 20935270.80 0.85% 17854665.00 0.79% 17.25%
Exhaust after-treatment
system
Varieties of
consumption
38004022.70 1.55% 51185446.15 2.27% -25.75%
(6) Whether the changes in the scope of consolidation in Reporting Period
√Yes □No
Changes of consolidate
scope
Enterprise Equity obtained
method
Time when equity
obtained
Contribution ratio
Consolidate scope
increased
Nanchang Weifu Leader Auto Parts &
Components Co. Ltd.
Newly established 2018-3-8 100.00%
(7) Major changes or adjustment in business product or service of the Company in Reporting Period
□ Applicable √ Not applicable
(8) Major sales and main suppliers
Major sales client of the Company
Total top five clients in sales (RMB) 4671119701.53
Proportion in total annual sales volume for top five clients 53.56%
Ratio of the related sales in total annual sales from top five clients 39.48%
Information of top five clients of the Company
Serial Name Sales (RMB) Proportion in total annual sales
1 Bosch Diesel System 2722919316.33 31.22%
2 Robert Bosch 720709408.92 8.26%
3 Client III 692335425.30 7.94%
4 Client IV 306289484.81 3.51%
5 Client V 228866066.17 2.62%
Total -- 4671119701.53 53.56%
Other situation of main clients
√Applicable □Not applicable
The Company has association with Bosch Diesel System and directors supervisors senior executives core
technicians and actual controller of the Company have no equity in main suppliers directly or indirectly.Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 2105290240.20
Proportion in total annual purchase amount for top five suppliers 33.36%
Ratio of the related purchase in total annual purchase amount from top five suppliers 26.86%
Information of top five suppliers of the Company
Serial Suppliers Purchasing amount (RMB) Ratio in annual total purchasing amount
1 Weifu Environment 1515266186.15 24.01%
2 Robert Bosch 179841237.03 2.85%
3 Supplier 1 145919020.67 2.31%
4 Supplier 2 141439877.36 2.24%
5 Supplier 3 122823918.99 1.95%
Total -- 2105290240.20 33.36%
Other notes of main suppliers of the Company
√Applicable □Not applicable
The Company has association with Weifu Environment and Robert Bosch Company and directors supervisors
senior executives core technicians and actual controller of the Company have no equity in main suppliers directly
or indirectly.
3. Expenses
In RMB
2018 2017
Increase/decrease
y-o-y
Note of major changes
Sales expenses 237839472.28 194854780.37 22.06%
Salary and wages expenses as well as
the guarantee fee increased
Administration expenses 585005385.75 539493552.86 8.44%
Financial expenses -17393580.55 7316996.79 -337.71% Interest income of deposit increased
R&D expenses 403263972.20 391315234.75 3.05%
4. R&D investment
√Applicable □ Not applicable
During the reporting period the Company focused on the enterprise technology innovation strategy and planning
adhered to the technological innovation accelerated the research and development of key projects and products
put forth effort to improve the industrialization of new products and enhanced new power for the enterprises
development. The traditional energy products are mainly power engineering which meet the requirements of
energy saving and emission reduction and continue to maintain the leading position in the industry. At the same
time the company actively deploys new energy driving technologies and promotes the research and development
and capacity building in new fields such as hydrogen fuel cell technology and intelligent network. The smooth
implementation of these projects guarantees the company’s leading position in the auto parts industry in the
future.
R&D investment of the Company
2018 2017 Change ratio
Number of R&D (people) 1109 1132 -2.03%
Ratio of number of R&D 20.08% 20.92% -0.84%
R&D investment (Yuan) 403263972.20 391315234.75 3.05%
R&D investment accounted for R&D income 4.62% 4.34% 0.28%
R&D investment capitalization (Yuan) 0.00 0.00 0.00%
Capitalization R&D investment accounted for R&D
investment
0.00% 0.00% 0.00%
The reason of great changes in the proportion of total R&D investment accounted for operation income than last year
□ Applicable √ Not applicable
Reason for the great change in R&D investment capitalization rate and rational description
□ Applicable √ Not applicable
5. Cash flow
In RMB
Item 2018 2017
Increase/decrea
se y-o-y
Subtotal of cash inflow arising from operating activities 8192375196.74 7864444717.03 4.17%
Subtotal of cash outflow arising from operating activities 7317993670.11 6906746815.96 5.95%
Net cash flows arising from operating activities 874381526.63 957697901.07 -8.70%
Subtotal of cash inflow from investing activities 12682037088.99 10609070063.25 19.54%
Subtotal of cash outflow from investing activities 12888463580.85 11859361718.71 8.68%
Net cash flows arising from investing activities -206426491.86 -1250291655.46
Subtotal of cash inflow from financing activities 471198213.94 254520000.00 85.13%
Subtotal of cash outflow from financing activities 1686046969.98 799122114.37 110.99%
Net cash flows arising from financing activities -1214848756.04 -544602114.37
Net increase of cash and cash equivalents -543765214.73 -846784323.89
Main reasons for y-o-y major changes in aspect of relevant data
√Applicable □ Not applicable
Cash outflow from financing activities has major growth mainly due to the greatly increase of profit distribution in the year
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
√Applicable □Not applicable
Mainly due to the investment and specific influencing factors found more in supplementary information of cash
flow statement carried in Annotation of the Report.III. Analysis of the non-main business
√Applicable □Not applicable
In RMB
Amount
Ratio in
total profit
Note Whether be sustainable
Investment income 1955668055.33 75.15%
Income mainly form the two joint
ventures (Bosch Automobile Diesel
and Zhonglian Electronic) with stock
participated by the Company
The joint ventures Bosch Automobile
Diesel and Zhonglian Electronic have
stable production and operation so
the investment returns can be
sustained and stable
Gain/loss of fair
value changes
-490329.13 -0.02%
Asset impairment 250873745.84 9.64%
Non-operating
income
1264830.90 0.05%
Non-operating
expense
9977159.55 0.38%
IV. Assets and liability
1. Major changes of assets composition
In RMB
End of 2018 End of 2017
Ratio
changes
Note of major changes
Amount
Ratio in
total
assets
Amount
Ratio in
total
assets
Monetary funds 2616321740.73 12.52% 3118709412.83 15.42% -2.90%
Account receivable 1919793266.91 9.19% 1995577830.90 9.86% -0.67%
Inventory 1438528714.59 6.89% 1478939040.70 7.31% -0.42%
Investment real estate 21906134.52 0.10% 23544830.78 0.12% -0.02%
Long-term equity
investments
4976773946.74 23.82% 4140064825.58 20.46% 3.36%
Fixed assets 2707374678.61 12.96% 2584872628.54 12.78% 0.18%
Construction in progress 166414542.18 0.80% 100345461.28 0.50% 0.30%
Construction in progress at
period-end has major
growth over that of
year-begin mainly because
the equipment for technical
innovation and expansion
increased
Short-term borrowings 298928213.94 1.43% 243000000.00 1.20% 0.23%
Long-term loans 30000000.00 0.14% 45000000.00 0.22% -0.08%
2. Assets and liability measured by fair value
√Applicable □Not applicable
In RMB
Items
Amount at the
beginning
period
Changes of fair value
gains/losses in this
period
Accumulative
changes of fair
value reckoned
into equity
Devaluation
of
withdrawing
in the period
Amount
of
purchase
in the
period
Amount of sale
in the period
Amount at
period-end
Financial assets
3.Available-for-
sale financial
assets
266376600.00 -117053064.00 -19809442.95 37869361.83
121066008.
00
Subtotal of
financial assets
266376600.00 -117053064.00 -19809442.95 37869361.83
121066008.
00
Above total 266376600.00 -117053064.00 -19809442.95 37869361.83
121066008.
00
Financial
liabilities
0.00 -490329.13 0.00 0.00 490329.13
Whether there have major changes on measurement attributes for main assets of the Company in report period or not
□ Yes √No
3. The assets rights restricted till end of the period
Item Book value at
period-end
Restriction reason
Monetary funds 1450000.00 Cash deposit paid for LC
Monetary funds 79315732.67 Cash deposit paid for bank acceptance
Monetary funds 881868.57 Court freeze
Notes receivable 423527758.19 Notes pledge for bank acceptance
Available-for-sale
financial assets
112850891.16
In accordance with the civil ruling No.(2016)Y03MC2490 and No.(2016) Y03MC2492 of
Guangdong Shenzhen Intermediate People's Court (Hereinafter referred to as Shenzhen
Intermediate People's Court) the property with the value of 217 million Yuan under the name of
the Company and other seven respondents and the third party Shenzhen Hejun Chuangye
Holdings Co. Ltd. (Hereinafter referred to as Hejun Company) was frozen. As of the end of the
reporting period 4.71 million shares of Miracle Logistics and 11739102 shares of SDEC held
by the Company were frozen.Total 618026250.59
V. Investment
1. Overall situation
□ Applicable √ Not applicable
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
√Applicable □Not applicable
In RMB
Va
riety of
securitie
s
Code of
securitie
s
Short
form of
securitie
s
Initial
investm
ent cost
Account
ing
measure
ment
model
Book
value at
the
beginni
ng of
the
period
Current
gain/los
s of fair
value
changes
Cumulat
ive fair
value
changes
in
equity
Current
purchas
e
amount
Current
sales
amount
Profit
and loss
in the
Reporti
ng
Period
Book
value at
the end
of the
period
Account
ing
subject
Capital
Source
Domesti
c and
foreign
stocks
600841 SDEC
199208
000.00
Measure
d by fair
value
186966
000.00
-73250
064.00
-20229
810.45
37869
361.83
-73196
378.59
85458
408.00
Availabl
e-for-sal
e
financia
l assets
Own
funds
Domesti
c and
foreign
stocks
002009
Miracle
Logistic
s
69331
500.00
Measure
d by fair
value
79410
600.00
-43803
000.00
420367
.50
-43567
500.00
35607
600.00
Availabl
e-for-sal
e
financia
l assets
Own
funds
Total
268539
500.00
--
266376
600.00
-11705
3064.0
0
-19809
442.94
0.00
37869
361.83
-11676
3878.5
9
121066
008.00
-- --
Disclosure date of
securities investment
approval of the Board
24 March 2012
4 June 2013
Disclosure date of
securities investment
approval of the Shareholder
Meeting (if applicable)
(2) Derivative investment
□ Applicable √ Not applicable
The Company has no derivatives investment in the Period
5. Application of raised proceeds
□ Applicable √ Not applicable
No application of raised proceeds in the period
VI. Significant asset and equity sales
1. Significant asset sales
□ Applicable √ Not applicable
No significant assets being sold in the Period
2. Significant equity sales
□ Applicable √ Not applicable
VII. Analysis of the main equity participation and controlling subsidiary
√ Applicable □ Not applicable
Main subsidiary and stock-jointly enterprise with over 10% influence on net profit of the Company
In RMB
Company
name
Type Main business
Register
capital
Total assets Net assets
Operating
revenue
Operating
profit
Net profit
Weifu
Leader
Subsidiary
Exhaust
after-treatment
system products
5025963
00.00
2996351016
.44
1629384624.
82
280087473
3.81
74092173.7
8
74556894.40
Weifu
Jinning
Subsidiary
Fuel injection
system products
3462868
25.80
1337513352
.71
973609125.61
613545903.
22
233693081.
69
208505596.11
Bosch
Automobile
Diesel
Equity
participation
enterprise
Fuel injection
system products
US$
2410000
00.00
1279851374
0.22
8698465606.
92
155398920
04.67
400324586
6.33
3545497532.3
3
Zhonglian
Electronic
Equity
participation
enterprise
Gasoline system
products
6006200
00.00
5431102281
.22
5425343448.
82
23186214.3
8
183468645
8.07
1834198811.7
8
Subsidiary obtained and disposed in the Period
□Applicable √Not applicable
Explanation on holding equity participation enterprise
In the reporting period Weifu Jinning’s land housing and housing attachments located at No. 69 Taiping Village
Yanziji Town Qixia District were levied by the government accordingly gains of disposal of assets increased by
100824053.07 yuan.
VIII. The structured subject controlled by the Company
□ Applicable √ Not applicable
IX. Prospects for future development
(I) Industry competition pattern and development trend
In the past 40 years of reform and opening up China’s economy has shifted from a high-speed growth stage to a
high-quality development stage. Although the market may continue to show unexpected changes in the future we
believe that the fundamentals of China’s healthy and stable economic development will not change and the Chinese
economy is fully capable of maintaining a reasonable growth range. At the same time the Chinese auto market has
entered a period of steady growth since 2010 in order to solve the increasingly severe traffic jams environmental
pollution energy conservation and consumption reduction the automobile industry has accelerated the technology
upgrades and the automobile new energy applications are rapidly advancing nowadays the artificial intelligence
internet of things and other technologies develop rapidly and accelerate the penetration into various fields it has
reached a consensus on the development of intelligent networked automobiles which promotes the development
environment of intelligent networked automobiles to become increasingly perfect.(ii)Development strategy of the Company
The Company has became the backbone enterprise of the core parts of domestic automobile (power engineering)
after 60 years of cultivation. 80% of the current core business of auto parts are matching with electronic control
system and with electronic control realized which owes a leading position in self-owned brand. The Company
give a positive response to national new energy and intelligent networking strategy core with the auto parts
industry chain and supplemented by other relevant fields make a layout for new energy automobile drive
technology improve hydrogen fuel battery technology as well as the research and development capability of
intelligent networking technology. Market target: consolidating the current business market position and
positioning new business for the potential market; technical target: strengthen the technical strength of pillar
business lay out the frontier technology for new business actively exploit new fields based on the current
business. And making efforts to achieved the enterprise goals of leaders of automotive core parts.(iii) Operation plan for year of 2019
In 2019 the market environment is still complicated and severe many factors such as macro economy automobile
industry cycle automobile consumption policy and implementation of the Guo VI Standard are still uncertain
opportunities and challenges coexist the opportunities are inspiring and challenges are alarming. In the new year
the company will revolve around the development goals of “high quality stable volume and fine management” and
complete the following key tasks:
1. Figure out the situation grasp the general trend conform to the trend conform to the mainstream change with
the situation face the difficulties seek opportunities and open up projects. The rapid improvement can meet the
Guo VI Standard and the technical quality level of T4 products enhance the project acquisition ability of products
on the client side locate at key customers leading products and key projects and strive to increase the market share
of key products. Promote the collaborative marketing of traditional product systems to further expand the
aftermarket and overseas markets.
2. Focus on management quality optimize product structure optimize input-output structure carefully analyze cost
structure find out the focus of cost reduction and the factors affecting cost increase and profit reduction
continuously control and gradually reduce manufacturing costs; optimize manufacturing process control make full
use of interconnection technology strengthen data interconnection and interoperability and further enhance the
ability of data collection analysis and prediction. Continuously improve the manufacturing process management
strengthen flexible and agile production realize the intelligent deployment capability of manufacturing process
further improve the lean manufacturing production level; optimize operational support management smooth the
processes build business project information management platform unblock business system barriers and
efficiently adjust and control improve quality and efficiency improve operational efficiency; promote the
construction of human resources platform further improve the talent selection training and management
mechanism and comprehensively optimize and improve the human resource management. Constantly strengthen
the foundation of development.
3. Struggle to act by innovation driven actively create new situations and form a dual-engine drive model.
Consolidate the existing business market position accelerate the development of traditional business products take
a position in the potential market for innovative business actively promote the investment in emerging businesses
accelerate the layout of forward-looking project products of innovative business promote the construction of
platform projects and promote the R&D capability of new business products and improve the research and
development system so as to lay a foundation for the company’s sustainable development.IV Risks and response measures
(1) Macroeconomic and market risks
China’s economy has shifted from a high-speed growth stage to a high-quality development stage the market may
continue to show unexpected changes but we believe that the Chinese economy is fully capable of maintaining a
reasonable growth range. At the same time the Chinese auto market has entered a period of steady growth and it
will also pay more attention to high-quality development in the future.Response measures: We must change the habitual and deterministic thinking model to cope with future
uncertainties rely on the existing business actively expand new areas consolidate the existing business market
position and take a position in the new business potential market and strive to improve the company’s core
competitiveness and overall ability to resist risks.
(2) Operating management and control risks
With the continuous expansion of the company’s asset scale and business scope the company has a large
management span and many links in terms of personnel business finance and capital and there are potential risks
of operating management and control.Response measures:
The company will continue to promote the optimization and improvement of internal management focus on
strengthening compliance management further improve the system and processes promote the institutionalization
and standardization of company management and control operational risks.
(3) Risk of fluctuations in raw material prices
The company’s main raw materials include various grades of steel aluminum precious metals etc. and the
continued rise in prices will bring the company the risk of rising costs.Response measures: Pay close attention to the price trend of the company’s main raw materials choose the right
timing for procurement and make reasonable strategic reserves to resolve the risk of fluctuations in raw material
prices.X. Reception of research communication and interview
1. In the report period reception of research communication and interview
√ Applicable □ Not applicable
Time Way Type Basic situation index of investigation
2018-06-27 Spot research Institution The scene of the shareholders’ general meeting
2018-01-01-
2018-12-31
Written inquiry Individual
The Company answered 151 questions for investors online through the
investor relations interactive platform(http://irm.p5w.net/dqhd/sichuan/)
2018-01-01-
2018-12-31
Telephone
communication
Individual
Basic condition of the Company and views on market communication
with investors by telephone more than 300
Reception (times) 460
Number of hospitality 50
Number of individual reception 260
Number of other reception 151
Disclosed released or let out major undisclosed
information (Y/N)
N
Section V. Important Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy during
the Reporting Period
√ Applicable □ Not applicable
1. Cash dividend policy: carry out bonus distribution according to the regulations in Article of Association
2. In reporting period the Company implemented the profit distribution for year of 2017 based on the total share
capital 1008950570 shares distributed 12.00 Yuan (tax included) bonus in cash for every 10 shares held no
capitalization from public reserves. The plan was completed in July 2018. The implementation of the Company's
cash dividend policy is in compliance with the provisions of Articles of Association relevant decision-making
procedures are complete and fully listen to the views of independent directors and minority shareholders and
maintain the legitimate rights and interests of minority shareholders.Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement of Article of Association (Y/N): Yes
Well-defined and clearly dividend standards and proportion (Y/N): Yes
Completed relevant decision-making process and mechanism (Y/N): Yes
Independent directors perform duties completely and play a proper role (Y/N): Yes
Minority shareholders have opportunity to express opinions and demands totally and their legal rights are fully
protected (Y/N):
Yes
Condition and procedures are compliance and transparent while the cash bonus policy adjusted or changed
(Y/N):
Not applicable
Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three years
(including the reporting period)
The profit distribution plan for 2018: based on total share capital of 1008950570 shares at end of 2018
distribute cash dividend of RMB 12.00 (tax included) for every 10 shares and no capitalization of capital reserve.The profit distribution plan for 2017: based on total share capital of 1008950570 shares at end of 2017
distribute cash dividend of RMB 12.00 (tax included) for every 10 shares and no capitalization of capital reserve.The plan was completed in July 2018.The profit distribution plan for 2016: based on total share capital of 1008950570 shares at end of 2016
distribute cash dividend of RMB 6.00 (tax included) for every 10 shares and no capitalization of capital reserve.The plan was completed in July 2017.
Cash dividend of common stock in latest three years (including the reporting period)
In RMB
Year for
bonus
shares
Amount for cash
bonus (tax
included)
Net profit
attributable to
common stock
shareholders of
listed company
in consolidation
statement for
Ratio of the
cash bonus in
net profit
attributable to
common stock
shareholders of
listed company
Proportion
for cash
bonus by
other
ways(i.e.share
buy-backs)
Ratio of the cash
bonus by other
ways in net
profit
attributable to
common stock
shareholders of
Total cash bonus
(including other
ways)
Ratio of the
total cash
bonus (other
ways included)
in net profit
attributable to
common stock
bonus year contained in
consolidation
statement
listed company
contained in
consolidation
statement
shareholders of
listed company
contained in
consolidation
statement
2018 1210740684.00 2396077415.21 50.53% 0.00 0.00% 1210740684.00 50.53%
2017 1210740684.00 2571339490.04 47.09% 0.00 0.00% 1210740684.00 47.09%
2016 605370342.00 1672224317.05 36.20% 0.00 0.00% 605370342.00 36.20%
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent company is
positive but no plan of cash dividend proposed of common stock
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
√ Applicable □ Not applicable
Bonus shares for every 10-share (Share) 0
Dividends for every 10-share (RMB) (Tax included) 12.00
Shares added for every 10-share base (Share) 0
Equity base of distribution plan (Share) 1008950570
Total cash dividend(RMB) (Tax included) 1210740684.00
Cash dividend by other ways (share buy-back included) (RMB) 0.00
Total cash dividend (other ways included) (RMB) 1210740684.00
Distributable profits (RMB) 9340610451.36
Ratio of the total cash dividend (other ways included) in total profit distribution 100%
Cash dividend policy:
Other
Detail explanation on profit distribution or capitalization from capital public reserve
Pursuit to the Standard Unqualified Auditor’s Report for year of 2018 issued by Jiangsu Gongzheng the profit available for
distribution of the parent company for year of 2018 are as: net profit of the parent company for year of 2018 amount as
2190550000 Yuan plus retained profit at beginning of the year 8360801100 Yuan and deducted the divided 1210740700 Yuan
for year of 2017 the distributable profit at end of the period amounted as 9340610400Yuan. Profit distribution plan for year of
2018: on base of the total 1008950570 shares at end of 2018 distributed 12.00 Yuan (tax included) in cash for each 10 shares no
bonus and no transfer of reserve to common shares. The remaining retained profit carried forward to next year. Profits allocate for
year of 2018 amounting to 1210740700 Yuan.III. Implementation of commitment
1. Commitments that the actual controller shareholders related party buyers and the Company have
fulfilled during the reporting period and have not yet fulfilled by the end of reporting period
□ Applicable √ Not applicable
No commitments that the actual controller shareholders related party buyers and the Company have fulfilled during the reporting
period and have not yet fulfilled by the end of the period
2. Concerning assets or project of the Company which has profit forecast and reporting period still in
forecasting period explain reasons of reaching the original profit forecast
□ Applicable √ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
V. Explanation from Board of Directors Supervisory Committee and Independent Directors
(if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable √ Not applicable
VI. Particulars about the changes in aspect of accounting policy estimates and calculation
method compared with the financial report of last year
√Applicable □ Not applicable
(1) Change of major accounting policy
On June 15 2018 the Ministry of Finance issued the Notice on Amending the Format of Financial Statements of
General Enterprises in 2018 (CK No. [2018] 15) revised the financial statements format of general enterprises.
According to the requirement relevant content of the accounting policy needs to be adjusted and the financial
statement should be prepared in line with the format of financial statement for general enterprise(applicable to
enterprise that have not yet implemented new financial and revenue standards).The impacts on the items and amounts related to consolidated financial statements and the parent company’s
financial statements during the comparable period are as:
Changes of
accounting policy
Impact on the amount in relevant financial statement of 2017/on 31 December 2017
Item Amount affected (+-)
Consolidate financial statement Financial statement of parent company
The Company
prepared the
financial statement of
2018 in line with the
format regulated in
CK No. [2018] 15
and changed the
presentation of
relevant financial
statements by
retrospective method
Notes receivable -1464256934.83 -449209323.02
Account receivable -1995577830.90 -1047012889.92
Note receivable and account
receivable
3459834765.73 1496222212.94
Interest receivable -2281979.17 -97627.77
Other receivables 2281979.17 97627.77
Note payable -947976759.10 -459762950.78
Account payable -2570956205.83 -1082206882.07
Note payable and account
payable
3518932964.93 1541969832.85
Interest payable -401928.43 -93777.78
Other accounts payable 401928.43 93777.78
Long-term account payable 18265082.11 --
Special account payable -18265082.11 --
Administration expenses -391315234.75 -119083205.53
R&D expenses 391315234.75 119083205.53
VII. Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.VIII. Compare with last year’s financial report; explain changes in consolidation statement’s
scope
√Applicable □Not applicable
Content changed Company
Way of obtained the
equity
Time when equity
obtained
Ratio of fund
contribution
Consolidate scope increased
Nanchang Weifu Leader Auto Parts &
Components Co. Ltd.
Newly established 2018-3-8 100.00%
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm
Jiangsu Gongzheng Tianye Certified Public
Accountants (Special General Partnership)
Remuneration for domestic accounting firm (in 10 thousand Yuan) 158
Continuous life of auditing service for domestic accounting firm 27
Name of domestic CPA Bo Lingjing Meng Yin
Continuous life of auditing service for domestic accounting firm 4
Re-appointed accounting firms in this period
□Yes √No
Appointment of internal control auditing accounting firm financial consultant or sponsor
√ Applicable □ Not applicable
Being deliberated in Annual Shareholders General Meeting of 2017 Jiangsu Gongzheng was appointed as audit
accounting firm for internal control of the Company for year of 2018. In the Period auditing charge for internal
control amounting to 0.22 million Yuan
X. Particular about suspended and delisting after annual report disclosed
□ Applicable √ Not applicable
XI. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitration of the Company
√Applicable □Not applicable
Basic Situation of
Litigation (Arbitration)
Amount
Related
to the
Case
(Yuan)
Whether
Formed
Accrued
Liabilities
Progress of
Litigation
(Arbitration)
Trial Results
and Effects
of Litigation
(Arbitration)
Judgment
Implementation
of Litigation
(Arbitration)
Disclosure
Date
Disclosure Index
On March 6 2017 the
company received the
civil ruling
No.(2016)Y03MC2490
and No.(2016)
Y03MC2492 from
Shenzhen Intermediate
People's Court about the
dispute case that the
plaintiff applicant China
Cinda Asset Management
Co. Ltd. Shenzhen
Branch (hereinafterreferred to as “Cinda
Company”) appealed the
respondent Weifu High
Technology and other
seven respondents and the
shareholders of the third
party Hejun Company
damaged the interests of
corporate creditors which
adopted the mandatory
measures to freeze the
assets with value of RMB
217 million under the
name of the Company and
other seven respondents
and Hejun Company.
Freeze 4.71 million shares
of Miracle Logistics and
15.3 million shares of
SDEC Stock held by the
company.
21703 N By the company’s
application for
reconsideration
Shenzhen
Intermediate
People's Court
deemed the total
assets that Cinda
Company applied
for preservation to
be RMB
217027697.23.
The total value of
15.3 million shares
of SDEC Stock
and 4.71 million
shares of Miracle
Logistics held by
the company has
exceeded the total
assets that Cinda
Company applied
for preservation
therefore
3560898 shares
of SDEC Stock
held by the
company was
unfrozen. Up to
the end of the
reporting period
the company’s
frozen assets were
as follows: 4.71
million shares of
Miracles Logistics
held by the
company and its
fruits and
11739102 shares
of SDEC Stock
held by the
company and its
This
litigation
will not
affect the
company’s
daily
operating
activities for
the time
being
Not yet
implemented
8 March
2017
(Announcement No.:
2017-002) published
on Juchao Website
(www.cninfo.com.cn)
fruits. At present
this litigation is in
the first instance
(the first trial held
on 24 Sept. 2017
and follow trial
will wait for notice
by the court).The Company has applied
to Futian People's Court
of Shenzhen for
compulsory liquidation
with Hejun Company
3300 N The Company has
applied to Futian
People's Court of
Shenzhen for
compulsory
liquidation with
Hejun Company.The civil ruling
paper (Yue (0304)
QS[2017] No.
5)made by
Shenzhen Futian
District People’s
Court ruled that
Hejun Company
should be made
compulsory
liquidation. The
Company will
actively cooperate
with the court to
work on the
liquidation to
protect its
legitimate rights
and interests.There are no
impact on
daily
operation
activities of
the
Company
Relevant works
are in process
6 Dec.
2017
(Announcement No.:
2017-023) published
on Juchao Website
(www.cninfo.com.cn)
XIII. Penalty and rectification
□ Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.XIV. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XV. Implementation of the company’s stock incentive plan employee stock ownership plan or
other employee incentives
√ Applicable □ Not applicable
On 20 June 2014 the Company held the 2013 AGM which deliberated "the Company’s incentive fund
implementation methods" the Company has fully implemented it during the reporting period completed the
medium and long term special incentive allocation for core talents farthest mobilized the enthusiasm and
creativity of employees stabilized the employees attracted the high-quality talents and enhance the cohesive
force in enterprise.
XVI. Major related transaction
1. Related transaction with routine operation concerned
√ Applicable □ Not applicable
Related
party
Relation
ship
Type of
related
transacti
on
Content
of
related
transacti
on
Pricing
principl
e
Related
transacti
on price
Related
transacti
on
amount
(in 10
thousan
d Yuan)
Proporti
on in
similar
transacti
ons
Trading
limit
approve
d (in 10
thousan
d Yuan)
Whethe
r over
the
approve
d
limited
or not
(Y/N)
Clearin
g form
for
related
transacti
on
Availabl
e
similar
market
price
Date of
disclosu
re
Index
of
disclos
ure
Weifu
Precision
Machiner
y
Associat
ed
enterpri
se
Procure
ment of
goods
Procure
ment of
goods
Fair
market
pricing
Market
price
4465.7
2
0.71% 5000 N
Accordi
ng to
the
contract
Market
price
17 April
2018
Notice
No:
09
Bosch
Automobi
le Diesel
Associat
ed
enterpri
se
controlli
ng
subsidia
ry of
Robert
Bosch
Procure
ment of
goods
Procure
ment of
goods
Fair
market
pricing
Market
price
6848.5
6
1.09% 7000 N
Accordi
ng to
the
contract
Market
price
17 April
2018
Notice
No:
09
Weifu
Environm
ent
Joint
venture
of
Weifu
Leader
Procure
ment of
goods
Procure
ment of
goods
Fair
market
pricing
Market
price
151526
.62
24.01% 192500 N
Accordi
ng to
the
contract
Market
price
17 April
2018
Notice
No:
09
Robert
Bosch
Second
largest
sharehol
der of
the
Compan
y
Procure
ment of
goods
Procure
ment of
goods
Fair
market
pricing
Market
price
17984.
12
2.85% 14300 Y
Accordi
ng to
the
contract
Market
price
17 April
2018
Notice
No:
09
Weifu
Precision
Machiner
y
Associat
ed
enterpri
se
Sales of
goods
Sales of
goods
Fair
market
pricing
Market
price
378.52 0.04% 300 Y
Accordi
ng to
the
contract
Market
price
17 April
2018
Notice
No:
09
Bosch
Automobi
le Diesel
Associat
ed
enterpri
se、controlli
ng
subsidia
ry of
Robert
Bosch
Sales of
goods
Sales of
goods
Fair
market
pricing
Market
price
272291
.93
31.22% 300000 N
Accordi
ng to
the
contract
Market
price
17 April
2018
Notice
No:
09
Weifu
Environm
ent
Joint
venture
of
Weifu
Leader
Sales of
goods
Sales of
goods
Fair
market
pricing
Market
price
5018.1
9
0.58% 5300 N
Accordi
ng to
the
contract
Market
price
17 April
2018
Notice
No:
09
Robert
Bosch
Second
largest
sharehol
der of
the
Sales of
goods
Sales of
goods
Fair
market
pricing
Market
price
72070.
94
8.26% 77220 N
Accordi
ng to
the
contract
Market
price
17 April
2018
Notice
No:
09
Compan
y
Bosch
Automobi
le Diesel
Associat
ed
enterpri
se
controlli
ng
subsidia
ry of
Robert
Bosch
Other
Payable
for
labour
and
technica
l
services
Fair
market
pricing
Market
price
135.55 100 Y
Accordi
ng to
the
contract
Market
price
17 April
2018
Notice
No:
09
Robert
Bosch
Second
largest
sharehol
der of
the
Compan
y
Other
Payable
for
technica
l
services
Fair
market
pricing
Market
price
348.48 550 N
Accordi
ng to
the
contract
Market
price
17 April
2018
Notice
No:
09
Weifu
Environm
ent
Joint
venture
of
Weifu
Leader
Other
Lease
fees
receivab
le
Fair
market
pricing
Market
price
250.81 255 N
Accordi
ng to
the
contract
Market
price
17 April
2018
Notice
No:
09
Bosch
Automobi
le Diesel
Associat
ed
enterpri
se、controlli
ng
subsidia
ry of
Robert
Bosch
Other
Purchas
e of
fixed
assets
Fair
market
pricing
Market
price
1962.9
9
5000 N
Accordi
ng to
the
contract
Market
price
17 April
2018
Notice
No:
09
Robert
Bosch
Second
largest
sharehol
der of
the
Compan
y
Other
Purchas
e of
fixed
assets
Fair
market
pricing
Market
price
357.6 Y
Accordi
ng to
the
contract
Market
price
Weifu
Environm
ent
Joint
venture
of
Weifu
Leader
Other
Purchas
e of
fixed
assets
Fair
market
pricing
Market
price
0.99 Y
Accordi
ng to
the
contract
Market
price
Weifu
Environm
ent
Joint
venture
of
Weifu
Leader
Other
Sales of
fixed
assets
Fair
market
pricing
Market
price
18.78 Y
Accordi
ng to
the
contract
Market
price
Industry
Group
First
majority
sharehol
der of
the
Compan
y
Other
Interest
paying
Fair
market
pricing
Market
price
21.44 Y
Accordi
ng to
the
contract
Market
price
Total -- --
533681
.24
-- 607525 -- -- -- -- --
Detail of sales return with major
amount involved
Not applicable
Report the actual implementation of
the daily related transactions which
were projected about their total
amount by types during the reporting
period(if applicable)
Being deliberated and approved by AGM of 2017 total related transaction for year of 2018
predicted as 6075.25 million Yuan actually 5336.8124 million Yuan occurred in the Period
the related transaction classified according to types are as: 1. it estimated that purchasing
goods and labor service from related party in 2018 will up to 2188 million Yuan while
1808.2502 million Yuan occurred actually in the Period; 2. it estimated that sales of goods
and labor service to related party in 2018 will up to 3828.2 million Yuan while 3497.5958
million Yuan actually occurred in the period; 3. it estimated that other related transactions
with related party for year of 2018 will up to 59.05 million Yuan while 30.9664 million
Yuan actually occurred.Reasons for major differences
between trading price and market
reference price
Not applicable
2. Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period
3. Main related transactions of mutual investment outside
□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period
4. Contact of related credit and debt
□ Applicable √ Not applicable
The Company had no contact of related credit and debt in the reporting period.
5. Other related transactions
□ Applicable √ Not applicable
The company had no other significant related transactions in reporting period.XVII. Significant contract and implementations
1. Trusteeship contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable √ Not applicable
No leasing for the Company in reporting period
2. Major guarantees
√ Applicable □ Not applicable
(1) Guarantees
In 10 thousand Yuan
Particulars about the external guarantee of the Company and subsidiary (Barring the guarantee for subsidiaries)
Name of the Company
guaranteed
Related
Announce
ment
disclosure
date
Guarantee
limit
Actual date of
happening
Actual
guarantee
limit
Guarantee
type
Guarantee
term
Implemen
ted (Y/N)
Guarante
e for
related
party
(Y/N)
Guarantee of the Company for subsidiaries
Name of the Company
guaranteed
Related
Announce
ment
disclosure
date
Guarantee
limit
Actual date of
happening
Actual
guarantee
limit
Guarantee
type
Guarantee
term
Implemen
ted (Y/N)
Guarante
e for
related
party
(Y/N)
Ningbo Tianli
Turbocharging
Technology Co. Ltd.
27 Oct.
2016
6000 4500
Joint liability
guaranty
5 N N
Total amount of approving
guarantee for subsidiaries in report
period (B1)
0
Total amount of actual
occurred guarantee for
subsidiaries in report period
(B2)
4500
Total amount of approved
guarantee for subsidiaries at the
end of reporting period (B3)
6000
Total balance of actual
guarantee for subsidiaries at
the end of reporting period
(B4)
4500
Guarantee of the subsidiaries for the subsidiaries
Name of the Company
guaranteed
Related
Announce
ment
disclosure
date
Guarantee
limit
Actual date of
happening
Actual
guarantee
limit
Guarantee
type
Guarantee
term
Implemen
ted (Y/N)
Guarante
e for
related
party
(Y/N)
Total amount of guarantee of the Company( total of three above mentioned guarantee)
Total amount of approving
guarantee in report period
(A1+B1+C1)
Total amount of actual
occurred guarantee in report
period (A2+B2+C2)
4500
Total amount of approved
guarantee at the end of report
period (A3+B3+C3)
6000
Total balance of actual
guarantee at the end of
report period (A4+B4+C4)
4500
The proportion of the total amount of actually guarantee in the net
assets of the Company (that is A4+ B4+C4)
0.28%
Including:
Amount of guarantee for shareholders actual controller and its
related parties(D)
0
The debts guarantee amount provided for the guaranteed parties
whose assets-liability ratio exceed 70% directly or indirectly(E)
0
Proportion of total amount of guarantee in net assets of the
Company exceed 50%(F)
0
Total amount of the aforesaid three guarantees(D+E+F) 0
Explanations on possibly bearing joint and several liquidating
responsibilities for undue guarantees (if applicable)
Not applicable
Explanations on external guarantee against regulated procedures
(if applicable)
Not applicable
Explanation on guarantee with composite way
(2)Guarantee outside against the regulation
□ Applicable √ Not applicable
No guarantee outside against the regulation in Period.
3. Entrust others to cash asset management
(1) Trust financing
√ Applicable □ Not applicable
Trust financing during the period
In 10 thousand Yuan
Specific type Sources of funds Amount occurred Undue balance Overdue amount
Financing products Free funds 334000 238150 0
Financial products of securities firms Free funds 13000 10000 0
Trust financial products Free funds 112790 97144.81 0
Other type Free funds 166150 106000 0
Total 625940 451294.81 0
Details of the single major amount or high-risk trust investment with low security poor fluidity and non-guaranteed
√ Applicable □ Not applicable
In 10 thousand Yuan
Trustee
institutio
n r name
Truste
e type
Type
Amou
nt
Source
of
funds
Start
date
End
date
Capita
l
invest
ment
purpos
e
Criteri
a for
fixing
reward
Refere
nce
annual
rate of
return
Antici
pated
incom
e (if
applic
able)
Actual
gains/l
osses
in
period
Actual
collect
ed
gains/l
osses
in
period
Amou
nt of
reserv
e for
devalu
ation
of
withdr
awing
(if
applic
able)
Wheth
er
appro
ved by
legal
proced
ure
(Y/N)
Wheth
er has
entrust
financ
e plan
in the
future
Summar
y of the
items
and
related
query
index (if
applicabl
e)
Bank Bank
Non-gu
arantee
d
floating
income
79100
0
Owne
d fund
3 Jan.
2018
8 Apr.
2019
Financ
ial
produc
ts
Refere
nce
annual
rate of
return
by the
contra
ct
4.05%
-5.7%
15684
.5
14162
.93
Collec
ted
accord
ing to
the
contra
ct
Y Y
Notice
No.:
on 17
April
2018
Securitie
s trader
Securi
ties
trader
Non-gu
arantee
d
floating
income
43000
Owne
d fund
31
Jan.
2018
16
Jan.
2019
Collec
tive
assets
manag
ement
plan
4.6%
-5.5%
730.11 306.15 Y Y
Trust Trust
Non-gu
arantee
23389
4
Owne
d fund
4 Jan.
2018
28
Jan.
Collec
tion
5.1%
7738.
81
7066.
41
Y Y
d
floating
income
2019 trust
plan
-9.5%
Other
(Fund
etc.)
Other
(Fund
etc.)
Non-gu
arantee
d
floating
income
12200
0
Owne
d fund
4 Jan.
2018
9 Sept.
2019
Fixed
incom
e fund
produc
ts
5%
-9%
5521.
57
9590.
71
Y Y
Total
1189
894
-- -- -- -- -- --
29674
.99
31126
.2
-- -- -- --
Entrust financial expected to be unable to recover the principal or impairment might be occurred
□ Applicable √ Not applicable
(2) Entrusted loans
□ Applicable √ Not applicable
The company had no entrusted loans in the reporting period.
4. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting period
XVIII. Social responsibility
1. Performance of social responsibility
As for the Social Responsibility Report 2018 of the Company found more in the Juchao Website (www.cninfo.com.cn) the
information disclosure website appointed by Shenzhen Stock Exchange
2. Precise poverty alleviation social responsibility
There are no precise poverty alleviation carried out in the period and no follow plan either
3. Environmental protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
No
The company and its subsidiaries are not the key pollutant discharge units announced by the State Environmental Protection
Department. The company attaches great importance to environmental protection management. During the production and operation
process the company strictly abides by relevant national and local environmental protection laws regulations and rules and timely
acquires updates and conveys relevant environmental laws regulations and standards and conducts the company’s internal daily
environmental management based on new regulations and standards. actively fulfills corporate environmental protection obligations
and implements national energy conservation and emission reduction guidelines and policies.XIX. Explanation on other significant events
□Applicable √ Not applicable
There are no explanation on other significant events in the period
XX. Significant event of subsidiary of the Company
√ Applicable □ Not applicable
1. Proposed application for listing in the national middle and small enterprises stock transfer system by the controlling subsidiary
Weifu Tianli
On 25 October 2016 the 9th session of the 8th BOD consider and approve the proposal relating to proposed application for listing in
the national middle and small enterprises stock transfer system by the controlling subsidiary Weifu Tianli Pressure Technology Co.Ltd; on 30 December 2016 Weifu Tianli was served with the notice of acceptance from the National Equities Exchange and
Quotations Company Limited (GP2016120120). The relevant announcements (No.: 2016-020 2016-023 and 2017-001) were
published on China Securities Journal Securities Times Hong Kong Commercial Daily and Juchao Information Website
(http://www.cninfo.com.cn).Other state-owned shareholders of Weifu Tianli are unable to obtain the approval of state-owned assets
so the matter is stagnant at present. Shareholders meeting of the Weifu Tianli decided to cancel the listing application of the National
Equities Exchange and Quotations
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
In Share
Before the Change Increase/Decrease in the Change (+ -) After the Change
Amount
Proportio
n
New
shares
issued
Bonus
shares
Capitalization
of public
reserve
Others Subtotal Amount Proportion
I. Restricted shares 78577 0.01% 1502 1502 80079 0.01%
3. Other domestic shares 78577 0.01% 1502 1502 80079 0.01%
Domestic natural
person’s shares
78577 0.01% 1502 1502 80079 0.01%
II. Unrestricted shares 1008871993 99.99% -1502 -1502 1008870491 99.99%
1. RMB Ordinary shares 836491993 82.90% -1502 -1502 836490491 82.90%
2. Domestically listed
foreign shares
172380000 17.09% 172380000 17.09%
III. Total shares 1008950570 100.00% 1008950570 100.00%
Reasons for share changed
□ Applicable √ Not applicable
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changed
□ Applicable √ Not applicable
Progress of shares buy-back
□ Applicable √ Not applicable
Implementation progress of reducing holdings of shares buy-back by centralized bidding
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of restricted shares
√ Applicable □Not applicable
In Share
Shareholder
Shares
restricted at
period-begin
Shares
released in the
period
Shares with
restriction
increased in the
period
Shares
restricted at
period-end
Restriction cause
Date release for
trading
Dai Lizhong 1500 1500
Lock-up shares for senior
executive (elected as supervisor
in general election of
supervisory committee)
Not applicable
Total 0 0 1500 1500 -- --
II. Securities issuance and listing
1. Security offering (without preferred stock) in Reporting Period
□ Applicable √ Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and
liability structure
□ Applicable √ Not applicable
3. Current internal staff shares
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
Total common
stock
shareholders in
reporting
period-end
60946
Total common stock
shareholders at end of
last month before
annual report
disclosed
54791
Total preference
shareholders with voting
rights recovered at end
of reporting period (if
applicable) (see note 8)
0
Total preference
shareholders with voting
rights recovered at end
of last month before
annual report disclosed
(if applicable) (see
note 8)
0
Particulars about shares held above 5% by shareholders or top ten shareholders
Full name of
Shareholders
Nature of
shareholder
Proportio
n of
shares
held
Total
shareholders at
the end of report
period
Changes in
report period
Amount of
restricted
shares held
Amount of
un-restrict
ed shares
held
Number of share
pledged/frozen
State of
share
Amount
Wuxi Industry
Development Group
Co. Ltd.
State-owned
corporate
20.22% 204059398 0
ROBERT BOSCH Foreign 14.16% 142841400 0
GMBH corporate
Hong Kong Securities
Clearing Company
Foreign
corporate
4.01% 40482044 20983702
Bank of
Communication –
HSBC Jixin Double
Core Strategy Mixed
Securities Investment
Fund
Other 2.64% 26612573 26612573
BBH BOS S/A
FIDELITY FD -
CHINA FOCUS FD
Foreign
corporate
1.78% 18002797 3243303
Central Huijin Assets
Management Co. Ltd.State-owned
corporate
1.27% 12811200 0
Zhonghai Trust Co.Ltd. - Jinhai No.9
Securities Investment
Collective Fund Trust
Other 0.79% 7931752 7931752
Agricultural Bank of
China - CS 500 ETF
Other 0.62% 6211068 4090419
FIDELITY INVMT
TRT FIDELITY INTL
SMALL CAP FUND
Foreign
corporate
0.57% 5791618 1378786
Basic pension fund--
1207 portfolio
Other 0.50% 5028007 5028007
Strategy investor or general legal
person becoming the top 10
shareholders by placing new shares (if
applicable) (see note 3)
Not applicable
Explanation on associated relationship
among the aforesaid shareholders
Among the top ten shareholders there has no associated relationship between Wuxi
Industry Development Croup Co. Ltd. and other shareholders the first largest shareholder
of the Company; and they do not belong to the persons acting in concert regulated by the
Management Measure of Information Disclosure on Change of Shareholding for Listed
Company.
Particular about top ten shareholders with un-restrict shares held
Shareholders’ name
Amount of un-restrict
shares held at
Period-end
Type of shares
Type Amount
Wuxi Industry Development Group Co. Ltd. 204059398 RMB common shares 204059398
ROBERT BOSCH GMBH 142841400 RMB common shares 115260600
Domestically listed
foreign shares
27580800
Hong Kong Securities Clearing Company 40482044 RMB common shares 40482044
Bank of Communication – HSBC Jixin Double Core Strategy
Mixed Securities Investment Fund
26612573 RMB common shares 26612573
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 18002797
Domestically listed
foreign shares
18002797
Central Huijin Assets Management Co. Ltd. 12811200 RMB common shares 12811200
Zhonghai Trust Co. Ltd. - Jinhai No.9 Securities Investment
Collective Fund Trust
7931752 RMB common shares 7931752
Agricultural Bank of China - CS 500 ETF 6211068 RMB common shares 6211068
FIDELITY INVMT TRT FIDELITY INTL SMALL CAP
FUND
5791618
Domestically listed
foreign shares
5791618
Basic pension fund-- 1207 portfolio 5028007 RMB common shares 5028007
Expiation on associated relationship or consistent actors
within the top 10 un-restrict shareholders and between top 10
un-restrict shareholders and top 10 shareholders
Among the top ten shareholders there has no associated relationship
between Wuxi Industry Development Croup Co. Ltd. and other
shareholders the first largest shareholder of the Company; and they
do not belong to the persons acting in concert regulated by the
Management Measure of Information Disclosure on Change of
Shareholding for Listed Company.
Explanation on top 10 shareholders involving margin
business (if applicable) (see note 4)
Not applicable
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
agreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no
buy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: local state-owned holding
Type of controlling shareholders: legal person
Controlling
shareholders
Legal person/person
in charge of the unit
Date of
foundation
Organization code Main operation business
Wuxi Industry
Development Group
Co. Ltd.
Jiang Guoxiong
5 October
1995
913202001360026543
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
entrust enterprise and management etc.
Equity of other
domestic/oversea
listed company
control by controlling
First majority shareholder of the Company—Industry Group is the controlling shareholder of Wuxi Taiji
Industry Corporation Limited (stock code: 600667)
shareholder as well as
stock-joint in report
period
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
The Company had no changes of controlling shareholders in reporting period
3. Actual controller and person acting in concert of the Company
Nature of actual controller: local state-owned assets management
Type of actual controller: legal person
Actual controlling shareholders
Legal person/person
in charge of the unit
Date of
foundation
Organization
code
Main operation business
State-owned Assets Supervision &
Administration Commission of Wuxi
Municipality of Jiangsu Province
～ ～
State-owned Assets
Administration
Equity of domestic/oversea listed
company control by actual controller in
report period
Not applicable
Changes of actual controller in reporting period
□ Applicable √ Not applicable
No changes of actual controllers for the Company in reporting period.Property right and controlling relationship between the actual controller and the Company is as follow:
Property right and controlling relationship between the actual controller and the Company is as follow:
State-owned Assets Supervision & Administration
Commission of Wuxi Municipality of Jiangsu Province
100%
20.22%
Actual controller controlling the Company by entrust or other assets management
□ Applicable √ Not applicable
Wuxi Industry Development Croup Co. Ltd.Weifu High-Technology Group Co. Ltd.
4. Particulars about other legal person shareholders with over 10% shares held
√Applicable □Not applicable
Corporate
shareholders
Legal rep./person
in charge of unit
Dated
founded
Register
capital
Main business or management activity
ROBERT
BOSCH GMBH
Heiko Carrie
Bettina Holzwarth
15
November
1886
1200
million
euros
Development manufacture and sales of automotive equipment and
engine equipment; engaged in electro-technical electronic
technology machinery manufacturing and optical system as well
as produce iron metal and plastic products and similar commodity.The company engaged in varies trading business concerned with
its business scope and established relevant company concerned
with its business scope.
5. Limitation and reducing the holdings of shares of controlling shareholders actual controllers
restructuring side and other commitment subjects
□ Applicable √ Not applicable
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period.
Section VIII. Particulars about Directors Supervisors Senior
Executives and Employees
I. Changes of shares held by directors supervisors and senior executives
Name
Title
Working
status
Sex
(M/F
)
Age
Start dated of
office term
End date of
office term
Shares
held at
period-be
gin
(Share)
Amount
of shares
increased
in this
period
(Share)
Amount
of shares
decreased
in this
period
(Share)
Other
changes
(share)
Shares
held at
period-en
d
(Share)
Chen
Xuejun
Chairman
Currently
in office
M 51 7 March 2012 26 June 2021 34753 34753
Rudolf
Maier
Vice
Chairman
Currently
in office
M 61 7 March 2012 26 June 2021
Wang
Xiaodong
Vice
Chairman
GM
Currently
in office
M 52 7 March 2012 26 June 2021 20781 20781
Ou
Jianbin
DirectorD
eputy
General
Manager
and
financing
Charger
Currently
in office
M 52 7 March 2012 26 June 2021 10000 10000
Zhang
Xiaogeng
Director
Currently
in office
M 55 28 May 2015 26 June 2021
Chen
Yudong
Director
Currently
in office
M 57 7 March 2012 26 June 2021
Hua
Wanrong
Director
Currently
in office
F 54 7 March 2012 26 June 2021
Yu Xiaoli
Independe
nt Director
Currently
in office
F 55 27 June 2018 26 June 2021
Lou
Diming
Independe
nt Director
Currently
in office
M 55 28 May 2015 26 June 2021
Jin
Zhangluo
Independe
nt Director
Currently
in office
M 68 28 May 2015 26 June 2021
Xu
Xiaofang
Independe
nt Director
Currently
in office
M 55 28 May 2015 26 June 2021
Shi
Xingyuan
Chairman
of the
Supervisor
y
Committee
Currently
in office
M 56 7 March 2012 26 June 2021 12673 12673
Ma
Yuzhou
Supervisor
Currently
in office
M 44 27 June 2018 26 June 2021
Dai
Lizhong
Supervisor
Currently
in office
M 43 27 June 2018 26 June 2021 2000 2000
Miao
Yuming
Deputy
GM
Currently
in office
M 55 16 April 2003 26 June 2021 10000 10000
Xu
Yunfeng
Deputy
GM
Currently
in office
M 47 7 March 2012 26 June 2021 13000 13000
Zhou
Weixing
Secretary
of the
Board
Currently
in office
M 55 9 June 2005 26 June 2021 3565 3565
Xing Min
Independe
nt Director
Office
leaving
M 64 7 March 2012 26 June 2018
Zhang
Zhenting
Supervisor
Office
leaving
M 54 28 May 2015 26 June 2018 500 -500
Liu Jinjun Supervisor
Office
leaving
M 43 7 March 2012 26 June 2018
Total -- -- -- -- -- -- 105272 2000 -500 106772
II. Changes of directors supervisors and senior executives
√Applicable □Not applicable
Name Position Type Date Cause
Xing Min
Independent
Director
Office leaving for office term
expires
26 June 2018 General election of the BOD
Zhang Zhenting Supervisor
Office leaving for office term
expires
26 June 2018 General election of the Supervisory Committee
Liu Jinjun Supervisor
Office leaving for office term
expires
26 June 2018 General election of the Supervisory Committee
III. Post-holding
Professional background major working experience and present main responsibilities in Company of directors supervisors and
senior executive
Mr. Chen Xuejun was born in May 1967 communist party members a university background and a senior
economist. He has served as Director and Party branch secretary of the Company mining and supply department
Director of Party Committee Office. He has served as chairman of supervisory committee of the Company deputy
chairman and General Manager of the Company. He currently serves as Chairman of the Company party
secretary of the Company and director of the majority shareholder of the Company – Industry Group.Mr. Rudolf Maier was born in October 1957 a German citizenship with a doctor degree. He previously was GM
of Bosch Automobile Diesel System Co. Ltd. executive deputy president of diesel system division and chairman
of commercial vehicle dept. in Robert Bosch Group; now he serves as Vice Chairman of the Company and
Chairman of Bosch Automobile Diesel System Co. Ltd.
Mr. Wang Xiaodong was born in November 1966 communist party members a university graduate MBA and senior
engineer. He previously served as Division Chief of Products Development Department of the Company Deputy
GM of Bosch Automobile Diesel and supervisor of the Company. Currently serves as vice chairman and GM of
the Company.Mr. Ou Jianbin born in June 1966 communist party members a senior college graduated and an accountant.Previously served as Assistant Minister and Deputy Minister of Financial Department of Weifu Company
Director and deputy GM of subsidiary Weifu Jinning Deputy GM and GM of subsidiary Weifu Leader and
supervisor of the Company. Currently he serves as director and standing deputy GM as well as chief of the
financial of the Company.Mr. Zhang Xiaogeng born in March 1963 college degree senior economist. He previously served as clerk of the
production system office at commission for restructuring of Wuxi City deputy director of enterprise reform
department of Wuxi City director of comprehensive institution department of Wuxi City director of development
and planning department (policy and regulation division) of SASAC of Wuxi City and deputy GM of Wuxi
Industry Asset Management Co. Ltd; now he serves sa the deputy President of Industry Group the first majority
shareholder of the Company and Director of the Company. currently serves as director of the Company deputy
president of majority shareholder – Industry Group; and
Mr. Chen Yudong was born in September 1961 an America citizenship and a Doctor. He previously served as
senior vice president of the gasoline system division of Robert Bosch Group executive vice president of Bosch
(China) Investment Ltd. Now he serves as President of Bosch (China) Investment Ltd. and director of the
Company.
Ms. Hua Wanrong born in September 1964 communist party members graduated from college a senior
accountant. She previously she served as deputy director of administrative resources division of State-owned
Assets Supervision and Administration Bureau of Wuxi City director of tax policy and regulations division and
director of state-owned assets division of Wuxi Municipal Bureau of Finance director of property management
department and director of development and planning department of State-owned Assets Supervision and
Administration Commission of Wuxi City director of investment banking department of major shareholder –
Industry Group. Currently she serves as GM of the investment banking dept. in Industry Group majority
shareholder of the Company and Director of Taiji Industry as well as the Company
Ms. Yu Xiaoli born in January 1963 a member of the Communist Party of China Ph.D. a professor of Zhejiang
University served as an independent director of the sixth and seventh board of directors of the Company and the
dean of the engineering branch of Zhejiang University City College. She is currently a professor at Zhejiang
University the chairman of the Society of Automotive Engineers of Zhejiang an executive director of Jinhua
Bozhong Automobile Technology Co. Ltd. the chairman of Zhejiang Bozhong Automobile Technology Co. Ltd.
a director of Shaoxing Taige Electromechanical Tech. Co. an independent director of Zhejiang Asia-Pacific
Mechanical & Electronic Co. Ltd. an independent director of Hangzhou XZB Tech Co. Ltd. an independent
director of Zhejiang Fenglong Electric Co. Ltd. an independent director of Hangzhou EVTECH Co. Ltd and an
independent director of the Company.Mr. Lou Diming born in July 1963 a member of the Communist Party of China has a Ph.D. and is a professor. He
used to be the deputy director and the secretary of the party branch of the Department of Mechanical Engineering of
Shanghai Railway Institute the deputy secretary of the party committee of the School of Mechanical Engineering of
Tongji University and the party secretary of the Department of Locomotive and Vehicle Engineering of Tongji
University and the executive vice president of the Institute of Rail Transit and the secretary of the second joint
committee of Tongji University etc. He is currently a professor of Tongji University a doctoral tutor director of
the Automotive Engine Design Institute of the School of Automotive Studies vice chairman of the Shanghai
Internal Combustion Engines Society director of the China Society for Internal Combustion Engines vice
chairman of the small and medium power diesel engine branch and the oils and clean fuels branch and the
post-processing technology branch a member of the Expert Committee of the National Technical Committee 177
on Internal Combustion Engine of Standardization Administration of China a member of the Expert Committee of
the China Internal Combustion Engine Industry Association an independent director of Shanghai Diesel Engine
Co. Ltd. an independent director of Jiangsu Liance Electromechanical Technology Co. Ltd. a senior consultant
of Kunming Yunnei Power Co. Ltd. and an independent director of the Company.Mr. Jin Zhangluo born in August 1950 a member of the Communist Party of China holds a college degree and is
a certified public accountant and senior accountant. He used to be the financial controller of Jintan Diesel Engine
Factory in Jiangsu Province deputy section chief section chief and chief accountant of finance section of Wuxi
Power Machine Factory and department manager deputy director and executive deputy director of Jiangsu
Gongzheng Certified Public Accountants. He currently serves as an independent director of Suzhou Taihu Electric
New Materials Co. Ltd. an independent director of Jiangsu Pengyao Environmental Protection Technology Co.Ltd. and an independent director of the Company.Mr. Xu Xiaofang born in March 1963 communist party members graduate a lawyer. He previously he served as
part-time lawyer in Beihai Economic Law Firm staff in China Chamber of International Commerce Beihai
Branch part-time lawyer of Guangdong Yuanjian Law Firm and staff of legal affairs in CEIEC and lawyer of
Guangdong Bohe Law Firm. Now he serves as lawyer in Kunlun (Shenzhen) Law Firm arbitrator of the
Shenzhen Arbitration Commission independent director of Shenzhen Kaizhong Precision Technology Co. Ltd
and the Company.Mr. Shi Xingyuan was born in May 1962 communist party members a postgraduate Master of Commerce and
Industry senior engineer. He previously he served as GM and Director of the Company; now he serves as Chairman of
the Supervisory Committee as well as the deputy Party Secretary and Chairman of the Labor Union of the Company
Mr. Ma Yuzhou was born in September 1974 communist party members owns Master’s degree and a engineer.He previously served as Deputy GM of Weifu Tianli Deputy GM and GM of the mechanical system division of
the Company; now he serves as Supervisor of the Company and director of the Organizational personnel
department of the Company.Mr. Dai Lizhong was born in July 1975 communist party members owns Master’s degree and a engineer. He
previously served as Deputy GM and GM of the Weifu Diesel; now he serves as Supervisor of the Company and
standing deputy GM of the mechanical system division of the Company
Mr. Miao Yuming born in April 1963 communist party members a university background MBA and senior engineer.He previously served as director of sales department and assistant GM in the Company. Currently he serves as
deputy GM of the Company deputy GM of Bosch Automobile Diesel;
Mr. Xu Yunfeng born in November 1971 communist party members graduate from University a Master and
engineer. He previously served as assistant GM and GM Weifu Automobile Diesel. Currently serves as deputy
GM of the Company.Mr. Zhou Weixing born in January 1963 communist party members graduate from University a senior engineer.He previously served as representative of security affairs and director of security office of the Company; now he
serves as secretary of the Board of the Company.Post-holding in shareholder’s unit
√ Applicable □ Not applicable
Name Name of shareholder’s unit
Position in
shareholder’s unit n
Start dated of
office term
End date
of office
term
Received remuneration
from shareholder’s unit
(Y/N)
Rudolf Maier Bosch Automobile Diesel System Co. Ltd. Chairman Y
Chen Yudong Bosch (China) Investment Ltd. President 1 Jan. 2011 Y
Zhang
Xiaogeng
Wuxi Industry Development Group Co. Ltd. Vice president 1 Apr. 2008 Y
Hua Wanrong Wuxi Industry Development Group Co. Ltd.GM of the
investment
banking
department
1 Oct. 2018 Y
Miao Yuming Bosch Automobile Diesel System Co. Ltd. Deputy GM 1 Mar. 2012 Y
Post-holding in other unit
√ Applicable □ Not applicable
Name Name of other units Position in other unit n
Start dated of office
term
End
date of
office
term
Received
remunera
tion from
other unit
(Y/N)
Yu Xiaoli Zhejiang University Teacher and professor 1 August 1985
Yu Xiaoli Society of Automotive Engineers of Zhejiang Director-general 1 June 2015
Yu Xiaoli Zhejiang Bozhong Auto Technology Co. Ltd Chairman 1 April 2008
Yu Xiaoli Shaoxing Taige Electromechanical Tech. Co. Ltd Director 1 April 2004
Yu Xiaoli
Zhejiang Asia-Pacific Mechanical & Electronic Co.Ltd
Independent Director 1 April 2013
Yu Xiaoli Hangzhou XZB Tech. Co. Ltd Independent Director 1 December 2013
Yu Xiaoli Zhejiang Fenglong Electric Co. Ltd Independent Director 1 April 2016
Yu Xiaoli Hangzhou EVTECH Co. Ltd Independent Director 1 June 2016
Lou Diming Tongji University
Professor doctoral
supervisor
15 April 2000
Lou Diming Shanghai Diesel Engine Co. Ltd Independent Director 20 May 2015
Lou Diming
Jiangsu Liance Electromechanical Technology Co.Ltd
Independent Director 1 June 2017
Lou Diming Kunming Yunnei Power Co. Ltd Senior consultant 1 August 2018
Jin Zhangluo Suzhou Taihu Electric Advanced Material Co. Ltd Independent Director 4 February 2016
Jin Zhangluo
Jiangsu Pengyao Environmental Protection Tech.
Co. Ltd
Independent Director 1 February 2014
Xu Xiaofang Kunlun (Shenzhen) Law Firm Lawyer 1 September 2004
Xu Xiaofang Shenzhen Kaizhong Precision Technology Co. Ltd Independent Director 1 June 2018
Explanation
on
post-holding
in other unit
The aforesaid are the independent directors of the Company
Punishment of securities regulatory authority in recent three years to the company’s current and outgoing directors supervisors and
senior management during the reporting period
□ Applicable √ Not applicable
IV. Remuneration for directors supervisors and senior executives
Decision-making procedures recognition basis and payment for directors supervisors and senior executives
1. Decision-making procedure: the remuneration and review committee of the Board shall make proposals
according to completion status of the major annual targets the implementation of which is subject to submission
to and approval by the Board;
2. Determination reference: remuneration of directors supervisors and senior management who receive
remuneration from the Company is determined based on the annual operating results assessment measures of
senior management and remuneration management rules of senior management as approved at the general
meetings. Salary for independent directors of the Company is determined by general meeting which is set at RMB
25000 per quarter (after tax) and the traveling expense occurred by them arising from attending the Company’s
board meeting general meetings and relevant activities will be reimbursed according to the actual conditions.
3. Actual payment: remuneration of directors supervisors and senior management who receive remuneration from
the Company comprises of basic annual pay and performance related annual salary. The basic annual pay shall be
determined based on specific positions and paid monthly while the performance related salary is determined and
paid based on satisfaction of the various performance indicators since it is directly linked with the economic
benefits of the Company. Remuneration of independent directors will be paid on a quarterly basis.Remuneration for directors supervisors and senior executives in reporting period
In 10 thousand Yuan
Name Title Sex Age Post-holding status
Total
remuneration
obtained from the
Company (before
taxes)
Whether
remuneration
obtained from
related party of
the Company
Chen Xuejun Chairman M 51 Currently in office 95 N
Rudolf Maier Vice Chairman M 61 Currently in office Y
Wang Xiaodong Vice Chairman、GM M 52 Currently in office 86 NOu Jianbin
Director Deputy General Manager
and financing Charger
M 52 Currently in office 72 N
Zhang Xiaogeng Director M 55 Currently in office Y
Chen Yudong Director M 57 Currently in office Y
Hua Wanrong Director F 54 Currently in office Y
Yu Xiaoli Independent Director F 55 Currently in office 6 N
Lou Diming Independent Director M 55 Currently in office 12 N
Jin Zhangluo Independent Director M 68 Currently in office 12 N
Xu Xiaofang Independent Director M 55 Currently in office 12 N
Shi Xingyuan
Chairman of the Supervisory
Committee
M 56 Currently in office 72 N
Ma Yuzhou Supervisor M 44 Currently in office 19 N
Dai Lizhong Supervisor M 43 Currently in office 19 N
Miao Yuming Deputy GM M 55 Currently in office Y
Xu Yunfeng Deputy GM M 47 Currently in office 72 N
Zhou Weixing Secretary of the Board M 55 Currently in office 41 N
Xing Min Independent Director M 64 Office leaving 6 N
Zhang Zhenting Supervisor M 54 Office leaving 23 N
Liu Jinjun Supervisor M 43 Office leaving 19 N
Total -- -- -- -- 566 --
Delegated equity incentive for directors supervisors and senior executives in reporting period
□ Applicable √ Not applicable
V. Particulars of workforce
1. Number of Employees Professional composition Education background
Employee in-post of the parent Company (people) 2509
Employee in-post of main Subsidiaries (people) 3013
The total number of current employees (people) 5522
The total number of current employees to receive pay (people) 5522
Retired employee’ s expenses borne by the parent Company and main Subsidiaries (people) 0
Professional composition
Category of professional composition
Numbers of professional
composition (people)
Production personnel 3386
Sales personnel 230
Technical personnel 1236
Financial personnel 91
Administrative personnel 579
Total 5522
Education background
Category of education background Numbers (people)
Master degree and above 244
Undergraduate 1317
Junior college 1202
Other 2759
Total 5522
2. Remuneration Policy
In 2018 the company further improved the performance management and compensation management system
differentiated the competency evaluation of “people” and the performance evaluation of “things” established a
two-dimensional evaluation system of performance and capability realized the interaction between organizationalperformance and employee performance and optimize the merit pay proportion by taking “one level isresponsible for one level” as the standard. Based on the principles of “remuneration market orientation andlandscape orientation balance” and combined with external research and internal post analysis optimized salary
strategy and salary model formed certain market competitiveness stabilized the core employees of the company’s
core positions; gave full play to the role of incentive funds clarified the objective of struggle strengthened the
incentive effect and promoted the spirit of “climbing higher than the challenge challenging the high difficulties”
in the employees which played an incentive role for the realization of the company’s annual goals; explored new
welfare mechanisms and piloted the establishment of flexible welfare platform for company employees. The
Company arranged social insurance for all of its employees and continued to make available the complementary
annuity and medical and accident commercial insurances effectively improve the level of employee motivation
and managing to activate employees’ enthusiasm and innovation retain employees attract high quality elites and
strengthen corporate cohesiveness.
3. Training programs
In 2018 the Company further increased training to improve the professionalism and expertise of employees.
Throughout the year it held in aggregate 118 internal training with 167 in-house trainers. Besides it conducted an
overall dynamic management against its training courses and trainers in order to achieve constant improvement of
internal training quality. A total of about 10300 people have received relevant training from the Company among
which internal training accounted for 91%. The major training subjects included development plan for potential
elites establishment and implementation of training plan for core elites. Together with the assessment on
effectiveness of training the Company managed to strengthen training management on application and sharing
plans. In addition the company also tried to design and implemented the “SPACE” model of talent professional
skill development and training solidified the talent development training mode strengthened the landing of
application and embodied the training concept of “results oriented training and fighting combinedinteresting and effective” through the course study rotation practice application action self
challenge evaluation improvement.
4. Labor outsourcing
□ Applicable √ Not applicable
Section IX. Corporate Governance
I. Corporate governance of the Company
During the reporting period the Company earnestly implemented the Basic Internal Control Standards for
Enterprise and its guidance in strict accordance to the requirements of the Company Law Securities Law Listing
Rules of Shenzhen Stock Exchange as well as Guidance on Standard Operation of Listed Company on Main Board
continued to improve and enhance legal person governance structure and internal control system thus to
standardize its operation. The actual status of corporate governance in accordance with the requirements of China
Securities Regulatory Commission regulatory documents related to listing Corporation.The company has established a series of document systems for standardized management including the Rules of
Procedure of three committees Working Rules internal control system Evaluation Management System of
Internal Control Information Disclosure Management Approach Financial Decision-making System of
Significant Investment Related Party Transaction System and Inside Information and Insider Management
System.
According to the Company Law Articles of Association and relevant laws and regulations the company
established a relatively complete organizational control architecture system. The company’s board of directors
executes the resolution of general meeting of stockholders takes charge of the company’s great decisions and
take responsible for the general meeting of stockholders; the company sets up the general manager according to
law to preside over the company’s daily production and operation and management organize and implement the
resolutions of the board of directors and take responsible for the board of directors; the company’s board of
supervisors is the company’s supervisory body takes responsible for behaviors of the directors and senior
management and the supervise the company’s financial affairs. The board of directors has four special committees
including the strategy committee remuneration and appraisal committee audit committee and nominations
committee. The company’s general meeting of stockholders board of directors board of supervisors and
management layer have clear rights and obligations perform their own duties effectively check and balance
scientifically make decisions coordinate operations and lay a solid foundation for the company’s sustainable
stable and healthy development.The company’s independent directors perform their duties and faithfully and conscientiously fulfill their
obligations in strict accordance with relevant regulations of Articles of Association and the Independent Director
System and actively attend the board meetings and shareholders' meetings understand and obtain relevant
information before meetings; carefully consider each motion and actively participate in the discussions and make
recommendations. Seriously make independent opinions and effectively protect the interests of the company and
shareholders especially the minority shareholders. Independent directors have no objections on relevant matters
of the company.
The company further implements the Basic Norms of Enterprise Internal Control and its guidelines constructs the
internal control system in the company headquarters and major subsidiaries enhance the company's management
and control level optimize the work flow improve the internal control system identify and control the
operational risks. Please see the detailed contents of 2018 Annual Internal Control Evaluation Report on
www.cninfo.com.cn which is the information disclosure website designated by Shenzhen Stock Exchange.Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance for
listed company from CSRC?
□ Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporate governance
for listed company from CSRC.II. Independence of the Company relative to controlling shareholders’ in aspect of businesses
personnel assets organization and finance
1. Business: the company has a complete independent research and development procurement production and
sales systems the main business does not have horizontal competition with the controlling shareholders. The
business is absolutely separated.
2. Personnel: the company has mutual independence with its controlling shareholders in labor personnel and
salary management; there is no mixed operation and management with the controlling shareholders. The
company’s general manager vice general manager financial administrator secretary of the board and senior
executives don’t hold any position in the shareholders’ units.
3. Assets: the company's assets are independent and complete the property relations with the controlling
shareholders are clear.
4. Organization: the company has established organization completely independent from its controlling
shareholders the duty and authority of the company’s stockholders' meeting board of directors board of
supervisors and management level are clearly defined the internal management system can operate
independently.
5. Finance: the company has set up an independent financial department established the independent financial
accounting system and financial management system opened the independent bank account and paid taxes
separately according to law.III. Horizontal competition
□ Applicable √ Not applicable
IV. In the report period the Company held annual shareholders’ general meeting and
extraordinary shareholders’ general meeting
1. Annual Shareholders’ General Meeting in the report period
Session of meeting Type
Ratio of investor
participation
Date
Date of
disclosure
Index of disclosure
Annual General
Meeting of 2017
AGM 42.04% 27 June 2018 28 June 2018
(Notice No.: 2018-021) published on
Juchao Website(www.cninfo.com.cn)
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and general meeting
The attending of independent directors to Board Meeting and general meeting
Independent
Director
Times of Board
meeting supposed
to attend in the
report period
Times of
Board
meeting
Presence
Times of
attending Board
meeting by
communication
Times of
Board meeting
entrusted
presence
Times of
Board meeting
Absence
Absent the
Board Meeting
for the second
time in a row
(Y/N)
Times of
attending
shareholding
meeting
Yu Xiaoli 3 1 2 0 0 N 1
Lou Diming 7 2 4 1 0 N 1
Jin Zhangluo 7 3 4 0 0 N 1
Xu Xiaofang 7 3 4 0 0 N 1
Explanation of absent the Board Meeting for the second time in a row
Not applicable
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□ Yes √ No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√ Yes □ No
Explanation on advice that accepted/not accepted from independent directors
During the reporting period the company’s independent directors have paid close attention to the company’s
operations independently performed their duties made special opinions on the company’s system improvement
and daily operating decisions in strict accordance with relevant laws and regulations and the provisions of Articles
of Association made independent and just opinions on the matters that need the independent directors’ opinions
during the reporting period and played the due role in improving the corporate governance mechanism
maintaining the legitimate rights and interests of the company and all shareholders.VI. Duty performance of the special committees under the board during the reporting period
1. Two meetings of Audit committee of the Board deliberated and approved followed: Financial Result Report of
2017 Annual Report of 2017 and its Summary Conclusion Report of auditing for year of 2017 Engagement of
audit institute for financial report of 2018 Engagement of audit institute for internal control of the Company of
2018 and Semi-Annual Report of 2018 and its Summary etc.;
2. One meeting of remuneration and appraisal committee of the Board deliberate and approved the Remuneration
evaluation and payment for senior executive of 2017;
3. One meeting of strategy committee of the Board deliberate and approved the Operation target for year of
2018.
4. Two meetings of nomination committee of the Company deliberate the director nominee of 9
th
BOD without
objection; and examined the qualification of senior managers and the related situation without objection.VII. Works from Supervisory Committee
The Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes √ No
Supervisory committee has no objection about supervision events in reporting period
VIII. Examination and incentives of senior management
Assessment and incentive of senior management of the Company is conducted pursuant to the Company Law
Articles of Association and the Annual Operating Results Assessment Measures of Senior Management and
Remuneration Management Rules of Senior Management as approved at the general meetings. Assessment of
operating results of senior management comprises of annual operating results assessment and term-of-service
operating results assessment. Assessment on results and procedure was combined and assessment results were
linked to incentives and punishment. With respect to annual operating results review the remuneration and review
committee of the Board made comprehensive assessment on satisfaction of the annual operating targets and
determined the annual remuneration incentives or punishment for senior management based on their review
results (which was implemented according to remuneration management rules of senior management) based on
the major annual operating targets set by the Board under required procedures and methods through establishment
of scientific performance indicators and assessment system and combination of scoring in terms of quantity and
review comments. During the reporting period the Company made appropriate assessment on its senior
management under the performance indicator and assessment system the results of which had been reflected in
the annual performance related remuneration.
Currently the Company has not exercised any share option scheme.
IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□Yes √ No
2. Appraisal Report of Internal Control
Disclosure date of full internal control
evaluation report
23 April 2019
Disclosure index of full internal control
evaluation report
Self-evaluation report of internal control for 2018 more details found in Juchao
website (www.cninfo.com.cn) appointed by Shenzhen Stock Exchange
The ratio of the total assets of units
included in the scope of evaluation
accounting for the total assets on the
company's consolidated financial
statements
100.00%
The ratio of the operating income of units
included in the scope of evaluation
accounting for the operating income on the
company's consolidated financial
statements
100.00%
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
Qualitative criteria
See details in (II) Basis for evaluation of
internal controls and defect identification
standards of internal controls of III
Evaluation of Internal Controls in 2018
Annual Internal Control Self-Evaluation
Report disclosed on www.cninfo.com.cn on
April 23 2019.
See details in (II) Basis for evaluation of
internal controls and defect identification
standards of internal controls of III
Evaluation of Internal Controls in 2018
Annual Internal Control Self-Evaluation
Report disclosed on www.cninfo.com.cn
on April 23 2019
Quantitative standard
See details in (II) Basis for evaluation of
internal controls and defect identification
standards of internal controls of III
Evaluation of Internal Controls in
2018Annual Internal Control
Self-Evaluation Report disclosed on
www.cninfo.com.cn on April 23 2019.See details in (II) Basis for evaluation of
internal controls and defect identification
standards of internal controls of III
Evaluation of Internal Controls in 2018
Annual Internal Control Self-Evaluation
Report disclosed on www.cninfo.com.cn
on April 23 2019
Amount of significant defects in financial
reports
0
Amount of significant defects in
non-financial reports
0
Amount of important defects in financial
reports
0
Amount of important defects in
non-financial reports
0
X. Auditing report of internal control
√Applicable □ Not applicable
Deliberations in Internal Control Audit Report
Audit institute considers that: according to relevant regulations and Basic Rules of Internal Control for Enterprises Weifu
High-Technology Co. Ltd. in all major aspects keeps an efficiency of internal control of financial report dated 31 December 2018
Disclosure details of audit report of internal
control
Disclosed
Disclosure date of audit report of internal
control (full-text)
23 April 2019
Index of audit report of internal control
(full-text)
Audit report of internal control for year of 2018 more details found in Juchao
website (www.cninfo.com.cn) appointed by Shenzhen Stock Exchange
Opinion type of auditing report of IC Standard unqualified
Whether the non-financial report had major
defects
No
Carried out modified opinion for internal control audit report from CPA
□Yes √ No
The internal control audit report issued by CPA has concerted opinion with self-evaluation report issued from the Board
√ Yes □ No
Section X. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when
annual report approved for released or fail to cash in full on due
No
Section XI. Financial Report
I. Audit report
Type of audit opinion Standard unqualified opinion
Signing date of audit report 19 April 2019
Name of audit institute Jiangsu Gongzheng Tianye Certified Public Accountants (Special General Partnership)
Document number of audit report SGW[2019]No.:A525
Name of CPA Bo Lingjing Meng Yin
Auditor’s Report
SGW[2019]No.:A525
To the Shareholders of Weifu High-Technology Group Co. Ltd.:
I. Auditing opinions
We have audited the financial statement under the name of Weifu High-Technology Group Co. Ltd. (hereinafter referred to as
WFHT) including the consolidated and parent Company’s balance sheet of 31 December 2018 and profit statement and cash flow
statement and statement on changes of shareholders’ equity for the year ended and notes to the financial statements for the year
ended.In our opinion the Company’s financial statements have been prepared in accordance with the Enterprises Accounting Standards and
Enterprises Accounting System and they fairly present the financial status of the Company and of its parent company as of 31
December 2018 and its operation results and cash flows for the year ended.
II. Basis of opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our responsibilities
under those standards are further described in the “Auditor’s Responsibilities for the Audit of the Financial Statements” section of the
auditor’s report. We are independent of the Company in accordance with the Certified Public Accountants of China’s Code of Ethics
for Professional Accountants and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.III. Key audit matters
Key audit matters are those matters that in our professional judgment were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and
in forming our opinion thereon and we do not provide a separate opinion on these matters.The key audit matter we identified is as follows:
(i) Revenue Recognition
1.Matter description
As carried in the 24. Revenue in Note V and 35. Operation revenue and cost in Note VII WFHT achieved an operation revenue of
8721.6747 million Yuan for the year of 2018.
As one of the biggest source of profits for WFHT operation revenue has a significant effect on the general financial statement in
which there are certain of inherent risks existed for the reason that the management manipulate the timing of recognition so as to
achieve specific objectives or anticipations. Therefore we will take the Revenue Recognition Principle as the key auditing matter.
2.The solution to the matter in auditing
(1)The Company has tested the design and execution of key internal control related to revenue recycling so as to confirm the validity
of internal control; (2) The Company should make sure whether the recognition condition and method of major operating revenue are
compliance with the enterprise accounting principle and whether the front phase consistent with the rear phase; it also should pay an
attention to that whether the cyclical and occasional revenue is compliance with the decided revenue recognition principle and
methods; (3) Combining with status and policies of the industry where WFHT is located and make a judgment on the rationality of
fluctuation; (4) The Company should carry out the procedure of account receivable and income letter of confirmation and make a
judgment on the rationality of the timing of revenue recognition; (5) Combining with the procedure of letter of confirmation the
Company should make a random inspection on sales contracts or orders delivery lists logistics bills customs declaration sales
invoices and other documents related to revenue to verify the authenticity of revenue; and (6) Referring to the recorded revenue
before and after the Balance Sheet Date the Company should select some samples and check out the supportive documents such as
delivery lists customs declaration and receipt forms to make a judgment on whether the income has been recorded at the appropriate
accounting period.(ii) Impairment of available-for-sale financial assets
1. Description of the matter
As stated in Note V 10 “Financial Instruments” and Note VII 7 “Available for Sale Financial Assets” of the financial statements as
of December 31 2018 the book balance of available-for-sale financial assets in the consolidated statements of WFHT was
460603200 Yuan the balance of impairment provision was204628034.04Yuan of which the impairment provision calculated in
the current period was145994927.09 Yuan. For available-for-sale financial assets the management of WFHT (hereinafter referred
to as the management) considered whether these financial assets had objective evidence showing signs of impairment the objective
evidence of the existence of signs of impairment included the fair value of available-for-sale equity instruments having a serious or
non-temporary decline. As the amount of available-for-sale financial assets was significant the impairment assessment required
significant judgment from the management and the impairment assessment of such assets was recognized as a key audit matter.
2. Response to the matter in the audit
(1) Assess and test the validity of the design and operation of the internal control of the process related to the impairment of
available-for-sale financial assets; (2) Assess the management’s judgment on whether there is any indication of impairment the
assessment is based on the fair value of the financial instrument and the financial condition of the invested enterprise; (3) Assess the
rationality of the management’s judgment that the financial instrument is serious or non-temporary less than its cost standard; (4) For
impairment of available-for-sale financial assets test the amount of impairment provision accrued by the management. We assessed
the basis and parameters (such as market value financial information of the invested enterprise etc.) used to calculate the impairment
provision during the test.IV. Other information
The management of WFHT is responsible for other information which includes the information covered in the Company’s 2018
annual report excluding the financial statement and our audit report.The audit opinion issued by us for the financial statement has not covered other information for which we do not issue any form of
assurance opinions.
Considering our audit on financial statements we are liable to read other information during which we shall consider whether other
information differs materially from the financial statements or that we understand during our audit or whether there is any material
misstatement.
Based on the work we have carried out if we determine that there is a material misstatement of other information we should report
that fact and in this regard we have nothing to report.V. Responsibilities of management and those charged with governance for the financial statements
The management is responsible for the preparation of the financial statements in accordance with the Accounting Standards for
Enterprise to secure a fair presentation and for the design establishment and maintenance of the internal control necessary to enable
the preparation of financial statements that are free from material misstatement whether due to fraud or error.In preparing the financial statements the management is responsible for assessing the Company’s ability to continue as a going
concern disclosing matters related to going concern (if applicable) and using the going concern assumption unless the management
either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting process.VI. Responsibilities of the auditor for the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement whether due to fraud or error and to issue an audit report that includes our audit opinion. Reasonable assurance is a
high level of assurance but is not a guarantee that an audit conducted in accordance with the CAS will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the
aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial
statements.
As part of an audit in accordance with the CAS we exercise professional judgment and maintain professional skepticism throughout
the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and
perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for
audit opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as
fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern assumption and based on the audit evidence
obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists we are required by the CAS to draw users’
attention in audit report to the related disclosures in the financial statements or if such disclosures are inadequate to modify audit
opinion. Our conclusions are based on the information obtained up to the date of audit report. However future events or conditions
may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation structure and content of the financial statements including the disclosures and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Company to express audit opinion on the financial statements. We are responsible for the direction supervision and performance of
the group audit. We remain solely responsible for audit opinion.We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and
significant audit findings including any significant deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence and communicate with them all relationships and other matters that may reasonably be considered to affect our
independence as well as the relevant precautions (if applicable)
From the matters communicated with those charged with governance we determine those matters that were of most significance in
the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in the
auditor’s report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we
determine that a matter should not be communicated in the auditor’s report because of the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.Jiangsu Gongzheng Tianye CPA Chinese CPA: Bo Lingjing
(Special Ordinary Partnership) (engagement partner)
Wuxi China Chinese CPA: Meng Yin
19 April 2019
II. Financial Statement
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated Balance Sheet
Prepared by Weifu High-Technology Group Co. Ltd.
2018-12-31
In RMB
Item Ending balance Opening balance
Current assets:
Monetary funds 2616321740.73 3118709412.83
Settlement provisions
Capital lent
Financial assets measured by fair value and with variation
reckoned into current gains/losses
Derivative financial assets
Note receivable and account receivable 3067900870.59 3459834765.73
Including: Note receivable 1148107603.68 1464256934.83
Account receivable 1919793266.91 1995577830.90
Account paid in advance 94651431.31 97576197.88
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other receivables 84582246.16 7496602.58
Including: Interest receivable 1842437.50 2281979.17
Dividend receivable
Buying back the sale of financial assets
Inventory 1438528714.59 1478939040.70
Assets held for sale
Non-current asset due within one year
Other current assets 4632137600.26 3887997290.53
Total current assets 11934122603.64 12050553310.25
Non-current assets:
Loans and payments on behalf
Available-for-sale financial assets 255975176.91 588142869.00
Held-to-maturity investments
Long-term receivables
Long-term equity investments 4976773946.74 4140064825.58
Investment real estate 21906134.52 23544830.78
Fixed assets 2707374678.61 2584872628.54
Construction in progress 166414542.18 100345461.28
Productive biological assets
Oil and gas assets
Intangible assets 324892822.75 340632143.36
Research and development costs
Goodwill 1784086.79 1784086.79
Long-term deferred expenses 16637652.31 2969770.81
Deferred income tax assets 234697139.58 203007622.23
Other non-current assets 251462676.27 195088675.74
Total non-current assets 8957918856.66 8180452914.11
Total assets 20892041460.30 20231006224.36
Current liabilities:
Short-term borrowings 298928213.94 243000000.00
Loan from central bank
Absorbing deposit and interbank deposit
Capital borrowed
Financial liability measured by fair value and with variation
reckoned into current gains/losses
Derivative financial liability 490329.13
Note payable and account payable 3065704368.40 3518932964.93
Accounts received in advance 41329857.80 42820236.07
Selling financial asset of repurchase
Commission charge and commission payable
Wage payable 312113178.24 327778677.29
Taxes payable 74271613.92 93869690.36
Other accounts payable 64448723.52 63339869.33
Including: Interest payable 517469.08 401928.43
Dividend payable
Reinsurance payable
Insurance contract reserve
Security trading of agency
Security sales of agency
Liability held for sale
Non-current liabilities due within one year 15000000.00 10000000.00
Other current liabilities
Total current liabilities 3872286284.95 4299741437.98
Non-current liabilities:
Long-term loans 30000000.00 45000000.00
Bonds payable
Including: preferred stock
Perpetual capital securities
Long-term account payable 35422354.11 35761445.11
Long-term wages payable 74679175.36 30448132.88
Accrual liabilities
Deferred income 425769854.13 451281721.77
Deferred income tax liabilities 1912744.40 17406622.39
Other non-current liabilities
Total non-current liabilities 567784128.00 579897922.15
Total liabilities 4440070412.95 4879639360.13
Owners’ equity:
Share capital 1008950570.00 1008950570.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital reserve 3416022795.14 3417841402.89
Less: Inventory shares
Other comprehensive income -19809442.95 87169455.01
Reasonable reserve 1618490.50 2606.93
Surplus reserve 510100496.00 510100496.00
Provision of general risk
Retained profit 10996945870.13 9811609138.92
Total owners’ equity attributable to parent company 15913828778.82 14835673669.75
Minority interests 538142268.53 515693194.48
Total owners’ equity 16451971047.35 15351366864.23
Total liabilities and owner’s equity 20892041460.30 20231006224.36
Legal Representative: Chen Xuejun
Person in charge of accounting works: Ou Jianbin
Person in charge of accounting institute: Ou Jianbin
2. Balance Sheet of Parent Company
In RMB
Item Ending balance Opening balance
Current assets:
Monetary funds 1922408227.00 2460413190.84
Financial assets measured by fair value and with variation
reckoned into current gains/losses
Derivative financial assets
Note receivable and account receivable 1006511198.29 1496222212.94
Including: Note receivable 264264207.30 449209323.02
Account receivable 742246990.99 1047012889.92
Account paid in advance 59028927.25 52269971.38
Other receivables 196849092.13 50272280.93
Including: Interest receivable 188682.78 97627.77
Dividend receivable
Inventory 492054274.67 425577163.53
Assets held for sale
Non-current asset due within one year
Other current assets 4576688553.49 3876370675.52
Total current assets 8253540272.83 8361125495.14
Non-current assets:
Available-for-sale financial assets 180035176.91 512202869.00
Held-to-maturity investments
Long-term receivables
Long-term equity investments 5739110426.55 4962522689.49
Investment real estate
Fixed assets 1534109106.80 1567315925.73
Construction in progress 78673300.59 29152398.74
Productive biological assets
Oil and gas assets
Intangible assets 188101655.94 196726670.75
Research and development costs
Goodwill
Long-term deferred expenses
Deferred income tax assets 140286756.70 114706976.54
Other non-current assets 184208090.40 80866308.04
Total non-current assets 8044524513.89 7463493838.29
Total assets 16298064786.72 15824619333.43
Current liabilities:
Short-term borrowings 112000000.00 78000000.00
Financial liability measured by fair value and with variation
reckoned into current gains/losses
Derivative financial liability
Note payable and account payable 1154238521.88 1541969832.85
Accounts received in advance 6639554.63 12242442.51
Wage payable 200205508.25 216598203.73
Taxes payable 39193425.15 71370793.35
Other accounts payable 12142596.68 10076446.33
Including: Interest payable 149966.66 93777.78
Dividend payable
Liability held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 1524419606.59 1930257718.77
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual capital securities
Long-term account payable
Long-term wages payable 63962762.93 16665236.81
Accrual liabilities
Deferred income 381609056.40 407070636.08
Deferred income tax liabilities 15382844.99
Other non-current liabilities
Total non-current liabilities 445571819.33 439118717.88
Total liabilities 1969991425.92 2369376436.65
Owners’ equity:
Share capital 1008950570.00 1008950570.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital reserve 3488221286.39 3488221286.39
Less: Inventory shares
Other comprehensive income -19809442.95 87169455.01
Reasonable reserve
Surplus reserve 510100496.00 510100496.00
Retained profit 9340610451.36 8360801089.38
Total owners’ equity 14328073360.80 13455242896.78
Total liabilities and owner’s equity 16298064786.72 15824619333.43
3. Consolidated Profit Statement
In RMB
Item Current period Last Period
I. Total operating income 8721674671.18 9017280159.80
Including: Operating income 8721674671.18 9017280159.80
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost 8216834165.41 8086342833.98
Including: Operating cost 6691856839.97 6761729398.36
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 65388329.92 72413140.48
Sales expenses 237839472.28 194854780.37
Administration expenses 585005385.75 539493552.86
R&D expenses 403263972.20 391315234.75
Financial expenses -17393580.55 7316996.79
Including: Interest expenses 17562164.63 10044328.07
Interest income 34156380.22 18726974.19
Losses of devaluation of asset 250873745.84 119219730.37
Add: Other income 48404480.99 40394724.11
Investment income (Loss is listed with “-”) 1955668055.33 1853638285.20
Including: Investment income on affiliated company
and joint venture
1623761059.52 1604027207.30
Income from change of fair value (Loss is listed with
“-”)
-490329.13
Exchange income (Loss is listed with “-”)
Income from assets disposal (Loss is listed with “-”) 102472995.47 -748927.63
III. Operating profit (Loss is listed with “-”) 2610895708.43 2824221407.50
Add: Non-operating revenue 1264830.90 11968167.87
Less: Non-operating expenditure 9977159.55 5773593.62
IV. Total Profit (Loss is listed with “-”) 2602183379.78 2830415981.75
Less: Income tax expense 135888676.31 183206057.17
V. Net profit (Net loss is listed with “-”) 2466294703.47 2647209924.58
(i) net profit from continuous operation (Net loss is listed
with “-”)
2466294703.47 2647209924.58
(ii) net profit from discontinued operation (Net loss is listed
with “-”)
Net profit attributable to owner’s of parent company 2396077415.21 2571339490.04
Minority shareholders’ gains and losses 70217288.26 75870434.54
VI. Net amount of other comprehensive income after-tax -106978897.96 -57553372.50
Net after-tax of other comprehensive income attributable to
owners of parent company
-106978897.96 -57553372.50
(i) Other comprehensive income items which will not be
reclassified subsequently to profit of loss
1.Re-measurement of the change of defined benefit plan
2.Other comprehensive income unable transfer to gain/loss
under equity method
(ii) Other comprehensive income items which will be
reclassified subsequently to profit or loss
-106978897.96 -57553372.50
1.Other comprehensive income able to transfer to gain/loss
under equity method
2.Gains or losses arising from changes in fair value of
available-for-sale financial assets
-106978897.96 -57553372.50
3.Gains or losses arising from reclassification of
held-to-maturity investment as available-for-sale financial assets
4.The effect hedging portion of gains or losses arising from
cash flow hedging instruments
5.Translation differences arising on translation of foreign
currency financial statements
6.Other
Net amount of other comprehensive income after-tax
attributable to minority shareholders
VII. Total comprehensive income 2359315805.51 2589656552.08
Total comprehensive income attributable to owners of parent
Company
2289098517.25 2513786117.54
Total comprehensive income attributable to minority
shareholders
70217288.26 75870434.54
VIII. Earnings per share:
(i) Basic earnings per share 2.37 2.55
(ii) Diluted earnings per share 2.37 2.55
As for the enterprise combined under the same control net profit of Yuan achieved by the merged party before combination while Yuan achieved last period
Legal Representative: Chen Xuejun
Person in charge of accounting works: Ou Jianbin
Person in charge of accounting institute: Ou Jianbin
4. Profit Statement of Parent Company
In RMB
Item Current period Last Period
I. Operating income 3998191191.20 3646015253.48
Less: Operating cost 2878837450.12 2772717901.96
Operating tax and extras 35149305.22 32231401.32
Sales expenses 37478558.29 41447839.21
Administration expenses 376379869.65 264781355.23
R&D expenses 177593532.59 119083205.53
Financial expenses -21456061.70 612009.78
Including: Interest expenses 7628727.78 10044328.07
Interest income 28648955.90 18726974.19
Losses of devaluation of asset 175101684.40 32483156.75
Add: Other income 29495580.27 29394763.19
Investment income (Loss is listed with “-”) 1936311115.66 2684760048.35
Including: Investment income on affiliated company
and joint venture
1529792676.71 1470504861.61
Income from change of fair value (Loss is listed with
“-”)
Income from assets disposal (Loss is listed with “-”) 378212.58 -712637.95
II. Operating profit (Loss is listed with “-”) 2305291761.14 3096100557.29
Add: Non-operating revenue 207671.23 3830135.74
Less: Non-operating expenditure 7273534.03 2394121.52
III. Total Profit (Total loss is listed with “-”) 2298225898.34 3097536571.51
Less: Income tax expense 106753611.42 96268627.83
IV. Net profit(Net loss is listed with “-”) 2190550045.98 3001267943.68
(i) net profit from continuous operation (Net loss is listed
with “-”)
2190550045.98 3001267943.68
(ii) net profit from discontinued operation (Net loss is listed
with “-”)
V. Net amount of other comprehensive income after-tax -106978897.96 -57553372.50
(i) Other comprehensive income items which will not be
reclassified subsequently to profit of loss
1.Re-measurement of the change of defined benefit plan
2.Other comprehensive income unable transfer to gain/loss
under equity method
(ii) Other comprehensive income items which will be
reclassified subsequently to profit or loss
-106978897.96 -57553372.50
1.Other comprehensive income able to transfer to gain/loss
under equity method
2.Gains or losses arising from changes in fair value of
available-for-sale financial assets
-106978897.96 -57553372.50
3.Gains or losses arising from reclassification of
held-to-maturity investment as available-for-sale financial assets
4.The effect hedging portion of gains or losses arising from
cash flow hedging instruments
5.Translation differences arising on translation of foreign
currency financial statements
6.Other
VI. Total comprehensive income 2083571148.02 2943714571.18
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share
5. Consolidated Cash Flow Statement
In RMB
Item Current period Last Period
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor
services
7999323110.21 7754845248.56
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
Net increase of insured savings and investment
Net increase of amount from disposal financial assets that
measured by fair value and with variation reckoned into current
gains/losses
Cash received from interest commission charge and commission
Net increase of capital borrowed
Net increase of returned business capital
Write-back of tax received 74874331.14 43620789.57
Other cash received concerning operating activities 118177755.39 65978678.90
Subtotal of cash inflow arising from operating activities 8192375196.74 7864444717.03
Cash paid for purchasing commodities and receiving labor service 4916153332.79 4582582669.13
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 1258270424.72 1160114421.44
Taxes paid 584432693.90 616431389.37
Other cash paid concerning operating activities 559137218.70 547618336.02
Subtotal of cash outflow arising from operating activities 7317993670.11 6906746815.96
Net cash flows arising from operating activities 874381526.63 957697901.07
II. Cash flows arising from investing activities:
Cash received from recovering investment 11441378669.57 9448612477.03
Cash received from investment income 1161469760.54 1098610121.87
Net cash received from disposal of fixed intangible and other
long-term assets
79188658.88 57287480.01
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities 4559984.34
Subtotal of cash inflow from investing activities 12682037088.99 10609070063.25
Cash paid for purchasing fixed intangible and other long-term
assets
642108805.53 469961718.71
Cash paid for investment 12245264000.00 11389400000.00
Net increase of mortgaged loans
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities 1090775.32
Subtotal of cash outflow from investing activities 12888463580.85 11859361718.71
Net cash flows arising from investing activities -206426491.86 -1250291655.46
III. Cash flows arising from financing activities:
Cash received from absorbing investment 800000.00 9520000.00
Including: Cash received from absorbing minority shareholders’
investment by subsidiaries
800000.00 9520000.00
Cash received from loans 464928213.94 245000000.00
Cash received from issuing bonds
Other cash received concerning financing activities 5470000.00
Subtotal of cash inflow from financing activities 471198213.94 254520000.00
Cash paid for settling debts 419000000.00 157000000.00
Cash paid for dividend and profit distributing or interest paying 1251137878.98 640733312.09
Including: Dividend and profit of minority shareholder paid by
subsidiaries
22543737.00 25491872.94
Other cash paid concerning financing activities 15909091.00 1388802.28
Subtotal of cash outflow from financing activities 1686046969.98 799122114.37
Net cash flows arising from financing activities -1214848756.04 -544602114.37
IV. Influence on cash and cash equivalents due to fluctuation in
exchange rate
3128506.54 -9588455.13
V. Net increase of cash and cash equivalents -543765214.73 -846784323.89
Add: Balance of cash and cash equivalents at the period-begin 2948439354.22 3795223678.11
VI. Balance of cash and cash equivalents at the period-end 2404674139.49 2948439354.22
6. Cash Flow Statement of Parent Company
In RMB
Item Current period Last Period
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor
services
4733753801.62 3416825598.91
Write-back of tax received
Other cash received concerning operating activities 41027003.47 517431460.97
Subtotal of cash inflow arising from operating activities 4774780805.09 3934257059.88
Cash paid for purchasing commodities and receiving labor service 2886319248.71 2151676404.43
Cash paid to/for staff and workers 680624287.14 536335082.41
Taxes paid 394154946.50 286855287.15
Other cash paid concerning operating activities 190629457.19 122961088.23
Subtotal of cash outflow arising from operating activities 4151727939.54 3097827862.22
Net cash flows arising from operating activities 623052865.55 836429197.66
II. Cash flows arising from investing activities:
Cash received from recovering investment 10801378669.57 8859701492.00
Cash received from investment income 1209267861.85 1994517515.08
Net cash received from disposal of fixed intangible and other
long-term assets
39600092.79 52607353.75
Net cash received from disposal of subsidiaries and other units 2410502.57
Other cash received concerning investing activities 208164304.89 203883811.97
Subtotal of cash inflow from investing activities 12258410929.10 11113120675.37
Cash paid for purchasing fixed intangible and other long-term
assets
374303391.72 171633121.17
Cash paid for investment 11561834000.00 10801729258.63
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities 298197471.87 47000000.00
Subtotal of cash outflow from investing activities 12234334863.59 11020362379.80
Net cash flows arising from investing activities 24076065.51 92758295.57
III. Cash flows arising from financing activities:
Cash received from absorbing investment
Cash received from loans 212000000.00 80000000.00
Cash received from issuing bonds
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities 212000000.00 80000000.00
Cash paid for settling debts 178000000.00 82000000.00
Cash paid for dividend and profit distributing or interest paying 1218313222.90 607280892.11
Other cash paid concerning financing activities
Subtotal of cash outflow from financing activities 1396313222.90 689280892.11
Net cash flows arising from financing activities -1184313222.90 -609280892.11
IV. Influence on cash and cash equivalents due to fluctuation in
exchange rate
2563681.07 -8586691.91
V. Net increase of cash and cash equivalents -534620610.77 311319909.21
Add: Balance of cash and cash equivalents at the period-begin 2454696969.20 2143377059.99
VI. Balance of cash and cash equivalents at the period-end 1920076358.43 2454696969.20
7. Statement of Changes in Owners’ Equity (Consolidated)
Current period
In RMB
Item
Current period
Owners’ equity attributable to parent company
Minority
interests
Total owners’
equity
Share
capital
Other equity
instrument
Capital reserve
Less:
Inventor
y shares
Other
comprehensiv
e income
Reasonable
reserve
Surplus reserve
Provisio
n of
general
risk
Retained profit Prefer
red
stock
Perpetual
capital
securities
Other
I. Balance at the end
of the last year
1008
95057
0.00
3417841402.89 87169455.01 2606.93 510100496.00 9811609138.92 515693194.48 15351366864.23
Add: Changes of
accounting policy
Error correction of the
last period
Enterprise combine
under the same control
Other
II. Balance at the
beginning of this year
1008
95057
0.00
3417841402.89 87169455.01 2606.93 510100496.00 9811609138.92 515693194.48 15351366864.23
III. Increase/ Decrease -1818607.75 -106978897. 1615883.5 1185336731.21 22449074.05 1100604183.12
in this year (Decrease
is listed with “-”)
96 7
(i) Total
comprehensive income
-106978897.
96
2396077415.21 70217288.26 2359315805.51
(ii) Owners’ devoted
and decreased capital
-1818607.75 7024.21 -12958416.46 -14770000.00
1.Common shares
invested by owners
800000.00 800000.00
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned
into owners equity
with share-based
payment
4．Other -1818607.75 7024.21 -13758416.46 -15570000.00
(III) Profit distribution -1210740684.00 -35204600.00 -1245945284.00
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk provisions
3. Distribution for
owners (or
shareholders)
-1210740684.00 -35204600.00 -1245945284.00
4．Other
(IV) 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. Change amount of
defined benefit plans
that carry forward
retained earnings
5．Other
(v) Reasonable reserve
1608859.3
6
394802.25 2003661.61
1. Withdrawal in the
report period
20133398.
64
2758918.74 22892317.38
2. Usage in the report
period
18524539.
28
2364116.49 20888655.77
(vi)Other
IV. Balance at the end
of the report period
1008
95057
0.00
3416022795.14
-19809442.9
5
1618490.5
0
510100496.00 10996945870.13 538142268.53 16451971047.35
Last period
In RMB
Item
Last period
Owners’ equity attributable to parent company
Minority
interests
Total owners’
equity
Share
capital
Other equity instrument
Capital reserve
Less:
Inventor
y shares
Other
comprehensiv
e income
Reasonabl
e reserve
Surplus reserve
Provisio
n of
general
risk
Retained profit
Prefer
red
stock
Perpetua
l capital
securitie
s
Other
I. Balance at the end
of the last year
1008
95057
0.00
3417841402.8
9
144722827.5
1
89005.19 510100496.00 7845639990.88 471086098.05 13398430390.52
Add: Changes of
accounting policy
Error correction of the
last period
Enterprise combine
under the same control
Other
II. Balance at the
beginning of this year
1008
95057
0.00
3417841402.8
9
144722827.5
1
89005.19 510100496.00 7845639990.88 471086098.05 13398430390.52
III. Increase/ Decrease
in this year (Decrease
is listed with “-”)
-57553372.5
0
-86398.26 1965969148.04 44607096.43 1952936473.71
(i) Total -57553372.5 2571339490.04 75870434.54 2589656552.08
comprehensive income 0
(ii) Owners’ devoted
and decreased capital
8480761.72 8480761.72
1.Common shares
invested by owners
9520000.00 9520000.00
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned
into owners equity
with share-based
payment
4．Other -1039238.28 -1039238.28
(III) Profit distribution -605370342.00 -39650290.00 -645020632.00
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk provisions
3. Distribution for
owners (or
shareholders)
-605370342.00 -39650290.00 -645020632.00
4．Other
(IV) 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. Change amount of
defined benefit plans
that carry forward
retained earnings
5．Other
(v)Reasonable reserve -86398.26 -93809.83 -180208.09
1. Withdrawal in the
report period
1794766
1.67
2379810.36 20327472.03
2. Usage in the report
period
1803405
9.93
2473620.19 20507680.12
(vi)Other
IV. Balance at the end
of the report period
1008
95057
0.00
3417841402.8
9
87169455.01 2606.93 510100496.00 9811609138.92 515693194.48 15351366864.23
8. Statement of Changes in Owners’ Equity (Parent Company)
Current period
In RMB
Item
Current period
Share capital
Other equity instrument
Capital reserve
Less:
Inventor
y shares
Other
comprehensiv
e income
Reasonabl
e reserve
Surplus reserve Retained profit
Total owners’
equity
Preferred
stock
Perpetual
capital
securities
Other
I. Balance at the end of
the last year
1008950570.00 3488221286.39 87169455.01 510100496.00 8360801089.38 13455242896.78
Add: Changes of
accounting policy
Error correction of the last
period
Other
II. Balance at the
beginning of this year
1008950570.00 3488221286.39 87169455.01 510100496.00 8360801089.38 13455242896.78
III. Increase/ Decrease in
this year (Decrease is
listed with “-”)
-106978897.
96
979809361.98 872830464.02
(i) Total comprehensive
income
-106978897.
96
2190550045.98 2083571148.02
(ii) Owners’ devoted and
decreased capital
1.Common shares
invested by owners
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned into
owners equity with
share-based payment
4．Other
(III) Profit distribution
-1210740684.0
0
-1210740684.00
1. Withdrawal of surplus
reserves
2. Distribution for owners
(or shareholders)
-1210740684.0
0
-1210740684.00
3．Other
(IV) 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. Change amount of
defined benefit plans that
carry forward retained
earnings
5．Other
(v)Reasonable reserve
1. Withdrawal in the
report period
7503921.
32
7503921.32
2. Usage in the report
period
7503921.
32
7503921.32
(vi)Other
IV. Balance at the end of
the report period
1008950570.00 3488221286.39
-19809442.9
5
510100496.00 9340610451.36 14328073360.80
Last period
In RMB
Item
Last period
Share capital
Other equity instrument
Capital reserve
Less:
Inventor
y shares
Other
comprehensive
income
Reasonable
reserve
Surplus reserve Retained profit
Total owners’
equity
Preferred
stock
Perpetual
capital
securities
Other
I. Balance at the end of
the last year
1008950570.00 3448408786.39 144722827.51 510100496.00 5525644079.79 10637826759.69
Add: Changes of
accounting policy
Error correction of the
last period
Other
II. Balance at the 1008950570.00 3448408786.39 144722827.51 510100496.00 5525644079.79 10637826759.69
beginning of this year
III. Increase/ Decrease in
this year (Decrease is
listed with “-”)
39812500.00 -57553372.50 2835157009.59 2817416137.09
(i) Total comprehensive
income
-57553372.50 3001267943.68 2943714571.18
(ii) Owners’ devoted
and decreased capital
1.Common shares
invested by owners
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned into
owners equity with
share-based payment
4．Other
(III) Profit distribution -605370342.00 -605370342.00
1. Withdrawal of surplus
reserves
2. Distribution for
owners (or shareholders)
-605370342.00 -605370342.00
3．Other
(IV) 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. Change amount of
defined benefit plans that
carry forward retained
earnings
5．Other
(v)Reasonable reserve
1. Withdrawal in the
report period
4785959.
00
4785959.00
2. Usage in the report
period
4785959.
00
4785959.00
(vi)Other 39812500.00 439259407.91 479071907.91
IV. Balance at the end of
the report period
1008950570.00 3488221286.39 87169455.01 510100496.00 8360801089.38 13455242896.78
III . Basic information of the Company
1. Historical origin of the Company
By the approval of STGS (1992) No. 130 issued by Jiangsu Economic Restructuring Committee Weifu
High-Technology Group 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.
Between year of 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 130909845 shares in 2005.
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 47736000
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.
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 share as prior to Share Merger Reform according to the aforesaid
Share Merger Reform with an aggregate of 14039979 shares dispatched. Subsequent to implementation of
dispatch of consideration shares Weifu Group then held 100021999 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.In accordance with the resolutions of shareholders' meeting and provisions of amended constitution and approved
by [2012] No. 109 document of China Securities Regulatory Commission in Feb. the Company issued RMB
ordinary shares (A-share) of 112858000 shares to Wuxi Industry Groups and overseas strategic investor Robert
Bosch Co. Ltd. (ROBERT BOSCHGMBH) (hereinafter referred to as Robert Bosch Company) face value was
ONE Yuan per share added registered capital of RMB 112858000 and the registered capital after change was
RMB 680133995. Wuxi Industry Group is the first majority shareholder of the Company and Robert Bosch
Company is the second majority shareholder of the Company.
In March 2013 the profit distribution pre-plan for year of 2012 was deliberated and approved by the Board and
also passed in Annual General Meeting 2012 of the Company in May 2013. On basis of total share capital
680133995 shares distribute 5-share for every 10 shares held by whole shareholders 340066997 shares in total
are distributed. Total share capital of the Company amounting RMB 1020200992 up to 31 December 2013.
Deliberated and approved by the company’s first extraordinary general meeting in 2015 the company has
repurchased 11250422 shares of A shares from August 26 2015 to September 8 2015 and has finished the
cancellation procedures for above repurchase shares in China Securities Depository and Clearing Corporation
Limited Shenzhen Branch on September 16 2015; after the cancellation of repurchase shares the company’s
paid-up capital (share capital) becomes 1008950570 Yuan after the change.
2. Registered place organization structure and head office of the Company
Registered place and head office of the Company: No. 5 Huashan Road New District Wuxi
Unified social credit code: 91320200250456967N
The Company sets up Shareholders’ General Meeting the Board of Directors and the Supervisory Committee.The Company sets up Administration Department Technology Centre organization & personnel department
Office of the Board compliance department IT department Market & Strategy Department Party-masses
Department Finance Department Purchase Department Manufacturing Quality Department MS (Mechanical
System) division AC(Automobile Components) division and DS (Diesel System ) division etc. and subsidiaries
such as Wuxi Weifu Leader Catalytic Converter Co. Ltd. and Nanjing Weifu Jinning Co. Ltd.
3. Business nature and major operation activities of the Company
Operation scope of parent company: Technology development and consulting service in the machinery industry;
manufacture of engine fuel oil system products fuel oil system testers and equipment manufacturing of auto
electronic parts automotive electrical components non-standard equipment non-standard knife tool and exhaust
after-treatment system; sales of the general machinery hardware & electrical equipment chemical products & raw
materials (excluding hazardous chemicals) automobile components and vehicles (excluding nine-seat passenger
car); internal combustion engine maintenance; leasing of the own houses; 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. (any projects that needs to
be approved by laws can only be carried out after getting approval by relevant authorities)
Major subsidiaries respectively activate in production and sales of engine accessories automobile components
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 19 April 2019.
5. Scope of consolidate financial statement
Name of subsidiary
Short name of
subsidiary
Shareholding ratio (%)
Proportion
of votes
(%)
Registered
capital (in 10
thousand
Yuan)
Business
scope
Statement
consolidat
e (Y/N)
Directly Indirectly
Nanjing Weifu Jinning Co. Ltd. Weifu Jinning 80.00 -- 80.00 34628.70 Internal-com
bustion
engine
accessories
Y
Wuxi Weifu Leader Catalytic
Converter Co. Ltd.
Weifu Leader 94.81 -- 94.81 50259.63 Purifier and
muffler
Y
Weifu Mashan Pump Glib Co. Ltd. Weifu Mashan 100.00 -- 100.00 16500 Internal-com
bustion
engine
Y
accessories
Wuxi Weifu Chang’an Co. Ltd. Weifu Chang’an 100.00 -- 100.00 21000 Internal-com
bustion
engine
accessories
Y
Wuxi Weifu International Trade Co.Ltd.Weifu
International
Trade
100.00 -- 100.00 3000 Trade Y
Wuxi Weifu ITM Supercharging
Technique Co. Ltd.Weifu ITM 100.00 -- 100.00 16000 Internal-com
bustion
engine
accessories
Y
Wuxi Weifu Schmidt Power System
Spare Parts Co. Ltd.Weifu Schmidt 66.00 -- 66.00 7600 Internal-com
bustion
engine
accessories
Y
Ningbo Weifu Tianli Supercharging
Technique Co. Ltd.Weifu Tianli 54.2295 -- 54.2295 11136 Internal-com
bustion
engine
accessories
Y
Wuxi Weifu-Autocam Fine Machinery
Co. Ltd.
Weifu Autocam 51.00 -- 51.00 US$ 2110 Automobile
components
Y
Wuxi Weifu Leader Catalytic
Converter (Wuhan) Co. Ltd.
Weifu Leader
(Wuhan)
-- 60.00 60.00 1000 Purifier and
muffler
Y
Weifu Leader(Chongqing)Automobile
components Co. Ltd.Weifu Leader
(Chongqing)
-- 100.00 100.00 5000 Purifier and
muffler
Y
Nanchang Weifu Leader Auto Parts &
Components Co. Ltd.
Weifu Leader
(Nanchang)
-- 100.00 100.00 5000 Purifier and
muffler
Y
The entity included in consolidate scope has Weifu Leader (Nanchang) newly added by compare with last period. Found more in
description carried in 5- Other change of consolidate scope in Note VIII.IV. Basis of preparation of financial statements
1. Preparation base
The financial statement were stated in compliance with Accounting Standard for Business Enterprises –Basic
Norms issued by Ministry of Finance the specific 42 accounting rules revised and issued dated 15 February 2006
and later the Application Instruments of Accounting Standards and interpretation on Accounting standards and
other relevant regulations (together as “Accounting Standards for Business Enterprise”) as well as the
Compilation Rules for Information Disclosure by Companies Offering Securities to the Public No.15 – General
Provision of Financial Report (Amended in 2014) issued by CSRC in respect of the actual transactions and
proceedings on a basis of ongoing operation.In line with relevant regulations of Accounting Standards of Business Enterprise accounting of the Company is
on accrual basis. Except for certain financial instruments the financial statement measured on historical cost.
Assets have impairment been found corresponding depreciation reserves shall accrual according to relevant rules.
2. Going concern
The Company comprehensively assessed the available information and there are no obvious factors that impact
sustainable operation ability of the Company within 12 months since end of the reporting period.V. Major Accounting Policies and Estimation
Whether the Company needs to comply with the disclosure requirement of special industry
No
Specific accounting policies and estimation attention:
The Company and its subsidiaries are mainly engaged in the manufacture and sales of engine fuel oil system
products automobile components mufflers and purifiers etc. in line with the real operational characteristics and
relevant accounting standards many specific accounting policies and estimation have been formulated for the
transactions and events with revenue recognized concerned. As for the explanation on major accounting judgment
and estimation found more in Note V-28- Other major accounting policy and accounting estimation.
1. Statement on observation of Accounting Standard for Business Enterprises
Financial statements prepared by the Company were in accordance with requirements of Accounting Standard for
Business Enterprises which truly and completely reflected the financial information of the Company dated 31
December 2018 such as financial position operation achievements and cash flow for the year of 2018.
2. Accounting period
Accounting period of the Company consist of annual and mid-term mid-term refers to the reporting period shorter
than one annual accounting year. The company adopts Gregorian calendar as accounting period namely form
each 1 January to 31 December.
3. Business cycles
Normal business cycle is the period from purchasing assets used for process by the Company to the cash and cash
equivalent achieved. The Company’s normal business cycle was one-year (12 months).
4. Recording currency
The Company’s reporting currency is the RMB Yuan.
5. Accounting Treatment Method for Business Combinations under the same/different control
Business combination is the transaction or events that two or two above independent enterprises combined as a
reporting entity. Business combination including enterprise combined under the same control and business
combined under different control.
(1) The business combination under the same control
Enterprise combination under the same control is the enterprise who take part in the combination are have the
same ultimate controller or under the same controller the control is not temporary. The assets and liability
acquired by combining party are measured by book value of the combined party on combination date. Balance of
net asset’s book value acquired by combining party and combine consideration paid (or total book value of the
shares issued) shall adjusted capital reserve (share premium); if the capital reserves (share premium) is not
enough for deducted adjusted for retained earnings. Vary directly expenses occurred for enterprise combination
the combining party shall reckoned into current gains/losses while occurring. Combination day is the date when
combining party obtained controlling rights from the combined party.
(2) Combine not under the same control
A business combination not involving entities under common control is a business combination in which all of the
combining entities are not ultimately controlled by the same party or parties both before and after the combination.
As a purchaser fair value of the assets (equity of purchaser held before the date of purchasing included) for
purchasing controlling right from the purchaser the liability occurred or undertake on purchasing date less the fair
value of identifiable net assets of the purchaser obtained in combination recognized as goodwill if the results is
positive; if the number is negative the acquirer shall firstly review the measurement of the fair value of the
identifiable assets obtained liabilities incurred and contingent liabilities incurred as well as the combination costs.
After that if the combination costs are still lower than the fair value of the identifiable net assets obtained the
acquirer shall recognize the difference as the profit or loss in the current period. Other directly expenses cost for
combination shall be reckoned into current gains/losses. Difference of the fair value of assets paid and its book
values reckoned into current gains/losses. On purchasing date the identifiable assets liability or contingency of
the purchaser obtained by the Company recognized by fair value that required identification conditions;
Acquisition date refers to the date on which the acquirer effectively obtains control of the purchaser.
6. Preparation method for consolidated financial statement
(1) Recognition principle of consolidated scope
On basis of the financial statement of the parent company and owned subsidiaries prepared consolidated
statement in line with relevant information. The scope of consolidation of consolidated financial statements is
ascertained on the basis of effective control. Once certain elements involved in the above definition of control
change due to changes of relevant facts or circumstances the Company will make separate assessment.
(2) Basis of control
Control is the right to govern an invested party so as to obtain variable return through participating in the invested
party’s relevant activities and the ability to affect such return by use of the aforesaid right over the invested party.Relevant activates refers to activates have major influence on return of the invested party’s.
(3) Consolidation process
Subsidiaries are consolidated from the date on which the company obtains their actual control and are
de-consolidated from the date that such control ceases. All significant inter-group balances investment
transactions and unrealized profits are eliminated in the consolidated financial statements. For subsidiaries being
disposed the operating results and cash flows prior to the date of disposal are included in the consolidated income
statement and consolidated cash flow statement; for subsidiaries disposed during the period the opening balances
of the consolidated balance sheet would not be restated. For subsidiaries acquired from a business combination
not under common control their operating results and cash flows subsequent to the acquisition date are included
in the consolidated income statement and consolidated cash flow statement and the opening balances and
comparative figures of the consolidated balance sheet would not be restated. For subsidiaries acquired from a
business combination under common control their operating results and cash flows from the date of
commencement of the accounting period in which the combination occurred to the date of combination are
included in the consolidated income statement and consolidated cash flow statement and the comparative figures
of the consolidated balance sheet would be restated.In preparing the consolidated financial statements where the accounting policies or the accounting periods are
inconsistent between the company and subsidiaries the financial statements of subsidiaries are adjusted in
accordance with the accounting policies and accounting period of the company.
Concerning 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.The unrealized gains and losses from the internal transactions occurred in the assets the Company sold to the
subsidiaries fully offset "the net profit attributable to the owners of the parent company". The unrealized gains and
losses from the internal transactions occurred in the assets the subsidiaries sold to the Company are distributed and
offset between "the net profit attributable to the owners of the parent company" and "minority interest" according
to the distribution ratio of the Company to the subsidiary. The unrealized gains and losses from the internal
transactions occurred in the assets sold among the subsidiaries are distributed and offset between "the net profit
attributable to the owners of the parent company" and "minority interest" according to the distribution ratio of the
Company to the subsidiary of the seller.
The share of the subsidiary’s ownership interest not attributable to the Company is listed as “minority interest”
item under the ownership interest in the consolidated balance sheet. The share of the subsidiary’s current profit or
loss attributable to the minority interests is listed as "minority interest" item under the net profit item in the
consolidated income statement. The share of the subsidiary’s current consolidated income attributable to the
minority interests is listed as the “total consolidated income attributable to the minority shareholders” item under
the total consolidated income item in the consolidated income statement. If there are minority shareholders add
the "minority interests" item in the consolidated statement of change in equity to reflect the changes of the
minority interests. If the losses of the current period shared by a subsidiary’s minority shareholders exceed the
share that the minority shareholders hold in the subsidiary ownership interest in the beginning of the period the
balance still charges against the minority interests.When the control over a subsidiary is ceased due to disposal of a portion of an interest in a subsidiary the fair
value of the remaining equity interest is re-measured on the date when the control ceased. The difference between
the sum of the consideration received from disposal of equity interest and the fair value of the remaining equity
interest less the net assets attributable to the company since the acquisition date is recognized as the investment
income from the loss of control. Other comprehensive income relating to original equity investment in
subsidiaries shall be treated on the same basis as if the relevant assets or liabilities were disposed of by the
purchaser directly when the control is lost namely be transferred to current investment income other than the
relevant part of the movement arising from re-measuring net liabilities or net assets under defined benefit scheme
by the original subsidiary. Subsequent measurement of the remaining equity interests shall be in accordance with
relevant accounting standards such as Accounting Standards for business Enterprises 2 – Long-term Equity
Investments or Accounting Standards for business Enterprises 22 – Financial Instruments Recognition and
Measurement.The company shall determine whether loss of control arising from disposal in a series of transactions should be
regarded as a bundle of transactions. When the economic effects and terms and conditions of the disposal
transactions met one or more of the following situations the transactions shall normally be accounted for as a
bundle of transactions: ①The transactions are entered into after considering the mutual consequences of each
individual transaction; ② The transactions need to be considered as a whole in order to achieve a deal in
commercial sense; ③The occurrence of an individual transaction depends on the occurrence of one or more
individual transactions in the series; ④ The result of an individual transaction is not economical but it would be
economical after taking into account of other transactions in the series. When the transactions are not regarded asa bundle of transactions the individual transactions shall be accounted as “disposal of a portion of an interest in asubsidiary which does not lead to loss of control” and “disposal of a portion of an interest in a subsidiary whichlead to loss of control”. When the transactions are regarded as a bundle of transactions the transactions shall be
accounted as a single disposal transaction; however the difference between the consideration received from
disposal and the share of net assets disposed in each individual transactions before loss of control shall be
recognized as other comprehensive income and reclassified as profit or loss arising from the loss of control when
control is lost.
7. Joint arrangement classification and accounting treatment for joint operations
In accordance with the Company’s rights and obligation under a joint arrangement the Company classifies joint
arrangements into: joint ventures and joint operations.The company confirms the following items related to the share of interests in its joint operations and in
accordance with the provisions of the relevant accounting standards for accounting treatment:
(1) Recognize the assets held solely by the Company and recognize assets held jointly by the Company in
appropriation to the share of the Company;
(2) Recognize the obligations assumed solely by the Company and recognize obligations assumed jointly by the
Company in appropriation to the share of the Company;
(3) Recognize revenue from disposal of the share of joint operations of the Company;
(4) Recognize fees solely occurred by Company;
(5) Recognize fees from joint operations in appropriation to the share of the Company.
8. Determining standards for cash and cash equivalent
Cash refers to stock cash savings available for paid at any time; cash and cash equivalent refers to the cash held
by the Company with short terms(expired within 3 months since purchased) and liquid and easy to transfer as
known amount and investment with minor variation in risks.
9. Foreign currency business and conversion
The occurred foreign currency transactions are converted into the recording currency in accordance with the
middle rate of the market exchange rate published by the People's Bank of China on the transaction date. Thereinto
the occurred foreign currency exchange or transactions involved in the foreign currency exchange are converted in
accordance with the actual exchange rate in the transactions.
At the balance sheet date the account balance of the foreign currency monetary assets and liabilities is converted
into the recording currency amount in accordance with the middle rate of the market exchange rate published by
the People's Bank of China on the transaction date. The balance between the recording currency amount converted
according to exchange rate at the balance sheet date and the original recording currency amount is disposed as the
exchange gains or losses. Thereinto the exchange gains or losses occurred in the foreign currency loans related to
the purchase and construction of fixed assets are disposed according to the principle of capitalization of borrowing
costs; the exchange gains and losses occurred during the start-up are included in the start-up costs; the rest is
included in the current financial expenses.
At the balance sheet date the foreign currency non-monetary items measured with the historical costs are converted
in accordance with the middle rate of the market exchange rate published by the People's Bank of China on the
transaction date without changing its original recording currency amount; the foreign currency non-monetary items
measured with the fair value are converted in accordance with the middle rate of the market exchange rate
published by the People's Bank of China on the fair value date and the generated exchange gains and losses are
included in the current profits and losses as the gains and losses from changes in fair value.The following displays the methods for translating financial statements involving foreign operations into the
statements in RMB: The asset and liability items in the balance sheets for overseas operations are translated at the
spot exchange rates on the balance sheet date. Among the owners’ equity items the items other than
“undistributed profits” are translated at the spot exchange rates of the transaction dates. The income and expense
items in the income statements of overseas operations are translated at the average exchange rates of the
transaction dates. The exchange difference arising from the above mentioned translation are recognized in other
comprehensive income and is shown separately under owner’ equity in the balance sheet; such exchange
difference will be reclassified to profit or loss in current year when the foreign operation is disposed according to
the proportion of disposal.The cash flows of overseas operations are translated at the average exchange rates on the dates of the cash flows.The effect of exchange rate changes on cash is presented separately in the cash flow statement.
10. Financial instrument
Financial instrument is the contract that taken shape of the financial asses for an enterprise and of the financial
liability or equity instrument for other units.
(1) Classification and measurement on financial assets and financial liability
In terms of investment purposes and economic natures the Company divides its financial assets into financial
assets( with its variation of fair value reckoned into current gains/losses) 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 owners’ 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.
(2) Determination of fair values for financial assets and financial liabilities
The fair value refers to the price that will be received when selling an asset or the price to be paid to transfer a
liability in an orderly transaction between market participants on the date of measurement. Financial instruments
exist in an active market. Fair value is determined based on the quoted price in such market. An active market
refers to where pricing is easily and regularly obtained from exchanges brokers industrial organizations and price
fixing service organizations representing the actual price of a market transaction that takes place in a fair deal.While financial instruments do not exist in an active market the fair value is determined using valuation
techniques. Valuation technologies include reference to be familiar with situation and prices reached in recent
market transactions entered into by both willing parties reference to present fair values of similar other financial
instruments cash flow discounting method and option pricing models.
As for the equity investment of the invested party held by the Company which has no controlling rights common
control or significant influence (that is under the major influence) has no quota in an active market and the fair
value cannot be measure reasonably than divided into financial assets available for sale and measured by cost.
(3) Recognition basis and measurement for transfer of financial assets
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;
② Transfer financial assets to another party while the aforementioned right is retained with obligation of paying
such cash flow to final collector
When 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.
(4) Recognition for termination of financial assets and liability
Upon satisfaction of one of the following condition financial assets will immediately experience discontinued
recognition:
① Right entitled by contract in respect of collection of cash flow from such financial asset terminates.② Such financial assets have been transferred and meet discontinued recognition condition 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.
(5) 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:
① Serious financial difficulty happens to issuer or debtor;
② Breach of terms of contract by debtor such as breach or overdue in repaying interest or principal;
③ Creditor makes concession for debtors who experience financial trouble in light of consideration for economy
or laws;
④ Debtor is very likely to experience bankrupt or financial reorganization;
⑤ Financial assets are not able to be traded in active market since material financial difficulty happens to issuer;
⑥ 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;
⑦ 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;
⑧ Fair value of equity instrument investment experiences severe or non-temporary falling;
⑨ 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.Impairment of available-for-sale financial assets: in the event that decline in fair value of the available-for-sale
equity instrument is regarded as “severe decline” or “non-temporary decline” on the basis of comprehensive
related factors it indicates that there is impairment loss of the available-for-sale equity instrument. In particular
“severe decline” refers to fair value is lower than 50% of the cost price and last for over one year.“Non-temporary decline” refers to fair value fell for over 6-month sessions.When the available-for-sale financial assets impair the accumulated loss originally included in the other
comprehensive income arising from the decrease in fair value was transferred out from the capital reserve and
included in the profit or loss for the period. The accumulated loss that transferred out from the capital reserve is
the balance of the acquired initial cost of asset after deduction of the principal recovered amortized amounts
current fair value and the impairment loss originally included in the profit or loss.
After recognition of the impairment loss if there is objective evidence showing recovery in value of such financial
assets impaired and which is related to any event occurring after such recognition in subsequent periods the
impairment loss originally recognized shall be reversed. The impairment loss reversal of the available-for-sale
equity instrument will be recognized as other comprehensive income and the impairment loss reversal of the
available-for-sale debt instrument will be included in the profit or loss for the period.When an equity investment that is not quoted in an active market and the fair value of which cannot be measured
reliably or the impairment loss of a derivative financial asset linked to the equity instrument that shall be settled
by delivery of that equity instrument then it will not be reversed.
11. Note receivable and account receivable
(1) Account Receivable withdrawal on single significant amount and with bad debt provision accrued for
single item
Determine basis or amount standards for single
significant amount
The Company’s account receivables with above RMB 1 million in single item
is defined as account receivables with significant amount in single item.Withdrawal method for account with single
significant amount and withdrawal single item bad
debt provision
In line with the difference of present value of future cash flow lower its book
value carried out impairment test independently and withdrawal the bad debt
reserves
(2) Receivables with bad debt provision accrual by credit portfolio
Combination Bad debt provision accrual
Classify to many combination based on credit portfolio for those receivables with minor account
singly and those with major amount but has no impairment been found after testing independently;
base on the actual loss ratio of the receivables of previous years with same or similar credit
portfolio and combining actual condition accrual bad debt reserves.
Age analysis method
In combination accounts whose bad debts provision was accrued by age analysis:
√ Applicable □ Not applicable
Account age Accrual ratio for account receivable Accrual ratio for other receivables
Within 6 months
6 months to one year 10.00% 10.00%
1－2 years 20.00% 20.00%
2－3 years 40.00% 40.00%
Over 3 years 100.00% 100.00%
3－4 years 100.00% 100.00%
4－5 years 100.00% 100.00%
Over 5 years 100.00% 100.00%
In combination withdrawal proportion of bad debt provision based on balance proportion
□ Applicable √ Not applicable
In combination withdrawal proportion of bad debt provision based on other methods:
□ Applicable √ Not applicable
(3) Account receivable with minor single amount but with withdrawal bad debt provision for single item
Reasons for withdrawal single item bad debt provision
The present value of future cash flow has major difference with the
receivable group’s present value of future cash flow
Withdrawal method for bad debt provision
Carried out impairment test independently accrual bad debt reserves
according to the difference of present value of future cash flow lower its
book value
12. Inventory
Whether the Company needs to comply with the disclosure requirement of special industry
N
(1) Classification of inventories
The Company’s inventories are categorized into stock materials product in process and stock goods etc.
(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 finished goods commodities 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
Perpetual Inventory System is adopted by the Company and takes a physical inventory.
(5) Amortization of low-value consumables and wrappage
①Low-value consumables
The Company adopts one-off amortization method to amortize the low-value consumables.②Wrappage
The Company adopts one-off amortization method to amortize the wrappage at the time of receipt.
13. Assets held for sale
The Company classifies non-current assets or disposal groups that meet all of the following conditions as
held-for-sale: according to the practice of selling this type of assets or disposal groups in a similar transaction the
non-current assets or disposal group can be sold immediately at its current condition; The sale is likely to occur
that is the Company has made resolution on the selling plan and obtained definite purchase commitment the
selling is estimated to be completed within one year. Those assets whose disposal is subject to approval from
relevant authority or supervisory department under relevant requirements are subject to that approval.Where the Company loses control over its subsidiary due to disposal of investment in the subsidiary whether or
not the Company retains part equity investment after such disposal investment in the subsidiary shall be classified
in its entirety as held for sale in the separate financial statement of the parent company subject to that the
investment in the subsidiary proposed to be disposed satisfies the conditions for being classified as held for sale
and all the assets and liabilities of the subsidiary shall be classified as held for sale in consolidated financial
statement.The purchase commitment identified refers to the legally binding purchase agreement entered into between the
Company and other parties which sets out certain major terms relating to transaction price time and adequately
stringent punishment for default which render an extremely minor possibility for material adjustment or
revocation of the agreement.
Assets held for sale are measured at the lower of heir carrying value and fair value less selling expense. If the
carrying value is higher than fair value less selling expense the excess shall be recognized as impairment loss and
recorded in profit or loss for the period and allowance for impairment shall be provided for in respect of the
assets. In respect of impairment loss recognized for disposal group held for sale carrying value of the goodwill in
the disposal group shall be deducted first and then deduct the carrying value of the non-current assets within the
disposal group applicable to this measurement standard on a pro rata basis according to the proportion taken by
their carrying value.If the net amount of fair value of non-current assets held for sale less sales expense on subsequent balance sheet
date increases the amount previously reduced for accounting shall be recovered and reverted from the impairment
loss recognized after the asset is classified under the category of held for sale with the amount reverted recorded
in profit or loss for the period. Impairment loss recognized before the asset is classified under the category of held
for sale shall not be reverted. If the net amount of fair value of the disposal group held for sale on the subsequent
balance sheet date less sales expenses increases the amount reduced for accounting in previous periods shall be
restored and shall be reverted in the impairment loss recognized in respect of the non-current assets which are
applicable to relevant measurement provisions after classification into the category of held for sale with the
reverted amount charged in profit or loss for the current period. The written-off carrying value of goodwill shall
not be reverted.The non-current assets in the non-current assets or disposal group held for sale is not depreciated or amortized
and the debt interests and other fees in the disposal group held for sale continue to be recognized.If the non-current assets or disposal group are no longer classified as held for sale since they no longer meet the
condition of being classified as held for sale or the non-current assets are removed from the disposal group held
for sale they will be measured at the lower of the following:
(i) The amount after their book value before they are classified as held for sale is adjusted based on the
depreciation amortization or impairment that should have been recognized given they are not classified as held
for sale;
(ii) The recoverable amount.
14.Long-term equity investments
Long-term equity investments refer to long-term equity investments in which the Company has control joint
control or significant influence over the invested party. Long-term equity investment without control or joint
control or significant influence of the Group is accounted for as available-for-sale financial assets or financial
assets measured at fair value with any change in fair value charged to profit or loss.
(1) Determination of initial investment cost
Investment costs of the long-term equity investment are recognized by the follow according to different way of
acquirement:
①For a long-term equity investment acquired through a business combination involving enterprises under
common control the initial investment cost of the long-term equity investment shall be the absorbing party’s
share of the carrying amount of the owner’s equity under the consolidated financial statements of the ultimate
controlling party on the date of combination. The difference between the initial cost of the long-term equity
investment and the cash paid non-cash assets transferred as well as the book value of the debts borne by the
absorbing party shall offset against the capital reserve. If the capital reserve is insufficient to offset the retained
earnings shall be adjusted. If the consideration of the merger is satisfied by issue of equity securities the initial
investment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount of
the owner’s equity under the consolidated financial statements of the ultimate controlling party on the date of
combination. With the total face value of the shares issued as share capital the difference between the initial cost
of the long-term equity investment and total face value of the shares issued shall be used to offset against the
capital reserve. If the capital reserve is insufficient to offset the retained earnings shall be adjusted. (For business
combination resulted in an enterprise under common control by acquiring equity of the absorbing party under
common control through a stage-up approach with several transactions these transactions will be judged whether
they shall be treat as “transactions in a basket”. If they belong to “transactions in a basket” these transactions will
be accounted for a transaction in obtaining control. If they are not belong to “transactions in a basket” the initial
investment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount of
the owner’s equity under the consolidated financial statements of the ultimate controlling party on the date of
combination. The difference between the initial cost of the long-term equity investment and the aggregate of the
carrying amount of the long-term equity investment before merging and the carrying amount the additional
consideration paid for further share acquisition on the date of combination shall offset against the capital reserve.If the capital reserve is insufficient to offset the retained earnings shall be adjusted. Other comprehensive income
recognized as a result of the previously held equity investment accounted for using equity method on the date of
combination or recognized for available-for-sale financial assets will not be accounted for.)
②For a long-term equity investment acquired through a business combination involving enterprises not under
common control the initial investment cost of the long-term equity investment shall be the cost of combination on
the date of acquisition. Cost of combination includes the aggregate fair value of assets paid by the acquirer
liabilities incurred or borne and equity securities issued. (For business combination resulted in an enterprise not
under common control by acquiring equity of the acquire under common control through a stage-up approach with
several transactions these transactions will be judged whether they shall be treat as “transactions in a basket”. If
they belong to “transactions in a basket” these transactions will be accounted for a transaction in obtaining
control. If they are not belong to “transactions in a basket” the initial investment cost of the long-term equity
investment accounted for using cost method shall be the aggregate of the carrying amount of equity investment
previously held by the acquire and the additional investment cost. For previously held equity accounted for using
equity method relevant other comprehensive income will not be accounted for. For previously held equity
investment classified as available-for-sale financial asset the difference between its fair value and carrying
amount as well as the accumulated movement in fair value previously included in the other comprehensive
income shall be transferred to profit or loss for the current period.) plus the combination cost measured by costs
which have directly connection with acquisition are considered as initial investment cost of such long-term equity
investment. Realizable assets and liabilities undertaken by such assets (including 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 (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;
D. Initial investment cost of long-term equity investment obtained through debt reorganization is determined at
fair value of such investment.
(2) Subsequent measurement on long-term equity investment
①Presented controlling ability on invested party the investment shall use cost method for measurement.②Long-term equity investments with joint control (excluding those constitute joint ventures) or significant
influence on the invested party are accounted for using equity method.Under the equity method where the initial investment cost of a long-term equity investment exceeds the
investor’s interest in the fair value of the invested party’s identifiable net assets at the acquisition date no
adjustment shall be made to the initial investment cost. Where the initial investment cost is less than the investor’s
interest in the fair value of the invested party’s identifiable net assets at the acquisition date the difference shall be
charged to profit or loss for the current period and the cost of the long term equity investment shall be adjusted
accordingly.Under the equity method investment gain and other comprehensive income shall be recognized based on the
Group’s share of the net profits or losses and other comprehensive income made by the invested party
respectively. Meanwhile the carrying amount of long-term equity investment shall be adjusted. The carrying
amount of long-term equity investment shall be reduced based on the Group’s share of profit or cash dividend
distributed by the invested party. In respect of the other movement of net profit or loss other comprehensive
income and profit distribution of invested party the carrying value of long-term equity investment shall be
adjusted and included in the capital reserves. The Group shall recognize its share of the invested party’s net profits
or losses based on the fair values of the invested party’s individual separately identifiable assets at the time of
acquisition after making appropriate adjustments thereto. In the event of inconformity between the accounting
policies and accounting periods of the invested party and the Company the financial statements of the invested
party shall be adjusted in conformity with the accounting policies and accounting periods of the Company.Investment gain and other comprehensive income shall be recognized accordingly. In respect of the transactions
between the Group and its associates and joint ventures in which the assets disposed of or sold are not classified as
operation the share of unrealized gain or loss arising from inter-group transactions shall be eliminated by the
portion attributable to the Company. Investment gain shall be recognized accordingly. However any unrealized
loss arising from inter-group transactions between the Group and an invested party is not eliminated to the extent
that the loss is impairment loss of the transferred assets. In the event that the Group disposed of an asset classified
as operation to its joint ventures or associates which resulted in acquisition of long-term equity investment by the
investor without obtaining control the initial investment cost of additional long-term equity investment shall be
the fair value of disposed operation. The difference between initial investment cost and the carrying value of
disposed operation will be fully included in profit or loss for the current period. In the event that the Group sold an
asset classified as operation to its associates or joint ventures the difference between the carrying value of
consideration received and operation shall be fully included in profit or loss for the current period. In the event
that the Company acquired an asset which formed an operation from its associates or joint ventures relevanttransaction shall be accounted for in accordance with “Accounting Standards for Business Enterprises No. 20
“Business combination”. All profit or loss related to the transaction shall be accounted for.
The Group’s share of net losses of the invested party shall be recognized to the extent that the carrying amount of
the long-term equity investment together with any long-term interests that in substance form part of the investor’s
net investment in the invested party are reduced to zero. If the Group has to assume additional obligations the
estimated obligation assumed shall be provided for and charged to the profit or loss as investment loss for the
period. Where the invested party is making profits in subsequent periods the Group shall resume recognizing its
share of profits after setting off against the share of unrecognized losses.
③Acquisition of minority interest
Upon the preparation of the consolidated financial statements since acquisition of minority interest increased of
long-term equity investment which was compared to fair value of identifiable net assets recognized which are
measured based on the continuous measurement since the acquisition date (or combination date) of subsidiaries
attributable to the Group calculated according to the proportion of newly acquired shares the difference of which
recognized as adjusted capital surplus capital surplus insufficient to set off impairment and adjusted retained
earnings.
④Disposal of long-term equity investments
In these consolidated financial statements for disposal of a portion of the long-term equity investments in a
subsidiary without loss of control the difference between disposal cost and disposal of long-term equity
investments relative to the net assets of the subsidiary is charged to the owners’ equity. If disposal of a portion of
the long-term equity investments in a subsidiary by the parent company results in a change in control it shall beaccounted for in accordance with the relevant accounting policies as described in Note V.- 6 “Preparation Methodof the Consolidated Financial Statements”.On disposal of a long-term equity investment otherwise the difference between the carrying amount of the
investment and the actual consideration paid is recognized through profit or loss in the current period.In respect of long-term equity investment accounted for using equity method with the remaining equity interest
after disposal also accounted for using equity method other comprehensive income previously under owners’
equity shall be accounted for in accordance with the same accounting treatment for direct disposal of relevant
asset or liability by invested party on pro rata basis at the time of disposal. The owners’ equity recognized for the
movement of other owners’ equity (excluding net profit or loss other comprehensive income and profit
distribution of invested party) shall be transferred to profit or loss for the current period on pro rata basis.In respect of long-term equity investment accounted for using cost method with the remaining equity interest after
disposal also accounted for cost equity method other comprehensive income measured and reckoned under equity
method or financial instrument before control of the invested party unit acquired shall be accounted for in
accordance with the same accounting treatment for direct disposal of relevant asset or liability by invested party
on pro rata basis at the time of disposal and shall be transferred to profit or loss for the current period on pro rata
basis; among the net assets of invested party unit recognized by equity method (excluding net profit or loss other
comprehensive income and profit distribution of invested party) shall be transferred to profit or loss for the current
period on pro rata basis.In the event of loss of control over invested party due to partial disposal of equity investment by the Group in
preparing separate financial statements the remaining equity interest which can apply common control or impose
significant influence over the invested party after disposal shall be accounted for using equity method. Such
remaining equity interest shall be treated as accounting for using equity method since it is obtained and
adjustment was made accordingly. For remaining equity interest which cannot apply common control or impose
significant influence over the invested party after disposal it shall be accounted for using the recognition and
measurement standard of financial instruments. The difference between its fair value and carrying amount as at
the date of losing control shall be included in profit or loss for the current period. In respect of other
comprehensive income recognized using equity method or the recognition and measurement standard of financial
instruments before the Group obtained control over the invested party it shall be accounted for in accordance with
the same accounting treatment for direct disposal of relevant asset or liability by invested party at the time when
the control over invested party is lost. Movement of other owners’ equity (excluding net profit or loss other
comprehensive income and profit distribution under net asset of invested party accounted for and recognized
using equity method) shall be transferred to profit or loss for the current period at the time when the control over
invested party is lost. Of which for the remaining equity interest after disposal accounted for using equity method
other comprehensive income and other owners’ equity shall be transferred on pro rata basis. For the remaining
equity interest after disposal accounted for using the recognition and measurement standard of financial
instruments other comprehensive income and other owners’ equity shall be fully transferred.In the event of loss of common control or significant influence over invested party due to partial disposal of equity
investment by the Group the remaining equity interest after disposal shall be accounted for using the recognition
and measurement standard of financial instruments. The difference between its fair value and carrying amount as
at the date of losing common control or significant influence shall be included in profit or loss for the current
period. In respect of other comprehensive income recognized under previous equity investment using equity
method it shall be accounted for in accordance with the same accounting treatment for direct disposal of relevant
asset or liability by invested party at the time when equity method was ceased to be used. Movement of other
owners’ equity (excluding net profit or loss other comprehensive income and profit distribution under net asset of
invested party accounted for and recognized using equity method) shall be transferred to profit or loss for the
current period at the time when equity method was ceased to be used.The Group disposes its equity investment in subsidiary by a stage-up approach with several transactions until the
control over the subsidiary is lost. If the said transactions belong to “transactions in a basket” each transaction
shall be accounted for as a single transaction of disposing equity investment of subsidiary and loss of control. The
difference between the disposal consideration for each transaction and the carrying amount of the corresponding
long-term equity investment of disposed equity interest before loss of control shall initially recognized as other
comprehensive income and subsequently transferred to profit or loss arising from loss of control for the current
period upon loss of control.
(3) Impairment test method and withdrawal method for impairment provision
Found more in Note V-20-”impairment of long-term investment”
(4) Criteria of Joint control and significant influence
Joint control is the Company’s contractually agreed sharing of control over an arrangement which relevant
activities of such arrangement must be decided by unanimously agreement from parties who share control. All the
participants or participant group whether have controlling over such arrangement as a group or not shall be judge
firstly than judge that whether the decision-making for such arrangement are agreed unanimity by the participants
or not.Significant influence is the power of the Company to participate in the financial and operating policy decisions of
an invested party but to fail to control or joint control the formulation of such policies together with other parties.While recognizing whether have significant influence by invested party the potential factors of voting power as
current convertible bonds and current executable warrant of the invested party held by investors and other parties
shall be thank over.
15. Investment real estate
Measurement mode
Measured by cost method
Depreciation or amortization method
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 Note V-20-“Impairment oflong-term assets”
16. Fixed assets
(1) Confirmation conditions
Fixed assets refer to the tangible assets for production of products provision of labor lease or operation with a
service life excess one year and has more unit value.
(2) Depreciation methods
Categories Method Years of depreciation Scrap value rate Yearly depreciation rate
House and Building Straight-line depreciation 20~35 5 2.71~4.75
Machinery equipment Straight-line depreciation 10 5 9.50
Transportation equipment Straight-line depreciation 4~5 5 19.00~23.75
Electronic and other equipment Straight-line depreciation 3～10 5 9.50～31.67
As for the fixed assets with impairment accrual calculated depreciation amount based on the accumulative
number of impairment of fixed assets accrual.
(3) Recognition basis valuation and depreciation method for financial lease assets
The Company affirms those that conform to below one or several criteria as the finance lease fixed assets:
① Agreed in the lease contract (or made a reasonable judgment according to the correlated conditions on the
lease commencement date) the ownership of lease fixed assets can be transferred to the Company after the expiry
of the lease period;
② The Company has the option to purchase or lease the fixed assets and the purchase price is estimated to be
much less than the fair value of the lease of fixed assets when exercises the options so whether the Company will
exercise the option can be reasonably determined on the lease commencement date;
③ Even though the fixed asset ownership is not transferred the lease term accounts for 75% of the service life of
the lease fixed assets;
④ The present value of the Company’s of minimum lease payment on the lease commencement date is
equivalent to 90% or more of the fair value of the lease fixed assets on the lease commencement date; the present
value of the leaser’s of minimum lease payment on the lease commencement date is equivalent to 90% or more of
the fair value of the lease fixed assets on the lease commencement date;
⑤ The leased assets with special properties can only be used by the Company without major modifications. The
fixed assets rented by finance leases is calculated as the book value according to the lower one between the fair
value of leased assets on the lease commencement date and the present value of the minimum lease payments.
(4) The impairment test method of fixed assets and the method of provision for impairment see Note V-20-“Longterm asset impairment”.
17. Construction in progress
Whether the Company needs to comply with the disclosure requirement of special industry
No
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.The basis of provision for impairment of properties held for construction in process is referred to Note
V-20-“Impairment of long-term assets”
18. 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:
① Capital expenditure has been occurred;
② Borrowing costs have been occurred;
③ 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
Borrowing costs arising from purchasing fixed asset investment real estate and inventory and occurred after such
assets reached to its intended use of status or sales than reckoned into assets costs while satisfy the above
mentioned capitalization condition; capitalization of borrowing costs shall be suspended and recognized as current
expenditure during periods in which construction of fixed assets investment real estate and inventory are
interrupted abnormally when the interruption is for a continuous period of more than 3 months until the
acquisition construction or production of the qualifying asset is resumed; capitalization shall discontinue when
the qualifying asset is ready for its intended use or sale the borrowing costs occurred subsequently shall reckoned
into financial expenses while occurring for the current period.
(3) Measure of capitalization for borrowing cost
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.
19. Intangible assets
(1) Measurement use of life and impairment testing
① Measurement of intangible assets
The intangible assets of the Company including land use rights patented technology and non-patents technology
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.
② Amortization methods and time limit for intangible assets:
Land use right of the company had average amortization by the transfer years from the beginning date of transfer
(date of getting land use light); Patented technology non-patented technology and other intangible assets of the
Company are amortized evenly with the shortest terms among expected useful life benefit years regulated in the
contract and effective age regulated by the laws. The amortization amount shall count in relevant assets costs and
current gains/losses according to the benefit object.
As for the intangible assets as trademark with uncertain benefit terms amortization shall not be carried.
Impairment testing methods and accrual for depreciation reserves for the intangible assets found more in Note
V-20-“Long-term assets impairment”.
(2) Internal accounting policies relating to research and development expenditures
Expenses incurred during the research phase are recognized as profit or loss in the current period; expenses
incurred during the development phase that satisfy the following conditions are recognized as intangible assets
(patented technology and non-patents technology):
① It is technically feasible that the intangible asset can be used or sold upon completion;
② there is intention to complete the intangible asset for use or sale;
③ The products produced using the intangible asset has a market or the intangible asset itself has a market;
④ there is sufficient support in terms of technology financial resources and other resources in order to complete
the development of the intangible asset and there is capability to use or sell the intangible asset;
⑤ the expenses attributable to the development phase of the intangible asset can be measured reliably.If the expenses incurred during the development phase did not qualify the above mentioned conditions such
expenses incurred are accounted for in the profit or loss for the current period. The development expenditure
reckoned in gains/losses previously shall not be recognized as assets in later period. The capitalized expenses in
development stage listed as development expenditure in balance sheet and shall be transfer as intangible assets
since such item reached its expected conditions for service.
20. Impairment of long-term asset
The Company will judge if there is any indication of impairment as at the balance sheet date in respect of
non-current non-financial assets such as fixed assets construction in progress intangible assets with a finite useful
life investment properties measured at cost and long-term equity investments in subsidiaries joint controlled
entities and associates. If there is any evidence indicating that an asset may be impaired recoverable amount shall
be estimated for impairment test. Goodwill intangible assets with an indefinite useful life and intangible assets
beyond working conditions will be tested for impairment annually regardless of whether there is any indication of
impairment.If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount the
impairment provision will be made according to the difference and recognized as an impairment loss. The
recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the
future cash flows expected to be derived from the asset. An asset’s fair value is the price in a sale agreement in an
arm’s length transaction. If there is no sale agreement but the asset is traded in an active market fair value shall be
determined based on the bid price. If there is neither sale agreement nor active market for an asset fair value shall
be based on the best available information. Costs of disposal are expenses attributable to disposal of the asset
including legal fee relevant tax and surcharges transportation fee and direct expenses incurred to prepare the
asset for its intended sale. The present value of the future cash flows expected to be derived from the asset over
the course of continued use and final disposal is determined as the amount discounted using an appropriately
selected discount rate. Provisions for assets impairment shall be made and recognized for the individual asset. If it
is not possible to estimate the recoverable amount of the individual asset the Group shall determine the
recoverable amount of the asset group to which the asset belongs. The asset group is the smallest group of assets
capable of generating cash flows independently.
For the purpose of impairment testing the carrying amount of goodwill presented separately in the financial
statements shall be allocated to the asset groups or group of assets benefiting from synergy of business
combination. If the recoverable amount is less than the carrying amount the Group shall recognize an impairment
loss. The amount of impairment loss shall first reduce the carrying amount of any goodwill allocated to the asset
group or set of asset groups and then reduce the carrying amount of other assets (other than goodwill) within the
asset group or set of asset groups pro rata on the basis of the carrying amount of each asset.
An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period in respect of
the part whose value can be recovered.
21. Long-term deferred expenses
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.
22. Employee compensation
(1) Accounting treatment for short-term compensation
During the accounting period when the staff providing service to the Company the short-term remuneration actual
occurred shall recognized as liability and reckoned into current gains/losses. During the accounting period when
staff providing service to the Company the actual short-term compensation occurred shall recognized as liabilities
and reckoned into current gains/losses except for those in line with accounting standards or allow to reckoned
into capital costs; the welfare occurred shall reckoned into current gains/losses or relevant asses costs while
actually occurred. The employee compensation shall recognize as liabilities and reckoned into current gains/losses
or relevant assets costs while actually occurred. The employee benefits that belong to non-monetary benefits are
measured in accordance with the fair value; the social insurances including the medical insurance work-injury
insurance and maternity insurance and the housing fund that the enterprise pays for the employees as well as the
labor union expenditure and employee education funds withdrawn by rule should be calculated and determined as
the corresponding compensation amount and determined the corresponding liabilities in accordance with the
specified withdrawing basis and proportion and reckoned in the current profits and losses or relevant asset costs
in the accounting period that the employees provide services.
(2) Accounting treatment for post-employment benefit
The post-employment benefit included the defined contribution plans and defined benefit plans. Post-employment
benefits plan refers to the agreement about the post-employment benefits between the enterprise and employees
or the regulations or measures the enterprise established for providing post-employment benefits to employees.Thereinto the defined contribution plan refers to the post-employment benefits plan that the enterprise doesn’t
undertake the obligation of payment after depositing the fixed charges to the independent fund; the defined benefit
plans refers to post-employment benefits plans except the defined contribution plan.
(3) Accounting for retirement benefits
When the Company terminates the employment relationship with employees before the end of the employment
contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy the
Company shall recognize employee compensation liabilities arising from compensation for staff dismissal and
included in profit or loss for the current period when the Company cannot revoke unilaterally compensation for
dismissal due to the cancellation of labor relationship plans and employee redundant proposals; and the Company
recognize cost and expenses related to payment of compensation for dismissal and restructuring whichever is
earlier. The early retirement plan shall be accounted for in accordance with the accounting principles for
compensation for termination of employment. The salaries or wages and the social contributions to be paid for the
employees who retire before schedule from the date on which the employees stop rendering services to the
scheduled retirement date shall be recognized (as compensation for termination of employment) in the current
profit or loss by the Group if the recognition principles for provisions are satisfied.
(4)Accounting for other long-term employee benefits
Except for the compulsory insurance the Company provides the supplementary retirement benefits to the
employees satisfying some conditions the supplementary retirement benefits belong to the defined benefit plans
and the defined benefit liability confirmed on the balance sheet is the value by subtracting the fair value of plan
assets from the present value of defined benefit obligation. The defined benefit obligation is annually calculated in
accordance with the expected accumulated welfare unit method by the independent actuary by adopting the
treasury bond rate with similar obligation term and currency. The service charges related to the supplementary
retirement benefits (including the service costs of the current period the previous service costs and the settlement
gains or losses) and the net interest are reckoned in the current profits and losses or other asset costs the changes
generated by recalculating the net liabilities of defined benefit plans or net assets should be reckoned in other
consolidated income.
23. Accrual liabilities
(1) Recognition principle
An obligation related to a contingency such as guarantees provided to outsiders pending litigation or arbitration
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:
① the obligation is a present obligation of the Company;
② it is Contingent that an outflow of economic benefits will be required to settle the obligation;
③ the amount of the obligation can be measured reliably.
(2) Measurement method: Measure on the basis of the best estimates of the expenses necessary for paying off the
contingencies
24. Revenue
Whether the Company needs to comply with the disclosure requirement of special industry
No
(1) Concrete judging criteria for time of recognized
The major risks and remuneration entitled to the ownership of goods are transferred to buyer; neither retain the
continued management right generally related to ownership nor exercise effective control over the sold products;
the relevant economic benefits are probable to flow into the Company; the relevant income and costs can be
measured reliably.
Concrete judging criteria for time of recognized the income from goods sales:
The Company's domestic sales revenue recognition time: The company delivers goods as agreed checks the
goods that the buyers have received and inspected during the period of the last reconciliation date and this
reconciliation date with the buyers on the reconciliation date as agreed and transfers the risks and remunerations
to the buyers after checking the Company issues the invoices to the buyers in accordance with the recognized
varieties quantities and amounts and affirms the sales revenue realization on the reconciliation date.The Company's overseas sales revenue recognition time: After checking by the customs the Company affirms the
sales revenue realization according to the date of departure on the customs declaration.
(2) Recognition of revenue of assets using right alienation
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 revenue measured by the follow:
① Interest income amount: calculated and determined in accordance with the time that others use the enterprises
cash and the actual interest rate.② Royalty revenue amount: calculated and determined in accordance with the charging time and method of the
relevant contract or agreement as agreed.The basis that the Company confirms the revenue from transferring the right to use assets.Rental income: the revenue realization is confirmed after collecting the rent on the date as agreed in the rental
contract (or agreement). For the rent not received on the date as agreed in the contract or agreement but can be
received and of which the amount of revenue can be measured reliably can also be recognized as revenue.
(3) When confirming the incomes of labor services and construction contracts according to the percentage of
completion method determine the basis and method of the contract completion plan.
For the service transaction results can be estimated reliably on the balance sheet date the service revenue is
determined and recognized by adopting the percentage of completion method. The completion progress of service
transaction is determined by the proportion of incurred costs in the estimated total cost.The total service revenue is determined by the received or receivable contract or agreement costs except that the
received or receivable contract or agreement costs are not fair. On the balance sheet date the service revenue of the
current period is determined by multiplying the total service revenue by the completion progress and deducting
the amount accumulated in the previous accounting period and confirmed to render the service revenue.Meanwhile the labor costs of the current period are carried forward by multiplying the total estimated costs of
labor services by the completion progress and deducting the amount accumulated in the previous accounting
period with confirmed service costs.
For the service transaction results cannot be estimated reliably on the balance sheet date respectively dispose as
following circumstances:
①The incurred labor costs estimated to be compensated are confirmed to render the service revenue according to
the incurred labor costs and are carried forward by the equivalent amount.②The incurred labor costs estimated not to be compensated are reckoned in the current profits or losses and are
not confirmed to render the service revenue.
25. Government Grants
(1) Types
Government grants are transfer of monetary assets or non-monetary assets from the government to the Group at
no consideration. Government grants are classified into government grants related to assets and government grants
related to income.
As for the assistance object not well-defined in government’s documents the classification criteria for
assets-related or income-related grants are as: whether the grants turn to long-term assets due to purchasing for
construction or other means.
(2) Recognition and measure
The government grants shall be recognized while meet the additional conditions of the grants and amount is
actually can be obtained.If a government grant is in the form of a transfer of monetary asset the item shall be measured at the amount
received or receivable. If a government grant is in the form of a transfer of non-monetary asset the item shall be
measured at fair value. If the fair value can not be reliably acquired than measured by nominal amount.
(3) Accounting treatment
A government grant related to an asset shall be recognized as deferred income and reckoned into current
gains/losses according to the depreciation process in use life of such assets.
A government grant related to income if they making up relevant expenses and losses for later period than
recognized deferred income and should reckoned into current gain/loss during the period while relevant expenses
are recognized; if they making up relevant expenses and losses that occurred than reckoned into current
gains/losses.
A government grant related to daily operation activity of the Company should reckoned into other income; those
without related to daily operation activity should reckoned into non-operation income and expenses.The financial discount funds received by the Company shall write down relevant borrowing costs.
26. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets or deferred income tax liabilities are realized based on the difference between the
carrying values of assets and liabilities and their taxation bases (as for the ones did not recognized as assets and
liability and with taxation basis recognized in line with tax regulations different between tax base and its book
value) at the tax rates applicable in the periods when the Company recovers such assets or settles such liabilities.
(2) Deferred income tax assets are realized to the extent that it is probable to obtain such taxable income which is
used to set off the deductible temporary difference. As at the balance sheet date if there is obvious evidence
showing that it is probable to obtain sufficient taxable income to set off the deductible temporary difference in
future periods deferred income tax assets not realized in previous accounting periods shall be realized.
(3) On balance sheet date re-review shall be made in respect of the carrying value of deferred income tax assets.
If it is impossible to obtain sufficient taxable income to set off the benefits of deferred income tax assets in future
periods then the carrying value of deferred income tax assets shall be reduced accordingly. If it is probable to
obtain sufficient taxable income then the amount reduced shall be switched back.
(4) Current income tax and deferred income tax considered as income tax expenses or incomes reckoned into
current gains/losses excluding the follow income tax:
①Enterprise combination;
②Transactions or events recognized in owner’s equity directly
27. Lease
(1) Accounting for operating lease
The rental fee paid for renting the properties by the company are amortized by the straight-line method and
reckoned in the current expenses throughout the lease term without deducting rent-free period. The initial direct
costs related to the lease transactions paid by the company are reckoned in the current expenses.When the lessor undertakes the expenses related to the lease that should be undertaken by the company the
company shall deduct the expenses from the total rental costs share by the deducted rental costs during the lease
term and reckon in the current expenses.Rental obtained from assets leasing during the whole leasing period without rent-free period excluded shall be
amortized by straight-line method and recognized as leasing revenue. The initial direct costs paid with leasing
transaction concerned are reckoned into current expenditure; the amount is larger is capitalized when incurred
and accounted for as profit or loss for the current period on the same basis as recognition of rental income over the
entire lease period.When the company undertakes the expenses related to the lease that should be undertaken by the lessor the
company shall deduct the expenses from the total rental income and distribute by the deducted rental costs during
the lease term.
(2) Accounting for financing lease
Assets lease-in by financing: On the beginning date of the lease the entry value of leased asset shall be at the
lower of the fair value of the leased asset and the present value of minimum lease payment at the beginning date
of the lease. Minimum lease payment shall be the entry value of long-term accounts payable with difference
recognized as unrecognized financing expenses. Unrecognized financing expenses shall be reckoned in financial
expenses and amortized and using effective interest method during the leasing period. The initial direct costs
incurred by the Company shall be reckoned into value of assets lease-in.
Finance leased assets: on the lease commencement date the company affirms the balance among the finance lease
receivables the sum of unguaranteed residual value and its present value as the unrealized financing income and
recognizes it as the rental income during the period of receiving the rent. For the initial direct costs related to the
rental transaction the company reckons in the initial measurement of the finance lease receivables and reduces
the amount of income confirmed in the lease term.
28. Other important accounting policy and accounting estimation
In the process of applying the Company's accounting policies due to the inherent uncertainty of business activities
the Company needs to judge estimate and assume the book value of the report items cannot be accurately
measured. These judgments estimates and assumptions are made on the basis of the historical experience of the
Company’s management and by considering other relevant factors which shall impact the reported amounts of
income expenses assets and liabilities and the disclosure of contingent liabilities on the balance sheet date.However the actual results caused by the estimated uncertainties may differ from the management's current
estimates of the Company so as to carry out the significant adjustments to the book value of the assets or liabilities
to be affected.The Company regularly reviews the aforementioned judgments estimates and assumptions on the basis of
continuing operations the changes in accounting estimates only affect the current period of which the impacts are
recognized in the current period; the changes in accounting estimates not only affect the current period but also the
future periods of which the impacts are recognized in the current and future periods.On the balance sheet date the important areas of the financial statements that the Company needs to judge estimate
and assume are as follows:
(1) Provision for bad debts
According to the accounting policies of the accounts receivable the Company adopts the allowance method to
calculate the bad debt losses. The impairment of receivables is based on the assessment to the collectability of the
accounts receivable. The impairment of accounts receivable requires the management’s judgments and estimates.The actual results and the differences between the previously estimated results shall affect the book value of
accounts receivable and the provision or return of the receivables’ bad debt reserves during the period estimated to
be changed.
(2) Inventory impairment
According to the inventory accounting policies the Company measures by the comparison between the cost and
the net realizable value if the cost is higher than the net realizable value and the old and unsalable inventories the
Company calculates and withdraws the inventory impairment. The inventory devalues to the net realizable value
by evaluating the inventory’s vendibility and net realizable value. To identify the inventory impairment the
management needs to obtain the unambiguous evidences and consider the purpose to hold the inventory and
judge and estimate the impacts of events after the balance sheet date. The actual results and the differences
between the previously estimated results shall affect the book value of inventory and the provision or return of the
inventory impairment during the period estimated to be changed.
(3) Held-to-maturity investments
The Company classifies the non-derivative financial assets that meet the requirements have the fixed or
ascertainable repayment amount and fixed due date and that the Company has the positive intention and ability to
hold to maturity as the held-to-maturity investment. This classification involves a lot of judgments. In the process
of making the judgments the Company will evaluate its willingness and ability to this held-to-maturity investment.
Except in certain cases (such as the investments with insignificant sales amount when the maturity date comes) if
the Company fails to hold these investments till the maturity date then all the investments shall be reclassified to
the available-for-sale financial assets which cannot be classified as the held-to-maturity investments in this fiscal
year and the next two fiscal years. This kind of case may have a significant impact on the relevant financial assets
value listed on the financial statements and may affect the Company's financial instruments risk management
strategy.
(4) Impairment of held-to-maturity investments
The Company determines that the impairment of held-to-maturity investments largely relies on management's
judgments. The objective evidences of impairment include that the issuer has serious financial difficulties so that
the financial assets cannot continue to be traded in an active market or cannot be able to fulfill the contract terms
(for example breach the contract of paying the interests or principal) etc. In the process of making the judgments
the Company needs to evaluate the impact of the objective evidence of impairment to the expected future cash
flows of the investment.
(5) Impairment of financial assets available for sale
The Company determines that the impairment of held-to-maturity investments largely relies on management's
judgments and assumptions so as to determine whether it is needed to affirm its impairment loss in the profit
statement. In the process of making the judgments and assumptions the Company needs to evaluate the extent and
duration when the fair value of the investment is less than the cost as well as the financial situation and short-term
business prospects of the invested party including the industry conditions technological change credit rating
default rates and risks of the counter party.
(6) Preparation for the impairment of non-financial & non-current assets
The Company checks whether the non-current assets except for the financial assets may decrease in value at the
balance sheet date. For the intangible assets with indefinite service life in addition to the annual impairment test
the impairment test is also needed when there is a sign of impairment. For the other non-current assets except for
the financial assets the impairment test is needed when it indicates that the book amounts may not be recoverable.When the book value of the asset or group of assets exceeds its recoverable amount i.e. the higher between the net
amount by subtracting the disposal costs from the fair value and the present value of expected future cash flows it
indicates the impairment.
As for the net amount by subtracting the disposal costs from the fair value refer to the sales agreement price similar
to the assets in the fair trade or the observable market price and subtract the incremental costs determination
directly attributable to the disposal of the asset.When estimating the present value of the future cash flow the Company needs to make significant judgments to the
output price and related operating expenses of the asset (or asset group) and the discount rate used for calculating
the present value. When estimating the recoverable amount the Company shall adopt all the relevant information
can be obtained including the prediction related to the output price and related operating expenses based on the
reasonable and supportable assumptions.The Company tests whether its business reputation decreases in value every year which requires to estimating the
present value of the asset group allocated with goodwill or the future cash flow combined by the asset group. When
estimating the present value of the future cash flow the Company needs to estimate the future cash flows generated
by the asset group or the combination of asset group and select the proper discount rate to determine the present
value of the future cash flows.
(7) Depreciation and amortization
The Company depreciates and amortizes the investment property fixed assets and intangible assets according to the
straight-line method in the service life after considering the residual value. The Company regularly reviews the
service life to determine the depreciation and amortization expense amount to be reckoned in each reporting period.The service life is determined by the Company based on the past experience of similar assets and the expected
technological updating. If the previous estimates have significant changes the depreciation and amortization
expense shall be adjusted in future periods.
(8) Income tax
In the Company’s normal business activities the final tax treatment and calculation of some transactions have some
uncertainties. Whether some projects can be disbursed from the cost and expenses before taxes requires needs to
get approval from the tax authorities. If the final affirmation of these tax matters differs from the initially estimated
amount the difference shall have an impact on its current and deferred income taxes during the final identification
period.
(9) Early retirement benefits and supplementary retirement benefits
The expenses of the Company's early retirement benefits and supplementary retirement benefits and the amount of
liabilities are determined in accordance with various assumptions. These assumptions include the discount rate
the average growth rate of health care costs the subsidy growth rate of the early retired personnel and retirees and
the other factors. The differences between the actual results and assumptions will be immediately identified and
included in the costs of the current year. Although the management thought the reasonable assumptions have been
adopted the changes in the actual experience and assumed conditions will impact the costs and liability balances
of the Company's internal early retirement benefits and supplementary retirement benefits.
29. Changes of important accounting policy and estimation
(1) Changes of major accounting policies
√ Applicable □Not applicable
Content and causes for changes of accounting policy Approval procedures
On June 15 2018 the Ministry of Finance issued the Notice on Amending the Format of Financial
Statements of General Enterprises in 2018 (CK No. [2018] 15) revised the financial statements format of
general enterprises. According to the requirement relevant content of the accounting policy needs to be
adjusted and the financial statement should be prepared in line with the format of financial statement for
Deliberated and
approved by 5th
session of the 9th BOD
general enterprise(applicable to enterprise that have not yet implemented new financial and revenue
standards).The impacts on the items and amounts related to consolidated financial statements and the parent company’s
financial statements during the comparable period are as:
Changes of
accounting policy
Impact on the amount in relevant financial statement of 2017/on 31 December 2017
Item
Amount affected (+-)
Consolidate financial
statement
Financial statement of parent
company
The Company
prepared the
financial statement of
2018 in line with the
format regulated in
CK No. [2018] 15
and changed the
presentation of
relevant financial
statements by
retrospective method
Notes receivable -1464256934.83 -449209323.02
Account receivable -1995577830.90 -1047012889.92
Note receivable and account receivable 3459834765.73 1496222212.94
Interest receivable -2281979.17 -97627.77
Other receivables 2281979.17 97627.77
Note payable -947976759.10 -459762950.78
Account payable -2570956205.83 -1082206882.07
Note payable and account payable 3518932964.93 1541969832.85
Interest payable -401928.43 -93777.78
Other accounts payable 401928.43 93777.78
Long-term account payable 18265082.11 --
Special account payable -18265082.11 --
Administration expenses -391315234.75 -119083205.53
R&D expenses 391315234.75 119083205.53
(2) Changes of important accounting estimate
□ Applicable √ Not applicable
VI. Taxation
1. Major taxes and tax rates
Tax Basis Tax rate
VAT Taxable income
Tax rate of 17% 16% 11% 10% 6% and 5%，rate for exportedcommodities is stipulated by the state with declaration of export
tax rebate rate of tax may be “exempted credited and refunded”
City maintaining & construction tax Turnover tax payable 7%
Corporation income tax Taxable income 25%、15%
Educational surtax Turnover tax payable 5%、4.5%
Disclose reasons for different taxpaying body
Taxpaying body Income tax rate
Weifu Mashan Weifu Chang’an Weifu International Trade Weifu ITM Weifu Schmidt Weifu Leader (Wuhan)
Weifu Leader(Nanchang)
25%
The Company Weifu Jinning Weifu Leader Weifu Tianli Weifu Autocam Weifu Leader(Chongqing) 15%
2. Tax preference
On 17 November 2017 the Company got a “High-Tech Enterprise Certificate” issued jointly by Science &
Technology Department of Jiangsu Province Department of Finance of Jiangsu Province Jiangsu Provincial
Office SAT and Jiangsu Local Taxation Bureau certificate No.: GR201732000007. Corporate income tax of the
Company shall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
On 27 December 2017 Weifu Jinning got a “High-Tech Enterprise Certificate” issued jointly by Science &
Technology Department of Jiangsu Province Department of Finance of Jiangsu Province Jiangsu Provincial
Office SAT and Jiangsu Local Taxation Bureau certificate No.: GR201732004010. Corporate income tax of the
Weifu Jinning shall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
On 17 November 2017 Weifu Leader got a “High-Tech Enterprise Certificate” issued jointly by Science &
Technology Department of Jiangsu Province Department of Finance of Jiangsu Province Jiangsu Provincial
Office SAT and Jiangsu Local Taxation Bureau certificate No.: GR201732001828. Corporate income tax of the
Weifu Leader shall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
On 29 November 2017 Weifu Tianli got a “High-Tech Enterprise Certificate” issued jointly by Science &
Technology Bureau of Ningbo Department of Finance of Ningbo Ningbo Office SAT and Ningbo Zhejiang
Provincial Local Taxation Bureau certificate No.: GR201733100363. Corporate income tax of the Weifu Tianli
shall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
On 17 November 2017 Weifu Autocam got a “High-Tech Enterprise Certificate” issued jointly by Science &
Technology Department of Jiangsu Province Department of Finance of Jiangsu Province Jiangsu Provincial
Office SAT and Jiangsu Local Taxation Bureau certificate No.: GR201732001043. Corporate income tax of the
Weifu Autocam shall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.The State Administration of Taxation announced the first item of Announcement of the State Administration of
Taxation on the Enterprise Income Tax Issues Concerning the Implementation of the Western Development
Strategy No. 12 of 2012 that from January 1 2011 to December 31 2020 the enterprises located in the west
region and mainly engaged in the industrial projects stipulated in the Catalogue of Encouragement Industries in
the Western Region and whose main business income accounting for more than 70% of the total income of the
enterprise in the current year can pay the corporate income tax at the tax rate of 15%. In 2018 Weifu Leader
(Chongqing) paid its corporate income tax at the tax rate of 15%.
VII. Notes to major items in consolidated financial statements
1. Monetary funds
In RMB/CNY
Item Ending balance Opening balance
Cash on hand 194161.03 736773.22
Cash in bank 2534479978.46 3027702581.00
Other Monetary funds 81647601.24 90270058.61
Total 2616321740.73 3118709412.83
Other explanation
Item 2018-12-31 2017-12-31
Bank acceptance bill L/C and other collateral 80765732.67 89623690.04
Frozen dividend 881868.57 646368.57
Total 81647601.24 90270058.61
Other explanation:
The frozen dividend of 881868.57 Yuan represents the part of dividends distributed by SDEC (stock code:600841)
and Miracle Logistics (stock code:002009) for 2017 and 2018 held by the Company as financial assets available
for sale. According to the notices numbered Yue 03MC[2016]2490 and Yue 03MC[2016]2492 served by
Guangdong Shenzhen Intermediate People’s Court these dividends were frozen.
2. Note receivable and account receivable
In RMB/CNY
Item Ending balance Opening balance
Notes receivable 1148107603.68 1464256934.83
Account receivable 1919793266.91 1995577830.90
Total 3067900870.59 3459834765.73
(1)Notes receivable
1)Classification of notes receivable
In RMB/CNY
Item Ending balance Opening balance
Bank acceptance bill 1082574482.88 1399006661.54
Commercial acceptance bill 65533120.80 65250273.29
Total 1148107603.68 1464256934.83
2) Notes receivable already pledged by the Company at the end of the period
In RMB/CNY
Item Amount pledge at period-end
Bank acceptance bill 423527758.19
Total 423527758.19
3) Notes endorsement or discount and undue on balance sheet date
In RMB/CNY
Item Amount derecognition at period-end Amount not derecognition at period-end
Bank acceptance bill 776847577.64
Commercial acceptance bill 9230507.00
Total 786078084.64
4) Notes transfer to account receivable due for failure implementation by drawer at period-end
In RMB/CNY
Item Amount transfer to account receivable at period-end
Commercial acceptance bill 7000000.00
Total 7000000.00
Other explanation
The commercial acceptance bills that the company transferred to the accounts receivable due to the failure of the
drawer to perform the agreement at the end of the period were the bills of the subsidiaries controlled by Baota
Petrochemical Group Co. Ltd. and the bills accepted by Baota Petrochemical Group Finance Co. Ltd. (hereinafter
referred to as “BD bills”); as of December 31 2018 these bills had expired.
(2)Account receivable
1) Classification of account receivable
In RMB/CNY
Category
Ending balance Opening balance
Book balance Bad debt reserve
Book
value
Book balance Bad debt reserve
Book value
Amount Ratio Amount
Accrual
ratio
Amount Ratio Amount
Accrual
ratio
Account receivable
with single
significant amount
and withdrawal bad
debt provision
separately
700000
0.00
0.36%
700000
0.00
100.00%
Account receivables
with bad debt
provision accrual by
195101
6221.14
99.56%
312229
54.23
1.60%
1919793
266.91
20069
37035.
99.90%
1135920
4.21
0.57%
19955778
30.90
credit portfolio 11
Account receivable
with single
significant amount
and bad debts
provision accrued
individually
168511
0.25
0.08%
168511
0.25
100.00%
19351
07.25
0.10%
1935107
.25
100.00%
Total
195970
1331.39
100.00%
399080
64.48
2.04%
1919793
266.91
20088
72142.
36
100.00%
1329431
1.46
0.66%
19955778
30.90
Account receivable with single significant amount and withdrawal bad debt provision separately at period end
√ Applicable □ Not applicable
In RMB/CNY
Account receivable(by
enterprise)
Ending balance
Account receivable Bad debt reserve Accrual ratio Accrual causes
BD bills 7000000.00 7000000.00 100.00% Have difficulty in collection
Total 7000000.00 7000000.00 -- --
Account receivable provided for bad debt reserve under aging analysis method in the groups:
√ Applicable □ Not applicable
In RMB/CNY
Account age
Ending balance
Account receivable Bad debt reserve Accrual ratio
Subitem of within one year
Within 6 months 1728298586.40
6 months to one year 179611775.01 17961177.51 10.00%
Subtotal of within one year 1907910361.41 17961177.51
1-2 years 36164276.98 7232855.40 20.00%
2-3 years 1521102.38 608440.95 40.00%
Over 3 years 5420480.37 5420480.37 100.00%
Total 1951016221.14 31222954.23 1.60%
Explanation on combination determines:
Excluding the account receivable accrual impairment provision separately; based on actual loss ratio of the
receivable groups that owes same or similar risk features which has classify by age in previous years determine
accrual ratio for bad debt provision combine with real condition
In combination withdrawal proportion of bad debt provision based on balance proportion for account receivable
□ Applicable √ Not applicable
In combination withdrawal proportion of bad debt provision based on other methods for account receivable:
Nil
2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was 27321822.63 Yuan; the amount collected or switches back amounting to 353111.39 Yuan.
3) Account receivable actual charge off in the Period
In RMB/CNY
Item Amount charge off
Jiangyin KPT Power Machinery Manufacturing Co. Ltd. 450000.00
Chengdu Chengfa Automobile Engine Co. Ltd. 142862.60
Hangzhou Yaman Engine Co. Ltd 92921.30
Rugao Diesel Engine Factory 76090.00
Retail enterprise 299307.10
Total 1061181.00
Charge-off for account receivable:
The amount are arising from non-related transactions
4) Top 5 receivables at ending balance by arrears party
Total year-end balance of top five receivables by arrears party amounting to 932473509.48 Yuan takes 47.58
percent of the total account receivable at year-end bad debt provision accrual correspondingly at year-end
amounting as 4753294.41 Yuan.
5) Account receivable derecognition due to financial assets transfer Nil
6) Assets and liabilities resulted by account receivable transfer and continues involvement Nil
3. Account paid in advance
(1)Account age of account paid in advance
In RMB/CNY
Account age
Ending balance Opening balance
Amount Ratio Amount Ratio
Within one year 89076980.53 94.11% 94641350.21 96.99%
1-2 years 4536408.47 4.79% 2550321.91 2.61%
2-3 years 980958.32 1.04% 319185.79 0.33%
Over 3 years 57083.99 0.06% 65339.97 0.07%
Total 94651431.31 -- 97576197.88 --
Explanation on reasons of failure to settle on important advance payment with age over one year: Nil
(2) Top 5 advance payment at ending balance by prepayment object
Total year-end balance of top five advance payment by prepayment object amounted to 30798878.95 Yuan
takes 32.54 percent of the total advance payment at year-end.
4. Other receivables
In RMB/CNY
Item Ending balance Opening balance
Interest receivable 1842437.50 2281979.17
Other receivables 82739808.66 5214623.41
Total 84582246.16 7496602.58
(1)Interest receivable
1) Category of interest receivable
In RMB/CNY
Item Ending balance Opening balance
Fixed deposits 1842437.50 2281979.17
Total 1842437.50 2281979.17
2) Significant overdue interest
Nil
(2)Dividend receivable
Nil
(3)Other receivables
1) Category of other receivables
In RMB/CNY
Category
Ending balance Opening balance
Book balance Bad debt reserve
Book
value
Book balance Bad debt reserve
Book value
Amount Ratio Amount
Accrual
ratio
Amount Ratio Amount
Accrual
ratio
Other account
receivable with
single significant
amount and
withdrawal bad debt
provision separately
277555
2.63
3.15%
277555
2.63
100.00%
27755
52.63
25.60%
2775552
.63
100.00%
Other receivables
with bad debt
provision accrual by
credit portfolio
854230
12.66
96.85%
268320
4.00
3.14%
8273980
8.66
80674
66.20
74.40%
2852842
.79
35.36%
5214623.4
1
Total
881985
65.29
100.00%
545875
6.63
6.19%
8273980
8.66
10843
018.83
100.00%
5628395
.42
51.91%
5214623.4
1
Other receivable with single significant amount and withdrawal bad debt provision separately at end of period:
√ Applicable □ Not applicable
In RMB/CNY
Other receivables(by
enterprise)
Ending balance
Other receivables Bad debt reserve Accrual ratio Accrual causes
American HESS 1514671.20 1514671.20 100.00% The counter party has bankruptcy
Nanjing Jinning
Machinery Factory
1260881.43 1260881.43 100.00% Have difficulty in collection
Total 2775552.63 2775552.63 -- --
In combination other accounts receivable whose bad debts provision was accrued by age analysis:
√ Applicable □ Not applicable
In RMB/CNY
Account age
Ending balance
Other receivables Bad debt reserve Accrual ratio
Subitem of within one year
Within 6 months 82715687.17
6 months to one year 19454.00 1945.40 10.00%
Subtotal of within one year 82735141.17 1945.40
1-2 years 5400.00 1080.00 20.00%
2-3 years 3821.49 1528.60 40.00%
Over 3 years 2678650.00 2678650.00 100.00%
Total 85423012.66 2683204.00 3.14%
Explanations on combination determine:
Excluding the other account receivable accrual impairment provision separately; based on actual loss ratio of the
receivable groups that owes same or similar risk features which has classify by age in previous years determine
accrual ratio for bad debt provision combine with real condition.In combination withdrawal proportion of bad debt provision based on balance proportion for other account receivable:
□ Applicable √ Not applicable
In combination withdrawal proportion of bad debt provision based on other methods for other account receivable:
□ Applicable √ Not applicable
2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was 120915.80 Yuan; the amount collected or switches back amounting to 262165.59 Yuan.
Including the important bad debt provision switch back or collected in the period: Nil
3) Other receivables actually written-off during the reporting period
In RMB/CNY
Item Amount charge off
Retail enterprise (Details of each amount is small and is not generated by related transactions) 28389.00
Note of important other receivables of written-off: Nil
Note of other receivables of written-off: Nil
4)Nature of other receivables
In RMB/CNY
Nature Ending book balance Opening book balance
Intercourse funds receivable from units 15328121.55 4883788.59
Receivable of Compensation(note) 67981726.00
Cash deposit 3206825.88 3457080.65
Staff loans and petty cash 1172017.93 2099504.91
Other 509873.93 402644.68
Total 88198565.29 10843018.83
In 2018 the Qixia District Housing Collection Management Office of Nanjing signed the Agreement on the
Collection and Compensation of Housing on State-owned Land in Nanjing with Weifu Jinning. According to the
agreement Weifu Jinning’s land housing and housing attachments located at No. 69 Taiping Village Yanziji
Town Qixia District were levied by the government; the compensation method was monetary compensation the
compensation amount was 104205929.00 yuan which was in accordance with the evaluation result of the
housing expropriation issued by the assessment company. As of December 31 2018 the company has delivered
the expropriated houses and land in accordance with the agreement and delivered the relevant original house
ownership certificates and state-owned land use certificates to the Qixia District Housing Collection Management
Office of Nanjing. In 2018 the company has collected compensation of 36224203.00 yuan and received the
remaining compensation of 67981726.00 yuan on January 30 2019.
5) Top 5 other receivables at ending balance by arrears party
In RMB/CNY
Enterprise Nature
Ending
balance
Account age
Ratio in total ending
balance of other
receivables
Ending balance
of bad debt
reserve
Qixia District Housing
Collection Management
Office of Nanjing
Compensation for
disposal of assets
67981726.00 Within 6 months 77.08%
Robert Bosch Company Intercourse funds of unit 12285081.81 Within 6 months 13.93%
Ningbo Jiangbei High-Tech
Industry Park Development
Construction Co. Ltd.
Performance bond 1767000.00 Over three years 2.00% 1767000.00
American HESS Company Intercourse funds of unit 1514671.20 Specific 1.72% 1514671.20
identification
Nanjing Jinning Machinery
Factory
Intercourse funds of unit 1260881.43
Specific
identification
1.43% 1260881.43
Total -- 84809360.44 -- 96.16% 4542552.63
6) Other account receivables related to government grants Nil
7) Other receivable for termination of confirmation due to the transfer of financial assets Nil
8)The amount of assets and liabilities that are transferred other receivable and continued to be involved
Nil
5. Inventory
(1)Category of inventory
In RMB/CNY
Item
Ending balance Opening balance
Book balance
Depreciation
reserve
Book value Book balance
Depreciation
reserve
Book value
Raw materials 405113183.37 71085820.65 334027362.72 444304506.71 83879268.03 360425238.68
Goods in process 182564277.52 13682081.67 168882195.85 198648407.88 15483517.38 183164890.50
Finished goods 1080800727.38 145181571.36 935619156.02 1098294008.21 162945096.69 935348911.52
Total 1668478188.27 229949473.68 1438528714.59 1741246922.80 262307882.10 1478939040.70
(2) Inventory depreciation reserve
In RMB/CNY
Item Opening balance
Current increased Current decreased
Ending balance
Accrual Other Switch back or write-off Other
Raw materials 83879268.03 29627483.24 42420930.62 71085820.65
Goods in process 15483517.38 6039633.18 7841068.89 13682081.67
Finished goods 162945096.69 41526222.10 59289747.43 145181571.36
Total 262307882.10 77193338.52 109551746.94 229949473.68
① Net realizable value of the inventory refers to: during the day-to-day activities results of the estimated sale
price less costs which are going to happen by estimation till works completed sales price estimated and
relevant taxes.
② Accrual basis for inventory depreciation reserve:
Cash on hand
Accrual basis for inventory impairment
provision
Specific basis for recognition
Materials in stock
The materials sold due to finished
goods manufactured its net realizable
value is lower than the book value
Results from the estimated sale price of such inventory less the cost
what will happen estimated sales expenses and relevant taxes till the
goods completed
Goods in process
The goods in process sold due to
finished goods manufactured its net
realizable value is lower than the book
value
Results from the estimated sale price of such inventory less the cost
what will happen estimated sales expenses and relevant taxes till the
goods completed
Finished goods
its net realizable value is lower than the
book value
Results from the estimated sale price less the vary taxes which shall
be taken in process of sales
③Reasons of write-off for inventory falling price reserves:
Cash on hand Reasons of write-off
Materials in stock Used for production and the finished goods are realized sales
Goods in process Goods in process completed in the Period and corresponding finished goods are realized sales in the Period
Finished goods Sales in the Period
(3) Explanation on capitalization of borrowing costs at ending balance of inventory
Nil
(4) Assets completed without settlement from construction contract at period-end
Nil
6. Other current assets
In RMB/CNY
Item Ending balance Opening balance
Entrust financing products 4571886703.43 3841320000.00
Receivable export tax rebates 7848937.72 14289026.22
Prepaid taxes and VAT retained 47808273.37 25338518.05
Input tax to be deducted and certification 3420317.46 2568145.27
Other 1173368.28 4481600.99
Total 4632137600.26 3887997290.53
7. Available-for-sale financial assets
(1)Available-for-sale financial assets
In RMB/CNY
Item
Ending balance Opening balance
Book balance
Depreciation
reserves
Book value Book balance
Depreciation
reserves
Book value
Equity instrument
available for sale:
460603210.95 204628034.04 255975176.91 469495975.95 59433106.95 410062869.00
Measured by fair value 121066008.00 121066008.00 266376600.00 266376600.00
Measured by cost 339537202.95 204628034.04 134909168.91 203119375.95 59433106.95 143686269.00
Other - financial products 178080000.00 178080000.00
Total 460603210.95 204628034.04 255975176.91 647575975.95 59433106.95 588142869.00
(2) Financial assets available for sale measured by fair value at period-end
In RMB/CNY
Category of available-for-sale financial assets
Equity instrument
available for sale
Debt instrument
available for sale
Total
Cost /liability of equity instrument/ amortization cost of debt instrument 144371235.00 144371235.00
Fair value 121066008.00 121066008.00
Amount of fair value changes that cumulatively reckoned in other
comprehensive gains
-23305227.00 -23305227.00
(3) Financial assets available for sale measured by cost at period-end
In RMB/CNY
The
invested
entity
Book balance Depreciation reserves
Ratio of
share-holdi
ng in
invested
entity
Current
cash
dividend Period-beg
inning
Current
increased
Current
decreased
Period-end
Period-beg
inning
Current
increased
Current
decreased
Period-end
Guolian
Securities
12000000
.00
12000000
.00
0.95%
Guangxi
Liufa Co.Ltd.
1600000.
00
1600000.
00
1600000.
00
1600000.
00
1.22%
Financial
Company
of
Changchai
Group Co.Ltd.
800000.00 800000.00 800000.00 800000.00
H&J
Vanguard
Investment
Co. Ltd.
33000000
.00
33000000
.00
33000000
.00
33000000
.00
Nanjing
Hengtai
Insurance
and Broker
Co. Ltd.
1000000.
00
1000000.
00
1000000.
00
1000000.
00
1.85%
Henan
Gushi
Weining
Oil Pump
& Nozzle
Co. Ltd.
2033106.
95
2033106.
95
2033106.
95
2033106.
95
Beijing
Zhike
Industrial
Investment
Holding
Group Co.Ltd
86940000
.00
86940000
.00
11000000
.00
11000000
.00
12.66%
Wuxi
Xidong
Technolog
ical
Industry
Park Co.Ltd.
5000000.
00
5000000.
00
1.43%
Shanghai
IMS
Automotiv
e
Electronic
System
Co. Ltd.
10000000
.00
10000000
.00
10000000
.00
10000000
.00
12.27%
Shanghai
CD
Dengtong
Equity
Investment
Fund
50746269
.00
14925373
.00
35820896
.00
14.93%
2985075.
00
Protean
Holdings
Corp.
15214320
0.00
15214320
0.00
14599492
7.09
14599492
7.09
Total
20311937
5.95
15214320
0.00
15725373
.00
33953720
2.95
59433106
.95
14599492
7.09
800000.00
20462803
4.04
--
2985075.
00
(4) Changes of impairment of available-for-sale financial assets in Period
In RMB/CNY
Category of available-for-sale financial assets
Equity instrument
available for sale
Debt instrument
available for sale
Total
Balance of impairment accrual at period-begin 59433106.95 59433106.95
Current accrual 145994927.09 145994927.09
Current decreased 800000.00 800000.00
Balance of impairment accrual at period-end 204628034.04 204628034.04
(5) Where the fair value of equity instruments available for sale drops significantly or not contemporarily
at period-end without impairment provision is made
Nil
8. Long-term equity investments
In RMB/CNY
The
invested
entity
Opening
balance
Current changes (+-)
Ending
balance
Ending
balance
of
depreciati
on
reserves
Additiona
l
investmen
t
Capital
reduction
Investme
nt
gain/loss
recognize
d under
equity
Other
comprehe
nsive
income
adjustmen
t
Other
equity
change
Cash
dividend
or profit
announce
d to
issued
Impairme
nt accrual
Other
I. Joint venture
Wuxi
Weifu
Environm
ent
Catalyst
Co. Ltd.
5228827
89.26
4276329
7.67
5656460
86.93
Wuxi
Weifu
Electric
Drive
Tech. Co.Ltd.
5518080
0.00
-438424.
98
5474237
5.02
Subtotal
5228827
89.26
5518080
0.00
4232487
2.69
6203884
61.95
II. Associated enterprise
Bosch
Automobi
le Diesel
System
Co. Ltd.
2608796
934.00
1206095
040.88
6077690
81.48
3207122
893.40
Zhonglian
Automobi
le
Electronic
Co. Ltd.
9590361
93.36
3668397
62.36
2394000
00.00
1086475
955.72
Weifu
Precision
Machiner
y
Manufact
4934890
8.96
9561248
.94
3600000
.00
5531015
7.90
uring Co.Ltd.Shinwell
Automobi
le Tech.(Wuxi)
Co. Ltd.
9000000
.00
-152352
2.23
7476477
.77
Subtotal
3617182
036.32
9000000
.00
1580972
529.95
8507690
81.48
4356385
484.79
Total
4140064
825.58
6418080
0.00
1623297
402.64
8507690
81.48
4976773
946.74
Other explanation
Explanation on investment for Wuxi Weifu Electric Drive Tech. Co. Ltd. and Shinwell Automobile Tech. (Wuxi) Co. Ltd measured
by equity found more in 3-(1) Joint venture or associated enterprise in Note VII
9. Investment real estate
(1) Investment real estate measured by cost
√ Applicable □ Not applicable
In RMB/CNY
Item
House and
Building
Land use right
Construction in
progress
Total
I. original book value
1.Opening balance 63545325.48 63545325.48
2.Current increased
(1) outsourcing
(2) Inventory\fixed assets\construction in process
transfer-in
(3) increased by combination
3.Current decreased 1867989.65 1867989.65
(1) disposal 1867989.65 1867989.65
(2) other transfer-out
4.Ending balance 61677335.83 61677335.83
II. Accumulated depreciation and accumulated
amortization
1.Opening balance 40000494.70 40000494.70
2.Current increased 1566198.87 1566198.87
(1) accrual or amortization 1566198.87 1566198.87
3.Current decreased 1795492.26 1795492.26
(1) disposal 1795492.26 1795492.26
(2) other transfer-out
4.Ending balance 39771201.31 39771201.31
III. Depreciation reserves
1.Opening balance
2.Current increased
(1) accrual
3. Current decreased
(1) disposal
(2) other transfer-out
4.Ending balance
IV. Book value
1.Ending Book value 21906134.52 21906134.52
2.Opening Book value 23544830.78 23544830.78
(2) Investment real estate measured at fair value
□ Applicable √ Not applicable
(3) Investment real estate without property certification held
Nil
10. Fixed assets
In RMB/CNY
Item Ending balance Opening balance
Fixed assets 2707374678.61 2584872628.54
Total 2707374678.61 2584872628.54
(1)Fixed assets
In RMB/CNY
Item
House and
Building
Machinery
equipment
Transportation
equipment
Electronic and
other equipment
Total
I. original book value:
1.Opening balance 1537881197.20 2214135391.61 40678767.59 423482779.18 4216178135.58
2.Current increased 14839633.48 305476750.70 4026263.61 93377537.08 417720184.87
(1) Purchase 18965806.44 330775.86 17351255.06 36647837.36
(2) Construction in progress
transfer-in
14839633.48 286510944.26 3695487.75 76026282.02 381072347.51
(3) increased by combination
3.Current decreased 28603301.23 8944035.83 9927902.72 47475239.78
(1) disposal or scrapping 28603301.23 8944035.83 9927902.72 47475239.78
4.Ending balance 1552720830.68 2491008841.08 35760995.37 506932413.54 4586423080.67
II. Accumulated depreciation
1.Opening balance 283668171.81 1077183649.52 29697332.26 185833218.62 1576382372.21
2.Current increased 46296560.27 176973334.14 3301058.79 57333902.25 283904855.45
(1) accrual 46296560.27 176973334.14 3301058.79 57333902.25 283904855.45
3.Current decreased 24603993.39 8252738.72 2604749.60 35461481.71
(1) disposal or scrapping 24603993.39 8252738.72 2604749.60 35461481.71
4.Ending balance 329964732.08 1229552990.27 24745652.33 240562371.27 1824825745.95
III. Depreciation reserves
1.Opening balance 48038049.98 73320.38 6811764.47 54923134.83
2.Current increased 504907.39 504907.39
(1) accrual 504907.39 504907.39
3.Current decreased 1168957.36 0.48 36428.27 1205386.11
(1) disposal or scrapping 1168957.36 0.48 36428.27 1205386.11
4.Ending balance 46869092.62 73319.90 7280243.59 54222656.11
IV. Book value
1.Ending Book value 1222756098.60 1214586758.19 10942023.14 259089798.68 2707374678.61
2.Opening Book value 1254213025.39 1088913692.11 10908114.95 230837796.09 2584872628.54
(2) Temporarily idle fixed assets Nil
(3) Fixed assets acquired by financing lease Nil
(4) Fixed assets acquired by operating lease Nil
(5)Fixed assets without property certification held
In RMB/CNY
Item Book value Reasons for without the property certification
Boiler room and guard house of Weifu Jinning 2743741.50 Still in process of relevant property procedures
Plant and office building of Weifu Chang’an 43746598.64 Still in process of relevant property procedures
(6)Disposal of fixed assets Nil
11. Construction in progress
In RMB/CNY
Item Ending balance Opening balance
Construction in progress 166414542.18 100345461.28
Total 166414542.18 100345461.28
(1)Construction in progress
In RMB/CNY
Item
Ending balance Opening balance
Book balance
Depreciation
reserves
Book value Book balance
Depreciation
reserves
Book value
2nd Phase
construction
project in
industrial park
3364768.05 3364768.05
Weifu Tianli
Technical
Transformation
Project
3214458.65 3214458.65 16518417.24 16518417.24
Technical 62131476.77 1470033.00 60661443.77 23611775.63 1470033.00 22141742.63
Technical
transformation of
Weifu Autocam
64861621.60 64861621.60 32705249.53 32705249.53
Other Item 39773360.78 2096342.62 37677018.16 27711626.45 2096342.62 25615283.83
Total 169980917.80 3566375.62 166414542.18 103911836.90 3566375.62 100345461.28
(2) Changes of major projects under construction
In RMB/CNY
Item Budget
Opening
balance
Current
increased
Fixed
assets
transfer-i
n in the
Period
Other
decrease
d in the
Period
Ending
balance
Proporti
on of
project
investme
nt in
budget
Progress
Accumul
ated
amount
of
interest
capitaliz
ation
including
: interest
capitaliz
ed
amount
of the
year
Interest
capitaliz
ation rate
of the
year
Source of
funds
2nd Phase
constructi
on project
in
industrial
336476
8.05
407810
2.04
744287
0.09
Other
park
Weifu
Tianli
Technical
Transform
ation
Project
165184
17.24
121662
03.74
254701
62.33
321445
8.65
Other
Technical
236117
75.63
156912
888.51
118393
187.37
621314
76.77
Other
Technical
transforma
tion of
Weifu
Autocam
327052
49.53
118272
226.62
861158
54.55
648616
21.60
Other
Total
762002
10.45
291429
420.91
237422
074.34
130207
557.02
-- -- --
(3) The provision for impairment of construction projects
Nil
(4)Engineering material
Nil
12. Intangible assets
(1)Intangible assets
In RMB/CNY
Item Land use right Patent
Non-patent
technology
Trademark and
trademark
license
Computer
software
Total
I. original book value
1.Opening balance 382073520.00 3539793.05 41597126.47 51218449.46 478428888.98
2.Current increased 1778429.82 1778429.82
(1) Purchase 1778429.82 1778429.82
(2) internal R&D
(3) increased by combination
3.Current decreased 870000.00 870000.00
(1) disposal 870000.00 870000.00
4.Ending balance 381203520.00 3539793.05 41597126.47 52996879.28 479337318.80
II. accumulated amortization
1.Opening balance 70825229.06 2271368.77 9709000.00 38344247.79 121149845.62
2.Current increased 8399994.44 353977.93 8495491.00 17249463.37
(1) accrual 8399994.44 353977.93 8495491.00 17249463.37
3.Current decreased 601712.94 601712.94
(1) disposal 601712.94 601712.94
4.Ending balance 78623510.56 2625346.70 9709000.00 46839738.79 137797596.05
III. Depreciation reserves
1.Opening balance 16646900.00 16646900.00
2.Current increased
(1) accrual
3.Current decreased
(1) disposal
4.Ending balance 16646900.00 16646900.00
IV. Book value
1.Ending Book value 302580009.44 914446.35 15241226.47 6157140.49 324892822.75
2.Opening Book value 311248290.94 1268424.28 15241226.47 12874201.67 340632143.36
Ratio of the intangible assets from internal R&D in balance of intangible assets at period-end was 0%.
(2)Land use right without property certification held
Nil
13. Goodwill
(1) Original book value of goodwill
In RMB/CNY
The invested entity or matters forming
goodwill
Opening balance Current increased Current decreased Ending balance
Weifu Tianli 1784086.79 1784086.79
Total 1784086.79 1784086.79
(2) Goodwill depreciation reserves
Nil
Relevant information about the assets group or portfolio goodwill included
Goodwill of the Weifu Tianli: the Company controlling and combine Weifu Tianli by increasing the capital the
goodwill is the number that combination cost greater than the fair value of identical net assets of Weifu Tianli
At the end of the period the company forecasted an impairment test on goodwill to estimate the present value of
future cash flows and the recoverable amount of the goodwill-related asset group which is based on the
management's financial budget for the next five years and a discount rate of 12.21% on the assumption that the
cash flow of the year after the financial budget for more than 5 years will remain stable. The asset group identified
during the goodwill impairment test is unchanged.
20%~23% gross profit margin and 9%~15% of the forecast period operating income growth rate are key
parameters during the measurement of current value of the expected future cash flow of the goodwill related asset
group. These parameters are determined by management based on historical conditions prior to the forecast period
and forecasts of market development. Through the above tests it comes a conclusion that the company's goodwill
does not need to make provision for impairment.
14. Long-term deferred expenses
In RMB/CNY
Item Opening balance Current increased Amortized in the Period Other decrease Ending balance
Remodeling costs etc. 2969770.81 15235143.93 1567262.43 16637652.31
Total 2969770.81 15235143.93 1567262.43 16637652.31
15. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets that are not offset
In RMB/CNY
Item
Ending balance Opening balance
Deductible temporary
difference
Deferred income
tax assets
Deductible
temporary difference
Deferred income
tax assets
Bad debt reserve 44576998.51 6770470.23 18591825.81 2834842.52
Inventory depreciation reserve 210088809.57 32942217.43 240520904.57 37599678.75
Depreciation reserves of fixed assets 20661129.43 3315363.51 20459349.51 3285096.52
Depreciation reserves of construction in progress 3566375.62 534956.34 3566375.62 534956.34
Depreciation reserves of intangible assets 16646900.00 2497035.00 16646900.00 2497035.00
Depreciation reserves of available-for-sale
financial asset
155994927.09 23399239.06 10000000.00 1500000.00
Change of fair value of available-for-sale
financial asset
23305227.00 3495784.05
Deferred income 422215782.35 63332367.36 447676720.31 67151508.04
Internal un-realized profit 33204053.14 6439903.29 28149575.30 4972350.93
Payable salary accrued expenses etc. 539804494.87 85801436.71 526642684.53 81166909.39
Depreciation assets amortization difference 53624344.54 8439877.52 9768298.31 1465244.74
Deductible loss of subsidiary 9677975.44 2419493.86
Change of fair value of derivative financial
liability
490329.13 73549.37
Total 1533857346.69 239461693.73 1322022633.96 203007622.23
(2) Deferred income tax liabilities that are not offset
In RMB/CNY
Item
Ending balance Opening balance
Taxable temporary
differences
Deferred income tax
liabilities
Taxable temporary
differences
Deferred income tax
liabilities
Asset evaluation increment for combination
not under the same control
12751629.44 1912744.40 13491849.42 2023777.40
Change of fair value of available-for-sale
financial asset
102552300.00 15382844.99
Accelerated depreciation of fixed assets 31763694.33 4764554.15
Total 44515323.77 6677298.55 116044149.42 17406622.39
(3) Deferred income tax assets and deferred income tax liabilities listed after off-set
In RMB/CNY
Item
Trade-off between the
deferred income tax
assets and liabilities
Ending balance of
deferred income tax
assets or liabilities after
off-set
Trade-off between the
deferred income tax
assets and liabilities at
period-begin
Opening balance of
deferred income tax
assets or liabilities after
off-set
Deferred income tax
assets
-4764554.15 234697139.58 203007622.23
Deferred income tax
liabilities
-4764554.15 1912744.40 17406622.39
(4) Details of unrecognized deferred income tax assets
In RMB/CNY
Item Ending balance Opening balance
Bad debt reserve 789822.60 330881.07
Inventory depreciation reserve 19860664.11 21786977.53
Loss from subsidiary 139281223.32 160376822.42
Depreciation reserves of fixed assets 33561526.68 34463785.32
Depreciation reserves of available-for-sale financial asset 48633106.95 49433106.95
Total 242126343.66 266391573.29
(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
In RMB/CNY
Maturity year Ending amount Opening amount Note
2018 23365456.08 Subsidiaries have operating losses
2019 25671694.55 35159237.40 Subsidiaries have operating losses
2020 44795747.87 44811748.35 Subsidiaries have operating losses
2021 46080956.48 46080956.48 Subsidiaries have operating losses
2022 10503882.86 10959424.11 Subsidiaries have operating losses
2023 12228941.56 Subsidiaries have operating losses
Total 139281223.32 160376822.42 --
16. Other non-current assets
In RMB/CNY
Item Ending balance Opening balance
Engineering equipment paid in advance 251462676.27 195088675.74
Total 251462676.27 195088675.74
17. Short-term borrowings
(1)Category of short-term borrowings
In RMB/CNY
Item Ending balance Opening balance
Debt of honor 298928213.94 243000000.00
Total 298928213.94 243000000.00
(2) Overdue short-term loans without payment
Nil
18. Derivative financial liability
√Applicable □Not applicable
In RMB/CNY
Item Ending balance Opening balance
Derivative financial liability 490329.13
Total 490329.13
19. Note payable and account payable
In RMB/CNY
Item Ending balance Opening balance
Note payable 1018367533.74 947976759.10
Account payable 2047336834.66 2570956205.83
Total 3065704368.40 3518932964.93
(1)Category of note payable
In RMB/CNY
Category Ending balance Opening balance
Bank acceptance bill 1018367533.74 947976759.10
Total 1018367533.74 947976759.10
Notes expired at year-end without paid was 0.00 Yuan.
(2)Account payable
In RMB/CNY
Item Ending balance Opening balance
Within 1 year 1957672043.76 2452140381.86
1-2 years 10208129.49 43524905.85
2-3 years 7830950.08 2318008.01
Over three years 71625711.33 72972910.11
Total 2047336834.66 2570956205.83
(3) Important account payable with account age over one year Nil
Other explanation:
Margin saving 79315732.67 Yuan was provided for the bank acceptance bill 423527758.19 Yuan was pledge
for not receivable.Notes expired at year-end without paid was 0.00 Yuan.
20.Accounts received in advance
(1)Accounts received in advance
In RMB/CNY
Item Ending balance Opening balance
Within 1 year 33337169.03 34272416.20
1-2 years 6544805.44 7271092.26
2-3 years 425759.63 346383.11
Over three years 1022123.70 930344.50
Total 41329857.80 42820236.07
(2) Important account received in advance with account age over one year :Nil
(3) Projects that settle without completed from construction contract at period-end:Nil
21. Wage payable
(1)Wage payable
In RMB/CNY
Item Opening balance Current increased Current decreased Ending balance
I. Short-term compensation 147444265.93 1013770970.76 993801185.87 167414050.82
II. Post-employment welfare- defined
contribution plans
34299401.90 156460615.16 158254339.58 32505677.48
III. Dismissed welfare 3397642.16 3204395.56 4000475.97 2601561.75
IV. Other welfare due within one year 121670000.00 69168944.19 100788944.19 90050000.00
V. Other short-term welfare-Housing subsidies
employee benefits and welfare funds
20967367.30 1425479.11 19541888.19
Total 327778677.29 1242604925.67 1258270424.72 312113178.24
(2) Short-term compensation
In RMB/CNY
Item Opening balance Current increased Current decreased Ending balance
1. Wages bonuses allowances and subsidies 128145458.85 796197236.14 775906715.58 148435979.41
2. Welfare for workers and staff 77548989.55 77548989.55
3. Social insurance 8642880.67 63595212.12 62786465.21 9451627.58
Including: Medical insurance 6749035.02 52393141.35 51461012.64 7681163.73
Work injury insurance 1221106.56 6031122.87 6254332.88 997896.55
Maternity insurance 672739.09 5170947.90 5071119.69 772567.30
4. Housing accumulation fund 1062011.00 63903092.60 64306305.60 658798.00
5. Labor union expenditure and personnel
education expense
9593915.41 12526440.35 13252709.93 8867645.83
Total 147444265.93 1013770970.76 993801185.87 167414050.82
(3) Defined contribution plans
In RMB/CNY
Item Opening balance Current increased Current decreased Ending balance
1. Basic endowment insurance 17818243.64 120730720.57 120603297.89 17945666.32
2. Unemployment insurance 1664483.26 1970982.42 3053950.52 581515.16
3. Enterprise annuity 14816675.00 33758912.17 34597091.17 13978496.00
Total 34299401.90 156460615.16 158254339.58 32505677.48
Other explanation:
1 Reclassification of long-term staff remuneration payable:
①An amount of RMB 128559600.00 in short-term remuneration is reclassified into long-term staff remuneration
payable which represents the incentive fund of RMB 128559600.00 provided for in this period.
② An amount of RMB 81262073.88 is recorded in post office benefits - defined benefit plan and incentive fund
payable within one year which represents the difference between the incentive fund of RMB 103820000.00
expected to be paid in 2019 and the beginning balance of incentive fund payable within one year post office
benefits-defined benefit plan and the actual amount paid in this period.
2. Post-employment welfare- defined contribution plans:
The Company participates in the pension insurance and unemployment insurance plans established by government
authorities by laws. Under these plans the Company makes monthly contribution to these plans based on 19% and
0.5% of the social insurance contribution base for 2018 respectively. Other than the aforesaid monthly
contribution the Company takes no further payment obligation. The relevant expenditure is included in currentprofit or loss or cost of relevant assets when occurs. Found more of enterprise annuity in Note XVI-4.” Annuityplan”
3. Dismiss welfare
The wages payable resulted from the implementation of inner retirement plan the amount paid in the year RMB
3066483.64 re-classified into the wage payable from long-term wages payable.
22. Taxes payable
In RMB/CNY
Item Ending balance Opening balance
Value-added tax 15332751.18 26675795.24
Corporation income tax 48855330.99 53333508.69
Individual income tax 1861196.92 3102645.73
City maintaining & construction tax 884819.63 1873973.56
Educational surtax 543438.10 1338552.54
Other (including stamp tax and local funds) 6794077.10 7545214.60
Total 74271613.92 93869690.36
23. Other accounts payable
In RMB/CNY
Item Ending balance Opening balance
Interest payable 517469.08 401928.43
Other accounts payable 63931254.44 62937940.90
Total 64448723.52 63339869.33
(1)Dividend payable
In RMB/CNY
Item Ending balance Opening balance
Long-term borrowing interest for installment 90312.50 79826.39
Interest payable for short-term loans 420478.58 322102.04
Other 6678.00
Total 517469.08 401928.43
Major overdue interest: Nil
(2)Dividend payable
Nil
(3)Other accounts payable
1) Classification of other accounts payable according to nature of account
In RMB/CNY
Item Ending balance Opening balance
Deposit and margin 18680843.00 20977476.26
Social insurance and reserves funds that withholding 7682496.48 7689385.68
Intercourse funds of unit 30982145.98 25754545.98
Other 6585768.98 8516532.98
Total 63931254.44 62937940.90
2) Significant other payable with over one year age
In RMB/CNY
Item Ending balance Reasons for non-repayment or carry-over
Nanjing Jidian Industrial Group Co. Ltd. 4500000.00 Intercourse funds
Total 4500000.00 --
24. Non-current liabilities due within one year
In RMB/CNY
Item Ending balance Opening balance
Long-term loans due within one year 15000000.00 10000000.00
Total 15000000.00 10000000.00
25. Other current liabilities
Nil
26. Long-term loans
(1)Category of long-term loans
In RMB/CNY
Item Ending balance Opening balance
Guaranteed loan 30000000.00 45000000.00
Total 30000000.00 45000000.00
27. Long-term account payable
In RMB/CNY
Item Ending balance Opening balance
Long-term account payable 17157272.00 17496363.00
Special accounts payable 18265082.11 18265082.11
Total 35422354.11 35761445.11
(1)Long-term account payable listed by nature
In RMB/CNY
Item Ending balance Opening balance
Hi-tech Branch of Nanjing Finance Bureau(note①) 1140000.00 1140000.00
Hi-tech Branch of Nanjing Finance Bureau(note②) 1250000.00 1250000.00
Hi-tech Branch of Nanjing Finance Bureau(note③) 1230000.00 1230000.00
Loan transferred from treasury bond (note④) 1017272.00 1356363.00
Hi-tech Branch of Nanjing Finance Bureau(note⑤) 2750000.00 2750000.00
Hi-tech Branch of Nanjing Finance Bureau(note⑥) 1030000.00 1030000.00
Hi-tech Branch of Nanjing Finance Bureau(note⑦) 960000.00 960000.00
Hi-tech Branch of Nanjing Finance Bureau(note⑧) 5040000.00 5040000.00
Hi-tech Branch of Nanjing Finance Bureau(note⑨) 2740000.00 2740000.00
Total 17157272.00 17496363.00
Other explanation:
note①: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 20 October 2005 to 20 October 2020. Provided that the operation period in the zone is less than 15 years
financial supporting capital will be reimbursed.note②: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 20 July 2006 to 20 July 2021. Provided that the operation period in the zone is less than 15 years financial
supporting capital will be reimbursed.note③: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 17 September 2007 to 17 September 2022. Provided that the operation period in the zone is
less than 15 years financial supporting capital will be reimbursed.note④:Loan transferred from treasury bond: Weifu Jinning received RMB1.87 million Yuan of special funds from
budget of the central government and RMB1.73 million Yuan of special funds from budget of the local
government. The non-operating income transferred in was 1.87 million Yuan in 2011 which was confirmed not to
return if the Company pays back special funds of 3.73 million Yuan to the local government in 11 years since
2012 then the Company needs to repay the principal of 339091.00 Yuan each year.
note⑤: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 10 November 2008 to 10 November 2023. Provided that the operation period in the zone is
less than 15 years financial supporting capital will be reimbursed.note⑥: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 27 October 2009 to 27 October 2024. Provided that the operation period in the zone is less than 15 years
financial supporting capital will be reimbursed.note⑦: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 27 December 2010 to 27 December 2025. Provided that the operation period in the zone is less
than 15 years financial supporting capital will be reimbursed.note⑧: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 28 December 2011 to 28 December 2026. Provided that the operation period in the zone is less than 15 years
financial supporting capital will be reimbursed.note⑨: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 18 December 2013 to 18 December 2028. Provided that the operation period in the zone is less than 15 years
financial supporting capital will be reimbursed.
(2)Special accounts payable
In RMB/CNY
Item Opening balance
Current
increased
Current
decreased
Ending balance
Cause of
formation
Removal compensation of subsidiary Weifu Jinning 18265082.11 18265082.11
Total 18265082.11 18265082.11 --
Other explanation:
In line with regulation of the house acquisition decision of People’s government of Xuanwu District Nanjing City
Ning Xuan Fu Zheng Zi (2012) No.001 part of the lands and property of Weifu Jingning needs expropriation in
order to carry out the comprehensively improvement of Ming Great Wall. According to the house expropriation
and compensation agreement in state-owned lands signed between Weifu Jinning and House Expropriation
Management Office of Xuanwu District Nanjing City RMB 19.7067 million in total are compensate including
operation losses from lessee RMB 1.4416 million in total. The above compensation was received in last period
and is making up for the losses from lessee and the above lands and property have not been collected up to 31
December 2018.
28. Long-term wages payable
(1)Long-term wages payable
In RMB/CNY
Item Ending balance Opening balance
II. Dismiss welfare 10716412.43 13782896.07
III. Other long-term welfare 63962762.93 16665236.81
Total 74679175.36 30448132.88
(2) Change of defined benefit plans
Nil
29. Deferred income
In RMB/CNY
Item Opening balance Current increased Current decreased Ending balance Cause of formation
Government grand 451281721.77 8558700.00 34070567.64 425769854.13 Financial allocation received
Total 451281721.77 8558700.00 34070567.64 425769854.13 --
Item with government grants involved:
In RMB/CNY
Item
Opening
balance
New
grants
in the
Period
Amount
reckoned in
non-operatio
n revenue
Amount
reckoned into
other income
in the period
Cost
reduction in
the period
Other
changes
Ending
balance
Assets
related/Incom
e related
Industrialization
project for
injection VE
pump system with
electronically
controlled high
pressure for
less-emission
diesel used
3605001.46 721000.30 2884001.16 Assets related
Appropriation on
reforming of
production line
technology and
R&D ability of
common rail
system for diesel
by distributive
high-voltage
7100000.00 7100000.00 Assets related
Fund of industry
upgrade(2012)
60400000.00
60400000.0
0
Income
related
Fund of industry
upgrade(2013)
60520000.00
60520000.0
0
Income
related
Appropriation on
central basic
construction
investment
2857142.87 714285.71 2142857.16 Assets related
R&D and
industrialization
of the high
pressure variable
pump of the
common rail
system of diesel
engine for
automobile
9956904.72 1543095.28 8413809.44 Assets related
Research institute
of motor vehicle
exhaust
aftertreatment
technology
3116125.34 643654.13 2472471.21 Assets related
Fund of industry
upgrade (2014)
36831000.00
36831000.0
0
Income
related
New-built assets
compensation
after the removal
of parent company
170951302.7
8
23375627.2
6
147575675.
52
Assets related
Fund of industry
upgrade (2016)
40000000.00
40000000.0
0
Income
related
Guiding capital
for the technical
reform from State
Hi-Tech Technical
9740000.00 9740000.00 Assets related
Commission
Implementation of
the variable
cross-section
turbocharger for
diesel engine
12438231.54
76000
0.00
2289510.51
10908721.0
3
Assets related
Demonstration
project for
intelligent
manufacturing
1808806.64 358776.54 1450030.10 Assets related
Other 31957206.42
77987
00.00
4424617.91
35331288.5
1
Assets related
Total
451281721.7
7
85587
00.00
34070567.6
4
425769854.
13
Other explanation:
(1) Appropriation on industrialization project of electrical control and high voltage jet VE system of low emissions diesel: in
September 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 RMB 4.775
million received in 2010 and RMB 0.875 million received in 2011. 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 which are belongs to the government grand with assets/income concerned. In 2013 accepted by the science &
technology agency of Jiangsu Province and RMB 4789997.04 with income related was reckoned into current operation revenue
directly; the RMB 7210002.96 with assets related was amortized during the predicted service period of the assets and RMB
721000.30 amortized in the Period.
(2) The appropriation for research and development ability of distributive high-pressure common rail system for diesel engine use
and production line technological transformation project: according to XCJ No. [2010] 59 the Company has received special funds
of 7.1 million Yuan appropriated by Finance Bureau of Wuxi New District in 2011 and used for the Company’s research and
development ability of distributive high-pressure common rail system for diesel engine use and production line technological
transformation project; this appropriation belongs to government subsidies related to assets and will be amortized according to the
depreciation process of the underlying assets when the project is completed.
(3) Industry upgrading funds (2012): In accordance with the document Xi Xin Guanjing Fa [2012] No.216 and Document Xi Xin
Guancai Fa [2012] No. 85 the Company received funds of 60.4 million Yuan appropriated for industry upgrading this year.
(4) Industry upgrading funds (2013): In accordance with the document Xi Xin Guan Jing Fa [2013] No.379 Xi Xin Guan Jing Fa
[2013] No.455 Xi Xin Guan Cai Fa [2013] No.128 and Xi Xin Guan Cai Fa [2013] No.153 the Company received funds of 60.52
million Yuan appropriated for industry upgrading in 2013.
(5) Appropriation for investment of capital construction from the central government: In accordance with the document Xi Caijian
[2012] No.43 the Company received appropriation of 5 million Yuan for investment of capital construction from the central
government in 2012. The project has passed the acceptance check in current period this appropriation should be amortized within the
surplus service life of current assets and amortization amount of current period is 714285.71 Yuan.
(6) R&D and industrialization of the high pressure variable pump of the common rail system of diesel engine for automobile: the
Company received appropriated for the project in 2013 with 8.05 million Yuan in line with documents of Xi Ke Ji [2013] No.186 Xi
Ke Ji [2013] No.208 Xi Cai Gong Mao [2013] No.104 Xi Cai Gong Mao [2013] No.138 Xi Ke Ji [2014] No.125 Xi Cai Gong
Mao [2014] No.58 Xi Ke Ji [2014] No. 246 and Xi Cai Gong Mao [2014] No.162. Received RMB 3 million in 2014 and RMB 0.45
million in 2015; and belongs to government grant with assets concerned and shall be amortized according to the depreciation process
amount of 1543095.28 Yuan amortize in the year.
(7) Vehicle exhaust after-treatment technology research institute project: in 2012 the subsidiary Weifu Leader has applied for
equipment purchase assisting funds to Wuxi Huishan Science and Technology Bureau and Wuxi Science and Technology Bureau for
the vehicle exhaust after-treatment technology research institute project. This declaration has been approved by Wuxi Huishan
Science and Technology Bureau and Wuxi Science and Technology Bureau in 2012 and the company has received appropriation of
2.4 million Yuan in 2012 and received appropriation of 1.6 million Yuan in 2013. This appropriation belongs to government
subsidies related to assets and will be amortized according to the depreciation process amount of 643654.13 Yuan amortize in the
year.
(8) Industry upgrading funds (2014): In accordance with the document Xi Xin Guan Jing Fa [2014] No.427 and Xi Xin Guan Cai Fa
[2014] No.143 the Company received funds of 36.831 million Yuan appropriated for industry upgrading in 2014.
(9) New-built assets compensation after the removal of parent company: policy relocation compensation received by the Company
and will be amortized according to the depreciation of new-built assets amount of 23375627.26 Yuan amortize in the year.
(10) Fund of industry upgrade (2016): In accordance with the document Xi Xin Guan Jing Fa [2016] No.585 and Xi Xin Fa [2016]
No.70 the Company received funds of 40 million Yuan appropriated for industry upgrading in 2016.
(11) Guilding capital for the technical reform from State Hi-Tech Technical Commission: In accordance with the document Xi Jing
Xin ZH [2016] No.9 and Xi Cai GM [2016] No.56 the Company received a 9.74 million Yuan for the guiding capital of technical
reform (1st batch) from Wuxi for year of 2016 which included in the government subsidy with assets-concerned and will amortized
according to the depreciation process after acceptance
(12) Implementation of the variable cross-section turbocharger for diesel engine: In accordance with the document YCZ Fa[2016]
NO.623 and “Strong Industrial Base Project Contract for year of 2016” subsidiary Weifu Tianli received a specific subsidy of 16.97
million Yuan (760000 Yuan received in the period) the fund supporting strong industrial base project (made-in-China 2025) of
central industrial transformation and upgrading 2016 from Ministry of Industry and Information Technology; and belongs to
government grant with assets concerned and shall be amortized according to the depreciation process amount of 2289510.51 Yuan
amortize in the year.
(13) Demonstration project for intelligent manufacturing: under the Notice Relating to Selection of the Intelligent Manufacturing
Model Project in Huishan District in 2016 (HJXF[2016]No.36) a fiscal subsidy of 3000000 Yuan was granted by relevant
government authority in Huishan district to our subsidiary Weifu Leader in 2017 to be utilized for transformation and upgrade of
Weifu Leader’s intelligent manufacturing facilities. This subsidy belongs to government grant related to assets which shall be
amortized based on the depreciation progress of the assets. Amortization for the year amounts to 358776.54 Yuan.
30. Share capital
In RMB
Opening balance
Change during the year(+-)
Ending balance New shares
issued
Bonus share
Shares transferred from
capital reserve
Other Subtotal
Total shares 1008950570.00 1008950570.00
31. Capital reserve
In RMB/CNY
Item Opening balance Current increased Current decreased Ending balance
Capital premium (Share
capital premium)
3372647413.97 1818607.75 3370828806.22
Other Capital reserve 45193988.92 45193988.92
Total 3417841402.89 1818607.75 3416022795.14
Other explanation including changes in the period and reasons for changes;
The share premium was reduced by 1818607.75 in the current period which was the difference between the long-term equity
investment newly acquired by the company through the purchase of minority shareholding of Weifu Tianli and the net assets share that
Weifu Tianli continued to calculate from the date of purchase according to the new shareholding ratio.
32. Other comprehensive income
In RMB/CNY
Item
Opening
balance
Current period
Ending
balance
Account
before
income tax in
the year
Less: written in
other
comprehensive
income in
previous period
and carried
forward to gains
and losses in
current period
Less : income
tax expense
Belong to
parent
company after
tax
Belong to
minority
shareholders
after tax
II. Other comprehensive income
items which will be reclassified
subsequently to profit or loss
87169455.0
1
-11705306
4.00
8804463.00
-18878629
.04
-10697889
7.96
-198094
42.95
Gains or losses arising from
changes in fair value of
available-for-sale financial assets
87169455.0
1
-11705306
4.00
8804463.00
-18878629
.04
-10697889
7.96
-198094
42.95
Total other comprehensive income
87169455.0
1
-11705306
4.00
8804463.00
-18878629
.04
-10697889
7.96
-198094
42.95
Other explanation including the adjustment on initial recognition for arbitrage items that transfer from the effective part of cash flow
hedge profit/loss Nil
33. Reasonable reserve
In RMB/CNY
Item Opening balance Current increased Current decreased Ending balance
Safety production costs 2606.93 20140422.85 18524539.28 1618490.50
Total 2606.93 20140422.85 18524539.28 1618490.50
Other explanation including changes and reasons for changes:
(1)Instructions for the withdrawing of special reserves (safe production cost): According to the CQ [2012] No. 16 - Administrative
Measures on the Withdrawing and Use of Enterprise Safety Production Expenses jointly issued by the Ministry of Finance and the
State Administration of Work Safety in the current period the Company adopted excess retreat method for quarterly withdrawal by
taking the actual operating income of the previous period as the withdrawing basis.
(2)Among the above safety production costs including the safety production costs accrual by the Company in line with regulations
and the parts enjoy by shareholders of the Company in safety production costs accrual by subsidiary in line with regulations.
(3)Other 7024.21 Yuan the difference between the special reserves obtained by the company from the purchase of minority
shareholding of Weifu Tianli and the special reserves to be calculated according to the new shareholding ratio.
34. Surplus reserve
In RMB/CNY
Item Opening balance Current increased Current decreased Ending balance
Statutory surplus reserves 510100496.00 510100496.00
Total 510100496.00 510100496.00
Other explanation including changes and reasons for changes:
Withdrawal of the statutory surplus reserves: Pursuit to the Company Law and Article of Association the Company extracted
statutory surplus reserve on 10 percent of the net profit. No more amounts shall be withdrawal if the accumulated statutory surplus
reserve takes over 50 percent of the registered capital.
35. Retained profit
In RMB/CNY
Item Current period Last period
Retained profits at the end of last year before adjustment 9811609138.92 7845639990.88
Retained profits at the beginning of the year after adjustment 9811609138.92 7845639990.88
Add: The net profits belong to owners of patent company of this period 2396077415.21 2571339490.04
Common dividend payable 1210740684.00 605370342.00
Retained profit at period-end 10996945870.13 9811609138.92
Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retained
profits at the beginning of the period amounting to 0 Yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan.
5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan
36. Operating income and cost
In RMB/CNY
Item
Current period Last Period
Income Cost Income Cost
Main operating 8262954878.87 6334140163.43 8535599504.73 6420982285.26
Other business 458719792.31 357716676.54 481680655.07 340747113.10
Total 8721674671.18 6691856839.97 9017280159.80 6761729398.36
37. Operating tax and extras
In RMB/CNY
Item Current period Last Period
City maintaining & construction tax 23365378.57 27342047.81
Educational surtax 16600470.65 19529544.78
Property tax 15673296.50 16168030.42
Land use tax 6488307.08 6297452.61
Vehicle use tax 37664.70 38597.80
Stamp duty 3054969.25 3033552.04
Other taxes 168243.17 3915.02
Total 65388329.92 72413140.48
38. Sales expenses
In RMB/CNY
Item Current period Last Period
Salary and fringe benefit 49030453.69 34445822.91
Consumption of office materials and
business travel charge
13500456.63 11190696.17
Transportation charge 36096699.36 38950920.39
Warehouse charge 13503116.85 12028839.44
Three-guarantee fee 93151070.22 75299163.49
Business entertainment fee 18934440.36 14336526.65
Other 13623235.17 8602811.32
Total 237839472.28 194854780.37
39. Administration expenses
In RMB/CNY
Item Current period Last Period
Salary and fringe benefit 242611825.10 258766943.35
Depreciation charger and long-term assets amortization 53544172.92 45736858.43
Consumption of office materials and business travel charge 19301684.66 21626135.74
Incentive fund 128559600.00 83610000.00
Other 140988103.07 129753615.34
Total 585005385.75 539493552.86
40. R&D expenses
In RMB/CNY
Item Current period Last Period
Technological development expenses 403263972.20 391315234.75
Total 403263972.20 391315234.75
41. Financial expenses
In RMB/CNY
Item Current period Last Period
Interest expenses 17562164.63 10044328.07
Note discount interest expenses 413348.40 1196392.60
Less:Saving interest income 34156380.22 18726974.19
Gains/losses from exchange -4437834.09 11345354.36
Handling charges 3225120.73 3457895.95
Total -17393580.55 7316996.79
Other explanation:
The interest expenses for year of 2018 including the 406834.00 Yuan received of regards for the provincial
engineering center
42. Losses of devaluation of asset
In RMB/CNY
Item Current period Last Period
I. Bad debt loss 27180572.84 2009413.99
II. Inventory falling price loss 77193338.52 97326180.89
III. Impairment loss of financial assets available for sale 145994927.09
VII. Impairment loss of fixed assets 504907.39 19884135.49
Total 250873745.84 119219730.37
43. Other income
In RMB/CNY
Sources of income generated Current period Last Period
Government grants with routine operation activity concerned 48404480.99 40394724.11
Other
Total 48404480.99 40394724.11
44. Investment income
In RMB/CNY
Item Current period Last Period
Income of long-term equity investment calculated based on equity 1623761059.52 1604027207.30
Investment income from holding financial assets available for sales 3274260.41 3291000.00
Investment income obtained from disposal of financial assets
available for sales
17370816.75 24625516.88
Entrust financial income 311261918.65 221705034.02
Gains/losses of subsidiary liquidation -10473.00
Total 1955668055.33 1853638285.20
45. Income from change of fair value
In RMB/CNY
Sources Current period Last Period
Financial assets measured by fair value and with its variation reckoned into
current gains/losses
-490329.13
Including: Income from change of fair value from derivative financial
instrument
-490329.13
Total -490329.13
46. Income from assets disposal
In RMB/CNY
Sources Current period Last Period
Income from disposal of non-current assets 103712793.61 1156664.72
Losses from disposal of non-current assets -1239798.14 -1905592.35
Total 102472995.47 -748927.63
Gains from non-current assets disposal was mainly the compensation of expropriation of housing and land
of Weifu Jinning. The detail see Note of VII. 4.(3).4)"Nature of other receivables"
47. Non-operating income
In RMB/CNY
Item Current period Last Period
Amount reckoned into current
non-recurring gains/losses
Government grants 6631568.54
Other 1264830.90 5336599.33 1264830.90
Total 1264830.90 11968167.87 1264830.90
Government grants reckoned into current gains/losses:
In RMB/CNY
Item
Granting
subject
Cause of
distribution
Nature
type
Whether the impact
of subsidies on the
current profit and
loss
Whether
special
subsidies
Current
period
Last period
Assets
related/Income
related
Stabilization subsidy 3202219.54 Income related
Patent funding 451800.00 Income related
Support funds 1100000.00 Income related
Reward for acceptance of
new third board
500000.00 Income related
Innovation ability reward 500000.00 Income related
The reward of top thirty
industrial enterprise Star
enterprise in service
industry and
demonstration award for
enterprise innovation and
development for the year
of 2016 in Jiangbei
District from People’s
Government of Jiangbei
District Ningbo City
400000.00 Income related
Other 477549.00
Total 6631568.54
48. Non-operating expense
In RMB/CNY
Item Current period Last Period
Amount reckoned into current
non-recurring gains/losses
Donations 1313246.00 1313246.00
Non-current assets disposal losses 6310772.90 2473919.63 6310772.90
Including: fixed assets disposal losses 6310772.90 2473919.63 6310772.90
Local fund 1804429.63 2442882.51
Other 548711.02 856791.48 548711.02
Total 9977159.55 5773593.62 8172729.92
49. Income tax expense
(1)Income tax expense
In RMB/CNY
Item Current period Last Period
Payable tax in current period 165302326.13 176981021.79
Adjusted the previous income tax -1108883.52 -853023.84
Increase/decrease of deferred income tax assets -32958287.45 7189092.22
Increase/decrease of deferred income tax liability 4653521.15 -111033.00
Total 135888676.31 183206057.17
(2)Adjustment on accounting profit and income tax expenses
In RMB/CNY
Item Current period
Total profit 2602183379.78
Income tax measured by statutory/applicable tax rate 390327506.97
Impact by different tax rate applied by subsidies 1919809.73
Adjusted the previous income tax -1108883.52
Impact by non-taxable revenue -243985949.07
Impact on cost expenses and losses that unable to deducted 3901402.22
Impact by the deductible losses of the un-recognized previous deferred income tax -12744805.79
The deductible temporary differences or deductible losses of the un-recognized deferred income tax
assets in the Period
17703986.16
Impact on additional deduction -21253446.60
Other 1129056.21
Income tax expense 135888676.31
50. Other comprehensive income
See Note VII. 32 “Other comprehensive income”
51. Items of ash flow statement
(1) Other cash received in relation to operation activities
In RMB/CNY
Item Current period Last Period
Cash in bank Interest income 34156380.22 18726974.19
Government grants 23299447.35 15752016.54
Margin on operation bill 53427527.69 25598576.55
Other 7294400.13 5901111.62
Total 118177755.39 65978678.90
(2)Other cash paid in relation to operation activities
In RMB/CNY
Item Current period Last Period
Cash cost 530988250.24 505309877.27
Other 28148968.46 42308458.75
Total 559137218.70 547618336.02
(3)Cash received from other investment activities
In RMB/CNY
Item Current period Last Period
Letter of credit for import equipment margin 79984.34
Government grants received relevant to assets 4480000.00
Total 4559984.34
(4)Cash paid related with investment activities
In RMB/CNY
Item Current period Last Period
Margin paid by L/C for purchase of equipment 1090775.32
Total 1090775.32
(5) Other cash received in relation to financing activities
In RMB/CNY
Item Current period Last Period
The borrowings/loans received by Weifu Leader from Wuxi Industry
Group
5470000.00
Total 5470000.00
(6)Cash paid related with financing activities
In RMB/CNY
Item Current period Last Period
Liquidation charges 1049711.28
National debt paid transfer to loans 339091.00 339091.00
Account paid for purchasing minority equity of Weifu Tianli 15570000.00
Total 15909091.00 1388802.28
52. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
In RMB/CNY
Supplementary information Current period Last Period
1. Net profit adjusted to cash flow of operation activities: -- --
Net profit 2466294703.47 2647209924.58
Add: Assets impairment provision 250873745.84 119219730.37
Depreciation of fixed assets consumption of oil assets and depreciation of
productive biology assets
285471054.32 266894355.57
Amortization of intangible assets 17249463.37 18616311.55
Amortization of long-term deferred expenses 1567262.43 1049187.11
Loss from disposal of fixed assets intangible assets and other long-term
assets(gain is listed with “-”)
-102472995.47 748927.63
Losses on scrapping of fixed assets (gain is listed with “-”) 6310772.90 2473919.63
Gain/loss of fair value changes (gain is listed with “-”) 490329.13
Financial expenses (gain is listed with “-”) 14840492.09 19423542.44
Investment loss (gain is listed with “-”) -1956287284.27 -1849764125.27
Decrease of deferred income tax asset( (increase is listed with “-”) -32958287.45 7189092.22
Increase of deferred income tax liability (decrease is listed with “-”) 4653521.15 -111033.00
Decrease of inventory (increase is listed with “-”) -35700126.59 -223562160.19
Decrease of operating receivable accounts (increase is listed with “-”) 381642704.00 -899544673.74
Increase of operating payable accounts (decrease is listed with “-”) -429597489.90 848035110.26
Other 2003661.61 -180208.09
Net cash flows arising from operating activities 874381526.63 957697901.07
2. Material investment and financing not involved in cash flow -- --
3. Net change of cash and cash equivalents: -- --
Balance of cash at period end 2404674139.49 2948439354.22
Less: Balance of cash equivalent at year-begin 2948439354.22 3795223678.11
Net increase of cash and cash equivalents -543765214.73 -846784323.89
(2)Net cash payment for the acquisition of a subsidiary in the period
Nil
(3)Net cash received from the disposal of subsidiaries
Nil
(4)Constitution of cash and cash equivalent
In RMB/CNY
Item Ending balance Opening balance
I. Cash 2404674139.49 2948439354.22
Including: Cash on hand 194161.03 736773.22
Bank deposit available for payment at any time 2404479978.46 2947702581.00
II. Balance of cash and cash equivalents at the period-end 2404674139.49 2948439354.22
53. Note of the changes of owners’ equity
Explain the items and amount at period-end adjusted for “Other” at end of the last year: Nil
54. Assets with ownership or use right restricted
In RMB/CNY
Item Ending Book value Restriction reason
Monetary funds 1450000.00 Cash deposit paid for LC
Notes receivable 423527758.19 Notes pledge for bank acceptance
Monetary funds 79315732.67 Cash deposit paid for bank acceptance
Monetary funds 881868.57 Court freeze
Available-for-sal
e financial assets
112850891.16
In accordance with the civil ruling No.(2016)Y03MC2490 and No.(2016) Y03MC2492 of
Guangdong Shenzhen Intermediate People's Court (Hereinafter referred to as Shenzhen
Intermediate People's Court) the property with the value of 217 million Yuan under the name
of the Company and other seven respondents and the third party Shenzhen Hejun Chuangye
Holdings Co. Ltd. (Hereinafter referred to as Hejun Company) was frozen. As of the end of
the reporting period 4.71 million shares of Miracle Logistics and 11739102 shares of SDEC
held by the Company were frozen.Total 618026250.59 --
55. Item of foreign currency
(1) Item of foreign currency
In RMB/CNY
Item
Closing balance of foreign
currency
Rate of conversion Ending RMB balance converted
Monetary funds -- --
Including: USD 31373244.14 6.8632 215320849.17
EUR 2499310.16 7.8473 19612836.63
HKD 16024984.73 0.8762 14041091.62
JPY 8364309.47 0.061887 517642.02
Account receivable -- --
Including: USD 4195415.85 6.8632 28793978.06
EUR 1040354.52 7.8473 8163974.02
JPY 3314442.00 0.061887 205120.87
Short-term borrowings
Including: EUR 3558958.36 7.8473 27928213.94
Account payable
Including: USD 411335.19 6.8632 2823075.67
EUR 1615586.95 7.8473 12677995.47
CHF 105642.70 6.9494 734153.38
JPY 31475376.00 0.061887 1947916.59
(2)Explanation on foreign operational entity including as for the major foreign operational entity
disclosed main operation place book-keeping currency and basis for selection; if the book-keeping
currency changed explain reasons
□ Applicable√ Not applicable
56. Government grants
(1)Government grants
In RMB/CNY
Category Amount Item
Amount reckoned in
current gain/loss
Industrialization project for injection VE pump
system with electronically controlled high
721000.30
Industrialization project for injection VE
pump system with electronically
721000.30
pressure for less-emission diesel used controlled high pressure for less-emission
diesel used
Key laboratory (engineering center) of the
pollution control from motor vehicle exhausting
in Jiangsu province
170000.00
Key laboratory (engineering center) of the
pollution control from motor vehicle
exhausting in Jiangsu province
170000.00
Grants for key laboratory in Wuxi City 70000.00 Grants for key laboratory in Wuxi City 70000.00
Supporting funds for technical improvement for
annual output as 140000 pieces of packaging line
of catalytic reduction system for commercial
vehicles (2014)
259000.00
Supporting funds for technical
improvement for annual output as 140000
pieces of packaging line of catalytic
reduction system for commercial vehicles
(2014)
259000.00
Technical transformation for annual output as
300000 sets of four-cylinder engine supercharger
225749.56
Technical transformation for annual output
as 300000 sets of four-cylinder engine
225749.56
Annual output of 150000 gasoline engine
superchargers
100000.00
Annual output of 150000 gasoline engine
superchargers
100000.00
Depreciation/amortization compensation for the
assets newly established after parent company
relocated
23375627.26
Depreciation/amortization compensation
for the assets newly established after
parent company relocated
23375627.26
Central capital investment allocation from Wuxi
Finance Bureau (R&D center)
714285.71
Central capital investment allocation from
Wuxi Finance Bureau (R&D center)
714285.71
Provincial special guiding funds for scientific and
technological innovation and achievement
conversion
328571.43
Provincial special guiding funds for
scientific and technological innovation
and achievement conversion
328571.43
Technical reform of catalytic reduction system for
180000 commercial vehicles annually
233555.56
Technical reform of catalytic reduction
system for 180000 commercial vehicles
annually
233555.56
Development and industrialization of high
pressure variable pump for common rail system
of vehicle diesel engine
1543095.28
Development and industrialization of high
pressure variable pump for common rail
system of vehicle diesel engine
1543095.28
Business development funds support allocation
from Finance bureau of the new district
200000.00
Business development funds support
allocation from Finance bureau of the new
district
200000.00
Funds for intelligent promotion of intelligent
integration of two modernization
Funds for intelligent promotion of
intelligent integration of two
modernization
Demonstration of intelligent manufacturing 358776.54
Demonstration of intelligent
manufacturing
358776.54
Research institute of motor vehicle exhaust
post-treatment
643654.13
Research institute of motor vehicle
exhaust post-treatment
643654.13
Implementation scheme of the variable section 2289510.51 Implementation scheme of the variable 2289510.51
turbocharger for diesel engine section turbocharger for diesel engine
Special funds for technical transformation 97010.66 Special funds for technical transformation 97010.66
Generation subsidy for distributed PV projects 923100.00
Generation subsidy for distributed PV
projects
923100.00
Funds allocation for science & technology
development plan
1302000.00
Funds allocation for science & technology
development plan
1302000.00
Supporting funds for new products and new
projects of the intelligent manufacturing industrial
park
2250000.00
Supporting funds for new products and
new projects of the intelligent
manufacturing industrial park
2250000.00
Funds for technical reform of boiler wheel
supercharger for annual output of 200000
gasoline engines
1193286.26
Funds for technical reform of boiler wheel
supercharger for annual output of 200000
gasoline engines
1193286.26
Other 11406257.79 Other 11406257.79
Total 48404480.99 Total 48404480.99
(2)Government grants rebate
Nil
57. Other
Nil
VIII. Changes of consolidation scope
1. Enterprise combine not under the same control
Nil
2. Enterprise combine under the same control
Nil
3. Reverse purchase
Nil
4. Disposal of subsidiaries
Nil
5. Other reasons for consolidation range changed
Explain the reasons on consolidate scope changes (i.e. subsidiary newly established subsidiary liquidation etc.) and relevant
information:
Change of consolidation
scope
Name
Way for obtained the
equity
Time for obtained
the equity
Ratio of
contribution
Increase of the consolidation
scope
Nanchang Weifu Leader Auto Parts &
Components Co. Ltd.
Newly established 2018-3-8 100.00%
IX. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
Subsidiary
Main
operation
place
Registered
place
Business nature
Share-holding ratio
Acquired way
Directly Indirectly
Weifu Jinning Nanjing Nanjing Spare parts of internal-combustion engine 80.00%
Enterprise combine
under the same control
Weifu Leader Wuxi Wuxi Automobile exhaust purifier muffler 94.81%
Enterprise combine
under the same control
Weifu Mashan Wuxi Wuxi Spare parts of internal-combustion engine 100.00% Investment
Weifu Chang’an Wuxi Wuxi Spare parts of internal-combustion engine 100.00% Investment
Weifu International
Trade
Wuxi Wuxi Trading 100.00%
Enterprise combine
under the same control
Weifu ITM Wuxi Wuxi Spare parts of internal-combustion engine 100.00%
Enterprise combine not
under the same control
Weifu Schmidt Wuxi Wuxi Spare parts of internal-combustion engine 66.00% Investment
Weifu Tianli Ningbo Ningbo Spare parts of internal-combustion engine 54.23%
Enterprise combine not
under the same control
Weifu Autocam Wuxi Wuxi Spare parts of internal-combustion engine 51.00%
Enterprise combine not
under the same control
Weifu Leader
(Wuhan)
Wuhan Wuhan Automobile exhaust purifier muffler 60.00% Investment
Weifu
Leader(Chongqing)
Chongqi
ng
Chongqin
g
Automobile exhaust purifier muffler 100.00% Investment
Weifu
Leader(Nanchang)
Nanchan
g
Nanchang Automobile exhaust purifier muffler 100.00% Investment
Explanation on share-holding ratio in subsidiary different from ratio of voting right: Nil
Basis of the invested unit control by the Company though holds half or below voting rights; and the invested unit without controls by
the Company but with over half voting rights hold:
Explanation on equity method for calculation of the investment for Weifu Electronic Drive
The company holds 80.00% equity of Weifu Electronic Drive; the Board of Directors of Weifu Electronic Drive Board consists of 5
directors 3 of whom are appointed by the company; Weifu Electronic Drive’s important board resolutions can only pass the resolution
when being unanimously voted by all the present directors. According to this judgment the company cannot control Weifu Electronic
Drive and its investment should be used as an investment in the joint venture which adopts equity method for business accounting.
Major structured entity included in consolidate statement: Nil
Basis of termination of agent or consignor: Nil
(2)Important non-wholly-owned subsidiary
In RMB/CNY
Subsidiary
Share-holding ratio of
minority
Gains/losses attributable
to minority in the Period
Dividend announced to
distribute for minority in
the Period
Ending equity of
minority
Weifu Jinning 20.00% 41594834.20 15604600.00 194243753.02
Weifu Schmidt 34.00% -114183.58 9481779.44
Weifu Leader 5.19% 3443152.24 84803572.03
Weifu Tianli 45.77% 9419706.13 105986824.42
Weifu Autocam 49.00% 15873779.27 19600000.00 143626339.62
Total 70217288.26 35204600.00 538142268.53
Explanation on holding ratio different from the voting right ratio for minority shareholders: Nil
(3)Main finance of the important non-wholly-owned subsidiary
In RMB/CNY
Subsidiary
Ending balance
Current assets
Non-current
assets
Total assets Current liabilities
Non-current
liabilities
Total liabilities
Weifu Jinning 994953012.95 342560339.76 1337513352.71 313381459.40 50522767.70 363904227.10
Weifu Schmidt 92342474.64 48855179.90 141197654.54 112913283.31 112913283.31
Weifu Leader 1958116370.10 1038234646.34 2996351016.44 1343115779.10 23850612.52 1366966391.62
Weifu Tianli 357404441.32 233476608.83 590881050.15 310421704.26 47838928.45 358260632.71
Weifu Autocam 242022679.84 310989080.94 553011760.78 262647739.06 262647739.06
Total 3644838978.85 1974115855.77 5618954834.62 2342479965.13 122212308.67 2464692273.80
Subsidiary
Opening balance
Current assets
Non-current
assets
Total assets Current liabilities
Non-current
liabilities
Total liabilities
Weifu Jinning 804641137.00 337158270.17 1141799407.17 245091101.59 54199342.64 299290444.23
Weifu Schmidt 88975034.68 33405432.30 122380466.98 93741159.45 93741159.45
Weifu Leader 2392378693.81 978224529.85 3370603223.66 1793072212.90 23503280.34 1816575493.24
Weifu Tianli 290628819.00 243156899.42 533785718.42 259270617.16 63076581.29 322347198.45
Weifu Autocam 250884987.49 216134430.81 467019418.30 169012066.26 169012066.26
Total 3827508671.98 1808079562.55 5635588234.53 2560187157.36 140779204.27 2700966361.63
In RMB/CNY
Subsidiary
Current period
Operation Income Net profit
Total comprehensive
income
Cash flow from operation
activity
Weifu Jinning 613545903.22 208505596.11 208505596.11 39369830.31
Weifu Schmidt 178431433.45 -354936.30 -354936.30 18242932.77
Weifu Leader 2800874733.81 74556894.40 74556894.40 -6864502.47
Weifu Tianli 378601103.90 20603781.23 20603781.23 21145599.68
Weifu Autocam 466437403.21 32356669.68 32356669.68 57006160.96
Total 4437890577.59 335668005.12 335668005.12 128900021.25
Subsidiary
Last Period
Operation Income Net profit
Total comprehensive
income
Cash flow from operation
activity
Weifu Jinning 639266713.42 123846080.79 123846080.79 -14327763.61
Weifu Schmidt 132237721.83 375719.98 375719.98 -1277329.17
Weifu Leader 2545737100.66 102430580.66 102430580.66 138916907.91
Weifu Tianli 331060782.23 8621636.11 8621636.11 13915991.57
Weifu Autocam 518304786.01 85063618.51 85063618.51 70463396.99
Total 4166607104.15 320337636.05 320337636.05 207691203.69
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group
Nil
(5)Financial or other supporting offers to the structured entity included in consolidated financial statement
range
Nil
2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights
(1)Owners equity shares changed in subsidiary
In May 2018 part of the equity held by minority of Weifu Tianli are purchased by the Company with 15.57 million Yuan in cash;
after that owners’ equity of the Weifu Tianli held by the Company up to 54.2295% instead of 47.9436%
(2)Impact on minority’s interest and owners’ equity attributable to parent company
In RMB/CNY
Weifu Tianli
Cost of acquisition/disposal consideration 15570000.00
--Cash 15570000.00
Less: Net assets share of the subsidiary calculated according to the equity ratio obtained/disposed 13751392.25
Balance 1818607.75
Including:Capital reserve adjustment 1818607.75
3. Equity in joint venture and associated enterprise
(1) Important joint venture and associated enterprise
Joint venture or associated enterprise
Main
operation
place
Registered
place
Business nature
Share-holding ratio Accounting
treatment on
investment for
joint venture and
associated
enterprise
Directly Indirectly
I. Joint venture
Wuxi Weifu Environment Catalyst Co. Ltd. Wuxi Wuxi Catalyst 49.00% Equity method
Wuxi Weifu Electric Drive Tech. Co. Ltd. Wuxi Wuxi
Wheel-hub
motor
80.00% Equity method
II. Associated enterprise
Bosch Automobile Diesel System Co. Ltd. Wuxi Wuxi
Internal-combus
tion engine
accessories
32.50% 1.50% Equity method
Zhonglian Automobile Electronic Co. Ltd. Shanghai Shanghai Internal-combus 20.00% Equity method
tion engine
accessories
Weifu Precision Machinery Manufacturing Co.Ltd.Wuxi Wuxi
Internal-combus
tion engine
accessories
20.00% Equity method
Shinwell Automobile Tech. (Wuxi) Co. Ltd. Wuxi Wuxi
Automobile
components
45.00% Equity method
Holding shares ratio different from the voting right ratio:
①Explanation on equity method for calculation of the investment for Weifu Electronic Drive
The company holds 80.00% equity of Weifu Electronic Drive; the Board of Directors of Weifu Electronic Drive Board consists of 5
directors 3 of whom are appointed by the company; Weifu Electronic Drive’s important board resolutions can only pass the resolution
when being unanimously voted by all the present directors. According to this judgment the company cannot control Weifu Electronic
Drive and its investment should be used as an investment in the joint venture which adopts equity method for business accounting.
②Explanation on equity method for calculation of the investment for Shinwell Automobile Tech. (Wuxi) Co. Ltd.
The subsidiary Weifu International Trade holds a 45.00% stake in Shinwell Automobile Tech. (Wuxi); the Board of Directors of
Shinwell Automobile Tech. (Wuxi) consists of 5 directors 2 of whom are appointed by Weifu International Trade.Has major influence with less 20% voting rights hold or has minor influence with over 20% (20% included) voting rights hold:Nil
(2)Main financial information of the important joint venture
In RMB/CNY
Ending balance/Current period Opening balance/Last Period
Weifu Environment Weifu Environment
Current assets 2524886121.93 3011258785.42
Including: cash and cash equivalents 62820292.38 120584888.35
Non -current assets 312633597.82 284089421.89
Total assets 2837519719.75 3295348207.31
Current liabilities 1658404950.50 2211790474.13
Non-current liabilities 24735000.00 16450000.00
Total liabilities 1683139950.50 2228240474.13
Shareholders’ equity attributable to parent company 1154379769.25 1067107733.18
Share of net assets calculated by shareholding ratio 565646086.93 522882789.26
Book value of equity investment in joint ventures 565646086.93 522882789.26
Operation income 3353480152.95 2949564841.97
Financial expenses 106283984.35 77268038.98
Income tax expense -9245702.92 13745114.70
Net profit 91456868.91 162415440.00
Total comprehensive income 91456868.91 162415440.00
(3)Main financial information of the important associated enterprise
In RMB/CNY
Ending balance/Current period Opening balance/Last Period
Bosch Diesel
System
Zhonglian
Automobile
Weifu Precision
Machinery
Bosch Diesel
System
Zhonglian
Automobile
Weifu Precision
Machinery
Current assets 10042409061.0
4
153125575.56 281266308.21 8194014833.80 688116022.56 238511756.68
Non -current
assets
2756104679.18 5277976705.66 133470007.84 2696164046.92 4668848226.74 123616959.50
Total assets
12798513740.2
2
5431102281.22 414736316.05
10890178880.7
2
5356964249.30 362128716.18
Current liabilities 4100048133.30 2999283.95 135365421.92 3949654684.13 566609302.26 112597321.52
Non-current
liabilities
2759548.45 2210310.00
Total liabilities 4100048133.30 5758832.40 135365421.92 3949654684.13 568819612.26 112597321.52
Attributable to
parent company
shareholders’
equity
8698465606.92 5425343448.82 279370894.13 6940524196.59 4788144637.04 249531394.66
Share of net
assets calculated
by shareholding
ratio
2957478306.35 1085068689.76 55874178.83 2359778226.84 957628927.40 49906278.93
--Goodwill 267788761.35 1407265.96 267788761.35 1407265.96
--Unrealized
profit of internal
trading
-18144174.02 -34986.88 -18770053.91 -28335.94
--Other -0.28 -529034.05 -0.28 -529034.03
Book value of
equity investment
in associated
enterprise
3207122893.40 1086475955.72 55310157.90 2608796934.00 959036193.36 49348908.96
Operation income
15539892004.6
7
23186214.38 310813025.45
15389748441.4
4
21430344.10 235059618.08
Net profit 3545497532.33 1834198811.78 47839499.47 3421160042.39 1777156110.72 32599240.87
Total
comprehensive
income
3545497532.33 1834198811.78 47839499.47 3421160042.39 1777156110.72 32599240.87
Dividends
received from
associated
enterprise in the
year
607769081.48 239400000.00 3600000.00 666460456.42 207800000.00 3600000.00
Other explanation
① adjustment item for other “-0.28”: the differential tail;
②The dividend of 3.6 million Yuan distributed from Weifu Precision Machinery are collected by bank acceptance in the year; the
note still in balance of note receivable on 31st December 2018
(4)Financial summary for non-important Joint venture and associated enterprise
In RMB/CNY
Ending balance/Current period Opening balance/Last Period
Joint venture: -- --
Total book value of investment 54742375.02
Amount based on share-holding ratio -- --
--Net profit -438424.98
--Total comprehensive income -438424.98
Associated enterprise: -- --
Total book value of investment 7476477.77
Amount based on share-holding ratio -- --
--Net profit -1523522.23
--Total comprehensive income -1523522.23
(5)Major limitation on capital transfer ability to the Company from joint venture or associated enterprise
Nil
(6) Excess loss occurred in joint venture or associated enterprise
Nil
(7)Unconfirmed commitment with joint venture investment concerned
Nil
(8)Intangible liability with joint venture or associated enterprise investment concerned
Nil
4. Major conduct joint operation
Nil
5. Structured body excluding in consolidate financial statement
Nil
X. Risk related with financial instrument
Main financial instrument of the Company including equity investment loans account receivable account
payable etc. more details of the financial instrument can be found in relevant items of Note V. Risks concerned
with the above mentioned financial instrument and the risk management policy takes for lower the risks are as
follow:
Aims of engaging in the risk management is to achieve equilibrium between the risk and benefit lower the
adverse impact on performance of the Company to minimum standards and maximized the benefit for
shareholders and other investors. Base on the risk management targets the basic tactics of the risk management is
to recognized and analyzed the vary risks that the Company counted established an appropriate risk exposure
baseline and caring risk management supervise the vary risks timely and reliably in order to control the risk in a
limited range.In business process the risks with financial instrument concerned happen in front of the Company mainly
including credit exposure market risk and liquidity risk. BOD of the Company takes full charge of the risk
management target and policy-making and takes ultimate responsibility for the target of risk management and
policy. Risk management department and financial control department manager and monitor those risk exposure
to ensuring the risks are control in a limited range.
1. Credit Risk
Credit risk refers to the one party fails to perform the obligation of the financial instruments form the other party
company mainly face credit risk for financial loss caused by the customer credit risks. In order to prevent the risks
the Company formulated an evaluation system for the new client’s credit and system to analyze the book credit
for regular customer. The evaluation system for the new client’s credit aims at the new clients the Company will
conduct an background investigation based on the established process with purpose of determine whether offer
credit limit to the client and the amount of the credit and credit terms or not. Whereby the Company setting a
credit limits and credit period for every new client and such limit is the maximum amount without additional
approval. The system to analyze the book credit for regular customer refers to after purchase order received by
regular customer the Company will examine the order amount and outstanding balance if the total over the credit
limit on the premise of additional approval sales on account shall be realized or prepayments for relevant
amount shall be required.
Furthermore as for the sales on account occurred the Company will guarantee the total credit risks in a
controlling range by analyzed and review the monthly report of the risk attention for account receivables.The maximum credit risk exposure of the Company is the book amount of such financial assets till end of 31st
December 2018; lists of the maximum credit risk exposure of the Company are as:
Item Amount of merge Amount of parent company
Account receivable 1919793266.91 742246990.99
Other receivables-Other receivables 82739808.66 196660409.35
2. Market risk
Market risk of the financial instrument refers to the fair value of financial instrument or future cash flow due to
fluctuations in the market price changes and produce mainly includes the IRR FX risk and other price risk.
(1) Interest rate risk (IRR)
IRR refers to the fluctuate risks on Company’s financial status and cash flow arising from rates changes in market.IRR of the Company mainly related with the bank loans. In order to lower the fluctuate of IRR the Company in
line with the anticipative change orientation choose floating rate or fixed rate that is the rate in future period will
goes up prospectively than choose fixed rate; if the rate in future period will decline prospectively than choose
the floating rate. In order to minor the bad impact from difference between the expectation and real condition
loans for liquid funds of the Company are choose the short-term period and agreed the terms of prepayment in
particular.
(2) Foreign exchange (FX) risk
FX risks refer to the losses arising from exchange rate movement. The FX risk sustain by the Company mainly
related with the USD EUR SF JPY and HKD except for the USD EUR SF JPY and HKD carried out for the
equipment purchasing of parent company and Autocam material purchasing from business section of Weifu
Diesel System technical service and trademark usage costs from business section of Weifu Diesel System and the
import and export of Weifu International Trade other main business of the Company are pricing and settle with
RMB (Yuan). In consequence of the foreign financial assets and liabilities takes minor ratio in total assets the
Company has small FX risk of the financial instrument considered by management of the Company.
End as 31st December 2018 except for the follow assets or liabilities listed with foreign currency assets and
liabilities of the Company are carried with RMB
①Foreign currency assets of the Company till end of 31st December 2018
Cash on hand
Ending foreign
currency balance
Convert rate Ending RMB balance converted Ratio in assets(%)
Monetary funds
Including: USD 31373244.14 6.8632 215320849.17 1.03
EUR 2499310.16 7.8473 19612836.63 0.09
JPY 8364309.47 0.061887 517642.02 0.00
HKD 16024984.73 0.8762 14041091.62 0.07
Account receivable
Including: USD 4195415.85 6.8632 28793978.06 0.14
EUR 1040354.52 7.8473 8163974.02 0.04
JPY 3314442.00 0.061887 205120.87 0.00
Total ratio in assets 1.37
②Foreign currency liability of the Company till end of 31st December 2018:
Cash on hand
Ending foreign
currency balance
Convert rate Ending RMB balance converted Ratio in assets(%)
Short-term borrowings
Including: EUR 3558958.36 7.8473 27928213.94 0.63
Account payable
Including: USD 411335.19 6.8632 2823075.67 0.06
EUR 1615586.95 7.8473 12677995.47 0.29
CHF 105642.70 6.9494 734153.38 0.02
JPY 31475376.00 0.061887 1947916.59 0.04
Total ratio in liabilities 1.04
③Other pricing risk
Classification of the Company held is the equity investments in financial assets available for sale and such
investment can be measured by fair value on balance sheet date thus the Company owns a risk of stock market
changes.
Furthermore on the premise of deliberated and approved in 16
th
session of 8
th
BOD the Company exercise entrust
financing with the self-owned idle capital; therefore the Company has the risks of collecting no principal due toentrust financial products default. Aims at such risk the Company formulated a “Management Mechanism of
Capital Financing” and well-defined the authority approval investment decision-making calculation
management and risk controls for the entrust financing in order to guarantee a security funds and prevent
investment risk efficiently. In order to lower the adverse impact from unpredictable factors the Company choose
short-term and medium period for investment and investment product’s term is up to 3 years in principle; in
variety of investment the Company did not invested for the stocks derivative products security investment fund
and the entrust financial products aims at security investment as well as other investment with securities
concerned.
3. Liquidity risk
Liquidity risk refers to the capital shortage risk occurred during the clearing obligation implemented by the
enterprise in way of cash paid or other financial assets. The Company aims at guarantee the Company has rich
capital to pay the due debts therefore a financial control department is established for collectively controlling
such risks. On the one hand the financial control department monitoring the cash balance the marketable
securities which can be converted into cash at any time and the rolling forecast on cash flow in future 12 months
ensuring the Company on condition of reasonable prediction owes rich capital to paid the debts; on the other
hand building a favorable relationship with the banks rationally design the line of credit credit products and
credit terms guarantee a sufficient limit for bank credits in order to satisfy vary short-term financing
requirements.XI. Disclosure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
In RMB/CNY
Item
Ending fair value
First-order Second-order Third-order Total
I. Sustaining measured by fair value -- -- -- --
(2) Equity instrument investment 121066008.00 -- -- 121066008.00
Total assets sustaining measured by fair value 121066008.00 121066008.00
Derivative financial liability 490329.13 490329.13
Total liability sustaining measured by fair value 490329.13 490329.13
II. Non-persistent measure -- -- -- --
2. Recognized basis for the market price sustaining and non-persistent measured by fair value on
first-order
According to relevant requirement of accounting standards the Company continues to measure the financial
assets available for sale-equity instrument investment by fair value on balance sheet date. On 31 December 2018
the financial assets available for sale-equity instrument investment held by the Company refers to the SDEC
(stock code: 600841) and Miracle Logistics (Stock code: 002009) determining basis of the market price at
period-end refers to the closing price of 28 December 2018 the 29 December 2018 30 December 2018 and 31
December 2018 are nonworking days.
3. The qualitative and quantitative information for the valuation technique and critical parameter that
sustaining and non-persistent measured by fair value on second-order
The derivative financial liabilities that continued to be measured at the second level of fair value were the forward
exchange settlement contracts and RMB option contracts held by the subsidiary Weifu Autocam the fair value
measurement of the derivative financial liabilities was measured by the fair value of the forward exchange
settlement contracts and RMB option contracts offered by the bank that signed the contracts.XII. Related party and related transactions
1. Parent company of the enterprise
Parent
company
Registration
place
Business nature Registered capital
Share-holding ratio on the
enterprise for parent company
Voting right ratio on
the enterprise
Wuxi Industry
Group
Wuxi
Operation of
state-owned assets
4720.6710 million
Yuan
20.22% 20.22%
Explanation on parent company of the enterprise
Wuxi Industry Development Group Co. Ltd 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
Ultimate controller of the Company is State-owned Assets Supervision & Administration Commission of Wuxi Municipality of
Jiangsu Province.
2. Subsidiary of the Enterprise
Found more in Note IX. 1.” Equity in subsidiary”
3. Joint venture and associated enterprise
Found more in Note IX.3. “Equity in joint venture and associated enterprise”
Other associated enterprise or joint ventures which has related transaction with the Company in the period or occurred previous:
Nil
4. Other Related party
Other Related party Relationship with the Enterprise
Robert Bosch Company Second largest shareholder of the Company
Key executive Director supervisor and senior executive of the Company
5. Related transaction
(1) Goods purchasing labor service providing and receiving
Goods purchasing/labor service receiving
In RMB/CNY
Related party
Content of related
transaction
Current period
Approved
transaction limit
Whether more than the
transaction limit (Y/N)
Last Period
Weifu Precision
Machinery
Goods and labor 44657225.89 50000000.00 N 43069065.48
Bosch Diesel System Goods and labor 68485584.07 70000000.00 N 200508313.30
Weifu Environment Goods 1515266186.15 1925000000.00 N 1131818717.21
Robert Bosch Company Goods 179841237.03 143000000.00 Y 158733424.37
Goods sold/labor service providing
In RMB/CNY
Related party Content of related transaction Current period Last Period
Weifu Precision Machinery Goods and labor 3785205.72 3377877.84
Bosch Diesel System Goods and labor 2722919316.33 3266539117.64
Weifu Environment Goods and labor 50181907.20 46216269.37
Robert Bosch Company Goods and labor 720709408.92 2528608.05
Explanation on goods sales/sold and labor service providing/receiving
(2)Related trusteeship management/contract & entrust management/ outsourcing
Nil
(3) Related lease
As a lessor for the Company:
In RMB/CNY
Lessee Assets type Lease income recognized in the Period Lease income recognized at last Period
Weifu Environment Workshop 2508057.00 2388626.00
Explanation on related lease
Weifu Leader entered into the house leasing contract with Weifu Environment as for the plant locates at No.9
Linjiang Road Wuxi new district owed by Weifu Leader rent-out to Weifu Environment agreements are made
as: Rental from 1 January 2018 to 31 December 2018 was 2508057.00 Yuan
(4) Related guarantee
Nil
(5)Related party’s borrowed/lending funds
In RMB/CNY
Related party Loan amount Start date Maturity Note
Wuxi Industry Group 5470000.00 2018-02-13- 2019-02-12
Weifu Leader borrowed 5.47 million Yuan from Wuxi
Industry Group which will expired on 12 February 2019.
(6)Related party’s assets transfer and debt reorganization
Nil
(7) Remuneration of key manager
In RMB/CNY
Item Current period Last Period
Remuneration of key manager 5180000.00 5070000.00
(8)Other related transactions
Item Related party 2018 2017
Payable for technical services Bosch Diesel System 1355480.71 1294739.84
Purchase of fixed assets Bosch Diesel System 19629922.97 2607798.18
Technology royalties paid etc. Robert Bosch Company 3484849.96 7945222.80
Purchase of fixed assets Robert Bosch Company 3576000.00 --
Purchase of fixed assets Weifu Environment 9858.69 --
Sales of fixed assets Weifu Environment 187779.24 --
Interest paying Wuxi Industry Group 214362.52 --
6. Receivable/payable items of related parties
(1)Receivable item
In RMB/CNY
Item Related party
Ending balance Opening balance
Book balance Bad debt reserve Book balance Bad debt reserve
Account receivable Weifu Precision Machinery 77477.41 425363.64
Account receivable Bosch Diesel System 420746170.76 615770490.57 72188.07
Account receivable Robert Bosch Company 132830976.56
Other receivables Robert Bosch Company 12285081.81
Account receivable Weifu Environment 1233580.22 710200.00
Other non-current
assets
Bosch Diesel System 877500.00
Account paid in
advance
Bosch Diesel System 1057272.58
(2)Payable item
In RMB/CNY
Item Related party Ending book balance Opening book balance
Account payable Weifu Precision Machinery 7941418.36 9737530.74
Account payable Weifu Environment 337307634.70 379374827.01
Account payable Bosch Diesel System 24743403.24 44262749.15
Account payable Robert Bosch Company 5170470.70 38202192.76
Other accounts payable Wuxi Industry Group 5476678.00
Accounts received in advance Robert Bosch Company 754552.15 579650.36
Accounts received in advance Weifu Environment 6514951.87
7. Commitments of related party
Nil
XIII. Share-based payment
Nil
XIV. Commitment or contingency
1. Important commitments
Important commitments in balance sheet date Nil
2. Contingency
(1) Contingency on balance sheet date
Guarantees to subsidiary
Guarantee provided
Guarantee
received
Debit bank
Guarantee amount
(in 10 thousand
Yuan)
Starting from
Terminated
dated
Whether guarantee
implemented or
not
Weifu High-Technology
Group Co. Ltd.Weifu Tianli
Jiangbei branch of Bank
of China in Ningbo
4500.00 2016-11-15 2021-11-10 N
(2) For the important contingency not necessary to disclosed by the Company explained reasons
The Company has no important contingency that need to disclosed
XV. Events after balance sheet date
1. Important non adjustment matters Nil
2. Profit distribution
In RMB/CNY
Profit or dividend plans to distributed 1210740684.00
Profit or dividend declare to distributed which have been approved 1210740684.00
3. Sales return
No significant sales return has occurred after the balance sheet date
4. Other events after balance sheet date
(1) In accordance with the resolution of 4
th
session of 9
th
BOD held on 26 March 2019 the Company plans to
establish a wholly-owned subsidiary SPV Company in Denmark. Acquired the 66.00% equity of
IRDFuelCellsA/S in Denmark held by FCCTApS. Company with EUR 7.26 million by conversion (value of
assessment for IRD as EUR 11 million)
(2)According to the resolution passed at the 5
th
session of the 9
th
BOD of the Company held on 19 April 2019 the
Company plans to make entrusted finance management with its own unused funds up to 5 billion Yuan in 2019.
The aforesaid limit can be rolling for use to invest in finance management products with low risks.XVI. Other important events
1. Previous accounting errors collection Nil
2. Debt restructuring Nil
3. Assets replacement Nil
4. Pension plan
The Enterprise Annuity Plan under the name of WFHT has deliberated and approved by 8
th
session of 7
th
BOD: in
order to mobilize the initiative and creativity of the employees established a talent long-term incentive
mechanism enhance the cohesive force and competitiveness in enterprise the Company carried out the above
mentioned annuity plan since the date of reply of plans reporting received from labor security administration
department. Annuity plans are: the annuity fund are paid by the enterprise and employees together; the amount
paid by enterprise shall not over the 1/12 of the total salary of last years amount paid by individual and enterprise
shall not over the 1/6 of the total salary of last year in accordance with the State’s annuity policy the Company
will adjusted the economic benefits in due time in principle of responding to the economic strength of the
enterprise the amount paid by the enterprise at current period control in the 8.33 percent of the total salary of last
year specific paying ratio later shall be adjust correspondingly in line with the operation condition of the
Company.
In December 2012 the Company received the Reply on annuity plans reporting under the name of WFHT from
labor security administration department later the Company entered into the Entrusted Management Contract of
the Annuity Plan of WFHT with PICC.
5. Discontinued operations Nil
6. Segment
(1) Recognition basis and accounting policy for reportable segment
Determine the operating segments in line with the internal organization structure management requirement and
internal reporting system. Operating segment of the Company refers to the followed components that have been
satisfied at the same time:
①the component is able to generate revenues and expenses in routine activities;
②management of the Company is able to assess the operation results regularly and determine resources
allocation and performance evaluation for the component;
③being analyzed financial status operation results and cash flow of the components are able to required by the
Company
The Company mainly engaged in the manufacture of fuel system of internal combustion engine products auto
components muffler and purifier etc. based on the product segment the Company determine three reporting
segment as auto fuel injection system air management system and automotive post processing system.
Accounting policy for the three reporting segments are shares the same policy state in Note III
Segment assets exclude financial assets measured by fair value and with variation reckoned into current
gains/losses derivative instruments dividends receivables financial products due within one year financial assets
available for sale long term equity investment and other undistributed assets since these assets are not related to
products operation.
(2) Financial information for reportable segment
In RMB/CNY
Item
Product segment
of automobile
fuel injection
system
Product segment
of automotive
post processing
system
Product segment
of air
management
system
Add:
investment/incom
e measured by
equity income of
financial products
or possession and
disposal income
the retained assets
or gains/losses as
the financial
assets available
for sale or
possession and
disposal income
Offset of segment Total
Operating
revenue
5633846119.26 2800874733.81 495075874.87 208122056.76 8721674671.18
Operating cost 4122647409.01 2423800297.06 359434846.25 214025712.35 6691856839.97
Total Profit 727880690.18 30653969.82 34686895.01 1810292357.18 1330532.41 2602183379.78
Net profit 615703275.72 31529412.98 37157142.45 1782896685.93 991813.61 2466294703.47
Total assets
8815931131.73 2301906124.76 814320686.35 9882216532.95 922333015.49
20892041460.3
0
Total liabilities 2780313471.43 1366966391.62 482134437.91 189343888.01 4440070412.95
7. Major transaction and events makes influence on investor’s decision
Nil
XVII. Principle notes of financial statements of parent company
1.Note receivable and account receivable
In RMB/CNY
Item Ending balance Opening balance
Notes receivable 264264207.30 449209323.02
Account receivable 742246990.99 1047012889.92
Total 1006511198.29 1496222212.94
(1)Notes receivable
1))Category of note receivable:
In RMB/CNY
Item Ending balance Opening balance
Bank acceptance bill 248904207.30 449209323.02
Commercial acceptance bill 15360000.00
Total 264264207.30 449209323.02
2)Notes receivable pledge at end of the period
In RMB/CNY
Item Amount pledge at period-end
Bank acceptance bill 106328022.46
Total 106328022.46
3)Notes receivable that has endorsed or discounted at end of the period and is not yet due on balance sheet date
In RMB/CNY
Item Amount cease for recognized at period-end
Amount not cease for recognized at
period-end
Bank acceptance bill 142341780.45
Commercial acceptance bill 190000.00
Total 142531780.45
4)The bills transferred to account receivable for the drawer failed to perform the contract
In RMB/CNY
Item Amount transfer to account receivable at period-end
Commercial acceptance bill 7000000.00
Total 7000000.00
Other explanation
Found more in 2-(1)-4) under the Note VII.
(2)Account receivable
1)Category of account receivable
In RMB/CNY
Category
Ending balance Opening balance
Book balance Bad debt reserve
Book
value
Book balance Bad debt reserve
Book value
Amount Ratio Amount
Accrual
ratio
Amount Ratio Amount
Accrual
ratio
Account receivable
with single
significant amount
and withdrawal bad
debt provision
separately
700000
0.00
0.93%
700000
0.00
100.00%
Account receivables
with bad debt
provision accrual by
credit portfolio
745766
010.32
99.07%
351901
9.33
0.47%
7422469
90.99
10494
89925.
33
100.00%
2477035
.41
0.24%
10470128
89.92
Total
752766
010.32
100.00%
105190
19.33
1.40%
7422469
90.99
10494
89925.
33
100.00%
2477035
.41
0.24%
10470128
89.92
Account receivable with single significant amount and withdrawal bad debt provision separately at period end :
√Applicable □ Not applicable
In RMB/CNY
Account receivable(by
enterprise)
Ending balance
Account receivable Bad debt reserve Accrual ratio Accrual causes
BD bills 7000000.00 7000000.00 100.00%
Have difficulty in
collection
Total 7000000.00 7000000.00 -- --
Account receivable provided for bad debt reserve under aging analysis method in the groups:
√ Applicable □ Not applicable
In RMB/CNY
Account age
Ending balance
Account receivable Bad debt reserve Accrual ratio
Subitem of within one year
Within 6 months 559297293.94
6 months to one year 12039849.09 1203984.91 10.00%
Subtotal of within one year 571337143.03 1203984.91
1-2 years 1971945.25 394389.05 20.00%
2-3 years 1101729.57 440691.83 40.00%
Over 3 years 1479953.54 1479953.54 100.00%
Total 575890771.39 3519019.33 0.61%
Explanations on combination determine:
Except for the receivables with impairment reserves accrual singly; base on the actual loss ratio of the receivables
of previous years with same or similar credit portfolio and combining actual condition accrual bad debt reserves
to determined the accrual ratio for bad debt reserves
In combination withdrawal bad debt provision based on balance proportion for account receivable:
□ Applicable √ Not applicable
In combination withdrawal bad debt provision based on other methods for account receivable:
2)Bad debt provision accrual collected or reversed
Accrual bad debt provision 8049045.12 Yuan; collected or reversed Yuan.
Including major amount collected or reversed in the period: Nil
3)Account receivable actually charge off in the period:
The amount charge off in the period refers to the amount from retail enterprise an the details of each amount is
small and is not generated by related transactions.
4)Top 5 receivables at ending balance by arrears party
Total receivables collected by arrears party for the Period amounting to 622252082.05 Yuan takes 82.66
percent in closing balance of the account receivables; 0 Yuan are accrual correspondingly for bad debt reserves.
5)Account receivable derecognition due to financial assets transfer Nil
6)Assets and liabilities resulted by account receivable transfer and continues involvement
2. Other receivables
In RMB/CNY
Item Ending balance Opening balance
Interest receivable 188682.78 97627.77
Other receivables 196660409.35 50174653.16
Total 196849092.13 50272280.93
(1)Interest receivable
1)category of interest receivable
In RMB/CNY
Item Ending balance Opening balance
Entrust loans 97627.77
Interest receivable from unified loan and return 188682.78
Total 188682.78 97627.77
Significant overdue interest Nil
(2)Dividend receivable
Nil
(3)Other receivables
1)Category of other receivables
In RMB/CNY
Category
Ending balance Opening balance
Book balance Bad debt reserve
Book
value
Book balance Bad debt reserve
Book value
Amount Ratio Amount
Accrual
ratio
Amount Ratio Amount
Accrual
ratio
Other receivables
with bad debt
provision accrual by
credit portfolio
196660
409.35
100.00%
1966604
09.35
50395
333.34
100.00%
220680.1
8
0.44%
50174653.
16
Total
196660
409.35
100.00%
1966604
09.35
50395
333.34
100.00%
220680.1
8
0.44%
50174653.
16
Other receivable with single significant amount and withdrawal bad debt provision separately at end of period:
□ Applicable √ Not applicable
In combination other accounts receivable whose bad debts provision was accrued by age analysis:
√ Applicable □ Not applicable
In RMB/CNY
Account age
Ending balance
Other receivables Bad debt reserve Accrual ratio
Subitem of within one year
Within 6 months 612673.63
6 months to one year
Subtotal of within one year 612673.63
Total 612673.63
Explanations on combination determine:
Except for the other receivables with impairment reserves accrual singly; base on the actual loss ratio of the
receivables of previous years with same or similar credit portfolio and combining actual condition accrual bad
debt reserves to determined the accrual ratio for bad debt reserves
In combination withdrawal bad debt provision based on balance proportion for other account receivable
□ Applicable √ Not applicable
In combination withdrawal bad debt provision based on other methods for other account receivable
? Applicable √ Not applicable
2)Bad debt provision accrual collected or reversed
Accrual bad debt provision Yuan; collected or reversed 220680.18 Yuan.
Including the important bad debt provision switch back or collected in the period:
3)Other receivable actually charge-off in the period:
4)Nature of other receivables
In RMB/CNY
Nature Ending book balance Opening book balance
Staff loans and petty cash 605473.63 1438626.00
Balance of related party in the consolidate scope 196047735.72 47000000.00
Intercourse funds of unit 1949507.34
Other 7200.00 7200.00
Total 196660409.35 50395333.34
5) Top 5 other receivables at ending balance by arrears party
In RMB/CNY
Enterprise Nature Ending balance Account age
Ratio in total
ending balance of
other receivables
Ending balance of
bad debt reserve
Weifu Leader
Balance of related party in the
consolidate scope
100000000.00 Within one year 50.85%
Weifu Mashan
Balance of related party in the
consolidate scope
52047735.72 Within 6 months 26.47%
Weifu Schmidt
Balance of related party in the
consolidate scope
24000000.00 Within one year 12.20%
Weifu Chang’an
Balance of related party in the
consolidate scope
20000000.00 Within 6 months 10.17%
Staff Staff loans and petty cash 120000.00 Within 6 months 0.06%
Total -- 196167735.72 -- 99.75%
6) Account receivable with government grand involved Nil
(7) Other account receivable derecognition due to financial assets transfer Nil
(8) Assets and liabilities resulted by other account receivable transfer and continues involvement Nil
3. Long-term equity investments
In RMB/CNY
Item
Ending balance Opening balance
Book balance
Depreciation
reserves
Book value Book balance
Depreciation
reserves
Book value
Investment for
subsidiary
1466611689.17 1466611689.17 1451041689.17 1451041689.17
Investment for
associates and
4272498737.38 4272498737.38 3511481000.32 3511481000.32
joint venture
Total 5739110426.55 5739110426.55 4962522689.49 4962522689.49
(1)Investment for subsidiary
In RMB/CNY
The invested entity Opening balance Current increased
Current
decreased
Ending balance
Impairment
accrual in the
period
Ending balance of
depreciation
reserves
Weifu Jinning 178639593.52 178639593.52
Weifu Leader 460113855.00 460113855.00
Weifu Mashan 168693380.51 168693380.51
Weifu Chang’an 220902037.30 220902037.30
Weifu
International Trade
32849254.85 32849254.85
Weifu ITM 167000000.00 167000000.00
Weifu Schmidt 50160000.00 50160000.00
Weifu Tianli 90229100.00 15570000.00 105799100.00
Weifu Autocam 82454467.99 82454467.99
Total 1451041689.17 15570000.00 1466611689.17
(2)Investment for associates and joint venture
In RMB/CNY
Enterprise
Opening
balance
Current changes (+-)
Ending
balance
Ending
balance
of
depreciati
on
reserves
Additional
investment
Capital
reductio
n
Investme
nt
gain/loss
recognize
d under
equity
Other
comprehe
nsive
income
adjustmen
t
Other
equity
change
Cash
dividend
or profit
announce
d to
issued
Impairme
nt accrual
Other
I. Joint venture
Weifu
Electronic
Drive
5518080
0.00
-438424.
98
5474237
5.02
Subtotal
5518080
0.00
-438424.
98
5474237
5.02
II. Associated enterprise
Bosch
Diesel
System
2503154
814.59
1153838
335.18
5809557
39.65
3076037
410.12
Zhonglian
Automobi
le
Electronic
Co. Ltd.
9590361
93.36
3668397
62.36
2394000
00.00
1086475
955.72
Weifu
Precision
Machiner
y
4928999
2.37
9553004
.15
3600000
.00
5524299
6.52
Subtotal
3511481
000.32
0.00
1530231
101.69
8239557
39.65
4217756
362.36
Total
3511481
000.32
5518080
0.00
1529792
676.71
8239557
39.65
4272498
737.38
(3)Other explanation
Nil
4. Operating income and cost
In RMB/CNY
Item
Current period Last Period
Income Cost Income Cost
Main business 3638414291.52 2552209818.43 3258274223.36 2457655148.49
Other business 359776899.68 326627631.69 387741030.12 315062753.47
Total 3998191191.20 2878837450.12 3646015253.48 2772717901.96
Other explanation:
5. Investment income
In RMB/CNY
Item Current period Last Period
Income of long-term equity investment calculated based on cost 82818400.00 978657310.00
Income of long-term equity investment calculated based on equity 1529792676.71 1470504861.61
Investment income from period of holding
the financial assets available for sale
3274260.41 3291000.00
Investment income obtained from disposal of financial assets available for 17370816.75 24625516.88
sale
Entrust financial income 303054961.79 215942650.46
Gains/losses of equity liquidation -8261290.60
Total 1936311115.66 2684760048.35
6. Other
Nil
XVIII. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable □ Not applicable
In RMB/CNY
Item Amount Note
Gains/losses from the disposal of non-current asset 96162222.57 含威孚金宁房屋土地征收处置损益
Governmental subsidy reckoned into current gains/losses (not including
the subsidy enjoyed in quota or ration according to national standards
which are closely relevant to enterprise’s business)
48811314.99
Profit and loss of assets delegation on others’ investment or management 311261918.65
Held transaction financial asset gains/losses of changes of fair values
from transaction financial liabilities and investment gains from disposal
of transaction financial asset transaction financial liabilities and financial
asset available for sales exclude the effective hedging business relevant
with normal operations of the Company
16880487.62
Including the gains/losses of fair value
changes from the derivative financial
liability
Switch back of provision for depreciation of account receivable which
was singly taken depreciation test
466200.00
Other non-operating income and expenditure except for the
aforementioned items
-597126.12
Other gain/loss qualify the definition of non-recurring gains/losses 353111.39
The amount collected in the period
while has been charged-off previous
Relocation expenses
Less: Impact on income tax 70234077.14
Impact on minority shareholders’ equity 21827350.95
Total 381276701.01 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss explain reasons
□ Applicable √ Not applicable
2. REO and earnings per share
Profits during report period
Weighted
average ROE
Earnings per share
Basic earnings per
share (RMB/Share)
Diluted earnings per
share (RMB/Share)
Net profits belong to common stock stockholders of the Company 15.48 2.37 2.37
Net profits belong to common stock stockholders of the Company
after deducting nonrecurring gains and losses
13.02 2.00 2.00
3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
(2) Difference of the net profit and net assets disclosed in financial report under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
(3) Explanation on data differences under the accounting standards in and out of China; as for the differences adjustment
audited by foreign auditing institute listed name of the institute
Not applicable
4. Other
Section XII. Documents available for reference
I. Financial statement carrying the signatures and seals of person in charge of the company principal of the
accounting works and person in charge of accounting organ (accounting Supervisor);
II. Original audit report seal with accounting firms and signature and seal with CPA;
III. Original documents of the Company and manuscripts of public notices that disclosed in the website Juchao
(http://www.cninfo.com.cn) designated by CSRC in the report period;
IV. Annual report published on China Securities Journal Securities Times and Hong Kong Commercial Daily
during the Period.
Board of Directors of
Weifu High-Technology Group Co. Ltd.
Chairman:
Chen Xuejun
23 April 2019
