公证天业会计师事务所(特殊普通合伙)

Gongzheng Tianye Certified Public Accountants SGP

中国 . 江苏 . 无锡 Wuxi . Jiangsu . China

总机：86（510）68798988 Tel：86（510）68798988

传真：86（510）68567788 Fax：86（510）68567788

电子信箱：mail@gztycpa.cn E-mail：mail@gztycpa.cn

Auditor’s Report

Su Gong W【2024】No. A366

To the Shareholders of Weifu High-Technology Group Co. Ltd.:

1. 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 2023 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 2023 and its operation

results and cash flows for the year ended.

2. Basis of opinion

We conducted our audit in accordance with the Auditing Standards for Certified Public Accountantsof China. Our responsibilities under those standards are further described in the “Auditor’sResponsibilities 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.

3. Highlighted paragraphs

We remind users of financial statements to pay attention: As described in Note XV-6 "Major

transaction and events influencing investor’s decision" WFHT’s Wholly-owned subsidiary

WFTR's "platform trade" business contract fraud is in the stage of transferring for review and

prosecution there is still uncertainty about the outcome of the case in the future.This paragraph does not affect the published audit opinion.

4. 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 thecontext 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 issues identified in our audit are as follows:

(1) Revenue recognition

1) Matter description

As described in Note III-28 “Revenue” and Note V-47 “Operating income and cost” carried in the

financial statement WFHT achieved an operation revenue of CNY 11.093 billion for year of 2023.As one of the biggest source of profits for WFHT operating revenue has a significant effect on the

general financial statement in which there are certain of inherent risks existed for the reason that

the WFHT management (the management) manipulate the timing of recognition so as to achieve

specific objectives or anticipations. Therefore we will take the Revenue recognition as the key

auditing matter.

2) The solution to the matter in auditing

(1) Understand the key internal controls related to revenue recognition evaluate the design of these

controls determine whether they are implemented and test the operational effectiveness of the

relevant internal controls;

(2) Review sales contracts to understand main contract terms or conditions and evaluate the

appropriateness of revenue recognition methods;

(3) Combining with status and data of the industry where WFHT is located the Company should

make a judgment on the rationality of fluctuation of the revenue composition;

(4) The Company should carry out the procedure of account receivable and revenue 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 signing-off sheet and other documents related to revenue to verify the authenticity of

revenue;

(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.

(2) Provision for expected credit losses of WFTR's "platform trade" business portfolio in

other receivables

1) Matter description

As described in Note XV-6 "Major transaction and events influencing investor’s decision" As of

December 31 2023 the book balance of other receivables formed by WFTR due to "platform trade"

contract fraud was CNY 2.5423 billion and an expected credit loss of CNY 1.6441 billion has been

provisioned. The management has made a comprehensive judgment based on information fromrelevant authorized departments the recoverable amount of the "platform trade" business portfolio

debt has not undergone significant changes compared to the end of the previous year and there is

no need for further provision or significant reversal of its expected credit losses. Due to the

significant accounting estimates and judgments made by management in relation to the recoverable

amount of claims in the "platform trade" business portfolio which is significant to the financial

statements we have identified the provision for expected credit losses in the "platform transaction"

business portfolio in other receivables as a key audit matter.

2) The solution to the matter in auditing

(1) Obtain the accounting estimation method and results of the management's provision of expected

credit losses for the debt portfolio of the "platform trade" business asking the sources of significant

judgments made by the management regarding the recoverability amount of the debt portfolio of

the "platform trade" business compare and analyze the changes in the basis of the recoverability

amount of the debt portfolio of the "platform trade" business compared to the end of the previous

year and evaluate its rationality;

(2) Conduct interviews to authorized departments based on the sources of estimates made by

management verify the authenticity and reliability of the sources and verify the changes in the

basis for the recoverable amount compared to the end of the previous year and the reasons for such

changes;

(3) Based on the information obtained from interviews to the related authorized departments

conduct interviews to the main "customers" and "suppliers" of the "platform trade" business to

evaluate the authenticity of relevant evidence;

(4) Re execute the calculation program based on the recoverable amount of debt in the "platform

trade" business portfolio and compare it with the estimated results of management further judgment

on whether the management's conclusion regarding the expected credit loss of the "platform trade"

business portfolio debt does not require further provision or significant reversal is reasonable.

(5) Check whether information related to "platform trade" business has been appropriately presented

and disclosed in the financial statements.

5. Other information

The management of WFHT is responsible for other information which includes the information

covered in the Company’s 2023 annual report excluding the financial statement and our audit report.Our audit opinions on the financial statements do not cover other information and we do not issue

any form of authentication conclusions on other information.In combination with our audit of the financial statements it is our responsibility to read other

information and in the process consider whether there is material inconsistency or material

misstatement between the other information and the financial statements or what we learned during

the audit.Based on the work we have carried out if we determine that there is a material misstatement ofother information we should report that fact and in this regard we have no matters to report.

6. 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.

7. 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 areinadequate 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 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 the governance with a statement of our compliance with the ethical requirements

relating to our independence and communicate with the governance on all relationships and other

matters that may reasonably be considered to affect our independence as well we 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: Gu Zhi

(Special General Partnership) (Engagement partner)

Wuxi China Chinese CPA: Zhang Qianqian

15 April 2024Consolidated Balance Sheet

Prepared by Weifu High-Technology Group Co. Ltd. In RMB

Assets Note Dec. 31 2023 Jan. 1 2023

Current assets:

Monetary funds V-1 2274771699.14 2389551930.76

Trading financial assets V-2 2391487144.96 2718820654.87

Derivative financial assets

Note receivable V-3 144976174.84 135559024.27

Account receivable V-4 3857539958.20 3127490177.25

Receivable financing V-5 1661749949.46 1918368845.21

Accounts paid in advance V-7 76202271.16 94323853.87

Other account receivable V-6 919684126.81 1264507456.47

Including: Interest receivable

Dividend receivable 147000000.00

Inventories V-8 2068533030.94 2283119656.27

Contract assets

Assets held for sale

Non-current asset due within one year

Other current assets V-9 325909383.11 430547201.24

Total current assets 13720853738.62 14362288800.21

Non-current assets:

Debt investment

Other debt investment

Long-term account receivable

Long-term equity investment V-10 5947633507.07 6282818108.96

Investment in other equity instrument V-11 677790690.00 677790690.00

Other non-current financial assets V-12 804350120.06 1326608914.00

Investment real estate V-13 46926716.49 49296869.73

Fixed assets V-14 3969574102.87 3769984185.94

Construction in progress V-15 564605931.90 509105587.49

Productive biological asset

Oil and gas asset

Right-of-use assets V-16 48832472.85 41865100.38

Intangible assets V-17 484834882.53 487627987.92

Expense on research and development

Goodwill V-18 122316819.20 237682375.72

Long-term expenses to be apportioned V-19 24714632.10 28586235.84

Deferred income tax asset V-20 311912955.07 275627772.45

Other non-current asset V-21 1356741223.05 479630436.37

Total non-current asset 14360234053.19 14166624264.80Total assets 28081087791.81 28528913065.01

Liabilities and owner's equity (or shareholder's

Note Dec. 31 2023 Jan. 1 2023

equity)

Current liabilities:

Short-term loans V-23 838889557.51 3604376527.82

Trading financial liability

Derivative financial liability V-24 747115.75

Note payable V-25 1759062642.60 1411089606.00

Account payable V-26 3668850423.29 3454601023.60

Accounts received in advance V-28 2911439.65 3633878.33

Contractual liability V-29 77686881.24 94850083.23

Wage payable V-30 334810352.56 317434386.24

Taxes payable V-31 56581082.49 54586315.53

Other account payable V-27 108893486.63 198990948.23

Including: Interest payable

Dividend payable

Liability held for sale

Non-current liabilities due within one year V-32 38084321.10 14285348.90

Other current liabilities V-33 257139908.60 211763779.77

Total current liabilities 7142910095.67 9366359013.40

Non-current liabilities:

Long-term loans V-34 299800000.00 238000000.00

Bonds payable

Including: Preferred stock

Perpetual capital securities

Lease liability V-35 37733196.51 31589277.20

Long-term account payable V-36 28035082.11 30785082.11

Long-term wages payable V-37 129844482.80 154093044.28

Accrued liability V-38 38016428.52 10106268.87

Deferred income V-39 188773622.29 223123978.78

Deferred income tax liabilities V-20 37752122.87 40149550.99

Other non-current liabilities

Total non-current liabilities 759954935.10 727847202.23

Total liabilities 7902865030.77 10094206215.63

Owner’s equity:

Share capital V-40 1002162793.00 1008603293.00

Other equity instrument

Including: Preferred stock

Perpetual capital securitiesCapital reserve V-41 3308170140.96 3398368567.63

Less: inventory shares V-42 533289512.24 541623002.63

Other comprehensive income V-43 54156915.97 -911310.13

Reasonable reserve V-44 3641439.97 2119800.95

Surplus public reserve V-45 510100496.00 510100496.00

Retained profit V-46 15054950398.12 13320021325.90

Total owner’ s equity attributable to parent company 19399892671.78 17696679170.72

Minority interests 778330089.26 738027678.66

Total owner’ s equity 20178222761.04 18434706849.38

Total liabilities and owner’ s equity 28081087791.81 28528913065.01

The accompanying notes are parts of these financial statements

Legal representative:

Person in charge of accounting works:

Person in charge of accounting institute:Balance Sheet of Parent Company

Prepared by Weifu High-Technology Group Co. Ltd. In RMB

Assets Note Dec. 31 2023 Jan. 1 2023

Current assets:

Monetary funds 714826120.43 823574329.53

Trading financial assets 2251060973.85 2693150975.20

Derivative financial assets

Note receivable 23523055.70 29575852.04

Account receivable XVI-1 1384059380.88 906808283.22

Receivable financing 227811949.87 216462262.44

Accounts paid in advance 45875061.25 56037892.68

Other account receivable XVI-2 1370649392.28 1472102439.27

Including: Interest receivable 842323.12 206325.34

Dividend receivable

Inventories 549696080.27 571571431.95

Contract assets

Assets held for sale

Non-current assets maturing within

one year

Other current assets 11054042.33 107462112.82

Total current assets 6578556056.86 6876745579.15

Non-current assets:

Debt investment

Other debt investment

Long-term receivables

Long-term equity investments XVI-3 8008012424.29 8369843351.10

Investment in other equity

601850690.00601850690.00

instrument

Other non-current financial assets 804350120.06 1326608914.00

Investment real estate 34453448.06 35584279.11

Fixed assets 2376023503.55 2251495050.80

Construction in progress 218670126.54 251304655.41

Productive biological assets

Oil and natural gas assets

Right-of-use assets 4290695.37 6061693.75

Intangible assets 220397330.28 209246490.17

Research and development costs

Goodwill

Long-term deferred expenses 3759490.67 6895352.43

Deferred income tax assets 109441564.66 109624761.50Other non-current assets 731758973.92 168744695.04

Total non-current assets 13113008367.40 13337259933.31

Total assets 19691564424.26 20214005512.46

Liabilities and owner's equity (or

Dec. 31 2023 Jan. 1 2023

shareholder's equity)

Current liabilities

Short-term borrowings 480490722.23 2121354415.53

Trading financial liability

Derivative financial liability 737424.50

Notes payable 365959174.48 251867652.05

Account payable 1166435681.25 1048268519.52

Accounts received in advance

Contract liability 8548593.06 6564332.93

Wage payable 168228976.90 166314985.33

Taxes payable 5327449.07 6048505.30

Other accounts payable 216435787.01 926276130.15

Including: Interest payable 1123734.04 835069.83

Dividend payable

Liability held for sale

Non-current liabilities due within

28000984.474306935.71

one year

Other current liabilities 38294705.54 102322311.03

Total current liabilities 2477722074.01 4634061212.05

Non-current liabilities:

Long-term loans 299800000.00

Bonds payable

Including: preferred stock

Perpetual capital securities

Lease liability 1836800.62 2690812.43

Long-term account payable

Long term employee compensation

95678717.83121683760.89

payable

Accrued liabilities 10709925.00 13750.00

Deferred income 160462135.18 198149511.20

Deferred income tax liabilities

Other non-current liabilities

Total non-current liabilities 568487578.63 322537834.52

Total liabilities 3046209652.64 4956599046.57

Owners’ equity:Share capital 1002162793.00 1008603293.00

Other equity instrument

Including: preferred stock

Perpetual capital securities

Capital reserve 3412506010.91 3515005861.23

Less: Inventory shares 533289512.24 541623002.63

Other comprehensive income

Special reserve

Surplus reserve 510100496.00 510100496.00

Retained profit 12253874983.95 10765319818.29

Total owner’s equity 16645354771.62 15257406465.89

Total liabilities and owner’s equity 19691564424.26 20214005512.46

The accompanying notes are parts of these financial statements

Legal representative:

Person in charge of accounting works:

Person in charge of accounting institute:Consolidated Profit Statement

Prepared by Weifu High-Technology Group Co. Ltd. In RMB

Item Note 2023 2022

I. Total operating income V-47 11093141950.98 12729634917.03

Less: Operating cost V-47 9150312640.74 11016385488.80

Tax and extras V-48 64464506.58 70575584.89

Sales expense V-49 230571186.60 189528090.71

Administrative expense V-50 612096726.09 586386474.32

R&D expense V-51 667871159.95 581488711.88

Financial expense V-52 48040932.65 82327615.76

Including: Interest expenses 95145829.10 107737432.78

Interest income 40360794.63 41020724.48

Add: other income V-53 97464970.76 112665397.27

Investment income (Loss is listed with

V-54 1701990058.24 1849145500.50

“-”)

Including: Investment income on

1596392131.721636986684.96

affiliated company and joint venture

The termination of

income recognition for financial assets measured

by amortized cost(Loss is listed with “-”)

Net exposure hedging income (Loss is

listed with “-”)

Income from change of fair value (Loss

V-55 9767646.64 -157622752.09

is listed with “-”)

Loss of credit impairment (Loss is

V-56 -4402449.07 -1645881142.40

listed with “-”)

Losses of devaluation of asset (Loss is

V-57 -331275532.54 -181610433.12

listed with “-”)

Income from assets disposal (Loss is

V-58 128314484.53 1986804.53

listed with “-”)

III. Operating profit (Loss is listed with “-”) 1921643976.93 181626325.36

Add: Non-operating income V-59 17111807.24 5699768.04

Less: Non-operating expense V-60 4411191.85 7711660.06

IV. Total profit (Loss is listed with “-”) 1934344592.32 179614433.34

Less: Income tax expense V-61 21195062.23 -11331574.91

V. Net profit (Net loss is listed with “-”) 1913149530.09 190946008.25

(i) Classify by business continuity

1.continuous operating net profit (net loss

1913149530.09190946008.25

listed with “-”)

2.termination of net profit (net loss listed

with “-”)

(ii) Classify by ownership

1.Net profit attributable to owner’s of parent

1837291259.68118819836.30

company

2.Minority shareholders’ gains and losses 75858270.41 72126171.95

VI. Net after-tax of other comprehensive income V-62 55068226.10 35835034.47

Net after-tax of other comprehensive income

55068226.1035835034.47

attributable to owners of parent company

(i) Other comprehensive income items

which will not be reclassified subsequently to -1189898.59 -399165.06

profit of loss1.Changes of the defined benefit plans

-1189898.59-399165.06

that re-measured

2.Other comprehensive income under

equity method that cannot be transfer to gain/loss

3.Change of fair value of investment in

other equity instrument

4.Fair value change of enterprise's

credit risk

(ii) Other comprehensive income items

which will be reclassified subsequently to profit or 56258124.69 36234199.53

loss

1.Other comprehensive income under

equity method that can transfer to gain/loss

2. The effective portion of cash flow

hedging gains and losses

3.Change of fair value of other debt

investment

4.Amount of financial assets re-classify

to other comprehensive income

5.Credit impairment provision for other

debt investment

6.Cash flow hedging reserve

7.Translation differences arising on

translation of foreign currency financial 56258124.69 36234199.53

statements

8.Other

Net after-tax of other comprehensive income

attributable to minority shareholders

VII. Total comprehensive income 1968217756.19 226781042.72

Total comprehensive income attributable to

1892359485.78154654870.77

owners of parent Company

Total comprehensive income attributable to

75858270.4172126171.95

minority shareholders

VIII. Earnings per share:

(i) Basic earnings per share 1.88 0.09

(ii) Diluted earnings per share 1.88 0.09

The accompanying notes are parts of these financial statements

Legal representative:

Person in charge of accounting works:

Person in charge of accounting institute:Profit Statement of Parent Company

Prepared by Weifu High-Technology Group Co. Ltd. In RMB

Item Note 2023 2022

I. Operating income XVI-4 3568007626.04 3864504995.80

Less: Operating cost XVI-4 2860201219.79 3263994952.63

Taxes and surcharge 26020608.91 21016396.56

Sales expenses 37348009.82 24032764.17

Administration expenses 317148490.36 312390634.03

R&D expenses 256555205.86 215942706.30

Financial expenses 43029546.08 -47492346.99

Including: Interest expenses 70100281.69 75002506.86

Interest income 22232354.69 123450262.42

Add: other income 60045052.24 78660020.95

Investment income (Loss is listed with

XVI-5 1551999553.88 1698892386.70

“-”)

Including: Investment income on

1372133258.691427651731.23

affiliated Company and joint venture

The termination of income recognition

for financial assets measured by amortized cost

(Loss is listed with “-”)

Net exposure hedging income (Loss is

listed with “-”)

Changing income of fair value (Loss is

9325222.30-157794622.92

listed with “-”)

Loss of credit impairment (Loss is

599535.81-1645695111.31

listed with “-”)

Losses of devaluation of asset (Loss is

-71109221.75-94397143.24

listed with “-”)

Income on disposal of assets (Loss is

8262258.43208706.65

listed with “-”)

II. Operating profit (Loss is listed with “-”) 1586826946.13 -45505874.07

Add: Non-operating income 978746.24 236560.76

Less: Non-operating expense 1204343.16 1624603.88

III. Total profit (Loss is listed with “-”) 1586601349.21 -46893917.19

Less: Income tax 288204.25 -24338482.27

IV. Net profit (Net loss is listed with “-”) 1586313144.96 -22555434.92

(i)continuous operating net profit (net loss

1586313144.96-22555434.92listed with ‘-”)

(ii) termination of net profit (net loss listedwith ‘-”)

V. Net after-tax of other comprehensive income

(I) Other comprehensive income items

which will not be reclassified subsequently to

profit of loss

1.Changes of the defined benefit plans

that re-measured

2.Other comprehensive income under

equity method that cannot be transfer to gain/loss

3.Change of fair value of investment in

other equity instrument

4.Fair value change of enterprise's credit

risk(II) Other comprehensive income items

which will be reclassified subsequently to profit

or loss

1.Other comprehensive income under

equity method that can transfer to gain/loss

2. The effective portion of cash flow

hedging gains and losses

3.Change of fair value of other debt

investment

4.Amount of financial assets re-classify

to other comprehensive income

5.Credit impairment provision for other

debt investment

6.Cash flow hedging reserve

7.Translation differences arising on

translation of foreign currency financial

statements

8.Other

VI. Total comprehensive income 1586313144.96 -22555434.92

VII. Earnings per share:

(i) Basic earnings per share

(ii) Diluted earnings per share

The accompanying notes are parts of these financial statements

Legal representative:

Person in charge of accounting works:

Person in charge of accounting institute:Consolidated Cash Flow Statement

Prepared by Weifu High-Technology Group Co. Ltd. In RMB

Item Note 2023 2022

I. Cash flows arising from operating activities:

Cash received from selling commodities and

11815615875.9712431900362.84

providing labor services

Write-back of tax received 247423811.65 306395040.32

Other cash received concerning operating

V-63 304312552.49 3682848864.34

activities

Subtotal of cash inflow arising from operating

12367352240.1116421144267.50

activities

Cash paid for purchasing commodities and

8080288216.6910077477240.02

receiving labor service

Cash paid to/for staff and workers 1566762591.01 1384027081.31

Taxes paid 421031865.46 580286995.87

Other cash paid concerning operating

V-63 673019655.05 6955095599.73

activities

Subtotal of cash outflow arising from operating

10741102328.2118996886916.93

activities

Net cash flows arising from operating activities V-64 1626249911.90 -2575742649.43

II. Cash flows arising from investing activities:

Cash received from recovering investment 3313684345.66 10740023339.08

Cash received from investment income 2327386986.20 1183837077.82

Net cash received from disposal of fixed

146353685.0720576391.79

intangible and other long-term assets

Net cash received from disposal of

136787298.86

subsidiaries and other units

Other cash received concerning investing

V-63 18840000.00

activities

Subtotal of cash inflow from investing activities 5806265016.93 12081224107.55

Cash paid for purchasing fixed intangible

1113912460.111152415535.85

and other long-term assets

Cash paid for investment 3455088494.14 7116445479.00

Net cash received from subsidiaries and other

13716100.3370190329.71

units obtained

Other cash paid concerning investing

V-63 13036225.94 146232114.50

activities

Subtotal of cash outflow from investing activities 4595753280.52 8485283459.06

Net cash flows arising from investing activities 1210511736.41 3595940648.49

III. Cash flows arising from financing activities

Cash received from absorbing investment 125000000.00

Including: Cash received from absorbing 125000000.00minority shareholders’ investment by subsidiaries

Cash received from loans 2696375308.64 4692002243.34

Cash received from bonds

Other cash received concerning financing

V-63

activities

Subtotal of cash inflow from financing activities 2696375308.64 4817002243.34

Cash paid for settling debts 5372848659.59 2328551163.70

Cash paid for dividend and profit distributing

232202783.521761911157.57

or interest paying

Including: Dividend and profit of minority

40453107.5854977987.52

shareholder paid by subsidiaries

Other cash paid concerning financing

V-63 164632874.00 591370195.57

activities

Subtotal of cash outflow from financing activities 5769684317.11 4681832516.84

Net cash flows arising from financing activities -3073309008.47 135169726.50

IV. Influence on cash and cash equivalents due to

21416449.7527730942.53

fluctuation in exchange rate

V. Net increase of cash and cash equivalents V-64 -215130910.41 1183098668.09

Add: Balance of cash and cash equivalents at

V-64 2277117604.82 1094018936.73

the period -begin

VI. Balance of cash and cash equivalents at the

V-64 2061986694.41 2277117604.82

period -end

The accompanying notes are parts of these financial statements

Legal representative:

Person in charge of accounting works:

Person in charge of accounting institute:Cash Flow Statement of Parent Company

Prepared by Weifu High-Technology Group Co. Ltd. In RMB

Item 2023 2022

I. Cash flows arising from operating activities:

Cash received from selling commodities and

2992755592.933542749700.01

providing labor services

Write-back of tax received 125190524.09 184495154.77

Other cash received concerning operating

77926649.9747404163.66

activities

Subtotal of cash inflow arising from operating

3195872766.993774649018.44

activities

Cash paid for purchasing commodities and

1844781220.302601006413.32

receiving labor service

Cash paid to/for staff and workers 663056090.53 707858677.98

Taxes paid 141072774.09 209864912.81

Other cash paid concerning operating

253804167.34186707374.55

activities

Subtotal of cash outflow arising from operating

2902714252.263705437378.66

activities

Net cash flows arising from operating activities 293158514.73 69211639.78

II. Cash flows arising from investing activities:

Cash received from recovering investment 2492465818.32 7606003001.77

Cash received from investment income 2060589193.54 1230308621.08

Net cash received from disposal of fixed

14663395.447573333.23

intangible and other long-term assets

Net cash received from disposal of

subsidiaries and other units

Other cash received concerning investing

326061324.331345164876.69

activities

Subtotal of cash inflow from investing activities 4893779731.63 10189049832.77

Cash paid for purchasing fixed intangible and

641672060.41676750590.56

other long-term assets

Cash paid for investment 2112142787.05 5495846939.59

Net cash received from subsidiaries and other

units obtained

Other cash paid concerning investing

223723855.144200652968.77

activities

Subtotal of cash outflow from investing activities 2977538702.60 10373250498.92

Net cash flows arising from investing activities 1916241029.03 -184200666.15

III. Cash flows arising from financing activities

Cash received from absorbing investment

Cash received from loans 1795000000.00 2765016400.00

Cash received from bonds

Other cash received concerning financing

300000000.00668810047.94

activities

Subtotal of cash inflow from financing activities 2095000000.00 3433826447.94

Cash paid for settling debts 3107144800.00 926483000.00

Cash paid for dividend and profit distributing

153437599.421660892442.17

or interest paying

Other cash paid concerning financing

1137043447.66426203919.97

activities

Subtotal of cash outflow from financing activities 4397625847.08 3013579362.14-

Net cash flows arising from financing activities 420247085.80

2302625847.08

IV. Influence on cash and cash equivalents due to

3332858.579734626.92

fluctuation in exchange rate

V. Net increase of cash and cash equivalents -89893444.75 314992686.35

Add: Balance of cash and cash equivalents at

803410185.18488417498.83

the period -begin

VI. Balance of cash and cash equivalents at the

713516740.43803410185.18

period -end

The accompanying notes are parts of these financial statements

Legal representative:

Person in charge of accounting works:

Person in charge of accounting institute:Statement of Changes in Owners’ Equity (Consolidated)

Prepared by Weifu High-Technology Group Co. Ltd. Period: year 2023 In RMB

Owners’ equity attributable to the parent Company

Other

equity instrument

Not Other Perpet Less: Minority Total owners’ Item

e Capital comprehen Reasonabl Surplus Retained Share capital Preferr ual Inventory Subtotal interests equity

Oth reserve sive e reserve reserve profit

ed capital shares

er income

stock securiti

es

I. Balance

at the end 100860329 339836856 54162300 - 2119800. 51010049 1332002132 1769667917 73802767 1843470684

of the last 3.00 7.63 2.63 911310.13 95 6.00 5.90 0.72 8.66 9.38

year

Add:

Changes of

accounting

policy

Error

correction

of the last

period

Other

II. Balance

at the 100860329 339836856 54162300 - 2119800. 51010049 1332002132 1769667917 73802767 1843470684

beginning 3.00 7.63 2.63 911310.13 95 6.00 5.90 0.72 8.66 9.38

of this year

III.Increase/

Decrease in - -

-55068226.1521639.1734929072170321350140302410.1743515911

this year 90198426.6 8333490.3

6440500.001002.22.0660.66

(Decrease 7 9

is listed

with “-”)

(i) Total 55068226. 1837291259 1892359485 75858270. 1968217756

comprehen 10 .68 .78 41 .19

sive income

(ii)

---

Owners’ - 4072852.9 -

103260862.8333490.3101367872.3

devoted 6440500.00 4 97295019.45

7899

anddecreased

capital

1.Common

shares

71917549.-5000000.0-

invested by

6171917549.61066917549.61

shareholder

s

2.Capital

invested by

holders of

other equity

instruments

3. Amount

reckoned

-

into owners - -

30009672.7-929399.14

equity with 30009672.78 30939071.92

8

share-based

payment

--

-

4. Other 73251190.0 80251040. 559350.00 2252.08 561602.08

6440500.00

000

----

(III) Profit

102362187.4102362187.440453107.142815295.0

distribution

66584

1.

Withdrawal

of surplus

reserves

2.

Distributio

--

n for - -

40453107.138211086.8

owners (or 97757979.30 97757979.30

588

shareholder

s)

3. Other -4604208.16 -4604208.16 -4604208.16

(IV)

Carrying

forward

internal

owners’

equity

1. Capital

reserves

conversedto capital

(share

capital)

2. Surplus

reserves

conversed

to capital

(share

capital)

3.

Remedying

loss with

surplus

reserve

4.Carry-

over

retained

earnings

from the

defined

benefit

plans

5.Carry-

over

retained

earnings

from other

comprehen

sive income

6. Other

(V)

1521639.

Reasonable 1521639.02 201878.14 1723517.16

02

reserve

1.

Withdrawal 30768590 3311493.5

30768590.8534080084.35

in the report .85 0

period

2. Usage in

292469513109615.3

the report 29246951.83 32356567.19.836

period

13062436.1

(VI)Others 13062436.11 622516.69 13684952.80

IV. Balance 100216279 330817014 53328951 54156915. 3641439. 51010049 1505495039 1939989267 77833008 2017822276

at the end 3.00 0.96 2.24 97 97 6.00 8.12 1.78 9.26 1.04of the

report

period

The accompanying notes are parts of these financial statements

Legal representative:

Person in charge of accounting works:

Person in charge of accounting institute:Statement of Changes in Owners’ Equity (Consolidated)

Prepared by Weifu High-Technology Group Co. Ltd. Period: year 2022 In RMB

Owners’ equity attributable to the parent Company

Other

equity instrument

Not Other Perpet Less: Minority Total owners’ Item

e Capital comprehen Reasonabl Surplus Retained Share capital Preferr ual Inventory Subtotal interests equity

Oth reserve sive e reserve reserve profit

ed capital shares

er income

stock securiti

es

I. Balance -

at the end 100865957 337134417 27024979 51010049 1481478737 1939860768 56409406 1996270175

36746344.712215.31

of the last 0.00 2.82 7.74 6.00 7.86 9.65 5.82 5.47 60

year

Add:

Changes of

accounting

policy

Error

correction

of the last

period

Other

II. Balance -

at the 100865957 337134417 27024979 51010049 1481478737 1939860768 56409406 1996270175

36746344.712215.31

beginning 0.00 2.82 7.74 6.00 7.86 9.65 5.82 5.47 60

of this year

III.Increase/

Decrease in - - -

27024394.82713732035835034.1407585.17393361

this year -56277.00 1494766051 1701928518 1527994906

14.8947642.84

(Decrease .96 .93 .09

is listed

with “-”)

(i) Total

35835034.118819836.3154654870.772126171.226781042.7

comprehen

4707952

sive income

(ii)

Owners’ - -

27024394.82713732013082661

devoted -56277.00 244405087.0 113578476.2

14.890.83

and 8 5

decreasedcapital

1.Common

shares - -

3978045413000000

invested by 397804542.6 267804542.6

2.630.00

shareholder 3 3

s

2. Capital

invested by

holders of

other equity

instruments

3. Amount

reckoned

into owners 28116895.5

28116895.55826610.8328943506.38

equity with 5

share-based

payment

-

-125282560.0125282560.0

4. Other -56277.00 12643133

1092500.7400

7.74

----

(III) Profit

1613585888161358588829306887.1642892775

distribution .26 .26 52 .78

1.

Withdrawal

of surplus

reserves

2.

Distributio - - - -

n for

1609059668160905966829306887.1638366556

owners (or .80 .80 52 .32

shareholder

s)

3. Other -4526219.46 -4526219.46 -4526219.46

(IV)

Carrying

forward

internal

owners’

equity

1. Capital

reserves

conversedto capital

(share

capital)

2. Surplus

reserves

conversed

to capital

(share

capital)

3.

Remedying

loss with

surplus

reserve

4.Carry-

over

retained

earnings

from the

defined

benefit

plans

5.Carry-

over

retained

earnings

from other

comprehen

sive income

6. Other

(V)

1407585.

Reasonable 1407585.64 287717.58 1695303.22

64

reserve

1.

Withdrawal 26087086 2700074.0

26087086.3428787160.37

in the report .34 3

period

2. Usage in

246795002412356.4

the report 24679500.70 27091857.15.705

period

(VI)Others

IV. Balance 100860329 339836856 54162300 - 2119800. 51010049 1332002132 1769667917 73802767 1843470684

at the end 3.00 7.63 2.63 911310.13 95 6.00 5.90 0.72 8.66 9.38of the

report

period

The accompanying notes are parts of these financial statements

Legal representative:

Person in charge of accounting works:

Person in charge of accounting institute:Statement of Changes in Owners’ Equity (Parent Company)

Prepared by Weifu High-Technology Group Co. Ltd. Period: year 2023 In RMB

Other equity instrument

Other

Perpetual Less: Inventory Reasonable Total owners’ Item Note Share capital Preferred Capital reserve comprehensive Surplus reserve Retained profit

capital Other shares reserve equity

stock income

securities

I. Balance at

the end of the 1008603293.00 3515005861.23 541623002.63 510100496.00 10765319818.29 15257406465.89

last year

Add: Changes

of accounting

policy

Error

correction of

the last period

Other

II. Balance at

the beginning 1008603293.00 3515005861.23 541623002.63 510100496.00 10765319818.29 15257406465.89

of this year

III. Increase/

Decrease in

this year -6440500.00 -102499850.32 -8333490.39 1488555165.66 1387948305.73

(Decrease is

listed with “-”)

(i) Total

comprehensive 1586313144.96 1586313144.96

income

(ii) Owners’

devoted and

-6440500.00-104190261.92-8333490.39-102297271.53

decreased

capital

1.Common

shares invested

71917549.61-71917549.61

by

shareholders

2. Capital

invested by

holders of

other equity

instruments

3. Amount

reckoned into

-30939071.92-30939071.92

owners equity

with share-based payment

4. Other -6440500.00 -73251190.00 -80251040.00 559350.00

(III) Profit -97757979.30 -97757979.30

distribution

1. Withdrawal

of surplus

reserves

2. Distribution

for owners (or -97757979.30 -97757979.30

shareholders)

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.Carry-over

retained

earnings from

the defined

benefit plans

5.Carry-over

retained

earnings from

other

comprehensive

income

6. Other

(V)

Reasonable

reserve

1. Withdrawal 6474505.00 6474505.00

in the reportperiod

2. Usage in the 6474505.00 6474505.00

report period

(VI)Others 1690411.60 1690411.60

IV. Balance at

the end of the 1002162793.00 3412506010.91 533289512.24 510100496.00 12253874983.95 16645354771.62

report period

The accompanying notes are parts of these financial statements

Legal representative:

Person in charge of accounting works:

Person in charge of accounting institute:Statement of Changes in Owners’ Equity (Parent Company)

Prepared by Weifu High-Technology Group Co. Ltd. Period: year 2022 In RMB

Other equity instrument

Other

Less: Inventory Reasonable Total owners’

Item Note Share capital Perpetual Capital reserve comprehensive Surplus reserve Retained profit

Preferred shares reserve equity

capital Other income

stock

securities

I. Balance at

the end of the 1008659570.00 3487154855.59 270249797.74 510100496.00 12396934922.01 17132600045.86

last year

Add: Changes

of accounting

policy

Error

correction of

the last period

Other

II. Balance at

the beginning 1008659570.00 3487154855.59 270249797.74 510100496.00 12396934922.01 17132600045.86

of this year

III. Increase/

Decrease in

this year -56277.00 27851005.64 271373204.89 -1631615103.72 -1875193579.97

(Decrease is

listed with “-”)

(i) Total

comprehensive -22555434.92 -22555434.92

income

(ii) Owners’

devoted and

-56277.0027851005.64271373204.89-243578476.25

decreased

capital

1.Common

shares invested

397804542.63-397804542.63

by

shareholders

2. Capital

invested by

holders of

other equity

instruments

3. Amount

reckoned into

28943506.3828943506.38

owners equity

with share-based payment

-

4. Other -56277.00 -1092500.74 125282560.00

126431337.74

(III) Profit -1609059668.80 -1609059668.80

distribution

1. Withdrawal

of surplus

reserves

2. Distribution

for owners (or -1609059668.80 -1609059668.80

shareholders)

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.Carry-over

retained

earnings from

the defined

benefit plans

5.Carry-over

retained

earnings from

other

comprehensive

income

6. Other

(V)

Reasonable

reserve1. Withdrawal

in the report 6791507.46 6791507.46

period

2. Usage in the 6791507.46 6791507.46

report period

(VI)Others

IV. Balance at

the end of the 1008603293.00 3515005861.23 541623002.63 510100496.00 10765319818.29 15257406465.89

report period

The accompanying notes are parts of these financial statements

Legal representative:

Person in charge of accounting works:

Person in charge of accounting institute:Notes to Financial Statement

I . 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 115.4355 million yuan including

state-owned share capital amounting to 92.4355 million yuan public corporate share capital amounting to 8 million

yuan and inner employee share capital amounting to 15 million yuan.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 1.00 yuan for each and the total value of those shares

amounted to 68 million yuan. After the issuance the Company’s total share capital increased to 183.4355 million

yuan.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 303.4355 million yuan.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 394.46615 million yuan of which state-owned shares amounted to 120.16615 million yuan public

corporate shares 10.4 million yuan foreign-funded shares (B-share) 88.40 million yuan RMB ordinary shares (A-

share) 156 million yuan and inner employee shares 19.5 million yuan.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 10 yuan

for each allotted share. Actually 41.9 million shares was allotted and the total share capital after the allotment

increased to 436.36615 million yuan of which state-owned corporate shares amounted to 121.56615 million yuan

public corporate shares 10.4 million yuan foreign-funded shares (B-share) 88.4 million yuan and RMB ordinary

shares (A-share) 216 million yuan.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 May 27 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 MergerReform 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 February 2012 the Company issued

RMB ordinary shares (A-share) of 112858000 shares to Wuxi Industry Groups and overseas strategic investor

privately Robert Bosch Co. Ltd. (ROBERT BOSCHGMBH) (hereinafter referred to as Robert Bosch Company)

face value was ONE yuan per share added registered capital of 112858000 yuan and the registered capital after

change was 680133995 yuan. 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 1020200992 yuan up to December 31 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.After deliberation and approved by the 5th meeting of 10th session of the BOD for year of 2021 the 291000 restricted

shares are buy-back and canceled by the Company initially granted under the 2020 Restricted Share Incentive Plan.The cancellation of the above mentioned buy-back shares are completed at the Shenzhen Branch of CSDC on

December 20 2021; the paid-in capital (equity) of the Company comes to 1008659570.00 yuan after changed.After deliberation and approved by the 8th meeting of 10th session of the BOD for year of 2022 the 56277 restricted

shares are buy-back and canceled by the Company initially granted under the 2020 Restricted Share Incentive Plan.The cancellation of the above mentioned buy-back shares are completed at the Shenzhen Branch of CSDC on July

8 2022; the paid-in capital (equity) of the Company comes to 1008603293.00 yuan after changed.

In 2023 deliberated and approved by the 14th 16th and 20th meetings of the 10th session of the Board of Directors

the company bought back and canceled 430000 5593500 and 417000 restricted shares granted for the first time

under the 2020 Restricted Stock Incentive Plan. The company completed the cancellation procedures for the bought

back shares on February 16 2023 June 16 2023 and December 18 2023 at the Shenzhen branch of China Securities

Depository and Clearing Corporation Limited. The company's paid in capital (share capital) after the change was

RMB 1002162793.00.

2. Registered place organization structure and head office of the Company

Registered place and head office of the Company: No.5 Huashan Road Xinwu District Wuxi

Unified social credit code: 91320200250456967N

The Company sets up Shareholders’ General Meeting the Board of Directors (BOD) and the Board of Supervisors

(BOS) .The Company sets up Administration Department Technology Centre organization & personnel department Office

of the Board compliance department IT department Strategy & new business Department market development

department Party-masses Department Finance Department Purchase DepartmentManufacturing Quality

Department MS (Mechanical System) division AC(Automotive Components) division and DS (Diesel System )

division etc. and subsidiaries such as Wuxi Weifu LIDA Catalytic Converter Co. Ltd Nanjing WFJN Co. Ltd

IRD Fuel Cells A/S and Borit NV etc.

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) automotive 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. Research and test

development of engineering and technical; R&D of the energy recovery system; manufacture of auto components

and accessories; general equipment manufacturing (excluding special equipment manufacturing) (any projects that

needs to be approved by laws can only be carried out after getting approval by relevant authorities) General items:

engage in investment activities with self-owned funds (except for items subject to approval according to the law

independently carry out business activities according to laws with business licenses )

Major subsidiaries respectively activate in production and sales of engine accessories automotive components

mufflers purifiers and fuel cell components etc.

4. Authorized reporting parties and reporting dates for the financial report

Financial report of the Company was approved by the Board of Directors for reporting dated April 15 2024.

5. Unless otherwise stated in the notes to these financial statements the following company

names are abbreviated as follows:

Name of subsidiary Short name of subsidiary

Nanjing WFJN Co. Ltd. WFJN

Wuxi Weifu Lida Catalytic Converter Co. Ltd. WFLD

Wuxi Weifu Nanshan Fuel Injection Equipment Co. Ltd. WFMA

Wuxi Weifu Chang’an Co. Ltd. WFCA

Wuxi Weifu International Trade Co. Ltd. WFTR

Wuxi Weifu Schmitter Powertrain Components Co. Ltd. WFSC

Ningbo WFTT Turbocharging Technology Co. Ltd. WFTT

Wuxi WFAM Precision Machinery Co. Ltd. WFAM

WFLD

Wuxi Weifu LIDA Catalytic Converter(Wuhan) Co. Ltd.(Wuhan)

WFLD

Weifu Lida (Chongqing) Automotive Components Co. Ltd.

(Chongqing)

WFLD

Nanchang Weifu LIDA Automotive Components Co. Ltd.(Nanchang)

Wuxi Weifu Autosmart Seating System Co. Ltd. WFAS

Wuxi Weifu E-drive Technologies Co. Ltd. WFDTName of subsidiary Short name of subsidiary

Wuxi Weifu Qinglong Power Technology Co. Ltd. WFQL

VHIT Automotive Systems(Wuxi) Co.Ltd VHWX

Weifu Holding ApS SPV

IRD Fuel Cells A/S IRD

IRD FUEL CELLS LLC IRD America

Borit NV Borit

Borit Inc. Borit America

VHIT S.p.A VHIO

II. Basis of Preparation of Financial Statements

1. Preparation base

The financial statements are stated in compliance with Accounting Standard for Business Enterprises –Basic Norms

issued by the Ministry of Finance the specific accounting rules revised and issued dated Feb. 15 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 2023) 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

Accrued basis. Except for certain financial instruments the financial statement measured on historical cost. Assets

have impairment been found corresponding depreciation reserves shall Accrued 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.III. Major Accounting Policies and Estimation

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

automotive components mufflers purifiers and fuel cell components etc. in line with the actual 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 III- 34. Changes of important accounting policies and

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 datedDecember 31 2023 such as financial status operation achievements and cash flow for the year of 2023.

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

January 1 to December 31.

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 recording currency is the RMB yuan.

5. Method for determining importance criteria and selection criteria

□Applicable □ Not applicable

Item Importance criteria

Important prepayments with an Prepayment with aging over 1 year accounting for more than 10% of the total

aging of over 1 year prepaid amount and with an amount greater than 15 million yuan

Important construction in

The budget for a single project is greater than 80 million yuan

progress

Important accounts payable Account payable with aging over 1 year accounting for more than 10% of the

with an aging of over 1 year total accounts payable and with an amount greater than 80 million yuan

Other important payables with Other payables with aging over 1 year accounting for more than 10% of the

aging of over 1 year total other payables and an amount greater than 15 million yuan

Important contract liabilities Contract liabilities with aging over 1 year account for more than 10% of the

with aging of over 1 year total contract liabilities and the amount greater than 15 million yuan

The net assets of subsidiaries account for more than 5% of the net assets in the

Important non-wholly-owned

consolidated financial statements or the net profit of subsidiaries accounts for

subsidiaries

more than 10% of the net profit in the consolidated financial statements

The book value of long-term equity investments in an invested entity accounts

for more than 5% of the net assets in the consolidated financial statements and

Important joint ventures or

the amount exceeds 1 billion yuan or the investment gains/losses under the

associates

equity method account for more than 10% of the net profits in the consolidated

financial statements and the amount exceeds 100 million yuan

6. 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 bycombining party are measured by book value of the combined party on combination date. The balance of net asset’s

book value acquired by combining party and combine consideration paid (or total book value of the shares issued)

shall be used to adjust capital reserve (share premium); if the capital reserve (share premium) is not enough for

deducted the retained earnings shall be adjusted. directly expenses occurred for enterprise combination The

combining party shall reckon expenses directly occurring for enterprise combination into current gains/losses at the

time of occurrence. Combination day is the date when the combining party obtains 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 the 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 shall be 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.

7. Criteria for judging control and preparation method for consolidated financial statement

(1) Criteria for judging control

The consolidation scope of the consolidated financial statements is determined based on control. Control refers to

the company having the power over the invested entity enjoying variable returns through participating in related

activities of the invested entity and having the ability to use the power over the invested entity to influence its return

amount. When changes in relevant facts and circumstances result in changes in the relevant elements involved in the

definition of control the company will conduct a reassessment.When determining whether to include a structured entity in the scope of consolidation our company takes into

account all facts and circumstances including evaluating the purpose and design of the establishment of the

structured entity identifying the types of variable returns and evaluating whether to control the structured entity by

participating in its related activities and assuming some or all of the variability of returns.

(2) Preparation method for consolidated financial statements

(1) Recognition principle of consolidation 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) 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 transactionsand 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. Subsequentmeasurement 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 package deal. When the economic effects and terms and conditions of the disposal transactions meet one

or more of the following situations the transactions shall normally be accounted for as package deal: * The

transactions are entered into after considering the mutual consequences of each individual transaction; * The

transactions need to be considered as a whole in order to achieve a deal in commercial sense;* The occurrence of

an individual transaction depends on the occurrence of one or more individual transactions in the series; * 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 as package deal the individual transactions shall

be accounted as “disposal of a portion of an interest in a subsidiary which does not lead to loss of control” and

“disposal of a portion of an interest in a subsidiary which lead to loss of control”. When the transactions are regarded

as package deal 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.

8. 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.

9. Recognition 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.

10. Foreign currency business and conversion

For foreign currency transactions convert the foreign currency amount into the accounting base currency amount.At the initial recognition of foreign currency transactions the foreign currency amount shall be converted into the

accounting base currency amount with the spot exchange rate on the transaction date. On the balance sheet date the

foreign currency monetary items shall be converted with the spot exchange rate on the balance sheet date. Thesettlement and monetary item discount differences arising from this are recognized in the current period's profit and

loss except for the differences arising from foreign currency special borrowings related to the acquisition and

construction of assets that meet capitalization conditions and are treated according to the principle of borrowing cost

capitalization. Foreign currency non-monetary items measured at historical cost shall be still converted with the

exchange rate used at the initial recognition without changing their accounting base currency amount. Foreign

currency non- monetary items measured at fair value shall be converted with the spot exchange rate on the fair value

determination date and the resulting differences are recognized in the current period’s profit and loss. The

subsequent difference shall be booked into current profit or loss or other comprehensive income in terms of the

feature of non-monetary items.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 thespot exchange rates on the balance sheet date. Among the owners’ equity items the items other than “undistributedprofits” 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.

11. Financial instrument

Financial instrument is the contract that forms the financial asses for an enterprise and forms the financial liability

or equity instrument for other units.

(1) Classification and initial measurement

The company recognizes a financial asset or liability when it becomes a party to a financial instrument contract.

1) Classification and initial measurement of financial assets

At the initial recognition according to the business model of managing financial assets and the contractual cash flow

characteristics of financial assets the Company classifies the financial assets into the financial assets measured at

amortized cost the financial assets measured at fair value and whose changes are included in other comprehensive

income and the financial assets measured at fair value and whose changes are included in current profit or loss.Financial assets are measured at fair value for the initial recognition but if the receivables or receivables financing

arising from the sale of goods or the provision of services do not include a significant financing component or the

financing component that does not exceed one year isn’t considered it shall be initially measured at the transaction

value.For financial assets measured at fair value and whose changes are included in the current profit or loss related

transaction costs are directly included in the current profit and loss; for other types of financial assets related

transaction costs are included in the initially recognized amount.

2)Classification and initial measurement of financial liabilities

The financial liabilities of the Company are classified as financial liabilities measured at fair value and whosechanges are included in current profit or loss and financial liabilities measured at amortized cost at the initial

recognition. For financial liabilities that are not classified as financial liabilities measured at fair value and whose

changes are included in current profit or loss the related transaction expenses are included in the initial recognition

amount.

(2) Subsequent measurement

1) The subsequent measurement of financial assets depends on their classification:

* Financial assets measured at amortized cost

The Company classifies the financial assets that meet the following conditions and are not designated as financial

assets measured at fair value and whose changes are included in current profit or loss as financial assets measured

at amortized cost:

A. The group’s business model for managing the financial assets is to collect contractual cash flows; and

B. The contractual terms of the financial assets stipulate that cash flow generated on a specific date will be only used

to pay for the principal and interest based on the outstanding principal amount.After initial recognition such financial assets are measured at amortized cost with the effective interest method.Gains or losses arising from financial assets which are measured at amortized cost and are not a component of any

hedging relationship are included in current profit or loss when being terminated for recognition amortized by

effective interest method or impaired.* Financial assets measured at fair value and whose changes are included in other comprehensive income

The Company classifies the financial assets that meet the following conditions and are not designated as financial

assets measured at fair value and whose changes are included in current profit or loss as financial assets measured

at fair value and whose changes are included in other comprehensive income:

A. The Group's business model for managing the financial assets is targeted at both the collection of contractual cash

flows and the sale of financial assets; and

B. The contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only used

to pay for the principal and the interest based on the outstanding principal amount.After initial recognition such financial assets are subsequently measured at fair value. Interests impairment losses

or gains and exchange gains and losses calculated with the effective interest method are included in profit or loss for

the period and other gains or losses are included in other comprehensive income. At the time of derecognition the

accumulated gains or losses previously included in other comprehensive income shall be carried forward from other

comprehensive income to current profit or loss.* Financial assets measured at fair value and whose changes are included in current profit or loss

Except for the above financial assets measured at amortized cost and measured at fair value and whose changes are

included in other comprehensive income the Company classifies all other financial assets as financial assets

measured at fair value and whose changes are included in current profit or loss. In the initial recognition in order to

eliminate or significantly reduce accounting mismatch the Company irreversibly designates part of the financial

assets that should be measured at amortized cost or measured at fair value and whose changes are included in the

other comprehensive income as the financial assets measured at fair value and whose changes are included in current

profit or loss.After the initial recognition such financial assets are subsequently measured at fair value and the gains or losses

(including interests and dividend income) are included in the current profit and loss unless the financial assets are

part of the hedging relationship.However for non-trading equity instrument investments the Company irreversibly designates them as the financial

assets that are measured at fair value and whose changes are included in other comprehensive income in the initial

recognition. The designation is made based on a single investment and the relevant investment is in line with the

definition of equity instruments from the issuer’s perspective. After initial recognition such financial assets are

subsequently measured at fair value. Dividend income that meets the conditions is included in profit or loss and

other gains or losses and changes in fair value are included in other comprehensive income. When it is terminated

for recognition the accumulated gains or losses previously included in other comprehensive income are transferred

from other comprehensive income and included in retained earnings.

2) The subsequent measurement of financial liabilities depends on their classification：

* Financial liabilities measured at fair value and with variation reckoned into current gains/losses

Financial liabilities measured at fair value and with variation reckoned into current gains/losses include tradable

financial liabilities and the financial liabilities that are designated as fair value in the initial recognition and whose

changes are included in current profit or loss. For such financial liabilities the subsequent measurement is based on

fair value and the gains or losses arising from changes in fair value and the dividends and interest expenses related

to these financial liabilities are included in current profit or loss.* Financial liability measured at amortized cost

Other financial liabilities are subsequently measured at amortized cost with the effective interest method. The gain

or loss arising from de-recognition or amortization is included in current profit or loss.

(3) Transfer and derecognition of financial instruments

1) Transfer and derecognition of financial assets

For financial assets that the Company has transferred almost all risks and rewards of ownership of financial assets

to the transferee terminate the recognition of the financial assets; if almost all the risks and rewards of ownership of

financial assets have been retained do not terminate the recognition of the financial assets.If the Company has neither transferred nor retained almost all the risks and rewards of ownership of financial assets

dispose as following situations: If the control of the financial assets is abandoned terminate the recognition of the

financial assets and determine the resulting assets and liabilities. If the control of the financial assets is not abandoned

determine the relevant financial assets according to the extent to which they continue to be involved in the transferred

financial assets and determine the related liabilities accordingly.For those who continue to be involved by providing financial guarantees for the transferred financial assets the

assets formed by further involvement shall be recognized based on the lower of the book value of the financial assets

and the amount of financial guarantees. The financial guarantee amount refers to the highest amount of consideration

received that will be required to be repaid.

2) General principles for derecognition of financial instruments

If the following conditions are met the company will derecognize the financial assets (or a portion of financial assets

or a group of similar financial assets) that is charge off them from their accounts and balance sheets:

* The right to receive cash flows from financial assets has expired;

* The right to receive cash flows from financial assets has been transferred or assume the obligation to timely and

fully pay the cash flows received to the third party under a “pass-through agreement”; and (a) substantiallytransferred almost all the risks and rewards of ownership of the financial asset or (b) relinquished control over the

financial asset even though substantially neither transferred nor retained almost all the risks and rewards of

ownership of the financial asset.In case the liability for financial liabilities has been fulfilled revoked or expired such financial liabilities shall be

derecognized. If the existing financial liability is replaced by another financial liability with substantially different

terms by the same creditor or if the terms of the existing liability are substantially modified such replacement or

modification shall be treated as derecognition of the original liability and recognition of new liability and the

difference shall be booked into the current period’s profit and loss.The financial assets which are bought or sold in a conventional manner shall be recognized or derecognized

according to the accounting on the transaction date. Buying and selling financial assets in a conventional manner

refers to the purchase or sale of financial assets in accordance with contractual provisions and the terms of the

contract stipulate that financial assets are delivered according to the time schedule usually determined by regulations

or market practices. The trading day refers to the date on which the company promises to buy or sell financial assets.

(4) Balance-out between the financial assets and liabilities

As the company has the legal right to balance out the financial liabilities by the net or liquidation of the financial

assets the balance-out sum between the financial assets and liabilities is listed in the balance sheet. In addition the

financial assets and liabilities are listed in the balance sheet without being balanced out.

(5) Fair value of financial instruments

For financial instruments with active markets their fair value shall be determined based on their quoted prices in the

active market. For financial instruments that do not have an active market their fair value shall be determined with

valuation techniques. At the time of valuation the company adopts valuation techniques that are applicable in the

current situation and have sufficient available data and other information support selects input values that are

consistent with the asset or liability characteristics considered by market participants in the transaction of related

assets or liabilities and uses relevant observable input values as much as possible and use unobservable input values

when relevant observable input values cannot be obtained or are not feasible.

(6) Impairment of financial instruments

Based on expected credit losses the company withdraws provisions for impairment loss and recognizes credit

impairment losses for financial assets measured at amortized cost debt instrument investments measured at fair

value with changes recognized in other comprehensive income and financial guarantee contracts.For accounts receivable bills receivable and accounts receivable financing that do not contain significant financing

components the company adopts a simplified measurement method to measure the provision for impairment losses

based on the expected credit loss amount in the entire existence period.For accounts receivable notes receivable and accounts receivable financing that contain significant financing

components the company chooses to use a simplified measurement method to measure the provision for losses based

on the expected credit loss amount equivalent to the entire existence period.For financial assets other than those using simplified measurement methods mentioned above the Company assesses

on each balance sheet date whether their credit risk has significantly increased since initial recognition. If credit risk

has not significantly increased since initial recognition and is in the first stage the Company measures loss provisions

based on the expected amount of credit loss in the next 12 months; If credit risk has significantly increased since

initial recognition but credit impairment has not yet occurred and is in the second stage the company measures the

provision for losses at an amount equivalent to the expected credit loss for the entire existence period; Financial

instruments that have experienced credit impairment since initial recognition are in the third stage and the companymeasures the provisions for impairment loss based on expected credit losses over the entire existence period.For financial instruments with lower credit risk on the balance sheet date the Company assumes that their credit risk

has not significantly increased since initial recognition and measures loss provisions based on expected credit losses

over the next 12 months.Except for accounts receivable that are individually assessed for credit risk our company divides other accounts

receivable into several portfolios based on credit risk characteristics and calculates expected credit losses on the

basis of these combinations.Accounts receivable that are individually assessed for credit risk such as those in dispute with the other party or

involved in litigation or arbitration; there are clear indications that the debtor may not be able to fulfill their

repayment obligations for accounts receivable etc.Due to similar credit risk characteristics no provision for bad debts is made for accounts receivable between

companies within the scope of our consolidated financial statements that have no impairment in a single test.Except for separately evaluating credit risk accounts receivable the company divides accounts receivable into

different portfolios based on common risk characteristics and evaluates credit risk on the basis of the portfolio. The

specific basis for determining different portfolios and methods for measuring expected credit losses are as follows:

Basis for determining the

Item Specific methods for measuring expected credit losses

portfolio

For accounts receivable within six months the company does

Accounts

not provide for expected credit losses; In addition the

receivable

company believes that the credit risk of the bank acceptance

financing -

Bank acceptance bill bills it holds is relatively low and will not cause significant

bank

losses due to bank defaults. Therefore the expected credit

acceptance

losses shall not be measured for the corresponding

bill portfolio

receivables financing bank acceptance portfolio.For accounts receivable within six months the company does

not provide for expected credit losses; In addition the credit

Accounts risk of the commercial acceptance bills held by our company

receivable - is relatively low as these bills are mainly issued by reputable

commercial Commercial acceptance bill automobile manufacturers. Based on historical experience

acceptance there have been no significant defaults. Therefore the

bill portfolio company doesn’t measure expected credit losses for the

portfolio of accounts receivable and commercial acceptance

bills

Accounts receivable other

Accounts than accounts receivable from

Receivable - internal related parties and

Measure expected credit losses based on aging

Customer those for which credit

Portfolio impairment losses have been

individually provisioned

Other receivables except for

Other Based on historical credit loss experience combined with

accounts receivable from

receivables - current conditions and predictions of future economic internal related parties and

accounts conditions the expected credit loss is calculated by default

accounts for which credit

receivable risk exposure and the expected credit loss rate for the next

impairment losses have been

other portfolio 12 months or the entire duration. individually provisioned

For accounts receivable that are measured for expected credit losses based on their aging their aging is calculated

continuously from the initial recognition date of the debt. The corresponding provision ratio for expected credit

losses at different aging stages is as follows:

Aging Provision ratio (%)

Within 6 months

6 months - 1 year 10.00

1 - 2 years 20.00

2 -3 years 40.00Over three years 100.00

12. Receivable financing

The note receivable and account receivable which are measured at fair value and whose changes are included in

other comprehensive income are classified as receivables financing within one year(inclusive) from the date of

acquisition. Refer to more relevant accounting policies in Note III. 11. “Financial Instrument”.

13. Contract assets

Recognition method and standard of contract assets: contract assets refer to the right of a company to receive

consideration after transferring goods or providing services to customers and this right depends on other factors

besides the passage of time. The company's unconditional (that is only depending on the passage of time) right to

collect consideration from customers are separately listed as receivables.Method for determining expected credit losses of contract assets: the method for determining expected credit losses

of contract assets is consistent with the method for determining expected credit losses of accounts receivable.Accounting treatment method of expected credit losses of contract assets: if the contract assets are impaired the

company shall debit the “asset impairment loss” account and credit the “contract asset impairment provision”

account according to the amount that should be written down. When reversing the provision for asset impairment

that has already been withdrawn make opposite accounting entries.

14. Inventory

(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

The cost of inventory at the time of acquisition and delivery is calculated according to the standard cost method and

the difference in cost that it should bear is carried forward at the end of the period and the standard cost is adjusted

to the actual cost.

(3) Recognition evidence for net realizable value of inventories and withdrawal method for inventory impairment

provision

Inventories 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 withdrawn 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 systemThe company adopts a perpetual inventory system and conducts regular physical inventory checks.

(5) Amortization of low-value consumables and wrappage

* Low-value consumables

The Company adopts one-off amortization method to amortize the low-value consumables.* Wrappage

The Company adopts one-off amortization method to amortize the wrappage at the time of receipt.

15. 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 their 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 firstly deduct the carrying value of the

goodwill in the disposal group 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 assets 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.

16. Long-term equity investment

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 and with variation reckoned into current gains/losses. As for other accounting policies found more in

Note III-11 “Financial instrument”

(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:

* For 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 resulting 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 treated as “package deal”.If they belong to “package deal” these transactions will be accounted for a transaction in obtaining control. If they

are not belonging to “package deal” 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.* For the long-term equity investment obtained by business combination not under the same control the fair value

of the assets involved the equity instruments issued and the liabilities incurred or assumed on the transaction date

plus the combined cost directly related to the acquisition is used as the initial investment cost of the long-term equity

investment. The identifiable assets of the combined party and the liabilities (including contingent liabilities) assumed

by the combined party on the combining date are all measured at fair value regardless of the amount of minority

shareholders’ equity. The amount of the combined cost exceeding the fair value of the identifiable net assets of thecombined party obtained by the Company is recorded as goodwill and the amount below the fair value of the

identifiable net assets of the combining party is directly recognized in the consolidated income statement.(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 “package deal”. If they belong to “package deal” these transactions will be accounted for a

transaction in obtaining control. If they are not belonging to “package deal” 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.)

* Long-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

* Presented controlling ability on invested party the investment shall use cost method for measurement.* Long-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 in-conformity 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 itsassociates 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 relevant transaction 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.* Acquisition 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.* Disposal 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 be accounted for inaccordance with the relevant accounting policies as described in Note III-7 “Criteria for judging control andpreparation method for consolidated financial statement”.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 equitymethod 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 “package deal” 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) 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. When determining

whether there is joint control firstly judge whether all the participants or participant group have controlling oversuch arrangement as a group or not and then judge 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.When determining whether significant influence can be exerted on the invested entity 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 considered.

17. Investment real estate

Measurement model of investment real estate

Cost measurement

Depreciation or amortization

Investment real estate is stated at cost. 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 investment real estate is subsequently measured by the Company with cost method. The depreciation and

amortization is calculated with the straight-line method on the basis of their estimated useful lives.

18. Fixed assets

(1) Recognition conditions

Fixed assets refer to the tangible assets for production of products provision of labor lease or operation with a

service life longer than one year and higher unit value.

(2) Depreciation methods

Category Years of depreciation Scrap value rate Yearly depreciation rate

Permanent ownership land Indefinite No depreciation

House and building 20~35 5% 2.71~4.75

Machinery equipment 10 5% 9.50

Transportation equipment 4~5 5% 19.00~23.75

Electronic and other equipment 3～10 5% 9.50～31.67

For the fixed assets with impairment provision the depreciation amount shall be calculated after deducting the

accumulated amount of impairment provision for fixed assets

Our company shall review the useful life estimated net residual value and depreciation method of fixed assets at

least at the end of each fiscal year and make necessary adjustments.19. Construction in progress

From the date on which the fixed assets built by the Company come into an expected usable state the construction

in progress 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.

20. Borrowing cost

(1) Recognition of capitalization of borrowing cost

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:

* Capital expenditure has been occurred;

* Borrowing costs have been occurred;

* 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) Measurement 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

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.21. Intangible assets

(1) Service life and its determination basis estimate amortization method or review

procedure

(1) Service life and its determination basis estimate amortization method or review procedure

* Measurement of intangible assets

The intangible assets of the Company include 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.* Amortization methods and time limit for intangible assets:

The land use rights of the company shall be amortized on an average basis over the transfer period from the date of

transfer (the date of obtaining the land use rights); Patented technology non-patented technology and other

intangible assets of the Company are amortized by straight-line method 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.Our company shall review the useful life and amortization method of intangible assets at least at the end of each

fiscal year and make necessary adjustments.

(2) The collection scope and related accounting treatment methods of R&D expenditure

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):

* It is technically feasible that the intangible asset can be used or sold upon completion;

* There is intention to complete the intangible asset for use or sale;

* The products produced using the intangible asset has a market or the intangible asset itself has a market;

* 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;

* 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.22. Impairment of long-term assets

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.

23. Long-term deferred expense

Long-term expenses to be amortized of the Company implies 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.

24. Contract liability

The Company lists the obligation to transfer goods or provide labor services to customers for the consideration

received or receivable from customers as contractual liabilities such as the amount that the company has received

before the transfer of the promissory goods.25. Employee compensation

(1) Accounting treatment for short-term compensation

During the accounting period when the staff provides service to the Company the short-term remuneration actual

occurred shall be recognized as liability and be reckoned into current gains/losses. During the accounting period

when staff provides service to the Company the actual short-term compensation occurred shall be recognized as

liabilities and be reckoned into current gains/losses except for those in line with accounting standards or being

allowed to be reckoned into capital costs; the welfare occurred shall be reckoned into current gains/losses or relevant

assets costs at the time of actual occurrence. The employee compensation shall be recognized as liabilities and be

reckoned into current gains/losses or relevant assets costs at the time of actual occurrence. The employee benefits

that belong to non-monetary benefits are measured at 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 relevant provisions

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 be 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 includes 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. 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 treatment for retirement benefits

In case 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 treatment for other long-term employee benefits

Except for the compulsory insurance the Company provides the supplementary retirement benefits to the employees

satisfying certain 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 with the

expected accumulated welfare unit method by the independent actuary on the basis of treasury bond rate with similar

obligation term and currency. The service charges related to the supplementary retirement benefits (including theservice 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.

26. Share-based payment

The Company’s share-based payment is a transaction that grants equity instruments or assumes liabilities determined

on the basis of equity instruments in order to obtain services provided by employees or other parties. The Company’s

share-based payment is classified as equity-settled share-based payment and cash-settled share-based payment.

(1) Equity-settled share-based payment and equity instruments

Equity-settled share-based payment in exchange for services provided by employees shall be measured at the fair

value of the equity instruments granted to employees. If the Company uses restricted stocks for share-based payment

employees contribute capital to subscribe for stocks and the stocks shall not be listed for circulation or transfer until

the unlocking conditions are met and unlocked; if the unlocking conditions specified in the final equity incentive

plan are not met the Company shall repurchase the stocks at the pre-agreed price. When the Company obtains the

payment for the employees to subscribe for restricted stocks it shall confirm the share capital and capital reserve

(share capital premium) according to the obtained subscription money and at the same time recognize a liability in

full for the repurchase obligation and recognize treasury shares. On each balance sheet date during the waiting period

the Company makes the best estimate of the number of vesting equity instruments based on the changes in the latest

obtained number of vested employees whether they meet the specified performance conditions and other follow-

up information. On this basis the services obtained in the current period are included in related costs or expenses

based on the fair value on the grant date and the capital reserve shall be increased accordingly.For share-based payments that cannot be vested in the end costs or expenses shall not be recognized unless the

vesting conditions are market conditions or non-vesting conditions. At this time regardless of whether the market

conditions or the non-vesting conditions are met as long as all non-market conditions in the vesting conditions are

met it is deemed as vesting.If the terms of equity-settled share-based payment are modified at least the services obtained should be confirmed

in accordance with the unmodified terms. In addition any modification that increases the fair value of the equity

instruments granted or a change that is beneficial to employees on the modification date is recognized as an increase

in services received.If the equity-settled share payment is canceled it will be treated as an accelerated vesting on the cancellation day

and the unconfirmed amount will be confirmed immediately. If an employee or other party can choose to meet the

non-vesting conditions but fails to meet within the waiting period it shall be treated as cancellation of equity-settled

share-based payment. However if a new equity instrument is granted and it is determined on the date of grant of the

new equity instrument that the new equity instrument granted is used to replace the cancelled equity instrument the

granted substitute equity instruments shall be treated in the same way as the modification of the original equity

instrument terms and conditions.

(2) Cash-settled share-based payment and equity instruments

Cash-settled share-based payments are measured at the fair value of the liabilities calculated and determined on the

basis of shares or other equity instruments undertaken by the Company. If it’s vested immediately after the grant

the fair value of the liabilities assumed on the date of the grant is included in the cost or expense and the liability is

increased accordingly. If the service within the waiting period is completed or the specified performance conditions

are met the service obtained in the current period shall be included in the relevant costs or expenses based on the

best estimate of the vesting situation within the waiting period and the fair value of the liabilities assumed to increasethe corresponding liabilities. On each balance sheet date and settlement date before the settlement of the relevant

liabilities the fair value of the liabilities is remeasured and the changes are included in the current profit and loss.

27. Accrued liability

(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:

* The obligation is a present obligation of the Company;

* It is Contingent that an outflow of economic benefits will be required to settle the obligation;

* 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

28. Revenue

Accounting policies used in revenue recognition and measurement

1)Revenue recognition principle

On the starting date of the contract the company evaluates the contract identifies each individual performance

obligation contained in the contract and determines whether each individual performance obligation is performed

within a certain period of time or at a certain point in time.When one of the following conditions is met it belongs to the performance obligation within a certain period of time

otherwise it belongs to the performance obligation at a certain point in time: * The customer obtains and consumes

the economic benefits brought by the company's performance while the company performs the contract; * The

customer can control the goods or services in progress during the company’s performance; * The goods or services

produced during the company’s performance have irreplaceable uses and the company has the right to collect

payment for the performance part that has been completed so far during the entire contract period.For performance obligations performed within a certain period of time the company recognizes revenue in

accordance with the performance progress during that period. When the performance progress cannot be reasonably

determined if the cost incurred is expected to be compensated the revenue shall be recognized according to the

amount of the cost incurred until the performance progress can be reasonably determined. For performance

obligations performed at a certain point in time revenue is recognized at the point when the customer obtains control

of the relevant goods or services. When judging whether the customer has obtained control of the goods the company

considers the following signs: * The company has the current right to receive payment for the goods that is the

customer has the current payment obligation for the goods; * The company has transferred the legal ownership of

the goods to the customer that is the customer has the legal ownership of the goods; * The company has transferred

the goods to the customer in kind that is the customer has physically taken possession of the goods; * The company

has transferred the main risks and rewards of the ownership of the goods to the customer that is the customer has

obtained the main risks and rewards of the ownership of the goods; * The customer has received the goods; *

Other signs that the customer has obtained control of the goods.

2)Revenue measurement principle

* The company measures revenue based on the transaction price allocated to each individual performance obligation.The transaction price is the amount of consideration that the company expects to be entitled to receive due to the

transfer of goods or services to customers and does not include payments collected on behalf of third parties and

payments expected to be returned to customers.* If there is variable consideration in the contract the company shall determine the best estimate of the variable

consideration according to the expected value or the most likely amount but the transaction price including the

variable consideration shall not exceed the amount of cumulatively recognized revenue that is unlikely to be

significantly turned back when the relevant uncertainty is eliminated.* If there is a significant financing component in the contract the company shall determine the transaction price

based on the amount payable that the customer is assumed to pay in cash when obtaining the control of the goods or

services. The difference between the transaction price and the contract consideration shall be amortized by the

effective interest method during the contract period. On the starting date of the contract if the company expects that

the customer pays the price within one year after obtaining control of the goods or services the significant financing

components in the contract shall not be considered.* If the contract contains two or more performance obligations the company will allocate the transaction price to

each individual performance obligation based on the relative proportion of the stand-alone selling price of the goods

promised by each individual performance obligation on the starting date of the contract.

(2) The Company's criteria for the recognition of commodity income and specific criteria for the recognition time:

The Company's domestic sales revenue recognition time: The company shall deliver the goods according to the

agreement of the order and check with the buyer the goods received and inspected by the buyer from the previous

reconciliation date to the current reconciliation date. After the check by both parties the risks and rewards shall be

transferred to the buyer. The Company shall issue invoices to the buyer according to the varieties quantities and

amounts confirmed by the reconciliation and confirm the realization of sales income on the reconciliation date.The Company's foreign sales revenue recognition time: after the completion of the customs audit the company in

accordance with the export date specified in the customs declaration to confirm the realization of sales revenue.

29. 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 government grant shall

be measured at fair value and it shall be measured by nominal amount in case the fair value can not be reliably

acquired.

(3) Accounting treatment

The government grant related to an asset shall be recognized as deferred income and reckoned into currentgains/losses according to the depreciation process in use life of such assets.The government grant related to income which is used to make up relevant expenses and losses for later period shall

be recognized as deferred income and be reckoned into current gain/loss during the period while relevant expenses

are recognized; The government grant related to income which is used to make up relevant expenses and losses that

occurred shall be reckoned into current gains/losses.The government grant related to daily operation activity of the Company should be reckoned into other income;

those without related to daily operation activity should be reckoned into non-operation income and expenses.The financial discount funds received by the Company shall be used to write down relevant borrowing costs.

30. Deferred income tax assets/Deferred income tax liabilities

The company adopts the balance sheet debt method to calculate deferred income tax based on the temporary

difference between the book value and tax basis of assets and liabilities on the balance sheet date as well as the

temporary difference between the book value and tax basis of items that have not been recognized as assets and

liabilities but can be determined according to tax laws.All types of taxable temporary differences are recognized as deferred income tax liabilities unless: * taxable

temporary differences arise in the following transactions: initial recognition of goodwill or initial recognition of

assets or liabilities arising from a single transaction with the following characteristics: the transaction is not a

business merger. When the transaction occurs it neither affects accounting profits nor taxable income or deductible

losses and the initially recognized assets and liabilities do not result in equal taxable temporary differences and

deductible temporary differences; * For taxable temporary differences related to investments in subsidiaries joint

ventures and associates the timing of the reversal of such temporary differences can be controlled and it is likely

that such temporary differences will not be reversed in the foreseeable future.For deductible temporary differences that can be carried forward deductible loss in future years or deduce taxes the

Company recognizes deferred income tax assets based on the future taxable income that is likely to be obtained to

offset the deductible temporary differences deductible losses and tax deductions that can be carried forward to

future years unless: * the deductible temporary differences arise from a single transaction that is not a business

merger. The transaction does not affect accounting profits or taxable income or deductible losses at the time of

occurrence and the initially recognized assets and liabilities do not result in equivalent taxable temporary differences

or deductible temporary differences. * For deductible temporary differences related to investments in subsidiaries

joint ventures and associates such temporary differences are likely to be reversed in the foreseeable future and are

likely to receive taxable income to be used to offset such temporary differences.On the balance sheet date the company measures deferred income tax assets and liabilities in accordance with tax

laws and regulations at the applicable tax rate during the expected period of asset recovery or liability settlement

and reflects the tax impact of the expected method of asset recovery or liability settlement on the balance sheet date.On the balance sheet date the company reviews the book value of deferred income tax assets. If it is likely that

sufficient taxable income will not be available in the future to offset the benefits of deferred income tax assets the

book value of deferred income tax assets will be written down. On the balance sheet date the Company reassesses

unconfirmed deferred income tax assets and recognizes deferred income tax assets to the extent that sufficient taxable

income is likely to be available for the reversal of all or part of the deferred income tax assets.When the following conditions are met simultaneously deferred income tax assets and deferred income tax liabilities

are presented at the net amount after offsetting: having the legal right to settle current income tax assets and current

income tax liabilities at the net amount; Deferred income tax assets and deferred income tax liabilities are related to

the income tax levied by the same tax collection and management department on the same taxable entity or ondifferent taxpayers. However in the period during which significant deferred income tax assets and deferred income

tax liabilities are reversed in the future the involved taxpayers intend to settle the current income tax assets and

liabilities on a net basis or acquire assets and settle debts simultaneously.

31. Lease

Lease refers to a contract in which the lessor transfers the right to use assets to the lessee for consideration within a

certain period of time. On the commencement date of the contract the company evaluates whether the contract is a

lease or includes a lease. If one party in the contract transfers the right to control the use of one or more identified

assets within a certain period in exchange for consideration the contract is a lease or includes a lease. If the contract

includes multiple separate leases at the same time the company will split the contract and conduct accounting

treatment for each separate lease. If the contract includes both the leased and non-leased parts the lessee and the

lessor shall separate the leased and non leased parts.

(1) The company as lessee

On the commencement date of the lease term the company recognizes leases with a lease term not exceeding 12

months and excluding purchase options as short-term leases; Leases with lower value when a single leased asset is

considered a brand new asset are recognized as low value asset leases.If the company subleases or expects to sublease leased assets the original lease is not recognized as a low value

asset lease.For all short-term leases and low value asset leases the Company recognizes lease payments in the relevant asset

cost or current profit and loss on a straight-line basis during each period of the lease term.Except for the simplified short-term leases and low value asset leases mentioned above the company recognizes the

right-of-use assets and lease liabilities for leases on the commencement date of the lease term.

1) Right-of-use assets

The right-of-use asset refers to the right of the lessee to use the leased asset during the lease term.On the commencement date of the lease term the right-of-use asset is initially measured at cost. This cost includes:

* The initial measurement amount of lease liabilities; * If the lease payment is made on or before the start date of

the lease term and the relevant amount of the lease incentive already enjoyed shall be deducted in case there is a

lease incentive; * The initial direct expenses incurred by the lessee; * The expected cost incurred by the lessee in

dismantling and removing the leased asset restoring the site where the leased asset is located or restoring the leased

asset to the state agreed upon in the lease terms. The company recognizes and measures the cost in accordance withthe recognition standards and measurement methods for estimated liabilities as detailed in Note V.29 “Accruedliability”. The aforementioned costs incurred for the production of inventory will be included in the inventory cost.The depreciation of right-of-use assets is classified and provisioned with the straight-line method. In case it can

reasonably determine that ownership of the leased asset will be obtained upon the expiration of the lease term the

depreciation rate shall be determined based on the category of the right-of-use asset and the estimated net residual

value rate within the expected remaining useful life of the leased asset; In case it cannot reasonably determine that

ownership of the leased asset will be acquired upon the expiration of the lease term the depreciation rate shall be

determined based on the category of the right-of-use asset during the shorter of the lease term and the remaining

useful life of the leased asset.

2)Lease liability

Lease liabilities shall be initially measured at the present value of the lease payments that have not yet been paid on

the commencement date of the lease term. The lease payment amount includes the following five items: * fixedpayment amount and substantial fixed payment amount. If there is a lease incentive the relevant amount of the lease

incentive shall be deducted; * Variable lease payments depending on index or ratio; * The exercise price of the

purchase option provided that the lessee reasonably determines that the option will be exercised; * The amount to

be paid for exercising the option to terminate the lease provided that the lease term reflects that the lessee will

exercise the option to terminate the lease; * The expected amount to be paid based on the residual value of the

guarantee provided by the lessee.When calculating the present value of lease payments the interest rate implicit in the lease is used as the discount

rate. If the interest rate implicit in the lease cannot be determined the company’s incremental borrowing rate is used

as the discount rate. The Company calculates the interest expense of the lease liability in each period of the lease

term according to the fixed periodic interest rate and includes it in the current profit and loss unless it is otherwise

stipulated to be included in the cost of the relevant assets. Variable lease payments that are not included in the

measurement of lease liabilities are included in the current profit and loss when they are actually incurred unless

otherwise stipulated to be included in the cost of the relevant assets.After the commencement date of the lease term when there is a change in the in-substance fixed payment or a

change in the estimated amount payable for the guaranteed residual value or a change in the index or ratio used to

determine the lease payment or a change in the evaluation results of the purchase option renewal option or

termination option or when the actual exercise situation changes the Company shall re-measure the lease liability

according to the present value of the changed lease payments.

(2) The company as lessor

On the lease commencement date the company classifies leases that have substantially transferred almost all the

risks and rewards related to the ownership of the leased assets as financial leases and all other leases are operating

leases.

1) Operating lease

During each period of the lease term the lease receipts is recognized by the company as rental income with straight-

line method and the initial direct expenses incurred are capitalized amortized on the same basis as the recognition

of rental income and included in the current profit and loss by stages. The variable lease payments obtained by the

company related to operating leases that are not included in the lease receipts are booked in the current profits and

losses when actually incurred.

2) Finance lease

On the beginning date of the lease term the financial lease receivables is recognized by the company according to

the net amount of the lease investment (the sum of the unsecured residual value and the present value of the lease

collection not received on the beginning date of the lease term discounted according to the embedded interest rate

of the lease) and terminates the recognition of the financial lease assets. During each period of the lease term the

company calculates and recognizes the interest income according to the interest rate embedded in the lease. The

amount of variable lease payments obtained by the company that are not included in the measurement of net lease

investment shall be included in the current profit and loss when actually incurred.

(3) Accounting treatment of lease changes

1) Lease change as a separate lease

If there is a change in lease and the following conditions are met simultaneously the company will treat the lease

change as a separate lease for accounting treatment: * The lease change expands the lease scope by adding the right

to use one or more leased assets; * The increased consideration is equivalent to the individual price for the

expansion of the lease scope adjusted according to the situation of the contract.

2) Lease change not treated as a separate lease* the company as the lessee

On the effective date of the lease change the company re-determines the lease term and uses the revised discount

rate to discount the revised lease payment amount in order to remeasure the lease liability. When calculating the

present value of lease payments after changes the implicit interest rate of the remaining lease period is used as the

discount rate; If the implicit interest rate of the remaining lease term cannot be determined the incremental loan

interest rate on the effective date of the lease change shall be used as the discount rate.Regarding the impact of the lease liability adjustment mentioned above distinguish the following situations for

accounting treatment:

A. If the lease change results in a reduction in the lease scope or lease term the book value of the right-of-use assets

shall be reduced and the relevant gains/losses arising from partial or complete termination of the lease shall be

recognized in the current profit and loss;

B. For other lease changes the book value of the right-of-use assets shall be adjusted accordingly.* The company as the lessor

If there is a change in the operating lease the company will treat it as a new lease for accounting treatment from the

effective date of the change. The advance receipts or receivable lease payments related to the lease before the change

are considered as the new lease payments.If the change in financing lease is not accounted for as a separate lease the Company will treat the changed lease as

follows: if the lease change takes effect on the lease commencement date and the lease will be classified as an

operating lease the Company will treat it as a new lease from the effective date of the lease change and use the net

lease investment before the effective date of the lease change as the book value of the leased asset; If the lease change

takes effect on the lease commencement date and the lease will be classified as a financing lease the company will

conduct accounting treatment in accordance with the provisions on modifying or renegotiating the contract.

(4) Sale leaseback

The company evaluates and determines whether the asset transfer in the sale leaseback transaction is a sale in

accordance with the accounting standards for Business Enterprises No. 14 - revenue.

1) The company as lessee

If the asset transfer in the sale leaseback transaction is a sale the company measures the right-to-use assets formed

by the sale and leaseback according to the part of the book value of the original assets related to the right-to-use

obtained by the leaseback and only recognizes the relevant gains or losses on the rights transferred to the lessor.If the asset transfer in the sale leaseback transaction is not a sale the company will continue to recognize the

transferred asset and meanwhile recognize a financial liability equal to the transfer income and carry out accounting

treatment for the financial liability in accordance with the accounting standards for Business Enterprises No. 22 -

recognition and measurement of financial instruments.

2) The company as lessor

If the asset transfer in the sale leaseback transaction is a sale the company will conduct accounting treatment for

asset purchase in accordance with other applicable accounting standards for business enterprises and accounting

treatment for asset lease in accordance with accounting standards for Business Enterprises No. 21 - leasing.If the asset transfer in the sale leaseback transaction is not a sale the company does not recognize the transferred

asset but recognizes a financial asset equal to the transfer income and carries out accounting treatment for the

financial asset in accordance with the accounting standards for Business Enterprises No. 22 - recognition and

measurement of financial instruments.32. Other major accounting policy and estimation

Nil

33. Changes of important accounting policies and estimation

(1) Changes of important accounting policies

(1) Significant accounting policy changes

Accounting treatment for deferred income tax related to assets and liabilities arising from individual transactions not

subject to initial recognition exemption:

On November 30 2022 the Ministry of Finance issued the Interpretation No. 16 of the Accounting Standards for

Enterprises (CK[2022] No. 31 hereinafter referred to as “Interpretation No. 16”).According to Interpretation No. 16 for individual transactions that are not business combinations and do not affect

accounting profits or taxable income (or deductible losses) at the time of transaction and the initially recognized

assets and liabilities result in equal taxable temporary differences and deductible temporary differences (including

leasing transactions in which the lessee initially recognizes the lease liability and books it in the right-of-use asset

on the lease term start date as well as transactions in which the lessee recognizes the expected liability and books it

in the cost of related assets due to abandonment obligations of fixed assets etc.) the provisions exempting the initial

recognition of deferred income tax liabilities and deferred income tax assets are not applicable. Enterprises should

recognize the corresponding deferred income tax liabilities and deferred income tax assets separately in accordance

with Accounting Standards for Enterprises No. 18- Income Tax and other relevant provisions at the time of

transaction.This regulation will come into effect since January 1 2023. For individual transactions that apply this regulation that

occur between the beginning and the implementation date of the earliest period in which this regulation is first

implemented in financial statements the lease liabilities and the right-of-use assets recognized at the beginning of

the earliest period in financial statements due to the application of this regulation in individual transactions as well

as the expected liabilities and corresponding assets related to abandonment obligations if there are taxable temporary

differences and deductible temporary differences the company shall make adjustments in accordance with this

regulation. The implementation of this regulation will not have any impact on the amounts of each account in the

company’s financial statements as of January 1 2023 but will have an impact on the presentation of the notes to the

financial statements as of January 1 2023 as follows:

Note 20 to the consolidated financial statements: Deferred tax assets/deferred tax liabilities:

(1) Deferred tax assets that have not been offset:

December 31 2022 Affected amount January 1 2023

Item Deductible Deductible Deductible Deferred Deferred tax Deferred tax

temporary temporary temporary

tax assets assets assets

differences differences differences

Lease

1345462.74234721.6813227441.182578204.6614572903.922812926.34

liabilities

(2) Deferred income tax liabilities that have not been offset

December 31 2022 Affected amount January 1 2023

Taxable Deferred Taxable Taxable

Item Deferred tax Deferred tax

temporary tax temporary temporary

liabilities liabilities

differences liabilities differences differences

Right-of-use

13227441.182578204.6613227441.182578204.66

assets(3) Deferred tax assets or liabilities presented as net after offsetting:

December 31 2022 Affected amount January 1 2023

Offset

Offset amount Opening

between Ending Offset

Balance of between balance of

deferred balance of amount

deferred deferred deferred

Item income tax deferred between income tax income tax income tax

assets and income tax deferred

assets or assets and assets or

liabilities assets or income tax

liabilities liabilities at liabilities

offset at the liabilities assets and

after offset the beginning after

end of the after offset liabilities

of the period offsetting

period

Deferred tax

126261238.77275627772.452578204.66128839443.43275627772.45

assets

Deferred tax

126261238.7740149550.992578204.66128839443.4340149550.99

liability

Note to the main items in the financial statements of the parent company: Nil.

(2) Changes of important accounting estimation

Nil

34. Significant accounting judgments and estimates

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 entries of financial statements which 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 shall be

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

The Company uses the expected credit loss model to assess the impairment of financial instruments. The application

of the expected credit loss model requires significant judgement and estimates and must consider all reasonable and

evidence-based information including forward-looking information. In making such judgments and estimates the

Company infers the expected changes in debtors’ credit risks based on historical repayment data combined with

economic policies macroeconomic indicators industry risks and other factors.

(2) Inventory depreciation reserve

According to the inventory accounting policy the company measures inventory at the lower of cost and net realizable

value. For inventory with costs higher than net realizable value as well as obsolete and unsold inventory the

inventory depreciation reserve shall be made. 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 theimpacts 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) Preparation for the impairment of non-financial and 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 relevant information

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 estimate 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.

(4) Depreciation and amortization

The Company depreciates and amortizes the investment property fixed assets and intangible assets with 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.

(5) Fair value of financial instrument

For financial instruments that there is no active market to provide quotes valuation techniques shall be used to

determine fair value. Valuation techniques include the latest transaction information discounted cash flow methods

and option pricing models The Company has established a set of work processes to ensure that qualified personnel

are responsible for the calculation verification and review of fair value. The valuation model used by the Company

applies the market information as much as possible and applies the company-specific information as little as possible.It should be noted that part of the information used in the valuation model requires management’s estimation (such

as discount rate target exchange rate volatility etc.). The Company regularly reviews the above estimates and

assumptions and makes adjustments if necessary.(6) 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.IV. Taxation

1. Major taxes and tax rates

Tax Basis Tax rate

The output tax is calculated based on the taxable 25%(IRD Denmark) 22%(VHIT ，income and VAT is calculated based on the

VAT Italy)21%(Borit Belgium) 13% 9%

difference after deducting the input tax available 6% Collection rate 5%

for deduction for the current period

City maintaining & Turnover tax payable 7%5%

construction tax

Taxable income 15% 20% 21% 22% 25% 24% +

Corporation income tax

regional tax 3.9%

Educational surtax Turnover tax payable 5%

Disclose reasons for different taxpaying body:

Taxpaying body Income tax rate

The Company WFJN WFLD WFTT WFMA WFAM WFSC

15%

WFLD(Chongqing)

WFLD(Wuhan) WFLD(Nanchang) 20%

IRD America Borit America 21%

IRD(Denmark) 22%

WFCA WFTR WFDT WFQL VHWX WFAS Borit(Belgium) 25%

VHIO(Italy) 24% + Regional tax 3.9%

2. Tax incentives

The Company WFJN WFLD WFTT and WFMA are recognized as high-tech enterprises in 2023 and enjoy a

preferential income tax rate of 15% from January 1 2023 to December 31 2025. WFAM is recognized as a high-

tech enterprise in 2021 and will enjoy a preferential income tax rate of 15% from January 1 2021 to December 31

2023. WFSC is recognized as a high-tech enterprise in 2022 and will enjoy a preferential income tax rate of 15%

from January 1 2022 to December 31 2024.According to the “Continuation of the Enterprise Income Tax Policies for Western Development ” No.23 (Year of

2020) issued together by Ministry of Finance SAT and NDRC from January 1 2011 to December 31 2030 the

enterprises located in the west region and mainly engaged in the industrial projects stipulated in the Catalogue of

Encouragement Industries in Western China and whose main business income accounting for more than 60% of

the total income of the enterprise in the current year can pay the corporate income tax at the tax rate of 15%. In the

year of 2023 WFLD (Chongqing) paid its corporate income tax at the tax rate of 15%.In 2023 WFLD (Wuhan) WFLD (Nanchang) was a qualified small and low-profit enterprises. According to the

Announcement on Further Supporting the Development of Small and Micro Enterprises and Individual Businesses

Related to Tax Policies (Announcement No. 12 of the Ministry of Finance and the State Administration of Taxation

in 2023) the taxable income of small and micro profit enterprises will be calculated at a reduced rate of 25% and

the enterprise income tax policy will be paid at a tax rate of 20% which will be extended until December 31 2027.V. Notes to major items in consolidated financial statements

(The following items have no special instructions and the unit of amount is RMB yuan. The end of the period refers

to December 31 2023 the beginning refers to January 1 2023 the current period refers to the year 2023 and the

previous period refers to the year 2022.)

1. Monetary funds

In RMB

Item Ending balance Opening balance

Cash on hand 6343.24 51818.51

Cash in bank 2241980351.17 2304848889.90

Other Monetary funds 32785004.73 84651222.35

Deposits with financial companies

Total 2274771699.14 2389551930.76

Including: total amount of funds deposited overseas 126839309.52 324409336.06

Other explanation

The ending balance of other monetary fund includes RMB 22174151.94 deposited in the bank acceptance deposit

Mastercard earnest money RMB 210720.00 in-transit dividends RMB 1309380.00 IRD performance bond RMB

7902000.00 in-transit foreign exchange fund RMB 1184752.79 and ETC freezing RMB 4000.00. The in-transit

dividends RMB 1309380.00 was a portion of the dividend distributed by Miracle Automation (002009) a trading

financial asset held by the company from 2017 to 2023 which was not transferred to the company’s current account

due to account issues.

2. Trading financial asset

In RMB

Item Ending balance Opening balance

Financial assets measured at fair value and whose changes are

2391487144.962718820654.87

included in current profit or loss

Including: SNAT 76756716.00 78834732.00

Miracle Automation 71073900.00 66693600.00

Lifan Technology 48516.34

Toyze Auto 462414.48

Other debt and equity instrument investments 2243656528.96 2572781392.05

Total 2391487144.96 2718820654.873. Note receivable

(1) Classification of notes receivable

In RMB

Item Ending balance Opening balance

Bank acceptance bill

Trade acceptance bill 144976174.84 135559024.27

Total 144976174.84 135559024.27

(2) Accrued bad debt reserve

Ending balance

Book balance Bad debts reserve

Category

Accrued Book value

Amount Ratio Amount

ratio

Note receivable with bad debt

144976174.84100.00%144976174.84

provision accrued on portfolio

Portfolio 1: bank acceptance bill

Portfolio 2: trade acceptance bill 144976174.84 100.00% 144976174.84

Total 144976174.84 100.00% 144976174.84

Opening balance

Book balance Bad debts reserve

Category

Accrued Book value

Amount Ratio Amount

ratio

Note receivable with bad debt

135559024.27100.00135559024.27

provision accrued on portfolio

Portfolio 1: bank acceptance bill

Portfolio 2: trade acceptance bill 135559024.27 100.00 135559024.27

Total 135559024.27 100.00 135559024.27

(3) Notes receivable already pledged by the Company at the end of the period

In RMB

Item Amount pledge at period-end

Bank acceptance bill

Trade acceptance bill 97820000.00

Total 97820000.00

(4) Notes endorsement or discount and undue on balance sheet date

Termination confirmation amount at Termination unconfirmed amount at the

Item

the end of the period end of the period

Bank acceptance bill

Trade acceptance bill

Total(5) Notes transfer to account receivable due for failure implementation by drawer at period-

end

In RMB

Item Amount transfer to account receivable at period-end

Trade acceptance bill 4270595.02

Other explanation

The trade acceptance bill that the company transferred to the accounts receivable due to in 2018 the failure of the

drawer to perform the agreement at the end of the period were the bills of the subsidiaries controlled by BD

Petrochemical Group Co. Ltd. and the bills accepted by BD Petrochemical Group Finance Co. Ltd. (hereinafter

referred to as “BD bills”).

(6) Note receivable actually charged off in the period

Nil

4. Account receivable

(1) By account age

In RMB

Aging Ending book balance Opening book balance

Within one year (One year included) 3841921162.54 3118871487.62

Including: within 6 months 3732178445.50 3025753558.24

6 months to one year 109742717.04 93117929.38

1-2 years 26336964.64 19350208.92

2-3 years 13723160.78 8919358.15

Over 3 years 57510391.30 59823351.18

Total 3939491679.26 3206964405.87

(2) Accrued of bad debt provision

In RMB

Ending balance

Category Book balance Bad debt reserve

Accrued Book value

Amount Ratio Amount

ratio

Account receivable with bad

debt provision accrued on a 53281843.03 1.35% 53281843.03 100.00%

single basis

Account receivable with bad

debt provision accrued on 3886209836.23 98.65% 28669878.03 0.74% 3857539958.20

portfolio

Total 3939491679.26 100.00% 81951721.06 2.08% 3857539958.20

Opening balance

Category

Book balance Bad debt reserve Book valueAccrued

Amount Ratio Amount

ratio

Account receivable with bad

debt provision accrued on a 57806705.14 1.80% 57806705.14 100.00%

single basis

Account receivable with bad

debt provision accrued on 3149157700.73 98.20% 21667523.48 0.69% 3127490177.25

portfolio

Total 3206964405.87 100.00% 79474228.62 2.48% 3127490177.25

Bad debt provision accrued on single basis:

In RMB

Openin balance Ending balance

Name Bad debt Bad debt Accrued Accrued

Book balance Book balance

reserve reserve ratio causes

Hubei

Meiyang Auto Difficult to

20139669.4520139669.4517610371.9117610371.91100.00%

Industry Co. recover

Ltd.Hunan

Difficult to

Leopaard Auto 8367245.47 8367245.47 8077361.13 8077361.13 100.00%

Co. Ltd. recover

Difficult to

BD bills 7201691.00 7201691.00 4270595.02 4270595.02 100.00%

recover

Linyi Zotye

Automobile

Difficult to

Components 6193466.77 6193466.77 6193466.77 6193466.77 100.00%

Manufacturing recover

Co. Ltd.Tongling

Ruineng Difficult to

4320454.344320454.344320454.344320454.34100.00%

Purchasing recover

Co. Ltd.Brilliance

Automotive

Difficult to

Group 3469091.33 3469091.33 3469091.33 3469091.33 100.00%

Holdings Co. recover

Ltd.Dongfeng

Chaoyang Difficult to

1823262.641823262.641823262.641823262.64100.00%

Diesel Co. recover

Ltd.Jiangsu Kawei

Auto

Difficult to

Industrial 1932476.26 1932476.26 1932476.26 1932476.26 100.00%

Group Co. recover

Ltd.Jiangsu Jintan

Automobile Difficult to

1059798.431059798.431059798.431059798.43100.00%

Industry Co. recover

Ltd.Tianjin Levol

Difficult to

Engine Co. 1018054.89 1018054.89 1018054.89 1018054.89 100.00%

Ltd. recover

Difficult to

Other clients 2281494.56 2281494.56 3506910.31 3506910.31 100.00%

recover

Total 57806705.14 57806705.14 53281843.03 53281843.03

Bad debt provision Accrued on portfolio:

Ending balance

Name

Book balance Bad debt reserve Accrued ratioWithin 6 months 3730857043.84

6 months to one year 108718559.21 10871855.93 10.00%

1-2 years 26336964.64 5267392.93 20.00%

2-3 years 12944398.96 5177759.59 40.00%

Over 3 years 7352869.58 7352869.58 100.00%

Total 3886209836.23 28669878.03

In the combination there are no accounts receivable that have been provisioned for bad debts using other methods.

(3) Bad debt provision accrued collected or reversal:

Amount changed in the period

Other -

Translatio

Categor Opening previously n of Ending

y balance Collected or Charged written off Accrued foreign balance

reversal off recovered in

currency

the current

statements

period

Bad debt

79474228.65788060.03464139.343813.0134234.8819517

provisio 63149.93

2381721.06

n

Significant amount of bad debt reserves recovered or reversed in this period: Nil

(4) Account receivable actually charged off in the Period

In RMB

Whether the payment generated by related

Item Amount charged off

party transactions

Account receivable actually charged off 43813.01 N

Important accounts receivable actually written off in this period: Nil

(5) Top five receivables and contract assets at ending balance by arrears party

In RMB

Ending balance of account Ratio in total ending balance Ending balance of reserve for

Name of account receivables and

receivable bad debts and contract assets

contract assets

RBCD 686424501.80 17.43% 1017817.82

Robert Bosch

596846772.5615.15%782592.70

Company

Client 3 337776101.99 8.57% 1651960.47

Client 4 200972141.72 5.10% 76326.16

Client 5 127691257.56 3.24% 7633344.34

Total 1949710775.63 49.49% 11162041.49

5. Receivable financing

(1) Category of receivable financing

In RMB

Item Ending balance Opening balance

Bill receivable- bank acceptance bill 1661749949.46 1918368845.21

Including: Bank acceptance bills 1661749949.46 1918368845.21Trade Acceptance Bill

Total 1661749949.46 1918368845.21

Other explanation: During the management of enterprise liquidity the company will discount or endorse transfers

before the maturity of some bills the business model for managing bills receivable is to collect contractual cash

flows and sell the financial asset so it is classified as financial assets measured at fair value and whose changes are

included in other comprehensive income which is listed in receivables financing.

(2) Notes receivable already pledged by the Company at period-end：

Item Amount pledge at period-end

Bank acceptance bill 568256134.85

Trade acceptance bill

Total 568256134.85

(3) Notes endorsement or discount and undue on balance sheet date

Amount derecognized at Amount not derecognized at

Item

period-end period-end

Bank acceptance bill 258965040.65

Trade acceptance bill

Total 258965040.65

(4) Receivable financing actually charged off in current period

Nil

6. Other account receivables

In RMB

Item Ending balance Opening balance

Interest receivable

Dividend receivable 147000000.00

Other account receivables 919684126.81 1117507456.47

Total 919684126.81 1264507456.47

(1) Interest receivable

Nil

(2) Dividend receivable

1) Details of dividend receivable

In RMB

Item (or invested enterprise) Ending balance Opening balance

Wuxi WFEC Catalyst Co. Ltd. 147000000.00

Total 147000000.002) Important dividend receivable with account age over one year

Nil

(3) Other accounts receivable

1) By nature

In RMB

Nature Ending book balance Opening book balance

Intercourse funds from units 4084594.65 1894818.08

Cash deposit 10215094.41 9087881.41

Staff loans and petty cash 904305.07 1823842.27

Social security and provident fund paid 12537832.68 11341820.83

WFTR “platform trade” business portfolio 2542263370.70 2741499131.95

Other 38770.10 66663.56

Total 2570043967.61 2765714158.10

2) By aging

In RMB

Aging Ending book balance Opening book balance

Within one year (One year included) 18850121.91 2758812664.93

Within 6 months 18448595.63 1919096046.09

6 months to one year 401526.28 839716618.84

1-2 years 2544896026.07 1358405.20

2-3 years 954984.11 2962710.00

Over 3 years 5342835.52 2580377.97

Total 2570043967.61 2765714158.10

3) Classified disclosure based on expected credit loss general model

Phase I Phase II Phase III

Expected credit

Expected credit

Bad debt reserve Expected credit losses for the entire Total

losses for the entire

losses over next 12 duration (without

duration (with credit

months credit impairment

impairment occurred)

occurred)

Balance on Jan. 1

4106646.901644100054.731648206701.63

2023

Balance of Jan. 1

2023 in the period

--Transfer into

Phase II

--Transfer into

Phase III

--Transfer back to

Phase II

--Transfer back to

Phase ICurrent accrued 3055915.03 3055915.03

Current reversal 977386.61 977386.61

Current period

write off

Other changes 74610.75 74610.75

Balance on Dec.

6259786.071644100054.731650359840.80

312023

4) Bad debt provision accrued collected or reversal

In RMB

Change in current period

Translation

Category Opening balance Collected Charged of foreign Ending balance

Accrued Other

or reversal off currency

statements

Bad debt

1648206701.633055915.03977386.6174610.751650359840.80

provision

5) Other accounts actually charged off during the reporting period

Nil

6) Top 5 other accounts receivable at ending balance by arrears party

In RMB

Ending balance of

Enterprise Nature Ending balance Aging Ratio

bad debt reserve

WFTR “platform trade” See “Other 1-2

2542263370.7098.92%1644068327.93business portfolio explanations” years

Intercourse funds Within

Robert Bosch Company 2500307.00 0.10%

from units 1 year

Wuxi China Resources Over

Deposit margin 1364750.00 0.05% 1364750.00

Gas Co. LTD 3 years

Zhenkunxing Industrial

Over 3

Supermarket (Shanghai) Deposit margin 1000000.00 0.04% 1000000.00

years

Co. LTD

With 1

BYD Deposit margin 900000.00 0.03%

year

Total 2548028427.70 99.14% 1646433077.93

Other explanations: For details of WFTR “platform trade” business portfolio please refer to the description in Note-

XV- 6 “Other Significant Transactions and Matters Affecting Investors' Decisions”. The ending balance of WFTR’s

“platform trade” business portfolio balance include the balance of other receivables listed in Note-XI- 6(5).

7) Listed as other receivables due to centralized fund management

Nil7. Account paid in advance

(1) By aging

In RMB

Ending balance Opening balance

Aging

Amount Ratio Amount Ratio

Within one year 56627071.44 74.31% 88207782.70 93.51%

1-2 years 17692490.92 23.22% 5066837.28 5.37%

2-3 years 1879201.90 2.47% 778819.68 0.83%

Over 3 years 3506.90 270414.21 0.29%

Total 76202271.16 100.00% 94323853.87 100.00%

Explanation of the reasons why prepayments with an aging of over 1 year and significant amounts were not settled

in a timely manner

Nil

(2) Top 5 accounts paid in advance at ending balance by prepayment object

Prepayment ending Proportion to the total ending balance

Enterprise

balance of prepayments (%)

State Grid Jiangsu Electric Power Co. Ltd.

11142648.7014.62

Wuxi Power Supply Branch

AIDA ENGINEERING 9206995.00 12.08

Daye Special Steel Co. Ltd 5838762.94 7.66

CITIC Taifu Steel Trading Co. Ltd 5583484.29 7.33

Shanghai Baogang Trading Co. Ltd 3382034.68 4.44

Total 35153925.61 46.13

8. Inventory

(1) Category of inventory

In RMB

Ending balance Opening balance

Inventory Inventory

depreciation depreciation

reserve or reserve or

Item provision for provision for

Book balance Book value Book balance Book value

impairment impairment

of contract of contract

performance performance

costs costs

Stock

116560014.473497173.2160326360.636614977.4

materia 590057187.6 796941337.6

490212

ls 9 3

Goods

30595290.3432502348.831641606.6406011714.5

in 463097639.2 437653321.2

4694

process 0 3

Finishe 1336512057 173978548. 1162533508 142342140. 1240492964

1382835104

d goods .06 18 .88 58 .31.89

2389666883321133853.20685330302617429763334310107.2283119656

Total.95 01 .94 .75 48 .27(2) Inventory depreciation reserve

Current increase

Translation of

Item Opening balance foreign Ending balance

Accrued Write-off

currency

statements

Stock

160326360.2150809350.0095388017.49812321.77116560014.49

materials

Goods in

31641606.6913255762.4514885152.10583073.3030595290.34

process

Finished

142342140.58141101760.51109738684.20273331.29173978548.18

goods

Total 334310107.48 205166872.96 220011853.79 1668726.36 321133853.01

* The net realizable value of inventory refers to the estimated selling price of inventory in daily activities minus

the estimated costs to be incurred until completion estimated sales expenses and related taxes.* Accrued basis for inventory depreciation reserve:

Accrued basis for inventory

Cash on hand Specific basis for recognition

impairment provision

The materials sold due to finished

Results from the estimated sale price of such inventory less

goods manufactured its net

Materials in stock the cost what will happen estimated sales expenses and

realizable value is lower than the

relevant taxes till the goods completed

book value

The goods in process sold due to

Results from the estimated sale price of such inventory less

finished goods manufactured its

Goods in process the cost what will happen estimated sales expenses and

net realizable value is lower than

relevant taxes till the goods completed

the book value

Accrued basis for inventory

Cash on hand Specific basis for recognition

impairment provision

* Reasons of inventory depreciation reserves written off in current period:

Cash on hand Reasons of written off

Materials in stock Used for production and the finished goods are realized sales

Goods in process completed in the Period and corresponding finished goods are realized sales in

Goods in process

the Period

Finished goods Sales in the Period

(3) Explanation on capitalization of borrowing costs at ending balance of inventory

Nil

9. Other current assets

In RMB

Item Ending balance Opening balance

Receivable export tax rebates 9103488.70 14325020.52

VAT refund receivable 114079600.14 25444657.63

Prepaid taxes and VAT retained 173908288.11 364556192.43

Input tax to be deducted and certification 2162292.69 1192752.68

Other 26655713.47 25028577.98

Total 325909383.11 430547201.2410. Long-term equity investment

In RMB

Current changes (+/ -)

Ending

Opening balance Investment Other

Invested entity Cash dividend or

Ending balance balance of

(book value) Additional Capital gain/loss comprehensive Other equity Impairment profit announced Other (book value) depreciation

investment reduction recognized under income change Accrued

to issued reserves

equity adjustment

Associated

enterprise

WFEC 824528809.89 196588496.35 11994541.20 117600000.00 915511847.44

RBCD 3659761310.97 1029151455.57 1673605474.71 3015307291.83

Zhonglian

1559413314.05408088732.68282000000.001685502046.73

Electronic

WFPM 54829812.51 -11779921.19 -1585695.67 41464195.65

Changchun

9621734.83-538911.049082823.79

Xuyang

PrecorsGmbH 5517924.56 2875994.14 -197141.96 390712.88 8587489.62

Auto Link 169145202.15 10247396.31 3288259.15 182680857.61

Lezhuo Bowei 110000000.00 -20489295.60 -13750.00 89496954.40

Total 6282818108.96 112875994.14 1611070811.12 13697104.68 2073205474.71 376962.88 5947633507.07

Note:：

Wuxi Weifu Precision Machinery Manufacturing Co. Ltd. was renamed into Wuxi Weifu Precision Machinery Manufacturing Company Limited on Feburary 28 2024.Explanation on those holding less than 20% of the voting rights but with significant influence:

Wuxi Chelian Tianxia Information Technology Co. Ltd. (hereinafter referred to as “Auto Link”)

The Company holds 9.6372% equity of Auto Link and appointed a director to Auto Link. Though the representative the Company can participate in the operation policies formulation of Auto

Link and thus exercise a significant influence over Auto Link.11. Other equity instrument investment

(1) Other equity instrument investment situation

In RMB

Gains recognized in Losses recognized in

other comprehensive other comprehensive

Item Ending balance Opening balance

income for the income for the

current period current period

Wuxi Xichang

Microchip

592742690.00592742690.00

Semi-

Conductor

Other 85048000.00 85048000.00

Total 677790690.00 677790690.00

Contiuned

In RMB

Reasons for

Accumulated gains Accumulated losses designating fair

recognized in other recognized in other Dividend income value measurement

Item comprehensive comprehensive recognized in this with changes

income at the end of income at the end of period recognized in other

this period this period comprehensive

income

Wuxi Xichang Non-trading equity

Microchip Semi- instrument

Conductor investments

Non-trading equity

Other instrument

investments

Total

(2) Explanation of termination of recognition in this period:

Nil

(3) Sub-item disclosure of current non-trading equity instrument investments

In RMB

Reasons for

Amount of defining fair Reasons for

value transferring

other

measurement other

comprehensive

Dividends Accumulated Accumulated with changes comprehensive

Item income recognized in income to

income gains losses

transferred to other retained

retained comprehensive earnings

earnings income

Wuxi

Non-trading

Xichang

equity

Microchip Not applicable

instrument

Semi-

investments

Conductor

Non-trading

equity

Other Not applicable

instrument

investments12. Other non-current financial assets

In RMB

Item Ending balance Opening balance

Guolian Securities 1084000.00 186608914.00

Investments in other debt instruments and equity

803266120.061140000000.00

instruments held for more than one year

Total 804350120.06 1326608914.00

13. Investment real estate

(1) Investment real estate measured by cost

In RMB

House and Construction in

Item Land use right Total

Building progress

I. Original book value

1.Opening balance 97691776.27 97691776.27

2.Current increased

(1) Outsourcing

(2) Inventory\fixed

assets\construction in

process transfer-in

3.Current decreased 2364090.24 2364090.24

(1) Disposal 2364090.24 2364090.24

(2) Transfer from rental to

self use

4.Ending balance 95327686.03 95327686.03

II. Accumulated depreciation and

accumulated amortization

1.Opening balance 48394906.54 48394906.54

2.Current increased 2299230.53 2299230.53

(1) Accrued or amortization 2299230.53 2299230.53

(2) Inventory fixed assets

and construction in progress

transferred in

3.Current decreased 2293167.53 2293167.53

(1) Disposal 2293167.53 2293167.53

(2) Transfer from rental to

self use

4.Ending balance 48400969.54 48400969.54

III. Depreciation reserves

1.Opening balance

2.Current increased

(1) Accrued

3. Current decreased

(1) Disposal

(2) Other transfer-out

4.Ending balance

IV. Book value

1.Ending Book value 46926716.49 46926716.492.Opening Book value 49296869.73 49296869.73

(2) Investment real estate using fair value measurement model:

Nil

14. Fixed assets

(1) Fixed assets

In RMB

Transportati Electronic and

House and Machinery

Item on other Land Total

Building equipment

equipment equipment

I. Original

book

value:

1.Opening 1934526060 4613504836 38612263. 1046301287 30483292. 7663427739

balance .96 .29 18 .16 05 .64

2.Current 427272709.1 6381131.8 210102119.2 733147350.5

89391390.28

increased 7 1 9 5

(1)

364604.289056652.4114344915.2523766171.94

Purchase

(2)

Constructi

418216056.76381131.8195757204.0709381178.6

on in 89026786.00

progress 6 1 4 1

transfer-in

3.Current 3200574.0 102713855.1

955274.7559944842.1138613164.29

decreased 1 6

(1)

Disposal 3200574.0 102713855.1

955274.7559944842.1138613164.29

or 1 6

scrapping

4.Conversi

on of

foreign 1792007.0

9145379.1826069448.48246984.2318609850.2355863669.20

currency 8

financial

statement

5.Ending 2032107555 5006902151 42039805. 1236400092 32275299. 8349724904

balance .67 .83 21 .39 13 .23

II.Accumulat

ed

depreciatio

n

1.Opening 536810138.4 2470972225 21621368. 664099659.9 3693503392

balance 9 .66 25 2 .32

2.Current 306039806.9 2743926.0 153201005.5 527686406.9

65701668.30

increased 5 7 9 1

(1)306039806.92743926.0153201005.5527686406.9

65701668.30

Accrued 5 7 9 1

3.Current 1358113.3

636001.2653285381.9726616861.9481896358.50

decreased 3

(1)

Disposal 1358113.3

636001.2653285381.9726616861.9481896358.50

or 3

scrapping

4.Conversi

3304279.6217949887.191105.2814270712.6935525984.78

on offoreign

currency

financial

statement

5.Ending 605180085.1 2741676537 23008286. 804954516.2 4174819425

balance 5 .83 27 6 .51

III.Depreciati

on reserves

1.Opening 148903639.0 15155086. 199940161.3

14097320.4973319.9021710795.11

balance 1 87 8

2.Current

502006.79502006.79

increased

(1)

502006.79502006.79

Accrued

3.Current

5366.681046191.48163374.041214932.20

decreased

(1)

Disposal

5366.681046191.48163374.041214932.20

or

scrapping

4.Conversi

on of

foreign

828599.733644352.76740272.36890915.036104139.88

currency

financial

statement

5.Ending 152003807.0 16046001. 205331375.8

14920553.5473319.9022287693.43

balance 8 90 5

IV. Book

value

1.Ending

1412006916211322180618958199.409157882.716229297.3969574102

Book

value .98 .92 04 0 23 .87

2.Opening

1383618601199362897116917575.360490832.115328205.3769984185

Book

value .98 .62 03 3 18 .94

(2) Temporarily idle fixed assets: Nil

(3) Fixed assets acquired by operating lease: Nil

(4) Fixed assets without property certification held

In RMB

Item Book value Reasons for without the property certification

Plant and office building of WFCA 30437612.45 Still in process of relevant property procedures

15. Construction in progress

In RMB

Item Ending balance Opening balance

Construction in progress 564605931.90 509105587.49

Project material -- --

Total 564605931.90 509105587.49(1) Construction in progress

In RMB

Ending balance Opening balance

Item Depreciatio Depreciatio

Book balance Book value Book balance Book value

n reserves n reserves

Renovation

of Xinan

Branch

148242724.8148242724.8

No. 1 41493029.41 41493029.41

workshop 9 9

of the

company

Lot 103

7509742.367509742.36

phase VI

Production

line and

equipment

391286034.9391101419.5386221995.0386221995.0

under 184615.38

installation 4 6 2 2

and

debugging

Sporadic

constructio

n and 5265721.92 5265721.92 41326068.85 41326068.85

installation

projects

Software

and system

under

12486323.1712486323.1740064494.2140064494.21

installation

and

debugging

564790547.2564605931.9509105587.4509105587.4

Total 184615.38

8099

(2) Changes of major construction in progress

Fixed assets Other

Opening Current Ending

Item transfer-in in decreased in

balance increased balance

the Period the Period

Renovation of Xinan

Branch No. 1

41493029.41106749695.48148242724.89

workshop of the

company

Lot 103 phase VI 7509742.36 7509742.36

Continued

including:

Proportion Accumulated Interest

interest

of project amount of capitalization

Item Progress capitalized Source of funds

investment interest rate of the

amount of

in budget capitalization year

the year

Renovation

of Xinan

The Company’s

Branch No.

35.06% 35.06% accumulated

1 workshop funds

of the

company

The Company’s

Lot 103

9% 9% accumulated

phase VI funds

Total(3) The provision for impairment of construction projects

In RMB

Opening Current Current Reason for

Item Ending balance

balance increase decrease withdrawal

Equipment

Equipment

184615.38 184615.38 debugging

installation

acceptance failed

Total 184615.38 184615.38 --

16. Right-of-use assets

Item Building Mechanical equipment Total

I. Original book value:

1.Opening balance 34416049.86 25021445.63 59437495.49

2.Current increased 19076134.73 1030006.72 20106141.45

(1)Increased lease 19076134.73 1030006.72 20106141.45

3.Current decreased 533688.55 533688.55

(1) Disposal 533688.55 533688.55

4. Conversion of foreign

currency financial 1454205.70 948261.18 2402466.88

statement

5.Ending balance 54412701.74 26999713.53 81412415.27

II. Accumulated

depreciation

1.Opening balance 11035938.99 6536456.12 17572395.11

2.Current increased 9820732.13 5049925.02 14870657.15

(1) Accrued 9820732.13 5049925.02 14870657.15

3.Current decreased 533688.55 533688.55

(1) Disposal 533688.55 533688.55

4. Conversion of foreign

currency financial 382978.91 287599.80 670578.71

statement

5.Ending balance 20705961.48 11873980.94 32579942.42

III. Depreciation reserves

1.Opening balance

2.Current increased

(1) Accrued

3.Current decreased

(1) Disposal

4.Translation of foreign

currency statements

4.Ending balance

IV. Book value

1.Ending Book value 33706740.26 15125732.59 48832472.85

2.Opening Book value 23380110.87 18484989.51 41865100.38

17. Intangible assets

(1) Intangible assets situation

Trademark Patented and

Computer

Item Land use right and trademark non patented Total

software

license technologiesI. Original book

value

1.Opening balance 381867130.62 156331661.37 41597126.47 247735742.07 827531660.53

2.Current

58288088.045000000.0063288088.04

increased

(1) Purchase 3880588.41 3880588.41

(2)Transfer

from

54407499.6354407499.63

construction in

progress

(3)

Shareholders’

5000000.005000000.00

capital

contribution

3.Current

8922112.00894373.209816485.20

decreased

(1)Disposal or

8922112.00894373.209816485.20

scrapping

(2)Other

4.Conversion of

foreign currency 1138252.40 12457935.72 13596188.12

financial statement

5.Ending balance 372945018.62 214863628.61 41597126.47 265193677.79 894599451.49

II. Accumulated

amortization

1.Opening balance 112319506.81 118642946.06 9709000.00 82143152.44 322814605.31

2.Current

8106024.8842059366.9622663087.2072828479.04

increased

(1)Amortization 8106024.88 42059366.96 22663087.20 72828479.04

(2)Other

3.Current

7410097.90894373.208304471.10

decreased

(1)Disposal 7410097.90 894373.20 8304471.10

(2)Other

4.Conversion of

foreign currency 493908.13 4816986.79 5310894.92

financial statement

5.Ending balance 113015433.79 160301847.95 9709000.00 109623226.43 392649508.17

III. Depreciation

reserves

1.Opening balance 442167.30 16646900.00 17089067.30

2.Current

increased

(1)Accrued

(2)Other

3.Current

decreased

(1)Disposal

(2)Other

4.Conversion of

foreign currency 25993.49 25993.49

financial statement

5.Ending balance 468160.79 16646900.00 17115060.79IV. Book value

1.Ending Book

259929584.8354093619.8715241226.47155570451.36484834882.53

value

2.Opening Book

269547623.8137246548.0115241226.47165592589.63487627987.92

value

(2) The situation of land use rights without completed property rights certificates: Nil

18. Goodwill

(1) Original book value of goodwill

Current Current

The invested Translation of

increased decreased

entity or matters Opening foreign

Formed by Ending balance

forming balance

business currency Disposal

goodwill

combination statements

Merged with

1784086.791784086.79

WFTT

Merged with

235898288.9313067389.94248965678.87

Borit

Total 237682375.72 13067389.94 250749765.66

(2) Goodwill depreciation reserve

Current

The invested Current increased Translation of

decreased

entity or matters Opening foreign

Formed by Ending balance

forming balance

business currency Disposal

goodwill

combination statements

Merged with

WFTT

Merged with

125422037.413010909.05128432946.46

Borit

Total 125422037.41 3010909.05 128432946.46

(3) Related information of asset group or asset portfolio of the goodwill

Is consistent

Operation branch and

Name Component and basis for asset group or asset portfolio with previous

basis

year

Automotive intake

Long term assets related to the merger of WFTL’s

system product

goodwill; The management made it clear that this asset

WFTL division; Category of Yes

group will be used and operated independently of other

asset group output

assets and will generate cash inflows independently

products

Long term assets related to the merger of Borit’s Other automotive parts

goodwill; The management made it clear that this asset divisions; Category of

Borit Yes

group will be used and operated independently of other asset group output

assets and will generate cash inflows independently products

(4) Specific method of determining the recoverable amount

For asset groups with signs of impairment the Company estimates the recoverable amount of the asset group based

on the higher of its fair value minus disposal expenses and the present value of expected future cash flows; For asset

groups with no signs of impairment the company determines the recoverable amount of the asset group based on

the present value of its expected future net cash flows.1) WFTT: Determine the recoverable amount based on the present value of expected future cash flows

Basis for

The year Key Key determinin

limited parameter parameter g key

Recoverable Depreciatio

Item Book value of the s for the s for the parameters

amount n amount

predictio prediction stable for the

n period period period stable

period

Income Based on

Income

growth prudence

growth

rate: 3% - consider a

rate: 0%;

16%; stable

Profit

WFT 178481237.4 230519591.1 Profit period of

5 years margin:

T 4 0 margin: income

4.33%;

3% -5%; growth of

Discount

Discount 0%

rate is

rate is

12.88%

12.88%

2) Borit: Determine its recoverable amount based on the net amount of fair value minus disposal expenses

Method of

Basis to

determining

Recoverable Depreciation Key determine

Item Book value fair value

amount amount parameters key

and disposal

parameters

expense

Average

Market Market value of

Borit 350313045.41 224891008.00 125422037.41

method multiplier comparable

company

(5) Completion of performance commitments and corresponding impairment of goodwill

Nil

19. Long-term deferred expense

Translation of

Opening Current Amortized in foreign

Item Ending balance

balance increase the Period currency

statements

Decoration

28586235.842875577.037361781.35614600.5824714632.10

expense etc.

20. Deferred income tax assets/Deferred income tax liabilities

(1) Deferred income tax assets that are not offset

Ending balance Opening balance

Item Deductible Deductible Deferred income Deferred income

temporary temporary

tax assets tax assets

difference difference

Bad debt provision 82811787.71 12593312.59 79078766.93 11972961.27

Inventory

286016361.3045423673.61299752548.9346412618.47

depreciation reserve

Depreciation reserves

95427114.1116503823.1070008612.2112701929.36

of fixed assets

Depreciation reserve

of construction in 184615.38 27692.31

progress

Depreciation reserves

16646900.002497035.0016646900.002497035.00

of intangible assetsDeferred income 182861766.95 27634668.38 222850907.79 33668167.75

Unrealized profit from

58038282.1610362240.1043939348.598056161.37

insider transactions

Payable salary

787779009.37148065821.58849436667.00139593056.66

accrued expenses etc.Depreciation assets

amortization 21482750.97 3311127.10 25570352.82 4153581.52

difference

Deductible loss 1021893078.26 153283961.74 942706826.57 142138790.82

Equity incentive 3066582.11 459987.32

Lease liability 50855198.17 11460004.56 14572903.92 2812926.34

Changes in fair value 17858685.16 2678802.77

Total 2621855549.54 433842162.84 2567630416.87 404467215.88

(2) Deferred income tax liabilities that are not offset

Ending balance Opening balance

Taxable Deferred Taxable Deferred

Item

temporary income tax temporary income tax

differences liabilities differences liabilities

The difference between the fair

value and taxation basis of WFTT

9724500.551458675.0710192264.151528839.60

assets in a merger not under the

same control

The difference between the fair

value and taxation basis of IRD

54330413.1711952690.8961131061.2413448833.47

assets in a merger not under the

same control

The difference between the fair

value and taxation basis of Borit

19310735.894827683.9321378918.495344729.59

assets in a merger not under the

same control

The difference between the fair

value and taxation basis of VH

53064614.5412735507.4959291649.8814229995.98

business in a merger not under the

same control

Change in fair value of transaction

8339996.551259587.67161415403.7824226534.89

financial asset

Accelerated depreciation of fixed

761694832.59116424109.44700548497.31107631856.23

assets

Right-of-use assets 48832472.85 11023076.15 13227441.18 2578204.66

Total 955297566.14 159681330.64 1027185236.03 168988994.42

(3) Deferred income tax assets and deferred income tax liabilities listed after off-set

Trade-off between

Trade-off between Ending balance of Opening balance of

the deferred income

the deferred income deferred income tax deferred income tax

Item tax assets and

tax assets and assets or liabilities assets or liabilities

liabilities at period-

liabilities after off-set after off-set

begin

Deferred income

121929207.77311912955.07128839443.43275627772.45

tax assets

Deferred income

121929207.7737752122.87128839443.4340149550.99

tax liabilities

(4) Details of unrecognized deferred income tax assets

Item Ending balance Opening balance Note

There is uncertainty about whether sufficient

Bad debt reserve 1649499774.15 1648602163.32

taxable income can be obtained in the future

Inventory There is uncertainty about whether sufficient

35117491.7134557558.55

depreciation reserve taxable income can be obtained in the futureThere is uncertainty about whether sufficient

Loss from subsidiary 845349190.11 529884134.82

taxable income can be obtained in the future

Depreciation reserves There is uncertainty about whether sufficient

109904261.74129931549.17

of fixed assets taxable income can be obtained in the future

Depreciation reserves There is uncertainty about whether sufficient

468160.79442167.30

of intangible assets taxable income can be obtained in the future

Other equity Due to the uncertainty in obtaining evidence

13600000.0013600000.00

instrument investment required by tax authorities

Wages payable There is uncertainty about whether sufficient

withholding expense 4572812.40 -- taxable income can be obtained in the future

etc.Total 2658511690.90 2357017573.16

(5) Deductible losses of unrecognized deferred income tax assets expired in following years

Maturity year Ending balance Opening balance Note

Operating loss occurs in

20232380501.89

domestic subsidiaries

Operating loss occurs in

20243792427.2912087441.12

domestic subsidiaries

Operating loss occurs in

202512140693.5412140693.54

domestic subsidiaries

Operating loss occurs in

202646418486.8446418486.83

domestic subsidiaries

Operating loss occurs in

2027126802486.76160833781.13

domestic subsidiaries

2028 and the following Operating loss occurs in

101104099.31

years domestic subsidiaries

Operating loss occurs in

No expiration date 555090996.37 296023230.31

overseas subsidiaries

Total 845349190.11 529884134.82

21. Other non-current assets

Item Ending balance Opening balance

Engineering equipment paid in advance 232894913.95 239775014.10

Contract acquisition cost 11333809.10 19855422.27

Large deposit certificates with a maturity of

1112512500.00220000000.00

more than one year

Total 1356741223.05 479630436.37

22. Assets with ownership or use right restricted

Ending

Item Restriction

Book balance Book value Restriction reason

type

Notes pledge for bank

Monetary funds 22174151.94 22174151.94 Cash deposit

acceptance

IRD performance

Monetary funds 7902000.00 7902000.00 Cash deposit

bond

Cash deposit for

Monetary funds 210720.00 210720.00 Cash deposit

Mastercard

Monetary funds 4000.00 4000.00 Cash deposit ETC freezing

Notes pledge for bank

Bill receivable 97820000.00 97820000.00 Pledge

acceptanceReceivables Notes pledge for bank

568256134.85 568256134.85 Cash deposit

financing acceptance

Account

16201589.48 14581430.53 Cash deposit Pledge to obtain loans

receivable

Total 712568596.27 710948437.32

Continued

Opening

Item Restriction

Book balance Book value Restriction reason

type

Foreign exchange

Monetary funds 18840000.00 18840000.00 Cash deposit

contract USD margin

Deposit paid for

Monetary funds 24368385.65 24368385.65 Cash deposit issuing bank

acceptance bills

IRD performance

Monetary funds 7487250.00 7487250.00 Cash deposit

bond

Cash deposit for

Monetary funds 199660.00 199660.00 Cash deposit

Mastercard

Monetary funds 180000.00 180000.00 Freezing ETC freezing

Monetary funds 5000.00 5000.00 Cash deposit Judicial freeze

Notes pledge for bank

Bill receivable 82908186.94 82908186.94 Pledge

acceptance

Receivables Notes pledge for bank

530337600.45 530337600.45 Pledge

financing acceptance

Total 664326083.04 664326083.04

23. Short-term borrowings

(1) Category of short-term borrowings

Item Ending balance Opening balance

Credit loan 818592983.28 3511504373.65

Guaranteed loan 3000000.00 89074800.00

Factory financing 16201589.48

Accrued interest 1094984.75 3797354.17

Total 838889557.51 3604376527.82

(2) Overdue short-term loans without payment

The total amount of overdue and unpaid short-term loans at the end of this period is 0.00 yuan

24. Derivative financial liabilities

Item Ending balance Opening balance

Forward settlement and sales of foreign exchange 747115.75

25. Note payable

In RMB

Category Ending balance Opening balanceBank acceptance bill 1759062642.60 1411089606.00

Other explanation:

To issue the above-mentioned bank acceptance bill a deposit of 22174151.94 yuan was paid and a financing of

666076134.85 yuan was secured by pledging accounts receivable and notes receivable.

(2) At the end of the current period the total amount of matured but unpaid notes payable is 0.00 yuan.

26. Account payable

(1) Account payable

Item Ending balance Opening balance

Operating expenses such as labor or goods payable 3547366822.23 3202009901.75

Accounts payable for engineering equipment 121483601.06 252591121.85

Total 3668850423.29 3454601023.60

(2) Significant accounts payable over one year or overdue

Nil

27. Other account payable

Item Ending balance Opening balance

Interest payable -- --

Dividend Payable -- --

Other accounts payable 108893486.63 198990948.23

Total 108893486.63 198990948.23

(1) Interest payable

Nil

(2) Dividend payable

Nil

(3) Other account payable

1) By nature

Item Ending balance Opening balance

Deposit and margin 13422590.66 15452400.65

Social insurance and reserves funds

1282686.661967741.92

that withholding

Intercourse funds of unit 25512145.98 25512145.98

Restricted stock repurchase

63567420.00138495060.00

obligations

Payable unpaid investment funds 13308176.65

Other 5108643.33 4255423.03

Total 108893486.63 198990948.23

2) Significant other payable over one year or overdue

Item Ending balance Reasons for not repaying or carry-overNingbo Jiangbei High-tech Industrial

Park Development and Construction 19026000.00 Intercourse funds

Co. Ltd

Restricted stock repurchase business 63567420.00 Restricted stock repurchase business

28. Accounts received in advance

(1) Accounts received in advance

Item Ending balance Opening balance

Within 1 year 2911439.65 3633878.33

Total 2911439.65 3633878.33

(2) Significant accounts receivable in advance whose aging is over 1 year or overdue

Nil

29. Contract liabilities

(1) Contract liabilities

Item Ending balance Opening balance

Within one year 63409595.72 60916157.84

1-2 years 3625754.55 31275903.90

2-3 years 8677954.57 1518759.78

Over three years 1973576.40 1139261.71

Total 77686881.24 94850083.23

(2) Significant contractual liabilities with an aging of over 1 year

Nil

(3) The amount and reasons for significant changes in book value during the reporting period

Nil

30. Wage payable

(1) Wage payable

Current Current

Item Opening balance Ending balance

increased decreased

I. Short-term compensation 241874758.99 1360126274.45 1333519922.47 268481110.97

II. Post-employment welfare-

27678116.81217004551.50216890672.0127791996.30

defined contribution plans

III. Dismissed welfare 973200.33 1317459.95 1326154.17 964506.11

IV. Incentive funds paid within

30740000.009475043.0622015043.0618200000.00

one year

V. Other short-term welfare-

Housing subsidies employee 16168310.11 4604208.16 1399779.09 19372739.18

benefits and welfare funds

Total 317434386.24 1592527537.12 1575151570.80 334810352.56

* Explanation of the current decrease in incentive funds paid within one year:

The incentive fund paid within one year has increased by 9475043.06 yuan in the current period which is due to

the reclassification of long-term employee compensation payable to employee compensation payable The

reclassification amount is determined based on the company's future payment plan.* Explanation of the dismissed welfare

Dismissal benefits refer to the employee compensation payable formed by the internal retirement plan implemented

by the company the expected amount to be paid in the following year is reported under the undergraduate project.

(2) Short-term compensation

Opening Current Current

Item Ending balance

balance increased decreased

1. Wages bonuses allowances

228262797.861109739091.021083836037.69254165851.19

and subsidies

2. Welfare for workers and staff 77988085.29 77988085.29

3. Social insurance 279543.63 58086131.45 58042437.08 323238.00

Including: Medical insurance 242824.57 45982995.55 45957179.46 268640.66

Work injury insurance 27398.20 6521781.05 6508696.96 40482.29

Maternity insurance 9320.86 5581354.85 5576560.66 14115.05

4. Housing accumulation fund 785727.00 84368651.34 84284320.34 870058.00

5. Labor union expenditure and

9960112.9916258839.4216482847.279736105.14

personnel education expense

6. Other short-term compensation

2586577.5113685475.9312886194.803385858.64

- social security

Total 241874758.99 1360126274.45 1333519922.47 268481110.97

(3) Post employment benefits - defined contribution plan

Current Current

Item Opening balance Ending balance

increased decreased

1. Basic endowment premium 6829377.95 166179217.39 164485029.84 8523565.50

2. Unemployment insurance 36478.41 4130074.00 4119344.29 47208.12

3. Enterprise annuity 20812260.45 46695260.11 48286297.88 19221222.68

Total 27678116.81 217004551.50 216890672.01 27791996.30

Post employment benefits - defined contribution plan explanation:

The Company participates in the pension insurance and unemployment insurance plans established by government

authorities by laws a certain percentage of the social security fee regulated by the government will pay by the

Company monthly for the plans. Other than the aforesaid monthly contribution the Company takes no further

payment obligation. The relevant expenditure is included in current profit or loss or cost of relevant assets when

occurs. Found more of enterprise annuity in Note XV-4 “Annuity plan”.

31. Tax payable

Item Ending balance Opening balance

Value-added tax 8011069.82 27961474.84

Corporation income tax 30183553.14 7847731.79

City maintaining & construction tax 568820.85 1546043.92

Educational surtax 410526.96 1105937.33

Individual income tax 7904270.96 6846289.60

Other (including stamp tax and local funds) 9502840.76 9278838.05

Total 56581082.49 54586315.53

32. Non-current liabilities due within one year

Item Ending balance Opening balanceLong-term borrowings due within one year 24700000.00 2000000.00

Lease payments due within one year 13122001.66 12044793.34

Interest payable 262319.44 240555.56

Total 38084321.10 14285348.90

33. Other current liabilities

Item Ending balance Opening balance

Rebate payable 253258241.31 201734082.52

Pending sales tax 3881667.29 8815298.56

Undue bill endorsed/discounted 1214398.69

Total 257139908.60 211763779.77

34. Long-term borrowings

Item Ending balance Opening balance

Credit loan 299800000.00 238000000.00

Total 299800000.00 238000000.00

35. Lease liability

Item Ending balance Opening balance

Lease payments 37733196.51 31589277.20

Total 37733196.51 31589277.20

36. Long-term account payable

Item Ending balance Opening balance

Long-term account payable 9770000.00 12520000.00

Special accounts payable 18265082.11 18265082.11

Total 28035082.11 30785082.11

(1) Long-term account payable listed by nature

Item Ending balance Opening balance

Hi-tech Branch of Nanjing Finance Bureau (note * ) Financial

2750000.00

support funds (2008)

Hi-tech Branch of Nanjing Finance Bureau (note * ) Financial

1030000.001030000.00

support funds (2009)

Hi-tech Branch of Nanjing Finance Bureau (note * ) Financial

960000.00960000.00

support funds (2010)

Hi-tech Branch of Nanjing Finance Bureau (note * ) Financial

5040000.005040000.00

support funds (2011)

Hi-tech Branch of Nanjing Finance Bureau (note * ) Financial

2740000.002740000.00

support funds (2013)

Total 9770000.00 12520000.00

Note to long-term accounts payable

Note * : To encourage WFJN 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 fromNovember 17 2008 to November 17 2023. Provided that the operation period in the zone is less than 15 years

financial supporting capital will be reimbursed. This support capital has been in use for 15 years in this period so it

has been transferred to other income.Note * : To encourage WFJN 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

October 27 2009 to October 27 2024. Provided that the operation period in the zone is less than 15 years financial

supporting capital will be reimbursed.Note * : To encourage WFJN 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

December 27 2010 to December 27 2025. Provided that the operation period in the zone is less than 15 years

financial supporting capital will be reimbursed.Note * : To encourage WFJN 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

December 28 2011 to December 28 2026. Provided that the operation period in the zone is less than 15 years

financial supporting capital will be reimbursed.Note * : To encourage WFJN 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

December 18 2013 to December 18 2028. Provided that the operation period in the zone is less than 15 years

financial supporting capital will be reimbursed.

(2) Special accounts payable

Item Opening balance Ending balance

Removal compensation of subsidiary WFJN 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 WFJN 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 WFJN and House Expropriation Management Office of Xuanwu

District Nanjing City 19.7067 million yuan in total were compensated including operation losses from lessee

1.4416 million yuan 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 December 31 2023.

37. Long-term wages payable

(1) Long-term wages payable

Item Ending balance Opening balance

I.Post-employment benefits -

21238891.6220380744.73

Defined benefit plan net liabilities

II. Dismiss welfare 12926873.35 12028538.66

III. Other long-term welfare -

130878717.83169323760.89

Incentive Fund

Less: Incentive funds paid within

35200000.0047640000.00

one year

Other long-term benefits -

95678717.83121683760.89

Incentive fund balance

Total 129844482.80 154093044.28(2) Changes in defined benefit plan

Present value of defined benefit plan

Item Current period Last period

I. Opening balance 20380744.73 19594011.39

II. Cost of defined benefit plan booked into current profit

783750.5838706.27

and loss

1.Current service cost 783750.58 38706.27

III. Cost of defined benefit plan booked into other

1664679.09399165.06

comprehensive income

1.Actuarial gains (losses are represented by “-”) 1664679.09 399165.06

IV. Other changes -1590282.78 348862.01

1.Welfare paid -2780181.37 -345481.69

2.Translation difference of foreign currency statements 1189898.59 694343.70

V. Ending balance 21238891.62 20380744.73

Plan assets: Nil

Other explanation:

According to relevant regulations in Italy the Trattamento di Fine Rapporto (TFR) system is established. VHIO

shall calculate and offer severance to employees in accordance with employees’ employment period and taxable

base salary when they leave or are dismissed. The plan predicts future cash outflows at the inflation rate and

determines its present value at the discount rate. The above-mentioned benefit plan poses actuarial risks to VHIO

mainly including interest rate risk and inflation risk. The decrease in interest rates will lead to an increase in the

present value of the defined benefit plan obligations. In addition the present value of benefit plan obligations is

related to the future payment standards of the plan which are determined based on inflation rates. Therefore an

increase in inflation rate will also lead to an increase in planned liabilities.

38. Estimated debts

Item Ending balance Opening balance

Product quality assurance 26946035.59 8695322.61

Withholding sales discounts 10709925.00

Investment losses in joint ventures 13750.00

Environmental protection commitment 301008.27 1150543.24

Pending dispute and litigation 59459.66 246653.02

Total 38016428.52 10106268.87

39. Deferred income

Translation of

Opening Current Current foreign

Item Ending balance

balance increased decreased currency

statements

Government

223123978.7826584244.2661078193.39143592.64188773622.29

grant

Item with government grants involved:Translatio

Amount

n of

reckoned Assets

Items of Opening New grants foreign Ending

into other related/Inco

liabilities balance in the Period currency balance

income in me related

statement

the period

s

Appropriation

for research

and

development

ability of

distributive

high-pressure

common rail

5536697.24 -- 781651.40 -- 4755045.84 Assets related

system for

diesel engine

use and

production

line

technological

transformation

project

Fund of

industry 11457713.5 Income

18710191.69----7252478.13

upgrade 6 related

(2013)

R&D and

industrializati

on of the high-

pressure

variable pump 2699860.97 -- 1012586.51 -- 1687274.46 Assets related

of the common

rail system of

diesel engine

for automobile

Research

institute of

motor vehicle

117789.93 -- 95763.54 -- 22026.39 Assets related

exhaust after-

treatment

technology

Fund of

industry Income

36831000.00----36831000.00

upgrade related

(2014)

New-built

assets

compensation 18616741.7

after the 63443087.73 -- -- 44826346.03 Assets related

removal of 0

parent

company

Fund of

industry Income

40000000.00----40000000.00

upgrade related

(2016)

Guiding

capital for the

technical

reform from 3787113.97 -- 1214425.00 -- 2572688.97 Assets related

State Hi-Tech

Technical

Commission

Implementatio

n of the

4254433.18 -- 1548680.15 -- 2705753.03 Assets related

variable cross-

sectionturbocharger

for diesel

engine

Demonstration

project for

431887.80 -- 180038.20 -- 251849.60 Assets related

intelligent

manufacturing

The 2nd batch

of provincial

special funds

for industry

transformation 1849844.13 -- 1200987.63 -- 648856.50 Assets related

of industrial

and

information in

2019

Municipal

technological

reform fund 3527096.61 -- 615897.08 -- 2911199.53 Assets related

allocation in

2020

Strategic

cooperation

agreement

funding for

key enterprise 3374618.86 -- 833156.76 -- 2541462.10 Assets related

of smart

manufacturing

in high-tech

zone

The 3rd batch

of provincial

special funds

for industry

transformation 13500000.00 -- 9554476.19 -- 3945523.81 Assets related

of industrial

and

information in

2021

2023 Wuxi

Industrial

Transformatio 10000000.0

-- 998752.96 -- 9001247.04 Assets related

n and 0

Upgrading

Fund

Technical

renovation and

capacity

optimization

project for -- 2000000.00 323880.62 -- 1676119.38 Assets related

annual

production of

150000 sets of

turbochargers

14584244.2 12643442.0 143592.6 Assets

Other 25060356.67 27144751.48 related/Inco

694

me related

223123978.726584244.261078193.3143592.6188773622.2

Total

86949

Other explanation:(1) 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 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 was asset-related

government grant and 781651.40 yuan was written off based on the depreciation schedule of the related assets

during the period.

(2) 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 and amount of

11457713.56 yuan was written off in the year.

(3) R&D and industrialization of the high pressure variable pump of the common rail system of diesel engine for

automobile: the Company received 8.05 million yuan appropriated for the project in 2013 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. The company received 8.05 million yuan 3 million yuan and 0.45 million yuan respectively in

2013 2014 and 2015; such funds were asset-related government grant and shall be written off according to the

depreciation process amount of 1012586.51 yuan was written off in the year.

(4) Vehicle exhaust after-treatment technology research institute project: in 2012 the subsidiary WFLD 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

was approved by Wuxi Huishan Science and Technology Bureau and Wuxi Science and Technology Bureau in

2012 and the company received appropriation of 2.4 million yuan in 2012 and received appropriation of 1.6

million yuan in 2013. Such funds were asset-related government grants and shall be written off according to the

depreciation process and amount of 95763.54 yuan was written off in the year.

(5) 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.

(6) New-built assets compensation after the removal of parent company: policy relocation compensation

received by the Company and will be written off according to the depreciation of new-built assets amount of

18616741.70 yuan was written off in the year.

(7) 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.

(8) Guiding 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 and belongs to government

grant with assets concerned and shall be written off according to the depreciation process amount of 1214425.00

yuan was written off in the year.

(9) 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 2017” subsidiary WFTT

received a specific subsidy of 16.97 million yuan in 2016 and of 760000 yuan in 2018 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; It belongs to government grant with assets concerned and shall

be written off according to the depreciation process. Amount of 1548680.15 yuan was written off in the year.(10) 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 WFLD in 2017 to be utilized

for transformation and upgrade of WFLD’s intelligent manufacturing facilities. This subsidy belongs to

government grant related to assets which shall be written off based on the depreciation progress of the assets.Amount of 180038.20 yuan was written off in the year.

(11) The 2nd batch of provincial special funds for industry transformation of industrial and information in 2019:

according to XCGM [2019] No. 121 the Company received a special fund of 5 million yuan in 2020. This subsidy

was related to the “Weifu High-Technology New Factory Internet Construction” projects and belonged to

government grants related to assets. and shall be written off according to the depreciation process amount of

1200987.63 yuan was written off in the year.

(12) Municipal technological reform fund allocation in 2020: according to XGXZH [2020] No. 16 the Company

received 4.77 million yuan of municipal technological transformation fund project allocation in 2020 which was

related to key technological transformation projects and belonged to government grants related to assets. and shall

be written off according to the depreciation process. Amount of 615897.08 yuan was written off in the year.

(13) Strategic cooperation agreement funding for key enterprise of smart manufacturing in high-tech zone:

according to XXGXF [2020] No. 61 the Company received a related grant of 4.06 million yuan in 2020 and 0.7

million yuan in 2021 this grant was related to the intelligent transformation project and belonged to the

government grants related to assets. and shall be written off according to the depreciation process amount of

833156.76 yuan was written off in the year.

(14) The 3rd batch of provincial special funds for industry transformation of industrial and information in 2021:

according to the SCGM [2021] No.92 the government grant 13.5 million yuan received in 2021 was for the

research development and industrialization of membrane electrodes for high-performance automotive proton

exchange membrane fuel cells which was an assets related government grants. According to the depreciation

progress of related assets amount of 9554476.19 yuan was written off in the year.

(15) 2023 Wuxi Industrial Transformation and Upgrading Fund: The government grant 10 million yuan received in

2023 was used for the company's new motor shaft water jacket injector seat and gasoline rail expansion project

which is a government subsidy related to assets. According to the depreciation progress of related assets amount

of 998752.96 yuan was written off in the year.

(16) Technical renovation and capacity optimization project for annual production of 150000 sets of turbochargers:

According to BQJX[2021] No.31 and BQJX[2022]No. 29 documents the subsidiary WFTL received a government

subsidy of 2 million yuan in 2023 for the annual production of 150000 sets of turbochargers technology renovation

and capacity optimization project. This subsidy belongs to asset related government grant. According to the

depreciation progress of related assets amount of 323880.62 yuan was written off in the year.

40. Share

Change during the year (+/-)

Shares

Item Opening balance New transferred Bonus Other- Ending balance

shares from Subtotal

share cancellation

issued capital

reserve

Total - -

1008603293.00------1002162793.00

shares 6440500.00 6440500.00

Other explanation:

Decreased in share capital was due to the buy-back and cancellation of 6440500 restricted shares initially grantedunder the Restricted Shares Incentive Plan.

41. Capital reserve

Current

Item Opening balance Current decreased Ending balance

increased

Capital premium 3318949527.98 73251190.00 3245698337.98

Other capital reserve 79419039.65 13074587.99 30021824.66 62471802.98

Total 3398368567.63 13074587.99 103273014.66 3308170140.96

Other explanation:

(1) Share capital premium has increased RMB73251190.00 in the period because the 6440500 shares under

restricted stock incentive plan which were unable to be unlocked were canceled by the Company.

(2) The increase of 13074587.99 yuan in other capital reserves in the current period is due to changes in other equity

of joint ventures which the company enjoys in proportion to its shareholding; The decrease of 30021824.66 yuan

in other capital reserves in the current period is composed of two parts: * a net amount of 30009672.78 yuan

after deducting 929399.14 yuan attributable to minority shareholders from the equity settled share payment expenses

of 30939071.92 yuan; * The handling fee for buy backing shares is 12151.88 yuan.

42. Treasury stock

Opening Current Current

Item Ending balance

balance increased decreased

Stock repurchases 397804542.63 71917549.61 469722092.24

Repurchase obligation of restricted

143818460.0080251040.0063567420.00

stock incentive plan

Total 541623002.63 71917549.61 80251040.00 533289512.24

Other explanation:

Share buy-back: the increase of 71917549.61 yuan due to share buy-back by way of centralized bidding in 2023;

Repurchase obligation of restricted stock incentive plan: has RMB 80251040.00 decreased in the Period mainly

including two parts: * RMB559350.00 cash dividends received by restricted stock incentive recipients during the

period; and * RMB 79691690.00 is the buying back and cancellation of 6440500 restricted shares the first

batch of unlocked in the Company’s restricted stock incentive plan by the Company as treasury stock.

43. Other comprehensive income

Current period

Opening Account Belong to

Item Less: Belong to

Ending

before minority

balance income tax parent company balance

income tax in shareholders

expense after tax

the year after tax

I. Other comprehensive income -

-

that cannot be reclassified to -383156.26 1189898.5 -1189898.59

profit or loss 1573054.85

9

Including: Other

comprehensive income that

cannot be transferred to profit or 16008.80 16008.80

loss under the equity method

-

Remeasure changes in defined -

benefit plans -399165.06 1189898.5 -1189898.59 1589063.65

9II. Other comprehensive income

56258124.56258124.655729970.8

items which will be reclassified -528153.87

subsequently to profit or loss 69 9 2

Including: Conversion

56258124.56258124.655729970.8

difference of foreign currency -528153.87

financial statement 69 9 2

55068226.55068226.154156915.9

Total -911310.13

1007

44. Reasonable reserve

Item Opening balance Current increased Current decreased Ending balance

Safety production costs 2119800.95 30768590.85 29246951.83 3641439.97

Other explanation:

(1) Explanation on the withdrawing of special reserves (safe production cost): According to the CZ [2022] No.136-

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 Accrued by the Company in line

with regulations and the parts enjoy by shareholders of the Company in safety production costs Accrued by

subsidiary in line with regulations.

45. Surplus reserve

Current Current

Item Opening balance Ending balance

increased decreased

Statutory surplus reserves 510100496.00 510100496.00

Explanation on statutory surplus reserve withdrawal:

Withdrawal of the statutory surplus reserves: Pursuit to the Company Law and Article of Association the Company

withdraws statutory surplus reserve on 10% of the net profit. No more amounts shall be withdrawal if the

accumulated statutory surplus reserve takes over 50% of the registered capital.

46. Retained profit

Extraction or allocation

Item Current period Last period

ratio

Retained profits at the end of

13320021325.9014814787377.86

last year before adjustment

Total undistributed profits at

the beginning of the

adjustment period

(increase+ decrease -)

Retained profits at the

beginning of the year after 13320021325.90 14814787377.86

adjustment

Add: The net profits belong

to owners of patent company 1837291259.68 118819836.30

of this period

Less: Withdrawal legal

surplus

Less: Withdraw employee

4604208.164526219.46

rewards and welfare funds1 yuan/10 shares this

Less: Cash dividends

97757979.30 1609059668.80 year 16 yuan/10 shares

payable

last year

Less:Common stock

dividends converted into

capital

Add: Impact of disposal of

other equity instrument

investments

Retained profit at period-end 15054950398.12 13320021325.90

47. Operating income and cost

(1) Operating income and cost situation

Current period Last Period

Item

Income Cost Income Cost

Main operating 10926750670.90 9083184521.77 12333099421.87 10658281929.91

Other business 166391280.08 67128118.97 396535495.16 358103558.89

Total 11093141950.98 9150312640.74 12729634917.03 11016385488.80

(2) Operating income and costs divided by the time of goods transfer

Automotive fuel injection systems and fuel Automotive after-treatment system product

Type of contract cell components product segment segment

Operating income Operating cost Operating income Operating cost

Main business

Including: Confirm at a 3409054236.79 2981940280.48

certain point in time 5080741962.36 3913984197.78

Confirm at a certain time

period

Other business

Including: Confirm at a 28752318.79 7542581.44

certain point in time 98121765.05 41281642.58

Confirm at a certain time

period

Rental Income 22700928.04 5093327.35 2006634.03 2032502.22

Total 5201564655.45 3960359167.71 3439813189.61 2991515364.14

Contiuned

Automotive intake system Other automotive components

Total

Type of product segment segment

contract Operating Operating Operating Operating Operating

Operating cost

income cost income income income

Main

business

Including:

Confirm

at a

certain 660060994.40 509537527.46 1776893477.35 1677722516.05 10926750670.90 9083184521.77

point in

time

Confirm

at a

certain

time

period

Other

businessIncluding:

Confirm

at a

certain 6177719.02 857866.05 7682787.10 9845827.41 140734589.96 59527917.48

point in

time

Confirm

at a

certain

time

period

Rental

Income 949128.05 474371.92 25656690.12 7600201.49

Total 667187841.47 510869765.43 1784576264.45 1687568343.46 11093141950.98 9150312640.74

48. Operating tax and extra

Item Current period Last Period

City maintaining & construction

16905414.5322771182.73

tax

Educational surtax 12088114.70 16273199.41

Property tax 21212224.67 18009579.96

Land use tax 3992127.78 4517681.71

Vehicle use tax 29435.60 19195.41

Stamp duty 8287007.60 8187585.86

Other taxes 1950181.70 797159.81

Total 64464506.58 70575584.89

49. Sales expenses

Item Current period Last Period

Salary and wage related expense 73662318.04 59134720.55

Consumption of office materials

12536232.607978020.25

and business travel charge

Warehouse charge 21000061.65 12489955.81

Three guarantees and quality cost 88247974.30 73394539.28

Business entertainment fee 14118610.14 16300099.96

Other 21005989.87 20230754.86

Total 230571186.60 189528090.71

50. Administration expenses

Item Current period Last Period

Salary and wage related expense 314566474.57 312885696.17

Depreciation charger and long-term

109483887.5180103136.06

assets amortization

Consumption of office materials

27671402.4720460578.25

and business travel charge

Share-based payment -19732503.59 18889058.87

Other 180107465.13 154048004.97

Total 612096726.09 586386474.3251. R&D expenditure

Item Current period Last period

Technology development expenditure 667871159.95 581488711.88

Total 667871159.95 581488711.88

52. Financial expenses

Item Current period Last Period

Interest expenses 95145829.10 107737432.78

Less: interest income 40360794.63 41020724.48

Gains/losses from exchange -10232320.08 10099986.41

Handling charges 3488218.26 5510921.05

Total 48040932.65 82327615.76

53. Other income

Sources of income generated Current period Last period

Government grants with routine

75786785.30108331768.29

operation activity concerned

VAT instant refund 13900358.81 --

Tax credit for overseas subsidiaries 6945676.32 3338966.48

Refund of individual income tax

832150.33994662.50

handling fee

Total 97464970.76 112665397.27

Details of government subsidies included in other income:

Related to

Subsidy projects Current period Last period

assets/income

Industrialization project of electric controlled

Related to

high-pressure injection VE pump system for low -- 721000.26

assets/income

emission diesel engines

Jiangsu Province Key Laboratory of Motor

Related to

Vehicle Exhaust Pollution Control (Engineering 140833.00 170000.00

assets/income

Center)

Related to

Funding for Wuxi Key Laboratory 35000.00 70000.00

assets/income

Support Fund for Technical Renovation of

Commercial Vehicle Catalytic Reduction

259000.00 259000.00 Related to assets

System Packaging Line with an Annual

Production of 140000 Units (2014)

Annual production of 300000 four cylinder

engine supercharger technology renovation 56878.65 96266.37 Related to assets

project

Annual production of 150000 gasoline engine

-- 24239.76 Related to assets

turbochargers project

Depreciation/amortization compensation for

newly built assets after the relocation of the 18616741.70 19691341.21 Related to assets

parent company

Technical transformation of catalytic reduction

system for commercial vehicles with an annual 233555.56 233555.56 Related to assets

output of 180000 units

Research and industrialization project of high- 1012586.51 1117613.70 Related to assetsRelated to

Subsidy projects Current period Last period

assets/income

pressure variable pump for common rail system

of automotive diesel engine

Intelligent manufacturing demonstration project

180038.20 220493.70 Related to assets

funds

Research Institute of Motor Vehicle Exhaust

95763.54 530870.24 Related to assets

Aftertreatment Technology

Implementation plan for variable cross-section

1548680.15 1628355.53 Related to assets

turbochargers in diesel engines

Subsidy for the annual production of 200000

gasoline engine turbochargers technology 276403.68 130825.45 Related to assets

renovation project

Annual production of 150000 gasoline engine

246974.99 282056.24 Related to assets

turbochargers

Technical Transformation Guidance Fund of the

1214425.00 1270553.36 Related to assets

National High tech Management Committee

Industrial upgrading fund 11977713.56 47459608.31 Related to assets

Funding for Wuxi Science and Technology Related to

--140000.00

Research and Development Institutions in 2015 assets/income

R&D capability and production line technology

transformation project of distributed high- 781651.40 781651.38 Related to assets

pressure common rail system for diesel engines

Anione 168069.46 264812.57 Related to income

Neptune 147478.34 357572.17 Related to income

Funding for municipal level technological

615897.08 616309.46 Related to assets

renovation projects in 2020

The second batch of provincial special funds for

industrial and information industry 1200987.63 1596505.99 Related to assets

transformation in 2019

Borit R&D subsidy -- 35419.76 Related to income

ECOethylene 529630.58 1250899.19 Related to income

Borit withholding’s returning -- 1400901.38 Related to income

Subsidies for stabilizing and expanding

2715586.61 3820755.20 Related to income

positions

WFJN financial Support Fund 2750000.00 1230000.00 Related to income

Key technology research and development

project for intelligent management of diesel 155154.12 680983.13 Related to income

engine electronic control fuel system

Selection of Top 50 Enterprises in Jiangbei

-- 1030000.00 Related to income

District Ningbo

Development funds for small and medium-sized

-- 2000000.00 Related to income

enterprises

Special funds for high-quality development -- 1000000.00 Related to income

Strategic Cooperation Agreement Funds for Key

Intelligent Manufacturing Enterprises in High 833156.76 1076250.73 Related to income

tech Zone

2021 Industrial Development Funds for

Investment Attracting Enterprises in Tongliang -- 6913300.00 Related to income

District

Training subsidies 143800.00 432575.00 Related to income

Talent policy subsidies 663250.00 1135000.00 Related to income

Special funds for intelligent transformation and

2300000.00 Related to income

digital transformationRelated to

Subsidy projects Current period Last period

assets/income

2022 Headquarters Enterprise Rewards 1000000.00 Related to income

2020 Wuxi Science and Technology

4500000.00 Related to income

Development Fund

Technical renovation awards and guidance funds 1030000.00 Related to income

Wuxi Industrial Transformation and Upgrading Related to

11678229.15

Fund assets/income

Technical Renovation and Capacity

Optimization Project for Annual Production of 323880.62 Related to assets

150000 Turbochargers

Related to

Other 8355419.01 8663052.64

assets/income

Total 75786785.30 108331768.29

54. Investment income

Item Current period Last period

Income of long-term equity investment

1596392131.721636986684.96

calculated based on equity method

Investment income from holding of trading

94704109.98216491612.58

financial assets

Dividend income obtained from other

equity instrument investments during the 683455.00

holding period

Investment income from disposal of

13328675.84137682.59

trading financial assets

Gains/losses recognized when financing of

accounts receivable is terminated for -2111334.30 -5153934.63

discounting

Income from debt restructuring -323525.00 --

Total 1701990058.24 1849145500.50

55. Income from change of fair value

Sources Current period Last period

Changes in the fair value of wealth

3864051.26-12803609.57

management products

Changes in the fair value of the stocks of

listed companies held-excluding the stocks

5903595.38-144072026.77

of listed companies that are included in

other equity instrument investments

Changes in fair value of foreign exchange

-747115.75

contracts

Total 9767646.64 -157622752.09

56. Credit impairment loss

Item Current period Last period

Bad debt loss of accounts receivable -2323920.65 -227652.91

Bad debt loss of other accounts receivable -2078528.42 -1645653489.49

Total -4402449.07 -1645881142.4057. Asset impairment loss

Item Current period Last period

Loss of inventory falling price and loss of

-205166872.96-181610433.12

contract performance cost impairment

Impairment loss of fixed assets -502006.79

Impairment loss of construction in

-184615.38

progress

Impairment loss of goodwill -125422037.41

Total -331275532.54 -181610433.12

58. Income from assets disposal

Sources Current period Last period

Income from disposal of non-current assets 129441950.49 3687970.49

Losses from disposal of non-current assets -1127465.96 -1701165.96

Total 128314484.53 1986804.53

Other explanation: In 2023 the Housing Acquisition Management Office of Qixia District Nanjing City signed the

Nanjing State owned Land Housing Acquisition and Compensation Agreement with its subsidiary WFJN. According

to the agreement the land houses and building attachments of Weifu Jinning located at No. 69 Taiping Village

Yanziji Town Qixia District will be expropriated by the government. The compensation method for expropriation is

monetary compensation with a compensation amount of 119435904.00 yuan which is mainly determined based

on the evaluation results issued by the evaluation company. As of December 31 2023 the Company has delivered

the expropriated houses and land in accordance with the agreement and has also delivered the relevant original

house ownership certificates and state-owned land use certificates to the Housing Expropriation Management Office

of Qixia District Nanjing City. In 2023 WFJN has received full compensation.

59. Non-operating income

Amount reckoned into

Item Current period Last period current non-recurring

gains/losses

Payables that do not

16309506.682048698.7216309506.68

require payment

Price difference for

business combinations

3181563.57

not under the same

control

Liquidated damages and

28044.25281760.5328044.25

compensation income

Other 774256.31 187745.22 774256.31

Total 17111807.24 5699768.04 17111807.24

60. Non-operating expense

Amount reckoned into

Item Current period Last period current non-recurring

gains/losses

Non-current assets

1776304.862135371.431776304.86

disposal lossesIncluding: loss on

scrapping of fixed 1776304.86 2135371.43 1776304.86

assets

Loss on

scrapping of intangible

assets

Donation 520000.00 5013500.00 520000.00

Other 2114886.99 562788.63 1094335.42

Total 4411191.85 7711660.06 4411191.85

61. Income tax expense

(1) Income tax expense

Item Current period Last period

Payable tax in current period 61654852.13 11061046.36

Adjust previous income tax -96623.66 2032113.63

Increase/decrease of deferred

-29999459.03-56032739.30

income tax assets

Increase/decrease of deferred

-10363707.2131608004.40

income tax liability

Total 21195062.23 -11331574.91

(2) Adjustment on accounting profit and income tax expenses

Item Current period

Total profit 1934344592.32

Income tax measured by statutory/applicable tax rate 290151688.85

Impact by different tax rate applied by subsidies -11444237.30

Impact from adjusting the previous income tax -96623.66

Impact by non-taxable revenue -241119377.31

Impact on cost expenses and losses that unable to deducted 43791316.04

Impact by the deductible losses of the un-recognized previous deferred

-20847787.63

income tax

The deductible temporary differences or deductible losses of the un-

27720065.21

recognized deferred income tax assets in the Period

Impact on additional deduction -64268987.24

Other -2690994.73

Total 21195062.23

62. Other comprehensive income

See Note V-43“Other comprehensive income”.

63. Items of cash flow statement

(1) Cash received in relation to operation activities

* Other cash received in relation to operation activities

Item Current period Last period

Interest income 40360794.63 41020724.48

Government grants 38542836.17 32507707.23Margin on operation bill 5804353.60 170000.00Capital inflow of WFTR “platform

199235761.253604252294.46trade” business portfolio

Other 20368806.84 4898138.17

Total 304312552.49 3682848864.34

* Other cash paid in relation to operation activities

Item Current period Last period

Cash cost 653211963.42 571583226.93

Capital outflow of WFTR

6345751426.41

“platform trade” business portfolio

Other 19807691.63 37760946.39

Total 673019655.05 6955095599.73

(2) Cash in relation to investment activities

* Other cash received in related to investment activities

Item Current period Last period

Recovery of forward foreign

exchange settlement and sales 18840000.00

deposit

Total 18840000.00

* Significant cash received in related to investment activities: Nil

* Cash paid in related to investment activities

Item Current period Last period

Deposit paid for the purchase of

136739145.73

VHWX

Payment of foreign exchange

contract deposit and loss of foreign 13036225.94 9492968.77

exchange contract

Total 13036225.94 146232114.50

(3) Cash in related to financing activities

* Other cash received in related to financing activities

Nil

* Other cash paid in related to financing activities

Item Current period Last period

Repayment of non-financial enterprise loans 163470112.06

Borrowing return by WFLD 5470000.00

Lease payments 18319242.80 19302140.88

Repurchase of A shares 71917549.61 397804542.63

Shares repurchase for restricted stock incentive plan

74368290.005323400.00

unlocked

Other 27791.59

Total 164632874.00 591370195.57

* Changes in liabilities arising from financing activities

In RMB

Current increase Current decrease

Beginning Ending

Item

balance Changes in Changes in Changes in Changes in balance

cash non-cash cash non-cashShort-

term 3604376527 2271375308 77537480.0 5114399759. 838889557.5

borrowi .82 .64 5 00 1

ng

Long-

term 238000000.0 425000000.0 338500000.0 24700000. 299800000.0

borrowi 0 0 0 00 0

ng

Non-

current

liabilitie

49784362.7

s 14285348.90 25985390.57 38084321.10

7

maturin

g within

one year

Lease

23663633.813122001.

liabilitie 31589277.20 4397712.88 37733196.51

566

s

38882511532696375308150985476.548328286237822001.1214507075

Total.92.6467.4566.12

Other Explanation: Current increase in short-term loans - non cash changes including exchange gains and losses -

RMB 1811249.94；The current decrease in long-term borrowings and lease liabilities - non cash changes due to

reclassification of amounts due within one year to non current liabilities due within one year.

(4) Explanation on cash flow listed at net amount

Nil

(5) Significant activities and financial impacts that do not involve current cash inflows and

outflows but affect the financial condition of the enterprise or may affect the cash flow of the

enterprise in the future

Nil

64. Supplementary information to statement of cash flow

(1) Supplementary information to statement of cash flow

Supplementary information Current period Last Period

1. Net profit adjusted to cash flow of operation activities:

Net profit 1913149530.09 190946008.25

Add: Assets impairment provision 335677981.61 1827491575.52

Depreciation of fixed assets consumption of oil assets and depreciation

529985637.44423381573.22

of productive biology assets

Depreciation of right-of-use assets 14870657.15 10487347.35

Amortization of intangible assets 72828479.04 47414586.57

Amortization of long-term deferred expenses 7361781.35 5676279.94

Losses from disposal of fixed assets intangible assets and other long-

-134092953.43-1986804.53

term assets (gains shall be filled in with the sign of “-”)

Losses on scrapping of fixed assets(gains shall be filled in with the sign

1791596.042135371.43

of “-”)

Gains/losses of fair value changes(gains shall be filled in with the sign -9767646.64 157622752.09of “-”)

Financial expenses(gains shall be filled in with the sign of “-”) 83562038.16 106707239.68

--

Investment loss (gains shall be filled in with the sign of “-”)

1715570129.251874322320.27

Decrease of deferred income tax asset(increase shall be filled in with

-29999459.03-56032739.30

the sign of “-”)

Increase of deferred income tax liability(decrease shall be filled in with

-10363707.2131608004.40

the sign of “-”)

Decrease of inventory(increase shall be filled in with the sign of “-”) 14264964.67 1073359311.32

Decrease of operating receivable accounts (increase shall be filled in -

-231126963.47

with the sign of “-”) 3936816340.90

Increase of operating payable accounts(decrease shall be filled in with

810038305.19-608366974.35

the sign of “-”)

Other -26360199.81 24952480.15

-

Net cash flows arising from operating activities 1626249911.90

2575742649.43

2. Net change of cash and cash equivalents:

Balance of cash at period end 2061986694.41 2277117604.82

Less: Balance of cash equivalent at year-begin 2277117604.82 1094018936.73

Add: Balance at year-end of cash equivalents

Less: Balance at year-begin of cash equivalents

Net increase of cash and cash equivalents -215130910.41 1183098668.09

(2) Net cash payment for the acquisition of subsidiaries in the period

Item Amount

The cash or cash equivalents paid in the current period

for the merger of enterprises that occurred in the

current period

Less: Cash and cash equivalents held by the company

on the date of purchase

Add: Cash or cash equivalents paid in the current

period for the business acquisition that occurred in 13716100.33

previous periods

Total 13716100.33

(3) Net cash received from the disposal of subsidiaries

Nil

(4) Constitution of cash and cash equivalent

Item Ending balance Opening balance

I. Cash 2061986694.41 2277117604.82

Including: Cash on hand 6343.24 51818.51

Bank deposit available for

2061980351.172277065786.31

payment at any time

Other monetary funds available

for payment at any time

I. Cash equivalents

Including: Bond investments

due within three months

III. Balance of cash and cash equivalents

2061986694.412277117604.82

at the period-end

Including: Restricted cash and cash

equivalents used by the parent company orsubsidiaries within the group

(5) Items whose application scope is restricted but are still listed as cash and cash equivalents

Nil

(6) Monetary items not belonging to cash and cash equivalents

Reasons for not belonging to

Item Current period Last period

cash and cash equivalents

Bank deposit-Bank fixed deposits of Does not meet the definition of

180000000.0060000000.00

more than 3 months cash and cash equivalents

Other monetary funds- Foreign Does not meet the definition of

18840000.00

exchange contract USD margin cash and cash equivalents

Other monetary funds- Deposit paid for Does not meet the definition of

22174151.9424368385.65

issuing bank acceptance bills cash and cash equivalents

Other monetary funds- IRD Does not meet the definition of

7902000.007487250.00

performance bond cash and cash equivalents

Other monetary funds- Mastercard Does not meet the definition of

210720.00199660.00

earnest money cash and cash equivalents

Does not meet the definition of

Other monetary funds- ETC freeze 4000.00 5000.00

cash and cash equivalents

Does not meet the definition of

Other monetary funds- Judicial freeze 180000.00

cash and cash equivalents

Other monetary funds- Foreign Does not meet the definition of

1184752.7991750.29

exchange funds in transit cash and cash equivalents

Other monetary funds- Dividends in Does not meet the definition of

1309380.001262280.00

transit cash and cash equivalents

Total 212785004.73 112434325.94

(7) Notes to other significant activities

Nil

65. Note of the changes of owners’ equity

In this period the company did not make any adjustments to the year-end balance of the previous year including the

names and amounts of other items.

66. Item of foreign currency

(1) Item of foreign currency

Ending balance of Rate of conversion Ending RMB balance

Item

foreign currency converted

Monetary funds

Including: USD 9668849.38 7.0827 68481559.49

EUR 31497419.60 7.8592 247544520.12

HKD 914138.23 0.90622 828410.35

JPY 7975655.00 0.050213 400481.57

DKK 15008361.83 1.0536 15812810.02

Account receivable

Including: USD 3671490.42 7.0827 26004065.20

EUR 26826563.09 7.8592 210835324.64JPY 15066940.00 0.050213 756556.26

DKK 9465657.99 1.0536 9973017.26

Other account receivables

Including: EUR 277184.18 7.8592 2178445.91

DKK 2180889.68 1.0536 2297785.37

Account payable

Including: USD 1259805.06 7.0827 8922821.30

EUR 29745541.80 7.8592 233776162.12

JPY 19496400.00 0.050213 978972.73

DKK 23043173.79 1.0536 24278287.91

GBP 2450.00 9.0411 22150.70

CHF 317934.39 8.4184 2676498.87

Other account payable

Including: EUR 13639.91 7.8592 107198.78

DKK 1230912.02 1.0536 1296888.90

Non-current liabilities

due within one year

Including: USD 156484.17 7.0827 1108330.43

EUR 601051.35 7.8592 4723782.77

DKK 1257635.41 1.0536 1325044.67

Leasing liabilities

Including: USD 230805.29 7.0827 1634724.63

EUR 1140990.24 7.8592 8967270.49

DKK 19974012.44 1.0536 21044619.51

Explanation: overseas operating entities

Subsidiary of the Company IRD was established in Denmark in 1996. The 66% equity of IRD were acquired by

the Company in cash in April 2019. In October 2020 the company acquired the remaining 34.00% equity of IRD in

cash thus the Company holds 100% equity of IRD. IRD is denominated in Danish krone and IRD is mainly engaged

in R&D production and sales of fuel cell components.Subsidiary Borit was established in Belgium in 2010. The Company acquired 100% equity of Borit in cash in

November 2020. Borit is denominated in Euro and engaged in R&D production and sales of fuel cell components.Subsidiary VHIO was established in Italy in 2000. The Company acquired 100.00% equity of VHIO in cash in

October 2022. The company is denominated in Euro and engaged in R&D production and sales of vacuum and

hydraulic pumps.

67. Lease

(1) The company as the lessee

Leasing cost of simplified handling of short-term leasing or leasing costs for low value assets is 8493394.15 yuan;

The total cash outflow related to leasing is 26928749.23 yuan.The relevant information on the right-of-use assets can be found in Note V- 16 “Right of use assets”.(2) The company as the lessor

Operating lease with the company as the lessor

Including: income related to variable lease payments not

Item Rental income

included in rental income

Rental of houses and

25656690.12

equipment

Total 25656690.12

68. R&D expenditure

Item Current period Last period

Employee compensation 285889549.54 252383929.03

Direct investment 195791776.44 189668890.73

Depreciation and amortization 117384698.44 95794189.07

Other 68805135.53 43641703.05

Total 667871159.95 581488711.88

Including: Expensed R&D expenditure 667871159.95 581488711.88

Capitalized R&D expenses

VI. Changes of consolidation scope (RMB)

1. Enterprise combines not under the same control occurred in the period

Nil

2. Enterprise combines under the same control occurred in the period

Nil

3. Reverse purchase

Nil

4. Disposal of subsidiaries

Nil

VII. Equity in other entity (RMB)

1. Equity in subsidiary

(1) Constitute of enterprise group

In ten thousand yuan

Voting

Main Direct Indirect

Egistered Business rights Acquired

Subsidiary operation shareholding shareholding

place nature ratio way

place ratio(%) ratio(%)

（%）

Spare parts Enterprise

WFJN Nanjing Nanjing 80.00 -- 80.00

of internal- combinescombustion under the

engine same

control

Enterprise

Automobile

combines

exhaust

WFLD Wuxi Wuxi 94.81 -- 94.81 under the

purifier

same

muffler

control

Spare parts

of internal-

WFMA Wuxi Wuxi 100.00 -- 100.00 Investment

combustion

engine

Spare parts

of internal-

WFCA Wuxi Wuxi 100.00 -- 100.00 Investment

combustion

engine

Enterprise

combines

WFTR Wuxi Wuxi Trading 100.00 -- 100.00 under the

same

control

Spare parts

of internal-

WFSC Wuxi Wuxi 66.00 -- 66.00 Investment

combustion

engine

Enterprise

Spare parts

combines

of internal-

WFTT Ningbo Ningbo 98.83 1.17 100.00 not under

combustion

the same

engine

control

Enterprise

Spare parts

combines

of internal-

WFAM Wuxi Wuxi 51.00 -- 51.00 not under

combustion

the same

engine

control

Automobile

WFLD exhaust

Wuhan Wuhan -- 60.00 60.00 Investment

(Wuhan) purifier

muffler

Automobile

WFLD exhaust

Chongqing Chongqing -- 100.00 100.00 Investment

(Chongqing) purifier

muffler

Automobile

WFLD exhaust

Nanchang Nanchang -- 100.00 100.00 Investment

(Nanchang) purifier

muffler

Smart car

WFAS Wuxi Wuxi -- 66.00 66.00 Investment

equipment

Enterprise

combines

WFDT Wuxi Wuxi Hub Motor 80.00 -- 80.00 not under

the same

control

Fuel cell

WFQL Wuxi Wuxi 45.00 30.00 75.00 Investment

components

Enterprise

Vacuum

combines

and

VHWX Wuxi Wuxi 100.00 -- 100.00 not under

hydraulic

the same

pump

control

SPV Denmark Denmark Investment 100.00 -- 100.00 Investment

Enterprise

Fuel cell combines

IRD Denmark Denmark -- 100.00 100.00

components not under

the samecontrol

Enterprise

combines

IRD Fuel cell

America America -- 100.00 100.00 not under

America components

the same

control

Enterprise

combines

Fuel cell

Borit Belgium Belgium -- 100.00 100.00 not under

components

the same

control

Enterprise

combines

Borit Fuel cell

America America -- 100.00 100.00 not under

America components

the same

control

Enterprise

Vacuum

combines

and

VHIO Italy Italy -- 100.00 100.00 not under

hydraulic

the same

pump

control

(2) Important non-wholly-owned subsidiary

Gains/losses Dividend announced

Share-holding ratio attributable to to distribute for Ending equity of

Subsidiary

of minority minority in the minority in the minority

Period Period

WFJN 20.00% 32815314.34 11641107.58 231399302.98

WFLD 5.19% 2868752.26 155910365.23

Total 81309877.12 40453107.58 647634107.86

(3) Main finance of the important non-wholly-owned subsidiary

Ending balance

Subsidiar

Non-current Current Non-current

y Current assets Total assets Total liabilities

assets liabilities liabilities

800008834.7763327722.51563336557.372678469.732816414.405494883.9

WFJN

62287218

3887564531.1588909706.5476474238.2658216800.20989867.92679206668.

WFLD

99929187077

4687573366.2352237429.7039810796.3030895270.53806282.13084701552.

Total

75441964175

Subsidia Opening balance

ry Current assets Current assets Current assets Current assets Current assets Current assets

858419058.1577359266.21435778324.346383138.635181853.381564992.2

WFJN

66423603

4869373661.1412237671.6281611332.3512116686.218075518.3730192205.

WFLD

601272687947

57277927191989596937771738965738584998252532573724111757197

Total.76.38.14.31.39.70

Current period

Subsidiary Total comprehensive Cash flow from

Operation Income Net profit

income operation activity

WFJN 661256020.17 164076571.71 164076571.71 7886426.15WFLD 3605313446.67 232172143.48 232172143.48 814222683.45

Total 4266569466.84 396248715.19 396248715.19 822109109.60

Last period

Subsidiary Operation

Operation Income Operation Income Operation Income

Income

WFJN 732361563.72 83150768.43 83150768.43 62087338.85

WFLD 5937549034.42 265352997.31 265352997.31 87740237.63

Total 6669910598.14 348503765.74 348503765.74 149827576.48

(4) Significant restrictions on the use of enterprise group assets and pay off debts of the

enterprise group

Nil

2. Transaction that has owners’ equity shares changed in subsidiary but still with controlling

rights

Nil

3. Equity in joint venture and associated enterprise

(1) Joint venture and associated enterprise

Share-holding ratio Accountin

g treatment

on

Joint venture Main investment

Enterprise Registered Business

or associated operation for joint

abbreviation place nature Indirectl

enterprise place Directly y venture

and

associated

enterprise

Wuxi

WFECal Equity

WFEC Wuxi Wuxi Catalyst 49.00%

Catalysts. method

Co. Ltd.Robert Internal-

Bosch combustio Equity

RBCD Wuxi Wuxi 32.50% 1.50%

Powertrain n engine method

Ltd. accessories

Zhonglian Internal-

Automobile Zhonglian combustio Equity

Shanghai Shanghai 20.00%

Electronics Electronics. n engine method

Co. Ltd. accessories

Wuxi Weifu

Internal-

Precision

combustio Equity

Machinery WFPM Wuxi Wuxi 20.00%

n engine method

Manufacturin

accessories

g Co. Ltd

Changchun

Automobil

Xuyang Weifu

Changchun Changchu Changchu e Equity

Automotive 34.00%

Xuyang n n component method

Parts

s

TechnologyCo. Ltd

PrecorsGmbH Fuel cell

PrecorsGmb Equity

Germany Germany component 43.39%

H method

s

Wuxi

ChelianTianxi

Telematics 9.6372 Equity

a Information Auto Link Wuxi Wuxi

services method

Technology %

Co. Ltd.Lezhuo Bowei

Automobil

Hydraulic

Lezhuo e Equity

Technology Shanghai Shanghai 50.00%

Bowei component method

(Shanghai)

s

Co. Ltd

Holding shares ratio different from the voting right ratio: Nil

Has major influence with less 20% voting rights hold or has minor influence with over 20% (20% included) voting

rights hold:

The Company holds 9.6372% equity of Auto Link and appointed a director to Auto Link. Though the representative

the Company can participate in the operation policies formulation of Auto Link and thus exercise a significant

influence over Auto Link.

(2) Main financial information of the important associated enterprise

Ending balance/Current period

WFEC RBCD Zhonglian Automobile

Current assets 3309330261.33 13057353298.24 156804165.22

Including: cash and cash

695880608.8716224264.19131177239.01

equivalent

Non -current assets 417489997.17 3452708227.20 8276183030.91

Total assets 3726820258.50 16510061525.44 8432987196.13

Current liabilities 1402974842.29 8401045934.29 7530191.60

Non-current liabilities 455453890.82 -- 4983100.68

Total liabilities 1858428733.11 8401045934.29 12513292.28

Minority interests -- --

Attributable to parent

company shareholders’ 1868391525.39 8109015591.15 8420473903.85

equity

Share of net assets

calculated by 915511847.44 2757065300.99 1684094780.77

shareholding ratio

Adjustment matters -- --

--Goodwill -- 267788761.35 1407265.96

--Unrealized profit of

---9546770.23

internal trading

--Other -- -0.28

Book value of equity

investment in associated 915511847.44 3015307291.83 1685502046.73

enterprise

Fair value of equity

investment for the

------

affiliates with

consideration publicly

Operation income 3925439987.43 13269586309.56 30337704.69

Financial expense 7037634.39 83168950.55 -4623827.42Income tax expense 59152017.79 287380800.90 7155753.05

Net profit 422428917.15 2994134912.69 2040443663.38

Net profit from

------

discontinued operations

Other comprehensive

------

income

Total comprehensive

422428917.152994134912.692040443663.38

income

Dividends received from

associated enterprise in 117600000.00 1673605474.71 282000000.00

the year

Other explanation

Adjustment item for other “-0.28”: the differential tail;

Opening balance/Current period

WFEC RBCD Zhonglian Automobile

Current assets 3507976754.16 15426523373.99 241595079.15

Including: cash and cash

813874175.2710773921.81225052854.96

equivalent

Non -current assets 333764427.43 3421035986.82 7557124612.32

Total assets 3841741181.59 18847559360.81 7798719691.47

Current liabilities 1665411123.81 8810309639.09 6171780.23

Non-current liabilities 493618200.85 -- 2517670.77

Total liabilities 2159029324.66 8810309639.09 8689451.00

Minority interests -- -- --

Attributable to parent

company shareholders’ 1682711856.93 10037249721.72 7790030240.47

equity

Share of net assets

calculated by 824528809.90 3412664905.38 1558006048.09

shareholding ratio

Adjustment matters -- -- --

--Goodwill -- 267788761.35 1407265.96

--Unrealized profit of

---20692355.48--

internal trading

--Other -- -0.28 --

Book value of equity

investment in associated 824528809.90 3659761310.97 1559413314.05

enterprise

Fair value of equity

investment for the

------

affiliates with

consideration publicly

Operation income 4983370807.15 13443929728.58 26913563.07

Financial expense 37298423.01 -12919599.29 -3814000.75

Income tax expense 43882305.71 494166513.51 4465983.95

Net profit 354097545.31 3059444530.82 1876187641.39

Net profit from

------

discontinued operations

Other comprehensive

------

income

Total comprehensive

354097545.313059444530.821876187641.39

income

Dividends received from

associated enterprise in 147000000.00 765837710.23 194400000.00

the year(3) Excess loss occurred in joint venture or associated enterprise

Nil

(4) Unconfirmed commitment with joint venture investment concerned

Nil

(5) Intangible liability with joint venture or associated enterprise investment concerned

Nil

4. Financial summary for non-important joint venture and associated enterprise

Ending balance/Current

Opening balance/Last period

period

Joint venture:

Total investment book value

Amount based on share-holding ratio

--Net profit

-- Other comprehensive income

-- Total comprehensive income

Associated enterprise:

Total book value of investment 331312321.07 239114674.05

Amount based on share-holding ratio

--Net profit -22757873.48 7198399.91

--Other comprehensive income

--Total comprehensive income -22757873.48 7198399.91

5. Major joint operation

Nil

6. Structured body excluding in consolidated financial statement

Nil

VIII. Government grant

1. Government grant recognized at report ending in terms of amount receivable

Nil

2. Liabilities involved with government grant

□Applicable □Not applicable

In RMB

Amount

Current Amount Other

booked

Accountin Opening increase in carried changes in Ending Asset/incom

into

g title balance government forward to current balance e related

non-

grant other income period

business

income

in

current

period

Deferred 124014866.2 16385000.0 44535440.1

-- -- 95864426.07 Asset related

income 3 0 6

Deferred Asset/incom

3404849.87----490987.12--2913862.75

income e related

Deferred 10199244.2 16051766.1 143592.6 Income

95704262.68--89995333.47

income 6 1 4 related

223123978.726584244.261078193.3143592.6188773622.2

Total --

86949

3. Government grant booked into current gains/losses

Accounting title Current period Last period

Other revenue 75786785.30 108331768.29

IX. Risk related with financial instrument

1. Various risks arising from financial instruments

Main financial instrument of the Company including monetary funds structured deposits account receivable equity

instrument investment financial products loans and 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. Compliance

department and financial control department manager and monitor those risk exposures to ensuring the risks are

control in a limited range.

(1) Credit Risk

Credit risk refers to the risk that one party of a financial instrument fails to perform its obligations and resulting in

the financial loss of other party. The company's credit risk mainly comes from monetary funds structured deposits

note receivable account receivable other account receivables. The management has established an appropriate credit

policy and continuously monitors the exposure to these credit risks.The monetary funds and structured deposits held by the Company are mainly deposited in financial institutions such

as commercial banks the management believes that these commercial banks have higher credit and asset status and

have lower credit risks. The Company adopts quota policies to avoid credit risks to any financial institutions.For accounts receivable other receivables and bills receivable the Company sets relevant policies to control thecredit risk exposure. To prevent the risks the company has formulated a new customer credit evaluation system and

an existing customer credit sales balance analysis system. The new customer credit evaluation system aims at new

customers the company will investigate a customer’s background according to the established process to determine

whether to give the customer a credit line and the credit line size and credit period. Accordingly the company has

set a credit limit and a credit period for each customer which is the maximum amount that does not require additional

approval. The analysis system for credit sales balance of existing customers means that after receiving a purchase

order from an existing customer the company will check the order amount and the balance of the accounts owed by

the customer so far if the total of the two exceeds the credit limit of the customer the company can only sell to the

customer on the premise of additional approval otherwise the customer must be required to pay the corresponding

amount in advance. In addition for the credit sales that have occurred the company analyzes and audits the monthly

statements for risk warning of accounts receivable to ensure that the company’s overall credit risk is within a

controllable range.The maximum credit risk exposure of the Company is the carrying amount of each financial asset on the balance

sheet.

(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 then 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 HKD DKK except for the USD EUR SF JPY HKD and DKK carried out

for the equipment purchasing of parent company and Autocam material purchasing of parent company technical

service and trademark usage costs of parent company the import and export of Weifu International Trade operation

of IRD operation of Borit and operation of VHIO and 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 2023 except for the follow assets or liabilities listed with foreign currency assets and

liabilities of the Company are carried with RMB

* Foreign currency assets of the Company till end of 31st December 2023:

Ending foreign Ending RMB balance Ratio in assets

Item Convert rate

currency balance converted (%)

Monetary funds

Including: USD 9668849.38 7.0827 68481559.49 0.24

EUR 31497419.60 7.8592 247544520.12 0.88

HKD 914138.23 0.90622 828410.35

JPY 7975655.00 0.050213 400481.57

DKK 15008361.83 1.0536 15812810.02 0.06Ending foreign Ending RMB balance Ratio in assets

Item Convert rate

currency balance converted (%)

Account receivable

Including: USD 3671490.42 7.0827 26004065.20 0.09

EUR 26826563.09 7.8592 210835324.64 0.75

JPY 15066940.00 0.050213 756556.26

DKK 9465657.99 1.0536 9973017.26 0.04

Other account

receivables

Including: EUR 277184.18 7.8592 2178445.91 0.01

DKK 2180889.68 1.0536 2297785.37 0.01

Total ratio in assets 2.08

* Foreign currency liability of the Company till end of 31st December 2023:

Ending foreign Ending RMB balance Ratio in

Item Convert rate

currency balance converted assets(%)

Account payable

Including: USD 1259805.06 7.0827 8922821.30 0.11

EUR 29745541.80 7.8592 233776162.12 2.96

JPY 19496400.00 0.050213 978972.73 0.01

DKK 23043173.79 1.0536 24278287.91 0.31

GBP 2450.00 9.0411 22150.70

317934.398.41842676498.870.03

CHF

Other account payable

Including: EUR 13639.91 7.8592 107198.78

DKK 1230912.02 1.0536 1296888.90 0.02

Non-current liabilities

due within one year

Including: USD 156484.17 7.0827 1108330.43 0.01

EUR 601051.35 7.8592 4723782.77 0.06

DKK 1257635.41 1.0536 1325044.67 0.02

Leasing liabilities

Including USD 230805.29 7.0827 1634724.63 0.02

EUR 1140990.24 7.8592 8967270.49 0.11

DKK 19974012.44 1.0536 21044619.51 0.27

Total ratio in liabilities 3.93

* Other pricing risk

The equity instrument investment held by the Company with classification as transaction financial asset and other

non-current financial assets are measured on fair value of the balance sheet date. The fluctuation of expected price

for these investments will affect the gains/losses of fair value changes for the Company.Furthermore on the premise of deliberated and approved in 10th meeting of 8th session of the BOD the Company

exercise entrust financing with the self-owned idle capital; therefore the Company has the risks of collecting no

principal due to entrust financial products default. Aims at such risk the Company formulated the ManagementMechanism of Capital Financing and well-defined the authority to entrust financial management audit process

reporting system Choice of trustee daily monitoring and verification and investigation of responsibility etc. 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 5 years in principle; The variety of investment includes bank

financial products trust plans of trust companies asset management plans of asset management companies various

products issued by securities companies fund companies and insurance companies etc.

(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.

2. Hedge

Nil

3. Financial assets

(1) By transfer manner

Amount of

Transfer Nature of transferred financial Derecognized Judgment basis for

transferred

method assets or not derecognition

financial asset

Bank acceptance bills in Almost all of its risks

Bill

accounts receivable financing 127359498.05 Derecognized and rewards have been

endorsement

that have not yet matured transferred

Bank acceptance bills in Almost all of its risks

Bill

accounts receivable financing 131605542.60 Derecognized and rewards have been

discounting

that have not yet matured transferred

Unexpired network supply chain

Not

Factoring "e-communication" in accounts 14581430.53

derecognized

receivable

total 273546471.18

(2) Financial assets derecognized due to transfer

Amount of

Methods of transferring Gains/losses related to de-

Item derecognized financial

financial assets recognition

assets

Accounts receivable

Bill endorsement 127359498.05

financing

Accounts receivable

Bill discounting 131605542.60 -2111334.30

financing

Total 258965040.65 -2111334.30(3) Financial assets which are transferred and involved continuously

Methods of transferring Amount of asset Amount of liability

Item

financial assets continuously involved continuously involved

Accounts receivable Factoring 14581430.53 16111371.14

Total 14581430.53 16111371.14

X. Disclosure of fair value

1. Ending fair value of the assets and liabilities measured by fair value

In RMB

Ending fair value

Item Second

First level Third level Total

level

I. Sustaining measured at fair value -- -- -- --

1. Financial assets measured at fair

value and whose changes are 148914616.00 -- 3046922649.02 3195837265.02

included in current profit or loss

(I) Trading financial assets 147830616.00 -- 2243656528.96 2391487144.96

(1) Equity instrument investment 147830616.00 -- -- 147830616.00

(2) Other liability instruments and

----2243656528.962243656528.96

equity instrument investment

2. Other non-current financial assets 1084000.00 803266120.06 804350120.06

(1) Equity instrument investment 1084000.00 653266120.06 654350120.06

(2) Other liability instruments and

----150000000.00150000000.00

equity instrument investment

(II) Financial assets measured at fair

value and whose changes are -- -- 2339540639.46 2339540639.46

included in current profit or loss

1. Receivable financing -- -- 1661749949.46 1661749949.46

2. Other equity instrument

----677790690.00677790690.00

investment

Total asset sustaining measured by

148914616.005386463288.485535377904.48

fair value

Total liabilities sustaining measured

by fair value

II. Non-persistent measure of fair

--------

value

Total asset non-persistent measured

by fair value

Total liabilities non-persistent

measured by fair value

2. Recognized basis for the market price sustaining and non-persistent measured by fair

value on first level

On 31 December 2023 the financial assets available for sale equity instrument investments held by the Company

include SNAT (stock code: 600841) and Miracle Automation (Stock code: 002009). The fair value at the end of the

period is determined at the closing price as of December 29 2023.On 31 December 2023 the non-current financial assets equity instrument investments held by the Company include

Guolian Securities (stock code: 601456). The fair value at the end of the period is determined at the closing price as

of December 29 2023

3. Continuous and non continuous third level fair value measurement items

(1) Accounts receivable financing

For this portion of financial assets the company uses discounted cash flow valuation techniques to determine their

fair value. Among them important unobservable input values mainly include discount rate contract cash flow

maturity period etc. Cash flows with a contract maturity of 12 months or less are not discounted and their fair value

is based on cost.

(2) Other equity instrument investments

For this portion of financial assets due to the lack of market liquidity the company adopts the reset cost method to

determine their fair value. Among them important unobservable input values mainly include financial data of the

invested company.

(3) Other debt instruments and equity instrument investments

For this portion of financial assets our company adopts the discounted cash flow valuation technique for

determination. Among them important unobservable input values mainly include expected annualized return risk

coefficient etc.XI. Related party and related party transactions

1. Parent company of the enterprise

Parent Related Business Registration legal Business Registered

company relationship nature place representative nature capital

Operation of Operation of

Wuxi Industry Parent

state-owned Wuxi Yao Zhiyong state-owned 5496785600

Group company

assets assets

Note: On January 18 2024 the registered capital of Wuxi Industrial Group was changed from RMB

5496785600.00 to RMB 5927940200.00.

Share-holding

ratio on the Voting right ratio The ultimate controlling party of Unified Social Credit

Parent company

enterprise for on the enterprise this enterprise Code

parent company

Wuxi State owned Assets

Wuxi Industry

20.36% 20.36% Supervision and Administration 913202001360026543

Group

Commission

Explanation of the situation of the parent company of the Company

Wuxi Industry Group is an enterprise controlled by the State-owned Assets Management Committee of Wuxi

Municipal People’s Government. Its business scope includes foreign investment by using its own assets house

leasing services self-operating and acting as an agent for the import and export business of various commodities

and technologies (Except for goods and technologies that are restricted by the state or prohibited for import and

export) domestic trade (excluding national restricted and prohibited items). (Projects that are subject to approval

in accordance with the law can be operated only after being approved by relevant departments).2. Subsidiary of the Company

For more details of the Company’s subsidiaries please refer to VII- 1. “Equity in subsidiary”

3. Joint venture and associated enterprise

For more details please refer to Note VII-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 Company

Robert Bosch Company Second largest shareholder of the Company

Guokai Metal Enterprises controlled by the parent company

Urban Public Distribution Enterprises controlled by the parent company

FAILCONTECH Enterprises controlled by the parent company

Jiangsu Huilian Aluminum Industry Co. Ltd.(hereinafter referred to as “Huilian Aluminum Enterprises controlled by the parent companyIndustry”)

Wuxi IoT Innovation Center Co. Ltd. (hereinafter

Enterprises controlled by the parent company

referred to as “Wuxi IoT”)

Hebei Machinery Import and Export Co. Ltd. Enterprises controlled by the Company’s former

(Hereinafter referred to as “Hebei Machinery”) director/senior management elder brother

Hebei Deshuang Trading Co. Ltd. (Hereinafter

Enterprises controlled by Hebei Machinery

referred to as “Hebei Deshuang”)

Hebei Jinda Import and Export Co. Ltd. (Hereinafter

Enterprises controlled by Hebei Machinery

referred to as “Hebei Jinda”)

Hebei Lanpai Technology Co. Ltd. (Hereinafter

Enterprises controlled by Hebei Machinery

referred to as “Hebei Lanpai”)

Hebei Mianzhuo Electromechanical Equipment SalesCo. Ltd. (Hereinafter referred to as “Hebei Enterprises controlled by Hebei MachineryMianzhuo”)

Director supervisor and senior executive of the

Key executive

Company

5. Related transaction situation

(1) Goods purchasing labor service providing and receiving

* Goods purchasing/labor service receiving

Related party Content of related transaction Current period Last Period

WFPM Goods and labor 41669848.47 52775709.71

RBCD Goods and labor 266965044.36 301077307.73

WFEC Goods and labor 955325713.19 575378265.05

Robert Bosch Company Goods and labor 199404542.49 232163763.73

Changchun Xuyang Goods -- 342520.00

GuokaiMetals Goods 15867033.58 14516381.84FAILCONTECH Goods and labor 50600.00 --

Huilian Aluminum

Goods 515250.00 --

Industry

* Goods sold/labor service providing

Related party Content of related transaction Current period Last Period

WFPM Goods and labor 532192.80 980889.25

RBCD Goods and labor 1673734280.25 2220345511.60

WFEC Goods and labor 7290384.61 944537.87

Robert Bosch Company Goods and labor 1868727976.48 1475458231.00

Changchun Xuyang Goods and labor 1011193.02 286036.62

Lezhuo Bowei Goods and labor 9695369.27 --

(2) Related trusteeship management/contract & entrust management/ outsourcing

Nil

(3) Related lease

The company as lessor:

Lease income recognized in Lease income recognized

Lessee Assets type

the Period at last Period

WFEC Workshop 2006634.03 2380758.09

RBCD Parking lost 234000.00

Lezhuo Bowei Workshop and equipment 2715935.47

Explanation on related lease

WFLD entered into a house leasing contract with WFEC.The plant locating at No.9 Linjiang Road Wuxi Xinwu

District owed by WFLD was rented out to WFEC. It is agreed that the rental income from January 1 2023 to

December 31 2022 was 2006634.03 yuan.WFJN signed a house leasing contract with Lezhuo Bowei. Lezhuo Bowei leases a portion of WFJN’s plant located

at No. 12 Liuzhou North Road Pukou District Nanjing City. The lease term is from January 1 2023 to December

31 2024. WFJN has confirmed the rental income of 2373906.08 yuan for the year 2023; Lezhuo Bowei also rented

some equipment from WFJN and WFJN confirmed equipment rental income of 342029.39 yuan in 2023.

(4) Connected guarantee

Nil

(5) Related party’s borrowed/lending funds

Nil

(6) Related party’s assets transfer and debt reorganization

Nil

(7) Remuneration of key manager

Current period(Ten thousand Last period(Ten thousand

Item

yuan) yuan)

Remuneration of key manager 662.00 679.00(8) Related transactions of "platform trade" business

Current period Last period

Name of related

parties Received "sales Paid "purchase Received "sales Paid "purchase price"

payment" price" payment"

Hebei Machinery -- -- 2125487770.72 --

Hebei Jinda -- -56753804.02 -- 2015224288.59

Hebei Deshuang -- -- -- 1436757179.96

Hebei Lanpai -- -- -- 609404930.22

Hebei Mianzhuo -- -- -- 479253260.75

Total -- -56753804.02 2125487770.72 4540639659.52

Other explaination: Because Hebei Jinda Hebei Deshuang Hebei Lanpai and Hebei Mianzhuo are controlled by

Hebei Machinery based on the business essence of "platform trade" business WFTR listed the difference between

the "purchase payment" paid by WFTR to Hebei Jinda Hebei Deshuang Hebei Lanpai and Hebei Mianzhuo and the

"sales payment" received from Hebei Machinery as other receivables. During the year of 2023 the negative amount

of "purchase payment" paid by WFTR to Hebei Jinda is the "purchase payment" returned by Hebei Jinda.

(9) Other related transactions

Related party Contents of item Current period Last Period

WFPM Purchase of fixed assets 186000.00 50000.00

RBCD Purchase of fixed assets 283185.85 4503484.90

Technology royalties

RBCD -- 1147294.75

paid etc.Providing of technical

RBCD -- 2053000.00

services etc.Technology royalties

Robert Bosch Company 2517526.28 2316825.65

paid etc.Robert Bosch Company Purchase of fixed assets 20337308.56 49061191.70

Providing of technical

Robert Bosch Company 2601403.49 --

services etc.Robert Bosch Company Sales of fixed assets 10066665.81 --

Payable for technical

WFEC 33396.23 102075.47

services

WFEC Utilities payable 1217617.88 1187817.04

Provide technical

WFEC 42169.81

services etc

WFEC Selling fixed assets 253046.93 --

Providing of technology

Lezhuo Bowei 110344.34 --

service etc.Purchase canteen

Urban public distribution 2074056.16 1392464.33

ingredients etc

Providing of technology

Wuxi Industry Group 160613.21 --

service etc.Wuxi IOT Purchase of fixed assets 602233.50 --6. Receivable/payable items of related parties

(1) Receivable item

Ending balance Opening balance

Item Related party Bad debt Bad debt

Book balance Book balance

reserve reserve

Account

WFPM 170770.59 -- 299389.13 10925.29

receivable

Account 686424501.80 1017817.82 461493652.46 174766.71

RBCD

receivable

Account Robert Bosch

receivable Company 596846772.56 782592.70 363021724.83 882016.11

Other account Robert Bosch

2500307.00------

receivables Company

Account Changchun

220134.29--5464.91--

receivable Xuyang

Account

WFEC 1787498.57 -- 514638.29 --

receivable

Other account

WFEC -- -- 147000000.00 --

receivables

Account

Lezhuo Bowei 3520841.22 -- -- --

receivable

(2) Prepayments item

Item Related party Ending balance Opening balance

Prepayments Robert Bosch Company 5249715.46

Other non-current assets Robert Bosch Company 470000.00 1470000.00

Other non-current assets Wuxi Industry Group 5452800.00 5452800.00

(3) Payable item

Item Related party Ending book balance Opening book balance

Account payable WFPM 15511126.97 17783464.23

Other account payable WFPM 29000.00 29000.00

Account payable WFEC 480670597.42 274115921.53

Account payable RBCD 49028994.76 37603958.72

Account payable Robert Bosch Company 18947846.60 49500046.68

Account payable Guokai Metals -- 3.12

Other current liabilities RBCD 0.05 0.05

Other current liabilities WFEC -- 76030.18

Other current liabilities Robert Bosch Company -- 63572.08

Other account payable Robert Bosch Company -- 13308176.65(4) Payable item

Ending book Opening book

Item Related party

balance balance

Advance payments and contract reliability RBCD 0.36 0.36

Advance payments and contract reliability Robert Bosch Company 6986398.10 510212.12

Advance payments and contract reliability WFPM 584847.43

(5) Related debts of “platform trade” business

Item Related party Ending balance Opening balance

Other receivables Hebei Machinery -2125487770.72 -2125487770.72

Other receivables Hebei Jinda 1958470484.57 2015224288.59

Other receivables Hebei Deshuang 1436757179.96 1436757179.96

Other receivables Hebei Lanpai 609404930.22 609404930.22

Other receivables Hebei Mianzhuo 479253260.75 479253260.75

Total 2358398084.78 2415151888.80

Note: Because Hebei Jinda Hebei Deshuang Hebei Lanpai and Hebei Mianzhuo are controlled by Hebei Machinery

based on the business essence of "platform trade" business WFTR listed the difference between the "purchase

payment" paid by WFTR to Hebei Jinda Hebei Deshuang Hebei Lanpai and Hebei Mianzhuo and the "sales

payment" received from Hebei Machinery 2358398084.78 yuan as other receivables including: The "sales

payment" received from Hebei Machinery is presented as a negative number. As of December 31 2023 the

Company has made a bad debt provision of 1448358922.04 yuan for the balance of other receivables; The bad

debt provision balance is calculated by 80.10% which is the proportion of other receivables balance of Hebei

Machinery and its controlled companies 2415151888.80 yuan to other receivables balance of WFTR's "platform

trade" business portfolio 2741499131.95 yuan as of December 31 2022 multiply the bad debt provision for other

accounts receivable balances in WFTR’s "platform trade" business portfolio 1644068327.93 yuan.

7. Undertakings of related party

Nil

XII. Share-based payment

1. Overall situation of share-based payment

Granted in current Executed in Unlocked in

Expired in current period

Category of period current period current period

grant object Quantit Amoun Quantit Amoun Quantit Amoun

Quantity Amount

y t y t y t

Sales staff 264264.00 6897290.40

Administrativ 3507814.0

91553945.40

e staff 0

1180287.0

R&D staff 30805490.70

0

Production

641135.0016733623.50

staff5593500.0 145990350.0

Total

00

2. Share-based payment settled by equity

Method for determining the fair value of equity instruments on the Determine based on the closing price of the

grant date restricted stock on the grant date

Important parameters for determining the fair value of equity

Closing price at grant date

instruments on the grant date

Basis for determining the number of vesting equity instruments Unlocking conditions

Reasons for the significant difference between estimate in the

Not applicable

current period and estimate in the prior period

Cumulative amount of equity-settled share-based payments

81051840.00

included in the capital reserve(yuan)

Total amount of expenses confirmed by equity-settled share-based

-30939071.92

payments in the current period(yuan)

3. Share-based payment settled by cash

Nil

4. Current share-based payment expenses

In RMB

Equity settled share based payment Cash settled share based payment

Category of grant object

expenses expenses

Sales staff -1418102.07

Administrative staff -19732503.59

R&D staff -6276034.25

Production staff -3512432.01

Total -30939071.92

5. Modification and termination of share-based payment

Nil

XIII. Undertakings or contingency

1. Important undertakings

Important undertakings on balance sheet date

Nil

2. Contingency

(1) Contingency on balance sheet date

Guarantee for subsidiaries:

As of December 31 2023 the Company has provided guarantees for all debts arising from the performance of

its subsidiaries VHWX and Shenzhen BYD Supply Chain Management Co. Ltd. with the guarantee amount notexceeding RMB 10.00 million.As of December 31 2023 the Company has provided guarantees of up to RMB 40 million and RMB 55 million

respectively for its subsidiary Zhixing Seats and its subsidiary VHIO the scope of guarantee includes but is not

limited to financing guarantees for financing business applications (including loans bank acceptance bills foreign

exchange derivative transactions letters of credit guarantees etc.) as well as performance guarantees for daily

operations.

(2) For the important contingency not necessary to disclosed by the Company explained

reasons

The Company has no important contingency that need to disclosed

XIV. Events Occurring after the Balance Sheet Date

1. Important undertakings

The reason for the

The impact on financial

Item Content inability to estimate the

condition and operating results

number of impacts

Issuance of stocks and

NA NA NA

bonds

Important outbound

NA NA NA

investment

Major debt

NA NA NA

restructuring

Natural calamities NA NA NA

Significant changes in

NA NA NA

foreign exchange rates

2. Profit distribution

Proposed distribution of dividends per 10

10.00

shares(yuan)

Plan to distribute every 10 bonus shares(share) 0

Proposed allocation of additional shares for every

0

10 shares(share)

The dividend payout for every 10 shares declared

10.00

after review and approval(yuan)

Every 10 dividend shares declared for distribution

0

after review and approval(yuan)

Proposed allocation of additional shares for every

0

10 shares after review and approval(share)

The company's 2023 annual profit distribution plan: based

on the 977162793 shares which exclude the buy-back

shares on buy-back account (25000000 A-stock) from

Profit distribution plan total share capital 1002162793 shares (According to the

provisions of the The Company Law of the People's

Republic of China the listed company does not have the

right to participate in the profit distribution and theconversion of the capital reserve into the share capital by

repurchasing the shares held by the company through the

special securities account) distributing 10.00 yuan (tax

included) cash dividend for every 10 shares held no bonus

shares without capitalization from capital reserves. The

remaining undistributed profit is carried forward to the

next year. The total amount of cash dividend to be paid is

977162793yuan (tax included). If the total share capital

of the Company changes before the implementation of the

distribution plan the Company will be allocated according

to the principle of unchanged distribution proportion and

adjustment of the total amount of distribution. The

independent directors of the Company expressed their

independent opinions and agreed to the above proposal.The profit distribution plan will be submitted for

consideration at the 2023 Annual General Meeting.

3. Return of sales

Nil

4. Other explanations on Events Occurring after the Balance Sheet Date:

Nil

XV. Other important events

1. Previous accounting errors correction

Nil

2. Debt restructuring

Significant debt restructuring not required to be disclosed by the company in this period

3. Asset replacement

Nil

4. Pension plan

The Enterprise Annuity Plan under the name of WFHT has deliberated and approved by 8th meeting of 7th session of

the 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 enterprise’s

contribution shall not exceed 8% of the gross salary of the employees of the enterprise per year the combined

contribution of the enterprise and the individual employee shall not exceed 12% of the total salary of the employees

of the enterprise. In accordance with the State’s annuity policy the Company will adjuste the economic benefits indue 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 percent of the total salary of last year the maximum annual allocation to employees

shall not exceed five times the average allocation to employees and the excess shall not be counted towards the

allocation. The individual contribution is limited to 1% of one’s total salary for the previous year. Specific paying

ratio later shall be adjusted 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. Segment information

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:

* The component is able to generate revenues and expenses in routine activities;

* Management of the Company is able to assess the operation results regularly and determine resources allocation

and performance evaluation for the component;

* Being analyzed financial status operation results and cash flow of the components are able to require by the

Company

If two or more operating segments have similar economic characteristics and meet certain conditions they can be

merged into one operating segment.The company considers the principle of importance and determines the reporting segments based on the operating

segments. The reporting segment of the company is a business unit that provides different products or services or

operates in different regions. Due to the need for different technologies and market strategies in various businesses

or regions the company independently manages the production and operation activities of each reporting segment

evaluates their operating results individually and decides to allocate resources to them and evaluate their

performance.Financial information for reportable segment:

Automotive fuel Automotive post Other automotive

Air management

Item injection system processing system components Total

system segment

component segment segment segment

Revenue 5201564655.45 3439813189.61 667187841.47 1784576264.45 11093141950.98

Cost 3960359167.71 2991515364.14 510869765.43 1687568343.46 9150312640.74

6. Major transaction and events influencing investor’s decision

(1) The security organs have launched a criminal investigation on the case that WFTR was defrauded by contracts

in its “platform trade” business. (For details please refer to the company's announcement No. 2023-007 disclosed

on www.cninfo.com.cn and other information disclosure websites on April 13 2023). At present the case is in the

stage of transferring for review and prosecution and the outcome of the case is uncertain in the future.

(2) Based on the "platform trade" business’s background transaction chain sales and purchase contract signing

transaction process physical flow and so on the company carefully analyzed and made comprehensive judgment

finds that the probability of this business not belonging to normal trade business is extremely high. In terms of

accounting treatment the company follows the principle of substance over form and does not treat it as normal tradebusiness but according to the receipt and payment of funds prudently counts as claims and liabilities respectively

purchases actually paid to "suppliers" and sales collected from "customers" Other receivables are reported on a net

basis in the financial statements as a "platform trading" portfolio. As of December 31 2023 the balance of the

“Platform Trade” business portfolio was RMB2542263400 yuan and an expected credit loss of

RMB1644068300.00 has been provisioned. Based on the comprehensive judgment of information from authorized

departments the company has determined that there has been no significant change in the recoverable amount of

debt in the “platform trade” business portfolio and there is no need for further provision or significant reversal of

expected credit losses. The recoverable amount of debt in the “platform trade” business combination is highly

dependent on a series of judicial procedures such as investigation prosecution trial judgment and execution of the

case and the results still have uncertainty.XVI. Principal notes of financial statements of parent company

1. Account receivable

(1) By account aging

Aging Ending book balance Beginning book balance

Within one year(inclusive) 1376943595.48 906775190.29

Including: within six months 1365664197.96 889181770.09

Six months to one year 11279397.52 17593420.20

1-2 years 9348871.78 1173006.18

2-3 years 732334.63 1935713.65

Over three years 6457957.26 8653217.73

Total 1393482759.15 918537127.85

(2) Accrued of bad debt provision

Ending balance

Category Book balance Bad debt reserve

Accrued Book value

Amount Ratio Amount

ratio

Account receivable with

bad debt provision accrued 4774540.26 0.34% 4774540.26 100.00%

on a single basis

Account receivable with

bad debt provision accrued 1388708218.89 99.66% 4648838.01 0.33% 1384059380.88

on portfolio

Including: receivables from

1219857129.3387.54%4648838.010.38%1215208291.32

customers

Receivables from internal

168851089.5612.12%168851089.56

related parties

Total 1393482759.15 100.00% 9423378.27 0.68% 1384059380.88

Opening balance

Category Book balance Bad debt reserve

Accrued Book value

Amount Ratio Amount

ratio

Account receivable with

bad debt provision accrued 7705636.24 0.84% 7705636.24 100.00%

on a single basisAccount receivable with

bad debt provision accrued 910831491.61 99.16% 4023208.39 0.44% 906808283.22

on portfolio

Including: receivables from

768218575.7083.63%4023208.390.52%764195367.31

customers

Receivables from internal

142612915.9115.53%142612915.91

related parties

Total 918537127.85 100.00% 11728844.63 1.28% 906808283.22

* Bad debt provision accrued on single basis

Beginning balance Ending balance

Name Book Bad debt Book Bad debt Accrued Accrued

balance reserve balance reserve ratio causes

Have difficulty

BD bills 7201691.00 7201691.00 4270595.02 4270595.02 100.00

in collection

Tianjin Leiwo

Have difficulty

Engine Co. 503945.24 503945.24 503945.24 503945.24 100.00

in collection

Ltd.Total 7705636.24 7705636.24 4774540.26 4774540.26 100.00

* Bad debt provision accrued on portfolio

Ending balance

Name

Book balance Bad debt reserve Accurual ratio(%)

Within 6 months 1200695320.63 -- --

6 months to one year 7548478.39 754847.85 10.00

1-2 years 9197578.68 1839515.74 20.00

2-3 years 602128.69 240851.48 40.00

Over 3 years 1813622.94 1813622.94 100.00

Total 1219857129.33 4648838.01 0.38

* In the portfolio accounts receivable from internal related parties:

Name of related party Amount Ratio of bad debt provision (%)

WFTR 67146422.58 --

WFSC 62445825.31 --

VHWX 21771307.71

WFLD 8062933.87 --

WFTT 4374383.39 --

WFQL 3737701.70

WFAS 1312515.00

Total 168851089.56 --

(3) Bad debt provision accrued collected or reversal

Opening Amount changed in the period Ending

Category

balance Accrued Collected or reversal Written-off balance

Bad debt provision 11728844.63 -- 2282334.65 23131.71 9423378.27

Total 11728844.63 -- 2282334.65 23131.71 9423378.27

Including: Important bad debt provision collected or reversal: Nil(4) Account receivable actual charged off in the Period

Is the payment generated by

Item Amount charged off

related party transactions

Jiangsu Nonghua Smart Agricultural

23131.71 N

Technology Co. Ltd

Total 23131.71

(5) Top 5 receivables and contract assets at ending balance by arrears party

Ratio in total ending balance Ending balance of bad debt

Ending balance of

Name of account receivable and reserve and impairment reserve of

account receivable

contract assets contract assets

RBCD 686424501.80 49.26 1017817.82

Robert Bosch

199928467.1814.35294416.19

Company

Client 3 143735925.57 10.31 394188.46

WFTR 67146422.58 4.82 --

WFSC 62445825.31 4.48 --

Total 1159681142.44 83.22 1706422.47

2. Other accounts receivable

Item Ending balance Opening balance

Interest receivable 842323.12 206325.34

Dividend receivable -- --

Other account receivables 1369807069.16 1471896113.93

Total 1370649392.28 1472102439.27

(1) Interest receivable

1) Category of interest receivable

Item Ending balance Opening balance

Interest receivable of subsidiary 842323.12 206325.34

Total 842323.12 206325.34

2) Significant overdue interest

Nil

(2) Dividend receivable

1) Category of dividend receivable

Nil

2) Important dividend receivable with account age over one year

Nil(3) Other account receivable

1) Other account receivables classification by nature

Nature Ending book balance Opening book balance

Staff loans and petty cash 520080.00 1279080.00

Balance of related party in the

3006132546.933106006521.72

consolidate scope

Margin 3920799.33 3738299.33

Social security and provident fund

6119110.706429166.22

paid

Other 371066.21 16781.83

Total 3017063603.17 3117469849.10

2) By account age

Account age Ending book balance Beginning book balance

Within one year (One year included) 365322657.63 3114813019.10

Including: within 6 months 134688758.70 768880846.69

6 months to one year 230633898.93 2345932172.41

1-2 years 2648713049.33 588300.00

2-3 years 218000.00 1300000.00

Over 3 years 2809896.21 768530.00

Total 3017063603.17 3117469849.10

3) Accrued of bad debt provision

Provision for bad debts based on the general model of expected credit losses:

Phase I Phase II Phase III

Expected credit

Expected Expected credit

losses for the entire

Bad debt reserve credit losses losses for the entire Total

duration (without

over next 12 duration (with credit

credit impairment

months impairment occurred)

occurred)

Balance of Jan. 1 2023 1505407.24 1644068327.93 1645573735.17

Balance of Jan. 1 2023 in

the period

--Transfer into Phase II

--Transfer into Phase III

--Transfer back to Phase

II

--Transfer back to Phase I

Current reversal 1682798.84 1682798.84

Current transfer back

Current write offOther change

Balance on Dec. 31 2023 3188206.08 1644068327.93 1647256534.01

4) Bad debt provision accrued collected or reversal

Amount changed in the period

Converted

Category Opening balance Collected difference Ending balance

Accrued or Written-off in Foreign

reversal Currency

Statements

Bad debt

1645573735.171682798.841647256534.01

provision

Total 1645573735.17 1682798.84 1647256534.01

Including the important bad debt provision reversal or collected in the period: Nil

5) Other receivables actually charged off during the reporting period

Nil

6) Top 5 other receivables at ending balance by arrears party

Ratio in total

Ending balance

Account ending balance

Name of enterprise Nature Ending balance of bad debt

age of other

reserve

receivables

Balance of

related party in Within

WFTR 2838260000.00 94.08% 1644068327.93

the consolidate 2 year

scope

Balance of

related party in Within

WFCA 96628898.93 3.20%

the consolidate 1 year

scope

Balance of

related party in Within

IRD 63384448.00 2.10%

the consolidate 1 year

scope

Balance of

related party in Within

Borit 7859200.00 0.26%

the consolidate 1 year

scope

Zhenkunxing

Industrial Over 3

Margin 1000000.00 0.03% 1000000.00

Supermarket years

(Shanghai) Co. Ltd.Total 3007132546.93 99.67% 1645068327.93

7) Those booked into other account receivables due to centralized fund management

Nil3. Long-term equity investments

Ending balance Opening balance

Provision Provision

Item for for

Book balance Book value Book balance Book value

impairme impairme

nt loss nt loss

Investme

nt in 3116879242. 3116879242. 3080762302. 3080762302.----

subsidiar 19 19 11 11

y

Investme

nt in

4891133182.4891133182.5289081048.5289081048.

associates -- --

and joint 10 10 99 99

venture

8008012424.8008012424.8369843351.8369843351.

Total -- --

29291010

(1) Investment in subsidiary

Changes in current period Ending

balance

Opening Negativ Provisio Ending

Additional Share- of

Investee balance e n for balance

Investmen based depreciat

(book value) Investm impairm (book value)

t Payment ion

ent ent loss

reserves

-

188389084.185704551.

WFJN 2684532 --

3482.52

-

470853106.467856451.

WFLD 2996654 --

5280.72

-

171807584.170986195.

WFMA 821389.3 --

7135

6

-

223351717.222664737.

WFCA 686980.0 --

0301

-

34067014.733726511.5

WFTR 340503.1 --

01

9

-

51490044.251116685.4

WFSC 373358.8 --

77

0

-

239283022.238063380.

WFTT 1219642 --

0000.00

82454467.982454467.9

WFAM --

99

54081519.5-54012820.2

WFDT --

268699.293

1195280224563028124091051

SPV --

3.977.051.02

WFLD(Chong -

265832.07191160.00--

qing) 74672.07

-

WFAS 878805.00 246915.0 631890.00 --

0

225000000.225000000.

WFQL --

0000

VHWX 143559879. 143559879. --99 99

-

3080762304563028311687924

Total 9513346 --

2.117.052.19.97

(2) Investment in associated enterprises and joint venture

In RMB

Current changes (+/ -)

Opening Ending

openin balance balance

Cash Ending

g of Investme of

dividen balance

Investee balanc provision Addition nt Other depreci

Capital Other d or Impairme (book

e (book for al gain/loss comprehensi Othe ation

reductio equity profit nt value)

value) impairme investme recognize ve income r reserve

n change announ Accrued

nt loss nt d under adjustment s

ced to

equity

issued

I. Joint venture

II. Associated enterprise

3505715997

986062289203

RBCD 46633. -- 69939. --

287.078981.78

7706

Zhonglian 15594

408088282000168550

Electronic 13314. -- --

732.68000.002046.73

s 05

--

54775414143

WFPM 117758 1585 -- --

899.0241.58

61.77695.67

16914

1024733288182680

Auto Link 5202.1 -- --

96.31259.15857.61

5

-

-

Lezhuo 110000 137 894969

--204892----

Bowei 000.00 50.0 54.40

95.60

0

-

5289018817

1100001372131702137489113

Total 81048. 69939.

000.003258.69563.4850.03182.10

9906

0

4. Operating income and cost

Current period Last period

Item

Income Cost Income Cost

Main business 3398402921.46 2767688522.76 3524971219.66 2995507161.73

Other business 169604704.58 92512697.03 339533776.14 268487790.90

Total 3568007626.04 2860201219.79 3864504995.80 3263994952.63

5. Investment income

In RMB

Item Current period Last Period

Investment income in subsidiaries 76552430.32 69841550.10

Investment income in joint ventures and associated enterprises 1372133258.69 1427651731.23

Investment income from holding transaction financial asset 89973294.02 201399105.37

Investment income obtained from the disposal of trading financial

13352570.85

assets

Revenue from debt restructuring -12000.00

Total 1551999553.88 1698892386.70XVII. Supplementary Information

1. Current non-recurring gains/losses

Item Amount Note

Gains/losses from the disposal of non-current asset 126538939.67

Governmental grants reckoned into current gains/losses (except for those with

normal operation business concerned and conform to the national policies &

31251345.14

regulations and are continuously enjoyed at a fixed or quantitative basis

according to certain standards)

Gains/losses of assets delegation on others’ investment or management 94647509.98

Except for the effective hedging operations related to normal business

operation of the Company the gains/losses of fair value changes from holding

the trading financial assets and trading financial liabilities and the investment 23096322.48

earnings obtained from disposing the trading financial asset trading financial

liability and financial assets available for sale

Reserve for impairment of receivables separately tested for impairment

5862949.67

transfer back

Accounts receivable charged off in previous years and recovered in

63149.93

current year

Gains/losses of debt restructuring -323525.00

Other non-operating income and expenditure except for the aforementioned

22253986.90

items

Less: Impact on income tax 40956611.82

Impact on minority shareholders’ equity 22464047.13

Total 239970019.82 --

Note: The number "+" in the table represents income and gains while "-" represents losses or expenses

2. ROE and earnings per share

Earnings per share

Weighted average Basic Diluted

Profits during report period

ROE(%) earnings per earnings per

share share

(RMB/Share) (RMB/Share)

Net profits belong to common stock stockholders of

9.921.881.88

the Company

Net profits belong to common stock stockholders of

the Company after deducting nonrecurring gains and 8.63 1.64 1.64

losses

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)

Not available(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)

Not available

4. Supplementary information related to changes in accounting policiesPlease refer to Note III- 33 " Changes of important accounting policies and estimation”.