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苏威孚B(200581)公告正文

苏威孚B:2016年半年度报告(英文版)

公告日期:2016-08-25

Weifu High-Technology Group Co., Ltd.

     SEMI-ANNUAL REPORT 2016




             August 2016
                                            无锡威孚高科技集团股份有限公司 2016 年半年度报告全文




         Section I. Important Notice, Contents and Paraphrase

Board of Directors, Supervisory Committee, all directors, supervisors and senior
executives of Weifu High-Technology Group Co., Ltd. (hereinafter referred to as
the Company) hereby confirm that there are no any fictitious statements,
misleading statements, or important omissions carried in this report, and shall
take all responsibilities, individual and/or joint, for the reality, accuracy and
completion of the whole contents.
All directors are attended the Board Meeting for report deliberation.
The Company has no plans of cash dividend distributed, no bonus shares and
has no share converted from capital reserve either.
Chen Xuejun, Principal of the Company, Ou Jianbin, person in charger of
accounting works and Ou Jianbin, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of Semi-Annual
Report 2016 is authentic, accurate and complete.

Concerning the forward-looking statements with future planning involved in the
Report, they do not constitute a substantial commitment for investors. Investors
should be cautious with investment risks.




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                                                             Content


Section I Important Notice, Contents and Paraphrase .................................................................. 2

Section II Company Profile ............................................................................................................... 5

Section III Accounting data and summary of finnaical indexes .................................................... 7

Section IV Report of the Board of Directors ................................................................................... 9

Section V Important Events ............................................................................................................ 24

Section VI Changes in shares and particular about shareholders............................................... 31

Section VII Preferred Stock……………………………………………………………………….34

Section VIII Directors, Supervisors and Senior Executives ....................................................... 35

Section IX Financial Report ............................................................................................................ 36

Section X Documents Available for Reference ........................................................................... 139




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                                                Paraphrase


                       Items                   Refers to                                Contents

Company, The Company, Wei-fu High-technology   Refers to Weifu High-Technology Group Co., Ltd.

Industry Group                                 Refers to Wuxi Industry Development Group Co., Ltd.

Robert Bosch, Robert Bosch Company             Refers to Robert Bosch Co., Ltd., ROBERT BOSCH GMBH

Bosch Automobile Diesel, Bosch Diesel System   Refers to Bosch Automobile Diesel System Co., Ltd

Weifu Automotive Diesel                        Refers to Wuxi Weifu Automotive Diesel System Co., Ltd.

Weifu Leader                                   Refers to Wuxi Weifu Leader Catalytic Converter Co., Ltd.

Weifu Jinning                                  Refers to Nanjing Weifu Jinning Co., Ltd.

Weifu Environment                              Refers to Wuxi Weifu Environment Catalyst Co., Ltd.

Weifu Fine Machinery                           Refers to Wuxi Weifu Fine Machinery Manufacturing Co., Ltd.

Zhonglian Electronic                           Refers to Zhonglian Automobile Electronic Co., Ltd.

Ping An Securities                             Refers to Ping An Securities Co., Ltd.

Ping An Wealth                                 Refers to Ping An Wealth Investment Management Co., Ltd.

Ping An Ronghui                                Refers to Shenzhen Ping An Ronghui Investment Fund Management Co., Ltd.

CSRC                                           Refers to China Securities Regulatory Commission

Jiangsu Gongzheng                              Refers to Jiangsu Gongzheng Tianye CPA (LLP)

The reporting period                           Refers to 1 Jan. 2016 to 30 Jun. 2016




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                                            Section II Company profile

I. Company profile

Short form of the stock                                Weifu High- Tech, Su Weifu-B          Stock code          000581, 200581

Stock exchange for listing                             Shenzhen Stock Exchange

Chinese name of the Company                            无锡威孚高科技集团股份有限公司

Abbr. of Chinese name of the Company(if applicable) 威孚高科

English name of the Company(if applicable)             WEIFU HIGH-TECHNOLOGY GROUP CO.,LTD.

Abbr. of English name of the Company(if applicable) WFHT

Legal Representative                                   Chen Xuejun


II. Person/Way to contact

                                           Secretary of the Board                             Rep. of security affairs

Name                         Zhou Weixing                                       Yan Guohong

Contact add.                 No.5, Huashan Road, New District, Wuxi City        No.5, Huashan Road, New District, Wuxi City

Tel.                         0510-80505999                                      0510-80505999

Fax.                         0510-80505199                                      0510-80505199

E-mail                       wfjt@public1.wx.js.cn                              wfjt@public1.wx.js.cn


III. Others

1. Way of contact

Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or
not
□ Applicable   √ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,
found more details in Annual Report 2015.


2. Information disclosure and preparation place

Whether information disclosure and preparation place changed in reporting period or not
□ Applicable   √ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation
place for semi-annual report have no change in reporting period, found more details in Annual Report 2015.


3. Registration changes of the Company

Whether registration has changed in reporting period or not



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                                                                         无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


√Applicable    □ Not applicable

                      Date of                                              Registration ID of
                                          Location of registration                              Tax authority No. Organization Code
                    registration                                           Business License

                                    Wuxi Industry &Commerce
At period-begin     2013-11-20                                            320200000014926 320200250456967 25045696-7
                                    Administration of Jiangsu Province

                                    Wuxi Industry &Commerce               913202002504569 913202002504569 913202002504569
At period-end       2016-04-29
                                    Administration                        67N                   67N              67N




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        Section III. Accounting data and summary of financial indexes

I. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting
error correction or not
□Yes   √ No

                                                Current period          Same period of last year Increase/decrease in this report y-o-y

Operating revenue (RMB)                           3,366,476,452.49             3,390,437,923.64                                     -0.71%

Net profit attributable to shareholders of
                                                    943,568,535.72             1,045,987,200.83                                     -9.79%
the listed company(RMB)
Net profit attributable to shareholders of
the listed company after deducting                  829,632,717.13               884,001,959.90                                     -6.15%
non-recurring gains and losses(RMB)
Net cash flow arising from operating
                                                    193,541,014.95               438,286,150.85                                    -55.84%
activities(RMB)

Basic earnings per share (RMB/Share)                             0.94                           1.03                                -8.74%

Diluted earnings per share (RMB/Share)                           0.94                           1.03                                -8.74%

Weighted average ROE                                         7.72%                        9.14%                                     -1.42%

                                                                                                       Increase/decrease in this report-end
                                             End of current period         End of last period
                                                                                                           over that of last period-end

Total assets (RMB)                               16,696,620,317.59            15,704,093,069.04                                      6.32%

Net assets attributable to shareholder of
                                                 12,166,563,837.58            11,783,228,273.39                                      3.25%
listed company(RMB)


II. Difference of the accounting data under accounting rules in and out of China

1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable     √ Not applicable
The Company has no 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) in reporting period


2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable     √ Not applicable
The Company has no difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and


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Chinese GAAP (Generally Accepted Accounting Principles) in reporting period


III. Items and amounts of extraordinary profit (gains)/loss

√Applicable      □Not applicable

                                           Item                                                Amount                    Note

Gains/losses from the disposal of non-current asset (including the write-off that
                                                                                                  -736,558.42
accrued for impairment of assets)
Governmental subsidy reckoned into current gains/losses (not including the subsidy                              Including government
enjoyed in quota or ration according to national standards, which are closely relevant         15,821,482.47 grand received for
to enterprise’s business)                                                                                      policy-based relocation
Profit and loss of assets delegation on others’ investment or management                      97,055,393.89
Held transaction financial asset, gains/losses of changes of fair values from
transaction financial liabilities, and investment gains from disposal of transaction
financial asset, transaction financial liabilities and financial asset available for sales,    20,210,318.13
exclude the effective hedging business relevant with normal operations of the
Company

Restoring of receivable impairment provision that tested individually                            1,012,469.08

Other non-operating income and expenditure except for the aforementioned items                   1,799,202.16

Relocation expenses                                                                                -57,116.41

Less: Impact on income tax                                                                     20,456,474.29

        Impact on minority shareholders’ equity (post-tax)                                       712,898.02

Total                                                                                         113,935,818.59              --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss




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                            Section IV. Report of the Board of Directors

I. Introduction
According to the data released by China Association of Automobile Manufacturers: in first half year of 2016,
production and sales of the automobile in China up to 12,892,200 and 12,829,800 with a y-o-y growth of 6.47
percent and 8.14 percent respectively; among which, passenger cars shows 11,099,400 and 11,042,300 in
production and sales respectively with 7.32 percent and 9.23 percent growth y-o-y and the commercial vehicle has
1,792,700 and 1,787,400 in production and sales respectively with 1.50 percent and 1.87 percent up on a y-o-y
basis.
During the reporting period, in front of the complicated macro economic situation and market conditions, the
Company played actively to capitalize every business opportunity to adapt to development trend. It insisted on
market orientation; focused on quality improvement, seek for efficiency enhancement, adhered to operating target,
improved internal control, detailed internal management and controlled risks and costs, ensuring structure
adjustment of three business segments and successful transformation. The Company realized operating income of
RMB3.366 billion, representing a year on year decrease of 0.71%; realized profit of RMB1.043 billion,
representing a year on year decrease of 9.95%; and realized net profit attributable to owners of parent company of
RMB944 million, representing a year on year decrease of 9.79%.
For the first half year of 2016, the Company managed to maintain stable operation, which accorded with the
current market condition of business vehicle and non-road machinery markets. Looking for the later half year, the
Company will continue to strengthen development of new products and new market, financial operation
management, product quality management, information system establishment and human resources management,
trying hard to deliver growth.

II. Main business analysis

Year-on-year changes for main financial data

                                                                                                                               In RMB

                                                                      Y-o-y
                                                 Same period of
                              Current period                       increase/dec                  Reasons for changes
                                                    last year
                                                                      rease
Operation revenue             3,366,476,452.49 3,390,437,923.64         -0.71%
Operation cost                2,633,281,983.25 2,643,639,033.68         -0.39%
Sales expenses                  92,799,369.25      85,114,812.69         9.03%
Administrative expenses        314,596,534.92     293,774,077.81         7.09%
Financial cost                   -2,909,491.43     -4,167,369.67
Income tax expense              68,314,427.18      88,185,218.04       -22.53%
R&D investment                 131,048,092.77     106,119,283.76       23.49%
Net cash flow arising
                               193,541,014.95     438,286,150.85       -55.84% The sales collection in the Period decreased
from operation activities

Net cash flow arising                                                             The capital out-flow increased over that of last
                             -2,078,064,480.91   -549,170,196.02
from investment activities                                                        period due to purchasing trust management in the


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                                                                                     Period


Net cash flow arising                                                                The payable dividend has not completed in the
                                -102,277,671.94       -515,429,962.26
from financing activities                                                            Period for payment
                                                                                     The capital out-flow increased over that of last
Net increase of cash and
                               -1,986,801,137.90      -626,314,007.43                period due to purchasing trust management in the
cash equivalent
                                                                                     Period
                                                                                     The compensation for removal of parent company
Non-operation revenue              18,747,382.73        77,198,017.61     -75.72%
                                                                                     decreased over that of last period
Non-operation                                                                        Expenditure of the parent company for removal
                                       2,335,822.02     56,924,343.71     -95.90%
 expenditure                                                                         decreased over that of last period
Gains/losses of fair value
                                                                                     The fair value of SDEC and Miracles decreased in
changes on the financial          -56,207,588.74       123,791,917.50    -145.40%
                                                                                     the Period over that of last period
assets available for sale
                                       Current
                                                      Last period-end    Changes                     Reasons for changes
                                  period-end
                                                                                     The capital out-flow increased over that of last
Monetary fund                  1,224,397,416.60 3,274,679,732.54          -62.61% year due to purchasing trust management in the
                                                                                     Period
                                                                                     Sales revenue in the period has a increased on a
Account receivable             1,738,607,467.83 1,261,163,184.87           37.86% chain basis, account receivables increased over that
                                                                                     of last year-end
                                                                                     The time deposit decreased and deposit interest
Interest receivable                    2,249,341.69       3,281,939.96    -31.46% rate decreased in the Period, thus the interest
                                                                                     receivable decreased over that of last year-end
                                                                                     The dividend receivable from Bosch Automobile
Dividend receivable              361,572,367.40           3,600,000.00   9,943.68%
                                                                                     Diesel and Zhonglian Electronic
                                                                                     The receivable amount of come-and-go money
Other account receivable           12,278,400.19          8,817,661.08     39.25%
                                                                                     from units increased over that of last year-end
                                                                                     The trust management increased over that of last
Other current assets           4,612,373,442.46 2,016,204,649.28          128.77%
                                                                                     year-end in the Period
                                                                                     The interest of long-term loans payable at
Interest payable                       3,640,952.21        778,673.59     367.58%
                                                                                     period-end increased over that of last year-end
                                                                                     The payable dividend still not been completed in
Dividend payable                 504,475,285.00
                                                                                     the Period
Major changes on profit composition or profit resources in reporting period
□ Applicable      √ Not applicable
No major changes on profit composition or profit resources occurred in reporting period
The future development and planning extended to reporting period that published in disclosure documents as prospectus, private
placing memorandum and recapitalize statement
□ Applicable      √ Not applicable
No future development and planning extended to reporting period that published in disclosure documents as prospectus, private
placing memorandum and recapitalize statement
Review on the previous business plan and its progress during reporting period

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In first half of 2016, business of the Company remain stable basically, and convergence with the market
enviornment of current commercial vehicle and non-road machinery, business development still have certain
pressures

III. Constitution of main business

                                                                                                                                              In RMB

                                                                                      Increase or             Increase or             Increase or
                                                                                      decrease of             decrease of         decrease of gross
                                                                    Gross profit
                          Operating revenue    Operating cost                      operating revenue      operating cost          profit ratio over
                                                                       ratio
                                                                                   over same period over same period                 same period of
                                                                                      of last year            of last year              last year
According to industries
Auto parts                 3,177,043,549.95 2,481,834,855.65            21.88%                 -0.45%                -0.19%                   -0.21%
According to products
Auto fuel injection
                           1,890,457,569.65 1,418,546,330.93            24.96%                 4.74%                     6.36%                -1.15%
system
Post-processing
                           1,159,240,371.67     965,574,610.52          16.71%                 -7.68%                -8.09%                    0.37%
system
Induction system            127,345,608.63        97,713,914.20         23.27%                 -2.64%                -4.53%                    1.52%
According to region
Domestic                   3,026,559,194.16 2,338,364,070.74            22.74%                 -0.29%                    0.14%                -0.33%
Overseas                    150,484,355.79      143,470,784.91           4.66%                 -3.55%                -5.31%                    1.77%
IV. Core competitive analysis
Core competence of the Company has no major changes in reporting period. More detail can be found in 2015 annual report.
V. Investment analysis
1. Situation of equity investment outside
(1) Situation of investment outside
□Applicable   √Not applicable
The Company had no investment outside in the Period.
(2)Holding equity of financial enterprise
√ Applicable □ Not applicable
                                                         Proporti                                                 Gains
                                                                                    Proporti
                                          Amount of       on of                                                     and
                                                                    Amount of        on of
                                          stock-holdin stock-ho                                Book value at loss in
                             Initial                                stock-holdin stock-ho
                                            g at the     lding at                              the end of the       the      Accounting Source
   Name         Type       investment                               g at the end lding at
                                          beginning of     the                                       period       reporti        subject     of stock
                           cost(RMB)                                of the period the end
                                           the period beginnin                                    (RMB)             ng
                                                                      (Share)        of the
                                            (Share)      g of the                                                 (RMB
                                                                                    period
                                                         period                                                      )
                                                                                                                             Financial
Guolian
             Securities                                                                                                      assets          Subscri
Securities                12,000,000.00    18,000,000      0.95% 18,000,000           0.95% 12,000,000.00
             company                                                                                                         available for ption
Co., Ltd.
                                                                                                                             sales



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                                                                              无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


Nanjing
Hengtai                                                                                                                     Financial
Insurance Insurance                                                                                                         assets                  Subscri
                               1,000,000.00      1,000,000     1.85%      1,000,000     1.85%      1,000,000.00
and          company                                                                                                        available for ption
Broker                                                                                                                      sales
Co., Ltd.
Total                         13,000,000.00     19,000,000      --       19,000,000      --      13,000,000.00       0.00           --                --

(3)Situation of securities investment

√ Applicable □ Not applicable

                                                               Propor
                                                               tion of                Proport
                                                 Amount of stock- Amount of ion of
                      Short
Variet                                          stock-holdin holdin stock-holdi stock-h Book value at
          Code of form            Initial                                                                         Gains and loss Accou Sourc
  y of                                            g at the      g at     ng at the    olding    the end of the
          securitie    of       investment                                                                        in the reporting nting              e of
securit                                         beginning of    the      end of the   at the       period
             s        secur     cost(RMB)                                                                            (RMB)               subject stock
  ies                                            the period beginn        period      end of       (RMB)
                      ities
                                                  (Share)      ing of     (Share)       the
                                                                the                   period
                                                               period
                                                                                                                                         Financ
                                                                                                                                         ial
                      SDE                                                                                                                            Subsc
                                                                                                                                         assets
Stock 600841            C     199,208,000.00 23,680,000 2.73% 20,470,000 2.36% 285,965,900.00                      -3,534,881.87                     riptio
                                                                                                                                         availa
                                                                                                                                                     n
                                                                                                                                         ble for
                                                                                                                                         sales
                                                                                                                                         Financ
                      Mira                                                                                                               ial
                                                                                                                                                     Subsc
                      cle                                                                                                                assets
Stock 002009                    69,331,500.00     4,710,000 1.29%         4,710,000 1.29% 76,914,300.00 -20,818,200.00                               riptio
                      Logi                                                                                                               availa
                                                                                                                                                     n
                      stics                                                                                                              ble for
                                                                                                                                         sales
Total                         268,539,500.00 28,390,000          --      25,180,000     --      362,880,200.00 -24,353,081.87                  --        --
Disclosure date of            2012-03-24
securities investment
approval of Board             2013-06-04
report

(4) Statement of holding other listed companies’ equity

□Applicable     √ Not applicable

The Company holding no other listed company’s equity in the Period




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2. Trust financing, investment of derivatives and entrustment loan

 (1) Trust financing

√ Applicable     □ Not applicable

                                                                                                                                    In 10 thousand Yuan

                                                                                                                       Amount
                                                                                                            Amount of reserve
         Relat                                                                                                of         for
                  Whethe                       Amount                                                                                          Actual
 Name     ed                                              Start date End            date Determination principal devaluati
                  r related                    of trust                                                                            Estimated gains/loss
   of    relati                   Type                    of        trust of        trust     method of     actual      on of
                  trade or                     financin                                                                             income      es in
trustee onshi                                             financing financing                   reward      taking    withdrawi
                      not                          g                                                                                           period
             p                                                                                              back in    ng (if
                                                                                                            period    applicable
                                                                                                                          )
                              Bank
                              financing,                                                    Anticipated
Bank,                         trust products              2016-01-0 2018-03-1 annual yield
         N        N                            611,090                                                      340,000             0 9,705.54 9,705.54
trust,                        and assets                  6              5                  agreed in the
                              management                                                    contract
                              plans
Total                                          611,090         --              --                 --        340,000             0 9,705.54 9,705.54
                                               All refers to the self-owned capital of the Company. Amount for financing is the accumulate
Capital resource                               amount and the actual capital for trust financing is RMB 2 billion at most, and recyclable
                                               within the limit.
Overdue un-received principal and
                                                                                                                                                        0
accumulated earnings amount
Lawsuit involved (if applicable)               N
Disclosure date for approval from the
Board for trust financing (if                  2016-04-19
applicable)
Disclosure date for approval from
board of shareholders for trust                N
financing (if applicable)

(2) Investment of derivatives

□ Applicable √ Not applicable

The Company has no derivatives investment in the Period

(3) Entrustment loan

□ Applicable √ Not applicable

The Company has no entrustment loan in the Period


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3. Application of raised proceeds

√ Applicable □ Not applicable

(1)Overall application of raised proceeds

√ Applicable □ Not applicable

                                                                                                                  In 10 thousand Yuan

Total raised proceeds                                                                                                     285,012.43
Total raised proceeds invested during the reporting period                                                                   9,525.71
Total accumulative raised proceeds invested                                                                               285,012.43
Total raised proceeds for new purposes during the reporting period                                                              2,365
Total accumulative raised proceeds for new purposes                                                                            12,365
Proportion of the total accumulative raised proceeds for new purposes                                                          4.34%
                                               General application of raised proceeds
On 21 January 2012, the CSRC issued the reply on approving non-public issuance of Weifu High-technology Group Co., Ltd.
(ZJXK(2012)No.109), pursuant to which, the Company was approved to issue new shares not exceeding 112,858,000 by
non-public offering. On 10 February 2012, Jiangsu Gongzheng Tianye Certified Public Accountant issued capital verification report
(SGW(2012)No.B006), stating that as at 10 February 2012, Weifu High-tech has already issued 112,858,000 RMB common shares
(A-share) and raised capital proceeds of RMB2,866,028,910.00. after deduction of issuance expense of RMB15,904,657.07, the net
raise proceeds was RMB2,850,124,252.93.The relevant announcements (No. 2012-002, No. 2012-012) were published on Juchao
Information Website dated 1 February 2012 and 28 February 2012.
The Company held the 9th meeting of the 7th Board on 26 March 2013 and the 2012 annual general meeting on 23 May 2013 to
consider and approve the resolution on alteration to equity investment plan which set out certain adjustments to the industrialization
project relating to exhaust after-treatment system products. The relevant announcements (No.2013-001, No.2013-007, and
No.2013-014) were published on Juchao Information Website dated 28 March and 24 May 2013.
The Company held the 21st meeting of the 7th Board on 21 April 2015 and the 2014 annual general meeting on 28 May 2015 to
consider and approve the resolution on adjustment to plans and production capacity of certain investment projects funded with
raised proceeds and alteration to certain such investment projects, which mainly referred to the adjustments to the plans and
production capacity of the WAPS R&D and industrialization project, diesel common rail system spare parts production capacity
enhancement project as well as    industry park construction project, and referred to alteration to the auto power battery materials
and power materials research and development project. The relevant announcements (No. 2015-003, No. 2015-010, and No.
2015-016) were published on Juchao Information Website dated 23 April and 29 May 2015.
The ”proposal of supplementary funding permanently with surplus raised-fund and interest income” was deliberated and approved
by the 5th session of 8th BOD held on 15 April 2016, agreed to supplemented current funds with the surplus raised-fund and interest
income permanently. The relevant announcements (No. 2016-002, No. 2016-008) were published on Juchao Information Website
dated19 April 2016.
By end of the reporting period, investments with raised-fund have completed and an aggregate of RMB 2,850,124,300 proceeds
raised has been invested.


(2) Situation of committed project of raised proceeds

√ Applicable □ Not applicable
                                                                                                                  In 10 thousand Yuan


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                                                                              无锡威孚高科技集团股份有限公司 2016 年半年度报告全文




                                                                                               Investm
                             Projects     Total                                                                                             Project
                                                                                  Amount of       ent                            Reach
                             changed committe          Total                                               Predicted    Profit              feasibili
                                                                                  accumulated program                              the
Committed investment          or not         d       investment      Amount                                serviceable realize              ty was
                                                                                  investment    till the                         predict
 projects &investment       (includin investme          after       invested in                            condition    d in                change
                                                                                    till the   period-e                            ed
      of raised fund            g         nt of      adjustment this period                                  date of     this                  d
                                                                                  period-end      nd                             interes
                             changed     raised         (1)                                                  project    year                hugely
                                                                                      (2)      (3)=(2)/(                         t or not
                            partially) capitals                                                                                              or not
                                                                                                  1)
Investment project commitment
R&D of WAPS,
industrialization,
productivity expansion          Y         62,032         59,667           4.04         59,667 100.00% 2015-12-31        5,999      N           N
of diesel common rail
system parts
Construction project in
                                Y         57,750         57,750       7,156.67         57,750 100.00% 2015-12-31 10,129             Y          N
industrial zone
Industrialization of tail
                                Y         26,000         26,000                        26,000 100.00% 2015-06-30        7,258      N           N
treatment system
Research institution
                                N            5,154        5,154                          5,154 100.00% 2012-12-31                   Y          N
project
Auto power battery
materials and power
                                Y         10,000                0                                                                  N           Y
battery research and
development project
Equity acquisition              N        34,381.5      34,381.5                      34,381.5 100.00% 2012-06-30        2,815       Y          N
Liquid assets
                                N         90,000      89,694.93                     89,694.93 100.00%                               Y          N
supplementation
Permanent liquid assets
                                N                        12,365          2,365         12,365 100.00%                               Y          N
supplementation
Subtotal of
                                --      285,317.5 285,012.43          9,525.71 285,012.43         --           --      26,201       --         --
commitment projects
Investment orientation for fund arising out of plan
N/A
Total                           --      285,317.5 285,012.43          9,525.71 285,012.43         --           --      26,201       --         --
Situation about not         Implementation of the national emission standard level IV brought substantial change to the industry
coming up to schemed condition. Routes using common rail technology have almost covered the entire national IV vehicle-based
progress or expected        diesel engine market, which led that market demand for WAPS system had not been satisfied as expected.
revenue and the             Meanwhile, due to the slowing macro economic growth and decrease of investment in infrastructure
reason(In specific          facilities, commercial vehicles suffered a tough market, resulting in insufficient market demand for auto
project)                    exhaust gas rear processing system products, which in turn affected the expected revenue.
Explanation on great
changes of feasibility      Not applicable
of project

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                                                                           无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


Amount, usage and
progress of using for
                             Not applicable
fund raising out of the
plan
Change of
implementation place
                             Not applicable
of investment project
of raised capitals
                             Applicable
                             Occurred in the Period
                             The Company has completed fund raising investment, with remaining proceeds of RMB23.65 million
                             which is used as capital for research and development and industrialization of WAPS system and
Adjustment of                production capacity improvement of diesel common rail system components. In order to improve
implementation way           utilization efficiency of the raised proceeds, decrease our financial expense and maximize the interests of
for investment project the Company and its shareholders, the Company convened the 5th meeting of the 8th board of directors on
of raised capitals           15 April 2016, to consider and approve the proposal relating to permanent liquidity supplement with the
                             remaining raised proceeds and relevant interest income, pursuant to which, the Company was allowed to
                             supplement liquidity permanently with the remaining raised proceeds and relevant interest income. The
                             relevant announcements (No. 2016-002, No. 2016-008) were published on Juchao Information Website
                             dated19 April 2016.
                             Applicable
                             According to the Verification Report of Fund-Raised Project Invested in Advance with Self-raised Funds of
                             WFHT (Su Gong W[2012] No. E1100) issued by Jiangsu Gongzheng Tianye Certified Public Accountants
                             Co., Ltd. Up to 29 February 2012, the actual investment funding for fund-raised project invested in advance
Regulation              of
                             with self-raised funds amounting as 299.12 million Yuan, including 1. R&D of WAPS, industrialization,
implementation       ways
                             productivity expansion of diesel common rail system parts: 180.05 million Yuan; 2. construction project in
of investment project
                             industrial zone: 16.62 million Yuan; 3. industrialization of tail treatment system: 28.56 million Yuan; 4.
of raised capitals
                             research institution project: 51.54 million Yuan; 5. Equity acquisition project: 22.35 million Yuan. On 31
                             March 2012, the Proposal of Replacing the Working Capital Input to Projects by Raised Capital was
                             deliberated and approved by 2nd extraordinary meeting of 7th session of the Board, agreed to replacing the
                             working capital input to projects by raised capital with 299.12 million Yuan.
Temporarily
supplement for the
                             Not applicable
current capitals with
idle raised capitals
                             Applicable
                             1. The Company has completed fund raising investment, with remaining proceeds of RMB23.65 million
                             which is used as capital for research and development and industrialization of WAPS system and
Amount surplus in
                             production capacity improvement of diesel common rail system components. Total expenses occurred for
implementation of
                             this project decreased mainly due to that the Company strengthened cost control, supervision and
raised proceeds and
                             management during the implementation of this project to strictly control expenditure provided that the
reasons
                             implementation effect of the project was promised. Besides, it was also attributable to adoption of resources
                             sharing model to reduce repeated input.
                             2. Since the implementation of fund raising investment, the Company has adopted special management in


                                                                                                                                        16
                                                                         无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


                         relation to the raised proceeds which accrued relevant interest income when being deposited.
                         3. The Company convened the 5th meeting of the 8th board of directors on 15 April 2016, to consider and
                         approve the proposal relating to permanent liquidity supplement with the remaining raised proceeds and
                         relevant interest income, pursuant to which, the Company was allowed to supplement liquidity permanently
                         with the remaining raised proceeds and relevant interest income.
Usage and trend of
                         All the raise money has been used by the end of the report period.
unused raised capitals
Questions or other
situation while using
                         Not applicable
raised capitals and in
disclosure


(3)The changed project of raised proceeds

√ Applicable □ Not applicable
                                                                                                                          In 10 thousand Yuan

                                                                Accumulati                                                          Project
                                      Total raised Amount                      Investment Predicted                   Reach the
                                                                 ve funds                                   Profit                 feasibility
                                      funds plans    actually                   program      serviceable              predicted
  Project after      Corresponding                                actually                                 realized               was changed
                                      to invested    invested                    till the    condition                 interest
     changed       original project                              invested                                  in this                hugely or not
                                          after       in the                   period-end      date of                 or not
                                                                ended as the                                year                  after project
                                      changed (1)    Period                    (3)=(2)/(1)     project                 (Y/N)
                                                                 Period (2)                                                         changed
                  R&D OF WAPS,
                  INDUSTRIALIZ
                  ATION,
Permanent         PRODUCTIVIT
liquid assets     Y EXPANSION                2,365      2,365         2,365      100.00%                                  Y            N
supplementation OF DIESEL
                  COMMON
                  RAIL SYSTEM
                  PARTS
R&D OF
WAPS,             R&D OF WAPS,
INDUSTRIALI INDUSTRIALIZ
ZATION,           ATION,
PRODUCTIVI PRODUCTIVIT
TY                Y EXPANSION               59,667       4.04        59,667      100.00% 2015-12-31          5,999        N            N
EXPANSION         OF DIESEL
OF DIESEL         COMMON
COMMON            RAIL SYSTEM
RAIL SYSTEM PARTS
PARTS
Construction      Construction
                                            57,750 7,156.67          57,750      100.00% 2015-12-31         10,129        Y            N
project in        project in


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                                                                          无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


industrial zone    industrial zone
                   Auto power
                   battery materials
Permanent
                   and power
liquid assets                                   10,000                 10,000   100.00%                            Y           Y
                   battery research
supplementation
                   and development
                   project
Industrialization Industrialization
of tail treatment of tail treatment             26,000                 26,000   100.00% 2015-06-30       7,258     N           N
system             system
      Total                   --               155,782 9,525.71      155,782      --          --        23,386     --          --
                   I. Matters occurred during the reporting period
                   The Company has completed fund raising investment, with remaining proceeds of RMB23.65 million which is
                   used as capital for research and development and industrialization of WAPS system and production capacity
                   improvement of diesel common rail system components. In order to improve utilization efficiency of the raised
                   proceeds, decrease our financial expense and maximize the interests of the Company and its shareholders, the
                   Company convened the 5th meeting of the 8th board of directors on 15 April 2016, to consider and approve the
                   proposal relating to permanent liquidity supplement with the remaining raised proceeds and relevant interest
                   income, pursuant to which, the Company was allowed to supplement liquidity permanently with the remaining
                   raised proceeds and relevant interest income.
                   II. Occurred in previous year
                   (i) The Company held the 21st meeting of the 7th Board on 21 April 2015 and the 2014 annual general meeting on
                   28 May 2015 to consider and approve the resolution on adjustment to plans and production capacity of certain
Explanation on investment projects funded with raised proceeds and alteration to certain such investment projects. The relevant
reasons of the announcements (No. 2015-003, No. 2015-010, and No. 2015-016) were published on Juchao Information Website
changes,           dated 23 April and 29 May 2015. Reasons for the adjustments and alteration and details thereof are set out below:
decision-makin 1. R&D OF WAPS, INDUSTRIALIZATION, PRODUCTIVITY EXPANSION OF DIESEL COMMON RAIL
g    procedures SYSTEM PARTS
and information ①Reasons for alteration: since the State has clearly determined the time to implement the national IV emission
disclosure         rules, market conditions experience substantial changes. There was a burst of increasing demands for common rail
(explain        by products and spare parts. Meanwhile, WAPS system had limited development space in national IV auto-applicable
specific project) diesel machine, and market demands for WAPS system in non-road machinery market will be uncertain in future.
                   In order to adapt to market variations, the Company made adjustments to investment plans and production
                   capacity of this project funded with raised proceeds. In particular, it increased production capacity of common rail
                   spare parts and reduced that of WAPS system, aiming to meet both processing demands for common rail spare
                   parts and WAPS system in future through adjusting equipment injection structure and increasing flexibility of
                   processing. In addition, the Company increased appropriately the minimum liquidity required for high pressure
                   common rail spare parts. It seeks suitable opportunity to make subsequent injection to WAPS system with its own
                   capital when the relevant market is matured in terms of demands.
                   ②Adjustments to the plans and production capacity of this project: subject to the total investment of RMB650
                   million remaining unchanged, investment for fixed assets is cut down to RMB440.73 million instead of the
                   original RMB500 million; liquidity investment is raised to RMB209.27 million instead of the original RMB150
                   million.        WAP3 system (heavy) by the original program of the 200 thousand sets adjusted for 50 thousand sets,
                   common rail system components from the original program of the 11.8 million pieces adjusted to 19. 23 million


                                                                                                                                       18
                                                     无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


pieces.
③Completion date of this project is adjusted to 31 December 2015.
2. Construction project in industrial zone
① Reasons for alteration: since the State has clearly determined the time to implement the national IV emission
rules, market conditions experience substantial changes, there is a burst of increasing demands for common rail
products and uncertainty exists in market demands for WAPS system, the Company accordingly makes
adjustments to the investment plan and production capacity of this project in order to adapt to the changing market
demands.
②Adjustments to the plans and production capacity of this project: subject to the total investment of RMB650
million remaining unchanged, investment for fixed assets is raised to RMB599.15 million instead of the original
RMB572.50 million; liquidity investment is cut down to RMB50.85 million instead of the original RMB77.50
million, and additional liquidity required in subsequent periods will be funded with its own capital. WAP2 system
(medium) by the original program of the 100 thousand sets adjusted for 30 thousand sets, common rail system
components from the original program of the 810 thousand sets adjusted to 1.25 million sets. As for specific
implementation, processing for the key common rail high pressure pump spare parts was implemented by the
machinery system segment of Weifu headquarter office. With utilization of existing equipment, the Company was
able to eliminate certain equipment that did not satisfy the requirements for environment protection and crafts
processing, acquired processing facilities that delivered guaranteed and flexible performance, targeting to balance
its processing capability. Capital needed for equipment investment was mainly funded with its own capital. Plant
construction was mainly funded with raised proceeds. The general instalment of high pressure common rail pump
was undertaken by its wholly-owned subsidiary Weifu Auto Diesel. Equipment injection occurred during assemble
procedure was funded with the own capital injected by Weifu Auto Diesel rather than with raised proceeds. And it
was finally sold to Bosch Auto Diesel System Co., Ltd. by Weifu Auto Diesel.
③Completion date of this project is adjusted to 31 December 2015.
3. Auto power battery materials and power battery research and development project
① Reasons for alteration: since there exists extremely huge uncertainty to implement this project technically and
investment scale is large, the Company has always been prudent to implementation of this project to prevent from
investment risk. In order to improve utilization efficiency of raised proceeds and protect investors’ interests, the
Company decided to change the raised proceeds for this project to permanent supplementary liquidity which will
be all invested in its major business operation. Meanwhile, the Company will continue to follow up development
of power battery and continue cooperation in terms of production, study and research, and will make prompt
investment with its own capital as appropriate.
②Raised proceeds for this project changed to be permanent supplementary liquidity instead.
 (II) The Company convened the 9th meeting of the 7th board of directors on 26 March 2013 and the 2012 annual
general meeting on 23 May 2013, to consider and approve the report relating to change of matters scheduled under
the fund raising investment. The relevant announcement was published on Juchao Information website dated 28
March 2013 and 24 May 2013, with announcement No. of 2013-001, 2013-007 and 2013-014.
The fund raising investment project subject to change refers to the “industrialization project of auto exhaust gas
rear disposal system products”. The major reason and specific changes are set out below:
①reason for change: taking into account the uncertainty arising from update of the prevailing national emission
regulations (namely from level III to level IV) and insufficient land supply at the time being, the original
investment plan of this fund raising investment project can no longer satisfy the development need of Wuxi Weifu
Lida Catalytic Purifier Company Limited which was a controlling subsidiary of the implementation entity. As
such, the Company needs to make corresponding adjustment to certain content of this project.


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                                                                         无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


                  ②the aggregate investment of this project has been changed to RMB340 million instead of the original RMB260
                  million, the gap of which will be filled up by its own capital in full.
                  ③the completion date of this project has been changed to 30 June 2015.
Particular and
reasons of fail   Implementation of the national emission standard level IV brought substantial change to the industry condition.
to reached the    Routes using common rail technology have almost covered the entire national IV vehicle-based diesel engine
target advance    market, which led that market demand for WAPS system had not been satisfied as expected. Meanwhile, due to
or anticipated    the slowing macro economic growth and decrease of investment in infrastructure facilities, commercial vehicles
income (explain suffered a tough market, resulting in insufficient market demand for auto exhaust gas rear processing system
by specific       products, which in turn affected the expected revenue.
project)
                  Major reasons for change of “auto power battery materials and power battery R&D project” into “permanent
Explanation on supplement for liquidity” occurred in previous year: there is substantial uncertainty for this project in terms of
major changes     technology routes; in order to maximize the utilization efficiency of raised proceeds and to protect investors’
on project        interests, the Company decided to change the raised proceeds of this project into permanent supplement for
feasibility after liquidity, which meant that they would be used for the Company’s principal business in full. However, the
project changed Company will continue to follow up development of power battery, continue cooperation between production,
                  study and research, and make investment with its own capital if necessary based on market conditions.


(4) Project of raised proceeds

                                                                                   Disclosure
                  Project of raised proceeds and summary                                                   Disclosure index
                                                                                      date
Being approved by “Reply of the Private Placement of WEIFU
HIGH-TECHNOLOGY GROUP CO.,LTD.” (Zheng Jian Xu Ke [2012]                                       “Private Placement of the Company
No.109) issued by CSRC, the Company issuing 112,858,000 shares                                  and Summary of Listing
privately with price of 25.395 Yuan/Share. The above mentioned shares 2012-02-28                Announcement” (Notice No.: 2012-12)
have been listed on Shenzhen Stock Exchange dated 29 February 2012.                             released on Juchao Website
Totally 2,866,028,900 Yuan are raised and net amount of 2,850,124,300                           (www.cninfo.com.cn)
Yuan after deducted the issuing expenses.
                                                                                                Released on Juchao Website
Special Report on Fund-raised Deposit and Use of Funds for year of 2012         2013-03-28
                                                                                                (www.cninfo.com.cn)
The Proposal of Changing the Fund-raised Projects Investment Plan was
deliberated and approved by 9th meeting of 7th session of the Board held on                     ” Notice of Changing the Fund-raised
26 March 2013 and Annual General Meeting 2012 dated 23 May 2013. The                            Projects Investment Plan” (Notice No.:
                                                                                2013-03-28
amount invested in industrialization of tail treatment system project                           2013-007) released on Juchao Website
changed from 260 million Yuan originally to 340 million Yuan, the parts                         (www.cninfo.com.cn)
adjusted will funding with self-owned capital.
                                                                                                 “Resolution Notice of AGM of 2012”
Resolution Notice of AGM of 2012                                                2013-05-24      (No.: 2013-014) released on Juchao
                                                                                                Website (www.cninfo.com.cn)
                                                                                                Released on Juchao Website
Special Report on Fund-raised Deposit and Use of Funds for year of 2013         2014-04-15
                                                                                                (www.cninfo.com.cn)
Special Report on Fund-raised Deposit and Use of Funds for year of 2014         2015-04-23      Released on Juchao Website


                                                                                                                                        20
                                                                        无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


                                                                                              (www.cninfo.com.cn)

On 21 April 2015, the Company holding the 21 st session of 7th BOD and
holding the AGM of 2014 on 28 May 2015 for deliberation and approved
                                                                                              ”the proposal to adjust some
the proposal to adjust some fundraising project investment plans and
                                                                                              fundraising project investment plans
capacity and change some fundraising projects, adjusted the WAPS
                                                                                              and capacity and change some
research and development and industrialization and the diesel common rail 2015-04-23
                                                                                              fundraising projects” (No,: 2015-010)
system components production capacity promotion and the investment
                                                                                              released on Juchao Website
plans and capacity of industrial park construction projects, and changed the
                                                                                              (www.cninfo.com.cn)
“Auto power battery materials and power battery research and development
project” in raised-fund projects.
                                                                                              “Resolution Notice of AGM of 2014”
Resolution Notice of AGM of 2014                                                2015-05-29    (No.: 2015-016) released on Juchao
                                                                                              Website (www.cninfo.com.cn)
Special Report on Fund-raised Deposit and Actual Use of Funds for year of                     Released on Juchao Website
                                                                                2016-04-19
2015                                                                                          (www.cninfo.com.cn)
                                                                                              The ”proposal of supplementary
The ”proposal of supplementary funding permanently with surplus
                                                                                              funding permanently with surplus
raised-fund and interest income” was deliberated and approved by the 5th
                                                                                2016-04-19    raised-fund and interest income” (No.:
session of 8th BOD held on 15 April 2016, agreed to supplemented current
                                                                                              2016-008) released on Juchao Website
funds with the surplus raised-fund and interest income permanently
                                                                                              (www.cninfo.com.cn)


4. Main subsidiaries and stock-jointly companies

√ Applicable □ Not applicable
Particular about main subsidiaries and stock-jointly companies
                                                                                                                                In RMB

                        Main
Com
               Indus produc Register                                              Operating
pany Type                                     Total assets      Net Assets                        Operating profit      Net profit
               tries    ts or     capital                                          revenue
name
                       service
Weif
                       Fuel
u
              Auto injectio
Auto
        Subsi mobil n            300,000
moti                                        1,548,248,926.98 1,256,445,022.30    784,142,134.06    125,512,090.44     106,134,116.81
        diary e        system ,000.00
ve
              parts produc
Diese
                       tions
l
                       Post-pr
Weif          Auto ocessin
u       Subsi mobil g            502,596
                                            2,585,223,851.94 1,422,390,822.32 1,218,577,303.58     147,877,397.39     130,828,227.30
Lead diary e           system ,300.00
er            parts produc
                       tions



                                                                                                                                       21
                                                                       无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


                        Fuel
Weif          Auto injectio
u       Subsi mobil n            346,286
                                            985,104,243.03   755,284,123.53    251,871,381.48     32,628,225.42     33,326,813.22
Jinni diary e           system ,825.80
ng            parts produc
                        tions
Bosc
                        Fuel
h
        Joint- Auto injectio
Auto                             USD
        stock mobil n
mobi                             241000 7,174,271,787.26 4,442,696,871.11 4,980,318,551.05 1,296,075,244.95 1,125,855,393.67
        comp e          system
le                               000.00
        any   parts produc
Diese
                        tions
l
                        Gasoli
Zhon Joint- Auto
                        ne
glian stock mobil                600,620
                        system             4,100,314,335.38 3,267,836,197.22     6,785,544.55   862,334,303.80     862,587,593.21
Elect comp e                     ,000.00
                        produc
ronic any     parts
                        tions


5. Major project invested by non-raised funds

□ Applicable √ Not applicable


No major project invested by non-raised funds in Period


VI. Prediction of business performance from January – September 2016

Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the
warning of its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable √ Not applicable


VII. Explanation from the Board and Supervisory Committee for “Qualified Opinion” from
the CPA of this year’s

□ Applicable √ Not applicable


VIII. Explanation on “Qualified Opinion” of previous year from the Board

□ Applicable √ Not applicable


IX. Implementation of profit distribution in reporting period

Implementation or adjustment of profit distribution plan in reporting period, cash dividend plan and shares converted from capital

reserve in particular

                                                                                                                               22
                                                                        无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


√□Applicable      □Not applicable

The bonus scheme of the Company was formulated strictly in line with relevant regulation of Article of Association.
Profit distribution plan for year of 2015 was: based on total share capital of the Company1, 008,950,570 distribute cash dividend of
RMB 5.00 (tax included) for every 10 shares to all shareholders. The scheme was deliberated and approve by 5th session of 8th BOD
held on 15 April 2016 and AGM of 2015 held on 26 May 2016. The implementation of equity distribution plan for year of 2015
(Notice No.: 2016-016) was published on China Securities Journal, Securities Times, Hong Kong Commercial Daily and Juchao
Website (http://www.cninfo.com.cn) dated 6 July 2016. And the equity distribution plan for year of 2015 was completed in July
2016.

                                               Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement of Article of Association (Y/N):                                            Y
Well-defined and clearly dividend standards and proportion (Y/N):                                                                 Y
Completed relevant decision-making process and mechanism (Y/N):                                                                   Y
Independent directors perform duties completely and play a proper role (Y/N):                                                     Y
Minority shareholders have opportunity to express opinions and demands totally and their legal rights are fully
                                                                                                                                  Y
protected    (Y/N):
                                                                                                                                 Not
Condition and procedures are compliance and transparent while the cash bonus policy adjusted or changed              (Y/N):
                                                                                                                              applicable


X. Profit distribution and capitalization of capital reserves in the Period

□ Applicable √ Not applicable

The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the semi-annual year


XI. In the report period, reception of research, communication and interview

√ Applicable □ Not applicable

        Time                  Place                Way         Type          Reception       Contents discussed and material provided
                       Scene of the
                                             Spot                                            Basic condition of the Company and views
2016-05-26             shareholders’                    Institution       Institution
                                             research                                        on market in 2016
                       general meeting
                                                                                             The Company answered 176 questions for
1 Jan. 2016 to 30                            Written                       Public            investors online through the investor
                       Office of the Board               Individual
Jun.                                         inquiry                       investor          relations interactive
                                                                                             platform(http://irm.p5w.net/dqhd/sichuan/)
                                             Telephone                                       Basic condition of the Company and views
1 Jan. 2016 to 30                                                          Public
                       Office of the Board communicat Individual                             on market in 2016, communication with
Jun.                                                                       investor
                                             ion                                             investors by telephone more than 100




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                                                                     无锡威孚高科技集团股份有限公司 2016 年半年度报告全文



                                          Section V. Important Events

I. Corporate governance

The actual corporate governance of the Company shows no major difference with the Company Law and relevant
regulations from CSRC.

II. Lawsuits

Significant lawsuits and arbitrations
□Applicable     √Not applicable
The Company had no significant lawsuits or arbitrations in the Period.
Other lawsuits
□Applicable     √Not applicable


III. Question from media

□ Applicable     √ Not applicable
No universal questioned by media in reporting period


IV. Bankruptcy reorganization

□ Applicable √ Not applicable
In reporting period, the Company has no bankruptcy reorganization occurred.


V. Transaction in assets

1. Assets acquisition
□ Applicable √ Not applicable
The Company did not purchased assets in the Period

2. Sales of assets
□ Applicable √ Not applicable
The Company did not sell assets in the Period

3. Business combination
□ Applicable √ Not applicable
The Company has no business combined in the Period


VI. Implementation of the company’s equity incentive and the effects

□ Applicable √ Not applicable
No equity incentive in reporting period



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                                                                  无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


VII. Significant related transaction

1. Related transaction connected to routine operations

√ Applicable □ Not applicable
                                                                      Propo
                                                                                      Wheth Relate
                                                                       rtion
                                                             Related          Trading er over d      Simila
 Related              Related                                         in the
                               Related Pricin Related transaction amou limit            the             r
                                                                                                             Date of Index of
transacti Related transacti                 g              amount (in        approved approv transa marke
         relationship   on    transactio princip transacti     10
                                                                       nt of
                                                                               (in 10    ed   ction t price disclosur disclosur
   on                                            on price               the                                     e         e
                              n content     al              thousand         thousand limited settle obtain
 parties               type                                            same
                                                              Yuan)            Yuan) or not   ment     ed
                                                                      transa
                                                                                       (Y/N) mode
                                                                       ction
                                        Based                                                                  2016.04. “Predicti
                                                                                              Based
Weifu                                   on fair                                                                  19     on       of
                       Procure Procurem                                                       on the
Fine    Associated                      value Market                    0.77                         Marke              routine
                       ment of ent of                       1,669.27            3,500   N     contra
Machine company                         of the  price                     %                          t price            related
                        goods    goods                                                          ct
ry                                      market                                                                          transacti
                                                                                              terms
                                        price                                                                           on      for
       Associated                                                                                                       year of
       company,
                                    Based
                                                                                              Based                     2016”
Bosch                               on fair                                                                             (Notice
       controlling Procure Procurem                                                           on the
Automo                              value Market                        3.32                         Marke              No.:
       subsidiary ment of ent of                            7,187.91           15,000   N     contra
bile                                of the  price                         %                          t price            2016-005
       of German goods       goods                                                              ct
Diesel                              market                                                                              )      and
       Bosch                                                                                  terms
       Company
                                    price                                                                               “Resoluti
                                                                                                                        on
                                        Based                                                                           Notice of
                                                                                              Based
        Joint                           on fair                                                                         AGM of
Weifu                  Procure Procurem                                                       on the
Environ
        venture of
                       ment of ent of
                                        value Market
                                                           57,293.93
                                                                       26.49
                                                                             135,000    N     contra
                                                                                                     Marke              2015”
        Weifu                           of the  price                     %                          t price            was
ment                    goods    goods                                                          ct
        Leader                          market                                                                          released
                                                                                              terms
                                        price                                                                           on
                                       Based                                                                            Juchao
          Second                                                                              Based                     Website
                                       on fair
          largest     Procure Procurem                                                        on the                    respectiv
Robert                                 value Market                     2.06                         Marke
          shareholder ment of ent of                        4,466.11           10,000   N     contra                    ely dated
Bosch                                  of the  price                      %                          t price
          of the       goods    goods                                                           ct                      19 April
                                       market
          Company                                                                             terms                     2016 and
                                       price
                                                                                                                        27 May
                                         Based                                                                          2016
                                                                                              Based
Weifu                                    on fair
                                                                                              on the
Fine    Associated Sales of Sales of     value Market                   0.05                         Marke
                                                              160.93              500   N     contra
Machine company     goods    goods       of the  price                    %                          t price
                                                                                                ct
ry                                       market
                                                                                              terms
                                         price
       Associated
                                         Based
       company,                                                                               Based
Bosch                                    on fair
       controlling                                                                            on the
Automo             Sales of Sales of     value Market                  27.24                         Marke
       subsidiary                                          91,686.04         160,000    N     contra
bile                goods    goods       of the  price                    %                          t price
       of German                                                                                ct
Diesel                                   market
       Bosch                                                                                  terms
                                         price
       Company
                                         Based
                                                                                              Based
        Joint                            on fair
Weifu                                                                                         on the
        venture of     Sales of Sales of value Market                   0.35                         Marke
Environ                                                     1,173.47            4,000   N     contra
        Weifu           goods    goods of the    price                    %                          t price
ment                                                                                            ct
        Leader                           market
                                                                                              terms
                                         price

Robert    Second      Sales of Sales of Based Market                    0.02                  Based Marke
          largest                                              57.01              500   N
Bosch                  goods    goods on fair price                       %                   on the t price
          shareholder                   value                                                 contra

                                                                                                                                25
                                                                          无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


         of the                                of the                                                     ct
         Company                               market                                                   terms
                                               price
                                             Based
                                                                                                        Based
                                             on fair
                                                                                                        on the
Industry Majority                  Payable value Market                                                        Marke
                          Other                                            0               100    N     contra
Group shareholder                 rental fee of the  price                                                     t price
                                                                                                          ct
                                             market
                                                                                                        terms
                                             price
       Associated
                                               Based
       company,                                                                                         Based
Bosch                           Labor and      on fair
       controlling                                                                                      on the
Automo                          tech-servi     value Market                                                    Marke
       subsidiary         Other                                            0               300    N     contra
bile                              ce fee       of the  price                                                   t price
       of German                                                                                          ct
Diesel                           payable       market
       Bosch                                                                                            terms
                                               price
       Company
                                               Based
         Second                                                                                         Based
                                    Fee for    on fair
         largest                                                                                        on the
Robert                            tech-servi   value Market                                                    Marke
         shareholder      Other                                      434.69              1,200    N     contra
Bosch                                 ce       of the  price                                                   t price
         of the                                                                                           ct
                                   payable     market
         Company                                                                                        terms
                                               price
                                             Based
                                                                                                        Based
        Joint                                on fair
Weifu                             Rental fee                                                            on the
        venture of                           value Market                                                      Marke
Environ                   Other   receivabl                                0               250     N    contra
        Weifu                                of the  price                                                     t price
ment                                  e                                                                   ct
        Leader                               market
                                                                                                        terms
                                             price
       Associated
                                               Based
       company,                                                                                         Based
Bosch                             Procurem     on fair
       controlling                                                                                      on the
Automo                              ent of     value Market                                                    Marke
       subsidiary         Other                                            0               500    N     contra
bile                                fixed      of the  price                                                   t price
       of German                                                                                          ct
Diesel                              assets     market
       Bosch                                                                                            terms
                                               price
       Company
                                               Based
                                                                                                        Based
        Joint                     Procurem     on fair
Weifu                                                                                                   on the
        venture of                  ent of     value Market                                                    Marke
Environ                   Other                                        17.09                      Y     contra
        Weifu                       fixed      of the  price                                                   t price
ment                                                                                                      ct
        Leader                      assets     market
                                                                                                        terms
                                               price
                                           Based
                                                                                                        Based
        Joint                              on fair
Weifu                             Sales of                                                              on the
        venture of                         value Market                                                        Marke
Environ                   Other    fixed                               14.19                      Y     contra
        Weifu                              of the  price                                                       t price
ment                               assets                                                                 ct
        Leader                             market
                                                                                                        terms
                                           price
                  Total                          --       --     164,160.64     --    330,850     --      --      --       --     --
Detail of sales return with major amount
                                               Not applicable
involved
Report the actual implementation of the
                                               The total amount from daily related transaction in reporting period still in the predicted
normal related transactions which were
                                               amount that approved in Annual Shareholders’ General Meeting of 2015, the predicted
projected about their total amount by
                                               amount of daily related transactions for year of 2016 at year-begin amounting as RMB
types during the reporting period(if
                                               3,308,500,000 in total.
applicable)
Reasons for major differences between
trading price and market reference price       Not applicable
(if applicable)




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                                                                       无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


2. Related transaction incurred by purchase or sales of assets
□ Applicable √ Not applicable
No related transaction incurred by purchase or sales of assets in Period

3. Related transaction from jointly investment outside
□ Applicable √ Not applicable
No related transaction from jointly investment outside occurred in Period

4. Credits and liability of related party
□ Applicable √ Not applicable
The Company had no non-operation related liabilities or credits relations in Period

5. Other related transactions
□ Applicable √ Not applicable
The Company had no other related transactions in the reporting period


VIII. Non-business capital occupying by controlling shareholders and its related parties

□ Applicable √ Not applicable
No non-business capital occupied by controlling shareholders and its related parties in Period


IX. Major contract and implantation

1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
The Company had no trusteeship in the reporting period.

(2) Contract
□ Applicable √ Not applicable
The Company had no contract in the reporting period.

(3) Leasing
□ Applicable √ Not applicable
The Company had no leasing in the reporting period.

2. Guarantee
√ Applicable □ Not applicable
                                                                                                                 In 10 thousand Yuan
                  Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)

                        Related            Actual date of                                                       Complete Guarante
    Name of the
                     Announceme Guarante happening (Date      Actual                                   Guarante implemen  e for
     Company                                                                          Guarantee type
                     nt disclosure e limit   of signing   guarantee limit                               e term tation or related
    guaranteed
                          date              agreement)                                                             not    party

                                         Guarantee of the Company for the subsidiaries
                        Related              Actual date of                                                     Complete Guarante
    Name of the
                     Announceme Guarante happening (Date         Actual                                Guarante implemen  e for
     Company                                                                   Guarantee type
                     nt disclosure e limit     of signing    guarantee limit                            e term tation or related
    guaranteed
                          date                agreement)                                                           not    party



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                                                                           无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


Ningbo Tianli
Turbocharging                                                                            Joint liability
                     2014-01-17          6,000 2013-12-24                        6,000                       3 years   No            No
Technology Co.,                                                                          guaranty
Ltd.
Total amount of approving guarantee for                               Total amount of actual occurred guarantee for
                                                                  0                                                                       6,000
subsidiaries in report period (B1)                                    subsidiaries in report period (B2)
Total amount of approved guarantee for subsidiaries                   Total balance of actual guarantee for subsidiaries at the
                                                           6,000                                                                          6,000
at the end of reporting period (B3)                                   end of reporting period (B4)
                                           Guarantee of the subsidiaries for the subsidiaries
                       Related
                                                 Actual date of                                                        Complete Guarante
      Name of the     Announce
                                     Guarantee happening (Date             Actual          Guarantee       Guarantee   implemen        e for
       Company          ment
                                       limit       of signing         guarantee limit         type           term       tation or     related
       guaranteed     disclosure
                                                  agreement)                                                                not       party
                         date
Total amount of guarantee of the Company (total three abovementioned guarantee)
Total amount of approving guarantee in report                         Total amount of actual occurred guarantee in report
                                                                                                                                          6,000
period (A1+B1+C1)                                                     period (A2+B2+C2)
Total amount of approved guarantee at the end of                      Total balance of actual guarantee at the end of report
                                                            6,000                                                                         6,000
report period (A3+B3+C3)                                              period (A4+B4+C4)
The proportion of the total amount of actually guarantee in the
                                                                                                                                          0.49%
net assets of the Company(A4+ B4+C4)
Including:
Amount of guarantee for shareholders, actual controller and its related parties(D)                                                              0
The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio
                                                                                                                                                0
exceed 70% directly or indirectly(E)
Proportion of total amount of guarantee in net assets of the Company exceed 50%(F)                                                              0
Total amount of the aforesaid three guarantees(D+E+F)                                                                                           0
Explanations on possibly bearing joint and several liquidating responsibilities for undue
                                                                                                                    Not applicable
guarantees (if applicable)
Explanations on external guarantee against regulated procedures (if applicable)                                     Not applicable

Explanation on guarantee with composite way
Nil

(1) Guarantee outside against the regulation
□ Applicable √ Not applicable
No guarantee outside against the regulation in Period

3. Other material contracts
□ Applicable √ Not applicable
The Company had no other material contracts in the reporting period.

4. Other material transactions
□ Applicable √ Not applicable
The Company had no other material transactions in the reporting period.




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                                                                        无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


X. Commitments made by the Company or shareholders holding above 5% shares of the Company in
reporting period or occurred in the previous reporting period but continued to reporting period

□ Applicable √ Not applicable
There are no commitments made by the Company or shareholders holding above 5% shares of the Company in reporting period or
occurred in the previous reporting period but continued to the period


XI. Engagement and non-reappointment of CPA

Whether the semi-annual report was audited or not
□ Yes   √ No
The semi-annual report had not been audited.


XII. Penalty and rectification

□ Applicable √ Not applicable
The Company had no penalty or rectification in the reporting period.


XIII. Risk disclosure of delisting with laws and rules violated

□ Applicable √ Not applicable
The Company has no delisting risks with laws and rules violated in Period


XIV. Other material events

√Applicable □ Not applicable

1. Wholly-owned subsidiary of the Company has investment intention on industry mergers & acquisitions
fund
On 31 May 2016, the Company held the 7th meeting of the 8th board of directors, to consider and approve the
resolution relating to the wholly-owned subsidiary of the Company proposing to establish industry merger &
acquisition funds. In order to accelerate the Company’s industrial upgrade and development speed, preserve
merger & acquisition projects, improve its comprehensive strength and realize development strategy, the
Company agreed with Ping’an Securities in reaching for initial cooperation plan. Weifu Auto Diesel, a
wholly-owned subsidiary of the Company, proposed to cooperate with Ping’an Ronghui which was established by
Ping’an Caizhi (a wholly-owned subsidiary of Ping’an Securities) to establish business merger & acquisition
funds. The relevant announcements (No. 2016-013 and No. 2016-015) were published on China Securities,
Securities Times, Hong Kong Commercial Daily and Juchao Information website(http://www.cninfo.com.cn).
Till now, this matter is being prepared.
2. Progress of the Company’s receipt of relocation compensation
In August 2010, the Company commenced relocation related works according to the general urban planning of
Wuxi government, the details of which was set out in the announcement of No. 2010-023. In September 2013, the
Company entered into the Acquisition Contract of the State-owned Land Use Right of Wuxi with Wuxi Land
Reservation Center, pursuant to which, the Company shall receive relocation compensation of RMB503,811,600,
the details of which was set out in the announcement of No. 2013-022. In particular, the Company received

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                                                                    无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


relocation compensation of RMB7.9 million, RMB145.23 million (announcement No. 2014-028), RMB145.23
million (announcement No. 2015-014), RMB180.15 million (announcement No. 2016-001) and RMB25.3016
million respectively in October 2013, October 2014, May 2015, December 2015 and June 2016, respectively. As
at the end of the reporting period, the Company has received the relocation compensation of RMB503,811,600 in
full. With respect to the compensation, it has been accounted for under the requirements of the Note 3 of
Enterprise Accounting Principles and No.16 of Enterprise Accounting Principles-government grant promulgated
by the Ministry of Finance. The related announcement was published on China Securities, Securities Times, Hong
Kong Commercial Daily and Juchao Information website(http://www.cninfo.com.cn).



XV. Corporate bond

Whether the Company has corporate bonds that have been publicly issued and listed on the stock exchange, and not yet due or due
but not fully cashed on the approval date of annual report or not
No




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                                                                     无锡威孚高科技集团股份有限公司 2016 年半年度报告全文




   Section VI. Changes in Shares and Particulars about Shareholders

I. Changes in Shares

                                                                                                                             In share
                                      Before the Change         Increase/Decrease in the Change (+, -)        After the Change
                                                                              Capitalizat
                                                               New
                                                                     Bonus      ion of                                    Proportio
                                      Amount       Proportion shares                      Others Subtotal    Amount
                                                                     shares     public                                       n
                                                              issued
                                                                               reserve
I. Restricted shares                     78,952        0.01%                               -375     -375         78,577      0.01%

1. State Shareholdings                         0
2. State-owned corporate
                                               0
shares
3. Other domestic shares                 78,952        0.01%                               -375     -375         78,577      0.01%
Including: domestic corporate
                                               0
shares
     Domestic nature person
                                         78,952        0.01%                               -375     -375         78,577      0.01%
shares
4. Foreign shares                              0
Including: Foreign corporate
                                               0
shares
     Foreign nature person
                                               0
shares
II. Unrestricted shares            1,008,871,618     99.99%                                 375      375 1,008,871,993      99.99%

1. RMB Ordinary shares              836,491,618      82.90%                                 375      375    836,491,993     82.90%
2. Domestically listed foreign
                                    172,380,000      17.09%                                                 172,380,000     17.09%
shares
3. Foreign listed foreign shares               0                                                                      0

4. Other                                       0                                                                      0

III. Total shares                  1,008,950,570    100.00%                                   0          0 1,008,950,570 100.00%

Reasons for share changed
□Applicable   √ Not applicable
Approval of share changed
□Applicable   √ Not applicable
Ownership transfer of share changed
□Applicable   √Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□Applicable   √Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators



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□Applicable     √Not applicable
Explanation on changes of total shares and shareholder structure as well as assets and liability structure
□Applicable     √Not applicable

II. Amount of shareholders of the Company and particulars about shares holding
                                                                                                                                              In share

Total common shareholders at                            Total preference shareholders with voting rights recovered at
                                               54,289                                                                                                0
period-end                                              end of reporting period (if applicable) (see Note 8)
                   Particulars about shares held above 5% by common shareholders or top ten common shareholders
                                                                 Total common                     Amount of      Amount of         Number of share
                                                  Proportion                        Changes
                                     Nature of                   shareholders                       restrict      un-restrict      pledged/frozen
  Full name of Shareholders                        of shares                        in report
                                    shareholder                  at    the end of                  common         common           State of    Amo
                                                     held                            period
                                                                 report period                    shares held    shares held         share     unt
Wuxi Industry Development           State-owne
                                                        20.22%        204,059,398             0                   204,059,398
Group Co., Ltd.                     d corporate
                                     Foreign
ROBERT BOSCH GMBH                                       14.16%        142,841,400             0                   142,841,400
                                     corporate
China Securities Finance            State-owne
                                                        2.79%          28,172,515 -2,333,854                       28,172,515
Corporation Limited                 d corporate
                                     Foreign
UBS      AG                                             2.03%          20,526,641 -1,714,307                       20,526,641
                                     corporate
Kangjian Assets Management           Foreign
                                                        1.52%          15,351,892   -529,900                       15,351,892
Company –Client’s fund             corporate
Central Huijin Assets               State-owne
                                                        1.27%          12,811,200             0                    12,811,200
Management Co., Ltd.                d corporate
BBH BOS S/A FIDELITY FD              Foreign
                                                        1.23%          12,382,279             0                    12,382,279
- CHINA FOCUS FD                     corporate
Puxin Investment Company-            Foreign
                                                        1.12%          11,347,877             0                    11,347,877
Client’s fund                       corporate
MERRILL LYNCH                        Foreign
                                                        1.07%          10,828,901   -474,724                       10,828,901
INTERNATIONAL                        corporate
JPMORGAN CHASE
                                     Foreign
BANK,NATIONAL                                           0.97%           9,742,287 2,009,900                            9,742,287
                                     corporate
ASSOCIATION
                                                  Among the top ten shareholders, there has no associated relationship between Wuxi
                                                  Industry Development Croup Co., Ltd. and other shareholders, the first largest
Explanation on associated relationship
                                                  shareholder of the Company; and they do not belong to the consistent actionist
among the aforesaid shareholders
                                                  regulated by the Management Measure of Information Disclosure on Change of
                                                  Shareholding for Listed Company.

                               Particular about top ten common shareholders with un-restrict shares held

                                                                         Amount of un-restricted                    Type of shares
                       Shareholders’ name                               common shares held at
                                                                                                                Type                  Amount
                                                                               period-end



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Wuxi Industry Development Group Co., Ltd.                                   204,059,398 RMB common shares             204,059,398
                                                                                          RMB common shares           115,260,600
ROBERT BOSCH GMBH                                                           142,841,400   Domestically listed
                                                                                                                       27,580,800
                                                                                             foreign shares
China Securities Finance Corporation Limited                                 28,172,515 RMB common shares              28,172,515
UBS      AG                                                                  20,526,641 RMB common shares              20,526,641
Kangjian Assets Management Company –Client’s fund                          15,351,892 RMB common shares              15,351,892
Central Huijin Assets Management Co., Ltd.                                   12,811,200 RMB common shares               12,811,200
                                                                                          Domestically listed
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD                                     12,382,279                                12,382,279
                                                                                             foreign shares
Puxin Investment Company- Client’s fund                                     11,347,877 RMB common shares               11,347,877
MERRILL LYNCH INTERNATIONAL                                                  10,828,901 RMB common shares              10,828,901
JPMORGAN CHASE BANK,NATIONAL ASSOCIATION                                        9,742,287 RMB common shares              9,742,287
                                                               Among the top ten shareholders, there has no associated relationship
Expiation on associated relationship or consistent actors      between Wuxi Industry Development Croup Co., Ltd. and other
within the top 10 un-restrict common shareholders and          shareholders, the first largest shareholder of the Company; and they
between top 10 un-restrict common shareholders and top 10      do not belong to the consistent actionist regulated by the
common shareholders                                            Management Measure of Information Disclosure on Change of
                                                               Shareholding for Listed Company.
Explanation on top 10 shareholders involving margin
                                                               Not applicable
business (if applicable) (see note 4)

Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement
dealing in reporting period
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy-back
agreement dealing in reporting period.


III. Changes of controlling shareholders or actual controller

Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
Changes of controlling shareholders had no change in reporting period.
Changes of actual controller in reporting period
□ Applicable √ Not applicable
Changes of actual controller in reporting period had no change in reporting period.

IV. Share holding increasing plan proposed or implemented in reporting period from
shareholder of the Company and its concerted action person

□ Applicable   √Not applicable
As far as the Company know, there are no share holding increasing plan proposed or implemented in Period from shareholder of the
Company and its concerted action person




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                                      Section VII. Preferred Stock

□ Applicable   √ Not applicable
The Company had no preferred stock in the reporting.




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           Section VIII. Directors, Supervisors and Senior Executives

I. Changes of shares held by directors, supervisors and senior executives

□Applicable     √ Not applicable

Found more in annual report 2015 for the changes of shares held by directors, supervisors and senior executives


II. Resignation and dismissal of directors, supervisors and senior executives

□Applicable     √ Not applicable

There are no changes in resignation and dismissal of directors, supervisors and senior executives in the Period, found more in annual
report of 2015




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                                         Section IX. Financial Report

I. Audit reports

Whether the semi-annual report was audited or not

□ Yes √ No

The financial report of this semi-annual report was unaudited

II. Financial statements

Units in Notes of Financial Statements is RMB

1. Consolidated balance sheet

Prepared by Weifu High-Technology Group Co., Ltd

                                                             2016-06-30
                                                                                                                    In RMB

                                         Item                                       Closing balance      Opening balance
Current assets:
     Monetary funds                                                                   1,224,397,416.60     3,274,679,732.54
     Settlement provisions
     Capital lent
     Financial liability measured by fair value and with variation reckoned into
current gains/losses
     Derivative financial liability
     Notes receivable                                                                 1,016,588,650.43     1,031,886,230.18
     Accounts receivable                                                              1,738,607,467.83     1,261,163,184.87
     Accounts paid in advance                                                            77,461,293.47        73,326,550.19
     Insurance receivable
     Reinsurance receivables
     Contract reserve of reinsurance receivable
     Interest receivable                                                                  2,249,341.69         3,281,939.96
     Dividend receivable                                                                361,572,367.40         3,600,000.00
     Other receivables                                                                   12,278,400.19         8,817,661.08
     Purchase restituted finance asset
     Inventories                                                                        907,280,742.58       865,574,792.41
     Divided into assets held for sale
     Non-current asset due within one year
     Other current assets                                                             4,612,373,442.46     2,016,204,649.28
Total current assets                                                                  9,952,809,122.65     8,538,534,740.51
Non-current assets:


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     Loans and payments on behalf
     Finance asset available for sales                                                  696,267,961.00      694,398,661.00
     Held-to-maturity investment
     Long-term account receivable
     Long-term equity investment                                                      2,884,406,007.82    3,283,584,245.43
     Investment property                                                                 19,733,596.73       20,233,111.93
     Fixed assets                                                                     2,342,751,201.54    2,320,627,323.42
     Construction in progress                                                           156,065,946.03      162,402,752.68
     Engineering material
     Disposal of fixed asset
     Productive biological asset
     Oil and gas asset
     Intangible assets                                                                  354,930,608.85      360,610,837.42
     Expense on Research and Development
     Goodwill                                                                             1,784,086.79        1,784,086.79
     Long-term expenses to be apportioned                                                14,224,114.08       14,004,911.64
     Deferred income tax asset                                                          160,033,019.01      158,873,725.37
     Other non-current asset                                                            113,614,653.09      149,038,672.85
Total non-current asset                                                               6,743,811,194.94    7,165,558,328.53
Total assets                                                                         16,696,620,317.59   15,704,093,069.04
Current liabilities:
     Short-term loans                                                                   263,000,000.00      360,000,000.00
     Loan from central bank
     Absorbing deposit and interbank deposit
     Capital borrowed
     Financial liability measured by fair value and with variation reckoned into
current gains/losses
     Derivative financial liability
     Notes payable                                                                      624,360,290.69      630,682,394.24
     Accounts payable                                                                 1,688,915,601.06    1,463,607,938.95
     Accounts received in advance                                                        38,372,570.85       33,545,363.49
     Selling financial asset of repurchase
     Commission charge and commission payable
     Wage payable                                                                       173,259,709.89      245,070,941.07
     Taxes payable                                                                       54,613,352.02       52,389,865.33
     Interest payable                                                                     3,640,952.21         778,673.59
     Dividend payable                                                                   504,475,285.00
     Other accounts payable                                                              54,891,464.32       49,333,826.26
     Reinsurance payables
     Insurance contract reserve
     Security trading of agency
     Security sales of agency
     Divided into liability held for sale


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     Non-current liabilities due within 1 year                            60,000,000.00       60,000,000.00
Other current liabilities
Total current liabilities                                              3,465,529,226.04    2,895,409,002.93
Non-current liabilities:
     Long-term loans
     Bonds payable
        Including: preferred stock
                Perpetual capital securities
     Long-term account payable                                            18,174,545.00       18,174,545.00
     Long-term wages payable                                              96,350,000.00       96,350,000.00
     Special accounts payable                                             49,407,023.28       44,725,048.69
     Projected liabilities
     Deferred income                                                     413,902,821.00      400,657,991.06
     Deferred income tax liabilities                                      25,524,818.14       35,499,320.90
     Other non-current liabilities
Total non-current liabilities                                            603,359,207.42      595,406,905.65
Total liabilities                                                      4,068,888,433.46    3,490,815,908.58
Owner’s equity:
     Share capital                                                     1,008,950,570.00    1,008,950,570.00
     Other equity instrument
        Including: preferred stock
                Perpetual capital securities
     Capital public reserve                                            3,396,935,227.97    3,396,935,227.97
     Less: Inventory shares
     Other comprehensive income                                          132,228,783.76      188,436,372.50
     Reasonable reserve                                                    1,364,550.30         914,648.09
     Surplus public reserve                                              510,100,496.00      510,100,496.00
     Provision of general risk
     Retained profit                                                   7,116,984,209.55    6,677,890,958.83
Total owner’s equity attributable to parent company                  12,166,563,837.58   11,783,228,273.39
Minority interests                                                       461,168,046.55      430,048,887.07
Total owner’s equity                                                 12,627,731,884.13   12,213,277,160.46
Total liabilities and owner’s equity                                 16,696,620,317.59   15,704,093,069.04

Legal Representative: Chen Xuejun
Person in charge of accounting works: Ou Jianbin
Person in charge of accounting institute: Ou Jianbin




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2. Balance Sheet of Parent Company

                                                                                                                     In RMB

                                           Item                                     Closing balance      Opening balance
Current assets:
     Monetary funds                                                                     662,491,750.00     1,739,313,657.29
     Financial liability measured by fair value and with variation reckoned into
current gains/losses
     Derivative financial liability
     Notes receivable                                                                   199,862,327.05       159,630,301.53
     Accounts receivable                                                                635,579,363.08       537,504,587.17
     Account paid in advance                                                             46,692,751.68        50,246,196.23
     Interest receivable                                                                                          33,287.67
     Dividends receivable                                                               352,802,998.25         3,600,000.00
     Other receivables                                                                   50,575,831.27        81,906,796.95
     Inventories                                                                        152,754,826.26       151,832,151.38
     Divided into assets held for sale
     Non-current assets maturing within one year
     Other current assets                                                             4,482,280,319.07     2,038,225,831.05
Total current assets                                                                  6,583,040,166.66     4,762,292,809.27
Non-current assets:
     Available-for-sale financial assets                                                610,327,961.00       608,458,661.00
     Held-to-maturity investments
     Long-term receivables
     Long-term equity investments                                                     4,097,687,016.97     4,241,205,473.10
     Investment property
     Fixed assets                                                                     1,425,906,965.23     1,417,143,347.25
     Construction in progress                                                            36,620,395.94        60,582,501.19
     Project materials
     Disposal of fixed assets
     Productive biological assets
     Oil and natural gas assets
     Intangible assets                                                                  197,304,169.19       199,636,812.43
     Research and development costs
     Goodwill
     Long-term deferred expenses
     Deferred income tax assets                                                          88,864,741.81        86,269,470.27
     Other non-current assets                                                            48,865,247.58        80,413,247.85
Total non-current assets                                                              6,505,576,497.72     6,693,709,513.09
Total assets                                                                         13,088,616,664.38    11,456,002,322.36
Current liabilities:
     Short-term borrowings                                                              180,000,000.00       230,000,000.00
     Financial liability measured by fair value and with variation reckoned into


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current gains/losses
     Derivative financial liability
     Notes payable                                                142,215,182.46       218,219,397.80
     Accounts payable                                             572,217,955.97       473,825,553.93
     Accounts received in advance                                    1,914,255.80        4,754,011.37
     Wage payable                                                  89,956,989.34       118,032,003.11
     Taxes payable                                                 25,891,786.30        16,992,552.61
     Interest payable                                                 292,886.11           292,886.11
     Dividend payable                                             504,475,285.00
     Other accounts payable                                      1,069,309,017.33       12,757,135.96
     Divided into liability held for sale
     Non-current liabilities due within 1 year
     Other current liabilities
Total current liabilities                                        2,586,273,358.31    1,074,873,540.89
Non-current liabilities:
     Long-term loans
     Bonds payable
        Including: preferred stock
                Perpetual capital securities
     Long-term account payable
     Long-term wages payable                                       96,350,000.00        96,350,000.00
     Special accounts payable                                      31,141,941.17        26,459,966.58
     Projected liabilities
     Deferred income                                              390,096,763.92       382,179,400.68
     Deferred income tax liabilities                               23,334,491.24        33,253,477.50
     Other non-current liabilities
Total non-current liabilities                                     540,923,196.33       538,242,844.76
Total liabilities                                                3,127,196,554.64    1,613,116,385.65
Owners’ equity:
     Share capita                                                1,008,950,570.00    1,008,950,570.00
     Other equity instrument
        Including: preferred stock
                Perpetual capital securities
     Capital public reserve                                      3,427,939,852.32    3,427,939,852.32
     Less: Inventory shares
     Other comprehensive income                                   132,228,783.76       188,436,372.50
     Reasonable reserve
     Surplus reserve                                              510,100,496.00       510,100,496.00
     Retained profit                                             4,882,200,407.66    4,707,458,645.89
Total owner’s equity                                            9,961,420,109.74    9,842,885,936.71
Total liabilities and owner’s equity                           13,088,616,664.38   11,456,002,322.36




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3. Consolidated Profit Statement

                                                                                                                    In RMB

                                           Item                                     Current Period        Last Period
I. Total operating income                                                             3,366,476,452.49    3,390,437,923.64
Including: Operating income                                                           3,366,476,452.49    3,390,437,923.64
     Interest income
     Insurance gained
     Commission charge and commission income
II. Total operating cost                                                              3,051,777,186.87    3,034,775,367.69
Including: Operating cost                                                             2,633,281,983.25    2,643,639,033.68
     Interest expense
     Commission charge and commission expense
     Cash surrender value
     Net amount of expense of compensation
     Net amount of withdrawal of insurance contract reserve
     Bonus expense of guarantee slip
     Reinsurance expense
     Operating tax and extras                                                           16,235,346.56        16,163,525.65
     Sales expenses                                                                     92,799,369.25        85,114,812.69
     Administration expenses                                                           314,596,534.92       293,774,077.81
     Financial expenses                                                                  -2,909,491.43       -4,167,369.67
     Losses of devaluation of asset                                                      -2,226,555.68          251,287.53
     Add: Changing income of fair value(Loss is listed with “-”)
     Investment income (Loss is listed with “-”)                                     711,952,563.17       782,338,464.77
     Including: Investment income on affiliated company and joint venture              593,102,462.02       606,080,898.87
     Exchange income (Loss is listed with “-”)
III. Operating profit    (Loss is listed with “-”)                                  1,026,651,828.79    1,138,001,020.72
     Add: Non-operating income                                                          18,747,382.73        77,198,017.61
           Including: Disposal gains of non-current asset                                  724,772.79        16,067,700.28
     Less: Non-operating expense                                                         2,335,822.02        56,924,343.71
           Including: Disposal loss of non-current asset                                 1,461,331.21           814,848.79
IV. Total Profit   (Loss is listed with “-”)                                        1,043,063,389.50    1,158,274,694.62
     Less: Income tax expense                                                           68,314,427.18        88,185,218.04
V. Net profit (Net loss is listed with “-”)                                          974,748,962.32     1,070,089,476.58
    Net profit attributable to owner’s of parent company                              943,568,535.72     1,045,987,200.83
  Minority shareholders’ gains and losses                                              31,180,426.60        24,102,275.75
VI. Net after-tax of other comprehensive income                                         -56,207,588.74      123,791,917.50
  Net after-tax of other comprehensive income attributable to owners of parent
                                                                                        -56,207,588.74      123,791,917.50
company
       (I) Other comprehensive income items which will not be reclassified
subsequently to profit of loss
        1. Changes as a result of re-measurement of net defined benefit plan


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liability or asset
        2. Share of the other comprehensive income of the investee accounted for
using equity method which will not be reclassified subsequently to profit and loss
     (II) Other comprehensive income items which will be reclassified
                                                                                           -56,207,588.74          123,791,917.50
subsequently to profit or loss
        1. Share of the other comprehensive income of the investee accounted for
using equity method which will be reclassified subsequently to profit or loss
        2. Gains or losses arising from changes in fair value of available-for-sale
                                                                                           -56,207,588.74          123,791,917.50
financial assets
        3. Gains or losses arising from reclassification of held-to-maturity
investment as available-for-sale financial assets
        4. The effect hedging portion of gains or losses arising from cash flow
hedging instruments
        5. Translation differences arising on translation of foreign currency
financial statements
        6. Other
  Net after-tax of other comprehensive income attributable to minority
shareholders
VII. Total comprehensive income                                                           918,541,373.58         1,193,881,394.08
     Total comprehensive income attributable to owners of parent Company                  887,360,946.98         1,169,779,118.33
     Total comprehensive income attributable to minority shareholders                       31,180,426.60           24,102,275.75
VIII. Earnings per share:
       (i) Basic earnings per share                                                                    0.94                    1.03
       (ii) Diluted earnings per share                                                                 0.94                    1.03

Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and
realized 0 Yuan at last period for combined party
Legal Representative: Chen Xuejun
Person in charge of accounting works: Ou Jianbin
Person in charge of accounting institute: Ou Jianbin


4. Profit Statement of Parent Company

                                                                                                                            In RMB

                                         Item                                         Current Period             Last Period
I. Operating income                                                                       984,069,968.80           880,233,176.47
     Less: Operating cost                                                                 808,344,072.54           693,408,205.57
           Operating tax and extras                                                          3,888,794.42                49,660.74
           Sales expenses                                                                  20,239,016.93            36,690,749.38
           Administration expenses                                                        126,327,383.34           101,127,787.76
           Financial expenses                                                               -6,167,195.97            -4,679,551.52
           Losses of devaluation of asset                                                       70,937.80              906,328.70
     Add: Changing income of fair value(Loss is listed with “-”)
         Investment income (Loss is listed with “-”)                                    654,795,209.22           764,430,263.87


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                                                                         无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


         Including: Investment income on affiliated company and joint venture              537,117,080.67      572,172,697.97
II. Operating profit     (Loss is listed with “-”)                                      686,162,168.96       817,160,259.71
  Add: Non-operating income                                                                 14,621,604.78       74,904,050.65
           Including: Disposal gains of non-current asset                                      461,816.10       15,891,236.49
     Less: Non-operating expense                                                               808,445.02       55,111,600.42
           Including: Disposal loss of non-current asset                                       591,980.61          690,888.31
III. Total Profit    (Loss is listed with “-”)                                          699,975,328.72       836,952,709.94
     Less: Income tax expense                                                               20,758,281.95       35,801,374.52
IV. Net profit (Net loss is listed with “-”)                                            679,217,046.77       801,151,335.42
V. Net after-tax of other comprehensive income                                             -56,207,588.74      123,791,917.50
       (I) Other comprehensive income items which will not be reclassified
subsequently to profit of loss
        1. Changes as a result of re-measurement of net defined benefit plan
liability or asset
        2. Share of the other comprehensive income of the investee accounted for
using equity method which will not be reclassified subsequently to profit and loss
       (II) Other comprehensive income items which will be reclassified
                                                                                           -56,207,588.74      123,791,917.50
subsequently to profit or loss
        1. Share of the other comprehensive income of the investee accounted for
using equity method which will be reclassified subsequently to profit or loss
        2. Gains or losses arising from changes in fair value of available-for-sale
                                                                                           -56,207,588.74      123,791,917.50
financial assets
        3. Gains or losses arising from reclassification of held-to-maturity
investment as available-for-sale financial assets
        4. The effect hedging portion of gains or losses arising from cash flow
hedging instruments
        5. Translation differences arising on translation of foreign currency
financial statements
        6. Other
VI. Total comprehensive income                                                            623,009,458.03       924,943,252.92
VII. Earnings per share:
       (i) Basic earnings per share
       (ii) Diluted earnings per share


5. Consolidated Cash Flow Statement

                                                                                                                       In RMB

                                             Item                                      Current Period        Last Period
I. Cash flows arising from operating activities:
     Cash received from selling commodities and providing labor services                 2,605,746,532.90    3,678,069,702.35
     Net increase of customer deposit and interbank deposit
     Net increase of loan from central bank
     Net increase of capital borrowed from other financial institution


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     Cash received from original insurance contract fee
     Net cash received from reinsurance business
   Net increase of insured savings and investment
     Net increase of amount from disposal financial assets that measured by fair
value and with variation reckoned into current gains/losses
     Cash received from interest, commission charge and commission
     Net increase of capital borrowed
     Net increase of returned business capital
     Write-back of tax received                                                          15,501,767.26        22,523,565.62
     Other cash received concerning operating activities                                 17,733,683.49        26,798,281.02
Subtotal of cash inflow arising from operating activities                              2,638,981,983.65    3,727,391,548.99
     Cash paid for purchasing commodities and receiving labor service                  1,589,143,730.33    2,456,249,486.21
     Net increase of customer loans and advances
     Net increase of deposits in central bank and interbank
     Cash paid for original insurance contract compensation
     Cash paid for interest, commission charge and commission
     Cash paid for bonus of guarantee slip
     Cash paid to/for staff and workers                                                 492,300,006.76       461,724,147.75
     Taxes paid                                                                         223,331,049.84       249,318,804.79
     Other cash paid concerning operating activities                                    140,666,181.77       121,812,959.39
Subtotal of cash outflow arising from operating activities                             2,445,440,968.70    3,289,105,398.14
Net cash flows arising from operating activities                                        193,541,014.95       438,286,150.85
II. Cash flows arising from investing activities:
     Cash received from recovering investment                                          3,452,670,890.00    1,909,218,450.02
     Cash received from investment income                                               727,664,592.58       847,778,190.90
     Net cash received from disposal of fixed, intangible and other long-term
                                                                                         49,158,379.90         3,149,480.44
assets
     Net cash received from disposal of subsidiaries and other units
     Other cash received concerning investing activities                                 30,296,467.00       145,230,000.00
Subtotal of cash inflow from investing activities                                      4,259,790,329.48    2,905,376,121.36
     Cash paid for purchasing fixed, intangible and other long-term assets              226,897,693.98       267,700,189.90
     Cash paid for investment                                                          6,110,900,000.00    3,149,457,761.02
     Net increase of mortgaged loans
     Net cash received from subsidiaries and other units obtained
     Other cash paid concerning investing activities                                         57,116.41        37,388,366.46
Subtotal of cash outflow from investing activities                                     6,337,854,810.39    3,454,546,317.38
Net cash flows arising from investing activities                                      -2,078,064,480.91     -549,170,196.02
III. Cash flows arising from financing activities
     Cash received from absorbing investment                                                                   8,419,964.00
     Including: Cash received from absorbing minority shareholders’ investment
                                                                                                               8,419,964.00
by subsidiaries
     Cash received from loans                                                           250,000,000.00       260,000,000.00
     Cash received from issuing bonds


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     Other cash received concerning financing activities
Subtotal of cash inflow from financing activities                                         250,000,000.00       268,419,964.00
     Cash paid for settling debts                                                         347,000,000.00       365,000,000.00
     Cash paid for dividend and profit distributing or interest paying                       5,277,671.94      418,849,926.26
     Including: Dividend and profit of minority shareholder paid by subsidiaries                                 4,000,000.00
     Other cash paid concerning financing activities
Subtotal of cash outflow from financing activities                                        352,277,671.94       783,849,926.26
Net cash flows arising from financing activities                                          -102,277,671.94     -515,429,962.26
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate
V. Net increase of cash and cash equivalents                                            -1,986,801,137.90     -626,314,007.43
     Add: Balance of cash and cash equivalents at the period -begin                      3,040,315,198.85    2,028,227,816.93
VI. Balance of cash and cash equivalents at the period –end                             1,053,514,060.95    1,401,913,809.50


6. Cash Flow Statement of Parent Company

                                                                                                                       In RMB

                                        Item                                           Current Period        Last Period
I. Cash flows arising from operating activities:
     Cash received from selling commodities and providing labor services                  793,334,844.25       993,616,855.94
     Write-back of tax received
     Other cash received concerning operating activities                                 1,103,292,123.70      431,928,273.04
Subtotal of cash inflow arising from operating activities                                1,896,626,967.95    1,425,545,128.98
     Cash paid for purchasing commodities and receiving labor service                     439,155,764.29       752,532,601.43
     Cash paid to/for staff and workers                                                   196,948,347.05       195,324,054.92
     Taxes paid                                                                             53,074,955.83       40,340,377.96
     Other cash paid concerning operating activities                                        33,496,708.65       20,494,047.59
Subtotal of cash outflow arising from operating activities                                722,675,775.82     1,008,691,081.90
Net cash flows arising from operating activities                                         1,173,951,192.13      416,854,047.08
II. Cash flows arising from investing activities:
     Cash received from recovering investment                                            3,325,000,000.00    2,026,218,450.02
     Cash received from investment income                                                 698,900,348.97       834,174,339.90
     Net cash received from disposal of fixed, intangible and other long-term
                                                                                            48,066,222.19        2,751,944.43
assets
     Net cash received from disposal of subsidiaries and other units
     Other cash received concerning investing activities                                    25,301,600.00      145,230,000.00
Subtotal of cash inflow from investing activities                                        4,097,268,171.16    3,008,374,734.35
     Cash paid for purchasing fixed, intangible and other long-term assets                134,171,768.94       161,093,724.45
     Cash paid for investment                                                            6,155,900,000.00    3,172,226,391.02
     Net cash received from subsidiaries and other units
     Other cash paid concerning investing activities                                            57,116.41       37,388,366.46
Subtotal of cash outflow from investing activities                                       6,290,128,885.35    3,370,708,481.93
Net cash flows arising from investing activities                                        -2,192,860,714.19     -362,333,747.58
III. Cash flows arising from financing activities


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     Cash received from absorbing investment
     Cash received from loans                                                             180,000,000.00       230,000,000.00
     Cash received from issuing bonds
     Other cash received concerning financing activities
Subtotal of cash inflow from financing activities                                         180,000,000.00       230,000,000.00
     Cash paid for settling debts                                                         230,000,000.00       260,000,000.00
     Cash paid for dividend and profit distributing or interest paying                      3,489,380.28       411,841,389.29
     Other cash paid concerning financing activities
Subtotal of cash outflow from financing activities                                        233,489,380.28       671,841,389.29
Net cash flows arising from financing activities                                          -53,489,380.28      -441,841,389.29
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate
V. Net increase of cash and cash equivalents                                            -1,072,398,902.34     -387,321,089.79
     Add: Balance of cash and cash equivalents at the period -begin                     1,734,531,427.66     1,159,462,935.71
VI. Balance of cash and cash equivalents at the period –end                              662,132,525.32       772,141,845.92




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7. Statement of Changes in Owners’ Equity (Consolidated)

This Period
                                                                                                                                                                                                  In RMB

                                                                                                            This Period
                                                                     Owners’ equity attributable to parent company
                                                Other
                                                equity                           Les
                                                                                                                                            Provi
                                           instrument                            s:
                                                                                                                                            sion
        Item                                    Perpe                            Inv Other                                                                             Minority          Total    owners’
                                          Pre                                                             Reasonable                        of
                       Share capital            tual          Capital reserve    ento comprehensive                       Surplus reserve           Retained profit    interests         equity
                                          fer            Ot                                               reserve                           gener
                                                capit                            ry     income
                                          red            he                                                                                 al
                                                al                               shar
                                          sto            r                                                                                  risk
                                                secur                            es
                                          ck
                                                ities
I. Balance at the
                       1,008,950,570.00                       3,396,935,227.97          188,436,372.50      914,648.09 510,100,496.00               6,677,890,958.83 430,048,887.07 12,213,277,160.46
end of the last year
Add: Changes of
accounting policy
Error correction of
the last period
Enterprise
 combine under
 the same control
Other
II. Balance at the
beginning of this      1,008,950,570.00                       3,396,935,227.97          188,436,372.50      914,648.09 510,100,496.00               6,677,890,958.83 430,048,887.07 12,213,277,160.46
year
III. Increase/
                                                                                         -56,207,588.74     449,902.21                                439,093,250.72     31,119,159.48      414,454,723.67
Decrease in this
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                                       无锡威孚高科技集团股份有限公司 2016 年半年度报告全文
year (Decrease is
listed with “-”)
 (i)Total
comprehensive         -56,207,588.74          943,568,535.72    31,180,426.60   918,541,373.58
income
 (ii)Owners’
devoted and
decreased capital
1.Common shares
invested by
shareholders
2. Capital invested
by holders of other
equity instruments
3. Amount
reckoned into
owners equity with
share-based
payment
4. Other
(III) Profit
                                              -504,475,285.00                   -504,475,285.00
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk
provisions
3. Distribution for
owners (or                                    -504,475,285.00                   -504,475,285.00
shareholders)

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                                                                                                         无锡威孚高科技集团股份有限公司 2016 年半年度报告全文
4. Other
(IV) Carrying
forward internal
owners’ equity
1. Capital reserves
conversed to
capital (share
capital)
2. Surplus reserves
conversed to
capital (share
capital)
3. Remedying loss
with surplus
reserve
4. Other
(V) Reasonable
                                                                            449,902.21                                              -61,267.12       388,635.09
reserve
1. Withdrawal in
                                                                          8,222,799.77                                            1,043,772.54      9,266,572.31
the report period
2. Usage in the
                                                                          7,772,897.56                                            1,105,039.66      8,877,937.22
report period
(VI)Others
IV. Balance at the
end of the report     1,008,950,570.00   3,396,935,227.97   132,228,783.76 1,364,550.30 510,100,496.00         7,116,984,209.55 461,168,046.55 12,627,731,884.13
period




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                                                                                                                                             无锡威孚高科技集团股份有限公司 2016 年半年度报告全文
Last Period
                                                                                                                                                                                                      In RMB

                                                                                                              Last Period
                                                                      Owners’ equity attributable to the parent Company
                                                 Other
                                                equity
                                           instrument                             Less
                                                 Perp                             :
                                                                                                                                             Provis
        Item                                     etua                             Inve Other                                                                               Minority          Total    owners’
                                          Pre                                                              Reasonable                        ion of
                        Share capital            l            Capital reserve     ntor comprehensive                       Surplus reserve             Retained profit     interests         equity
                                          ferr           Ot                                                reserve                           gener
                                                 capi                             y      income
                                          ed             he                                                                                  al risk
                                                 tal                              shar
                                          sto            r
                                                 secu                             es
                                          ck
                                                 ritie
                                                 s
I. Balance at the
                       1,020,200,992.00                        3,635,684,413.04           121,598,365.00      867,353.00 510,100,496.00                 5,570,583,069.92 404,075,770.46 11,263,110,459.42
end of the last year
Add: Changes of
accounting policy
Error correction of
the last period
Enterprise
combine under the
same control
Other
II. Balance at the
beginning of this      1,020,200,992.00                        3,635,684,413.04           121,598,365.00      867,353.00 510,100,496.00                 5,570,583,069.92 404,075,770.46 11,263,110,459.42
year
III. Increase/
                         -11,250,422.00                         -238,749,185.07            66,838,007.50       47,295.09                                1,107,307,888.91     25,973,116.61      950,166,701.04
Decrease in this
                                                                                                                                                                                                            50
                                                                         无锡威孚高科技集团股份有限公司 2016 年半年度报告全文
year (Decrease is
listed with “-”)
 (i) Total
comprehensive                                            66,838,007.50         1,515,388,285.71   37,375,926.49 1,619,602,219.70
income
 (ii) Owners’
devoted and           -11,250,422.00   -238,749,185.07                                            12,812,655.54    -237,186,951.53
decreased capital
1.Common shares
invested by                                                                                       12,812,655.54     12,812,655.54
shareholders
2. Capital invested
by holders of other
equity instruments
3. Amount
reckoned into
owners equity with
share-based
payment
4 Other               -11,250,422.00   -238,749,185.07                                                             -249,999,607.07
(III) Profit
                                                                                -408,080,396.80 -24,324,710.00     -432,405,106.80
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk
provisions
3. Distribution for
owners (or                                                                      -408,080,396.80   -24,324,710.00   -432,405,106.80
shareholders)

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                                                                                                           无锡威孚高科技集团股份有限公司 2016 年半年度报告全文
4. Other
(IV) Carrying
forward internal
owners’ equity
1. Capital reserves
conversed to
capital (share
capital)
2. Surplus reserves
conversed to
capital (share
capital)
3. Remedying loss
with surplus
reserve
4. Other
(V) Reasonable
                                                                                47,295.09                                             109,244.58       156,539.67
reserve
1. Withdrawal in
                                                                             17,777,214.23                                          2,228,444.50     20,005,658.73
the report period
2. Usage in the
                                                                             17,729,919.14                                          2,119,199.92     19,849,119.06
report period
(VI)Others
IV. Balance at the
end of the report     1,008,950,570.00   3,396,935,227.97   188,436,372.50     914,648.09 510,100,496.00         6,677,890,958.83 430,048,887.07 12,213,277,160.46
period




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                                                                                                                                         无锡威孚高科技集团股份有限公司 2016 年半年度报告全文
8. Statement of Changes in Owners’ Equity (Parent Company)

This Period
                                                                                                                                                                                         In RMB

                                                                                                                   This Period
                                                                       Other
                                                            equity instrument
                                                                                                      Less:
                                                                   Perpet
                                                            Pref                                      Inve Other
                 Item                                              ual                                                         Reasonable                                        Total owners’
                                          Share capital     erre                   Capital reserve    ntory comprehensive                    Surplus reserve   Retained profit
                                                                   capita Othe                                                 reserve                                              equity
                                                            d                                         share income
                                                                   l           r
                                                            stoc                                      s
                                                                   securi
                                                            k
                                                                   ties
I. Balance at the end of the last year   1,008,950,570.00                          3,427,939,852.32           188,436,372.50                   510,100,496.00 4,707,458,645.89 9,842,885,936.71
Add: Changes of accounting policy
Error correction of the last period
Other
II. Balance at the beginning of this
                                         1,008,950,570.00                          3,427,939,852.32           188,436,372.50                   510,100,496.00 4,707,458,645.89 9,842,885,936.71
year
III. Increase/ Decrease in this year
                                                                                                              -56,207,588.74                                    174,741,761.77   118,534,173.03
(Decrease is listed with “-”)
 (i) Total comprehensive income                                                                               -56,207,588.74                                    679,217,046.77   623,009,458.03
 (ii) Owners’ devoted and decreased
capital
1.Common shares invested by
shareholders
2. Capital invested by holders of
other equity instruments
3. Amount reckoned into owners


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                                                                                                     无锡威孚高科技集团股份有限公司 2016 年半年度报告全文
equity with share-based payment
4. Other
(III) Profit distribution                                                                                                    -504,475,285.00   -504,475,285.00
1. Withdrawal of surplus reserves
2. Distribution for owners (or
                                                                                                                             -504,475,285.00   -504,475,285.00
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. Other
(V) Reasonable reserve
1. Withdrawal in the report period                                                            1,698,128.36                                        1,698,128.36
2. Usage in the report period                                                                 1,698,128.36                                        1,698,128.36
(VI)Others
IV. Balance at the end of the report
                                       1,008,950,570.00   3,427,939,852.32   132,228,783.76                  510,100,496.00 4,882,200,407.66 9,961,420,109.74
period




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                                                                                                                                        无锡威孚高科技集团股份有限公司 2016 年半年度报告全文
Last period
                                                                                                                                                                                        In RMB

                                                                                                                    Last period
                                                                   Other
                                                                   equity
                                                                instrument                           Less:
                                                                   Perpe                             Inve Other
                 Item                                       Pref                                                              Reasonable                                         Total owners’
                                          Share capital            tual          Capital reserve     ntory comprehensive                     Surplus reserve   Retained profit
                                                            erre                                                              reserve                                               equity
                                                                   capita Oth                        share income
                                                            d
                                                                   l        er                       s
                                                            stoc
                                                                   securi
                                                            k
                                                                   ties
I. Balance at the end of the last year   1,020,200,992.00                         3,666,689,037.39           121,598,365.00                  510,100,496.00    3,908,431,926.63 9,227,020,817.02
Add: Changes of accounting policy
Error correction of the last period
Other
II. Balance at the beginning of this
                                         1,020,200,992.00                         3,666,689,037.39           121,598,365.00                  510,100,496.00    3,908,431,926.63 9,227,020,817.02
year
III. Increase/ Decrease in this year
                                           -11,250,422.00                          -238,749,185.07            66,838,007.50                                     799,026,719.26    615,865,119.69
(Decrease is listed with “-”)
 (i) Total comprehensive income                                                                               66,838,007.50                                    1,207,107,116.06 1,273,945,123.56
 (ii) Owners’ devoted and
                                           -11,250,422.00                          -238,749,185.07                                                                               -249,999,607.07
decreased capital
1.Common shares invested by
shareholders
2. Capital invested by holders of
other equity instruments
3. Amount reckoned into owners
equity with share-based payment


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                                                                                                    无锡威孚高科技集团股份有限公司 2016 年半年度报告全文
4. Other                                 -11,250,422.00   -238,749,185.07                                                                       -249,999,607.07
(III) Profit distribution                                                                                                     -408,080,396.80   -408,080,396.80
1. Withdrawal of surplus reserves
2. Distribution for owners (or
                                                                                                                              -408,080,396.80   -408,080,396.80
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. Other
(V) Reasonable reserve
1. Withdrawal in the report period                                                            4,167,337.97                                         4,167,337.97
2. Usage in the report period                                                                 4,167,337.97                                         4,167,337.97
(VI)Others
IV. Balance at the end of the report
                                       1,008,950,570.00   3,427,939,852.32   188,436,372.50                  510,100,496.00   4,707,458,645.89 9,842,885,936.71
period




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                                                             无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


III. Basic information of the Company

1. Historical origin of the Company
By the approval of STGS (1992) No. 130 issued by Jiangsu Economic Restructuring Committee, Weifu
High-Technology Group Co., Ltd. (hereinafter referred to “the Company” or “Company”) was established as a
company of limited liability with funds raised from targeted sources, and registered at Wuxi Administration for
Industry & Commerce in October 1992. The original share capital of the Company totaled RMB 115.4355 million,
including state-owned share capital amounting to RMB 92.4355 million, public corporate share capital amounting
to RMB 8 million and inner employee share capital amounting to RMB 15 million.
Between year of 1994 and 1995, the Company was restructured and became a holding subsidiary of Wuxi Weifu
Group Co., Ltd (hereinafter referred to as “Weifu Group”).
By the approval of Jiangsu ERC and Shenzhen Securities Administration Office in August 1995, the Company
issued 68 million special ordinary shares (B-share) with value of RMB 1.00 for each, and the total value of those
shares amounted to RMB 68 million. After the issuance, the Company’s total share capital increased to RMB
183.4355 million.
By the approval of CSRC in June 1998, the Company issued 120 million RMB ordinary shares (A-share) at
Shenzhen Stock Exchange through on-line pricing and issuing. After the issuance, the total share capital of the
Company amounted to RMB 303.4355 million.
In the middle of 1999, deliberated and approved by the Board and Shareholders’ General Meeting, the Company
implemented the plan of granting 3 bonus shares for each 10 shares. After that, the total share capital of the
Company amounted to RMB 394.46615 million, of which state-owned shares amounted to RMB 120.16615
million, public corporate shares RMB 10.4 million, foreign-funded shares (B-share) RMB 88.40 million, RMB
ordinary shares (A-share) RMB 156 million and inner employee shares RMB 19.5 million.
In the year 2000, by the approval of the CSRC and based upon the total share capital of 303.4355 million shares
after the issuance of A-share in June 1998, the Company allotted 3 shares for each 10 shares, with a price of RMB
10 for each allotted share. Actually 41.9 million shares was allotted, and the total share capital after the allotment
increased to RMB 436.36615 million, of which state-owned corporate shares amounted to RMB 121.56615
million, public corporate shares RMB 10.4 million, foreign-funded shares (B-share) RMB 88.4 million and RMB
ordinary shares (A-share) RMB 216 million.
In April 2005, Board of Directors of the Company has examined and approved 2004 Profit Pre-distribution Plan,
and examined and approved by 2004 Shareholders’ General Meeting , the Company distributed 3 shares for each
10 shares to the whole shareholders totaling to 130,909,845 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 47,736,000
shares), so as to realize the originally non-circulating shares can be traded on market when satisfied certain
conditions, the scheme has been implemented on April 5, 2006.
On 27 May 2009, Weifu Group satisfied the consideration arrangement by dispatching 0.5 shares for each 10
shares based on the number of circulating A shares as prior to Share Merger Reform, according to the aforesaid
Share Merger Reform, with an aggregate of 14,039,979 shares dispatched. Subsequent to implementation of
dispatch of consideration shares, Weifu Group then held 100,021,999 shares of the Company, representing


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                                                            无锡威孚高科技集团股份有限公司 2016 年半年度报告全文


17.63% of the total share capital of the Company.
Pursuant to the document (XGZQ(2009)No.46) about “Approval for Merger of Wuxi Weifu Group Co., Ltd. by
Wuxi Industry Development Group Co., Ltd.” issued by the State-owned Assets Supervision and Administration
Commission of Wuxi City Government, Wuxi Industry Development Group Co., Ltd. (hereinafter referred to as
Wuxi Industry Group) acquired Weifu Group. After the merger, Weifu Group was then revoked, and its assets and
credits & debts were transferred to be under the name of Wuxi Industry Group. Accordingly, Wuxi Industry
Group became the first largest shareholder of the Company since then.
In accordance with the resolutions of shareholders' meeting and provisions of amended constitution, and approved
by [2012] No. 109 document of China Securities Regulatory Commission, in Feb., the Company issued RMB
ordinary shares (A-share) of 112,858,000 shares to Wuxi Industry Groups and overseas strategic investor,
ROBERT BOSCH GMBH (hereinafter referred to as Germany BOSCH), face value was RMB 1 Yuan per share,
added registered capital of RMB112,858,000 Yuan , and the registered capital after change was RMB
680,133,995 Yuan. Wuxi Industry Group is the first majority shareholder of the Company, and Germany BOSCH
is the second majority shareholder of the Company.
In March 2013, the profit distribution re-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
680,133,995 shares, distribute 5-share for every 10 shares held by whole shareholders, 340,066,997 shares in total
are distributed. Total share capital of the Company amounting RMB 1,020,200,992 up to 31 December 2013.
Deliberated and approved by the company’s first extraordinary general meeting in 2015, the company has
repurchased 11,250,422 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 (capital) becomes RMB 1,008,950,570 Yuan after the change.
2. Registered place, organization structure and head office of the Company
Registered place and head office of the Company: No.5, Huashan Road, New District, Wuxi City
Registered number: 91320200250456967N
The Company sets up Shareholders’ General Meeting, the Board of Directors and the Supervisory Committee.
The Company sets up Administration Department, Engineering Technology Research Institution, Human
Resources Department, Office of the Board, Risk Management Department, Information Systems Department,
Market & Strategy Plan Department, Party-masses Security Department, Finance Control Department, Project
Purchase Department, Manufacturing Quality Department, MS Business Segment, and subsidiaries such as Wuxi
Weifu Leader Catalytic Converter Co., Ltd., Nanjing Weifu Jinning Co., Ltd., and Wuxi Weifu Automotive Diesel
System Co., Ltd.
3. Business nature and major operation activities of the Company
Operation scope of the Company: technological development and consultancy service of machinery industry;
internal combustion engine fuel system product, fuel system test instrument and equipment manufacturing;
wholesale of dangerous chemicals (operates in line with the lists in license); general machinery, hardware and
electrical, chemical products and raw materials (other than chemical dangerous), auto spare parts, autos (other
than autos under-9 seats); repair of engine; 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. (items subject to approvals should be operated
after approval by authorities )
Major subsidiaries respectively activate in production and sales of engine accessories, auto spare parts, mufflers,

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and purifiers.
4. Relevant party offering approval reporting of financial statements and date thereof
Financial statements of the Company were approved by the Board of Directors for reporting dated 23 August
2016.
                                                              Shareholding               Registered                          Stateme
                                                                ratio (%)     Proportion capital (in                            nt
                                                Shortname
              Name of subsidiary                                               of votes     10          Business scope       consolid
                                               of subsidiary           Indire
                                                             Directly            (%)     thousand                              ate
                                                                        ctly               Yuan)                              (Y/N)
                                                                                                   Internal-combustio
                                                  Weifu
Nanjing Weifu Jinning Co., Ltd.                               80.00     --     80.00     34,628.70    n engine and              Y
                                                 Jinning
                                                                                                       accessories
Wuxi Weifu Leader Catalytic Converter Co.,        Weifu                                                Purifier and
                                                              94.81     --     94.81     50,259.63                              Y
Ltd.                                              Leader                                                 muffler
                                                                                                   Internal-combustio
                                                 Weifu
Weifu Mashan Pump Glib Co., Ltd.                             100.00     --     100.00     16500       n engine and              Y
                                                 Mashan
                                                                                                       accessories
                                                                                                   Internal-combustio
                                                 Weifu
Wuxi Weifu Chang’an Co., Ltd.                               100.00     --     100.00      6,000      n engine and              Y
                                                Chang’an
                                                                                                       accessories
                                                                                                   Internal-combustio
Wuxi Weifu Automotive Diesel System Co., Weifu Diesel
                                                      100.00            --     100.00     30,000      n engine and              Y
Ltd.                                       System
                                                                                                       accessories
                                                  Weifu
Wuxi Weifu International Trade Co. Ltd.        International 100.00     --     100.00      3,000       International trade      Y
                                                   Trade
                                                                                                       Internal-combustio
Wuxi Weifu ITM Supercharging Technique Co.,
                                            Weifu ITM 100.00            --     100.00      16,000         n engine and          Y
Ltd.
                                                                                                           accessories
                                                                                                       Internal-combustio
Wuxi Weifu Schmidt Power System Spare Parts       Weifu
                                                              66.00     --     66.00       4,800          n engine and          Y
Co., Ltd.                                        Schmidt
                                                                                                           accessories
                                                                                                       Internal-combustio
Ningbo Weifu Tianli Supercharging Technique
                                            Weifu Tianli 51.00          --     51.00       10,469         n engine and          Y
Co., Ltd.
                                                                                                           accessories
                                                                                                       Internal-combustio
                                                 Weifu
Anhui Weifu Tianshi Machinery Co., Ltd.                       52.00     --     52.00       1,000          n engine and          Y
                                                 Tianshi
                                                                                                           accessories
                                                                                                       Internal-combustio
                                                Kunming
Kunming Xitong Machinery Co., Ltd.                            70.00     --     70.00        400           n engine and          Y
                                                 Xitong
                                                                                                           accessories
                                                  Weifu
Wuxi Weifu-Autocam Fine Machinery Co. Ltd.                    51.00     --     51.00     USD1,510          Auto parts           Y
                                                 Autocam
                                                  Weifu                                                   Purifier and
Wuxi Weifu Leader          Catalytic   Converter
                                                  Leader        --    60.00    60.00      1,000.00          muffler             Y
(Wuhan) Co., Ltd.
                                                 (Wuhan)


Note: the Company completed capital increase of RMB120 million for Weifu Mashan during this reporting period. Upon completion
of the capital increase, the registered capital of Weifu Mashan increased from RMB 45 million to RMB165 million. The Company
completed capital increase of RMB150 million for Weifu Chang’an during this reporting period. Upon completion of the capital
increase, the registered capital of Weifu Chang’an increased from RMB60 million to RMB210 million. Business registration for
Weifu Chang’an is in the process.




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IV. Basis of preparation of financial statements

1. Preparation base

The financial statement were stated in compliance with Accounting Standard for Business Enterprises –Basic
Norms issued by Ministry of Finance, the specific 41 accounting rules revised and issued dated 15 February 2006
and later, the Application Instruments of Accounting Standards and interpretation on Accounting standards and
other relevant regulations (together as “Accounting Standards for Business Enterprise”), as well as the
Compilation Rules for Information Disclosure by Companies Offering Securities to the Public No.15 – General
Provision of Financial Report (Amended in 2014) issued by CSRC in respect of the actual transactions and
proceedings, on a basis of ongoing operation.


In line with relevant regulations of Accounting Standards of Business Enterprise, accounting of the Company is
on accrual basis. Except for certain financial instruments, the financial statement measured on historical cost.
Assets have impairment been found, corresponding depreciation reserves shall accrual according to relevant rules.

2. Going concern

The Company comprehensively assessed the available information, and there are no obvious factors that impact
sustainable operation ability of the Company within 12 months since end of the reporting period.

V. Major Accounting Policies and Estimation

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, Auto spare parts, mufflers and purifiers etc., in line with the real operational characteristics and relevant
accounting standards, many specific accounting policies and estimation have been formulated for the transactions
and events with revenue recognized concerned. As for the explanation on major accounting judgment and
estimation, found more in 28-“Other major 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, such as
financial position, operation achievements and cash flow.

2. Accounting period

Accounting period of the Company consist of annual and mid-term, mid-term refers to the reporting period shorter
than one annual accounting year. The company adopts Gregorian calendar as accounting period, namely form each
1 January to 31 December.

3. Business cycles

Normal business cycle is the period from purchasing assets used for process by the Company to the cash and cash
equivalent achieved. The Company’s normal business cycle was one-year (12 months).

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4. Recording currency

The Company’s reporting currency is the RMB Yuan.

5. Accounting Treatment Method for Business Combinations

Business combination is the transaction or events that two or two above independent enterprises combined as a
reporting entity. Business combination including enterprise combined under the same control and business
combined under different control.
(1) The business combination under the same control
Enterprise combination under the same control is the enterprise who take part in the combination are have the
same ultimate controller or under the same controller, the control is not temporary. The assets and liability
acquired by combining party are measured by book value of the combined party on combination date. Balance of
net asset’s book value acquired by combining party and combine consideration paid (or total book value of the
shares issued), shall adjusted capital reserve (share premium); if the capital reserves (share premium) is not
enough for deducted, adjusted for retained earnings. Vary directly expenses occurred for enterprise combination,
the combining party shall reckoned into current gains/losses while occurring. Combination day is the date when
combining party obtained controlling rights from the combined party.
(2) Combine not under the same control
A business combination not involving entities under common control is a business combination in which all of the
combining entities are not ultimately controlled by the same party or parties both before and after the combination.
As a purchaser, fair value of the assets (equity of acquiree held before the date of purchasing included) for
purchasing controlling right from the actuiree, the liability occurred or undertake on purchasing date less the fair
value of identifiable net assets of the acuquiree obtained in combination, recognized as goodwill if the results is
positive; if the number is negative, the acquirer shall firstly review the measurement of the fair value of the
identifiable assets obtained, liabilities incurred and contingent liabilities incurred, as well as the combination costs.
After that, if the combination costs are still lower than the fair value of the identifiable net assets obtained, the
acquirer shall recognize the difference as the profit or loss in the current period. Other directly expenses cost for
combination shall be reckoned into current gains/losses. Difference of the fair value of assets paid and its book
values, reckoned into current gains/losses. On purchasing date, the identifiable assets, liability or contingency of
the acquiree 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 acquiree.

6. Preparation method for consolidated financial statement

(1) Recognition principle of consolidated scope
On basis of the financial statement of the parent company and owned subsidiaries, prepared consolidated
statement in line with relevant information. The scope of consolidation of consolidated financial statements is
ascertained on the basis of effective control. Once certain elements involved in the above definition of control
change due to changes of relevant facts or circumstances, the Company will make separate assessment.
(2) Basis of control
Control is the right to govern an investee so as to obtain variable return through participating in the investee’s
relevant activities and the ability to affect such return by use of the aforesaid right over the investee. Relevant
activities refers to the activities have major influence on return of the investee’s.


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(3) Consolidation process
Subsidiaries are consolidated from the date on which the company obtains their actual control, and are
deconsolidated from the date that such control ceases. All significant inter-group balances, investment,
transactions and unrealized profits are eliminated in the consolidated financial statements. For subsidiaries being
disposed, the operating results and cash flows prior to the date of disposal are included in the consolidated income
statement and consolidated cash flow statement; for subsidiaries disposed during the period, the opening balances
of the consolidated balance sheet would not be restated. For subsidiaries acquired from a business combination
not under common control, their operating results and cash flows subsequent to the acquisition date are included
in the consolidated income statement and consolidated cash flow statement, and the opening balances and
comparative figures of the consolidated balance sheet would not be restated. For subsidiaries acquired from a
business combination under common control, their operating results and cash flows from the date of
commencement of the accounting period in which the combination occurred to the date of combination are
included in the consolidated income statement and consolidated cash flow statement, and the comparative figures
of the consolidated balance sheet would be restated.
In preparing the consolidated financial statements, where the accounting policies or the accounting periods are
inconsistent between the company and subsidiaries, the financial statements of subsidiaries are adjusted in
accordance with the accounting policies and accounting period of the company.
Concerning the subsidiary obtained under combination with different control, adjusted several financial statement
of the subsidiary based on the fair value of recognizable net assets on purchased day while financial statement
consolidation; concerning the subsidiary obtained under combination with same control, considered current status
of being control by ultimate controller for consolidation while financial statement consolidation.
The unrealized gains and losses from the internal transactions occurred in the assets the Company sold to the
subsidiaries fully offset "the net profit attributable to the owners of the parent company". The unrealized gains and
losses from the internal transactions occurred in the assets the subsidiaries sold to the Company are distributed and
offset between "the net profit attributable to the owners of the parent company" and "minority interest" according
to the distribution ratio of the Company to the subsidiary. The unrealized gains and losses from the internal
transactions occurred in the assets sold among the subsidiaries are distributed and offset between "the net profit
attributable to the owners of the parent company" and "minority interest" according to the distribution ratio of the
Company to the subsidiary of the seller.
The share of the subsidiary’s ownership interest not attributable to the Company is listed as “minority interest”
item under the ownership interest in the consolidated balance sheet. The share of the subsidiary’s current profit or
loss attributable to the minority interests is listed as "minority interest" item under the net profit item in the
consolidated income statement. The share of the subsidiary’s current consolidated income attributable to the
minority interests is listed as the “total consolidated income attributable to the minority shareholders” item under
the total consolidated income item in the consolidated income statement. If there are minority shareholders, add
the "minority interests" item in the consolidated statement of change in equity to reflect the changes of the
minority interests. If the losses of the current period shared by a subsidiary’s minority shareholders exceed the
share that the minority shareholders hold in the subsidiary ownership interest in the beginning of the period, the
balance still charges against the minority interests.
When the control over a subsidiary is ceased due to disposal of a portion of an interest in a subsidiary, the fair
value of the remaining equity interest is re-measured on the date when the control ceased. The difference between
the sum of the consideration received from disposal of equity interest and the fair value of the remaining equity
interest, less the net assets attributable to the company since the acquisition date, is recognized as the investment
income from the loss of control. Other comprehensive income relating to original equity investment in

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subsidiaries shall be treated on the same basis as if the relevant assets or liabilities were disposed of by the
acquiree directly when the control is lost, namely be transferred to current investment income other than the
relevant part of the movement arising from re-measuring net liabilities or net assets under defined benefit scheme
by the original subsidiary. Subsequent measurement of the remaining equity interests shall be in accordance with
relevant accounting standards such as “Accounting Standards for business Enterprises 2 – Long-term Equity
Investments” or “Accounting Standards for business Enterprises 22 – Financial Instruments Recognition and
Measurement”.
The company shall determine whether loss of control arising from disposal in a series of transactions should be
regarded as a bundle of transactions. When the economic effects and terms and conditions of the disposal
transactions met one or more of the following situations, the transactions shall normally be accounted for as a
bundle of transactions: ①The transactions are entered into after considering the mutual consequences of each
individual transaction; ② The transactions need to be considered as a whole in order to achieve a deal in
commercial sense; ③The occurrence of an individual transaction depends on the occurrence of one or more
individual transactions in the series; ④ The result of an individual transaction is not economical, but it would be
economical after taking into account of other transactions in the series. When the transactions are not regarded as
a bundle of transactions, 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 a bundle of transactions, the transactions shall be
accounted as a single disposal transaction; however, the difference between the consideration received from
disposal and the share of net assets disposed in each individual transactions before loss of control shall be
recognized as other comprehensive income, and reclassified as profit or loss arising from the loss of control when
control is lost.

7. Joint arrangement classification and accounting treatment for joint operations

In accordance with the Company’s rights and obligation under a joint arrangement, the Company classifies joint
arrangements into: joint ventures and joint operations.
The company confirms the following items related to the share of interests in its joint operations, and in
accordance with the provisions of the relevant accounting standards for accounting treatment:
(1) Recognize the assets held solely by the Company, and recognize assets held jointly by the Company in
appropriation to the share of the Company;
(2) Recognize the obligations assumed solely by the Company, and recognize obligations assumed jointly by the
Company in appropriation to the share of the Company;
(3) Recognize revenue from disposal of the share of joint operations of the Company;
(4) Recognize fees solely occurred by Company;
(5) Recognize fees from joint operations in appropriation to the share of the Company.

8. Determining standards for cash and cash equivalent

Cash refers to stock cash, savings available for paid at any time; cash and cash equivalent refers to the cash held
by the Company with short terms(expired within 3 months since purchased), and liquid and easy to transfer as
known amount and investment with minor variation in risks.

9. Foreign currency business and conversion


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The occurred foreign currency transactions are converted into the recording currency in accordance with the
middle rate of the market exchange rate published by the People's Bank of China on the transaction date. Thereinto,
the occurred foreign currency exchange or transactions involved in the foreign currency exchange are converted in
accordance with the actual exchange rate in the transactions.
At the balance sheet date, the account balance of the foreign currency monetary assets and liabilities is converted
into the recording currency amount in accordance with the middle rate of the market exchange rate published by
the People's Bank of China on the transaction date. The balance between the recording currency amount converted
according to exchange rate at the balance sheet date and the original recording currency amount is disposed as the
exchange gains or losses. Thereinto, the exchange gains or losses occurred in the foreign currency loans related to
the purchase and construction of fixed assets are disposed according to the principle of capitalization of borrowing
costs; the exchange gains and losses occurred during the start-up are included in the start-up costs; the rest is
included in the current financial expenses.
At the balance sheet date, the foreign currency non-monetary items measured with the historical costs are converted
in accordance with the middle rate of the market exchange rate published by the People's Bank of China on the
transaction date without changing its original recording currency amount; the foreign currency non-monetary items
measured with the fair value are converted in accordance with the middle rate of the market exchange rate
published by the People's Bank of China on the fair value date, and the generated exchange gains and losses are
included in the current profits and losses as the gains and losses from changes in fair value.
The following displays the methods for translating financial statements involving foreign operations into the
statements in RMB: The asset and liability items in the balance sheets for overseas operations are translated at the
spot exchange rates on the balance sheet date. Among the owners’ equity items, the items other than
“undistributed profits” are translated at the spot exchange rates of the transaction dates. The income and expense
items in the income statements of overseas operations are translated at the average exchange rates of the
transaction dates. The exchange difference arising from the above mentioned translation are recognized in other
comprehensive income and is shown separately under owner’ equity in the balance sheet; such exchange
difference will be reclassified to profit or loss in current year when the foreign operation is disposed according to
the proportion of disposal.
The cash flows of overseas operations are translated at the average exchange rates on the dates of the cash flows.
The effect of exchange rate changes on cash is presented separately in the cash flow statement.

10. Financial instrument

Financial instrument is the contract that taken shape of the financial asses for an enterprise and of the financial
liability or equity instrument for other units.
(1) Classification and measurement on financial assets and financial liability
In terms of investment purposes and economic natures, the Company divides its financial assets into financial
assets (with its variation of fair value reckoned into current gains/losses), financial assets available for sale,
account receivables and held-to-maturity investments, among which, transactional financial asset is measured at
fair value and movement of its fair value is recorded in current gains and losses; financial asset available for sale
is measured at fair value and movement of its fair value is recorded in owners’ equity; account receivables and
held-to-maturity investments are measured at amortized cost.
In terms of economic nature, the Company divides its financial liabilities into two groups, namely financial
liabilities at fair value through gains and losses and other financial liabilities at amortized cost.
(2) Determination of fair values for financial assets and financial liabilities

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The fair value refers to the price that will be received when selling an asset or the price to be paid to transfer a
liability in an orderly transaction between market participants on the date of measurement. Financial instruments
exist in an active market. Fair value is determined based on the quoted price in such market. An active market
refers to where pricing is easily and regularly obtained from exchanges, brokers, industrial organizations and price
fixing service organizations, representing the actual price of a market transaction that takes place in a fair deal.
While financial instruments do not exist in an active market, the fair value is determined using valuation
techniques. Valuation technologies include reference to be familiar with situation and prices reached in recent
market transactions entered into by both willing parties, reference to present fair values of similar other financial
instruments, cash flow discounting method and option pricing models.
As for the equity investment of the investee held by the Company, which has no controlling rights, common
control or significant influence (that is under the major influence), has no quota in an active market and the fair
value cannot be measure reasonably, than divided into financial assets available for sale and measured by cost.
(3) Recognition basis and measurement for transfer of financial assets
That the Company grants or delivers financial assets to party other than the issuer of such financial assets equals
transfer of financial assets. Financial assets transferred could be the entire or part of such financial assets. Two
forms are listed as follows:
① Transfer of right for collecting cash flow of financial assets to another party;
② Transfer financial assets to another party, while the aforementioned right is retained, with obligation of paying
such cash flow to final collector
When that the Company has transferred almost all risks and remunerations arising from ownership of all or part
financial assets to another party, accordingly, recognition for such entire or part financial assets shall be ceased.
Gains and losses are determined by the received consideration less the carrying value of the transferred financial
assets. Meanwhile, the original accumulated gains or losses of financial assets recognized in the owners’ equity
shall transferred to gains and losses; when all risks and remunerations attached to ownership are retained,
recognition for such entire or part financial assets shall continue, and the consideration received shall be viewed as
financial liabilities.
As for the financial assets which the Company has neither transferred nor retained all risks and remunerations
attached to ownership of such financial assets, while control upon such financial assets still exists, recognition
shall be conducted in light of the degree of its continuous involvement in the transferred financial assets.
Accordingly, relevant liabilities shall be recognized.
(4) Recognition for termination of financial assets and liability
Upon satisfaction of one of the following condition, financial assets will immediately experience discontinued
recognition:
① Right entitled by contract in respect of collection of cash flow from such financial asset terminates.
② Such financial assets have been transferred and meet discontinued recognition condition for financial assets as
regulated by Accounting Standard for Enterprise No.23-Transfer of Financial Assets.
Only when present obligations under financial liability have been released entirely or partly, could cease
recognition of such financial liability or part thereof.
(5) Impairment of financial assets
The Company conducts inspection on carrying values of financial assets, except for transactional financial assets,
as at balance sheet date. If there is objective evidence indicating that impairment has happened to financial assets,
impairment reserve then shall be provided. Financial asset with great amount in single item is subject to separate
impairment test. In case of any objective evidence indicating that impairment has happened to such financial asset,

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impairment loss shall be recognized and recorded in current gains and losses. As for the financial assets with no
great amount in single item and those which prove to be not impaired after separate test, the Company will
conduct impairment test on basis of credit portfolio which is determined in light of customers’ credit records and
historical bad debts, so as to recognize impairment loss.
Objective evidence indicating impairment happens to financial assets means the proceedings meeting the three
characteristics: actually occurred subsequent to initial recognition of such financial assets, bring influence over the
estimated future cash flow of such financial assets, and such influence could be reliably measured by the
Company.
The followings are included in objective evidences indicating impairment happens to financial assets:
① Serious financial difficulty happens to issuer or debtor;
② Breach of terms of contract by debtor, such as breach or overdue in repaying interest or principal;
③ Creditor makes concession for debtors who experience financial trouble in light of consideration for economy
or laws;
④ Debtor is very likely to experience bankrupt or financial reorganization;
⑤ Financial assets are not able to be traded in active market since material financial difficulty happens to issuer;
⑥ It is unable to judge whether cash flow from certain asset in a group of financial assets has decreased, while it
is finally found that the estimated future cash flow of such financial asset has actually decreased since its initial
recognition and the decrease can be reliably measured by reference to the general valuation based on open data.
For example, payment capacity of debtor of such financial assets portfolio gradually worsens, or unemployment in
country or region where the debtor locates risen, price of guaranty falls greatly in the place where it locate, and the
industry in which it belongs to is unpromising;
⑦ Material negative changes happen to technologies, markets, economy or law environment in which debtor
operates, which leads to that equity instrument investor is not likely to be able to recover investment cost;
⑧ Fair value of equity instrument investment experiences severe or non-temporary falling;
⑨ Other objective evidence indicating impairment happens to financial assets.
In the event of impairment in financial asset at amortized cost, impairment loss is calculated based on the
difference between carrying value and present value of estimated future cash flow discounted at effective interest
rate.
After impairment loss is recognized for financial asset at amortized cost, if there is objective evidence indicating
value of such financial asset has recovered, which is objectively related to proceedings occurred after recognition
of such loss, the original impairment loss shall be reversed and recorded in current gains and losses. However, the
carrying value subsequent to such reversal shall not exceed the amortized cost of such financial asset as at the
reversal date on assumption that such impairment loss had not been provided.
Impairment of available-for-sale financial assets: in the event that decline in fair value of the available-for-sale
equity instrument is regarded as “severe decline” or “non-temporary decline” on the basis of comprehensive
related factors, it indicates that there is impairment loss of the available-for-sale equity instrument. In particular,
“severe decline” refers to fair value is lower than 50% of the cost price and last for over one year.
“Non-temporary decline” refers to fair value fell for over 6-month sessions.
When the available-for-sale financial assets impair, the accumulated loss originally included in the other
comprehensive income arising from the decrease in fair value was transferred out from the capital reserve and
included in the profit or loss for the period. The accumulated loss that transferred out from the capital reserve is
the balance of the acquired initial cost of asset, after deduction of the principal recovered, amortized amounts,


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current fair value and the impairment loss originally included in the profit or loss. After recognition of the
impairment loss, if there is objective evidence showing recovery in value of such financial assets impaired and
which is related to any event occurring after such recognition in subsequent periods, the impairment loss
originally recognized shall be reversed. The impairment loss reversal of the available-for-sale equity instrument
will be recognized as other comprehensive income, and the impairment loss reversal of the available-for-sale debt
instrument will be included in the profit or loss for the period.
When an equity investment that is not quoted in an active market and the fair value of which cannot be measured
reliably, or the impairment loss of a derivative financial asset linked to the equity instrument that shall be settled
by delivery of that equity instrument, then it will not be reversed.

11. Account Receivable

(1) Account Receivable withdrawal on single significant amount and with bad debt provision accrued for
single item

Determine basis or amount standards for single       The Company’s account receivables with above RMB 1 million in single item
significant amount                                   is defined as account receivables with significant amount in single item.

Withdrawal method for account with single            In line with the difference of present value of future cash flow lower its book
significant amount and withdrawal single item bad    value, carried out impairment test independently and withdrawal the bad debt
debt provision                                       reserves


(2) Receivables with bad debt provision accrual by credit portfolio:

                                     Combination                                                 Bad debt provision accrual

Classify to many combination based on credit portfolio for those receivables with
minor account singly and those with major amount but has no impairment been found
after testing independently; base on the actual loss ratio of the receivables of previous Age analysis method
years, with same or similar credit portfolio, and combining actual condition accrual bad
debt reserves

In combination, accounts whose bad debts provision was accrued by age analysis:
√ Applicable □ Not applicable

                 Account age                            Rate for receivables                     Rate for other receivables

Within 1 year (one year included)                                               10.00%                                        10.00%

Within 6 months

6 months to 1 year                                                              10.00%                                        10.00%

1-2 years                                                                      20.00%                                        20.00%

2-3 years                                                                      40.00%                                        40.00%

Over 3 years                                                                   100.00%                                      100.00%

3-4 years                                                                     100.00%                                      100.00%

4-5 years                                                                     100.00%                                      100.00%

Over 5 years                                                                   100.00%                                      100.00%


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In combination, withdrawal proportion of bad debt provision based on balance proportion
□ Applicable √ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods:
□ Applicable √ Not applicable


(3) Account receivable with minor single amount but with withdrawal bad debt provision for single item

Reasons for withdrawal single item    The present value of future cash flow has major difference with the receivable group’s
bad debt provision                    present value of future cash flow

Withdrawal method for bad debt        Carried out impairment test independently, accrual bad debt reserves according to the
provision                             difference of present value of future cash flow lower its book value


12. Inventories

(1) Classification of inventories
The Company’s inventories are categorized into stock materials, product in process and stock goods etc.
(2) Pricing for delivered inventories
A. Generally, stock materials are calculated at planned cost. Material cost difference is individually set according
to classification of grant types. Pursuant to the difference between the planned cost of the received or delivered
raw materials and the material cost the aforesaid cost should share after carrying forward at period-end, the
Company adjusts the planned cost to effective cost; finished products are priced at effective costs, and carried
forward to operating cost by weighted average method when being delivered;
B. Products in process are priced at effective costs, and carried forward to finished products at actually occurred
cost;
C. Finished self-produced products are priced at effective costs, and carried forward to operating cost by weighted
average method; external purchase goods (from import and export trades) are carried forward to sales cost by
individual pricing method.
(3) Recognition evidence for net realizable value of inventories and withdrawal method for inventory impairment
provision
Inventories as at period-end are priced at the lower of costs and net realizable values; at period end, on the basis of
overall clearance about inventories, inventory impairment provision is withdrew for uncollectible part of costs of
inventories which result from destroy of inventories, out-of-time of all and part inventories, or sales price
lowering than cost. Inventory impairment provision for stock goods and quantity of raw materials is subject to the
difference between costs of single inventory item over its net realizable value. As for other raw materials with
large quantity and comparatively low unit prices, inventory impairment provision is withdrawn pursuant to
categories.
As for finished goods, commodities and materials available for direct sales, their net realizable values are
determined by their estimated selling prices less estimated sales expenses and relevant taxes. For material
inventories held for purpose of production, their net realizable values are determined by the estimated selling
prices of finished products less estimated costs, estimated sales expenses and relevant taxes accumulated till
completion of production. As for inventories held for implementation of sales contracts or service contracts, their
net realizable values are calculated on the basis of contract prices. In the event that inventories held by a company
exceed order amount as agreed in sales contracts, net realizable values of the surplus part are calculated on the

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basis of normal sale price.
(4) Inventory system
Perpetual Inventory System is adopted by the Company and takes a physical inventory.
(5) Amortization of low-value consumables and wrappage
①Low-value consumables
The Company adopts one-off amortization method to amortize the low-value consumables.
②Wrappage
The Company adopts one-off amortization method to amortize the wrappage at the time of receipt.

13. Classified as assets held for sale

The Company’s component (or non-current asset) will recognize as held-for-sale while satisfied the followed
conditions simultaneously: the component can be promptly sold at its existing status only according to the practice
terms in connection with disposal of this kind of assets; the Company has already made resolution on disposal of
such component, such as approved by shareholders in line with regulations, have already approved by general
meeting or relevant authority; the Company entered into irrevocable transfer agreement with the transferee; and
this transfer will be completed within one year.
Book value of the assets held-for-sale shall be adjusted on recoverable amounts (no more than the original book
value while qualify held-for-sale conditions), the exceed parts from original book value and recoverable amounts
after adjusted shall considered as assets impairment loss reckoned into current gains/losses. Held-for-sale fixed
assets and intangible assets would be not applicable to depreciation or amortization, and would be measured at the
lower of its carrying value less disposal cost and fair value less disposal cost.


If classified as held for sale no longer meets the recognition condition as non-current asset held for sale or
disposal group, the Company will cease such recognition and measure the asset at the lower of the following two
items:
(1) The carrying value of the asset or disposal group prior to being classified as held for sale, based on the amount
adjusted with the depreciation, amortization or impairment which should have been recognized assuming it had
not been classified as held for sale;
(2) The recoverable amount on the date when the Company decides to cease disposal.

14. 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 investee. Long-term equity investment without control or joint control or
significant influence of the Group is accounted for as available-for-sale financial assets or financial assets
measured at fair value with any change in fair value charged to profit or loss.


(1) Determination of initial investment cost
Investment costs of the long-term equity investment are recognized by the follow according to different way of
acquirement:
①For a long-term equity investment acquired through a business combination involving enterprises under
common control, the initial investment cost of the long-term equity investment shall be the absorbing party’s

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share of the carrying amount of the owner’s equity under the consolidated financial statements of the ultimate
controlling party on the date of combination. The difference between the initial cost of the long-term equity
investment and the cash paid, non-cash assets transferred as well as the book value of the debts borne by the
absorbing party shall offset against the capital reserve. If the capital reserve is insufficient to offset, the retained
earnings shall be adjusted. If the consideration of the merger is satisfied by issue of equity securities, the initial
investment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount of
the owner’s equity under the consolidated financial statements of the ultimate controlling party on the date of
combination. With the total face value of the shares issued as share capital, the difference between the initial cost
of the long-term equity investment and total face value of the shares issued shall be used to offset against the
capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. (For business
combination resulted in an enterprise under common control by acquiring equity of the absorbing party under
common control through a stage-up approach with several transactions, these transactions will be judged whether
they shall be treat as “transactions in a basket”. If they belong to “transactions in a basket”, these transactions will
be accounted for a transaction in obtaining control. If they are not belong to “transactions in a basket”, the initial
investment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount of
the owner’s equity under the consolidated financial statements of the ultimate controlling party on the date of
combination. The difference between the initial cost of the long-term equity investment and the aggregate of the
carrying amount of the long-term equity investment before merging and the carrying amount the additional
consideration paid for further share acquisition on the date of combination shall offset against the capital reserve.
If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. Other comprehensive income
recognized as a result of the previously held equity investment accounted for using equity method on the date of
combination or recognized for available-for-sale financial assets will not be accounted for.)


②For a long-term equity investment acquired through a business combination involving enterprises not under
common control, the initial investment cost of the long-term equity investment shall be the cost of combination on
the date of acquisition. Cost of combination includes the aggregate fair value of assets paid by the acquirer,
liabilities incurred or borne and equity securities issued. (For business combination resulted in an enterprise not
under common control by acquiring equity of the acquire under common control through a stage-up approach with
several transactions, these transactions will be judged whether they shall be treat as “transactions in a basket”. If
they belong to “transactions in a basket”, these transactions will be accounted for a transaction in obtaining
control. If they are not belong to “transactions in a basket”, the initial investment cost of the long-term equity
investment accounted for using cost method shall be the aggregate of the carrying amount of equity investment
previously held by the acquire and the additional investment cost. For previously held equity accounted for using
equity method, relevant other comprehensive income will not be accounted for. For previously held equity
investment classified as available-for-sale financial asset, the difference between its fair value and carrying
amount, as well as the accumulated movement in fair value previously included in the other comprehensive
income shall be transferred to profit or loss for the current period.) plus the combination cost measured by costs
which have directly connection with acquisition are considered as initial investment cost of such long-term equity
investment. Realizable assets and liabilities undertaken by such assets (including contingent liabilities) of the
party being combined as at the combination date are all measured at fair values, without consideration to amount
of minority interests. The surplus of combination cost less fair value net realizable assets of the party being
combined is recorded as goodwill, and the deficit is directly recognized in the consolidated statement of gains and
losses.



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③Long-term investments obtained through other ways:
A. Initial investment cost of long-term equity investment obtained through cash payment is determined according
to actual payment for purchase;
B. Initial investment cost of long-term equity investment obtained through issuance of equity securities is
determined at fair value of such securities;
C. Initial investment cost of long-term equity investment (exchanged-in) obtained through exchange with
non-monetary assets, which is of commercial nature, is determined at fair value of the assets exchanged-out;
otherwise determined at carrying value of the assets exchanged-out if it is not of commercial nature;
D. Initial investment cost of long-term equity investment obtained through debt reorganization is determined at
fair value of such investment.


(2) Subsequent measurement on long-term equity investment
①Presented controlling ability on investee, the investment shall use cost method for measurement.
②Long-term equity investments with joint control (excluding those constitute joint ventures) or significant
influence on the investee 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 investee’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 investee’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 investee, 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 investee. In respect of the other movement of net profit or loss, other comprehensive income and profit
distribution of investee, 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 investee’s net profits or losses based on the fair values
of the investee’s individual separately identifiable assets at the time of acquisition, after making appropriate
adjustments thereto. In the event of inconformity between the accounting policies and accounting periods of the
investee and the Company, the financial statements of the investee shall be adjusted in conformity with the
accounting policies and accounting periods of the Company. Investment gain and other comprehensive income
shall be recognized accordingly. In respect of the transactions between the Group and its associates and joint
ventures in which the assets disposed of or sold are not classified as operation, the share of unrealized gain or loss
arising from inter-group transactions shall be eliminated by the portion attributable to the Company. Investment
gain shall be recognized accordingly. However, any unrealized loss arising from inter-group transactions between
the Group and an investee 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

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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 investee 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 investee 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 investee is making profits in subsequent periods, the Group shall resume recognizing its share of profits after
setting off against the share of unrecognized losses.
③Acquisition of minority interest
Upon the preparation of the consolidated financial statements, since acquisition of minority interest increased of
long-term equity investment which was compared to fair value of identifiable net assets recognized which are
measured based on the continuous measurement since the acquisition date (or combination date) of subsidiaries
attributable to the Group calculated according to the proportion of newly acquired shares, the difference of which
recognized as adjusted capital surplus, capital surplus insufficient to set off impairment and adjusted retained
earnings.
④Disposal of long-term equity investments
In these consolidated financial statements, for disposal of a portion of the long-term equity investments in a
subsidiary without loss of control, the difference between disposal cost and disposal of long-term equity
investments relative to the net assets of the subsidiary is charged to the owners’ equity. If disposal of a portion of
the long-term equity investments in a subsidiary by the parent company results in a change in control, it shall be
accounted for in accordance with the relevant accounting policies as described in Note V- 6 “Preparation Method
of the Consolidated Financial Statements”.


On disposal of a long-term equity investment otherwise, the difference between the carrying amount of the
investment and the actual consideration paid is recognized through profit or loss in the current period.


In respect of long-term equity investment accounted for using equity method with the remaining equity interest
after disposal also accounted for using equity method, other comprehensive income previously under owners’
equity shall be accounted for in accordance with the same accounting treatment for direct disposal of relevant
asset or liability by investee 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 investee) shall be transferred to profit or loss for the current period on pro rata basis.


In respect of long-term equity investment accounted for using cost method with the remaining equity interest after
disposal also accounted for cost equity method, other comprehensive income measured and reckoned under equity
method or financial instrument before control of the investee unit acquired shall be accounted for in accordance
with the same accounting treatment for direct disposal of relevant asset or liability by investee 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 investee unit recognized by equity method (excluding net profit or loss, other comprehensive income and
profit distribution of investee) shall be transferred to profit or loss for the current period on pro rata basis.

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In the event of loss of control over investee 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 investee 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 investee 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 investee, it shall be accounted for in accordance with the same accounting treatment for
direct disposal of relevant asset or liability by investee at the time when the control over investee is lost.
Movement of other owners’ equity (excluding net profit or loss, other comprehensive income and profit
distribution under net asset of investee 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 investee 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 investee 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 investee 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 investee
accounted for and recognized using equity method) shall be transferred to profit or loss for the current period at
the time when equity method was ceased to be used.


The Group disposes its equity investment in subsidiary by a stage-up approach with several transactions until the
control over the subsidiary is lost. If the said transactions belong to “transactions in a basket”, each transaction
shall be accounted for as a single transaction of disposing equity investment of subsidiary and loss of control. The
difference between the disposal consideration for each transaction and the carrying amount of the corresponding
long-term equity investment of disposed equity interest before loss of control shall initially recognized as other
comprehensive income, and subsequently transferred to profit or loss arising from loss of control for the current
period upon loss of control.


(3) Impairment test method and withdrawal method for impairment provision
Found more in 20-”impairment of long-term investment”


(4) Criteria of Joint control and significant influence

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Joint control is the Company’s contractually agreed sharing of control over an arrangement, which relevant
activities of such arrangement must be decided by unanimously agreement from parties who share control. All the
participants or participant group whether have controlling over such arrangement as a group or not shall be judge
firstly, than judge that whether the decision-making for such arrangement are agreed unanimity by the participants
or not.


Significant influence is the power of the Company to participate in the financial and operating policy decisions of
an investee, but to fail to control or joint control the formulation of such policies together with other parties.
While recognizing whether have significant influence by investee, the potential factors of voting power as current
convertible bonds and current executable warrant of the investee held by investors and other parties shall be thank
over.

15. Investment real estate

Measurement mode
Measured by cost method
Depreciation or amortization method
Depreciation or amortization method

Investment real estate is stated at cost. During which, the cost of externally purchased properties
held-for-investment includes purchasing price, relevant taxes and surcharges and other expenses which are
directly attributable to the asset. Cost of self construction of properties held for investment is composed of
necessary expenses occurred for constructing those assets to a state expected to be available for use. Properties
held for investment by investors are stated at the value agreed in an investment contract or agreement, but those
under contract or agreement without fair value are stated at fair value.


The Company adopts cost methodology amid subsequent measurement of properties held for investment, while
depreciation and amortization is calculated using the straight-line method according to their estimated useful lives.
The basis of provision for impairment of properties held for investment is referred to 20.-“Impairment of
long-term assets”

16. Fixed assets

(1) Confirmation conditions
Fixed assets refer to the tangible assets for production of products, provision of labor, lease or operation, with a
service life excess one year and has more unit value.

(2) Depreciation methods

       Categories                 Method              Years of depreciation      Scrap value rate   Yearly depreciation rate
House and Building        Straight-line depreciation 20~35                    5.00%                 2.71~4.75
Machinery equipment       Straight-line depreciation 10                       5.00%                 9.50
Transportation
                          Straight-line depreciation 4~5                      5.00%                 19.00~23.75
equipment
Electronic and other
                          Straight-line depreciation 3~10                    5.00%                 9.50~31.67
equipment


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(3) Reorganization basis, valuation and depreciation method for financial lease assets

The Company affirms those that conform to below one or several criteria as the finance lease fixed assets:
①Agreed in the lease contract (or made a reasonable judgment according to the correlated conditions on the lease
commencement date), the ownership of lease fixed assets can be transferred to the Company after the expiry of
the lease period;
②The Company has the option to purchase or lease the fixed assets, and the purchase price is estimated to be
much less than the fair value of the lease of fixed assets when exercises the options, so whether the Company will
exercise the option can be reasonably determined on the lease commencement date;
③Even though the fixed asset ownership is not transferred, the lease term accounts for 75% of the service life of
the lease fixed assets;
④The present value of the Company of minimum lease payment on the lease commencement date is equivalent to
90% or more of the fair value of the lease fixed assets on the lease commencement date; the present value of the
leaser’s of minimum lease payment on the lease commencement date is equivalent to 90% or more of the fair
value of the lease fixed assets on the lease commencement date;
⑤The leased assets with special properties can only be used by the Company without major modifications. The
fixed assets rented by finance leases is calculated as the book value according to the lower one between the fair
value of leased assets on the lease commencement date and the present value of the minimum lease payments.

(4) The impairment test method of fixed assets and the method of provision for impairment

The impairment test method of fixed assets and the method of provision for impairment see 20-“Long term asset
impairment”.

17. Construction in process

From the date on which the fixed assets built by the Company come into an expected usable state, the projects
under construction are converted into fixed assets on the basis of the estimated value of project estimates or
pricing or project actual costs, etc. Depreciation is calculated from the next month. Further adjustments are made
to the difference of the original value of fixed assets after final accounting is completed upon completion of
projects.
The basis of provision for impairment of properties held for construction in process is referred to 20-“Impairment
of long-term assets”

18. Borrowing costs

(1) Recognition of capitalization of borrowing costs
Borrowing costs comprise interest occurred, amortization of discounts or premiums, ancillary costs and exchange
differences in connection with foreign currency borrowings. The borrowing costs of the Company, which incur
from the special borrowings occupied by the fixed assets that need more than one year (including one year) for
construction, development of investment properties or inventories or from general borrowings, are capitalized and
recorded in relevant assets costs; other borrowing costs are recognized as expenses and recorded in the profit or
loss in the period when they are occurred. Relevant borrowing costs start to be capitalized when all of the
following three conditions are met:


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① Capital expenditure has been occurred;
② Borrowing costs have been occurred;
③ Acquisition or construction necessary for the assets to come into an expected usable state has been carried out.


(2) Period of capitalization of borrowing costs
Borrowing costs arising from purchasing fixed asset, investment real estate and inventory, and occurred after such
assets reached to its intended use of status or sales, than reckoned into assets costs while satisfy the above
mentioned capitalization condition; capitalization of borrowing costs shall be suspended and recognized as current
expenditure during periods in which construction of fixed assets, investment real estate and inventory are
interrupted abnormally, when the interruption is for a continuous period of more than 3 months, until the
acquisition, construction or production of the qualifying asset is resumed; capitalization shall discontinue when
the qualifying asset is ready for its intended use or sale, the borrowing costs occurred subsequently shall reckoned
into financial expenses while occurring for the current period.


(3) Measure of capitalization for borrowing cost
In respect of the special borrowings borrowed for acquisition, construction or production and development of the
assets qualified for capitalization, the amount of interests expenses of the special borrowings actually occurred in
the period less interest income derived from unused borrowings deposited in banks or less investment income
derived from provisional investment, are recognized.


With respect to the general borrowings occupied for acquisition, construction or production and development of
the assets qualified for capitalization, the capitalized interest amount for general borrowings is calculated and
recognized by multiplying a weighted average of the accumulated expenditure on the assets in excess of the
expenditure on the some assets of the special borrowings, by a capitalization rate for general borrowings. The
capitalization rate is determined by calculation of the weighted average interest rate of the general borrowings.

19. Intangible assets

(1) Measurement, use of life and impairment testing

① Measurement of intangible assets
The intangible assets of the Company including land use rights, patented technology and non-patents technology
etc.
The cost of a purchased intangible asset shall be determined by the expenditure actually occurred and other related
costs.
The cost of an intangible asset contributed by an investor shall be determined in accordance with the value
stipulated in the investment contract or agreement, except where the value stipulated in the contract or agreement
is not fair.
The intangible assets acquired through exchange of non-monetary assets, which is commercial in substance, is
carried at the fair value of the assets exchanged out; for those not commercial in substance, they are carried at the
carrying amount of the assets exchanged out.
The intangible assets acquired through debt reorganization, are recognized at the fair value.
② Amortization methods and time limit for intangible assets:

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Land use right of the company had average amortization by the transfer years from the beginning date of transfer
(date of getting land use light); Patented technology, non-patented technology and other intangible assets of the
Company are amortized evenly with the shortest terms among expected useful life, benefit years regulated in the
contract and effective age regulated by the laws. The amortization amount shall count in relevant assets costs and
current gains/losses according to the benefit object.
As for the intangible assets as trademark, with uncertain benefit terms, amortization shall not be carried.
Impairment testing methods and accrual for depreciation reserves for the intangible assets found more in
20-“Long-term assets impairment”.

(2) Internal accounting policies relating to research and development expenditures

Expenses incurred during the research phase are recognized as profit or loss in the current period; expenses
incurred during the development phase that satisfy the following conditions are recognized as intangible assets
(patented technology and non-patents technology):
① it is technically feasible that the intangible asset can be used or sold upon completion;
② there is intention to complete the intangible asset for use or sale;
③ the products produced using the intangible asset has a market or the intangible asset itself has a market;
④ there is sufficient support in terms of technology, financial resources and other resources in order to complete
the development of the intangible asset, and there is capability to use or sell the intangible asset;
⑤ the expenses attributable to the development phase of the intangible asset can be measured reliably.
If the expenses incurred during the development phase did not qualify the above mentioned conditions, such
expenses incurred are accounted for in the profit or loss for the current period. The development expenditure
reckoned in gains/losses previously shall not be recognized as assets in later period. The capitalized expenses in
development stage listed as development expenditure in balance sheet, and shall be transfer as intangible assets
since such item reached its expected conditions for service.

20. Impairment of long-term asset

The Company will judge if there is any indication of impairment as at the balance sheet date in respect of
non-current non-financial assets such as fixed assets, construction in progress, intangible assets with a finite useful
life, investment properties measured at cost, and long-term equity investments in subsidiaries, joint controlled
entities and associates. If there is any evidence indicating that an asset may be impaired, recoverable amount shall
be estimated for impairment test. Goodwill, intangible assets with an indefinite useful life and intangible assets
beyond working conditions will be tested for impairment annually, regardless of whether there is any indication of
impairment.
If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount, the
impairment provision will be made according to the difference and recognized as an impairment loss. The
recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the
future cash flows expected to be derived from the asset. An asset’s fair value is the price in a sale agreement in an
arm’s length transaction. If there is no sale agreement but the asset is traded in an active market, fair value shall be
determined based on the bid price. If there is neither sale agreement nor active market for an asset, fair value shall
be based on the best available information. Costs of disposal are expenses attributable to disposal of the asset,
including legal fee, relevant tax and surcharges, transportation fee and direct expenses incurred to prepare the
asset for its intended sale. The present value of the future cash flows expected to be derived from the asset over

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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 restorable value.

21. Long-term Deferred Expenses

Long-term expenses to be amortized of the Company the expenses that are already charged and with the beneficial
term of more than one year are evenly amortized over the beneficial term. For the long-term deferred expense
items cannot benefit the subsequent accounting periods, the amortized value of such items is all recorded in the
profit or loss during recognition.

22. Employee compensation

(1) Accounting treatment for short-term compensation

During the accounting period when the staff providing service to the Company, the short-term remuneration actual
occurred shall recognized as liability and reckoned into current gains/losses. During the accounting period when
staff providing service to the Company, the actual short-term compensation occurred shall recognized as liabilities
and reckoned into current gains/losses, except for those in line with accounting standards or allow to reckoned
into capital costs; the welfares occurred shall reckoned into current gains/losses or relevant asses costs while
actually occurred. The employee compensation shall recognize as liabilities and reckoned into current gains/losses
or relevant assets costs while actually occurred. The employee benefits that belong to non-monetary benefits are
measured in accordance with the fair value; the social insurances including the medical insurance, work-injury
insurance and maternity insurance and the housing fund that the enterprise pays for the employees as well as the
labor union expenditure and employee education funds withdrawn by rule should be calculated and determined as
the corresponding compensation amount and determined the corresponding liabilities in accordance with the
specified withdrawing basis and proportion, and reckoned in the current profits and losses or relevant asset costs
in the accounting period that the employees provide services.

(2) Accounting treatment for post-employment benefit

The post-employment benefit included the defined contribution plans and defined benefit plans. Post-employment
benefits plan refers to the agreement about the post-employment benefits between the enterprise and employees,
or the regulations or measures the enterprise established for providing post-employment benefits to employees.
Thereinto, the defined contribution plan refers to the post-employment benefits plan that the enterprise doesn’t


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undertake the obligation of payment after depositing the fixed charges to the independent fund; the defined benefit
plans refers to post-employment benefits plans except the defined contribution plan.

(3) Accounting for retirement benefits

When the Company terminates the employment relationship with employees before the end of the employment
contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, the
Company shall recognize employee compensation liabilities arising from compensation for staff dismissal and
included in profit or loss for the current period, when the Company cannot revoke unilaterally compensation for
dismissal due to the cancellation of labor relationship plans and employee redundant proposals; and the Company
recognize cost and expenses related to payment of compensation for dismissal and restructuring, whichever is
earlier. The early retirement plan shall be accounted for in accordance with the accounting principles for
compensation for termination of employment. The salaries or wages and the social contributions to be paid for the
employees who retire before schedule from the date on which the employees stop rendering services to the
scheduled retirement date, shall be recognized (as compensation for termination of employment) in the current
profit or loss by the Group if the recognition principles for provisions are satisfied.

(4) Accounting for other long-term employee benefits

Except for the compulsory insurance, the Company provides the supplementary retirement benefits to the
employees satisfying some conditions, the supplementary retirement benefits belong to the defined benefit plans,
and the defined benefit liability confirmed on the balance sheet is the value by subtracting the fair value of plan
assets from the present value of defined benefit obligation. The defined benefit obligation is annually calculated in
accordance with the expected accumulated welfare unit method by the independent actuary by adopting the
treasury bond rate with similar obligation term and currency. The service charges related to the supplementary
retirement benefits (including the service costs of the current period, the previous service costs, and the settlement
gains or losses) and the net interest are reckoned in the current profits and losses or other asset costs, the changes
generated by recalculating the net liabilities of defined benefit plans or net assets should be reckoned in other
consolidated income.

23. Accrued liability

(1) Recognition principle
An obligation related to a contingency, such as guarantees provided to outsiders, pending litigations or arbitrations,
product warranties, redundancy plans, onerous contracts, reconstructing, expected disposal of fixed assets, etc.
shall be recognized as an estimated liability when all of the following conditions are satisfied:
① the obligation is a present obligation of the Company;
② it is Contingent that an outflow of economic benefits will be required to settle the obligation;
③ the amount of the obligation can be measured reliably.
(2) Measurement method: measure on the basis of the best estimates of the expenses necessary for paying off the
contingencies

24. Revenue

(1) Concrete judging criteria for time of recognized

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The major risks and remuneration entitled to the ownership of goods are transferred to buyer; neither retains the
continued management right generally related to ownership, nor exercise effective control over the sold products;
the relevant economic benefits are probable to flow into the Company; the relevant income and costs can be
measured reliably.
Concrete judging criteria for time of recognized the income from goods sales:
The Company's domestic sales revenue recognition time: The company delivers goods as agreed, checks the goods
that the buyers have received and inspected during the period of the last reconciliation date and this reconciliation
date with the buyers on the reconciliation date as agreed, and transfers the risks and remunerations to the buyers
after checking, the Company issues the invoices to the buyers in accordance with the recognized varieties,
quantities and amounts and affirms the sales revenue realization on the reconciliation date.
The Company's overseas sales revenue recognition time: After checking by the customs, the Company affirms the
sales revenue realization according to the date of departure on the customs declaration.


(2) Recognition of revenue of assets using right alienation
Revenue from use by others of enterprise assets shall be recognized only when the associated economic benefit
can flow into the Company, and the amount of revenue can be measured reliably, revenue measured by the follow:
① Interest income amount: calculated and determined in accordance with the time that others use the enterprises
cash and the actual interest rate.
② Royalty revenue amount: calculated and determined in accordance with the charging time and method of the
relevant contract or agreement as agreed.
The basis that the Company confirms the revenue from transferring the right to use assets
Rental income: the revenue realization is confirmed after collecting the rent on the date as agreed in the rental
contract (or agreement). For the rent not received on the date as agreed in the contract or agreement but can be
received, and of which the amount of revenue can be measured reliably can also be recognized as revenue.


(3) When confirming the incomes of labor services and construction contracts according to the percentage of
completion method, determine the basis and method of the contract completion plan.
For the service transaction results can be estimated reliably on the balance sheet date, the service revenue is
determined and recognized by adopting the percentage of completion method. The completion progress of service
transaction is determined by the proportion of incurred costs in the estimated total cost.
The total service revenue is determined by the received or receivable contract or agreement costs, except that the
received or receivable contract or agreement costs are not fair. On the balance sheet date, the service revenue of the
current period is determined by multiplying the total service revenue by the completion progress and deducting
the amount accumulated in the previous accounting period and confirmed to render the service revenue.
Meanwhile, the labor costs of the current period are carried forward by multiplying the total estimated costs of
labor services by the completion progress and deducting the amount accumulated in the previous accounting
period with confirmed service costs.
For the service transaction results cannot be estimated reliably on the balance sheet date, respectively dispose as
following circumstances:
①The incurred labor costs estimated to be compensated are confirmed to render the service revenue according to
the incurred labor costs, and are carried forward by the equivalent amount.
②The incurred labor costs estimated not to be compensated are reckoned in the current profits or losses, and are


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not confirmed to render the service revenue.

25. Government Grants

(1) Determination basis and accounting for government grants related to assets

(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
The government grants shall be recognized while meet the additional conditions of the grants and amount is
actually can be obtained.
If a government grant is in the form of a transfer of monetary asset, the item shall be measured at the amount
received or receivable. If a government grant is in the form of a transfer of non-monetary asset, the item shall be
measured at fair value.
(3) Accounting treatment
A government grant related to an asset shall be recognized as deferred income, and evenly amortized to profit or
loss over the useful life of the asset.

(2) Determination basis and accounting for government grants related to income

(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
The government grants shall be recognized while meet the attache conditions of the grants and amount is actually
can be obtained.
If a government grant is in the form of a transfer of monetary asset, the item shall be measured at the amount
received or receivable. If a government grant is in the form of a transfer of non-monetary asset, the item shall be
measured at fair value.


(3) Accounting treatment
For a government grant related to income, if the grant is a compensation for related expenses or losses to be
incurred in subsequent periods, the grant shall be recognized as deferred income, and recognized in profit or loss


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over the periods in which the related costs are recognized; if the grant is a compensation for related expenses or
losses already incurred, the grant shall be recognized immediately in profit or loss for the current period.

26. Deferred tax assets / deferred income tax liabilities

(1) Deferred income tax assets or deferred income tax liabilities are realized based on the difference between the
carrying values of assets and liabilities and their taxation bases (as for the ones did not recognized as assets and
liability and with taxation basis recognized in line with tax regulations, different between tax base and its book
value) at the tax rates applicable in the periods when the Company recovers such assets or settles such liabilities.
(2) Deferred income tax assets are realized to the extent that it is probable to obtain such taxable income which is
used to set off the deductible temporary difference. As at the balance sheet date, if there is obvious evidence
showing that it is probable to obtain sufficient taxable income to set off the deductible temporary difference in
future periods, deferred income tax assets not realized in previous accounting periods shall be realized.
(3) On balance sheet date, re-review shall be made in respect of the carrying value of deferred income tax assets.
If it is impossible to obtain sufficient taxable income to set off the benefits of deferred income tax assets in future
periods, then the carrying value of deferred income tax assets shall be reduced accordingly. If it is probable to
obtain sufficient taxable income, then the amount reduced shall be switched back.
(4) Current income tax and deferred income tax considered as income tax expenses or incomes reckoned into
current gains/losses, excluding the follow income tax:
①Enterprise combination;
②Transactions or events recognized in owner’s equity directly.

27. Lease

(1) Accounting for operating lease

The rental fee paid for renting the properties by the company are amortized by the straight-line method and
reckoned in the current expenses throughout the lease term without deducting rent-free period. The initial direct
costs related to the lease transactions paid by the company are reckoned in the current expenses.
When the lessor undertakes the expenses related to the lease that should be undertaken by the company, the
company shall deduct the expenses from the total rental costs, share by the deducted rental costs during the lease
term, and reckon in the current expenses.
Rental obtained from assets leasing, during the whole leasing period without rent-free period excluded, shall be
amortized by straight-line method and recognized as leasing revenue. The initial direct costs paid with leasing
transaction concerned are reckoned into current expenditure; the amount is larger is capitalized when incurred,
and accounted for as profit or loss for the current period on the same basis as recognition of rental income over the
entire lease period.
When the company undertakes the expenses related to the lease that should be undertaken by the lessor, the
company shall deduct the expenses from the total rental income, and distribute by the deducted rental costs during
the lease term.

(2) Accounting for financing lease

Assets lease-in by financing: On the beginning date of the lease, the entry value of leased asset shall be at the


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lower of the fair value of the leased asset and the present value of minimum lease payment at the beginning date
of the lease. Minimum lease payment shall be the entry value of long-term accounts payable, with difference
recognized as unrecognized financing expenses. Unrecognized financing expenses shall be reckoned in financial
expenses and amortized and using effective interest method during the leasing period. The initial direct costs
incurred by the Company shall be reckoned into value of assets lease-in.
Finance leased assets: on the lease commencement date, the company affirms the balance among the finance lease
receivables, the sum of unguaranteed residual value and its present value as the unrealized financing income, and
recognizes it as the rental income during the period of receiving the rent. For the initial direct costs related to the
rental transaction, the company reckons in the initial measurement of the finance lease receivables, and reduces
the amount of income confirmed in the lease term.

28. Other major accounting policy and accounting estimates

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 report items cannot be accurately
measured. These judgments, estimates and assumptions are made on the basis of the historical experience of the
Company’s management and by considering other relevant factors, which shall impact the reported amounts of
income, expenses, assets and liabilities and the disclosure of contingent liabilities on the balance sheet date.
However, the actual results caused by the estimated uncertainties may differ from the management's current
estimates of the Company so as to carry out the significant adjustments to the book value of the assets or liabilities
to be affected.
The Company regularly reviews the aforementioned judgments, estimates and assumptions on the basis of
continuing operations, the changes in accounting estimates only affect the current period, of which the impacts are
recognized in the current period; the changes in accounting estimates not only affect the current period but also the
future periods, of which the impacts are recognized in the current and future periods.
On the balance sheet date, the important areas of the financial statements that the Company needs to judge, estimate
and assume are as follows:


(1) Provision for bad debts
According to the accounting policies of the accounts receivable, the Company adopts the allowance method to
calculate the bad debt losses. The impairment of receivables is based on the assessment to the collectability of the
accounts receivable. The impairment of accounts receivable requires the management’s judgments and estimates.
The actual results and the differences between the previously estimated results shall affect the book value of
accounts receivable and the provision or return of the receivables’ bad debt reserves during the period estimated to
be changed.


(2) Inventory impairment
According to the inventory accounting policies, the Company measures by the comparison between the cost and
the net realizable value, if the cost is higher than the net realizable value and the old and unsalable inventories, the
Company calculates and withdraws the inventory impairment. The inventory devalues to the net realizable value
by evaluating the inventory’s vendibility and net realizable value. To identify the inventory impairment, the
management needs to obtain the unambiguous evidences, and consider the purpose to hold the inventory, and

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judge and estimate the impacts of events after the balance sheet date. The actual results and the differences
between the previously estimated results shall affect the book value of inventory and the provision or return of the
inventory impairment during the period estimated to be changed.


(3) Held-to-maturity investments
The Company classifies the non-derivative financial assets that meet the requirements, have the fixed or
ascertainable repayment amount and fixed due date, and that the Company has the positive intention and ability to
hold to maturity as the held-to-maturity investment. This classification involves a lot of judgments. In the process
of making the judgments, the Company will evaluate its willingness and ability to this held-to-maturity investment.
Except in certain cases (such as the investments with insignificant sales amount when the maturity date comes), if
the Company fails to hold these investments till the maturity date, then all the investments shall be reclassified to
the available-for-sale financial assets which cannot be classified as the held-to-maturity investments in this fiscal
year and the next two fiscal years. This kind of case may have a significant impact on the relevant financial assets
value listed on the financial statements, and may affect the Company's financial instruments risk management
strategy.


(4) Impairment of held-to-maturity investments
The Company determines that the impairment of held-to-maturity investments largely relies on management's
judgments. The objective evidences of impairment include that the issuer has serious financial difficulties so that
the financial assets cannot continue to be traded in an active market, or cannot be able to fulfill the contract terms
(for example, breach the contract of paying the interests or principal), etc. In the process of making the judgments,
the Company needs to evaluate the impact of the objective evidence of impairment to the expected future cash
flows of the investment.


(5) Impairment of financial assets available for sale
The Company determines that the impairment of held-to-maturity investments largely relies on management's
judgments and assumptions so as to determine whether it is needed to affirm its impairment loss in the profit
statement. In the process of making the judgments and assumptions, the Company needs to evaluate the extent and
duration when the fair value of the investment is less than the cost, as well as the financial situation and short-term
business prospects of the investees, including the industry conditions, technological change, credit rating, default
rates, and risks of the counterparty.


(6) Preparation for the impairment of non-financial & non-current assets
The Company checks whether the non-current assets except for the financial assets may decrease in value at the
balance sheet date. For the intangible assets with indefinite service life, in addition to the annual impairment test,
the impairment test is also needed when there is a sign of impairment. For the other non-current assets except for
the financial assets, the impairment test is needed when it indicates that the book amounts may not be recoverable.
When the book value of the asset or group of assets exceeds its recoverable amount, i.e. the higher between the net
amount by subtracting the disposal costs from the fair value and the present value of expected future cash flows, it
indicates the impairment.
As for the net amount by subtracting the disposal costs from the fair value, refer to the sales agreement price
similar to the assets in the fair trade or the observable market price, and subtract the incremental costs
determination directly attributable to the disposal of the asset.

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When estimating the present value of the future cash flow, the Company needs to make significant judgments to
the output, price, and related operating expenses of the asset (or asset group) and the discount rate used for
calculating the present value. When estimating the recoverable amount, the Company shall adopt all the relevant
information can be obtained, including the prediction related to the output, price, and related operating expenses
based on the reasonable and supportable assumptions.
The Company tests whether its business reputation decreases in value every year, which requires to estimating the
present value of the asset group allocated with goodwill or the future cash flow combined by the asset group.
When estimating the present value of the future cash flow, the Company needs to estimate the future cash flows
generated by the asset group or the combination of asset group, and select the proper discount rate to determine the
present value of the future cash flows.


(7) Depreciation and amortization
The Company depreciates and amortizes the investment property, fixed assets and intangible assets according to
the straight-line method in the service life after considering the residual value. The Company regularly reviews the
service life to determine the depreciation and amortization expense amount to be reckoned in each reporting period.
The service life is determined by the Company based on the past experience of similar assets and the expected
technological updating. If the previous estimates have significant changes, the depreciation and amortization
expense shall be adjusted in future periods.


(8) Income tax
In the Company’s normal business activities, the final tax treatment and calculation of some transactions have some
uncertainties. Whether some projects can be disbursed from the cost and expenses before taxes requires needs to
get approval from the tax authorities. If the final affirmation of these tax matters differs from the initially estimated
amount, the difference shall have an impact on its current and deferred income taxes during the final identification
period.


(9) Early retirement benefits and supplementary retirement benefits
The expenses of the Company's early retirement benefits and supplementary retirement benefits and the amount of
liabilities are determined in accordance with various assumptions. These assumptions include the discount rate,
the average growth rate of health care costs, the subsidy growth rate of the early retired personnel and retirees and
the other factors. The differences between the actual results and assumptions will be immediately identified and
included in the costs of the current year. Although the management thought the reasonable assumptions have been
adopted, the changes in the actual experience and assumed conditions will impact the costs and liability balances
of the Company's internal early retirement benefits and supplementary retirement benefits.

29. Changes of important accounting policy and estimation

(1) Changes of major accounting policies

□ Applicable √ Not applicable

(2) Changes of important accounting estimate

□ Applicable √ Not applicable

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30. Other

VI. Taxation
1. Major taxes and tax rates
               Tax                                Basis                                         Tax rate
                                                                      17%, 6% and 5% charge rate; exportation goods are declare
VAT                             Taxable revenue                       export tax rebates on the tax refund rate regulated by the
                                                                      Country or “exemption, counteraction, drawback”
                                Tax on 5% of the business turnover,
Operation tax                                                         5%
                                and no more business tax since May
City      maintaining       &
                                Turnover tax payable                  7%
construction tax
Corporation income tax          Taxable income                        25%、15%
Educational surtax              Turnover tax payable                  5%

Disclose reasons for different taxpaying body

                         Taxpaying body                                                   Income tax rate
Parent company of Weifu Hi-Technology                             15%
Weifu Jinning                                                     15%
Weifu Diesel System                                               15%
Weifu Leader                                                      15%
Weifu Tianli                                                      15%
Weifu Autocam                                                     15%
Weifu Mashan                                                      25%
Weifu Chang’an                                                   25%
Weifu International Trade                                         25%
Weifu ITM                                                         25%
Weifu Schmidt                                                     25%
Kunming Xitong                                                    25%
Weifu Tianshi                                                     25%
Weifu Leader (Wuhan)                                              25%


2. Tax preference

On 2 September 2014, the Company got a “High-Tech Enterprise Certificate” issued jointly by Science &
Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu Provincial
Office, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201432001331. Corporate income tax of the
Company shall be taxed by 15% in three years since 1 January 2014 in accordance with State regulations.


On 2 September 2014, Weifu Jinning got a “High-Tech Enterprise Certificate” issued jointly by Science &
Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu Provincial
Office, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201432001794. Corporate income tax of the
Weifu Jinning shall be taxed by 15% in three years since 1 January 2014 in accordance with State regulations.



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On 31 October 2014, Weifu Diesel System got a “High-Tech Enterprise Certificate” issued jointly by Science &
Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu Provincial
Office, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201432002594. Corporate income tax of the
Weifu Diesel System shall be taxed by 15% in three years since 1 January 2014 in accordance with State
regulations.


On 2 September 2014, Weifu Leader got a “High-Tech Enterprise Certificate” issued jointly by Science &
Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu Provincial
Office, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201432001480. Corporate income tax of the
Weifu Leader shall be taxed by 15% in three years since 1 January 2014 in accordance with State regulations.


On 25 September 2014, Weifu Tianli got a “High-Tech Enterprise Certificate” issued jointly by Science &
Technology Bureau of Ningbo, Department of Finance of Ningbo, Ningbo Office, SAT and Ningbo, Zhejiang
Provincial Local Taxation Bureau, certificate No.: GR201433100224. Corporate income tax of the Weifu Tianli
shall be taxed by 15% in three years since 1 January 2014 in accordance with State regulations.


On 31 October 2014, Weifu Autocam got a “High-Tech Enterprise Certificate” issued jointly by Science &
Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu Provincial
Office, SAT and Jiangsu Local Taxation Bureau, certificate No.: GF201432001254. Corporate income tax of the
Weifu Autocam shall be taxed by 15% in three years since 1 January 2014 in accordance with State regulations.

3. Other

Nil




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VII. Notes to major items in consolidated financial statements

1. Monetary capital

                                                                                                                             In RMB

                    Item                                  Closing balance                             Opening balance
Cash on hand                                                                599,430.35                                   593,508.90
Cash in bank                                                         1,176,906,292.97                               3,216,383,596.65
Other monetary fund                                                     46,891,693.28                                 57,702,626.99
Total                                                                1,224,397,416.60                               3,274,679,732.54

Other explanation

                    Item                                           2016-06-30                               2015-12-31
Bank acceptance bill, L/C and other collateral                                  46,891,693.28                         57,702,626.99


2. Note receivables

(1) Classification of notes receivable

                                                                                                                             In RMB

                    Item                                  Closing balance                             Opening balance
Bank acceptance bill                                                   954,672,667.47                                941,836,230.18
Commercial acceptance bill                                              61,915,982.96                                 90,050,000.00
Total                                                                1,016,588,650.43                               1,031,886,230.18


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

                                                                                                                             In RMB

                              Item                                                    Amount pledge at period-end
Bank acceptance bill                                                                                                  22,324,948.91
Total                                                                                                                 22,324,948.91


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

                                                                                                                             In RMB

                    Item                         Amount derecognition at period-end        Amount not derecognition at period-end
Bank acceptance bill                                                   491,581,496.02
Total                                                                  491,581,496.02


3. Accounts receivable

(1) Accounts receivable by category:

                                                                                                                             In RMB




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                                          Closing balance                                                  Opening balance
                         Book balance            Bad debt reserve                       Book balance           Bad debt reserve
        Types                                                             Book
                                                              Accru                                                          Accru      Book value
                        Amount          Ratio    Amount                   value       Amount      Ratio        Amount
                                                              al ratio                                                       al ratio
Account
receivable with
single significant
                                                2,336,848.9 100.00                    2,336,848                              100.00
amount and             2,336,848.93 0.13%                                                         0.18% 2,336,848.93
                                                          3        %                        .93                                   %
withdrawal bad
debt provision
separately
Receivables with
bad debt provision 1,753,779,687        99.70 15,172,219.                1,738,607 1,276,903      99.44 15,739,942.3                    1,261,163,18
                                                              0.87%                                                          1.23%
accrual by credit                 .00       %           17                 ,467.83      ,127.17        %                 0                      4.87
portfolio
Accounts with
single minor
amount but with                                 2,971,107.8 100.00                    4,823,109                              100.00
                       2,971,107.87 0.17%                                                         0.38% 4,823,109.15
bad debts                                                 7        %                        .15                                   %
provision accrued
individually
                      1,759,087,643 100.00 20,480,175.                   1,738,607 1,284,063 100.00 22,899,900.3                        1,261,163,18
Total                                                         1.16%                                                          1.78%
                                  .80       %           97                 ,467.83      ,085.25        %                 8                      4.87

Account receivable with single significant amount and withdrawal bad debt provision separately at period end:
√ Applicable □ Not applicable
                                                                                                                                             In RMB

                                                                                     Closing balance
  Account receivable (by units)
                                        Account receivable          Bad debt reserve              Accrual ratio                    Reasons
Changzhou Liankai Power                                                                                                  The account was too
                                                2,336,848.93                 2,336,848.93                      100.00%
Machinery Co., Ltd.                                                                                                      old to collect
Total                                           2,336,848.93                 2,336,848.93                 --                            --

Account receivable provided for bad debt reserve under aging analysis method in the groups:
√ Applicable □ Not applicable
                                                                                                                                             In RMB

                                                                                  Closing balance
                Age
                                          Account receivable                      Bad debt reserve                        Accrual ratio
Sub item of within one year
Within 6 months                                    1,662,763,766.40
6 months to 1 year                                    68,364,155.00                            6,836,415.51                                  10.00%
Subtotal of within 1 year                          1,731,127,921.40                            6,836,415.51
1-2 years                                             15,142,318.25                            3,028,463.65                                  20.00%
2-3 years                                              3,670,178.89                            1,468,071.55                                  40.00%



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Over 3 years                                         3,839,268.46                     3,839,268.46                    100.00%
Total                                             1,753,779,687.00                   15,172,219.17                       0.87%

Explanation on combination determines:

Excluding the account receivable accrual impairment provision separately; based on actual loss ratio of the
receivable groups that owes same or similar risk features, which has classify by age in previous years, determine
accrual ratio for bad debt provision combine with real condition.


In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable
□ Applicable √ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for account receivable:
Nil

(2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was 729,144.11 Yuan; the amount collected or switches back amounting to
3,106,962.88 Yuan.
Important bad debt provision collected or switch back:
                                                                                                                        In RMB

                 Company                           Collected or switch back amount                   Collection way
Hubei Yuchai Engine Co., Ltd.                                               214,814.85 Monetary Fund
Anhui Quanchai Power Co., Ltd.                                              797,654.23 Bank acceptance bill
Total                                                                     1,012,469.08                        --

The amount with bad debt provision accrual seperattely at period-end of last year was collected by cash of RMB
1,012,469.08 in the Period, rests of the amount are collected on the bae debt provision calculated based on age
account; bad debt provision verified in the Period amounting to RMB 41,905.64
(3) Account receivable actual charge off in the Period
                                                                                                                        In RMB

                                  Item                                                   Amount written off
Sporadic households                                                                                                   41,905.64

Written-off for the major receivable: Nil
Note of written-off for account receivable: Nil

(4) Top 5 receivables at ending balance by arrears party
Total year-end balance of top five receivables by arrears party amounting to 689,230,917.56 Yuan, takes 39.18
percent of the total account receivable at year-end, bad debt provision accrual correspondingly at year-end
amounting as 785,840.21 Yuan.
(5) Account receivable derecognition due to financial assets transfer
Nil

(6) Assets and liabilities resulted by account receivable transfer and continues involvement
Nil




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4. Advance payment

(1) Advance payment by age

                                                                                                                                               In RMB

                                                  Closing balance                                             Opening balance
            Age
                                       Amount                           Ratio                       Amount                         Ratio
Within one year                          65,051,955.31                            83.99%              56,430,230.21                            76.96%
1-2 years                                     7,453,279.05                         9.62%              16,547,115.99                            22.56%
2-3 years                                     4,782,248.57                         6.17%                    231,840.37                          0.32%
Over 3 years                                   173,810.54                          0.22%                    117,363.62                          0.16%
Total                                    77,461,293.47                   --                           73,326,550.19                   --

Explanation on reasons of failure to settle on important advance payment with age over one year: Nil

(2) Top 5 advance payment at ending balance by prepayment object
Total year-end balance of top five advance payment by prepayment object amounting to 28,220,256.13 Yuan,
takes 36.43 percent of the total advance payment at year-end

5. Interest receivable

 Category
                                                                                                                                               In RMB

                      Item                                        Closing balance                                 Opening balance
Time deposit                                                                         2,249,341.69                                         3,281,939.96
Total                                                                                2,249,341.69                                         3,281,939.96


6. Dividend receivables

 Dividend receivables
                                                                                                                                               In RMB

                  Item (or the invested entity)                                 Closing balance                          Opening balance
Bosch Automobile Diesel System Co., Ltd                                                    198,772,367.40
Zhonglian Automobile Electronic Co., Ltd.