苏威孚B(200581)公告正文

苏威孚B:2017年半年度报告(英文版)

公告日期:2017-08-25

Weifu High-Technology Group Co., Ltd.

       Semi-Annual Report 2017




             August 2017
                                            无锡威孚高科技集团股份有限公司 2017 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.
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 2017 is authentic, accurate and complete.
All directors are attended the Board Meeting for report deliberation.
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.
In this report, details of relevant risks and countermeasures in operation have
described, investors can be found in X. Risks and countermeasures carried in
Section IV Discussion and Analysis of Operation. The China Securities Journal,
Securities Times, Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn)are the information disclosure media appointed by the
Company, all information should be prevail on the above mentioned media,
investors are advice to pay attention on investment risks.
The Company has no plan of cash dividend distributed, no cash bonus and
capitalizing of common reserves either carried out.
This Report has been prepared in both Chinese and English. Should there be
any discrepancies or misunderstandings between the two versions, the Chinese
version shall prevail.



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                                                           Contents




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

Section II Company Profile and Main Finnaical Indexes ............................................................. 5

Section III Summary of Company Business .................................................................................. 8

Section IV Discussion and Analysis of Operation ........................................................................ 10

Section V Important Events .......................................................................................................... 17

Section VI Changes in shares and particular about shareholders............................................... 24

Section VII Preferred Stock……………………………………………………………………….28

Section VIII Particulars about Directors, Supervisors and Senior Executives…. ..................... 29

Section IX Corporate Bonds ........................................................................................................... 30

Section X Financial Report ............................................................................................................. 31

Section XI Documents Available for Reference ........................................................................... 149




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                                            Paraphrase


                       Items            Refers to                                Contents

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

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

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 Tianli                            Refers to   Ningbo Weifu Tianli Supercharging Technique Co., Ltd.

Kunming Xitong                          Refers to   Kunming Xitong Machinery Co., Ltd.

Weifu Tianshi                           Refers to   Anhui Weifu Tianshi Machinery Co., Ltd.

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

Weifu Precision Machinery               Refers to   Weifu Precision Machinery Manufacturing Co., Ltd.

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

CSRC                                    Refers to   China Securities Regulatory Commission

Reporting period                        Refers to   1 January 2017 to 30 June 2017




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                Section II Company Profile and Main Finnaical Indexes

I. Company information

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

Stock exchange for listing                                    Shenzhen Stock Exchange

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

Short form of the Company in Chinese (if applicable)          威孚高科

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

Short form of foreign name of the Company (if applicable)     WFHT

Legal representative                                          Chen Xuejun


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 2016.


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 2016



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IV. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data
□ Yes √ No

                                                Current period       Same period of last year         Changes over last year

Operating income (RMB)                          4,728,125,599.02           3,366,476,452.49                                    40.45%

Net profit attributable to shareholders of
                                                1,325,922,029.56             943,568,535.72                                    40.52%
the listed company(RMB)

Net profit attributable to shareholders of
the   listed   company     after   deducting    1,208,264,288.81             829,632,717.13                                    45.64%
non-recurring gains and losses(RMB)

Net cash flow arising from operating
                                                  352,401,241.52             193,541,014.95                                    82.08%
activities(RMB)

Basic earnings per share (RMB/Share)                          1.31                      0.94                                   39.36%

Diluted earnings per share (RMB/Share)                        1.31                      0.94                                   39.36%

Weighted average ROE                                       9.84%                      7.72%                                    2.12%

                                                 Period-end          Period-end of last year    Changes over period-end of last year

Total assets (RMB)                             18,865,622,758.77          17,263,771,897.78                                    9.28%

Net assets attributable to shareholder of
                                               13,608,625,100.64          12,927,344,292.47                                    5.27%
listed company (RMB)


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

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

□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.


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

□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.


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

√Applicable   □ Not applicable




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                                                                                                                                   In RMB

                                         Item                                             Amount                      Note

Gains/losses from the disposal of non-current asset (including the write-off that
                                                                                          -1,300,820.32
accrued for impairment of assets)

                                                                                                          Including the compensation
Governmental subsidy reckoned into current gains/losses (not including the
                                                                                                          of new-building assets for
subsidy enjoyed in quota or ration according to national standards, which are            17,106,756.73
                                                                                                          relocation from parent
closely relevant to enterprise’s business)
                                                                                                          company

Profit and loss of assets delegation on others’ investment or management                97,021,850.83

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     24,625,516.88
sales, exclude the effective hedging business relevant with normal operations of
the Company

Switch back of provision for depreciation of account receivable which was singly
                                                                                          1,208,025.21
taken depreciation test

Other non-operating income and expenditure except for the aforementioned items              654,034.81

Less: Impact on income tax                                                               20,999,064.11

     Impact on minority shareholders’ equity (post-tax)                                    658,559.28

Total                                                                                   117,657,740.75                  --



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 III Summary of Company Business

I. Main businesses of the company in the reporting period
The Company belongs to auto parts industry, and its main business products include diesel fuel injection system
products, vehicle’s exhaust after-treatment system products and air management system products. Main business
and operation model of the Company have no changes in the reporting period.


I. Main uses of the Company's products
(1) The diesel Fuel management systemare widely used in different power diesel engines supporting all types of
trucks, passenger cars, buses, construction machinery, marine, farm machinery and generator sets. The company
not only makes products matching with the main engines used at home but also exports some products to the
Americas, Southeast Asia, and the Middle East. The products meet the needs of emission regulations of the
national.
(2) The vehicle’s exhaust after-treatment system products mainly support the major manufacturers of automobile,
motorcycle and general machinery at home which meet the National emission standards.
(3) The wheel diameter range of air management system products (supercharger) covers 30mm to 125mm whole
series which matches with most of the domestic small-bore diesel engine plants and some six-cylinder diesel
engine manufacturers and meet the needs of the light and heavy commercial vehicles and some passenger cars.
The company has the vacuum valve control that meets the emission standards of Euro IV & Euro V, the
electronically controlled variable geometry turbochargers, the titanium-aluminum alloy superchargers, the electric
superchargers, the ceramic ball bearing superchargers and some kinds of gasoline engine turbochargers.


II. Business model of the company
The company follows the operating philosophy of making competitive products, creating famous brands, striving
for first choices, and creating value for the users, implements the business model that parent company unifies the
management and subsidiaries decentralize the production. Namely, the group company is responsible for making
strategic development planning and operation targets, and making the unified management, instruction and
assessment for the finance, significant personnel management, core raw materials, quality control, and technology
of the subsidiaries. The subsidiaries arrange production based on the order management model of market, which
makes the subsidiaries keep the consistent quality with the company, helps keep abreast of customer needs and
saving logistics costs, maintain the timeliness of products production and supply, and improve the Company’s
economic benefits.




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II. Major changes in main assets

1. Major changes in main assets


                Major assets                                        Note of major changes


Equity assets                       No major change

Fixed assets                        No major change

Intangible assets                   No major change

Construction in progress            Capacity developing investment of accessories


2. Main overseas assets

□ Applicable √ Not applicable



III. Core Competitiveness Analysis
The company belongs to the auto parts industry whose main business includes diesel fuel injection system products,
automotive exhaust after-treatment system products and air-intake system products. The company has complete
product range, stable customers, and mature market.
Over the years, the company has always been taking the research and development of diesel fuel injection system
products, automobile exhaust after-treatment system products, and air-intake system products as the primary tasks,
it has the domestic first-class and the world leading research and development and test center for diesel injection
system, air-intake system and tail gas after-treatment system which can meet the requirements of the matching
testing of the company's three major systems, has the calibration test capability for the emission regulation above
national IV of heavy-duty engines and light vehicle, and reaches the comprehensive testing level approved by the
national emission certification testing center. With such a platform, the company can speed up the adjustment of
product structure, promote the enterprise transformation and upgrading, accelerate the autonomation pace of key
parts and components, and comprehensively improve the R & D and manufacturing level of domestic engine core
parts industry. At the same time, the company has a team of senior experts that master the core technology, and has
grasped the necessary common core technologies for diesel fuel injection system, tail gas treatment system and
air-intake system and reached the advanced level in the same industry over years of digestion and absorption, and
research and development efforts. The company has a number of invention patents, utility model patents, and
design patents.
Core competitiveness of the Company has no major changes in the Period




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                      Section IV Discussion and Analysis of Operation

I. Overview

The data released by the China Association of Automobile Manufacturers showed that the automobile production
and sales throughout the country in the first half of 2017 respectively reached 13,525,800 and 13,353,900,
respectively increased by 4.64% and 3.81% on a year-on-year basis, of which the production and sales of
passenger vehicles respectively reached 11,482,700 and 11,253,000, respectively increased by 3.16% and 1.61%
on a year-on-year basis, and the production and sales of commercial vehicles respectively reached 2,043,000 and
2,100,900, respectively increased by 13.80%% and 17.39% on a year-on-year basis.
Since this year, benefited by the stable macro economy, the national project construction investment, the
governance overload, the upgrading of urban logistics needs and the steady growth of the automotive market, the
company has been adhering to market-oriented business philosophy, integrating the internal and external resources,
and maximumly tapping the production potential so as to meet customer needs and achieve the synchronous
growth of various businesses and comprehensive economic result.
During the period, the Company has operation revenue of 4,728 million Yuan with a growth of 40.45% on a y-o-y
basis; net profit amounting to 1,462 million Yuan, a y-o-y growth of 40.20% and net profit attributable to owners
of parent company amounting to 1,326 million Yuan, a 40.52% growth over same period of last year.
In the next half year, the company will actively seize the market opportunities, and continue to strengthen new
product development and market development, financial operation and risk control, product manufacturing and
quality management, information sharing and safety management, talent construction and human resources
management so as to promote the sustainable and healthy development of enterprise.
II. Main business analysis
See the “I-Introduction” in “Discussion and Analysis of the Operation”
Change of main financial data on a y-o-y basis
                                                                                                                                 In RMB

                                           Current period     Same period of last year y-o-y changes (+,-)           Reasons

Operation income                          4,728,125,599.02           3,366,476,452.49              40.45% Product sales increased

Operation cost                            3,736,290,938.86           2,633,281,983.25              41.89% Product sales increased

Sales expenses                                71,559,262.66             92,799,369.25             -22.89%

                                                                                                             Accrual the incentive
Administrative expenses                     399,568,734.73             314,596,534.92              27.01%
                                                                                                             fund by quarterly

Financial cost                                 1,688,051.32              -2,909,491.43

Income tax expense                            94,025,933.36             68,314,427.18              37.64% Product sales increased

R&D investment                              140,532,863.22             131,048,092.77               7.24%




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Net cash flow arising from operation
                                             352,401,241.52           193,541,014.95               82.08% Product sales increased
activities

Net cash flow arising from investment
                                          -2,563,680,842.64         -2,078,064,480.91
activities

Net cash flow arising from financing
                                               14,285,552.13         -102,277,671.94
activities

Net increase of cash and cash
                                          -2,200,012,859.87         -1,986,801,137.90
equivalent

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
Constitution of main business
                                                                                                                              In RMB
                                                                                Increase or      Increase or       Increase or
                                                                                decrease of     decrease of     decrease of gross
                                                                  Gross
                        Operating revenue     Operating cost                 operating revenue operating cost    profit ratio over
                                                                profit ratio
                                                                             over same period over same period same period of last
                                                                                of last year     of last year          year

According to industries

Auto parts               4,480,811,897.39 3,526,184,596.99        21.30%                41.04%          42.08%                -0.58%

According to products

Auto fuel injection
                         2,913,085,541.84 2,151,780,977.80        26.13%                54.09%          51.69%                1.17%
system

Post-processing
                         1,384,385,244.26 1,238,343,823.36        10.55%                19.42%          28.25%                -6.16%
system

Induction system           183,341,111.29      136,059,795.83     25.79%                43.97%          39.24%                2.52%

According to region

Domestic                 4,322,947,409.12 3,375,340,561.68        21.92%                42.83%          44.35%                -0.82%

Overseas                   157,864,488.27      150,844,035.31       4.45%               4.90%             5.14%               -0.21%


III. Analysis of non-main business

√Applicable □Not applicable
                                                                                                                              In RMB
                                       Ratio in total
                       Amount                                         Note                           Whether be sustainable
                                          profit
                                                    Income mainly from the two joint         The Company’s joint ventures Bosch
Investment                                          ventures the Company (Bosch              Automobile Diesel and Zhonglian
                      955,437,915.36         65.33%
income                                              Automobile Diesel and Zhonglian          Electronic have stable production and
                                                    Electronic)                              operation on a sustained basis

Asset
                      -11,296,473.56          -0.77%
impairment


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                                                                          无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


Non-operating
                       3,019,773.33         0.21%
income

Non-operating
                       4,125,199.11         0.28%
expense


IV. Assets and liability

1. Major changes of assets composition

                                                                                                                                  In RMB

                                              Period-end                       Period-end of last year
                                                                                                               Ratio      Notes of major
                                                         Ratio in total                          Ratio in     changes        changes
                                         Amount                                Amount
                                                            assets                             total assets
Monetary fund                         1,846,838,076.57          9.79%       1,224,397,416.60         7.33%       2.46%

Account receivable                    2,028,796,617.26        10.75%        1,738,607,467.83        10.41%       0.34%

Inventory                             1,134,167,227.47          6.01%         907,280,742.58         5.43%       0.58%

Investment property                     24,344,196.10           0.13%          19,733,596.73         0.12%       0.01%

Long-term equity investment           3,381,642,657.07        17.92%        2,884,406,007.82        17.28%       0.64%

Fix assets                            2,443,323,924.72        12.95%        2,342,751,201.54        14.03%      -1.08%

Construction in process                137,789,424.89           0.73%         156,065,946.03         0.93%      -0.20%

Short-term loans                       185,000,000.00           0.98%         263,000,000.00         1.58%      -0.60%

Long-term loans                         57,500,000.00           0.30%                                            0.30%


2. Assets and liability measured by fair value

√Applicable □Not applicable
                                                                                                                                  In RMB
                                 Changes of fair    Accumulative          Devaluation
                   Amount at the                                                          Amount of
                                      value         changes of fair             of                       Amount of sale    Amount at
      Items         beginning                                                             purchase in
                                 gains/losses in    value reckoned        withdrawing                     in the period    period-end
                     period                                                                the period
                                   this period        into equity         in the period

Financial assets
3. Financial
assets available 361,847,700.00 -22,474,500.00       104,925,615.01                                       53,860,000.00 287,266,200.00
for sale
Subtotal of
                 361,847,700.00 -22,474,500.00       104,925,615.01                                       53,860,000.00 287,266,200.00
financial assets
Above total        361,847,700.00 -22,474,500.00     104,925,615.01                                       53,860,000.00 287,266,200.00
Financial
                             0.00                                                                                                   0.00
liabilities
Whether there have major changes on measurement attributes for main assets of the Company in report period or not
□ Yes    √No




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                                                                         无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


3. The assets rights restricted till end of the period

                                                                                                                                    In RMB
                      Book value at
      Item                                                                        Restriction reasons
                       period-end

Monetary fund               359,224.68 Cash deposit paid for LC

Notes receivable        47,896,098.81 Notes pledge for bank acceptance

Monetary fund          105,357,048.62 Cash deposit paid for bank acceptance and pledge of time certificate of deposit

                                      In accordance with the civil ruling No.(2016)Y03MC2490 and No.(2016) Y03MC2492 of
                                      Guangdong Shenzhen Intermediate People's Court (Hereinafter referred to as “Shenzhen
Financial assets                      Intermediate People's Court”), the property with the value of 217 million Yuan under the name
                       232,926,896.52
available for sale                    of the Company and other seven respondents and the third party Shenzhen Hejun Chuangye
                                      Holdings Co., Ltd. was frozen. As of the end of the reporting period, 4.71 million shares of
                                      Miracle Logistics and 11,739,102 shares of SDEC held by the Company were frozen.

      Total            386,539,268.63                                                     --


V. Investment

1. Overall situation

□ Applicable √ Not applicable


2. The major equity investment obtained in the reporting period

□ Applicable √ Not applicable


3. The major non-equity investment doing in the reporting period

□ Applicable √ Not applicable


4. Financial assets investment

(1) Securities investment
√Applicable □Not applicable
                                                                                                                                    In RMB
                                                   Changes
                      S                       Book                     Cumulat    Curre
                                 Account            in fair                                                  Book
      Var      C hort       Init          value at                     ive fair     nt          Profit and                     Capit
                                   ing             value of                             Current             value at
 iety of ode of form      ial               the                         value     purch         loss in the          Accountin al
                                 measure              the                                sales              the end
securitie securit of investme            beginning                     changes     ase          Reporting            g subject Sourc
                                  ment             current                              amount               of the
    s       ies securit nt cost            of the                         in      amou            Period                         e
                                  model             profit                                                   period
                  ies                      period                       equity      nt
                                                   and loss
Domesti                                                                                                                 Financial
                                       Measure
  c and   60084             199,208,               293,694,0 -8,109,0 89,051,            53,860,0 -8,109,000 233,478,    assets     Own
                     SDEC              d by fair
 foreign 1                    000.00                  00.00    00.00    737.51                 00.00     .00   000.00 available funds
                                       value
 stocks                                                                                                                 for sales



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                                                                          无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


Domesti            Miracl                                                                                                Financial
                                        Measure
  c and   00200 e            69,331,5               68,153,70 -14,365, 15,873,                     -14,130,00 53,788,2    assets     Own
                                        d by fair
 foreign 9         Logisti      00.00                    0.00   500.00   877.50                         0.00    00.00 available funds
                                        value
 stocks            cs                                                                                                    for sales

                             268,539,               361,847,7 -22,474, 104,925           53,860,0 -22,239,00 287,266,
Total                                      --                                     0.00                                      --         --
                               500.00                  00.00    500.00 ,615.01             00.00        0.00   200.00

Disclosure date of           24 March 2012
securities investment
                             4 June 2013
approval of the Board

Disclosure date of
securities investment
approval of the              Not applicable
Shareholder Meeting (if
applicable)


(2) Derivative investment

□ Applicable √ Not applicable
The Company has no derivatives investment in the Period


VI. Significant asset and equity sales

1. Significant asset sales

□ Applicable     √ Not applicable
No significant assets being sold in the Period


2. Significant equity sales

□ Applicable     √ Not applicable


VII. Analysis of the main stock-jointly and controlling subsidiary

√ Applicable     □ Not applicable
Main subsidiary and stock-jointly enterprise with over 10% influence on net profit of the Company
                                                                                                                                     In RMB
Comp          Main
                    Industr Register                                                 Operating
  any Type busine                       Total assets               Net Assets                         Operating profit      Net profit
                       y    capital                                                   revenue
 name          ss
Weifu        Fuel
Autom Subsid manag Auto 300,000,
                                     1,073,882,447.53             596,331,032.12 1,329,045,702.24      164,637,963.30      138,909,283.08
otive iary   ement parts 000.00
Diesel       system

Weifu Subsid After-t Auto
Leader iary  reatme parts         502,596, 2,842,271,404.18 1,539,190,972.23 1,397,383,244.81            96,539,174.28      87,593,822.47
             nt

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                                                                        无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


                   system          300.00
                   produc
                   ts
              Fuel
Weifu                              346,286,
       Subsid manag Auto
Jinnin                                        1,091,112,421.09   794,423,128.61    320,793,577.32     75,192,047.18    75,554,314.01
       iary   ement parts          825.80
g
              system
Bosch    Joint-s   Fuel            USD241
Autom    tock      manag Auto
                                   ,000,000 9,483,636,426.85 5,269,550,311.04 7,780,712,323.52 2,051,610,173.24 1,750,186,156.84
obile    compa     ement parts
Diesel   ny        system          .00
                 Fuelin
Zhong    Joint-s
                 g                 600,620,
lian     tock           Auto
                 system                       5,047,766,720.84 3,991,874,638.27       8,953,773.36   981,759,686.07   980,886,111.95
Electr   compa          parts      000.00
                 produc
onic     ny
                 ts
Subsidiary obtained and disposed in the Period
√Applicable       □ Not applicable

       Name                       Obtained/disposed way                         Impact on whole production and performance

Kunming Xitong         Registration cancelled on 16 Feb. 2017       No impact

Weifu Tianshi          Registration cancelled on 14 Mar. 2017       No impact

Statement on main controlling and stock-jointly Company

1. Market needs of vehicles have a good condition from this year, heavy truck market in particular, the Company
and joint ventures seized the opportunity to increasing the operation revenue and profit in fuel management
system product;
2. The products of after-treatment system business have sharply delined in sales prices for the violent competition;
the profit is affected by soaring costs of bulky cargo (steel) and change of product structure (emission upgrade of
diesel vehicle) etc.

VIII. The structured subject controlled by the Company

□ Applicable      √ Not applicable


IX. Prediction of business performance from January – September 2017

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


X. Risks and countermeasures

(1) The risks of macro economy and market conditions
The company belongs to the auto parts industry which is closely related to the macroeconomic situation and the
automobile industry policies. As we all know, the auto industry has become a pillar industry for China's national
economic development, and the auto market demand is closely related to the national economy. At present, there


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                                                               无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


are uncertainties in the world economy, if macro economy has substantial adjustments in the future, it will
certainly have an impact on the growth rate of auto industry. After experiencing over ten years of rapid growth,
China's auto market starts to step in the mature stage of steady growth, in the future, the growth of automobile
production and sales will slow down, which will have an impact on the company's business.
Countermeasures: The company will continue to strengthen the tracking research on macroeconomic situation and
auto market dynamics, and constantly enrich the product line, strengthen the new technology reserves, improve the
industrial chain, accelerate the adjustment of product structure, strengthen the quality management, and improve
the product market share based on policy guidance and market conditions; at the same time, increase the
technological innovation and market development efforts, speed up the development and application of new
products and new technology, and improve the company's core competitiveness and overall anti-risk capability.
(2) The risks of operation management and control
In recent years, the rapid growth of the company's assets and the continuous expansion of the business scope put
forward higher demands for the company's operation management and control. Over the years the company has
established corresponding internal control system in accordance with the relevant national laws and regulations in
the process of operation management and control, but there are still potential risks of operation management and
control because of the large span and multiple links in personnel, business, finance, and capital management.
Countermeasures: The company will continue to improve the management system of subsidiaries, strengthen the
business guidance and assessment of subsidiaries, and regularly evaluate and audit the operation of subsidiaries to
ensure the steady growth of subsidiaries’ performance; the company will optimize the management mode and
organizational structure, strengthen the training and learning of middle and senior management, improve the
management quality and decision-making ability, and gradually strengthen the process and systematization of
internal management based on the changes in internal and external environment so as to make the company’s
management more systematized, standardized and scientific, and effectively avoid business management mistakes.
(3) The risks of fluctuations in raw material prices
The company's main raw materials include various grades of steel, aluminum, precious metals, etc., the continuous
rise in prices will bring the risks of rising costs to the company.
Countermeasures: The company will pay close attention to the price trend of its main raw materials, and take the
appropriate procurement opportunities for reasonable strategic reserves to resolve the risks of fluctuations in raw
material prices.




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                                                                        无锡威孚高科技集团股份有限公司 2017 年半年度报告全文



                                         Section V. Important Events
      I. AGM and extraordinary general meeting

      1. AGM held in the period

                                      Participation ratio
       Meeting              Type                            Holding date     Disclosure date                     Index
                                         for investors

Annual General                                                                                  Notice   No.: 2017-013 released on
                        AGM                       46.22% 19 May 2017 22 May 2017
Meeting of 2016                                                                                 Juchao Website (www.cninfo.com.cn)


2. Request for extraordinary general meeting by preferred stockholders with rights to vote

□ Applicable √ Not applicable

II. Profit distribution plan and capitalizing of common reserves in the period

□ Applicable √ Not applicable

There are no cash dividend, bonus and capitalizing of common reserves carried out in the semi-annual

III. Commitments that the company, shareholders, actual controller, offeror, directors, supervisors, senior
management or other related parties have fulfilled during the reporting period and have not yet fulfilled by
the end of reporting period

□ Applicable √ Not applicable

There are no commitments that the company, shareholders, actual controller, offeror, directors, supervisors, senior management or

other related parties have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period


IV. Appointment and non-reappointment (dismissal) of CPA


Whether the semi-annual financial report had been audited

□Yes √ No

The semi-annual report was not audited

V. Explanation on “Qualified Opinion” from CPA by the Board and Supervisory Committee

□ Applicable √ Not applicable


VI. Explanation from the Board for “Qualified Opinion” of last year’s


□ Applicable √ Not applicable

VII. Bankruptcy reorganization


                                                                                                                                     17
                                                                         无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


□ Applicable √ Not applicable

No bankruptcy reorganization in Period.

VIII. Lawsuits

Material lawsuits and arbitration

□ Applicable √ Not applicable

No material lawsuits and arbitration in the reporting

Other lawsuits

√Applicable□ Not applicable
                                                                                                          Judgment
                              Amount    Whether
                                                                                           Trial Results Implement
                              Related   Formed                                                                              Disclos
Basic Situation of Litigation                             Progress of Litigation            and Effects ation of Disclosure
                               to the   Accrued                                                                              ure
       (Arbitration)                                          (Arbitration)                of Litigation Litigation  Date
                                Case    Liabiliti                                                                           Index
                                                                                           (Arbitration) (Arbitratio
                              (Yuan)       es
                                                                                                             n)
On March 6, 2017, the 21,703            No          The company has engaged
company received the civil                          professional lawyers to strive to      This            Not yet   March 08,   (Annou
ruling                                              properly handle and resolve the        litigation      implement 2017        ncemen
No.(2016)Y03MC2490 and                              litigation and the frozen stock        will        not ed                    t No.:
No.(2016)       Y03MC2492                           equity as soon as possible through     affect      the                       2017-0
from Shenzhen Intermediate                          normal and legal approaches and        company’s                            02)
People's Court about the                            protect the legitimate rights and      daily                                 publish
dispute case that the                               interests    of    the     company     operating                             ed on
plaintiff applicant China                           according to law.                      activities for                        www.c
Cinda Asset Management                              1. By the company’s application       the       time                        ninfo.c
Co., Ltd. Shenzhen Branch                           for reconsideration, Shenzhen          being                                 om.cn
(hereinafter referred to as                         Intermediate      People's    Court
“Cinda          Company”)                         deemed the total assets that Cinda
appealed the respondent                             Company applied for preservation
Weifu High Technology and                           to be RMB 217,027,697.23. The
other seven respondents and                         total value of 15.3 million shares
the shareholders of the third                       of SDEC Stock and 4.71 million
party    Hejun     Company                          shares of Tianqi Stock held by the
damaged the interests of                            company has exceeded the total
corporate creditors, which                          assets that Cinda Company
adopted the mandatory                               applied       for      preservation,
measures to freeze the assets                       therefore, 3,560,898 shares of
with value of RMB 217                               SDEC Stock held by the company
million under the name of                           was unfrozen. Up to the end of the
the Company and other                               reporting period, the company’s
seven     respondents    and                        frozen assets were as follows:
Hejun Company. Freeze                               4.71 million shares of Miracles
4.71 million shares of                              Logistics held by the company
Tianqi Stock and 15.3                               and its fruits, and 11,739,102
million shares of SDEC                              shares of SDEC Stock held by the
Stock held by the company.                          company and its fruits. At present,
                                                    this litigation is in the first
                                                    instance (not yet held a court).
                                                    2. The company has applied to
                                                    Futian People's Court of Shenzhen
                                                    for compulsory liquidation with
                                                    Hejun Company, which has been
                                                    put on record but not yet held a
                                                    court.




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                                                                    无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


IX. Penalty and rectification


□ Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.


X. Integrity of the Company and its controlling shareholders and actual controllers

□ Applicable √ Not applicable


XI. Implementation of the company’s stock incentive plan, employee stock ownership plan or other
employee incentives


□ Applicable √ Not applicable
Nil

XII. Major related transaction

1. Related transaction with routine operation concerned

√ Applicable □ Not applicable
                                                                                         Wheth
                                                                                                   Cleari
                      Type                                                      Trading er over
                                                 Relate     Related   Proporti                        ng    Availab
                        of    Content                                             limit   the                        Date Index
                                                     d    transaction  on in                        form      le
Relate                relate of related Pricing                                approved approv                        of      of
        Relationship                             transac amount (in similar                           for   similar
d party                 d transactio principle                                   (in 10    ed                       disclos disclos
                                                   tion 10 thousand transacti                     related   market
                     transa       n                                            thousand limited                       ure     ure
                                                   price     Yuan)    ons (%)                     transac    price
                      ction                                                      Yuan)   or not
                                                                                                     tion
                                                                                         (Y/N)
                                        Based                                                                       18 Notice
Weifu                                                                                             Based
                     Procu              on fair                                                             Market April No.:
Precisi                                                                                           on the
        Associated remen                value of Marke                                                      priceM 2017 2017-0
on                           Goods                           2,042.82 0.69%         4,000 N       contra
        company      t of               the      t price                                                    arket         08
Machi                                                                                             ct
                     goods              market                                                              price
nery                                                                                              terms
                                        price
       Associated
                                       Based
       company,                                                                                   Based
Bosch                  Procu           on fair
       Controlling                                                                                on the
Diesel                 remen           value of Marke                                                    Market
       subsidiary of         Goods                          10,190.59   3.44%    17,000   N       contra
Syste                  t of            the      t price                                                  price
       German                                                                                     ct
m                      goods           market
       Bosch                                                                                      terms
                                       price
       Company
                                       Based
                                                                                                  Based
                    Procu              on fair
Weifu Joint venture                                                                               on the
                    remen              value of Marke                                                    Market
Enviro of Weifu           Goods                             68,335.15 23.06%    150,000   N       contra
                    t of               the      t price                                                  price
nment Leader                                                                                      ct
                    goods              market
                                                                                                  terms
                                       price
                                       Based
       Second                                                                                     Based
Robert                 Procu           on fair
       largest                                                                                    on the
Bosch                  remen           value of Marke                                                    Market
       shareholder           Goods                           7,703.57   2.60%    12,000   N       contra
Comp                   t of            the      t price                                                  price
       of the                                                                                     ct
any                    goods           market
       Company                                                                                    terms
                                       price
Weifu Associated       Sales Goods     Based     Marke
                                                               181.64   0.04%      300    N       Based Market
Precisi company        of    and       on fair   t price                                          on the price


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                                                                       无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


on                  goods labors        value of                                                       contra
Machi                                   the                                                            ct
nery                                    market                                                         terms
                                        price
       Associated
                                        Based
       company、                                                                                       Based
Bosch                                   on fair
       Controlling Sales Goods                                                                         on the
Diesel                                  value of Marke                                                        Market
       subsidiary of of    and                             168,435.04 35.62%         300,000      N    contra
Syste                                   the      t price                                                      price
       German        goods labors                                                                      ct
m                                       market
       Bosch                                                                                           terms
                                        price
       Company
                                        Based
                                                                                                       Based
                                        on fair
Weifu Joint venture Sales Goods                                                                        on the
                                        value of Marke                                                        Market
Enviro of Weifu     of    and                                 3,701.69    0.78%         8,000     N    contra
                                        the      t price                                                      price
nment Leader        goods labors                                                                       ct
                                        market
                                                                                                       terms
                                        price
                                        Based
       Second                                                                                          Based
Robert                                  on fair
       largest     Sales                                                                               on the
Bosch                                   value of Marke                                                        Market
       shareholder of    Goods                                  158.35    0.03%           120     Y    contra
Comp                                    the      t price                                                      price
       of the      goods                                                                               ct
any                                     market
       Company                                                                                         terms
                                        price
       Associated
                                        Based
       company、           Fee for                                                                     Based
Bosch                                   on fair
       Controlling         tech-serv                                                                   on the
Diesel                                  value of Marke                                                        Market
Syste  subsidiary of Other ice          the      t price
                                                                                          150     N    contra
                                                                                                              price
       German              payable                                                                     ct
m                                       market
       Bosch               etc.                                                                        terms
                                        price
       Company
                                   Based
       Second                                                                                          Based
Robert                   Royalties on fair
       largest                                                                                         on the
Bosch                    for       value of Marke                                                             Market
       shareholder Other                                        246.85                    800     N    contra
Comp                     technolo the       t price                                                           price
       of the                                                                                          ct
any                      gy paid market
       Company                                                                                         terms
                                   price
                                        Based
                                                                                                       Based
                                        on fair
Weifu Joint venture                                                                                    on the
                          Rental        value of Marke                                                        Market
Enviro of Weifu     Other                                       119.43                    250     N    contra
                          fee           the      t price                                                      price
nment Leader                                                                                           ct
                                        market
                                                                                                       terms
                                        price

Total                                      --       --      261,115.13      --       492,620      --     --      --       --      --

Detail of sales return with major
                                                                                 Not applicable
amount involved

                                        After deliberated and approved by AGM of 2016, it is estimated that the routine related
                                        transaction for year of 2017 amounting to 4926.2 million Yuan, actually 2611.1513 million
                                        Yuan in total occurred in reporting period, including:
Report the actual implementation of     1. It is estimated that purchasing goods and labors from related parties amounted as 1830
the normal related transactions which   million Yuan at most for year of 2017, actually 882.7213 million Yuan occurred in reporting
were projected about their total        period;
amount by types during the reporting    2. It is estimated that sales of goods and labors to related parties amounted as 3084.2 million
period(if applicable)                   Yuan at most for year of 2017, actually 1724.7672 million Yuan occurred in reporting
                                        period;
                                        3. It is estimated that other related transactions with related parties amounted as 12 million
                                        Yuan at most for year of 2017, actually 3.6628 million Yuan occurred in reporting period;
Reasons for major differences
between trading price and market                                                 Not applicable
reference price (if applicable)



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                                                                      无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


2. Related transactions by assets acquisition and sold

□ Applicable    √ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period


3. Main related transactions of mutual investment outside

□ Applicable    √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period


4. Contact of related credit and debt

□ Applicable    √ Not applicable
The Company had no contact of related credit and debt in the reporting period.


5. Other related transactions

□ Applicable    √ Not applicable
The company had no other significant related transactions in reporting period.


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


XIV. Significant contract and implementations

1. Trusteeship, contract and leasing

(1) Trusteeship

□ Applicable    √ Not applicable
No trusteeship for the Company in reporting period

(2) Contract
□ Applicable    √ Not applicable
No contract for the Company in reporting period

(3) Leasing
□ Applicable    √ Not applicable
No leasing for the Company in reporting period


2. Major guarantees
√ Applicable   □ Not applicable




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                                                                           无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


(1) Guarantees
                                                                                                                         In 10 thousand Yuan

                     Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
                                                                                                                                   Guarante
                                                Actual date of
  Name of the             Related                                                                                                     e for
                                      Guarante happening (Date     Actual                     Guarantee Implemen
   Company            Announcement                                             Guarantee type                                       related
                                       e limit    of signing   guarantee limit                  term    ted (Y/N)
  guaranteed          disclosure date                                                                                                 party
                                                 agreement)
                                                                                                                                     (Y/N)
                                               Guarantee of the Company and the subsidiaries
                                                                                                                                   Guarante
                        Related             Actual date of
  Name of the                                                                                                                         e for
                     Announcemen Guarantee happening (Date     Actual                     Guarantee Implemen
   Company                                                                 Guarantee type                                           related
                      t disclosure limit      of signing   guarantee limit                  term    ted (Y/N)
  guaranteed                                                                                                                          party
                          date               agreement)
                                                                                                                                     (Y/N)
Ningbo Tianli
Turbocharging                                                                            Joint liability
                2016-10-27                  6,000       2016-11-11               6,000                     5              N           N
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                                Total balance of actual guarantee for
                                                              6,000                                                                   5,750
subsidiaries at the end of reporting period (B3)                      subsidiaries at the end of reporting period (B4)
                                              Guarantee of the subsidiaries for the subsidiaries
                          Related                                                                                                Guarante
                                                   Actual date of
      Name of the        Announce                                                                                                   e for
                                        Guarantee happening (Date     Actual               Guarantee       Guarantee   Implemen
       Company              ment                                                                                                  related
                                          limit      of signing   guarantee limit            type            term      ted (Y/N)
      guaranteed         disclosure                                                                                                 party
                                                    agreement)
                            date                                                                                                   (Y/N)
                           Total amount of guarantee of the Company( total of three abovementioned guarantee)
Total amount of approving guarantee in report                         Total amount of actual occurred guarantee in
                                                                  0                                                                   6,000
period (A1+B1+C1)                                                     report period (A2+B2+C2)
Total amount of approved guarantee at the end of                      Total balance of actual guarantee at the end of
                                                              6,000                                                                   5,750
report period (A3+B3+C3)                                              report period (A4+B4+C4)
The proportion of the total amount of actually guarantee in the
                                                                                                                                     0.42%
net assets of the Company (that is 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


(2)Guarantee outside against the regulation

□ Applicable       √ Not applicable
No guarantee outside against the regulation in Period.


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                                                                      无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


3. Other material contracts
□ Applicable   √ Not applicable
No other material contracts for the Company in reporting period


XV. Social responsibility

1. Precise poverty alleviation social responsibility

□ Applicable   √ Not applicable


2. Material environmental protection

The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department

No


XVI. Explanation on other significant events

□Applicable    √Not applicable
There are no explanations on other significant events in the period


XVII. Significant event of subsidiary of the Company

√ Applicable   □ Not applicable
1. Proposed investment in establishment of industrial buyout funds by a wholly-owned subsidiary of the Company
On 31 May 2016, the 8th board of directors of the Company held the 7th meeting to consider and approve the
proposal relating to proposed investment in establishment of industrial buyout funds by a wholly-owned
subsidiary of the Company. In order to accelerate industrial upgrade and development progress, reserve merger &
acquisition projects, improve its comprehensive strength and realize its development strategy, the Company
entered into initial intention of cooperation with Ping An Securities Co., Ltd. (hereinafter referred to as Ping’an
Securities), pursuant to which, Weifu Automotive Diesel, a wholly-owned subsidiary of the Company, intended to
cooperate with Ping’an Ronghui (a subsidiary of Ping’an Caizhi which is a wholly-owned subsidiary of Ping’an
Securities) to invest in establishing industrial buyout funds. The relevant announcements (No.: 2016-013 and
2016-015) were published on China Securities Journal, Securities Times, Hong Kong Commercial Daily and
Juchao Information Website (http://www.cninfo.com.cn). At the current stage, this matter is in the progress of
preparation.

2. Proposed application for listing in the national middle and small enterprises stock transfer system by the
controlling subsidiary Weifu Tianli
On 25 October 2016, the 8th board of directors of the Company held the 9th meeting to consider and approve the
proposal relating to proposed application for listing in the national middle and small enterprises stock transfer
system by the controlling subsidiary Ningbo Weifu Tianli Supercharging Technique Co., Ltd. on 30 December
2016, Weifu Tianli was served with the notice of acceptance from the National Middle and Small Enterprise Stock
Transfer System Company Limited (GP2016120120). The relevant announcements (No.: 2016-020, 2016-023 and
2017-001) were published on China Securities Journal, Securities Times, Hong Kong Commercial Daily and
Juchao Information Website (http://www.cninfo.com.cn). At the current stage, this matter is in the progress of
consideration and approval.




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                                                                           无锡威孚高科技集团股份有限公司 2017 年半年度报告全文



      Section VI. Changes in Shares and Particulars about Shareholders
 I. Changes in Shares
 1. Changes in Shares
                                                                                                                                  In Share

                                        Before the Change          Increase/Decrease in the Change (+, -)            After the Change
                                                                 New              Capitalization
                                                     Proporti            Bonus                          Subtot
                                        Amount                  shares              of public    Others            Amount        Proportion
                                                       on                shares                           al
                                                                issued               reserve
I. Restricted shares                        78,577     0.01%                                                           78,577        0.01%

1. State Shareholdings                           0                                                                          0

2. State-owned corporate
                                                 0                                                                          0
shares

3. Other domestic shares                    78,577     0.01%                                                           78,577        0.01%

Including: domestic corporate
                                                 0                                                                          0
shares

Domestic nature person shares               78,577     0.01%                                                           78,577        0.01%

4. Foreign shares                                0                                                                          0

Including: Foreign corporate
                                                 0                                                                          0
shares

Foreign nature person shares                     0                                                                          0

II. Unrestricted shares            1,008,871,993 99.99%                                                          1,008,871,993      99.99%

1. RMB Ordinary shares                  836,491,993 82.90%                                                        836,491,993       82.90%

2. Domestically listed foreign
                                        172,380,000 17.09%                                                        172,380,000       17.09%
shares

3. Foreign listed foreign
                                                 0                                                                          0
shares

4. Other                                         0                                                                          0

III. Total shares                  1,008,950,570 100.00%                                                         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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                                                                       无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


□Applicable     √Not applicable


2. Changes of restricted shares

□ Applicable     √ Not applicable


II. Securities issuance and listing

□ Applicable     √ Not applicable

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

                                                              Total preference shareholders with voting
Total common shareholders at
                                                     52,791 rights recovered at end of reporting period                                       0
period-end
                                                              (if applicable)

                     Particulars about shares held above 5% by common shareholders or top ten common shareholders

                                                                                                                           Number of share
                                                              Total common                     Amount of     Amount of
                                                                                Changes in                                 pledged/frozen
                                       Nature of Proportion shareholders                         restrict    un-restrict
     Full name of Shareholders        shareholde of shares                        report                                   State
                                           r        held    at the end of                       common        common
                                                                                  period                                     of    Amount
                                                             report period                     shares held   shares held
                                                                                                                           share
                                       State-own
Wuxi Industry Development Group
                                           ed       20.22%      204,059,398                0                 204,059,398
Co., Ltd
                                       corporate

                                        Foreign
ROBERT BOSCH GMBH                                   14.16%      142,841,400                0                 142,841,400
                                       corporate

Hong Kong Securities Clearing         Foreign
                                                      2.57%      25,932,279 24,322,297                        25,932,279
Company Ltd. (HKSCC)                  corporate

Kangjian Assets Management            Foreign
                                                      1.53%      15,409,392         69,500                    15,409,392
Company –Client’s fund              corporate

BBH BOS S/A FIDELITY FD -             Foreign
                                                      1.41%      14,228,423      1,846,144                    14,228,423
CHINA FOCUS FD                        corporate
                                      State-own
Central Huijin Assets Management
                                      ed              1.27%       12,811,200               0                  12,811,200
Co., Ltd.
                                      corporate

Puxin Investment Company-             Foreign
                                                      1.18%       11,919,831     1,694,654                    11,919,831
Client’s fund                        corporate

RBC EMERGING MARKETS                  Foreign
                                                      0.89%        9,005,335      -620,929                     9,005,335
EQUITY FUND                           corporate
CCB- Fullgoal Tianbo Innovation       Domestic
                                                      0.65%        6,551,359       234,983                     6,551,359
Theme Mix Securities Investment       non-state-



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                                                                       无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


Fund                                  owned
                                      corporate

                                      State-own
China Securities Finance Corp.        ed              0.54%         5,426,261 -21,129,254                    5,426,261
                                      corporate

Strategy investors or general corporation comes
top 10 shareholders due to rights issue (if       Not applicable
applicable)
                                                  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 among
                                                  shareholder of the Company; and they do not belong to the consistent actionist
the aforesaid shareholders
                                                  regulated by the Management Measure of Information Disclosure on Change of
                                                  Shareholding for Listed Company.

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

                                                               Amount of un-restrict                     Type of shares
                      Shareholders’ name                          common shares held
                                                                                                     Type                 Amount
                                                                      at Period-end

Wuxi Industry Development Group Co., Ltd.                                  204,059,398 RMB common shares                  204,059,398

                                                                                         RMB common shares                115,260,600
Robert Bosch Co., Ltd                                                      142,841,400 Domestically listed foreign
                                                                                                                           27,580,800
                                                                                         shares

Hong Kong Securities Clearing Company Ltd. (HKSCC)                          25,932,279 RMB common shares                   25,932,279

Kangjian Assets Management Company –Client’s fund                         15,409,392 RMB common shares                   15,409,392

BBH BOS S/A FIDELITY FD - CHINA FOCUS FD                                    14,228,423 Foreign listed foreign shares       14,228,423
Central Huijin Assets Management Co., Ltd.                                  12,811,200 RMB common shares                   12,811,200
Puxin Investment Company- Client’s fund                                    11,919,831 RMB common shares                   11,919,831

                                                                                         Domestically listed foreign
RBC EMERGING MARKETS EQUITY FUND                                             9,005,335                                      9,005,335
                                                                                         shares
CCB- Fullgoal Tianbo Innovation Theme Mix Securities
                                                                             6,551,359 RMB common shares                    6,551,359
Investment Fund

China Securities Finance Corp.                                               5,426,261 RMB common shares                    5,426,261

                                                               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 do
between top 10 un-restrict common shareholders and top 10      not belong to the consistent actionist regulated by the Management
common shareholders                                            Measure of Information Disclosure on Change of Shareholding for
                                                               Listed Company.

Explanation on top 10 shareholders involving margin
                                                               Not applicable
business (if applicable)


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                                                                      无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


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.


IV. 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.




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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 2016 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 2016




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                                         Section IX Corporate Bond

Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when
semi-annual report approved for released or fail to cash in full on due
□Yes   √No




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                                         Section X. 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 statement

Unit in note of financial statement refers to CNY: RMB (Yuan)


1. Consolidated balance sheet

Prepared by Weifu High-Technology Group Co., Ltd.
                                                            2017-06-30
                                                                                                                   In RMB

                                     Item                                       Closing balance       Opening balance

Current assets:

     Monetary funds                                                                1,846,838,076.57      3,969,674,068.56

     Settlement provisions

     Capital lent

     Financial assets measured by fair value and with variation reckoned into
current gains/losses

     Derivative financial assets

     Notes receivable                                                              1,217,598,956.03      1,279,844,777.10

     Accounts receivable                                                           2,028,796,617.26      1,324,703,543.17

     Account paid in advance                                                         100,690,123.80         74,030,486.38

     Insurance receivable

     Reinsurance receivables

     Contract reserve of reinsurance receivable

     Interest receivable                                                               1,900,454.93          2,487,527.65

     Dividends receivable                                                            541,265,728.20

     Other receivables                                                                 8,377,418.93          5,907,873.92

     Purchase restituted finance asset

     Inventories                                                                   1,134,167,227.47      1,349,444,535.25



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     Divided into assets held for sale

     Non-current assets due within one year

     Other current assets                                                          4,674,236,184.08      1,914,225,879.67

Total current assets                                                              11,553,870,787.27      9,920,318,691.70

Non-current assets:

     Loans and payments on behalf

     Available-for-sale financial assets                                             629,032,469.00        695,235,461.00

     Held-to-maturity investments

     Long-term receivables

     Long-term equity investments                                                  3,381,642,657.07      3,421,030,760.78

     Investment property                                                              24,344,196.10         25,113,472.54

     Fixed assets                                                                  2,443,323,924.72      2,447,840,035.34

     Construction in progress                                                        137,789,424.89         90,621,102.20

     Project materials

      Disposal of fixed assets

      Productive biological assets

     Oil and natural gas assets

     Intangible assets                                                               339,561,892.54        347,206,518.76

     Research and development costs

      Goodwill                                                                         1,784,086.79          1,784,086.79

     Long-term deferred expenses                                                       6,431,302.70          1,753,413.10

     Deferred income tax assets                                                      199,683,064.44        210,196,714.45

     Other non-current assets                                                        148,158,953.25        102,671,641.12

Total non-current assets                                                           7,311,751,971.50      7,343,453,206.08

Total assets                                                                      18,865,622,758.77     17,263,771,897.78

Current liabilities:

     Short-term borrowings                                                           185,000,000.00        150,000,000.00

     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                                                                   659,009,237.47        837,045,962.78




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     Accounts payable                                            2,264,365,529.46      1,729,250,355.93

     Accounts received in advance                                   47,118,373.32         42,983,352.84

     Selling financial asset of repurchase

     Commission charge and commission payable

     Wage payable                                                  144,061,569.60        230,672,269.58

     Taxes payable                                                  78,596,242.59         62,634,922.88

     Interest payable                                                 313,792.16            437,938.27

     Dividend payable                                              605,370,342.00

     Other accounts payable                                         51,678,206.75         96,514,485.59

     Reinsurance payables

     Insurance contract reserve

     Security trading of agency

     Security sales of agency

     Divided into liability held for sale

     Non-current liabilities due within one year

     Other current liabilities

Total current liabilities                                        4,035,513,293.35      3,149,539,287.87

Non-current liabilities:

     Long-term loans                                                57,500,000.00         60,000,000.00

     Bonds payable

        Including: preferred stock

                Perpetual capital securities

     Long-term account payable                                      17,835,454.00         17,835,454.00

     Long-term wages payable                                       137,198,200.42        112,815,704.51

     Special accounts payable                                       18,265,082.11         18,265,082.11

     Accrual liabilities

     Deferred income                                               469,575,838.60        479,211,845.88

     Deferred income tax liabilities                                20,595,578.89         27,674,132.89

     Other non-current liabilities

Total non-current liabilities                                      720,970,154.02        715,802,219.39

Total liabilities                                                4,756,483,447.37      3,865,341,507.26

Owners’ equity:

     Share capital                                               1,008,950,570.00      1,008,950,570.00

     Other equity instrument



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       Including: preferred stock

                  Perpetual capital securities

     Capital reserve                                                                3,417,841,402.89      3,417,841,402.89

     Less: Inventory shares

     Other comprehensive income                                                      104,925,615.01         144,722,827.51

     Reasonable reserve                                                                   615,338.30             89,005.19

     Surplus reserve                                                                 510,100,496.00         510,100,496.00

     Provision of general risk

     Retained profit                                                                8,566,191,678.44      7,845,639,990.88

Total owners’ equity attributable to parent company                               13,608,625,100.64     12,927,344,292.47

     Minority interests                                                              500,514,210.76         471,086,098.05

Total owners’ equity                                                              14,109,139,311.40     13,398,430,390.52

Total liabilities and owner’s equity                                              18,865,622,758.77     17,263,771,897.78


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


2. Balance Sheet of Parent Company

                                                                                                                   In RMB

                                        Item                                     Closing balance       Opening balance

Current assets:

     Monetary funds                                                                 1,226,392,556.23      2,143,816,269.01

     Financial assets measured by fair value and with variation reckoned into
current gains/losses

     Derivative financial assets

     Notes receivable                                                                 388,160,459.87        216,516,806.40

     Accounts receivable                                                              875,605,550.39        611,594,846.92

     Account paid in advance                                                           59,998,299.18         34,805,212.41

     Interest receivable

     Dividends receivable                                                             526,564,394.61

     Other receivables                                                                 87,552,518.74         46,349,571.47

     Inventories                                                                      225,387,663.55        202,839,001.66

     Divided into assets held for sale

     Non-current assets due within one year

     Other current assets                                                           4,577,381,587.58      1,945,446,935.23



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Total current assets                                                               7,967,043,030.15      5,201,368,643.10

Non-current assets:

     Available-for-sale financial assets                                             553,092,469.00        619,295,461.00

     Held-to-maturity investments

     Long-term receivables

     Long-term equity investments                                                  4,504,635,093.52      4,591,005,651.65

     Investment property

     Fixed assets                                                                  1,386,526,889.03      1,438,192,853.38

     Construction in progress                                                         72,035,061.68         36,142,328.79

     Project materials

      Disposal of fixed assets

      Productive biological assets

     Oil and natural gas assets

     Intangible assets                                                               187,844,597.17        192,448,576.72

     Research and development costs

      Goodwill

     Long-term deferred expenses

     Deferred income tax assets                                                       90,158,850.98         96,943,564.13

     Other non-current assets                                                         49,082,459.12         31,747,194.01

Total non-current assets                                                           6,843,375,420.50      7,005,775,629.68

Total assets                                                                      14,810,418,450.65     12,207,144,272.78

Current liabilities:

     Short-term borrowings                                                            80,000,000.00         80,000,000.00

     Financial liability measured by fair value and with variation reckoned
into current gains/losses

     Derivative financial liability

     Notes payable                                                                   228,579,008.37        171,760,000.00

     Accounts payable                                                                746,193,720.36        595,558,830.63

     Accounts received in advance                                                      5,756,895.86           732,252.09

     Wage payable                                                                     63,640,989.73        119,456,739.08

     Taxes payable                                                                    35,050,434.52         28,055,629.04

     Interest payable                                                                     84,400.00             88,933.33

     Dividend payable                                                                605,370,342.00

     Other accounts payable                                                          549,233,174.62         14,190,407.16




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     Divided into liability held for sale

     Non-current liabilities due within one year

     Other current liabilities

Total current liabilities                                         2,313,908,965.46     1,009,842,791.33

Non-current liabilities:

     Long-term loans

     Bonds payable

        Including: preferred stock

                Perpetual capital securities

     Long-term account payable

     Long-term wages payable                                       125,622,495.91        101,240,000.00

     Special accounts payable

     Accrual liabilities

     Deferred income                                               419,080,069.39        432,695,399.27

     Deferred income tax liabilities                                18,516,284.99         25,539,322.49

     Other non-current liabilities

Total non-current liabilities                                      563,218,850.29        559,474,721.76

Total liabilities                                                 2,877,127,815.75     1,569,317,513.09

Owners’ equity:

     Share capital                                                1,008,950,570.00     1,008,950,570.00

     Other equity instrument

        Including: preferred stock

                Perpetual capital securities

     Capital reserve                                              3,448,408,786.39     3,448,408,786.39

     Less: Inventory shares

     Other comprehensive income                                    104,925,615.01        144,722,827.51

     Reasonable reserve

     Surplus reserve                                               510,100,496.00        510,100,496.00

     Retained profit                                              6,860,905,167.50     5,525,644,079.79

Total owners’ equity                                            11,933,290,634.90    10,637,826,759.69

Total liabilities and owner’s equity                           14,810,418,450.65     12,207,144,272.78




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3. Consolidated Profit Statement

                                                                                                                  In RMB

                                               Item                                   This period        Last period

I. Total operating income                                                             4,728,125,599.02   3,366,476,452.49

Including: Operating income                                                           4,728,125,599.02   3,366,476,452.49

     Interest income

     Insurance gained

     Commission charge and commission income

II. Total operating cost                                                              4,235,672,796.49   3,051,777,186.87

Including: Operating cost                                                             3,736,290,938.86   2,633,281,983.25

     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                                                       37,862,282.48      16,235,346.56

         Sales expenses                                                                 71,559,262.66      92,799,369.25

           Administration expenses                                                     399,568,734.73     314,596,534.92

           Financial expenses                                                            1,688,051.32       -2,909,491.43

           Losses of devaluation of asset                                               -11,296,473.56      -2,226,555.68

  Add: Changing income of fair value(Loss is listed with “-”)

        Investment income (Loss is listed with “-”)                                  955,437,915.36     711,952,563.17

        Including: Investment income on affiliated company and joint venture           833,565,520.64     593,102,462.02

        Exchange income (Loss is listed with “-”)

        Other income                                                                    15,608,007.28

III. Operating profit (Loss is listed with “-”)                                     1,463,498,725.17   1,026,651,828.79

  Add: Non-operating income                                                              3,019,773.33      18,747,382.73

        Including: Disposal gains of non-current asset                                     235,193.85         724,772.79

  Less: Non-operating expense                                                             4,125,199.11      2,335,822.02

        Including: Disposal loss of non-current asset                                    1,536,014.17       1,461,331.21

IV. Total Profit (Loss is listed with “-”)                                          1,462,393,299.39   1,043,063,389.50

  Less: Income tax expense                                                              94,025,933.36      68,314,427.18


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                                                                          无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


V. Net profit (Net loss is listed with “-”)                                                1,368,367,366.03     974,748,962.32

    Net profit attributable to owner’s of parent company                                    1,325,922,029.56     943,568,535.72

        Minority shareholders’ gains and losses                                                42,445,336.47      31,180,426.60

VI. Net after-tax of other comprehensive income                                                -39,797,212.50     -56,207,588.74

  Net after-tax of other comprehensive income attributable to owners of parent
                                                                                               -39,797,212.50     -56,207,588.74
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 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 subsequently to
                                                                                               -39,797,212.50     -56,207,588.74
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
                                                                                               -39,797,212.50     -56,207,588.74
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                                                              1,328,570,153.53     918,541,373.58

        Total comprehensive income attributable to owners of parent Company                  1,286,124,817.06     887,360,946.98

        Total comprehensive income attributable to minority shareholders                        42,445,336.47      31,180,426.60

VIII. Earnings per share:

        (i) Basic earnings per share                                                                     1.31               0.94

        (ii) Diluted earnings per share                                                                  1.31               0.94

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




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                                                                          无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


4. Profit Statement of Parent Company

                                                                                                                        In RMB

                                                Item                                        This period        Last period

I. Operating income                                                                         1,626,480,415.71    984,069,968.80

        Less: Operating cost                                                                1,268,622,661.58    808,344,072.54

             Operating tax and extras                                                         14,826,758.76       3,888,794.42

             Sales expenses                                                                   13,791,093.39      20,239,016.93

             Administration expenses                                                         184,157,736.45     126,327,383.34

             Financial expenses                                                                 -346,977.87      -6,167,195.97

             Losses of devaluation of asset                                                       48,394.70          70,937.80

        Add: Changing income of fair value(Loss is listed with “-”)

             Investment income (Loss is listed with “-”)                                  1,830,767,022.75    654,795,209.22

             Including: Investment income on affiliated company and joint venture            767,309,765.64     537,117,080.67

             Other income                                                                     13,915,329.88

II. Operating profit (Loss is listed with “-”)                                            1,990,063,101.33    686,162,168.96

        Add: Non-operating income                                                                289,904.06      14,621,604.78

             Including: Disposal gains of non-current asset                                       45,644.41         461,816.10

        Less: Non-operating expense                                                            2,277,466.80         808,445.02

             Including: Disposal loss of non-current asset                                     1,248,544.33         591,980.61

III. Total Profit (Loss is listed with “-”)                                               1,988,075,538.59    699,975,328.72

        Less: Income tax expense                                                              47,444,108.88      20,758,281.95

IV. Net profit (Net loss is listed with “-”)                                              1,940,631,429.71    679,217,046.77

V. Net after-tax of other comprehensive income                                                -39,797,212.50    -56,207,588.74

        (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 subsequently
                                                                                              -39,797,212.50    -56,207,588.74
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
                                                                                              -39,797,212.50    -56,207,588.74
financial assets




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                                                                         无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


     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                                                             1,900,834,217.21    623,009,458.03

VII. Earnings per share:

      (i) Basic earnings per share

      (ii) Diluted earnings per share


5. Consolidated Cash Flow Statement

                                                                                                                       In RMB

                                         Item                                              This period        Last period

I. Cash flows arising from operating activities:

     Cash received from selling commodities and providing labor services                   3,437,449,626.28   2,605,746,532.90

      Net increase of customer deposit and interbank deposit

     Net increase of loan from central bank

     Net increase of capital borrowed from other financial institution

     Cash received from original insurance contract fee

     Net cash received from reinsurance business

     Net increase of insured savings and investment

     Net increase of amount from disposal financial assets that measured by fair
value and with variation reckoned into current gains/losses

     Cash received from interest, commission charge and commission

     Net increase of capital borrowed

     Net increase of returned business capital

     Write-back of tax received                                                              22,168,009.92      15,501,767.26

     Other cash received concerning operating activities                                     19,713,087.22      17,733,683.49

Subtotal of cash inflow arising from operating activities                                  3,479,330,723.42   2,638,981,983.65

     Cash paid for purchasing commodities and receiving labor service                      2,032,254,137.91   1,589,143,730.33

     Net increase of customer loans and advances

      Net increase of deposits in central bank and interbank

     Cash paid for original insurance contract compensation



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                                                                         无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


      Cash paid for interest, commission charge and commission

     Cash paid for bonus of guarantee slip

     Cash paid to/for staff and workers                                                     614,817,453.84      492,300,006.76

     Taxes paid                                                                             325,770,301.21      223,331,049.84

     Other cash paid concerning operating activities                                        154,087,588.94      140,666,181.77

Subtotal of cash outflow arising from operating activities                                 3,126,929,481.90   2,445,440,968.70

Net cash flows arising from operating activities                                            352,401,241.52      193,541,014.95

II. Cash flows arising from investing activities:

     Cash received from recovering investment                                              3,091,512,477.03   3,452,670,890.00

     Cash received from investment income                                                   430,252,079.05      727,664,592.58

     Net cash received from disposal of fixed, intangible and other long-term assets         53,235,402.65       49,158,379.90

      Net cash received from disposal of subsidiaries and other units

     Other cash received concerning investing activities                                                         30,296,467.00

Subtotal of cash inflow from investing activities                                          3,574,999,958.73   4,259,790,329.48

     Cash paid for purchasing fixed, intangible and other long-term assets                  212,687,557.71      226,897,693.98

     Cash paid for investment                                                              5,925,993,243.66   6,110,900,000.00

     Net increase of mortgaged loans

      Net cash received from subsidiaries and other units

     Other cash paid concerning investing activities                                                                 57,116.41

Subtotal of cash outflow from investing activities                                         6,138,680,801.37   6,337,854,810.39

Net cash flows arising from investing activities                                          -2,563,680,842.64   -2,078,064,480.91

III. Cash flows arising from financing activities

     Cash received from absorbing investment

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

     Cash received from loans                                                               185,000,000.00      250,000,000.00

     Cash received from issuing bonds

     Other cash received concerning financing activities

Subtotal of cash inflow from financing activities                                           185,000,000.00      250,000,000.00

     Cash paid for settling debts                                                           152,500,000.00      347,000,000.00

     Cash paid for dividend and profit distributing or interest paying                       17,164,736.59        5,277,671.94

     Including: Dividend and profit of minority shareholder paid by subsidiaries             11,958,920.00

     Other cash paid concerning financing activities                                           1,049,711.28

Subtotal of cash outflow from financing activities                                          170,714,447.87      352,277,671.94




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                                                                        无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


Net cash flows arising from financing activities                                            14,285,552.13     -102,277,671.94

IV. Influence on cash and cash equivalents due to fluctuation in exchange rate               -3,018,810.88

V. Net increase of cash and cash equivalents                                             -2,200,012,859.87   -1,986,801,137.90

     Add: Balance of cash and cash equivalents at the period -begin                       3,795,223,678.11   3,040,315,198.85

VI. Balance of cash and cash equivalents at the period -end                               1,595,210,818.24   1,053,514,060.95


6. Cash Flow Statement of Parent Company

                                                                                                                       In RMB

                                          Item                                            This period         Last period

I. Cash flows arising from operating activities:

     Cash received from selling commodities and providing labor services                  1,138,848,252.21     793,334,844.25

     Write-back of tax received

     Other cash received concerning operating activities                                   505,652,991.97    1,103,292,123.70

Subtotal of cash inflow arising from operating activities                                 1,644,501,244.18   1,896,626,967.95

     Cash paid for purchasing commodities and receiving labor service                      707,951,478.67      439,155,764.29

     Cash paid to/for staff and workers                                                    277,978,923.53      196,948,347.05

     Taxes paid                                                                            133,461,523.26       53,074,955.83

     Other cash paid concerning operating activities                                       168,294,750.99       33,496,708.65

Subtotal of cash outflow arising from operating activities                                1,287,686,676.45     722,675,775.82

Net cash flows arising from operating activities                                           356,814,567.73    1,173,951,192.13

II. Cash flows arising from investing activities:

     Cash received from recovering investment                                             2,974,601,492.00   3,325,000,000.00

     Cash received from investment income                                                 1,365,386,425.45     698,900,348.97

     Net cash received from disposal of fixed, intangible and other long-term assets        52,252,940.94       48,066,222.19

      Net cash received from disposal of subsidiaries and other units                        2,410,502.57

     Other cash received concerning investing activities                                                        25,301,600.00

Subtotal of cash inflow from investing activities                                         4,394,651,360.96   4,097,268,171.16

     Cash paid for purchasing fixed, intangible and other long-term assets                  61,095,071.88      134,171,768.94

     Cash paid for investment                                                             5,617,929,258.63   6,155,900,000.00

      Net cash received from subsidiaries and other units

     Other cash paid concerning investing activities                                                                57,116.41

Subtotal of cash outflow from investing activities                                        5,679,024,330.51   6,290,128,885.35

Net cash flows arising from investing activities                                         -1,284,372,969.55   -2,192,860,714.19

III. Cash flows arising from financing activities



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                                                                         无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


     Cash received from absorbing investment

     Cash received from loans                                                                80,000,000.00      180,000,000.00

     Cash received from issuing bonds

     Other cash received concerning financing activities

Subtotal of cash inflow from financing activities                                            80,000,000.00      180,000,000.00

     Cash paid for settling debts                                                            80,000,000.00      230,000,000.00

     Cash paid for dividend and profit distributing or interest paying                        1,637,133.32        3,489,380.28

     Other cash paid concerning financing activities

Subtotal of cash outflow from financing activities                                           81,637,133.32      233,489,380.28

Net cash flows arising from financing activities                                              -1,637,133.32     -53,489,380.28

IV. Influence on cash and cash equivalents due to fluctuation in exchange rate                -3,018,810.88

V. Net increase of cash and cash equivalents                                               -932,214,346.02    -1,072,398,902.34

     Add: Balance of cash and cash equivalents at the period -begin                        2,143,377,059.99   1,734,531,427.66

VI. Balance of cash and cash equivalents at the period -end                                1,211,162,713.97     662,132,525.32




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                                                                                                                                  无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


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

This period
                                                                                                                                                                                    In RMB

                                                                                                       This period

                                                                   Owners’ equity attributable to parent company
                                                Other
                                                equity
                                             instrument
                                                  Pe                          Less
                                                  rp                                                                           Prov
         Item                                                                   :                                                                          Minority
                                                 etu                                                                           ision
                                             Pr                               Inve     Other                                                                              Total owners’ equity
                                                  al                                                Reasonable                   of                        interests
                           Share capital     efe           Capital reserve    ntor comprehensive               Surplus reserve          Retained profit
                                                  ca Ot                                              reserve                   gene
                                             rre                                y     income
                                                  pit he                                                                         ral
                                              d                               shar
                                                  al r                                                                          risk
                                             sto                               es
                                                  se
                                             ck
                                                  cu
                                                 riti
                                                  es
I. Balance at the end
                          1,008,950,570.00                 3,417,841,402.89        144,722,827.51      89,005.19 510,100,496.00         7,845,639,990.88 471,086,098.05    13,398,430,390.52
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
                          1,008,950,570.00                 3,417,841,402.89        144,722,827.51      89,005.19 510,100,496.00         7,845,639,990.88 471,086,098.05    13,398,430,390.52
beginning of this year


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                                                          无锡威孚高科技集团股份有限公司 2017 年半年度报告全文

III. Increase/ Decrease
in this year (Decrease      -39,797,212.50   526,333.11          720,551,687.56    29,428,112.71     710,708,920.88
is listed with “-”)

 (i) Total
comprehensive               -39,797,212.50                      1,325,922,029.56   42,445,336.47    1,328,570,153.53
income

 (ii) Owners’ devoted
                                                                                    -1,039,238.28      -1,039,238.28
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                                                                            -1,039,238.28      -1,039,238.28

(III) Profit distribution                                        -605,370,342.00   -11,958,920.00   -617,329,262.00

1. Withdrawal of
surplus reserves

2. Withdrawal of
general risk provisions

3. Distribution for
owners (or                                                       -605,370,342.00   -11,958,920.00   -617,329,262.00
shareholders)

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                                                                                                             无锡威孚高科技集团股份有限公司 2017 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
                                                                                 526,333.11                                             -19,065.48         507,267.63
reserve

1. Withdrawal in the
                                                                                8,969,586.03                                          1,184,584.27      10,154,170.30
report period

2. Usage in the report
                                                                                8,443,252.92                                          1,203,649.75        9,646,902.67
period

(VI)Others

IV. Balance at the end
                         1,008,950,570.00   3,417,841,402.89   104,925,615.01    615,338.30 510,100,496.00         8,566,191,678.44 500,514,210.76   14,109,139,311.40
of the report period




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                                                                                                                                 无锡威孚高科技集团股份有限公司 2017 年半年度报告全文
Last period
                                                                                                                                                                                      In RMB

                                                                                                    Last period

                                                                Owners’ equity attributable to parent company
                                                Other
                                                equity
                                             instrument
                                                  Pe
                                                                        Les
                                                  rpe                                                                            Prov
          Item                                                           s:                                                                                  Minority
                                                  tua                                                                            ision
                                                                        Inv     Other                                                                                       Total owners’ equity
                                             Pre l                                              Reasonable                         of                        interests
                           Share capital                Capital reserve ent comprehensive                        Surplus reserve         Retained profit
                                             fer ca Ot                                           reserve                         gene
                                                                        ory    income
                                             red pit he                                                                            ral
                                                                        shar
                                             sto al r                                                                             risk
                                                                         es
                                              ck sec
                                                  uri
                                                  tie
                                                   s
I. Balance at the end
                          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
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
                          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
beginning of this year

III. Increase/ Decrease
                                                          20,906,174.92       -43,713,544.99     -825,642.90                             1,167,749,032.05   41,037,210.98      1,185,153,230.06
in this year (Decrease

                                                                                                                                                                                             47
                                                                       无锡威孚高科技集团股份有限公司 2017 年半年度报告全文
is listed with “-”)

 (i) Total
comprehensive                            -43,713,544.99                      1,672,224,317.05   53,780,463.47    1,682,291,235.53
income

 (ii) Owners’ devoted
                         20,906,174.92                    -12,418.48                            12,375,177.63      33,268,934.07
and decreased capital

1.Common shares
invested by                                                                                     12,800,000.00      12,800,000.00
shareholders

2. Capital invested by
holders of other
equity instruments

3. Amount reckoned
into owners equity
with share-based
payment

4. Other                 20,906,174.92                    -12,418.48                              -424,822.37      20,468,934.07

(III) Profit
                                                                              -504,475,285.00   -24,803,800.00   -529,279,085.00
distribution

1. Withdrawal of
surplus reserves

2. Withdrawal of
general risk
provisions

3. Distribution for
owners (or                                                                    -504,475,285.00   -24,803,800.00   -529,279,085.00
shareholders)

                                                                                                                              48
                                                                                                              无锡威孚高科技集团股份有限公司 2017 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
                                                                                  -813,224.42                                           -314,630.12       -1,127,854.54
reserve

1. Withdrawal in the
                                                                                16,421,979.63                                          2,104,124.88      18,526,104.51
report period

2. Usage in the report
                                                                                17,235,204.05                                          2,418,755.00      19,653,959.05
period

(VI)Others

IV. Balance at the end
                         1,008,950,570.00   3,417,841,402.89   144,722,827.51      89,005.19 510,100,496.00         7,845,639,990.88 471,086,098.05   13,398,430,390.52
of the report period




                                                                                                                                                                    49
                                                                                                                                    无锡威孚高科技集团股份有限公司 2017 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
                                                                                                    Less
                                                                 instrument
                                                                                                     :
                                                                    Perp                            Inve      Other
                    Item                                       Pref                                                         Reasonable
                                                                    etual
                                             Share capital     erre              Capital reserve    ntor comprehensive                   Surplus reserve   Retained profit    Total owners’ equity
                                                                    capit Othe                                                 reserve
                                                                 d
                                                                      al   r                         y        income
                                                               stoc
                                                                    secu
                                                                 k                                  shar
                                                                    rities
                                                                                                     es

I. Balance at the end of the last year      1,008,950,570.00                     3,448,408,786.39          144,722,827.51                 510,100,496.00 5,525,644,079.79      10,637,826,759.69

  Add: Changes of accounting policy

  Error correction of the last period

  Other

II. Balance at the beginning of this year   1,008,950,570.00                     3,448,408,786.39          144,722,827.51                 510,100,496.00 5,525,644,079.79      10,637,826,759.69

III. Increase/ Decrease in this year
                                                                                                           -39,797,212.50                                  1,335,261,087.71      1,295,463,875.21
(Decrease is listed with “-”)

 (i) Total comprehensive income                                                                            -39,797,212.50                                  1,940,631,429.71      1,900,834,217.21

 (ii) Owners’ devoted and decreased
capital

1.Common shares invested by
shareholders

2. Capital invested by holders of other
equity instruments


                                                                                                                                                                                               50
                                                                                                         无锡威孚高科技集团股份有限公司 2017 年半年度报告全文

3. Amount reckoned into owners equity
with share-based payment

4. Other

(III) Profit distribution                                                                                                        -605,370,342.00     -605,370,342.00

1. Withdrawal of surplus reserves

2. Distribution for owners (or
                                                                                                                                 -605,370,342.00     -605,370,342.00
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                                                                1,968,399.95                                          1,968,399.95

2. Usage in the report period                                                                     1,968,399.95                                          1,968,399.95

(VI)Others

IV. Balance at the end of the report
                                           1,008,950,570.00   3,448,408,786.39   104,925,615.01                  510,100,496.00 6,860,905,167.50   11,933,290,634.90
period




                                                                                                                                                                 51
                                                                                                                                  无锡威孚高科技集团股份有限公司 2017 年半年度报告全文
Last period
                                                                                                                                                                                      In RMB

                                                                                                               Last period
                                                              Other equity
                                                                                                  Less
                                                               instrument
                                                                                                   :
                                                                  Perp                            Inve      Other
                  Item                                       Pref                                                         Reasonable
                                                                  etual
                                           Share capital     erre              Capital reserve    ntor comprehensive                   Surplus reserve   Retained profit    Total owners’ equity
                                                                  capit Othe                                                 reserve
                                                               d
                                                                    al   r                         y        income
                                                             stoc
                                                                  secu
                                                               k                                  shar
                                                                  rities
                                                                                                   es

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
                                                                                 20,468,934.07           -43,713,544.99                                   818,185,433.90         794,940,822.98
(Decrease is listed with “-”)

 (i) Total comprehensive income                                                                          -43,713,544.99                                  1,322,660,718.90      1,278,947,173.91

 (ii) Owners’ devoted and decreased
                                                                                 20,468,934.07                                                                                    20,468,934.07
capital

1.Common shares invested by
shareholders

2. Capital invested by holders of other
equity instruments

3. Amount reckoned into owners

                                                                                                                                                                                             52
                                                                                                     无锡威孚高科技集团股份有限公司 2017 年半年度报告全文
equity with share-based payment

4. Other                                                    20,468,934.07                                                                         20,468,934.07

(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                                                            3,396,256.71                                          3,396,256.71

2. Usage in the report period                                                                 3,396,256.71                                          3,396,256.71

(VI)Others
IV. Balance at the end of the report
                                       1,008,950,570.00   3,448,408,786.39   144,722,827.51                  510,100,496.00 5,525,644,079.79   10,637,826,759.69
period




                                                                                                                                                             53
I I I . Basic information of the Company

1. Historical origin of the Company
By the approval of STGS (1992) No. 130 issued by Jiangsu Economic Restructuring Committee, Weifu
High-Technology Group Co., Ltd. (hereinafter referred to “the Company” or “Company”) was established as a
company of limited liability with funds raised from targeted sources, and registered at Wuxi Administration for
Industry & Commerce in October 1992. The original share capital of the Company totaled 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
                                                            无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


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
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


                                                                                                                55
                                                                无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


 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, AC 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 parent company: technological development and consultancy service of machinery industry,
 manufacture of engine fuel oil system products, fuel oil system testers and equipment; manufacture of automotive
 electronics components and automotive electrical appliance components; manufacture of non-standard equipment
 and non-standard cutter; manufacture of after treatment system; sales of energy-oriented machinery, hardware &
 electric materials, chemical products and raw materials (other than chemical dangerous). Auto spare parts, autos
 (other than autos under-9 seats); repair of engine; lease of company-owned house; import and export business in
 respect of diversified commodities and technologies (other than those commodities and technologies limited or
 forbidden by the State for import and export) by self-operation and works as agent for such business.
 Major subsidiaries respectively activate in production and sales of engine accessories, auto spare parts, mufflers,
 and purifiers.


 4. Relevant party offering approval reporting of financial statements and date thereof
 Financial statements of the Company were approved by the Board of Directors for reporting dated 23 August
 2017.


 5. Scope of consolidate financial statement
                                                  Shareholding ratio (%) Proportion Registered                     Statement
                                  Shortname of                                     capital (in 10
         Name of subsidiary                                               of votes                 Business scope consolidate
                                   subsidiary     Directly   Indirectly              thousand
                                                                            (%)                                      (Y/N)
                                                                                       Yuan)
                                                                                                  Internal-combust
Nanjing Weifu Jinning Co., Ltd.   Weifu Jinning    80.00          --       80.00    34,628.70 ion engine and           Y
                                                                                                     accessories


                                                                                                                          56
                                                                    无锡威孚高科技集团股份有限公司 2017 年半年度报告全文


Wuxi Weifu Leader         Catalytic                                                                 Purifier and
                                         Weifu Leader      94.81     --      94.81    50,259.63                      Y
Converter Co., Ltd.                                                                                   muffler
                                                                                                Internal-combust
Weifu Mashan Pump Glib Co., Ltd.        Weifu Mashan      100.00     --      100.00    16,500    ion engine and      Y
                                                                                                   accessories
                                                                                                Internal-combust
Wuxi Weifu Chang’an Co., Ltd.          Weifu Chang’an   100.00     --      100.00   21,000.00 ion engine and       Y
                                                                                                   accessories
                                                                                                Internal-combust
Wuxi Weifu Automotive Diesel Weifu Diesel
                                                          100.00     --      100.00    30,000    ion engine and      Y
System Co., Ltd.               System
                                                                                                   accessories
                                            Weifu
Wuxi Weifu International Trade Co.                                                                 International
                                         International    100.00     --      100.00     3,000                        Y
Ltd.                                                                                                   trade
                                             Trade
                                                                                                  Internal-combust
Wuxi Weifu ITM Supercharging
                                          Weifu ITM       100.00     --      100.00    16,000      ion engine and    Y
Technique Co., Ltd.
                                                                                                     accessories
                                                                                                  Internal-combust
Wuxi Weifu Schmidt Power System
                                Weifu Schmidt              66.00     --      66.00      4,800      ion engine and    Y
Spare Parts Co., Ltd.
                                                                                                     accessories
                                                                                                  Internal-combust
Ningbo Weifu Tianli Supercharging
                                         Weifu Tianli     47.9436    --     47.9436    11,136      ion engine and    Y
Technique Co., Ltd.
                                                                                                     accessories
                                                                                                  Internal-combust
Anhui Weifu Tianshi Machinery Co.,
                                   Weifu Tianshi           52.00     --      52.00      1,000      ion engine and    Y
Ltd.
                                                                                                     accessories
                                                                                                  Internal-combust
Kunming Xitong Machinery Co.,
                              Kunming Xitong               70.00     --      70.00      400        ion engine and    Y
Ltd.
                                                                                                     accessories
Wuxi     Weifu-Autocam           Fine
                                        Weifu Autocam      51.00     --      51.00    USD1,510       Auto parts      Y
Machinery Co. Ltd.
Wuxi Weifu Leader Catalytic Weifu Leader                                                            Purifier and
                                                            --      60.00    60.00    1,000.00                       Y
Converter (Wuhan) Co., Ltd.  (Wuhan)                                                                  muffler



 (1) The voting rights of Weifu Tianli hold by the Company is not over 50%, however, Weifu Tianli still included
 in the consolidation scope, mainly due to the Company substantially control Weifu Tianli, found more in the “1.
 Equity in subsidiary” in Note IX.

 (2) Subsidiary Kunming Xitong and Weifu Tianshi cancelled respectively dated 16 Feb. 2017 and 14 March 2017;

 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.




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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).

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


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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

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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.


(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


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the "minority interests" item in the consolidated statement of change in equity to reflect the changes of the
minority interests. If the losses of the current period shared by a subsidiary’s minority shareholders exceed the
share that the minority shareholders hold in the subsidiary ownership interest in the beginning of the period, the
balance still charges against the minority interests.
When the control over a subsidiary is ceased due to disposal of a portion of an interest in a subsidiary, the fair
value of the remaining equity interest is re-measured on the date when the control ceased. The difference between
the sum of the consideration received from disposal of equity interest and the fair value of the remaining equity
interest, less the net assets attributable to the company since the acquisition date, is recognized as the investment
income from the loss of control. Other comprehensive income relating to original equity investment in
subsidiaries shall be treated on the same basis as if the relevant assets or liabilities were disposed of by the
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:


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(1) Recognize the assets held solely by the Company, and recognize assets held jointly by the Company in
appropriation to the share of the Company;
(2) Recognize the obligations assumed solely by the Company, and recognize obligations assumed jointly by the
Company in appropriation to the share of the Company;
(3) Recognize revenue from disposal of the share of joint operations of the Company;
(4) Recognize fees solely occurred by Company;
(5) Recognize fees from joint operations in appropriation to the share of the Company.


8. Determining standards for cash and cash equivalent

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


9. Foreign currency business and conversion

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

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transaction dates. The exchange difference arising from the above mentioned translation are recognized in other
comprehensive income and is shown separately under owner’ equity in the balance sheet; such exchange
difference will be reclassified to profit or loss in current year when the foreign operation is disposed according to
the proportion of disposal.
The cash flows of overseas operations are translated at the average exchange rates on the dates of the cash flows.
The effect of exchange rate changes on cash is presented separately in the cash flow statement.


10. Financial instrument

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


(2) Determination of fair values for financial assets and financial liabilities
The fair value refers to the price that will be received when selling an asset or the price to be paid to transfer a
liability in an orderly transaction between market participants on the date of measurement. Financial instruments
exist in an active market. Fair value is determined based on the quoted price in such market. An active market
refers to where pricing is easily and regularly obtained from exchanges, brokers, industrial organizations and price
fixing service organizations, representing the actual price of a market transaction that takes place in a fair deal.
While financial instruments do not exist in an active market, the fair value is determined using valuation
techniques. Valuation technologies include reference to be familiar with situation and prices reached in recent
market transactions entered into by both willing parties, reference to present fair values of similar other financial
instruments, cash flow discounting method and option pricing models.
As for the equity investment of the 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

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forms are listed as follows:

① Transfer of right for collecting cash flow of financial assets to another party;

② Transfer financial assets to another party, while the aforementioned right is retained, with obligation of paying
such cash flow to final collector
When that the Company has transferred almost all risks and remunerations arising from ownership of all or part
financial assets to another party, accordingly, recognition for such entire or part financial assets shall be ceased.
Gains and losses are determined by the received consideration less the carrying value of the transferred financial
assets. Meanwhile, the original accumulated gains or losses of financial assets recognized in the owners’ equity
shall transferred to gains and losses; when all risks and remunerations attached to ownership are retained,
recognition for such entire or part financial assets shall continue, and the consideration received shall be viewed as
financial liabilities.
As for the financial assets which the Company has neither transferred nor retained all risks and remunerations
attached to ownership of such financial assets, while control upon such financial assets still exists, recognition
shall be conducted in light of the degree of its continuous involvement in the transferred financial assets.
Accordingly, relevant liabilities shall be recognized.


(4) Recognition for termination of financial assets and liability
Upon satisfaction of one of the following condition, financial assets will immediately experience discontinued
recognition:
① Right entitled by contract in respect of collection of cash flow from such financial asset terminates.

② Such financial assets have been transferred and meet discontinued recognition condition for financial assets as
regulated by Accounting Standard for Enterprise No.23-Transfer of Financial Assets.
Only when present obligations under financial liability have been released entirely or partly, could cease
recognition of such financial liability or part thereof.



(5) Impairment of financial assets
The Company conducts inspection on carrying values of financial assets, except for transactional financial assets,
as at balance sheet date. If there is objective evidence indicating that impairment has happened to financial assets,
impairment reserve then shall be provided. Financial asset with great amount in single item is subject to separate
impairment test. In case of any objective evidence indicating that impairment has happened to such financial asset,
impairment loss shall be recognized and recorded in current gains and losses. As for the financial assets with no
great amount in single item and those which prove to be not impaired after separate test, the Company will
conduct impairment test on basis of credit portfolio which is determined in light of customers’ credit records and
historical bad debts, so as to recognize impairment loss.
Objective evidence indicating impairment happens to financial assets means the proceedings meeting the three
characteristics: actually occurred subsequent to initial recognition of such financial assets, bring influence over the


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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 is
significant amount                                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     value, carried out impairment test independently and withdrawal the bad debt
bad debt provision                                reserves


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


                                                                                                                     Bad debt
                                                 Combination
                                                                                                                 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 Age analysis
ratio of the receivables of previous years, with same or similar credit portfolio, and combining actual condition method
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%




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3-4 years                                                                        100.00%                                 100.00%

4-5 years                                                                        100.00%                                 100.00%

Over 5 years                                                                      100.00%                                 100.00%

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


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


Reasons for withdrawal single item    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

Does the Company need to comply with the disclosure requirement of the special industry

No

(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

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inventories which result from destroy of inventories, out-of-time of all and part inventories, or sales price
lowering than cost. Inventory impairment provision for stock goods and quantity of raw materials is subject to the
difference between costs of single inventory item over its net realizable value. As for other raw materials with
large quantity and comparatively low unit prices, inventory impairment provision is withdrawn pursuant to
categories.
As for finished goods, commodities and materials available for direct sales, their net realizable values are
determined by their estimated selling prices less estimated sales expenses and relevant taxes. For material
inventories held for purpose of production, their net realizable values are determined by the estimated selling
prices of finished products less estimated costs, estimated sales expenses and relevant taxes accumulated till
completion of production. As for inventories held for implementation of sales contracts or service contracts, their
net realizable values are calculated on the basis of contract prices. In the event that inventories held by a company
exceed order amount as agreed in sales contracts, net realizable values of the surplus part are calculated on the
basis of normal sale price.


(4) Inventory system
Perpetual Inventory System is adopted by the Company and takes a physical inventory.


(5) Amortization of low-value consumables and wrappage
① Low-value consumables

The Company adopts one-off amortization method to amortize the low-value consumables.
② Wrappage

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:


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(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:
① For a long-term equity investment acquired through a business combination involving enterprises under
common control, the initial investment cost of the long-term equity investment shall be the absorbing party’s
share of the carrying amount of the owner’s equity under the consolidated financial statements of the ultimate
controlling party on the date of combination. The difference between the initial cost of the long-term equity
investment and the cash paid, non-cash assets transferred as well as the book value of the debts borne by the
absorbing party shall offset against the capital reserve. If the capital reserve is insufficient to offset, the retained
earnings shall be adjusted. If the consideration of the merger is satisfied by issue of equity securities, the initial
investment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount of
the owner’s equity under the consolidated financial statements of the ultimate controlling party on the date of
combination. With the total face value of the shares issued as share capital, the difference between the initial cost
of the long-term equity investment and total face value of the shares issued shall be used to offset against the
capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. (For business
combination 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).
② For 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,


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

(2) Subsequent measurement on long-term equity investment
① Presented controlling ability on investee, the investment shall use cost method for measurement.
② Long-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


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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
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.
③ Acquisition of minority interest
Upon the preparation of the consolidated financial statements, since acquisition of minority interest increased of
long-term equity investment which was compared to fair value of identifiable net assets recognized which are
measured based on the continuous measurement since the acquisition date (or combination date) of subsidiaries
attributable to the Group calculated according to the proportion of newly acquired shares, the difference of which
recognized as adjusted capital surplus, capital surplus insufficient to set off impairment and adjusted retained
earnings.
④ Disposal of long-term equity investments
In these consolidated financial statements, for disposal of a portion of the long-term equity investments in a
subsidiary without loss of control, the difference between disposal cost and disposal of long-term equity
investments relative to the net assets of the subsidiary is charged to the owners’ equity. If disposal of a portion of
the long-term equity investments in a subsidiary by the parent company results in a change in control, it shall be
accounted for 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


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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.
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


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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
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
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.




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(2) Depreciation methods


            Categories                     Method             Years of depreciation Scrap value rate Yearly depreciation rate

House and Building               Straight-line depreciation   20~35                 5                2.71~4.75

Machinery equipment              Straight-line depreciation   10                    5                9.50

Transportation equipment         Straight-line depreciation   4~5                   5                19.00~23.75

Electronic and other equipment   Straight-line depreciation   3~10                 5                9.50~31.67


(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: ①
Agreed in the lease contract (or made a reasonable judgment according to the correlated conditions on the lease
commencement date), the ownership of lease fixed assets can be transferred to the Company after the expiry of
the lease period; 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 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


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from the special borrowings occupied by the fixed assets that need more than one year (including one year) for
construction, development of investment properties or inventories or from general borrowings, are capitalized and
recorded in relevant assets costs; other borrowing costs are recognized as expenses and recorded in the profit or
loss in the period when they are occurred. Relevant borrowing costs start to be capitalized when all of the
following three conditions are met:
① Capital expenditure has been occurred;

② Borrowing costs have been occurred;

③ Acquisition or construction necessary for the assets to come into an expected usable state has been carried out.


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



(3) Measure of capitalization for borrowing cost
In respect of the special borrowings borrowed for acquisition, construction or production and development of the
assets qualified for capitalization, the amount of interests expenses of the special borrowings actually occurred in
the period less interest income derived from unused borrowings deposited in banks or less investment income
derived from provisional investment, are recognized.
With respect to the general borrowings occupied for acquisition, construction or production and development of
the assets qualified for capitalization, the capitalized interest amount for general borrowings is calculated and
recognized by multiplying a weighted average of the accumulated expenditure on the assets in excess of the
expenditure on the some assets of the special borrowings, by a capitalization rate for general borrowings. The
capitalization rate is determined by calculation of the weighted average interest rate of the general borrowings.


19. Intangible assets

(1) Measurement, use of life and impairment testing

① Measurement of intangible assets
The intangible assets of the Company including land use rights, patented technology and non-patents technology
etc.
The cost of a purchased intangible asset shall be determined by the expenditure actually occurred and other related


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costs.
The cost of an intangible asset contributed by an investor shall be determined in accordance with the value
stipulated in the investment contract or agreement, except where the value stipulated in the contract or agreement
is not fair.
The intangible assets acquired through exchange of non-monetary assets, which is commercial in substance, is
carried at the fair value of the assets exchanged out; for those not commercial in substance, they are carried at the
carrying amount of the assets exchanged out.
The intangible assets acquired through debt reorganization, are recognized at the fair value.

② Amortization methods and time limit for intangible assets:
Land use right of the company had average amortization by the transfer years from the beginning date of transfer
(date of getting land use light); Patented technology, non-patented technology and other intangible assets of the
Company are amortized evenly with the shortest terms among expected useful life, benefit years regulated in the
contract and effective age regulated by the laws. The amortization amount shall count in relevant assets costs and
current gains/losses according to the benefit object.
As for the intangible assets as trademark, with uncertain benefit terms, amortization shall not be carried.
Impairment testing methods and accrual for depreciation reserves for the intangible assets found more in
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


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non-current non-financial assets such as fixed assets, construction in progress, intangible assets with a finite useful
life, investment properties measured at cost, and long-term equity investments in subsidiaries, joint controlled
entities and associates. If there is any evidence indicating that an asset may be impaired, recoverable amount shall
be estimated for impairment test. Goodwill, intangible assets with an indefinite useful life and intangible assets
beyond working conditions will be tested for impairment annually, regardless of whether there is any indication of
impairment.
If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount, the
impairment provision will be made according to the difference and recognized as an impairment loss. The
recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the
future cash flows expected to be derived from the asset. An asset’s fair value is the price in a sale agreement in an
arm’s length transaction. If there is no sale agreement but the asset is traded in an active market, fair value shall be
determined based on the bid price. If there is neither sale agreement nor active market for an asset, fair value shall
be based on the best available information. Costs of disposal are expenses attributable to disposal of the asset,
including legal fee, relevant tax and surcharges, transportation fee and direct expenses incurred to prepare the
asset for its intended sale. The present value of the future cash flows expected to be derived from the asset over
the course of continued use and final disposal is determined as the amount discounted using an appropriately
selected discount rate. Provisions for assets impairment shall be made and recognized for the individual asset. If it
is not possible to estimate the recoverable amount of the individual asset, the Group shall determine the
recoverable amount of the asset group to which the asset belongs. The asset group is the smallest group of assets
capable of generating cash flows independently.
For the purpose of impairment testing, the carrying amount of goodwill presented separately in the financial
statements shall be allocated to the asset groups or group of assets benefiting from synergy of business
combination. If the recoverable amount is less than the carrying amount, the Group shall recognize an impairment
loss. The amount of impairment loss shall first reduce the carrying amount of any goodwill allocated to the asset
group or set of asset groups, and then reduce the carrying amount of other assets (other than goodwill) within the
asset group or set of asset groups, pro rata on the basis of the carrying amount of each asset.
An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period in respect of
the 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.




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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
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,

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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

Does the Company need to comply with the disclosure requirement of the special industry

No

(1) Concrete judging criteria for time of recognized
The major risks and remuneration entitled to the ownership of goods are transferred to buyer; neither 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.

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(2) Recognition of revenue of assets using right alienation
Revenue from use by others of enterprise assets shall be recognized only when the associated economic benefit
can flow into the Company, and the amount of revenue can be measured reliably, revenue measured by the follow:

① Interest income amount: Calculated and determined in accordance with the time that others use the enterprises
cash and the actual interest rate.

② Royalty revenue amount: Calculated and determined in accordance with the charging time and method of the
relevant contract or agreement as agreed.


The basis that the Company confirms the revenue from transferring the right to use assets
Rental income: the revenue realization is confirmed after collecting the rent on the date as agreed in the rental
contract (or agreement). For the rent not received on the date as agreed in the contract or agreement but can be
received, and of which the amount of revenue can be measured reliably can also be recognized as revenue.


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

①The incurred labor costs estimated to be compensated are confirmed to render the service revenue according to
the incurred labor costs, and are carried forward by the equivalent amount.

②The incurred labor costs estimated not to be compensated are reckoned in the current profits or losses, and are
not confirmed to render the service revenue.


25. Government grants

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

(1) Types


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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.
The government subsidy related to the daily activities of the enterprise shall be included in other income or offset
other relevant costs and expenses in accordance with the essence of the economic business, and the government
subsidy unrelated to the daily activities of the enterprise shall be included in the non-operating income and
expenditure.


 (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
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.


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The government subsidy related to the daily activities of the enterprise shall be included in other income or offset
other relevant costs and expenses in accordance with the essence of the economic business, and the government
subsidy unrelated to the daily activities of the enterprise shall be included in the non-operating income and
expenditure.


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

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company shall deduct the expenses from the total rental income, and distribute by the deducted rental costs during
the lease term.

(2) Accounting for financing lease

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


28. Other 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.


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(2) Inventory impairment
According to the inventory accounting policies, the Company measures by the comparison between the cost and
the net realizable value, if the cost is higher than the net realizable value and the old and unsalable inventories, the
Company calculates and withdraws the inventory impairment. The inventory devalues to the net realizable value
by evaluating the inventory’s vendibility and net realizable value. To identify the inventory impairment, the
management needs to obtain the unambiguous evidences, and consider the purpose to hold the inventory, and
judge and estimate the impacts of events after the balance sheet date. The actual results and the differences
between the previously estimated results shall affect the book value of inventory and the provision or return of the
inventory impairment during the period estimated to be changed.

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

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

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



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When the book value of the asset or group of assets exceeds its recoverable amount, i.e. the higher between the net
amount by subtracting the disposal costs from the fair value and the present value of expected future cash flows, it
indicates the impairment.

As for the net amount by subtracting the disposal costs from the fair value, refer to the sales agreement price
similar to the assets in the fair trade or the observable market price, and subtract the incremental costs
determination directly attributable to the disposal of the asset.

When estimating the present value of the future cash flow, the Company needs to make significant judgments to
the output, price, and related operating expenses of the asset (or asset group) and the discount rate used for
calculating the present value. When estimating the recoverable amount, the Company shall adopt all the relevant
information can be obtained, including the prediction related to the output, price, and related operating expenses
based on the reasonable and supportable assumptions.

The Company tests whether its business reputation decreases in value every year, which requires to estimating the
present value of the asset group allocated with goodwill or the future cash flow combined by the asset group.
When estimating the present value of the future cash flow, the Company needs to estimate the future cash flows
generated by the asset group or the combination of asset group, and select the proper discount rate to determine the
present value of the future cash flows.

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

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

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



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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

VI. Taxation

1. Major taxes and tax rates


                  Tax                           Basis                                   Tax rate

                                                         17%, 11%、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”

City maintaining & construction tax Turnover tax payable 7%

Operation 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%




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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.

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

VII. Notes to major items in consolidated financial statements

1. Monetary capital

                                                                                                        In RMB

                      Item                            Closing balance                 Opening balance

Cash on hand                                                        555,497.42                      776,872.53

Cash in bank                                                  1,740,566,305.85                3,893,357,790.61



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Other monetary fund                                                             105,716,273.30                            75,539,405.42

Total                                                                          1,846,838,076.57                       3,969,674,068.56

Other explanation

                       Item                                            2017-06-30                              2016-12-31
Bank acceptance bill, L/C and other collateral                                  105,716,273.30                            75,539,405.42



2. Note receivables

(1) Classification of notes receivable

                                                                                                                                In RMB

                    Item                                    Closing balance                              Opening balance

Bank acceptance bill                                                     1,065,807,104.55                             1,150,084,383.06

Commercial acceptance bill                                                 151,791,851.48                                129,760,394.04

Total                                                                    1,217,598,956.03                             1,279,844,777.10


(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                                                                                                      47,896,098.81

Total                                                                                                                     47,896,098.81


(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                                                       641,309,775.02

Total                                                                      641,309,775.02


(4) Notes transfer to account receivable due for failure implementation by drawer at period-end: Nil

3. Accounts receivable

(1) Accounts receivable by category:

                                                                                                                                In RMB
                                          Closing balance                                           Opening balance
                           Book balance          Bad debt reserve                Book balance         Bad debt reserve
        Types                                                          Book
                                                            Accru      value                                     Accru Book value
                       Amount          Ratio     Amount                         Amount      Ratio     Amount
                                                            al ratio                                             al ratio
Account                                                                        1,112,231 0.08% 1,112,231.00 100.00

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receivable with                                                                   .00                             %
single significant
amount and
withdrawal bad
debt provision
separately
Receivables with
bad debt provision 2,039,798,642     99.88 11,002,024.       2,028,796 1,332,696        99.75                    1,324,703,54
                                                       0.54%                                  7,992,570.78 1.23%
accrual by credit            .09        %          83          ,617.26    ,113.95          %                             3.17
portfolio
Accounts with
single minor
amount but with                             2,504,849.3 100.00             2,237,015                    100.00
                      2,504,849.32 0.12%                                             0.17% 2,237,015.22
bad debts                                             2     %                    .22                        %
provision accrued
individually
                     2,042,303,491 100.00 13,506,874.       2,028,796 1,336,045 100.00 11,341,817.0       1,324,703,54
Total                                                 0.66%                                         1.78%
                               .41     %          15          ,617.26   ,360.17     %             0               3.17

Account receivable with single significant amount and withdrawal bad debt provision separately at period-end:
□ Applicable √ Not applicable
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                                1,986,842,361.70

6 months to 1 year                                36,056,517.41                     3,605,651.74                             10.00%

Subtotal of within 1 year                      2,022,898,879.11                     3,605,651.74

1-2 years                                          9,932,102.59                     1,986,420.53                             20.00%

2-3 years                                          2,596,179.72                     1,038,471.89                             40.00%

Over 3 years                                       4,371,480.67                     4,371,480.67                             100.00%

Total                                          2,039,798,642.09                    11,002,024.83                              0.54%

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 3,059,424.79 Yuan; the amount collected or switches back amounting to 457,384.50 Yuan.

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Important bad debt provision collected or switch back:
Nil


(3) Account receivable actual charge off in the Period

                                                                                                                             In RMB

                                        Item                                                  Amount written off

Changzhou Mengfa Fuel Injector Co., Ltd.                                                                               353,111.39

Cixi Sanhuan Diesel Co., Ltd.                                                                                              33,901.01

Nanchang Yuqing Shengyuan Industrial Co., Ltd.                                                                             30,156.00

Dongying Branch of GAC Gonow Auto Co., Ltd                                                                                  9,000.00

Chongqing Jikun Commerce Co., Ltd.                                                                                          3,514.97

Urnmchi Kangweisen Commerce Co., Ltd.                                                                                       7,299.77

Total                                                                                                                  436,983.14

Written-off for the major receivable:
Nil


(4) Top 5 receivables at ending balance by arrears party

Total period-end balance of top five receivables by arrears party amounting to 927,684,181.13Yuan, takes 45.42 percent of the total
account receivable at period-end, bad debt provision accrual correspondingly at period-end amounting as 29,346.35 Yuan


(5) Account receivable derecognition due to financial assets transfer

Nil


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

Nil


4. Advance payment

(1) Advance payment by age

                                                                                                                             In RMB

                                               Closing balance                                   Opening balance
            Age
                                    Amount                       Ratio                  Amount                     Ratio

Within one year                          96,448,493.05                    95.79%          70,920,782.92                      95.80%

1-2 years                                 2,545,782.70                     2.53%           2,014,547.03                       2.72%

2-3 years                                 1,633,759.17                     1.62%           1,095,156.43                       1.48%



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Over 3 years                                 62,088.88                  0.06%

Total                                   100,690,123.80          --                        74,030,486.38          --

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 period-end balance of top five advance payment by prepayment object amounting to 39,242,309.06 Yuan, takes 38.97 percent
of the total advance payment at period-end


5. Interest receivable

(1) Category

                                                                                                                          In RMB



                    Item                                 Closing balance                           Opening balance

Time deposit                                                               1,900,454.93                              2,487,527.65

Total                                                                      1,900,454.93                              2,487,527.65


(2) Major overdue interest

Nil


6. Dividend receivables

(1) Dividend receivables

                                                                                                                          In RMB

        Item (or the invested entity)                    Closing balance                           Opening balance

Bosch Automobile Diesel System Co., Ltd                                333,230,228.20

Zhonglian Automobile Electronic Co., Ltd.                              207,800,000.00

Miracle Automation Engineering Co., Ltd.                                    235,500.00

Total                                                                  541,265,728.20


(2) Major dividend receivable over 1 year

Nil




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7. Other accounts receivable

(1) Other accounts receivable by category

                                                                                                                                          In RMB

                                               Closing balance                                               Opening balance

        Category        Book balance             Bad debt provision                    Book balance            Bad debt provision
                                                                         Book value                                                  Book value
                                                               Accrual                                                     Accrual
                       Amount          Ratio      Amount                               Amount        Ratio     Amount
                                                                ratio                                                       ratio
Other account
receivable with
single significant 2,605,552.6 18.95 2,605,552.6 100.00             3,358,098. 27.84               100.00
amount and                                                                           3,358,098.66
withdrawal bad               3     %            3      %                   66     %                    %
debt provision
separately
Other receivables
with bad debt       11,142,800. 81.05 2,765,381.9        8,377,418. 8,705,106. 72.16                      5,907,873.9
                                                  24.82%                             2,797,232.62 32.13%
provision accrual           86     %            3                93        54     %                                 2
by credit portfolio
                     13,748,353. 100.00 5,370,934.5                      8,377,418. 12,063,205 100.0                                 5,907,873.9
Total                                                          39.07%                                        6,155,331.28 51.03%
                                  49      %                6                      93          .20      0%                                      2

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

                                                                                       Closing balance
    Other account receivable(units)
                                               Account receivable Bad debt reserve         Accrual ratio                  Reasons

American HESS                                        1,514,671.20           1,514,671.20        100.00% The account was too old to collect

Nanjing Jinning Machinery Factory                    1,090,881.43           1,090,881.43        100.00% The account was too old to collect

Total                                                2,605,552.63           2,605,552.63        --                             --

In combination, other accounts receivable whose bad debts provision was accrued by age analysis
√ Applicable □ Not applicable
                                                                                                                                          In RMB
                                                                                    Closing balance
               Age
                                         Other accounts receivable                Bad debt provision                     Accrual ratio
Sub item of within one year

Within 6 months                                            6,994,433.96

6 months to one year                                           574,365.45                            57,436.55                           10.00%

Subtotal within one year                                   7,568,799.41                              57,436.55

1-2 years                                                      986,434.50                        197,286.90                              20.00%

2-3 years                                                      128,180.79                            51,272.32                           40.00%

Over 3 years                                               2,459,386.16                        2,459,386.16                              100.00%

Total                                                    11,142,800.86                         2,765,381.93                              24.82%



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Explanations on combination determine:

Excluding the other account receivable accrual impairment provision separately; based on actual loss ratio of the
receivable groups that owes same or similar risk features, which has classify by age in previous years, determine
accrual ratio for bad debt provision combine with real condition.
In combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable:
□ Applicable √ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable:
□ Applicable √ Not applicable


(2) Bad debt provision accrual collected or switch back

Bad debt provision accrual was 67,343.99 Yuan; the amount collected or switches back amounting to 751,140.71 Yuan.
The major switch back or collected of the bad debt provision in the Period:
                                                                                                                                In RMB

                   Name                           Amount switch-back or collected                       Way of collection

Nanjing Jinning Machinery Factory                                              750,640.71 Accepted the goods

Total                                                                          750,640.71                          --


(3) Other receivables actually written-off during the reporting period

                                                                                                                                In RMB

                                  Item                                                       Amount of write off

Sporadic households                                                                                                         100,600.00

Note of important other receivables of written-off: Nil


(4) Other receivables by nature

                                                                                                                                In RMB

                   Nature                                 Ending book balance                         Opening book balance

Intercourse funds receivable from units                                       6,870,378.58                                 5,124,447.95

Staff loans and petty cash                                                    4,753,882.12                                 1,958,084.34

Other                                                                         2,124,092.79                                 4,980,672.91

Total                                                                       13,748,353.49                                 12,063,205.20


(5) Top 5 other receivables at ending balance by arrears party

                                                                                                                                In RMB
                                                                                                    Ratio in total      Ending balance
                                                                  Ending
                 Company                         Nature                              Age          ending balance of       of bad bet
                                                                  balance
                                                                                                  other receivables       provision
Ningbo Jiangbei High-Tech Industry Park Performance
                                                                1,767,000.00 Over 3 years                   12.85%         1,767,000.00
Development Construction Co., Ltd.      bond

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                                          Advance
                                                                             Specific
American HESS                             payment             1,514,671.20                                   11.02%       1,514,671.20
                                                                             identification
                                          transfer-in
Wuxi Aimingsi Automotive Electronic       Intercourse
                                                              1,093,143.44 Within 2 years                     7.95%         186,256.41
System Co., Ltd.                          funds of unit
                                          Intercourse                        Specific
Nanjing Jinning Machinery Factory                             1,090,881.43                                    7.93%       1,090,881.43
                                          funds of unit                      identification
Nanjiang Yinkun Tongchan Operation        Intercourse
                                                               866,342.63 Within 6 months                     6.30%
Management Co., Ltd.                      funds of unit

Total                                               --        6,332,038.70           --                      46.05%       4,558,809.04



(6) Account receivables related to government subsidies

Nil


(7) Other receivable for termination of confirmation due to the transfer of financial assets

Nil


(8) The amount of assets and liabilities that are transferred other receivable and continued to be involved

Nil


8. Inventory

(1) Inventory classification:

                                                                                                                                In RMB

                                      Closing balance                                             Opening balance
        Item                           Depreciation                                                Depreciation
                    Book balance                           Book value         Book balance                               Book value
                                          reserve                                                       reserve

Raw materials       384,066,575.88      78,606,491.38     305,460,084.50      344,263,200.85           95,153,127.76    249,110,073.09

Goods in process    157,645,734.54      15,979,821.61     141,665,912.93      158,783,541.69           16,100,730.42    142,682,811.27

Finished goods      830,194,810.49     143,153,580.45     687,041,230.04 1,102,621,081.29          144,969,430.40       957,651,650.89

Total              1,371,907,120.91    237,739,893.44 1,134,167,227.47 1,605,667,823.83            256,223,288.58 1,349,444,535.25


(2) Inventory depreciation reserve

                                                                                                                                In RMB

                                      Increase in the current period         Decrease in the current period
        Item       Opening balance                                                                                     Closing balance
                                         Accrual           Other        Switch back or write-off          Other

Raw materials        95,153,127.76          99,454.68                              16,646,091.06                         78,606,491.38

Goods in process     16,100,730.42                                                        120,908.81                     15,979,821.61

Finished goods      144,969,430.40          92,208.10                                1,908,058.05                       143,153,580.45



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Total                  256,223,288.58         191,662.78                               18,675,057.92                      237,739,893.44


①Net realizable value of the inventory refers to: During the day-to-day activities, results of the estimated sale
price less costs which are going to happen by estimation till works completed sales price estimated and relevant
taxes.

②Accrual basis for inventory depreciation reserve:
      Item       Accrual basis for inventory impairment provision                      Specific basis for recognization
Materials on The materials sold due to finished goods Results from the estimated sale price of such inventory less the
hand          manufactured, its net realizable value is lower than cost what will happen, estimated sales expenses and relevant
              the book value                                       taxes till the goods completed
Goods in     The goods in process sold due to finished goods Results from the estimated sale price of such inventory less the
process      manufactured, its net realizable value is lower than cost what will happen, estimated sales expenses and relevant
             the book value                                        taxes till the goods completed
Finished     its net realizable value is lower than the book value Results from the estimated sale price less the vary taxes which
goods                                                              shall be taken in process of sales


③Reasons of write-off for inventory falling price reserves:
         Item                                                       Reasons of write-off

Materials on hand      Used for production and the finished goods are realized sales

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

Finished goods         Sales in the Period


④Reasons of switch-back for inventory falling price reserves:
         Item                                                       Reasons of write-off
Raw materials          The market price for the materials for selling soaring in the Period, thus switch-back in the inventory falling
                       price reserves which was accrual


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

Nil

(4) Assets completed without unsettlement from construction contract at period-end

Nil

9. Other current assets

                                                                                                                                 In RMB

                     Item                                  Closing balance                               Opening balance

Entrust financing products                                              4,648,100,000.00                              1,870,000,000.00

Receivable export tax rebates                                                9,952,301.30                                   8,633,684.76

Prepaid taxes and VAT retained                                             14,502,827.55                                   31,578,246.17



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Input tax to be deducted and certification                                      1,291,820.45                                    937,665.59

Other                                                                             389,234.78                                  3,076,283.15

Total                                                                       4,674,236,184.08                              1,914,225,879.67


10. Financial assets available for sale

(1) Particular about financial assets available for sale

                                                                                                                                       In RMB

                                               Closing balance                                        Opening balance
             Item                               Depreciation                                            Depreciation
                               Book balance                        Book value       Book balance                            Book value
                                                  reserves                                                reserves

Instrument equity
                              490,385,575.95 59,433,106.95 430,952,469.00 624,668,567.95                 59,433,106.95     565,235,461.00
available for sale:

  Measured by fair value 287,266,200.00                           287,266,200.00 361,847,700.00                            361,847,700.00

  Measured by cost            203,119,375.95 59,433,106.95 143,686,269.00 262,820,867.95                 59,433,106.95     203,387,761.00

  Other -- financial
                              198,080,000.00                      198,080,000.00 130,000,000.00                            130,000,000.00
products

Total                         688,465,575.95 59,433,106.95 629,032,469.00 754,668,567.95                 59,433,106.95     695,235,461.00


(2) Financial assets available for sale measured by fair value at period-end

                                                                                                                                       In RMB

                                                                             Instrument equity     Instrument liability
                                    Type                                                                                       Total
                                                                             available for sale     available for sale

Cost /liability of equity instrument/ amortization cost of debt
                                                                                 163,824,300.00                           163,824,300.00
instrument

Fair value                                                                       287,266,200.00                           287,266,200.00

Amount of fair value changes that accumulatively reckoned in other
                                                                                 123,441,900.00                           123,441,900.00
comprehensive gains


(3) Financial assets available for sale measured by cost at period-end

                                                                                                                                       In RMB
                                      Book balance                                     Depreciation reserves               Ratio of
                                                                                                                          share-hold Cash
The invested                                                                                     Decr
             Period-beginnin Incre                                          Period-beginni Incre                            ing in   divid
   entity                                  Decreased         Period-end                          ease     Period-end
                    g        ased                                                 ng       ased                            invested end
                                                                                                  d                          entity
Guolian
                    12,000,000.00                        12,000,000.00                                                        0.95%
Securities
Guangxi              1,600,000.00                            1,600,000.00     1,600,000.00                1,600,000.00        1.22%


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Liufa Co.,
Ltd.
Financial
Company of
Changchai         800,000.00                           800,000.00         800,000.00                  800,000.00
Group Co.,
Ltd.
H&J
Vanguard
                33,000,000.00                       33,000,000.00 33,000,000.00                    33,000,000.00      11.72%
Investment
Co., Ltd.
Nanjing
Hengtai
Insurance        1,000,000.00                        1,000,000.00    1,000,000.00                   1,000,000.00       1.85%
and Broker
Co., Ltd.
Henan
Gushi
Weining Oil
                 2,033,106.95                        2,033,106.95    2,033,106.95                   2,033,106.95
Pump &
Nozzle Co.,
Ltd.
Beijing
Foton
Environmen      86,940,000.00                       86,940,000.00 11,000,000.00                    11,000,000.00      12.66%
tal Engine
Co., Ltd.
Wuxi
Xidong
Technologic
                 5,000,000.00                        5,000,000.00                                                      1.43%
al Industry
Park Co.,
Ltd.
Shanghai
IMS
Automotive
                10,000,000.00                       10,000,000.00 10,000,000.00                    10,000,000.00      12.27%
Electronic
System Co.,
Ltd.
Shanghai
CD
Dengtong
               110,447,761.00      59,701,492.00 50,746,269.00                                                        14.93%
Equity
Investment
Fund

Total          262,820,867.95      59,701,492.00 203,119,375.95 59,433,106.95                      59,433,106.95       --


(4) Changes of impairment in Period

                                                                                                                               In RMB

               Type                Instrument equity available for sale     Instrument liability available for sale         Total

Balance of impairment accrual at
                                                         59,433,106.95                                                59,433,106.95
period-begin

Balance of impairment accrual at
                                                         59,433,106.95                                                59,433,106.95
period-end



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(5) where the fair value of equity instruments available for sale drops significantly or not contemporarily at
period-end, without impairment provision is made

Nil


11. Long-term equity investment

                                                                                                                                   In RMB

                                                                           +,-
                                                                                                                                    Endin
                                      Ad                             Other
                                                                                                                                     g
                                      diti                           compr
                                             Cap                              Other                     Imp                         balan
                                      ona                            ehensi
 The invested                                ital Investment gains            equit Cash dividend or airm Ot                        ce of
                   Opening balance     l                              ve                                         Closing balance
       entity                                red recognized under                y    profit announced ent he                       impai
                                      inv                            incom
                                             ucti      equity                 chan       to issued      accr r                      rment
                                      est                              e
                                             on                                  ge                     ual                         provi
                                      me                             adjust
                                                                                                                                    sion
                                      nt                             ment

I. Joint venture

Wuxi Weifu
Environment
                     447,259,593.58                  42,182,917.41                                                489,442,510.99
Catalyst Co.,
Ltd.

Subtotal             447,259,593.58                  42,182,917.41                                                489,442,510.99

II. Associated enterprise

Bosch
Automobile
                   2,115,920,812.13                 593,031,744.26                     666,460,456.42            2,042,492,099.97
Diesel System
Co., Ltd

Zhonglian
Automobile
                    811,404,971.22                  196,177,222.39                     207,800,000.00             799,782,193.61
Electronic
Co., Ltd.

Wuxi Weifu
Fine
Machinery            46,445,383.85                    3,480,468.65                                                  49,925,852.50
Manufacturin
g Co., Ltd.

Subtotal           2,973,771,167.20                 792,689,435.30                     874,260,456.42            2,892,200,146.08

Total              3,421,030,760.78                 834,872,352.71                     874,260,456.42            3,381,642,657.07




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12. Investment real estate

(1) Investment real estate measured at cost

                                                                                                                         In RMB



                         Item                     House and building    Land use right   Construction in process      Total

I. original book value

     1.Opening balance                                  63,545,325.48                                              63,545,325.48

     2. increased in the Period

     (1) outsourcing

     (2) Inventory\fixed assets\construction in
process transfer-in

     (3) increased by combination

     3. decreased in the Period

     (1) disposal

     (2) other transfer-out

     4.Closing balance                                  63,545,325.48                                              63,545,325.48

II. Accumulated depreciation and accumulated
amortization

     1.Opening balance                                  38,431,852.94                                              38,431,852.94

     2. increased in the Period                            769,276.44                                                769,276.44

     (1) accrual or amortization                           769,276.44                                                769,276.44

     3. decreased in the Period

     (1) disposal

     (2) other transfer-out

     4.Closing balance                                  39,201,129.38                                              39,201,129.38

III. Depreciation reserves

     1.Opening balance

     2. increased in the Period

     (1) accrual

     3. decreased in the Period

     (1) disposal

     (2) other transfer-out

     4.Closing balance

IV. Book value


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      1. Ending Book value                             24,344,196.10                                          24,344,196.10

      2. Opening Book value                            25,113,472.54                                          25,113,472.54


(2) Investment real estate measured by fair value

□ Applicable√ Not applicable


(3) Investment real estate without property certification held

Nil


13. Fixed assets

(1) Fixed assets

                                                                                                                        In RMB

                                    Housing           Machinery        Transportation     Electronic and
                Item                                                                                            Total
                                    buildings         equipment          equipment       other equipment

I. original book value

  1.Opening balance              1,325,757,440.87   2,039,144,555.18     42,046,936.44     427,745,109.70   3,834,694,042.19

  2. increased in the Period       52,192,277.14      44,078,845.38       1,044,756.17      34,434,928.18    131,750,806.87

  (1) Purchase                                         9,473,617.53          93,634.15       2,222,830.61     11,790,082.29

  (2) construction in process
                                   52,192,277.14      34,605,227.85         951,122.02      32,212,097.57    119,960,724.58
transfer-in

  (3) increased by combination

  3. decreased in the Period                 0.00      6,931,464.73         954,793.88       4,496,493.43     12,382,752.04

  (1) disposal or scrapping                  0.00      6,931,464.73         954,793.88       4,496,493.43     12,382,752.04

  4.Closing balance              1,377,949,718.01   2,076,291,935.83     42,136,898.73     457,683,544.45   3,954,062,097.02

II. Accumulated depreciation

  1.Opening balance               237,002,543.29     910,479,996.85      29,379,831.90     174,403,406.82   1,351,265,778.86

  2. increased in the Period       22,196,297.63      84,664,403.45       1,965,950.42      24,928,001.31    133,754,652.81

  (1) accrual                      22,196,297.63      84,664,403.45       1,965,950.42      24,928,001.31    133,754,652.81

  3. decreased in the Period                 0.00      5,090,565.45         797,789.47       3,982,131.58      9,870,486.50

  (1) disposal or scrapping                  0.00      5,090,565.45         797,789.47       3,982,131.58      9,870,486.50

  4.Closing balance               259,198,840.92     990,053,834.85      30,547,992.85     195,349,276.55   1,475,149,945.17

III. Depreciation reserves

  1.Opening balance                                   29,086,874.78          73,320.38       6,428,032.83     35,588,227.99

  2. increased in the Period

  (1) accrual


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  3. decreased in the Period                                        0.86                                                         0.86

  (1) disposal or scrapping                                         0.86                                                         0.86

  4.Closing balance                                      29,086,873.92            73,320.38         6,428,032.83       35,588,227.13

IV. Book value

  1. Ending Book value           1,118,750,877.09     1,057,151,227.06       11,515,585.50      255,906,235.07       2,443,323,924.72

  2. Opening Book value          1,088,754,897.58     1,099,577,683.55       12,593,784.16      246,913,670.05       2,447,840,035.34


(2) Temporarily idle fixed assets

Nil


(3) Fixed assets acquired by financing lease

Nil


(4) Fixed assets acquired by operating lease

Nil


(5) Certificate of title un-completed

                                                                                                                              In RMB

                      Item                              Book value                                  Reasons

Boiler room and guard house of Weifu Jinning               3,061,061.92 Still in process of relevant property procedures

Plant and office building of Weifu Chang’an              41,190,079.98 Still in process of relevant property procedures

Warehouse and power center etc of Weifu ITM               41,963,111.01 Still in process of relevant property procedures


14. Construction in progress

(1) Construction in progress

                                                                                                                              In RMB

                                                  Closing balance                                   Opening balance
             Item
                                                   Depreciation                                       Depreciation
                                 Book balance                        Book value      Book balance                       Book value
                                                     reserves                                           reserves
2nd Phase construction project
                                  61,132,269.51                      61,132,269.51   29,844,630.44                     29,844,630.44
in industrial park

Technical equipment of
                                    103,500.00                         103,500.00     &nbs