威孚高科(000581)2004年年度报告摘要（英文版）

WEIFU HIGH-TECHNOLOGY CO., LTD. 无锡威孚高科技股份有限公司 (Incorporated in the People’ s Republic of China with limited liability) SUMMARY OF ANNUAL REPORT 2004 §1. IMPORTANT HINTS 1.1 The Board of Directors of Weifu High-Technology Co., Ltd. (hereinafter referred to as the Company) collectively and individually accept full responsibility for the authenticity, accuracy and completeness of the information contained in this report and confirm that there are no false statements and material omissions which would make any statement in this report misleading. The reader is advised that this is a summary for the annual report 2004. For more details, please read the original annual report. 1.2 Naught 1.3 All directors of the Company attended meetings of the Board of Directors. 1.4 Domestic Jiangsu Gongzheng Certified Public Accountants and overseas PricewaterhouseCoopers Zhong Tian CPAs Co., Ltd. issued the unqualified Auditors’Report for the Company. 1.5 Mr. Xu Liangfei, legal representative of the Company, Mr. Han Jiangming, General Manager of the Company, and Ms. Sun Qingxian, Deputy General Manager as well as person in charge of Financing confirm that the Financial Report enclosed in the Annual Report 2004 is true and complete. §2. COMPANY INFORMATION 2.1 General information Short Form of the Stock: Weifu High-Tech, Su Weifu-B Stock Code: 000581, 200581 Stock Exchange Listed with: Shenzhen Stock Exchange Registered Address: Plot 46, Wuxi National High-Tech Registered Address & Industrial Development Zone Head Office: Head Office: No.107, Renmin West Road, Wuxi Postal Code Postal Code of registered Address: 214028 Postal Code of head Office: 214031 Homepage: http://www. weifu.com.cn Company’s E-Mail web@weifu.com.cn 2.2 Contact person and method: Secretary of the Board Authorized Representative Name: Mr. Liu Yonglin Mr. Zhou Weixin & Mr. Gu Yiming Contact Address: No.107, Renmin West Road, Wuxi No.107, Renmin West Road, Wuxi Tel: (86) 510-2719579 (86) 510-2719579 Fax: (86) 510-2751025 (86) 510-2751025 E-mail: wfjt @ public1.wx.js.cn wfjt @ public1.wx.js.cn §3. SUMMARY OF ACCOUNTING AND BUSINESS DATA 3.1 Major accounting data as of year 2004 Unit: RMB’000 Items 2004 2003 Increase/decrease 2002 （％） over last year Income from main 2,118,745 1,640,793 29.13% 1,499,973 operations Total profit 258,142 275,018 -6.14% 216,696 Net profit 227,287 239,557 -5.12% 197,646 Net cash flow from 179,736 8,659 107.57% 118,790 operating activities Increase/decrease At the end of At the end of At the end of from the end of 2004 2003 2002 （％） previous year Total assets 4,195,117 2,888,951 45.21% 2,508,934 Shareholder’s equity (excluding minority 2,186,558 2,046,544 6.84% 1,894,260 interests) 3.2 Key financial indexes Unit: RMB’000 Increase/decrease Items 2004 2003 2002 （％） over last year Earnings per share 0.52 0.55 -5.45% 0.45 Earnings per share (note) - - - - Return on net assets (%) 10.39% 11.71% -1.32% 10.34% Net cash flow per share arising from operating 0.41 0.02 1950% 0.27 activities Increase/decrease At the end of At the end of At the end of Items from the end of 2004 2003 2002 （％） previous year Net assets per share 5.01 4.69 6.82% 4.34 Net assets per share after 5.01 4.69 6.82% 4.34 adjustment Note: Earrings per share was calculated based on new share capital if share capital was changed from the end of the report period to disclosure date. Items of non-recurring gains and losses □Applicable √ Inapplicable 3.3 Difference in net profit as audited by Chinese Accounting Standard (CAS) and International Accounting Standard (IAS) √Applicable □Inapplicable In RMB’000 CAS IAS Net profit 235,069 227,287 Explanation on the difference Adjustment: Reorganization of investment income (loss) under equity method amounting to( RMB’000) 7,782 §4. SHARE CAPITAL AND SHAREHOLDERS 4.1 Change in share Unit: share Increase / decrease in Before the change After the change this time (+, -) Subtotal I. Unlisted shares 1. Sponsor’s shares 121,566,150 0 121,566,150 Including: State-owned shares 121,566,150 0 121,566,150 Share held by domestic legal person 0 0 0 Share held by foreign legal person 0 0 0 Others 0 0 0 2. Raised legal person’ s shares 10,400,000 0 10,400,000 3. Inner employees’shares 0 0 0 4. Preference shares or others 0 0 0 Total unlisted shares 131,966,150 0 131,966,150 II. Listed shares 1. RMB ordinary shares 215,921,900 0 215,921,900 2. Domestically listed foreign shares 88,400,000 0 88,400,000 3. Overseas listed foreign shares 0 0 0 4. Others 78,100 0 78,100 Total listed shares 304,400,000 0 304,400,000 III. Total shares 436,366,150 0 436,366,150 The amount of shares offered by funds, inner employees’shares traded in the counter, shares offered by strategic investor and shares offered ordinary juridical person should be disclosed respectively □Applicable √Inapplicable 4.2 Statement of shares held by the top ten shareholders and the top ten shareholders of circulating share Total shareholders at the end of report period 49,662 Particulars about shares held by the top ten shareholders Nature of Share Increase / shareholders Shares held at Type of shares held decrease in Proportion (State-owned Name of Shareholder the year-end (Circulating/No pledged the report (%) share or (share) n-circulating) or frozen year foreign (share) shareholder) 1. WUXI WEIFU GROUP State-owned 121,566,150 27.86% Non-circulating 0 COMPANY LIMITED shareholder 14,144,000 3.24% Foreign 2. ROBERT BOSCH GMBH Circulating 0 shareholder 3. GALAXY YINTAI FINANCING AND DISTRIBUTION 11,086,894 11,086,894 2.54% Circulating 0 Other SECURITIES INVESTMENT FUNDS 4. TONGQIAN SECURITIES INVESTMETN 5,311,515 10,009,465 2.29% Circulating 0 Other FUNDS 5. BOSHI SELECTED SHARES SECURITIES INVESTMENT 8,299,794 8,299,794 1.90% Circulating 0 Other FUNDS 6. YINFENG SECURITIES 7,195,023 7,195,023 1.65% Circulating 0 Other INVESTMENT FUNDS 7. YUYANG SECURITIES 1,673,718 6,937,644 1.59% Circulating 0 Other INVESTMENT FUNDS 8. SHANGHAI BAOSTEEL ENGINEERING & EQUIPMENT 5,589,950 5,589,950 1.28% Circulating 0 Other CO., LTD 9. RONGTONG NEW BLUE CHIP SECURITIES -558,155 5,084,193 1.17% Circulating 0 Other INVESTMENT FUNDS 10. YUYUAN SECURITIES INVESTMENT 1,087,983 5,028,200 1.15% Circulating 0 Other FUNDS Particulars about shares held by the top ten shareholders of circulation share Holding circulating shares at the Type of shares (A-share, B -share, H-share and Shareholders’ name (full name) year-end (share) other) ROBERT BOSCH GMBH 14,144,000 B-share GALAXY YINTAI FINANCING AND DISTRIBUTION SECURITIES INVESTMENT 11,086,894 A-share FUNDS TONGQIAN SECURITIES INVESTMENT 10,009,465 A-share FUNDS BOSHI SELECTED SHARES SECURITIES 8,299,794 A-share INVESTMENT FUNDS YINFENG SECURITIES INVESTMENT 7,195,023 A-share FUNDS YUYANG SECURITIES INVESTMENT 6,937,644 A-share FUNDS SHANGHAI BAOSTEEL ENGINEERING 5,589,950 A-share &EQUIPMENT CO., LTD. RONGTONG NEW BLUE CHIP SECURITIES 5,084,193 A-share INVESTMENT FUNDS YUYUAN SECURITIES INVESTMENT 5,028,200 A-share FUNDS TIANYUAN SECURITIES INVESTMETN 5,000,000 A-share FUNDS Explanation on associated relationship Among the top ten shareholders, Rongtong New Blue Chip Securities among the above shareholders of Investment Funds and Tongqian Securities Investment Funds belong to the circulation share same funds company; Boshi Selected Shares Securities Investment Funds, Yuyang Securities Investment Funds and Yuyuan Securities Investment Funds belong to the same funds company. 4.3 Particulars about the holding shareholders and actual controller of the Company 4.3.1 Particulars about change in the holding shareholders and actual controller of the Company □Applicable √Inapplicable 4.3.2 Introduction of especial situation for the holding shareholder and other actual controller A shareholder who has the actual holding right to the Company is Wuxi Weifu Group Company Limited, as well as state-owned sole enterprise, whose legal representative is Mr. Xu Liangfei. The said company was founded on Dec. 14, 1994, its registered capital was RMB 134,830,000, and it was mainly engaged in Processing and manufacturing of general machinery, instruments and meters, import and export. In the report period, the holding shareholder remained unchanged. 4.3.3 Property right and controlling relationship between the actual controller of the Company and the Company is as follow: .WUXI WEIFU GROUP COMPANY LIMITED 27.86% WEIFU HIGH-TECHNOLOGY CO., LTD. §5. DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND STAFF 5.1 Particulars about changes in shares held by directors, supervisors and senior executives Shares held Reason Shares held at Name Position Age Gender Office term at the for the year-begin year-end change Chairman of the Jun. 1, 2002 – Xu Liangfei 60 Male 12,800 12,800 Board Jun. 30, 2005 Han Jun. 1, 2002 – General Manager 53 Male 12,800 12,800 Jiangming Jun. 30, 2005 Wang Director Jun. 1, 2002 – 39 Male 8,000 8,000 Weiliang Jun. 30, 2005 Director Jun. 1, 2002 – Gao Guoyuan 51 Male 6,500 6,500 Jun. 30, 2005 J Jun. 1, 2002 – Shi Xingyuan Director 42 Male 2,000 2,000 Jun. 30, 2005 Jun. 1, 2002 – Li Tonghua Director 61 Male 12,800 12,800 Jun. 30, 2005 Jun. 1, 2002 – Chen Zhaolin Director 47 Male 0 0 Jun. 30, 2005 Zhang Independent Jun. 1, 2002 – 61 Male 0 0 Xiaoyu Director Jun. 30, 2005 Ouyang Independent Jun. 1, 2002 – 46 Male 0 0 Minggao Director Jun. 30, 2005 Independent Jun. 1, 2002 – Chen Qilong 54 Male 0 0 Director Jun. 30, 2005 Independent Jun. 1, 2003 – Chen Juchang 65 Male 0 0 Director Jun. 30, 2005 Chairman of the Jun. 1, 2002 – Chen Xuejun Supervisory 37 Male 2,000 2,000 Jun. 30, 2005 Committee Jun. 1, 2002– Li Guodong Supervisor 55 Male 0 0 Jun. 30, 2005 Jun. 1, 2002 – Zhang Jiming Supervisor 35 Male 0 0 Jun. 30, 2005 Jun. 1, 2002 – Wang Chuan Supervisor 55 Male 0 0 Jun. 30, 2005 Wang Jun. 1, 2002 – Supervisor 38 Male 2,000 2,000 Xiaodong Jun. 30, 2005 You Jun. 1, 2002 – Supervisor 37 Male 6,400 6,400 Jianzhong Jun. 30, 2005 Financial Chief Jun. 1,2002 – Sun Qingxian 51 Female 0 0 Officer Jun. 30, 2005 Deputy General Apr. 1,2003– Miao Yuming 41 Male 0 0 Manager Jun. 30, 2005 Secretary of the Jun. 1, 2002 – Liu Yonglin 61 Male 8,000 8,000 Board Jun. 30, 2005 Jan. 1, 2004 – Wang Yawei General Engineer 49 Male 0 0 Jun. 30, 2005 Assistance General Jan. 1, 2004 – Deng Xijiang 41 Male 4,800 4,800 Manager Jun. 30, 2005 5.2 Particulars about the position held by directors, supervisors in Shareholding Company √Applicable □Inapplicable Drawing the payment from Name Shareholding Companies Position Office term the Company (Yes / No) Xu Liangfei Wuxi Weifu Group Company Limited Chairman of the Board, GM Oct. 18, 1998 No till now Wang Wuxi Weifu Group Company Limited Director, Deputy General Sep. 1, 2000 No Weiliang Manager till now Gao Guoyuan Wuxi Weifu Group Company Limited Director, Deputy General Feb. 8, 2003 No Manager till now Chen Zhaolin Bosch (China) Investment Co., Ltd. Executive chief supervisor May 31, 1996 No till now Li Guodong Wuxi Guolian Development (Group) Manager of Investment & Jan. 10, 2002 No Co. Management till now Zhang Jiming State Investment Machinery and Light Senior manager of automobile Jan. 30, 2000 No Industrial Co. parts investment dept. till now Wang Chuan China Auto Industry General Co. Section Chief Dec. 30, 1997 No Investment and Development Corp. till now 5.3 Particulars about the annual remuneration of directors, supervisors and senior executives Total annual payment 1,535,500 Total annual payment of the top three directors 471,400 drawing the highest payment Total annual payment of ht e top three senior 671,800 executives drawing the highest payment Allowance of independent director 50,000 per person/year Other treatment of Independent Directors Reimbursement for travel costs upon attending the meetings of the board of directors and shareholders Name of directors and supervisors received no Chairman of the Board, Mr. Xu Liangfei, payment or allowance from the Company directors of Mr. Wang Weiliang, Mr. Gao Guoyuan, Mr. Li Tonghua, Mr. Chen Zhaolin, and supervisor Mr. Li Guodong, Mr. Zhang Jiming and Mr. Wang Chuan Payment Number of persons RMB 25,000-50,000 1 RMB 50,000-100,000 1 RMB 100,000-200,000 6 RMB 200,000-300,000 1 §6. REPORT OF THE BOARD OF DIRECTORS 6.1 Discussion and analysis to the whole operation in the report period In 2004, with structural adjustment in the automobile industry of the State consistently deepening, new automobile industry policies coming, international petroleum prices keeping high, need of automobiles driven by diesel oil increased a lot, and especially demand of camions went on rising from second half of the year, which brought chances to the Company. With respect to the situation, the Board and managers made decisions, arranged every operative elements reasonably, overcame adverse factors including fund difficulties from joint operation and investment in newly constructed projects, sharply rising-up of raw materials etc., and basically accomplished operating objective confirmed by Shareholders’General Meeting. The Company realized income from core business amounting to (RMB’0000) 211874.50 for the whole year, with an increase of 29.13% over last year, net profit amounting to (RMB’0000) 22728.70, with a decrease of 5.12%. 6.2 Statement of main operations classified according to industries or products Unit: RMB’0000 Classified according to industries Classified according to Income from Cost of main Gross Increase/decrease Increase/decreas Increase/decrease industries or products main operations profit in income from e in cost of main in gross profit ratio operations (RMB) ratio (%) main operations operations over over the last year (RMB) over the last year the last year (%) (%) (%) Manufacture of other universal parts and 211,874.50 164,538.30 22.34% 29.13% 32.27% -0.49% components Including: rela ted 0.00 0.00 0.00% 0.00% 0.00% 0.00% transactions Classified according to products Fittings and accessories 204,320.10 158,956.35 22.20% 40.66% 49.45% -4.58% of gas engine Converter and muffler 7,554.40 5,581.95 26.11% 36.96% 35.61% 6.74% Including: related 0.00 0.00 0.00% 0.00% 0.00% 0.00% transactions Pricing rules for related Fair market price transactions Necessity and durative Other transactions between Weifu Group and the Company of related transactions The Company has the following agreements with Weifu Group: (a) Agreement on trademark use The Company sells products by using the trademark of Weifu Group and pays trademark use expense with 0.3% of the sales amount, not less than RMB 1.20 million per year. This agreement takes effect from Jan. 1, 1995 with term of ten years. (b) Agreement on lease of land use right The Company leases the land of Weifu Group and pays the lease expense of land use right. The rental for the first year is RMB 327,285 and it increases by 10% per year later. This agreement takes effect from Jan. 1, 1995 with term of ten year. Including: total amount of related transactions that the listed company sold products or provided labor service to the controlling shareholder and its subsidiaries was RMB 352,964,000 in the report period. 6.3 Particulars about main operations classified according to areas Unit: RMB’0000 Areas Income from main Increase/decrease in income from main operations (RMB) operations over the last year (%) Inside the Province 41,257.67 0.16% Outside the Province 167,755.55 53.09% 6.4 Particulars about the customers of purchase and sales Unit: RMB’ 0000 Total amount of purchase Proportion in the total 87,467.53 48.78% of the top five suppliers amount of purchase Total amount of sales of the Proportion in the total 88,375.17 42.28% top five sales customers amount of sales 6.5 Operation of share-holding companies √Applicable □Inapplicable Name of share-holding company Zhonglian Automobile Electronics Co. Investment earnings contributed in 7,228.50 Proportion in net profit of 30.75% the period listed company Share-holding Business scope Fittings and accessories of gas engine company Net profit 36,117.17 Name of share-holding company Bosch Diesel Systems Co. Ltd. Investment earnings contributed in 5,903.40 Proportion in net profit of 25.11% the period listed company Share-holding Business scope Fittings and accessories of gas engine company Net profit 13,179.58 6.6 Explanation on reasons of material changes in main operations and its structure □Applicable √Inapplicable 6.7 Explanation on reasons of material changes in profitability capability of main operations (gross profit ratio) than that in the last year □Applicable √Inapplicable 6.8 Analysis to reasons of material changes in operating results and profit structure compared with the previous year □Applicable √Inapplicable Analysis to reasons of material changes in the whole financial position than that in the last year □Applicable √Inapplicable 6.9 Explanation on the past, current and future important effects of the material changes in production and operation environment, macro-policies and regulations on the Company’ s financial position and operating results □Applicable √Inapplicable 6.10 Completion of the profit estimation □Applicable √Inapplicable 6.11 Completion of the business plan □Applicable √Inapplicable 6.12 Application of the raised proceeds □Applicable √Inapplicable Particulars about the changed projects □Applicable √Inapplicable 6.13 Application of the proceeds not raised through shares offering √Applicable □Inapplicable Names of projects Amount of projects Progress of projects Earnings of projects Bosch Diesel Systems Co. 33,715.60 33,715.60 2562.22 Ltd. Weifu Automobile Diesel 14,000.00 14,000.00 0 Systems Co. Ltd. Total 47,715.60 - - 6.14 Explanation of the Board of Directors on the “Qualified Opinion” made by the Certified Public Accountants □Applicable √Inapplicable 6.15 Business plan as of the next year of the Board of Directors □Applicable √Inapplicable Profit estimation of the new report year □Applicable √Inapplicable 6.16 The preplan on the profit distribution and capitalization of capital public reserve of the Board of Directors √Applicable □Inapplicable As audited by Jiangsu Gongzheng Certified Public Accountants Co., Ltd., the Company realized net profit totally (RMB’0000) 23,506.87 in 2004, plus the retained profit at the end of 2003 amounting to (RMB’0000) 42,955.51, the distributable profit for shareholders is (RMB’0000)66,462.38. According to the regulation of Articles of Association of the Company, after appropriating 10% as public reserve totaling (RMB’0000) 2,350.69 and 5% as welfare fund totaling (RMB’0000) 1,175.34, the distributable profit for shareholders of the statutory account audited as Chinese Accounting System is (RMB’0000) 62,936.35. The Board of Directors decided to distribute RMB 1 cash dividend (including tax) and 3 bonus shares for every ten shares based on the total share capital amounting to 436,366,150 shares at the end of 2004. The left distributable profit is carried forward to next year. The Company did not appropriate share distribution preplan though the Company achieved the profit in the report period □Applicable √Inapplicable §7. Significant Events 7.1 Purchase of assets □Applicable √Inapplicable 7.2 Sales of assets □Applicable √Inapplicable 7.3 Important guarantee √Applicable □Inapplicable Unit: RMB’ 0000 Particulars about the external guarantee of the Company (Barring the guarantee for the controlling subsidiaries) Guarantee Name of the Date of happening Complete Amount of Guarantee for related Company (date of signing Guarantee term Implementation guarantee type party (yes or guaranteed agreement) or not not) Total amount of guarantee in the report period 13,000.00 Total balance of guarantee at the end of the report period 13,000.00 Guarantee of the Company for the controlling subsidiaries Total amount of guarantee for controlling subsidiaries in the report period 13,000.00 Total balance of guarantee for controlling subsidiaries at the end of the report 13,000.00 period Particulars about the external guarantee of the Company (Including the guarantee for the controlling subsidiaries) Total amount of guarantee 13,000.00 The proportion of the total amount of guarantee in the net assets of the 5.91% Company Particulars about the guarantees out of line Total amount of guarantee for other related parties, which the Company or 0.00 controlling shareholders held less than 50% The debts guarantee amount provided for the guarantee of which the 0.00 assets-liability ratio exceeded 70% Proportion of total amount of guarantee in net assets of the Company exceeded No 50% (Yes of No) Total amount of guarantee breaking regulations 0.00 7.4 Significant related transactions 7.4.1 Current related purchase and sale √Applicable □Inapplicable Unit: RMB’ 0000 Selling products and providing service Purchasing products and to related parties accepting service to related parties Related parties Transaction Proportion in the Transaction Proportion in the amount same kind of amount same kind of transaction amount transaction amount Wuxi Weifu Group Co., Ltd. 19,484.00 9.67% 1,948.50 1.13% Wuxi Weifu Mashan Fuel 2,103.50 1.04% 7,181.20 4.15% Injection Co. Wuxi Weifu Chang’ an Fuel 1,711.40 0.85% 12,155.70 7.03% Injection Co. Wuxi Weifu Exact Machinery 2,406.80 1.19% 8,555.20 4.95% Manufacture Limited Bosch Automobile Diesel Oil 9,590.70 4.76% 11,230.20 6.49% System Co., Ltd. Wuxi Weifu International 0.00 0.00% 24.30 0.01% Trade Co., Ltd. Total 35,296.40 16.03% 41,095.10 23.76% 7.4.2 Current related credits and liabilities √Applicable □Inapplicable Unit: RMB’ 0000 Supply funds to related Related parties supplied funds to the parties Company Related parties Occurred Balance Occurred amount Balance amount Wuxi Weifu Group Co., Ltd. 14,766.07 0.00 15,466.35 737.11 Wuxi Weifu Jida New Material 9.56 0.00 29.39 40.91 Application Development Co., Ltd. Wuxi Weifu Mashan Fuel Injection 14,700.36 903.72 13,724.49 0.00 Co. Wuxi Weifu Chang’ an Fuel 20,608.77 1,446.26 19,006.28 0.00 Injection Co. Bosch Automobile Diesel System 16,195.41 175.85 15,099.94 0.00 Co., Ltd. Wuxi Weifu Exact Machinery 16,939.46 347.25 16,708.72 0.00 Manufacture Limited Wuxi Weifu International Trade Co., 15.64 0.00 15.64 0.00 Ltd. Total amount 83,235.27 2,873.08 80,050.81 778.02 Including: in the report period, the capital amount the listed company provided to controlling shareholder and its subsidiaries was RMB 147,660,700 and the balance was RMB 0.00. 7.5 Entrusted assets □Applicable √Inapplicable 7.6 Implementation of commitment items √Applicable □Inapplicable Ended Dec. 31, 2004, the Company and subsidiaries had significant commitments as follows: The Company and subsidiaries need to pay RMB 82,700,000 to build plants and purchase equipments (contract was signed). 7.7 Significant lawsuit and arbitration □Applicable √Inapplicable 7.8 Particulars about the performance of obligations of Independent Directors Particulars about the independent directors attending the Board Name of This year times Presence in Entrusted Absence Notes Independent of attending the person presence (Times) Directors Board meeting (times) Zhang Xiaoyu 7 7 0 0 Ouyang Minggao 7 7 0 0 Chen Qilong 7 7 0 0 Chen Juchang 7 7 0 0 Particulars about the independent directors proposed different opinions about the relevant matters of the Company □Applicable √Inapplicable Other relevant information Special explanation and independent opinion of the independent directors on the accumulated and current guarantee for external parties of the Company and execution of No.56 Document Independent directors believe: (1) The situation of current capital reflected in Special Explanation on Occupying Capital by the Controlling Shareholder and Other Associated Parties of the Company belongs to normal current capital, occurred for meeting the need of the production and operation activities of the Company, are commercial behavior on the basis of justness, fairness and publicity and there existed no situation of illegally occupying the Company’ s capital by the principal shareholder. (2) The Company has not provided guarantee for the controlling shareholder and other associated parties. §8. Report of the Supervisory Committee √Applicable □Inapplicable I. Work of the Supervisory Committee The Supervisory Committee held two meetings in the report period: 1. The 6th meeting of the 4 th Supervisory Committee was held on Apr. 14, 2004 and the examined topics were Work Report of the Supervisory Committee in 2003, 2003 Annual Report of the Company and its Summary, Report of Financial Settlement and Profit Distribution Preplan for 2003 of the Company and the 1st Quarterly Report in 2004 of the Company; 2. The 7th meeting of the 4 th Supervisory Committee was held on Aug. 11, 2004 and the examined topics were Semiannual Report in 2004 of the Company and its Summary and Report of Profit Distribution Preplan in the 1st Half Year of 2004. II. The Supervisory Committee expressed independent opinion for the following events: 1. Operation according to law. In 2004, the members of the Supervisory Committee were present at every meeting of the Shareholders’General Meeting and the Board of Directors and supervised over the decision-making and operation of the Company. Especially during the decision-making process of the Board on the all-around cooperation between German Bosch Company and the Company to reorganize on the basis of the former Euro-Asia Company and establish Bosch Automotive Diesel Systems Co., Ltd., the Supervisory Committee had checked up and supervised the joint-venture cooperation plan and the feasibility report, and safeguarded the interests of the Company. The Supervisory Committee believed that every decision-making procedure of the Company this year had been in accordance with laws, regulations and Articles of Association of the Company, the internal control system of the Company was perfect. When the Company’ s directors and senior executives executed authorities, there found neither behavior of breaking laws, regulations and Articles of Association of the Company nor abusing authorities and damaging the interest of the Company and the Shareholders. 2. Check of the Company’ s financial status. The members of the Supervisory Committee attended every meeting of the Board of Directors this year and examined annual, semiannual and quarterly report and other documents submitted by the Board of Directors. The Supervisory Committee believed that the financial report in every period reflected objectively and truly the financial situation and operation result of the Company. 3. Related transactions. The Supervisory Committee believes the related transaction occurred in the report period had been conducted according to the Related Transactions Agreement signed by Wuxi Weifu Group Co., Ltd. and by the approval of the Shareholders’General Meeting. Related transactions could reflect the principle of market trading and had not done harm to the interest of the Company. §9. Financial Report 9.1 Auditor’s opinions Auditor’ s opinions: Standard unqualified auditor’ s opinions 9.2 Financial statement 9.3 Explanation on changes of accounting policy, accounting estimation and settlement compared with the latest annual report □Applicable √Inapplicable 9.4 Contents, correct amount, reason and its influence of significant accounting errors □Applicable √Inapplicable 9.5 Explanation on change of consolidated scope compared with the latest annual report √Applicable □Inapplicable In the report period, the consolidation scope increased Wuxi Weifu Automobile Diesel System Co., Ltd., of which the Company held 70% equity. Board of Directors of Weifu High Technology Co., Ltd. Apr. 22, 2005 WEIFU HIGH-TECHNOLOGY COMPANY LIMITED AND ITS SUBSIDIARIES CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2004 (All amounts in Renminbi (“RMB”) thousands, except for earnings per share) Notes 2004 2003 Revenue, net 4,29 2,118,745 1,640,793 Cost of sales (1,645,383) (1,251,925) Gross profit 473,362 388,868 Other operating income 4 6,015 8,639 Distribution costs (80,271) (78,217) Administrative expenses (188,611) (177,422) Other operating expenses (52,997) (5,324) Profit from operations 6 157,498 136,544 Finance costs, net 5 (31,256) (28,254) Share of results of associates before tax 13 145,991 162,785 Income from unconsolidated subsidiaries 14 4,909 3,943 Impairment loss of investments 15 (19,000) - Profit before tax and minority interests 258,142 275,018 Income tax expense 7(b) (24,191) (27,137) Profit before minority interests 233,951 247,881 Minority interests 26 (6,664) (8,324) Net profit 227,287 239,557 Earnings per share 8 - Basic RMB 0.52 RMB 0.55 - Diluted Not applicable Not applicable The accompanying accounting policies and notes form an integral part of these consolidated financial statements. WEIFU HIGH-TECHNOLOGY COMPANY LIMITED AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER 2004 (All amounts in RMB thousands) 31 December 31 December Notes 2004 2003 ASSETS Non-current assets Leasehold land 10 73,614 49,706 Property, plant and equipment 11 854,015 906,002 Intangible assets 12 70,207 32,370 Investments in associates 13 802,093 475,365 Investments in unconsolidated subsidiaries 14 46,678 41,769 Available-for-sale investments 15 29,520 43,520 Held-to-maturity investments 16 3,000 - Deferred tax assets 7(b) 5,851 - Total non-current assets 1,884,978 1,548,732 Current assets Inventories 17 670,671 354,845 Due from related parties 29(e) 27,760 1,165 Dividend receivable 91,173 - Prepayments 32,492 5,032 Trade and other receivables 18 673,081 491,920 Cash and bank deposits 27(b) 814,962 487,257 Total current assets 2,310,139 1,340,219 Total Assets 4,195,117 2,888,951 WEIFU HIGH-TECHNOLOGY COMPANY LIMITED AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEET (CONTINUED) AS OF 31 DECEMBER 2004 (All amounts in RMB thousands) 31 December 31 December Notes 2004 2003 EQUITY AND LIABILITIES Shareholders’equity Ordinary shares 23 436,366 436,366 Reserves 24 1,134,212 1,094,407 Retained earnings 25 615,980 515,771 Total shareholders’equity 2,186,558 2,046,544 Minority interests 26 143,974 77,310 Non-current liabilities Long-term bank borrowings 21(b) 225,000 160,000 Long-term payables 22 56,822 47,538 Total non-current liabilities 281,822 207,538 Current liabilities Trade and other payables 19 1,000,747 333,144 Current tax liabilities (28,991) 5,846 Due to related parties 29(e) 7,780 9,564 Dividend payable 416 416 Short-term bank borrowings 21(a) 552,830 195,500 Accruals and other current liabilities 20 14,981 13,089 Current portion of long-term bank borrowings 21(b) 35,000 - Total current liabilities 1,582,763 557,559 Total liabilities 1,864,585 765,097 Total Equity and Liabilities 4,195,117 2,888,951 The accompanying accounting policies and notes form an integral part of these consolidated financial statements. WEIFU HIGH-TECHNOLOGY COMPANY LIMITED AND ITS SUBSIDIARIES CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2004 (All amounts in RMB thousands) Notes 2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Cash generated from operations 27(a) 227,508 40,530 Interest paid (28,414) (14,463) Income tax paid (19,358) (17,408) Net cash from operating activities 179,736 8,659 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of leasehold land (25,612) (5,836) Purchase of Intangible assets (8,575) - Purchase of property, plant and equipment (217,478) (239,552) Proceeds from disposal s of property, plant and equipment 27(c) 6,875 137,386 Increase in investments in associates 13 (152,732) - Increase in available-for-sale investments 15 (5,000) - Purchase of held-to-maturity investments (3,000) - Proceeds from disposals of trading investments - 6 Interest received 7,496 4,447 Dividends received 70,605 66,3 07 Net cash used in investing activities (327,421) (37,242) CASH FLOWS FROM FINANCING ACTIVITIES: Net increase in short-term bank borrowings 357,330 38,000 Increase in long-term bank borrowings 100,000 160,000 Cash injection from minority shareholders 60,000 - Dividends paid (87,273) (87,065) Cash received from government grants 11,823 28,740 Increase in long-term payable 1,710 - Net cash from financing activities 443,590 139,675 Net increase in cash and cash equivalents 295,905 111,092 Cash and cash equivalents at beginning of year 487,257 376,165 Cash and cash equivalents at end of year 27(b) 783,162 487,257 The accompanying accounting policies and notes form an integral part of these consolidated financial statements.