Wafangdian Bearing Company Ltd. Midyear Report of 2011
Wafangdian Bearing Company Limited
Midyear Report of 2011
(Report period：Jan. 1, 2011－Jun. 30, 2011)
Chairman（Signature）：Wang Lushun
August 18, 2011
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
Index
Ⅰ Important notice Page 3
Ⅱ Brief introduction of the Company Page 4
Page 5
Ⅲ Change of capital Stock and the stocks holding by the major shareholders
Page 7
Ⅳ Status of directors, supervisors and top managers
Page 8
Ⅴ Discussion and analysis of the management
Page 11
Ⅵ Important events
Page 15
Ⅶ Financial statement
Page 60
Ⅸ Reference documents
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
Wafangdian Bearing Company Ltd.
Midyear Report of 2011
Section 1. Important notice
The board of directors, the supervisory committee, the director, the supervisor and the top management
guaranteed no false record, false statement of misleading data or major omission in the report, and took
associated responsibilities of the truth, accuracy and completeness.
All directors attended the meeting.
The Midyear financial report was not audited.
Chairman Mr. Wang Lushun, finance controller Mrs. Sun Najuan and financial charger Mrs. Yao Chunjuan
guaranteed the truth, completeness of the financial report in the Midyear report.
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
Section 2. Brief introduction of the Company
Ⅰ Brief introduction of the Company
1. Chinese name of the Company: 瓦房店轴承股份有限公司
Abbreviation of Chinese name: 瓦轴股份公司
English name of the Company: Wafangdian Bearing Company Limited
Abbreviation of English name: WBC
2. Legal representative of the Company: Wang Lushun
3. Secretary of the Board of Directors of the Company: Sun Najuan
Authorized Stock and Security Affairs Representative: Su Shaoli
Correspondence address: No. 1 Beigongji Street, Wafangdian City, Liaoning
Province, China.
Consulting telephone: 0411-39116732
Fax: 0411-39116738
E-mail: zwz2308＠126.com
4. Registered address: No. 1 Beigongji Street, Wafangdian City, Liaoning Province, China
Office address of the Company: No. 1 Beigongji Street, Wafangdian City, Liaoning Province, China
Post code: 116300
International net address: http//www.zwz-bearing.com
E-mail address: zwz2308@126.com
5. The Company chose Securities Times, Hong Kong Commercial Newspaper, and Wen Wei Po for disclosure of
information of the Company
International net address for disclosure: http//www.cninfo.com.cn
Preparation and liaison office of this report: Investment and Securities Department of the Company
6. Listing location of the Company’s stock:: Shenzhen Stock Exchange
Abbreviated name of the stock: Wazhou B
Stock code: 200806
7. Other relative information
1). The originally registered date of the company was March 20, 1997
The originally registered location of the company was: No. 1, Section 1, Beigongji Street, Wafangdian City,
Liaoning Province, China
2). Business license registration No. of the entity: 大工商企法字 6-14522102001101996
3).Tax registration No. of the company: 国税大字 2102812242399712
4). Certified public accountants engaged by the company and its address:
Shine wing Certified Public Accountants: Floor 9 of A section of FuHua mantion ,No. 8 ,north street of ChaoYang
door ,Dong Cheng area ,Bei Jing .
2 Abstract of accounting data and business data
2.1 Main financial indexes
Unit: RMB Yuan
At the end of current At the end of previous
+/-（％）comparing with the previous
period period
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
period
Total assets (Yuan) 3,508,170,075.81 3,119,127,425.10 12.47%
Owner’s equity (Yuan) 1,498,916,806.13 1,445,337,309.72 3.71%
Share capital(share) 402,600,000.00 402,600,000.00 0.00%
Net asset on per share (Yuan per share) 3.72 3.59 3.62%
+/-（％）comparing with the previous
2011.01.01-.06.30 2010.01.01-06.30
period
Total operating revenue 1,757,865,663.28 1,573,795,209.58 11.70%
Operating profits 59,374,200.82 75,047,891.31 -20.88%
Total profit 63,961,198.24 73,898,230.58 -13.45%
Net profits attribute to the shareholder 53,579,496.41 62,472,158.62 -14.23%
Net profits with abnormal profits and losses
48,992,498.99 57,885,161.20 -15.36%
deducted
Basic gains on per share 0.13 0.16 -18.75%
Diluted gains on per share 0.13 0.16 -18.75%
Net returns on assets (%) 3.57% 4.42% -0.85%
Net returns on assets with abnormal profits and
3.27% 4.50% -1.23%
losses deducted (%)
Net cash flow from the operation activities 91,389,270.77 19,622,663.23 365.73%
Net cash flow from the operation activities on
0.23 0.05 360.00%
per share
* Note 1: the deducted abnormal profits and losses
Unit: RMB Yuan
The item of the abnormal profits and losses Amount
Profits and losses relating to disposal of fixed assets 4,525,321.38
Other non-operating incomes and expenses with the provisions for
impairment of assets depreciation deducted according to the -67,113.38
enterprises’ routine accounting system
Profits and losses relating to the debt restructure 128,789.42
Total 4,586,997.42
There are no differences between the CAS in aspect of financial data.
Section 3. The change of capital stock and stocks holding
by major shareholders
1. Explanation of the total shares and changes of share structure in report period:
In the report period, there was no change either in the total shares or in the share structure due to allocation of
gift shares, transferred capital stock, allotment of shares and new issues.
2. The number of the total shareholders at the end of the report period:
At the end of the report period, there are 8,944 registered shareholders, including 1 state-owned shareholder and
8,943 public shareholders.
3. The introduction to the main shareholders:
(1) The top 10 main shareholders and top 10 current shareholders registered prior to June 30, 2011
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
Unite: shares
Total shareholders 8,944
Top ten shareholders’ status
Non-circulation Impawned and
Name Nature Proportion Total shares
shares frozen shares
Wang Fangdian Bearing Group State-owned
60.61% 244,000,000 244,000,000 0
Corporation shareholder
Foreign
AKTIEBOLAGET SKF 19.70% 79,300,000 0 0
shareholder
Foreign
GAOLING FUND,L.P. 1.82% 7,311,755 0 0
shareholder
Domestic
Huang Junyue 0.88% 3,528,830 0 0
shareholder
Foreign
KGI ASIA LIMITED 0.19% 753,710 0 0
shareholder
Domestic
Ma Yuancheng 0.18% 735,425 0 0
shareholder
Merchant securities Hong Kong State-owned
0.18% 716,753 0 0
Company shareholder
Foreign
MAN,KWAI WING 文贵荣 0.18% 713,101 0 0
shareholder
Domestic
Chen Zhongwu 0.13% 532,700 0 0
shareholder
Foreign
Hei Youxin 0.13% 507,359 0 0
shareholder
the top 10 current shareholders
Name Amount Type
AKTIEBOLAGET SKF 79,300,000 B
GAOLING FUND,L.P. 7,311,755 B
Huang Junyue 3,528,830 B
KGI ASIA LIMITED 753,710 B
Ma Yuancheng 735,425 B
Merchant securities Hong Kong Company 716,753 B
MAN,KWAI WING 文贵荣 713,101 B
Chen Zhongwu 532,700 B
Hei Youxin 507,359 B
GUOTAI JUNAN SECURITIES(HONGKONG)
471,800 B
LIMITED
There is no relationship and consistent activities between the first big
shareholder and the top ten current shareholders in the major ten
The explanation on the relationship and consistent
activities between above shareholders shareholders of the company, The relationship among other shareholders, top
ten current shareholders, top ten current shareholders and other shareholders
is not clear.
Note: In the report period, the frozen period of the shares purchased by the company’s strategic investor
AKTIEBOLAGET SK expired in 1999, and has not dealt with the releasing-procedure in this report period.
(2) Introduction to shareholdings of the top ten shareholders
(1) Wafangdian Bearing Group Corporation Limited (hereinafter referred to as WBGC, the parent company of the
Company) holds 244 million shares of the Company, taking up 60.61% of the total shares.
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
(2) AKTIEBOLAGET SKF holds 79.3 million shares of the Company, which account for 19.70% of the total
shares.
(3) There is no change for the shareholders during the current period.
Section 4. The information of the directors, supervisors
and top managers
1.The changes of the shares held by the directors, supervisors and top managers:
No directors, supervisors or top managers have ever held the Company’s shares during the report period.
2. Appointment and removal of the directors, supervisors and top managers:
In the report period, director Su Shaoli reached the statutory retirement age, and applied for resigning the post of
director. The company hires Chen Jiajun as a director and Meng Wei as a supervisor. (Details refer to the
announcements on April 26 and June 18).
The Directors and Supervisors and top management now in the post are as follows:
Shares
Shares
Holding in
Holding at +/-
Name Position Sex Age Term the
the end of ,reason
beginning
year
of year
Wang Lushun Chairman Male 60 2009.6-2012.6 0 0 0
Cong Hong Vice-Chairman Male 52 2009.6-2012.6 0 0 0
Shao Yang Director, GM Male 44 2009.8-2012.6 0 0 0
Zhang Xinghai Director Male 42 2009.6-2012.6 0 0 0
Sun Najuan Director, CFO Female 43 2009.6-2012.6 0 0 0
Chen Jiajun Director Male 44 2011.6-2012.6 0 0 0
Rakesh Makhija Director Male 59 2010.10-2012.6 0 0 0
Fang Bo Director Female 39 2009.6-2012.6 0 0 0
Liu Yuping Independent director Male 55 2009.6-2012.6 0 0 0
Wang Keyi Independent director Male 67 2009.6-2012.6 0 0 0
Zhang Qiluan Independent director Male 54 2009.6-2012.6 0 0 0
Wang Huabin Independent director Male 70 2009.8-2012.6 0 0 0
Sun Maolin Supervisor Male 47 2009.6-2012.6 0 0 0
Wang Longjie Supervisor Male 49 2009.6-2012.6 0 0 0
Meng Wei Supervisor Male 43 2011.6-2012.6 0 0 0
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
Yao Chunjuan Supervisor Female 45 2009.6-2012.6 0 0 0
Qu Rongjun Supervisor Male 56 2009.6-2012.6 0 0 0
Jiang Yulin Vice-GM Male 56 2009.8-2012.6 0 0 0
Gao Yongyang Vice-GM Male 58 2009.8-2012.6 0 0 0
Hua Yuehong Vice-GM Male 43 2009.8-2012.6 0 0 0
Section 5. Work report of Board meeting
1. The summary of the business in the current period:
1.1 The discussion and analysis on the operation situation in the current period
During the report period, led by scientific outlook on development, the Company adjusted the product structure,
drove the orders and the sales have been greatly increased. Implemented E Project and improved the efficiency.
Pushed forward ”U” project, and promoted product quality. The company has promoted enterprise reform and the
implement management innovation. However, due to raw materials, energy price increases significantly, resulting in
rising costs; product selling price was flat, funds has increased, and the quality is worse. Therefore, the operating profit
and net profit decreased respectively.
In the first half-year of 2011, the company’s operating incomes reached up to 175, 7860,000 Yuan with an
increase by 11.70% comparing with the previous period; the operating profits reached up to 5, 9370,000 Yuan with an
decrease by 20.88% comparing with the previous period; the net profits reached up to 5, 3570,000 Yuan with an
decrease by 14.23% comparing with the previous period.
1.2 Business scope and operation situation of the Company:
The business scope of company is sales of bearings, machinery, automobile auxiliaries and relative products,
rent of building and machinery; inspection of bearings, related machinery and Metrologic instruments. The company
has become a modernized enterprise system integrating the production, supply and sales.
1.3 The company and the subsidiaries’ main business calculated by region
Unit: RMB’0000 Yuan
The information on the main business according to region
Catalog 2011.6.30 2010.6.30 The operating income comparing with last year %(+/)
Export 9,205.98 8,069.20 14.09
Domestic 124,544.75 112,651.88 10.56
Including: North 40,913.05 34,264.67 19.40
South 26,874.35 22,478.55 19.56
East 39,957.05 39,395.03 1.43
West 16,800.31 16,513.63 1.74
Industrial work income 7,208.08 5,081.78 41.84
Total 140,958.81 125,802.86 12.05
1.4 The main business of the company and its subsidiaries according to industry and product
Unit: RMB’0000 Yuan
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
The information on the main business according to industry
Increase/
Increase/ Increase/
Decrease of
Items Main business Main business Main business Decrease of Decrease of
the main
income cost Profit ratio main business main business
business
cost (%) profit ratio (%)
income (%)
Export 9,205.98 9,333.84 -1.39% 14.09% 28.01% -11.03%
Domestic 124,544.75 107,905.20 13.36% 10.56% 10.14% 0.32%
Including: Transportation
55,238.67 48,764.39 11.72% -3.35% -5.96% 2.45%
bearing
Special-used bearing 28,811.69 23,940.80 16.91% 22.94% 35.41% -7.65%
General –used bearing 40,494.38 35,200.01 13.07% 26.29% 23.81% 1.74%
Industrial work income 7,208.08 7,286.37 -1.09% 41.84% 78.00% -20.54%
The information on the main business according to product
Bearings 133,750.73 117,239.04 12.35% 10.79% 11.38% -0.46%
Industrial work income 7,208.08 7,286.37 -1.09% 41.84% 78.00% -20.54%
1.5 Introduction to the joint holding company whose investment gains can occupy over 10% of net
profits of the company:
Unit: RMB Yuan
Name of joint stock company Dalian SKF Wazhou Co., Ltd.
Investment gains from the participating interest Proportion occupying the net profit of
6,302,534.50 11.76%
company in the report period the listed company
Participating Business scope Produce and sell the spherical roller bearings
company Net profits 12,862,315.31
1.6 The problems and difficulties in operation
Affected by the raw materials, auxiliary materials, and the price of energies increased greatly, the cost of product
increased, well the price decreased slightly, resulting in gross profits of the main business decreases comparing with
the previous period, and the quality of operation is low, funds increases, the contradiction of funds shortage is still
serious.
Facing the problems and difficulties, the company takes the following measures:
(1) Try best to explore new markets to realize sales’ high growth;
(2) Implement E Project and improve efficiency.;
(3) Push forward “U” project, and promote product quality level;
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
(4) Promoted the reform of enterprise and carried out management innovation
2. Investment of the Company in the report period:
2.1 Application of the B share fund:
The company had no raise, and no previous B share continued using in current period.
2.2 Investment and earnings of non-B-share
Investment plan and the completion of the table below:
2.3 Application of non-B-share fund item:
Unit: RMB’0000 Yuan
Capital
Items Total H1 of Process Gains
investment investment
Trucks bearing plant construction project 2980 2390
Trucks bearing plant mechanical and electrical
1270 868 Completion of plant construction,
installation projects
equipment installation and
Wheel bearing plant and ancillary 2011.08 commissioning is planned in late
2760 2142
infrastructure improvement projects September 2011, put into trial
Transformation of the truck bearing cone 2870 2084 production.
Automotive Cylindrical Bearings transformation 2960 2088
In large-scale reconstruction project tapered
2415 313 2011.12 Complete equipment order.
cylindrical bearings
In large-scale reconstruction project tapered
cylindrical bearing precision bearing large 1620 923 2011.12 Planned implementation.
renovation project
Precision motor bearings reconstruction Order to complete equipment, is
665 488 2011.11
project manufacturing.
Heavy truck bearing rail reconstruction project 700 338 2011.11 Being implemented.
Improve the level of production of rough roller
2900 1680
reconstruction project 2 New high-speed cold heading
machine have been put into
2011.10
production, and other equipment in
Middle-huge roller grinding transformation 1800 693
place after another.
Cage reconstruction project 1280 684 2011.12 Being implemented.
Improve the quality of products for
the market and needs, timely
Other auxiliary production reconstruction
800 395 2011.12 production and operation of
project
infrastructure improvement to meet
production and market requirements.
Total 25020 15086
3. Business achievements and financial situation analysis:
Unite: RMByuan
Item June 30, 2011 December 31, 2010 +/- (%)
Total assets 3,508,170,075.81 3,119,127,425.10 12.47%
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
Owner’s equity 1,498,916,806.13 1,445,337,309.72 3.71%
Item June 30, 2011 June 30, 2010 +/-(%)
Operating revenue 1,757,865,663.28 1,573,795,209.58 11.70%
Operating cost
1,549,779,169.18 1,374,971,207.09 12.71%
Operating profits 59,374,200.82 75,047,891.31 -20.88%
Net profit 53,579,496.41 62,472,158.62 -14.23%
The net increment of cash and its
equivalents 27,881,598.74 4,560,331.14
511.39%
Section 6 Important events
1. Practical situation of corporation government
The Company followed the regulations of Company Law, Corporation Government Rules, the AOA, etc to
regulate its operations and perfect its corporation government step by step.
1.1 The holding of the shareholders, board of directors and board of supervisors, the voting procedures
and the formation of the resolutions were totally subject to these regulations.
1.2 The Company has made its interior management systems and regulations for restriction of budgeting,
purchasing, logistics and sale, etc, and executed them strictly.
1.3 The company has Separated business, personnel, assets, interior organization and finance from its
holding shareholder:
(1) The Company had independent operations itself, with its business separated from its holding shareholders;
(2)The Company was independent in terms of its personnel, labor and salary management, and had its own
independent labor and personnel management systems. Except the Chairman of Board of Directors of the parent
company Wafangdian Bearing Group Corporation who occupies as the Chairman of the Company, the General
Manager, Deputy-General Managers and the Finance Controller of the Company were all independent from the
controlling shareholder.
(3)The production system, auxiliary production system and supplementary facilities of the Company were
independent from the controlling shareholder.
(4)The Company has separated the accounting from the controlling shareholder. The Company carried out
independent finance and accounting on its own and paid taxes independently.
(5)The Company has established the organizations independent on the holding shareholder.
In the report period, the key control activities that the company controls the subsidiaries, associated transaction,
guaranteeing for other companies, important investment and information disclosure, all conforms to relative laws,
regulations, and requirements made by the supervisors. And no violation of “Interior control index” issued by Shen
Zhen Stock exchange and the regulations systems issued by the company circumstances occurred.
2. The profit distribution plan of 2009 and reserves transferred to the capital plan
Based on 402.60 million shares, the Company decided to allocate the before-tax cash dividends of 0.4 Yuan per
10 shares (including tax). After taxed, 0.36 Yuan per 10 shares will be distributed to the non-resident enterprises of B
shareholders and individual shareholders. Remain profits leave for the next year for another arrangement. The profits
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
distribution plan has approved by the 2010 annual Shareholders’ meeting. The company has completed the dividend
distribution on August 12.
No capital public surplus transferred into capital stock in the report period.
3. In the report period, the Company was not involved in any material lawsuits or arbitration issues.
4. There is no significant asset purchase, sales, disposal and enterprise purchase issues in the report
period.
5. There are no significant items in the report period.
6. Significant associated transactions in the report period:
6.1 The purchase of products (merchandise) or receipt of labor
Occupies by
Principle of
Related parties Content Amount the same Settlement
price
transactions
Wafangdian Bearing Precision Steel Ball
Components Market price 967 0.51 Pay by cash
Manufacturing Co., Ltd.（Precision Ball）
Wafangdian Bearing Precision Forging Co.,
Components Market price 23,945 12.74 Pay by cash
Ltd.（Precision Forging）
Dalian WBGC Bearing Equipment
Manufacturing Co., Ltd.（Equipment Products Market price 998 0.53 Pay by cash
Manufacturing）
Dalian SKF Wazhou Bearing Co., Ltd.(SKF
Bearings Market price 10,481 5.58 Pay by cash
Wazhou)
Managerial expense Market price 162 0.09 Pay by cash
Promotional service Market price 39 0.02 Pay by cash
Technique development
Market price 270 0.14 Pay by cash
Wafangdian Bearing Group Corporation service
Trademark Market price 1,160 0.62 Pay by cash
Land and housing lease Market price 568 0.30 Pay by cash
Equipment Market price - Pay by cash
WBGC Slewing Bearing Co.,Ltd Bearing Market price 2,030 1.08 Pay by cash
WBGC transmission driving Bearing Co.,Ltd Bearing Market price 4,960 2.64 Pay by cash
WBGC Precision Specialty Bearing Co.,Ltd Bearing Market price 1,227 0.65
Total 46,807 24.90
6.2 The sale of products (merchandise)or supply of labor:
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
Occupies by the
Related parties Content Principle of price Amount Settlement
same transactions
Wafangdian Bearing Precision Steel Materials Negotiated price 560 0.32 Pay by cash
Ball Manufacturing Co., Ltd.（Precision
Ball） Heat treatment Market price 52 0.03 Pay by cash
Wafangdian Bearing Precision Forging
Materials Negotiated price 21,264 12.10 Pay by cash
Co., Ltd.（Precision Forging）
Dalian WBGC Bearing Equipment
Manufacturing Co., Ltd.（Equipment Materials Market price 90 0.05 Pay by cash
Manufacturing）
Dalian SKF Wazhou Bearing Co., Components Negotiated price 3,966 2.26 Pay by cash
Ltd.(SKF Wazhou)
Heat treatment Market price 232 0.13 Pay by cash
Wafangdian Bearing Group
Products Market price 1,383 0.79 Pay by cash
Corporation(Overseas Network)
WBGC Slewing Bearing Co.,Ltd Components Market price 5,195 2.96 Pay by cash
WBGC transmission driving Bearing
Components Market price 1,911 1.09 Pay by cash
Co.,Ltd
WBGC Precision Specialty Bearing
Components Market price 910 0.52 Pay by cash
Co.,Ltd
Total 35,563 20.23
7. Significant contracts and the fulfillment
7.1 In the report period, the Information that the company entrusted, contracted and leased other
company’s assets or other company entrusted, contracted and leased the company’s assets
The company and the Wafangdian Precision forging and pressing Co., Ltd.signed the “lease of land use proporty
right”contract. The land covers 482, 20.82 square meters. The rent period is from Jan1, 2011 to Dec 31, 2011. The
lease fee is 385,766.56RMB in this period.
The company and the Wafangdian Precision forging and pressing Co., Ltd.signed the “lease of worshop proporty
right contract. The land covers 8,249.00 square meters. The rent period is from Jan1, 2011 to Dec 31, 2011. The lease
fee is 261,012.00 Yuan in the period.
Special Large Bearing Branch of the Company and Precision Bearing Branch of the Company rent the buildings
of industrial park of Wazhou Group as the workshop. Pursuant to Lease Contract signed with Wazhou Group on
October 20, 2007, the rental period from January 1, 2007 to December 31, 2011, the rental for this year is RMB
4,335,500.00 Yuan.
In the report period, Roller Branch and No. 2 Branch of the Company entered into a building lease contract with
13
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Wazhou Group on January 20, 2008. The rental period from January 1, 2008 to December 31, 2012, the rental for the
year is 2,663,859.00 Yuan.
The company has been renting the land, houses and workshops from the Wafangdian Bearing Group
Corporation, and using the trademark of ”ZWZ” for pay, and receiving the services of Security, fire-fighting,
propagandize and technology development.
7.2 Major items
The Company sells products with the trademark of “ZWZ” and pay for that fee. In the report period, the company
paid for the Wafangdian Bearing Group Corporation 116,000,000.00 RMB accumulately.
7.3 In the report period, there are no major guarantee items.
7.4 In the report period, there are no major entrusted financing occurred.
8. Independent opinions and Special explanations on the related parties capital employment and
information of external guarantee issued by Independent directors.
8.1 The independent opinions regarding the capital employment by related parties
According to the regulations and stipulations of the Notice of Standardization of the Capital Relationship Between
The Listed Company And The Related Parties issued by the CSRC with the Zhengjianfa No.56(2003) and the Notice
of Standardization of The External Guarantee Of Listed Company with Zhengjianfa No.120(2005), As the independent
directors of Wa Fangdian Bearing Co.,Ltd (hereafter refers to as “the company), under the principle of seeking truth
from facts and being responsible for the company and the investors, we took a serious examination and investigation
to the situation of capital employment by holding shareholders and other related parties and the situation of external
guarantee. Following were our independent opinions:
The capital employment by the holding shareholder and other related parties did not occur.
8.2 The independent opinions regarding the external guarantee
In the report period, there is no external guarantee.
9. In the report period, neither the Company nor shareholders, directors, supervisors and top
management made any commitment that may significantly influence on the operating performance and
financial position of the Company.
10. In the report period, information on the changing or dismissing of the certified public accountants.
In the report period the Company did not change or dismiss the certified public accountants. In 2011, the
Company decides to continuously employ Shine Wing Certified Public Accountants as the Certified Public Accountants,
with the annual expenses of 450,000RMB Yuan.
11. In the report period, neither did check, administration penalty or notifying criticism by CSRC occurred ,
board of directors of the company and the directors, nor publicly condemned by the Shenzhen Stock
Exchange.
12. There are no investigation, communication and interview, etc. in the report period
13. The disclosure information
The important information was all published on the Securities times, HongKong commercial newspaper and
http://www.cninfo.com.cn
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
.
Date Items
The annual report of 2010 and abstract
Audit report of 2010
The 1st quarter report of 2011
Independent director work report of 2010
Announcement of resolution of the 6th meeting of the 5th board of supervisors;
April 26, 2011
Announcement of resolution of the 7th meeting of the 5th board session;
Self- assessment report of internal control
Proposal of the implementation of daily related transaction of 2010, the confirmation of the
excess amount and estimation of the daily related transaction of 2011
Special explanation on capital employment of shareholders and its related parties
The notice of holding 2010 annual shareholders’ meeting
May 4, 2011 The notice of changing related phone number
May 10, 2011 Supplement Announcement of annual report of 2010
June 18, 2011 Announcement of resolution of 2010 annual shareholders’ meeting
Law report of the 2010 annual shareholders’ meeting
Section 7 Financial Statements (un-audited)
Wa Fangdian Bearing Co.,Ltd
Balance Sheet
2011.01.01---2011.06.30
Unit:RMByuan
2011.06.30 2010.12.31
Item
Consolidated Parent Consolidated Parent
Current assets：
Monetary capital 79,938,608.43 74,746,785.43 52,507,009.69 44,206,831.34
Settlement preparation cash
Borrowing capital
Trading financial assets
Notes receivables 127,430,396.73 125,963,334.01 48,119,537.52 47,226,537.52
Account receivables 985,151,796.65 981,756,220.65 856,207,264.50 846,898,630.11
Prepayment 63,769,467.09 59,732,783.67 47,849,548.92 35,148,332.06
Interests receivables
Dividend receivables
Other receivables 17,945,605.07 12,303,216.74 17,572,715.37 15,023,534.07
Inventories 1,215,495,327.47 1,062,123,747.32 1,160,554,511.93 1,123,540,714.88
15
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Non current assets due within 1
year
Other current assets 305,311.10 305,311.10 238,439.89 238,439.89
Subtotal current assets 2,490,036,512.54 2,316,931,398.92 2,183,049,027.82 2,112,283,019.87
Non-current assets：
Long-term receivables
Long-term equity investment 96,498,758.54 241,356,075.85 90,196,224.04 110,053,541.35
Investment-purpose real
estate
Fixed assets 583,616,502.35 420,270,576.39 591,960,635.98 572,245,505.81
Construction in process 186,884,339.37 170,987,543.98 100,665,047.38 92,344,979.56
Projects materials
Disposal of fixed assets
Productive biologic assets
Petro and gas assets
Intangible assets 134,124,356.38 134,124,356.38 136,135,471.67 136,135,471.67
exploitation expense
Reputation
Long-term prepaid expenses 998,899.34 981,148.82 1,110,310.92 1,110,310.92
Deferred income tax assets 16,010,707.29 16,010,707.29 16,010,707.29 16,010,707.29
Other non-current assets
Subtotal non-current assets 1,018,133,563.27 983,730,408.71 936,078,397.28 927,900,516.60
Total assets 3,508,170,075.81 3,300,661,807.63 3,119,127,425.10 3,040,183,536.47
Current liabilities ：
Short-term loans 503,780,235.14 490,000,000.00 503,780,235.14 490,000,000.00
Trading financial liabilities
Notes payables 151,683,992.15 151,683,992.15 140,290,000.00 140,290,000.00
Account payables 1,006,064,956.12 846,641,135.48 698,418,246.19 660,043,446.89
Advances from customers 41,999,964.75 40,440,373.80 45,759,336.61 43,296,551.60
Fees and commission
payables
Accrued payroll 29,147,926.45 18,394,361.13 27,467,879.22 18,225,087.48
Tax payables 19,878,444.32 12,333,785.13 5,413,791.70 2,568,380.40
Interests payables
Other payables 93,217,051.77 65,246,102.34 89,179,927.54 62,254,424.75
Provision for the insurance
contract
Non-current liabilities due
20,000,000.00 20,000,000.00 20,000,000.00 20,000,000.00
within 1 year
Other current liabilities
Subtotal current liabilities 1,865,772,570.70 1,644,739,750.03 1,530,309,416.40 1,436,677,891.12
Non-current liabilities ：
Long-term loans 138,000,000.00 138,000,000.00 138,000,000.00 138,000,000.00
Debenture payables
Long-term account payables 100,000.00 100,000.00
Special account payables 221,698.98 221,698.98 221,698.98 221,698.98
Predicted liabilities
Deferred income tax liabilities
Other non-current liabilities 5,159,000.00 5,159,000.00 5,159,000.00 5,159,000.00
Subtotal non-current liabilities 143,480,698.98 143,380,698.98 143,480,698.98 143,380,698.98
Total liabilities 2,009,253,269.68 1,788,120,449.01 1,673,790,115.38 1,580,058,590.10
Owner’s equity（shareholders’
equity）：
16
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Capital stock 402,600,000.00 402,600,000.00 402,600,000.00 402,600,000.00
Capital public reserves 485,691,050.47 482,563,945.37 485,691,050.47 482,563,945.37
less：stock shares
Surplus public reserves 116,726,055.56 116,726,055.56 116,726,055.56 116,726,055.56
General provision for risk
Unallocated profits 493,899,700.10 510,651,357.69 440,320,203.69 458,234,945.44
Total owner’s equity available for
1,498,916,806.13 1,512,541,358.62 1,445,337,309.72 1,460,124,946.37
parent company
Minority owner’s equity
Total owner’s equity 1,498,916,806.13 1,512,541,358.62 1,445,337,309.72 1,460,124,946.37
Total liabilities and owner’s equity 3,508,170,075.81 3,300,661,807.63 3,119,127,425.10 3,040,183,536.47
Wa Fangdian Bearing Co.,Ltd
Income statement
2011.01.01---2011.06.30
Unit:RMByuan
2011.06.30 2010.06.30
Item
Consolidated Parent Consolidated Parent
1.Total operating revenue 1,757,865,663.28 1,736,700,902.96 1,573,795,209.58 1,559,742,234.17
including：operating revenue 1,757,865,663.28 1,736,700,902.96 1,573,795,209.58 1,559,742,234.17
Interest revenue
2.Total operating cost 1,704,793,996.96 1,683,816,361.38 1,505,560,403.78 1,494,513,569.30
including：operating cost 1,549,779,169.18 1,536,759,541.06 1,374,971,207.09 1,371,081,935.89
Interest payment
Operating tax and adds 6,618,239.08 6,060,254.04 5,344,843.08 4,987,592.85
Sales expense 104,038,854.06 102,944,125.96 76,795,002.85 75,935,491.41
Administrative expense 31,813,142.30 25,760,718.57 36,257,160.19 30,829,514.56
Financial expense 12,337,942.40 12,085,071.81 12,192,190.57 11,679,034.59
Loss on depreciation of
206,649.94 206,649.94
assets
plus：gains on the changes of
fair value （loss as “-”）
Gains on investment（loss as
6,302,534.50 6,302,534.50 6,813,085.51 6,813,085.51
“-”）
Including: the gains on
investment to affiliated and joint 6,302,534.50 6,813,085.51 6,813,085.51
stock companies
Gains on currency exchange
（loss as “-”）
3.Operating profits（loss as “-”） 59,374,200.82 59,187,076.08 75,047,891.31 72,041,750.38
plus：non-operating revenue 5,602,126.12 3,902,738.40 1,120,644.22 1,064,209.22
less：non-operating expenses 1,015,128.70 455,824.73 2,270,304.95 1,229,308.61
including：losses on disposal
33,413.92 33,413.92 440,223.64 440,223.64
of non-current assets
4.Total profits（loss as “-”） 63,961,198.24 62,633,989.75 73,898,230.58 71,876,650.99
Less: income tax 10,381,701.83 10,217,577.50 11,467,126.87 11,467,126.87
5.Net profits（net loss as “-”） 53,579,496.41 52,416,412.25 62,431,103.71 60,409,524.12
Net profits available for parent
53,579,496.41 52,416,412.25 62,472,158.62 60,409,524.12
company
17
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Minority owner’s equity -41,054.91
6.Gains on per share
basic gains on per share 0.13 0.13 0.16 0.15
diluted gains on per share 0.13 0.13 0.16 0.15
7.Other comprehensive returns
8.Total comprehensive returns 53,579,496.41 52,416,412.25 62,431,103.71 60,409,524.12
Total comprehensive returns
53,579,496.41 52,416,412.25 62,472,158.62 60,409,524.12
available for parent company
Total comprehensive returns
available for minority -41,054.91
shareholders
Wa Fangdian Bearing Co.,Ltd
Cash flow statement
2011.01.01---2011.06.30
Unit:RMByuan
2010.06.30 2010.06.30
Item
Consolidated Parent Consolidated Parent
1 Cash flow from operating
activities
Cash received from sales of
689,708,029.75 697,995,241.14 613,319,677.86 573,927,435.94
goods or rendering services
Refunds of taxes
Cash received relating to
7,890,682.24 2,887,835.52 12,690,474.96 12,690,220.37
other operating activities
Sub-total of cash inflows from
697,598,711.99 700,883,076.66 626,010,152.82 586,617,656.31
operating activities
Cash paid for goods or
346,607,556.83 380,209,362.66 348,714,033.31 326,563,501.30
receiving services
Cash paid to and on behalf
141,325,005.75 119,125,032.61 130,187,161.86 121,311,341.96
of employees
Tax payments 51,042,443.76 47,575,932.05 69,864,359.77 66,188,987.72
Cash paid relating to other
operating activities 67,234,434.88 58,626,117.09 57,621,934.65 54,685,415.90
Sub-total of cash outflows from
606,209,441.22 605,536,444.41 606,387,489.59 568,749,246.88
operating activities
Net Cash Flow from Operating
91,389,270.77 95,346,632.25 19,622,663.23 17,868,409.43
Activities
2 Cash Flow from Investing
Activities
Cash received from disposal
of investments
Cash received from
investments income
Net cash received from
disposal of fixed assets, intangible 637,836.53 637,836.53
assets and other long-term assets
Cash received from disposal
of subsidiary or other operating
business units
Cash received relating to
other investing activities
18
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Sub-total of cash inflows 637,836.53 637,836.53
Cash paid to acquire fixed
assets, intangible assets and 52,070,561.57 42,023,184.89 11,010,380.58 4,859,955.58
other long-term assets
Cash paid to acquire
6,000,000.00
investments
Net increase of the mortgage
loans
Cash payments relating to
other investing activities
Sub-total of cash outflows 52,070,561.57 48,023,184.89 11,010,380.58 4,859,955.58
Net Cash Flow from Investing
-51,432,725.04 -47,385,348.36 -11,010,380.58 -4,859,955.58
Activities
3 Cash Flow from Financing
Activities
Cash received by investors
Cash received from
198,170,000.00 193,000,000.00 514,355,000.00 505,300,000.00
borrowings
Cash from issuing debenture
Cash received relating to
382,401.91 382,401.91
other financing activities
Sub-total of cash inflows 198,170,000.00 193,000,000.00 514,737,401.91 505,682,401.91
Repayments of borrowings 193,000,000.00 193,000,000.00 504,050,000.00 504,000,000.00
Cash payment for dividends,
17,220,190.68 16,946,573.49 14,537,624.13 14,160,095.59
profits and the interests
Cash payments relating to
150,854.13 150,854.13
other financing activities
Sub-total of cash outflows 210,220,190.68 209,946,573.49 518,738,478.26 518,310,949.72
Net Cash Flow from Financing
-12,050,190.68 -16,946,573.49 -4,001,076.35 -12,628,547.81
Activities
4 Effect of cash and cash
equivalents Foreign Currency -24,756.31 -24,756.31 -50,875.16 -50,875.16
Translation
5 Net Increase (Decrease) in
27,881,598.74 30,989,954.09 4,560,331.14 329,030.88
Cash and Cash Equivalents
plus：the balance in the
52,057,009.69 43,756,831.34 61,708,406.71 61,161,745.51
period-beginning
6 The balance in the period-end 79,938,608.43 74,746,785.43 66,268,737.85 61,490,776.39
The annotation is enclosed as the complement of the above statements.
The balance sheet (consolidated and parent), the income statement (consolidated and parent) and the cash flow
statement (consolidated and parent) have been approved by the board meting held on August 18, 2011.
Charger : Shao Yang Charger : Sun Najuan
19
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Wafangdian Bearing Co., Ltd.
Statement of the provision for assets depreciation (consolidated)
June 30, 2011
Unit: RMByuan
Decreases in current period
Book value in the Provided in current The book value in
Item Transferred and the period-end
year-beginning period Transferred
written off
1 provision for bad debt 51,288,845.65 - 557,521.33 50,731,324.32
Including: A/R 47,630,762.07 557,521.33 47,073,240.74
Other A/R 3,658,083.58 3,658,083.58
2 provision for the impairment of
60,149,845.11 - - 60,149,845.11
inventories
Including: inventory 56,358,265.81 56,358,265.81
Material 2,658,311.39 2,658,311.39
Semi-product 1,133,267.91 1,133,267.91
3 provision for the depreciation of
21,627,119.69 21,627,119.69
long-term investment
Long-tern equity investment 21,627,119.69 21,627,119.69
4 provision for the depreciation of
4,095,361.67 - - 4,095,361.67
fixed assets
Machine and equipment 4,095,361.67 4,095,361.67
Wafangdian Bearing Co., Ltd.
Statement of the provision for assets depreciation (parent company)
June 30, 2011
Unit :RMByuan
Decreases in current period
Book value in the Provided in The book value in
Item Transferred and the period-end
year-beginning current period Transferred
written off
1 provision for bad debt 51,288,845.65 - 557,521.33 50,731,324.32
Including: A/R 47,630,762.07 557,521.33 47,073,240.74
Other A/R 3,658,083.58 3,658,083.58
2 provision for the impairment of
60,149,845.11 - - 60,149,845.11
inventories
Including: inventory 56,358,265.81 56,358,265.81
Material 2,658,311.39 2,658,311.39
Semi-product 1,133,267.91 1,133,267.91
3 provision for the depreciation of
21,627,119.69 21,627,119.69
long-term investment
long-term equity investment 21,627,119.69 21,627,119.69
4 provision for the depreciation of fixed
4,095,361.67 - - 4,095,361.67
assets
Machine and equipment 4,095,361.67 4,095,361.67
20
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Wafangdian Bearing Co., Ltd.
The changes of owner’s equity (consolidated)
June 30, 2011
Unit: RMB yuan
Amount of this period Amount of previous period
Owner’s equity attributed to parent Owner’s equity attributed to parent
Paid-in Reserve Minority Total Paid-in Reserve Minority Total
items Minus: Undistrib Minus: Undistri
capital Capital Surplus s for Other owner’s owner’s capital Capital Surplus s for Other owner’s owner’s
stock uted stock buted
(capital surplus reserves general s equity equity (capital surplus reserves general s equity equity
shares profits shares profits
stock) risks stock) risks
1,354,5
1.Balance in the 402,600,0 485,691,0 116,726,0 440,320, 1,445,33 402,600 485,431 108,140, 356,113 2,258,306
43,521.
previous year-end 00.00 50.47 55.56 203.69 7,309.72 ,000.00 ,518.07 566.51 ,130.88 .32
78
Plus : the changes in
accounting standards
Correction to previous
1,354,5
2.Balance in current 402,600,0 485,691,0 116,726,0 440,320, 1,445,33 402,600 485,431 108,140, 356,113 2,258,306
0.00 43,521.
year-beginning 00.00 50.47 55.56 203.69 7,309.72 ,000.00 ,518.07 566.51 ,130.88 .32
78
3.The increase or
53,579,4 53,579,4 259,532 8,585,48 84,207, -2,258,30 90,793,
decrease in this period
96.41 96.41 .40 9.05 072.81 6.32 787.94
(decrease as -)
53,579,4 53,579,4 87,900, 87,900,
(1)Net profits 0.00
96.41 96.41 637.71 637.71
53,579,4 53,579,4 87,900, 87,900,
Total of (1) and (2) 0.00 0.00 0.00
96.41 96.41 637.71 637.71
(3) the investment or
withdrawal of the owner
1) the investment
2)the shares calculated
into the owner’s equity
3)others
8,585,48 -24,689, -16,104,
(4) profits distribution
9.05 489.05 000.00
1 )withdrawal of surplus 8,585,48 -8,585,4
reserves 9.05 89.05
21
Wafangdian Bearing Company Ltd. Midyear Report of 2011
2).withdrawal of
reserves for general
risks
3)distribution to owners -16,104, -16,104,
and shareholders 000.00 000.00
4)others
(5)owner’s equity
internally transferred
(1)transferring
capital reserves to
capital (capital
stock)
(2) transferring surplus
reserves to capital
(capital stock)
(3)Offsetting the loss by
surplus reserves
259,532 20,995, -2,258,30 18,997,
(4).Others
.40 924.15 6.32 150.23
1,445,3
4.Balance in current 402,600,0 485,691,0 116,726,0 493,899, 1,498,91 402,600 485,691 116,726, 440,320
0.00 37,309.
period-end 00.00 50.47 55.56 700.10 6,806.13 ,000.00 ,050.47 055.56 ,203.69
72
22
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Wafangdian Bearing Co., Ltd.
The changes of owner’s equity (Parent Company)
June 30, 2011
Unit: RMByuan
Amount of this period Amount of previous period
Owner’s equity attributed to parent Owner’s equity attributed to parent
Paid-in Reserve Minority Total Paid-in Reserve Minority Total
items Minus: Surplus Undistri Minus: Surplus Undistri
capital Capital s for owner’s owner’s capital Capital s for owner’s owner’s
stock reserve buted Others stock reserve buted Others
(capital surplus general equity equity (capital surplus general equity equity
shares s profits shares s profits
stock) risks stock) risks
1,460,1 1,390,3
1.Balance in the previous 402,600 482,563 116,726 458,234 402,600 482,563 108,140 397,069
24,946. 74,055.
year-end ,000.00 ,945.37 ,055.56 ,945.44 ,000.00 ,945.37 ,566.51 ,544.00
37 88
Plus : the changes in
accounting standards
Correction to previous
1,460,1 1,390,3
2.Balance in current 402,600 482,563 116,726 458,234 402,600 482,563 108,140 397,069
24,946. 74,055.
year-beginning ,000.00 ,945.37 ,055.56 ,945.44 ,000.00 ,945.37 ,566.51 ,544.00
37 88
3.The increase or decrease in 52,416, 52,416, 8,585,4 61,165, 69,750,
this period (decrease as -) 412.25 412.25 89.05 401.44 890.49
52,416, 52,416, 85,854, 85,854,
(1)Net profits
412.25 412.25 890.49 890.49
52,416, 52,416, 85,854, 85,854,
Total of (1) and (2)
412.25 412.25 890.49 890.49
(3) the investment or
withdrawal of the owner
1) the investment
2)the shares calculated into
the owner’s equity
3)others
8,585,4 -24,689, -16,104,
(4) profits distribution
89.05 489.05 000.00
1 )withdrawal of surplus 8,585,4 -8,585,4
23
Wafangdian Bearing Company Ltd. Midyear Report of 2011
reserves 89.05 89.05
2).withdrawal of reserves for
general risks
3)distribution to owners and -16,104, -16,104,
shareholders 000.00 000.00
4)others
(5)owner’s equity internally
transferred
(1)transferring capital
reserves to capital
(capital stock)
(2) transferring surplus
reserves to capital (capital
stock)
(3)Offsetting the loss by
surplus reserves
(4).Others
1,512,5 1,460,1
4.Balance in current 402,600 482,563 116,726 510,651 402,600 482,563 116,726 458,234
41,358. 24,946.
period-end ,000.00 ,945.37 ,055.56 ,357.69 ,000.00 ,945.37 ,055.56 ,945.44
62 37
24
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Wafangdian Bearing Co., Ltd
Notes to financial statements
Accounting session is from Jan. 1, 2011 to June 30, 2011
(The currency is in RMB Yuan except otherwise indicated)
1. Company Profile
WAFANGDIAN BEARING COMPANY LIMITED (hereinafter referred to as the Company) was incorporated on
July 16, 1996 with approval by Dalian Municipal Commission of Economic System Reform with Document of DMCESR
[1996] No. 64, with Wafangdian Bearing Group Co., Ltd. (hereinafter referred to as Wafangdian Bearing Group as the
Company’s exclusive promoter, with the major production and operation assets (and the relevant liabilities) held by
Wafangdian Bearing Group through authorization by the central government as the share capital contribution after
being converted into money by means of proceeds raising through share offering to the public.
On February 19, 1997, through approval by China Securities Regulatory Commission with Document ZHENG FA
[1997] No. 9, the Company was approved to issue domestically listed foreign shares (B shares)to the public and the
shares were listed for trading.
On March 19, 1997, the Company’s founding ceremony and the 1st meeting of the 1st Board of Directors
decided that April 1, 1997 was the date when the Company’s joint stock system based reorganization came into force
in terms of accounting (i.e. the date of setting up account).
On March 20, 1997, the Company was granted the corporate business license with registration No. DA GONG
SHANG QI FA ZI 24239971-2. The business scope is manufacture and sales of bearings, machinery equipment,
automobile parts and components and relevant products.
On March 25, 1997, the domestically listed foreign ordinary public shares (B shares) were been listed on the
Shenzhen Stock Exchange. The proceeds raised through the offering amounted to RMB 406.58 million and the
Company’s registered capital after issuing was RMB 330 million.
On August 7, 2003, the 9th meeting of the 2nd Board of Directors decided to change the Company’s business
scope, for which the Company was granted new corporate business licence with registration No. DA SHANG QI FA ZI
2102001. The business scope after the change is: manufacture and sales of bearing, machinery equipment,
automobile parts and components and relevant products, lease of machinery equipment and housing, testing of
bearings and relevant machinery equipment and measuring instruments and meters.
According to the supplementary notice regarding the stock distributing of listed company sent by Shen Zhen
Stock Exchange on August ,30th,2006 (herein refers to as “supplementary notice”) and based on the audited financial
statements offered on Sep.30,2006, the company decided to transfer the capital public reserves to the shares . with
2.2 shares gifted by per 10 shares, the total stocks of the company are up to 402,600,000 shares based
on330,000,000 shares, totally adding 72,600,000 shares .the legal person shares owned by Wa Fangdian Bearing
Group Corporation add up to 244,000,000 shares based on 200,000,000 shares ,which are equivalent to 60.6% of the
total stock ; the shares held by SKF add up to 79,300,000 shares based on 65,000,000 shares, which are equivalent
to19.7% of the total stock. the social public shares add up to 79,300,000 shares based on 65,000,000 shares, which
are equivalent to19.7% of the total stock. After the distribution, the share structure of the company meets the
25
Wafangdian Bearing Company Ltd. Midyear Report of 2011
stipulations of “Supplementary notice”.
2. Principal Accounting Policies, Accounting Estimation and Preparation of the Consolidated Accounting
Statements
2.1 Accounting system
The group prepares the financial statements on the basis of going concern.
The Company implements the PRC Enterprise Accounting Standards and the PRC Enterprise Accounting
System and the complementary provisions from January 1, 2007. The financial statement complies the Enterprise
Accounting Standards.
2.2 Fiscal Year:
A fiscal year: from January 1 to December 31 of a calendar year.
2.3 Standard currency for bookkeeping
The Company uses Renminbi (RMB) as the standard currency for book keeping.
2.4 Bookkeeping basis and valuation principle:
Bookkeeping is based on the accrual system. Assets are stated at actual cost at the time of acquisition.
Afterwards, provision for impairment of various assets is made in case of impairment according to the Enterprise
Accounting System.
2.5 Foreign Currency Translation
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bank of China
(“PBOC”) when the transaction incurs. Monetary assets and liabilities in foreign currencies are translated into RMB at
the exchange rate prevailing at the balance sheet day. Exchange differences arising from the settlement of monetary
items are charged as in profit or loss for the period. Exchange differences of specific borrowings related to the
acquisition or construction of a fixed asset should be capitalized as occurred, before the relevant fixed asset being
acquired or constructed is ready for its intended uses. The foreign currency non-monetary items recorded at fair value
are translated at the exchange rate issued on the date of fair value recognized. Exchange differences are charged as
profit and loss of change of fair value. The foreign currency non-monetary items recorded at historical cost are
translated at the exchange rate issued on the date when the transaction incurs, and don’t change the RMB amount.
Foreign currency cash flows are translated at the spot exchange rate on the day when the cash flows incur. The
amounts resulted from change of exchange rate are presented separately in the cash flow statement.
2.6 Recognition of Cash Equivalent
The Company takes the investments held by short term highly liquid, readily convertible into known amounts of
cash and involve very little risk in the change of their value.
2.7 Financial assets
(1) Classification of financial assets
The financial assets are classified into the following four categories according to investment purpose and economic
substance.
1) Financial asset measured at fair value and the amount of the change in fair value of a financial asset is
recognized in profit and loss in current period: mainly represents the objective of being held for sale in short term and
presented at financial asset held for transaction in balance sheet.
26
Wafangdian Bearing Company Ltd. Midyear Report of 2011
2) Investment held to maturity: non-derivative financial assets of fixed maturity, fixed or confirmable recoverable
amount, which management have definite purpose and capacity to hold to maturity.
3) Accounts receivable: represents non-derivative financial assets of no quote, fixed or confirmable recoverable
amount, including notes receivable, accounts receivable, interest receivable, dividends receivable and others
receivable etc.
4) Financial assets available for sale: financial assets available for sale include non-derivative financial assets
available for sale when initially recognized and others financial assets which are classified.
(2) Recognition and measurement of financial assets
1）Financial assets should be initially recognized at fair value. Financial assets which are measured at fair value
and the variation of fair value is charged as the profit or loss for the current period, related transaction expenses
incurred when acquiring financial assets shall be directly charged as profit or loss for the current period. The
transaction expenses of others financial assets shall be charged as initial amount. When the contractual rights for
collecting the cash flow of the said financial asset are terminated, or when the risk and reward accompanied with the
ownership of the said financial assets have been transferred to the receiving party, the recognition of financial assets
shall be terminated.
2）For the financial assets measured at their fair values and of which the variation is charged as the profit or loss
for the current period and financial assets held for sale shall be measured subsequently at fair value. Accounts
receivable and investment held to maturity shall be measured on the basis of the post-amortization costs by adopting
actual interest rate method.
3）For the financial assets measured at fair values and of which the variation is charged as profit or loss for the
current period, changes of their fair values shall be recorded into changes of fair value of financial assets. The interest
and cash dividends from financial assets when held shall be recognized investment income. When the financial assets
are disposed, the difference between its fair value and initial recognition amount shall be recognized into investment
profit or loss, and meanwhile, adjust the change of fair value of financial assets.
4）The change of fair value of financial assets held for sale shall be recorded as owner’s equity. The interests of
the financial assets held for sale calculated according to the actual interest rate method shall be recorded into the
investment income of the current period. The cash dividends of the equity instrument investments available-for-sale
shall be recorded into the investment income of the current period when the investee announces the distribution of
dividends. When the financial assets are disposed, the difference between the prices with carrying amount deducted
accumulated change amounts of fair values which recorded into owner’s equity shall be recorded into investment profit
and loss.
(3) Impairment of financial assets
The Company carries out an inspection, on the balance sheet day, on the carrying amount of the financial assets
other than those measured at their fair values. Where there is any objective evidence proving that such financial asset
has been impaired, an impairment provision shall be made. Where a financial asset available-for-sale is impaired,
even if the recognition of the financial asset has not been terminated, the accumulative losses arising from the
decrease of the fair value of the owner’s equity which was directly included shall be transferred out and charged as the
profit or loss for the current period. As for the debt instruments available-for-sale whose impairment-related losses
have been recognized, if, within the accounting period thereafter, the fair value has risen and are objectively related to
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
the subsequent events that occur after the originally impairment-related losses were recognized, the originally
recognized impairment-related losses shall be reversed and be charged as the profit and loss for the current period.
As for the debt instruments available-for-sale whose impairment-related losses have been recognized, if, within the
accounting period thereafter, the fair value has risen and are objectively related to the subsequent events that occur
after the originally impairment-related losses were recognized, the originally recognized impairment-related losses
shall be reversed and be recorded as the owner’s equity. The impairment-related losses incurred to an equity
instrument investment for which there is no quoted price in the active market and whose fair value cannot be reliably
measured, and which shall be settled by delivering the said equity instrument, should not be reversed.
2.8 Calculation of the Loss from Doubtful Debt in Accounts Receivable
The Company shall recognize it as significant accounts receivable when the amounts of the receivable exceed
RMB 3 million. When there is evidence to prove that the Company can’t collect the receivable it shall made the
impairment test and the provision for the bad debts based on the difference between the present value of cash flow
and the carrying amounts.
For the single amount of non-significant accounts receivable, the Company will divide the amount into some
combinations altogether with the individually tested and non-impaired significant accounts receivable according to their
credit risk quality, and calculate the provision for bad debts for the current period based on the actual loss rate of the
combination of accounts receivable which is the same as or similar to the previous years and with the similar credit
risk quality, and the rate of provision for bad debts combined with the actual situation of current period. The Company
recognizes the mortgage with the age more than three years and the amounts with the evidence showing
non-collectable or little possibility on collection as special assets combination, and fully makes provision for bad debts.
The rate of provision for bad debts based on the age of accounts receivable as follows:
Age Provision proportion% Other A/R proportion%
Within a year 1 1
1 to 2 years 5 5
2 to 3 years 20 20
Over 3 years 50 50
2.9 Inventories
Inventories are classified as raw material, wrappage, low-valuable consumable, working-in-progress, and
finished goods etc.
The inventories are processed on perpetual inventory system, purchased and stored based on their standard
cost. The raw materials are priced daily on their standard costs. The differences between the standard and actual
costs is recorded into the costs of materials and for sending out according to proportion of storage and sending out of
materials, and adjust the planned costs of raw material into actual costs. The working-in-progress finished goods are
priced on their standard costs; the differences between the standard and actual costs are recorded into the costs of
working-in-progress and finished goods according to the receiving and sending out proportion, and finally adjust the
planned costs into actual costs. Low-valuable consumable and wrappage are to be amortized in lump sum at the time
of requisition.
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
At the balance sheet date inventory should be measured at the lower of the cost and realizable value. For the
inventories which are damaged, fully or partly obsolete and selling price below cost, the Company should calculate the
provision for impairment of inventories according to the estimated non-recoverable part of cost. The inventories goods
and a large amount raw materials should be calculated provision for impairment based on the difference of the cost
exceed the realizable value of single item. For raw and accessorial materials with a large quantities and lower unit
price should be calculated provison for impairment according to classify of inventory.
For the goods, working in progress and raw material held for sale etc which shall be sold directly, their
realizable value should be confirmed at the estimated selling price less estimated selling expenses and related tax and
expenses. The raw material held for production, its realizable value should be confirmed at the estimated selling price
of finished goods less estimated cost of completion, estimated selling expenses and related tax. The net realizable
value of inventories held for execution of sale contracts or labor contracts shall be calculated based on the contract
price. If the enterprise holds more inventories than quantities subscribed in the sales contracts, the net realizable value
of the excessive part of the inventories should be calculated based on the general selling price.
2.10 Long-term investment check method
Long-term equity investments include the equity investments which the Group can control, joint control or have
significant influence on the investee, or the Group can not control, joint control or significant influence on the investee
and there is no offer in the active market, fair value can not be reliably measured.
Joint control refers to the control over an economic activity in accordance with contract. Any party of joint venture
can not separately control the business activity of joint venture. The decision related to principal operating activities
need unanimous consent from any party
Significant influence refers to the power to participate in making decisions on the financial and operating policies
of investee, but not to control or do joint control together with other parties over the formulation of these policies.
Significant influence confirm according to the Group holds the over 20% (including 20%) but lower than 50% voteing
shares. Unless there is evidence which indicate the Group can not participate in the decision of production and
operating under the conditions above.
The initial cost of long term equity investments formed in the merger of enterprise under the same control shall
be recognized at the carry amounts of equity of the merged enterprise. The initial cost of long term equity investments
acquired in the merger of enterprise under the different control shall be recognized at fair value of the assets paid,
liabilities risen or charged, and equity securities issued.
Besides the long-term equity investments acquired by the merger of enterprises, the initial cost of a long-term
equity investment obtained by other means shall be ascertained in accordance with the provisions as follows:
(1) The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase
cost which is actually paid. The initial cost consists of the expenses directly relevant to the obtaining of the long-term
equity investment, taxes and other necessary expenses.
(2) The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the
fair value of the equity securities issued.
(3) The initial cost of a long-term equity investment of an investor shall be the value stated in the investment
contract or agreement except the unfair value stated in the contract or agreement.
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
(4) The initial cost of a long-term investment obtained by the exchange of non-monetary assets and the initial
cost of a long-term equity investment obtained by debts restructuring shall be ascertained in accordance with related
Accounting Standards for Enterprises.
For the long-term equity investment in subsidiaries of the Group shall be measured in accordance with the cost
method, and shall be adjusted when preparing consolidated financial statements in accordance with equity method.
For the long-term equity investment of joint venture shall be measured in accordance with equity method.
For the long-term equity investment of the investing enterprise that does not do joint control or does not have
significant influences on the invested entity, and has no offer in the active market and its fair value cannot be reliably
measured should be measured in accordance with cost method. For the long-term equity investment of the investing
enterprise that does not do joint control or does not have significant influences on the invested entity, and has offer in
the active market and its fair value can be reliably measured should be measured as the assets available for sale.
2.11 Fixed assets and depreciation
(1) Recognition criteria of fixed assets: Fixed assets are defined as the tangible assets which are held for the
purpose of producing goods, rendering services, leasing or for operation & management, and have more than one
year of useful life.
(2) Classification of Fixed Assets: Housing and building, machines and equipment, motor vehicle, electronic
equipment and other equipment.
(3) Valuation of fixed assets: Fixed assets are valuated based on the actual cost. The cost of purchased fixed
asset including purchase price, value added tax, duty and other related tax and fee, other expenses that bring the
fixed asset to the expected conditions for use and that may be relegated to the fixed asset. The cost of a
self-constructed fixed asset shall be formed by the necessary expenses incurred for bringing the asset to the expected
conditions for use. The cost of fixed asset which was invested by investor should be recorded in accordance with the
price stipulated in the contract or agreement, other than those of unfair value as stipulated in the contract or
agreement. The cost of fixed assets which is obtained by financial leasing should be measured at the lower one of fair
value and the minimum lease payment in the beginning of lease.
(4) Depreciation method: the Company withdraws depreciation for all fixed assets except for the fixed assets
which had been fully depreciated and are still being used. The Company withdraws depreciation by adopting
straight-line method and depreciation rate of unit item on monthly basis, and brings it cost or expenses in current
period. Estimated net residual value rate is 3%, useful life, depreciation rate as follows:
Types Depreciation Life (Years) Annual depreciation rate%
Housing and buildings
Incl: building 15 6.47
production purpose housing 30 3.23
Non-production purpose housing 35 2.77
Machines & equipment 10-15 6.47～9.70
Motor vehicles 6 16.17
Electronic instruments, meters and equipment
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
Incl: Computer 4 24.25
General testing instruments 7 13.86
Special electronic equipment 8 12.13
Automation control equipment 8 12.13
Automation control instruments and meters 8 12.13
Other equipment
Incl: industrial kilns 7 13.86
Tools and other production devices 9 10.78
Conduction equipment 15 6.47
Non-production equipment and appliances 18 5.39
(5) Subsequent expenditure of fixed assets: Subsequent expenditure comprises repair expenditure, renewed &
improvement expenditure, decoration expenditure and others, is recorded as cost of fixed asset when relevant
economic benefit can flow into the Company and be measured reliably. For the parts of displacement, its book value
should be derecognized. All the others subsequent costs should be recorded in profit and loss during current period.
(6) The Company should review the estimated useful life, estimated net residual value and depreciation method
at the end of each year. If any change has occurred, it shall be regarded as a change in the accounting estimates.
(7) The Company should derecognized fixed asset when the fixed asset has been disposed, or the fixed assets
can’t generate any future economic benefit through using and disposal. The amount that income resulting from
disposal of fixed asset deducts fixed asset’s book value and relevant tax shall be recorded in the profit and loss for the
current period.
2.12 Construction-in-progress
(1) Measurement of CIP: Construction-in-progress is recognized at actual cost. Self-construction project is
recognized at the cost of material, labor cost and construction expenses. Contractual construction is recognized at
project price which should be paid. Installed construction is recognized at the value of equipment, installation and
assembly cost. Besides above, the cost of CIP comprises borrowing cost and profit and loss resulting from foreign
exchange.
(2)The criteria and time spot of constructions in progress’s being transferred to fixed assets: Constructions in
progress are carried down to fixed assets on their actual costs when completing and achieving estimated usable
status. The fixed assets that have been completed and reached estimated usable status but have not yet been
through completion and settlement procedures are charged to an account according to their estimate values;
adjustment will be conducted upon confirmation of their actual values. The Company should withdraw depreciation in
the next month after completion.
2.13 Borrowing costs
Borrowing expenses include loan interest, the amortization of discount and premium, ancillary expenses as well
as the exchange balance on foreign currency borrowings etc. Directly attributable to the qualified asset under
acquisition and construction or production of assets in borrowing expenses, during expenditure has been incurred,
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
borrowing expenses have already occurred, to prepare the asset for its intended use or sale the purchase of
necessary construction or production activities have been started, begin capitalization; when the structure or
production line with capital condition of assets achieve the intended use or sale, stop capitalization. Other borrowing
expenses are recognised as an expense in the current.
Special borrowing of current actual cost incurred, deduct the unused funds in the bank to obtain the interest
income or as a temporary investment made in the investment income amount capitalized; general loan according to
the accumulative asset disbursements over special borrowing part of the weighted average capital expenditure by
multiplying the number of occupied by the capitalization rate of the general borrowing, determine capital amount. The
capitalization rate is calculated by the weighted average interest rate.
The assets eligible for capitalization, refers to taking quite a long time ( usually 1 years ) the structure or
production activities to achieve the intended use or sale of fixed assets, investment real estate and stock assets.
If a qualified asset under structure or production process is interrupted abnormally, and the interruption time for
more than 3 consecutive months, suspended the capitalization of the borrowing expenses, until the assets structure or
production activities start.
2.14 Intangible assets
(1) Measurement of intangible assets: The intangible assets of the Company refer to land use right, ERP system
software. The cost of outsourcing intangible assets shall include the purchase price, relevant taxes and other
necessary expenditures directly attributable to intangible assets. The cost invested into intangible assets by investors
shall be determined according to the stated value in the investment contract or agreement, except for those of unfair
value in the contract or agreement.
(2) Amortisation method and period: The Company shall amortise land use right on the basis of its useful life by
adopting straight line method from the time of acquiring. ERP system software and other intangible assets shall be
amortised on the basis of shorter of estimated useful life, stated beneficial year in the contract, and legal available
year. The amortization amount should be recorded into the cost or expense of relevant in the current period.
(3)The Company shall check the estimated useful life and amortization method of intangible assets with limited
useful life at the end of each year, if any change has been made, it shall be adjusted. The Company shall check the
estimated useful life of intangible assets with uncertain useful life during the each accounting period. If there are
evidences to prove the useful life of intangible assets is limited, the Company shall estimate the useful life and
amortize the intangible assets within estimated useful life.
Impairment of non-financial assets
The Company checks the long-term equity investment for its subsidiaries, association and joint venture, fixed
asset, construction-in-progress, intangible asset and others on each balance sheet date. There may be an impairment
of asset when one of following indications occurs. The Company should test impairments. The company tests the
impairment of goodwill, intangible asset with uncertain useful life on the end of every year. When it is difficult to
measure the recoverable amount of asset, it should measure the recoverable amount of asset on the basis of asset
group.
After impairment test, if the book value exceeds the recoverable amount of the asset, the difference should be
recognized as impairment loss. Once any loss of impairment is recognized, it shall not be reversed in the future
accounting periods. The recoverable amount of asset refers to the higher one of the net amount of the fair value of
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
asset minus disposal expense and the present value of estimated future cash flow of asset.
Indications of impairment as follows:
(1) During the period, an fair value of the asset in the market has declined significantly, which exceeds the
expected decline as time passing or normal use;
(2) Significant changes with an adverse effect on the Company have taken place during the period, or will take
place in the near future, in the technological, market, economic or legal environment in which the entity operates or in
the market to which an asset is dedicated;
(3) Market interest rates or other market rates of return on investments have increased during the period, and
those increases are likely to affect the discount rate applied in calculating an asset's value in use and decrease the
asset's recoverable amount materially;
(4) Evidence is available of obsolescence or physical damage of an asset;
(5) The asset has been idle or is becoming idle, discontinued, or plans to dispose of an asset before the
previously expected date;
(6) Evidence is available from internal reporting that indicates that the economic performance of an asset is, or
will be, worse than expected; and
(7) Other evidence indicates impairment of asset.
2.16 Employee compensation
(1) Employee compensation
The Group should recognize the employee compensation as liability during the period of employee provide
service to company. In accordance with the beneficiaries of the service rendered by employee, the Company should
record the employee benefits into relevant cost and expense. For the compensation for employee due to cancellation
of labor contract, the Company should charge the compensation as the profit and loss during the current period.
Employee compensation comprises salary, bonus, allowance, welfare, social insurance, housing fund, labor
union expenditure, employee education expenditure and other relevant expenditures of service rendered by the
employees.
If there are projected liabilities of dismiss or pension plan required a separate disclosure content.
If before labor contract expires decides to terminate the labor relationship with the employees, or for encouraging
employees to voluntarily accept cuts offer of compensation is proposed, if the group has formulated a formal plan on
the cancellation of labor relationship or proposed voluntary layoff proposal, and is about to carry out, at the same time
the group cannot unilaterally withdraw the plan on the cancellation of labor relationship or reduction of suggestion,
identified by relieving the labor relations compensation resulting projected liabilities, included in the current profits and
losses.
2.17 Ontingent liability
The obligation pertinent to a contingency shall be recognized as an estimated debt when the following conditions
are satisfied simultaneously: The obligation is a current obligation of the Group ;It is likely to cause any economic
benefit to flow out of the Company as a result of performance of the obligation; and The amount of the obligation can
33
Wafangdian Bearing Company Ltd. Midyear Report of 2011
be measured reliably.
Measurement method of contingent liability: The estimated debts shall be initially measured in accordance with
the best estimate of the necessary expenses for the performance of the current obligation, and the Company shall
take into full consideration of the risks, uncertainty, time value of money, and other factors pertinent to the
contingencies. If the time value of money is of great significance, the best estimate amounts shall be determined after
discounting the relevant future outflow of cash. The Company shall check the book value of the estimated debts on the
balance sheet date. If there is any exact evidence indicating that the book value cannot really reflect the current best
estimate amounts, the Company shall adjust the book value in accordance with the current best estimate amounts.
2.18 Recognition of revenue
The revenue of the Company is mainly from selling goods, providing labor services and abalienating the right of
use assets. The relevant revenue shall be recognized, when the relevant economic benefits may flow into the
Company, and the relevant amount of revenue can be measured reliably, and also satisfying the following recognition
standards,
(1) Revenue of selling goods
The revenue from selling goods shall be recognized, when the significant risks and rewards of ownership of the
goods have been transferred to the buyer by the Company, and the Company remains neither continuous
management right that usually keeps relation with the ownership nor effective control over the sold goods.
(2) Revenue from providing labor services
If the Company can, on the date of the balance sheet, reliably estimate the outcome of a transaction concerning
the labor services it provides, it shall recognize the revenue from providing services employing the
percentage-of-completion method.
(3) Revenue from abalienating the use right of use assets
The revenue from abalienating of use right of assets shall be recognized, when the relevant economic benefits
are likely to flow into the Company, and the amount of revenues can be measured reliably.
2.19 Leases
The leases of the Company refer to operating lease. The rents from operating leases shall be recorded by the
lessee into the relevant asset costs or the profits and losses of the current period by using the straight-line method
over each period of the lease term.
2.20 Government subsidies
A government subsidy of the Company shall be recognized if the Company can meet the conditions for the
government subsidy and also can obtain the government subsidy. If a government subsidy is a monetary asset, it shall
be measured in the light of the received or receivable amount. If a government subsidy is a non-monetary asset, it
shall be measured at its fair value; if its fair value cannot be obtained in a reliable way, it shall be measured at its
nominal amount (RMB 1).
The government subsidies pertinent to assets shall be recognized as deferred income, equally distributed within
the useful lives of the relevant assets, and included in the current profits and losses. The government subsidies
pertinent to incomes shall be treated respectively in accordance with the indications as follows: (1) those subsidies
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
used for compensating the related future expenses or losses of the Company shall be recognized as deferred income
and shall included in the current profits and losses during the period when the relevant expenses are recognized; or
(2) those subsidies used for compensating the related expenses or losses incurred to the Company shall be directly
included in the current profits and losses.
2.21 Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liability should be recognized at the differences (taxable temporary
differences) between the tax base of an asset or liability and its carrying amount. The Company shall recognize the
deferred income tax assets arising from a deductible temporary difference to the extent of the amount of the taxable
income which it is most likely to obtain and which can be deducted from the deductible temporary difference. At the
balance sheet date, deferred tax asset and deferred tax liability should be measured at applicable tax rate.
The Company shall recognize the deferred tax assets arising from a deductible temporary difference to the
extent of the amount of the taxable income which is most likely to obtained which can be deducted from the deductible
temporary difference. For the deferred tax assets which already have been recognized, where there is any evidence
showing that the Company is probably unable to acquire sufficient amount of taxable income tax in a future period to
offset against the deductible temporary difference, the book value of the deferred tax assets shall be deducted. Where
it is likely to acquire sufficient amount of taxable income tax, the amount deducted shall be reversed.
2.22 Income tax
The Company shall recognize income tax by balance sheet liability method. The income taxes of the current
period and deferred income tax of the Company shall be treated as income tax expenses or incomes, and shall be
recorded into the current profits and losses, excluding the income taxes incurred in the following circumstances: (1)
the business combination; and (2) the transactions or events directly recognized as the owner’s equity. The income
taxes of the current period and deferred income tax related to the transactions or events directly recorded as the
owner’s equity shall be recorded into the owner’s equity.
The income tax expenses for the current period the amount payable to the Tax Office which are calculated and
recognized according to the tax law and transactions and events of the current period, i.e. income taxes payable; the
deferred income taxes refer to the differences recognized between the amounts at the end of the period and amounts
recognized originally of deferred tax assets and liabilities according to the balance sheet liability method.
2.23 Discontinued operation
Discontinued operation represents the component of the Company that had been disposed or plan to sell, and
the component can be separately divided when operating and preparing financial statements. The component shall be
disposed partly or wholly in accordance with the Company’s’ plan. The component of the Company shall be
recognized as the component held for selling when satisfying the conditions as bellows: 1) The Company had made a
decision on disposal of the component; 2) The Company had signed the irrepealable Transfer Agreement with
transferee; and3) The transfer shall be finished within one year.
2.24 Presentation of consolidated financial statements
(1) Recognition principles of consolidation scope: Scope of consolidated financial statements should include all
subsidiaries and the special purpose entities.
(2) Accounting methods of consolidated financial statements: The Company’s consolidated financial statements
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
had been prepared in accordance with . All material intragroup transaction and balance had been eliminated in full. The parts of subsidiaries’
equity non-attributable to parent company shall be as minority equity lined separately in the owner’ equity on the face
of consolidated financial statements.
Where there are inconsistent accounting policies and accounting period, when preparing the consolidated
financial statements, the Company shall adjust the subsidiaries’ financial statements in accordance with the
Company’s accounting policies and accounting period.
For the subsidiary obtained under different control, when preparing the consolidated financial statements, the
Company shall adjust the separate financial statements based on the fair value of identifiable net assets at the
purchase date; for the subsidiaries combined by the Company under the same control, regard the subsidiaries that
they have been existing since the beginning of the period, and the assets, liabilities, operation performance and cash
flows shall be consolidated into the financial statements of the beginning of the combination period according to their
original book value.
2. Taxes and Others
Taxes and tax rates applicable to the Company are as follows:
3.1 Business income tax
The business income tax rate of the Company and its subsidiary –Liaoyang Bearing Manufacture Co., Ltd.
(hereinafter referred to Liaozhou Co.) is 25%;
The business income tax rate of the Company’s subsidiary – Wafangdian General Bearing Co., Ltd. (hereinafter
referred to as Watong Co.) is an enterprise with foreign investment is 24%. According to Articles 7 and 8 of the
Enterprise Income Tax Law of the People’s Republic of China, Watong Co. enjoys the preferential tax policy of
“exemption for 2 years and reduction by a half for another 3 years”.
In the report period, there is no change in the aspect of tax comparing to the last period.
3.2 Value-added tax
Value-added tax is applicable to the sales income of the Company’s commodities, where: the output VAT rate for
the commodities sold in the domestic market is 17%; zero tax rate is applied to the Company’s products exported and
the export tax-rebating policy of “exemption, offsetting and rebate” is implemented.
The payable VAT amount is the balance of the output VAT of the current period less the input VAT of the very
period.
3.3 Business tax
The applicable business tax of the Company’s housing lease income is based on the rate of 5%.
3.4 Urban construction tax and educational surcharge
Both the urban construction tax and educational surcharge are all based on the payable value-added tax and
business tax with applicable tax rates of 7% and 3% respectively.
3.5 Real estate tax
Real estate tax is calculated based on 70% of the cost of the real estate and the tax rate is 1.2%; the real estate
lease tax is based on the rental income with tax rate of 12%.
3.6 Land use tax
Liaozhou Co. pays the land use right tax based on RMB 1.50 per square meter of the land use right.
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
3.7 River Course Surcharge
Liaozhou Co. pays the river course surcharge based on 1‰ of the product sales income.
4. Controlled subsidiaries and joint ventures
4.1 About the subsidiaries whose equity capital is held by the Company by over 50% and that are listed in the
Company’s consolidated accounting statements:
Investment Proportion of
Entity Names Registered capital Principal business Remark
amount shares held
Production of bearings and
Dalian motor 10,000,000.00 10,478,956.37 100% A
relevant products
Production and sales of
Liao zhou
19,350,000.00 17,337,259.95 100% bearings and machinery B
company
manufacture
A. Dalian ZWZ Precision Motor Car Bearing Co., Ltd. is the company seted up subsidiaries by us this year, the
Dalian Mingshi jointly issued by the accountant firm Mingshikuai check word [ 2010 ] forty-sixth, the capital verification
report for verification of the establishment, the registered capital is 10000000, monetary contributions is 3000000,
equipment investment is 7000000, in August 11, 2010, from Dalian City Administration of industry and Commerce
Management Bureau, obtain registration number Dabao industrial and commercial enterprises law word
2102421101388 of the business license of enterprise legal person.
B. Liaozhou Co., whose former name was Liaoyang Bearing Plant, was entirely merged to Wazhou Group with
approval by Dalian Municipal Commission of Foreign Economic Relations and Trade with Document LIAO JING MAO
FA [1996] No. 420. On November 22, 1996, Liaozhou Co. was granted corporate business licence with registration
No. 122822243 and was renamed to the present name.
On June 15, 1997, the board of directors of Wazhou Group, the Company and Liaozhou Co. formed respectively
a resolution which approved Wazhou Group to assign the equity capital held by it in Liaozhou Co. by 100% to the
Company; for return, the Company assigned the secured short term accounts receivable with the equal amount to
Wazhou Group. On November 7, 1997, Wazhou Group and the Company executed the Ownership Assignment
Agreement, according to which the equity assignment on accounting basis would come into force on January 1, 1998.
The said equity assignment was approved by the Company’s Shareholders’ General Meeting on November 8, 1997.
According to the Request for Instructions on Assignment of the Equity Held by the Chinese Party in Liaozhou Co.
and Huamei Co. issued by Wazhou Group with Document WA ZHOU JI ZI [1998] No. 2, approved by Dalian Municipal
State-owned Assets Supervision and Administration Bureau, the assignment price was determined based on the net
asset determined by Liaozhou Co. through appraisal by Dalian Zhonghua Certified Public Accountants and confirmed
by Dalian Municipal State-owned Assets Supervision and Administration Bureau with Document ZI PING GUAN REN
ZI [1997] No. 102 after the appraisal on April 30, 1997 plus the amount of increase/ decrease of the net assets during
the accounting period from May 1 to December 31, 1997. The procedures for change of registration with the Industry
and Commerce Authority resulted from assignment of the equity are in process of handling.
Feb.6th,2008,Liaozhou company got the enterprise legal person license with the No. of 2110001100574 ; the
name was changed as “WaZhou liaoyang bearing manufacturing co.,ltd”, the legal person is Shao Yang , and the
registered capital is 19.35 millionRMByuan.
4.2 Joint ventures or associates whose equity capital is held by the Company by below 50% are listed as
follows:
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Wafangdian Bearing Company Ltd. Midyear Report of 2011
Entity Names Registered capital Investment Proportion of Principal Business Remark
amount shares held
Dalian SKF
Production and sales of
Wazhou Bearings USD16,900,000.00 68,600,000.00 49.00% A
spherical roller bearings
Co., Ltd.
Distribution of bearings,
Shanghai Zhenxin
mechanical and electrical
Wazhou
equipment and accessories,
Mechanical and 1,000,000.00 400,000.00 40.00% B
instruments and meters, metal
Electrical Products
materials and hardware and
Sales Co., Ltd.
tools
A. Dalian SKF Wazhou Bearings Co., Ltd. (hereinafter referred to as SKF Wazhou Co.) is a joint venture
established by SKF (China) Investment Co., Ltd. and the Company with approval by Dalian Municipal Foreign
Economic Relations and Trade Commission with Document (DFERTC ZI ZI (1998) No. 72) and Dalian Municipal
People’s Government with Approval Certificate (WAI JING MAO DA ZI ZI (1998) No. 0262 with the capital contribution
proportion between the two parties to the joint venture being 51% and 49% respectively.
B. Shanghai Zhenxin Wazhou Mechanical and Electrical Products Sales Co., Ltd. (hereinafter referred to as
Zhenxin Co.) was jointly established by Shanghai Mechanical and Electrical Equipment Corporation, China
Mechanical and Electrical Equipment East China Co., the Company and natural persons.
5. Notes to the principal items in the consolidated statements
5.1 account receivable
(1) Accounts receivable category
2011.06.30 2010.12.31
Items Booking balance Provision Booking balance Provision
Amounts % Amounts % Amounts % Amounts %
Other receivables with
individual significant amount
and 3,910,007.43 0.38 3,910,007.43 100.00 3,910,007.43 0.44 3,910,007.43 100.00
identification separately bad
debt provision
Other receivables
accrued bad debt
provision by portfolio
Accounting aging
992,233,334.98 96.13 38,323,317.06 3.89 867,135,386.28 95.94 38,620,000.29 4.44
portfolio
Related parties portfolio 31,241,778.73 3.03 27,691,878.51 3.06
Risk-free portfolio
Subtotal of portfolio 1,023,475,113.71 99.15 38,323,317.06 3.77 894,827,264.79 99.00 38,620,000.29 4.32
Other receivables with
individual insignificant
amount and identification 4,839,916.25 0.47 4,839,916.25 100.00 5,100,754.35 0.56 5,100,754.35 100.00
separately bad debt
provision
Total 1,032,225,037.39 100 47,073,240.74 903,838,026.57 100 47,630,762.07 ---
38
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Accounts receivable with individual significant amount and identification separately bad debt provision
Provision for bad Proportion Reasons for
Debtors name Booking balance
debts (%) provision
A/R with over 5
Baoding North China Machine & years aging,
3,910,007.43 3,910,007.43 100
Electronic Equipment Ltd Co. unlikely to be
collected
Total 3,910,007.43 3,910,007.43 — —
Accounts receivable accrued the bad debt provisions in the portfolio as accounting aging analysis method
2011.06.30 2010.12.31
Items
Amounts % Provision Amounts % Provision
Within 1 year 854,471,901.95 86.12 6,218,722.75 766,233,218.08 88.36 7,662,332.18
1-2 years 74,739,150.09 7.53 3,736,957.50 33,366,838.00 3.85 1,668,341.90
2-3 years 10,478,348.86 1.06 2,095,669.77 14,862,290.70 1.71 2,972,458.14
Over 3 years 52,543,934.08 5.30 26,271,967.04 52,673,039.50 6.07 26,316,868.07
Total 992,233,334.98 100.00 38,323,317.06 867,135,386.28 100.00 38,620,000.29
Accounts receivable with individual insignificant amount and identification separately bad debt provision
Provision for bad Proportion Reasons for provision
Debtors name Booking balance
debts (%)
Shenyang Sewerage A/R with over 5 years aging,
2,706,703.13 2,706,703.13 100.00
Equipment Co.,Ltd unlikely to be collected
Other sporadic accounts A/R with over 5 years aging,
2,133,213.12 2,133,213.12 100.00
receivable unlikely to be collected
Total 4,839,916.25 4,839,916.25 -
Accounts receivable for the top 5 companies
Relationship with the
Company name Amounts Aging % in the total AR
Company
China Railway Materials
Unrelated party 75,428,272.75 Within 1 year 7.31
Company
China Heavy Vehicle Group
Jinan Qiaoxiang Company Unrelated party 45,035,857.61 Within 1 year 4.36
Limited
Shanxi Fast Gearing Company
Unrelated party 32,888,149.89 Within 1 year 3.19
Limited
39
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Dalian Huarui Company Limited Unrelated party 29,011,872.24 Within 1 year 2.81
Taiyuan goods supplied part of
Unrelated party 26,909,386.50 Within 1 year 2.61
Daqin Railway Company Limited
Total 209,273,538.99 20.27
5.2 Other account receivable
(1) The category of other receivable
2011.06.30 2010.12.31
Items Booking balance Provision Booking balance Provision
Amounts % Amounts % Amounts % Amounts %
Other receivables with individual
significant amount and identification
separately bad debt provision
Other receivables accrued bad debt
provision by portfolio
Accounting aging portfolio 21,603,688.65 100 3,658,083.58 100 21,123,141.82 99.49 3,658,083.58 17.32
Related parties portfolio
Risk-free portfolio 107,657.13 0.51
Subtotal of portfolio 21,603,688.65 100 3,658,083.58 100 21,230,798.95 100 3,658,083.58 17.23
Other receivables with individual
insignificant amount and identification
separately bad debt provision
Total 21,603,688.65 100 3,658,083.58 100 21,230,798.95 100 3,658,083.58
Other receivable accrued the bad debt provisions in the portfolio as accounting aging analysis method
2011.06.30 2010.12.31
Items
Amounts % Provision Amounts % Provision
Within 1 year 13,848,918.96 64.10% 138,489.19 12,592,597.00 59.62% 125,925.97
1-2 years 820,657.29 3.80% 41,032.86 1,537,585.40 7.28% 76,879.27
2-3 years 181,236.02 0.84% 36,247.20 137,337.90 0.65% 27,467.58
Over 3 years 6,752,876.38 31.26% 3,442,314.33 6,855,621.52 32.46% 3,427,810.76
Total 21,603,688.65 100.00% 3,658,083.58 21,123,141.82 100.00% 3,658,083.58
Other receivables from the top 5 debtors
Relationship with the % of the total OR
Debtor name Amounts Aging
Company
Yingkou general Company Unrelated party 2,206,464.84 Within 1 year 12.30
Limited
Dalian Jinhua Metal Materials
Unrelated party 800,000.00 Over 3 years 4.46
Distribution Department
40
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Relationship with the % of the total OR
Debtor name Amounts Aging
Company
Dagang Company Unrelated party 736,160.12 Within 1 year 4.10
Baita Spark Processing
Unrelated party 457,529.25 Within 1 year 2.55
Factory
Shenyang Electrical
Unrelated party 366,591.88 Within 1 year 2.04
Corporation
Total 4,566,746.09 25.45
5.3 Inventories and provision for devaluation:
2011.6.30 2010.12.31
Item Provision for the Provision for the
Amount Amount
impairment impairment
Raw material 150,726,813.58 2,658,311.39 176,521,371.52 2,658,311.39
Packing material 679,892.54 0 508,166.13 0
Low value
0.00 0 259,615.85 0
consumption articles
Finished goods 916,002,563.36 56,358,265.81 821,496,376.18 56,358,265.81
Commissioned by the
processing of 0 0 0.00 0
materials
Semi-products 208,235,903.10 1,133,267.91 221,918,827.36 1,133,267.91
Total 1,275,645,172.58 60,149,845.11 1,220,704,357.04 60,149,845.11
5.4 Advances to supplier
Advances to suppliers as accounting aging analysis method
2011.06.30 2010.12.31
Items
Amounts % Amounts %
Within 1 year 62,938,574.31 98.70 45,461,736.79 95.01
1-2 years 90,458.45 0.14 176,144.52 0.37
2-3 years 214,213.74 0.34 1,133,575.91 2.37
Over 3 years 526,220.59 0.82 1,078,091.70 2.25
Total 63,769,467.09 100.00 47,849,548.92 100.00
Advances to suppliers for the top 5 companies
Relationship with the Pending reason
Debtor name Amounts Aging
Company
Fushun Special Steel Goods not yet
Unrelated party 16,394,951.59 Within 1 year
Company Limited reached
41
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Relationship with the Pending reason
Debtor name Amounts Aging
Company
Xingcheng Special Steel Goods not yet
Unrelated party 11,779,638.74 Within 1 year
Company Limited of Jiangyin reached
Daye Special Steel Company Goods not yet
Unrelated party 8,528,090.58 Within 1 year
Limited reached
Xining Special Steel Company Goods not yet
Unrelated party 6,325,455.36 Within 1 year
Limited reached
Beixing Special Steel Goods not yet
Unrelated party 2,869,359.82 Within 1 year
Company Limited of Qiqihaer reached
Total 45,897,496.09
5.5 Long-term equity investment
(1) Long-term equity investment
Items Final Amounts Initial Amounts
L-T equity investment under cost method 30,030,375.50 30,030,375.50
L-T equity investment under equity method 88,095,502.73 81,792,968.23
Total 118,125,878.23 111,823,343.73
Less: provision for impairment of L-T 21,627,119.69 21,627,119.69
Net amounts 96,498,758.54 90,196,224.04
(2) According to cost and equity method
Cash
Vote dividend
Equity
Investee Initial Amounts 2010.12..31 Increase Decrease 2011.06.30 s
(%) (%) received
in 2011
Cost method
Shanghai ME
machine-electrical
equitpment 4.76 4.76 2,000,000.00 2,000,000.00 0.00 0.00 2,000,000.00 0.00
chain Ltd.
WaTong company 75 75 28,030,375.50 28,030,375.50 28,030,375.50
30,030,375.5
30,030,375.50 30,030,375.50 0.00 0.00 0.00
Sub-total 0
Equity method
Dalian SKF Wazhou
49.00 49.00 68,600,000.00 81,382,113.11 6,302,534.50 87,684,647.61
Bearings Co., Ltd.
Shanghai Zhenxin
40.00 40.00 400,000.00 410,855.12 410,855.12 0.00
Wazhou Machinery
42
Wafangdian Bearing Company Ltd. Midyear Report of 2011
and Electricity
Co., Ltd.
Sub－total 69,000,000.00 81,792,968.23 6,302,534.50 88,095,502.73
Total 99,030,375.50 111,823,343.73 6,302,534.50 118,125,878.23
(3) Provison for impairment of L-T investments
Investee Initial Amounts Increase Decrease Final Amounts Reason of draw
Watong limited stop production
company 21,627,119.69 0.00 21,627,119.69
arrears
Totle 21,627,119.69 0.00 21,627,119.69
Note: At the end of June 30, 2011, Watong limited company--- the company's subsidiary has closed down, and has
been in the liquidation. The company on its control has transferred to the liquidation group. Thus, the company
checked is its investment with cost method temporarily in the report period, and calculated impairment provision with
the amount of 21627100yuan after evaluating investment recoverable value.
5.6 Fix assets, accumulative depreciation and the reserves for the depreciation of the fixed assets:
Houses and Machines and
Transport devices Electronic devices Other Total
buildings facilities
Original value of
the fixed assets
2010.12.31 255,954,797.95 844,107,047.43 19,151,564.60 28,203,185.20 269,264,275.47 1,416,680,870.65
Increase in
527,194.44 27,518,237.38 636,076.79 2,166,264.78 7,933,731.84 38,781,505.23
current period
Including:tr
ansferred
by
527,194.44 25,913,302.93 1,277,923.08 6,363,275.66 34,081,696.11
constructio
n in
progress
Decrease in
23,104,973.46 448649.6 151,513.48 1,[p212,192.54 24,917,329.08
current period
2011.06.30 256,481,992.39 848,520,311.35 19,338,991.79 30,217,936.50 275,985,814.77 1,430,545,046.80
The accumulated
depreciation of
fixed assets
2010.12.31 156,588,985.95 458,056,538.31 14,310,483.16 24,144,672.16 167,524,193.42 820,624,873.00
Increase
10,322,922.89 17,510,922.82 910,950.27 977,300.15 12,632,898.13 42,354,994.26
in current period
43
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Decrease in
18,208,303.04 405222.2 117,745.82 992556.42 19,723,827.48
current period
2011.06.30 166,911,908.84 457,359,158.09 14,816,211.23 25,004,226.49 179,164,535.13 843,256,039.78
Provision for
the depreciation
of fixed assets
2010.12.31 - 3,853,373.23 200,000.00 - 41,988.44 4,095,361.67
Increase
Transferred
Decrease in
382,028.07 - - 40,828.93 422,857.00
other items
2011.06.30 - 3,471,345.16 200,000.00 0 1,159.51 3,672,504.67
Net value of
fixed assets
2010.12.31 99,365,812.00 382,197,135.89 4,641,081.44 4,058,513.04 101,698,093.61 591,960,635.98
2011.06.30 89,570,083.55 387,689,808.10 4,322,780.56 5,213,710.01 96,820,120.13 583,616,502.35
Increases of fixed assets this year, the amount transfer from construction is 34081696.11 yuan. The annual increase
in the accumulated depreciation, provision of 42261896.82 yuan this year。
5.7 Construction in progress:
(1) The details are as follows:
Transferred Other
Name Budget 2010.12.31 Increase into fixed 2011.06.30 Sources
assets decrease
Overhaul of
2#Double Self-raising
carbonization 3,220,000.00 1,097,726.50 567.77 5726.5 1,092,567.77 /loans
production
lines
M250Grinding elf-raising
Machine 791,500.00 130,730.53 0 30730.53 100,000.00 /loans
Improvement
fork truck 2,522,100.00 1,109,707.95 596 299,462.01 810,841.94
Plant reform 12,170,188.70 3,467,993.08 575,977.23 71,194.44 3,972,775.87 Self-raising
/loans
Installation
engineering of 24,183,156.00 1,735,233.81 933.33 444,292.08 1,291,875.06 Self-raising
ultra precise /loans
machine
Reform of the Self-raising
finished goods 11,754,961.72 1,850,734.12 5,246,591.04 456,000.00 6,641,325.16 /loans
warehouse
Dalian Self-raising
Industrial Park 60,938,420.51 12,148,134.74 9,223,333.03 16,508,261.55 4,863,206.22 /loans
project
Crane 4,939,587.00 2,843,862.76 317218.93 768,214.20 2,392,867.49 Self-raising
engineering /loans
44
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Computer 16,432,793.83 2652719.97 737731.84 1327923.08 2,062,528.73 Self-raising
engineering /loans
Grinding Self-raising
Machine 20,851,000.00 4,262,661.52 3,859,054.50 195,726.49 7,925,989.53 /loans
Improvemen
Grinding Self-raising
production 71,270,231.85 13,943,633.11 1728319.78 373,971.67 15,297,981.22 /loans
lines
Reform of the
seventh Self-raising
finished 11,296,136.00 690,423.49 2,263,708.40 263,639.00 2,690,492.89 /loans
production
channel
Heat treatment 14,184,233.00 3,651,663.74 20753572.9 3502564.12 20,902,672.52 Self-raising
/loans
Digital boring 14,680,000.00 4,069,640.90 1,014,381.36 2,081,507.88 3,002,514.18 Self-raising
machine /loans
Reform Self-raising
engineering of 38,778,502.00 1,899,749.30 0 485796.09 1,413,953.21 /loans
flaw detector
Reform of Ist 4,952,485.00 668,002.83 4,707,497.41 0 5,375,500.24 Self-raising
factory /loans
Instruments 4,198,435.00 565,875.87 52,116.00 181,994.77 435,997.10 Self-raising
/loans
Carbonization Self-raising
production 5,893,251.95 6,396,000.00 5653765.58 741,111.59 11,308,653.99 /loans
lines
Medium deep
groove ball Self-raising
bearing 30,340,000.00 13,369,785.10 158273.05 46,735.05 13,481,323.30 /loans
production
lines
Assembly Self-raising
production 2,055,000.00 1,669,197.36 16375.95 0 1,685,573.31 /loans
lines
Car division 117,773,954.00 50787176.94 0 50,787,176.94 Self-raising
/loans
Heat treatment 1,149,000.00 1093791.25 0 1,093,791.25 Self-raising
improvement /loans
Precision Self-raising
branch 272,000.00 262734.26 0 262,734.26 /loans
improvement
Precision Self-raising
rolling body 2,287,000.00 4083309.3 250000 3,833,309.30 /loans
improvement
Industrial Park 230,000.00 242568 0 242,568.00 Self-raising
/loans
The retainer Self-raising
modification 87,600.00 77581.2 77,581.20 0 /loans
improvement
LiaoZhou new 0.00 8,320,067.82 4,616,498.98 0 12,936,566.80 Self-raising
plant /loans
Other 40,266,601.37 14,121,502.88 2,827,314.07 5,969,263.86 10,979,553.09 Self-raising
/loans
Total 517,518,137.93 100,665,047.38 120,300,988.10 34,081,696.11 186,884,339.37
Capitalization
of the 13,982,077.95 3,024,004.94 17,006,082.89
borrowing
expense
45
Wafangdian Bearing Company Ltd. Midyear Report of 2011
The capitalized interest which is used for confirming the projects’ interest assets is the averaged weight rate by the
actual using rate of special borrowing and the general borrowings.
5.8 Intangible assets
Items 2010.12.31 Increase Decrease 2011.06.30
Cost 154,200,495.05 143,589.74 - 154,344,084.79
Land use right 148,782,429.50 - 148,782,429.50
ERP software 4,985,843.33 - 4,985,843.33
Anti-virus 143,589.74 143,589.74
Others 432,222.22 - 432,222.22
Amortization 18,065,023.38 2,154,705.03 - 20,219,728.41
Land use right 15,155,620.35 1,859,757.72 17,015,378.07
ERP software 2,492,921.37 249,292.14 2,742,213.51
Anti-virus 29,914.61 29,914.61
Others 416,481.66 15,740.56 432,222.22
Net book value 136,135,471.67 - - 134,124,356.38
Land use right 133,626,809.15 131,767,051.43
ERP software 2,492,921.96 2,243,629.82
Anti-virus - 113,675.13
Others 15,740.56 -
Provision for impairment -
Land use right -
ERP software -
Anti-virus -
Others -
Book value 136,135,471.67 134,124,356.38
Land use right 133,626,809.15 131,767,051.43
ERP software 2,492,921.96 2,243,629.82
Anti-virus - 113,675.13
Others 15,740.56 -
ERP software is SAP system software with purchased by the Company.
5.9 Long-term deferred expenses
Items 2011.06.30 2010.12.31
Right to use premise 894,428.65 928,343.83
Heat fee etc 104,470.69 181,967.09
Total 998,899.34 1,110,310.92
Pursuant to the Premise Use and Lease Contract signed with Finance and Trade Office of Shanghai Zhabei District
Government on March 30, 1993, the Company paid a one-off payment for the right to use the premises located at
Qiujiang Road, Zhabei District, Shanghai. Subject to its estimated economic useful life, the premise use fees is being
46
Wafangdian Bearing Company Ltd. Midyear Report of 2011
amortized over a period of thirty years starting May 1, 1994.
5.10 Deferred income tax assets
(1) Deferred income tax assets recognized
Items 2011.06.30 2010.12.31
Deferred income tax assets
Provision for impairment of assets 15,053,861.79 15,053,861.79
Unrealized intragroup profit 956,845.50 956,845.50
Total 16,010,707.29 16,010,707.29
(2) Details of temporary difference project
Items Amounts
Provision for bad debts 11,520,455.76
Provision for impairment of fixed assets 4,095,361.68
Provision for decline in value of inventories 32,658,909.64
Difference due to depreciation of fixed assets 11,940,720.08
Unrealized intragroup profit 3,827,382.00
Total 64,042,829.16
Note: The fixed assets depreciation difference arises from accrual for idle fixed assets when implementing
5.11 Short-term loans
(1)Category of short-term loan
Category 2011.06.30 2011.12.31
Credit loan 490,000,000.00 490,000,000.00
Mortgage loan 13,780,235.14 13,780,235.14
Total 503,780,235.14 503,780,235.14
(2) Short-term loan due but not repaid
Interest Reason of Expected New
rate Requirements maturity
Creditor Amounts Purpose outstanding payment Roll-over
of roll-over
（%） on schedule date
Industrial and Transferred to
Commercial Bank assets
13,590,235.14 5.31 Production Uncertainty No none none
of China Liaoyang management
Branch from bank
47
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Transferred to
China
assets
Construction Bank 190,000.00 8.892 Production Uncertainty No none none
management
Liaoyang Branch
from bank
Total 13,780,235.14
A Pursuant to the loan contract signed between Liaoyang Bearings and Liaoyang Zhanqian Branch, the Industrial and
Commercial Bank of China, machinery equipments (with original amount RMB 22,930,000.00) were pledged for the
loan of RMB 13,590,235.14 with annual interest rate of 5.31%. The loan has been overdue.
B The loan was guaranteed by Liaoyang Forging Machine Tool Co., Ltd. The loan has been transferred to Dongfang
Asset Management Ltd Co.,
The above short-term loan due but not repaid are still overdue at the balance sheet date.
5.12 Welfares payable
Items Amount in the Increases in the Decreased in Amount in the
year-beginning current period period-end
current period
Salary, bonus, allowance and
3,487,661.79 49,280,290.43 49,177,220.17 3,590,732.05
subsidy
Employee welfare 7,561,229.79 7,561,229.79
Social insurance 11,070,657.39 26,249,085.08 26,636,857.13 10,682,885.34
Including:1.Medical insurance 235,118.10 5,368,450.24 5,456,126.01 147,442.33
2.Basis endowment insurance 10,217,636.77 17,318,306.18 17,605,043.64 9,930,899.31
3.Unemployment insurance 325,418.44 1,550,973.82 1,562,157.65 314,234.61
4.Compo insurance 216,364.68 1,310,573.46 1,306,358.78 220,579.36
5.Bearing insurance 76,119.40 700,781.38 707,171.05 69,729.73
Housing fund 2,743,439.86 6,264,023.10 5,721,109.40 3,286,353.56
Labour union expenditure &
10,166,120.18 4,143,607.23 2,721,771.91 11,587,955.50
employee education expenditure
total 27,467,879.22 93,498,235.63 91,818,188.40 29,147,926.45
5.13 Taxes payable
Item 2011.06.30 2010.12.31
VAT of products 13,118,324.38 4,098,089.53
Income tax 195,887.82 291,191.69
Urban maintenance and Construction tax 4,014,872.41 -435,677.18
Enterprise income tax 159,905.62 224,285.92
Individual income tax 847,554.24 391,012.02
House property tax 6,406.29 6,406.27
48
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Land usage tax 0.00 18,621.40
Stamp tax 176,916.98 137,398.77
Added tax for Education 1,045,036.12 206,646.71
Bank construction and maintenance fee 310,514.29 470,845.14
Others 3,026.17 4,971.43
Total 19,878,444.32 5,413,791.70
5.14 Long-term borrowings
Conditions 2011.06.30 2010.12.31
Guaranteed borrowing 138,000,000.00 138,000,000.00
Total 138,000,000.00 138,000,000.00
* It is the loan for which Wafangdian Bearing Group provided guarantee to the Company.
5.15 Special accounts payable
Item 2011.06.30 2010.12.31
Special appropriation for sewage
221,698.98 221,698.98
treatment station renovation project
Total 221,698.98 221,698.98
The special account payable is the special fund appropriated for pollution control, which was approved by Wafangdian
Municipal Financial Bureau and Wafangdian Municipal Environment Protection Administration with Wa Cai Zhi Qi
(2004) No. 217 Document.
5.16 Capital surplus
Items 2010.12.31 Increase Decrease 2011.06.30
Premium on issue of shares 201,956,446.52 201,956,446.52
Other capital reserves 283,734,603.95 283,734,603.95
Total 485,691,050.47 485,691,050.47
5.17 Operating revenue & cost
(1) Operating revenue
Items 2011.1.1-2011.06. 30 2010.1.1-2010.06.30
Revenue from main operation 1,409,588,079.02 1,258,028,618.46
Revenue from other operation 348,277,584.26 315,766,591.12
Total 1,757,865,663.28 1,573,795,209.58
Cost of main operation 1,245,254,099.79 1,093,522,131.81
Cost of other operation 304,525,069.39 281,449,075.28
49
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Total 1,549,779,169.18 1,374,971,207.09
(2) Main operation - classified according to products
2011.1.1-2011.06. 30 2010.1.1-2010.06.30
Items
Sales revenue Cost of sales Sales revenue Cost of sales
Export 92,059,807.51 93,338,365.04 80,692,021.86 72,914,396.47
Domestic 1,245,447,513.94 1,079,052,003.65 1,126,518,762.75 979,672,743.60
Including:
Transportation vehicle 552,386,739.64 487,643,937.89 571,518,622.51 518,563,847.26
bearings
Special use bearings 288,116,927.78 239,407,962.19 234,359,135.15 176,798,196.37
General use bearings 404,943,846.52 352,000,103.57 320,641,005.09 284,310,699.97
Industrial Operations 72,080,757.57 72,863,731.10 50,817,833.85 40,934,991.74
Total 1,409,588,079.02 1,245,254,099.79 1,258,028,618.46 1,093,522,131.81
5.18 Financial expenses
Item 2011.6.30 2010.06.30
Interest payment 13,886,565.05 14,248,499.74
Minus interest income 2,628,486.77 2,704,792.05
Plus :Loss from exchange 785,947.48 638,774.52
Minus : gains form exchange 504,971.01 108,868.71
Plus : other expenditure 798,887.65 118,577.07
Total 12,337,942.40 12,192,190.57
5.19 Investment income
The details of the shared net profit of invested companies adjusted on equity basis at the end of period are as follows:
Name of invested company 2011.06.30 2010.06.30
SKF Wazhou Company 6,302,534.50 6,813,085.51
Zhenxin Company
Total 6,302,534.50 6,813,085.51
There is no material restriction on the return of the investment revenue from the Company and its subsidiaries.
5.20 Non-operating income
Item 2011.06.30 2010.06.30
Net income from disposal of non-current fixed assets 4,558,735.30 545,235.03
50
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Net income from penalty 1,499.00 15,195.00
Gains from debt restructure 342,225.97 312,412.00
Government grant 5,100.00 2,000.00
Others 694,565.85 245,802.19
Total 5,602,126.12 1,120,644.22
5.21 Non-operating expenses
Item 2011.06.30 2010.06.30
Fine expenses 137,034.08 16,808.39
Loss on debt restructure 213,436.55 366,905.04
Net loss on disposal of non-current fixed assets 33,413.92 447339.03
Donation expenditure - 20,000.00
Others 631,244.15 1,419,22.49
Total 1,015,128.70 2,270,304.95
6. Notes to main items of financial statements of parent company
6.1 Accounts receivable
(1) Accounts receivable category
2011.06.30 2010.12.31
Items Booking balance Provision Booking balance Provision
Amounts % Amounts % Amounts % Amounts %
Other receivables with individual
significant amount and
3,910,007.43 0.38 3,910,007.43 100.00 3,910,007.43 0.44 3,910,007.43 100.00
identification separately bad debt
provision
Other receivables
accrued bad debt
provision by portfolio
Accounting aging
972,768,091.22 96.05 33,901,757.64 3.49 853,405,192.47 95.88 34,198,440.87 4.02
portfolio
Related parties portfolio 31,241,778.73 3.08 27,691,878.51 3.11
Risk-free portfolio
Subtotal of portfolio 1,004,009,869.95 99.13 33,901,757.64 3.38 881,097,070.98 98.99 34,198,440.87 3.88
Other receivables with individual
insignificant amount and
4,839,916.25 0.48 4,839,916.25 100 5,100,754.35 0.57 5,100,754.35 100
identification separately bad debt
provision
Total 1,012,759,793.63 100 42,651,681.32 890,107,832.76 100 43,209,202.65 ---
Accounts receivable with individual significant amount and identification separately bad debt provision
Provision for bad Proportion Reasons for
Debtors name Booking balance
debts (%) provision
Baoding North China Machine & A/R with over 5
3,910,007.43 3,910,007.43 100.00
Electronic Equipment Ltd Co. years aging,
51
Wafangdian Bearing Company Ltd. Midyear Report of 2011
unlikely to be
collected
Total 3,910,007.43 3,910,007.43 —
Accounts receivable accrued the bad debt provisions in the portfolio as accounting aging analysis method
2011.06.30 2010.12.31
Items
Amounts % Provision Amounts % Provision
Within 1 year 843,943,933.97 86.76 6,195,762.72 761,304,255.36 7,613,042.55
89.21
1-2 years 74,652,823.05 7.67 3,732,641.15 33,280,510.80 1,664,025.54
3.90
2-3 years 10,374,377.77 1.07 2,074,875.55 14,721,225.05 2,944,245.01
1.72
Over 3 years 43,796,956.43 4.50 21,898,478.22 44,099,201.26 21,977,127.77
5.17
Total 972,768,091.22 100 33,901,757.64 853,405,192.47 100 34,198,440.87
Accounts receivable with individual insignificant amount and identification separately bad debt provision
Provision for bad Proportion Reasons for provision
Debtors name Booking balance
debts (%)
Shenyang Sewerage A/R with over 5 years aging,
2,706,703.13 2,706,703.13 100.00
Equipment Co.,Ltd unlikely to be collected
Other sporadic accounts A/R with over 5 years aging,
2,133,213.12 2,133,213.12 100.00
receivable unlikely to be collected
Total 4,839,916.25 4,839,916.25 -
Accounts receivable for the top 5 companies
Relationship with the
Company name Amounts Aging % in the total AR
Company
China Railway Materials
Unrelated party 75,428,272.75 Within 1 year 7.45
Company
China Heavy Vehicle Group
Jinan Qiaoxiang Company Unrelated party 45,035,857.61 Within 1 year 4.45
Limited
Shanxi Fast Gearing Company
Unrelated party 32,888,149.89 Within 1 year 3.25
Limited
Dalian Huarui Company Limited Unrelated party 29,011,872.24 Within 1 year 2.86
Taiyuan goods supplied part of
Unrelated party 26,909,386.50 Within 1 year 2.66
Daqin Railway Company Limited
Total 209,273,538.99 20.66
52
Wafangdian Bearing Company Ltd. Midyear Report of 2011
5.2 Other account receivable
(1) The category of other receivable
2011.06.30 2010.12.31
Items Booking balance Provision Booking balance Provision
Amounts % Amounts % Amounts % Amounts %
Other receivables with individual
significant amount and identification
separately bad debt provision
Other receivables accrued bad debt
provision by portfolio
Accounting aging portfolio 13,526,907.21 100 1,140,898.32 100 16,056,775.28 99.33 1,140,898.32 7.11
Related parties portfolio 0 0 0 0
Risk-free portfolio 107,657.11 0.67 0 0
Subtotal of portfolio 13,526,907.21 100 1,140,898.32 100 16,164,432.39 100 1,140,898.32 7.06
Other receivables with individual
insignificant amount and identification 0 0 0 0
separately bad debt provision
Total 13,526,907.21 100 1,140,898.32 100 16,164,432.39 100 1,140,898.32 —
Other receivable accrued the bad debt provisions in the portfolio as accounting aging analysis method
2011.06.30 2010.12.31
Items
Amounts % Provision Amounts % Provision
Within 1 year 10,838,504.08 80.12 108,385.04 12,559,948.00 78.22 125,599.48
1-2 years 788,008.29 5.83 39,400.41 1,537,585.40 9.58 76,879.27
2-3 years 181,236.02 1.34 36,247.20 137,337.90 0.86 27,467.58
Over 3 years 1,719,158.82 12.71 956,865.67 1,821,903.98 11.35 910,951.99
Total 13,526,907.21 100 1,140,898.32 16,056,775.28 100.00 1,140,898.32
6.3 Long-term equity investment
(1) Long-term equity investment
Item 2010.12.31 Increase Decrease 2011.6.30
Other equity 41,302,534.50 172,983,195.54
131,680,661.04
investment
Total 131,680,661.04 41,302,534.50 172,983,195.54
Less:Provison for 21,627,119.69
impairment of L-T 21,627,119.69
investments
53
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Total 110,053,541.35 41,302,534.50 151,356,075.85
（2）Other equity investment
Decrease
Name of the Increases in
Investment Original Balance in the year d in Balance in the
company Proportion the current
term amount beginning current period-end
invested period
period
Calculating by
cost
Wa Tong
15 75.00% 28,030,375.50 28,030,375.50 28,030,375.50
company
Liao Zhou
10 100.00% 17,337,259.95 17,337,259.95 17,337,259.95
Company
Aimuyi
12 4.76% 2,000,000.00 2,000,000.00 2,000,000.00
company
Dalian
Electricity car
15 100% 10,478,956.37 10,478,956.37 35,000,000.00 45,478,956.37
bearing
company
35,000,000.0
57,846,591.82 57,846,591.82 92,846,591.82
subtotal 0
Calculating
by equity
Dalian SKF
30 49.00% 68,600,000.00 73,423,214.10 6,302,534.50 79,725,748.60
Wazhou
Shanghai
Zhenxin 10 40.00% 400,000.00 410,855.12 410,855.12
Wazhou
Subtotal 69,000,000.00 73,834,069.22 6,302,534.50 80,136,603.72
126,846,591.8 41,302,534.5
131,680,661.04 172,983,195.54
Total 2 0
(3) Less:Provison for impairment of L-T inwestments
Name of the Amount in the Increases in the Decreased in current Amount in the
company invested year-beginning current period period period-end
Wa Tong company 21,627,119.69 21,627,119.69
Total 21,627,119.69 21,627,119.69
6.4 Operating revenue & cost
(1) Operating revenue
Items 2011.1.1-2011.06. 30 2010.1.1-2010.06.30
Revenue from main operation 1,382,011,740.04 1,245,411,491.05
Revenue from other operation 367,578,892.85 314,330,743.12
54
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Total 1,749,590,632.89 1,559,742,234.17
Cost of main operation 1,225,551,763.57 1,090,931,745.51
Cost of other operation 322,951,274.55 280,150,190.38
Total 1,548,503,038.12 1,371,081,935.89
(2) Main operation - classified according to products
2011.1.1-2011.06. 30 2010.1.1-2010.06.30
Items
Sales revenue Cost of sales Sales revenue Cost of sales
Export 92,059,807.51 93,338,365.04 80,692,021.86 72,914,396.47
Domestic 1,213,595,065.41 1,056,083,856.15 1,113,901,635.34 977,082,357.30
Including:
Transportation vehicle 552,386,739.64 477,264,199.14 563,901,495.10 515,973,460.96
bearings
Special use bearings 288,116,927.78 234,312,047.10 234,359,135.15 176,798,196.37
General use bearings 373,091,397.99 344,507,609.91 315,641,005.09 284,310,699.97
Industrial Operations 76,356,867.12 76,129,542.38 50,817,833.85 40,934,991.74
Total 1,382,011,740.04 1,225,551,763.57
1,245,411,491.05 1,090,931,745.51
6.5 Investment income
(1) The details of investment income are as follows:
Item 2011.06.30 2010.06.30
Shared and adjusted the net profits from the companies invested
6,302,534.50 6,813,085.51
according to the equity calculating method in the period-end
Total 6,302,534.50 6,813,085.51
(2) The details that Shared and adjusted the net profits from the companies invested according to the equity
calculating method in the period-end
Name of invested company 2011.06.30 2010.06.30
SKF Wazhou Company 6,302,534.50 6,813,085.51
Total 6,302,534.50 6,813,085.51
(3) There is no material restriction on the return of the investment revenue from the Company and its subsidiaries.
7. Relationship and transactions with related parties
7.1 Relationship with related parties
55
Wafangdian Bearing Company Ltd. Midyear Report of 2011
(1) The related parties with controlling relationship
Relationship
Legal
Enterprise name Registered address Main operation with the Economic nature
representative
Company
No.1, Section 1 of Manufacturing and
Wafangdian Bearing Parent State-owned
Beigongji Street, sales of bearings and Wang Lushun
Group company enterprise
Wafangdian City, Dalian all kinds of equipment
Manufacturing and
Liaoyang Bearing 61 Weiguo Road, Baita sales of bearings and Limited
Subsidiary Shao Yang
Company District, Liaoyang City mechanical company
processing
No.1, Section 1 of Production of
Sino-foreign joint
Watong Company Beigongji Street, bearings and relevant Subsidiary Wang Lushun
venture
Wafangdian City, Dalian products
Dalian motor No.12 Bearing
Shisanliyongsheng manufacturing, sales Limited
Subsidiary Shao Yang
Street of Bonded and mechanical company
zone,Dlalian processing
(2)The registered capital of the related parties with controlling relationship and the change therein
Increase in Decrease in
Name of related party 2010.12.31 2011.06.30
current period current period
Wafangdian Bearing Group 360,000,000.00 0.00 0.00 360,000,000.00
Liaoyang Bearing Company 19,350,000.00 0.00 0.00 19,350,000.00
Watong Company USD 4,510,000.00 0.00 0.00 USD 4,510,000.00
Dalian motor 10,000,000.00 10,000,000.00
(3).The shares held by the related parties with controlling relationship and the change therein
Name of related
Amount of shares held Shareholding ratio
party
2011.06.30 2010.12.31 2011.06.30 2010.12.31
Wafangdian
Bearing Group 244,000,000.00 244,000,000.00 60.61% 60.61%
Liaoyang Bearing
Company 19,350,000.00 19,350,000.00 100.00% 100.00%
Watong Company USD 3,382,000.00 USD 3,382,000.00 75.00% 75.00%
Dalian motor 10,000,000.00 10,000,000.00 100.00% 100.00%
(4) Nature of the related parties without controlling relationship
1) Controlled by the same parent company
Content of related
Shares held by the
Name of related party Main operation transaction with the
parent company
Company
56
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Wafangdian slewing Bearing Bearing design, processing Processing and Sell materials and
Co., Ltd. 100.00% manufacturing, sales Purchase products
Dalian Wafangdian Bearing of special-purpose moulds for bearings,
Purchase and sale of
Group Equipment 100.00% manufacturing of special-purpose equipment for
materials
Manufacturing Company bearings and spare parts.
Wafangdian Bearing Precision Design, processing, manufacturing and sales of Sales of semi-finished
Steel Ball Manufacturing Co., 48.90% steel balls, manufacturing and sales of machinery products and purchase of
Ltd. parts and machinery products materials
Processing of forged pieces and machinery parts, Sales of semi-finished
Wafangdian Bearing Precision
90.00% maintenance of forging equipment, annealing for products and purchase of
Forging and Pressing Co., Ltd.
forged pieces, etc. materials
Sales of semi-finished
Wafangdian Bearing Special
100.00% Bearing manufacturing and sales products and purchase of
Precision Bearing Co., Ltd.
materials
2) Joint ventures and affiliated companies of the Company
Shares held by the Content of related transaction with
Name of related party Main operation
Company the Company
Production and sales of
SKF Wazhou Company 49.00% Purchase and sale of products
spherical roller bearings
7.2 Related transactions
(1) Sales of commodities, raw materials and semi-finished products
2011.06.30 2010.06.30
Name of related party
Amount Proportion Amount Proportion
The external network of WBGC 13,825,465.42 0.79 17,708,766.59 1.13
SKF WaZhou 41,977,744.41 2.39 34,550,871.05 2.2
Dalian Wafangdian Bearing Group
904,108.71 0.05 1,182,667.08 0.08
Equipment Manufacturing Company
Wafangdian Bearing Precision Steel Ball
6,120,820.86 0.35 6,134,980.26 0.39
Manufacturing Co., Ltd.
Wafangdian Bearing Precision Forging and
212,642,796.07 12.1 191,326,949.78 12.16
Pressing Co., Ltd.
WBGC Slewing Bearing Co.,Ltd 51,948,101.86 2.96 35,240,309.85 2.24
WBGC Precision transmission Bearing Co.ltd 19,107,417.33 1.09 12,674,243.98 0.81
Wafangdian Bearing Special Precision
9,106,614.90 0.52
Bearing Co., Ltd.
Total 355,633,069.56 20.23 298,818,788.59 18.99
A Products selled by the Company to external network of WBGC are less than the last year in the 1H year of 2011.
The sale price made according to the market.
B The Company supplied the semi-products to SKF Wa Zhou based on the agreement price in the H1 year of 2011.
C The Company supplied materials to the precise steel ball company based on the agreement price in the H1 year of
2011.
57
Wafangdian Bearing Company Ltd. Midyear Report of 2011
D The company supplied materials to the precise forging and pressing company based on he agreement price in the
H1 year of 2011.
(2) Purchase of materials
2011.06.30 2010.06.30
Name of related party Proportio
Amount Amount Proportion
n
The external sales network of WBGC 17,708,766.59 1.13
SKF Wazhou Company 104,807,746.88 5.58 34,550,871.05 2.20
Dalian WBGC Equipment Manufacturing
9,978,761.83 0.53 1,182,667.08 0.08
Co.ltd
Wafangdian Bearing Precision Steel Ball
9,665,059.82 0.51 6,134,980.26 0.39
Manufacturing Co., Ltd.
Wafangdian Bearing Precision Forging and
239,449,854.41 12.74 191,326,949.78 12.16
Pressing Co., Ltd.
WBGC Slewing Bearing Co.,ltd 20,305,363.08 1.08 35,240,309.85 2.24
WBGC Precision transmission Bearing
49,600,148.62 2.64 12,674,243.98 0.81
Co.ltd
Wafangdian Bearing Special Precision
12,274,987.53 0.65
Bearing Co., Ltd.
Total 446,081,922.17 23.73 298,818,788.59 18.99
A The company procured finished goods from SKF Wa Zhou based on the agreement price in the H1 year of 2011.
B The company procured semi-products of steel ball from the precise steel ball company based on the market price
in the H1 year of 2011.
C The Company procured semi-products of rings from the precise forging and pressing company based on the
market price in the H1 year of 2011.
D The Company procured Slewing Bearing from the Slewing Bearing Company based on the market price deducted
adequate sales expenses in the H1 year of 2011.
7.3 Balance of current accounts with related parties
Name of related party Name of account 2011.06.30 2010.12.31
WBGC Other payable 33,350,487.14 34,120,958.55
The external sales network of WBGC Account receivable 25,620,657.65 27,691,878.51
SKF Wazhou Company Accounts payable 97,634,972.59 62,871,069.04
Dalian WBGC Equipment Manufacturing Co.ltd Accounts payable 9,646,097.61 9,500,801.86
Wafangdian Bearing Precision Steel Ball
Accounts payable 2,523,486.65 2,177,399.84
Manufacturing Co., Ltd.
Wafangdian Bearing Precision Forging and
Accounts payable 15,317,318.01 11,273,804.31
Pressing Co., Ltd.
Account receivable 5,621,121.08
WBGC Slewing Bearing Co.,Ltd Accounts payable 6,110,550.43
58
Wafangdian Bearing Company Ltd. Midyear Report of 2011
WBGC Precision transmission Bearing Co.ltd Accounts payable 40,786,483.55 35,060,405.92
Wafangdian Bearing Special Precision Bearing
Accounts payable 188,428.44
Co., Ltd.
8. Contingent events
There were no major contingent events in the H1 year of 2011.
9. Important issues
9.1Trademark
The company uses the WBGC trademark with sales of finished-product, and pays the fee use 11.6 million RMB was
provided and paid to WBGC in the report period.
10. Commitments
Ended on June 30,2011 no any significant commitment was made.
11. Approval of the consolidated financial statements
The consolidated financial statements had been approved by the board meeting held on August 18, 2011
Other financial data
1 Abnormal profits and losses
Unit: RMB Yuan
2011.06.30 2010.06.30
Item
Before tax After tax Before tax After tax
Profits and losses relating to disposal of
4,525,321.38 3,393,991.04 97,896.00 73,422.00
fixed assets
Other non-operating incomes and
expenses with the provisions for
impairment of assets depreciation -67,113.38 -189,045.46 -1,193,063.69 -1,622,828.21
according to the enterprises’ routine
accounting system
Profits and losses relating to the debt
128,789.42 43,232.93 -54,493.04 -132,596.04
restructure
Total 4,586,997.42 3,248,178.51 -1,149,660.73 -1,682,002.25
Supplement:
item consolidated Parent
2011.6.30 2010.6.30 2011.6.30 2010.6.30
Gains from sales and disposal of
department or invested units
Loss from natural disaster -400,000.00 -400,000.00
Total profit(+/-) from the account policy
changing
Total profit(+/-) from the account
estimation changing
Loss from the debt restructure (-) -213,436.55 -366,905.04 -213,436.55 -366,905.04
59
Wafangdian Bearing Company Ltd. Midyear Report of 2011
Others 4,800,433.97 -382,755.69 3,660,350.22 601,805.65
The attachment table to the 20101Midyear Profit Composition Table has been prepared in accordance with the Notice
No. 9 Regulations on Information Preparation and Disclosure of Listed Companies of the Securities Supervisory
Committee of China:
Return on net assets (%) Gain per share (Yuan/share)
Profit in the
Items report period Fully diluted Weighted average Fully diluted Weighted average
(Yuan) 2011.6.3 2010.6.3 2011.6.3 2010.6.3 2011.6.3 2010.6.3 2011.6.3 2010.6.3
0 0 0 0 0 0 0 0
Main business 164,333,979.2
10.96 11.63 10.96 11.63 0.41 0.41 0.41 0.41
profit 3
Operative profit 59,374,200.82 3.96 5.30 3.96 5.3 0.15 0.19 0.15 0.19
Net profit 53,579,496.41 3.57 4.42 3.57 4.42 0.13 0.16 0.13 0.16
Net profit after
deductions of
48,992,498.99 3.27 4.50 3.27 4.5 0.12 0.16 0.12 0.16
abnormal profit
and loss
Chapter Eight. List of reference documents
1. The Accounting statements of the first half year of 2011 which is with the signatures and seals of the legal
representative, finance controller and the director of accounting department of the Company.;
2. Original documents and notices of the Company disclosed in newspapers designated by the Security
Supervisory Committee of China in report period.
The documents above are deposited in the Investment&Security Department of the Company.
60
