Wafangdian Bearing Company Limited Midyear Report 2013
Stock code 200706 Stock ID:Wazhou B Announcement No.2013-28
Wafangdian Bearing Company Limited
2013 Midyear Report
2013-28
August 2013
1
Wafangdian Bearing Company Limited Midyear Report 2013
Chapter I. Important Prompts, Table of Contents, and Definitions
The Board of Directors, board of supervisors, directors, supervisors, and top management of the
Company hereby guarantee that there are no false record, misleading statements and important
omission of the material in this report, and assume the individual and associated responsibilities for
the truth, accuracy and completeness of the contents.
Chairman Mr. Wang Lushun, General Accountant Ms. Sun Najuan and accounting charger Ms.
Yao Chunjuan declare: guarantee the truth and completeness of the financial report in the annual
report.
Chairman Wang Lushun did not attend the meeting because of busy work and authorized
Vice-Chairman Cong Hong attended and preside the meeting ,Director Mr. Li Shi did not attend the
meeting because of busy work and authorized Mr,Chen Jiajun on his behalf and Director Sun
Guangguo did not attend the meeting because of busy work and authorized Mrs. Zhang Li on his
behalf. Other directors have all attended the meeting of deliberation this annual report.
Profit distribution preplan, no profit distribution in report period
The description of the future development in this report does not constitute a commitment for
investors. Investors are requested to pay attention to the risks involved in your investment.
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Wafangdian Bearing Company Limited Midyear Report 2013
Table of Contents
Chapter I. Important Prompts, Table of Contents, and Definitions......... 2
Chapter II.Company Profile................................................................................... 5
Chapter III.Financial Highlights.......................................................................... 7
Chapter IV Directors Report.................................................................................. 9
Chapter Significant Events............................................................................. 20
Chapter . Changes in Capital Stock and Shareholders............................ 43
Chapter Ⅶ. Directors, Supervisors, Senior Management and Staff........ 46
Chapter Ⅷ. Corporate Governance.................................................................. 54
Chapter . Internal Control................................................................................. 58
Chapter . Financial Report (Attachment)...................................................... 60
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Wafangdian Bearing Company Limited Midyear Report 2013
Glossary
Terms Defined as Description
Company,the Company Defined as Wafangdian Bearing Company Limited
Wazhou Group Defined as Wafangdian Bearing Group Company
the report period, the current period, the
current year
Defined as January 1,2012–December 31,2012
Liaozhou Co.,Ltd Defined as Wazhou Liaoyang Bearing Manufacture Co.,Ltd
Dalian motor Defined as Dalian motor Bearing Co.,Ltd
The Board of Directors Defined as Wafangdian Bearing Company Limited The Board of
Directors
The Supervisory Committee Defined as Wafangdian Bearing Company Limited The
Supervisory Committee
Wafangdian Bearing Company Wafangdian Bearing Company Limited The
Defined as
Limited Shareholders’Meeting
Shen Jiao Suo Defined as Shen Zhen Stock Exchange
SRC Defined as China Securities Regulatory Commission
Chapter II.Company Profile
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Wafangdian Bearing Company Limited Midyear Report 2013
I. Company Information
II.Contacts
Secretary of the Board Representative of StockA ffairs
Abbreviated name of the Stock code: 200706
Wazhou B
stock
Listing location of the
Shenzhen Stock Exchange
Company’s stock:
Chinese name of the
瓦房店轴承股份有限公司
Company
Abbreviation of Chinese
瓦轴股份公司
name
English name of the
Wafangdian Bearing Company Limited
Company
Abbreviation of English
WBC
name
Legal representative of
Wang Lushun
the Company
Name Sun Najuan Su Shaoli
No. 1 Beigongji Street, Wafangdian No. 1 Beigongji Street, Wafangdian
Correspondence address
City, Liaoning Province, China. City, Liaoning Province, China.
Consulting telephone 0411-39116369 0411-39116732
Fax 0411-39116738 0411-39116738
E-mail zwz2308＠126.com zwz2308＠126.com
III.Other information
i.The way to contact with compay
In the report period the Registered address ,P.C, office address,office P.C of the company is no
change.Detials can be seen in 2012 annual report.
ii.Place for information disclosure
In the report period the place for information disclosure is no change. is no change.Detials can be seen in
2012 annual report.
iii. Change of Business Registration
In the report period the Registration .date Registration place No. of Incorporation, Certificate No. of Taxation Registration
Organization code is no change. etials can be seen in 2012 annual report.
iv.Other relevant information
In the report period other relevant information is no change.
Chapter III. Financial Highlights
I.Main accounting data and indices
Are there any retrospective adjustments or restatement of financial information of previous year due to change of
5
Wafangdian Bearing Company Limited Midyear Report 2013
accounting policies or correcting of accounting errors?
[ ] Yes [V] No
In RMB Yuan
Changed over last year
2013.01.01-2013.06.30 2012,01.01-2012.06.30
(%)
Turnover(RMB) 1,547,403,493.37 1,617,746,695.03 -4.35%
Net profit attributable to
shareholders of the listed 22,832,072.23 30,377,280.34 -24.84%
company(Yuan)
Net profit attributable to the
shareholders of the
listed company and after deducting 20,937,895.75 28,816,096.49 -27.34%
of
non-recurring gain/loss(RMB)
Net Cash flow generated by
business operation -43,132,233.48 148,855,325.74 -128.98%
(RMB)
Basic earnings per
0.06 0.08 -25%
share(Yuan/share)
Diluted earnings per
0.06 0.08 -25%
share(Yuan/share)
Net return on equity(%) 1.49% 2.02% -0.53%
Changed over last year
End of 2013.06.30 End of 2012.12.31
(%)
Total Assets (RMB) 3,817,806,705.30 3,618,360,177.55 5.51%
Owner’s Equity Attributed to
Shareholders of Listed 1,538,766,219.97 1,515,934,147.74 1.51%
Company(RMB)
II. Differences in accounting information under IAS and domestic accounting standard
1. Differences in net profit and net asset under domestic and international accounting standards
In RMB Yuan
Net profit attributable to the shareholders Net asset attributable to the shareholders
of the listed company of the listed company
Current term Amount of last term End of term Beginning of term
On Chinese Accounting
22,832,072.23 30,377,280.34 1,538,766,219.97 1,515,934,147.74
Standard
Items and amounts adjusted on IAS
Under International
22,832,072.23 30,377,280.34 1,538,766,219.97 1,515,934,147.74
Accounting Standard
2. Differences in net profit and net asset under domestic and overseas accounting standards
In RMB Yuan
Net profit attributable to the shareholders Net asset attributable to the shareholders
of the listed company of the listed company
Current term Amount of last term End of term Beginning of term
On Chinese Accounting
22,832,072.23 30,377,280.34 1,538,766,219.97 1,515,934,147.74
Standard
Accounts and amounts adjusted according to overseas accounting standard
On IAS 22,832,072.23 30,377,280.34 1,538,766,219.97 1,515,934,147.74
There is no difference, and the result is not audited.
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Wafangdian Bearing Company Limited Midyear Report 2013
3. Statement on the differences of accounting information on IAS and domestic accounting standard
III. Non-recurring gain/loss items and amounts
In RMB Yuan
Items Amount Remarks
Gain/loss of non-current assets
(includes the neutralized part of the asset impairment provision
413,059.97
drawn
already)
Gains and losses included in the current period of government
subsidies, excluding those government grants which are closely
related to normal business and in line with national policy, or in
accordance with fixed standards or quantities
Debt restructuring gains and losses -770,059.48
Other non-business income and expenditures other than the
2,585,442.43
above
Influenced amount of income tax 334,266.44
Influence on minority shareholders’ equity(after tax)
Total 1,894,176.48 --
For the Company‘s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
Information Disclosure for Companies Offering their Securities to the Public–Non-recurring Gains and Losses
and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on Information
Disclosure for Companies Offering their Securities to the Public–Non-recurring Gains and Losses which have
been defined as recurring gains and losses, it is necessary to explain the reason.
□Applicable√Inapplicable
Chapter IV Directors Report
I. Overview
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Wafangdian Bearing Company Limited Midyear Report 2013
II. Analysis of Main Business
In the first half of 2013, the business income of the company is 1,547,400,000Yuan, profit total is
23,670,000Yuan, the net profit attributable to shareholders of listed companies is 22,830,000Yuan.
During the reporting period, influenced by domestic factors such as economic growth is slowing, bearing
product sales prices fell. The board of directors of the company persisted take the market as the core, to the
authors as the main line, increase the production and business operation, efforts to expand capacity, reduce
cost, increase the intensity of market development, constantly improve the market risk response capacity, to
ensure the stable growth of the company's performance in a unfavorable market environment.
During the reporting period, the company management to carry out their duties diligently, hard work,
vigorously promotes the company's internal management, efforts to improve the management level, solid,
effectively promote the work.
During the reporting period, the company according to the ministry of finance, securities and other five
ministries jointly issued the "enterprise internal control basic norms", "form a complete set of enterprise
internal control guidelines" and the regulatory department requirements, actively promoting the company's
internal control system. Company board of directors and management in accordance with the relevant
regulations, follow the basic principles of internal control, in combination with the practical situation of the
company, establish and improve the cover company each link of the internal control system, and constantly
improve, improve the company's internal control management, effectively guard against operational risks, and
strive to work through this new stage, the management of the company to ensure the normal operation and
healthy development of the company.
During the reporting period, all the directors shall, in accordance with the "company law", "securities law"
and "the company's articles of association" and the relevant provisions of the working conditions and so on,
the board of directors carefully perform the duty of a director, the interest of the company and shareholders.
Each director to perform the duty of the faithful and diligent work priorities and important decisions for the
company provided the beneficial opinions and suggestions make independent judgment and decision making.
The board of directors of the board of directors of the company earnestly perform their duties, and discuss the
issues presented in an objective and fair independent advice, pay attention to maintenance of small and
medium shareholders' interests, provide professional support for the corporate governance and management,
scientific decision-making to provide strong guarantee for the board of directors. The board of directors of the
company is responsible for the effectiveness of internal control.
1. Overview
In the first half year of 2013, the business income is 1,547,400,000 Yuan, total profit 23,670,000,and Net profit
attributable to shareholders of the listed company is 22,830,000 Yuan. Details as follows:
Item Report Last report period Changed by Change reason
period %YoY
Main Business Income 1,547,403,493.37 1,617,746,695.03 -4.35%
Main Business Cost 1,375,879,876.97 1,433,460,380.71 -4.02%
Sales Expenses 102,660,427.82 104,774,136.63 -2.02%
Management Expenses 34,739,784.53 30,125,540.59 15.32%
Financial Expenses 12,206,072.78 13,815,248.96 -11.65%
Tax Expenses Main because the taxable income
842,546.41 3,052,564.11 -72.4%
in this report period decline
Spending on research and
development of the business 57,433,942.21 56,708,078.80 1.28%
income ratio
Net Cash Flows from Operating Main because the cash payment
-43,132,233.48 148,855,325.74 -128.98%
Activities for operation increase largely
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Wafangdian Bearing Company Limited Midyear Report 2013
Net Cash Flows from Investing Main because cash payment for
-395,610.77 -6,180,919.70 -93.6%
Activities purchase fix asst decline largely
Net Cash Flows from Financing Main because cash payment for
38,323,909.62 -112,318,951.40 -134.12%
Activities debt repay decline
Main because Net Cash Flows
Net Increase in Cash and Cash
-5,684,625.07 30,457,968.44 -118.66% from Operating Activities decline
Equivalents
largely
The profit structure or source change greatly
□ Applicable √Inapplicable
Pre-disclosure of operation plan
□Applicable √Inapplicable
III. Main business composition
In RMB Yuan
+/-(%) of
+/-(%) of
Operating income Operating cost BOI operating +/-(%) of BOI
operating cost
income
By Industries
Export 472,567,440.34 420,559,469.61 11.01% -4.72% -4.49% -0.21%
Civil 314,199,759.02 282,940,370.36 9.95% -6.91% -3.34% -3.33%
Including: Traffic
455,591,104.53 406,960,535.49 10.67% -6.21% -6.11% -0.1%
Bearing
Special Bearing 45,453,202.14 51,961,915.61 -14.32% -15.53% -12.95% -3.39%
Common
472,567,440.34 420,559,469.61 11.01% -4.72% -4.49% -0.21%
Bearing
Industrial income 314,199,759.02 282,940,370.36 9.95% -6.91% -3.34% -3.33%
On Products
Bearing 1,242,358,303.89 1,110,460,375.46 10.62% -5.83% -4.8% -0.96%
Industry
45,453,202.14 51,961,915.61 -14.32% -15.53% -12.95% -3.39%
operation
Region
Civil 136,810,764.89 131,410,972.37 3.95% 0.02% -4.66% 4.71%
Foreign 1,151,000,741.14 1,031,011,318.70 10.42% -6.9% -5.27% -1.54%
IV. Core competence analyzing
As the country's largest bearing technology and product r&d and manufacturing base, company has accumulated more
than seventy years practice experience in the field of bearings and related areas, set up perfect bearing technology
innovation system, maintain close cooperation with domestic scientific research institutes, colleges and universities. As the
main drafter of bearing industry a number of standard, company control the latest technology development trend in the
industry. In technology research and development, product manufacturing, marketing , customer services and other aspects
have established a significant advantage.
Company improve responsiveness to the market and customer personalized demand, in line with customer's personalized
design and needs of manufacturing processes balancing cost, delivery time and customer,
Company has established strategic cooperative relations with key customers in domestic equipment applications, carry
out the depth of marketing through involvement in customer value engineer, set firmly up the company's brand and influence
in the domestic bearing market, the company has won the certification qualification of important target markets in the
international market , the international popularity established preliminary.
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Wafangdian Bearing Company Limited Midyear Report 2013
The company has complete product service system and 24-hour dynamic service ability product operating site. And was
praised with a good image of the "ten value-added services" by the majority customers. Company has strong manufacturing
capability and quality assurance capabilities, extensive services in railway, automobile, metallurgy, mining, wind power,
aviation, aerospace, completion, and other industries and fields.
V. Investment Analysis
1.External equity investment
None
2. Analysis of Main Subsidiaries and Investment Companies
Unit:RMB
Main
Company Registered Operating Operating
Type Industry Product or Total Asset Net Asset Net Profit
Name Capital Revenue Profit
Service
Product
Dalian SKF
and Sales
Wazhou Joint-stock 140,000,00 255,932,01 204,374,50 112,161,27 13,600,400 10,268,423
Spherical
Bearing Company 0.00 1.27 6.53 6.81 .49 .16
Roller
Co.,Ltd.
Bearing
3. Important Non-raised Capital’s Projects
Unit:0000’Yuan
Total
Plan Investment in
Accumulated
Project Invest the report Progress Earnings
investment
ment period
Perfect entity cage production
Expend matched ability on
1,800 625 98 34.72% ability ,promote work environment and
entity cage for precision bearing
promote production efficiency
Production ability upgrade on
Implement CC type production in the
cage for CC type self-aligning 2,800 0 0 0%
next half year.
roller bearing
Upgrade on roller shaping
1,400 420 158 30%
process Form production ability on roller for CC
Grinding upgrade on spherical type spherical roller bearing
2,700 2,600 850 96.3%
roller bearing
Grinding upgrade on tapered Form high-level production ability on
2,800 1,800 430 64.29%
roller bearing roller and promote precision level.
Upgrade on railway lorry
1,800 1,041 340 57.83%
bearing hard machining
Upgrade on railway lorry Upgrade on hard machining, hot
2,700 1,896 240 70.22%
bearing hot treatment treatment, grinding assemble autumnally,
Upgrade on railway lorry to make sure railway lorry machines and
2,900 2,413 220 83.21%
bearing grinding machining craft reach to international level.
Upgrade on railway lorry
1,140 998 118 87.54%
bearing matched
Upgrade on export auto bearing
2,600 2,022 1,236 77.77%
and grinding machines Form high-level export auto bearing
Auto bearing matched and test ability with 4 million sets
1,460 770 330 52.74%
reform
Guarantee normal work machines
Others 900 556 518 61.78%
operation
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Wafangdian Bearing Company Limited Midyear Report 2013
Total 25,000 15,141 4,538 -- --
VI. Forecast for operation outstanding from 2013 January to September
Inapplicable
VII. Explanation of the Board of Directions and Board of supervisor on the Qualified Auditor ’s
Report Issued by the CPAs
The financial report is unaudited
VIII Explanation of the Board of Directions on the Qualified Auditor ’s last year Report Issued by the
CPAs
The financial report is unaudited
IX. Dividend Distribution
The dividend distribution made by 2012 shareholder meeting is that : based on the total capital stock of 40,260 shares at the
end of June 30,2013, RMB 0.4Yuan will be paid per 10 shares (including tax) , totally allocates cash of 16,104,000.00 RMB
The Company has been devoting itself not only to maximize the shareholders’ benefit, but also to environment and resource
preserving, as well as the stakes of all related parties, such as the employees, clients, suppliers and the community.
Continuous and concord development along with the community is the target of the Company.
X.Reception of investigations,communications,or interviews in the report period
Main content involved
Time/date Place Way Type of visitors Visitors
and material provided
Telephone The general information of
2013.02.15 Office Private investor Private investor
communication the company
Telephone The general information of
2013.03.11 Office Private investor Private investor
communication the company
Telephone The general information of
2013.03.19 Office Private investor Private investor
communication the company
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Wafangdian Bearing Company Limited Midyear Report 2013
Chapter Significant Events
Ⅰ. Corporate Governance
During the report period, the Company had continuously observed Company Law, Securities Law, and
Guidelines of Corporate Governance for Listed Company and relevant regulations to improve and enhance its
corporate governance.
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 internal 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
II Main Lawsuits and Arbitration Affairs
□Applicable √ Inapplicable
There were no important lawsuits and arbitration affairs.
III. Media query.
□ Applicable √ Inapplicable
There was no media query in the report period.
IV. Bankruptcy and Recombination
Inapplicable
V. Asset business
Inapplicable
VI.Implementation and Influence of Equity Incentives
Inapplicable
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Wafangdian Bearing Company Limited Midyear Report 2013
VII. Important Contracts and Implementation
1、The relate transactions related to the day-to-day operations.
Relative The Percentage
Relative Principle Relative The Way Market Disclosure Disclosure
Relationship Relative type Content Amount(RMB’0 of accounted for
parties of price Price Of Account price Date Index
000) similar deals(%)
Dalian SKF
Cash
Wazhou Merchandise Bearing Justice and Negotiated
Associates 11,231.04 6.69% Payment or
Bearings Procurement Product Equity price
The Knot
Co., Ltd
Other Companies
Wazhou controlled by the same Cash
Merchandise Justice and
Steel Ball controlling share holders Installation Kit Market price 338.99 0.2% Payment or
Procurement Equity
Company and the ultimate The Knot
controlling party
Other Companies
Wazhou controlled by the same
Cash
Exact controlling share Merchandise Installation Justice and
Market price 11,912.65 7.09% Payment or
Forge holders and the Procurement Kit Equity
The Knot
Ltd., ultimate controlling
party
Dalian Other Companies
Wazhou controlled by the same
Cash
Manufactu controlling share Merchandise Justice and
Production Market price 1,148.94 0.68% Payment or
ring holders and the Procurement Equity
The Knot
Equipmen ultimate controlling
t Co., Ltd party
Other Companies
Wazhou
controlled by the same
Group Cash
controlling share Merchandise Bearing Justice and
Turnplate Market price 5,362.22 3.19% Payment or
holders and the Procurement Product Equity
Bearing The Knot
ultimate controlling
Ltd
party
Wazhou Other Companies
Group controlled by the same
Cash
Exact controlling share Merchandise Bearing Justice and
Market price 6,454.13 3.84% Payment or
Transmissi holders and the Procurement Product Equity
The Knot
on ultimate controlling
Bearing party
13
Wafangdian Bearing Company Limited Midyear Report 2013
Co., Ltd
Wazhou
Other Companies
Group
controlled by the same
Precision Cash
controlling share Merchandise Bearing Justice and
special Market price 31.35 0.02% Payment or
holders and the Procurement Product Equity
Bearing The Knot
ultimate controlling
Company
party
Limited
Wazhou
Other Companies
Group
controlled by the same
equipment
controlling share Merchandise Equipment ustice and
technolog Market price 697.32 0.42%
holders and the Procurement purchase Equity
y engineer
ultimate controlling
Company
party
Limited
Da Lian
Wazhou Cash
Other Related party Merchandise Bearing Justice and
Fengyuan Market price 7,957.87 4.74% Payment or
Procurement Product Equity
Machine The Knot
Co.,Ltd
Da Lian
Wazhou Cash
Other Related party Merchandise Bearing Justice and
Jin Zhou Market price 5,243.55 3.12% Payment or
Procurement Product Equity
Machine The Knot
Co.,Ltd
Wazhou The controlling share
Group(out holders and the Bearing Justice and Cash
Acceot Service Market price 33.63 0.02%
side ultimate controlling Product Equity Payment
network) party
Dalian
SKF Cash
Installation Justice and Negotiated
Wazhou Associates Sales of Goods 2,449.48 1.58% Payment or
Kit Equity price
Bearings The Knot
Co., Ltd
Other Companies Negotiated
Wazhou controlled by the same price and
Justice and Cash
Steel Ball controlling share Sales of Goods Materials generation of 285.96 0.18%
Equity Payment
Company holders and the purchasing
ultimate controlling cost
14
Wafangdian Bearing Company Limited Midyear Report 2013
party
Other Companies
Negotiated
Wazhou controlled by the same
price and
Exact controlling share Justice and Cash
Sales of Goods Materials generation of 21,028.02 13.59%
Forge holders and the Equity Payment
purchasing
Ltd., ultimate controlling
cost
party
Dalian Other Companies Market
Wazhou controlled by the same
Manufactu controlling share Justice and Cash
Sales of Goods Materials 104.85 0.07%
ring holders and the Equity Payment
Equipmen ultimate controlling
t Co., Ltd party
Other Companies Market
Wazhou
controlled by the same
Group
controlling share Justice and Cash
Turnplate Sales of Goods Component 1,071.92 0.69%
holders and the Equity Payment
Bearing
ultimate controlling
Ltd
party
Wazhou Market
Other Companies
Group
controlled by the same
Exact
controlling share Justice and Cash
Transmissi Sales of Goods Component 1,506.19 0.97%
holders and the Equity Payment
on
ultimate controlling
Bearing
party
Co., Ltd
Wazhou Market
Other Companies
Group
controlled by the same
Precision
controlling share Justice and Cash
special Sales of Goods Component 191.26 0.12%
holders and the Equity Payment
Bearing
ultimate controlling
Company
party
Limited
Da Lian Market
Wazhou
Other Related party Justice and Cash
Jin Zhou Sales of Goods Component 305.54 0.2%
Equity Payment
Machine
Co.,Ltd
15
Wafangdian Bearing Company Limited Midyear Report 2013
Dalian Market
SKF
Heat Justice and Cash
Wazhou Associates Service 211.42 0.14%
treatment Equity Payment
Bearings
Co., Ltd
Other Companies Market
controlled by the same
Wazhou
controlling share Heat Justice and Cash
Steel Ball Service 32.04 0.02%
holders and the treatment Equity Payment
Company
ultimate controlling
party
Wazhou Market Cash
Other Companies
Group Payment
controlled by the same
Exact
controlling share Heat Justice and
Transmissi Service 141.59 0.09%
holders and the treatment Equity
on
ultimate controlling
Bearing
party
Co., Ltd
Wazhou Market Cash
Other Companies
Group Payment
controlled by the same
Precision
controlling share Heat Justice and
special Service 21.01 0.01%
holders and the treatment Equity
Bearing
ultimate controlling
Company
party
Limited
Da Lian Market Cash
Wazhou Payment
Other Related party Heat Justice and
Jin Zhou Service 3.5 0%
treatment Equity
Machine
Co.,Ltd
Total -- -- 77,764.47 -- -- -- --
16
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
ii、The related business on asset purchase and sales
iii. Major related business on jointly investment
iv Credit and Debt with relevant parties
Credit and Debt from non-operation
□ Yes √ No
Amount in
Opening Closing
Non-operati report
Related party relationship Type Reason amount(ten amount(ten
on employ period(ten
thousand) thousand)
thousand)
Wafangdian Bearing Group
Parent Account
Corporation(outside work Sale bearing No 611.67 111.56 723.23
company: receivable
web ) product
Other No
companies
Wafangdian Slewing controlled Account Sale
817.03 -817.03 0
Bearing Co.Ltd by the same receivable component
parent
company
Other No
companies Sale
WBGC precision special controlled Account component ,
395.66 373.01 768.67
bearing Co., Ltd by the same receivable hot
parent treatment
company
Other No
companies
Wafangdian Bearing Sale
controlled Account
Precision Ball material ,ho 0 63.3 63.3
by the same receivable
Manufacturing Co., Ltd t treatment
parent
company
Da Lian Wazhou Feng Yuan Other No
Account Sale
Machinery Company Related 62.96 -62.96 0
receivable component
Limited party
Purchase No
Dalian SKF-Wazhou Account
Associates finished 13,559.32 2,081.32 15,640.65
Bearing Company Limited payable
good
Other No
companies
Purchase
Wafangdian Bearing controlled Account
unfinished 109.2 839.12 948.33
Precision Forging Co., Ltd. by the same payable
good
parent
company
Other No
companies
Purchase
Wafangdian Slewing controlled Account
finished 379.26 2,847.93 3,227.2
Bearing Co.Ltd by the same payable
good
parent
company
Other No
companies
WBGC Precision Purchase
controlled Account
transmission driving finished 6,613.86 1,401.21 8,015.07
by the same payable
Bearing Co.,Ltd good
parent
company
43
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Other No
companies
Dalian Wafangdian Bearing Purchase
controlled Account
Equipment Manufacturing finished 351.15 109.88 461.03
by the same payable
Co., Ltd. good
parent
company
Other No
companies
Purchase
Dalian Wafangdian Bearing controlled Account
finished 1.85 -1.85 0
special precision Co., Ltd. by the same payable
good
parent
company
Other No
companies
Dalian Wafangdian Bearing
controlled Account Purchase
equipment technology 0 372.81 372.81
by the same payable machines
project Co., Ltd.
parent
company
Da Lian Wazhou Jin Zhou Other No
Account Purchase
Machinery Company Related 360.03 1,019.03 1,379.06
payable work piece
Limited party
Da Lian Wazhou Feng Yuan Other No
Account Purchase
Machinery Company Related 367.66 1,319.75 1,687.41
payable work piece
Limited party
Wafangdian Bearing Group Parent Account Purchase No
2,909.27 362.01 3,271.27
Corporation company: payable work piece
V. Other important related business
No
Vi. Important contract and implement
1. Deposit, contract and rent.
（1）Assets rent out
The Company entered into a building lease contract with Wazhou Exact Forge Ltd., in 2011. The rented area is
9177m.The rental period is from 1 January 2013 to 31 December 2013. The annual rent is RMB 345,515.
The Company entered into a building lease contract with Wazhou Group Special Precision Bearing Company
Limited (Special precision Company) in 2013. The rented area is 6,534.4 m. The rental period is from 1 January
2013 to 31 December 2013. The annual rent is RMB 514,303.17.
The Company entered into a building lease contract with Feng yuan Company in 2013. The rented area is
1,791m. The rental period is from 1 June 2013 to 31 December 2013. The annual rent is RMB 107,460.00. The
rental for the year has been received.
The Company entered into a building lease contract with Dalian Wazhou Jinzhou machinery Company Limited
(Jinzhou Company) in 2013. The rented area is 13,386m. The rental period is from 1 June 2013 to 31 December
2013. The annual rent is RMB 803,160.
ChapterⅥ. Changes in Capital Stock and Shareholders
I. Changes in Capital Stock
Before Changes Changes in Shares After Changes
Shares Ratio New
Bonus Conversi Ratio
Shares Others Subtotal Shares
Shares on of
Issued Reserves
44
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
to Share
244,000, 244,000,
1.Non-tradable Shares 60.61% 60.61%
000 000
244,000, 244,000,
a. Promoters’ Shares 60.61% 60.61%
000 000
Including：State-owned 244,000, 244,000,
60.61% 60.61%
share 000 000
158,600, 158,600,
2.Tradable shares 39.39% 39.39%
000 000
158,600, 158,600,
b.B shares 39.39% 39.39%
000 000
402,600, 402,600,
3.Total 100% 100%
000 000
Reason of Changes of Shares
□Applicable √ Inapplicable
Influence from the shareholding movements upon such financial indicators as earnings per share, net asset per
share of the latest year and the latest accounting period
□Applicable √ Inapplicable
Other information as the Company considers necessary to be disclosed or demanded by the securities regulatory
authority for disclosing:
None
II. Shareholders and Actual Controller
1. Number of Shareholders and Shares
Unit: Share
Total number of shareholder at the Total number of shareholders 5 trading day
8,583 8,336
end of report period before annual report disclosure
Shareholders with 5% or above Shares
Increase or Non-cur Impawned or Frozen Shares
Current
Total decrease rent
Ratio shares
Name Nature shares in the shares
（%） held
held
held report Status Amount
period
Wafangdian
State-owned 60.61 244,000,00 244,00
Bearing Group
shareholder % 0 0,000
Corporation
AKTIEBOLAGE Foreign
19.7% 79,300,000 79,300,000 Frozen 79,300,000
T SKF shareholder
GAOLING Foreign
1.78% 7,160,185 7,160,185
FUND,L.P. shareholder
Domestic
Huang Yuejun 0.89% 3,600,000 3,600,000
shareholder
Qin Shaobin Domestic
0.23% 913,223 913,223
shareholder
Ma Yuancheng 0.19% 748,925 748,925
MAN,KWAI
Foreign private
WING Wen 0.18% 713,101 713,101
shareholder
Guirong
Domestic
Chen Zhongwu 0.13% 537,500 537,500
shareholder
Foreign private
Hei Youxin 0.13% 512,559 512,559
shareholder
Domestic
Yang Yufei 0.12% 470,090 470,090
shareholder
Explanation for the Affiliated In the report period, the frozen period of the shares purchased by the
45
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Relations or United Action of the company’s strategic investor AKTIEBOLAGET SKF expired in 1999, and has not
Top Ten Shareholders dealt with the releasing-procedure in this report period.
Notes to relationship or “action in
concert ” among the top ten
shareholders.
Top Ten Tradable Shareholders
Category of Shares
Name Current shares held at end of year (Note 4)
Categories Amount
AKTIEBOLAGET SKF 79,300,000 B 79,300,000
GAOLING FUND,L.P. 7,160,185 B 7,160,185
Huang Yuejun 3,600,000 B 3,600,000
Qin Shaobin 913,223 B 913,223
Ma Yuancheng 748,925 B 748,925
MAN,KWAI WING Wen Guirong 713,101 B 713,101
Chen Zhongwu 537,500 B 537,500
Hei Youxin 512,559 B 512,559
Yang Yufei 470,090 B 470,090
VANGUARD TOTAL INTERNATIONAL
459,900 B 459,900
STOCK INDEX FUND
Explanation for the Affiliated
Relations or There was no relationship and consistent activities between the first big shareholder and
United Action of the Top Ten other shareholders or the top ten common stock holders; The relationship among other
Shareholders and the Top Ten shareholders, top ten circulation shareholders, top ten circulation shareholders and other
Tradable shareholders was not clear.
Shareholders
iii Change of Controlling Shareholder Actual Controller in the Report Period
□ Applicable √ Inapplicable
Chapter Ⅶ. Directors, Supervisors, Senior Management and Staff
I. Shares holding change in Directors, Supervisors, Senior Management
Inapplicable
II. Changes of Directors, Supervisors and Senior Management
Name Position Type Date Reason
Zhang Xinghai Director Expire 2013.06.26 Leave his position due to expire
Vice General Expire 2013.06.26
Gao Yongyang Retire
Manager
Sun Maolin Supervisor Expire 2013.06.26 Leave his position due to expire
Yao Chunjuan Supervisor Expire 2013.06.26 Leave her position due to expire
Hu Xiuli Supervisor Expire 2013.06.26 Leave her position due to expire
Lishi Director Elected 2013.06.26 New director
Zhang Xinghai Supervisor Elected 2013.06.26 New supervisor
Li Xiumin Supervisor Elected 2013.06.26 New supervisor
Tan Jianguang Supervisor Elected 2013.06.26 New supervisor
46
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Wang Lin Supervisor Elected 2013.06.26 New supervisor
Independent Expire 2013.06.26
Wang Huabin Leave his position due to expire
Director
Independent Expire 2013.06.26
Wang Keyi Leave his position due to expire
Director
Independent Expire 2013.06.26
Zhang Qiluan Leave his position due to expire
Director
Independent 2013.06.26
Zhang Li Elected New director
Director
Independent 2013.06.26
Wu Chunyou Elected New director
Director
Independent 2013.06.26
Sun Guangguo Elected New director
Director
Chapter VIII. Financial Report
I.Audit Report
The financial report is unaudited
II. Financial Statement
1. Consolidated Balance Sheet.
Unit: RMB Yuan
Item Closing Balance Opening Balance
Current assets ：
Monetary fund 95,548,588.97 101,233,214.04
Financial assets held-for-trading
Bills receivable 184,324,635.71 113,253,584.93
Account receivable 1,195,520,185.10 1,077,510,354.13
Account paid in advance 17,806,664.87 33,883,731.60
Interest receivable
Other receivables 30,531,045.86 19,891,810.30
Inventory 1,191,957,431.92 1,156,565,201.60
Non-current assets due within 1 year
Other current assets 1,891,901.75 2,672,185.24
Total current assets 2,717,580,454.18 2,505,010,081.84
Non-current assets
Financial assets available-for-sale
Investments held-to-maturity
Long-term receivable
Long-term equity investment 102,226,168.48 97,194,641.13
Investment property
Fixed assets 599,550,334.64 620,008,753.04
Construction in progress 245,143,041.64 240,524,680.98
Construction materials
Fixed assets disposal
Biological assets
Gas and petrol assets
Intangible assets 141,715,315.40 143,996,714.42
Development expenditure
Goodwill
Long-term prepaid expense 758,767.93 792,683.11
47
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Deferred tax assets 10,832,623.03 10,832,623.03
Other non-current assets
Total non-current assets 1,100,226,251.12 1,113,350,095.71
Total assets 3,817,806,705.30 3,618,360,177.55
Current liabilities
Short-term loan 460,000,000.00 588,000,000.00
Note payable 108,437,488.00 221,485,454.42
Accounts payable 1,310,171,117.88 968,244,826.46
Accounts received in advance 26,163,578.08 47,450,550.80
Commission charge payable
Accrued payroll 20,804,419.88 21,960,176.22
Tax payable 6,417,657.71 -411,670.20
Interest payable
Dividends payable
Other payables 142,721,708.16 143,928,598.47
Non-current liabilities due within I year
Other current liabilities 88,000,000.00
Total current liabilities 2,074,715,969.71 1,990,657,936.17
Non-current liabilities
Long-term loan 150,000,000.00 60,000,000.00
Debenture payable
Long-term payables 100,000.00 100,000.00
Special payables 311,698.98 321,698.98
Contingent liabilities
Deferred tax liabilities 393,621.42 393,621.42
Other non-current liabilities 53,519,195.22 50,952,773.24
Total non-current liabilities 204,324,515.62 111,768,093.64
Total liabilities 2,279,040,485.33 2,102,426,029.81
Owner’s equity (shareholders’ equity)
Capital stock 402,600,000.00 402,600,000.00
Capital public reserves 485,691,050.47 485,691,050.47
Less: treasury share
Surplus reserve 129,292,318.86 129,292,318.86
Undistributed profit 521,182,850.64 498,350,778.41
Difference of foreign currency translation
Equity attributable to parent company 1,538,766,219.97 1,515,934,147.74
Minority interest
Total owner’s equity 1,538,766,219.97 1,515,934,147.74
Total owner’s equity and liabilities 3,817,806,705.30 3,618,360,177.55
Chairman: Wang Lushun General Accountant : Sun Najuan Accounting charger: Yao Chunjuan
2. Balance Sheet Of Parent Company
Unit: RMB Yuan
Item Opening Balance Closing Balance
Current assets ：
Monetary fund 93,041,685.30 98,688,072.55
Financial assets held-for-trading
Bills receivable 183,901,635.71 109,923,584.93
Account receivable 1,174,271,743.77 1,082,311,050.10
Account paid in advance 17,120,692.38 32,587,830.67
Interest receivable
Other receivables 26,219,814.80 15,125,784.55
Inventory 1,125,970,628.06 1,080,300,720.82
Non-current assets due within 1 year
Other current assets 1,891,901.75 2,672,185.24
48
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Total current assets 2,622,418,101.77 2,421,609,228.86
Non-current assets
Financial assets available-for-sale
Investments held-to-maturity
Long-term receivable
Long-term equity investment 159,329,231.31 154,297,703.96
Investment property
Fixed assets 488,423,401.63 506,327,706.02
Construction in progress 245,132,811.64 240,524,680.98
Construction materials
Fixed assets disposal
Biological assets
Gas and petrol assets
Intangible assets 125,574,481.73 127,689,514.42
Development expenditure
Goodwill
Long-term prepaid expense 758,767.93 792,683.11
Deferred tax assets 10,832,623.03 10,832,623.03
Other non-current assets
Total non-current assets 1,030,051,317.27 1,040,464,911.52
Total assets 3,652,469,419.04 3,462,074,140.38
Current liabilities
Short-term loan 460,000,000.00 588,000,000.00
Note payable 108,437,488.00 221,485,454.42
Accounts payable 1,164,326,747.44 842,791,947.56
Accounts received in advance 24,804,565.94 46,597,401.40
Commission charge payable 12,508,207.05 12,967,151.76
Accrued payroll 3,272,379.55 -3,619,755.25
Tax payable
Interest payable
Dividends payable
Other payables 89,545,401.92 88,997,888.85
Non-current liabilities due within I year
Other current liabilities 88,000,000.00
Total current liabilities 1,862,894,789.90 1,797,220,088.74
Non-current liabilities
Long-term loan 150,000,000.00 60,000,000.00
Debenture payable
Long-term payables
Special payables 311,698.98 321,698.98
Contingent liabilities
Deferred tax liabilities
Other non-current liabilities 53,519,195.22 50,952,773.24
Total non-current liabilities 203,830,894.20 111,274,472.22
Total liabilities 2,066,725,684.10 1,908,494,560.96
Owner’s equity (shareholders’ equity)
Capital stock 402,600,000.00 402,600,000.00
Capital public reserves 482,563,945.37 482,563,945.37
Less: treasury share
Surplus reserve 129,292,318.86 129,292,318.86
Undistributed profit 571,287,470.71 539,123,315.19
Difference of foreign currency translation
Equity attributable to parent company
Minority interest
Total owner’s equity 1,585,743,734.94 1,553,579,579.42
Total owner’s equity and liabilities 3,652,469,419.04 3,462,074,140.38
Chairman: Wang Lushun General Accountant : Sun Najuan Accounting charger: Yao Chunjuan
49
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
3. Consolidated Income Sheet.
Unit: RMB Yuan
Item Account for the current period Account for the prior period
1.Total operating income 1,547,403,493.37 1,617,746,695.03
Including: Operating revenue 1,547,403,493.37 1,617,746,695.03
Interest income
Handling charge and commission income
2.Total operating cost 1,531,668,845.00 1,588,856,098.95
Including: Operating cost 1,375,879,876.97 1,433,460,380.71
Interest expenses
Handling charge and commission income
Tax & surcharges for main operations 5,706,680.51 6,385,704.89
Selling expenses 102,660,427.82 104,774,136.63
Administrative expense 34,739,784.53 30,125,540.59
Financial expense 12,206,072.78 13,815,248.96
Loss of impairment of assets 476,002.39 295,087.17
Add: Gains of change of fair value of assets(loss with"-")
Investment income(loss with "-") 5,711,527.35 2,978,064.52
Including: Income form investment on associated
5,031,527.35 2,978,064.52
enterprise and jointly enterprise
3.Operating profit (loss with"-") 21,446,175.72 31,868,660.60
Add: Non-operating revenue 3,549,564.64 3,974,650.29
Less: Non-operating cost 1,321,121.72 2,413,466.44
Including: loss on disposal of non-current assets 35,866.08
4.Total profit(loss with"-") 23,674,618.64 33,429,844.45
Less: Income tax expenses 842,546.41 3,052,564.11
5. Net profit(Loss with"-") 22,832,072.23 30,377,280.34
Net profit attributable to shareholders of parent company 22,832,072.23 30,377,280.34
Minority interests
6.Earnings per share
(1) Basic earnings per share 0.06 0.08
(2) Diluted earnings per share 0.06 0.08
7. Other comprehensive returns
8. Total comprehensive returns 22,832,072.23 30,377,280.34
Total comprehensive returns available for parent company 22,832,072.23 30,377,280.34
Total comprehensive returns available for minority
shareholders
Chairman: Wang Lushun General Accountant : Sun Najuan Accounting charger: Yao Chunjuan
4. Income Sheet of Parent Company.
Unit: RMB Yuan
Item Account for the current period Account for the prior period
1.Total operating income 1,547,227,335.54 1,610,534,206.84
Including: Operating revenue
Interest income
Handling charge and commission income
2.Total operating cost
Including: Operating cost 1,376,283,798.47 1,426,359,883.98
Interest expenses
Handling charge and commission income
Tax & surcharges for main operations 5,035,242.43 6,218,981.76
Selling expenses 102,033,585.21 104,068,079.19
Administrative expense 25,650,126.17 22,269,686.56
50
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Financial expense 12,170,694.57 13,502,411.13
Loss of impairment of assets 476,002.39 295,087.17
Add: Gains of change of fair value of assets(loss with"-")
Investment income(loss with "-") 5,711,527.35 2,978,064.52
Including: Income form investment on associated
5,031,527.35 2,978,064.52
enterprise and jointly enterprise
3.Operating profit (loss with"-") 31,289,413.65 40,798,141.57
Add: Non-operating revenue 3,038,093.75 3,483,559.87
Less: Non-operating cost 1,320,805.47 1,747,850.85
Including: loss on disposal of non-current assets
4.Total profit(loss with"-") 33,006,701.93 42,533,850.59
Less: Income tax expenses 842,546.41 3,052,564.11
5. Net profit(Loss with"-") 32,164,155.52 39,481,286.48
Net profit attributable to shareholders of parent company
Minority interests
6.Earnings per share
(1) Basic earnings per share 0.08 0.1
(2) Diluted earnings per share 0.08 0.1
7. Other comprehensive returns
8. Total comprehensive returns 32,164,155.52 39,481,286.48
Total comprehensive returns available for parent company
Total comprehensive returns available for minority
shareholders
Chairman: Wang Lushun General Accountant : Sun Najuan Accounting charger: Yao Chunjuan
5. Consolidated Cash Flow Statement.
Unit: RMB yuan
Item Account for the current period Account for the prior period
1.Cash from operating activities
Cash received from sale of goods or rendering of services 637,446,979.54 646,285,337.83
Refund of taxes and fares 446.93 251.06
Other cash received relating to operating activities 6,525,851.06 7,670,858.08
Sub-total of cash inflows 643,973,277.53 653,956,446.97
Cash paid for goods and services 406,059,927.21 270,585,561.67
Cash paid to or on behalf of the employees 149,744,170.51 126,124,633.85
Tax payments 35,876,925.76 29,729,831.00
Other cash paid relating to operating activities 95,424,487.53 78,661,094.71
Sub-total of cash outflows 687,105,511.01 505,101,121.23
Net cash flows from operating activities -43,132,233.48 148,855,325.74
2.Cash flows from investing activities
Cash received from return of investment 403,916.91
Cash received from investment incomes 680,000.00
Net cash received from disposal of fixed assets, intangible
705,000.00
assets and other long-term assets
Proceeds from sale of subsidiaries and other operating
units
Other cash received relating to investing activities
Sub-total of cash inflows 680,000.00 1,108,916.91
Cash paid to acquire fixed assets, intangible assets and
1,075,610.77 7,289,836.61
other long-term assets
Cash paid to acquire investment
Net cash used in acquiring subsidiaries and other operating
units
Other cash paid relating to investing activities
Sub-total of cash outflows 1,075,610.77 7,289,836.61
Net cash flows from investment activities -395,610.77 -6,180,919.70
51
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
3.Cash flows from financing activities
Cash received from absorbing investment 516,000,000.00 508,385,611.16
Including: Cash received from increase in minority interest
Proceeds from borrowings
Other proceeds relating to financing activities 4,723,200.00
Sub-total of cash inflows 520,723,200.00 508,385,611.16
Repayment of borrowings 466,849,955.55 600,770,466.67
Distribution of dividends or profits & interest expenses 15,549,334.83 19,934,095.89
Including: dividends or profit paid to minority interest
Cash paid for other financing activities
Sub-total of cash outflows 482,399,290.38 620,704,562.56
Net cash flows from financing activities 38,323,909.62 -112,318,951.40
4. Effects of foreign exchange rate changes on cash -480,690.44 102,513.80
5.Net increases in cash and cash equivalents -5,684,625.07 30,457,968.44
Add: cash and cash equivalent, at the beginning of year 101,233,214.04 62,187,956.71
6.Cash and cash equivalent at the end of the year 95,548,588.97 92,645,925.15
Chairman: Wang Lushun General Accountant : Sun Najuan Accounting charger: Yao Chunjuan
6. Cash Flow Statement Of Parent Company.
Unit: RMB yuan
Item Account for the current period Account for the prior period
1.Cash from operating activities
Cash received from sale of goods or rendering of services 636,200,717.44 667,620,105.77
Refund of taxes and fares 446.93 251.06
Other cash received relating to operating activities 5,148,013.18 7,670,858.08
Sub-total of cash inflows 641,349,177.55 675,291,214.91
Cash paid for goods and services 440,456,825.08 325,756,259.45
Cash paid to or on behalf of the employees 125,912,567.93 102,006,163.07
Tax payments 28,513,264.98 27,148,770.37
Other cash paid relating to operating activities 89,695,198.03 71,161,503.32
Sub-total of cash outflows 684,577,856.02 526,072,696.21
Net cash flows from operating activities -43,228,678.47 149,218,518.70
2.Cash flows from investing activities
Cash received from return of investment 403,916.91
Cash received from investment incomes 680,000.00
Net cash received from disposal of fixed assets, intangible
131,500.00
assets and other long-term assets
Proceeds from sale of subsidiaries and other operating
units
Other cash received relating to investing activities
Sub-total of cash inflows 680,000.00 535,416.91
Cash paid to acquire fixed assets, intangible assets and
940,927.96 7,116,620.11
other long-term assets
Cash paid to acquire investment
Net cash used in acquiring subsidiaries and other operating
units
Other cash paid relating to investing activities
Sub-total of cash outflows 940,927.96 7,116,620.11
Net cash flows from investment activities -260,927.96 -6,581,203.20
3.Cash flows from financing activities
Cash received from absorbing investment
Including: Cash received from increase in minority interest
Proceeds from borrowings 516,000,000.00 508,385,611.16
Other proceeds relating to financing activities 4,723,200.00
Sub-total of cash inflows 520,723,200.00 508,385,611.16
Repayment of borrowings 466,849,955.55 599,860,466.67
52
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Distribution of dividends or profits & interest expenses 15,549,334.83 19,833,117.08
Including: dividends or profit paid to minority interest
Cash paid for other financing activities
Sub-total of cash outflows 482,399,290.38 619,693,583.75
Net cash flows from financing activities 38,323,909.62 -111,307,972.59
4. Effects of foreign exchange rate changes on cash -480,690.44 102,513.80
5.Net increases in cash and cash equivalents -5,646,387.25 31,431,856.71
Add: cash and cash equivalent, at the beginning of year 98,688,072.55 59,742,088.63
6.Cash and cash equivalent at the end of the year 93,041,685.30 91,173,945.34
Chairman: Wang Lushun General Accountant : Sun Najuan Accounting charger: Yao Chunjuan
53
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
7. Consolidated Sheet Of Changes In Shareholder ’s Equity
Unit: RMB yuan
Amount in current period
Owner’s equity attributable to parent company Minority
Item
Capital Capital public less：treasure General provision shareholders’ Owner’s equity
Surplus public reserves Undistributed profits Others
stock reserves stock for risk equity
402,600,00
1.Balance at the end of last year 485,691,050.47 129,292,318.86 498,350,778.41 1,515,934,147.74
0.00
Add: changes in accounting
policies
Changes in previous errors
Others
2.Balance at the beginning of 402,600,00
485,691,050.47 129,292,318.86 498,350,778.41 1,515,934,147.74
this year 0.00
3. The changes in this year
22,832,072.23 22,832,072.23
（decrease with“-”）
(1) Net profits 22,832,072.23 22,832,072.23
(2) Other comprehensive returns
Total (1) and (2) 22,832,072.23 22,832,072.23
(3) The assets invested or
returned by the owners
1) capital invested by owners
2)The amount of share
payment recorded owner’s
equity
3) others
(4）Profits distribution
1)Provision for surplus public
reserves
2)provision for general risks
3)distribution for
owner(shareholders)
4)others
(5 ） interior transference of
owner’s equity
1)capital (capital
43
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
stock)transferred by the capital
public reserves
2)capital (capital
stock)transferred by the surplus
public reserves
3)loss offset by the surplus
public reserves
4)others
4. Balance at the end of the 402,600,00
485,691,050.47 129,292,318.86 521,182,850.64 1,538,766,219.97
current period 0.00
Unit: RMB yuan
Amount in previous period
Owner’s equity attributable to parent company Minority
Item Capital Capital public less：treasure General provision shareholders’ Owner’s equity
Surplus public reserves Undistributed profits Others
stock reserves stock for risk equity
1.Balance at the end of last 402,600,00
485,691,050.47 123,972,268.17 477,496,320.23 1,489,759,638.87
year 0.00
Add: changes in accounting
policies
Changes in previous errors
Others
2.Balance at the beginning of 402,600,00
485,691,050.47 123,972,268.17 477,496,320.23 1,489,759,638.87
this year 0.00
3. The changes in this year
5,320,050.69 20,854,458.18 26,174,508.87
（decrease with“-”）
(1) Net profits 42,278,508.87 42,278,508.87
(2) Other comprehensive
returns
Total (1) and (2) 42,278,508.87 42,278,508.87
(3) The assets invested or
returned by the owners
1) capital invested by owners
2)The amount of share
payment recorded owner’s
equity
3) others
44
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
(4）Profits distribution 5,320,050.69 -21,424,050.69 -16,104,000.00
1)Provision for surplus public
5,320,050.69 -5,320,050.69
reserves
2)provision for general risks -16,104,000.00 -16,104,000.00
3)distribution for
owner(shareholders)
4)others
(5 ） interior transference of
owner’s equity
1)capital (capital
stock)transferred by the capital
public reserves
2)capital (capital
stock)transferred by the surplus
public reserves
3)loss offset by the surplus
public reserves
4)others
4. Balance at the end of the 402,600,00
485,691,050.47 129,292,318.86 498,350,778.41 1,515,934,147.74
current period 0.00
8. Sheet Of Changes In Shareholder’s Equity Of Parent Compamy.
Unit: RMB yuan
Amount in current period
Owner’s equity attributable to parent company Minority
Item
less：treasure General provision shareholders’ Owner’s equity
Capital stock Capital public reserves Surplus public reserves Undistributed profits Others
stock for risk equity
1.Balance at the end of last
402,600,000.00 482,563,945.37 129,292,318.86 539,123,315.19 1,553,579,579.42
year
Add: changes in accounting
policies
Changes in previous errors
Others
2.Balance at the beginning of
402,600,000.00 482,563,945.37 129,292,318.86 539,123,315.19 1,553,579,579.42
this year
3. The changes in this year
32,164,155.52 32,164,155.52
（decrease with“-”）
(1) Net profits 32,164,155.52 32,164,155.52
(2) Other comprehensive
45
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
returns
Total (1) and (2) 32,164,155.52 32,164,155.52
(3) The assets invested or
returned by the owners
1) capital invested by owners
2)The amount of share
payment recorded owner’s
equity
3) others
(4）Profits distribution
1)Provision for surplus public
reserves
2)provision for general risks
3)distribution for
owner(shareholders)
4)others
(5 ） interior transference of
owner’s equity
1)capital (capital
stock)transferred by the
capital public reserves
2)capital (capital
stock)transferred by the
surplus public reserves
3)loss offset by the surplus
public reserves
4)others
4. Balance at the end of the 571,287,470
402,600,000.00 482,563,945.37 129,292,318.86 1,585,743,734.94
current period .71
Unit: RMB yuan
Amount in previous period
Owner’s equity attributable to parent company Minority
Item less： Surplus public General provision Undistributed shareholders’ Owner’s equity
Capital stock Capital public reserves Others
treasure stock reserves for risk profits equity
1.Balance at the end of last
402,600,000.00 482,563,945.37 123,972,268.17 507,346,858.96 1,516,483,072.50
year
Add: changes in accounting
policies
46
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Changes in previous errors
Others
2.Balance at the beginning of
402,600,000.00 482,563,945.37 123,972,268.17 507,346,858.96 1,516,483,072.50
this year
3. The changes in this year
5,320,050.69 31,776,456.23 37,096,506.92
（decrease with“-”）
(1) Net profits 53,200,506.92 53,200,506.92
(2) Other comprehensive
returns
Total (1) and (2) 53,200,506.92 53,200,506.92
(3) The assets invested or
returned by the owners
1) capital invested by owners
2)The amount of share
payment recorded owner’s
equity
3) others
(4）Profits distribution 5,320,050.69 -21,424,050.69 -16,104,000.00
1)Provision for surplus public
5,320,050.69 -5,320,050.69
reserves
2)provision for general risks
3)distribution for
-16,104,000.00 -16,104,000.00
owner(shareholders)
4)others
(5 ） interior transference of
owner’s equity
1)capital (capital
stock)transferred by the
capital public reserves
2)capital (capital
stock)transferred by the
surplus public reserves
3)loss offset by the surplus
public reserves
4)others
4. Balance at the end of the
402,600,000.00 482,563,945.37 129,292,318.86 539,123,315.19 1,553,579,579.42
current period
47
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
1. General information
Wafangdian Bearing Company Limited (the “Company”) is a joint stock limited company established in the
People’s Republic of China (the “PRC”) on 16 July 1997. In the opinion of the directors, its parent and ultimate
holding company is Wafangdian Bearing Group Company Limited (“Wazhou Group”).
The Company’s B shares have been listed on the Shenzhen Stock Exchange since 29 Feburary 1997.
The addresses of the registered office and principal place of business of the Company are No.1, Phrase 1, Gongji
Street, Wafangdian North, Liaoning Province, and the PRC.
The Company is principally engaged in the manufacturing and sale of bearing products, engineering equipment,
automobile spare parts and relating products.
The Company together with its subsidiaries is collectively referred to as the “Group”.
2. Significant accounting policies, accounting estimates and method for preparation of consolidated
financial statements
2.1 Basis for the preparation of financial statements
The Group prepares the financial statements on the basis of going concern and actual transactions and events, and
in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance of the
People’s Republic of China, and based on the accounting policies and estimates in the note 4 ‘Significant
accounting policies, accounting estimates and method for preparation of consolidated financial statements’.
2.2 Complying with Accounting Standard for Business Enterprise
The financial statements are prepared by the Group according to the requirements of Accounting Standard for
Business Enterprise, and reflect the relative information for the financial position, operating performance, cash
flow of the Group truly and fully.
2.3 Accounting period
The Group adopts the Gregorian calendar year as accounting period, i.e. from Jan 1 to Dec 31.
2.4 Funcitonal currency
The Group adopts RMB as functional currency.
2.5 Recording basis and pricing principle
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
The accrual basis shall be adopted for accounting treatment to follow the historical cost method, except that the
financial assets held for trading and sale are measured at fair value.
2.6 Business combination
Business combination refers to transaction or event bringing together two or more separate enterprises into one
reporting entity. The Group should recognize the acquired assets and liabilities at the combining date or
acquisition date. The combining date or acquisition date is the date when the Group acquired actually acquiree
and combined party.
The assets and liabilities that the combining party obtains in a business combination under the same control
should be measured on the basis of their carrying amount in the combined party on the combining date. As for the
balance between the carrying amount of the net assets obtained by the combining party and the carrying amount
of the consideration paid by it, the capital surplus shall be adjusted. If the capital surplus is not sufficient to be
offset, the retained earnings shall be adjusted.
For a business combination not under same control, the combination cost shall be the fair value, on the
acquisition date, of the assets paid, the liabilities incurred or assumed and equity securities issued by the acquirer
in exchange for the control of the acquiree. The difference when combination cost exceeds the fair value of
identifiable net assets of acquiree should be recognized as goodwill. If the combination cost is less than the he
fair value of identifiable net assets of acquiree, the difference should be recognized as current profit or loss.
2.7 Method of preparation of consolidated financial statements
(1) Recognition principle of scope of consolidation
Scope of consolidated financial statements should include all subsidiaries of the parent and the special purpose
entities.
(2) Accounting method of consolidated financial statements
The Group’s consolidated financial statements had been prepared in accordance with and related regulations. 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 interest presented in the in the consolidated balance sheet within equity.
Where there are inconsistent accounting policies or accounting period, when preparing the consolidated financial
statements, the Group shall adjust the subsidiaries’ financial statements in accordance with the Group’s
accounting policies and accounting period.
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
For the subsidiary obtained under different control, when preparing the consolidated financial statements, the
Group 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 Group 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.
2.8 Cash and cash equivalent
The cash listed on the cash flow statements of the Group refers to cash on hand and bank deposit. The cash
equivalents refer to short-term (normally with original maturities of three months or less) and liquid investments
which are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value.
2. 9 Translation of foreign currency
(1) Foreign currency transaction
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.
(2) Translation of foreign currency financial statements
The asset and liability items in the foreign currency balance sheet should be translated at a spot exchange rate at
the balance sheet date. Among the ower’s equity items except “undistributed profit”, others should be translated
at the spot exchange rate when they are incurred. The income and expense should be translated at spot exchange
rate when the transaction incurs. Translation difference of foreign currency financial statements should be
presented separately under the ower’s equity item. For the foreign currency monetary items that form
substantially the oversea business net investment, their exchange difference of movement of exchange rate should
be presented separately as translation difference of foreign currency financial statement under the ower’s equity
item when prepare the consolidated financial statements. When disposing an overseas business, the Group should
shift the translation difference of foreign currency financial statement related to the overseas business into the
disposal profits and losses of current period. Foreign currency cash flows are translated at the spot exchange rate
45
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
on the day when the cash flows incur. The amounts resulted from change of exchange rate are presented
separately in the cash flow statement.
2.10 Financial assets and financial liabilities
(1) Financial assets
1)Classification
The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and
receivables, held-to-maturity financial assets and available-for-sale. The classification depends on the purpose for
which the financial assets were acquired. Management determines the classification of its financial assets at
initial recognition.
a)Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is
classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are
also categorised as held for trading unless they are designated as hedges. Assets in this category are classified
as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.
b)Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They are included in current assets, except for maturities greater than 12 months
after the reporting period, which are classified as non-current assets.
c)Held-to-maturity financial assets
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and
fixed maturities that the Groups management has the positive intention and ability to hold to maturity. If the
Group were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category
would be tainted and reclassified as available for sale. Held-to-maturity financial assets are included in
non-current assets, except for those with maturities less than 12 months from the end of the reporting period,
which are classified as current assets.
d)Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are included in non-current assets unless the investment
matures or management intends to dispose of it within 12 months of the end of the reporting period.
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
2)Recognition and measurement
Financial assets are recognized at fair value on the balance sheet when the Group becomes a party to the
contractual provisions of the financial instrument. Transaction costs of financial assets carried at the fair
value through profit or loss are expensed in the income statement;Transaction costs of other financial assets
are included in financial assets at initial recognition.
Available-for-sale financial assets are subsequently measured at fair value. Investments inequity instruments
are measured at cost when they do not have a quoted market price in an active market and whose fair value
cannot be reliably measured. Loans and receivables are measured at amortised cost using the effective
interest method.
A gain or loss arising from change in fair value of an available-for-sale financial asset is recognised directly
in equity, except for impairment losses and foreign exchange gains and losses arising from the translation of
monetary financial assets. When such financial asset is derecognised, the cumulative gain or loss previously
recognised in equity is recognised in income statement. Interest on available for sale debt instrument,
calculated using effective interest method, and cash dividends declared by the investee on available-for-sale
equity instruments are recognised as investment income in income statement.
3) Impairment of financial assets
The Group assesses the carrying amount of financial assets other than financial assets at fair value
through profit or loss at each balance sheet date. If there is objective evidence that the financial asset is
impaired, the Group shall determine the amount of any impairment loss accounts.
If an impairment loss on a financial asset carried at amortized cost has been incurred, the amount of
loss is measured at the difference between the asset’s carrying amount and the present value of
estimated future cash flows (excluding future credit losses that have not been incurred). If there is
objective evidence that the value of the financial asset recovered and the recovery can be related
objectively to an event occurring after the impairment was recognized, the previously recognized
impairment loss is reversed and the amount of reversal is recognized in income statement.
If objective evidence shows that impairment for available-for-sale financial assets will occur,the
cumulative loss arising from the decline in fair value that had been recognized directly in equity is
removed from equity and recognized as impairment loss. For an available for sale debt instrument, if
there is objective evidence that the value of the financial asset recovered and the recovery can be
related objectively to an event occurring after the impairment was recognized, the previously
recognized impairment loss is reversed and the amount of reversal is recognized in income statement.
For an available for sale equity instrument, if there is objective evidence that the value recovered and
the recovery can be objectively related to an event occurring after the impairment loss recognized, the
47
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
previously recognized impairment loss is reversed and directly recognized in equity.
4)Derecognition of financial assets
Financial assets are derecognized when: i) the contractual rights to receive the cash flows from the
financial assets have expired; or ii) all substantial risks and rewards of ownership of the financial assets
have been transferred; or iii) the control over the financial asset has been waived even if the Group
does not transfer or retain nearly all of the risks and rewards relating to the ownership of a financial
asset.
On derecognition of a financial asset, the difference between the carrying amount and the aggregate of
consideration received and the accumulative amount of changes of fair value originally recorded in the
owner’s equity is recognised in the income statement.
(2) Financial liabilities
The financial liabilities are classified into the financial liability at fair value through profit or loss and other
financial liability for the initial recognition.
The financial liabilities at fair value through profit or loss include the financial liabilities held for trading and the
designated financial liabilities at fair value through profit or loss when initial recognized. For this kind of
financial liabilities should be measured at fair value, variation of fair value should be recorded into the current
profit or loss.
Other financial liabilities should be subsequently measured at amortization cost by adopting actual interest rate
method.
(3) Fair value measurment of financial assets and liabilities
a) If the market for a fiancial instrument is active, an entity establishes fair value by using the quoted price in the
active market. In the active market, the Group meausres the fair value of its holding financial assets and
contingent financial liabilities by using the current quoted price; the Group measures the fair value of its
contingent financial assets and holding financial liabilties by using the curent quoted price. If there are no current
quoted prices for the financial assets and liabilties, and no significant change in the economic environment after
the settlement date, the quoted prices of the recent transactions should be used to measure the fair value of the
financial assets and liabilties.
b) If the market for a financial instrument is not active, an entity establishes fair value by using a valuation
technique. Valuation techniques include using recent arm’s length market transactions between knowledgeable,
willing parties, if available, reference to the current fair value of another instrument that is substantially the same,
discounted cash flow analysis and option pricing models.
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
2.11 Provision for bad debts of receivables
The Group shall review the carrying amount of receivables fully at the balance sheet date. The Group shall
calculate the full provision for bad debts for the following receivables: debtor has been log-out, bankruptcy,
minus net asset, significant poor cash flow and significant nature disaster leads to discontinue production and the
debtors could not pay for the debts within the foreseeable time . Other solid evidences indicates that the
receivables cound not be paid or be of a slim chance.
The allowance method is applied to the potential loss of bad debt. The Group should make the impairment test
separately or in combination and accure the bad debt provisions which shall be recorded into current profit or
loss at the end of the period. If there is defined evidence for the receivables not to or not likely to be received,
which shall be recognized as the loss of bad debt and write off the accrued bad debts provisions after going
through the approval procedure of the Group.
(1) Individually significant amounts of accounts receivable accrued bad debt provision as per portfolio
The receivables with more than RMB 3 million
Judgment basis or amount standards of
individually significant amounts individual amount shall be recognized as the
significant receivables;
The accruing method of the receivables The bad debt provisions shall be accrued based on
with individually significant amounts the difference between current value of future cash
flow and the carrying amounts.
(2) Accounts receivable accrued bad debt provision by portfolio
The basis of portfolio
Use the accounting aging of the receivables as the
Accounting aging
credit risk characteristics to classify the portfolio
Use the amount characteristics of the receivables , if
Related parties the transaction party is related parties
characteristics need to classify the portfolio
Use the amount characteristics of the receivables, the
credit of transaction party, the nature of the amounts
Risk-free
and the safeguard mechanism of transaction as
characteristics to classify the portfolio
The accrual method for bad debt provision by portfolio
Accrue the bad debt provision by accounting aging
Accounting aging
analysis method
Accrue the bad debt provision by individual
Related parties
identification method
Accrue the bad debt provision by individual
Risk-free
identification method
1) The percentage of provision for bad debts based on the age of receivables as followings:
Accouting aging Accrual percentage of the Accrual percentage of other
receivables (%) receivables (%)
Within 1 year 1 1
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
1-2 years 5 5
2-3 years 20 20
Over 3 years 50 50
2) The other methods is applied to accrualing of bad debts provision
Related parties Accrue the bad debt provision by individual identification
method
Risk-free Accrue the bad debt provision by individual identification
method
(3) Individually insignificant amount accounts receivable but accrued bad debt provision as per portfolio
The individual amount is not significant, but the
Accrual reason accrued bad debt provision on the basis of portfolio
can not reflect its risk characteristic
The bad debt provisions should be accrued based on
Accrual method the difference between current value of future cash
flow and the carrying amount.
2.12 Inventories
Classification of inventory: Inventories are classified as raw material, wrappage, low-valuable consumable,
working-in-progress, and finished goods etc.
Pricing of inventories received and sent out: 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 finaly adjust the planned costs into actual costs.
At the balance sheet date inventory should be measured at the lower of the cost and net realizable value. For the
inventories which are damaged, fully or partly obsoleted and selling price below cost, the Group should calculate
the provision for impairment of inventories according to the estimated nonrecoverable part of cost. Finished
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 finished goods, working in progress and raw material held for sale etc which shall be sold directly, the net
realizable value should be confirmed at the estimated selling price less estimated selling expenses and related tax
50
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
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 quantities of inventories in the Group are more than quantities if inventories
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.
2.13 Long-term equity investment
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 Co., Ltd B） 2012 Annual Report
(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.
2.14 Fixed asset
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, and whose unit price is over RMB2,000.
Classification of fixed assets: Building, machinery, transportation equipment, electronic equipment and others.
Measurement of fixed assets: Initial measurement of fixed assets shall be conducted on fixed assets according to
the actual cost when obtained, including, 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.
Depreciation method: the Group withdraws depreciation for all fixed assets except for the fixed assets which had
been fully depreciated and are still being used. The Group 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:
Useful Estimated
Category Annual depreciation rate
life(years) net residual
52
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
value rate
(%)
Housing and Buildings
Including: Buildings 15 3 6.47%
Housing for productive 30 3 3.23%
Housing for non-productive 35 3 2.77%
Machinery equipments 10-15 3 6.47%～9.70%
Transportation equipments 6 3 16.17%
Electronic equipments
Including: Computer 4 3 24.25%
General testing instruments 7 3 13.86%
Specialized electronic 8 3 12.13%
equipments
Automated controlling 8 3 12.13%
equipments
Automated controlling 8 3 12.13%
meters
Others equipments
Including: Industrial kiln 7 3 13.86%
Tools & other production tools 9 3 10.78%
Transmission equipments 15 3 6.47%
Non-operational equipments and tools 18 3 5.39%
The Group 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.
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.
2.15 Construction in progress
Measurement of CIP: Construction-in-progress is recognized at actual cost. Self-construction project is
recognized at the cost of material, labour 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.
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
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 Group should withdraw depreciation
in the next month after completion.
2.16 Borrowing costs
Recognition principles on capitalisation of borrowing cost: The Group should capitalizes the borrowing cost
directly attributable to the acquisition, construction or production of a qualifying asset and record borrowing cost
into cost of related asset. The Group should recognize the other borrowing cost as the current expense and
charged it as profit and loss of current period. A qualifying asset refers to fixed asset, investment property and
inventory need be constructed for so long time to its intended use or sale.
Duration of capitalisation of borrowing cost: When expenditures and borrowing cost are being incurred, and
activities that are necessary to put the asset available for use or sale are in progress, the capitalisation of
borrowing costs as part of the cost of a qualifying asset should commence. Capitalisation of borrowing costs
should be suspended during extended periods in which active development is interrupted and interruption period
last for over 3 month. The borrowing cost incurred during the period should be recognized as expenses and
recorded into the profit and loss in the current period. When all the activities for bringing the asset to its intended
use or sale are completed, the capitalization of borrowing costs ceases, and the borrowing costs should be
recognized as an expense in the period incurred.
Measurement of borrowing cost: As for specifically borrowed loans for the acquisition and construction or
production of assets eligible for capitalization, the to-be-capitalized amount of interests shall be determined as the
difference of the actual cost incurred of the specially borrowed loan at the present period minus the income of
interests earned on the unused borrowing loans as a deposit in the bank or as a temporary investment. Where a
general borrowing is used for the acquisition and construction or production of assets eligible for capitalization,
the Group shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by
multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus
the general borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be
calculated and determined at the weighted average interest rate of the general borrowing.
2.17 Intangible assets
Measurement of intangible assets: The intangible assets of the Group 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
54
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
be determined according to the stated value in the investment contract or agreement, except for those of unfair
value in the contract or agreement.
Amortisation method and period: The Group 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.
The Group 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 Group 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 Group shall estimate the useful life and
amortize the intangible assets within estimated useful life.
2.18 Impairment of non-financial asset
The Group 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 Group should test impairments. The Group 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
asset minus disposal expense and the present value of estimated future cash flow of asset.
Indications of impairment as follows:
(1) During the period, a 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 Group 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;
55
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
(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.
2.19 Long-term deferred expenses
Long-term deferred expenses of the Group refer to expenses which are paid and should be deferred over the
future period. The amortization period shall be more than one year (no including 1 year). The expenses should be
amortized averagely over the beneficial period. If the deferred expense can not take benefit for the future
accounting period, the unamortized balance of the deferred expenses should be transferred into the current profit
or loss.
2.20 Employee benefits
Employee compensation comprises salary, bonus, allowance, welfare, social insurance, housing fund, labour
union expenditure, employee education expenditure and other relevant expenditures of service rendered by the
employees.
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 Group should
record the employee benefits into relevant cost and expense. For the compensation for employee due to
cancellation of labour contract, the Group should charge the compensation as the profit and loss during the
current period.
Termination benefits are benefits payable as a result of cancellation of labour contract between the company and
employees. For the termination plans with instalment or voluntary termination advice, when planning and
checking the recognition condition of contingent liability for each period or stage, then the contingent liability
caused by providing termination benefits shall be confirmed, and charged as management expenses satisfying the
confirmation conditions of contingent liability for the current period.
2.21 Contingent liabilities
The obligation pertinent to a contingency shall be recognized as an estimated debt when the following conditions
are satisfied simultaneously:
(1) The obligation is a current obligation of the Group;
56
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
(2) It is likely to cause any economic benefit to flow out of the Group as a result of performance of the obligation;
and
(3) The amount of the obligation can be measured reliably.
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 Group 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 Group 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 Group shall
adjust the book value in accordance with the current best estimate amounts.
2.22 Principle of recognition of revenue
The revenue of the Group is mainly from selling goods, providing labour services and abalienating the right of
use assets. Recognition standards for revenue are as below:
(1) Recognition of revenue from selling good:
1) The significant risks and rewards of ownership of the goods have been transferred to the buyer;
2) The Group remains neither continuous management right that usually keeps relation with the ownership nor
effective control over the sold goods;
3) The amount of revenues can be measured reliably;
4) The relevant economic benefits are likely to flow into the Group; and
5) The incurred cost or intended cost can be measured reliably.
(2) Recognition of revenue from providing labour services:
1) Total revenue and total cost can be measured reliably; the relevant economic benefits are likely to flow into the
Group; and the stage of completion can be confirmed reliably;
2) If the Group can, on the date of the balance sheet day, reliably estimate the outcome of a transaction
concerning the labour services it provides, it shall recognize the revenue from providing services employing the
stage of completion method. If the outcome can not be estimated reliably and incurred cost can be offset, the
revenue should be recognised by the compensation. When the standards can not be satisfied, the revenue should
not be recognised, and the incurred cost should be recorded into the current profit and loss.
57
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
(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 Group, and the amount of revenues can be measured reliably.
2.23 Government grants
A government subsidy of the Group shall be recognized if the Group 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 used for compensating the related future expenses or losses of the Group 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 Group
shall be directly included in the current profits and losses.
2.24 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 Group 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 Group 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 obtain 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 Group 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.
2.25 Lease
The leases of the Group refer to operating lease.
58
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
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.
2.26 Accounting treatment method of income tax
The Group shall recognize income tax by balance sheet liability method. The income taxes of the current period
and deferred income tax of the Group 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.
2.27 Segment report
Business segment is confirmed in accordance with governance structure, management requests, internal reporting
system, and the Group confirm the report segment on the basis of business segment.
Business segment is a component of the Group that satisfys the following conditions simultaneously: the
component can take revenue and expenses; the management level can appraise the operating performance of the
component in order to allocation of resource and appraise the performance; and the Group can acquire the
financial position, operating performance and cash flow of the component etc.
2.28 Discontinued operation
Discontinued operation represents the component of the Group 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 Group’s plan.
The component of the Group shall be recognized as the component held for selling when satisfying the conditions
as below:
1) The Group had made a decision on disposal of the component;
2) The Group had signed the irrepealably Transfer Agreement with transferee; and
59
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
3) The transfer shall be finished within one year.
3. Changes in accounting policies, accounting estimates and correction of previous errors
There are no changes in accounting policies, accounting estimates and correction of previous errors in 2012.
4. Taxation
4.1. The main applicable tax and rate to the Group as follows:
Tax Tax base Tax rate
Value-added tax (VAT) Sales revenue or Purchase 17%
Business tax Revenue from property lease 5%
City construction tax Value-added tax payables, business tax 7%
Education surcharge Value-added tax payables, business tax 3%
Local education surcharge Value-added tax payables, business tax 2%
Enterprise income tax(EIT) Current period taxable profit 15%
70% of cost of own property or
Real estate tax 1.2% or 12%
revenue from leasing property
Land use tax Land using right area RMB 6 per square meter
The enterprise income tax rate of Liaoyang Bearing (the company’s subsidiary) is 25%.
The enterprise income tax rate of Dalian Electrical Equipment (the company’s subsidiary) is 25%.
4.2. Tax preference and approval
The company obtained the qualification of high and new technology enterprises at 14 Oct 2011.The Certificate
number is GR201121200028, and the period of validity is three years. According to the provisions of the tax law
the company can enjoy the preferential tax policy of enterprise income tax rate of 15% in three years (including
2011) .
5. Business combination and consolidated financial statements
5.1 Subsidiaries
Company Company Registered address Nature of Registered
name type operation capital
Production and
No.61, Weiguo road,
Liaoyang sales of bearing
Limited Baita district Liaoyang 19,350,000.00
Bearing and machinery
city
manufacturing
No.12, Shisanli Production and
Dalian
yongsheng street, sales of bearing
Electrical Limited 10,000,000.00
free trade zone Dalian and machinery
Equipment
city manufacturing
60
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
(Continued)
Company Business scope Total Holding % Voting % Consolidation
Name investment
amounts
Production and
Liaoyang sales of bearing
17,337,259.95 100 100 Yes
Bearing and machinery
manufacturing
Manufacture
and sales of
Dalian precise motor
Electrical and car’s 45,478,956.37 100 100 Yes
Equipment bearings,
components and
related products
6. Notes to consolidated financial statements
6.1 Cash and cash in bank
2013.06.30 2012.12.31
Items Original Exchang Amount Original Exchange Amount
currency e rate (RMB) currency rate (RMB)
Cash on
373,759.29 292,632.98
hand
RMB 373,759.29 292,632.98
Cash in
66,784,740.44 59,711,673.27
bank
RMB 47,871,131.14 55,851,714.09
USD 3,061,098.50 6.1787 18,913,609.30 614,105.35 6.2855 3,859,959.18
Other cash 28,390,089.24 41,228,907.79
RMB 28,390,089.24 41,228,907.79
Total 95,548,588.97 101,233,214.04
Note 1: The ending balance of other cash is the security deposit for bank acceptance notes. It is deducted from the
ending balance of cash and equivalents due to its restriction on use.
6.2 Notes receivable
(1) Category of notes receivable
Items 2013.06.30 2012.12.31
Bank acceptance notes 160,195,706.61 95,459,955.84
Commercial acceptance notes 24,128,929.10 17,793,629.09
Total 184,324,635.71 113,253,584.93
(2) No pledged notes receivable up to June 30，2013.
61
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
(3) Notes receivable endorsed to other parties not mature at the end of June 2013
Note issuer Issuing date Maturity Amount
Ben xi Pingan car
2013-04-22 2013-10-22 9,000,000.00
Co., Ltd
China railway material
2013-05-06 2013-09-06 5,000,000.00
Co., Ltd
China railway material
2013-05-06 2013-09-06 5,000,000.00
Co., Ltd
Bei Jing North car
2013-03-12 2013-09-21 5,000,000.00
development Co., Ltd
Bei Jing North car
2013-03-12 2013-09-21 5,000,000.00
development Co., Ltd
— — — 29,000,000.00
6.3 Accounts receivable
(1) Category of accounts receivable
2013.06.30
Provision for bad and
Booking balance
Items doubtful debts
Percentage Percentage
Amount Amount
(%) (%)
Accounts receivable with
individual significant amount 3,910,007.4
3,910,007.43 0.3% 100%
3
and identification separately
bad debt provision
Accounts receivable accrued
bad debt provision by
portfolio
44,602,111.7
Accounting aging portfolio 97.5% 3.6%
1,224,570,260.47 0
Related parties portfolio 15,552,036.33 1.2%
Risk-free portfolio
44,602,111.7
Subtotal of portfolio 1,240,122,296.80 98.7% 3.45%
0
Accounts receivable with
individual insignificant 11,813,753.9
11,813,753.94 0.9% 100%
4
amount and identification
separately bad debt provision
60,325,873.
Total 1,255,846,058.17 -- --
07
(Continued)
Items 2012.12.31
62
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Booking balance Provision for bad and
doubtful debts
Percentag Percentage
Amount Amount
e
(%)
(%)
Accounts receivable with
individual significant amount
3,910,007.43 0.34% 3,910,007.43 100%
and identification separately
bad debt provision
Accounts receivable accrued
bad debt provision by portfolio
44,948,646.0
Accounting aging portfolio 1,106,861,753.94 97.25% 4.06%
6
Related parties portfolio 15,597,246.25 1.37%
Risk-free portfolio
44,948,646.0
Subtotal of portfolio 1,122,459,000.19 98.62% 3.98%
6
Accounts receivable with
individual insignificant
11,813,753.94 1.04% 11,813,753.94 100%
amount and identification
separately bad debt provision
60,672,407.4
Total 1,138,182,761.56 -- --
3
1) Accounts receivable with individual significant amount and identification separately bad debt provision at the
end of June 30,2013
Provision
Booking Provision for
Company name rate Reasons for provision
balance bad debts
(%)
Baoding North China A/R with over 5 years
Machine & Electronic 3,910,007.43 3,910,007.43 100.00 aging, unlikely to be
Equipment Co., Ltd. collected
Total 3,910,007.43 3,910,007.43 — —
2) Accounts receivable accrued the bad debt provisions under accounting aging analysis method
Items 2013.06.30 2012.12.31
Percentage Percentage
Amount Provision Amount Provision
(%) (%)
for bad for bad
debts debts
Within 1 year 1,041,095,3 85.02% 10,410,95 906,609,161 81.91% 9,066,091.
63
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
62.12 3.62 .15 60
106,196,62 5,309,831. 118,285,473 5,914,273.
1 to 2 years 8.67% 10.69%
3.01 15 .83 69
32,526,035. 6,505,207. 36,717,595. 7,343,519.
2 to 3 years 2.66% 3.32%
80 16 73 15
44,752,239. 22,376,119 45,249,523. 22,624,76
Over 3 years 3.65% 4.08%
54 .77 23 1.62
1,224,570,2 44,602,111 1,106,861,7 44,948,64
-- --
Total 60.47 .70 53.94 6.06
3) Individually insignificant amount accounts receivable but accrued bad debt provision separately at the end of
June 30,2013
Proportio
Booking Provision for
Company name n Reasons for provision
balance bad 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
Shen Yang General A/R with over 3 years aging,
2,452,138.58 100.00
Bearing Co., Ltd 2,452,138.58 unlikely to be collected
Tiefa coal sector A/R with over 3 years aging,
2,352,760.15 100.00
Group Company 2,352,760.15 unlikely to be collected
Shuangyashan
A/R with over 3 years aging,
Mining industry 1,368,257.55 100.00
1,368,257.55 unlikely to be collected
Group Company
Chongqing
A/R with over 3 years aging,
Sailimeng electrical 100.00
650,758.88 650,758.88 unlikely to be collected
machine LLC
Qingdao Qingte
A/R with over 3 years aging,
Zhongli axle 100.00
590,898.99 590,898.99 unlikely to be collected
Co.,Ltd
Other sporadic A/R with over 5 years aging,
1,692,236.66 1,692,236.66 100.00
accounts receivable unlikely to be collected
Total 11,813,753.9
11,813,753.94
4
(2) Write-off of accounts receivables during the reporting period
(3) Accounts receivable due from shareholders holding over 5% (including 5%) of the Company’s shares
2013.06.30 2012.12.31
Company name
Amount Provision for Amount Provision for
64
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
bad debt bad debt
Wazhou Group 7,232,280.81 6,116,707.30
Total 7,232,280.81 6,116,707.30
(4) Accounts receivable for the top 5 companies
Relationship Percentage
Company name with the Amount Aging in the total
Company AR(%)
Siemens Energy Inc Unrelated party 27,433,726.91 Within 1 year 2.18%
Ji Nan Qiaoxiang Co.,Ltd Within 1 year
Unrelated party 26,661,119.71 2.12%
of SINOTRUK
1-2years
Xi’an fashite auto
Unrelated party 26,604,613.67 Within 1 year 2.12%
transmion company
Hudong vehicle section
of Daqin railway Stock Unrelated party 23,243,767.75 Within 1 year 1.85%
Co.,Ltd
Chengdu Leejun Within 1 year
Unrelated party 22,260,107.65 1.77%
Industrial Co., Ltd 1-2years
Total — 126,203,335.69 — 10.04%
(4) Accounts receivable due from related parties
Percentage in the
Relationship with the
Company name Amount total accounts
Company receivable(%)
Wazhou Group Parent company 7,232,280.81 0.58%
Wazhou Group Special Other companies controlled
7,686,721.74 0.61%
Precision Bearing Co., Ltd by the same parent company
Wafangdian bearing precision Other companies controlled
633,033.78 0.05%
ball manufactory Co., Ltd by the same parent company
Total — 15,552,036.33 1.24%
6.4 Other receivables
(1) The categories of other receivable
2013.06.30
Provision for bad and doubtful
Booking balance
Items debts
Amount Percentage Amount Percentage
(%) (%)
Other receivables with individual
significant amount and identification — — — —
separately bad debt provision
Other receivables accrued bad debt — — — —
65
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
provision by portfolio
Accounting aging portfolio 30,461,651.67 88.88% 3,741,341.49 16.17%
Related parties portfolio
Risk-free portfolio 3,810,735.68 11.12%
Subtotal of portfolio 34,272,387.35 100% 3,741,341.49 14.12%
Other receivables with individual
insignificant amount and identification
separately bad debt provision
Total 34,272,387.35 -- 3,741,341.49 --
(Continued)
2012.12.31
Provision for bad and doubtful
Booking balance
Items debts
Amount Percentage Amount Percentage
(%) (%)
Other receivables with individual
significant amount and identification — — — —
separately bad debt provision
Other receivables accrued bad debt
— — — —
provision by portfolio
Accounting aging portfolio 17,637,468.19 74.63% 3,741,341.49 21.21%
Related parties portfolio
Risk-free portfolio 5,995,683.60 25.37%
Subtotal of portfolio 23,633,151.79 100% 3,741,341.49 15.83%
Other receivables with individual
insignificant amount and
identification separately bad debt
provision
Total 23,633,151.79 -- 3,741,341.49 --
(2) Other receivables accrued the bad debt provisions under accounting aging analysis method
Items 2013.06.30 2012.12.31
Percentage Percentage
Amount Provision Amount Provision
(%) (%)
Within 1
21,880,136.23 71.83% 218,801.36 7,623,265.85 53.83% 76,232.66
year
1 to 2 years 755,828.11 2.48% 37,791.41 2,636,691.48 11.31% 131,834.58
2 to 3 years 1,426,983.14 4.68% 285,396.63 518,270.58 2.54% 103,654.12
Over 3 6,398,704.19 21.01% 3,199,352.10 6,859,240.28 32.32% 3,429,620.13
66
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
years
Total 30,461,651.67 -- 3,741,341.49 17,637,468.19 -- 3,741,341.49
No other receivables are due from shareholders holding over 5% (including 5%) of the Company’s shares at the
end of June 30,2013.
(3) Other accounts receivable for the top 5 companies
Relationship Percentage
Company name with the Amount Aging in the total
Company AR(%)
Ying Kou General
Unrelated party 1,086,793.32 Within 1 year 3.17%
bearing Co.,Ltd
Da Lian Jinhua metal
Unrelated party 800,000.00 Over 3 years 2.33%
material agency
Da Gang Unrelated party 736,160.12 Over 3 years 2.15%
Bai Ta Star fire factory Unrelated party 457,529.25 Over 3 years 1.33%
Shen Yang electricity
Unrelated party 366,591.88 Over 3 years 1.07%
Machine Co.,Ltd
Total — 3,447,074.57 — 10.05%
6.5 Advances to suppliers
(1) Aging of advances to suppliers
Items 2013.06.30 2012.12.31
Amount Percentage(%) Amount Percentage(%)
Within 1 year 13,169,121.40 73.96% 29,405,218.97 86.78%
1 to 2 years 2,888,622.58 16.22% 2,343,243.15 6.92%
2 to 3 years 1,095,725.86 6.15% 104,369.37 0.31%
Over 3 years 653,195.03 3.67% 2,030,900.11 5.99%
Total 17,806,664.87 -- 33,883,731.60 --
(2) Main advances to suppliers
Relationship
Company name with the Amount Aging Pending reason
Company
Fushun Special Steel Goods not yet
Unrelated party 4,848,729.33 Within 1 year
Company Limited reached
Qiqi Ha’er Beixing Unrelated party 3,379,670.02 Within 1 year Goods not yet
67
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
special steel Co., Ltd reached
Luo Yang Zhong zhong Goods not yet
Unrelated party 2,731,127.10 Within 1 year
foundry reached
Wazhou Dynamic
bill not yet
heating Engineering Co., Unrelated party 743,326.56 Within 1 year
reached
Ltd.
Goods not yet
Unrelated party 466,006.55 Within 1 year
reached
Total — 12,168,859.56 -- —
No advances to suppliers are due from shareholders holding over 5% (including 5%) of the Company’s shares at
the end of June 30,2013.
6.6 Inventories
(1) Categories of inventories
2013.06.30 2012.12.31
Item Provision for Net book Provision
Cost Cost Net book value
decline value for declines
178,484,351.9 175,826,04 162,613,3
Raw materials 2,658,311.39 2,658,311.39 159,955,045.81
3 0.54 57.20
161,037,665.6 160,435,16 178,825,9
Workingin progress 602,496.86 602,496.86 178,223,473.97
2 8.76 70.83
912,054,488.4 855,696,22 874,203,0 56,358,265.8
Finished goods 56,358,265.81 817,844,828.47
3 2.62 94.28 1
541,853.3
Wrappage 541,853.35
5
1,251,576,505 1,191,957,4 1,216,184, 59,619,074.0 1,156,565,201.
59,619,074.06
Total .98 31.92 275.66 6 60
(2) Provision for decline in the value of inventories
Decrease
Items 2012.12.31 Increase Others 2013.06.30
Reverse
transferred
Raw materials 2,658,311.39 2,658,311.39
Finished goods 602,496.86 602,496.86
Working in progress 56,358,265.81 56,358,265.81
Total 59,619,074.06 59,619,074.06
6.7 Other current assets
Item 2013.06.30 2012.12.31
Over paid income tax 1,050,485.15 1,823,854.11
Rental 841,416.60 848,331.13
Total 1,891,901.75 2,672,185.24
68
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
6.8 Investment in associated company
Monetary unit: RMB Ten Thousand Yuan
Total assets Total liabilities Total net Total sales
Holding Voting Net profits in
Investee as at June as at June assets as at revenue in
% % report period
30,2013 30,2013 June 30,2013 report period
Associated
— — — — — — —
company
Dalian SKF
Wazhou 204,374,506.5
49% 49% 255,932,011.27 51,557,504.74 112,161,276.81 10,268,423.16
Bearings 3
Co., Ltd.
204,374,506.5
Total 49% 49% 255,932,011.27 51,557,504.74 112,161,276.81 10,268,423.16
3
6.9 Long-term equity investments
(2) Long-term equity investments under cost and equity method
Holding Voting
Investee Original Amounts
% %
Cost method
Shanghai ME machine-electrical equipment chain Ltd. 4.76 4.76 2,000,000.00
Sub-total — — 2,000,000.00
Equity method — — —
Dalian SKF Wazhou Bearings Co., Ltd. 49.00 49.00 68,600,000.00
Sub-total — — 68,600,000.00
Total — — 70,600,000.00
(Continued)
Cash dividends
Investees 2012.12.31 Change amount 2013.06.30 received in report
period
—
— —
Cost method —
Shanghai ME —
—
machine-electrical equipment 2,000,000.00
chain Ltd. — 2,000,000.00
—
2,000,000.00 2,000,000.00 —
Sub-total —
Equity method —
Dalian SKF Wazhou Bearings 100,226,16
95,194,641.13 5,031,527.35 —
Co., Ltd. 8.48
100,226,16
95,194,641.13 5,031,527.35 —
Sub-total 8.48
102,226,16
97,194,641.13 5,031,527.35 —
Total 8.48
69
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
6.9 Fixed assets
(1) Fixed assets by categories
Items 2012.12.31 Increase Decrease 2013.06.30
Cost 1,535,268,263.51 18,902,808.55 3,515,307.37 1,550,655,764.69
Buildings 385,061,768.70 1,049,393.97 386,111,162.67
Machinery 889,854,185.86 15,416,997.03 3,480,307.37 901,790,875.52
Transportation
19,250,791.84 1,649,082.12 35,000.00 20,864,873.96
equipment
Electronic
66,929,856.68 626,467.04 67,556,323.72
equipment
Others 174,171,660.43 160,868.39 174,332,528.82
Accumulated
912,055,304.20 38,647,366.84 2,336,518.04
deprecation
Buildings 164,982,722.58 5,845,080.24
Machinery 548,443,929.13 24,829,449.03 2,301,518.04
Transportation
12,936,152.86 697,749.21 35,000.00
equipment
Electronic
54,017,597.91 2,282,378.89
equipment
Others 131,674,901.72 4,992,709.47
Net book value 623,212,959.31 602,289,611.69
Buildings 220,079,046.12 215,283,359.85
Machinery 338,407,209.97 328,280,897.86
Transportation
6,114,638.98 7,065,971.89
equipment
Electronic
12,912,258.77 11,256,346.92
equipment
Others 42,495,599.20 37,663,758.12
Provision for
3,204,206.27 2,739,277.05
impairment
Buildings
Machinery 3,003,046.76 2,538,117.54
Transportation
200,000.00 200,000.00
equipment
Electronic
equipment
Others 1,159.51 1,159.51
Booking value 620,008,753.04 599,550,334.64
70
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Buildings 220,079,046.12 215,283,359.85
Machinery 338,407,209.97 328,280,897.86
Transportation
6,114,638.98 7,065,971.89
equipment
Electronic
12,912,258.77 11,256,346.92
equipment
Others 42,495,599.20 37,663,758.12
At the end of June 30,2013 the increase includes the assets which were transferred from construction in
progress amounted to RMB 17,076,798.21, and in the increase of accumulated depreciation, the amount
accrued for current period was RMB 38,647,366.84
6.10 Construction in progress
(1) Details of Construction-in-progress
Items 2013.06.30 2012.12.31
Provision Provision
Book
for Book value Book balance for Book value
balance
impairment impairment
M250Grinding
Machine 130,730.53 130,730.53 130,730.53 130,730.53
Improvement
Forked truck 1,950,485.37 1,950,485.37 1,950,485.37 1,950,485.37
Improvement of
5,726,511.77 5,726,511.77 5,000,473.77 5,000,473.77
plant
Installation of
super finish 1,237,545.89 1,237,545.89 1,351,173.24 1,351,173.24
machine
Improvement of
10,419,850.4 10,419,850.4 10,395,850.4 10,395,850.4
finished goods 5 5 5 5
storage
Dalian industry 19,030,894.3 19,030,894.3 20,565,071.2 20,565,071.2
park project 7 7 5 5
Crane Project 3,431,223.53 3,431,223.53 3,317,410.04 3,317,410.04
Improvement of
two-finished 3,381,407.88 3,381,407.88 1,763,639.14 1,763,639.14
products
Computer Project 2,117,551.69 2,117,551.69 2,032,624.60 2,032,624.60
Improvement of
precision roller 6,703,314.99 6,703,314.99 7,509,145.15 7,509,145.15
branch
Improvement of
5,338,219.59 5,338,219.59 1,358,768.24 1,358,768.24
Liao zhou
Improvement
14,510,074.5 14,510,074.5 14,422,811.5
of grinding 14,422,811.50
3 3 0
machine
71
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Grinding product 12,160,000.4 12,160,000.4 12,273,932.0 12,273,932.0
line 2 2 5 5
Improvement of
13,279,456.7 13,279,456.7
seven-finished 7,398,962.60 7,398,962.60
8 8
products
11,996,135.9 11,996,135.9 16,413,539.7 16,413,539.7
Others 4 4 1 1
Heat treatment
1,512,348.50 1,512,348.50 1,512,348.50 1,512,348.50
product line
Digital Boring
1,820,270.56 1,820,270.56 5,583,145.92 5,583,145.92
machine
Improvement of
exploration 878,298.23 878,298.23 467,787.14 467,787.14
machinery
Improvement of
special large 2,478,824.45 2,478,824.45 2,734,319.94 2,734,319.94
branch
Improvement of
72,443,113.5 72,443,113.5 70,823,754.4 70,823,754.4
one-finished 4 4 2 2
products
Instruments 1,404,307.73 1,404,307.73 1,602,437.64 1,602,437.64
Medium sized deep
36,023,932.1 36,023,932.1 36,023,932.1 36,023,932.1
groove ball bearing 3 3 3 3
product line
17,168,542.7 17,168,542.7 15,892,337.6 15,892,337.6
Assembling line 7 7 5 5
245,143,041. 245,143,041. 240,524,680. 240,524,680.
Total 64 64 98 98
(2) Change in the significant construction in progress
Construction name Decrease
2012.12.31 Increase Transferred to 2013.06.30
others
fixed assets
M250Grinding Machine
130,730.53 130,730.53
Improvement
Forked truck 1,950,485.37 1,950,485.37
Improvement of plant 5,000,473.77 726,038.00 5,726,511.77
Installation of super finish
1,351,173.24 574.36 114,201.71 1,237,545.89
machine
Improvement of finished 10,395,850.4 10,419,850.4
24,000.00
goods storage 5 5
20,565,071.2 19,030,894.3
Dalian industry park project 535,908.59 2,070,085.47
5 7
Crane Project 3,317,410.04 126,634.00 12,820.51 3,431,223.53
Improvement of
1,763,639.14 1,617,768.74 3,381,407.88
two-finished products
Computer Project 2,032,624.60 191,821.37 106,894.28 2,117,551.69
Improvement of precision
7,509,145.15 1,730,551.03 2,536,381.19 6,703,314.99
roller branch
Improvement of Liao zhou 1,358,768.24 3,979,451.35 5,338,219.59
72
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Improvement of grinding 14,510,074.5
14,422,811.50 87,263.03
machine 3
12,273,932.0 12,160,000.4
Grinding product line 113,931.63
5 2
Improvement of 13,279,456.7
7,398,962.60 5,939,417.26 58,923.08
seven-finished products 8
16,413,539.7 11,996,135.9
Others 3,255,471.44 7,651,841.01 21,034.20
1 4
Heat treatment product line 1,512,348.50 1,512,348.50
Digital Boring machine 5,583,145.92 21,367.52 3,784,242.88 1,820,270.56
Improvement of exploration
467,787.14 424,487.16 13,976.07 878,298.23
machinery
Improvement of special
2,734,319.94 118,151.63 373,647.12 2,478,824.45
large branch
Improvement of 70,823,754.4 72,443,113.5
1,822,569.38 198,895.99 4,314.27
one-finished products 2 4
Instruments 1,602,437.64 113,856.42 84,273.49 1,404,307.73
Medium sized deep groove 36,023,932.1 36,023,932.1
ball bearing product line 3 3
15,892,337.6 17,168,542.7
Assembling line 1,276,205.12
5 7
240,524,680. 21,877,679.9 17,076,798.2 245,143,041.
Total 182,521.11
98 8 1 64
(Continued)
Including:
% of Accumulat Accumulate
Constructi Interest
Construction investme ed d Source
Budget on progress capitalizati
name nt against capitalized capitalized of funds
(%) on rate
budget interest interest in
2011
Loan/Se
M250Grinding
lf
Machine 737,500.00
financin
Improvement
g
Loan/Se
lf
Forked truck 1,589,700.00
financin
g
Loan/Se
Improvement of lf
4,163,236.70
plant financin
g
Loan/Se
Installation of
lf
super finish 6,605,396.00
financin
machine
g
Loan/Se
Improvement of
12,698,394.6 lf
finished goods 3 financin
storage
g
73
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Loan/Se
Dalian industry 46,541,160.6 lf
park project 1 financin
g
Loan/Se
lf
Crane Project 3,743,975.00
financin
g
Loan/Se
Improvement of
lf
two-finished 5,313,372.00
financin
products
g
Loan/Se
lf
Computer Project 3,387,566.00
financin
g
Loan/Se
Improvement of
11,417,671.0 lf
precision roller 0 financin
branch
g
Loan/Se
Improvement of lf
8,696,123.00
Liao zhou financin
g
Loan/Se
Improvement
20,354,600.0 lf
of grinding 0 financin
machine
g
Loan/Se
Grinding product 38,056,500.0 lf
line 0 financin
g
Loan/Se
Improvement of
33,645,251.0 lf
seven-finished 0 financin
products
g
Loan/Se
33,640,001.3 lf
Others 5 financin
g
Loan/Se
Heat treatment lf
1,545,900.00
product line financin
g
Loan/Se
Digital Boring 19,835,500.0 lf
machine 0 financin
g
Improvement of Loan/Se
exploration 3,065,400.00 lf
machinery financin
74
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
g
Loan/Se
Improvement of
lf
special large 6,517,200.00
financin
branch
g
Loan/Se
Improvement of
137,857,166. lf
one-finished 00 financin
products
g
Loan/Se
lf
Instruments 3,134,752.00
financin
g
Medium sized
deep groove ball 59,660,000.0
0 —
bearing product
line
21,644,000.0
Assembling line 0
483,850,365.
Total 29
6.11 Intangible assets
Items 2012.12.31 Increase Decrease 2013.06.30
Cost 170,984,084.79 170,984,084.79
Land use right 165,422,429.50 165,422,429.50
ERP software 4,985,843.33 4,985,843.33
Others 575,811.96 575,811.96
Amortization 26,987,370.37 2,281,399.02 29,268,769.39
Land use right 22,927,451.23 2,026,124.05 24,953,575.28
ERP software 3,490,089.93 249,292.14 3,739,382.07
Others 569,829.21 5,982.83 575,812.04
Net book value 143,996,714.42 -2,281,399.02 141,715,315.40
Land use right 142,494,978.27 -2,026,124.05 140,468,854.22
ERP software 1,495,753.40 -249,292.14 1,246,461.26
Others 5,982.75 -5,982.83 0.00
Provision for impairment
Land use right
ERP software
Others
Book value 143,996,714.42 -2,281,399.02 141,715,315.40
Land use right 142,494,978.27 -2,026,124.05 140,468,854.22
ERP software 1,495,753.40 -249,292.14 1,246,461.26
Others 5,982.75 -5,982.83 0.00
75
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Note: The increased accumulated amortization of this year includes normal amortization of intangible assets for
RMB2,281,399.02
6.12 Long-term deferred and prepaid expenses
Other
Item 2012.12.31 Increase Amortization 2013.06.30
decrease
Right to use premise
of Shanghai sales 792,683.11 33,915.18 758,767.93
office
Total 792,683.11 33,915.18 758,767.93
6.13 Deferred tax assets and deferred tax liabilities
(1) Recognized deferred tax assets and deferred tax liabilities
Items 2013.06.30 2012.12.31
Deferred tax assets — —
Provision for impairment of assets 9,041,515.02 9,041,515.02
Difference due to depreciation of
1,791,108.01 1,791,108.01
fixed assets
Total 10,832,623.03 10,832,623.03
Deferred tax liabilities
Unrealized intragroup loss 393,621.42 393,621.42
Total 393,621.42 393,621.42
(2) Temporary differences
Items Amount of temporary differences
Taxable differences 2,624,142.79
Unrealized intragroup loss 2,624,142.79
Subtotal
Deductible differences
Provision for bad debts 24,944,421.95
Provision for impairment of fixed assets 3,204,206.27
Provision for decline in value of inventories 32,128,138.59
Difference due to depreciation of fixed assets 11,940,720.08
Subtotal 72,217,486.89
6.14 Details of provision for impairment of assets
76
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Decrease
2012.12.31 Accrual Others 2013.06.30
Reversal
transfer
Provision for bad
64,413,748.92 346,534.36 64,067,214.56
debts
Provision for
decline in value 59,619,074.06 59,619,074.06
of inventories
Provision for
impairment of 3,204,206.27 464,929.22 2,739,277.05
fixed assets
Total 127,237,029.25 811,463.58 126,425,565.67
6.15 Short-term loan
(1) Category of short-term loan
Loan category 2013.06.30 2012.12.31
Mortgage loan
Guaranteed loan 90,000,000.00
Credit loan 460,000,000.00 498,000,000.00
Total 460,000,000.00 588,000,000.00
6.16 Notes payable
Items 2013.06.30 2012.12.31
Commercial acceptance notes 17,937,488.00
Bank acceptance notes 90,500,000.00 221,485,454.42
Total 108,437,488.00 221,485,454.42
6.17 Accounts payable
(1) Accounts payable
Items 2013.06.30 2012.12.31
Including: within 1 year 1,026,321,048.02 855,853,775.10
over 1 year 195,850,069.86 112,391,051.36
Total 1,222,171,117.88 968,244,826.46
6.18 Advances from customers
(1) Advances from customers
Items 2013.06.30 2012.12.31
Including: within 1year 22,272,588.91 41,439,249.85
over 1 year 3,890,989.17 6,011,300.95
77
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Total 26,163,578.08 47,450,550.80
(2) No advances from customers are due to shareholders holding over 5% (including 5%) of the Company’s
shares at the end of period.
6.19 Employee benefits payable
Items 2012.12.31 Increase Decrease 2013.06.30
Salary, bonus, allowance
530,751.14 92,818,457.62 92,664,912.07 684,296.69
and subsidy
Social insurance 9,952,866.06 33,026,596.06 33,281,888.26 9,697,573.86
Housing fund 3,132,942.85 7,003,682.84 7,203,614.79 2,933,010.90
Other 8,343,616.17 682,892.10 1,536,969.84 7,489,538.43
Total 21,960,176.22 133,531,628.62 134,687,384.96 20,804,419.88
6.20 Taxes payable
Items 2013.06.30 2012.12.31
Value-added tax 4,300,471.22 -1,354,921.87
Business tax 263,709.72 173,964.24
Individual income tax 251,393.71 21,688.42
Enterprise income tax 652,770.44 203,872.75
City maintenance and construction tax 65,500.32 55,208.80
Real estate tax 39,026.00 39,376.00
Land use tax 153,812.60 151,889.61
Stamp tax 470,075.91 133,406.39
Education surcharge 220,897.79 4,037.58
River toll fee 0.00 159,807.88
Others 6,417,657.71 -411,670.20
Total 4,300,471.22 -1,354,921.87
6.21 Other payables
(1) Other payables
Item 2013.06.30 2012.12.31
Within 1year 1,114,321,048.02 77,880,704.50
over 1 year 195,850,069.86 66,047,893.97
Total 1,310,171,117.88 143,928,598.47
(2) Other payables due to shareholders who hold more than 5% (including 5%) of the Group’s shares
Company name 2013.06.30 2012.12.31
Wazhou Group 13,742,621.37 29,092,653.21
Total 13,742,621.37 29,092,653.21
78
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
(3) Significant other payables at the end of the period
(4) Other payables include the following foreign currency balance
6.22 Other current liabilities
6.23 Long-term loan
(1) Category of long-term loan
Category 2013.06.30 2012.12.31
Credit loan 150,000,000.00 60,000,000.00
Total 150,000,000.00 60,000,000.00
(2) Details of long-term loan
Creditor Starting date Maturity Currency Interest rate (%) 2013.06.30 2012.12.31
Import and The people's Bank of
Export export business credit
2012-11-6 2014-11-5 RMB 60,000,000.00 —
Bank of interest rate, adjusted by
China quarter
Import and The people's Bank of
Export export business credit
2013-01-06 2014-07-16 90,000,000.00
Bank of interest rate, adjusted by
China quarter
6.24 Long-term payables
Items Loan 2012.12.31 Interest Interest 2013.06.30 Loan conditions
period rate (%) payable
Liaoyang Bureau
— 100,000.00 — — 100,000.00 —
of Environment
Total — 100,000.00 — — 100,000.00 —
This is the loan for the improvement of forging from Liaoyang Bureau of Environment in 1999. The loan
didn’t repay after the project accomplished.
6.25 Special payables
Items 2012.12.31 Increase Decrease 2013.06.30
Special pollution treatment 221,698.98 221,698.98
Informatization Construction 100,000.00 10,000.00 90,000.00
Total 321,698.98 10,000.00 311,698.98
79
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
* Special pollution treatment is the environmental protection subsidy granted by Wafangdian Bureau of
Finance and Wafangdian Bureau of Environment Protection for the treatment of waste water pursuant to the
circular No.[2004]217.
The balance of informatization construction comes from No.[2012]917 and No.[2012]199 Dalian Financial
Bureau and Municipal Office of Economic and Information Technology Committee
6.26 Other non-current liabilities
Item 2013.06.30 2012.12.31
Improvement subsidy 3,316,499.96 3,684,999.98
Compensation for plants moving 41,915,655.32 43,267,773.26
Development of intelligent
3,799,999.94 4,000,000.00
manufacturing equipment subsidies
Gants for debt dicount 4,487,040.00
Total 53,519,195.22 50,952,773.24
(1) Note: The improvement subsidy is the railway transportation bearing technologic improvement subsidy
with total amount of RMB 7,370,000.00 granted by Bureau of Finance Liaoning province. The subsidy should be
deferred over the useful life of related asset (i.e. 10 years). In 2012 the revenue should be recognized at RMB
737,000.00.
The compensation for plants moving is RMB 59,820,000.00. And the amount of making up for the
removal loss of the current period is RMB 11,143,755.05；The rest of 48,676,244.95 is recognized as the removal
compensation related with assets, which is amortized 18 years, according to the new fixed assets formed after the
Dalian branch removal. The income confirmed in this year is RMB 2,704,235.83.
The RMB 4,000,000.00 of development of intelligent manufacturing equipment subsidies is distributed by
Dalian City Finance Bureau in 2012.The subsidies are used in the project ”Grinding vehicle integration and
processing digitalization”. Up to Dec 31, 2012, this project is still construction in process, and no revenue has
been recognized in current period.
Company received government grants pay-though from Wafangdian Bearing Group Company(the
company’s control shareholder, Hereinafter referred to as the ”Wazhou Group”) with the amount of
4,723,200 Yuan. This grants is paid to Wazhou Group by Wafangdian Financial Bureau on industry discount
capital (Hereinafter referred to as the discount capital) on” High-end equipment manufacturing bearing
technology upgrade projects”. Due to some part under this project are implemented in the company, , Wazhou
Group pay it to the company.
6.27 Share capital
2011.12.31 Change for current period 2012.12.31
Shareholders Issuing Transferring
D istributin
name/category Amounts % new capital O thers Subtotal Amounts %
g shares
shares reserves to
80
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
share capital
100.0
Total shares 402,600,000.00 100.00 — — — — — 402,600,000.00
0
6.28 Capital reserves
Items 2012.12.31 Increase Decrease 2013.06.30
Share premium 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
6.29 Surplus reserves
Items 2012.12.31 Increase Decrease 2013.06.30
Statutory surplus reserve 108,701,699.95 108,701,699.95
Discretionary surplus reserve 20,590,618.91 20,590,618.91
Total 129,292,318.86 129,292,318.86
6.30 Undistributed profit
Provision or
Items Amount distribution
%
Ending balance of 2012 498,350,778.41
Add: Adjustments to the opening balance of
undistributed profits
Including: Other adjustment factors
Opening balance of 2013 498,350,778.41
Add: Current net profit attributable to shareholders
22,832,072.23
of parent company
Less: Provision for statutory surplus reserve
Dividends payable for common shares (Note1)
Other transfer in (Note2)
Closing balance of 2012 521,182,850.64
6.31 Operating revenue & cost
(1) Operating revenue & cost
Items This period Last period
Revenue from main operation 1,287,811,506.03 1,373,071,130.04
Revenue from other operation 259,591,987.34 244,675,564.99
Cost of main operation 1,375,879,876.97 1,433,460,380.71
（2）Main operation - classified according to operation
81
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Unit: Yuan
This period Last period
Items
Sales revenue Cost of sales Sales revenue Cost of sales
Export 136,810,764.89 131,410,972.37 136,789,260.11 137,835,006.35
Transportation
472,567,440.34 420,559,469.61 495,964,564.24 440,341,915.64
vehicle bearings
Special use bearings 259,475,453.06 230,375,981.41 282,818,191.38 237,585,214.27
General use bearings 373,504,645.60 328,113,952.07 403,687,524.75 350,746,226.95
Industrial Operations 45,453,202.14 51,961,915.61 53,811,589.56 59,693,569.81
Total 1,287,811,506.03 1,162,422,291.07 1,373,071,130.04 1,226,201,933.02
（3）Main operation - classified according to products
Unit: Yuan
This period Last period
Items
Sales revenue Cost of sales Sales revenue Cost of sales
Bearings 1,242,358,303.89 1,110,460,375.46 1,319,259,540.48 1,166,508,363.21
Components 45,453,202.14 51,961,915.61 53,811,589.56 59,693,569.81
Total 1,287,811,506.03 1,162,422,291.07 1,373,071,130.04 1,226,201,933.02
（4）Main operation - classified according to region
Unit : Yuan
This period Last period
Items
Sales revenue Cost of sales Sales revenue Cost of sales
Export 136,810,764.89 131,410,972.37 136,789,260.11 137,835,006.35
Domestic 1,151,000,741.14 1,031,011,318.70 1,236,281,869.93 1,088,366,926.67
Total 1,287,811,506.03 1,162,422,291.07 1,373,071,130.04 1,226,201,933.02
(5) Sales revenue from top 5 customers
Items Sales revenue Accounting for
proportion of total
Client 1 210,280,229.17 13.59%
Client 2 52,939,033.64 3.42%
Client 3 37,313,668.17 2.41%
Client 4 33,846,153.83 2.19%
Client 5 24,929,686.28 1.61%
Total 359,308,771.09 23.22%
6.32 Operating taxes and surcharges
Items This period Last period Base of calculation
Business tax 543,237.27 392,064.60 5% of rental revenue
City construction tax 3,022,854.34 3,474,108.43 7% of turnover tax
82
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Education surcharge 2,140,588.90 2,491,918.85 4% of turnover tax
Other 27,613.01 —
Total 5,706,680.51 6,385,704.89 —
6.33 Selling expenses
Items This period Last period
Selling expenses 102,660,427.82 104,774,136.63
Total 102,660,427.82 104,774,136.63
6.34 Administrative expenses
Items This period Last period
Administrative expenses 34,739,784.53 30,125,540.59
Total 34,739,784.53 30,125,540.59
6.35 Financial expenses
Items This period Last period
Interest expenses 16,880,617.03 21,312,159.44
Less: interest income -6,426,372.50 -8,161,457.98
Add: Exchange losses 1,505,814.08 336,777.27
Less: Exchange income -262,917.45 -530,006.02
Add: Others expenditure 508,931.62 857,776.25
Total 12,206,072.78 13,815,248.96
6.36 Assets impairment losses
Items This period Last period
Loss of bad debts 476,002.39 295,087.17
Total 476,002.39 295,087.17
6.37 Investment income
(1) Sources of investment income
Items This period Last period
Long-term equity investment income under cost method 680,000.00
Long-term equity investment income under equity method 5,031,527.35 2,985,002.73
Investment income from disposal of long-term equity
-6,938.21
investment
Total 5,711,527.35 2,978,064.52
(2) Long-term equity investment income under cost method
Items This period Last period Reason for change
83
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Total 680,000.00 680,000.00 —
Including: —
The dividend increased
Shang ME Co., Ltd. 680,000.00 680,000.00
compared with last year
(2) Long-term equity investment income under equity method
Items This period Last period Reason for change
Total 5,031,527.35 2,985,002.73 —
Including: —
Dalian SKF Wazhou Bearings The associates profits increased
5,031,527.35 2,985,002.73
Co., Ltd. compared with last year
6.38 Non-operating income
(1) Non-operating income list
This period Last period Amounts recognized into
Items current non-recurring
profit or loss
Gains on disposal of non-current
448,926.05 644,282.54 448,926.05
assets
Income from debt restructuring 436,592.70 1,448,127.73 436,592.70
Government grants 2,156,909.17 1,720,617.92 2,156,909.17
Penalty income 56,763.03 22,599.15 56,763.03
Others 450,373.69 139,022.95 450,373.69
Total 3,549,564.64 3,974,650.29 3,549,564.64
(2) Government grants list
Item This period Last period Resource and basis
Allowance for upgrade 368,500.02 368,500.00
Compensate for Dalian factory
1,352,117.94 1,352,117.92
relocation
High-end equipment manufacturing
200,000.06
bearing technology upgrade projects
Grant for show space 230,000.00
Financial grant 6,291.15
Total 2,156,909.17 1,720,617.92
6.39 Non-operating expenses
This period Last period Amounts
Items
recognized into
84
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
current
non-recurring
profit or loss
Loss on disposal of non-current assets 35,866.08 35,866.08
Loss from debt restructuring 1,206,652.18 1,632,022.46 1,206,652.18
Others 78,603.46 781,443.98 78,603.46
Total 1,321,121.72 2,413,466.44 1,321,121.72
6.40 Income tax expenses
(1) Income tax expenses
Items This period Last period
Current income tax expenses 842,546.41 3,052,564.11
Total 842,546.41 3,052,564.11
6.41 Calculation of basic earnings per share and diluted earnings per share
Items No. This period Last period
Net profit attributable to shareholders of
1 22,832,072.23 30,377,280.34
parent company
Non-operating profit and loss attributable to
2 2,228,442.92 1,561,183.85
shareholders of parent company
Net profit after deducting non-operating profit
20937895.75 28,816,096.49
and loss attributable to shareholders of parent 3=1-2
company
Total number of shares at the period begin 4 402,600,000.00 402,600,000.00
The number of shares increased due to
transferring capital reserve into share capital
5 — —
or dividend distribution of shares during
report period (Ⅰ)
The number of shares increased due to
issuance of new shares or debt for equity swap 6 — —
during the report period (Ⅱ)
the number of shares (Ⅱ)from the next month
to the end of the report period for increase of 7 — —
shares
The number of months decreased due to stock
repurchase or draw back stock during the 8 — —
report period
The number of months from the next month to 9 — —
85
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
the end of the report period for decrease of
shares
The number of shares for decrease of shares 10 — —
Duration of the period in terms of month 11 — —
Weighted average number of ordinary shares 12=4+5+6×7÷1
402,600,000.00 402,600,000.00
issued out 1-8×9÷11-10
EPS – basis ( ) 13=1÷12 0.06 0.08
EPS – basis (Ⅱ) 14=3÷12 0.05 0.07
Potential diluted interests of ordinary shares
15 — —
recognized as expense
Transfer fee 16 — —
EIT rate 17 — —
Weighted average amount of ordinary shares
18 — —
increased due to warrant, share options
19=[1+(15-16)
0.06 0.08
EPS – diluted (Ⅰ) ×(1-17)]÷(12+1
8)
20=[3+(15-16)
0.05 0.07
EPS – diluted (Ⅱ) ×(1-17)]÷(12+1
8)
6.42 Notes to cash flow statement
(1) Cash receipt/payment of other operating/investing/financing activities
1) Other cash received relating to operating activities
Items amount
Interest income 87,428.52
Waste material income 864,254.00
Return of reserve fund, deposit etc. 5,574,168.54
Total 6,525,851.06
2) Other cash paid relating to operating activities
Items amount
Trademark use fee 4,824,300.00
Travel expenses 15,496,351.49
Rent expense 9,512,125.32
Freight service expense 17,168,167.22
Conference expense 11,643,553.85
86
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Collection and payment for others 7,790,040.88
Office expense 5,791,869.07
Market development expense 2,000,485.45
Guard and fire fighting expense 1,700,900.00
Business promotion expense 2,687,341.50
Office expense 16,809,352.75
Other expense 95,424,487.53
Total 4,824,300.00
3) Others cash received relating to financing activities
Items amount
Debt discount grant from WBGC 4,723,200.00
Total 4,723,200.00
6.4.3 Supplementary information of consolidated cash flow statement
Items This period Last period
1. Adjusting net profit into cash flows of operating
— —
activities:
Net profit 22,832,072.23 30,377,280.34
Add: Provision for impairment of assets 476,002.39 295,087.17
Depreciation of fixed assets 38,647,366.84 39,206,790.74
Amortization of intangible assets 2,281,399.02 2,144,947.32
Amortization of long-term deferred expenses 33,915.18 42,906.71
Losses on disposal of fixed assets, intangible assets, and
-413,059.97 -644,282.54
long-term assets (income listed with”-”)
Losses on write-off of fixed assets (income listed with”-”)
Financial expense (income listed with”-”) 12,206,072.78 13,815,248.96
Investment loss (income listed with”-”) -5,711,527.35 -2,978,064.52
Decrease of inventory (increase listed with”-”) -35,392,230.32 84,429,746.86
Increase of deferred tax liabilities(decrease listed
with”-”)
Decrease of operating receivables (increase listed
-221,007,090.03 -191,225,781.90
with”-”)
Increase of operating payables (decrease listed
142,914,845.75 173,391,446.60
with”-”)
Others
Net cash flows arising from operating activities -43,132,233.48 148,855,325.74
2. Significant investment and financing activities
unrelated to cash income and expenses
87
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Liabilities transferred to capital
Convertible bonds within 1 year
Financing leased fixed assets
3. Net increase (decrease) of cash and cash equivalent
Ending balance of cash 95,548,588.97 92,645,925.15
Less: Opening balance of cash 101,233,214.04 62,187,956.71
Add: Ending balance of cash equivalent
Less: Opening balance of cash equivalent
Net increase of cash and cash equivalent -5,684,625.07 30,457,968.44
(3) Cash and cash equivalents
Items This period Last period
Cash 95,548,588.97 101,233,214.04
Including: Cash on hand 373,759.29 292,632.98
Bank deposit used for paying at any moment 66,784,740.44 59,711,673.27
Other cash used for paying at any moment 28,390,089.24 41,228,907.79
Cash equivalents
Including: Bond investment due within 3 months
Closing balance of cash and cash equivalents 28,390,089.24 41,228,907.79
Including: Cash and cash equivalents with restricted use
right by parent company or subsidiaries of the Group
The difference between cash and cash equivalent and cash at the end of this year refers to notes 6.1.
7. Related parties relationship and transactions
7.1 Related parties relationship
(1) Parent company and ultimate controller
1) Parent company and ultimate controller
Parent Enterprise Registered Business Legal Organization
company nature address nature representative code
Manufacture and
No. 1 North
sales of bearing
Wazhou State-owne Gongji Street,
and Wang Lushun 24238666-3
Group d Limited Wafangdian
other equipment
City, Dalian
s
2) Registered capital and its movement of parent company
88
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Parent company 2012.12.31 Increase Decrease 2013.06.30
Wazhou Group 413,793,100.00 — — 413,793,100.00
3) Share held and its movement of parent company
Parent company Amount Share holding
(%)
2013.06.30 2012.12.31 2013.06.30 2012.12.31
Wazhou Group 244,000,000.00 244,000,000.00 60.61 60.61
(2) Subsidiaries
1) Subsidiaries
Subsidiaries Enterprise Registered address Business nature Legal Organization
nature representative code
No.61, Weiguo road, Manufacture and sales
Liaoyang
Limited Baita district of bearing and Shao Yang 12199127-7
Bearing
Liaoyang city machine manufacture
No.12, Shisanli
Dalian Manufacture and sales
yongsheng street,
Electrical Limited of bearing and Shao Yang 55980608-0
free trade zone
Equipment machine manufacture
Dalian city
2) Registered capital and its movement of subsidiaries
Subsidiary 2012.12.31 Increase Decrease 2013.06.30
Liaoyang Bearing 19,350,000.00 — — 19,350,000.00
Dalian Electrical
10,000,000.00 — — 10,000,000.00
Equipment
3) Stock holding percentage or equity and its movement of subsidiaries
Amount Share holding (%)
Subsidiary
2013.06.30 2012.12.31 2013.06.30 2012.12.31
Liaoyang Bearing 19,350,000.00 19,350,000.00 100.00 100.00
Dalian Electrical Equipment 10,000,000.00 10,000,000.00 100.00 100.00
(3) Associates
1) Associates
89
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Associates Enterprise Registered address Legal Business
nature representative nature
Chinese-for Manufacture and
No.1, Phrase 1,
Dalian SKF Wazhou eign equity sales of
Gongji Street, Wang Lushun
Bearings Co., Ltd. joint ball-surface
Wafangdian North
venture rolling bearing
(Continued)
Associates Registered Share holding % Voting % Organization
capital code
Dalian SKF
Wazhou Bearings 140 million 49.00 49.00 70218806-0
Co., Ltd.
(4) Other related parties
Related party Organization
Name of related party Main transactions
relationship code
Other companies Purchase and sales of
Dalian Wazhou Manufacturing
controlled by the raw materials and 24239291-6
Equipment Co., Ltd
same parent goods
company and Sales of working in
ultimate Wazhou Steel Ball Company progress and purchase 76078283-4
controlling party of raw materials
Sales of working in
Wazhou Exact Forge Ltd., progress and purchase 76079407-7
of raw materials
Wazhou Group Turnplate Bearing
Purchase of goods 66112524-9
Ltd
Wazhou Group Exact Transmission
Sales of raw materials 66582213-x
Bearing Co., Ltd
Wazhou Group Special Precision Sales of raw materials
56552248X
Bearing Co., Ltd. and purchase of goods
Dalian Wazhou Jinzhou Machinery Purchase of working
Co., Ltd in progress 57605032-6
Dalian Wazhou Fengyuan Purchase of working
Machinery Co., Ltd in progress 57605568-8
7.2 Related party transactions
(1) Purchase of goods
Related party type and name This period Last period
Amount % Amounts %
Associates: — — — —
Including: Dalian SKF Wazhou Bearings Co., 112,310,394.31 6.69% 86,536,401.16 4.69%
90
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Ltd.
Other companies controlled by the same
parent company
Including: Wazhou Steel Ball Company 3,389,924.16 0.2% 4,795,034.20 0.26%
Wazhou Exact Forge Ltd., 119,126,487.11 7.09% 134,851,660.65 7.3%
Dalian Wazhou Manufacturing
11,489,432.22 0.68% 8,773,401.12 0.48%
Equipment Co., Ltd
Wazhou Group Turnplate Bearing
53,622,175.28 3.19% 47,462,221.50 2.57%
Ltd
Wazhou Group Exact Transmission
64,541,260.21 3.84% 68,942,848.37 3.73%
Bearing Co., Ltd
Wazhou Group Special Precision
313,525.57 0.02%
Bearing Co., Ltd.
Dalian Wazhou Fengyuan
52,435,533.52 3.12% 53,480,698.48 52,435,533.52
Machinery Co., Ltd
Dalian Wazhou Jinzhou Machinery
79,578,698.23 4.74% 50,220,644.83 79,578,698.23
Co., Ltd
Total 503,780,614.79 29.99% 455,062,910.31 24.64%
The Company’s purchase price from Dalian SKF Wazhou Bearings Co., Ltd was the contract price determined in
2002; others related party purchase price was market price.
(2) Sales of goods
Related party type and company This period Last period
Amount % Amount %
Parent company: — — — —
Including: Wazhou Group 336,292.25 0.02% -8,581,155.49 -0.53%
Associates: — — — —
Including: Dalian SKF Wazhou Bearings Co., Ltd. 24,494,835.47 1.58% 27,656,599.41 1.71%
Other companies controlled by the same parent
— — — —
company
Including: Wazhou Steel Ball Company 2,859,622.43 0.18% 3,997,657.95 0.25%
13.59
Wazhou Exact Forge Ltd. 210,280,229.17 186,225,395.68 11.51%
%
Dalian Wazhou Manufacturing
1,048,483.89 0.07% 1,287,960.84 0.08%
Equipment Co., Ltd
Wazhou Group Turnplate Bearing Ltd 10,719,178.30 0.69% 10,525,530.76 0.64%
Wazhou Group Exact Transmission
15,061,881.25 0.97% 16,419,342.09 1.01%
Bearing Co., Ltd
Wazhou Group Special Precision
1,912,565.79 0.12% 6,140,575.58 0.38%
Bearing Co., Ltd
91
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Dalian Wazhou Fengyuan Machinery
Co., Ltd
Dalian Wazhou Jinzhou Machinery
3,055,438.89 0.2% 133,022.76 0.01%
Co., Ltd
The Company’s sales price of working in progress and raw materials to Dalian SKF Wazhou Bearings Co., Ltd
was the contract price determined in 2002; the sales price of raw materials to Wazhou Steel Ball Company and
Wazhou Exact Forge Ltd was the contract plus the expense occurred in the purchase on behalf of the customers;
others related party sales price was market price.
(3) Rendering service
The Company entered into a building lease contract with Wazhou Exact Forge Ltd., in 2011. The rented area
is 9177m.The rental period is from 1 January 2013 to 31 December 2013. The annual rent is RMB 345,515.
The Company entered into a building lease contract with Wazhou Group Special Precision Bearing Company
Limited (Special precision Company) in 2013. The rented area is 6,534.4 m. The rental period is from 1 January
2013 to 31 December 2013. The annual rent is RMB 514,303.17.
The Company entered into a building lease contract with Feng yuan Company in 2013. The rented area is
1,791m. The rental period is from 1 June 2013 to 31 December 2013. The annual rent is RMB 107,460.00. The
rental for the year has been received.
The Company entered into a building lease contract with Dalian Wazhou Jinzhou machinery Company
Limited (Jinzhou Company) in 2013. The rented area is 13,386m. The rental period is from 1 June 2013 to 31
December 2013. The annual rent is RMB 803,160.
7.3 Balances with related parties
(1) Accounts receivable due from related parties
Related party This period Last period
Parent company
Including: Wazhou Group 7,232,280.81 6,116,707.30
Other companies controlled by the same parent company
Including: Wazhou Group Turnplate Bearing Ltd 8,170,254.23
Wazhou Group Special Precision Bearing Co., Ltd 7,686,721.74 3,956,619.13
Wafangdian Bearing precision ball manufactory Co., Ltd 633,033.78
Dalian wazhou Fengyuan machinery Co., Ltd 629,563.26
Total 15,552,036.33 18,873,143.92
(2)Accounts payable due to related parties
Related party This period Last period
Associates — —
Including: Dalian SKF Wazhou Bearings Co., Ltd. 156,406,464.18 135,593,236.84
92
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Other companies controlled by the same parent company
Including: Wazhou Exact Forge Ltd. 9,483,260.45 1,092,034.17
Wazhou Group Turnplate Bearing Ltd 32,271,952.89 3,792,635.96
Wazhou Steel Ball Company
Wazhou Group Exact Transmission Bearing Co.,
80,150,723.69 66,138,578.06
Ltd
Dalian Wazhou Manufacturing Equipment Co., Ltd 4,610,256.35 3,511,491.23
Wazhou Group Special Precision Bearing Co., Ltd 18,529.64
Wafangdian Bearing Group Equipment Technology
3,728,087.71
Engineer Co., Ltd
Dalian Wazhou Jinzhou Machinery Co., Ltd 13,790,555.55 3,600,291.95
16,874,082.08 3,676,604.71
Dalian Wazhou Fengyuan Machinery Co., Ltd
32,712,718.28 29,092,653.21
Other Accounts payable
350,028,101.18 246,516,055.77
Total
8. Contingency
As at June 30,2013, the Group does not have any other contingencies.
9. Commitment
As at June 30,2013, the Group does not have any other significant commitments.
10. Events after the balance sheet date
11. Other significant events
11.1 Debt restructuring
11.2 Assets rent out under operating lease
12. Notes to the main items of the financial statements of parent company
12.1 Accounts receivable
(1) Accounts receivable category
2013.06.30
Items
Booking balance Provision
93
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Amount % Amount %
Accounts receivable with
individual significant amount
3,910,007.43 0.32% 3,910,007.43 100%
and identification separately
bad debt provision
Accounts receivable accrued
bad debt provision by portfolio
Accounting aging portfolio 1,178,167,977.55 95.74% 40,565,402.71 3.25%
Related parties portfolio 36,669,168.93 2.98%
Risk-free portfolio
Subtotal of portfolio 1,214,837,146.48 98.72% 40,565,402.71 3.21%
Accounts receivable with
individual insignificant
11,813,753.94 0.96% 11,813,753.94 100%
amount and identification
separately bad debt provision
Total 1,230,560,907.85 -- 56,289,164.08 --
(Continued)
2012.12.31
Items Booking balance Provision
Amount % Amount %
Accounts receivable with
individual significant amount
3,910,007.43 0.34% 3,910,007.43 100%
and identification separately
bad debt provision
Accounts receivable accrued
bad debt provision by
portfolio
Accounting aging portfolio 1,094,616,573.92 96.11% 40,911,937.07 3.74%
Related parties portfolio 28,606,413.25 2.51%
Risk-free portfolio
Subtotal of portfolio 1,123,222,987.17 98.62% 40,911,937.07 3.64%
Accounts receivable with
individual insignificant
11,813,753.94 1.04% 11,813,753.94 100%
amount and identification
separately bad debt provision
Total 1,138,946,748.54 -- 56,635,698.44 --
1) Individually significant amounts of accounts receivable accrued the bad debt provision separately at the end of
June 30,2013
94
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Booking Provision for Proportion Reasons for
Debtors name
balance bad debts (%) provision
A/R with over
Baoding North China
5 years aging,
Machine & Electronic 3,910,007.43 3,910,007.43 100%
unlikely to be
Equipment Co., Ltd
collected
Total 3,910,007.43 3,910,007.43 -- —
2) Accounts receivable accrued the bad debt provisions in the portfolio as accounting aging analysis method
2013.06.30 2012.12.31
Items
Amount % Provision Amount % Provision
Within 85.17 82.54
1,003,392,858.29 10,033,928.58 903,501,819.80 9,035,018.20
% %
1 year
1-2
105,037,596.66 8.92% 5,251,879.83 117,102,766.91 10.7% 5,855,138.33
years
2-3
31,963,890.02 2.71% 6,392,778.00 36,614,043.59 3.34% 7,322,808.72
years
Over
3 37,773,632.58 3.21% 18,886,816.29 37,397,943.62 3.42% 18,698,971.82
years
1,094,616,573.
Total 1,178,167,977.55 -- 40,565,402.71 -- 40,911,937.07
92
3) Individually insignificant amount accounts receivable but accrued bad debt provision separately at the end of
June 30,2013
Proportio
Provision for
Company name Booking balance n Reasons for provision
bad debts
(%)
Shenyang Sewerage A/R with over 5 years aging,
2,706,703.13 2,706,703.13 100%
Equipment Co., Ltd unlikely to be collected
Shen Yang General A/R with over 3 years aging,
2,452,138.58 2,452,138.58 100%
unlikely to be collected
Bearing Co., Ltd
Tiefa coal sector A/R with over 3 years aging,
2,352,760.15 2,352,760.15 100%
unlikely to be collected
Group Company
Shuangyashan
A/R with over 3 years aging,
Mining industry 1,368,257.55 1,368,257.55 100%
unlikely to be collected
Group Company
Chongqing
A/R with over 3 years aging,
Sailimeng electrical 650,758.88 650,758.88 100%
unlikely to be collected
machine LLC
95
Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Qingdao Qingte
A/R with over 3 years aging,
Zhongli axle Co., 590,898.99 590,898.99 100%
unlikely to be collected
Ltd
Other sporadic A/R with over 5 years aging,
1,692,236.66 1,692,236.66 100%
accounts receivable unlikely to be collected
Total 11,813,753.94 11,813,753.94 -- —
(2) Write-off of accounts receivable during the reporting period
(3) Accounts receivable due from shareholders holding over 5% (including 5%) of the Company’s shares
This period Last period
Debtor name Amount Provision for Amount Provision for
bad debt bad debt
Wazhou Group 7,232,280.81 6,116,707.30 —
Total 7,232,280.81 6,116,707.30 —
(4)Accounts receivable for the top 5 companies
Relationship Percentage
Company name with the Amount Aging in the total
Company AR(%)
Siemens Energy Inc Unrelated party 27,433,726.91 Within 1 year 2.23%
Ji Nan Qiaoxiang Co.,Ltd Within 1 year
Unrelated party 26,661,119.71 2.17%
of SINOTRUK
1-2years
Xi’an fashite auto
Unrelated party 26,604,613.67 Within 1 year 2.16%
transmion company
Hudong vehicle section
of Daqin railway Stock Unrelated party 23,243,767.75 Within 1 year 1.89%
Co.,Ltd
Chengdu Leejun Within 1 year
Unrelated party 22,260,107.65 1.81%
Industrial Co., Ltd 1-2years
Total — 126,203,335.69 — 10.26%
(5)Accounts receivable due from related parties
Relationship with the % in the total
Company name Amounts
Company AR
Wazhou Group Parent company 7,232,280.81 0.6%
Wazhou Group Special Other companies controlled
7,686,279.17 0.6%
Precision Bearing Co., Ltd
by the same parent company
Other companies controlled
Wazhou Steel Ball Company 1,246,680.47 0.1%
by the same parent company
Wazhou Group Precision
Other companies controlled 20,503,928.48 1.7%
Forge Co., Ltd
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
by the same parent company
Total — 36,669,168.93 3%
12.2 Other receivables
(1) The category of other receivable
2013.06.30
Items Booking balance Provision
Amount % Amount %
Other receivables with
individual significant amount
and identification separately bad
debt provision
Other receivables accrued bad
— — — —
debt provision by portfolio
Accounting aging portfolio 23,547,447.84 86.07% 1,138,368.72 7.12%
Related parties portfolio
Risk-free portfolio 3,810,735.68 13.93%
Subtotal of portfolio 27,358,183.52 100% 1,138,368.72 5.89%
Other receivables with
individual insignificant amount
and identification separately bad
debt provision
Total 27,358,183.52 -- 1,138,368.72 --
（Continued）
2012.12.31
Items Booking balance Provision
Amount % Amount %
Other receivables with individual
significant amount and
— — — —
identification separately bad debt
provision
Other receivables accrued bad debt
— — — —
provision by portfolio
Accounting aging portfolio 10,287,420.85 85.32% 1,138,368.72 11.07%
Related parties portfolio
Risk-free portfolio 5,976,732.42 14.68%
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Subtotal of portfolio 16,264,153.27 100% 1,138,368.72 7%
Other receivables with individual
insignificant amount and
identification separately bad debt
provision
Total 16,264,153.27 -- 1,138,368.72 --
1) Other receivable accrued the bad debt provisions in the portfolio as accounting aging analysis method
2013.06.30 2012.12.31
Items
Amount % Provision Amount % Provision
87.81
Within 1 year 20,676,858.77 206,768.59 7,107,506.08 69.09% 71,075.06
%
1-2 years 629,945.90 2.68% 31,497.30 832,860.57 8.1% 41,643.03
2-3 years 734,062.50 3.12% 146,812.50 492,921.58 4.79% 98,584.32
Over 3 years 1,506,580.67 6.4% 753,290.34 1,854,132.62 18.02% 927,066.31
Total 23,547,447.84 -- 1,138,368.72 10,287,420.85 -- 1,138,368.72
No other receivable is due from shareholders holding over 5% (including 5%) of the Company’s shares at the end
of period.
2) Other receivables from the top 5 debtors
Relationship with the Percentage
Company name Amount Aging
Company in the total AR(%)
Ying Kou General
Unrelated party 1,086,793.32 Within 1 year 3.17%
bearing Co.,Ltd
Da Lian Jinhua
metal material Unrelated party 800,000.00 Over 3 years 2.33%
agency
Da Gang Unrelated party 736,160.12 Over 3 years 2.15%
Bai Ta Star fire
Unrelated party 457,529.25 Over 3 years 1.33%
factory
Shen Yang
electricity Machine Unrelated party 366,591.88 Over 3 years 1.07%
Co.,Ltd
Total — 3,447,074.57 — 10.05%
3) Other receivables includes the following foreign currency balance
12.3 Long-term equity investments
(1) Long-term equity investments under cost and equity method
Investee Share holding Voting % Original
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
% Amounts
Cost method — — —
Shanghai ME machine-electrical equipment
4.76 4.76 2,000,000.00
chain Ltd.
Liaoyang Bearing 100.00 100.00 17,337,259.95
Dalian Wazhou Precision Motor Car Bearing
100.00 100.00 10,478,956.37
Company Limited
Equity method — — —
Dalian SKF Wazhou Bearings Co., Ltd. 49.00 49.00 68,600,000.00
Total — — 98,416,216.32
(Continued)
Investee 2012.12.31 Increase Decrease 2013.06.30 Cash dividends in
report period
Cost method — — — — —
Shanghai ME
machine-electrical 2,000,000.00 — — 2,000,000.00 —
equipment chain Ltd.
Liaoyang Bearing 17,337,259.95 — — 17,337,259.95 —
Dalian Wazhou
Precision Motor Car
45,478,956.37 — — 45,478,956.37 —
Bearing Company
Limited
Equity method — — — — —
Dalian SKF Wazhou
89,481,487.64 5,031,527.35 — 94,513,014.99 —
Bearings Co., Ltd.
Total 154,297,703.96 5,031,527.35 159,329,231.31 —
12.4 Operating revenue and cost
Items This period Last period
Revenue from main operation 1,284,660,133.07 1,363,566,348.39
Revenue from other operation 262,567,202.47 246,967,858.45
Total 1,547,227,335.54 1,610,534,206.84
Cost of operation 1,376,283,798.47 1,426,359,883.98
Total
(1)Main operation - classified according to Industries
This period Last period
Industries
Sales revenue Cost of sales Sales revenue Cost of sales
Export 136,810,764.89 132,713,666.62 136,789,260.11 137,835,006.35
Domestic
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Including: Transportation
472,567,440.34 420,559,469.61 488,355,468.26 432,201,256.81
vehicle bearings
Special use bearings 259,475,453.06 230,375,981.41 282,818,191.38 237,585,214.27
General use bearings 370,065,951.11 324,731,071.28 400,426,483.61 347,257,373.16
Industrial Operations 45,740,523.67 52,242,943.03 55,176,945.03 61,162,035.12
Total 472,567,440.34 420,559,469.61 488,355,468.26 432,201,256.81
(2) Sales revenue from top 5 customers
Items Sales revenue Accounting for proportion of total
Client 1 210,280,229.17 13.59%
Client 2 52,939,033.64 3.42%
Client 3 37,313,668.17 2.41%
Client 4 33,846,153.83 2.19%
Client 5 24,929,686.28 1.61%
Total 359,308,771.09 23.22%
12.5 Investment income
(1) Source of investment income
Items This period Last period
Income from long-term equity investments
680,000.00
under cost method
Income from long-term equity investments
5,031,527.35 2,985,002.73
under equity method
Earnings from Disposing of a long-term
-6,938.21
equity investment
Total 5,711,527.35 2,978,064.52
(2) Long-term equity investment income under cost method
Items This period Last period Reason for change
Total 680,000.00 680,000.00 —
Including: —
The dividend increased
Shang ME Co., Ltd. 680,000.00 680,000.00
compared with last year
(3) Long-term equity investment income under equity method
Items This period Last period Reason for change
Total —
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
The associates
Including: Dalian SKF profits decreased
Wazhou Bearings Co., Ltd. compared with last
year
12.6 Supplementary information of consolidated cash flow statement of parent company
Items This period Last period
1. Adjusting net profit into cash flows of operating
— —
activities:
Net profit 32,164,155.52 39,481,286.48
Add: Provision for impairment of assets 476,002.39 295,087.17
Depreciation of fixed assets 33,779,270.91 34,454,208.48
Amortization of intangible assets 2,115,032.69 2,144,947.32
Amortization of long-term deferred expenses 33,915.18 42,906.71
Losses on disposal of fixed assets, intangible assets, and
-253,987.77 -642,321.00
long-term assets (income listed with”-”)
Losses on write-off of fixed assets (income listed
with”-”)
Financial expense (income listed with”-”) 12,170,694.57 13,502,411.13
Investment loss (income listed with”-”) -5,711,527.35 -2,978,064.52
Decrease of deferred tax assets(increase listed
with”-”)
Increase of deferred tax liabilities (decrease listed
with”-”)
Decrease of inventories (increase listed with”-”) -45,669,907.24 76,262,892.16
Decrease of operating receivables (increase listed
-198,479,075.80 -162,988,482.94
with”-”)
Increase of operating payables (decrease listed
126,146,748.43 149,643,647.71
with”-”)
Others
Net cash flows arising from operating activities -43,228,678.47 149,218,518.70
2. Significant investment and financing activities
unrelated to cash income and expenses
Liabilities transferred to capital
Convertible bonds within 1 year
Financing leased fixed assets
3. Net increase (decrease) of cash and cash equivalent
Ending balance of cash 93,041,685.30 91,173,945.34
Less: Opening balance of cash 98,688,072.55 59,742,088.63
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Add: Ending balance of cash equivalent
Less: Opening balance of cash equivalent
Net increase of cash and cash equivalent -5,646,387.25 31,431,856.71
Supplementary information to the financial statements
1. Non-operating profit or loss
Items This period Last period
Gain or loss from disposal of non-current assets 413,059.97
Government grants recorded into profit or loss
during current period
Profit or loss from debts restructuring -770,059.48
Others non-operating revenue and expense
2,585,442.43
besides the above items
Subtotal
Effect from income tax 334,266.44
Effect of minority interests (after tax)
Total 1,894,176.48
2
(1). Differences in net profit and net asset under domestic and international accounting standards
In RMB Yuan
Net profit attributable to the shareholders Net asset attributable to the shareholders
of the listed company of the listed company
Current term Amount of last term End of term Beginning of term
On Chinese Accounting
22,832,072.23 30,377,280.34 1,538,766,219.97 1,515,934,147.74
Standard
Items and amounts adjusted on IAS
Under International
22,832,072.23 30,377,280.34 1,538,766,219.97 1,515,934,147.74
Accounting Standard
(2). Differences in net profit and net asset under domestic and overseas accounting standards
In RMB Yuan
Net profit attributable to the shareholders Net asset attributable to the shareholders
of the listed company of the listed company
Current term Amount of last term End of term Beginning of term
On Chinese Accounting
22,832,072.23 30,377,280.34 1,538,766,219.97 1,515,934,147.74
Standard
Accounts and amounts adjusted according to overseas accounting standard
On IAS 22,832,072.23 30,377,280.34 1,538,766,219.97 1,515,934,147.74
2. Return on equity and earnings per share
Weighted average Earnings per share (EPS)
Profit of report period return on net assets Basic Diluted EPS
(%) EPS
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
Net profit attributable to shareholders of parent
1.49% 0.06 0.06
company
Net profit after deducting non-recurring gains and losses
1.37% 0.05 0.05
attributable to shareholders of parent company
3. Explanation for the abnormity and change of main items of financial statements
1. notes receivable increase 63%, main because customer collection is mainly bank acceptance and the
compression to pay suppliers lead to the increase of notes receivable balances.
2. Advance payment decline 47%.It is mainly due to that current advance payment of Shanxi Taigang reduce
4.2 million Yuan compared with the beginning of the period , Qiqihar north xing advance payment is beginning
to reduce 3.85 million yuan, and the advance payment of dynamic heating engineering fell 1.75 million Yuan
compared with the beginning of the period .
3.Ohter account receivable increase 53% ,mainly due to 1.The annual salary of cost leadership is allocated by
the month in the current period in 2012 , there are 3.75 million Yuan unamortized completely; 2.The railway bid
bond increases; 3. The travel cost sales staff was reimbursed every three months, which lead to the increase of
travel cost not being reimbursed.
4.Note payable decline 51%,mainly due to payment for suppliers in current period was compressed, and the bank
acceptance reduced.
5. Account payable increase 53%,mainly due to payment for suppliers in current period was compressed, which
leads to the accounts payable increased compared with the beginning of period.
6.Advance receivable account decline 45%,mainly due to the payment in advance of Inner Mongolia MingYang
wind power equipment co. LTD.in the same period last year which is 14.25 million Yuan, but there is not this
year
7.Tax payment increase 1659% ,mainly due to the ascension range at end of the period is higher at beginning of
period compread with the previous period, which is due to the input tax 3.17 Yuan million will be deducted.
8. Long-term loan increase 150%,mainly due to the short-term loan which run over was trasfered to the long-term
loan whose interest is more lower in order reduce interest payments.
9. Asset impairment loss increase 61.31%,mainly due to verification of accounts receivable of Shenhua
ZhunGeEr energy limited liability company lead to the increase of asset impairment loss of 344000 Yuan.
10.Investment income increase 91.79%,mainly due to the increase of net profit of consortium SKF in current
period. 2.Receving annual bonus 680000 Yuan of ME Shanghai electrical and mechanical equipment co., LTD.of
2008-2011 annual.
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Wafangdian Bearing Co., Ltd B） 2012 Annual Report
11.Non-operation payment decline 45.26%,mainly due to 1.The loss of debt restructuring reduce 430000 Yuan
compared with the same period. 2. The claim on quality of Liaoyag Bearing is 530000 Yuan in the same period,
but there is not this year.
12.Income tax decline 72.40,mainly due to Current total profit fell by 9.53 million Yuan, minus r&d cost and
plus deductions, return on investment and the government subsidies, etc., which lead to the current taxable
income fell by 14.734 million Yuan compared with the same period, and the tax fell 2.21 million Yuan compared
with the same period.
Chapter X. List of reference documents
List of reference documents
1. The Accounting statements of the first half year of 2013 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.
104
