Wafangdian Bearing Company Limited 2014 Midyear Report
Stock code：200706 Stock ID:Wazhou B Announcement No.2014-25
Wafangdian Bearing Company Limited
2014 Midyear Report
2014-25
August 2014
Wafangdian Bearing Company Limited 2014 Midyear Report
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. Cong Hong, 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.
All directors attended the meeting.
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 2014 Midyear Report
Table of Contents
Chapter I. Important Prompts, Table of Contents, and Definitions............................................................2
Chapter II.Company Profile......................................................................................................................4
Chapter III. Financial Highlights.............................................................................................................5
Chapter IV Directors Report..................................................................................................................... 7
ChapterⅤ Significant Events................................................................................................................ 12
ii、The related business on asset purchase and sales............................................................... 43
iii. Major related business on jointly investment........................................................................ 43
iv、Credit and Debt with relevant parties................................................................................. 43
V. Other important related business......................................................................................... 44
ChapterⅥ. Changes in Capital Stock and Shareholders.......................................................................... 44
Chapter Ⅶ. Directors, Supervisors, Senior Management and Staff........................................................... 46
Chapter VIII. Financial Report................................................................................................................ 46
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Wafangdian Bearing Company Limited 2014 Midyear Report
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 1,2014–June 30,2014
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
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Wafangdian Bearing Company Limited 2014 Midyear Report
Chapter II.Company Profile
I. Company Information
II.Contacts
Abbreviatednameofthestock WazhouB Stockcode: 200706
ListinglocationoftheCompany’s
ShenzhenStockExchange
stock:
Chinese name of the Company 瓦房店轴承股份有限公司
Abbreviation of Chinese name 瓦轴股份公司
English name of the Company Wafangdian Bearing Company Limited
Abbreviation of English name WBC
Legal representative of the
Cong Hong
Company
Secretary of the Board Representative of StockA ffairs
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 2013 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
2013 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 2013 annual report.
iv.Other relevant information
In the report period other relevant information is no change.
Chapter III. Financial Highlights
4
Wafangdian Bearing Company Limited 2014 Midyear Report
I.Main accounting data and indices
Are there any retrospective adjustments or restatement of financial information of previous year due to change of accounting
policies or correcting of accounting errors?
[ ] Yes [V] No
In RMB Yuan
+/-（％）comparing with the
current period previous period
previous period
Turnover(RMB) 1,641,013,208.71 1,547,403,493.37 6.05%
Net profit attributable to shareholders of the
-17,449,186.08 22,832,072.23 -176.42%
listed company(Yuan)
Net profit attributable to the shareholders of
the
-20,480,427.05 20,937,895.75 -197.82%
listed company and after deducting of
non-recurring gain/loss(RMB)
Net Cash flow generated by business
operation 56,163,250.30 -20,293,414.93 -230.21%
(RMB)
Basic earnings per share(Yuan/share) -0.04 0.06 -166.67%
Diluted earnings per share(Yuan/share) -0.04 0.06 -166.67%
Net return on equity(%) -1.17% 1.49% -2.66%
Changed over last year
End of 2014.06.30 End of 2013.12.31
(%)
Total Assets (RMB) 3,942,232,259.61 3,717,797,889.26 6.04%
Owner’s Equity Attributed to
Shareholders of Listed 1,487,517,249.42 1,504,966,435.50 -1.16%
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 of the Net asset attributable to the shareholders of the
listed company listed company
Current term Amount of last term End of term Beginning of term
On Chinese Accounting
-17,449,186.08 22,832,072.23 1,487,517,249.42 1,504,966,435.50
Standard
Items and amounts adjusted on IAS
Under International
-17,449,186.08 22,832,072.23 1,487,517,249.42 1,504,966,435.50
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 of the Net asset attributable to the shareholders of the
listed company listed company
Current term Amount of last term End of term Beginning of term
On Chinese Accounting
-17,449,186.08 22,832,072.23 1,487,517,249.42 1,504,966,435.50
Standard
Accounts and amounts adjusted according to overseas accounting standard
On IAS -17,449,186.08 22,832,072.23 1,487,517,249.42 1,504,966,435.50
There is no difference, and the result is not audited.
3. Statement on the differences of accounting information on IAS and domestic accounting standard
III. Non-recurring gain/loss items and amounts
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Wafangdian Bearing Company Limited 2014 Midyear Report
In RMB Yuan
Items Amount Remarks
Gain/loss of non-current assets
(includes the neutralized part of the asset impairment provision drawn 27,802.77
already)
Gains and losses included in the current period of government
subsidies, excluding those government grants which are closely related
2,376,811.94
to normal business and in line with national policy, or in accordance
with fixed standards or quantities
Debt restructuring gains and losses -146,236.39
Other non-business income and expenditures other than the above 1,307,787.53
Influenced amount of income tax 534,924.88
Total 3,031,240.97 --
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
6
Wafangdian Bearing Company Limited 2014 Midyear Report
I. Overview
At the situation of the bearing market production oversupply, market competition acutely and price
decline commonly in Q2,the company take some measures like products structure adjustment, cost reducing
and expenses compressing, which make operation improved.
But affected by bearing market demands lacking, sales price decline continually, the main business gross
profit margin decline, and profit space compressed, the profit in reduce compared with the same period of
last year.
At the end of June 30, company's total assets is 3.9422 billion Yuan, rose 6.04% compared with the
beginning of this year; Net assess attributing to shareholders of listed company 1.4875 billion Yuan,
decreased by 1.16% compared with then beginning of this year; Operating income is 1.641 billion Yuan,
increase by 6.05% compared with the same period last year; Net profit of attributing to shareholders of the
parent company is minus 17.45 million Yuan.
II. Analysis of Main Business
Item Report period Last report period Changed by Change reason
%YoY
Main Business Income 1,641,013,208.71 1,547,403,493.37 6.05%
Main Business Cost 1,490,487,024.71 1,375,879,876.97 8.33%
Sales Expenses 118,732,526.35 102,660,427.82 15.66%
Management Expenses 35,930,304.10 34,739,784.53 3.43%
Financial Expenses 11,935,634.49 12,206,072.78 -2.22%
Tax Expenses because the profit in this period is
842,546.41 -100.00%
minus, the income tax isn’t withdrawn
Spending on research and
development of the business 60,000,000.00 55,426,392.85 8.25%
income ratio
Mainly because the payment from client
Net Cash Flows from Operating
56,163,250.30 -20,293,414.93 -376.76% increase, and monetary payment to
Activities
supplies compressed.
Mainly because pay the Germany
Net Cash Flows from Investing import machines with amount of 19.51
-32,108,788.92 -395,610.77 8,016.26%
Activities million Yuan, the payable note expire
with amount of 8.67 million Yuan
Mainly because the monetary financing
Net Cash Flows from Financing
21,065,196.30 38,323,909.62 -45.03% under order decline compared with last
Activities
period.
Mainly because the Cash Flows from
Net Increase in Cash and Cash
46,283,411.30 17,154,193.48 169.81% Operating Activities increase largely
Equivalents
compared with last period.
The profit structure or source change greatly
□ Applicable √Inapplicable
Pre-disclosure of operation plan
□Applicable √Inapplicable
Review on the progress of prior disclosure development strategy and business plan during the reporting period
In Q2, the company take some measures like products structure adjustment, cost reducing and expenses compressing,
which make operation improved.
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Wafangdian Bearing Company Limited 2014 Midyear Report
But affected by bearing market demands lacking, sales price decline continually, the main business gross profit margin
decline, and profit space compressed, the profit in reduce compared with the same period of last year.
III. Main business composition
In RMB Yuan
+/-(%) of
+/-(%) of
Operating income Operating cost BOI operating +/-(%) of BOI
operating cost
income
By Industries
Export 140,992,686.32 134,917,023.46 4.31% 3.06% 2.67% 0.36%
Civil 1,252,501,784.65 1,126,197,836.81 10.08% 13.29% 15.03% -1.36%
Including: Traffic
578,284,516.64 511,593,649.12 11.53% 22.37% 21.65% 0.53%
Bearing
Special Bearing 312,384,405.97 299,963,874.67 3.98% 20.39% 30.21% -7.24%
Common
361,832,862.04 314,640,313.02 13.04% -3.12% -4.11% 0.89%
Bearing
Industrial
52,644,486.65 58,789,239.75 -11.67% 15.82% 13.14% 2.65%
income
On Products
Bearing 1,393,494,470.97 1,261,114,860.27 9.50% 12.17% 13.57% -1.12%
Industry
52,644,486.65 58,789,239.75 -11.67% 15.82% 13.14% 2.65%
operation
Region
Civil 1,305,146,271.30 1,184,987,076.56 9.21% 13.39% 14.93% -1.22%
Foreign 140,992,686.32 134,917,023.46 4.31% 3.06% 2.67% 0.36%
IV. Core competence analyzing
The company core competition ability is no change.
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 and Sale
Liaoyang Bearing and 130,288,050.8
Subsidiary 19,350,000 -17,381,928.61 62,055,422.75 -5,604,384.49 -3,333,471.04
Bearing machine-electrica 6
l equipment
Dalian Electrical Product and Sale 104,498,663.2 103,737,560.4
Subsidiary 10,000,000 18,167,907.95 -2,840,717.92 -2,809,194.86
Equipment Bearing 0 6
Dalian SKF Product and Sales
Joint-stock 268,375,628.9 222,228,464.2
Wazhou Bearing Spherical Roller 194,000,000 93,263,566.51 6,708,292.52 4,614,725.69
Company 9 1
Co.,Ltd. Bearing
Shanghai ME Sale
Machine-electri Joint-stock machine-electrica
cal Equipment Company l equipment、 35,000,000 297,142,100 253,196,100 137220200 11,045,000 11,122,500
Metal Material、
chain Ltd. Computer、etc.
3. Important Non-raised Capital’s Projects
Unit:0000’Yuan
Project Total Plan Investment in Accumulated Progress Earnings
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Wafangdian Bearing Company Limited 2014 Midyear Report
Investment the report investment
period
High-grade rolling Forma high grade roller production capacity, improve the level of
800 460 370 57.50%
process product precision
High-grade
Forma high grade roller production capacity, improve the level of
spherical roller 2,881 2,600 1,480 90.25%
product precision
roller grinding
Carry out processing, grinding, assembly automation production
car modification, make the railway wagon bearing production
Railway wagon equipment, technology level to reach international standards
600 400 356 66.67%
bearing lathe work Processing, grinding, assembly automation production car
modification, the railway wagon bearing production equipment,
technology level has reached international standards
Carry out processing, grinding, assembly automation production
car modification, make the railway wagon bearing production
Railway wagon
equipment, technology level to reach international standards
bearing thermal 1,200 1,080 1,029 90.00%
Processing, grinding, assembly automation production car
transformation
modification, the railway wagon bearing production equipment,
technology level has reached international standards
Carry out processing, grinding, assembly automation production
car modification, make the railway wagon bearing production
Railway wagon equipment, technology level to reach international standards
2,860 834 185 29.16%
bearing grinding Processing, grinding, assembly automation production car
modification, the railway wagon bearing production equipment,
technology level has reached international standards
Carry out processing, grinding, assembly automation production
car modification, make the railway wagon bearing production
equipment, technology level to reach international standards
Railway wagon
1,280 800 560 62.50% Processing, grinding, assembly automation production car
bearing assembly
modification, the railway wagon bearing production equipment,
technology level has reached international standards
Grinding
equipment
Form 4 roll high-grade car exports bearing production lines
renovation project 2,480 1,860 1,606 75.00%
of premium car
bearing
Assembly test
reform project of
1,460 887 316 60.75% Form 4 roll high-grade car exports bearing production lines
premium car
bearing
Other 500 280 248 56.00% Ensure normal production and operation facilities operation
Total 14,061 9,201 6,150 --
VI. Forecast for operation outstanding from 2014 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 2013 shareholder meeting is that : based on the total capital stock of 40,260 shares at the
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Wafangdian Bearing Company Limited 2014 Midyear Report
end of December 31,2013, 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.
Cash dividend policy of special statement
Whether compliance with the provisions of the company's articles of association or
yes
resolutions of the shareholders' general meeting requirements:
Whethert he standard of share out bonus and the proportion are clear r: yes
Whether related decision-making process and mechanism are completeness: yes
Whether the independent director takes office responsible and play a proper role: yes
Whether the small and medium-sized shareholders the chance to fully express their
yes
views and demands;Whether the legitimate rights and interests were protected fully:
Cash dividend policy to adjust or change，whether Conditions and the program are Companies cash dividend policy is
transparent: not to adjust or change.
X.Reception of investigations,communications,or interviews in the report period
Main content involved and
Time/date Place Way Type of visitors Visitors
material provided
Telephone The general information of
February 19,2014 Office Private investor Private investor
communication the company
Telephone The general information of
March 24,2014 Office Private investor Private investor
communication the company
Telephone The general information of
March 26,2014 Office Private investor Private investor
communication the company
Telephone The general information of
March 31,2014 Office Private investor Private investor
communication the company
Telephone The general information of
April 16,2014 Office Private investor Private investor
communication the company
Telephone The general information of
May 20,2014 Office Private investor Private investor
communication the company
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Wafangdian Bearing Company Limited 2014 Midyear Report
ChapterⅤ 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
□ Applicable √ Inapplicable
V. Asset business
□ Applicable √ Inapplicable
VI.Implementation and Influence of Equity Incentives
□ Applicable √ Inapplicable
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Wafangdian Bearing Company Limited 2014 Midyear Report
VII. Important Contracts and Implementation
1、The relate transactions related to the day-to-day operations.
Relative The Percentage of
Principle The Way Of Market Disclosure
Relative parties Relationship Relative type Content Relative Price Amount(RM accounted for Disclosure Index
of price Account price Date
B’0000) similar deals(%)
Merchandis
Bearing Negotiated Cash Payment or http://www.cninf
e 9,148 5.29% 2014.08.21
Product price The Knot o.com.cn
Dalian SKF Procurement
Wazhou Bearings Associates Sales of Negotiated Cash Payment or http://www.cninf
Components 3,413 2.08% 2014.08.21
Co., Ltd Goods price The Knot o.com.cn
Provide Heat Cash Payment or 2014.08.21 http://www.cninf
193 0.12%
Service treatment The Knot o.com.cn
Merchandis 2014.08.21
Justice and Cash Payment or http://www.cninf
Other Companies e Components Market price 310 0.18%
Equity The Knot o.com.cn
Wazhou precision controlled by the same Procurement
Steel Ball controlling share holders Sales of Goods and Justice and Cash Payment or 2014.08.21 http://www.cninf
and the ultimate Market price 389 0.24%
Company goods Materials Equity The Knot o.com.cn
controlling party Provide Heat Cash Payment or 2014.08.21 http://www.cninf
50 0.03%
Service treatment The Knot o.com.cn
Other Companies Merchandis 2014.08.21
Justice and Cash Payment or http://www.cninf
e Components Market price 13,659 7.89%
Wazhou precision controlled by the same Procurement
Equity The Knot o.com.cn
controlling share holders
forging Ltd., and the ultimate 2014.08.21 http://www.cninf
Sales of Goods and Justice and Cash Payment or
controlling party Market price 17,923 10.92%
goods Materials Equity The Knot o.com.cn
Other Companies Merchandis 2014.08.21
Dalian Wazhou Justice and Cash Payment or http://www.cninf
controlled by the same e Production Market price 1,131 0.65%
Manufacturing Equity The Knot o.com.cn
Equipment Co., controlling share holders Procurement
Ltd and the ultimate Sales of Goods and Justice and Cash Payment or 2014.08.21 http://www.cninf
controlling party Market price 66 0.04%
goods Materials Equity The Knot o.com.cn
Other Companies Merchandis 2014.08.21
Bearing Justice and Cash Payment or http://www.cninf
Wazhou Group controlled by the same e Market price 11,211 6.48%
Product Equity The Knot o.com.cn
Turnplate Bearing controlling share holders Procurement
Ltd and the ultimate Sales of Goods and Justice and Cash Payment or 2014.08.21 http://www.cninf
controlling party Market price 39 0.02%
goods Materials Equity The Knot o.com.cn
Wazhou Group Other Companies Merchandis 2014.08.21
Bearing Justice and Cash Payment or http://www.cninf
precision controlled by the same e Market price 5,317 3.07%
controlling share holders Product Equity The Knot o.com.cn
Transmission Procurement
Bearing Co., Ltd and the ultimate Sales of Goods and Justice and Market price 1,315 0.80% Cash Payment or 2014.08.21 http://www.cninf
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Wafangdian Bearing Company Limited 2014 Midyear Report
controlling party goods Materials Equity The Knot o.com.cn
Provide Heat Cash Payment or 2014.08.21
Market price 135 0.08%
Service treatment The Knot
Merchandis 2014.08.21
Bearing Justice and Cash Payment or http://www.cninf
Other Companies e Market price 0
Wazhou Group Product Equity The Knot o.com.cn
Precision special controlled by the same Procurement
controlling share holders Sales of Goods and Justice and Cash Payment or 2014.08.21 http://www.cninf
Bearing Company and the ultimate Market price 197 0.12%
goods Materials Equity The Knot o.com.cn
Limited controlling party Provide Heat Cash Payment or 2014.08.21 http://www.cninf
25 0.02%
Service treatment The Knot o.com.cn
Merchandis 2014.08.21
Bearing Justice and Cash Payment or http://www.cninf
Da Lian Wazhou e Market price 7,113 4.11%
Other Related party Product Equity The Knot o.com.cn
Fengyuan Procurement
Machine Co.,Ltd Sales of Goods and Justice and Cash Payment or 2014.08.21 http://www.cninf
Market price 0 0.00%
goods Materials Equity The Knot o.com.cn
Merchandis 2014.08.21
Bearing Justice and Cash Payment or http://www.cninf
e Market price 6,891 3.98%
Product Equity The Knot o.com.cn
Da Lian Wazhou Procurement
Other Related party
Jin Zhou Machine Sales of Goods and Justice and Cash Payment or 2014.08.21 http://www.cninf
Market price 15 0.01%
Co.,Ltd goods Materials Equity The Knot o.com.cn
Provide Heat Cash Payment or 2014.08.21 http://www.cninf
20 0.01%
Service treatment The Knot o.com.cn
Other Companies
Equipment controlled by the same Merchandis justice and Cash Payment or
technical controlling share holders e equipment Market price 1,543 0.89% 2014.08.21
and the ultimate Equity The Knot
engineering Procurement
controlling party
Security and 2014.08.21
Accept Fire Service Cash Payment or http://www.cninf
204 0.12%
Service Announceme The Knot o.com.cn
nt Service
Technology 2014.08.21
The controlling share Cash Payment or http://www.cninf
Development 270 0.16%
Wazhou Group holders and the ultimate The Knot o.com.cn
Service
controlling party
Use of Cash Payment or 2014.08.21 http://www.cninf
400 0.23%
Trademark The Knot o.com.cn
Lease of 2014.08.21
Cash Payment or http://www.cninf
Land, House, 1,214 0.70%
The Knot o.com.cn
Equipment
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Wafangdian Bearing Company Limited 2014 Midyear Report
Sales of Goods and Justice and Cash Payment or 2014.08.21 http://www.cninf
Market price 62 0.04%
goods Materials Equity The Knot o.com.cn
Other Companies 2014.08.21
Wazhou group controlled by the same
Sales of Bearing Justice and Cash Payment or http://www.cninf
(USA) bearing co., controlling share holders Market price 1,196 0.73%
goods Product Equity The Knot o.com.cn
LTD and the ultimate
controlling party
Total -- -- 83,449 -- -- -- -- --
14
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-yearal 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
□ Applicable √ Inapplicable
V. Other important related business
□ Applicable √ Inapplicable
Vi. Important contract and implement
1. Deposit, contract and rent.
（1）Assets rent out
Lease income
Category of assets Starting
Lessor Lessee Mature date Basis of lease pricing recognized in
rent out date
current period
Land (located in
The Wazhou Exact No.1, Phrase1, North Contract Laws of China and
2014-1-1 2014-12-31
Company Forge Ltd. Gongji Street, with No.58[1997] Dazhengfa
area of 7,881 m.
Land (located in
The Wazhou Steel No.1, Phrase1, North Contract Laws of China and
2014-1-1 2014-12-31
Company Ball Company Gongji Street, with No.58[1997] Dazhengfa
area of 13,171 m.
Wazhou Group
Land (located in
Special
The No.1, Phrase1, North Contract Laws of China and
Precision 2014-1-1 2014-12-31
Company Gongji Street, with No.58[1997] Dazhengfa
Bearing Co.,
area of 5,864 .40m.
Ltd
The Wazhou Exact Contract Laws of China and
Buildings（9,177 m） 2014-1-1 2014-12-31
Company Forge Ltd. No.58[1997] Dazhengfa
The Wazhou Group
Company Special
Precision Buildings（6,534.4 Contract Laws of China and
2014-1-1 2014-12-31
Bearing Co., m） No.58[1997] Dazhengfa
Ltd
Dalian
Wazhou
The Contract Laws of China and
Fengyuan Buildings（1,791 m） 2014-1-1 2014-12-31
Company No.58[1997] Dazhengfa
Machinery
Co., Ltd
Dalian
Wazhou
The Buildings（13,386 Contract Laws of China and
Jinzhou 2014-1-1 2014-12-31
Company m） No.58[1997] Dazhengfa
Machinery
Co., Ltd
15
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-yearal Report
Note: According to the No.3 [2012] Wazhou Group Fa issued by the
Wazhou Group, from January 2012, Wazhou Group should be responsible for checking, putting on records to
the tax bureau, and modifying the registration information of land use on internet, if the land of Wazhou Group and
the Company is used. The units using land are responsible for declaring and paying land use tax according to the
statutory regulations and the land area checked by the department of corporation layout and development, security
equipment energy of Wazhou Group. Wazhou Group and the Company are no longer collecting and paying land use
tax on behalf of the units who using the land. In 2014 the company charges the lessee a total of 1.99 million yuan,
invoices to the lessee in August, confirms the rental income
（2）Assets under lease
Lease expense
Starting Basis of lease
Lessor Lessee Category of assets rent in Mature date recognized in
date pricing
current period
Contract Laws of
Two finished Land (located in Wazhou
China and
WazhouGroup branch of the Group industrial park, with 2014-1-1 2014-12-31
No.58[1997]
Company area of 14,418.00 m.
Dazhengfa
Land (located in No.1, Contract Laws of
Phrase1, North Gongji China and
Wazhou Group The Company 2014-1-1 2014-12-31
Street, with area of 715.20 No.58[1997]
m. Dazhengfa
The physical Contract Laws of
Land (located in Wazhou
distribution China and
Wazhou Group Group industrial park, with 2014-1-1 2014-12-31
branch of the No.58[1997]
area of 17,829.00 m.
company Dazhengfa
Land (located in No.1,
Phrase1, North Gongji
Wazhou Group The Company 2012-1-1 No fixed period Free
Street, with area of
21,692.06 m.
Land (located in west
WazhouGroup The Company industrial park, with area of 2012-1-1 No fixed period Free
58,500 m.
Precision Contract Laws of
Land (located in Wazhou
bearing China and
Wazhou Group Group industrial park, with 2014-1-1 2014-12-31 120,000
branch of the No.58[1997]
area of 30,380 m.
Company Dazhengfa
Contract Laws of
Special large Land (located in Wazhou
China and
Wazhou Group branch of the Group industrial park, with 2014-1-1 2014-12-31 80,850
No.58[1997]
Company area of 20,207 m.
Dazhengfa
Contract Laws of
Special large Land (located in Wazhou
China and
Wazhou Group branch of the Group industrial park, with 2014-1-1 2014-12-31 65,550
No.58[1997]
Company area of 16,388.00 m.
Dazhengfa
The precision Contract Laws of
Land (located in Wazhou
Wazhou rolling China and
Group industrial park, with 2014-1-1 2014-12-31 28,800
company of No.58[1997]
Group area of 7,199.00 m.
the Company Dazhengfa
16
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-yearal Report
Lease expense
Starting Basis of lease
Lessor Lessee Category of assets rent in Mature date recognized in
date pricing
current period
Contract Laws of
China and
Wazhou Group The Company Buildings（3770.04 m） 2014-1-1 2014-12-31
No.58[1997] 50,000.00
Dazhengfa
Precision Contract Laws of
bearing China and
Wazhou Group Buildings（19494.20 m） 2014-1-1 2014-12-31 2,480,000
branch of the No.58[1997]
Company Dazhengfa
Contract Laws of
Two finished
China and
Wazhou Group branch of the Buildings（9518.49 m） 2014-1-1 2014-12-31 600,000
No.58[1997]
Company
Dazhengfa
Contract Laws of
Special large
China and
Wazhou Group branch of the Buildings（14353.94 m） 2014-1-1 2014-12-31 1,386,750
No.58[1997]
Company
Dazhengfa
The precision Contract Laws of
rolling China and
Wazhou Group Buildings（4759.24 m） 2014-1-1 2014-12-31 446,000
company of No.58[1997]
the Company Dazhengfa
The physical Contract Laws of
distribution China and
Wazhou Group Buildings（5043.67 m） 2014-1-1 2014-12-31 300，000.00
branch of the No.58[1997]
company Dazhengfa
Contract Laws of
Special large
China and
Wazhou Group branch of the Buildings（13749.80 m） 2014-1-1 2014-12-31 1,302,000.00
No.58[1997]
Company
Dazhengfa
The precision Contract Laws of
Wazhou Steel rolling China and
Buildings（2592.00 m） 2014-1-1 2014-12-31
company of No.58[1997]
Ball Company
the Company Dazhengfa
Two finished
Contract Laws of
Wazhou Group branch of the Equipment 2014-1-1 2014-12-31
China 52,684.41
Company
The precision
rolling Contract Laws of
Wazhou Group Equipment 2014-1-1 2014-12-31 2,416,751.14
company of China
the Company
The auto 0
bearing 2011-9-2 Contract Laws of
Wazhou Group Equipment 2016-9-20
company of 0 China
the Company
The auto
bearing Contract Laws of
Wazhou Group Equipment 2014-1-1 2014-12-31
company of China 2,809,112.77
the Company
17
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-yearal Report
ChapterⅥ. Changes in Capital Stock and Shareholders
I. Changes in Capital Stock
Before Changes Changes in Shares After Changes
Shares Ratio New Conversion Ratio
Bonus of
Shares Others Subtotal Shares
Shares Reserves
Issued
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
II. Shareholders and Actual Controller
1. Number of Shareholders and Shares
Unit: Share
Total number of shareholder at the end Total number of shareholder at the end of report
9,115 0
of report period period with preferred stock
Shareholders with 5% or above Shares
Increase or Non-curr Impawned or Frozen Shares
Current
Ratio Total shares decrease ent
shares
Name Nature in the shares
held
（%） held held
report Status Amount
period
Wafangdian
State-owned 244,00
Bearing Group 60.61% 244,000,000
shareholder 0,000
Corporation
AKTIEBOLAGET Foreign
19.7% 79,300,000 79,300,000 Frozen 79,300,000
SKF shareholder
Domestic
Huang Junyue 0.70% 2,828,321
shareholder
BOCI SECURITIES Foreign
0.70% 2,800,085
LIMITED shareholder
Domestic
Ma Yuancheng 0.19% 755,825
shareholder
Foreign private
MAN,KWAI WING 0.18% 713,101
shareholder
Foreign private
Yan Jianhui 0.14% 564,900
shareholder
Foreign private
Hei Youxin 0.13% 512,559
shareholder
18
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-yearal Report
EVERBRIGHTSEC
URITIES Foreign
0.12% 482,150
LIMITED(HONG shareholder
KONG)
Domestic
Yang Yufei 0.12% 474,090
shareholder
Explanation for the Affiliated In the report period, the frozen period of the shares purchased by the company’s strategic
Relations or United Action of the investor AKTIEBOLAGET SKF expired in 1999, and has not dealt with the releasing-procedure in
Top Ten Shareholders 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
Huang Junyue 2,828,321 B 2,828,321
BOCI SECURITIES LIMITED 2,800,085 B 2,800,085
Ma Yuancheng 755,825 B 755,825
MAN,KWAI WING 713,101 B 713,101
Yan Jianhui 564,900 B 564,900
Hei Youxin 512,559 B 512,559
EVERBRIGHTSECURITIES B
482,150 482,150
LIMITED(HONG KONG)
Yang Yufei 474,090 B 474,090
Wang Hongting 388,891 B 388,891
Explanation for the Affiliated Relations
There was no relationship and consistent activities between the first big shareholder and
or
other shareholders or the top ten common stock holders; The relationship among other
United Action of the Top Ten
shareholders, top ten circulation shareholders, top ten circulation shareholders and other
Shareholders and the Top Ten Tradable
shareholders was not clear.
Shareholders
iii Change of Controlling Shareholder Actual Controller in the Report Period
□ Applicable √ Inapplicable
ChapterⅧ. Relevant information about preferred stock
ChapterⅧ. 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
Hua Yuehong Vice-manager Resigns ion 2014.04.28 personal reason
19
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-yearal Report
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 146,719,100.22 80,687,086.92
Financial assets held-for-trading
Bills receivable 152,222,140.07 100,329,887.46
Account receivable 1,301,381,593.11 1,138,605,661.45
Account paid in advance 34,102,822.32 33,712,904.14
Interest receivable 240,000.00
Other receivables 22,598,251.17 29,727,292.33
Inventory 1,126,647,752.16 1,196,734,228.79
Non-current assets due within 1 year
Other current assets 2,969,167.26 2,772,988.57
Total current assets 2,786,640,826.31 2,582,810,049.66
Non-current assets
Financial assets available-for-sale
Investments held-to-maturity
Long-term receivable
Long-term equity investment 110,533,646.70 108,272,431.11
Investment property
Fixed assets 542,635,346.40 572,492,122.56
Construction in progress 353,554,300.23 303,172,462.62
Construction materials
Fixed assets disposal
Biological assets 137,259,152.75 139,563,086.91
Gas and petrol assets
Intangible assets
Development expenditure
Goodwill
Long-term prepaid expense 846,103.57 724,852.75
Deferred tax assets 10,762,883.65 10,762,883.65
Other non-current assets
Total non-current assets 1,155,591,433.30 1,134,987,839.60
Total assets 3,942,232,259.61 3,717,797,889.26
Current liabilities
Short-term loan 408,000,000.00 418,000,000.00
Note payable 249,796,543.78 93,247,340.00
Accounts payable 1,261,935,771.38 1,166,466,116.64
Accounts received in advance 62,911,847.40 74,433,323.04
Commission charge payable
Accrued payroll 17,459,162.49 19,654,053.70
Tax payable 5,557,677.41 5,762,579.01
Interest payable 1,728,222.22
Dividends payable
Other payables 154,144,365.34 136,673,398.82
Non-current liabilities due within I year 150,000,000.00 150,000,000.00
Other current liabilities 4,011,103.83 4,011,103.83
Total current liabilities 2,313,816,471.63 2,069,976,137.26
Non-current liabilities
20
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-yearal Report
Long-term loan 90,000,000.00 90,000,000.00
Debenture payable
Long-term payables 100,000.00 100,000.00
Special payables 321,698.98 321,698.98
Contingent liabilities
Deferred tax liabilities
Other non-current liabilities 50,476,839.58 52,433,617.52
Total non-current liabilities 140,898,538.56 142,855,316.50
Total liabilities 2,454,715,010.19 2,212,831,453.76
Owner’s equity (shareholders’ equity)
Capital stock 402,600,000.00 402,600,000.00
Capital public reserves 488,805,548.36 488,805,548.36
Less: treasury share
Surplus reserve 131,442,909.11 131,442,909.11
Undistributed profit 464,668,791.95 482,117,978.03
Difference of foreign currency translation
Equity attributable to parent company 1,487,517,249.42 1,504,966,435.50
Minority interest
Total owner’s equity 1,487,517,249.42 1,504,966,435.50
Total owner’s equity and liabilities 3,942,232,259.61 3,717,797,889.26
Chairman: Cong Hong 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 144,132,898.03 76,549,204.53
Financial assets held-for-trading
Bills receivable 145,432,603.48 99,829,887.46
Account receivable 1,279,284,513.62 1,139,776,660.21
Account paid in advance 33,567,617.57 32,824,584.91
Interest receivable 240,000.00
Other receivables 19,334,694.73 25,564,205.17
Inventory 1,067,015,369.68 1,125,983,146.27
Non-current assets due within 1 year
Other current assets 2,969,167.26 2,772,988.57
Total current assets 2,691,736,864.37 2,503,540,677.12
Non-current assets
Financial assets available-for-sale
Investments held-to-maturity
Long-term receivable
Long-term equity investment 166,811,661.03 164,550,445.44
Investment property
Fixed assets 437,311,946.95 462,267,249.78
Construction in progress 353,554,300.23 303,169,052.62
Construction materials
Fixed assets disposal
Biological assets 121,451,132.75 123,588,686.87
Gas and petrol assets
Intangible assets
Development expenditure
Goodwill
Long-term prepaid expense 846,103.57 724,852.75
Deferred tax assets 10,762,883.65 10,762,883.65
Other non-current assets
Total non-current assets 1,090,738,028.18 1,065,063,171.11
Total assets 3,782,474,892.55 3,568,603,848.23
21
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-yearal Report
Current liabilities
Short-term loan 408,000,000.00 418,000,000.00
Note payable 249,796,543.78 93,247,340.00
Accounts payable 1,101,988,307.67 1,017,390,652.18
Accounts received in advance 57,878,019.81 74,528,538.89
Commission charge payable
Accrued payroll 9,403,984.70 11,427,966.15
Tax payable 2,734,782.12 3,078,968.63
Interest payable 1,728,222.22
Dividends payable
Other payables 111,071,567.90 95,022,064.02
Non-current liabilities due within I year 150,000,000.00 150,000,000.00
Other current liabilities 3,913,555.83 3,913,555.83
Total current liabilities 2,094,786,761.81 1,868,337,307.92
Non-current liabilities
Long-term loan 90,000,000.00 90,000,000.00
Debenture payable
Long-term payables
Special payables 321,698.98 321,698.98
Contingent liabilities
Deferred tax liabilities
Other non-current liabilities 45,892,083.58 47,848,861.52
Total non-current liabilities 136,213,782.56 138,170,560.50
Total liabilities 2,231,000,544.37 2,006,507,868.42
Owner’s equity (shareholders’ equity)
Capital stock 402,600,000.00 402,600,000.00
Capital public reserves 485,678,443.26 485,678,443.26
Less: treasury share
Surplus reserve 131,442,909.11 131,442,909.11
Undistributed profit 531,752,995.81 542,374,627.44
Difference of foreign currency translation
Equity attributable to parent company 1,551,474,348.18 1,562,095,979.81
Minority interest
Total owner’s equity 1,551,474,348.18 1,562,095,979.81
Total owner’s equity and liabilities 3,782,474,892.55 3,568,603,848.23
Chairman: Cong Hong General Accountant : Sun Najuan Accounting charger: Yao Chunjuan
3. Consolidated Income Sheet.
Unit: RMB Yuan
Item Account for the current period Account for the prior period
1.Total operating income 1,641,013,208.71 1,547,403,493.37
Including: Operating revenue 1,641,013,208.71 1,547,403,493.37
Interest income
Handling charge and commission income
2.Total operating cost 1,664,289,776.23 1,531,668,845.00
Including: Operating cost 1,490,487,024.71 1,375,879,876.97
Interest expenses
Handling charge and commission income
Tax & surcharges for main operations 6,171,354.22 5,706,680.51
Selling expenses 118,732,526.35 102,660,427.82
Administrative expense 35,930,304.10 34,739,784.53
Financial expense 11,935,634.49 12,206,072.78
Loss of impairment of assets 1,032,932.36 476,002.39
Add: Gains of change of fair value of assets(loss with"-")
Investment income(loss with "-") 2,261,215.59 5,711,527.35
22
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-yearal Report
Including: Income form investment on associated
2,261,215.59 5,031,527.35
enterprise and jointly enterprise
3.Operating profit (loss with"-") -21,015,351.93 21,446,175.72
Add: Non-operating revenue 4,368,539.55 3,549,564.64
Less: Non-operating cost 802,373.70 1,321,121.72
Including: loss on disposal of non-current assets 35,866.08
4.Total profit(loss with"-") -17,449,186.08 23,674,618.64
Less: Income tax expenses 842,546.41
5. Net profit(Loss with"-") -17,449,186.08 22,832,072.23
Net profit attributable to shareholders of parent company -17,449,186.08 22,832,072.23
Minority interests
6.Earnings per share
(1) Basic earnings per share -0.04 0.06
(2) Diluted earnings per share -0.04 0.06
7. Other comprehensive returns
8. Total comprehensive returns -17,449,186.08 22,832,072.23
Total comprehensive returns available for parent company -17,449,186.08 22,832,072.23
Total comprehensive returns available for minority
shareholders
Chairman: Cong Hong 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 1,643,461,366.28 1,547,227,335.54
Less:Operating cost 1,494,654,881.09 1,376,283,798.47
Tax & surcharges for main operations 5,418,432.45 5,035,242.43
Selling expenses 118,078,966.63 102,033,585.21
Administrative expense 26,247,250.39 25,650,126.17
Financial expense 12,175,479.92 12,170,694.57
Loss of impairment of assets 1,032,932.36 476,002.39
Add: Gains of change of fair value of assets(loss with"-")
Investment income(loss with "-") 118,078,966.63 102,033,585.21
Including: Income form investment on associated
118,078,966.63 102,033,585.21
enterprise and jointly enterprise
2.Operating profit (loss with"-") 118,078,966.63 102,033,585.21
Add: Non-operating revenue 26,247,250.39 25,650,126.17
Less: Non-operating cost 12,175,479.92 12,170,694.57
Including: loss on disposal of non-current assets
3.Total profit(loss with"-") -10,621,631.63 33,006,701.93
Less: Income tax expenses 842,546.41
4. Net profit(Loss with"-") -10,621,631.63 32,164,155.52
Net profit attributable to shareholders of parent company
Minority interests
5.Earnings per share
(1) Basic earnings per share -0.03 0.08
(2) Diluted earnings per share -0.03 0.08
6. Other comprehensive returns
7. Total comprehensive returns
Total comprehensive returns available for parent company
Total comprehensive returns available for minority
-10,621,631.63 32,164,155.52
shareholders
Chairman: Cong Hong General Accountant : Sun Najuan Accounting charger: Yao Chunjuan
23
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-yearal Report
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 Provideing of services 699,010,861.57 637,446,979.54
Refund of taxes and fares 129.17 446.93
Other cash received relating to operating activities 6,856,715.72 6,525,851.06
Sub-total of cash inflows 705,867,706.46 643,973,277.53
Cash paid for goods and services 346,912,442.67 383,221,108.66
Cash paid to or on behalf of the employees 171,292,291.78 149,744,170.51
Tax payments 42,258,628.44 35,876,925.76
Other cash paid relating to operating activities 89,241,093.27 95,424,487.53
Sub-total of cash outflows 649,704,456.16 664,266,692.46
Net cash flows from operating activities 56,163,250.30 -20,293,414.93
2.Cash flows from investing activities
Cash received from return of investment 240,000.00 680,000.00
Cash received from investment incomes
Net cash received from disposal of fixed assets, intangible
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 240,000.00 680,000.00
Cash paid to acquire fixed assets, intangible assets and
32,348,788.92 1,075,610.77
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 32,348,788.92 1,075,610.77
Net cash flows from investment activities -32,108,788.92 -395,610.77
3.Cash flows from financing activities
Cash received from absorbing investment
Including: Cash received from increase in minority interest
Proceeds from borrowings 338,000,000.00 516,000,000.00
Other proceeds relating to financing activities 4,723,200.00
Sub-total of cash inflows 338,000,000.00 520,723,200.00
Repayment of borrowings 299,322,611.11 466,849,955.55
Distribution of dividends or profits & interest expenses 17,612,192.59 15,549,334.83
Including: dividends or profit paid to minority interest
Cash paid for other financing activities
Sub-total of cash outflows 316,934,803.70 482,399,290.38
Net cash flows from financing activities 21,065,196.30 38,323,909.62
4. Effects of foreign exchange rate changes on cash 1,163,753.62 -480,690.44
5.Net increases in cash and cash equivalents 46,283,411.30 17,154,193.48
Add: cash and cash equivalent, at the beginning of year 60,616,759.13 60,004,306.25
6.Cash and cash equivalent at the end of the year 106,900,170.43 77,158,499.73
Chairman: Cong Hong 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 Providing of services 701,385,036.16 636,200,717.44
24
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-yearal Report
Refund of taxes and fares 129.17 446.93
Other cash received relating to operating activities 4,955,678.49 5,148,013.18
Sub-total of cash inflows 706,340,843.82 641,349,177.55
Cash paid for goods and services 385,265,879.81 417,618,006.53
Cash paid to or on behalf of the employees 147,731,859.49 125,912,567.93
Tax payments 34,630,453.11 28,513,264.98
Other cash paid relating to operating activities 81,176,929.37 89,695,198.03
Sub-total of cash outflows 648,805,121.78 661,739,037.47
Net cash flows from operating activities 57,535,722.04 -20,389,859.92
2.Cash flows from investing activities
Cash received from return of investment 240,000.00 680,000.00
Cash received from investment incomes
Net cash received from disposal of fixed assets, intangible
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 240,000.00 680,000.00
Cash paid to acquire fixed assets, intangible assets and
32,228,548.92 940,927.96
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 32,228,548.92 940,927.96
Net cash flows from investment activities -31,988,548.92 -260,927.96
3.Cash flows from financing activities
Cash received from absorbing investment
Including: Cash received from increase in minority interest
Proceeds from borrowings 338,000,000.00 516,000,000.00
Other proceeds relating to financing activities 4,723,200.00
Sub-total of cash inflows 338,000,000.00 520,723,200.00
Repayment of borrowings 299,322,611.11 466,849,955.55
Distribution of dividends or profits & interest expenses 17,553,224.13 15,549,334.83
Including: dividends or profit paid to minority interest
Cash paid for other financing activities
Sub-total of cash outflows 316,875,835.24 482,399,290.38
Net cash flows from financing activities 21,124,164.76 38,323,909.62
4. Effects of foreign exchange rate changes on cash 1,163,753.62 -480,690.44
5.Net increases in cash and cash equivalents 47,835,091.50 17,192,431.30
Add: cash and cash equivalent, at the beginning of year 56,478,876.74 57,459,164.76
6.Cash and cash equivalent at the end of the year 104,313,968.24 74,651,596.06
Chairman: Cong Hong General Accountant : Sun Najuan Accounting charger: Yao Chunjuan
25
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year 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 488,805,548.36 131,442,909.11 482,117,978.03 1,504,966,435.50
0.00
Add: changes in accounting
policies
Changes in previous errors
Others
2.Balance at the beginning of 402,600,00
488,805,548.36 131,442,909.11 482,117,978.03 1,504,966,435.50
this year 0.00
3. The changes in this year
-17,449,186.08 -17,449,186.08
（decrease with“-”）
(1) Net profits -17,449,186.08 -17,449,186.08
(2) Other comprehensive returns
Total (1) and (2) -17,449,186.08 -17,449,186.08
(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
26
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year 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
488,805,548.36 131,442,909.11 464,668,791.95 1,487,517,249.42
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
485,691,050.47 129,292,318.86 498,350,778.41 1,515,934,147.74
year 0.00
Add: changes in accounting
policies
Changes in previous errors
Others
2.Balance at the beginning of 402,600,00
485,691,050.47 129,292,318.86 498,350,778.41 0.00 1,515,934,147.74
this year 0.00
3. The changes in this year
3,114,497.89 2,150,590.25 -16,232,800.38 -10,967,712.24
（decrease with“-”）
(1) Net profits 2,021,789.87 2,021,789.87
(2) Other comprehensive
3,114,497.89 3,114,497.89
returns
Total (1) and (2) 3,114,497.89 2,021,789.87 0.00 2,021,789.87
(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
27
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
(4）Profits distribution 2,150,590.25 -18,254,590.25 16,104,000.00
1)Provision for surplus public
2,150,590.25 -18,254,590.25
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 402,600,00
488,805,548.36 131,442,909.11 482,117,978.03 1,504,966,435.50
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
402,600,000.00 485,678,443.26 131,442,909.11 542,374,627.44 1,562,095,979.81
year
Add: changes in accounting
policies
Changes in previous errors
Others
2.Balance at the beginning
402,600,000.00 485,678,443.26 131,442,909.11 542,374,627.44 1,562,095,979.81
of this year
3. The changes in this year
-10,621,631.63 -10,621,631.63
（decrease with“-”）
(1) Net profits -10,621,631.63 -10,621,631.63
(2) Other comprehensive
28
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
returns
Total (1) and (2) -10,621,631.63 -10,621,631.63
(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
402,600,000.00 485,678,443.26 131,442,909.11 531,752,995.81 1,551,474,348.18
current period
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
402,600,000.00 482,563,945.37 129,292,318.86 539,123,315.19 1,553,579,579.42
year
Add: changes in accounting
policies
29
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Changes in previous errors
Others
2.Balance at the beginning
402,600,000.00 482,563,945.37 129,292,318.86 539,123,315.19 1,553,579,579.42
of this year
3. The changes in this year
3,114,497.89 2,150,590.25 3,251,312.25 8,516,400.39
（decrease with“-”）
(1) Net profits 21,505,902.50 21,505,902.50
(2) Other comprehensive
3,114,497.89 3,114,497.89
returns
Total (1) and (2) 3,114,497.89 21,505,902.50 21,505,902.50
(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 2,150,590.25 -18,254,590.25 -16,104,000.00
1)Provision for surplus public
2,150,590.25 -2,150,590.25
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
402,600,000.00 485,678,443.26 131,442,909.11 542,374,627.44 1,562,095,979.81
current period
30
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year 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
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.
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Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
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.
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
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Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
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 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.
33
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
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 Group s 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.
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
34
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
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 previously recognized impairment loss is reversed and directly recognized in equity.
4)Derecognizing 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.
35
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
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 measurement of financial assets and liabilities
a) If the market for a financial instrument is active, an entity establishes fair value by using the quoted price in the active
market. In the active market, the Group measures 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 liabilities by using the current 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 liabilities.
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.
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
Judgment basis or amount standards of The receivables with more than RMB 3 million individual amount shall be
individually significant amounts recognized as the significant receivables;
The accruing method of the receivables with The bad debt provisions shall be accrued based on the difference
individually significant amounts 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 credit risk characteristics
Accounting aging
to classify the portfolio
36
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Use the amount characteristics of the receivables , if the transaction party
Related parties
is related parties characteristics need to classify the portfolio
Use the amount characteristics of the receivables, the credit of transaction
Risk-free party, the nature of the amounts and the safeguard mechanism of
transaction as characteristics to classify the portfolio
The accrual method for bad debt provision by portfolio
Accounting aging Accrue the bad debt provision by accounting aging analysis method
Related parties Accrue the bad debt provision by individual identification method
Risk-free Accrue the bad debt provision by individual identification method
1) The percentage of provision for bad debts based on the age of receivables as followings:
Accounting aging Accrual percentage of the Accrual percentage of other receivables (%)
receivables (%)
Within 1 year 1 1
1-2 years 5 5
2-3 years 20 20
Over 3 years 50 50
2) The other methods is applied to actuating 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 accrued bad debt
Accrual reason
provision on the basis of portfolio can not reflect its risk characteristic
The bad debt provisions should be accrued based on the difference
Accrual method
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.
37
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
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 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:
38
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
(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.
(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, Provideing 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.
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Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
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:
Estimated net
Useful
Category residual value Annual depreciation rate
life(years)
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 meters 8 3 12.13%
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
40
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
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.
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 capitalization 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 capitalization 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 capitalization of borrowing costs as part of the cost of a
qualifying asset should commence. Capitalization 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 be determined according to the
stated value in the investment contract or agreement, except for those of unfair value in the contract or agreement.
41
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Amortization method and period: The Group shall amortize 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 amortized 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;
(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;
42
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
(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, and welfare, social insurance, housing fund, labor union
expenditure, employee education expenditure and other relevant expenditures of service Provided 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 Provided by employee, the Group should record the employee benefits into
relevant cost and expense. For the compensation for employee due to cancellation of labor 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 labor contract between the company and employees.
For the termination plans with installment 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;
(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
43
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
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.
(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
44
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
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.
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.
45
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
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
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%，13%，11%，6%，3%
Business tax Revenue from property lease 5%
City construction tax Value-added tax payables, business tax 7%
Enterprise income tax(EIT) Current period taxable profit 15%
46
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Education surcharge Value-added tax payables, business tax 3%
Local education surcharge Value-added tax payables, business tax 2%
70% of cost of own property or revenue
Real estate tax 1.2% or 12%
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 type Registered address Nature of operation Registered capital
name
Production and
No.61, Weiguo road,
Liaoyang sales of bearing and
Limited Baita district Liaoyang 19,350,000.00
Bearing machinery
city
manufacturing
No.12, Shisanli Production and
Dalian
yongsheng street, sales of bearing and
Electrical Limited 10,000,000.00
free trade zone Dalian machinery
Equipment
city manufacturing
(Continued)
Company Business scope Total investment Holding % Voting % Consolidation
Name amounts
Production and
Liaoyang sales of bearing
17,337,259.95 100 100 Yes
Bearing and machinery
manufacturing
Manufacture and
sales of precise
Dalian
motor and car’s
Electrical 45,478,956.37 100 100 Yes
bearings,
Equipment
components and
related products
6. Notes to consolidated financial statements
47
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
6.1 Cash and cash in bank
2014.06.30 2013.12.31
Items Original Exchange Amount Original Exchange rate Amount
currency rate (RMB) currency (RMB)
Cash on
-- -- 144,752.65 -- -- 294,706.89
hand
RMB -- -- 144,752.65 -- -- 294,706.89
Cash in
-- -- 106,755,417.78 -- -- 60,322,052.24
bank
RMB -- -- 91,693,131.06 -- -- 40,579,655.69
USD 2,311,600.61 6.1528 14,222,816.23 3,237,689.79 6.0969 19,739,870.88
Euro 100,001.25 8.3946 839,470.49 300.00 8.4189 2,525.67
Other cash -- -- 39,818,929.79 -- -- 20,070,327.79
RMB -- -- 39,818,929.79 -- -- 20,070,327.79
Total -- -- 146,719,100.22 -- -- 80,687,086.92
6.2 Notes receivable
(1) Category of notes receivable
Items 2014.06.30 2013.12.31
Bank acceptance notes 140,346,331.78 79,689,279.98
Commercial acceptance notes 11,875,808.29 20,640,607.48
Total 152,222,140.07 100,329,887.46
(2) Up to June 30, 2014 No pledged notes receivable
(3) Notes receivable endorsed to other parties not mature at the end of June 2014
Note issuer Issuing date Maturity Amount
Wei Fang Shen Zhou Zhong
2014-02-12 2014-08-12 5,800,000.00
Gong Machinery Co.,Ltd
Shen Yang Railway Bureau 2014-05-08 2014-11-08 5,000,000.00
China Boat Zhong
Gong(Chong Qing)Hai
2014-05-05 2014-11-05 5,000,000.00
Zhuang Wind Power
Equipment Co.,Ltd.
Gan Su Hua Dian Yu Men
Wind power Development 2014-05-22 2015-05-14 5,000,000.00
Co.,Ltd
Shen Yang Railway Bureau 2014-05-08 2014-11-08 5,000,000.00
合计 — — 25,800,000.00
6.3 dividend receivable
48
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
5. Dividend receivable
2013.12.3 2014.06.3 Reason for
Items Increase Decrease Impairment
1 0 uncollection
Dividend receivable due 240,000.0 — —
240,000.00 0
within 1 year 0
Of which: — —
Shanghai ME — —
240,000.0
machine-electrical 240,000.00 0
0
equipment chain Ltd
Total 240,000.0 — —
240,000.00 0
0
6.4 Accounts receivable
(1) Category of accounts receivable
2014.06.30
Booking balance Provision for bad and doubtful debts
Items
Percentage Percentage
Amount Amount
(%) (%)
Accounts receivable with
individual significant amount
3,910,007.43 0.29% 3,910,007.43 100.00%
and identification separately bad
debt provision
Accounts receivable accrued bad
debt provision by portfolio
Accounting aging portfolio 1,325,238,985.18 97.21% 46,121,712.13 3.48%
Related parties portfolio 22,264,320.06 1.63%
Risk-free portfolio
Subtotal of portfolio 1,347,503,305.24 98.84% 46,121,712.13 3.42%
Accounts receivable with
individual insignificant amount
11,796,099.81 0.87% 11,796,099.81 100.00%
and identification separately bad
debt provision
Total 1,363,209,412.48 -- 61,827,819.37 --
(Continued)
2013.12.31
Items Booking balance Provision for bad and doubtful debts
Percentage(%) Percentage(%)
Amount Amount
Accounts receivable with individual
significant amount and identification 3,910,007.43 0.32% 3,910,007.43 100.00%
separately bad debt provision
49
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Accounts receivable accrued bad debt
provision by portfolio
Accounting aging portfolio 1,168,651,721.54 97.35% 46,132,926.18 3.95%
Related parties portfolio 16,086,866.09 1.34%
Risk-free portfolio
Subtotal of portfolio 1,184,738,587.63 98.69% 46,132,926.18 3.89%
Accounts receivable with individual
insignificant amount and
11,796,099.81 0.99% 11,796,099.81 100.00%
identification separately bad debt
provision
Total 1,200,444,694.87 -- 61,839,033.42 --
1) Accounts receivable with individual significant amount and identification separately bad debt provision at the end of June
30,2014
Booking Provision for Provision rate
Company name Reasons for provision
balance bad debts (%)
Baoding North China
A/R with over 5 years aging,
Machine & Electronic 3,910,007.43 3,910,007.43 100.00
unlikely to be collected
Equipment Co., Ltd.
Total 3,910,007.4
3,910,007.43 —
3 —
2) Accounts receivable accrued the bad debt provisions under accounting aging analysis method
Items 2014.06.30 2013.12.31
Percentage Percentage
Amount Provision for Amount Provision for
(%) (%)
bad debts bad debts
1,149,579,774.0 11,495,797.7
Within 1 year 84.33% 987,605,318.88 82.27% 9,876,053.19
8 4
1 to 2 years 91,560,581.10 6.72% 4,578,029.06 93,380,711.97 7.78% 4,669,035.60
2 to 3 years 40,004,765.55 2.93% 8,000,953.11 40,816,693.16 3.40% 8,163,338.63
22,046,932.2
Over 3 years 44,093,864.45 3.23% 46,848,997.53 3.90% 23,424,498.76
2
1,325,238,985. 46,121,712.1 1,168,651,721.5
Total -- -- 46,132,926.18
18 3 4
3) Individually insignificant amount accounts receivable but accrued bad debt provision separately at the end of June
30,2014
Booking Provision for Proportion
Company name Reasons for provision
balance bad debts (%)
Shenyang Sewerage Equipment A/R with over 5 years aging,
2,706,703.13 2,706,703.13 100.00
Co.,Ltd unlikely to be collected
A/R with over 3 years aging,
Shen Yang General Bearing Co., Ltd 2,452,138.58 2,452,138.58 100.00
unlikely to be collected
50
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
A/R with over 3 years aging,
Tiefa coal sector Group Company 2,352,760.15 2,352,760.15 100.00
unlikely to be collected
Shuangyashan Mining industry A/R with over 3 years aging,
1,368,257.55 1,368,257.55 100.00
Group Company unlikely to be collected
Chongqing Sailimeng electrical A/R with over 3 years aging,
650,758.88 650,758.88 100.00
machine LLC unlikely to be collected
A/R with over 3 years aging,
Qingdao Qingte Zhongli axle Co.,Ltd 590,898.99 590,898.99 100.00
unlikely to be collected
Other sporadic accounts receivable A/R with over 5 years aging,
1,674,582.53 1,674,582.53 100.00
unlikely to be collected
Total 11,796,099.81 11,796,099.81
(2) Write-off of accounts receivables during the reporting period
Related business or
Name Properties Amount Reason
Time not
China Heavy Automobile Ji Account difference
Goods selling 920,469.22
Nan Bridge-box Co.,Ltd over 8 years No
Nan Jing High Speed Gear
Goods selling 41,938.02 Quality problem No
Manufactory Co.,Ltd
Nan Jing high-extractive Gear
Goods selling 80,958.78 Quality problem No
Group Company
Tong Hua Oil Chemical Account difference
Goods selling 780.39 No
industry Machinery over 8 years
Total -- -- 1,044,146.41 -- --
(3) Accounts receivable due from shareholders holding over 5% (including 5%) of the Company’s shares
2014.06.30 2013.12.31
Company name
Amount Provision for bad debt Amount Provision for bad debt
Wazhou Group 6,903,361.61 6,903,361.61
Total 6,903,361.61 6,903,361.61
(4) Accounts receivable for the top 5 companies
Relationship with the
Company name Amount Aging Percentage in the total A/R(%)
Company
Top 1 Unrelated party 45,853,594.65 Within 1 year 3.40%
Top 2 Unrelated party 42,696,266.67 Within 1 year 3.10%
Top 3 Unrelated party 30,633,004.16 Within 1 year 2.20%
Top 4 Unrelated party 29,979,922.68 Within 1 year 2.20%
Within 1
Top 5 Unrelated party 28,630,199.97 2.10%
year;1-2years
Total — 177,792,988.13 — 13.00%
51
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
(4) Accounts receivable due from related parties
Percentage in the total
Company name Relationship with the Company Amount accounts receivable (%)
Wazhou Group Parent company 6,903,361.61 0.50%
Wazhou Group Special Other companies controlled by the
7,627,664.68 0.56%
Precision Bearing Co., Ltd same parent company
Wazhou Group(US) Bearing Other companies controlled by the
7,733,293.77 0.57%
Co.,Ltd same parent company
Total — 22,264,320.06 1.63%
6.4 Other receivables
(1) The categories of other receivable
2014.06.30
Booking balance Provision for bad and doubtful debts
Items
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 17,902,420.27 67.27% 4,013,105.80 22.42%
Related parties portfolio
Risk-free portfolio 8,708,936.70 32.73%
Subtotal of portfolio 26,611,356.97 100.00% 4,013,105.80 15.08%
Total 26,611,356.97 -- 4,013,105.80 --
(Continued)
2013.12.31
Booking balance Provision for bad and doubtful debts
Items
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 18,307,069.77 54.26% 4,013,105.80 21.92%
Related parties portfolio
52
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Risk-free portfolio 15,433,328.36 45.74%
Subtotal of portfolio 33,740,398.13 100.00% 4,013,105.80 11.89%
Total 33,740,398.13 -- 4,013,105.80 --
(2) Other receivables accrued the bad debt provisions under accounting aging analysis method
Items 2014.06.30 2013.12.31
Percentage Percentage
Amount Provision Amount Provision
(%) (%)
Within 1 year 7,892,769.91 29.66% 78,927.70 8,314,567.63 24.64% 83,145.67
1 to 2 years 1,770,443.29 6.65% 88,522.16 1,691,648.13 5.01% 84,582.40
2 to 3 years 913,158.66 3.43% 182,631.73 1,016,830.94 3.01% 203,366.19
Over 3 years 7,326,048.41 27.53% 3,663,024.21 7,284,023.07 21.60% 3,642,011.54
18,307,069.7
Total 17,902,420.27 -- 4,013,105.80 -- 4,013,105.80
7
No other receivables are due from shareholders holding over 5% (including 5%) of the Company’s shares at the end of June
30,2014.
(3) Other accounts receivable for the top 5 companies
Relationship with Percentage
Company name Amount Aging
the Company in the total AR(%)
Top 1 Unrelated party 5,843,915.27 Within 1year 22%
Top 2 Unrelated party 1,302,940.42 Within 4.9%
Top 3 Unrelated party 800,000.00 Within 3.0%
Top 4 Unrelated party 457,529.25 Within 1.7%
Top 5 Unrelated party 370,000.00 Within 3 year 1.4%
Total — 8,774,384.94 -- 33%
6.5 Advances to suppliers
(1) Aging of advances to suppliers
Items 2014.06.30 2013.12.31
Amount Percentage (%) Amount Percentage (%)
Within 1 year 25,660,048.66 75.24% 28,330,096.29 84.03%
1 to 2 years 3,150,191.83 9.24% 1,164,471.54 3.45%
2 to 3 years 2,773,731.57 8.13% 2,203,266.20 6.54%
Over 3 years 2,518,850.26 7.39% 2,015,070.11 5.98%
Total 34,102,822.32 -- 33,712,904.14 --
(2) Top 5 advances to suppliers
53
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Relationship with
Company name Amount Aging Pending reason
the Company
Top 1 Unrelated party 8,583,368.91 within 1 year trade unfinished
Top 2 4,978,345.85 within 1 year trade
Unrelated party
within 1 trade
Top 3 Unrelated party 4,916,307.76
year;1-2 year
Top 4 Unrelated party 2,731,127.10 2-3 year Goods quality issues
Top 5 Unrelated party 1,043,748.71 within 1 year trade unfinished
Total — 22,252,898.33 —
No advances to suppliers are due from shareholders holding over 5% (including 5%) of the Company’s shares at the end
of June 30,2014.
6.6 Inventories
(1) Categories of inventories
2014.06.30 2013.12.31
Item Provision for Provision for
Cost Net book value Cost Net book value
decline declines
Raw materials 175,766,899.33 2,385,945.20 173,380,954.13 156,386,450.54 2,385,945.20 154,000,505.34
Workingin
165,991,437.01 602,496.86 165,388,940.15 173,497,408.33 602,496.86 172,894,911.47
progress
Finished goods 844,497,493.59 56,976,781.48 787,520,712.11 924,735,016.96 56,976,781.48 867,758,235.48
Wrappage 357,145.77 357,145.77 2,080,576.50 2,080,576.50
59,965,223.5 1,256,699,452.3 59,965,223.5
1,186,612,975.70 1,126,647,752.16 1,196,734,228.79
Total 4 3 4
(2) Provision for decline in the value of inventories
Decrease
Items 2013.12.31 Increase Others 2014.06.30
Reverse
transferred
Raw materials 2,385,945.20 2,385,945.20
Finished goods 602,496.86 602,496.86
Working in progress 56,976,781.48 56,976,781.48
Total 59,965,223.54 59,965,223.54
6.7 Other current assets
Item 2014.06.30 2013.12.31
Rental 1,113,829.70 908,658.20
Over paid income tax 1,855,337.56 1,855,337.56
Over paid added value tax 8,992.81
Total 2,969,167.26 2,772,988.57
54
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
6.8 Investment in associated company
Monetary unit: RMB Ten Thousand Yuan
Total assets as Total liabilities Total net assets Total sales
Holding Voting Net profits in
Investee at June as at June as at June revenue in
% % report period
30,2014 30,2014 30,2014 report period
Associated
— — — — — — —
company
Dalian SKF
Wazhou 268,375,628. 222,228,464.2 93,263,566.5
49% 49% 46,147,164.78 4,614,725.69
Bearings 99 1 1
Co., Ltd.
6.9 Long-term equity investments
(2) Long-term equity investments under cost and equity method
Investee Holding% Voting% 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 95,060,000.00
Sub-total — — 95,060,000.00
Total — — 97,060,000.00
(Continued)
Cash dividends received
Investees 2013.12.31 Change amount 2014.06.30
in report period
—
— —
Cost method —
Shanghai ME machine-electrical — —
2,000,000.00 2,000,000.00
equipment chain Ltd. —
—
2,000,000.00 2,000,000.00 —
Sub-total —
Equity method —
Dalian SKF Wazhou Bearings Co.,
106,272,431.11 2,261,215.59 108,533,646.70 —
Ltd.
Sub-total 106,272,431.11 2,261,215.59 108,533,646.70 —
Total 108,272,431.11 2,261,215.59 110,533,646.70 —
6.9 Fixed assets
(1) Fixed assets by categories
Items 2013.12.31 Increase Decrease 2014.06.30
55
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Cost 1,553,083,323.15 8,922,266.83 985,669.07 1,561,019,920.91
Buildings 387,096,282.69 361,705.52 387,457,988.21
Machinery 901,974,591.72 3,489,474.67 440,195.26 905,023,871.13
Transportation
19,876,916.92 545,473.81 19,331,443.11
equipment
Electronic
70,266,205.61 1,721,474.74 71,987,680.35
equipment
Others 173,869,326.21 3,349,611.90 177,218,938.11
Accumulated
977,851,923.54 38,089,355.14 295,981.22 1,015,645,297.46
deprecation
Buildings 177,390,093.89 6,091,815.29 183,481,909.18
Machinery 586,510,794.50 24,476,389.97 149,447.72 610,837,736.75
Transportation
13,561,031.62 679,322.68 146,533.50 14,093,820.80
equipment
Electronic
58,027,520.72 1,976,528.08 60,004,048.80
equipment
Others 142,362,482.81 4,865,299.12 147,227,781.93
Net book value 575,231,399.61 545,374,623.45
Buildings 209,706,188.80 203,976,079.03
Machinery 315,463,797.22 294,186,134.38
Transportation
6,315,885.30 5,237,622.31
equipment
Electronic
12,238,684.89 11,983,631.55
equipment
Others 31,506,843.40 29,991,156.18
Provision for
2,739,277.05 2,739,277.05
impairment
Buildings
Machinery 2,538,117.54 2,538,117.54
Transportation
200,000.00 200,000.00
equipment
Electronic
equipment
Others 1,159.51 1,159.51
Booking value 572,492,122.56 1,159.51
Buildings 209,706,188.80 542,635,346.40
Machinery 312,925,679.68 203,976,079.03
Transportation
6,115,885.30 291,648,016.84
equipment
56
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Electronic
12,238,684.89 5,037,622.31
equipment
Others 31,505,683.89 11,983,631.55
At the end of June 30,2014 the increase includes the assets which were transferred from construction in progress
amounted to RMB5,049,045.08,
6.10 Construction in progress
(1) Details of Construction-in-progress
Items 2014.06.30 2013.12.31
Book Provision for Provision for
Book value Book balance Book value
balance impairment impairment
M250Grinding Machine
130,730.53 130,730.53 130,730.53 130,730.53
Improvement
Forked truck 1,739,365.29 1,739,365.29 1,739,365.29 1,739,365.29
Improvement of plant 9,262,952.38 9,262,952.38 7,370,997.06 7,370,997.06
Installation of super
1,312,460.84 1,312,460.84 1,280,668.30 1,280,668.30
finish machine
Improvement of finished
10,285,752.92 10,285,752.92 10,081,207.24 10,081,207.24
goods storage
Dalian industry park
19,521,623.66 19,521,623.66 17,791,792.04 17,791,792.04
project
Crane Project 2,943,466.97 2,943,466.97 2,860,733.35 2,860,733.35
Improvement of
6,215,944.07 6,215,944.07 3,459,601.61 3,459,601.61
two-finished products
Computer Project 162,841.97 162,841.97 1,535,381.58 1,535,381.58
Improvement of
42,326,575.95 42,326,575.95 19,150,962.11 19,150,962.11
precision roller branch
Improvement of Liao
14,627,958.92 14,627,958.92 13,916,307.14 13,916,307.14
zhou
automobile
1,757,080.22 1,757,080.22 1,835,259.09 1,835,259.09
improvement
Improvement
15,173,673.95 15,173,673.95 14,748,946.41 14,748,946.41
of grinding machine
Grinding product line 12,808,307.54 12,808,307.54 12,449,271.43 12,449,271.43
Improvement of
39,540,297.03 39,540,297.03 31,672,411.92 31,672,411.92
seven-finished products
Heat treatment product
1,386,791.97 1,386,791.97 1,485,321.71 1,485,321.71
line
Digital Boring machine 1,927,130.76 1,927,130.76 1,873,327.72 1,873,327.72
Improvement of
820,843.12 820,843.12 785,812.85 785,812.85
exploration machinery
Improvement of special
4,948,161.20 4,948,161.20 4,251,393.54 4,251,393.54
large branch
Improvement of 90,354,246.05 90,354,246.05 82,262,814.56 82,262,814.56
57
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
one-finished products
Instruments 1,197,252.35 1,197,252.35 1,197,252.35 1,197,252.35
Medium sized deep
groove ball bearing 45,115,213.19 45,115,213.19 37,928,717.99 37,928,717.99
product line
Assembling line 18,949,681.57 18,949,681.57 18,007,638.86 18,007,638.86
others 11,045,947.78 11,045,947.78 15,356,547.94 15,356,547.94
Total 353,554,300.23 353,554,300.23 303,172,462.62 303,172,462.62
(2) Change in the significant construction in progress
Construction name 2013.12.31 Increase Decrease 2014.06.30
Transferred to fixed
others
assets
M250Grinding
Machine Improvement 130,730.53 - - - 130,730.53
Forked truck 1,739,365.29 - - - 1,739,365.29
Improvement of plant 7,370,997.06 1,891,955.32 - - 9,262,952.38
Installation of super
finish machine 1,280,668.30 31,792.54 - - 1,312,460.84
Improvement of
finished goods storage 10,081,207.24 204,545.68 - - 10,285,752.92
Dalian industry park
project 17,791,792.04 1,739,835.62 - 10,004.00 19,521,623.66
Crane Project 2,860,733.35 82,733.62 - - 2,943,466.97
Improvement of
two-finished products 3,459,601.61 2,756,584.97 242.51 - 6,215,944.07
Computer Project 1,535,381.58 - 1,372,539.61 - 162,841.97
Improvement of
precision roller branch 19,150,962.11 23,271,485.61 66,256.40 29,615.37 42,326,575.95
Improvement of Liao
zhou 13,916,307.14 711,651.78 - - 14,627,958.92
American automobile
improvement 1,835,259.09 55,925.77 91,102.56 43,002.08 1,757,080.22
Improvement
of grinding machine 14,748,946.41 424,727.54 - - 15,173,673.95
Grinding product line 12,449,271.43 359,040.84 4.73 - 12,808,307.54
Improvement of
seven-finished
products 31,672,411.92 11,590,324.49 3,130,039.38 592,400.00 39,540,297.03
Heat treatment
product line 1,485,321.71 10,048.15 - 108,577.89 1,386,791.97
Digital Boring machine 1,873,327.72 53,803.04 - - 1,927,130.76
Improvement of
exploration machinery 785,812.85 35,030.27 - - 820,843.12
Improvement of
special large branch 4,251,393.54 840,357.41 143,589.75 - 4,948,161.20
Improvement of
one-finished products 82,262,814.56 8,144,231.49 52,800.00 - 90,354,246.05
58
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Instruments 1,197,252.35 - - - 1,197,252.35
Medium sized deep
groove ball bearing
product line 37,928,717.99 7,186,495.20 - - 45,115,213.19
Assembling line 18,007,638.86 942,042.71 - - 18,949,681.57
others 15,356,547.94 192,470.14 4,118,130.02 11,045,947.78
Total 303,172,462.62 60,332,612.05 5,049,045.08 4,901,729.36 353,554,300.23
(Continued)
%of Including:
investm Accumulated Accumulated Interest
Construction Sourceof
Constructionname Budget ent capitalized capitalized capitalization
progress(%) funds
against interest interestin rate
budget 2011
M250Grinding Loan/Sel
Machine f
Improvement 737,500.00 financing
Loan/Sel
Forked truck f
1,589,700.00 financing
Loan/Sel
Improvement of
f
plant
8,970,026.78 financing
Installation of Loan/Sel
super finish f
machine 6,013,996.00 financing
Improvement of Loan/Sel
finished goods f
storage 11,905,070.60 financing
Loan/Sel
Dalian industry
f
park project
42,738,036.61 financing
Loan/Sel
Crane Project f
3,041,975.00 financing
Improvement of Loan/Sel
two-finished f
products 8,462,672.00 financing
Loan/Sel
Computer Project f
1,968,222.00 financing
Improvement of Loan/Sel
precision roller f
branch 20,316,126.00 financing
Loan/Sel
Improvement of
f
Liao zhou
19,682,175.00 financing
automobile Loan/Sel
improvement 2,030,970.00 f
59
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
financing
Improvement Loan/Sel
of grinding f
machine 20,258,600.00 financing
Loan/Sel
Grinding product
f
line
24,050,000.00 financing
Improvement of Loan/Sel
seven-finished f
products 66,584,851.00 financing
Loan/Sel
Heat treatment
f
product line
1,622,900.00 financing
Loan/Sel
Digital Boring
f
machine
5,974,500.00 financing
Improvement of Loan/Sel
exploration f
machinery 2,150,600.00 financing
Improvement of Loan/Sel
special large f
branch 6,000,330.00 financing
Improvement of Loan/Sel
one-finished f
products 107,599,461.00 financing
Loan/Sel
Instruments f
2,304,760.00 financing
Medium sized deep Loan/Sel
groove ball bearing f
product line 59,660,000.00 financing
Loan/Sel
Assembling line f
21,536,000.00 financing
Loan/Sel
others f
19,193,314.81 financing
Total 464,391,786.80
6.11 Intangible assets
Items 2013.12.31 Increase Decrease 2014.06.30
Cost 171,131,093.34 — 171,131,093.34
Land use right 165,422,429.50 - - 165,422,429.50
ERP software 5,085,843.33 - 5,085,843.33
Others 622,820.51 - 622,820.51
Amortization 31,568,006.43 2,303,934.16 — 33,871,940.59
Land use right 26,979,766.63 2,026,137.76 29,005,904.39
60
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
ERP software 3,992,840.86 254,292.12 4,247,132.98
Others 595,398.94 23,504.28 618,903.22
Net book value 139,563,086.91 -2,303,934.16 137,259,152.75
Land use right 138,442,662.87 -2,026,137.76 136,416,525.11
ERP software 1,093,002.47 -254,292.12 838,710.35
Others 27,421.57 -23,504.28 3,917.29
Provision for impairment
Land use right
ERP software
Others
Book value 139,563,086.91 -2,303,934.16 137,259,152.75
Land use right 138,442,662.87 -2,026,137.76 136,416,525.11
ERP software 1,093,002.47 -254,292.12 838,710.35
Others 27,421.57 -23,504.28 3,917.29
Note: The increased accumulated amortization of this year includes normal amortization of intangible assets for RMB
2,303,934.16
6.12 Long-term deferred and prepaid expenses
Other
Item 2013.12.31 Increase Amortization 2014.06.30
decrease
Right to use premise of
724,852.75 - 33,915.18 - 690,937.57
Shanghai sales office
Fitment expense for
192,111.00 36,945.00 155,166.00
storeroom office in Shanghai
Total 724,852.75 192,111.00 70,860.18 846,103.57
6.13 Deferred tax assets and deferred tax liabilities
(1) Recognized deferred tax assets and deferred tax liabilities
Items 2014.06.30 2013.12.31
Deferred tax assets
Provision for impairment of assets 8,971,775.64 8,971,775.64
Difference due to depreciation of fixed
1,791,108.01 1,791,108.01
assets
Total 10,762,883.65 10,762,883.65
Deferred tax liabilities
Unrealized intragroup loss
Total
61
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
(2) Temporary differences
Items Amount of temporary differences
Taxable differences
Unrealized intragroup loss
Subtotal
Deductible differences
Provision for bad debts 24,890,103.98
Provision for impairment of fixed assets 2,739,277.05
Provision for decline in value of inventories 32,128,138.59
Difference due to depreciation of fixed assets 11,940,720.08
Subtotal 71,698,239.70
6.14 Details of provision for impairment of assets
Decrease
2013.12.31 Accrual
Reversal Otherstransfer 2014.06.30
Provision for bad
65,852,139.22
debts 11,214.05 65,840,925.17
Provision for decline
in value of 59,965,223.54
inventories 59,965,223.54
Provision for
impairment of fixed 2,739,277.05 2,739,277.05
assets
Total 128,556,639.81 128,545,425.76
6.15 Short-term loan
(1) Category of short-term loan
Loan category 2014.06.30 2013.12.31
Mortgage loan
Guaranteed loan
Credit loan 408,000,000.00 418,000,000.00
Total 408,000,000.00 418,000,000.00
6.16 Notes payable
Items 2014.06.30 2013.12.31
Commercial acceptance notes 246,718,550.00 90,347,340.00
Bank acceptance notes 3,077,993.78 2,900,000.00
Total 249,796,543.78 93,247,340.00
6.17 Accounts payable
62
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
(1) Accounts payable
Items 2014.06.30 2013.12.31
Including: within 1 year 1,058,678,058.88 914,048,531.49
over 1 year 203,257,712.50 252,417,585.15
Total 1,261,935,771.38 1,166,466,116.64
6.18 Advances from customers
(1) Advances from customers
Items 2014.06.30 2013.12.31
Including: within 1year 55,761,476.17 66,620,868.44
over 1 year 7,150,371.23 7,812,454.60
Total 62,911,847.40 74,433,323.04
(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 2013.12.31 Increase Decrease 2014.06.30
Salary, bonus, allowance and
742,117.04 110,188,795.93 110,303,124.53 627,788.44
subsidy
welfare 0.00 7,684,075.01 7,684,075.01 0.00
Social insurance 9,066,754.25 29,871,854.11 30,759,087.43 8,179,520.93
medical treatment insurance -103,096.14 8,011,185.81 8,156,000.01 -247,910.34
Endowment insurance 8,630,840.64 19,712,657.99 20,416,484.40 7,927,014.23
Unemployment insurance 276,899.07 984,000.20 1,001,638.22 259,261.05
Industrial injury insurance 201,544.45 873,695.02 890,773.14 184,466.33
Bear insurance 60,566.23 290,315.09 294,191.66 56,689.66
Housing fund 2,848,554.76 6,324,282.00 6,493,974.00 2,678,862.76
Other 6,996,627.65 1,081,531.58 2,105,168.87 5,972,990.36
Include: Labor union fund and
6,996,627.65 581,756.30 1,605,393.59 5,972,990.36
staff education funds
Compensate for relieve labor
117,926.00 117,926.00
relationship
Un-monetary welfare 381,849.28 381,849.28
Total 19,654,053.70 155,150,538.63 157,345,429.84 17,459,162.49
6.20 Taxes payable
Items 2014.06.30 2013.12.31
Value-added tax 4,005,036.57 4,057,635.57
Business tax 177,668.44 123,617.77
63
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Enterprise income tax 6,153.34 6,153.34
Individual income tax 283,795.94 68,747.03
City maintenance and construction tax 411,813.78 650,506.01
Real estate tax 29,633.15
Land use tax 350.00
Stamp tax 153,932.42 133,171.97
Education surcharge 298,804.76 472,093.58
River toll fee 220,472.16 218,868.28
Others 1,802.31
Total 5,557,677.41 5,762,579.01
6.21 Interest payable
Item 2014.06.30 2013.12.31
Interest payable on short loan 1,728,222.22
Total 1,728,222.22
6.22 Other payables
(1) Other payables
Item 2014.06.30 2013.12.31
Within 1year 78,381,400.88 54,775,559.67
over 1 year 75,762,964.46 81,897,839.15
Total 154,144,365.34 136,673,398.82
(2) Other payables due to shareholders who hold more than 5% (including 5%) of the Group’s shares
Company name 2014.06.30 2013.12.31
Wazhou Group 27,510,366.87 15,513,083.10
Total 27,510,366.87 15,513,083.10
6.22 Non-current liabilities due within one year
(1)Non-current liabilities due within one year
Item Closing Balance Opening Balance
Long-term loan due within one year 150,000,000.00 150,000,000.00
Total 150,000,000.00 150,000,000.00
(2) Long-term loan within one year
Category Closing Balance Opening Balance
Credit loan 150,000,000.00 150,000,000.00
Total 150,000,000.00 150,000,000.00
64
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
6.23 Other non-current liabilities
Item Closing Balance Opening Balance
Government subsidy within 1 year 4,011,103.83 4,011,103.83
Total 4,011,103.83 4,011,103.83
6.24 Long-term loan
(1) Category of long-term loan
Category 2014.06.30 2013.12.31
Credit loan 90,000,000.00 90,000,000.00
Total 90,000,000.00 90,000,000.00
(2) Details of long-term loan
Creditor Starting date Maturity Currency Interest rate (%) 2014.06.30 2013.12.31
Import and Export
2013-07-23 2015-07-22 RMB 90,000,000.00 —
Bank of China
6.24 Long-term payables
Items Loan 2013.12.31 Interest rate Interest 2014.06.30 Loan conditions
period (%) payable
Liaoyang Bureau of
— 100,000.00 — — 100,000.00 —
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 2013.12.31 Increase Decrease 2014.06.30
Special pollution treatment 221,698.98 221,698.98
Informatization Construction 100,000.00 100,000.00
Total 321,698.98 321,698.98
* 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
65
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
6.26 Other non-current liabilities
Item 2014.06.30 2013.12.31
Improvement subsidy 1,842,499.97 2,210,999.97
Compensation for plants moving 36,507,183.61 37,859,301.55
Development of intelligent manufacturing equipment subsidies 4,000,000.00 4,000,000.00
Improvement of high-end bearing production subsidies 3,542,400.00 3,778,560.00
Support fund due to Liao Yang Company move into Liao Yang
4,584,756.00 4,584,756.00
development zones
Total 50,476,839.58 52,433,617.52
(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). the revenue should be recognized at RMB368,500.00 in the period.
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 the report peirod is RMB1,352,117.94
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.
The RMB 4,723,200 Yuan interest subsidy of “Improvement of bearing base in high-end equipment sector” is distributed
by Wafangdian Finance Bureau in 2013 for the year of 2011. The subsidy is specially used to improve the project of
improvement of bearing base in high-end equipment sector. The item is amortized within 10 years and 236,160.00RMB is
recognized in the current year.
The 4,877,400.00 Yuan,in the other un-flow debt,the “Support fund due to Liao Yang Company move into Liao Yang
development zones” is distributed by the Liaoyang Economic and Development district Bureau of Finance in 2013. no revenue
has been recognized in current period..
(2) Government subsidy
Amounts Other
Reason for
Government subsidy Opening Balance recognized into change
Increase Closing Balance reimburseme
category current profit or
nt
loss
Improvement subsidy 2,210,999.97 368,500.00 1,842,499.97 Investment
Compensation for
37,859,301.55 1,352,117.94 36,507,183.61 Investment
plants moving
Development of
intelligent
4,000,000.00 4,000,000.00 Investment
manufacturing
equipment subsidies
Improvement of
high-end bearing 3,778,560.00 236,160.00 3,542,400.00 Investment
production subsidies
Support fund due to
4,584,756.00 4,584,756.00 Investment
Liao Yang Company
66
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
move into Liao Yang
development zones
Total 52,433,617.52 1,956,777.94 50,476,839.58 —
6.27 Share capital
2011.12.31 Change for current period 2013.12.31
Transferring
Issuin
Shareholders Distributi capital
g new
name/category Amounts % ng reserves to Others Subtotal Amounts %
share
shares share
s
capital
402,600,00 100.
Total shares — — — — — 402,600,000.00 100.00
0.00 00
6.28 Capital reserves
Items 2013.12.31 Increase Decrease 2014.06.30
Share premium 201,956,446.52 201,956,446.52
Other capital reserves 286,849,101.84 286,849,101.84
Total 488,805,548.36 488,805,548.36
6.29 Surplus reserves
Items 2013.12.31 Increase Decrease 2014.06.30
Statutory surplus reserve 110,852,290.20 110,852,290.20
Discretionary surplus reserve 20,590,618.91 20,590,618.91
Total 131,442,909.11 131,442,909.11
6.30 Undistributed profit
Items Amount Provision or distribution %
Ending balance of 2013 482,117,978.03
Closing balance of June 2014 464,668,791.95
6.31 Operating revenue & cost
(1) Operating revenue & cost
Items This period Last period
Revenue from main operation 1,446,138,957.62 1,287,811,506.03
Revenue from other operation 194,874,251.09 259,591,987.34
Cost of main operation 1,490,487,024.71 1,375,879,876.97
（2）Main operation - classified according to operation
Unit: Yuan
67
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
This period Last period
Items
Sales revenue Cost of sales Sales revenue Cost of sales
Export 140,992,686.32 134,917,023.46 136,810,764.89 131,410,972.37
Transportation
578,284,516.64 511,593,649.12 472,567,440.34 420,559,469.61
vehicle bearings
Special use bearings 312,384,405.97 299,963,874.67 259,475,453.06 230,375,981.41
General use bearings 361,832,862.04 314,640,313.02 373,504,645.60 328,113,952.07
Industrial Operations 52,644,486.65 58,789,239.75 45,453,202.14 51,961,915.61
Total 1,446,138,957.62 1,319,904,100.02 1,287,811,506.03 1,162,422,291.07
（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 1,393,494,470.97 1,261,114,860.27 1,242,358,303.89 1,110,460,375.46
Components 52,644,486.65 58,789,239.75 45,453,202.14 51,961,915.61
Total 1,446,138,957.62 1,319,904,100.02 1,287,811,506.03 1,162,422,291.07
（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 1,305,146,271.30 1,184,987,076.56 1,151,000,741.14 1,031,011,318.70
Domestic 140,992,686.32 134,917,023.46 136,810,764.89 131,410,972.37
Total 1,446,138,957.62 1,319,904,100.02 1,287,811,506.03 1,162,422,291.07
(5) Sales revenue from top 5 customers
Items Sales revenue Accounting for
proportion of total
Client 1 179,230,758.96 10.92
Client 2 69,191,111.13 4.22
Client 3 55,660,908.66 3.39
Client 4 54,197,059.66 3.30
Client 5 45,635,864.72 2.78
Total 403,915,703.13 24.61
6.32 Operating taxes and surcharges
Items This period Last period Base of calculation
Business tax 276,220.06 543,237.27 5% of rental revenue
City construction tax 3,438,828.25 3,022,854.34 7% of turnover tax
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Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Education surcharge 2,456,305.91 2,140,588.90 5% of turnover tax
Total 6,171,354.22 5,706,680.51
6.33 Selling expenses
Items This period Last period
Selling expenses 118,732,526.35 102,660,427.82
Total 118,732,526.35 102,660,427.82
6.34 Administrative expenses
Items This period Last period
Administrative expenses 35,930,304.10 34,739,784.53
Total 35,930,304.10 34,739,784.53
6.35 Financial expenses
Items This period Last period
Interest expenses 19,435,381.54 16,880,617.03
Less: interest income -6,090,557.66 -6,426,372.50
Add: Exchange losses 307,956.76 1,505,814.08
Less: Exchange income -2,069,590.92 -262,917.45
Add: Others expenditure 352,444.77 508,931.62
Total 11,935,634.49 12,206,072.78
6.36 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 2,261,215.59 5,031,527.35
Total 2,261,215.59 5,711,527.35
(2) Long-term equity investment income under equity method
Items This period Last period Reason for change
Total 2,261,215.59 5,031,527.35 —
Including: —
The associates profits increased
Dalian SKF Wazhou Bearings Co., Ltd. 2,261,215.59 5,031,527.35
compared with last year
6.37 Assets impairment losses
Items This period Last period
Loss of bad debts 1,032,932.36 476,002.39
69
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Total 1,032,932.36 476,002.39
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 assets 27,802.77 448,926.05
Income from debt restructuring 27,802.77 448,926.05
Government grants 645,467.57 436,592.70
Penalty income 2,376,811.94 2,156,909.17
Others 25,923.28 56,763.03
Total 1,292,533.99 450,373.69
(2) Government grants list
This period Last period Related with Non-recurring
Item
asset/income gain/loss
Allowance for upgrade 368,500.00 368,500.02 Related with asset Yes
Yes
Compensate for Dalian factory relocation 1,352,117.94 1,352,117.94 Related with asset
Yes
High-end equipment manufacturing Related with asset
bearing technology upgrade 200,000.06
projects
Yes
High-end equipment manufacturing
bearing technology upgrade 236,160.00 Related with asset
projects
Total 1,956,777.94 1,920,618.02
6.39 Non-operating expenses
This period Last period Amounts recognized into current
Items
non-recurring profit or loss
Loss on disposal of non-current assets 35,866.08
Loss from debt restructuring 791,703.96 1,206,652.18
Others 10,669.74 78,603.46
Total 802,373.70 1,321,121.72
6.40 Income tax expenses
(1) Income tax expenses
70
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Items This period Last period
Current income tax expenses 842,546.41
Total 842,546.41
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 parent
1 -17,449,186.08 22,832,072.23
company
2
Non-operating profit and loss attributable to
3,031,240.97 2,228,442.92
shareholders of parent company
Net profit after deducting non-operating profit and
3=1-2 -20,480,427.05 20,937,895.75
loss attributable to shareholders of parent
company
4 402,600,000.00 402,600,000.00
Total number of shares at the period begin
5 - -
The number of shares increased due to transferring
capital reserve into share capital or dividend
distribution of shares during report period (Ⅰ)
6 - -
The number of shares increased due to issuance of
new shares or debt for equity swap during the
report period (Ⅱ)
the number of shares (Ⅱ)from the next month to 7 - -
the end of the report period for increase of shares
8 - -
The number of months decreased due to stock
repurchase or draw back stock during the report
period
9 - -
The number of months from the next month to the
end of the report period for decrease of shares
10 - -
The number of shares for decrease of shares
11 - -
Duration of the period in terms of month
12=4+5+6×7÷11
Weighted average number of ordinary shares
402,600,000.00 402,600,000.00
issued out
EPS – basis (Ⅰ) -8×9÷11-10
EPS – basis (Ⅱ) 13=1÷12 -0.04 0.06
14=3÷12 -0.05 0.05
Potential diluted interests of ordinary shares
recognized as expense
15 - -
Transfer fee
16 - -
EIT rate
17 - -
Weighted average amount of ordinary shares
increased due to warrant, share options
71
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
EPS – diluted (Ⅰ) 18 - -
19=[1+(15-16)×(1-17) -0.04 0.06
EPS – diluted (Ⅱ) ]÷(12+18)
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 160,754.26
Allowance for exhibition place 20,034.00
Waste material income 768,913.10
Return of reserve fund, deposit etc. 5,907,014.36
Total 6,856,715.72
2) Other cash paid relating to operating activities
Items amount
Travel expenses 12,375,169.88
Rent expense 16,938,756.96
Freight service expense 10,718,256.31
Conference expense 8,359,293.55
Collection and payment for others 9,780,040.50
Office expense 4,157,457.04
Market development expense 1,744,933.96
Guard and fire fighting expense 1,650,000.00
Business promotion expense 3,649,883.73
Total 19,867,301.34
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 -17,449,186.08 22,832,072.23
Add: Provision for impairment of assets 1,032,932.36 476,002.39
Depreciation of fixed assets 38,102,595.42 38,647,366.84
Amortization of intangible assets 2,303,934.16 2,281,399.02
Amortization of long-term deferred expenses 70,860.18 33,915.18
Losses on disposal of fixed assets, intangible assets, and
-27,802.77 -413,059.97
long-term assets (income listed with”-”)
Financial expense (income listed with”-”) 11,935,634.49 12,206,072.78
Investment loss (income listed with”-”) -2,261,215.59 -5,711,527.35
72
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Decrease of inventory (increase listed with”-”) 70,086,476.63 -35,392,230.32
Decrease of operating receivables (increase listed with”-”) -190,068,176.59 -221,007,090.03
Increase of operating payables (decrease listed with”-”) 142,437,198.09 165,753,664.30
Net cash flows arising from operating activities 56,163,250.30 -20,293,414.93
2. Significant investment and financing activities unrelated to
cash income and expenses
3. Net increase (decrease) of cash and cash equivalent
Ending balance of cash 106,900,170.43 77,158,499.73
Less: Opening balance of cash 60,616,759.13 60,004,306.25
Add: Ending balance of cash equivalent
Less: Opening balance of cash equivalent
Net increase of cash and cash equivalent 46,283,411.30 17,154,193.48
(3) Cash and cash equivalents
Items This period Last period
Cash 106,900,170.43 60,616,759.13
Including: Cash on hand 144,752.65
Bank deposit used for paying at any moment 106,755,417.78
Other cash used for paying at any moment
Cash equivalents
Including: Bond investment due within 3 months
Closing balance of cash and cash equivalents 106,900,170.43 60,616,759.13
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 address Business nature Legal Organization
company nature representative code
No. 1 North Gongji Manufacture and sales
State-owned
Wazhou Group Street, Wafangdian of bearing and Cong Hong 24238666-3
Limited
City, Dalian other equipments
73
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
2) Registered capital and its movement of parent company
Parent company 2013.12.31 Increase Decrease 2014.06.30
Wazhou Group 413,793,100.00 — — 413,793,100.00
3) Share held and its movement of parent company
Parent company Amount Share holding(%)
2014.06.30 2013.12.31 2014.06.30 2013.12.31
Wazhou Group 244,000,000.00 244,000,000.00 60.61 60.61
(2) Subsidiaries
Subsidiaries Enterprise Registered address Legal representative Business nature Registered
nature
Manufacture and
No.61, Weiguo road,
Liaoyang sales of bearing
Limited Baita district Liaoyang Shao Yang 19,350,000.0
Bearing and machine
city
manufacture 0
No.12, Shisanli Manufacture and
Dalian Electrical yongsheng street, sales of bearing 10,000,000.0
Limited Shao Yang
Equipment free trade zone Dalian and machine 0
city manufacture
(Continue )
Subsidiary Organization code Stock holding percentage Voting percentage
Liaoyang Bearing 12199127-7 100.00 100.00
Dalian Electrical Equipment 55980608-0 100.00 100.00
(3) Associates
1) Associates
Associates Enterprise Registered address Legal representative Business nature
nature
Chinese-forei No.1, Phrase 1, Gongji
Dalian SKF Wazhou Manufacture and sales of
gn equity Street, Wafangdian Cong Hong
Bearings Co., Ltd. ball-surface rolling bearing
joint venture North
(Continued)
Associates Registered capital Share holding % Voting % Organization code
Dalian SKF Wazhou
Bearings Co., Ltd. 194 million 49.00 49.00 70218806-0
(4) Other related parties
Related party Name of related party Organization code
74
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
relationship
Other companies Dalian Wazhou Manufacturing Equipment Co., Ltd 24239291-6
controlled by the same Wazhou Steel Ball Company 76078283-4
parent company and
Wazhou Exact Forge Ltd., 76079407-7
ultimate controlling
party Wazhou Group Turnplate Bearing Ltd 66112524-9
Wazhou Group Exact Transmission Bearing Co., Ltd 66582213-x
Wazhou Group Equipment Technology engineering Co., Ltd 59443405-9
Wazhou Group Special Precision Bearing Co., Ltd. 56552248X
Wazhou Group American Bearing Co., Ltd
Others Dalian Wazhou Jinzhou Machinery Co., Ltd 57605032-6
Dalian Wazhou Fengyuan Machinery Co., Ltd 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., Ltd. 91,479,064.50 5.29% 112,310,394.31 6.69%
Other companies controlled by the same parent
company
Including: Wazhou Steel Ball Company 3,096,656.30 0.18% 3,389,924.16 0.20%
Wazhou Exact Forge Ltd., 136,587,261.89 7.89% 119,126,487.11 7.09%
Dalian Wazhou Manufacturing
11,307,415.15 0.65% 11,489,432.22 0.68%
Equipment Co., Ltd
Wazhou Group Turnplate Bearing Ltd 112,108,498.00 6.48% 53,622,175.28 3.19%
Wazhou Group Exact Transmission
53,168,501.14 3.07% 64,541,260.21 3.84%
Bearing Co., Ltd
Wazhou Group Special Precision
313,525.57 0.02%
Bearing Co., Ltd.
Wazhou Group Equipment Technology
15,432,733.33 0.89% 6,973,184.18 0.42%
engineering Co., Ltd
Dalian Wazhou Fengyuan Machinery
71,125,192.00 4.11% 52,435,533.52 3.12%
Co., Ltd
Dalian Wazhou Jinzhou Machinery Co.,
68,905,658.17 3.98% 79,578,698.23 4.74%
Ltd
Total
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
75
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Related party type and company This period Last period
Amount % Amount %
Parent company:
Including: Wazhou Group 622,270.14 0.04% 336,292.25 0.02%
Associates:
Including: Dalian SKF Wazhou Bearings Co., Ltd. 34,129,174.94 2.08% 24,494,835.47 1.58%
Other companies controlled by the same parent
company
Including: Wazhou Steel Ball Company 3,886,120.88 0.24% 2,859,622.43 0.18%
Wazhou Exact Forge Ltd. 179,230,758.96 10.92% 210,280,229.17 13.59%
Dalian Wazhou Manufacturing Equipment
661,955.32 0.04% 1,048,483.89 0.07%
Co., Ltd
Wazhou Group Turnplate Bearing Ltd 386,515.20 0.02% 10,719,178.30 0.69%
Wazhou Group Exact Transmission Bearing
13,147,922.82 0.80% 15,061,881.25 0.97%
Co., Ltd
Wazhou Group Special Precision Bearing
1,973,843.00 0.12% 1,912,565.79 0.12%
Co., Ltd
Wazhou Group American Bearing Co., Ltd 11,957,485.95 0.73%
Other Related parties
Dalian Wazhou Fengyuan Machinery Co.,
152,612.23 0.01% 3,055,438.89 0.20%
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) Provideing service
Related party type and company This period Last period
Amount % Amount %
Associates:
Including: Dalian SKF Wazhou Bearings Co., Ltd. 1,925,926.98 0.12% 2,092,088.47 0.13%
Other companies controlled by the same parent
company
Including: Wazhou Steel Ball Company 501,943.65 0.03% 367,343.50 0.02%
Wazhou Exact Forge Ltd. 97,256.60 0.01%
Wazhou Group Exact Transmission Bearing
1,349,653.11 0.08% 1,469,308.79 0.09%
Co., Ltd
Wazhou Group Special Precision Bearing
249,363.99 0.02% 76,417.67 0.00%
Co., Ltd
76
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Other Related parties
Dalian Wazhou Jin Zhou Machinery Co., Ltd 202,486.37 0.01% 1,583,618.90 0.10%
7.3 Related parties rent
7.4 Balances with related parties
(1) Accounts receivable due from related parties
Related party End of June 2014 Beginning of the year
Parent company 6,903,361.6 6,903,361.6
Including: Wazhou Group
Other companies controlled by the same parent company
Wazhou Group Special Precision Bearing Co., Ltd 7,627,664.68 7,627,664.68
Wazhou Group American Bearing Co., Ltd 7,733,293.77 7,733,293.77
(2)Accounts payable due to related parties
Related party This period Last period
Associates
Including: Dalian SKF Wazhou Bearings Co., Ltd. 81,721,462.87 70,617,717.03
Other companies controlled by the same parent company
Including: Wazhou Exact Forge Ltd. 19,899,619.78 41,757,360.03
Wazhou Group Turn plate Bearing Ltd 125,779,899.15 61,781,330.93
Wazhou Steel Ball Company 4,081,797.37 1,498,795.06
Wazhou Group Exact Transmission Bearing Co., Ltd 102,208,085.78 94,934,478.93
Dalian Wazhou Manufacturing Equipment Co., Ltd 8,271,090.75 4,923,156.28
Wafangdian Bearing Group Equipment Technology
9,480,662.96 24,955,761.96
Engineer Co., Ltd
Dalian Wazhou Jinzhou Machinery Co., Ltd 37,952,755.32 12,911,691.20
29,534,525.26 3,731,824.50
Dalian Wazhou Fengyuan Machinery Co., Ltd
8. Contingency
As at June 30,2014, the Group does not have any other contingencies.
9. Commitment
77
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
As at June 30,2014, 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
2014.06.30
Items Booking balance Provision
Amount % Amount %
Accounts receivable with individual significant amount and
3,910,007.43 0.29% 3,910,007.43 100.00%
identification separately bad debt provision
Accounts receivable accrued bad debt provision by portfolio
Accounting aging portfolio 1,295,267,075.59 96.88% 41,977,100.39 3.24%
Related parties portfolio 25,994,538.42 1.95%
Risk-free portfolio
Subtotal of portfolio 1,321,261,614.01 98.83% 41,977,100.39 3.18%
Accounts receivable with individual insignificant amount and
11,796,099.81 0.88% 11,796,099.81 100.00%
identification separately bad debt provision
Total 1,336,967,721.25 -- 57,683,207.63 --
(Continued)
2013.12.31
Items Booking balance Provision
Amount % Amount %
Accounts receivable with individual significant
amount and identification separately bad debt 3,910,007.43 0.33% 3,910,007.43 100.00%
provision
Accounts receivable accrued bad debt provision by
portfolio
Accounting aging portfolio 1,156,136,444.23 96.55% 41,988,314.44 3.63%
Related parties portfolio 25,628,530.42 2.13%
Risk-free portfolio
Subtotal of portfolio 1,181,764,974.65 98.68% 41,988,314.44 3.55%
78
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Accounts receivable with individual insignificant
amount and identification separately bad debt 11,796,099.81 0.99% 11,796,099.81 100.00%
provision
Total 1,197,471,081.89 -- 57,694,421.68 --
1) Individually significant amounts of accounts receivable accrued the bad debt provision separately at the end of June
30,2014
Provision for Proportion
Debtors name Booking balance Reasons for provision
bad debts (%)
Baoding North China Machine & A/R with over 5 years aging,
3,910,007.43 3,910,007.43 100.00%
Electronic Equipment Co., Ltd unlikely to be 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
2014.06.30 2013.12.31
Items
Amount % Provision Amount % Provision
Within 1 year 1,130,694,339.88 84.57% 11,306,943.40 984,412,200.17 82.21% 9,844,122.00
1-2 years 88,557,885.45 6.62% 4,427,894.27 92,785,902.07 7.75% 4,639,295.10
2-3 years 39,217,208.03 2.93% 7,843,441.61 39,880,912.19 3.33% 7,976,182.44
Over 3 years 36,797,642.23 2.75% 18,398,821.12 39,057,429.80 3.26% 19,528,714.90
3) Individually insignificant amount accounts receivable but accrued bad debt provision separately at the end of June
30,2014
Provision for Proportion
Company name Booking balance Reasons for provision
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 2,452,138.58 100.00%
unlikely to be collected
Bearing Co., Ltd
Tiefa coal sector A/R with over 3 years aging,
2,352,760.15 2,352,760.15 100.00%
unlikely to be collected
Group Company
Shuangyashan Mining
A/R with over 3 years aging,
industry Group 1,368,257.55 1,368,257.55 100.00%
unlikely to be collected
Company
Chongqing Sailimeng A/R with over 3 years aging,
650,758.88 650,758.88 100.00%
unlikely to be collected
electrical machine LLC
Qingdao Qingte A/R with over 3 years aging,
590,898.99 590,898.99 100.00%
unlikely to be collected
Zhongli axle Co., Ltd
Other sporadic A/R with over 5 years aging,
1,674,582.53 1,674,582.53 100.00%
accounts receivable unlikely to be collected
79
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Total 11,796,099.81 11,796,099.81 -- —
(2) Write-off of accounts receivable during the reporting period
Related business or
Name Properties Amount Reason
Time not
China Heavy Automobile Ji Account difference
Goods selling 920,469.22
Nan Bridge-box Co.,Ltd over 8 years No
Nan Jing High Speed Gear
Goods selling 41,938.02 Quality problem No
Manufactory Co.,Ltd
Nan Jing high-extractive Gear
Goods selling 80,958.78 Quality problem No
Group Company
Tong Hua Oil Chemical Account difference
Goods selling 780.39 No
industry Machinery over 8 years
合计 -- -- 1,044,146.41 -- --
(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 bad debt Amount Provision for bad debt
Wazhou Group 6,903,361.61 6,903,361.61
Total 6,903,361.61 6,903,361.61
(4)Accounts receivable for the top 5 companies
Relationship with Percentage
Company name Amount Aging
the Company in the total AR(%)
TOP 1 Unrelated party 45,853,594.65 Within 1 year 3.43%
Within 1 year
TOP 2 Unrelated party 42,696,266.67 3.19%
1-2years
TOP 3 Unrelated party 30,633,004.16 Within 1 year 2.29%
TOP 4 Unrelated party 29,979,922.68 Within 1 year 2.24%
TOP 5 Unrelated party 28,630,199.97 Within 1 year;1-2years 2.14%
Total — 177,792,988.13 — 13.29%
(5)Accounts receivable due from related parties
Company name Relationship with the Company Amounts % in the total AR
Wazhou Group Parent company 6,903,361.61 0.52%
Wazhou Group Special Precision Other companies controlled by
7,627,664.68 0.57%
Bearing Co., Ltd
the same parent company
Other companies controlled by
Wazhou Group American Co., Ltd 7,733,293.77 0.58%
the same parent company
Liao Zhou Subsidiary 3,730,218.36 0.28%
Total — 25,994,538.42 1.95%
80
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
12.2 Other receivables
(1) The category of other receivable
2014.06.30
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 11,972,879.14 57.89% 1,347,121.11 11.25%
Related parties portfolio
Risk-free portfolio 8,708,936.70 42.11%
Subtotal of portfolio 20,681,815.84 100.00% 1,347,121.11 6.51%
Other receivables with individual
insignificant amount and
identification separately bad debt
provision
Total 20,681,815.84 -- 1,347,121.11 --
（Continued）
2013.12.31
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 11,844,521.56 44.01% 1,347,121.11 11.37%
Related parties portfolio
Risk-free portfolio 15,066,804.72 55.99%
Subtotal of portfolio 26,911,326.28 100.00% 1,347,121.11 5.01%
Other receivables with individual
insignificant amount and identification
separately bad debt provision
26,911,3
Total 26,911,326.28 -- 1,347,121.11
26.28
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Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
1) Other receivable accrued the bad debt provisions in the portfolio as accounting aging analysis method
2014.06.30 2013.12.31
Items
Amount % Provision Amount % Provision
37.82
Within 1 year 7,821,512.86 78,215.13 7,875,751.87 29.27% 78,757.52
%
1-2 years 1,570,443.29 7.59% 78,522.16 1,373,068.49 5.10% 68,653.42
2-3 years 333,592.25 1.61% 66,718.45 327,134.79 1.22% 65,426.96
10.87
Over 3 years 2,247,330.74 1,123,665.37 2,268,566.41 8.42% 1,134,283.21
%
Total 11,972,879.14 -- 1,347,121.11 11,844,521.56 -- 1,347,121.11
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(%)
Top 1 Unrelated party 5,843,915.27 Within 1 year 28.30%
Within 1 year
Top 2 Unrelated party 370,000.00 1.80%
Top 3 150,000.00 Within 1 year 0.70%
Unrelated party
Top 4 100,000.00 Within 1 year 0.50%
Unrelated party
Top 5 100,000.00 Within 1 year 0.50%
Unrelated party
Total — 6,563,915.27 — 31.80%
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
Amounts
Cost method — — —
Shanghai ME machine-electrical equipment chain
4.76 4.76 2,000,000.00
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 95,060,000.00
Total — — 124,876,216.32
82
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
(Continued)
Investee 2013.12.31 Increase Decrease 2014.06.30 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 Bearing 45,478,956.37 — — 45,478,956.37 —
Company Limited
Equity method — — — — —
Dalian SKF Wazhou
99,734,229.12 2,261,215.59 — 101,995,444.71 —
Bearings Co., Ltd.
Total 164,550,445.44 2,261,215.59 166,811,661.03 —
12.4 Operating revenue and cost
Items This period Last period
Revenue from main operation 1,445,719,557.96 1,284,660,133.07
Revenue from other operation 197,741,808.32 262,567,202.47
Cost of operation 1,643,461,366.28 1,547,227,335.54
Total 1,494,654,881.09 1,376,283,798.47
(1)Main operation - classified according to Industries
This period Last period
Industries
Sales revenue Cost of sales Sales revenue Cost of sales
Export 140,992,686.32 135,561,738.21 136,810,764.89 132,713,666.62
Domestic
Including: Transportation
578,284,516.64 511,593,649.12 472,567,440.34 420,559,469.61
vehicle bearings
Special use bearings 312,384,405.97 299,963,874.67 259,475,453.06 230,375,981.41
General use bearings 360,675,310.32 314,570,263.39 370,065,951.11 324,731,071.28
Industrial Operations 53,382,638.71 59,483,712.85 45,740,523.67 52,242,943.03
Total 1,445,719,557.96 1,321,173,238.24 1,284,660,133.07 1,160,623,131.95
(2) Main operation - classified according to product
This period Last period
Industries
Sales revenue Cost of sales Sales revenue Cost of sales
Bearing 1,392,336,919.25 1,261,689,525.39 1,238,919,609.40 1,108,380,188.92
Component 53,382,638.71 59,483,712.85 45,740,523.67 52,242,943.03
Total 1,445,719,557.96 1,321,173,238.24 1,284,660,133.07 1,160,623,131.95
83
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
(3 Main operation - classified according to area
This period Last period
Industries
Sales revenue Cost of sales Sales revenue Cost of sales
Export 140,992,686.32 135,561,738.21 136,810,764.89 132,713,666.62
Civil 1,304,726,871.64 1,185,611,500.03 1,147,849,368.18 1,027,909,465.33
Total 1,445,719,557.96 1,321,173,238.24 1,284,660,133.07 1,160,623,131.95
(4)Sales revenue from top 5 customers
Items Sales revenue Accounting for proportion of total
Client 1 179,230,758.96 10.91%
Client 2 69,191,111.13 4.21%
Client 3 55,660,908.66 3.39%
Client 4 54,197,059.66 3.30%
Client 5 45,635,864.72 2.78%
Total 403,915,703.13 24.59%
12.5 Investment income
(1) Source of investment income
Items This period Last period
Income from long-term equity investments under
680,000.00
cost method
Income from long-term equity investments under
2,261,215.59 5,031,527.35
equity method
Total 2,261,215.59 5,711,527.35
(2) Long-term equity investment income under equity method
Items This period Last period Reason for change
Total —
The associates profits
Including: Dalian SKF Wazhou
2,261,215.59 5,031,527.35 decreased compared
Bearings Co., Ltd.
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 -10,621,631.63 32,164,155.52
Add: Provision for impairment of assets 1,032,932.36 476,002.39
Depreciation of fixed assets 33,030,705.74 33,779,270.91
84
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
Amortization of intangible assets 2,137,554.12 2,115,032.69
Amortization of long-term deferred expenses 70,860.18 33,915.18
Losses on disposal of fixed assets, intangible assets, and
-253,987.77
long-term assets (income listed with”-”)
Financial expense (income listed with”-”) 12,175,479.92 12,170,694.57
Investment loss (income listed with”-”) -2,261,215.59 -5,711,527.35
Decrease of inventories (increase listed with”-”) 58,967,776.59 -45,669,907.24
Decrease of operating receivables (increase listed with”-”) -195,520,364.02 -198,479,075.80
Increase of operating payables (decrease listed with”-”) 158,523,624.37 148,985,566.98
Net cash flows arising from operating activities 57,535,722.04 -20,389,859.92
2. Significant investment and financing activities unrelated to
cash income and expenses
3. Net increase (decrease) of cash and cash equivalent
Ending balance of cash 104,313,968.24 74,651,596.06
Less: Opening balance of cash 56,478,876.74 57,459,164.76
Net increase of cash and cash equivalent 47,835,091.50 17,192,431.30
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 27,802.77
Government grants recorded into profit or loss during
2,376,811.94
current period
Profit or loss from debts restructuring -146,236.39
Others non-operating revenue and expense besides
1,307,787.53
the above items
Subtotal
Effect from income tax 534,924.88
Effect of minority interests (after tax)
Total 3,031,240.97 --
2
(1). Differences in net profit and net asset under domestic and international accounting standards
In RMB Yuan
Net profit attributable to the shareholders of the Net asset attributable to the shareholders of
listed company the listed company
Current term Amount of last term End of term Beginning of term
On Chinese Accounting
-17,449,186.08 22,832,072.23 1,487,517,249.42 1,504,966,435.50
Standard
Items and amounts adjusted on IAS
Under International -17,449,186.08 22,832,072.23 1,487,517,249.42 1,504,966,435.50
85
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
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 of the Net asset attributable to the shareholders of
listed company the listed company
Current term Amount of last term End of term Beginning of term
On Chinese Accounting
-17,449,186.08 22,832,072.23 1,487,517,249.42 1,504,966,435.50
Standard
Accounts and amounts adjusted according to overseas accounting standard
On IAS -17,449,186.08 22,832,072.23 1,487,517,249.42 1,504,966,435.50
2. Return on equity and earnings per share
Weighted average return Earnings per share (EPS)
Profit of report period
on net assets (%) Basic EPS Diluted EPS
Net profit attributable to shareholders of parent company -1.17% -0.04 -0.04
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
Opening Closing
No. Project Percentage Reason
Balance Balance
Mainly customer receivable increased and at the
1 Monetary fund 81.8% same time compression currency payment to
14,671.9 8,068.7
supplier.
In this term we increased long note for suppliers,
reduce sight bill payment, receivable increased at
2 Notes receivable 51.7%
15,222.2 10,033.0 the same time, causing larger notes receivable year
growth.
Mainly the risk-free host customers increase
Accounts goods, from the industry analysis, accounts
3 130,138.16 14.3%
receivable 113,860.6 receivable rise is mainly concentrated in the railway
industry, cars and wind power.
Mainly company carried out unauthorized to offset
4 Other receivables 2,259.83 -24.0%
2,972.7 the input tax 9.21 million Yuan of the end of 2013
Mainly company strengthens
to manage contracts, reduce
the finished products 80.24 million that is less than
5 inventory -5.9% at the start ，the company strengthen production
112,664.8 119,673.4
management, cut the production, reduce production
fund for the year 7.51 million, and reserves increase
from a year earlier
Unfinished project including: precision rolling body
transform an increase of 23.18 million Yuan, a
Projects under finished product transform an increase of 8.09
6 16.6%
construction 35,355.4 30,317.2 million, seven product transformation, an increase of
7.87 million medium-sized deep groove ball bearing
production line an increase of 7.19 million.
Mainly this increase for long note when payment to
7 Notes payable 24,979.7 9,324.7 167.9%
supplier, lead to growth larger notes payable .
Compression for the customer payment, annual
8 Accounts payable 126,193.6 116,646.6 8.2%
growth is in accounts payable
86
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
company adjusts structure, increases the orders ,
adjusts the structure of the market, expands
9 Operating income 164,101.3 154,740.3 6.0%
customers and channels, makes this bearing revenue
grew by 12.3% year on year.
prices of company product is fall 4.5%, the reduce
profit is 34.1 million Yuan. The costs is 82.5 Yuan,
10 149,048.7 137,588.0 8.3% fell to 1.4 Yuan, including: one hundred Yuan output
Operating cost
value is expected to cost is 48.7 Yuan, fell to 1.6
Yuan.
Salary is an increase of 4.08 million Yuan, the freight
is an increase of 7.85 million Yuan, the sea freight is
11 Cost of sales 11,873.3 10,266.0 15.7%
an increase of 1.85 million Yuan, use of trademark is
an increase of 1 million Yuan.
In the period, the company write-off the different
Asset impairment account with Zhong Qi Brige-box with amount of
12 103.3 47.6 117.0%
loss 0.91 million Yuan, with make loss as assets
depreciation increase.
Mainly because the SKF Wazhou profit ability
decrease sharply,which make the investment income
Return on
13 226.1 571.2 -60.4% decrease.Besides, in last period, the company
investment
received the 2008 to 2011 dividend from
ME with amount of 0.68 million Yuan.
Non-operating 。Mainly because Liao Zhou write-off account
14 436.9 355.0 23.1%
income payable increase with amount of 1.21 million Yuan.
Non-business The loss from debt recombined decrease with 0.41
15 80.2 132.1 -39.3%
expenses million Yuan compared with last period.
Income tax Mainly because the company is loss, the income tax
16 0.0 84.3 -100.0%
expenses is not withdrawn.
Mainly because the main business gross rate
decreases, profit space compressed. In the last half
17 Net profit (1,744.9) 2,283.2 -176.4%
year, the main business gross rate is 8.7%, which
decrease 1% compared with last period.
The cash by
selling goods,
18 69,901.1 63,744.7 9.7%
providing labor Mainly because the cash from the clients increase.
services received
1,pay the benefit award with amount of 5.78 million
Paid to the Yuan;2,salary increase with amount of 10 million
worker and the Yuan;3,pay the salesperson Q1 performance salary
19 17,129.2 14,974.4 14.4%
cash to pay for with amount of 0.84 million Yuan;4,the sale
the worker subsidiary pay the performance salary with amount
of 2 million Yuan.
Last period the company received the 2008 to 2011
Obtain
dividend from AME with amount of 0.68 million
investment
20 24.0 68.0 -64.7% Yuan, in the report period receive 2012 dividend with
income received
amount of 0.24 million Yuan(this is accounted in
in cash
2013).
Construction of
fixed assets,
Mainly because pay the Germany import machines
intangible assets
21 3,234.9 107.6 2907.5% with amount of 19.51 million Yuan, and the note
and other
payable expire with amount of 8.67 million Yuan.
long-term assets
and pay cash
Borrow money Mainly affected by loan transferred, which make the
22 33,800.0 51,600.0 -34.5%
received in cash cash received in the period decrease
Other related to In last period, the company received the financial
23 the financing 0.0 472.3 -100.0% subsidy transferred from WBGC with amount of
activities of cash 4.7232 million Yuan.
87
Wafangdian Bearing Co., Ltd（Wazhou B） 2014 Mid-year Report
received
Repayment of the
Mainly affected by loan transferred, which make the
24 debt payment by -35.9%
29,932.3 46,685.0 cash shall paid for loan in the period decrease.
cash
The impact of
exchange rate Mainly because the change rate in the report period
25 movements of -342.1% increase, which make CNY devalue, the change
116.4 -48.07
cash and cash income increase.
equivalents
Chapter X. List of reference documents
List of reference documents
1. The Accounting statements 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.
88
