Wafangdian Bearing Company Limited 2016 Midyear Report
Wafangdian Bearing Company Limited
2016 Midyear Report
2016-25
August 25, 2016
Wafangdian Bearing Company Limited 2016 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.
Besides the following directors, all the other directors attended the Board meeting and discussed the report.
Name Post Reasons Assignee name
Tang Yurong director Busy work Fang Bo
Wan Shouyi Independent director Busy work Zhang Li
The Company plans not to distribute cash dividends or bonus shares or turn capital reserve into share
capital.
Chairman Meng Wei , 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.
According to the relevant provisions of the "Shenzhen Stock Exchange Listing Rules", if the
company ‘s net profit attributable to shareholders of audit listed companies continue to be negative
by the year 2016, the company shares will be suspended from listing in the 2016 annual
announcement. Please the majority of investors of investment risks.
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 2016 Midyear Report
Table of Contents
Chapter I. Important Prompts, Table of Contents, and Definitions.............................. 1
Chapter II.Company Profile..........................................................................................4
Chapter III.Financial Highlights.................................................................................... 5
Chapter IV Directors Report.........................................................................................6
ChapterⅤ Significant Events.............................................................. 错误！未定义书签。
ChapterⅥ. Changes in Capital Stock and Shareholders...................... 错误！未定义书签。
Chapter Ⅶ. Directors, Supervisors, Senior Management and Staff....... 错误！未定义书签。
Chapter Ⅷ. Corporate Governance..................................................... 错误！未定义书签。
ChapterⅨ. Internal Control................................................................. 错误！未定义书签。
ChapterⅩ. Financial Report (Attachment)........................................... 错误！未定义书签。
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Wafangdian Bearing Company Limited 2016 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 1,2016–June 30,2016
Liaozhou Co.,Ltd Defined as Wazhou Liaoyang Bearing Manufacture Co.,Ltd
Dalian motor Defined as Dalian motor Bearing Co.,Ltd
SRB company Defined as Wazhou spherial roller bearing company limited
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
The Shareholders’Meeting Defined as Wafangdian Bearing Company Limited The
Shareholders’Meeting
Shen Jiao Suo Defined as Shen Zhen Stock Exchange
SRC Defined as China Securities Regulatory Commission
3
Wafangdian Bearing Company Limited 2016 Midyear Report
Chapter II.Company Profile
I. Company Information
Abbreviated name of the Stock code: 200706
Wazhou B
stock
Listing location of the
Shenzhen Stock Exchange
Company’s stock:
Chinese name of the
瓦房店轴承股份有限公司
Company
Abbreviation of Chinese
瓦轴股份公司
name
English name of the
Wafangdian Bearing Company Limited
Company
Abbreviation of English
WBC
name
Legal representative of the
Meng Wei
Company
Registered address No. 1 Beigongji Street, Wafangdian City, Liaoning Province, China.
P.C 116300
office address No. 1 Beigongji Street, Wafangdian City, Liaoning Province, China.
office P.C 116300
Website http//www.zwz-200706.com
E-mail zwz2308＠126.com
II.Contacts
Secretary of the Board Representative of StockA ffairs
Name Sun Najuan Ke Xin
No. 1 Beigongji Street, Wafangdian City, No. 1 Beigongji Street, Wafangdian City,
Correspondence address
Liaoning Province, China. 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
2015annual 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 2015 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 2015 annual report.
iv.Other relevant information
In the report period other relevant information is no change.
4
Wafangdian Bearing Company Limited 2016 Midyear Report
Chapter III. Financial Highlights
I.Main accounting data and indices
Are there any retrospective adjustments or restatement of financial information of previous year due to change of accounting
policies or correcting of accounting errors?
[ ] Yes [V] No
In RMB Yuan
+/-（％）comparing with the
current period previous period
previous period
Turnover(RMB) 1,125,455,031.98 1,168,093,679.34 -3.65%
Net profit attributable to shareholders of the
-44,024,185.93 -59,587,254.16 -26.12%
listed company(Yuan)
Net profit attributable to the shareholders of
the
-55,263,473.29 -65,404,823.42 -15.51%
listed company and after deducting of
non-recurring gain/loss(RMB)
Net Cash flow generated by business
-8,389,665.15 14,734,845.66 -156.94%
operation (RMB)
Basic earnings per share(Yuan/share) -0.11 -0.15 -26.67%
Diluted earnings per share(Yuan/share) -0.11 -0.15 -26.67%
Net return on equity(%) -3.32% -4.41% 1.09%
End of 2016.06.30 End of 2015.12.31 Changed over last year (%)
Total Assets (RMB) 3,520,139,949.23 3,523,969,203.48 -0.11%
Owner’s Equity Attributed to Shareholders of
1,304,440,789.40 1,348,464,975.33 -3.26%
ListedCompany(RMB)
II. Differences in accounting information under IAS and domestic accounting standard
No difference
III. Non-recurring gain/loss items and amounts
In RMB Yuan
Items Amount Remarks
Gain/loss of non-current assets
(includes the neutralized part of the asset impairment provision drawn 4,570,629.34
already)
Gains and losses included in the current period of government
subsidies, excluding those government grants which are closely related
5,575,349.68
to normal business and in line with national policy, or in accordance with
fixed standards or quantities
Debt restructuring gains and losses 1,972,518.59
Other non-business income and expenditures other than the above 480,334.81
Influenced amount of income tax 1,359,545.06
Total 11,239,287.36 --
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
5
Wafangdian Bearing Company Limited 2016 Midyear Report
Chapter IV Directors Report
I. Overview
In the first half of year,the macroeconomic downward pressure diminished, the industrial economy remains in the
doldrums, the bearing industry is still in negative growth,but the company has overcome the lack of market orders, sales
prices continue to decline, market competition and many other difficulties, has taken various measures to actively and steadily,
maintained a steady business development.
At the end of June 30, company's total assets is 3.25014 billion Yuan, which decrease 0.11% compared with the
beginning of this year; Net assess attributing to shareholders of listed company 1.30444 billion Yuan, decreased by3.26%
compared with then beginning of this year; Operating income is 1.12546 billion Yuan, decrease by 3.65% compared with the
same period last year; Net profit of attributing to shareholders of the parent company is minus 44.02 million Yuan, in the last
year was 59.59 million Yuan.
II. Analysis of Main Business
Item Report period Last report period Changed Change reason
by %YoY
Main Business Income 1,125,455,031.98 1,168,093,679.34 -3.65%
Main Business Cost 1,043,602,026.69 1,068,509,261.57 -2.33%
Sales Expenses 84,742,685.88 98,588,255.39 -14.04%
Management Expenses 36,646,177.56 40,067,918.93 -8.54%
Financial Expenses 1.the loan interest decrease with 5.41
million Yuan,2.exchange gain and loss
12,390,741.72 20,655,027.80 -40.01% decrease with 5.04 million
Yuan.3.long-term loan interest increase
1.23 million Yuan.
Tax Expenses Because the SRB company is loss,the
264,036.88 -100.00%
tax expense is unprovision.
Spending on research and
development of the business 45,000,000.00 55,000,000.00 -18.18%
income ratio
The sale amount decrease,receiveable
Net Cash Flows from from customer decline,which make the
-8,389,665.15 14,734,845.66 -156.94%
Operating Activities Net Cash Flows from Operating
Activities decrease sharpe.
Net Cash Flows from
-25,642,335.69 -17,722,945.26 44.68%The cash pay to assets increase.
Investing Activities
Net Cash Flows from Mainly affected by loan change,the
68,025,342.68 -58,164,206.80 -216.95%
Financing Activities Repayment of borrowings decrease.
Net Increase in Cash and Net Cash Flows from Financing
35,385,469.18 -60,933,606.57 -158.07%
Cash Equivalents Activities increase.
Because the returned money by
Bills receivable 176,846,224.26 100,506,003.70 75.96%
bank acceptance increase.
Dividend reciivable with 240 thousand
Dividend reciivable 0.00 240,000.00 -100.00% Yuan from ME at the beginning of the
year
1. disposal of fixed assets income
increased with 3.69 million Yuan.2.
Non-operating revenue 14,004,273.12 6,894,300.08 103.13% Mainly because the fine income from
agency.3.the government subsidiary
increased with 3.08 million Yuan.
Non-operating cost 1,405,440.70 474,066.00 196.47%
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Wafangdian Bearing Company Limited 2016 Midyear Report
1.debt restruct loss increase with 580
thousand Yuan.2.personal injury
compensation with 550 thouand Yuan.
Other cash received relating
3,957,803.39 1,986,184.06 99.27%.the government subsidiary increase.
to operating activities
Net cash received from
disposal of fixed assets, Sale assets to WBGC,receive the
10,000,000.00 18,000.00 55,455.56%
intangible assets and other payment.
long-term assets
Cash paid to acquire fixed
assets, intangible assets and 35,882,335.69 6,490,945.26 452.81%Payment for grinding manchines
other long-term assets
Mainly because last year the company buy
Cash paid to acquire Dalian sikaifu ZWZ Bearing Co., Ltd. 51% of
11,250,000.00 -100.00% the equity, the issuing bank letter of credit of
investment
11.25 million yuan payment at maturity
Generations of forging discounted repayment
separately to the payment related to financing
Other proceeds relating to activities cash. At the same time, the
147,525,694.44
financing activities imputation in the purchase of goods and
receive services paid cash with 70.83 million
Yuan.
Affected by loan change, the repayment
Repayment of borrowings 287,000,000.00 488,000,000.00 -41.19% of borrowings decrease in the report
peirod.
Because the dollar exchange rate increase,
Effects of foreign exchange
1,392,127.34 218,699.83 536.55% the exchange profit increase, impact of the
rate changes on cash current dollar denominated bank deposits
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 2016,the domestic market was more competitive, price of product was failing, profit margins was becoming
narrowly.The international market competition was trending he domestic market, domestic competition internationalization
was serious day by day,sales price of bearing product continued to slide, These reasons constitute a bigger threat to improve
operation quality, cause the company did not finish business plan.
III. Main business composition
In RMB Yuan
+/-(%) of
+/-(%) of
Operating income Operating cost BOI operating +/-(%) of BOI
operating cost
income
By Industries
Export 185,404,198.78 171,817,900.02 7.33% -4.33% -7.78% 3.47%
Civil 313,045,519.50 309,100,505.47 1.26% -4.23% 2.48% -6.46%
Including: Traffic
234,876,679.63 209,419,001.52 10.84% -3.19% -5.13% 1.83%
Bearing
Special Bearing 264,036,944.51 223,609,548.98 15.31% -9.63% -9.51% -0.12%
Common
25,188,757.18 30,843,348.31 -22.45% 114.30% 109.50% 2.81%
Bearing
Industrial income 313,045,519.50 309,100,505.47 1.26% -4.23% 2.48% -6.46%
On Products
Bearing 997,363,342.42 913,946,955.99 8.36% -5.50% -4.38% -1.08%
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Wafangdian Bearing Company Limited 2016 Midyear Report
Industry
25,188,757.18 30,843,348.31 -22.45% 114.30% 109.50% 2.81%
operation
Region
Civil 837,147,900.82 772,972,404.28 7.67% -4.15% -1.43% -2.54%
Foreign 185,404,198.78 171,817,900.02 7.33% -4.33% -7.78% 3.47%
IV. Core competence analyzing
As the country's largest bearing technology and product r&d and manufacturing base, company has accumulated more
than seventy years practice experience in the field of bearings and related areas, set up perfect bearing technology
innovation system, maintain close cooperation with domestic scientific research institutes, colleges and universities. As the
main drafter of bearing industry a number of standard, company control the latest technology development trend in the
industry. In technology research and development, product manufacturing, marketing , customer services and other aspects
have established a significant advantage.
Company improve responsiveness to the market and customer personalized demand, in line with customer's
personalized design and needs of manufacturing processes balancing cost, delivery time and customer,
The company has complete product service system and 24-hour dynamic service ability product operating site. And was
praised with a good image of the "ten value-added services" by the majority customers. Company has strong manufacturing
capability and quality assurance capabilities, extensive services in railway, automobile, metallurgy, mining, and other
industries and fields.
Company has established strategic cooperative relations with key customers in domestic equipment applications, carry
out the depth of marketing through involvement in customer value engineer, set firmly up the company's brand and influence
in the domestic bearing market, the company has won the certification qualification of important target markets in the
international market , the international popularity established preliminary.
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 19,350,000 115,076,935.48 -48,220,600.98 78,874,398.15 -5,338,468.89 -3,648,342.18
Subsidiary
Bearing machine-electrical
equipment
Dalian Electrical Product and Sale 10,000,000 116,143,552.74 19,653,622.82 66,288,350.18 764,169.49 764,169.49
Subsidiary
Equipment Bearing
Wzhou
precision
spherical Joint-stock
Product and
roller Sales Spherical 194,000,000 243,863,379.97 226,056,372.94 51,235,049.19 -5,451,705.19 -5,348,869.95
bearing(Wafa Company Roller Bearing
ngdian)
Co.,Ltd.
3. Important Non-raised Capital’s Projects
Unit:0000’Yuan
Investment in
Total Plan Accumulated
Project the report Progress Earnings
Investment investment
period
8
Wafangdian Bearing Company Limited 2016 Midyear Report
The second
Imform the grinding ability of second generation wheel hub with
generation wheel 787 273 620 80.00%
150 thousand sets.
hub bearing
Precise roller
1,400 306 1,106 85.00% Provide matched roller for main product
improved
Large precise entity
550 14 147 30.00% Provide cage for Large precise bearing
cage
Heat treament and Improve the ability
660 187 478 60.00%
matched machines
Other projects 2,000 1,106 1,106 65.00% To ensure the bearing qulity and enhance productivity
Total 5,397 1,886 3,457 --
VI. Forecast for operation outstanding from 2016 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
Inapplicable
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
January 27,2016 Office Private investor Private investor
communication the company
Telephone The general information of
March9,2016 Office Private investor Private investor
communication the company
Telephone The general information of
March 17,2016 Office Private investor Private investor
communication the company
Telephone The general information of
April 27,2016 Office Private investor Private investor
communication the company
9
Wafangdian Bearing Company Limited 2016 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.
(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
Sales of asset
The Whether Therightassets
The debt is
Price（10 assets is totally Date of
The dealing assets
party sale
for
Sale date thousandYu Contrubut Influence to principle transactio totally
company
Pricing is related transferd or disclos The index
an） ion to ns changed or not ure
profit not
assets http：
and //www.cninfo.com.
liabilities cn
related value of Wafangdian
Detials can
Wazhou May Bearing Company
Group
with 18,2018
1,094.3 be found in net Yes
Limited
auto anncement assets. Affiliate
transfer Transaction
case Announcement of
bearing Assets Sale
VI.Implementation and Influence of Equity Incentives
□ Applicable √ Inapplicable
10
Wafangdian Bearing Company Limited 2015 Midyear Report
VII. Important Contracts and Implementation
1、The relate transactions related to the day-to-day operations.
The
More than
Percentage
Relative Approval the
Relative Principle Relative of The Way Of Market Disclosure Disclosure
Relative parties Relationship Content Amount(R amount approved
type of price Price accounted Account price Date Index
MB’0000) (RMB’0000) amount or
for similar
not
deals(%)
Merchandise Compon Justice and Cash Payment
Market price 257 0.17% 300 no
Procurement ents Equity or The Knot
Lease of Lease of Justice and Cash Payment
Market price 45 0.03% 22 Yes
Houses Houses Equity or The Knot
Other Companies Goods
Wazhou precision controlled by the same Sales of Justice and Cash Payment
and Market price 76 0.07% 70 Yes
Steel Ball controlling share holders goods Equity or The Knot
and the ultimate Materials
Company
controlling party Land Justice and Cash Payment
Land rent Market price 10 0.01% 20 no
rent Equity or The Knot
Heat
Provide Justice and Cash Payment
treatmen Market price 45 0.03% 300 no
Service Equity or The Knot
t
Merchandise Compon Justice and Cash Payment
Market price 8,093 5.25% 20,000 no
Procurement ents Equity or The Knot
Goods
Other Companies Sales of Justice and Cash Payment
and Market price 8,099 7.20% 21,000 no
the
Wazhou precision controlled byshare same goods
controlling holders Materials
Equity or The Knot
forging Ltd., and the ultimate Lease of Lease of Justice and Cash Payment
controlling party Market price 17 0.02% 55 no
Houses Houses Equity or The Knot
Land Justice and Cash Payment
Land rent Market price 28 0.02% 55 no
rent Equity or The Knot
Merchandise Producti Justice and Cash Payment
Market price 712 0.46% 1,500 no
Procurement on Equity or The Knot
Dalian Wazhou Other Companiessame
controlled by the Goods
Manufacturing Sales of Justice and Cash Payment
Equipment Co., controllingultimate holders goods
and the
share and
Equity
Market price 55 0.05% 400 no
or The Knot
Ltd Materials
controlling party
Merchandise Justice and Cash Payment
Equipment Market price 48 0.05% 1,800 no
Procurement Equity or The Knot
11
Wafangdian Bearing Company Limited 2015 Midyear Report
Other Companies Merchandise Bearing Justice and Cash Payment
Wazhou Group controlled by the same Market price 2,959 1.92% 5,000 no
Procurement Product Equity or The Knot
Turnplate Bearing controlling share holders
and the ultimate Sales of Justice and Cash Payment
Ltd Materials Market price 31 0.03% 200 no
controlling party goods Equity or The Knot
Merchandise Bearing Justice and Cash Payment
Market price 4,504 2.92% 9,500 no
Other Companies Procurement Product Equity or The Knot
Wazhou Group
precision controlled by the same Sales of Materials
Justice and
Market price 1,453 1.29% 6,000 no
Cash Payment
controlling share holders goods Equity or The Knot
Transmission and the ultimate Heat
Bearing Co., Ltd controlling party Provide Justice and Cash Payment
treatmen Market price 44 0.03% 0 Yes
Service Equity or The Knot
t
Goods
Sales of Justice and Cash Payment
and Market price 145 0.13% 600 no
goods Equity or The Knot
Materials
Wazhou Group Other Companies Lease of Lease of Justice and Cash Payment
Market price 26 0.02% 51 no
Precision special controlled by the same Houses Houses Equity or The Knot
controlling share holders
Bearing Company and the ultimate Land Justice and Cash Payment
Limited controlling party Land rent Market price 4 0.00% 9 no
rent Equity or The Knot
Heat
Provide Justice and Cash Payment
treatmen Market price 18 0.01% 100 no
Service Equity or The Knot
t
Other Companies controlled
Equipment technical Equipment
by the same controlling share Merchandise Justice and Cash Payment
engineering and Market price 1,261 0.82% 3,000 no
holders and the ultimate Procurement
service
Equity or The Knot
controlling party
Merchandise Bearing Justice and Cash Payment
Market price 2,531 1.64% 7,000 no
Procurement Product Equity or The Knot
Wafangdian Heat
Provide Justice and Cash Payment
Tongda Bearing treatmen Market price 0 0.00% 50 no
Other Related party Service Equity or The Knot
Manufacturing t
Co., Ltd Goods
Sales of Justice and Cash Payment
and Market price 12 0.01% 100 no
goods Equity or The Knot
Materials
Da Lian KOYO Other Related party Merchandise Justice and Cash Payment
Goods Market price 1,755 1.14% 4,000 no
Co., Ltd Procurement Equity or The Knot
Da Lian Wazhou Other Related party Merchandise Bearing Justice and Cash Payment
Market price 4,408 2.86% 10,000 no
Fengyuan Procurement Product Equity or The Knot
12
Wafangdian Bearing Company Limited 2015 Midyear Report
Machine Co.,Ltd Sales of Lease of Justice and Cash Payment
Market price 5 0.00% 11 no
goods huouse Equity or The Knot
Heat
Provide Justice and Cash Payment
treatmen Market price 0 0.00% 20 no
Service Equity or The Knot
t
Merchandise Bearing Justice and Cash Payment
Market price 4,148 2.69% 9,500 no
Procurement Product Equity or The Knot
Goods
Da Lian Wazhou Sales of Justice and Cash Payment
Other Related party and Market price 33 0.03% 150 no
Jin Zhou Machine goods Equity or The Knot
Materials
Co.,Ltd Lease of Lease of Justice and Cash Payment
Market price 40 0.04% 80 no
Houses Houses Equity or The Knot
Heat
Provide Justice and Cash Payment
treatmen Market price 5 0.00% 100 no
Service Equity or The Knot
t
Other Companies controlled
Wazhou group (USA) by the same controlling share Bearing Justice and Cash Payment
Sales of goods Market price 4,751 4.22% 13,000 no
bearing co., LTD holders and the ultimate Product Equity or The Knot
controlling party
Wazhou group Other Companies controlled
high-end by the same controlling share Bearing Justice and Cash Payment
Sales of goods Market price 378 0.34% 0 Yes
automobile holders and the ultimate Product Equity or The Knot
bearing co., LTD controlling party
Other Companies controlled
Da Lian North metal Goods
by the same controlling share Justice and Cash Payment
material trading Sales of goods and Market price 0 0.00% 9,000 no
center
holders and the ultimate
Materials
Equity or The Knot
controlling party
Merchandise justice and Cash Payment
product Market price 7,389 4.80% 16,000 no
Procurement Equity or The Knot
The controlling share Security
justice and Cash Payment
Wazhou Group holders and the ultimate and Fire Market price 165 0.11% 329 no
Equity or The Knot
controlling party Service
Accept
Announc
Service justice and Cash Payment
ement Market price 39 0.03% 80 no
Equity or The Knot
Service
Technol justice and Market price 270 0.18% 540 no Cash Payment
13
Wafangdian Bearing Company Limited 2015 Midyear Report
ogy Equity or The Knot
Develop
ment
Service
Tradema justice and Cash Payment
Market price 212 0.14% 500 no
rk Equity or The Knot
Lease of justice and Cash Payment
Market price 468 0.30% 1,900 no
Houses, Equity or The Knot
Land justice and Cash Payment
Market price 83 0.05% 524 no
rent Equity or The Knot
machime Cash Payment
467 0.30% 1,239 no
s rent or The Knot
Goods
Sales of Justice and Cash Payment
and Market price 1,788 1.59% 8,000 no
goods Equity or The Knot
Materials
Total 56,877 -- 152,105
Details of the rejection of the goods
already sold in big amount
non
In case the total amount of the regularrelated transaction incurred in
thereporting period has been predicted basedon categories, state the actual non
implementation of the in the reportingperiod (if any)
Cause of the big difference between the
transaction price and the market reference In-applicable
price. (if applicable)
14
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 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
VIII. Statements of the Supervisory Committee and Independent Directors (if applicable) on the “Non-standard
Auditors’ Report” issued by the CPA.
□ Applicable √ Inapplicable
IX. The implement of major contract and its performance
1. Deposit, contract and rent.
The content of rent can be found in part eleven “Related Parties Relationship and Transactions” section five“Related
rent”
X. Commitment made by sharehoder with over 5% shares in the report or happen before but last to the report
□ Applicable √ Inapplicable
XI. Hiring, firing certified public accountants
□ Applicable √ Inapplicable
XII. Punishment and rectification
□ Applicable √ Inapplicable
XIII. Suspension and terminated listig after the annual report disclosure.
□Yes √ No
XIV. Other important matters
□Yes √ No
15
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-yearal Report
ChapterⅥ. Changes in Capital Stock and Shareholders
Before Changes Changes in Shares After Changes
Shares Ratio New Conversio Ratio
Bonus n of
Shares Others Subtotal Shares
Shares Reserves
Issued
to Share
244,000,0
1.Non-tradable Shares 244,000,000 60.61% 60.61%
00
244,000,0
a. Promoters’ Shares 244,000,000 60.61% 60.61%
00
Including：State-owned 244,000,0
244,000,000 60.61% 60.61%
share 00
158,600,0
2.Tradable shares 158,600,000 39.39% 39.39%
00
158,600,0
b.B shares 158,600,000 39.39% 39.39%
00
402,600,0
3.Total 402,600,000 100% 100%
00
I. Changes in Capital Stock
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
7,325 0
of report period period with preferred stock
Shareholders with 5% or above Shares
Current Impawned or Frozen Shares
Ratio Total shares Increase or Non-current
shares
Name Nature Decrease in shares held
held
（%） held
hereportperiod
Status Amount
Wafangdian
State-owned 244,000,0
Bearing Group 60.61% 402,600,000
shareholder 00
Corporation
AKTIEBOLAGET Foreign
19.70% 79,300,000 79,300,000 Frozen 79,300,000
SKF shareholder
Domestic
Huang Junyue 1.01% 4,050,000
shareholder
BOCI
Foreign
SECURITIES 0.55% 2,220,000
shareholder
LIMITED
Domestic
Jin Yunhua 0.51% 2,072,629
shareholder
Domestic
Hu Xiaofeng 0.47% 1,879,277
shareholder
GUOTAI JUNAN Foreign
0.45% 1,795,540
SECURITIES(HO shareholder
16
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-yearal Report
NGKONG)
LIMITED
CREDIT SUISSE
Foreign
(HONG KONG) 0.26% 1,049,915
shareholder
LIMITED
MAN,KWAI WING Foreign private
0.18% 713,101
文贵荣 shareholde
Domestic
Miao Jun 0.14% 552,700
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
Categories Amount
AKTIEBOLAGET SKF 79,300,000 B 79,300,000
Huang Junyue 4,050,000 B 4,050,000
BOCI SECURITIES LIMITED 2,220,000 B 2,220,000
Jin Yunhua 2,072,629 B 2,072,629
Hu Xiaofeng 1,879,277 B 1,879,277
GUOTAI JUNAN B
1,795,540 1,795,540
SECURITIES(HONGKONG) LIMITED
CREDIT SUISSE (HONG KONG) B
1,049,915 1,049,915
LIMITED
MAN,KWAI WING 文贵荣 713,101 B 713,101
Miao Jun 552,700 B 552,700
Zhou Junlin 539,600 B 539,600
Explanation for the Affiliated Relations There was no relationship and consistent activities between the first big shareholder and
or United Action of the Top Ten other shareholders or the top ten common stock holders; The relationship among other
Shareholders and the Top Ten Tradable shareholders, top ten circulation shareholders, top ten circulation shareholders and other
Shareholders shareholders was not clear.
iii Change of Controlling Shareholder Actual Controller in the Report Period
□ Applicable √ Inapplicable
ChapterⅦ. 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
Wu Chunyou Independent Director expiration May 18,2016
Liu Yuping Independent Director Elected May 18,2016
17
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 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 137,341,499.74 116,316,020.57
Financial assets held-for-trading
Bills receivable 176,846,224.26 100,506,003.70
Account receivable 1,023,728,246.54 993,933,326.37
Account paid in advance 36,428,881.73 32,673,623.77
Interest receivable
Dividend reciivable 240,000.00
Other receivables 23,335,159.29 21,462,837.65
Inventory 1,023,253,563.94 1,075,275,456.02
Non-current assets due within 1 year
Other current assets 6,509,506.13 8,973,032.78
Total current assets 2,427,443,081.63 2,349,380,300.86
Non-current assets
Financial assets available-for-sale 2,000,000.00 2,000,000.00
Investments held-to-maturity
Long-term receivable
Long-term equity investment
Investment property
Fixed assets 616,407,430.76 695,125,451.81
Construction in progress 328,735,373.03 329,632,219.42
Construction materials
Fixed assets disposal
Biological assets
Gas and petrol assets
Intangible assets 133,145,519.69 135,366,608.09
Development expenditure
Goodwill
Long-term prepaid expense 555,276.85 611,356.03
Deferred tax assets 11,853,267.27 11,853,267.27
Other non-current assets
Total non-current assets 1,092,696,867.60 1,174,588,902.62
Total assets 3,520,139,949.23 3,523,969,203.48
Current liabilities
Short-term loan 468,000,000.00 385,000,000.00
Note payable 280,518,900.00 327,466,550.20
Accounts payable 987,988,300.81 973,485,937.22
Accounts received in advance 32,089,340.69 44,835,510.10
Commission charge payable
Accrued payroll 18,561,649.49 19,440,701.80
Tax payable 5,092,488.91 6,074,347.23
Interest payable 1,630,007.00 1,400,000.00
Dividends payable
Other payables 141,135,587.68 133,832,447.67
Non-current liabilities due within I year 50,000,000.00
18
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-yearal Report
Other current liabilities 4,651,103.83 4,411,103.83
Total current liabilities 1,939,667,378.41 1,945,946,598.05
Non-current liabilities
Long-term loan
Debenture payable
Long-term payables 1,597,305.72 1,597,305.72
Special payables 321,698.98 321,698.98
Contingent liabilities
Deferred income 43,124,348.14 46,650,196.82
Deferred tax liabilities 988,428.58 988,428.58
Other non-current liabilities
Total non-current liabilities 276,031,781.42 229,557,630.10
Total liabilities 2,215,699,159.83 2,175,504,228.15
Owner’s equity (shareholders’ equity)
Capital stock 402,600,000.00 402,600,000.00
Capital public reserves 485,691,050.47 485,691,050.47
Less: treasury share
Surplus reserve 131,442,909.11 131,442,909.11
Undistributed profit 284,706,829.82 328,731,015.75
Difference of foreign currency translation
Equity attributable to parent company 1,304,440,789.40 1,348,464,975.33
Minority interest
Total owner’s equity 1,304,440,789.40 1,348,464,975.33
Total owner’s equity and liabilities 3,520,139,949.23 3,523,969,203.48
Chairman: Meng Wei 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 126,213,924.67 108,582,231.28
Financial assets held-for-trading
Bills receivable 163,966,034.71 89,099,697.82
Account receivable 1,059,965,179.77 1,020,633,783.54
Account paid in advance 24,244,288.23 23,489,543.17
Interest receivable
Dividend receivable
Other receivables 20,572,835.85 19,679,695.34
Inventory 957,755,966.88 998,035,803.15
Non-current assets due within 1 year
Other current assets 3,984,664.78 4,828,826.85
Total current assets 2,356,702,894.89 2,264,589,581.15
Non-current assets
Financial assets available-for-sale 2,000,000.00 2,000,000.00
Investments held-to-maturity
Long-term receivable
Long-term equity investment 211,583,897.67 211,583,897.67
Investment property
Fixed assets 481,663,202.15 577,635,433.51
Construction in progress 230,348,546.67 204,617,819.76
Construction materials
Fixed assets disposal
Biological assets
Gas and petrol assets
Intangible assets 113,240,306.68 115,105,064.38
19
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-yearal Report
Development expenditure
Goodwill
Long-term prepaid expense 555,276.85 611,356.03
Deferred tax assets 10,580,100.02 10,580,100.02
Other non-current assets
Total non-current assets 1,049,971,330.04 1,122,133,671.37
Total assets 3,406,674,224.93 3,386,723,252.52
Current liabilities
Short-term loan 468,000,000.00 385,000,000.00
Note payable 280,518,900.00 327,466,550.20
Accounts payable 917,783,859.28 882,281,596.61
Accounts received in advance 29,570,701.69 44,003,546.25
Commission charge payable
Accrued payroll 11,152,800.28 11,902,749.05
Tax payable 1,901,261.90 3,381,449.54
Interest payable 1,630,007.00 1,400,000.00
Dividends payable
Other payables 102,700,853.83 94,547,419.88
Non-current liabilities due within I year 50,000,000.00
Other current liabilities 4,553,555.83 4,313,555.83
Total current liabilities 1,817,811,939.81 1,804,296,867.36
Non-current liabilities
Long-term loan 230,000,000.00 180,000,000.00
Debenture payable
Long-term payables
Special payables 321,698.98 321,698.98
Contingent liabilities
Deferred income 38,734,688.14 42,260,536.82
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 269,056,387.12 222,582,235.80
Total liabilities 2,086,868,326.93 2,026,879,103.16
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 300,084,545.63 340,122,796.99
Total owner’s equity 1,319,805,898.00 1,359,844,149.36
Total owner’s equity and liabilities 3,406,674,224.93 3,386,723,252.52
3. Consolidated Income Sheet.
Unit: RMB Yuan
Item Account for the current period Account for the prior period
1.Total operating income 1,125,455,031.98 1,168,093,679.34
Including: Operating revenue 1,125,455,031.98 1,168,093,679.34
Interest income
Handling charge and commission income
2.Total operating cost 1,182,078,050.33 1,233,837,130.70
Including: Operating cost 1,043,602,026.69 1,068,509,261.57
Interest expenses
Handling charge and commission income
Tax & surcharges for main operations 4,695,351.44 6,001,203.40
Selling expenses 84,742,685.88 98,588,255.39
Administrative expense 36,646,177.56 40,067,918.93
Financial expense 12,390,741.72 20,655,027.80
Loss of impairment of assets 1,067.04 15,463.61
Add: Gains of change of fair value of assets(loss with"-")
20
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-yearal Report
Investment income(loss with "-")
Including: Income form investment on associated
enterprise and jointly enterprise
3.Operating profit (loss with"-") -56,623,018.35 -65,743,451.36
Add: Non-operating revenue 14,004,273.12 6,894,300.08
Including:income on disposal of non-current assets 4,649,046.02 957,589.72
Less: Non-operating cost 1,405,440.70 474,066.00
Including: loss on disposal of non-current assets 78,416.68 240,546.34
4.Total profit(loss with"-") -44,024,185.93 -59,323,217.28
Less: Income tax expenses 264,036.88
5. Net profit(Loss with"-") -44,024,185.93 -59,587,254.16
Net profit attributable to shareholders of parent company -44,024,185.93 -59,587,254.16
Minority interests
6. Other comprehensive returns
7. Total comprehensive returns -44,024,185.93 -59,587,254.16
Total comprehensive returns available for parent company -44,024,185.93 -59,587,254.16
Total comprehensive returns available for minority
shareholders
6.Earnings per share
(1) Basic earnings per share -0.11 -0.15
(2) Diluted earnings per share -0.11 -0.15
Chairman: Meng Wei 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 1,139,151,566.77 1,207,722,167.59
Less:Operating cost 1,066,012,164.06 1,113,365,931.88
Tax & surcharges for main operations 4,099,633.44 5,301,076.02
Selling expenses 83,766,587.44 98,046,463.76
Administrative expense 23,712,562.59 25,937,146.39
Financial expense 12,403,674.03 20,948,319.00
Loss of impairment of assets 1,067.04 15,463.61
Add: Gains of change of fair value of assets(loss with"-")
Investment income(loss with "-")
Including: Income form investment on associated
enterprise and jointly enterprise
2.Operating profit (loss with"-") -50,844,121.83 -55,892,233.07
Add: Non-operating revenue 12,178,115.07 6,560,907.95
Less: Non-operating cost 1,372,244.60 340,057.61
Including: loss on disposal of non-current assets
3.Total profit(loss with"-") -40,038,251.36 -49,671,382.73
Less: Income tax expenses
4. Net profit(Loss with"-") -40,038,251.36 -49,671,382.73
Net profit attributable to shareholders of parent company
Minority interests
5. Other comprehensive returns
6. Total comprehensive returns -40,038,251.36 -49,671,382.73
7.Earnings per share
(1) Basic earnings per share -0.11 -0.15
(2) Diluted earnings per share -0.11 -0.15
5. Consolidated Cash Flow Statement.
Unit: RMB yuan
Item Account for the current period Account for the prior period
21
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-yearal Report
1.Cash from operating activities
Cash received from sale of goods or Provideing of services 553,562,725.50 602,752,635.37
Refund of taxes and fares
Other cash received relating to operating activities 3,957,803.39 1,986,184.06
Sub-total of cash inflows 557,520,528.89 604,738,819.43
Cash paid for goods and services 326,921,872.04 331,602,614.87
Cash paid to or on behalf of the employees 156,421,038.32 170,346,950.86
Tax payments 26,059,090.72 25,216,808.36
Other cash paid relating to operating activities 56,508,192.96 62,837,599.68
Sub-total of cash outflows 565,910,194.04 590,003,973.77
Net cash flows from operating activities -8,389,665.15 14,734,845.66
2.Cash flows from investing activities
Cash received from return of investment
Cash received from investment incomes 240,000.00
Net cash received from disposal of fixed assets, intangible
10,000,000.00 18,000.00
assets and other long-term assets
Proceeds from sale of subsidiaries and other operating
units
Other cash received relating to investing activities
Sub-total of cash inflows 10,240,000.00 18,000.00
Cash paid to acquire fixed assets, intangible assets and
35,882,335.69 6,490,945.26
other long-term assets
Cash paid to acquire investment 11,250,000.00
Net cash used in acquiring subsidiaries and other operating
units
Other cash paid relating to investing activities
Sub-total of cash outflows 35,882,335.69 17,740,945.26
Net cash flows from investment activities -25,642,335.69 -17,722,945.26
3.Cash flows from financing activities
Cash received from absorbing investment
Including: Cash received from increase in minority interest
Proceeds from borrowings 375,000,000.00 447,579,700.00
Other proceeds relating to financing activities 147,525,694.44
Sub-total of cash inflows 522,525,694.44 447,579,700.00
Repayment of borrowings 287,000,000.00 488,000,000.00
Distribution of dividends or profits & interest expenses 17,500,351.76 17,743,906.80
Including: dividends or profit paid to minority interest
Cash paid for other financing activities 150,000,000.00
Sub-total of cash outflows 454,500,351.76 505,743,906.80
Net cash flows from financing activities 68,025,342.68 -58,164,206.80
4. Effects of foreign exchange rate changes on cash 1,392,127.34 218,699.83
5.Net increases in cash and cash equivalents 35,385,469.18 -60,933,606.57
Add: cash and cash equivalent, at the beginning of year 78,556,030.56 143,399,164.66
6.Cash and cash equivalent at the end of the year 113,941,499.74 82,465,558.09
6. Cash Flow Statement Of Parent Company.
Unit: RMB yuan
Account for the current
Item Account for the prior period
period
1.Cash from operating activities
Cash received from sale of goods or Providing of services 541,591,437.79 599,345,378.91
Refund of taxes and fares
Other cash received relating to operating activities 3,381,289.60 1,583,863.47
Sub-total of cash inflows 544,972,727.39 600,929,242.38
22
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-yearal Report
Cash paid for goods and services 356,059,070.83 374,127,409.24
Cash paid to or on behalf of the employees 128,163,845.74 139,776,818.16
Tax payments 20,179,431.19 18,316,626.33
Other cash paid relating to operating activities 52,713,413.47 55,546,990.88
Sub-total of cash outflows 557,115,761.23 587,767,844.61
Net cash flows from operating activities -12,143,033.84 13,161,397.77
2.Cash flows from investing activities
Cash received from return of investment
Cash received from investment incomes 240,000.00
Net cash received from disposal of fixed assets, intangible
10,000,000.00
assets and other long-term assets
Proceeds from sale of subsidiaries and other operating units
Other cash received relating to investing activities
Sub-total of cash inflows 10,240,000.00
Cash paid to acquire fixed assets, intangible assets and other
35,523,972.38 5,168,003.59
long-term assets
Cash paid to acquire investment 11,250,000.00
Net cash used in acquiring subsidiaries and other operating
units
Other cash paid relating to investing activities
Sub-total of cash outflows 35,523,972.38 16,418,003.59
Net cash flows from investment activities -25,283,972.38 -16,418,003.59
3.Cash flows from financing activities
Cash received from absorbing investment
Including: Cash received from increase in minority interest
Proceeds from borrowings 375,000,000.00 447,579,700.00
Other proceeds relating to financing activities 147,525,694.44
Sub-total of cash inflows 522,525,694.44 447,579,700.00
Repayment of borrowings 287,000,000.00 488,000,000.00
Distribution of dividends or profits & interest expenses 17,499,132.16 17,741,736.11
Including: dividends or profit paid to minority interest 150,000,000.00
Cash paid for other financing activities
Sub-total of cash outflows 454,499,132.16 505,741,736.11
Net cash flows from financing activities 68,026,562.28 -58,162,036.11
4. Effects of foreign exchange rate changes on cash 1,392,127.34 218,699.83
5.Net increases in cash and cash equivalents 31,991,683.40 -61,199,942.10
Add: cash and cash equivalent, at the beginning of year 70,822,241.27 135,518,792.14
6.Cash and cash equivalent at the end of the year 102,813,924.67 74,318,850.04
23
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 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
402,600,000
1.Balance at the end of last year 485,691,050.47 131,442,909.11 328,731,015.75 1,348,464,975.33
.00
Add: changes in accounting
policies
Changes in previous errors
Others
2.Balance at the beginning of 402,600,000
485,691,050.47 131,442,909.11 328,731,015.75 1,348,464,975.33
this year .00
3. The changes in this year
-44,024,185.93 -44,024,185.93
（decrease with“-”）
（1）Total of comprehensive
-44,024,185.93 -44,024,185.93
income
（2）Capital contribution and
reduction
1）Ordinary share
2）Capital contributed by other
equity instrument holders
3）Share-based payments
charged to equity
4）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
24
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 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 402,600,000
485,691,050.47 131,442,909.11 284,706,829.82 1,304,440,789.40
current period .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 402,600,000
485,691,050.47 131,442,909.11 362,111,029.14 1,381,844,988.72
year .00
Add: changes in accounting
policies
Changes in previous errors
Others
2.Balance at the beginning of 402,600,000
485,691,050.47 131,442,909.11 362,111,029.14 1,381,844,988.72
this year .00
3. The changes in this year
-33,380,013.39 -33,380,013.39
（decrease with“-”）
（1）Total of comprehensive
-33,380,013.39 -33,380,013.39
income
（2）Capital contribution and
reduction
1）Ordinary share
2）Capital contributed by other
equity instrument holders
3）Share-based payments
charged to equity
4）Others
(4）Profits distribution
25
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
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
485,691,050.47 131,442,909.11 328,731,015.75 1,348,464,975.33
current period .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
Capital Capital public less：treasure General provision shareholders’ Owner’s equity
Surplus public reserves Undistributed profits
stock reserves stock for risk equity
402,600,000
1.Balance at the end of last year 485,678,443.26 131,442,909.11 362,111,029.14 1,381,844,988.72
.00
Add: changes in accounting
policies
Changes in previous errors
Others
2.Balance at the beginning of 402,600,000
485,678,443.26 131,442,909.11 362,111,029.14 1,381,844,988.72
this year .00
3. The changes in this year
-33,380,013.39 -33,380,013.39
（decrease with“-”）
（1）Total of comprehensive
-33,380,013.39 -33,380,013.39
income
26
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
（2）Capital contribution and
reduction
1）Ordinary share
2）Capital contributed by other
equity instrument holders
3）Share-based payments
charged to equity
4）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
485,678,443.26 131,442,909.11 328,731,015.75 1,348,464,975.33
current period .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 402,600,000
485,678,443.26 131,442,909.11 350,783,815.44 1,370,505,167.81
year .00
Add: changes in accounting
policies
27
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Changes in previous errors
Others
2.Balance at the beginning of 402,600,000
485,678,443.26 131,442,909.11 350,783,815.44 1,370,505,167.81
this year .00
3. The changes in this year
-10,661,018.45 -10,661,018.45
（decrease with“-”）
（1）Total of comprehensive
-10,661,018.45 -10,661,018.45
income
（2）Capital contribution and
reduction
1）Ordinary share
2）Capital contributed by other
equity instrument holders
3）Share-based payments
charged to equity
4）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
485,678,443.26 131,442,909.11 340,122,796.99 1,359,844,149.36
current period .00
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
III. 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”.
IV. Basis for the preparation of financial statements
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’.
v. Significant accounting policies, accounting estimates and method for preparation of consolidated financial
statements
1 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 Accounting period
The Group adopts the Gregorian calendar year as accounting period, i.e. from Jan 1 to Dec 31.
3.Operating cycle
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Normal operating cycle refers to the duration from purchasing the assets for manufactuing up to cash or cash
equivelant realisation. The group sets twelve months for one operating cycle and as the liquidity criterion for
assets and liability.
4 Funcitonal currency
The Group adopts RMB as functional currency.
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.
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.
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.
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
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.
8 Cash and cash equivalent
The cash listed on the cash flow statements of the Group refers to cash on hand and bank deposit. The cash
equivalents refer to short-term (normally with original maturities of three months or less) and liquid investments which are
readily convertible to known amounts of cash and subject to an insignificant risk of changes in value.
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
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
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.
10 Financial assets and financial liabilities
(1) Financial assets
1)Classification
The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables,
held-to-maturity financial assets and available-for-sale. The classification depends on the purpose for which the financial
assets were acquired. Management determines the classification of its financial assets at initial recognition.
a)Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in
this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held
for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to
be settled within 12 months; otherwise, they are classified as non-current.
b)Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for maturities greater than 12 months after the reporting
period, which are classified as non-current assets.
c)Held-to-maturity financial assets
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed
maturities that the 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
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Financial assets are recognized at fair value on the balance sheet when the Group becomes a party to the contractual
provisions of the financial instrument. Transaction costs of financial assets carried at the fair value through profit or loss
are expensed in the income statement;Transaction costs of other financial assets are included in financial assets at initial
recognition.
Available-for-sale financial assets are subsequently measured at fair value. Investments inequity instruments are
measured at cost when they do not have a quoted market price in an active market and whose fair value cannot be
reliably measured. Loans and receivables are measured at amortised cost using the effective interest method.
A gain or loss arising from change in fair value of an available-for-sale financial asset is recognised directly in equity,
except for impairment losses and foreign exchange gains and losses arising from the translation of monetary financial
assets. When such financial asset is derecognised, the cumulative gain or loss previously recognised in equity is
recognised in income statement. Interest on available for sale debt instrument, calculated using effective interest method,
and cash dividends declared by the investee on available-for-sale equity instruments are recognised as investment
income in income statement.
3) Impairment of financial assets
The Group assesses the carrying amount of financial assets other than financial assets at fair value through profit or loss
at each balance sheet date. If there is objective evidence that the financial asset is impaired, the Group shall determine
the amount of any impairment loss accounts.
If an impairment loss on a financial asset carried at amortized cost has been incurred, the amount of loss is measured at
the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding
future credit losses that have not been incurred). If there is objective evidence that the value of the financial asset
recovered and the recovery can be related objectively to an event occurring after the impairment was recognized, the
previously recognized impairment loss is reversed and the amount of reversal is recognized in income statement.
If objective evidence shows that impairment for available-for-sale financial assets will occur,the cumulative loss arising
from the decline in fair value that had been recognized directly in equity is removed from equity and recognized as
impairment loss. For an available for sale debt instrument, if there is objective evidence that the value of the financial
asset recovered and the recovery can be related objectively to an event occurring after the impairment was recognized,
the previously recognized impairment loss is reversed and the amount of reversal is recognized in income statement. For
an available for sale equity instrument, if there is objective evidence that the value recovered and the recovery can be
objectively related to an event occurring after the impairment loss recognized, the 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
33
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
control over the financial asset has been waived even if the Group does not transfer or retain nearly all of the risks and
rewards relating to the ownership of a financial asset.
On derecognition of a financial asset, the difference between the carrying amount and the aggregate of consideration
received and the accumulative amount of changes of fair value originally recorded in the owner’s equity is recognised in
the income statement.
(2) Financial liabilities
The financial liabilities are classified into the financial liability at fair value through profit or loss and other financial liability for
the initial recognition.
The financial liabilities at fair value through profit or loss include the financial liabilities held for trading and the designated
financial liabilities at fair value through profit or loss when initial recognized. For this kind of financial liabilities should be
measured at fair value, variation of fair value should be recorded into the current profit or loss.
Other financial liabilities should be subsequently measured at amortization cost by adopting actual interest rate method.
(3) Fair value 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.
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.
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
(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
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
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
Related parties Accrue the bad debt provision by individual identification method
Risk-free Accrue the bad debt provision by individual identification method
2) The other methods is applied to actuating of bad debts provision
(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.
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
35
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
sending out of materials, and adjust the planned costs of raw material into actual costs. The working-in-progress finished
goods are priced on their standard costs; the differences between the standard and actual costs are recorded into the costs of
working-in-progress and finished goods according to the receiving and sending out proportion, and finaly adjust the planned
costs into actual costs.
At the balance sheet date inventory should be measured at the lower of the cost and net realizable value. For the inventories
which are damaged, fully or partly obsoleted and selling price below cost, the Group should calculate the provision for
impairment of inventories according to the estimated nonrecoverable part of cost. Finished goods and a large amount raw
materials should be calculated provision for impairment based on the difference of the cost exceed the realizable value of
single item. For raw and accessorial materials with a large quantities and lower unit price should be calculated provison for
impairment according to classify of inventory.
For the finished goods, working in progress and raw material held for sale etc which shall be sold directly, the net realizable
value should be confirmed at the estimated selling price less estimated selling expenses and related tax 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.
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.
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Besides the long-term equity investments acquired by the merger of enterprises, the initial cost of a long-term equity
investment obtained by other means shall be ascertained in accordance with the provisions as follows:
(1) The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost which is
actually paid. The initial cost consists of the expenses directly relevant to the obtaining of the long-term equity investment,
taxes and other necessary expenses.
(2) The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair value of
the equity securities issued.
(3) The initial cost of a long-term equity investment of an investor shall be the value stated in the investment contract or
agreement except the unfair value stated in the contract or agreement.
(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.
14 Fixed asset
Recognition criteria of fixed assets: Fixed assets are defined as the tangible assets which are held for the purpose of
producing goods, rendering services, leasing or for operation & management, and have more than one year of useful
life, and whose unit price is over RMB2,000.
Fixed assets shall be recognized when the economic benefit probably flows into the Group and its cost can be
measured reliably. Fixed assets include: building, machinery, transportation equipment, electronic equipment and
others.
All fixed assets shall be depreciated unless the fixed assets had been fully depreciated and are still being used and
land is separately measuered. Straight-line depreciation method is adopted by the Group. Estimated net residual
value rate, useful life, depreciation rate as follows:
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
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.
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 equipments 8 3 12.13
Automated controlling equipments 8 3 12.13
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
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
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.
15 Construction in progress
Measurement of CIP: Construction-in-progress is recognized at actual cost. Self-construction project is recognized at the cost
of material, labour cost and construction expenses. Contractual construction is recognized at project price which should be
paid. Installed construction is recognized at the value of equipment, installation and assembly cost. Besides above, the cost
of CIP comprises borrowing cost and profit and loss resulting from foreign exchange.
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.
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
39
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
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.
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.
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.
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;
40
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
(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;
(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.
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.
20 Employee benefits
Employee compensation comprises short-term benefit, post-employment benefit, termination benefit and other long-term
employee’s benefit.
Employee’s payables include salary, bonus, allowance, welfare, social insurance, housing funds, labour union expense, staff
training expense,during the period in which the service rendered by the employees, the actually incurred short term employee
benefits shall be recognized as liability and shall be recognized in P&L or related cost of assets based on benefit objective
allocated from the service rendered by employees.
Post-employment benefits include the basic pension schemeand unemployment insurance etc. Based on the risk and
obligation borne by the Group, post-employment benefits are classified into defined contribution plan and defined benefit
plan.For defined contribution plan, liability shall be recognized based on the contributed amount made by the Group to
separate entity at the balance sheet date in exchange of employee service for the period and it shall be recorded into current
profit and loss account or relevant cost of assets in accordance with beneficial objective.
41
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Termination benefits are employee benefits payable as a result of either an entity’s decision to terminate an employee’s
employment before the contract due date or an employee’s decision to accept voluntary redundancy in exchange for those
benefits. An entity shall recognize the termination benefits as a liability and an expense at the earlier date when the entity
cannot unilateral withdraw the termination benefits due to employment termination plan or due to redundancy suggestion, or
when the entity can recognize the restricting cost or expense arising from paying termination benefits. For the termination
benefits that will not be expected to be fully paid within twelve months after the end of the reporting period, it shall be
accounted as other long-term employee benefit. For employee internally retired informally, termination benefits accounting
shall be applied. The Group shall recognized the planned wages and social insurance of retired employee in the current profit
and loss account when provision conditions are met, for the period since the termination of employee service rendered until
the formal retirement date.(termination benefit).
Other long-term employee benefit provided by the Group, shall be accounted for as defined contribution plan if the defined
contribution plan are met, otherwise shall be accounted for as defined benefit plan.
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
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.
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;
42
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
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.
23 Government grants
A government subsidy of the Group shall be recognized if the Group can meet the conditions for the government subsidy and
also can obtain the government subsidy. If a government subsidy is a monetary asset, it shall be measured in the light of the
received or receivable amount. If a government subsidy is a non-monetary asset, it shall be measured at its fair value; if its
fair value cannot be obtained in a reliable way, it shall be measured at its nominal amount (RMB 1).
The government subsidies pertinent to assets shall be recognized as deferred income, equally distributed within the useful
lives of the relevant assets, and included in the current profits and losses. The government subsidies pertinent to incomes
shall be treated respectively in accordance with the indications as follows: (1) those subsidies used for compensating the
related future expenses or losses of the Group shall be recognized as deferred income and shall included in the current
profits and losses during the period when the relevant expenses are recognized; or (2) those subsidies used for
compensating the related expenses or losses incurred to the Group shall be directly included in the current profits and losses.
24 Deferred tax assets and deferred tax liabilities
43
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
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.
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.
26 Accounting treatment method of income tax
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, examination fee, surcharge 5%
City construction tax Value-added tax payables, business tax 7%
Education surcharge Value-added tax payables, business tax 3%
Value-added tax payables, business tax
Local education surcharge 2%
Current period taxable profit
Enterprise income tax(EIT) 15%
70% of cost of own property or revenue from leasing
Real estate tax 1.2% or 12%
property
44
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Land use tax Land using right area RMB 6 per square meter
Notes for tax principles with different EIT rate
Tax principles EIT rate
Wazhou Liaoyang Bearing construction Co.,Ltd 25%
Dalian Wazhou Precision Motor Car Bearing Company Limited 25%
Wazhou Precision of Spherical Roller Bearings(Wafangdian)Co., Ltd 25%
2. Tax preference
The company obtained the qualification of high and new technology enterprises at 29September, 2014.The Certificate
No is GF201421200004, and the validity duration is three years. According to the tax law, the company can be granted for
the preferential tax policy of enterprise income tax rate of 15% in three years.
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.
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.
29. 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
VI. Taxation
1. The main applicable tax and rate to the Group as follows:
45
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
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%
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 from
Real estate tax 1.2% or 12%
leasing property
Land use tax Land using right area RMB 6 per square meter
Notes for tax principles with different EIT rate
Tax principles EIT rate
Wazhou Liaoyang Bearing construction Co.,Ltd 25%
Dalian Wazhou Precision Motor Car Bearing Company Limited 25%
Wazhou Precision of Spherical Roller Bearings(Wafangdian)Co., Ltd 25%
2. Tax preference and approval
The company obtained the qualification of high and new technology enterprises at 29Sep2014.The Certificate number is
GF201421200004, and the period of validity is three years.According to the provisions of the tax law the company can be
granted the preferential tax policy of enterprise income tax rate of 15% in three years.
VII. Notes to consolidated financial statements
1. Cash and cash in bank
Item Closing Balance Opening Balance
Cash on hand 333,827.70 372,523.88
Cash in bank 113,607,672.04 78,183,506.68
Other cash and cash equivalents 23,400,000.00 37,759,990.01
Total 137,341,499.74 116,316,020.57
Notes: the closing balance of other cash and cash equivalents are all security deposits of bank acceptance notes.
Since the liquiditylimitation, this will be deducted from the closing balance.
2 Notes receivable
(1) Category of notes receivable
Items 2016.06.30 2015.12.31
Bank acceptance notes 112,870,440.17 74,843,528.50
Commercial acceptance notes 63,975,784.09 25,662,475.20
Total 176,846,224.26 100,506,003.70
3 Accounts receivable
(1) Category of accounts receivable
46
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Closing Balance
Items Booking balance Provision
Booking balance
Amount % Amount %
Accountsreceivable with individual
significant amount and identification 12,810,943.69 1.14% 12,810,943.69 100.00%
separately bad debt provision
Accounts receivable identified bad
1,067,829,852
debt provision based on the 0.96% 44,101,606.05 4.36%
.59
characters of credit risk portfolio
Accountsreceivable with individual
insignificant amount and identification 30,991,469.16 2.80% 30,991,469.16 100.00%
separately bad debt provision
1,111,632,265
Total 100.00% 87,904,018.90 7.91%
.44
(Continued)
Opening balance
Items Booking balance Provision
Booking balance
Amount % Amount %
Accountsreceivable with
individual significant amount and
12,810,943.69 1.18% 12,810,943.69 100.00%
identification separately bad debt
provision
Accounts receivable identified
bad debt provision based on the 1,038,035,999.46 95.95% 44,102,673.09 4.53% 993,933,326.37
characters of credit risk portfolio
Accountsreceivable with
individual insignificant amount
30,991,469.16 2.85% 30,991,469.16 100.00%
and identification separately bad
debt provision
Total 1,081,838,412.31 100.00% 87,905,085.94 993,933,326.37
1) Accounts receivable with individual significant amount and identification separately bad debt provision at the end of June
30,2016
Booking Provision for bad Provision rate
Company name Reasons for provision
balance debts (%)
A 5,092,669.00 5,092,669.00 100.00% Broke down
A/R with over 5 years aging,
B 3,910,007.43 3,910,007.43 100.00%
unlikely to be collected
A/R with over 5 years aging,
C 3,808,267.26 3,808,267.26 100.00%
unlikely to be collected
Total 9,002,676.43 9,002,676.43 — —
2) Accounts receivable accrued the bad debt provisions under accounting aging analysis method
Closing Balance
Aging Accounts Proportion
Provision for bad debts
receivable (%)
Within1 year 809,091,481.86 8,090,914.82 1.00%
1 to 2 years 111,813,205.52 5,590,660.28 5.00%
47
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
2 to 3 years 50,832,435.38 10,166,487.08 20.00%
Over 3 years 40,507,087.76 20,253,543.88 50.00%
Total 1,012,244,210.52 44,101,606.05
(2) Bad debt provision accrued and written-off (withdraw)
(3) Accounts receivable written off in current period
Item Written-off Amount
Accounts receivable written off 2,134.08
4 Advances to suppliers
(1) Aging of advances to suppliers
Items 2016.06.30 2015.12.31
Amount Percentage (%) Amount Percentage (%)
Within 1 year 27,077,091.48 74.33% 21,395,885.05 65.48%
1 to 2 years 3,752,459.60 10.30% 1,883,664.93 5.77%
2 to 3 years 247,994.57 0.68% 5,206,158.32 15.93%
Over 3 years 5,351,336.08 14.69% 4,187,915.47 12.82%
Total 36,428,881.73 -- 32,673,623.77 --
(2) The top five significant advances to supplierscategorized by debtors
The total amount of top five significant advances to suppliers categorized by debtors is 19,922,566.83 Yuan, taking
the parentage of 54.69% of the closing balance of advances to suppliers.
5. Dividends receivable
(1) Dividends receivable
Company Closing Balance Opening Balance
Shanghai ME Mechanical & Electrical
Equipment Chain Co., Ltd 240,000.00
Total 240,000.00
6 Other receivables
(1) The categories of other receivable
Closing Balance
Items Booking balance Provision
Booking balance
Amount % Amount %
Other receivables identified
bad debt provision based on 24,599,803.
0.89% 1,264,644.60 0.07% 23,335,159.29
the characters of credit risk 89
portfolio
48
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Accountsreceivable with
individual insignificant
1,687,122.1 100.00
amount and identification 5.27% 1,687,122.13
3 %
separately bad debt
provision
Total 26,286,926.
100.00% 2,951,766.73 11.23% 23,335,159.29
02
(Continued)
Opening Balance
Items Booking balance Provision Booking
Amount % Amount % balance
Other receivables identified bad
21,462,837.6
debt provision based on the 22,727,482.25 0.93% 1,264,644.60 8.31%
5
characters of credit risk portfolio
Accountsreceivable with individual
insignificant amount and
1,687,122.13 6.91% 1,687,122.13 100.00%
identification separately bad debt
provision
Total 21,462,837.6
24,414,604.38 100.00% 2,951,766.73
5
(2) Other receivables accrued the bad debt provisions under accounting aging analysis method
Closing Balance
Aging Provision for bad Proportion
Other receivables
debts (%)
Within 1 year 13,385,177.48 133,851.77 1.00%
1-2 years 1,415,238.37 70,761.92 5.00%
2-3 years 1,210,546.82 242,109.36 20.00%
Over 3 years 1,635,843.09 817,921.55 50.00%
Total 17,646,805.76 1,264,644.60
(3) Other receivables categorized by nature
Nature Closing Balance Opening Balance
Other receivables 26,286,926.02 24,414,604.38
Total 26,286,926.02 24,414,604.38
7 Inventories
(1) Categories of inventories
2016.06.30 2015.12.31
Item Provision for Provision for
Cost Net book value Cost Net book value
decline declines
Raw materials 142,656,195.54 2,654,008.58 140,002,186.96 136,420,995.34 2,654,008.58 133,766,986.76
Workingin
175,101,849.88 602,496.86 174,499,353.02 184,481,338.87 602,496.86 183,878,842.01
progress
49
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Finished goods 771,737,850.71 67,782,949.02 703,954,901.69 821,542,628.29 67,782,949.02 753,759,679.27
Wrappage 4,797,122.27 4,797,122.27 3,869,947.98 3,869,947.98
Total 1,094,293,018.40 71,039,454.46 1,023,253,563.94 1,146,314,910.48 71,039,454.46 1,075,275,456.02
(2) Provision for decline in the value of inventories
Item Increase Decrease
Closing
Opening Balance Reverse/ Others
Accrual Other Balance
Written- off transferred
Raw materials 2,654,008.58 2,654,008.58
Finished goods 602,496.86 602,496.86
Working in
67,782,949.02 67,782,949.02
progress
Total 71,039,454.46 71,039,454.46
Accrual for provision for decline in the value of inventories
Item Basis on recognized convertible net value Reason for write-off
Raw materials Materials market price at the end of period Market price falling
Falling product unit cost and
Finished goods Average sale price of similar product
promote backlogged stock
8 Other current assets
Item 2016.06.30 2015.12.31
VAT to be deducted 4,536,190.23 6,999,716.88
Rental
Prepaid income tax 1,973,315.90 1,973,315.90
Total 6,509,506.13 8,973,032.78
9. Available-for-sale financial assets
(1) Available-for-sale financial assets
Item Closing Balance Opening Balance
Booking balance Provision Book value Booking balance Provision Book value
Available-for-sale
2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00
equity instruments
Measured as cost
2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00
method
Total 2,000,000.00 - 2,000,000.00 2,000,000.00 - 2,000,000.00
(2) Available-for-sale financial assets measured at cost method
Proportion Cash
Booking Balance Provision
(%) dividend
Name
Opening Closing Opening Closing
Increase Decrease Increase Decrease
Balance Balance Balance Balance
50
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Shanghai ME
Mechanical &
Electrical
2,000,000.00 - 2,000,000.00 - - - - 4.76 240,000.00
Equipment
Chain Co.,
Ltd
Total 2,000,000.00 - 2,000,000.00 - - - - 4.76 240,000.00
10 Fixed assets
(1) Fixed assets by categories
Machinery Electronic Other
Item Building Transportation Device Equipment Total
Equipment
1. Initial Cost
(1) Opening Balance 437,178,196.13 1,117,923,351.33 20,025,972.96 65,113,499.42 181,292,058.26 1,821,533,078.10
(2) Increase 975,345.88 55,648,293.66 875,375.91 421,788.50 964,807.92 58,885,611.87
1) Purchase 975,345.88 55,648,293.66 875,375.91 421,788.50 964,807.92 58,885,611.87
2) Transferred from
677,496.88 56,410.25 71,794.87 0.00 805,702.00
construction-in-progress
3) Acquired from
business combination
(3) Decrease 0.00 104,476,447.48 1,390,876.92 2,873,244.76 895,469.26 109,636,038.42
1) Disposal 104,476,447.48 1,390,876.92 2,873,244.76 895,469.26 109,636,038.42
(4) Closing Balance 438,153,542.01 1,069,095,197.51 19,510,471.95 62,662,043.16 181,361,396.92 1,770,782,651.55
2.Accumulated
Depreciation
(1) Opening Balance 213,563,140.85 687,481,029.29 15,775,340.86 51,720,694.71 156,431,829.18 1,124,972,034.89
(2) Increase 6,599,355.30 52,206,097.18 1,266,893.77 2,256,682.91 2,532,165.68 64,861,194.84
1)Accrued 6,599,355.30 52,206,097.18 1,266,893.77 2,256,682.91 2,532,165.68 64,861,194.84
2) Other transfer
(3) Decrease 0.00 33,753,708.20 1,232,638.17 1,875,888.84 28,665.13 36,890,900.34
1) Disposal 33,753,708.20 1,232,638.17 1,875,888.84 28,665.13 36,890,900.34
4) Closing Balance 220,162,496.15 705,933,418.27 15,809,596.46 52,101,488.78 158,935,329.73 1,152,942,329.39
3. Impairment Reserve
(1) Opening Balance 1,234,431.89 200,000.00 1,159.51 1,435,591.40
(2) Increase
(3) Decrease 2,700.00 2,700.00
1) Disposal
(4) Closing Balance 1,231,731.89 200,000.00 1,159.51 1,432,891.40
4. Book Value
1. Closing book value 217,991,045.86 361,930,047.35 3,500,875.49 10,560,554.38 22,424,907.68 616,407,430.76
2. Opening book value 223,615,055.28 429,207,890.15 4,050,632.10 13,392,804.71 24,859,069.57 695,125,451.81
51
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
11 Construction in progress
(1) Details of Construction-in-progress
Closing Balance Opening Balance
Item
Book Balance Provision Book Balance Provision
Spherical
surface 124,994,399.6 124,994,399.6
98,386,826.36 98,386,826.36
bearings new 6 6
plant
Improvement
of
79,149,024.85 79,149,024.85 42,161,475.27 42,161,475.27
seven-finished
products
Improvement
of one-finished 35,208,518.87 35,208,518.87 39,589,942.44 39,589,942.44
products
Improvement
of precision 25,294,255.36 25,294,255.36 24,819,080.90 24,819,080.90
roller branch
Dalian industry
20,729,890.09 20,729,890.09 20,650,648.09 20,650,648.09
park project
Improvement
4,767,240.49 4,767,240.49 8,827,390.94 8,827,390.94
of Amerauto
Improvement
of grinding 4,353,344.93 4,353,344.93 8,677,462.24 8,677,462.24
machine
Grinding
6,775,988.54 6,775,988.54 7,534,651.82 7,534,651.82
product line
Heat treatment
7,998,572.50 7,998,572.50 5,166,367.38 5,166,367.38
product line
Improvement
of
4,470,874.95 4,470,874.95 4,470,874.95 4,470,874.95
second-finishe
d products
Improvement
of liaoyang 2,391,715.09 2,391,715.09 3,982,724.88 3,982,724.88
bearing
Improvement
3,734,829.95 3,734,829.95 3,734,829.95 3,734,829.95
of plant
Improvement
of special large 3,568,262.29 3,568,262.29 3,448,969.98 3,448,969.98
branch
Crane Project 2,861,762.32 2,861,762.32 2,861,762.32 2,861,762.32
Computer
2,646,148.77 2,646,148.77 2,646,148.77 2,646,148.77
Project
Overhaul
factory 2,610,307.16 2,610,307.16 2,195,185.79 2,195,185.79
reconstruction
Others 23,787,810.51 23,787,810.51 23,870,304.04 23,870,304.04
328,735,373.0 329,632,219.4 329,632,219.4
Total 328,735,373.03
3 2 2
12 Intangible assets
Item Land use right software Total
52
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
1.Initial cost
1). Opening balance 176,189,727.74 6,135,356.44 182,325,084.18
2).Increase
(1) Purchase
(2)Internaldevelopment
(3) Acquired by company
combination
3). Decrease
4). Closing balance 176,189,727.74 6,135,356.44 182,325,084.18
2. Amortization
1). Opening balance 41,037,224.61 5,921,251.48
2).Increase 2,194,753.80 26,334.60
(1)Accrual 2,194,753.80 26,334.60
(2)Transfer into
3). Decrease
4). Closing balance 43,231,978.41 5,947,586.08 49,179,564.49
3. Provision
for impairment
1). Opening balance
2).Increase
3). Decrease
4). Closing balance
4. Book value
1.Closing Book value 132,957,749.33 187,770.36 133,145,519.69
2.Opening Book value 135,152,503.13 214,104.96 135,366,608.09
13 Long-term deferred and prepaid expenses
Other
Item 2015.12.31 Increase Amortization 2016.06.30
decrease
Right to use premise of
589,192.03 33,915.18 555,276.85
Shanghai sales office
Decoration fees 22,164.00 22,164.00 0.00
Total 611,356.03 56,079.18 555,276.85
14 Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without deduction
Item Closing Balance Opening Balance
Deductibletemporary Deferredtax Deductibletemporary Deferredtax
difference assets difference assets
Provision for impairment of assets 63,685,949.07 10,062,159.26 63,685,949.07 10,062,159.26
53
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Difference due to depreciation of
11,940,720.07 1,791,108.01 11,940,720.07 1,791,108.01
fixed assets
Total 75,626,669.14 11,853,267.27 75,626,669.14 11,853,267.27
(2) Deferred tax liabilities without deduction
Item Closing Balance Opening Balance
Taxabletemporary Deferred tax Taxable Deferred tax
difference liabilities temporary liabilities
difference
Asset evaluation increment in
business combination without 6,589,523.85 988,428.58 6,589,523.85 988,428.58
the same control
Total 6,589,523.85 988,428.58 6,589,523.85 988,428.58
(3) The net value of deferred tax assets and deferred tax liabilities with deduction
Closing Balance Closing Balance Opening Balance of Opening Balance of
of deferred tax of deferred tax deferred tax assets deferred tax
Item assets and assets/deferred and liabilities with assets/deferred tax
liabilities with tax liabilities deduction liabilities
deduction
Deferred tax
11,853,267.27 11,853,267.27
assets
Deferred tax
988,428.58 988,428.58
liabilities
(4) Unrecognized deferred tax assets details
Item Closing Balance Opening Balance
Deductible temporary difference 39,005,808.79 39,005,808.79
Deductible loss 271,715,626.48 271,715,626.48
Total 310,721,435.27 310,721,435.27
(5) Unrecognizeddeductible loss of deferred tax assets expired next period
Year Closing Balance Opening Balance Notes
2018 21,053,716.07 21,053,716.07
2019 166,740,210.42 166,740,210.42
2020 83,921,699.99 83,921,699.99
Total 271,715,626.48 271,715,626.48
15 Short-term loan
(1) Category of short-term loan
Loan category 2016.06.30 2015.12.31
Credit loan 468,000,000.00 385,000,000.00
54
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Total 468,000,000.00 385,000,000.00
16 Notes payable
Items 2016.06.30 2015.12.31
Commercial acceptance notes 318,900.00 3,086,550.20
Bank acceptance notes 280,200,000.00 324,380,000.00
Total 280,518,900.00 327,466,550.20
17 Accounts payable
(1) Accounts payable
Item Closing Balance Opening Balance
Loan 756,558,520.47 755,528,200.42
Project payments 102,592,541.94 103,948,960.02
Other 128,837,238.40 114,008,776.78
Total 987,988,300.81 973,485,937.22
18 Advances from customers
(1) Received in advance
Item Closing Balance Opening Balance
Loan 32,089,340.69 44,835,510.10
Total 32,089,340.69 44,835,510.10
19 Employee benefits payable
(1) Category of employee’s payables
Item Opening Increase Decrease Closing Balance
Balance
Short-term
9,548,956.48 130,031,033.15 130,874,047.63 8,705,942.00
employee’s payable
Welfare with deposit
9,891,745.32 22,254,189.52 22,290,227.35 9,855,707.49
and withdrawal plan
Total 19,440,701.80 152,285,222.67 153,164,274.98 18,561,649.49
(2) Short-term employee’s payables
Item Opening Increase Decrease Closing
55
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Balance Balance
Salaries, bonus,
allowance, and 631,579.56 98,709,477.88 99,138,368.36 202,689.08
subsidy
Welfare 9,014,823.32 9,014,823.32
Social insurance 589,427.33 10,464,411.80 10,497,386.42 556,452.71
Include: Medical
291,857.26 8,956,088.17 8,986,120.17 261,825.26
insurance
Industrial injury
226,180.34 1,050,017.09 1,052,424.81 223,772.62
insurance
Maternity
71,389.73 458,306.54 458,841.44 70,854.83
insurance
Housingfunds 2,973,140.95 10,874,238.90 10,986,404.12 2,860,975.73
Labour union and
5,354,808.64 968,081.25 1,237,065.41 5,085,824.48
training expense
Total 9,548,956.48 130,031,033.15 130,874,047.63 8,705,942.00
(3) Welfare with deposit and withdrawal plan
Item Opening Increase Decrease Closing Balance
Balance
Pension 9,555,250.03 21,270,619.70 21,303,982.39 9,521,887.34
Unemployment insurance 336,495.29 983,569.82 986,244.96 333,820.15
Total 9,891,745.32 22,254,189.52 22,290,227.35 9,855,707.49
6.20 Taxes payable
Item Closing Balance Opening Balance
Value-added tax 3,426,775.73 4,025,060.14
Business tax 0.00 458,152.37
Individual income tax 298,524.32 172,957.42
Enterprise income tax 0.00 6,153.34
City maintenance and construction tax 341,180.25 319,932.74
Real estate tax 313,864.85 310,655.78
Land use tax 53,261.00 252,121.87
Stamp tax 104,020.56 92,079.71
Education surcharge 288,740.44 230,567.80
River toll fee 3,768.13
Others 266,121.76 202,897.93
Total 5,092,488.91 6,074,347.23
21 Interest payable
Item Closing Balance Opening Balance
56
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Interest for short-term loan 1,630,007.00 1,400,000.00
Total 1,630,007.00 1,400,000.00
22 Other payables
Other payablescategorized by payments nature
Payments nature Closing Balance Opening Balance
Bid security deposits 2,095,575.42 5,075,575.42
Risk deposits from branch manager 21,452,958.00 22,857,703.42
Trademark fees 2,824,012.10 4,931,241.97
Others 114,763,042.16 100,967,926.86
Total 141,135,587.68 133,832,447.67
23 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 50,000,000.00
Total 50,000,000.00
24 Other non-current liabilities
Item Closing Balance Opening Balance
Government subsidy within 1 year 4,651,103.83 4,411,103.83
Total 4,651,103.83 4,411,103.83
Government subsidy
Recorded Related
Opening Incre into non Other Closing with
Project
Balance ase -operation Change Balance asset/equit
income y
Technology subsidy 737,000.0 - 368,500.00 368,500.00 737,000.00
asset
from province 0
Dalian sub-factory 2,704,235. - 1,352,117.94 1,352,117.94 2,704,235.83
asset
remove subsidy 83
Intelligent equipment 400,000.0 - 200,000.00 200,000.00 400,000.00
manufacturing 0
asset
development specific
subsidy
High-end bearing 472,320.0 - 236,160.00 236,160.00 472,320.00
asset
improvement project 0
Liaoyang Bearing 97,548.00 - 97,548.00
asset
Industry subsidy
57
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Recorded Related
Opening Incre into non Other Closing with
Project
Balance ase -operation Change Balance asset/equit
income y
subsidy from heavy 1,125,308.18 1,365,308.18 240,000.00
asset
axle load wagon
Total ——
“Other Change”: the expected amortization occurred during the next year will be re-categorized from
deferred income to other current liabilities.
25 Long-term loan
(1) Category of long-term loan
Category 2016.06.30 2015.12.31
Assurance loan 140,000,000.00 90,000,000.00
Credit loan 90,000,000.00 90,000,000.00
Total 230,000,000.00 180,000,000.00
26 Long-term payables
(1) Long-term payablescategorized by payments nature
Payments nature Closing Balance Opening Balance
Equipment payments 100,000.00 100,000.00
Housing subsidy 1,497,305.72 1,497,305.72
27 Special payables
Items Opening Increase Decrease Closing Formation Basis
Balance Balance
Granted by Wafangdian Bureau of
Finance and Wafangdian Bureau
Special pollution
221,698.98 - - 221,698.98 of Environment Protection with
treatment
approval with “WaCaiZhi Qi
No.[2004]217”
Dalian Financial Bureau and
Municipal Office of Economic and
Informatization Information Technology Committee
100,000.00 - - 100,000.00
Construction with approval with “Da CaiZhi Qi
No. [2012]917” and “Da Jing Xin
Fa No. [2012]199”
Total 321,698.98 - - 321,698.98
28 Other non-current liabilities
(1) Category of deferred income
58
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Item Opening Increase Decrease Closing
Formation Basis
Balance Balance
Government
46,650,196.82 3,525,848.68 43,124,348.14
subsidy
Total 46,650,196.82 3,525,848.68 43,124,348.14
(2) Government subsidy
Recorded Related Related
Government Opening into non Other Closing with with
Increase
subsidy item Balance -operatio Change Balance asset/equi asset/equ
n income ty ity
Liaozhou
Industry 4,389,660.
4,389,660.00 0.00 4,389,660.00 asset
development 00
subsidies
Technology
736,999.9
subsidy from 736,999.97 368,500.00 368,499.97 asset
7
province
Compensation
32,450,82
for Da Lian 32,450,829.84 1,352,117.94 31,098,711.90 asset
9.84
plants moving
Development
of intelligent
3,200,000.
manufacturing 3,200,000.00 200,000.00 3,000,000.00 asset
00
equipment
subsidies
Improvement
of high-end
2,833,920.
bearing 2,833,920.00 236,160.00 2,597,760.00 asset
00
production
subsidies
Interest
subsidy of 2,400,000.
2,400,000.00 1,365,308.18 1,034,691.82 asset
grand axle 00
load
Construction
of workshop
638,787.0
for technology 638,787.01 3,762.56 635,024.45 asset
1
masters
subsidy
46,650,19
Total 46,650,196.82 3,762.56 3,522,086.12 43,124,348.14
6.82
“Other change”: carried forward the non-operation income occurred in 2016 from the subsidy and re-categorized to
other current liabilities.
(1) A: Deferred income: the RMB 4,877,400.00 of “Industry development subsidies” is distributed by the Liaoyang
Economic and Development district Bureau of Finance in 2013. The grant is related to land and amortized over
50 years in accordance with land amortization criteria.
(2) B: Deferred income: 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 in 2008. The
subsidy related to asset should be deferred over the useful life of 10 years.
59
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
(3) C: Deferred income: the compensation for plants moving is RMB 59,820,000.00 granted from Dalian
government-owned assets investment and operating Co., Ltd in 2011. 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 are 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.
(4) D: Deferred income: the RMB 4,000,000.00 of development of intelligent manufacturing equipment subsidy is
distributed by Dalian City Finance Bureau in 2012.The subsidies are used in the project “Grinding vehicle
integration and processing digitalization”. Currently, the equipment has been used for production manufacturing
and grant is amortized over 10 years.
(5) E: Deferred income: the RMB 4,723,200 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.
(6) F: Deferred income: the RMB 2,400,000.00 interest subsidy of “Axle box and bearing technology improvement
of grand axle load railway carriages” is granted by Wafangdian Finance Bureau in 2014. The subsidy is now in
processing the project “Axle box and bearing technology improvement of grand axle load railway carriages”.
This project is still in the progress and is expected to be completed for inspection in 2016.
(7) G: Deferred income: the 700,000.00 RMB of the construction of workshop for technology masters subsidy is
granted by Dalian Finance Bureau in 2014 according to “Da Cai She (Zhuan) No. [2013]26”, “Da Cai She
(Zhuan) No. [2013]37”, “Da Cai She (Zhuan) No. [2013]45”, “Da Cai She (Zhuan) No. [2014]27”, and “Da Cai
She (Zhuan) No. [2014]32”. No assets are established yet so far, the grant has been booked into non-operating
income.
29 Share capital
2015.12.31 Change for current period 2016.06.30
Issui Transferrin
Shareholders ng Distributi g capital
name/category Amounts % new ng reserves Others Subtotal Amounts %
share shares to share
s capital
402,600,00 100.0
Total shares — — — — — 402,600,000.00 100.00
0.00 0
30 Capital reserves
Items 2015.12.31 Increase Decrease 2016.06.30
Share premium 201,956,446.52 201,956,446.52
Other capital reserves 283,734,603.95 283,734,603.95
Total 485,691,050.47 485,691,050.47
31 Surplus reserves
60
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Items 2015.12.31 Increase Decrease 2016.06.30
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
32 Undistributed profit
Item This period Last period
Closing balance before adjustment 328,731,015.75 362,111,029.14
Opening balance after adjustment 328,731,015.75 362,111,029.14
Add: Current net profit attributable to shareholders of
-44,024,185.93 -33,380,013.39
parent company
Closing balance of 284,706,829.82 328,731,015.75
33 Operating revenue & cost
Items This period Last period
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from
1,022,552,099.60 944,790,304.30 1,067,217,904.74 970,528,875.41
main operation
Revenue from
102,902,932.38 98,811,722.39 100,875,774.60 97,980,386.16
other operation
Total 1,125,455,031.98 1,043,602,026.69 1,168,093,679.34 1,068,509,261.57
34 Operating taxes and surcharges
Items This period Last period
Business tax 217,909.95 168,576.54
City construction tax 2,620,938.60 3,380,286.62
Education surcharge 1,844,718.24 2,452,340.24
Other 11,784.65
Total 4,695,351.44 6,001,203.40
35 Selling expenses
Items This period Last period
Transportation expense 30,956,962.62 41,134,466.75
Employee benefit 17,531,901.82 18,073,440.55
Travel expense 7,641,428.07 8,924,402.37
Conference expense 4,375,408.70 2,399,555.14
Trademark use fee 2,000,000.00 2,000,000.00
Other expense 22,236,984.67 26,056,390.58
61
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Total 84,742,685.88 98,588,255.39
36 Administrative expenses
Items This period Last period
Employee benefit 16,327,231.64 16,574,731.01
Tax expense 4,217,328.76 4,092,368.48
Technology development expense 2,713,800.00 3,012,053.45
Intangible assets amortization 2,221,088.40 2,470,380.54
Guide and firefighting expense 1,647,500.00 1,372,500.00
Depreciation expense 1,199,666.57 1,453,558.98
Business entertaining expense 305,960.70 363,178.10
Travel expense 440,495.52 499,658.13
Other expense 7,573,105.97 10,229,490.24
Total 36,646,177.56 40,067,918.93
37 Financial expenses
Items This period Last period
Interest expenses 17,700,659.58 21,883,652.63
Less: interest income 131,402.31 293,769.45
Add: Exchange losses -5,015,729.40 30,814.35
Add: Others expenditure -162,786.15 -965,669.73
Total 12,390,741.72 20,655,027.80
38 Assets impairment losses
Items This period Last period
Loss of bad debts 1,067.04 15,463.61
Total 1,067.04 15,463.61
39 Non-operating income
(1) Non-operating income list
This period Last period Amounts recognized into
Item current non-recurring profit
or loss
Gains on disposal of non-current
4,649,046.02 957,589.72 4,649,046.02
assets
Including: gains on disposal of
4,649,046.02 957,589.72 4,649,046.02
fixed assets
Income from debt restructuring 2,695,634.43 3,325,164.04 2,695,634.43
Government grants 5,575,349.68 2,497,040.93 5,576,169.68
Penalty income 1,057,551.00 6,649.49 1,057,551.00
62
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Others 26,691.99 107,855.90 25,871.99
Total 14,004,273.12 6,894,300.08 14,004,273.12
(2) Government grants list
Opening Closing Related with
Government subsidy item Balance Balance asset/equity
Technology subsidy from province 368,500.00 368,500.00 Related with asset
Compensation for plants moving 1,352,117.94 1,306,617.94 Related with asset
Improvement of high-end bearing production
236,160.00 236,160.00 Related with asset
subsidies
Exhibition subsidy 20,050.00 Related with equity
Technical research and development subusidy 350,000.00 Related with equity
Interest subsidy of grand axle load 1,125,308.18 Related with asset
Development of intelligent manufacturing equipment
200,000.00 200,000.00 Related with asset
subsidies
Construction of workshop for technology masters
3,762.56 15,712.99 Related with equity
subsidy
Speical subsidies for export stimulation funds 459,501.00 Related with equity
Subsidy from bureau of finance 1,580,000.00 Related with equity
Industry technical research subsidies 250,000.00 Related with equity
Total 5,575,349.68 2,497,040.93
40 Non-operating expenses
This period Last period Amounts recognized into
Item current non-recurring profit or
loss
Loss on disposal of non-current assets 78,416.68 240,546.34 78,416.68
Including: Loss on disposal of fixed assets 78,416.68 240,546.34 78,416.68
Loss from debt restructuring 723,115.84 138,947.37 723,115.84
Penalty loss 650.00 10,000.00 650.00
Others 603,258.18 84,572.29 603,258.18
Total 1,405,440.70 474,066.00 1,405,440.70
41 Income tax expenses
(1) Income tax expenses
Items This period Last period
Current income tax expenses 264,036.88
Total 264,036.88
63
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
（2）Adjustment for profit and income tas expenss
item amoutn
Total profit -44,024,185.93
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 This period Last period
Other cash received relating to operating activities 3,957,803.39 1,986,184.06
Total 3,957,803.39 1,986,184.06
2) Other cash paid relating to operating activities
Items This period Last period
Other cash paid relating to operating
56,508,192.96 62,837,599.68
activities
Total 56,508,192.96 62,837,599.68
3) Other cash received relating to financial activities
Items This period Last period
Other cash paid relating to financial
147,525,694.44
activities
Total 147,525,694.44
4) Other cash paid relating to financial activities
Items This period Last period
Other cash paid relating to financial
150,000,000.00
activities
Total 150,000,000.00
43 Supplementary information of consolidated cash flow statement
Items This period Last period
1. Adjusting net profit into cash flows of operating activities:
Net profit -44,024,185.93 -59,587,254.16
Add: Provision for impairment of assets 1,067.04 15,463.61
Depreciation of fixed assets 64,861,194.84 43,773,526.92
Amortization of intangible assets 2,221,088.40 2,470,380.54
Amortization of long-term deferred expenses 56,079.18 78,249.18
64
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Losses on disposal of fixed assets, intangible assets, and
-4,570,629.34 -717,043.38
long-term assets (income listed with”-”)
Financial expense (income listed with”-”) 12,390,741.72 20,655,027.80
Investment loss (income listed with”-”)
Decrease of inventory (increase listed with”-”) -52,021,892.08 -52,131,204.86
Decrease of operating receivables (increase listed with”-”) -95,261,292.96 -79,538,779.90
Increase of operating payables (decrease listed with”-”)
other 107,958,163.98 139,716,479.91
Net cash flows arising from operating activities -8,389,665.15 14,734,845.66
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 113,941,499.74 82,465,558.09
Less: Opening balance of cash 78,556,030.56 143,399,164.66
Net increase of cash and cash equivalent 35,385,469.18 -60,933,606.57
(3) Cash and cash equivalents
Items This period Last period
Cash 113,941,499.74 78,556,030.56
Closing balance of cash and cash equivalents 113,941,499.74 78,556,030.56
VIII. Equity of Other Entities
1. Equity of subsidiaries
(1) Organization structure of group company
Share（%）
Name of subsidiary Location Registered Location Nature of operation Method
Direct Indirect
Wazhou Liaoyang Manufacturing and
Liaoyang Baita District acquisitio
Bearing construction Wafangdian selling bearing and 100
Weiguo Rd No.61 n
Co.,Ltd machines
Dalian Wazhou Precision Dalian Free Trade Zone Manufacturing and
investmen
Motor Car Bearing Wafangdian SanshiliYongsheng Rd selling bearing and 100
t
Company Limited No.12 machines
Wazhou Precision of
Manufacturing and
Spherical Roller WafangdianBeigongji St acquisitio
Wafangdian selling bearing and 100
Bearings(Wafangdian)Co. No.1 n
machines
, Ltd
IX Risk Related to Financial Instrument
The main financial instruments held by the group company are including investment in share equity, borrowing,
accounts receivable, and accounts payable. The details introduction about each financial instrument is referred to this
notes No.VI above. The related risks of these financial instruments and the risk management policy conducted to
reduce these risks by the group company are introduced as below. The Group management conducts to manage and
65
Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
monitor these risks exposure and control these risks under certain risk level.
1. Objectives and policies of each risk management
The objectives of risk management conducted by the group company are to reach the balance between risk and
profit return by reducing the negative influence to operating performance to the minimum level as well as
maximising the shareholders’ and other investors’ profits. Based on these objectives, the basic risk management
policy is to recognize and analyse all sorts of risk that the group company faced with, to set up the proper risk
tolerance bottom line conducting risk management, as well as to monitor these risks in a timely and effective manner,
and to ensure these risks under the limit level.
(1) Market risk
1) Currency risk
The currency risk is referred as the risk caused by the fluctuation of exchange rate. The main currency risk that the
company faced with is related to the USD since the main export business is settled by USD. Other than the balance
of foreign currency presented in Note VI. 44, all assets and liabilities of company are presented in RMB On
December 31, 2015.The balance in foreign currency of assets and liabilities may cause currency risk with influence
to operating performance.
2) Interest risk
The main potential interest risk which is caused by the fluctuation of the cash flow of financial instruments is related
to the floating rate of bank loan (Note VI. 15). The policy that adopted by the Group is to maintain the floating rate of
loan.
(2) Credit risk
On 31 December, 2015, the Group’s most probable credit risk exposure is from the financial loss primarily due to the
failure of fulfilling the obligation by one party of the contract. The impairment losses of company’s financial assets
are including:
Among the book value of recognized financial assets in the consolidated statement of financial position, for the
financial instruments measured at fair value, their book values reflect the risk exposure, however, not maximum risk
level; the level is changing along with the fair value.
As the aim to reduce the credit risk, the Group sets up the credit department to ensure the credit limit, to examine
and approve the credit application, and to carry out monitor procedures to claim expired creditor’s right. In addition,
at each of balance sheet date, the Group checks with every single process of receipt of receivable to ensure the
sufficiency of provision of bad debt. Therefore, the management of the Group believed the credit risk had been
minimized significantly.
The working capital has low level of credit risk since the cash is deposited in the banks with high credit reputation.
(3) Liquidity risk
As the management of liquidity risk, the Group’s policy is to regularly monitor the sufficiency of cash and cash
equivalent, the liquidity requirements to ensure the normal operations, and the fluctuation of cash flow. The bank
loan activities are under monitoring by management to make sure to comply with the loan agreement.
The liquidity risk is referred as the Group failed to fulfil its financial obligations by the due date. The Group manages
the liquidity risk by the maintain sufficiency of working capital to cover the expired debt to avoid the unacceptable
losses or the damage of Group’s reputation. The Group analyses the debt structure and due time periodically to
ensure the sufficiency of available cash flow. The bank loan activities are under monitoring by management to make
sure to comply with the loan agreement. At the same, the Group has consultation with financial organizations about
the financing activities to maintain the credit level and to reduce the credit risk.
The Group’s main financial resources come from bank loan. By the date of 31 December, 2015, the unencumbered
bank loan credit is 2.14 billion Yuan.
X. Disclosure of Fair Value
XI Related Parties Relationship and Transactions
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
1 Parent company and ultimate controller
Parent Registered Business Registered Shareholding Voting power
company address nature capital percentage percentage (%)
(%)
No. 1 North Manufacture and
Wazhou Gongji Street, sales of bearing
413,793,100.00 60.61 60.61
Group Wafangdian and other
City, Dalian equipments
(2). Subsidiaries
Referring to the content in Note VIII. 1. (1) Organization structure of group company
2 Other related parties
Name of related party Related party relationship
Dalian Wazhou Bearing Manufacturing Other entity controlled by the same parent
Equipment Co., Ltd company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Precision Steel Ball Company
company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Exact Forge Ltd.,
company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Group Precision Turnplate Bearing Ltd
company and ultimate controlling party
Wazhou Group Exact Transmission Bearing Other entity controlled by the same parent
Co., Ltd company and ultimate controlling party
Wazhou Group Equipment Technology Project Other entity controlled by the same parent
Co., Ltd. company and ultimate controlling party
Wazhou Group Special Precision Bearing Co., Other entity controlled by the same parent
Ltd. company and ultimate controlling party
Wazhou Group National Bearings Engineering Other entity controlled by the same parent
Research Centre Co., Ltd company and ultimate controlling party
Dalian North Metal Materials Trade Centre Co., Other entity controlled by the same parent
Ltd company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Group (USA) Bearing CO., Ltd.
company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Group High-end auto bearing CO., Ltd.
company and ultimate controlling party
Wazhou Tong Da Bearing Manufacturing Co., Other entity controlled by the same parent
Ltd company and ultimate controlling party
Dalian GONA Wazhou Auto Bearings Co., Ltd Other related party
Dalian Wazhou Jinzhou Machinery Co., Ltd Other related party
Dalian WazhouFengyuan Machinery Co., Ltd Other related party
3 Related party transactions
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
(1) Purchase of goods
More than the
Amount in Amount in last
Related party type and company Content Approval amount approved
report peirod period
amount or not
WazhouPrecision Steel Ball Purchase of
3,000,000.00 No 2,725,471.71
Company goods 2,568,074.54
Purchase of
Wazhou Exact Forge Ltd., 200,000,000.00 No 94,883,662.09
goods 80,928,801.62
Dalian Wazhou Bearing Purchase of
15,000,000.00 No 19,861,528.90
Manufacturing Equipment Co., Ltd goods 7,600,761.94
Wazhou Group Precision Turnplate Purchase of No
29,594,210.30 50,000,000.00 79,575,288.50
Bearing Ltd goods
Wazhou Group Exact Transmission Purchase of No
45,035,862.80 95,000,000.00 37,937,403.92
Bearing Co., Ltd goods
Wafangdian Tongda Bearing Purchase of
70,000,000.00 No 18,877,936.00
Manufacturing Co., Ltd. goods 25,311,327.78
Wazhou Group Equipment Purchase of No
12,609,205.58 30,000,000.00 15,673,365.23
Technology Project Co., Ltd. goods
Dalian GONA Wazhou Auto Purchase of No
17,547,926.50 40,000,000.00 20,401,779.48
Bearings Co., Ltd goods
Dalian WazhouFengyuan Machinery Purchase of No
44,082,609.39 100,000,000.00 43,801,272.14
Co., Ltd goods
Dalian Wazhou Jinzhou Machinery Purchase of No
41,477,674.50 95,000,000.00 55,427,499.53
Co., Ltd goods
Purchase of No
Wazhou Group 73,888,995.00 160,000,000.00 29,500,397.79
goods
(2) Sales of goods
Related party type and company Content This period Last period
Wazhou Group Sales of goods 17,882,786.55 524,942.00
Wazhou Steel Ball Company Sales of goods 758,255.81 438,013.51
Wazhou Exact Forge Ltd. Sales of goods 80,988,022.23 88,452,666.21
Dalian Wazhou Manufacturing Equipment Co.,
Sales of goods 552,337.25 761,089.22
Ltd
Wazhou Group Turnplate Bearing Ltd Sales of goods 307,525.77 395,923.38
Wazhou Group Exact Transmission Bearing
Sales of goods 14,527,459.89 8,200,007.98
Co., Ltd
Wazhou Group Special Precision Bearing
Sales of goods 1,454,091.21 1,596,963.99
Co., Ltd.
Dalian Wazhou Jinzhou Machinery Co., Ltd Sales of goods 325,157.89 299,558.77
Wazhou Group (USA) Bearing CO., Ltd. Sales of goods 47,514,626.52 84,387,819.12
Wafangdian Tongda Bearing
Sales of goods 250,351.68
Manufacturing Co., Ltd. 115,769.90
Wazhou Group High-end auto bearing
Sales of goods 3,782,649.18
CO., Ltd.
Wazhou Steel Ball Company Provideing service 447,879.20 776,046.02
Wazhou Group Exact Transmission Bearing
Provideing service 444,777.79 577,433.61
Co., Ltd
Wazhou Group Special Precision Bearing
Provideing service 180,012.65 172,678.01
Co., Ltd.
Dalian Wazhou Jinzhou Machinery Co., Ltd Provideing service 48,488.29 122,870.03
Wafangdian Tongda manufacture Co., Ltd Provideing service 57,327.35
4 Assets rent out
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Detials can be found in the part VII “the important rlated party transactions” 1 “The relate transactions related to the
day-to-day operations.”
5 Related party assets transfer and debt structure reconstruction
Amount in the Amount in the last
Related party Type of transaction report peirod peirod
Wazhou Group assets transfer 10,943,000.00
Wazhou Group Equipment Technology debt structure
164,634.20
Project Co., Ltd. reconstruction
Dalian Wazhou Manufacturing Equipment Co., debt structure
20,150.00
Ltd reconstruction
6. Balances with related parties
(1) Accounts receivable due from related parties
Closing Balance Opening Balance
Item Related party Provi Book
Book Balance Provision
sion Balance
Accounts
Wazhou Group 6,903,361.61 6,903,361.61
receivable
Accounts Wazhou Group Special Precision
9,107,540.97 8,421,176.40
receivable Bearing Co., Ltd
Accounts 48,281,914.3
Wazhou Group (USA) Bearing CO., Ltd. 35,742,461.41
receivable 2
Accounts Wazhou Group Exact Transmission
104,803.24 104,803.24
receivable Bearing Co., Ltd
Accounts Dalian WazhouFengyuan Machinery
12,295.63
receivable Co., Ltd
Accounts Wazhou Group High-end auto bearing
3,715,179.21
receivable CO., Ltd.
Wazhou Group High-end auto bearing
Prepaid 6,956,433.86
CO., Ltd.
Dalian Wazhou Manufacturing
Prepaid 40,853.62
Equipment Co., Ltd
(2) Accounts payable due from related parties
Item Related party Closing Balance Opening Balance
Dalian Wazhou Manufacturing
Accounts ayable 32,630,839.08 37,230,732.63
Equipment Co., Ltd
Accounts ayable Wazhou Steel Ball Company 2,876,185.21 4,099,619.68
Accounts payable Wazhou Group 18,764,171.56 5,723,806.00
Accounts ayable Wazhou Exact Forge Ltd. 9,651,538.76 30,763,439.55
Accounts ayable Wazhou Group Turnplate Bearing Ltd 39,958,061.95 9,451,169.77
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Accountspayable Wazhou Group Exact Transmission Bearing Co., Ltd 47,919,391.19 73,147,036.86
Accounts ayable Dalian Wazhou Jinzhou Machinery Co., Ltd 25,027,287.08 18,007,755.48
Accounts ayable Dalian WazhouFengyuan Machinery Co., Ltd 22,778,990.48 10,024,155.08
Accounts ayable Wazhou Group Equipment Technology Project Co., Ltd. 19,806,900.50 12,482,589.73
Accounts ayable Wafangdian Tongda manufacture Co., Ltd 32,115,656.73 27,932,114.26
Accounts ayable Wazhou Group (USA) Bearing CO., Ltd. 484,765.77
Accounts ayable Wazhou Group Special Precision Bearing Co., Ltd. 395,708.76
Accounts ayable Dalian GONA Wazhou Auto Bearings Co., Ltd 20,664,595.49 17,871,582.98
Other payables Wazhou Group 15,178,004.31 21,234,927.86
Dalian Wazhou Manufacturing
Other payables 358,588.45
Equipment Co., Ltd
Other payables Wazhou Group Equipment Technology Project Co., Ltd. 952,000.00 952,000.00
Wazhou Group (USA) Bearing CO., Ltd. 37,444.44
7. Contingency
As at June 30,2016, the Group does not have any other contingencies.
XII. Share-Based Payment
XIII. Commitment and Contingency
As at June 30,2016, the Group does not have any other significant commitments.
XIV. Events after the Balance Sheet Date
The Group does not have any other significant events after the Balance Sheet Date.
XV. Other Significant Events
1. Debt restructuring
In this report peirod, the Company has signed the ‘Debt Restructuring Agreement’ with the customers, through
cash reimbursement less than the debt-equity carrying value, and implemented the restructuring, which lead to the
debt restructuring losses RMB723,115.84Yuan, and were recognized into non-operating expenses.
In this report peirod, the Company has signed the ‘Debt Restructuring Agreement’ with the creditors, through cash
or bank notes reimbursement less than the debt-equity carrying value, and implemented the restructuring, which
lead to the debt restructuring income RMB2,695,634.43Yuan and were recognized into non-operating revenue.
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
XVI. Notes to the Main Items of the Financial Statements of Parent Company
1 Accounts receivable
(1) Accounts receivable category
2016.06.30
Items Booking balance Provision
Amount % Amount %
Accounts receivable with significant individual amount and
7,718,274.69 0.67% 7,718,274.69 100.00%
separate bad debt provision
Accounts receivable with bad debt provision based on the
1,103,970,903.58 0.97% 44,005,723.81 4.26%
characters of credit risk portfolio
Accounts receivable with insignificant individual amount and
22,131,211.74 1.93% 22,131,211.74 100.00%
separate bad debt provision
Total 1,133,820,390.01 100.00% 73,855,210.24
(Continued)
2015.12.31
Items Booking balance Provision
Amount % Amount %
Accounts receivable with significant individual amount
7,718,274.69 0.71% 7,718,274.69 100.00%
and separate bad debt provision
Accounts receivable with bad debt provision based on
1,064,640,574.39 97.27% 44,006,790.85 4.53%
the characters of credit risk portfolio
Accounts receivable with insignificant individual amount
22,131,211.74 2.02% 22,131,211.74 100.00%
and separate bad debt provision
Total 1,094,490,060.82 100.00% 73,856,277.28
1) Individually significant amounts of accounts receivable accrued the bad debt provision separately at the end of June
30,2016
Closing Balance
Debtors name Accounts Provision for Proportion
Reasons for provision
receivable bad debts (%)
A/R with over 5 years aging,
Company A 3,910,007.43 3,910,007.43 100.00%
unlikely to be collected
A/R with over 5 years aging,
Company B 3,808,267.26 3,808,267.26 100.00%
unlikely to be collected
Total 7,718,274.69 7,718,274.69 —
2) Accounts receivable accrued the bad debt provisions in the portfolio as accounting aging analysis method
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Closing Balance
Aging Provision for bad Proportion
Accounts receivable
debts (%)
Within 1 year 831,527,165.28 8,315,271.65 1.00%
1-2 years 111,073,673.73 5,553,683.69 5.00%
2-3 years 48,924,390.30 9,784,878.06 20.00%
3-4 years 40,703,780.82 20,351,890.41 50.00%
Total 1,032,229,010.13 44,005,723.81
(2) Bad debt provision accrued and write-off (withdraw)
(3) Accounts receivable written off in current period
Item Written-off Amount
Accounts receivable written off 2,134.08
2 Other receivables
2. Other receivables
(1) The category of other receivables
Closing Balance
Items Booking balance Provision Booking
balance
Amount % Amount %
Other receivables identified bad
debt provision based on the
21,610,358.03 0.88% 1,037,522.18 0.05% 20,572,835.85
characters of credit risk
portfolio
Other receivables with
insignificant individual 100.00
1,512,562.13 5.24% 1,512,562.13
amount and separate bad %
debt provision
Total 23,122,920.16 100.00% 2,550,084.31 20,572,835.85
(Continued)
Opening Balance
Items Booking balance Provision Booking balance
Amount % Amount %
Other receivables identified
bad debt provision based on
20,717,217.52 76.60% 1,037,522.18 7.85% 19,679,695.34
the characters of credit risk
portfolio
Other receivables with
100.00
insignificant individual 1,512,562.13 6.80% 1,512,562.13
%
amount and separate bad
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
debt provision
Total 22,229,779.65 100.00% 2,550,084.31 19,679,695.34
1) Other receivables accrued the bad debt provisions in the portfolio as accounting aging analysis method
Closing Balance
Aging Provision for bad Proportion
Other receivables
debts (%)
Within 1 year 12,359,088.23 123,590.88 1.00%
1-2 years 935,907.95 46,795.40 5.00%
2-3 years 692,037.93 138,407.59 20.00%
3-4 years 1,457,456.61 728,728.31 50.00%
Total 15,444,490.72 1,037,522.18
(2) Other receivables categorized by nature
Nature Closing Balance Opening Balance
Other receivables 23,122,920.16 22,229,779.65
Total 23,122,920.16 22,229,779.65
3 Long-term equity investments
(1) Category of long-term equity investments
Item Closing Balance Opening Balance
Opening
Closing Balance Provision Book Value Provision Book Value
Balance
Investment into
211,583,897.67 211,583,897.67 211,583,897.67 211,583,897.67
subsidiaries
Total 211,583,897.67 211,583,897.67 211,583,897.67 211,583,897.67
(2) Investments into subsidiaries
Provision
Opening Closing carried Closing Balance
Subsidiaries names Increase Decrease
Balance Balance current of provision
period
Wazhou Liaoyang Bearing
17,337,259.95 17,337,259.95
construction Co.,Ltd
Dalian Wazhou Precision
Motor Car Bearing Company 45,478,956.37 45,478,956.37
Limited
Wazhou Precision of Spherical
148,767,681.35 148,767,681.35
Roller
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
Bearings(Wafangdian)Co., Ltd
Total 211,583,897.67 211,583,897.67
4 Operating revenue and cost
Item This period Last period
Revenue Cost Revenue Cost
Revenue from main
1,045,680,912.95 974,858,913.33 1,105,704,985.20 1,013,477,311.71
operation
Revenue from other
93,470,653.82 91,153,250.73 102,017,182.39 99,888,620.17
operation
Total 1,139,151,566.77 1,066,012,164.06 1,207,722,167.59 1,113,365,931.88
XVII Supplementary Information to the Financial Statements
1. Non-operating profit or loss
Items Amount Notes
Gain or loss from disposal of non-current assets 4,570,629.34
Government grants recorded into profit or loss during current period 5,575,349.68
Profit or loss from debts restructuring 1,972,518.59
Others non-operating revenue and expense besides the above items 480,334.81
Effect from income tax 1,359,545.06
Total 11,239,287.36
2. Return on equity and earnings per share
Weighted average Earnings per share (EPS)
Profit of report period return on net assets Basic Diluted EPS
(%) EPS
Net profit attributable to shareholders of parent company -3.32% -0.11 -0.11
Net profit after deducting non-recurring gains and losses
-4.17% -0.1373 -0.1373
attributable to shareholders of parent company
3. Differences in accounting information under IAS and domestic accounting standard
Chapter X. List of reference documents
List of reference documents
1. The 2016 mid-yare 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.
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Wafangdian Bearing Co., Ltd（Wazhou B） 2016 Mid-year Report
75
