Wafangdian Bearing Company Limited 2016 Midyear Report Wafangdian Bearing Company Limited
2016 Midyear Report
2016-25
August 25, 2016
WafangdianBearingCompanyLimited 2016 MidyearReport
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 assumetheindividualandassociatedresponsibilitiesforthetruth,accuracyandcompletenessofthecontents.
Besidesthefollowingdirectors,alltheotherdirectorsattendedtheBoardmeetinganddiscussedthereport.
|||||
|-|-|-|-|
|Name|Post|Reasons|Assignee name|
|TangYurong|director|Busywork|FangBo|
|WanShouyi|Independentdirector|Busywork|ZhangLi|

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:guaranteethetruthandcompletenessofthefinancialreportintheannualreport.
Accordingtotherelevantprovisionsofthe"ShenzhenStockExchangeListingRules",ifthecompany‘snetprofitattributabletoshareholdersofauditlistedcompaniescontinuetobenegative bytheyear2016,thecompanyshareswill besuspendedfromlistinginthe2016annual
announcement.Pleasethemajorityofinvestorsofinvestmentrisks.
The description of the future development in this report does not constitute a commitment for investors.Investorsarerequestedtopayattentiontotherisksinvolvedinyourinvestment.
WafangdianBearingCompanyLimited 2016 MidyearReport
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.........................................................................................6ChapterⅤ
SignificantEvents..............................................................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 andStaff.......错误！未定义书签。
Chapter
Ⅷ.
CorporateGovernance.....................................................错误！未定义书签。
ChapterⅨ.
InternalControl.................................................................错误！未定义书签。
ChapterⅩ.
Financial Report(Attachment)...........................................错误！未定义书签。
WafangdianBearingCompanyLimited 2016 MidyearReport
Glossary
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|-|-|-|
|Terms|Definedas|Description|
|Company,theCompany|Definedas|WafangdianBearingCompanyLimited|
|WazhouGroup|Definedas|WafangdianBearingGroupCompany|
|thereportperiod,thecurrentperiod,thecurrentyear|Definedas|January1,2016–June30,2016|
|LiaozhouCo.,Ltd|Definedas|WazhouLiaoyangBearingManufactureCo.,Ltd|
|Dalianmotor|Definedas|DalianmotorBearingCo.,Ltd|
|SRBcompany|Definedas|Wazhouspherialrollerbearingcompanylimited|
|TheBoardofDirectors|Definedas|WafangdianBearingCompanyLimitedTheBoardofDirectors|
|TheSupervisoryCommittee|Definedas|WafangdianBearingCompanyLimitedTheSupervisoryCommittee|
|TheShareholders’Meeting|Definedas|WafangdianBearingCompanyLimitedTheShareholders’Meeting|
|ShenJiaoSuo|Definedas|ShenZhenStockExchange|
|SRC|Definedas|ChinaSecuritiesRegulatoryCommission|

WafangdianBearingCompanyLimited 2016 MidyearReport
Chapter II.Company Profile
I.CompanyInformation
|||||
|-|-|-|-|
|Abbreviatednameofthestock|WazhouB|Stockcode:|200706|
|ListinglocationoftheCompany’sstock:|ShenzhenStockExchange|||
|ChinesenameoftheCompany|瓦房店轴承股份有限公司|||
|AbbreviationofChinesename|瓦轴股份公司|||
|EnglishnameoftheCompany|WafangdianBearingCompanyLimited|||
|AbbreviationofEnglishname|WBC|||
|LegalrepresentativeoftheCompany|MengWei|||
|Registeredaddress|No.1BeigongjiStreet,WafangdianCity,LiaoningProvince,China.|||
|P.C|116300|||
|officeaddress|No.1BeigongjiStreet,WafangdianCity,LiaoningProvince,China.|||
|officeP.C|116300|||
|Website|http//www.zwz-200706.com|||
|E-mail|zwz2308＠126.com|||

II.Contacts
||||
|-|-|-|
||SecretaryoftheBoard|RepresentativeofStockAffairs|
|Name|SunNajuan|KeXin|
|Correspondenceaddress|No. 1 Beigongji Street, Wafangdian City,LiaoningProvince,China.|No. 1 Beigongji Street, Wafangdian City,LiaoningProvince,China.|
|Consultingtelephone|0411-39116369|0411-39116732|
|Fax|0411-39116738|0411-39116738|
|E-mail|zwz2308＠126.com|zwz2308＠126.com|

III.Otherinformation
i.Thewaytocontactwithcompay
InthereportperiodtheRegisteredaddress,P.C,officeaddress,officeP.Cofthecompanyisnochange.Detialscanbeseenin 2015annualreport.
ii.Placeforinformationdisclosure
Inthereportperiodtheplaceforinformationdisclosureisnochange.isnochange.Detialscanbeseenin2015annualreport. iii.ChangeofBusinessRegistration
In the report period the Registration.date Registration place No. of Incorporation,Certificate No. ofTaxation Registration Organizationcodeisnochange.etialscanbeseenin2015annualreport.
iv.Otherrelevantinformation
Inthereportperiodotherrelevantinformationisnochange.
WafangdianBearingCompanyLimited 2016 MidyearReport
Chapter III. Financial Highlights
I.Mainaccountingdataandindices
Arethere anyretrospectiveadjustmentsorrestatementoffinancial informationofpreviousyeardue tochangeof accounting policiesorcorrectingofaccountingerrors?
[]Yes[V]No
InRMBYuan
|||||
|-|-|-|-|
||currentperiod|previousperiod|+/-（％）comparingwiththepreviousperiod|
|Turnover(RMB)|1,125,455,031.98|1,168,093,679.34|-3.65%|
|Netprofitattributabletoshareholdersofthelistedcompany(Yuan)|-44,024,185.93|-59,587,254.16|-26.12%|
|Netprofitattributabletotheshareholdersofthelistedcompanyandafterdeductingofnon-recurringgain/loss(RMB)|-55,263,473.29|-65,404,823.42|-15.51%|
|Net Cash flow generated by businessoperation(RMB)|-8,389,665.15|14,734,845.66|-156.94%|
|Basicearningspershare(Yuan/share)|-0.11|-0.15|-26.67%|
|Dilutedearningspershare(Yuan/share)|-0.11|-0.15|-26.67%|
|Netreturnonequity(%)|-3.32%|-4.41%|1.09%|
||Endof2016.06.30|Endof2015.12.31|Changedoverlastyear(%)|
|TotalAssets(RMB)|3,520,139,949.23|3,523,969,203.48|-0.11%|
|Owner’sEquityAttributedtoShareholdersofListedCompany(RMB)|1,304,440,789.40|1,348,464,975.33|-3.26%|

II.DifferencesinaccountinginformationunderIASanddomesticaccountingstandard
Nodifference
III.Non-recurringgain/lossitemsandamounts
InRMBYuan
||||
|-|-|-|
|Items|Amount|Remarks|
|Gain/lossofnon-currentassets(includestheneutralizedpartoftheassetimpairmentprovisiondrawnalready)|4,570,629.34||
|Gainsandlossesincludedinthecurrentperiodofgovernmentsubsidies,excludingthosegovernmentgrantswhicharecloselyrelatedtonormalbusinessandinlinewithnationalpolicy,orinaccordancewithfixedstandardsorquantities|5,575,349.68||
|Debtrestructuringgainsandlosses|1,972,518.59||
|Othernon-businessincomeandexpendituresotherthantheabove|480,334.81||
|Influencedamountofincometax|1,359,545.06||
|Total|11,239,287.36|--|

For theCompany‘s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on Information Disclosure for Companies Offering their Securities to thePublic–Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the ExplanatoryAnnouncement No.1 on Information Disclosure for Companies Offering their Securities to thePublic–Non-recurring Gains and Losses which have been defined as recurring gains and losses, it is
necessarytoexplainthereason.
□Applicable√Inapplicable
WafangdianBearingCompanyLimited 2016 MidyearReport
Chapter IV Directors Report
I.Overview
Inthefirsthalfofyear,themacroeconomicdownwardpressurediminished,theindustrialeconomyremainsinthe doldrums,thebearingindustryisstillinnegativegrowth,but thecompanyhasovercomethelackofmarketorders,sales pricescontinuetodecline,marketcompetitionandmanyotherdifficulties,hastakenvariousmeasurestoactivelyandsteadily, maintainedasteadybusinessdevelopment.
At the end of June 30, company's total assets is 3.25014 billion Yuan, which decrease0.11% compared with the beginning of this year; Net assess attributing to shareholders of listed company 1.30444 billion Yuan, decreasedby3.26% comparedwith thenbeginningof thisyear;Operating incomeis1.12546billionYuan,decreaseby3.65%comparedwith the sameperiod lastyear; Netprofit ofattributingto shareholdersofthe parentcompany isminus44.02 millionYuan, inthe last yearwas59.59millionYuan.
II.AnalysisofMainBusiness
||||||
|-|-|-|-|-|
|Item|Reportperiod|Lastreportperiod|Changedby%YoY|Changereason|
|MainBusinessIncome|1,125,455,031.98|1,168,093,679.34|-3.65%||
|MainBusinessCost|1,043,602,026.69|1,068,509,261.57|-2.33%||
|SalesExpenses|84,742,685.88|98,588,255.39|-14.04%||
|ManagementExpenses|36,646,177.56|40,067,918.93|-8.54%||
|FinancialExpenses|12,390,741.72|20,655,027.80|-40.01%|1.theloaninterestdecreasewith5.41millionYuan,2.exchangegainandlossdecreasewith5.04millionYuan.3.long-termloaninterestincrease1.23millionYuan.|
|TaxExpenses||264,036.88|-100.00%|BecausetheSRBcompanyisloss,thetaxexpenseisunprovision.|
|Spending on research anddevelopment of the businessincomeratio|45,000,000.00|55,000,000.00|-18.18%||
|NetCashFlowsfromOperatingActivities|-8,389,665.15|14,734,845.66|-156.94%|Thesaleamountdecrease,receiveablefromcustomerdecline,whichmaketheNetCashFlowsfromOperatingActivitiesdecreasesharpe.|
|NetCashFlowsfromInvestingActivities|-25,642,335.69|-17,722,945.26|44.68%|Thecashpaytoassetsincrease.|
|NetCashFlowsfromFinancingActivities|68,025,342.68|-58,164,206.80|-216.95%|Mainlyaffectedbyloanchange,theRepaymentofborrowingsdecrease.|
|NetIncreaseinCashandCashEquivalents|35,385,469.18|-60,933,606.57|-158.07%|NetCashFlowsfromFinancingActivitiesincrease.|
|Billsreceivable|176,846,224.26|100,506,003.70|75.96%|Because the returned money bybank acceptance increase.|
|Dividendreciivable|0.00|240,000.00|-100.00%|Dividendreciivablewith240thousandYuanfromMEatthebeginningoftheyear|
|Non-operatingrevenue|14,004,273.12|6,894,300.08|103.13%|1.disposaloffixedassetsincomeincreasedwith3.69millionYuan.2.Mainlybecausethefineincomefromagency.3.thegovernmentsubsidiaryincreasedwith3.08millionYuan.|
|Non-operatingcost|1,405,440.70|474,066.00|196.47%||

WafangdianBearingCompanyLimited 2016 MidyearReport
||||||
|-|-|-|-|-|
|||||1.debtrestructlossincreasewith580thousandYuan.2.personalinjurycompensationwith550thouandYuan.|
|Othercashreceivedrelatingtooperatingactivities|3,957,803.39|1,986,184.06|99.27%|.thegovernmentsubsidiaryincrease.|
|Netcashreceivedfromdisposaloffixedassets,intangibleassetsandotherlong-termassets|10,000,000.00|18,000.00|55,455.56%|SaleassetstoWBGC,receivethepayment.|
|Cashpaidtoacquirefixedassets,intangibleassetsandotherlong-termassets|35,882,335.69|6,490,945.26|452.81%|Paymentforgrindingmanchines|
|Cashpaidtoacquireinvestment||11,250,000.00|-100.00%|MainlybecauselastyearthecompanybuyDaliansikaifuZWZBearingCo.,Ltd.51%oftheequity,theissuingbankletterofcreditof11.25millionyuanpaymentatmaturity|
|Otherproceedsrelatingtofinancingactivities|147,525,694.44|||Generationsofforgingdiscountedrepaymentseparatelytothepaymentrelatedtofinancingactivitiescash.Atthesametime,theimputationinthepurchaseofgoodsandreceiveservicespaidcashwith70.83millionYuan.|
|Repaymentofborrowings|287,000,000.00|488,000,000.00|-41.19%|Affectedbyloanchange,therepaymentofborrowingsdecreaseinthereportpeirod.|
|Effectsofforeignexchangeratechangesoncash|1,392,127.34|218,699.83|536.55%|Becausethedollarexchangerateincrease,theexchangeprofitincrease,impactofthecurrentdollardenominatedbankdeposits|

 Theprofitstructureorsourcechangegreatly
□Applicable√Inapplicable
Pre-disclosureofoperationplan
□Applicable√Inapplicable
Reviewontheprogressofpriordisclosuredevelopmentstrategyandbusinessplanduringthereportingperiod In2016,thedomesticmarketwasmorecompetitive,priceofproductwasfailing,profitmarginswasbecoming
narrowly.Theinternationalmarketcompetitionwastrendinghedomesticmarket,domesticcompetitioninternationalization wasseriousdaybyday,salespriceofbearingproductcontinuedtoslide,Thesereasonsconstituteabiggerthreattoimprove operationquality,causethecompanydidnotfinishbusinessplan.
III.Mainbusinesscomposition
InRMBYuan
||||||||
|-|-|-|-|-|-|-|
||Operatingincome|Operatingcost|BOI|+/-(%)ofoperatingincome|+/-(%)ofoperatingcost|+/-(%)ofBOI|
|ByIndustries|||||||
|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:TrafficBearing|234,876,679.63|209,419,001.52|10.84%|-3.19%|-5.13%|1.83%|
|SpecialBearing|264,036,944.51|223,609,548.98|15.31%|-9.63%|-9.51%|-0.12%|
|CommonBearing|25,188,757.18|30,843,348.31|-22.45%|114.30%|109.50%|2.81%|
|Industrialincome|313,045,519.50|309,100,505.47|1.26%|-4.23%|2.48%|-6.46%|
|OnProducts|||||||
|Bearing|997,363,342.42|913,946,955.99|8.36%|-5.50%|-4.38%|-1.08%|

WafangdianBearingCompanyLimited 2016 MidyearReport
||||||||
|-|-|-|-|-|-|-|
|Industryoperation|25,188,757.18|30,843,348.31|-22.45%|114.30%|109.50%|2.81%|
|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.Corecompetenceanalyzing
As the country's largest bearing technology and productr&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 haveestablishedasignificantadvantage.
Company improve responsiveness to the market and customer personalized demand, in line with customer's personalizeddesignandneedsofmanufacturingprocessesbalancingcost,deliverytimeandcustomer,
Thecompanyhascompleteproductservicesystemand24-hourdynamicserviceabilityproduct operatingsite.Andwas praised with a goodimage of the "ten value-addedservices"by the majority customers.Company has strongmanufacturing capability and quality assurance capabilities, extensive services in railway, automobile, metallurgy, mining, and other industriesandfields.
Company has established strategic cooperative relations with key customers in domestic equipment applications, carry out thedepthof marketingthroughinvolvementincustomervalueengineer,setfirmlyup thecompany'sbrandandinfluence in the domestic bearing market, the company has won the certification qualification of important target markets in the internationalmarket,theinternationalpopularityestablishedpreliminary.
V.InvestmentAnalysis
1.Externalequityinvestment
None
2.AnalysisofMainSubsidiariesandInvestmentCompanies
Unit:RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|CompanyName|Type|Industry|MainProductorService|RegisteredCapital|TotalAsset|NetAsset|OperatingRevenue|OperatingProfit|NetProfit|
|LiaoyangBearing|Subsidiary||ProductandSaleBearingandmachine-electricalequipment|19,350,000|115,076,935.48|-48,220,600.98|78,874,398.15|-5,338,468.89|-3,648,342.18|
|DalianElectricalEquipment|Subsidiary||ProductandSaleBearing|10,000,000|116,143,552.74|19,653,622.82|66,288,350.18|764,169.49|764,169.49|
|Wzhouprecisionsphericalrollerbearing(Wafangdian)Co.,Ltd.|Joint-stockCompany||ProductandSalesSphericalRollerBearing|194,000,000|243,863,379.97|226,056,372.94|51,235,049.19|-5,451,705.19|-5,348,869.95|

3.ImportantNon-raisedCapital’sProjects
Unit:0000’Yuan
|||||||
|-|-|-|-|-|-|
|Project|Total PlanInvestment|Investmentinthereportperiod|Accumulatedinvestment|Progress|Earnings|

WafangdianBearingCompanyLimited 2016 MidyearReport
|||||||
|-|-|-|-|-|-|
|Thesecondgenerationwheelhubbearing|787|273|620|80.00%|Imformthegrindingabilityofsecondgenerationwheelhubwith150thousandsets.|
|Preciserollerimproved|1,400|306|1,106|85.00%|Providematchedrollerformainproduct|
|Largepreciseentitycage|550|14|147|30.00%|ProvidecageforLargeprecisebearing|
|Heattreamentandmatchedmachines|660|187|478|60.00%|Improvetheability|
|Otherprojects|2,000|1,106|1,106|65.00%|Toensurethebearingqulityandenhanceproductivity|
|Total|5,397|1,886|3,457||--|

 VI.Forecastforoperationoutstandingfrom2016JanuarytoSeptember
Inapplicable
VII. Explanation of the Board of Directions and Board of supervisor on the QualifiedAuditor’s Report Issued by the CPAs
Thefinancialreportisunaudited
VIII Explanation of the Board of Directions on the QualifiedAuditor’s last year Report Issued by the CPAs
Thefinancialreportisunaudited
IX. Dividend Distribution
Inapplicable
X.Reception of investigations,communications,or interviews in the report period
|||||||
|-|-|-|-|-|-|
|Time/date|Place|Way|Typeofvisitors|Visitors|Maincontentinvolvedandmaterialprovided|
|January27,2016|Office|Telephonecommunication|Privateinvestor|Privateinvestor|The general information ofthecompany|
|March9,2016|Office|Telephonecommunication|Privateinvestor|Privateinvestor|The general information ofthecompany|
|March17,2016|Office|Telephonecommunication|Privateinvestor|Privateinvestor|The general information ofthecompany|
|April27,2016|Office|Telephonecommunication|Privateinvestor|Privateinvestor|The general information ofthecompany|

WafangdianBearingCompanyLimited 2016 MidyearReport
ChapterⅤ
Significant Events
I.CorporateGovernance
Duringthereportperiod,theCompanyhadcontinuouslyobservedCompanyLaw,SecuritiesLaw,andGuidelinesof
CorporateGovernanceforListedCompanyandrelevantregulationstoimproveandenhanceitscorporategovernance. 1.1Theholdingoftheshareholders,boardofdirectorsandboardofsupervisors,thevotingproceduresandtheformationof theresolutionsweretotallysubjecttotheseregulations.
1.2TheCompanyhasmadeitsinternalmanagementsystemsandregulationsforrestrictionofbudgeting,purchasing, logisticsandsale,etc,andexecutedthemstrictly.
1.3Thecompanyhasseparatedbusiness,personnel,assets,interiororganizationandfinancefromitsholdingshareholder: (1)TheCompanyhadindependentoperationsitself,withitsbusinessseparatedfromitsholdingshareholders;
(2)TheCompanywasindependentintermsofitspersonnel,laborandsalarymanagement,andhaditsownindependent laborandpersonnelmanagementsystems.
(3)Theproductionsystem,auxiliaryproductionsystemandsupplementaryfacilitiesoftheCompanywereindependentfrom thecontrollingshareholder.
(4)TheCompanyhasseparatedtheaccountingfromthecontrollingshareholder.TheCompanycarriedoutindependent financeandaccountingonitsownandpaidtaxesindependently.
(5)TheCompanyhasestablishedtheorganizationsindependentontheholdingshareholder
II. MainLawsuitsandArbitrationAffairs
□Applicable√Inapplicable
Therewerenoimportantlawsuitsandarbitrationaffairs.
III.Mediaquery.
□Applicable√Inapplicable
Therewasnomediaqueryinthereportperiod.
IV. BankruptcyandRecombination
□Applicable√Inapplicable
V.Assetbusiness
√Applicable□Inapplicable
Salesofasset
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Thedealingparty|assets forsale|Saledate|Price（10thousandYuan）|TheassetsContrubutiontoprofit|Influencetocompany|Pricingprinciple|Whetherisrelatedtransactions|Theassetsrightistotallychangedornot|Thedebtistotallytransferdornot|Dateofdisclosure|Theindex|
|WazhouGroup|assetsandliabilitiesrelatedwithautotransfercasebearing|May18,2018|1,094.3||Detialscanbefoundinanncement||valueofnetassets.|Yes|||http：//www.cninfo.com.cnWafangdianBearing CompanyLimitedAffiliateTransactionAnnouncementofAssetsSale|

VI.ImplementationandInfluenceofEquityIncentives
□Applicable√Inapplicable
WafangdianBearingCompanyLimited 2015MidyearReport
VII.ImportantContractsandImplementation
1、Therelatetransactionsrelatedtotheday-to-dayoperations.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Relativeparties|Relationship|Relativetype|Content|Principleofprice|RelativePrice|RelativeAmount(RMB’0000)|ThePercentageofaccountedforsimilardeals(%)|Approvalamount(RMB’0000)|Morethantheapprovedamountornot|TheWayOfAccount|Marketprice|DisclosureDate|DisclosureIndex|
|WazhouprecisionSteelBallCompany|OtherCompaniescontrolledbythesamecontrollingshareholdersandtheultimatecontrollingparty|MerchandiseProcurement|Components|JusticeandEquity|Marketprice|257|0.17%|300|no|CashPaymentorTheKnot||||
|||LeaseofHouses|LeaseofHouses|JusticeandEquity|Marketprice|45|0.03%|22|Yes|CashPaymentorTheKnot||||
|||Salesofgoods|GoodsandMaterials|JusticeandEquity|Marketprice|76|0.07%|70|Yes|CashPaymentorTheKnot||||
|||Landrent|Landrent|JusticeandEquity|Marketprice|10|0.01%|20|no|CashPaymentorTheKnot||||
|||ProvideService|Heattreatment|JusticeandEquity|Marketprice|45|0.03%|300|no|CashPaymentorTheKnot||||
|Wazhouprecisionforging Ltd.,|OtherCompaniescontrolledbythesamecontrollingshareholdersandtheultimatecontrollingparty|MerchandiseProcurement|Components|JusticeandEquity|Marketprice|8,093|5.25%|20,000|no|CashPaymentorTheKnot||||
|||Salesofgoods|GoodsandMaterials|JusticeandEquity|Marketprice|8,099|7.20%|21,000|no|CashPaymentorTheKnot||||
|||LeaseofHouses|LeaseofHouses|JusticeandEquity|Marketprice|17|0.02%|55|no|CashPaymentorTheKnot||||
|||Landrent|Landrent|JusticeandEquity|Marketprice|28|0.02%|55|no|CashPaymentorTheKnot||||
|DalianWazhouManufacturingEquipmentCo.,Ltd|OtherCompaniescontrolledbythesamecontrollingshareholdersandtheultimatecontrollingparty|MerchandiseProcurement|Production|JusticeandEquity|Marketprice|712|0.46%|1,500|no|CashPaymentorTheKnot||||
|||Salesofgoods|GoodsandMaterials|JusticeandEquity|Marketprice|55|0.05%|400|no|CashPaymentorTheKnot||||
|||MerchandiseProcurement|Equipment|JusticeandEquity|Marketprice|48|0.05%|1,800|no|CashPaymentorTheKnot||||

WafangdianBearingCompanyLimited 2015MidyearReport
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|WazhouGroupTurnplateBearingLtd|OtherCompaniescontrolledbythesamecontrollingshareholdersandtheultimatecontrollingparty|MerchandiseProcurement|BearingProduct|JusticeandEquity|Marketprice|2,959|1.92%|5,000|no|CashPaymentorTheKnot|
|||Salesofgoods|Materials|JusticeandEquity|Marketprice|31|0.03%|200|no|CashPaymentorTheKnot|
|WazhouGroupprecisionTransmissionBearingCo.,Ltd|OtherCompaniescontrolledbythesamecontrollingshareholdersandtheultimatecontrollingparty|MerchandiseProcurement|BearingProduct|JusticeandEquity|Marketprice|4,504|2.92%|9,500|no|CashPaymentorTheKnot|
|||Salesofgoods|Materials|JusticeandEquity|Marketprice|1,453|1.29%|6,000|no|CashPaymentorTheKnot|
|||ProvideService|Heattreatment|JusticeandEquity|Marketprice|44|0.03%|0|Yes|CashPaymentorTheKnot|
|WazhouGroupPrecisionspecialBearingCompanyLimited|OtherCompaniescontrolledbythesamecontrollingshareholdersandtheultimatecontrollingparty|Salesofgoods|GoodsandMaterials|JusticeandEquity|Marketprice|145|0.13%|600|no|CashPaymentorTheKnot|
|||LeaseofHouses|LeaseofHouses|JusticeandEquity|Marketprice|26|0.02%|51|no|CashPaymentorTheKnot|
|||Landrent|Landrent|JusticeandEquity|Marketprice|4|0.00%|9|no|CashPaymentorTheKnot|
|||ProvideService|Heattreatment|JusticeandEquity|Marketprice|18|0.01%|100|no|CashPaymentorTheKnot|
|Equipmenttechnicalengineering|OtherCompaniescontrolledbythesamecontrollingshareholdersandtheultimatecontrollingparty|MerchandiseProcurement|Equipmentandservice|JusticeandEquity|Marketprice|1,261|0.82%|3,000|no|CashPaymentorTheKnot|
|WafangdianTongdaBearingManufacturingCo.,Ltd|OtherRelatedparty|MerchandiseProcurement|BearingProduct|JusticeandEquity|Marketprice|2,531|1.64%|7,000|no|CashPaymentorTheKnot|
|||ProvideService|Heattreatment|JusticeandEquity|Marketprice|0|0.00%|50|no|CashPaymentorTheKnot|
|||Salesofgoods|GoodsandMaterials|JusticeandEquity|Marketprice|12|0.01%|100|no|CashPaymentorTheKnot|
|DaLianKOYOCo.,Ltd|OtherRelatedparty|MerchandiseProcurement|Goods|JusticeandEquity|Marketprice|1,755|1.14%|4,000|no|CashPaymentorTheKnot|
|DaLianWazhouFengyuan|OtherRelatedparty|MerchandiseProcurement|BearingProduct|JusticeandEquity|Marketprice|4,408|2.86%|10,000|no|CashPaymentorTheKnot|

WafangdianBearingCompanyLimited 2015MidyearReport
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|MachineCo.,Ltd||Salesofgoods|Leaseofhuouse|JusticeandEquity|Marketprice|5|0.00%|11|no|CashPaymentorTheKnot|
|||ProvideService|Heattreatment|JusticeandEquity|Marketprice|0|0.00%|20|no|CashPaymentorTheKnot|
|DaLianWazhouJinZhouMachineCo.,Ltd|OtherRelatedparty|MerchandiseProcurement|BearingProduct|JusticeandEquity|Marketprice|4,148|2.69%|9,500|no|CashPaymentorTheKnot|
|||Salesofgoods|GoodsandMaterials|JusticeandEquity|Marketprice|33|0.03%|150|no|CashPaymentorTheKnot|
|||LeaseofHouses|LeaseofHouses|JusticeandEquity|Marketprice|40|0.04%|80|no|CashPaymentorTheKnot|
|||ProvideService|Heattreatment|JusticeandEquity|Marketprice|5|0.00%|100|no|CashPaymentorTheKnot|
|Wazhougroup(USA)bearingco.,LTD|OtherCompaniescontrolledbythesamecontrollingshareholdersandtheultimatecontrollingparty|Salesofgoods|BearingProduct|JusticeandEquity|Marketprice|4,751|4.22%|13,000|no|CashPaymentorTheKnot|
|Wazhougrouphigh-endautomobilebearingco.,LTD|OtherCompaniescontrolledbythesamecontrollingshareholdersandtheultimatecontrollingparty|Salesofgoods|BearingProduct|JusticeandEquity|Marketprice|378|0.34%|0|Yes|CashPaymentorTheKnot|
|DaLianNorthmetalmaterialtradingcenter|OtherCompaniescontrolledbythesamecontrollingshareholdersandtheultimatecontrollingparty|Salesofgoods|GoodsandMaterials|JusticeandEquity|Marketprice|0|0.00%|9,000|no|CashPaymentorTheKnot|
|WazhouGroup|Thecontrollingshareholdersandtheultimatecontrollingparty|MerchandiseProcurement|product|justiceandEquity|Marketprice|7,389|4.80%|16,000|no|CashPaymentorTheKnot|
|||AcceptService|SecurityandFireService|justiceandEquity|Marketprice|165|0.11%|329|no|CashPaymentorTheKnot|
||||AnnouncementService|justiceandEquity|Marketprice|39|0.03%|80|no|CashPaymentorTheKnot|
||||Technol|justiceand|Marketprice|270|0.18%|540|no|CashPayment|

WafangdianBearingCompanyLimited 2015MidyearReport
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||ogyDevelopmentService|Equity||||||orTheKnot|
|||Trademark|justiceandEquity|Marketprice|212|0.14%|500|no|CashPaymentorTheKnot|
|||LeaseofHouses,|justiceandEquity|Marketprice|468|0.30%|1,900|no|CashPaymentorTheKnot|
|||Landrent|justiceandEquity|Marketprice|83|0.05%|524|no|CashPaymentorTheKnot|
|||machimesrent|||467|0.30%|1,239|no|CashPaymentorTheKnot|
||Salesofgoods|GoodsandMaterials|JusticeandEquity|Marketprice|1,788|1.59%|8,000|no|CashPaymentorTheKnot|
|Total|||||56,877|--|152,105|||
|Detailsoftherejectionofthegoodsalreadysoldinbigamount|||non|||||||
|Incasethetotalamountoftheregularrelatedtransactionincurredinthereportingperiodhasbeenpredictedbasedoncategories,statetheactualimplementationoftheinthereportingperiod(ifany)|||non|||||||
|Causeofthebigdifferencebetweenthetransactionpriceandthemarketreferenceprice.(ifapplicable)|||In-applicable|||||||

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearalReportii、Therelatedbusinessonassetpurchaseandsales
iii.Majorrelatedbusinessonjointlyinvestment
iv、CreditandDebtwithrelevantparties
CreditandDebtfromnon-operation
□Applicable√Inapplicable
V.Otherimportantrelatedbusiness
□Applicable√Inapplicable
Vi.Importantcontractandimplement
VIII.StatementsoftheSupervisoryCommitteeandIndependentDirectors(ifapplicable)onthe“Non-standardAuditors’Report”issuedbytheCPA.
□Applicable√Inapplicable
IX. Theimplementofmajorcontractanditsperformance
1.Deposit,contractandrent.
Thecontentofrentcanbefoundinparteleven“RelatedPartiesRelationshipandTransactions”sectionfive“Related rent”
X.Commitmentmadebysharehoderwithover5%sharesinthereportorhappenbeforebutlasttothereport□Applicable√Inapplicable
XI.Hiring,firingcertifiedpublicaccountants
□Applicable√Inapplicable
XII.Punishmentandrectification
□Applicable√Inapplicable
XIII.Suspensionandterminatedlistigaftertheannualreportdisclosure.
□Yes√No
XIV.Otherimportantmatters
□Yes√No
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearalReportChapterⅥ.
Changes in Capital Stock and Shareholders
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||BeforeChanges||ChangesinShares|||||AfterChanges||
||Shares|Ratio|NewSharesIssued|BonusShares|ConversionofReservestoShare|Others|Subtotal|Shares|Ratio|
|1.Non-tradableShares|244,000,000|60.61%||||||244,000,000|60.61%|
|a.Promoters’Shares|244,000,000|60.61%||||||244,000,000|60.61%|
|Including：State-ownedshare|244,000,000|60.61%||||||244,000,000|60.61%|
|2.Tradableshares|158,600,000|39.39%||||||158,600,000|39.39%|
|b.Bshares|158,600,000|39.39%||||||158,600,000|39.39%|
|3.Total|402,600,000|100%||||||402,600,000|100%|

I.ChangesinCapitalStock
ReasonofChangesofShares
□Applicable√Inapplicable
Influencefromtheshareholdingmovementsuponsuchfinancialindicatorsasearningspershare,netassetper
shareofthelatestyearandthelatestaccountingperiod
□Applicable√Inapplicable
II.ShareholdersandActualController
1.NumberofShareholdersandShares
Unit:Share
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Totalnumberofshareholderattheendofreportperiod|||7,325||Totalnumberofshareholderattheendofreportperiodwithpreferredstock||||0||
|Shareholderswith5%oraboveShares|||||||||||
|Name|Nature|Ratio（%）||Totalsharesheld|IncreaseorDecreaseinhereportperiod|Non-currentsharesheld|Currentsharesheld|ImpawnedorFrozenShares|||
|||||||||Status||Amount|
|WafangdianBearingGroupCorporation|State-ownedshareholder|60.61%||402,600,000||244,000,000|||||
|AKTIEBOLAGETSKF|Foreignshareholder|19.70%||79,300,000|||79,300,000|Frozen||79,300,000|
|HuangJunyue|Domesticshareholder|1.01%||4,050,000|||||||
|BOCISECURITIESLIMITED|Foreignshareholder|0.55%||2,220,000|||||||
|JinYunhua|Domesticshareholder|0.51%||2,072,629|||||||
|HuXiaofeng|Domesticshareholder|0.47%||1,879,277|||||||
|GUOTAIJUNANSECURITIES(HO|Foreignshareholder|0.45%||1,795,540|||||||

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearalReport
||||||||
|-|-|-|-|-|-|-|
|NGKONG)LIMITED|||||||
|CREDITSUISSE(HONGKONG)LIMITED|Foreignshareholder|0.26%||1,049,915|||
|MAN,KWAIWING文贵荣|Foreignprivateshareholde|0.18%||713,101|||
|MiaoJun|Domesticshareholder|0.14%||552,700|||
|ExplanationfortheAffiliatedRelationsorUnitedActionoftheTopTenShareholders||In the report period, the frozen period of the shares purchased by the company’s strategicinvestorAKTIEBOLAGETSKFexpired in1999,andhas notdealtwith thereleasing-procedureinthisreportperiod.|||||
|Notes to relationship or “action inconcert”among the top tenshareholders.|||||||
|TopTenTradableShareholders|||||||
|Name|||Currentsharesheldatendofyear||Categoryof Shares||
||||||Categories|Amount|
|AKTIEBOLAGETSKF|||79,300,000||B|79,300,000|
|HuangJunyue|||4,050,000||B|4,050,000|
|BOCISECURITIESLIMITED|||2,220,000||B|2,220,000|
|JinYunhua|||2,072,629||B|2,072,629|
|HuXiaofeng|||1,879,277||B|1,879,277|
|GUOTAIJUNANSECURITIES(HONGKONG)LIMITED|||1,795,540||B|1,795,540|
|CREDITSUISSE(HONGKONG)LIMITED|||1,049,915||B|1,049,915|
|MAN,KWAIWING文贵荣|||713,101||B|713,101|
|MiaoJun|||552,700||B|552,700|
|ZhouJunlin|||539,600||B|539,600|
|ExplanationfortheAffiliatedRelationsorUnitedActionoftheTopTenShareholdersandtheTopTenTradableShareholders|||Therewasnorelationshipandconsistentactivitiesbetweenthefirstbigshareholderandothershareholdersorthetoptencommonstockholders;Therelationshipamongothershareholders,toptencirculationshareholders,toptencirculationshareholdersandothershareholderswasnotclear.||||

iiiChangeofControllingShareholderActualControllerintheReportPeriod
□Applicable√Inapplicable
ChapterⅦ.
Relevant information about preferred stock
ChapterⅧ.
Directors, Supervisors, Senior Management and Staff
I.SharesholdingchangeinDirectors,Supervisors,SeniorManagement
Inapplicable
II. ChangesofDirectors,SupervisorsandSeniorManagement
||||||
|-|-|-|-|-|
|Name|Position|Type|Date|Reason|
|WuChunyou|IndependentDirector|expiration|May18,2016||
|LiuYuping|IndependentDirector|Elected|May18,2016||

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearalReport Chapter VIII. Financial Report
I. AuditReport
Thefinancialreportisunaudited
II. Financial Statement
1.ConsolidatedBalanceSheet.
Unit:RMBYuan
||||
|-|-|-|
|Item|ClosingBalance|OpeningBalance|
|Currentassets ：|||
|Monetaryfund|137,341,499.74|116,316,020.57|
|Financialassetsheld-for-trading|||
|Billsreceivable|176,846,224.26|100,506,003.70|
|Accountreceivable|1,023,728,246.54|993,933,326.37|
|Accountpaidinadvance|36,428,881.73|32,673,623.77|
|Interestreceivable|||
|Dividendreciivable||240,000.00|
|Otherreceivables|23,335,159.29|21,462,837.65|
|Inventory|1,023,253,563.94|1,075,275,456.02|
|Non-currentassetsduewithin1year|||
|Othercurrentassets|6,509,506.13|8,973,032.78|
|Totalcurrentassets|2,427,443,081.63|2,349,380,300.86|
|Non-currentassets|||
|Financialassetsavailable-for-sale|2,000,000.00|2,000,000.00|
|Investmentsheld-to-maturity|||
|Long-termreceivable|||
|Long-termequityinvestment|||
|Investmentproperty|||
|Fixedassets|616,407,430.76|695,125,451.81|
|Constructioninprogress|328,735,373.03|329,632,219.42|
|Constructionmaterials|||
|Fixedassetsdisposal|||
|Biologicalassets|||
|Gasandpetrolassets|||
|Intangibleassets|133,145,519.69|135,366,608.09|
|Developmentexpenditure|||
|Goodwill|||
|Long-termprepaidexpense|555,276.85|611,356.03|
|Deferredtaxassets|11,853,267.27|11,853,267.27|
|Othernon-currentassets|||
|Totalnon-currentassets|1,092,696,867.60|1,174,588,902.62|
|Totalassets|3,520,139,949.23|3,523,969,203.48|
|Currentliabilities|||
|Short-termloan|468,000,000.00|385,000,000.00|
|Notepayable|280,518,900.00|327,466,550.20|
|Accountspayable|987,988,300.81|973,485,937.22|
|Accountsreceivedinadvance|32,089,340.69|44,835,510.10|
|Commissionchargepayable|||
|Accruedpayroll|18,561,649.49|19,440,701.80|
|Taxpayable|5,092,488.91|6,074,347.23|
|Interestpayable|1,630,007.00|1,400,000.00|
|Dividendspayable|||
|Otherpayables|141,135,587.68|133,832,447.67|
|Non-currentliabilitiesduewithinIyear||50,000,000.00|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearalReport
||||
|-|-|-|
|Othercurrentliabilities|4,651,103.83|4,411,103.83|
|Totalcurrentliabilities|1,939,667,378.41|1,945,946,598.05|
|Non-currentliabilities|||
|Long-termloan|||
|Debenturepayable|||
|Long-termpayables|1,597,305.72|1,597,305.72|
|Specialpayables|321,698.98|321,698.98|
|Contingentliabilities|||
|Deferredincome|43,124,348.14|46,650,196.82|
|Deferredtaxliabilities|988,428.58|988,428.58|
|Othernon-currentliabilities|||
|Totalnon-currentliabilities|276,031,781.42|229,557,630.10|
|Totalliabilities|2,215,699,159.83|2,175,504,228.15|
|Owner’sequity(shareholders’equity)|||
|Capitalstock|402,600,000.00|402,600,000.00|
|Capitalpublicreserves|485,691,050.47|485,691,050.47|
|Less:treasuryshare|||
|Surplusreserve|131,442,909.11|131,442,909.11|
|Undistributedprofit|284,706,829.82|328,731,015.75|
|Differenceofforeigncurrencytranslation|||
|Equityattributabletoparentcompany|1,304,440,789.40|1,348,464,975.33|
|Minorityinterest|||
|Totalowner’sequity|1,304,440,789.40|1,348,464,975.33|
|Totalowner’sequityandliabilities|3,520,139,949.23|3,523,969,203.48|

 Chairman: MengWei GeneralAccountant:SunNajuan Accountingcharger:YaoChunjuan
2. BalanceSheetofParentCompany
Unit:RMBYuan
||||
|-|-|-|
|Item|OpeningBalance|ClosingBalance|
|Currentassets ：|||
|Monetaryfund|126,213,924.67|108,582,231.28|
|Financialassetsheld-for-trading|||
|Billsreceivable|163,966,034.71|89,099,697.82|
|Accountreceivable|1,059,965,179.77|1,020,633,783.54|
|Accountpaidinadvance|24,244,288.23|23,489,543.17|
|Interestreceivable|||
|Dividendreceivable|||
|Otherreceivables|20,572,835.85|19,679,695.34|
|Inventory|957,755,966.88|998,035,803.15|
|Non-currentassetsduewithin1year|||
|Othercurrentassets|3,984,664.78|4,828,826.85|
|Totalcurrentassets|2,356,702,894.89|2,264,589,581.15|
|Non-currentassets|||
|Financialassetsavailable-for-sale|2,000,000.00|2,000,000.00|
|Investmentsheld-to-maturity|||
|Long-termreceivable|||
|Long-termequityinvestment|211,583,897.67|211,583,897.67|
|Investmentproperty|||
|Fixedassets|481,663,202.15|577,635,433.51|
|Constructioninprogress|230,348,546.67|204,617,819.76|
|Constructionmaterials|||
|Fixedassetsdisposal|||
|Biologicalassets|||
|Gasandpetrolassets|||
|Intangibleassets|113,240,306.68|115,105,064.38|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearalReport
||||
|-|-|-|
|Developmentexpenditure|||
|Goodwill|||
|Long-termprepaidexpense|555,276.85|611,356.03|
|Deferredtaxassets|10,580,100.02|10,580,100.02|
|Othernon-currentassets|||
|Totalnon-currentassets|1,049,971,330.04|1,122,133,671.37|
|Totalassets|3,406,674,224.93|3,386,723,252.52|
|Currentliabilities|||
|Short-termloan|468,000,000.00|385,000,000.00|
|Notepayable|280,518,900.00|327,466,550.20|
|Accountspayable|917,783,859.28|882,281,596.61|
|Accountsreceivedinadvance|29,570,701.69|44,003,546.25|
|Commissionchargepayable|||
|Accruedpayroll|11,152,800.28|11,902,749.05|
|Taxpayable|1,901,261.90|3,381,449.54|
|Interestpayable|1,630,007.00|1,400,000.00|
|Dividendspayable|||
|Otherpayables|102,700,853.83|94,547,419.88|
|Non-currentliabilitiesduewithinIyear||50,000,000.00|
|Othercurrentliabilities|4,553,555.83|4,313,555.83|
|Totalcurrentliabilities|1,817,811,939.81|1,804,296,867.36|
|Non-currentliabilities|||
|Long-termloan|230,000,000.00|180,000,000.00|
|Debenturepayable|||
|Long-termpayables|||
|Specialpayables|321,698.98|321,698.98|
|Contingentliabilities|||
|Deferredincome|38,734,688.14|42,260,536.82|
|Deferredtaxliabilities|||
|Othernon-currentliabilities|||
|Totalnon-currentliabilities|269,056,387.12|222,582,235.80|
|Totalliabilities|2,086,868,326.93|2,026,879,103.16|
|Owner’sequity(shareholders’equity)|||
|Capitalstock|402,600,000.00|402,600,000.00|
|Capitalpublicreserves|485,678,443.26|485,678,443.26|
|Less:treasuryshare|||
|Surplusreserve|131,442,909.11|131,442,909.11|
|Undistributedprofit|300,084,545.63|340,122,796.99|
|Totalowner’sequity|1,319,805,898.00|1,359,844,149.36|
|Totalowner’sequityandliabilities|3,406,674,224.93|3,386,723,252.52|

 3.ConsolidatedIncomeSheet.
Unit:RMBYuan
||||
|-|-|-|
|Item|Accountforthecurrentperiod|Accountforthepriorperiod|
|1.Totaloperatingincome|1,125,455,031.98|1,168,093,679.34|
|Including:Operatingrevenue|1,125,455,031.98|1,168,093,679.34|
|Interestincome|||
|Handlingchargeandcommissionincome|||
|2.Totaloperatingcost|1,182,078,050.33|1,233,837,130.70|
|Including:Operatingcost|1,043,602,026.69|1,068,509,261.57|
|Interestexpenses|||
|Handlingchargeandcommissionincome|||
|Tax&surchargesformainoperations|4,695,351.44|6,001,203.40|
|Sellingexpenses|84,742,685.88|98,588,255.39|
|Administrativeexpense|36,646,177.56|40,067,918.93|
|Financialexpense|12,390,741.72|20,655,027.80|
|Lossofimpairmentofassets|1,067.04|15,463.61|
|Add:Gainsofchangeoffairvalueofassets(losswith"-")|||

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearalReport
||||
|-|-|-|
|Investmentincome(losswith"-")|||
|Including:Incomeforminvestmentonassociatedenterpriseandjointlyenterprise|||
|3.Operatingprofit(losswith"-")|-56,623,018.35|-65,743,451.36|
|Add:Non-operatingrevenue|14,004,273.12|6,894,300.08|
|Including:incomeondisposalofnon-currentassets|4,649,046.02|957,589.72|
|Less:Non-operatingcost|1,405,440.70|474,066.00|
|Including:lossondisposalofnon-currentassets|78,416.68|240,546.34|
|4.Totalprofit(losswith"-")|-44,024,185.93|-59,323,217.28|
|Less:Incometaxexpenses||264,036.88|
|5.Netprofit(Losswith"-")|-44,024,185.93|-59,587,254.16|
|Netprofitattributabletoshareholdersofparentcompany|-44,024,185.93|-59,587,254.16|
|Minorityinterests|||
|6.Othercomprehensivereturns|||
|7.Totalcomprehensivereturns|-44,024,185.93|-59,587,254.16|
|Totalcomprehensivereturnsavailableforparentcompany|-44,024,185.93|-59,587,254.16|
|Totalcomprehensivereturnsavailableforminorityshareholders|||
|6.Earningspershare|||
|(1)Basicearningspershare|-0.11|-0.15|
|(2)Dilutedearningspershare|-0.11|-0.15|

 Chairman: MengWei GeneralAccountant:SunNajuan Accountingcharger:YaoChunjuan
4.IncomeSheetofParentCompany.
Unit:RMBYuan
||||
|-|-|-|
|Item|Accountforthecurrentperiod|Accountforthepriorperiod|
|1.Totaloperatingincome|1,139,151,566.77|1,207,722,167.59|
|Less:Operatingcost|1,066,012,164.06|1,113,365,931.88|
|Tax&surchargesformainoperations|4,099,633.44|5,301,076.02|
|Sellingexpenses|83,766,587.44|98,046,463.76|
|Administrativeexpense|23,712,562.59|25,937,146.39|
|Financialexpense|12,403,674.03|20,948,319.00|
|Lossofimpairmentofassets|1,067.04|15,463.61|
|Add:Gainsofchangeoffairvalueofassets(losswith"-")|||
|Investmentincome(losswith"-")|||
|Including:Incomeforminvestmentonassociatedenterpriseandjointlyenterprise|||
|2.Operatingprofit(losswith"-")|-50,844,121.83|-55,892,233.07|
|Add:Non-operatingrevenue|12,178,115.07|6,560,907.95|
|Less:Non-operatingcost|1,372,244.60|340,057.61|
|Including:lossondisposalofnon-currentassets|||
|3.Totalprofit(losswith"-")|-40,038,251.36|-49,671,382.73|
|Less:Incometaxexpenses|||
|4.Netprofit(Losswith"-")|-40,038,251.36|-49,671,382.73|
|Netprofitattributabletoshareholdersofparentcompany|||
|Minorityinterests|||
|5.Othercomprehensivereturns|||
|6.Totalcomprehensivereturns|-40,038,251.36|-49,671,382.73|
|7.Earningspershare|||
|(1)Basicearningspershare|-0.11|-0.15|
|(2)Dilutedearningspershare|-0.11|-0.15|

5.ConsolidatedCashFlowStatement.
Unit:RMByuan
||||
|-|-|-|
|Item|Accountforthecurrentperiod|Accountforthepriorperiod|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearalReport
||||
|-|-|-|
|1.Cashfromoperatingactivities|||
|CashreceivedfromsaleofgoodsorProvideingofservices|553,562,725.50|602,752,635.37|
|Refundoftaxesandfares|||
|Othercashreceivedrelatingtooperatingactivities|3,957,803.39|1,986,184.06|
|Sub-totalofcashinflows|557,520,528.89|604,738,819.43|
|Cashpaidforgoodsandservices|326,921,872.04|331,602,614.87|
|Cashpaidtooronbehalfoftheemployees|156,421,038.32|170,346,950.86|
|Taxpayments|26,059,090.72|25,216,808.36|
|Othercashpaidrelatingtooperatingactivities|56,508,192.96|62,837,599.68|
|Sub-totalofcashoutflows|565,910,194.04|590,003,973.77|
|Netcashflowsfromoperatingactivities|-8,389,665.15|14,734,845.66|
|2.Cashflowsfrominvestingactivities|||
|Cashreceivedfromreturnofinvestment|||
|Cashreceivedfrominvestmentincomes|240,000.00||
|Net cash received from disposal of fixed assets, intangibleassetsandotherlong-termassets|10,000,000.00|18,000.00|
|Proceeds from sale of subsidiaries and other operatingunits|||
|Othercashreceivedrelatingtoinvestingactivities|||
|Sub-totalofcashinflows|10,240,000.00|18,000.00|
|Cash paid to acquire fixed assets, intangible assets andotherlong-termassets|35,882,335.69|6,490,945.26|
|Cashpaidtoacquireinvestment||11,250,000.00|
|Netcashusedinacquiringsubsidiariesandotheroperatingunits|||
|Othercashpaidrelatingtoinvestingactivities|||
|Sub-totalofcashoutflows|35,882,335.69|17,740,945.26|
|Netcashflowsfrominvestmentactivities|-25,642,335.69|-17,722,945.26|
|3.Cashflowsfromfinancingactivities|||
|Cashreceivedfromabsorbinginvestment|||
|Including:Cashreceivedfromincreaseinminorityinterest|||
|Proceedsfromborrowings|375,000,000.00|447,579,700.00|
|Otherproceedsrelatingtofinancingactivities|147,525,694.44||
|Sub-totalofcashinflows|522,525,694.44|447,579,700.00|
|Repaymentofborrowings|287,000,000.00|488,000,000.00|
|Distributionof dividendsorprofits&interestexpenses|17,500,351.76|17,743,906.80|
|Including:dividendsorprofitpaidtominorityinterest|||
|Cashpaidforotherfinancingactivities|150,000,000.00||
|Sub-totalofcashoutflows|454,500,351.76|505,743,906.80|
|Netcashflowsfromfinancingactivities|68,025,342.68|-58,164,206.80|
|4.Effectsofforeignexchangeratechangesoncash|1,392,127.34|218,699.83|
|5.Netincreasesincashandcashequivalents|35,385,469.18|-60,933,606.57|
|Add:cashandcashequivalent,atthebeginningofyear|78,556,030.56|143,399,164.66|
|6.Cashandcashequivalentattheendoftheyear|113,941,499.74|82,465,558.09|

 6.CashFlowStatementOfParentCompany.
Unit:RMByuan
||||
|-|-|-|
|Item|Accountforthecurrentperiod|Accountforthepriorperiod|
|1.Cashfromoperatingactivities|||
|CashreceivedfromsaleofgoodsorProvidingofservices|541,591,437.79|599,345,378.91|
|Refundoftaxesandfares|||
|Othercashreceivedrelatingtooperatingactivities|3,381,289.60|1,583,863.47|
|Sub-totalofcashinflows|544,972,727.39|600,929,242.38|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearalReport
||||
|-|-|-|
|Cashpaidforgoodsandservices|356,059,070.83|374,127,409.24|
|Cashpaidtooronbehalfoftheemployees|128,163,845.74|139,776,818.16|
|Taxpayments|20,179,431.19|18,316,626.33|
|Othercashpaidrelatingtooperatingactivities|52,713,413.47|55,546,990.88|
|Sub-totalofcashoutflows|557,115,761.23|587,767,844.61|
|Netcashflowsfromoperatingactivities|-12,143,033.84|13,161,397.77|
|2.Cashflowsfrominvestingactivities|||
|Cashreceivedfromreturnofinvestment|||
|Cashreceivedfrominvestmentincomes|240,000.00||
|Net cash received from disposal of fixed assets, intangibleassetsandotherlong-termassets|10,000,000.00||
|Proceedsfromsaleofsubsidiariesandotheroperatingunits|||
|Othercashreceivedrelatingtoinvestingactivities|||
|Sub-totalofcashinflows|10,240,000.00||
|Cash paid to acquire fixed assets, intangible assets and otherlong-termassets|35,523,972.38|5,168,003.59|
|Cashpaidtoacquireinvestment||11,250,000.00|
|Net cash used in acquiring subsidiaries and other operatingunits|||
|Othercashpaidrelatingtoinvestingactivities|||
|Sub-totalofcashoutflows|35,523,972.38|16,418,003.59|
|Netcashflowsfrominvestmentactivities|-25,283,972.38|-16,418,003.59|
|3.Cashflowsfromfinancingactivities|||
|Cashreceivedfromabsorbinginvestment|||
|Including:Cashreceivedfromincreaseinminorityinterest|||
|Proceedsfromborrowings|375,000,000.00|447,579,700.00|
|Otherproceedsrelatingtofinancingactivities|147,525,694.44||
|Sub-totalofcashinflows|522,525,694.44|447,579,700.00|
|Repaymentofborrowings|287,000,000.00|488,000,000.00|
|Distributionof dividendsorprofits&interestexpenses|17,499,132.16|17,741,736.11|
|Including:dividendsorprofitpaidtominorityinterest|150,000,000.00||
|Cashpaidforotherfinancingactivities|||
|Sub-totalofcashoutflows|454,499,132.16|505,741,736.11|
|Netcashflowsfromfinancingactivities|68,026,562.28|-58,162,036.11|
|4.Effectsofforeignexchangeratechangesoncash|1,392,127.34|218,699.83|
|5.Netincreasesincashandcashequivalents|31,991,683.40|-61,199,942.10|
|Add:cashandcashequivalent,atthebeginningofyear|70,822,241.27|135,518,792.14|
|6.Cashandcashequivalentattheendoftheyear|102,813,924.67|74,318,850.04|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport7.ConsolidatedSheetOfChangesInShareholder’sEquity
Unit:RMBYuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Item|Amountincurrentperiod|||||||||
||Owner’sequityattributabletoparentcompany|||||||Minorityshareholders’equity|Owner’sequity|
||Capitalstock|Capitalpublicreserves|less：treasurestock|Surpluspublicreserves|Generalprovisionforrisk|Undistributedprofits|Others|||
|1.Balanceattheendoflastyear|402,600,000.00|485,691,050.47||131,442,909.11||328,731,015.75|||1,348,464,975.33|
|Add: changes in accountingpolicies||||||||||
|Changesinpreviouserrors||||||||||
|Others||||||||||
|2.Balance at the beginning ofthisyear|402,600,000.00|485,691,050.47||131,442,909.11||328,731,015.75|||1,348,464,975.33|
|3.Thechangesinthisyear（decreasewith“-”）||||||-44,024,185.93|||-44,024,185.93|
|（1）Totalofcomprehensiveincome||||||-44,024,185.93|||-44,024,185.93|
|（2）Capitalcontributionandreduction||||||||||
|1）Ordinaryshare||||||||||
|2）Capitalcontributedbyotherequityinstrumentholders||||||||||
|3）Share-basedpaymentschargedtoequity||||||||||
|4）Others||||||||||
|(4）Profitsdistribution||||||||||
|1)Provision for surplus publicreserves||||||||||
|2)provisionforgeneralrisks||||||||||
|3)distribution forowner(shareholders)||||||||||
|4)others||||||||||
|(5 ） interior transference ofowner’sequity||||||||||
|1)capital (capital||||||||||

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
|||||||
|-|-|-|-|-|-|
|stock)transferred by the capitalpublicreserves||||||
|2)capital (capitalstock)transferred by the surpluspublicreserves||||||
|3)loss offset by the surpluspublicreserves||||||
|4)others||||||
|4. Balance at the end of thecurrentperiod|402,600,000.00|485,691,050.47|131,442,909.11|284,706,829.82|1,304,440,789.40|

Unit:RMByuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Item|Amountinpreviousperiod|||||||||
||Owner’sequityattributabletoparentcompany|||||||Minorityshareholders’equity|Owner’sequity|
||Capitalstock|Capitalpublicreserves|less：treasurestock|Surpluspublicreserves|Generalprovisionforrisk|Undistributedprofits|Others|||
|1.Balance at the end of lastyear|402,600,000.00|485,691,050.47||131,442,909.11||362,111,029.14|||1,381,844,988.72|
|Add: changes in accountingpolicies||||||||||
|Changesinpreviouserrors||||||||||
|Others||||||||||
|2.Balance at the beginning ofthisyear|402,600,000.00|485,691,050.47||131,442,909.11||362,111,029.14|||1,381,844,988.72|
|3.Thechangesinthisyear（decreasewith“-”）||||||-33,380,013.39|||-33,380,013.39|
|（1）Totalofcomprehensiveincome||||||-33,380,013.39|||-33,380,013.39|
|（2）Capitalcontributionandreduction||||||||||
|1）Ordinaryshare||||||||||
|2）Capitalcontributedbyotherequityinstrumentholders||||||||||
|3）Share-basedpaymentschargedtoequity||||||||||
|4）Others||||||||||
|(4）Profitsdistribution||||||||||

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
|||||||
|-|-|-|-|-|-|
|1)Provision for surplus publicreserves||||||
|2)provisionforgeneralrisks||||||
|3)distribution forowner(shareholders)||||||
|4)others||||||
|(5 ） interior transference ofowner’sequity||||||
|1)capital (capitalstock)transferred by the capitalpublicreserves||||||
|2)capital (capitalstock)transferred by the surpluspublicreserves||||||
|3)loss offset by the surpluspublicreserves||||||
|4)others||||||
|4. Balance at the end of thecurrentperiod|402,600,000.00|485,691,050.47|131,442,909.11|328,731,015.75|1,348,464,975.33|

8.SheetOfChangesInShareholder’sEquityOfParentCompamy.
Unit:RMByuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Item|Amountincurrentperiod||||||||
||Owner’sequityattributabletoparentcompany||||||Minorityshareholders’equity|Owner’sequity|
||Capitalstock|Capitalpublicreserves|less：treasurestock|Surpluspublicreserves|Generalprovisionforrisk|Undistributedprofits|||
|1.Balanceattheendoflastyear|402,600,000.00|485,678,443.26||131,442,909.11||362,111,029.14||1,381,844,988.72|
|Add: changes in accountingpolicies|||||||||
|Changesinpreviouserrors|||||||||
|Others|||||||||
|2.Balance at the beginning ofthisyear|402,600,000.00|485,678,443.26||131,442,909.11||362,111,029.14||1,381,844,988.72|
|3.Thechangesinthisyear（decreasewith“-”）||||||-33,380,013.39||-33,380,013.39|
|（1）Totalofcomprehensiveincome||||||-33,380,013.39||-33,380,013.39|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
|||||||
|-|-|-|-|-|-|
|（2）Capitalcontributionandreduction||||||
|1）Ordinaryshare||||||
|2）Capitalcontributedbyotherequityinstrumentholders||||||
|3）Share-basedpaymentschargedtoequity||||||
|4）Others||||||
|(4）Profitsdistribution||||||
|1)Provision for surplus publicreserves||||||
|2)provisionforgeneralrisks||||||
|3)distribution forowner(shareholders)||||||
|4)others||||||
|(5 ） interior transference ofowner’sequity||||||
|1)capital (capitalstock)transferred by the capitalpublicreserves||||||
|2)capital (capitalstock)transferred by the surpluspublicreserves||||||
|3)loss offset by the surpluspublicreserves||||||
|4)others||||||
|4. Balance at the end of thecurrentperiod|402,600,000.00|485,678,443.26|131,442,909.11|328,731,015.75|1,348,464,975.33|

Unit:RMByuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Item|Amountinpreviousperiod|||||||||
||Owner’sequityattributabletoparentcompany|||||||Minorityshareholders’equity|Owner’sequity|
||Capitalstock|Capitalpublicreserves|less：treasurestock|Surpluspublicreserves|Generalprovisionforrisk|Undistributedprofits|Others|||
|1.Balance at the end of lastyear|402,600,000.00|485,678,443.26||131,442,909.11||350,783,815.44|||1,370,505,167.81|
|Add: changes in accountingpolicies||||||||||

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
|||||||
|-|-|-|-|-|-|
|Changesinpreviouserrors||||||
|Others||||||
|2.Balance at the beginning ofthisyear|402,600,000.00|485,678,443.26|131,442,909.11|350,783,815.44|1,370,505,167.81|
|3.Thechangesinthisyear（decreasewith“-”）||||-10,661,018.45|-10,661,018.45|
|（1）Totalofcomprehensiveincome||||-10,661,018.45|-10,661,018.45|
|（2）Capitalcontributionandreduction||||||
|1）Ordinaryshare||||||
|2）Capitalcontributedbyotherequityinstrumentholders||||||
|3）Share-basedpaymentschargedtoequity||||||
|4）Others||||||
|(4）Profitsdistribution||||||
|1)Provision for surplus publicreserves||||||
|2)provisionforgeneralrisks||||||
|3)distribution forowner(shareholders)||||||
|4)others||||||
|(5 ） interior transference ofowner’sequity||||||
|1)capital (capitalstock)transferred by the capitalpublicreserves||||||
|2)capital (capitalstock)transferred by the surpluspublicreserves||||||
|3)loss offset by the surpluspublicreserves||||||
|4)others||||||
|4. Balance at the end of thecurrentperiod|402,600,000.00|485,678,443.26|131,442,909.11|340,122,796.99|1,359,844,149.36|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport III.Generalinformation
WafangdianBearingCompanyLimited(the“Company”)isajointstocklimitedcompanyestablishedinthePeople’sRepublic ofChina(the “PRC”)on 16July1997.Intheopinionof thedirectors,itsparentandultimateholdingcompanyisWafangdian BearingGroupCompanyLimited(“WazhouGroup”).
TheCompany’sBshareshavebeenlistedontheShenzhenStockExchangesince29Feburary1997.
The addresses of the registered office and principal place of business of the Company are No.1, Phrase 1, Gongji Street, WafangdianNorth,LiaoningProvince,andthePRC.
The Company is principally engaged in the manufacturing and sale of bearing products, engineering equipment, automobile sparepartsandrelatingproducts.
TheCompanytogetherwithitssubsidiariesiscollectivelyreferredtoasthe“Group”.
IV.Basisforthepreparationoffinancialstatements
1Basisforthepreparationoffinancialstatements
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 thePeople’s Republic of China, and based on the accounting policies and estimates in the note 4‘Significant accounting policies,accountingestimatesandmethodforpreparationofconsolidatedfinancialstatements’.
v. Significant accounting policies, accounting estimates and method for preparation of consolidated financial statements
1ComplyingwithAccountingStandardforBusinessEnterprise
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 andfully.
2Accountingperiod
TheGroup adoptstheGregoriancalendaryearasaccountingperiod,i.e.fromJan1toDec31.
3.Operatingcycle
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport 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 assetsandliability.
4Funcitonalcurrency
TheGroup adoptsRMBasfunctionalcurrency.
5Recordingbasisandpricingprinciple
The accrual basis shall be adopted for accounting treatment to follow the historical cost method, except that the financial assetsheldfortradingandsalearemeasuredatfairvalue.
6Businesscombination
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 combiningdateoracquisitiondateisthedatewhentheGroupacquiredactuallyacquireeandcombinedparty.
The assets and liabilities that the combining party obtains in a business combination under the same control should be measuredonthebasisoftheircarryingamountinthecombinedpartyonthecombiningdate.Asforthebalancebetweenthe carryingamountofthenetassetsobtainedbythecombiningpartyandthecarryingamountoftheconsiderationpaidbyit,the capitalsurplusshallbeadjusted.Ifthecapitalsurplusisnotsufficienttobeoffset,theretainedearningsshallbeadjusted. For a business combination not under same control, the combination cost shall be the fair value, on the acquisition date, of theassets paid,theliabilitiesincurredorassumedandequity securitiesissuedbytheacquirerinexchangefor thecontrolof 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 differenceshouldberecognizedascurrentprofitorloss.
7Methodofpreparationofconsolidatedfinancialstatements
(1)Recognitionprincipleofscopeofconsolidation
Scopeofconsolidatedfinancialstatementsshouldincludeallsubsidiariesoftheparentandthespecialpurposeentities. (2)Accountingmethodofconsolidatedfinancialstatements
TheGroup’s consolidated financial statements had been prepared in accordance with<Accounting Standard for Business Enterprise No.33– Consolidated FinancialStatements> and related regulations. All material intragroup transaction and
balance hadbeen eliminatedin full. The partsofsubsidiaries’equity non-attributableto parent companyshall be as minority
interestpresentedintheintheconsolidatedbalancesheetwithinequity.
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport Wherethereareinconsistentaccountingpoliciesoraccountingperiod,whenpreparingtheconsolidatedfinancialstatements, the Group shall adjust thesubsidiaries’ financial statements in accordance with theGroup’s accounting policies and accountingperiod.
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 financialstatementsofthebeginningofthecombinationperiodaccordingtotheiroriginalbookvalue.
8Cashandcashequivalent
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 readilyconvertibletoknownamountsofcashandsubjecttoaninsignificantriskofchangesinvalue.
9Translationofforeigncurrency
(1)Foreigncurrencytransaction
Foreign currency transactions are translated at the spot exchange rate issued byPeople’s Bank of China (“PBOC”) whenthetransactionincurs.MonetaryassetsandliabilitiesinforeigncurrenciesaretranslatedintoRMBattheexchangerate 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 assetshouldbecapitalizedasoccurred,beforetherelevantfixedassetbeingacquiredorconstructedisreadyforitsintended uses.Theforeigncurrencynon-monetaryitemsrecordedatfairvaluearetranslatedat theexchangerateissuedonthedate 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 transactionincurs,anddon’tchangetheRMBamount.
(2)Translationofforeigncurrencyfinancialstatements
Theassetandliabilityitemsintheforeigncurrencybalancesheetshouldbetranslatedataspotexchangerateatthebalancesheetdate.Amongtheower’sequityitemsexcept“undistributedprofit”,othersshouldbetranslatedatthespotexchangerate 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 theower’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 theower’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
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport spotexchangerateonthedaywhenthecashflowsincur.Theamountsresultedfromchangeofexchangeratearepresented separatelyinthecashflowstatement.
10Financialassetsandfinancialliabilities
(1)Financialassets
1)Classification
TheGroupclassifiesitsfinancialassetsinthefollowingcategories:atfair valuethroughprofitorloss,loansandreceivables, held-to-maturity financial assets and available-for-sale. The classification depends on the purpose for which the financial assetswereacquired.Managementdeterminestheclassificationofitsfinancialassetsatinitialrecognition.
a)Financialassetsatfairvaluethroughprofitorloss
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 unlessthey are designated as hedges. Assets in this categoryare classified as current assetsif expected to besettledwithin12months;otherwise,theyareclassifiedasnon-current.
b)Loansandreceivables
Loansand receivablesare non-derivativefinancial assetswith fixedordeterminable paymentsthatare notquoted inan active market. They are included in current assets, except for maturities greater than 12 months after the reporting period,whichareclassifiedasnon-currentassets.
c)Held-to-maturityfinancialassets
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturitiesthat theGroup‟ smanagement has thepositive intention andability to hold to maturity.If the Groupwere 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 withmaturitieslessthan12monthsfromtheendofthereportingperiod,whichareclassifiedascurrentassets.
d)Available-for-salefinancialassets
Available-for-salefinancialassetsarenon-derivativesthatareeitherdesignatedinthiscategoryornotclassifiedinanyof the other categories.They are included in non-currentassets unless the investmentmatures or managementintends to disposeofitwithin12monthsoftheendofthereportingperiod.
2)Recognitionandmeasurement
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport Financial assets are recognized at fair value on the balance sheet when the Group becomes a party to the contractual provisionsof the financialinstrument. Transactioncosts offinancial assetscarried at thefair value throughprofit or loss areexpensedintheincomestatement;Transactioncostsofotherfinancialassetsareincludedinfinancialassetsatinitial 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 reliablymeasured.Loansandreceivablesaremeasuredatamortisedcostusingtheeffectiveinterestmethod.
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 recognisedinincomestatement.Interestonavailableforsaledebtinstrument,calculatedusingeffectiveinterestmethod, and cash dividends declared by the investee on available-for-sale equity instruments are recognised as investment incomeinincomestatement.
3)Impairmentoffinancialassets
TheGroupassessesthecarryingamountoffinancialassetsotherthanfinancialassetsatfairvaluethroughprofitorloss at eachbalance sheetdate. If thereis objectiveevidence that thefinancial assetis impaired,the Group shalldetermine theamountofanyimpairmentlossaccounts.
Ifanimpairmentlossonafinancialassetcarriedatamortizedcosthasbeenincurred,theamountoflossismeasuredat the difference between theasset’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 previouslyrecognizedimpairmentlossisreversedandtheamountofreversalisrecognizedinincomestatement.
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 recoveredand the recoverycan berelated objectivelyto an eventoccurring afterthe impairment wasrecognized, thepreviouslyrecognizedimpairmentlossisreversedandtheamountofreversalisrecognizedinincomestatement.For an available for sale equity instrument, if there is objective evidence that the value recovered and the recovery can be objectivelyrelatedtoaneventoccurringaftertheimpairmentlossrecognized,thepreviouslyrecognizedimpairmentloss isreversedanddirectlyrecognizedinequity.
4)Derecognizingoffinancialassets
Financialassetsarederecognizedwhen:i)thecontractualrightstoreceivethecashflowsfromthefinancialassetshave
expired; or ii) all substantial risks and rewards of ownership of the financial assets have been transferred; or iii) the
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport controlover the financialasset has been waivedeven if theGroup does nottransfer or retainnearly all ofthe risks and rewardsrelatingtotheownershipofafinancialasset.
On derecognition of a financial asset, the difference between the carrying amount and the aggregate of consideration receivedandthe accumulativeamountofchangesof fairvalueoriginallyrecordedintheowner’sequityis recognisedin theincomestatement.
(2)Financialliabilities
The financialliabilitiesareclassified intothe financialliabilityat fairvalue throughprofitor lossand otherfinancial liabilityfor theinitialrecognition.
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 measuredatfairvalue,variationoffairvalueshouldberecordedintothecurrentprofitorloss.
Otherfinancialliabilitiesshouldbesubsequentlymeasuredatamortizationcostbyadoptingactualinterestratemethod. (3)Fairvaluemeasurementoffinancialassetsandliabilities
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 financialliabilitiesbyusingthecurrentquotedprice.Iftherearenocurrentquotedpricesforthefinancialassetsandliabilties, andnosignificantchangeintheeconomicenvironmentafterthesettlementdate,thequotedpricesoftherecenttransactions shouldbeusedtomeasurethefairvalueofthefinancialassetsandliabilities.
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 recentarm’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 analysisandoptionpricingmodels.
11Provisionforbaddebtsofreceivables
The Groupshall reviewthe carryingamount ofreceivables fullyat thebalance sheet date.The Groupshall calculatethe full provision for bad debts for the following receivables: debtor has been log-out, bankruptcy, minus net asset, significant poor cashflowandsignificantnaturedisasterleadstodiscontinueproductionandthedebtorscouldnotpayforthedebtswithinthe foreseeabletime.Othersolidevidencesindicatesthatthereceivablescoundnotbepaidorbeofaslimchance.
Theallowancemethodisappliedtothepotentiallossofbaddebt.TheGroupshouldmaketheimpairmenttest separatelyor incombinationandaccurethebaddebtprovisionswhich shallberecordedintocurrentprofitorlossattheendoftheperiod. Ifthereisdefinedevidenceforthereceivablesnottoornotlikelytobereceived,whichshallberecognizedasthelossofbad
debtandwriteofftheaccruedbaddebtsprovisionsaftergoingthroughtheapprovalprocedureoftheGroup.
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport (1)Individuallysignificantamountsofaccountsreceivableaccruedbaddebtprovisionasperportfolio
Judgmentbasisoramountstandardsof ThereceivableswithmorethanRMB3millionindividualamountshallbe individuallysignificantamounts recognizedasthesignificantreceivables;
Theaccruingmethodofthereceivableswith Thebaddebtprovisionsshallbeaccruedbasedonthedifference individuallysignificantamounts betweencurrentvalueoffuturecashflowandthecarryingamounts. (2)Accountsreceivableaccruedbaddebtprovisionbyportfolio
Thebasisofportfolio
Usetheaccountingagingofthereceivablesasthecreditriskcharacteristics Accountingaging
toclassifytheportfolio
Usetheamountcharacteristicsofthereceivables,ifthetransactionparty Relatedparties
isrelatedpartiescharacteristicsneedtoclassifytheportfolio
Usetheamountcharacteristicsofthereceivables,thecreditoftransaction Risk-free party,thenatureoftheamounts and thesafeguardmechanismof transactionascharacteristicstoclassifytheportfolio
1)Thepercentageofprovisionforbaddebtsbasedontheageofreceivablesasfollowings:
Accountingaging Accrualpercentageofthe Accrualpercentageofotherreceivables(%)receivables(%)
Within1year 1 1
1-2years 5 5
2-3years 20 20
Over3years 50 50
Relatedparties Accruethebaddebtprovisionbyindividualidentification method
Risk-free Accruethebaddebtprovisionbyindividualidentification method
2)Theothermethodsisappliedtoactuatingofbaddebtsprovision
(3)Individuallyinsignificantamountaccountsreceivablebutaccruedbaddebtprovisionasperportfolio
The individual amount is not significant, but the accrued bad debt Accrualreason
provisiononthebasisofportfoliocannotreflectitsriskcharacteristic The bad debt provisions should be accrued based on the difference Accrualmethod
betweencurrentvalueoffuturecashflowandthecarryingamount. 12Inventories
Classification of inventory: Inventories are classified as raw material, wrappage, low-valuable consumable, working-in-progress,andfinishedgoodsetc.
Pricing of inventories received and sent out: The inventories are processed on perpetual inventory system, purchased and storedbased ontheirstandardcost.Theraw materialsarepriceddailyon theirstandardcosts.Thedifferencesbetweenthe
standard and actual costs is recorded into the costs of materials and for sending out according to proportionof storage and
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport sending out of materials, and adjust the planned costs of raw material into actual costs. The working-in-progress finished goodsarepricedontheirstandardcosts;thedifferencesbetweenthestandardandactualcostsarerecordedintothecostsof working-in-progress and finished goods according to the receiving and sending out proportion, and finaly adjust the planned costsintoactualcosts.
Atthebalancesheetdateinventoryshouldbemeasuredatthelowerofthecostandnetrealizablevalue.Fortheinventories 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 impairmentaccordingtoclassifyofinventory.
For thefinished goods,working in progressand rawmaterial held forsale etc whichshall be solddirectly, thenet realizable value shouldbe confirmedat the estimatedselling priceless estimatedselling expensesand related taxand expenses.The rawmaterialheldforproduction,itsrealizablevalueshouldbeconfirmedat theestimatedsellingpriceoffinishedgoodsless estimated cost of completion, estimated selling expenses and related tax. The net realizable value of inventories held for executionofsalecontractsorlaborcontractsshallbecalculatedbasedonthecontractprice.Ifthequantitiesofinventoriesin the Group are morethan quantities if inventoriessubscribed in the sales contracts,the net realizablevalue of the excessive partoftheinventoriesshouldbecalculatedbasedonthegeneralsellingprice.
13Long-termequityinvestment
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 offerintheactivemarket,fairvaluecannotbereliablymeasured.
Joint control refers to the control over an economic activity in accordance with contract. Any party of joint venture can not separatelycontrol thebusiness activityof jointventure. Thedecision relatedto principaloperatingactivities needunanimous consentfromanyparty
Significantinfluencereferstothe powertoparticipateinmakingdecisionsonthe financialand operatingpoliciesofinvestee, 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 over20% (including20%) but lower than50% voteing shares. Unless there is evidencewhichindicatetheGroupcannotparticipateinthedecisionofproductionandoperatingundertheconditionsabove. Theinitialcostoflongtermequityinvestmentsformedinthemergerofenterpriseunderthesamecontrolshallberecognized at the carry amounts of equity of the merged enterprise. The initial cost of long term equity investments acquired in the mergerofenterpriseunderthedifferentcontrolshallberecognizedatfairvalueoftheassetspaid,liabilitiesrisenorcharged, andequitysecuritiesissued.
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport Besides the long-term equity investments acquired by the merger of enterprises, the initial cost of a long-term equity investmentobtainedbyothermeansshallbeascertainedinaccordancewiththeprovisionsasfollows:
(1)The initialcostofa long-termequityinvestmentobtainedbymakingpayment incashshallbe thepurchasecostwhichis actually paid. The initial cost consists of the expenses directly relevant to the obtaining of the long-term equity investment, taxesandothernecessaryexpenses.
(2)Theinitialcostofalong-termequityinvestmentobtainedonthebasisofissuingequitysecuritiesshallbethefairvalueof theequitysecuritiesissued.
(3) The initial cost of a long-term equity investment of an investor shall be the value stated in the investment contract or agreementexcepttheunfairvaluestatedinthecontractoragreement.
(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 StandardsforEnterprises.
Forthe long-termequityinvestmentin subsidiariesoftheGroupshallbe measuredinaccordancewiththecost method,and shall be adjusted when preparing consolidated financial statements in accordance with equity method. For the long-term equityinvestmentofjointventureshallbemeasuredinaccordancewithequitymethod.
For the long-term equity investment of the investing enterprise that does not do joint control or does not have significant influenceson theinvestedentity, andhas noofferin theactive marketandits fairvalue cannotbereliably measuredshould bemeasuredinaccordancewithcostmethod.Forthelong-termequityinvestmentoftheinvestingenterprisethatdoesnotdo jointcontrolordoesnothavesignificantinfluencesontheinvestedentity,andhasofferintheactivemarketanditsfairvalue canbereliablymeasuredshouldbemeasuredastheassetsavailableforsale.
14Fixedasset
Recognitioncriteriaoffixed assets:Fixedassetsaredefinedasthetangibleassetswhichareheldforthepurposeofproducinggoods,renderingservices,leasingorforoperation&management,andhavemorethanoneyearofuseful life,andwhoseunitpriceisoverRMB2,000.
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 beenfully depreciated andare still being usedand land is separately measuered. Straight-line depreciation method is adopted by the Group. Estimated net residual valuerate,usefullife,depreciationrateasfollows:
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport 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, andwhoseunitpriceisoverRMB2,000.
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 assetto theexpected conditions for use and that may be relegated to the fixed asset.Thecostofaself-constructedfixedassetshallbeformedbythenecessaryexpensesincurredforbringingtheassetto 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.Thecostof fixedassetswhichisobtainedby financialleasingshouldbemeasuredatthelowerone offairvalue andtheminimumleasepaymentinthebeginningoflease.
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. Estimatednet residual value rate is3%, usefullife,depreciationrateasfollows:
Estimatednet
Useful
Category residualvalue Annualdepreciationrate life(years)
rate(%)
HousingandBuildings
15 3 6.47
Including:Buildings
30 3 3.23
Housingforproductive
Housingfornon-productive
35 3 2.77
Machineryequipments
10-15 3 6.47～9.70
Transportationequipments
6 3 16.17
Electronicequipments
4 3 24.25
Including:Computer
7 3 13.86
Generaltestinginstruments
8 3 12.13
Specializedelectronicequipments
8 3 12.13
Automatedcontrollingequipments
Automatedcontrollingmeters
8 3 12.13
Othersequipments
Including:Industrialkiln
7 3 13.86
Tools&otherproductiontools
9 3 10.78
15 3 6.47
Transmissionequipments
18 3 5.39
Non-operationalequipmentsandtools
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport The Group shouldreview the estimateduseful life, estimatednet residualvalue and depreciationmethod at the end ofeach year.Ifanychangehasoccurred,itshallberegardedasachangeintheaccountingestimates.
The Company should derecognized fixed asset when the fixed asset has been disposed, or the fixed assetscan’t generate any future economic benefit through using and disposal. The amount that income resulting from disposal of fixed assetdeductsfixedasset’sbookvalueandrelevanttaxshallberecordedintheprofitandlossforthecurrentperiod.
15Constructioninprogress
MeasurementofCIP:Construction-in-progressisrecognizedatactualcost.Self-constructionprojectisrecognizedatthecost 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 ofCIPcomprisesborrowingcostandprofitandlossresultingfromforeignexchange.
The criteria and time spot of constructions inprogress’s being transferred to fixed assets: Constructions in progress are carried down to fixed assets on their actual costs when completingand achieving estimatedusable status. The fixed assets that have been completed and reached estimated usable status but have not yet been through completion and settlement proceduresare chargedto anaccount accordingto theirestimatevalues; adjustmentwillbe conductedupon confirmationof theiractualvalues.TheGroupshouldwithdrawdepreciationinthenextmonthaftercompletion.
16Borrowingcosts
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 timetoitsintendeduseorsale.
Durationofcapitalizationofborrowingcost:Whenexpendituresandborrowingcostarebeingincurred,andactivitiesthatare necessarytoputtheassetavailableforuseorsaleareinprogress,thecapitalizationofborrowingcostsaspartofthecostof a qualifying asset should commence. Capitalization of borrowing costs should be suspended during extended periods in whichactivedevelopmentis interruptedandinterruptionperiodlastfor over3month.The borrowingcostincurredduringthe periodshouldberecognizedasexpensesandrecordedintotheprofitandlossinthecurrentperiod.Whenalltheactivitiesfor bringing theasset to itsintended use orsale are completed,the capitalizationof borrowingcosts ceases,and the borrowing costsshouldberecognizedasanexpenseintheperiodincurred.
Measurementofborrowingcost:Asforspecificallyborrowedloansfortheacquisitionandconstructionorproductionofassets eligible for capitalization, the to-be-capitalized amount of interests shall be determined as the difference of the actual cost incurred ofthe specially borrowedloan at the presentperiod minus the incomeof interests earnedon the unusedborrowing 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
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport amount of interests on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulativeassetdisbursementsminusthegeneralborrowingbythecapitalizationrateofthe generalborrowingused.The capitalizationrateshallbecalculatedanddeterminedattheweightedaverageinterestrateofthegeneralborrowing.
17Intangibleassets
Measurementofintangibleassets:TheintangibleassetsoftheGrouprefertolanduseright,ERPsystemsoftware.Thecost 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 statedvalueintheinvestmentcontractoragreement,exceptforthoseofunfairvalueinthecontractoragreement.
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 softwareand other intangibleassets 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 shouldberecordedintothecostorexpenseofrelevantinthecurrentperiod.
TheGroupshallchecktheestimatedusefullifeandamortizationmethodofintangibleassetswithlimitedusefullifeattheend ofeachyear,ifanychangehasbeenmade,itshallbeadjusted.TheGroupshallchecktheestimatedusefullifeofintangible assetswithuncertainusefullifeduringtheeachaccountingperiod.Ifthereareevidencestoprovetheusefullifeofintangible assetsislimited,theGroupshallestimatetheusefullifeandamortizetheintangibleassetswithinestimatedusefullife. 18Impairmentofnon-financialasset
The Group checks the long-term equity investment for its subsidiaries, association and joint venture, fixed asset, construction-in-progress,intangibleassetandothersoneachbalancesheetdate.Theremaybeanimpairmentofassetwhen one of following indications occurs. The Group should test impairments. The Group tests the impairment of goodwill, intangibleasset with uncertainusefullife on the endof everyyear. Whenit is difficultto measurethe recoverableamount of asset,itshouldmeasuretherecoverableamountofassetonthebasisofassetgroup.
Afterimpairmenttest,ifthebookvalueexceedstherecoverableamountoftheasset,thedifferenceshouldberecognizedas impairment loss. Once any loss of impairment is recognized, it shall not be reversed in the future accounting periods. The recoverableamountofassetreferstothehigheroneofthenetamountofthefairvalueofassetminusdisposalexpenseand thepresentvalueofestimatedfuturecashflowofasset.
Indicationsofimpairmentasfollows:
(1)During theperiod,a fairvalue ofthe assetin themarkethas declinedsignificantly,whichexceedsthe expecteddecline astimepassingornormaluse;
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport (2)SignificantchangeswithanadverseeffectontheGrouphavetakenplaceduringtheperiod,orwilltakeplaceinthenear future, in the technological,market, economicor legal environmentin which the entity operatesor in the market to whichan assetisdedicated;
(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 recoverableamountmaterially;
(4)Evidenceisavailableofobsolescenceorphysicaldamageofanasset;
(5)Theassethasbeenidleorisbecomingidle,discontinued,orplanstodisposeofanassetbeforethepreviouslyexpected date;
(6) Evidence is available from internal reporting that indicates that the economic performance of an asset is, or will be, worsethanexpected;and
(7)Otherevidenceindicatesimpairmentofasset.
19Long-termdeferredexpenses
Long-term deferred expenses of the Group refer to expenses which are paid and should be deferred over the future period. Theamortizationperiodshallbemorethanoneyear(noincluding1year).Theexpensesshouldbeamortizedaveragelyover thebeneficialperiod.Ifthedeferredexpensecannottakebenefitforthefutureaccountingperiod,theunamortizedbalanceof thedeferredexpensesshouldbetransferredintothecurrentprofitorloss.
20Employeebenefits
Employee compensation comprises short-term benefit, post-employment benefit, termination benefit and other long-termemployee’sbenefit.
Employee’spayables includesalary, bonus,allowance, welfare,socialinsurance, housingfunds, labourunion expense,staff trainingexpense,duringtheperiodinwhichtheservicerenderedbytheemployees,theactuallyincurredshorttermemployee benefits shall be recognized as liability and shall be recognized inP&L or related cost of assets based on benefit objective allocatedfromtheservicerenderedbyemployees.
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 separateentityatthebalancesheetdateinexchangeofemployeeservicefortheperiodanditshallberecordedintocurrent profitandlossaccountorrelevantcostofassetsinaccordancewithbeneficialobjective.
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport Termination benefits are employee benefits payable as a result of either anentity’s decision to terminate anemployee’s employment before the contract due date or anemployee’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 withdrawthe termination benefits due to employmenttermination 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 shallbeapplied.TheGroupshallrecognizedtheplannedwagesandsocialinsuranceofretiredemployeeinthecurrentprofit and loss account when provision conditions are met, for the period since the termination of employee service rendered until theformalretirementdate.(terminationbenefit).
Other long-term employee benefit provided by the Group, shall be accounted for as defined contribution plan if the defined contributionplanaremet,otherwiseshallbeaccountedforasdefinedbenefitplan.
21Contingentliabilities
Theobligationpertinenttoacontingencyshallberecognizedasanestimateddebtwhenthefollowingconditionsaresatisfied simultaneously:
(1)TheobligationisacurrentobligationoftheGroup;
(2)ItislikelytocauseanyeconomicbenefittoflowoutoftheGroupasaresultofperformanceoftheobligation;and
(3)Theamountoftheobligationcanbemeasuredreliably.
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 otherfactorspertinenttothe contingencies.If thetimevalue ofmoneyis ofgreatsignificance,thebest 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 reflectthecurrentbestestimateamounts,theGroupshalladjustthebookvalueinaccordancewiththecurrentbestestimate amounts.
22Principleofrecognitionofrevenue
The revenue of the Group is mainly from selling goods, providing labour services and abalienating the right of use assets. Recognitionstandardsforrevenueareasbelow:
(1)Recognitionofrevenuefromsellinggood:
1)Thesignificantrisksandrewardsofownershipofthegoodshavebeentransferredtothebuyer;
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport 2) The Group remains neither continuous management right that usually keeps relation with the ownership nor effective controloverthesoldgoods;
3)Theamountofrevenuescanbemeasuredreliably;
4)TherelevanteconomicbenefitsarelikelytoflowintotheGroup;and
5)Theincurredcostorintendedcostcanbemeasuredreliably.
(2)Recognitionofrevenuefromprovidinglabourservices:
1)Totalrevenueandtotalcostcanbemeasuredreliably;therelevanteconomicbenefitsarelikelytoflowintotheGroup;and thestageofcompletioncanbeconfirmedreliably;
2) If the Group can, on the date of the balance sheet day, reliably estimate the outcome of a transaction concerning the labourservicesitprovides,itshallrecognizetherevenuefromprovidingservicesemployingthestageofcompletionmethod. If the outcome can not be estimated reliably and incurred cost can be offset, the revenue should be recognised by the compensation.Whenthestandardscannotbesatisfied,therevenueshouldnotberecognised,andtheincurredcostshould berecordedintothecurrentprofitandloss.
(3)Revenuefromabalienatingtheuserightofuseassets
The revenue from abalienating of use right of assets shall be recognized, when the relevant economic benefits are likely to flowintotheGroup,andtheamountofrevenuescanbemeasuredreliably.
23Governmentgrants
AgovernmentsubsidyoftheGroupshallberecognizediftheGroupcanmeettheconditionsforthegovernmentsubsidyand alsocanobtainthegovernmentsubsidy.Ifagovernmentsubsidyisamonetaryasset,itshallbemeasuredinthelightof the received or receivable amount. If a government subsidy is a non-monetaryasset, it shall be measuredat its fair value; if its fairvaluecannotbeobtainedinareliableway,itshallbemeasuredatitsnominalamount(RMB1).
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 compensatingtherelatedexpensesorlossesincurredtotheGroupshallbedirectlyincludedinthecurrentprofitsandlosses. 24Deferredtaxassetsanddeferredtaxliabilities
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport Deferredtaxassetsanddeferredtaxliabilityshouldberecognizedatthedifferences(taxabletemporarydifferences)between thetaxbaseofanassetorliabilityanditscarryingamount.TheGroupshallrecognizethedeferredincometaxassetsarising fromadeductibletemporarydifferencetotheextentof theamountofthetaxableincomewhichitis mostlikelytoobtainand whichcan bedeductedfromthe deductibletemporarydifference.Atthe balancesheetdate,deferredtax assetanddeferred taxliabilityshouldbemeasuredatapplicabletaxrate.
TheGroupshallrecognizethedeferredtaxassetsarisingfromadeductibletemporarydifferencetotheextentoftheamount ofthetaxableincomewhichismostlikelytoobtainwhichcanbedeductedfromthedeductibletemporarydifference.Forthe 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 taxableincometax,theamountdeductedshallbereversed.
25Lease
TheleasesoftheGrouprefertooperatinglease.
Therents fromoperatingleasesshallbe recordedbythelesseeinto therelevantassetcosts ortheprofitsand lossesofthe currentperiodbyusingthestraight-linemethodovereachperiodoftheleaseterm.
26Accountingtreatmentmethodofincometax
1.ThemainapplicabletaxandratetotheGroupasfollows:
||
|-|
|Taxbase|
|SalesrevenueorPurchase|
|Revenuefrompropertylease,examinationfee,surcharge|
|Value-addedtaxpayables,businesstax|
|Value-addedtaxpayables,businesstax|
|Value-addedtaxpayables,businesstax|
|Currentperiodtaxableprofit|
|70%ofcostofownpropertyorrevenuefromleasingproperty|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport Landusetax Landusingrightarea RMB6persquaremeter NotesfortaxprincipleswithdifferentEITrate
Taxprinciples EITrate
WazhouLiaoyangBearingconstructionCo.,Ltd 25%
DalianWazhouPrecisionMotorCarBearingCompanyLimited 25%
WazhouPrecisionofSphericalRollerBearings(Wafangdian)Co.,Ltd 25%
2.Taxpreference
Thecompanyobtainedthe qualificationofhighand newtechnologyenterprisesat 29September,2014.TheCertificate No is GF201421200004, andthe validity durationis three years.According tothe tax law, thecompany can begranted forthepreferentialtaxpolicyofenterpriseincometaxrateof15%inthreeyears.
27Segmentreport
Business segment is confirmed in accordance with governance structure, management requests, internal reporting system, andtheGroupconfirmthereportsegmentonthebasisofbusinesssegment.
BusinesssegmentisacomponentoftheGroupthatsatisfysthefollowingconditionssimultaneously:thecomponentcantake revenue and expenses; the management level can appraise the operating performance of the component in order to allocationofresourceandappraisetheperformance;andtheGroupcanacquirethefinancialposition,operatingperformance andcashflowofthecomponentetc.
28Discontinuedoperation
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 orwhollyinaccordancewiththeGroup’splan.
ThecomponentoftheGroupshallberecognizedasthecomponentheldforsellingwhensatisfyingtheconditionsasbelow: 1)TheGrouphadmadeadecisionondisposalofthecomponent;
2)TheGrouphadsignedtheirrepealablyTransferAgreementwithtransferee;and
3)Thetransfershallbefinishedwithinoneyear.
29.Changesinaccountingpolicies,accountingestimatesandcorrectionofpreviouserrors
Therearenochangesinaccountingpolicies,accountingestimatesandcorrectionofpreviouserrors
VI.Taxation
1.ThemainapplicabletaxandratetotheGroupasfollows:
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport Tax Taxbase Taxrate
Value-addedtax(VAT) SalesrevenueorPurchase
17%，13%，11%，6%，3% Businesstax Revenuefrompropertylease 5%
Cityconstructiontax Value-addedtaxpayables,businesstax 7%
Enterpriseincometax(EIT) Currentperiodtaxableprofit 15%
Educationsurcharge Value-addedtaxpayables,businesstax 3%
Localeducationsurcharge Value-addedtaxpayables,businesstax 2%
70%ofcostofownpropertyorrevenuefrom
Realestatetax 1.2%or12%
leasingproperty
Landusetax Landusingrightarea RMB6persquaremeter NotesfortaxprincipleswithdifferentEITrate
Taxprinciples EITrate
WazhouLiaoyangBearingconstructionCo.,Ltd 25%
DalianWazhouPrecisionMotorCarBearingCompanyLimited 25%
WazhouPrecisionofSphericalRollerBearings(Wafangdian)Co.,Ltd 25%
2.Taxpreferenceandapproval
Thecompanyobtainedthequalificationofhighandnewtechnologyenterprisesat29Sep2014.TheCertificatenumberis GF201421200004,andtheperiodofvalidityisthreeyears.Accordingtotheprovisionsofthetaxlawthecompanycanbegrantedthepreferentialtaxpolicyofenterpriseincometaxrateof15%inthreeyears.
VII.Notestoconsolidatedfinancialstatements
1.Cashandcashinbank
||
|-|
|ClosingBalance|
|333,827.70|
|113,607,672.04|
|23,400,000.00|
|137,341,499.74|

 Notes: the closing balance of other cash and cash equivalents areall security deposits of bank acceptance notes. Sincetheliquiditylimitation,thiswillbedeductedfromtheclosingbalance.
2Notesreceivable
(1)Categoryofnotesreceivable
2016.06.30 2015.12.31 Items
112,870,440.17 74,843,528.50 Bank acceptance notes
63,975,784.09 25,662,475.20
Commercial acceptance notes
176,846,224.26 100,506,003.70
Total
3Accountsreceivable
(1)Categoryofaccountsreceivable
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport ClosingBalance
|||||
|-|-|-|-|
|Bookingbalance||Provision||
|Amount|%|Amount|%|
|12,810,943.69|1.14%|12,810,943.69|100.00%|
|1,067,829,852.59|0.96%|44,101,606.05|4.36%|
|30,991,469.16|2.80%|30,991,469.16|100.00%|
|1,111,632,265.44|100.00%|87,904,018.90|7.91%|

(Continued)
Openingbalance
|||||
|-|-|-|-|
|Bookingbalance||Provision||
|Amount|%|Amount|%|
|12,810,943.69|1.18%|12,810,943.69|100.00%|
|1,038,035,999.46|95.95%|44,102,673.09|4.53%|
|30,991,469.16|2.85%|30,991,469.16|100.00%|
|1,081,838,412.31|100.00%|87,905,085.94||

 1) Accounts receivable with individual significant amount and identification separately bad debt provision at the end of June 30,2016
Booking Provisionforbad Provisionrate
Companyname Reasonsforprovision balance debts (%)
A 5,092,669.00 5,092,669.00 100.00% Brokedown
A/Rwithover5yearsaging, B 3,910,007.43 3,910,007.43 100.00%
unlikelytobecollected
A/Rwithover5yearsaging, C 3,808,267.26 3,808,267.26 100.00%
unlikelytobecollected
Total 9,002,676.43 9,002,676.43 — —
2)Accountsreceivableaccruedthebaddebtprovisionsunderaccountingaginganalysismethod
ClosingBalance
|||
|-|-|
|Accountsreceivable|Provisionforbaddebts|
|809,091,481.86|8,090,914.82|
|111,813,205.52|5,590,660.28|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
|||
|-|-|
|50,832,435.38|10,166,487.08|
|40,507,087.76|20,253,543.88|
|1,012,244,210.52|44,101,606.05|

(2)Baddebtprovisionaccruedandwritten-off(withdraw)
(3)Accountsreceivablewrittenoffincurrentperiod
Item Written-offAmount
Accountsreceivablewrittenoff 2,134.08
4Advancestosuppliers
(1)Agingofadvancestosuppliers
Items 2016.06.30 2015.12.31
Amount Percentage(%) Amount Percentage(%)
Within1year
27,077,091.48 74.33% 21,395,885.05 65.48% 1to2years
3,752,459.60 10.30% 1,883,664.93 5.77% 2to3years
247,994.57 0.68% 5,206,158.32 15.93% Over3years
5,351,336.08 14.69% 4,187,915.47 12.82% Total
36,428,881.73 -- 32,673,623.77 --
(2)Thetopfivesignificantadvancestosupplierscategorizedbydebtors
The total amount of top five significant advances to suppliers categorized by debtors is 19,922,566.83 Yuan, takingtheparentageof54.69%oftheclosingbalanceofadvancestosuppliers.
5.Dividendsreceivable
(1)Dividendsreceivable
||
|-|
|ClosingBalance|

 6 Otherreceivables
(1)Thecategoriesofotherreceivable
ClosingBalance
|||||
|-|-|-|-|
|Bookingbalance||Provision||
|Amount|%|Amount|%|
|24,599,803.89|0.89%|1,264,644.60|0.07%|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
|||||
|-|-|-|-|
|1,687,122.13|5.27%|1,687,122.13|100.00%|
|26,286,926.02|100.00%|2,951,766.73|11.23%|

(Continued)
OpeningBalance
|||||
|-|-|-|-|
|Bookingbalance||Provision||
|Amount|%|Amount|%|
|22,727,482.25|0.93%|1,264,644.60|8.31%|
|1,687,122.13|6.91%|1,687,122.13|100.00%|
|24,414,604.38|100.00%|2,951,766.73||

 (2)Otherreceivablesaccruedthebaddebtprovisionsunderaccountingaginganalysismethod
ClosingBalance
|||
|-|-|
|Otherreceivables|Provisionforbaddebts|
|13,385,177.48|133,851.77|
|1,415,238.37|70,761.92|
|1,210,546.82|242,109.36|
|1,635,843.09|817,921.55|
|17,646,805.76|1,264,644.60|

(3)Otherreceivablescategorizedbynature
||
|-|
|ClosingBalance|
|26,286,926.02|
|26,286,926.02|

 7Inventories
(1)Categoriesofinventories
||||||
|-|-|-|-|-|
|2016.06.30|||||
|Cost|Provisionfordecline|Netbookvalue|Cost|Provisionfordeclines|
|142,656,195.54|2,654,008.58|140,002,186.96|136,420,995.34|2,654,008.58|
|175,101,849.88|602,496.86|174,499,353.02|184,481,338.87|602,496.86|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
||||||
|-|-|-|-|-|
|771,737,850.71|67,782,949.02|703,954,901.69|821,542,628.29|67,782,949.02|
|4,797,122.27||4,797,122.27|3,869,947.98||
|1,094,293,018.40|71,039,454.46|1,023,253,563.94|1,146,314,910.48|71,039,454.46|

(2)Provisionfordeclineinthevalueofinventories
||||||
|-|-|-|-|-|
|OpeningBalance|Increase||Decrease||
||Accrual|Other|Reverse/Written-off|Otherstransferred|
|2,654,008.58|||||
|602,496.86|||||
|67,782,949.02|||||
|71,039,454.46|||||

 Accrualforprovisionfordecline inthevalue of inventories
||
|-|
|Basisonrecognizedconvertiblenetvalue|
|Materialsmarketprice atthe endof period|
|Average salepriceof similarproduct|

 8Othercurrentassets
Item 2016.06.30 2015.12.31
VATtobededucted
4,536,190.23 6,999,716.88 Rental
Prepaidincome tax
1,973,315.90 1,973,315.90 Total
6,509,506.13 8,973,032.78 9.Available-for-salefinancialassets
(1)Available-for-salefinancialassets
||||||
|-|-|-|-|-|
|ClosingBalance|||||
|Bookingbalance|Provision|Bookvalue|Bookingbalance|Provision|
|2,000,000.00||2,000,000.00|2,000,000.00||
|2,000,000.00||2,000,000.00|2,000,000.00||
|2,000,000.00|-|2,000,000.00|2,000,000.00|-|

 (2)Available-for-salefinancialassetsmeasuredatcostmethod
||||||||||
|-|-|-|-|-|-|-|-|-|
|BookingBalance||||Provision||||Proportion(%)|
|OpeningBalance|Increase|Decrease|ClosingBalance|OpeningBalance|Increase|Decrease|ClosingBalance||

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
|||||||||
|-|-|-|-|-|-|-|-|
|2,000,000.00|-|2,000,000.00|-|-|-|-|4.76|
|2,000,000.00|-|2,000,000.00|-|-|-|-|4.76|

 10Fixedassets
(1)Fixedassetsbycategories
||||||
|-|-|-|-|-|
|Building|MachineryEquipment|Transportation|ElectronicDevice|OtherEquipment|
|437,178,196.13|1,117,923,351.33|20,025,972.96|65,113,499.42|181,292,058.26|
|975,345.88|55,648,293.66|875,375.91|421,788.50|964,807.92|
|975,345.88|55,648,293.66|875,375.91|421,788.50|964,807.92|
|677,496.88|56,410.25|71,794.87||0.00|
|0.00|104,476,447.48|1,390,876.92|2,873,244.76|895,469.26|
||104,476,447.48|1,390,876.92|2,873,244.76|895,469.26|
|438,153,542.01|1,069,095,197.51|19,510,471.95|62,662,043.16|181,361,396.92|
|213,563,140.85|687,481,029.29|15,775,340.86|51,720,694.71|156,431,829.18|
|6,599,355.30|52,206,097.18|1,266,893.77|2,256,682.91|2,532,165.68|
|6,599,355.30|52,206,097.18|1,266,893.77|2,256,682.91|2,532,165.68|
|0.00|33,753,708.20|1,232,638.17|1,875,888.84|28,665.13|
||33,753,708.20|1,232,638.17|1,875,888.84|28,665.13|
|220,162,496.15|705,933,418.27|15,809,596.46|52,101,488.78|158,935,329.73|
||1,234,431.89|200,000.00||1,159.51|
||2,700.00||||
||1,231,731.89|200,000.00||1,159.51|
|217,991,045.86|361,930,047.35|3,500,875.49|10,560,554.38|22,424,907.68|
|223,615,055.28|429,207,890.15|4,050,632.10|13,392,804.71|24,859,069.57|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport 11Constructioninprogress
(1)DetailsofConstruction-in-progress
||||||||
|-|-|-|-|-|-|-|
|Item|ClosingBalance|||OpeningBalance|||
||BookBalance|Provision||BookBalance|Provision||
|Sphericalsurfacebearings newplant|98,386,826.36||98,386,826.36|124,994,399.66||124,994,399.66|
|Improvementofseven-finishedproducts|79,149,024.85||79,149,024.85|42,161,475.27||42,161,475.27|
|Improvementofone-finishedproducts|35,208,518.87||35,208,518.87|39,589,942.44||39,589,942.44|
|Improvementofprecisionrollerbranch|25,294,255.36||25,294,255.36|24,819,080.90||24,819,080.90|
|Dalianindustryparkproject|20,729,890.09||20,729,890.09|20,650,648.09||20,650,648.09|
|ImprovementofAmerauto|4,767,240.49||4,767,240.49|8,827,390.94||8,827,390.94|
|Improvementof grindingmachine|4,353,344.93||4,353,344.93|8,677,462.24||8,677,462.24|
|Grindingproductline|6,775,988.54||6,775,988.54|7,534,651.82||7,534,651.82|
|Heattreatmentproductline|7,998,572.50||7,998,572.50|5,166,367.38||5,166,367.38|
|Improvementofsecond-finishedproducts|4,470,874.95||4,470,874.95|4,470,874.95||4,470,874.95|
|Improvementofliaoyangbearing|2,391,715.09||2,391,715.09|3,982,724.88||3,982,724.88|
|Improvementofplant|3,734,829.95||3,734,829.95|3,734,829.95||3,734,829.95|
|Improvementofspeciallargebranch|3,568,262.29||3,568,262.29|3,448,969.98||3,448,969.98|
|CraneProject|2,861,762.32||2,861,762.32|2,861,762.32||2,861,762.32|
|ComputerProject|2,646,148.77||2,646,148.77|2,646,148.77||2,646,148.77|
|Overhaulfactoryreconstruction|2,610,307.16||2,610,307.16|2,195,185.79||2,195,185.79|
|Others|23,787,810.51||23,787,810.51|23,870,304.04||23,870,304.04|
|Total|328,735,373.03||328,735,373.03|329,632,219.42||329,632,219.42|

12Intangibleassets
|||
|-|-|
|Landuseright|software|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
|||
|-|-|
|176,189,727.74|6,135,356.44|
|176,189,727.74|6,135,356.44|
|41,037,224.61||
|2,194,753.80||
|2,194,753.80||
|43,231,978.41|5,947,586.08|
|132,957,749.33|187,770.36|
|135,152,503.13|214,104.96|

13Long-termdeferredandprepaidexpenses
Other
Item 2015.12.31 Increase Amortization 2016.06.30 decrease
Righttousepremiseof
589,192.03 33,915.18 555,276.85 Shanghaisalesoffice
Decorationfees
22,164.00 22,164.00 0.00 Total
611,356.03 56,079.18 555,276.85 14Deferredtaxassetsanddeferredtaxliabilities
(1)Deferredtaxassetswithoutdeduction
||||
|-|-|-|
|ClosingBalance|||
|Deductibletemporarydifference|Deferredtaxassets|Deductibletemporarydifference|
|63,685,949.07|10,062,159.26|63,685,949.07|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
||||
|-|-|-|
|11,940,720.07|1,791,108.01|11,940,720.07|
|75,626,669.14|11,853,267.27|75,626,669.14|

 (2)Deferredtaxliabilitieswithoutdeduction
||||
|-|-|-|
|ClosingBalance|||
|Taxabletemporarydifference|Deferredtaxliabilities|Taxabletemporarydifference|
|6,589,523.85|988,428.58|6,589,523.85|
|6,589,523.85|988,428.58|6,589,523.85|

 (3)Thenetvalueofdeferredtaxassetsanddeferredtaxliabilitieswithdeduction
||||
|-|-|-|
|ClosingBalanceofdeferredtaxassetsandliabilitieswithdeduction|ClosingBalanceofdeferredtaxassets/deferredtaxliabilities|OpeningBalanceofdeferredtaxassetsandliabilitieswithdeduction|
||11,853,267.27||
||988,428.58||

(4)Unrecognizeddeferredtaxassetsdetails
||
|-|
|ClosingBalance|
|39,005,808.79|
|271,715,626.48|
|310,721,435.27|

 (5)Unrecognizeddeductiblelossofdeferredtaxassetsexpirednextperiod
|||
|-|-|
|ClosingBalance|OpeningBalance|
|21,053,716.07|21,053,716.07|
|166,740,210.42|166,740,210.42|
|83,921,699.99|83,921,699.99|
|271,715,626.48|271,715,626.48|

15Short-termloan
(1)Categoryofshort-termloan
Loancategory 2016.06.30 2015.12.31
Creditloan
468,000,000.00 385,000,000.00
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport 468,000,000.00 385,000,000.00 Total
16Notespayable
Items 2016.06.30 2015.12.31
318,900.00 3,086,550.20 Commercialacceptance notes
280,200,000.00 324,380,000.00 Bank acceptancenotes
Total
280,518,900.00 327,466,550.20 17Accountspayable
(1)Accountspayable
||
|-|
|ClosingBalance|
|756,558,520.47|
|102,592,541.94|
|128,837,238.40|
|987,988,300.81|

 18Advancesfromcustomers
(1) Receivedinadvance
||
|-|
|ClosingBalance|
|32,089,340.69|
|32,089,340.69|

 19Employeebenefitspayable
(1)Categoryofemployee’spayables
||||
|-|-|-|
|OpeningBalance|Increase|Decrease|
|9,548,956.48|130,031,033.15|130,874,047.63|
|9,891,745.32|22,254,189.52|22,290,227.35|
|19,440,701.80|152,285,222.67|153,164,274.98|

(2)Short-termemployee’spayables
||||
|-|-|-|
|Opening|Increase|Decrease|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
||||
|-|-|-|
|Balance|||
|631,579.56|98,709,477.88|99,138,368.36|
||9,014,823.32|9,014,823.32|
|589,427.33|10,464,411.80|10,497,386.42|
|291,857.26|8,956,088.17|8,986,120.17|
|226,180.34|1,050,017.09|1,052,424.81|
|71,389.73|458,306.54|458,841.44|
|2,973,140.95|10,874,238.90|10,986,404.12|
|5,354,808.64|968,081.25|1,237,065.41|
|9,548,956.48|130,031,033.15|130,874,047.63|

 (3)Welfarewithdepositandwithdrawalplan
||||
|-|-|-|
|OpeningBalance|Increase|Decrease|
|9,555,250.03|21,270,619.70|21,303,982.39|
|336,495.29|983,569.82|986,244.96|
|9,891,745.32|22,254,189.52|22,290,227.35|

 6.20Taxespayable
||
|-|
|ClosingBalance|
|3,426,775.73|
|0.00|
|298,524.32|
|0.00|
|341,180.25|
|313,864.85|
|53,261.00|
|104,020.56|
|288,740.44|
|266,121.76|
|5,092,488.91|

21Interestpayable
Item ClosingBalance OpeningBalance
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
||
|-|
|1,630,007.00|
|1,630,007.00|

 22Otherpayables
Otherpayablescategorizedbypaymentsnature
||
|-|
|ClosingBalance|
|2,095,575.42|
|21,452,958.00|
|2,824,012.10|
|114,763,042.16|
|141,135,587.68|

 23 Non-currentliabilitiesduewithinoneyear
(1)Non-currentliabilitiesduewithinoneyear
Item ClosingBalance OpeningBalance
Long-termloanduewithinoneyear
50,000,000.00 Total
50,000,000.00 24 Othernon-currentliabilities
Item ClosingBalance OpeningBalance
Governmentsubsidywithin1year
4,651,103.83 4,411,103.83 Total
4,651,103.83 4,411,103.83 Government subsidy
||||||
|-|-|-|-|-|
|OpeningBalance|Increase|Recordedinto non-operationincome|OtherChange|ClosingBalance|
|737,000.00|-|368,500.00|368,500.00|737,000.00|
|2,704,235.83|-|1,352,117.94|1,352,117.94|2,704,235.83|
|400,000.00|-|200,000.00|200,000.00|400,000.00|
|472,320.00|-|236,160.00|236,160.00|472,320.00|
|97,548.00|-|||97,548.00|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
||||||
|-|-|-|-|-|
|OpeningBalance|Increase|Recordedinto non-operationincome|OtherChange|ClosingBalance|
|||1,125,308.18|1,365,308.18|240,000.00|

 “Other Change”: the expected amortization occurred during the next year will be re-categorized from deferredincome toothercurrentliabilities.
25 Long-termloan
(1)Categoryoflong-termloan
Category 2016.06.30 2015.12.31
Assuranceloan
140,000,000.00 90,000,000.00 Creditloan
90,000,000.00 90,000,000.00 230,000,000.00 180,000,000.00 Total
26Long-termpayables
(1) Long-termpayablescategorizedbypaymentsnature
||
|-|
|ClosingBalance|
|100,000.00|
|1,497,305.72|

 27 Specialpayables
|||||
|-|-|-|-|
|OpeningBalance|Increase|Decrease|ClosingBalance|
|221,698.98|-|-|221,698.98|
|100,000.00|-|-|100,000.00|
|321,698.98|-|-|321,698.98|

28Othernon-currentliabilities
(1) Categoryofdeferredincome
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
|||||
|-|-|-|-|
|OpeningBalance|Increase|Decrease|ClosingBalance|
|46,650,196.82||3,525,848.68|43,124,348.14|
|46,650,196.82||3,525,848.68|43,124,348.14|

(2)Governmentsubsidy
|||||||
|-|-|-|-|-|-|
|OpeningBalance|Increase|Recordedinto non-operationincome|OtherChange|ClosingBalance|Relatedwithasset/equity|
|4,389,660.00|||0.00|4,389,660.00|4,389,660.00|
|736,999.97|||368,500.00|368,499.97|736,999.97|
|32,450,829.84|||1,352,117.94|31,098,711.90|32,450,829.84|
|3,200,000.00|||200,000.00|3,000,000.00|3,200,000.00|
|2,833,920.00|||236,160.00|2,597,760.00|2,833,920.00|
|2,400,000.00|||1,365,308.18|1,034,691.82|2,400,000.00|
|638,787.01||3,762.56||635,024.45|638,787.01|
|46,650,196.82||3,762.56|3,522,086.12|43,124,348.14|46,650,196.82|

 “Other change”: carried forward the non-operation income occurred in 2016 from the subsidy and re-categorized to othercurrentliabilities.
(1) A: Deferred income: the RMB 4,877,400.00 of “Industry development subsidies” is distributed by the Liaoyang EconomicandDevelopment districtBureauofFinancein2013.Thegrantis relatedto landandamortizedover 50yearsinaccordancewithlandamortizationcriteria.
(2) B: Deferred income: the improvement subsidy is the railway transportation bearing technologic improvement
subsidywith total amount of RMB 7,370,000.00 granted by Bureau of Finance Liaoning province in 2008. The
subsidyrelatedtoassetshouldbedeferredovertheusefullifeof10years.
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport (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 RMB11,143,755.05；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 formedaftertheDalianbranchremoval.
(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 integrationandprocessingdigitalization”.Currently, theequipment hasbeenusedforproduction manufacturing andgrantisamortizedover10years.
(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 speciallyusedtoimprovetheprojectofimprovementofbearingbaseinhigh-endequipmentsector.Theitem is amortizedwithin10years.
(6) F: Deferred income: the RMB 2,400,000.00 interest subsidy of “Axle box and bearingtechnology improvement ofgrandaxleload railwaycarriages”is granted byWafangdianFinanceBureauin 2014.Thesubsidyis nowin processing the project “Axle box and bearing technology improvement of grand axle load railway carriages”. Thisprojectisstillintheprogressandisexpectedtobecompletedforinspectionin2016.
(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 CaiShe(Zhuan)No.[2014]32”.Noassetsareestablishedyetsofar,thegranthasbeenbookedintonon-operating income.
29Sharecapital
2015.12.31 Changeforcurrentperiod 2016.06.30 Issui Transferrin
Shareholders ng Distributi gcapital
name/category Amounts % new ng reserves Others Subtotal Amounts % share shares toshare
s capital
402,600,00 100.0
Totalshares — — — — — 402,600,000.00 100.00 0.00 0
30Capitalreserves
Items 2015.12.31 Increase Decrease 2016.06.30 201,956,446.52 201,956,446.52 Sharepremium
283,734,603.95 283,734,603.95 Othercapitalreserves
485,691,050.47 485,691,050.47 Total
31Surplusreserves
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport Items 2015.12.31 Increase Decrease 2016.06.30
110,852,290.20 110,852,290.20 Statutorysurplusreserve
20,590,618.91 20,590,618.91 Discretionarysurplusreserve
131,442,909.11 131,442,909.11 Total
32Undistributedprofit
||
|-|
|Thisperiod|
|328,731,015.75|
|328,731,015.75|
|-44,024,185.93|
|284,706,829.82|

33Operatingrevenue&cost
||||
|-|-|-|
|Thisperiod|||
|Salesrevenue|Costofsales|Salesrevenue|
|1,022,552,099.60|944,790,304.30|1,067,217,904.74|
|102,902,932.38|98,811,722.39|100,875,774.60|
|1,125,455,031.98|1,043,602,026.69|1,168,093,679.34|

 34Operatingtaxesandsurcharges
Items Thisperiod Lastperiod
217,909.95 168,576.54 Businesstax
2,620,938.60 3,380,286.62 Cityconstructiontax
1,844,718.24 2,452,340.24 Educationsurcharge
11,784.65
Other
4,695,351.44 6,001,203.40 Total
35Sellingexpenses
Items Thisperiod Lastperiod
Transportationexpense 30,956,962.62 41,134,466.75 Employee benefit 17,531,901.82 18,073,440.55
Travelexpense 7,641,428.07 8,924,402.37
Conference expense 4,375,408.70 2,399,555.14
Trademarkusefee 2,000,000.00 2,000,000.00
Other expense 22,236,984.67 26,056,390.58
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport 84,742,685.88 98,588,255.39 Total
36Administrativeexpenses
Items Thisperiod Lastperiod
Employee benefit 16,327,231.64 16,574,731.01 Taxexpense 4,217,328.76 4,092,368.48 Technology development expense 2,713,800.00 3,012,053.45 Intangible assetsamortization 2,221,088.40 2,470,380.54 Guide andfirefighting expense 1,647,500.00 1,372,500.00 Depreciation expense 1,199,666.57 1,453,558.98 Businessentertainingexpense 305,960.70 363,178.10 Travelexpense 440,495.52 499,658.13 Other expense 7,573,105.97 10,229,490.24 36,646,177.56 40,067,918.93 Total
37Financialexpenses
Items Thisperiod Lastperiod Interestexpenses
17,700,659.58 21,883,652.63 131,402.31 293,769.45 Less:interestincome
-5,015,729.40 30,814.35 Add:Exchangelosses
-162,786.15 -965,669.73 Add:Othersexpenditure
12,390,741.72 20,655,027.80 Total
38Assetsimpairmentlosses
Items Thisperiod Lastperiod
Lossofbaddebts
1,067.04 15,463.61 Total
1,067.04 15,463.61 39Non-operatingincome
(1)Non-operatingincomelist
|||
|-|-|
|Thisperiod|Lastperiod|
|4,649,046.02|957,589.72|
|4,649,046.02|957,589.72|
|2,695,634.43|3,325,164.04|
|5,575,349.68|2,497,040.93|
|1,057,551.00|6,649.49|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
|||
|-|-|
|26,691.99|107,855.90|
|14,004,273.12|6,894,300.08|

 (2) Governmentgrantslist
|||
|-|-|
|OpeningBalance|ClosingBalance|
|368,500.00|368,500.00|
|1,352,117.94|1,306,617.94|
|236,160.00|236,160.00|
||20,050.00|
||350,000.00|
|1,125,308.18||
|200,000.00|200,000.00|
|3,762.56|15,712.99|
|459,501.00||
|1,580,000.00||
|250,000.00||
|5,575,349.68|2,497,040.93|

40Non-operatingexpenses
|||
|-|-|
|Thisperiod|Lastperiod|
|78,416.68|240,546.34|
|78,416.68|240,546.34|
|723,115.84|138,947.37|
|650.00|10,000.00|
|603,258.18|84,572.29|
|1,405,440.70|474,066.00|

 41Incometaxexpenses
(1)Incometaxexpenses
Items Thisperiod Lastperiod
Currentincometaxexpenses
264,036.88
Total
264,036.88
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport（2）Adjustmentforprofitandincometasexpenss
|||
|-|-|
|item|amoutn|
|Totalprofit|-44,024,185.93|

 42Notestocashflowstatement
(1)Cashreceipt/paymentofotheroperating/investing/financingactivities
1)Othercashreceivedrelatingtooperatingactivities
Items Thisperiod Lastperiod
Othercashreceivedrelatingtooperatingactivities
3,957,803.39 1,986,184.06
3,957,803.39 1,986,184.06
Total
2)Othercashpaidrelatingtooperatingactivities
Items
Thisperiod Lastperiod
Othercashpaidrelatingtooperating
56,508,192.96 62,837,599.68
activities
Total 56,508,192.96 62,837,599.68
3)Othercashreceivedrelatingtofinancialactivities
Items
Thisperiod Lastperiod
Othercashpaidrelatingtofinancial
147,525,694.44
activities
Total 147,525,694.44
4)Othercashpaidrelatingtofinancialactivities
Items
Thisperiod Lastperiod
Othercashpaidrelatingtofinancial
150,000,000.00
activities
Total 150,000,000.00
43Supplementaryinformationofconsolidatedcashflowstatement
Items Thisperiod Lastperiod
1.Adjustingnetprofitintocashflowsofoperatingactivities:
-44,024,185.93 -59,587,254.16
Netprofit
Add:Provisionforimpairmentofassets
1,067.04 15,463.61
Depreciationoffixedassets
64,861,194.84 43,773,526.92
Amortizationofintangibleassets
2,221,088.40 2,470,380.54
56,079.18 78,249.18
Amortizationoflong-termdeferredexpenses
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport Lossesondisposaloffixedassets,intangibleassets,and
-4,570,629.34 -717,043.38
long-termassets(incomelistedwith”-”)
12,390,741.72 20,655,027.80
Financialexpense(incomelistedwith”-”)
Investmentloss(incomelistedwith”-”)
-52,021,892.08 -52,131,204.86
Decreaseofinventory(increaselistedwith”-”)
-95,261,292.96 -79,538,779.90
Decreaseofoperatingreceivables(increaselistedwith”-”)
Increaseofoperatingpayables(decreaselistedwith”-”)
other
107,958,163.98 139,716,479.91
Netcashflowsarisingfromoperatingactivities
-8,389,665.15 14,734,845.66
2.Significantinvestmentandfinancingactivitiesunrelatedto
cashincomeandexpenses
3.Netincrease(decrease)ofcashandcashequivalent
113,941,499.74 82,465,558.09
Endingbalanceofcash
78,556,030.56 143,399,164.66
Less:Openingbalanceofcash
35,385,469.18 -60,933,606.57
Netincreaseofcashandcashequivalent
(3)Cashandcashequivalents
Items Thisperiod Lastperiod
Cash
113,941,499.74 78,556,030.56 113,941,499.74 78,556,030.56 Closingbalanceofcashandcashequivalents
VIII.EquityofOtherEntities
1. Equityofsubsidiaries
(1) Organizationstructureofgroupcompany
||||||
|-|-|-|-|-|
|Location|RegisteredLocation|Natureofoperation|Share（%）||
||||Direct|Indirect|
|Wafangdian|LiaoyangBaitaDistrictWeiguoRdNo.61|Manufacturingandsellingbearingandmachines|100||
|Wafangdian|DalianFreeTradeZoneSanshiliYongshengRdNo.12|Manufacturingandsellingbearingandmachines|100||
|Wafangdian|WafangdianBeigongjiStNo.1|Manufacturingandsellingbearingandmachines|100||

IXRiskRelatedtoFinancialInstrument
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
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport monitortheserisksexposureandcontroltheserisksundercertainrisklevel.
1. Objectivesandpoliciesofeachriskmanagement
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 theshareholders’ and otherinvestors’ 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 tolerancebottomlineconductingriskmanagement,aswellastomonitortheserisksinatimelyandeffectivemanner, andtoensuretheserisksunderthelimitlevel.
(1) Marketrisk
1) Currencyrisk
The currencyriskis referredas the riskcausedby thefluctuation of exchangerate.The maincurrencyriskthat the companyfacedwithisrelatedtotheUSDsincethemainexportbusinessissettledbyUSD.Otherthanthebalance of foreign currency presented in Note VI. 44, all assets and liabilities of company are presented in RMB On December 31, 2015.Thebalance in foreign currencyof assetsand liabilitiesmay cause currencyrisk with influence tooperatingperformance.
2) Interestrisk
Themain potential interest riskwhichiscausedbythefluctuation ofthe cashflow offinancial instruments isrelated tothefloatingrateofbankloan(NoteVI.15).ThepolicythatadoptedbytheGroupistomaintainthefloatingrateof loan.
(2) Creditrisk
On31December,2015,theGroup’smostprobablecreditriskexposureisfromthefinanciallossprimarilyduetothe failure of fulfilling the obligation by one party of the contract. The impairment losses ofcompany’s financial assets areincluding:
Among the book value of recognized financial assets in the consolidated statement of financial position, for the financial instruments measuredatfair value,their bookvaluesreflect the riskexposure,however,notmaximum risk level;thelevelischangingalongwiththefairvalue.
As the aim to reduce the credit risk, the Group sets up the credit department to ensure the credit limit, to examine and approvethe credit application, and to carryout monitor proceduresto claim expiredcreditor’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 minimizedsignificantly.
Theworkingcapitalhaslowlevelofcreditrisksincethecashisdepositedinthebankswithhighcreditreputation. (3) Liquidityrisk
As the management of liquidity risk, theGroup’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 loanactivitiesareundermonitoringbymanagementtomakesuretocomplywiththeloanagreement.
Theliquidityriskis referredastheGroupfailedtofulfil itsfinancial obligationsbytheduedate.TheGroupmanages the liquidity risk by the maintain sufficiency of working capital to cover the expired debt to avoid the unacceptable losses or the damage ofGroup’s reputation. The Group analyses the debt structure and due time periodically to ensurethesufficiencyofavailablecashflow.Thebankloanactivitiesareundermonitoringbymanagementtomake sureto comply with the loanagreement.At the same, the Grouphasconsultation with financial organizationsabout thefinancingactivitiestomaintainthecreditlevelandtoreducethecreditrisk.
TheGroup’smain financial resourcescomefrom bankloan. Bythe date of 31 December,2015,the unencumbered bankloancreditis2.14billionYuan.
X.DisclosureofFairValue
XIRelatedPartiesRelationshipandTransactions
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport 1Parentcompanyandultimatecontroller
|||||
|-|-|-|-|
|Registeredaddress|Businessnature|Registeredcapital|Shareholdingpercentage(%)|
|No.1NorthGongjiStreet,WafangdianCity,Dalian|Manufactureandsalesofbearingandotherequipments|413,793,100.00|60.61|

(2).Subsidiaries
ReferringtothecontentinNoteVIII.1.(1)Organizationstructureofgroupcompany
2Otherrelatedparties
Name ofrelatedparty Relatedpartyrelationship
Dalian Wazhou Bearing Manufacturing Other entity controlled by the same parent
Equipment Co.,Ltd companyandultimatecontrollingparty
Other entity controlled by the same parent
WazhouPrecisionSteelBallCompany
companyandultimatecontrollingparty
Other entity controlled by the same parent
WazhouExactForge Ltd.,
companyandultimatecontrollingparty
Other entity controlled by the same parent
WazhouGroupPrecisionTurnplateBearingLtd
companyandultimatecontrollingparty
Wazhou Group Exact Transmission Bearing Other entity controlled by the same parent
Co.,Ltd companyandultimatecontrollingparty
Wazhou Group Equipment Technology Project Other entity controlled by the same parent
Co.,Ltd. companyandultimatecontrollingparty
Wazhou Group Special Precision Bearing Co., Other entity controlled by the same parent
Ltd. companyandultimatecontrollingparty
Wazhou Group National Bearings Engineering Other entity controlled by the same parent
ResearchCentreCo.,Ltd companyandultimatecontrollingparty
Dalian North Metal Materials Trade Centre Co., Other entity controlled by the same parent
Ltd companyandultimatecontrollingparty
Other entity controlled by the same parent
WazhouGroup(USA) BearingCO.,Ltd.
companyandultimatecontrollingparty
Other entity controlled by the same parent
WazhouGroupHigh-end autobearingCO.,Ltd.
companyandultimatecontrollingparty
Wazhou Tong Da Bearing Manufacturing Co., Other entity controlled by the same parent
Ltd companyandultimatecontrollingparty
DalianGONAWazhouAutoBearingsCo.,Ltd Other relatedparty
DalianWazhouJinzhou MachineryCo.,Ltd Other relatedparty
DalianWazhouFengyuanMachineryCo.,Ltd Other relatedparty
3Relatedpartytransactions
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport (1)Purchaseofgoods
|||||||
|-|-|-|-|-|-|
|Relatedpartytypeandcompany|Content|Amountinreportpeirod|Approvalamount|Morethantheapprovedamountornot|Amountinlastperiod|
|WazhouPrecision Steel BallCompany|Purchaseofgoods|2,568,074.54|3,000,000.00|No|2,725,471.71|
|WazhouExactForgeLtd.,|Purchaseofgoods|80,928,801.62|200,000,000.00|No|94,883,662.09|
|Dalian Wazhou BearingManufacturingEquipment Co.,Ltd|Purchaseofgoods|7,600,761.94|15,000,000.00|No|19,861,528.90|
|Wazhou Group Precision TurnplateBearingLtd|Purchaseofgoods|29,594,210.30|50,000,000.00|No|79,575,288.50|
|Wazhou Group Exact TransmissionBearingCo.,Ltd|Purchaseofgoods|45,035,862.80|95,000,000.00|No|37,937,403.92|
|Wafangdian Tongda BearingManufacturingCo.,Ltd.|Purchaseofgoods|25,311,327.78|70,000,000.00|No|18,877,936.00|
|Wazhou Group EquipmentTechnologyProjectCo.,Ltd.|Purchaseofgoods|12,609,205.58|30,000,000.00|No|15,673,365.23|
|Dalian GONA Wazhou AutoBearingsCo.,Ltd|Purchaseofgoods|17,547,926.50|40,000,000.00|No|20,401,779.48|
|DalianWazhouFengyuan MachineryCo.,Ltd|Purchaseofgoods|44,082,609.39|100,000,000.00|No|43,801,272.14|
|Dalian Wazhou Jinzhou MachineryCo.,Ltd|Purchaseofgoods|41,477,674.50|95,000,000.00|No|55,427,499.53|
|WazhouGroup|Purchaseofgoods|73,888,995.00|160,000,000.00|No|29,500,397.79|

(2)Salesofgoods
|||||
|-|-|-|-|
|Relatedpartytypeandcompany|Content|Thisperiod|Lastperiod|
|WazhouGroup|Salesofgoods|17,882,786.55|524,942.00|
|WazhouSteelBallCompany|Salesofgoods|758,255.81|438,013.51|
|WazhouExactForgeLtd.|Salesofgoods|80,988,022.23|88,452,666.21|
|DalianWazhouManufacturingEquipmentCo.,Ltd|Salesofgoods|552,337.25|761,089.22|
|WazhouGroupTurnplateBearingLtd|Salesofgoods|307,525.77|395,923.38|
|WazhouGroupExactTransmissionBearingCo.,Ltd|Salesofgoods|14,527,459.89|8,200,007.98|
|WazhouGroupSpecialPrecisionBearingCo.,Ltd.|Salesofgoods|1,454,091.21|1,596,963.99|
|DalianWazhouJinzhouMachineryCo.,Ltd|Salesofgoods|325,157.89|299,558.77|
|WazhouGroup(USA)BearingCO.,Ltd.|Salesofgoods|47,514,626.52|84,387,819.12|
|Wafangdian TongdaBearingManufacturingCo.,Ltd.|Salesofgoods|115,769.90|250,351.68|
|Wazhou Group High-end auto bearingCO.,Ltd.|Salesofgoods|3,782,649.18||
|WazhouSteelBallCompany|Provideingservice|447,879.20|776,046.02|
|WazhouGroupExactTransmissionBearingCo.,Ltd|Provideingservice|444,777.79|577,433.61|
|WazhouGroupSpecialPrecisionBearingCo.,Ltd.|Provideingservice|180,012.65|172,678.01|
|DalianWazhouJinzhouMachineryCo.,Ltd|Provideingservice|48,488.29|122,870.03|
|WafangdianTongdamanufactureCo.,Ltd|Provideingservice||57,327.35|

4Assetsrentout
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport Detials can be found in the part VII “the important rlated party transactions” 1 “The relate transactions related to the day-to-dayoperations.”
5Relatedpartyassetstransferanddebtstructurereconstruction
|||
|-|-|
|Typeoftransaction|Amountinthereportpeirod|
|assetstransfer|10,943,000.00|
|debtstructurereconstruction|164,634.20|
|debtstructurereconstruction|20,150.00|

6.Balanceswithrelatedparties
(1)Accountsreceivableduefromrelatedparties
|||||
|-|-|-|-|
|Relatedparty|ClosingBalance|||
||BookBalance|Provision|BookBalance|
|WazhouGroup|6,903,361.61||6,903,361.61|
|WazhouGroupSpecialPrecisionBearingCo.,Ltd|9,107,540.97||8,421,176.40|
|WazhouGroup(USA)BearingCO.,Ltd.|35,742,461.41||48,281,914.32|
|WazhouGroupExactTransmissionBearingCo.,Ltd|104,803.24||104,803.24|
|DalianWazhouFengyuanMachineryCo.,Ltd|12,295.63|||
|WazhouGroupHigh-endautobearingCO.,Ltd.|3,715,179.21|||
|WazhouGroupHigh-endautobearingCO.,Ltd.|6,956,433.86|||
|DalianWazhouManufacturingEquipmentCo.,Ltd|||40,853.62|

(2) Accountspayableduefromrelatedparties
|||
|-|-|
|Relatedparty|ClosingBalance|
|DalianWazhouManufacturingEquipmentCo.,Ltd|32,630,839.08|
|WazhouSteelBallCompany|2,876,185.21|
|WazhouGroup|18,764,171.56|
|WazhouExactForgeLtd.|9,651,538.76|
|WazhouGroupTurnplateBearingLtd|39,958,061.95|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
|||
|-|-|
|WazhouGroupExactTransmissionBearingCo.,Ltd|47,919,391.19|
|DalianWazhouJinzhouMachineryCo.,Ltd|25,027,287.08|
|DalianWazhouFengyuanMachineryCo.,Ltd|22,778,990.48|
|WazhouGroupEquipmentTechnologyProjectCo.,Ltd.|19,806,900.50|
|WafangdianTongdamanufactureCo.,Ltd|32,115,656.73|
|WazhouGroup(USA)BearingCO.,Ltd.||
|WazhouGroupSpecialPrecisionBearingCo.,Ltd.||
|DalianGONAWazhouAutoBearingsCo.,Ltd|20,664,595.49|
|WazhouGroup|15,178,004.31|
|DalianWazhouManufacturingEquipmentCo.,Ltd||
|WazhouGroupEquipmentTechnologyProjectCo.,Ltd.|952,000.00|
|WazhouGroup(USA)BearingCO.,Ltd.||

 7.Contingency
AsatJune30,2016,theGroupdoesnothaveanyothercontingencies.
XII.Share-BasedPayment
XIII.CommitmentandContingency
AsatJune30,2016,theGroupdoesnothaveanyothersignificantcommitments.
XIV.EventsaftertheBalanceSheetDate
TheGroupdoesnothaveanyothersignificanteventsaftertheBalanceSheetDate.
XV.OtherSignificantEvents
1.Debtrestructuring
In this report peirod, the Company has signed the‘Debt RestructuringAgreement’ with the customers, through cashreimbursementlessthanthedebt-equitycarryingvalue,andimplementedtherestructuring,whichleadtothe debtrestructuringlossesRMB723,115.84Yuan,andwererecognizedintonon-operatingexpenses.
Inthisreportpeirod,theCompanyhassignedthe‘DebtRestructuringAgreement’ withthecreditors,throughcash or bank notes reimbursement less than the debt-equity carrying value, and implemented the restructuring, which leadtothedebtrestructuringincomeRMB2,695,634.43Yuanandwererecognizedintonon-operatingrevenue.
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport XVI.NotestotheMainItemsoftheFinancialStatementsofParentCompany
1Accountsreceivable
(1)Accountsreceivablecategory
2016.06.30
Items Bookingbalance Provision Amount % Amount % Accountsreceivablewithsignificantindividualamountand
7,718,274.69 0.67% 7,718,274.69100.00% separatebaddebtprovision
Accountsreceivablewithbaddebtprovisionbasedonthe
1,103,970,903.58 0.97% 44,005,723.81 4.26% charactersofcreditriskportfolio
Accountsreceivablewithinsignificantindividualamountand
22,131,211.74 1.93% 22,131,211.74100.00% separatebaddebtprovision
Total
1,133,820,390.01100.00% 73,855,210.24
(Continued)
2015.12.31
Items Bookingbalance Provision Amount % Amount % Accountsreceivablewithsignificantindividualamount
7,718,274.69 0.71% 7,718,274.69 100.00% andseparatebaddebtprovision
Accountsreceivablewithbaddebtprovisionbasedon
1,064,640,574.39 97.27% 44,006,790.85 4.53% thecharactersofcreditriskportfolio
Accountsreceivablewithinsignificantindividualamount
22,131,211.74 2.02% 22,131,211.74 100.00% andseparatebaddebtprovision
Total
1,094,490,060.82100.00% 73,856,277.28
1) Individually significant amounts of accounts receivable accrued the bad debt provision separately at the end of June 30,2016
ClosingBalance
||||
|-|-|-|
|Accountsreceivable|Provisionforbaddebts|Proportion(%)|
|3,910,007.43|3,910,007.43|100.00%|
|3,808,267.26|3,808,267.26|100.00%|
|7,718,274.69|7,718,274.69||

2)Accountsreceivableaccruedthebaddebtprovisionsintheportfolioasaccountingaginganalysismethod
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport ClosingBalance
|||
|-|-|
|Accountsreceivable|Provisionforbaddebts|
|831,527,165.28|8,315,271.65|
|111,073,673.73|5,553,683.69|
|48,924,390.30|9,784,878.06|
|40,703,780.82|20,351,890.41|
|1,032,229,010.13|44,005,723.81|

(2)Baddebtprovisionaccruedandwrite-off(withdraw)
(3)Accountsreceivablewrittenoffincurrentperiod
Item Written-offAmount
Accountsreceivablewrittenoff 2,134.08
2Otherreceivables
2.Otherreceivables
(1)Thecategoryofotherreceivables
|||||
|-|-|-|-|
|ClosingBalance||||
|Bookingbalance||Provision||
|Amount|%|Amount|%|
|21,610,358.03|0.88%|1,037,522.18|0.05%|
|1,512,562.13|5.24%|1,512,562.13|100.00%|
|23,122,920.16|100.00%|2,550,084.31||

(Continued)
|||||
|-|-|-|-|
|OpeningBalance||||
|Bookingbalance||Provision||
|Amount|%|Amount|%|
|20,717,217.52|76.60%|1,037,522.18|7.85%|
|1,512,562.13|6.80%|1,512,562.13|100.00%|

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
||||
|-|-|-|
|22,229,779.65|100.00%|2,550,084.31|

 1) Otherreceivablesaccruedthebaddebtprovisionsintheportfolioasaccountingaginganalysismethod ClosingBalance
|||
|-|-|
|Otherreceivables|Provisionforbaddebts|
|12,359,088.23|123,590.88|
|935,907.95|46,795.40|
|692,037.93|138,407.59|
|1,457,456.61|728,728.31|
|15,444,490.72|1,037,522.18|

(2)Otherreceivablescategorizedbynature
||
|-|
|ClosingBalance|
|23,122,920.16|
|23,122,920.16|

 3Long-termequityinvestments
(1)Categoryoflong-termequityinvestments
||||||
|-|-|-|-|-|
|ClosingBalance|||||
|ClosingBalance|Provision|BookValue|OpeningBalance|Provision|
|211,583,897.67||211,583,897.67|211,583,897.67||
|211,583,897.67||211,583,897.67|211,583,897.67||

 (2)Investmentsintosubsidiaries
||||||
|-|-|-|-|-|
|OpeningBalance|Increase|Decrease|ClosingBalance|Provisioncarriedcurrentperiod|
|17,337,259.95|||17,337,259.95||
|45,478,956.37|||45,478,956.37||
|148,767,681.35|||148,767,681.35||

WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport
|||
|-|-|
|211,583,897.67|211,583,897.67|

4Operatingrevenueandcost
||||
|-|-|-|
|Thisperiod|||
|Revenue|Cost|Revenue|
|1,045,680,912.95|974,858,913.33|1,105,704,985.20|
|93,470,653.82|91,153,250.73|102,017,182.39|
|1,139,151,566.77|1,066,012,164.06|1,207,722,167.59|

 XVIISupplementaryInformationtotheFinancialStatements
1.Non-operatingprofitorloss
||
|-|
|Amount|
|4,570,629.34|
|5,575,349.68|
|1,972,518.59|
|480,334.81|
|1,359,545.06|
|11,239,287.36|

2.Returnonequityandearningspershare
|||
|-|-|
|Weightedaveragereturnonnetassets(%)||
||BasicEPS|
|-3.32%|-0.11|
|-4.17%|-0.1373|

3.DifferencesinaccountinginformationunderIASanddomesticaccountingstandard
Chapter X. List of reference documents
Listofreferencedocuments
1.The2016mid-yareAccountingstatementswhichiswiththesignaturesandsealsofthelegalrepresentative,finance
controllerandthedirectorofaccountingdepartmentoftheCompany.
2.OriginaldocumentsandnoticesoftheCompanydisclosedinnewspapersdesignatedbytheSecuritySupervisory
CommitteeofChinainreportperiod.
WafangdianBearingCo.,Ltd（WazhouB） 2016Mid-yearReport