Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-yearal Report 2014 Midyear Report
I. Audit Report
The financial report is unaudited
II. Financial Statement
1. Consolidated Balance Sheet.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|Current assets ：|||
|Monetary fund|146,719,100.22|80,687,086.92|
|Financial assets held-for-trading|||
|Bills receivable|152,222,140.07|100,329,887.46|
|Account receivable|1,301,381,593.11|1,138,605,661.45|
|Account paid in advance|34,102,822.32|33,712,904.14|
|Interest receivable||240,000.00|
|Other receivables|22,598,251.17|29,727,292.33|
|Inventory|1,126,647,752.16|1,196,734,228.79|
|Non-current assets due within 1 year|||
|Other current assets|2,969,167.26|2,772,988.57|
|Total current assets|2,786,640,826.31|2,582,810,049.66|
|Non-current assets|||
|Financial assets available-for-sale|||
|Investments held-to-maturity|||
|Long-term receivable|||
|Long-term equity investment|110,533,646.70|108,272,431.11|
|Investment property|||
|Fixed assets|542,635,346.40|572,492,122.56|
|Construction in progress|353,554,300.23|303,172,462.62|
|Construction materials|||
|Fixed assets disposal|||
|Biological assets|137,259,152.75|139,563,086.91|
|Gas and petrol assets|||
|Intangible assets|||
|Development expenditure|||
|Goodwill|||
|Long-term prepaid expense|846,103.57|724,852.75|
|Deferred tax assets|10,762,883.65|10,762,883.65|
|Other non-current assets|||
|Total non-current assets|1,155,591,433.30|1,134,987,839.60|
|Total assets|3,942,232,259.61|3,717,797,889.26|
|Current liabilities|||
|Short-term loan|408,000,000.00|418,000,000.00|
|Note payable|249,796,543.78|93,247,340.00|
|Accounts payable|1,261,935,771.38|1,166,466,116.64|
|Accounts received in advance|62,911,847.40|74,433,323.04|
|Commission charge payable|||
|Accrued payroll|17,459,162.49|19,654,053.70|
|Tax payable|5,557,677.41|5,762,579.01|
|Interest payable||1,728,222.22|

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-yearal Report
||||
|-|-|-|
|Dividends payable|||
|Other payables|154,144,365.34|136,673,398.82|
|Non-current liabilities due within I year|150,000,000.00|150,000,000.00|
|Other current liabilities|4,011,103.83|4,011,103.83|
|Total current liabilities|2,313,816,471.63|2,069,976,137.26|
|Non-current liabilities|||
|Long-term loan|90,000,000.00|90,000,000.00|
|Debenture payable|||
|Long-term payables|100,000.00|100,000.00|
|Special payables|321,698.98|321,698.98|
|Contingent liabilities|||
|Deferred tax liabilities|||
|Other non-current liabilities|50,476,839.58|52,433,617.52|
|Total non-current liabilities|140,898,538.56|142,855,316.50|
|Total liabilities|2,454,715,010.19|2,212,831,453.76|
|Owner’s equity (shareholders’ equity)|||
|Capital stock|402,600,000.00|402,600,000.00|
|Capital public reserves|488,805,548.36|488,805,548.36|
|Less: treasury share|||
|Surplus reserve|131,442,909.11|131,442,909.11|
|Undistributed profit|464,668,791.95|482,117,978.03|
|Difference of foreign currency translation|||
|Equity attributable to parent company|1,487,517,249.42|1,504,966,435.50|
|Minority interest|||
|Total owner’s equity|1,487,517,249.42|1,504,966,435.50|
|Total owner’s equity and liabilities|3,942,232,259.61|3,717,797,889.26|

 Chairman: Cong Hong General Accountant : Sun Najuan Accounting charger: Yao Chunjuan 2. Balance Sheet of Parent Company
Unit: RMB Yuan
||||
|-|-|-|
|Item|Opening Balance|Closing Balance|
|Current assets ：|||
|Monetary fund|144,132,898.03|76,549,204.53|
|Financial assets held-for-trading|||
|Bills receivable|145,432,603.48|99,829,887.46|
|Account receivable|1,279,284,513.62|1,139,776,660.21|
|Account paid in advance|33,567,617.57|32,824,584.91|
|Interest receivable||240,000.00|
|Other receivables|19,334,694.73|25,564,205.17|
|Inventory|1,067,015,369.68|1,125,983,146.27|
|Non-current assets due within 1 year|||
|Other current assets|2,969,167.26|2,772,988.57|
|Total current assets|2,691,736,864.37|2,503,540,677.12|
|Non-current assets|||
|Financial assets available-for-sale|||
|Investments held-to-maturity|||
|Long-term receivable|||
|Long-term equity investment|166,811,661.03|164,550,445.44|
|Investment property|||
|Fixed assets|437,311,946.95|462,267,249.78|
|Construction in progress|353,554,300.23|303,169,052.62|
|Construction materials|||
|Fixed assets disposal|||
|Biological assets|121,451,132.75|123,588,686.87|
|Gas and petrol assets|||
|Intangible assets|||
|Development expenditure|||

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-yearal Report
||||
|-|-|-|
|Goodwill|||
|Long-term prepaid expense|846,103.57|724,852.75|
|Deferred tax assets|10,762,883.65|10,762,883.65|
|Other non-current assets|||
|Total non-current assets|1,090,738,028.18|1,065,063,171.11|
|Total assets|3,782,474,892.55|3,568,603,848.23|
|Current liabilities|||
|Short-term loan|408,000,000.00|418,000,000.00|
|Note payable|249,796,543.78|93,247,340.00|
|Accounts payable|1,101,988,307.67|1,017,390,652.18|
|Accounts received in advance|57,878,019.81|74,528,538.89|
|Commission charge payable|||
|Accrued payroll|9,403,984.70|11,427,966.15|
|Tax payable|2,734,782.12|3,078,968.63|
|Interest payable||1,728,222.22|
|Dividends payable|||
|Other payables|111,071,567.90|95,022,064.02|
|Non-current liabilities due within I year|150,000,000.00|150,000,000.00|
|Other current liabilities|3,913,555.83|3,913,555.83|
|Total current liabilities|2,094,786,761.81|1,868,337,307.92|
|Non-current liabilities|||
|Long-term loan|90,000,000.00|90,000,000.00|
|Debenture payable|||
|Long-term payables|||
|Special payables|321,698.98|321,698.98|
|Contingent liabilities|||
|Deferred tax liabilities|||
|Other non-current liabilities|45,892,083.58|47,848,861.52|
|Total non-current liabilities|136,213,782.56|138,170,560.50|
|Total liabilities|2,231,000,544.37|2,006,507,868.42|
|Owner’s equity (shareholders’ equity)|||
|Capital stock|402,600,000.00|402,600,000.00|
|Capital public reserves|485,678,443.26|485,678,443.26|
|Less: treasury share|||
|Surplus reserve|131,442,909.11|131,442,909.11|
|Undistributed profit|531,752,995.81|542,374,627.44|
|Difference of foreign currency translation|||
|Equity attributable to parent company|1,551,474,348.18|1,562,095,979.81|
|Minority interest|||
|Total owner’s equity|1,551,474,348.18|1,562,095,979.81|
|Total owner’s equity and liabilities|3,782,474,892.55|3,568,603,848.23|

 Chairman: Cong Hong General Accountant : Sun Najuan Accounting charger: Yao Chunjuan 3. Consolidated Income Sheet.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Account for the current period|Account for the prior period|
|1.Total operating income|1,641,013,208.71|1,547,403,493.37|
|Including: Operating revenue|1,641,013,208.71|1,547,403,493.37|
|Interest income|||
|Handling charge and commission income|||
|2.Total operating cost|1,664,289,776.23|1,531,668,845.00|
|Including: Operating cost|1,490,487,024.71|1,375,879,876.97|
|Interest expenses|||
|Handling charge and commission income|||
|Tax & surcharges for main operations|6,171,354.22|5,706,680.51|

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-yearal Report
||||
|-|-|-|
|Selling expenses|118,732,526.35|102,660,427.82|
|Administrative expense|35,930,304.10|34,739,784.53|
|Financial expense|11,935,634.49|12,206,072.78|
|Loss of impairment of assets|1,032,932.36|476,002.39|
|Add: Gains of change of fair value of assets(loss with"-")|||
|Investment income(loss with "-")|2,261,215.59|5,711,527.35|
|Including: Income form investment on associated|2,261,215.59|5,031,527.35|
|enterprise and jointly enterprise|||
|3.Operating profit (loss with"-")|-21,015,351.93|21,446,175.72|
|Add: Non-operating revenue|4,368,539.55|3,549,564.64|
|Less: Non-operating cost|802,373.70|1,321,121.72|
|Including: loss on disposal of non-current assets||35,866.08|
|4.Total profit(loss with"-")|-17,449,186.08|23,674,618.64|
|Less: Income tax expenses||842,546.41|
|5. Net profit(Loss with"-")|-17,449,186.08|22,832,072.23|
|Net profit attributable to shareholders of parent company|-17,449,186.08|22,832,072.23|
|Minority interests|||
|6.Earnings per share|||
|(1) Basic earnings per share|-0.04|0.06|
|(2) Diluted earnings per share|-0.04|0.06|
|7. Other comprehensive returns|||
|8. Total comprehensive returns|-17,449,186.08|22,832,072.23|
|Total comprehensive returns available for parent company|-17,449,186.08|22,832,072.23|
|Total comprehensive returns available for minority|||
|shareholders|||

Chairman: Cong Hong General Accountant : Sun Najuan Accounting charger: Yao Chunjuan 4. Income Sheet of Parent Company.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Account for the current period|Account for the prior period|
|1.Total operating income|1,643,461,366.28|1,547,227,335.54|
|Less:Operating cost|1,494,654,881.09|1,376,283,798.47|
|Tax & surcharges for main operations|5,418,432.45|5,035,242.43|
|Selling expenses|118,078,966.63|102,033,585.21|
|Administrative expense|26,247,250.39|25,650,126.17|
|Financial expense|12,175,479.92|12,170,694.57|
|Loss of impairment of assets|1,032,932.36|476,002.39|
|Add: Gains of change of fair value of assets(loss with"-")|||
|Investment income(loss with "-")|118,078,966.63|102,033,585.21|
|Including: Income form investment on associated|118,078,966.63|102,033,585.21|
|enterprise and jointly enterprise|||
|2.Operating profit (loss with"-")|118,078,966.63|102,033,585.21|
|Add: Non-operating revenue|26,247,250.39|25,650,126.17|
|Less: Non-operating cost|12,175,479.92|12,170,694.57|
|Including: loss on disposal of non-current assets|||
|3.Total profit(loss with"-")|-10,621,631.63|33,006,701.93|
|Less: Income tax expenses||842,546.41|
|4. Net profit(Loss with"-")|-10,621,631.63|32,164,155.52|
|Net profit attributable to shareholders of parent company|||
|Minority interests|||
|5.Earnings per share|||
|(1) Basic earnings per share|-0.03|0.08|
|(2) Diluted earnings per share|-0.03|0.08|
|6. Other comprehensive returns|||
|7. Total comprehensive returns|||

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-yearal Report
||||
|-|-|-|
|Total comprehensive returns available for parent company|||
|Total comprehensive returns available for minority|-10,621,631.63|32,164,155.52|
|shareholders|||

Chairman: Cong Hong General Accountant : Sun Najuan Accounting charger: Yao Chunjuan 5. Consolidated Cash Flow Statement.
Unit: RMB yuan
||||
|-|-|-|
|Item|Account for the current period|Account for the prior period|
|1.Cash from operating activities|||
|Cash received from sale of goods or Provideing of services|699,010,861.57|637,446,979.54|
|Refund of taxes and fares|129.17|446.93|
|Other cash received relating to operating activities|6,856,715.72|6,525,851.06|
|Sub-total of cash inflows|705,867,706.46|643,973,277.53|
|Cash paid for goods and services|346,912,442.67|383,221,108.66|
|Cash paid to or on behalf of the employees|171,292,291.78|149,744,170.51|
|Tax payments|42,258,628.44|35,876,925.76|
|Other cash paid relating to operating activities|89,241,093.27|95,424,487.53|
|Sub-total of cash outflows|649,704,456.16|664,266,692.46|
|Net cash flows from operating activities|56,163,250.30|-20,293,414.93|
|2.Cash flows from investing activities|||
|Cash received from return of investment|240,000.00|680,000.00|
|Cash received from investment incomes|||
|Net cash received from disposal of fixed assets, intangible|||
|assets and other long-term assets|||
|Proceeds from sale of subsidiaries and other operating|||
|units|||
|Other cash received relating to investing activities|||
|Sub-total of cash inflows|240,000.00|680,000.00|
|Cash paid to acquire fixed assets, intangible assets and|32,348,788.92|1,075,610.77|
|other long-term assets|||
|Cash paid to acquire investment|||
|Net cash used in acquiring subsidiaries and other operating|||
|units|||
|Other cash paid relating to investing activities|||
|Sub-total of cash outflows|32,348,788.92|1,075,610.77|
|Net cash flows from investment activities|-32,108,788.92|-395,610.77|
|3.Cash flows from financing activities|||
|Cash received from absorbing investment|||
|Including: Cash received from increase in minority interest|||
|Proceeds from borrowings|338,000,000.00|516,000,000.00|
|Other proceeds relating to financing activities||4,723,200.00|
|Sub-total of cash inflows|338,000,000.00|520,723,200.00|
|Repayment of borrowings|299,322,611.11|466,849,955.55|
|Distribution of dividends or profits & interest expenses|17,612,192.59|15,549,334.83|
|Including: dividends or profit paid to minority interest|||
|Cash paid for other financing activities|||
|Sub-total of cash outflows|316,934,803.70|482,399,290.38|
|Net cash flows from financing activities|21,065,196.30|38,323,909.62|
|4. Effects of foreign exchange rate changes on cash|1,163,753.62|-480,690.44|
|5.Net increases in cash and cash equivalents|46,283,411.30|17,154,193.48|
|Add: cash and cash equivalent, at the beginning of year|60,616,759.13|60,004,306.25|
|6.Cash and cash equivalent at the end of the year|106,900,170.43|77,158,499.73|

Chairman: Cong Hong General Accountant : Sun Najuan Accounting charger: Yao Chunjuan
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-yearal Report 6. Cash Flow Statement Of Parent Company.
Unit: RMB yuan
||||
|-|-|-|
|Item|Account for the current period|Account for the prior period|
|1.Cash from operating activities|||
|Cash received from sale of goods or Providing of services|701,385,036.16|636,200,717.44|
|Refund of taxes and fares|129.17|446.93|
|Other cash received relating to operating activities|4,955,678.49|5,148,013.18|
|Sub-total of cash inflows|706,340,843.82|641,349,177.55|
|Cash paid for goods and services|385,265,879.81|417,618,006.53|
|Cash paid to or on behalf of the employees|147,731,859.49|125,912,567.93|
|Tax payments|34,630,453.11|28,513,264.98|
|Other cash paid relating to operating activities|81,176,929.37|89,695,198.03|
|Sub-total of cash outflows|648,805,121.78|661,739,037.47|
|Net cash flows from operating activities|57,535,722.04|-20,389,859.92|
|2.Cash flows from investing activities|||
|Cash received from return of investment|240,000.00|680,000.00|
|Cash received from investment incomes|||
|Net cash received from disposal of fixed assets, intangible|||
|assets and other long-term assets|||
|Proceeds from sale of subsidiaries and other operating|||
|units|||
|Other cash received relating to investing activities|||
|Sub-total of cash inflows|240,000.00|680,000.00|
|Cash paid to acquire fixed assets, intangible assets and|32,228,548.92|940,927.96|
|other long-term assets|||
|Cash paid to acquire investment|||
|Net cash used in acquiring subsidiaries and other operating|||
|units|||
|Other cash paid relating to investing activities|||
|Sub-total of cash outflows|32,228,548.92|940,927.96|
|Net cash flows from investment activities|-31,988,548.92|-260,927.96|
|3.Cash flows from financing activities|||
|Cash received from absorbing investment|||
|Including: Cash received from increase in minority interest|||
|Proceeds from borrowings|338,000,000.00|516,000,000.00|
|Other proceeds relating to financing activities||4,723,200.00|
|Sub-total of cash inflows|338,000,000.00|520,723,200.00|
|Repayment of borrowings|299,322,611.11|466,849,955.55|
|Distribution of dividends or profits & interest expenses|17,553,224.13|15,549,334.83|
|Including: dividends or profit paid to minority interest|||
|Cash paid for other financing activities|||
|Sub-total of cash outflows|316,875,835.24|482,399,290.38|
|Net cash flows from financing activities|21,124,164.76|38,323,909.62|
|4. Effects of foreign exchange rate changes on cash|1,163,753.62|-480,690.44|
|5.Net increases in cash and cash equivalents|47,835,091.50|17,192,431.30|
|Add: cash and cash equivalent, at the beginning of year|56,478,876.74|57,459,164.76|
|6.Cash and cash equivalent at the end of the year|104,313,968.24|74,651,596.06|

 Chairman: Cong Hong General Accountant : Sun Najuan Accounting charger: Yao Chunjuan
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 7. Consolidated Sheet Of Changes InShareholder’s Equity
Unit: RMB Yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Amount in current period|||||||||
||Owner‘s equity attributable to parent company|||||||Minority||
|Item||||||||||
||Capital|Capital public|less：treasure||General provision|||shareholders‘|Owner‘s equity|
|||||Surplus public reserves||Undistributed profits|Others|||
||stock|reserves|stock||for risk|||equity||
||402,600,000.00|488,805,548.36||131,442,909.11||482,117,978.03|||1,504,966,435.50|
|1.Balance at the end of last year||||||||||
|Add: changes in accounting||||||||||
|policies||||||||||
|Changes in previous errors||||||||||
|Others||||||||||
|2.Balance at the beginning of|402,600,000.00|488,805,548.36||131,442,909.11||482,117,978.03|||1,504,966,435.50|
|this year||||||||||
|3. The changes in this year||||||-17,449,186.08|||-17,449,186.08|
|（decrease with―-‖）||||||||||
|(1) Net profits||||||-17,449,186.08|||-17,449,186.08|
|(2) Other comprehensive returns||||||||||
|||||||-17,449,186.08|||-17,449,186.08|
|Total (1) and (2)||||||||||
|(3) The assets invested or||||||||||
|returned by the owners||||||||||
|1) capital invested by owners||||||||||
|2)The amount of share||||||||||
|payment recorded owner‘s||||||||||
|equity||||||||||
|3) others||||||||||
|(4）Profits distribution||||||||||
|1)Provision for surplus public||||||||||
|reserves||||||||||
|2)provision for general risks||||||||||
|3)distribution for||||||||||
|owner(shareholders)||||||||||
|4)others||||||||||
|(5 ） interior transference of||||||||||
|owner‘s equity||||||||||
|1)capital (capital||||||||||

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report
|||||||
|-|-|-|-|-|-|
|stock)transferred by the capita|l|||||
|public reserves||||||
|2)capital (capita|l|||||
|stock)transferred by the surplus||||||
|public reserves||||||
|3)loss offset by the surplus||||||
|public reserves||||||
|4)others||||||
|4. Balance at the end of the|402,600,000.00|488,805,548.36|131,442,909.11|464,668,791.95|1,487,517,249.42|
|current period||||||

Unit: RMB yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Amount in previous period|||||||||
||Owner‘s equity attributable to parent company|||||||Minority||
|Item|Capital|Capital public|less：treasure||General provision|||shareholders‘|Owner‘s equity|
|||||Surplus public reserves||Undistributed profits|Others|||
||stock|reserves|stock||for risk|||equity||
|1.Balance at the end of last|402,600,000.00|485,691,050.47||129,292,318.86||498,350,778.41|||1,515,934,147.74|
|year||||||||||
|Add: changes in accounting||||||||||
|policies||||||||||
|Changes in previous errors||||||||||
|Others||||||||||
|2.Balance at the beginning of|402,600,000.00|485,691,050.47||129,292,318.86||498,350,778.41||0.00|1,515,934,147.74|
|this year||||||||||
|3. The changes in this year||3,114,497.89||2,150,590.25||-16,232,800.38|||-10,967,712.24|
|（decrease with―-‖）||||||||||
|(1) Net profits||||||2,021,789.87|||2,021,789.87|
|(2) Other comprehensive||3,114,497.89|||||||3,114,497.89|
|returns||||||||||
|||3,114,497.89||||2,021,789.87||0.00|2,021,789.87|
|Total (1) and (2)||||||||||
|(3) The assets invested or||||||||||
|returned by the owners||||||||||
|1) capital invested by owners||||||||||
|2)The amount of share||||||||||
|payment recorded owner‘s||||||||||
|equity||||||||||
|3) others||||||||||

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report
|||||||
|-|-|-|-|-|-|
|(4）Profits distribution|||2,150,590.25|-18,254,590.25|16,104,000.00|
|1)Provision for surplus public|||2,150,590.25|-18,254,590.25||
|reserves||||||
|2)provision for general risks||||||
|3)distribution for||||-16,104,000.00|-16,104,000.00|
|owner(shareholders)||||||
|4)others||||||
|(5）interior transference of||||||
|owner‘s equity||||||
|1)capital (capital||||||
|stock)transferred by the capital||||||
|public reserves||||||
|2)capital (capital||||||
|stock)transferred by the surplus||||||
|public reserves||||||
|3)loss offset by the surplus||||||
|public reserves||||||
|4)others||||||
|4. Balance at the end of the|402,600,000.00|488,805,548.36|131,442,909.11|482,117,978.03|1,504,966,435.50|
|current period||||||

8. Sheet Of Changes InShareholder’s Equity Of Parent Compamy.
Unit: RMB yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Amount in current period|||||||||
||Owner‘s equity attributable to parent company|||||||Minority||
|Item||||||||||
||||less：treasure||General provision|||shareholders‘|Owner‘s equity|
||Capital stock|Capital public reserves||Surplus public reserves||Undistributed profits|Others|||
||||stock||for risk|||equity||
|1.Balance at the end of last|402,600,000.00|485,678,443.26||131,442,909.11||542,374,627.44|||1,562,095,979.81|
|year||||||||||
|Add: changes in accounting||||||||||
|policies||||||||||
|Changes in previous errors||||||||||
|Others||||||||||
|2.Balance at the beginning of|402,600,000.00|485,678,443.26||131,442,909.11||542,374,627.44|||1,562,095,979.81|
|this year||||||||||
|3. The changes in this year||||||-10,621,631.63|||-10,621,631.63|
|（decrease with―-‖）||||||||||
|(1) Net profits||||||-10,621,631.63|||-10,621,631.63|
|(2) Other comprehensive||||||||||

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report
|||||||
|-|-|-|-|-|-|
|returns||||||
|Total (1) and (2)||||-10,621,631.63|-10,621,631.63|
|(3) The assets invested or||||||
|returned by the owners||||||
|1) capital invested by owners||||||
|2)The amount of share||||||
|payment recorded owner‘s||||||
|equity||||||
|3) others||||||
|(4）Profits distribution||||||
|1)Provision for surplus public||||||
|reserves||||||
|2)provision for general risks||||||
|3)distribution for||||||
|owner(shareholders)||||||
|4)others||||||
|(5）interior transference of||||||
|owner‘s equity||||||
|1)capital (capital||||||
|stock)transferred by the||||||
|capital public reserves||||||
|2)capital (capital||||||
|stock)transferred by the||||||
|surplus public reserves||||||
|3)loss offset by the surplus||||||
|public reserves||||||
|4)others||||||
|4. Balance at the end of the|402,600,000.00|485,678,443.26|131,442,909.11|531,752,995.81|1,551,474,348.18|
|current period||||||

Unit: RMB yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Amount in previous period|||||||||
||Owner‘s equity attributable to parent company|||||||Minority||
|Item|||less：|Surplus public|General provision|Undistributed||shareholders‘|Owner‘s equity|
||Capital stock|Capital public reserves|||||Others|||
||||treasure stock|reserves|for risk|profits||equity||
|1.Balance at the end of last|402,600,000.00|482,563,945.37||129,292,318.86||539,123,315.19|||1,553,579,579.42|
|year||||||||||
|Add: changes in accounting||||||||||
|policies||||||||||

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report
|||||||
|-|-|-|-|-|-|
|Changes in previous errors||||||
|Others||||||
|2.Balance at the beginning of|402,600,000.00|482,563,945.37|129,292,318.86|539,123,315.19|1,553,579,579.42|
|this year||||||
|3. The changes in this year||3,114,497.89|2,150,590.25|3,251,312.25|8,516,400.39|
|（decrease with―-‖）||||||
|(1) Net profits||||21,505,902.50|21,505,902.50|
|(2) Other comprehensive||3,114,497.89|||3,114,497.89|
|returns||||||
|Total (1) and (2)||3,114,497.89||21,505,902.50|21,505,902.50|
|(3) The assets invested or||||||
|returned by the owners||||||
|1) capital invested by owners||||||
|2)The amount of share||||||
|payment recorded owner‘s||||||
|equity||||||
|3) others||||||
|(4）Profits distribution|||2,150,590.25|-18,254,590.25|-16,104,000.00|
|1)Provision for surplus public|||2,150,590.25|-2,150,590.25||
|reserves||||||
|2)provision for general risks||||||
|3)distribution for||||-16,104,000.00|-16,104,000.00|
|owner(shareholders)||||||
|4)others||||||
|(5）interior transference of||||||
|owner‘s equity||||||
|1)capital (capital||||||
|stock)transferred by the||||||
|capital public reserves||||||
|2)capital (capital||||||
|stock)transferred by the||||||
|surplus public reserves||||||
|3)loss offset by the surplus||||||
|public reserves||||||
|4)others||||||
|4. Balance at the end of the|402,600,000.00|485,678,443.26|131,442,909.11|542,374,627.44|1,562,095,979.81|
|current period||||||

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 1. General information
Wafangdian Bearing Company Limited (the―Company‖) is a joint stock limited company established in thePeople‘s Republic of China (the―PRC‖) on 16 July 1997. In the opinion of the directors, its parent and ultimate holding company is Wafangdian Bearing Group Company Limited(―WazhouGroup‖).
TheCompany‘s B shares have been listed on the Shenzhen Stock Exchange since 29 Feburary 1997.
The addresses of the registered office and principal place of business of the Company are No.1, Phrase 1, Gongji Street, Wafangdian North, Liaoning Province, and the PRC.
The Company is principally engaged in the manufacturing and sale of bearing products, engineering equipment, automobile spare parts and relating products.
The Company together with its subsidiaries is collectively referred to as the―Group‖.
2. Significant accounting policies, accounting estimates and method for preparation of consolidated financial statements
2.1 Basis for the preparation of financial statements
The Group prepares the financial statements on the basis of going concern and actual transactions and events, and in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance of thePeople‘s Republic of China, and based on the accounting policies and estimates in the note 4‗Significant accounting policies, accounting estimates and method for preparation of consolidated financialstatements‘.
2.2 Complying with Accounting Standard for Business Enterprise
The financial statements are prepared by the Group according to the requirements of Accounting Standard for Business Enterprise, and reflect the relative information for the financial position, operating performance, cash flow of the Group truly and fully.
2.3 Accounting period
The Group adopts the Gregorian calendar year as accounting period, i.e. from Jan 1 to Dec 31.
2.4 Funcitonal currency
The Group adopts RMB as functional currency.
2.5 Recording basis and pricing principle
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report The accrual basis shall be adopted for accounting treatment to follow the historical cost method, except that the financial assets held for trading and sale are measured at fair value.
2.6 Business combination
Business combination refers to transaction or event bringing together two or more separate enterprises into one reporting entity. The Group should recognize the acquired assets and liabilities at the combining date or acquisition date. The combining date or acquisition date is the date when the Group acquired actually acquiree and combined party.
The assets and liabilities that the combining party obtains in a business combination under the same control should be measured on the basis of their carrying amount in the combined party on the combining date. As for the balance between the carrying amount of the net assets obtained by the combining party and the carrying amount of the consideration paid by it, the capital surplus shall be adjusted. If the capital surplus is not sufficient to be offset, the retained earnings shall be adjusted. For a business combination not under same control, the combination cost shall be the fair value, on the acquisition date, of the assets paid, the liabilities incurred or assumed and equity securities issued by the acquirer in exchange for the control of the acquiree. The difference when combination cost exceeds the fair value of identifiable net assets of acquiree should be recognized as goodwill. If the combination cost is less than the he fair value of identifiable net assets of acquiree, the difference should be recognized as current profit or loss.
2.7 Method of preparation of consolidated financial statements
(1) Recognition principle of scope of consolidation
Scope of consolidated financial statements should include all subsidiaries of the parent and the special purpose entities. (2) Accounting method of consolidated financial statements
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 had been eliminated in full. The parts ofsubsidiaries‘ equity non-attributable to parent company shall be as minority interest presented in the in the consolidated balance sheet within equity.
Where there are inconsistent accounting policies or accounting period, when preparing the consolidated financial statements, the Group shall adjust thesubsidiaries‘ financial statements in accordance with theGroup‘s accounting policies and accounting period.
For the subsidiary obtained under different control, when preparing the consolidated financial statements, the Group shall adjust the separate financial statements based on the fair value of identifiable net assets at the purchase date; for the subsidiaries combined by the Group under the same control, regard the subsidiaries that they have been existing since the
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report beginning of the period, and the assets, liabilities, operation performance and cash flows shall be consolidated into the financial statements of the beginning of the combination period according to their original book value.
2.8 Cash and cash equivalent
The cash listed on the cash flow statements of the Group refers to cash on hand and bank deposit. The cash equivalents refer to short-term (normally with original maturities of three months or less) and liquid investments which are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value.
2. 9 Translation of foreign currency
(1) Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued byPeople‘s Bank of China(―PBOC‖) when the transaction incurs. Monetary assets and liabilities in foreign currencies are translated into RMB at the exchange rate prevailing at the balance sheet day. Exchange differences arising from the settlement of monetary items are charged as in profit or loss for the period. Exchange differences of specific borrowings related to the acquisition or construction of a fixed asset should be capitalized as occurred, before the relevant fixed asset being acquired or constructed is ready for its intended uses. The foreign currency non-monetary items recorded at fair value are translated at the exchange rate issued on the date of fair value recognized. Exchange differences are charged as profit and loss of change of fair value. The foreign currency non-monetary items recorded at historical cost are translated at the exchange rate issued on the date when the transaction incurs, anddon‘t change the RMB amount.
(2) Translation of foreign currency financial statements
The asset and liability items in the foreign currency balance sheet should be translated at a spot exchange rate at the balance sheet date. Among theower‘s equity items except―undistributedprofit‖, others should be translated at the spot exchange rate when they are incurred. The income and expense should be translated at spot exchange rate when the transaction incurs. Translation difference of foreign currency financial statements should be presented separately under 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 spot exchange rate on the day when the cash flows incur. The amounts resulted from change of exchange rate are presented separately in the cash flow statement.
2.10 Financial assets and financial liabilities
(1) Financial assets
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 1)Classification
The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, held-to-maturity financial assets and available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
a)Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.
b)Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the reporting period, which are classified as non-current assets.
c)Held-to-maturity financial assets
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that theGroup‟s management has the positive intention and ability to hold to maturity. If the Group were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as available for sale. Held-to-maturity financial assets are included in non-current assets, except for those with maturities less than 12 months from the end of the reporting period, which are classified as current assets.
d)Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.
2)Recognition and measurement
Financial assets are recognized at fair value on the balance sheet when the Group becomes a party to the contractual provisions of the financial instrument. Transaction costs of financial assets carried at the fair value through profit or loss are expensed in the income statement;Transaction costs of other financial assets are included in financial assets at initial recognition.
Available-for-sale financial assets are subsequently measured at fair value. Investments inequity instruments are
measured at cost when they do not have a quoted market price in an active market and whose fair value cannot be
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report reliably measured. Loans and receivables are measured at amortised cost using the effective interest method.
A gain or loss arising from change in fair value of an available-for-sale financial asset is recognised directly in equity, except for impairment losses and foreign exchange gains and losses arising from the translation of monetary financial assets. When such financial asset is derecognised, the cumulative gain or loss previously recognised in equity is recognised in income statement. Interest on available for sale debt instrument, calculated using effective interest method, and cash dividends declared by the investee on available-for-sale equity instruments are recognised as investment income in income statement.
3) Impairment of financial assets
The Group assesses the carrying amount of financial assets other than financial assets at fair value through profit
or loss at each balance sheet date. If there is objective evidence that the financial asset is impaired, the Group
shall determine the amount of any impairment loss accounts.
If an impairment loss on a financial asset carried at amortized cost has been incurred, the amount of loss is
measured at the difference between 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 previously recognized impairment loss is reversed and the amount of reversal is
recognized in income statement.
If objective evidence shows that impairment for available-for-sale financial assets will occur,the cumulative loss
arising from the decline in fair value that had been recognized directly in equity is removed from equity and
recognized as impairment loss. For an available for sale debt instrument, if there is objective evidence that the
value of the financial asset recovered and the recovery can be related objectively to an event occurring after the
impairment was recognized, the previously recognized impairment loss is reversed and the amount of reversal is
recognized in income statement. For an available for sale equity instrument, if there is objective evidence that the
value recovered and the recovery can be objectively related to an event occurring after the impairment loss
recognized, the previously recognized impairment loss is reversed and directly recognized in equity.
4)Derecognizing of financial assets
Financial assets are derecognized when: i) the contractual rights to receive the cash flows from the financial
assets have expired; or ii) all substantial risks and rewards of ownership of the financial assets have been
transferred; or iii) the control over the financial asset has been waived even if the Group does not transfer or retain
nearly all of the risks and rewards relating to the ownership of a financial asset.
On derecognition of a financial asset, the difference between the carrying amount and the aggregate of
consideration received and the accumulative amount of changes of fair value originally recorded in theowner‘s
equity is recognised in the income statement.
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report (2) Financial liabilities
The financial liabilities are classified into the financial liability at fair value through profit or loss and other financial liability for the initial recognition.
The financial liabilities at fair value through profit or loss include the financial liabilities held for trading and the designated financial liabilities at fair value through profit or loss when initial recognized. For this kind of financial liabilities should be measured at fair value, variation of fair value should be recorded into the current profit or loss.
Other financial liabilities should be subsequently measured at amortization cost by adopting actual interest rate method. (3) Fair value measurement of financial assets and liabilities
a) If the market for a financial instrument is active, an entity establishes fair value by using the quoted price in the active market. In the active market, the Group measures the fair value of its holding financial assets and contingent financial liabilities by using the current quoted price; the Group measures the fair value of its contingent financial assets and holding financial liabilities by using the current quoted price. If there are no current quoted prices for the financial assets and liabilties, and no significant change in the economic environment after the settlement date, the quoted prices of the recent transactions should be used to measure the fair value of the financial assets and liabilities.
b) If the market for a financial instrument is not active, an entity establishes fair value by using a valuation technique. Valuation techniques include using 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 analysis and option pricing models.
2.11 Provision for bad debts of receivables
The Group shall review the carrying amount of receivables fully at the balance sheet date. The Group shall calculate the full provision for bad debts for the following receivables: debtor has been log-out, bankruptcy, minus net asset, significant poor cash flow and significant nature disaster leads to discontinue production and the debtors could not pay for the debts within the foreseeable time . Other solid evidences indicates that the receivables cound not be paid or be of a slim chance.
The allowance method is applied to the potential loss of bad debt. The Group should make the impairment test separately or in combination and accure the bad debt provisions which shall be recorded into current profit or loss at the end of the period. If there is defined evidence for the receivables not to or not likely to be received, which shall be recognized as the loss of bad debt and write off the accrued bad debts provisions after going through the approval procedure of the Group.
(1) Individually significant amounts of accounts receivable accrued bad debt provision as per portfolio
Judgment basis or amount standards of The receivables with more than RMB 3 million individual amount shall be individually significant amounts recognized as the significant receivables;
The accruing method of the receivables with The bad debt provisions shall be accrued based on the difference individually significant amounts between current value of future cash flow and the carrying amounts.
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report (2) Accounts receivable accrued bad debt provision by portfolio
The basis of portfolio
Use the accounting aging of the receivables as the credit risk characteristics Accounting aging
to classify the portfolio
Use the amount characteristics of the receivables , if the transaction party Related parties
is related parties characteristics need to classify the portfolio
Use the amount characteristics of the receivables, the credit of transaction Risk-free party, the nature of the amounts and the safeguard mechanism of transaction as characteristics to classify the portfolio
The accrual method for bad debt provision by portfolio
Accounting aging Accrue the bad debt provision by accounting aging analysis method Related parties Accrue the bad debt provision by individual identification method Risk-free Accrue the bad debt provision by individual identification method 1) The percentage of provision for bad debts based on the age of receivables as followings:
Accounting aging Accrual percentage of the Accrual percentage of other receivables(%) receivables(%)
Within 1 year 1 1
1-2 years 5 5
2-3 years 20 20
Over 3 years 50 50
2) The other methods is applied to actuating of bad debts provision
Related parties Accrue the bad debt provision by individual identification method
Risk-free Accrue the bad debt provision by individual identification method
(3) Individually insignificant amount accounts receivable but accrued bad debt provision as per portfolio
The individual amount is not significant, but the accrued bad debt Accrual reason
provision on the basis of portfolio can not reflect its risk characteristic The bad debt provisions should be accrued based on the difference Accrual method
between current value of future cash flow and the carrying amount. 2.12 Inventories
Classification of inventory: Inventories are classified as raw material, wrappage, low-valuable consumable, working-in-progress, and finished goods etc.
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Pricing of inventories received and sent out: The inventories are processed on perpetual inventory system, purchased and stored based on their standard cost. The raw materials are priced daily on their standard costs. The differences between the standard and actual costs is recorded into the costs of materials and for sending out according to proportion of storage and sending out of materials, and adjust the planned costs of raw material into actual costs. The working-in-progress finished goods are priced on their standard costs; the differences between the standard and actual costs are recorded into the costs of working-in-progress and finished goods according to the receiving and sending out proportion, and finaly adjust the planned costs into actual costs.
At the balance sheet date inventory should be measured at the lower of the cost and net realizable value. For the inventories which are damaged, fully or partly obsoleted and selling price below cost, the Group should calculate the provision for impairment of inventories according to the estimated nonrecoverable part of cost. Finished goods and a large amount raw materials should be calculated provision for impairment based on the difference of the cost exceed the realizable value of single item. For raw and accessorial materials with a large quantities and lower unit price should be calculated provison for impairment according to classify of inventory.
For the finished goods, working in progress and raw material held for sale etc which shall be sold directly, the net realizable value should be confirmed at the estimated selling price less estimated selling expenses and related tax and expenses. The raw material held for production, its realizable value should be confirmed at the estimated selling price of finished goods less estimated cost of completion, estimated selling expenses and related tax. The net realizable value of inventories held for execution of sale contracts or labor contracts shall be calculated based on the contract price. If the quantities of inventories in the Group are more than quantities if inventories subscribed in the sales contracts, the net realizable value of the excessive part of the inventories should be calculated based on the general selling price.
2.13 Long-term equity investment
Long-term equity investments include the equity investments which the Group can control, joint control or have significant influence on the investee, or the Group can not control, joint control or significant influence on the investee and there is no offer in the active market, fair value can not be reliably measured.
Joint control refers to the control over an economic activity in accordance with contract. Any party of joint venture can not separately control the business activity of joint venture. The decision related to principal operating activities need unanimous consent from any party
Significant influence refers to the power to participate in making decisions on the financial and operating policies of investee, but not to control or do joint control together with other parties over the formulation of these policies. Significant influence confirm according to the Group holds the over20% (including20%) but lower than50% voteing shares. Unless there is evidence which indicate the Group can not participate in the decision of production and operating under the conditions above. The initial cost of long term equity investments formed in the merger of enterprise under the same control shall be recognized
at the carry amounts of equity of the merged enterprise. The initial cost of long term equity investments acquired in the
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report merger of enterprise under the different control shall be recognized at fair value of the assets paid, liabilities risen or charged, and equity securities issued.
Besides the long-term equity investments acquired by the merger of enterprises, the initial cost of a long-term equity investment obtained by other means shall be ascertained in accordance with the provisions as follows:
(1) The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost which is actually paid. The initial cost consists of the expenses directly relevant to the obtaining of the long-term equity investment, taxes and other necessary expenses.
(2) The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair value of the equity securities issued.
(3) The initial cost of a long-term equity investment of an investor shall be the value stated in the investment contract or agreement except the unfair value stated in the contract or agreement.
(4) The initial cost of a long-term investment obtained by the exchange of non-monetary assets and the initial cost of a long-term equity investment obtained by debts restructuring shall be ascertained in accordance with related Accounting Standards for Enterprises.
For the long-term equity investment in subsidiaries of the Group shall be measured in accordance with the cost method, and shall be adjusted when preparing consolidated financial statements in accordance with equity method. For the long-term equity investment of joint venture shall be measured in accordance with equity method.
For the long-term equity investment of the investing enterprise that does not do joint control or does not have significant influences on the invested entity, and has no offer in the active market and its fair value cannot be reliably measured should be measured in accordance with cost method. For the long-term equity investment of the investing enterprise that does not do joint control or does not have significant influences on the invested entity, and has offer in the active market and its fair value can be reliably measured should be measured as the assets available for sale.
2.14 Fixed asset
Recognition criteria of fixed assets: Fixed assets are defined as the tangible assets which are held for the purpose of producing goods, Provideing services, leasing or for operation& management, and have more than one year of useful life, and whose unit price is over RMB2,000.
Classification of fixed assets: Building, machinery, transportation equipment, electronic equipment and others.
Measurement of fixed assets: Initial measurement of fixed assets shall be conducted on fixed assets according to the actual cost when obtained, including, the cost of purchased fixed asset including purchase price, value added tax, duty and other
related tax and fee, other expenses that bring the fixed asset to the expected conditions for use and that may be relegated to
the fixed asset. The cost of a self-constructed fixed asset shall be formed by the necessary expenses incurred for bringing the
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report asset to the expected conditions for use. The cost of fixed asset which was invested by investor should be recorded in accordance with the price stipulated in the contract or agreement, other than those of unfair value as stipulated in the contract or agreement. The cost of fixed assets which is obtained by financial leasing should be measured at the lower one of fair value and the minimum lease payment in the beginning of lease.
Depreciation method: the Group withdraws depreciation for all fixed assets except for the fixed assets which had been fully depreciated and are still being used. The Group withdraws depreciation by adopting straight-line method and depreciation rate of unit item on monthly basis, and brings it cost or expenses in current period. Estimated net residual value rate is3%, useful life, depreciation rate as follows:
Estimated net
Useful
Category residual value Annual depreciation rate life(years)
rate(%)
Housing and Buildings
Including: Buildings 15 3 6.47% Housing for productive 30 3 3.23% Housing for non-productive 35 3 2.77% Machinery equipments 10-15 3 6.47%～9.70% Transportation equipments 6 3 16.17% Electronic equipments
Including: Computer 4 3 24.25% General testing instruments 7 3 13.86% Specialized electronic equipments 8 3 12.13% Automated controlling equipments 8 3 12.13% Automated controlling meters 8 3 12.13% Others equipments
Including: Industrial kiln 7 3 13.86% Tools& other production tools 9 3 10.78% Transmission equipments 15 3 6.47% Non-operational equipments and tools 18 3 5.39% The Group should review the estimated useful life, estimated net residual value and depreciation method at the end of each year. If any change has occurred, it shall be regarded as a change in the accounting estimates.
The Company should derecognized fixed asset when the fixed asset has been disposed, or the fixed assetscan‘t generate any future economic benefit through using and disposal. The amount that income resulting from disposal of fixed asset deducts fixedasset‘s book value and relevant tax shall be recorded in the profit and loss for the current period.
2.15 Construction in progress
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Measurement of CIP: Construction-in-progress is recognized at actual cost. Self-construction project is recognized at the cost of material, labour cost and construction expenses. Contractual construction is recognized at project price which should be paid. Installed construction is recognized at the value of equipment, installation and assembly cost. Besides above, the cost of CIP comprises borrowing cost and profit and loss resulting from foreign exchange.
The criteria and time spot of constructions inprogress‘s being transferred to fixed assets: Constructions in progress are carried down to fixed assets on their actual costs when completing and achieving estimated usable status. The fixed assets that have been completed and reached estimated usable status but have not yet been through completion and settlement procedures are charged to an account according to their estimate values; adjustment will be conducted upon confirmation of their actual values. The Group should withdraw depreciation in the next month after completion.
2.16 Borrowing costs
Recognition principles on capitalization of borrowing cost: The Group should capitalizes the borrowing cost directly attributable to the acquisition, construction or production of a qualifying asset and record borrowing cost into cost of related asset. The Group should recognize the other borrowing cost as the current expense and charged it as profit and loss of current period. A qualifying asset refers to fixed asset, investment property and inventory need be constructed for so long time to its intended use or sale.
Duration of capitalization of borrowing cost: When expenditures and borrowing cost are being incurred, and activities that are necessary to put the asset available for use or sale are in progress, the capitalization of borrowing costs as part of the cost of a qualifying asset should commence. Capitalization of borrowing costs should be suspended during extended periods in which active development is interrupted and interruption period last for over 3 month. The borrowing cost incurred during the period should be recognized as expenses and recorded into the profit and loss in the current period. When all the activities for bringing the asset to its intended use or sale are completed, the capitalization of borrowing costs ceases, and the borrowing costs should be recognized as an expense in the period incurred.
Measurement of borrowing cost: As for specifically borrowed loans for the acquisition and construction or production of assets eligible for capitalization, the to-be-capitalized amount of interests shall be determined as the difference of the actual cost incurred of the specially borrowed loan at the present period minus the income of interests earned on the unused borrowing loans as a deposit in the bank or as a temporary investment. Where a general borrowing is used for the acquisition and construction or production of assets eligible for capitalization, the Group shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated and determined at the weighted average interest rate of the general borrowing.
2.17 Intangible assets
Measurement of intangible assets: The intangible assets of the Group refer to land use right, ERP system software. The cost
of outsourcing intangible assets shall include the purchase price, relevant taxes and other necessary expenditures directly
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report attributable to intangible assets. The cost invested into intangible assets by investors shall be determined according to the stated value in the investment contract or agreement, except for those of unfair value in the contract or agreement.
Amortization method and period: The Group shall amortize land use right on the basis of its useful life by adopting straight line method from the time of acquiring. ERP system software and other intangible assets shall be amortized on the basis of shorter of estimated useful life, stated beneficial year in the contract, and legal available year. The amortization amount should be recorded into the cost or expense of relevant in the current period.
The Group shall check the estimated useful life and amortization method of intangible assets with limited useful life at the end of each year, if any change has been made, it shall be adjusted. The Group shall check the estimated useful life of intangible assets with uncertain useful life during the each accounting period. If there are evidences to prove the useful life of intangible assets is limited, the Group shall estimate the useful life and amortize the intangible assets within estimated useful life. 2.18 Impairment of non-financial asset
The Group checks the long-term equity investment for its subsidiaries, association and joint venture, fixed asset, construction-in-progress, intangible asset and others on each balance sheet date. There may be an impairment of asset when one of following indications occurs. The Group should test impairments. The Group tests the impairment of goodwill, intangible asset with uncertain useful life on the end of every year. When it is difficult to measure the recoverable amount of asset, it should measure the recoverable amount of asset on the basis of asset group.
After impairment test, if the book value exceeds the recoverable amount of the asset, the difference should be recognized as impairment loss. Once any loss of impairment is recognized, it shall not be reversed in the future accounting periods. The recoverable amount of asset refers to the higher one of the net amount of the fair value of asset minus disposal expense and the present value of estimated future cash flow of asset.
Indications of impairment as follows:
(1) During the period, a fair value of the asset in the market has declined significantly, which exceeds the expected decline as time passing or normal use;
(2) Significant changes with an adverse effect on the Group have taken place during the period, or will take place in the near future, in the technological, market, economic or legal environment in which the entity operates or in the market to which an asset is dedicated;
(3) Market interest rates or other market rates of return on investments have increased during the period, and those increases are likely to affect the discount rate applied in calculating an asset's value in use and decrease the asset's recoverable amount materially;
(4) Evidence is available of obsolescence or physical damage of an asset;
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report (5) The asset has been idle or is becoming idle, discontinued, or plans to dispose of an asset before the previously expected date;
(6) Evidence is available from internal reporting that indicates that the economic performance of an asset is, or will be, worse than expected; and
(7) Other evidence indicates impairment of asset.
2.19 Long-term deferred expenses
Long-term deferred expenses of the Group refer to expenses which are paid and should be deferred over the future period. The amortization period shall be more than one year (no including 1 year). The expenses should be amortized averagely over the beneficial period. If the deferred expense can not take benefit for the future accounting period, the unamortized balance of the deferred expenses should be transferred into the current profit or loss.
2.20 Employee benefits
Employee compensation comprises salary, bonus, allowance, and welfare, social insurance, housing fund, labor union expenditure, employee education expenditure and other relevant expenditures of service Provided by the employees. The Group should recognize the employee compensation as liability during the period of employee provide service to company. In accordance with the beneficiaries of the service Provided by employee, the Group should record the employee benefits into relevant cost and expense. For the compensation for employee due to cancellation of labor contract, the Group should charge the compensation as the profit and loss during the current period.
Termination benefits are benefits payable as a result of cancellation of labor contract between the company and employees. For the termination plans with installment or voluntary termination advice, when planning and checking the recognition condition of contingent liability for each period or stage, then the contingent liability caused by providing termination benefits shall be confirmed, and charged as management expenses satisfying the confirmation conditions of contingent liability for the current period.
2.21 Contingent liabilities
The obligation pertinent to a contingency shall be recognized as an estimated debt when the following conditions are satisfied simultaneously:
(1) The obligation is a current obligation of the Group;
(2) It is likely to cause any economic benefit to flow out of the Group as a result of performance of the obligation; and
(3) The amount of the obligation can be measured reliably.
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report The estimated debts shall be initially measured in accordance with the best estimate of the necessary expenses for the performance of the current obligation, and the Group shall take into full consideration of the risks, uncertainty, time value of money, and other factors pertinent to the contingencies. If the time value of money is of great significance, the best estimate amounts shall be determined after discounting the relevant future outflow of cash. The Group shall check the book value of the estimated debts on the balance sheet date. If there is any exact evidence indicating that the book value cannot really reflect the current best estimate amounts, the Group shall adjust the book value in accordance with the current best estimate amounts.
2.22 Principle of recognition of revenue
The revenue of the Group is mainly from selling goods, providing labour services and abalienating the right of use assets. Recognition standards for revenue are as below:
(1) Recognition of revenue from selling good:
1) The significant risks and rewards of ownership of the goods have been transferred to the buyer;
2) The Group remains neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods;
3) The amount of revenues can be measured reliably;
4) The relevant economic benefits are likely to flow into the Group; and
5) The incurred cost or intended cost can be measured reliably.
(2) Recognition of revenue from providing labour services:
1) Total revenue and total cost can be measured reliably; the relevant economic benefits are likely to flow into the Group; and the stage of completion can be confirmed reliably;
2) If the Group can, on the date of the balance sheet day, reliably estimate the outcome of a transaction concerning the labour services it provides, it shall recognize the revenue from providing services employing the stage of completion method. If the outcome can not be estimated reliably and incurred cost can be offset, the revenue should be recognised by the compensation. When the standards can not be satisfied, the revenue should not be recognised, and the incurred cost should be recorded into the current profit and loss.
(3) Revenue from abalienating the use right of use assets
The revenue from abalienating of use right of assets shall be recognized, when the relevant economic benefits are likely to
flow into the Group, and the amount of revenues can be measured reliably.
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 2.23 Government grants
A government subsidy of the Group shall be recognized if the Group can meet the conditions for the government subsidy and also can obtain the government subsidy. If a government subsidy is a monetary asset, it shall be measured in the light of the received or receivable amount. If a government subsidy is a non-monetary asset, it shall be measured at its fair value; if its fair value cannot be obtained in a reliable way, it shall be measured at its nominal amount (RMB 1).
The government subsidies pertinent to assets shall be recognized as deferred income, equally distributed within the useful lives of the relevant assets, and included in the current profits and losses. The government subsidies pertinent to incomes shall be treated respectively in accordance with the indications as follows: (1) those subsidies used for compensating the related future expenses or losses of the Group shall be recognized as deferred income and shall included in the current profits and losses during the period when the relevant expenses are recognized; or (2) those subsidies used for compensating the related expenses or losses incurred to the Group shall be directly included in the current profits and losses. 2.24 Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liability should be recognized at the differences (taxable temporary differences) between the tax base of an asset or liability and its carrying amount. The Group shall recognize the deferred income tax assets arising from a deductible temporary difference to the extent of the amount of the taxable income which it is most likely to obtain and which can be deducted from the deductible temporary difference. At the balance sheet date, deferred tax asset and deferred tax liability should be measured at applicable tax rate.
The Group shall recognize the deferred tax assets arising from a deductible temporary difference to the extent of the amount of the taxable income which is most likely to obtain which can be deducted from the deductible temporary difference. For the deferred tax assets which already have been recognized, where there is any evidence showing that the Group is probably unable to acquire sufficient amount of taxable income tax in a future period to offset against the deductible temporary difference, the book value of the deferred tax assets shall be deducted. Where it is likely to acquire sufficient amount of taxable income tax, the amount deducted shall be reversed.
2.25 Lease
The leases of the Group refer to operating lease.
The rents from operating leases shall be recorded by the lessee into the relevant asset costs or the profits and losses of the current period by using the straight-line method over each period of the lease term.
2.26 Accounting treatment method of income tax
The Group shall recognize income tax by balance sheet liability method. The income taxes of the current period and deferred income tax of the Group shall be treated as income tax expenses or incomes, and shall be recorded into the current profits
and losses, excluding the income taxes incurred in the following circumstances: (1) the business combination; and (2) the
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report transactions or events directly recognized as theowner‘s equity. The income taxes of the current period and deferred income tax related to the transactions or events directly recorded as theowner‘s equity shall be recorded into theowner‘s equity. The income tax expenses for the current period the amount payable to the Tax Office which are calculated and recognized according to the tax law and transactions and events of the current period, i.e. income taxes payable; the deferred income taxes refer to the differences recognized between the amounts at the end of the period and amounts recognized originally of deferred tax assets and liabilities according to the balance sheet liability method.
2.27 Segment report
Business segment is confirmed in accordance with governance structure, management requests, internal reporting system, and the Group confirm the report segment on the basis of business segment.
Business segment is a component of the Group that satisfys the following conditions simultaneously: the component can take revenue and expenses; the management level can appraise the operating performance of the component in order to allocation of resource and appraise the performance; and the Group can acquire the financial position, operating performance and cash flow of the component etc.
2.28 Discontinued operation
Discontinued operation represents the component of the Group that had been disposed or plan to sell, and the component can be separately divided when operating and preparing financial statements. The component shall be disposed partly or wholly in accordance with theGroup‘s plan.
The component of the Group shall be recognized as the component held for selling when satisfying the conditions as below: 1) The Group had made a decision on disposal of the component;
2) The Group had signed the irrepealably Transfer Agreement with transferee; and
3) The transfer shall be finished within one year.
3. Changes in accounting policies, accounting estimates and correction of previous errors
There are no changes in accounting policies, accounting estimates and correction of previous errors in 2012.
4. Taxation
4.1. The main applicable tax and rate to the Group as follows:
Tax Tax base Tax rate
Value-added tax (VAT) Sales revenue or Purchase 17%，13%，11%，6%，3%
Business tax Revenue from property lease 5%
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report City construction tax Value-added tax payables, business tax 7%
Enterprise income tax(EIT) Current period taxable profit 15%
Education surcharge Value-added tax payables, business tax 3%
Local education surcharge Value-added tax payables, business tax 2%
70% of cost of own property or revenue
Real estate tax 1.2% or12%
from leasing property
Land use tax Land using right area RMB 6 per square meter
The enterprise income tax rate of Liaoyang Bearing (thecompany‘s subsidiary) is25%.
The enterprise income tax rate of Dalian Electrical Equipment (thecompany‘s subsidiary) is25%.
4.2. Tax preference and approval
The company obtained the qualification of high and new technology enterprises at 14 Oct 2011.The Certificate number is GR201121200028, and the period of validity is three years. According to the provisions of the tax law the company can enjoy the preferential tax policy of enterprise income tax rate of15% in three years (including 2011) .
5. Business combination and consolidated financial statements
5.1 Subsidiaries
Company Company type Registered address Nature of operation Registered capital
name
Production and
No.61, Weiguo road,
Liaoyang sales of bearing and
Limited Baita district Liaoyang 19,350,000.00
Bearing machinery
city
manufacturing
No.12, Shisanli Production and
Dalian
yongsheng street, sales of bearing and
Electrical Limited 10,000,000.00
free trade zone Dalian machinery
Equipment
city manufacturing
(Continued)
Company Business scope Total investment Holding% Voting% Consolidation
Name amounts
Production and
Liaoyang sales of bearing
17,337,259.95 100 100 Yes
Bearing and machinery
manufacturing
Manufacture and
sales of precise
Dalian
motor andcar‘s
Electrical 45,478,956.37 100 100 Yes
bearings,
Equipment
components and
related products
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 6. Notes to consolidated financial statements
6.1 Cash and cash in bank
2014.06.30 2013.12.31
Items Original Exchange Amount Original Exchange rate Amount currency rate (RMB) currency (RMB) Cash on
-- -- 144,752.65 -- -- 294,706.89 hand
RMB -- -- 144,752.65 -- -- 294,706.89 Cash in
-- -- 106,755,417.78 -- -- 60,322,052.24 bank
RMB -- -- 91,693,131.06 -- -- 40,579,655.69 USD 2,311,600.61 6.1528 14,222,816.23 3,237,689.79 6.0969 19,739,870.88 Euro 100,001.25 8.3946 839,470.49 300.00 8.4189 2,525.67 Other cash -- -- 39,818,929.79 -- -- 20,070,327.79 RMB -- -- 39,818,929.79 -- -- 20,070,327.79 Total -- -- 146,719,100.22 -- -- 80,687,086.92 6.2 Notes receivable
(1) Category of notes receivable
2014.06.30 2013.12.31 Items
Bank acceptance notes
140,346,331.78 79,689,279.98 Commercial acceptance notes
11,875,808.29 20,640,607.48 152,222,140.07 100,329,887.46 Total
(2) Up to June 30, 2014 No pledged notes receivable
(3) Notes receivable endorsed to other parties not mature at the end of June 2014
Note issuer Issuing date Maturity Amount
Wei Fang Shen Zhou Zhong
2014-02-12 2014-08-12 5,800,000.00 Gong Machinery Co.,Ltd
Shen Yang Railway Bureau 2014-05-08 2014-11-08 5,000,000.00 China Boat Zhong
Gong(Chong Qing)Hai
2014-05-05 2014-11-05 5,000,000.00 Zhuang Wind Power
Equipment Co.,Ltd.
Gan Su Hua Dian Yu Men
Wind power Development 2014-05-22 2015-05-14 5,000,000.00 Co.,Ltd
Shen Yang Railway Bureau 2014-05-08 2014-11-08 5,000,000.00合计 — — 25,800,000.00 6.3 dividend receivable
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 5. Dividend receivable
Reason for
Items 2013.12.31 Increase Decrease 2014.06.30 Impairment uncollection
Dividend receivable due — — 240,000.00 240,000.00 0
within 1 year
Of which: — — Shanghai ME — — machine-electrical 240,000.00 240,000.00 0
equipment chain Ltd
Total 240,000.00 240,000.00 0 — — 6.4 Accounts receivable
(1) Category of accounts receivable
2014.06.30
Booking balance
Provision for bad and doubtful debts Items
Percentage Percentage Amount Amount
(%) (%)
Accounts receivable with
individual significant amount and
3,910,007.43 0.29% 3,910,007.43 100.00% identification separately bad debt
provision
Accounts receivable accrued
bad debt provision by portfolio
Accounting aging portfolio 1,325,238,985.18 97.21% 46,121,712.13 3.48% Related parties portfolio 22,264,320.06 1.63%
Risk-free portfolio
Subtotal of portfolio 1,347,503,305.24 98.84% 46,121,712.13 3.42% Accounts receivable with
individual insignificant amount
11,796,099.81 0.87% 11,796,099.81 100.00% and identification separately bad
debt provision
1,363,209,412.48 -- 61,827,819.37 --
Total
(Continued)
2013.12.31
Items Booking balance Provision for bad and doubtful debtsPercentage(%) Percentage(%) Amount Amount
Accounts receivable with individual
3,910,007.43 0.32% 3,910,007.43 100.00%
significant amount and identification
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report separately bad debt provision
Accounts receivable accrued bad debt
provision by portfolio
Accounting aging portfolio 1,168,651,721.54 97.35% 46,132,926.18 3.95% Related parties portfolio 16,086,866.09 1.34%
Risk-free portfolio
Subtotal of portfolio 1,184,738,587.63 98.69% 46,132,926.18 3.89% Accounts receivable with individual
insignificant amount and identification 11,796,099.81 0.99% 11,796,099.81 100.00% separately bad debt provision
1,200,444,694.87 -- 61,839,033.42 -- Total
1) Accounts receivable with individual significant amount and identification separately bad debt provision at the end of June 30,2014
Booking Provision for Provision rate
Company name Reasons for provision balance bad debts (%)
Baoding North China
A/R with over 5 years aging, Machine& Electronic 3,910,007.43 3,910,007.43 100.00
unlikely to be collected
Equipment Co., Ltd.
Total 3,910,007.43 3,910,007.43 — —
2) Accounts receivable accrued the bad debt provisions under accounting aging analysis method
Items 2014.06.30 2013.12.31
Percentage Percentage
Amount Provision for Amount Provision for(%) (%)
bad debts bad debts 1,149,579,774.08 84.33% 11,495,797.74 987,605,318.88 82.27% 9,876,053.19 Within 1 year
1 to 2 years
91,560,581.10 6.72% 4,578,029.06 93,380,711.97 7.78% 4,669,035.60 2 to 3 years
40,004,765.55 2.93% 8,000,953.11 40,816,693.16 3.40% 8,163,338.63 Over 3 years
44,093,864.45 3.23% 22,046,932.22 46,848,997.53 3.90% 23,424,498.76 1,325,238,985.18 -- 46,121,712.13 1,168,651,721.54 -- 46,132,926.18 Total
3) Individually insignificant amount accounts receivable but accrued bad debt provision separately at the end of June 30,2014
Booking Provision for Proportion
Company name Reasons for provision balance bad debts (%)
Shenyang Sewerage Equipment A/R with over 5 years aging, 2,706,703.13 2,706,703.13 100.00
Co.,Ltd unlikely to be collected A/R with over 3 years aging, Shen Yang General Bearing Co., Ltd 2,452,138.58 2,452,138.58 100.00
unlikely to be collected
Tiefa coal sector Group Company 2,352,760.15 2,352,760.15 100.00 A/R with over 3 years aging,
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report unlikely to be collected Shuangyashan Mining industry A/R with over 3 years aging, 1,368,257.55 1,368,257.55 100.00
Group Company unlikely to be collected Chongqing Sailimeng electrical A/R with over 3 years aging, 650,758.88 650,758.88 100.00
machine LLC unlikely to be collected A/R with over 3 years aging, Qingdao Qingte Zhongli axle Co.,Ltd 590,898.99 590,898.99 100.00
unlikely to be collected Other sporadic accounts receivable A/R with over 5 years aging, 1,674,582.53 1,674,582.53 100.00
unlikely to be collected Total
11,796,099.81 11,796,099.81
(2) Write-off of accounts receivables during the reporting period
|||||||
|-|-|-|-|-|-|
||||||Related business or|
|Name|Properties||Amount|Reason||
|||Time|||not|
|China Heavy Automobile Ji||||Account difference||
||Goods selling||920,469.22|||
|Nan Bridge-box Co.,Ltd||||over 8 years|No|
|Nan Jing High Speed Gear||||||
||Goods selling||41,938.02|Quality problem|No|
|Manufactory Co.,Ltd||||||
|Nan Jing high-extractive Gear||||||
||Goods selling||80,958.78|Quality problem|No|
|Group Company||||||
|Tong Hua Oil Chemical||||Account difference||
||Goods selling||780.39||No|
|industry Machinery||||over 8 years||
|Total|--|--|1,044,146.41|--|--|

 (3) Accounts receivable due from shareholders holding over5% (including5%) of theCompany‘s shares
2014.06.30 2013.12.31
Company name
Amount Provision for bad debt Amount Provision for bad debt 6,903,361.61 6,903,361.61
Wazhou Group
Total
6,903,361.61 6,903,361.61
(4) Accounts receivable for the top 5 companies
Relationship with the
Company name Amount Aging
Percentage in the totalA/R(%) Company
Top 1 45,853,594.65 3.40% Unrelated party Within 1 year
Top 2
Unrelated party
42,696,266.67
Within 1 year
3.10% Top 3
Unrelated party
30,633,004.16
Within 1 year
2.20% Top 4
Unrelated party
29,979,922.68
Within 1 year
2.20% Within 1
Top 5 Unrelated party
28,630,199.97 2.10% year;1-2years
Total —
177,792,988.13
—
13.00%
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report (4) Accounts receivable due from related parties
Percentage in the total Company name Relationship with the Company Amount
accounts receivable(%)
Wazhou Group Parent company
6,903,361.61 0.50% Wazhou Group Special Other companies controlled by the
7,627,664.68 0.56% Precision Bearing Co., Ltd same parent company
Wazhou Group(US) Bearing Other companies controlled by the
7,733,293.77 0.57% Co.,Ltd same parent company
Total —
22,264,320.06 1.63% 6.4 Other receivables
(1) The categories of other receivable
2014.06.30
Provision for bad and doubtful Booking balance
Items debts
Amount Percentage Amount Percentage(%) (%)
Other receivables with individual significant
amount and identification separately bad
debt provision
Other receivables accrued bad debt
provision by portfolio
Accounting aging portfolio
17,902,420.27 67.27% 4,013,105.80 22.42% Related parties portfolio
Risk-free portfolio
8,708,936.70 32.73%
Subtotal of portfolio 26,611,356.97 100.00% 4,013,105.80 15.08% Total 26,611,356.97 -- 4,013,105.80 --
(Continued)
2013.12.31
Provision for bad and doubtful
Booking balance
Items debts
Amount Percentage Amount Percentage
(%) (%)
Other receivables with individual
significant amount and identification
— — — — separately bad debt provision
Other receivables accrued bad debt
— — — —
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report provision by portfolio
Accounting aging portfolio
18,307,069.77 54.26% 4,013,105.80 21.92% Related parties portfolio
Risk-free portfolio
15,433,328.36 45.74%
33,740,398.13 100.00% 4,013,105.80 11.89% Subtotal of portfolio
Total
33,740,398.13 -- 4,013,105.80 --
(2) Other receivables accrued the bad debt provisions under accounting aging analysis method
Items 2014.06.30 2013.12.31
Percentage Percentage
Amount Provision Amount Provision
(%) (%)
Within 1 year
7,892,769.91 29.66% 78,927.70 8,314,567.63 24.64% 83,145.67 1 to 2 years
1,770,443.29 6.65% 88,522.16 1,691,648.13 5.01% 84,582.40 2 to 3 years
913,158.66 3.43% 182,631.73 1,016,830.94 3.01% 203,366.19 Over 3 years
7,326,048.41 27.53% 3,663,024.21 7,284,023.07 21.60% 3,642,011.54 Total
17,902,420.27 -- 4,013,105.80 18,307,069.77 -- 4,013,105.80 No other receivables are due from shareholders holding over5% (including5%) of theCompany‘s shares at the end of June 30,2014.
(3) Other accounts receivable for the top 5 companies
Relationship with
Percentage Company name Amount Aging
the Company
in the totalAR(%) Top 1
Unrelated party 5,843,915.27
Within 1year 22% Top 2 Within 4.9% Unrelated party 1,302,940.42
Top 3
Unrelated party 800,000.00
Within 3.0% Top 4
Unrelated party 457,529.25
Within 1.7% Top 5
Unrelated party 370,000.00
Within 3 year 1.4% 8,774,384.94 -- 33% Total —
6.5 Advances to suppliers
(1) Aging of advances to suppliers
Items 2014.06.30 2013.12.31
Amount Percentage(%) Amount Percentage(%) Within 1 year
25,660,048.66 75.24% 28,330,096.29 84.03% 3,150,191.83 9.24% 1,164,471.54 3.45% 1 to 2 years
2 to 3 years
2,773,731.57 8.13% 2,203,266.20 6.54%
Over 3 years
2,518,850.26 7.39% 2,015,070.11 5.98%
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 34,102,822.32 -- 33,712,904.14 --
Total
(2) Top 5 advances to suppliers
Relationship
Company name with the Amount Aging Pending reason Company
Top 1
Unrelated party
8,583,368.91 within 1 year trade unfinished Top 2
Unrelated party
4,978,345.85 within 1 year
trade
within 1 trade
Top 3
Unrelated party
4,916,307.76
year;1-2 year
Top 4
Unrelated party
2,731,127.10 2-3 year Goods quality issues Top 5
Unrelated party
1,043,748.71 within 1 year trade unfinished Total —
22,252,898.33
—
No advances to suppliers are due from shareholders holding over5% (including5%) of theCompany‘s shares at the end of June 30,2014.
6.6 Inventories
(1) Categories of inventories
2014.06.30 2013.12.31
Item
Provision for Provision for
Cost Net book value Cost Net book value decline declines
175,766,899.33 2,385,945.20 173,380,954.13 156,386,450.54 2,385,945.20 154,000,505.34 Raw materials
Workingin
165,991,437.01 602,496.86 165,388,940.15 173,497,408.33 602,496.86 172,894,911.47 progress
844,497,493.59 56,976,781.48 787,520,712.11 924,735,016.96 56,976,781.48 867,758,235.48 Finished goods
357,145.77 357,145.77 2,080,576.50 2,080,576.50 Wrappage
1,186,612,975.70 59,965,223.54 1,126,647,752.16 1,256,699,452.33 59,965,223.54 1,196,734,228.79 Total
(2) Provision for decline in the value of inventories
Decrease
Items 2013.12.31 Increase Others 2014.06.30
Reverse
transferred
Raw materials
2,385,945.20 2,385,945.20 Finished goods
602,496.86 602,496.86 Working in progress
56,976,781.48 56,976,781.48 Total
59,965,223.54 59,965,223.54 6.7 Other current assets
Item 2014.06.30 2013.12.31
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 1,113,829.70 908,658.20 Rental
Over paid income tax
1,855,337.56 1,855,337.56 Over paid added value tax
8,992.81 Total
2,969,167.26 2,772,988.57 6.8 Investment in associated company
Monetary unit: RMB Ten Thousand Yuan Total assets Total liabilities Total net Total sales
Holding Voting Net profits in Investee as at June as at June assets as at revenue in
% % report period 30,2014 30,2014 June 30,2014 report period
Associated
— — — — — — — company
Dalian SKF
Wazhou
49% 49% 268,375,628.99 46,147,164.78 222,228,464.21 93,263,566.51 4,614,725.69 Bearings
Co., Ltd.
6.9 Long-term equity investments
(2) Long-term equity investments under cost and equity method
Investee Holding% Voting% Original Amounts
Cost method
Shanghai ME machine-electrical equipment chain Ltd. 4.76 4.76 2,000,000.00 Sub-total — — 2,000,000.00 Equity method — — — Dalian SKF Wazhou Bearings Co., Ltd. 49.00 49.00 95,060,000.00 Sub-total — — 95,060,000.00 Total — — 97,060,000.00 (Continued)
Cash dividends Investees 2013.12.31 Change amount 2014.06.30 received in report period—
— —
Cost method —
— — Shanghai ME machine-electrical
2,000,000.00 2,000,000.00
equipment chain Ltd. —
—
2,000,000.00 2,000,000.00 — Sub-total —
Equity method —
Dalian SKF Wazhou Bearings
2,261,215.59 108,533,646.70
106,272,431.11 — Co., Ltd.
Sub-total 106,272,431.11
2,261,215.59 108,533,646.70
—
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Total
108,272,431.11 2,261,215.59 110,533,646.70
— 6.9 Fixed assets
(1) Fixed assets by categories
Items 2013.12.31 Increase Decrease 2014.06.30
Cost
1,553,083,323.15 8,922,266.83 985,669.07 1,561,019,920.91 387,096,282.69 361,705.52 387,457,988.21 Buildings
Machinery
901,974,591.72 3,489,474.67 440,195.26 905,023,871.13 Transportation
19,876,916.92 545,473.81 19,331,443.11 equipment
Electronic
70,266,205.61 1,721,474.74 71,987,680.35 equipment
173,869,326.21 3,349,611.90 177,218,938.11 Others
Accumulated
977,851,923.54 38,089,355.14 295,981.22 1,015,645,297.46 deprecation
Buildings
177,390,093.89 6,091,815.29 183,481,909.18 Machinery
586,510,794.50 24,476,389.97 149,447.72 610,837,736.75 Transportation
13,561,031.62 679,322.68 146,533.50 14,093,820.80 equipment
Electronic
58,027,520.72 1,976,528.08 60,004,048.80 equipment
Others
142,362,482.81 4,865,299.12 147,227,781.93 Net book value
575,231,399.61 545,374,623.45
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report
 At the end of June 30,2014 the increase includes the assets which were transferred from construction in progress amounted to RMB5,049,045.08,
6.10 Construction in progress
(1) Details of Construction-in-progress
Items 2014.06.30 2013.12.31
Book Provision for Provision for
Book value Book balance Book value balance impairment impairment
M250Grinding Machine
130,730.53 130,730.53 130,730.53 130,730.53 Improvement
Forked truck 1,739,365.29 1,739,365.29 1,739,365.29 1,739,365.29 Improvement of plant 9,262,952.38 9,262,952.38 7,370,997.06 7,370,997.06 Installation of super
1,312,460.84 1,312,460.84 1,280,668.30 1,280,668.30 finish machine
Improvement of finished
10,285,752.92 10,285,752.92 10,081,207.24 10,081,207.24 goods storage
Dalian industry park
19,521,623.66 19,521,623.66 17,791,792.04 17,791,792.04 project
Crane Project 2,943,466.97 2,943,466.97 2,860,733.35 2,860,733.35 Improvement of
6,215,944.07 6,215,944.07 3,459,601.61 3,459,601.61 two-finished products
Computer Project 162,841.97 162,841.97 1,535,381.58 1,535,381.58 Improvement of
42,326,575.95 42,326,575.95 19,150,962.11 19,150,962.11 precision roller branch
Improvement of Liao
14,627,958.92 14,627,958.92 13,916,307.14 13,916,307.14 zhou
automobile improvement 1,757,080.22 1,757,080.22 1,835,259.09 1,835,259.09 Improvement
15,173,673.95 15,173,673.95 14,748,946.41 14,748,946.41 of grinding machine
Grinding product line 12,808,307.54 12,808,307.54 12,449,271.43 12,449,271.43
Improvement of
39,540,297.03 39,540,297.03 31,672,411.92 31,672,411.92
seven-finished products
Heat treatment product
1,386,791.97 1,386,791.97 1,485,321.71 1,485,321.71
line
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Digital Boring machine 1,927,130.76 1,927,130.76 1,873,327.72 1,873,327.72 Improvement of
820,843.12 820,843.12 785,812.85 785,812.85 exploration machinery
Improvement of special
4,948,161.20 4,948,161.20 4,251,393.54 4,251,393.54 large branch
Improvement of
90,354,246.05 90,354,246.05 82,262,814.56 82,262,814.56 one-finished products
Instruments 1,197,252.35 1,197,252.35 1,197,252.35 1,197,252.35 Medium sized deep
groove ball bearing 45,115,213.19 45,115,213.19 37,928,717.99 37,928,717.99 product line
Assembling line 18,949,681.57 18,949,681.57 18,007,638.86 18,007,638.86 others 11,045,947.78 11,045,947.78 15,356,547.94 15,356,547.94 Total 353,554,300.23 353,554,300.23 303,172,462.62 303,172,462.62 (2) Change in the significant construction in progress
Construction name 2013.12.31 Increase Decrease 2014.06.30 Transferred to fixed
others
assets
M250Grinding Machine
Improvement 130,730.53 - - - 130,730.53 Forked truck
1,739,365.29 - - - 1,739,365.29 Improvement of plant
7,370,997.06 1,891,955.32 - - 9,262,952.38 Installation of super
finish machine 1,280,668.30 31,792.54 - - 1,312,460.84 Improvement of
finished goods storage 10,081,207.24 204,545.68 - - 10,285,752.92 Dalian industry park
project 17,791,792.04 1,739,835.62 - 10,004.00 19,521,623.66 Crane Project
2,860,733.35 82,733.62 - - 2,943,466.97 Improvement of
two-finished products 3,459,601.61 2,756,584.97 242.51 - 6,215,944.07 Computer Project
1,535,381.58 - 1,372,539.61 - 162,841.97 Improvement of
precision roller branch 19,150,962.11 23,271,485.61 66,256.40 29,615.37 42,326,575.95 Improvement of Liao
zhou 13,916,307.14 711,651.78 - - 14,627,958.92 American automobile
improvement 1,835,259.09 55,925.77 91,102.56 43,002.08 1,757,080.22 Improvement
of grinding machine 14,748,946.41 424,727.54 - - 15,173,673.95 Grinding product line
12,449,271.43 359,040.84 4.73 - 12,808,307.54 Improvement of
seven-finished
products 31,672,411.92 11,590,324.49 3,130,039.38 592,400.00 39,540,297.03 Heat treatment product
line 1,485,321.71 10,048.15 - 108,577.89 1,386,791.97
Digital Boring machine
1,873,327.72 53,803.04 - - 1,927,130.76
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Improvement of
exploration machinery 785,812.85 35,030.27 - - 820,843.12 Improvement of special
large branch 4,251,393.54 840,357.41 143,589.75 - 4,948,161.20 Improvement of
one-finished products 82,262,814.56 8,144,231.49 52,800.00 - 90,354,246.05 Instruments
1,197,252.35 - - - 1,197,252.35 Medium sized deep
groove ball bearing
product line 37,928,717.99 7,186,495.20 - - 45,115,213.19 Assembling line
18,007,638.86 942,042.71 - - 18,949,681.57 others
15,356,547.94 192,470.14 4,118,130.02 11,045,947.78 Total
303,172,462.62 60,332,612.05 5,049,045.08 4,901,729.36 353,554,300.23 (Continued)
% of Including:
invest Constructio Accumulate Accumulated Interest
Source Construction name Budget ment n progress d capitalized capitalized capitalization
of funds against (%) interest interest in rate
budget 2011
M250Grinding
Loan/Self Machine
financing Improvement 737,500.00
Loan/Self Forked truck
1,589,700.00 financing Improvement of Loan/Self plant 8,970,026.78 financing Installation of super Loan/Self finish machine 6,013,996.00 financing Improvement of
Loan/Self finished goods
financing storage 11,905,070.60
Dalian industry Loan/Self park project 42,738,036.61 financing Loan/Self Crane Project
3,041,975.00 financing Improvement of
Loan/Self two-finished
financing products 8,462,672.00
Loan/Self Computer Project
1,968,222.00 financing Improvement of
Loan/Self precision roller
financing branch 20,316,126.00
Improvement of Loan/Self Liao zhou 19,682,175.00 financing automobile Loan/Self
improvement 2,030,970.00 financing
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Improvement
Loan/Self of grinding
financing machine 20,258,600.00
Grinding product Loan/Self line 24,050,000.00 financing Improvement of
Loan/Self seven-finished
financing products 66,584,851.00
Heat treatment Loan/Self product line 1,622,900.00 financing Digital Boring Loan/Self machine 5,974,500.00 financing Improvement of
Loan/Self exploration
financing machinery 2,150,600.00
Improvement of
Loan/Self special large
financing branch 6,000,330.00
Improvement of
Loan/Self one-finished
financing products 107,599,461.00
Loan/Self Instruments
2,304,760.00 financing Medium sized deep
Loan/Self groove ball bearing
financing product line 59,660,000.00
Loan/Self Assembling line
21,536,000.00 financing Loan/Self others
19,193,314.81 financing Total
464,391,786.80
6.11 Intangible assets
Items 2013.12.31 Increase Decrease 2014.06.30 Cost 171,131,093.34 — 171,131,093.34 Land use right 165,422,429.50 - - 165,422,429.50 ERP software 5,085,843.33 - 5,085,843.33 Others 622,820.51 - 622,820.51 Amortization 31,568,006.43 2,303,934.16 — 33,871,940.59 Land use right 26,979,766.63 2,026,137.76 29,005,904.39 ERP software 3,992,840.86 254,292.12 4,247,132.98 Others 595,398.94 23,504.28 618,903.22 Net book value
139,563,086.91 -2,303,934.16 137,259,152.75 138,442,662.87 -2,026,137.76 136,416,525.11 Land use right
ERP software
1,093,002.47 -254,292.12 838,710.35
Others
27,421.57 -23,504.28 3,917.29
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Provision for impairment
Land use right
ERP software
Others
139,563,086.91 -2,303,934.16 137,259,152.75 Book value
Land use right
138,442,662.87 -2,026,137.76 136,416,525.11 ERP software
1,093,002.47 -254,292.12 838,710.35 Others
27,421.57 -23,504.28 3,917.29 Note: The increased accumulated amortization of this year includes normal amortization of intangible assets for RMB 2,303,934.16
6.12 Long-term deferred and prepaid expenses
Other
Item 2013.12.31 Increase Amortization 2014.06.30 decrease
Right to use premise of
724,852.75 - 33,915.18 - 690,937.57 Shanghai sales office
Fitment expense for
192,111.00 36,945.00 155,166.00 storeroom office in Shanghai
Total
724,852.75 192,111.00 70,860.18 846,103.57 6.13 Deferred tax assets and deferred tax liabilities
(1) Recognized deferred tax assets and deferred tax liabilities
Items 2014.06.30 2013.12.31
Deferred tax assets
Provision for impairment of assets 8,971,775.64 8,971,775.64 Difference due to depreciation of fixed
1,791,108.01 1,791,108.01 assets
Total 10,762,883.65 10,762,883.65 Deferred tax liabilities
Unrealized intragroup loss
Total
(2) Temporary differences
Items Amount of temporary differences Taxable differences
Unrealized intragroup loss
Subtotal
Deductible differences
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Provision for bad debts 24,890,103.98 Provision for impairment of fixed assets 2,739,277.05 Provision for decline in value of inventories 32,128,138.59 Difference due to depreciation of fixed assets 11,940,720.08 Subtotal 71,698,239.70 6.14 Details of provision for impairment of assets
Decrease
2013.12.31 Accrual
Reversal Others transfer 2014.06.30 Provision for bad
65,852,139.22
debts 11,214.05 65,840,925.17 Provision for decline
in value of 59,965,223.54
inventories 59,965,223.54 Provision for
impairment of fixed 2,739,277.05 2,739,277.05 assets
Total
128,556,639.81
128,545,425.76 6.15 Short-term loan
(1) Category of short-term loan
Loan category 2014.06.30 2013.12.31
Mortgage loan
Guaranteed loan
Credit loan 408,000,000.00 418,000,000.00 Total 408,000,000.00 418,000,000.00 6.16 Notes payable
Items 2014.06.30 2013.12.31
246,718,550.00 90,347,340.00 Commercial acceptance notes
3,077,993.78 2,900,000.00 Bank acceptance notes
Total
249,796,543.78 93,247,340.00 6.17 Accounts payable
(1) Accounts payable
Items 2014.06.30 2013.12.31
Including: within 1 year
1,058,678,058.88 914,048,531.49 203,257,712.50 252,417,585.15 over 1 year
Total
1,261,935,771.38 1,166,466,116.64
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 6.18 Advances from customers
(1) Advances from customers
Items 2014.06.30 2013.12.31
Including: within 1year
55,761,476.17 66,620,868.44 over 1 year
7,150,371.23 7,812,454.60 62,911,847.40 74,433,323.04 Total
(2) No advances from customers are due to shareholders holding over5% (including5%) of theCompany‘s shares at the end of period.
6.19 Employee benefits payable
Items 2013.12.31 Increase Decrease 2014.06.30 Salary, bonus, allowance and
742,117.04 110,188,795.93 110,303,124.53 627,788.44 subsidy
0.00 7,684,075.01 7,684,075.01 0.00 welfare
Social insurance
9,066,754.25 29,871,854.11 30,759,087.43 8,179,520.93 medical treatment insurance
-103,096.14 8,011,185.81 8,156,000.01 -247,910.34 Endowment insurance
8,630,840.64 19,712,657.99 20,416,484.40 7,927,014.23 Unemployment insurance
276,899.07 984,000.20 1,001,638.22 259,261.05 Industrial injury insurance
201,544.45 873,695.02 890,773.14 184,466.33 Bear insurance
60,566.23 290,315.09 294,191.66 56,689.66 Housing fund
2,848,554.76 6,324,282.00 6,493,974.00 2,678,862.76 Other
6,996,627.65 1,081,531.58 2,105,168.87 5,972,990.36 Include: Labor union fund and
6,996,627.65 581,756.30 1,605,393.59 5,972,990.36 staff education funds
Compensate for relieve labor
117,926.00 117,926.00
relationship
Un-monetary welfare 381,849.28 381,849.28
Total
19,654,053.70 155,150,538.63 157,345,429.84 17,459,162.49 6.20 Taxes payable
Items 2014.06.30 2013.12.31 Value-added tax 4,005,036.57 4,057,635.57 Business tax 177,668.44 123,617.77 Enterprise income tax 6,153.34 6,153.34 Individual income tax 283,795.94 68,747.03 City maintenance and construction tax 411,813.78 650,506.01 Real estate tax 29,633.15 Land use tax 350.00
Stamp tax 153,932.42 133,171.97
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Education surcharge 298,804.76 472,093.58 River toll fee 220,472.16 218,868.28 Others 1,802.31 Total 5,557,677.41 5,762,579.01 6.21 Interest payable
Item 2014.06.30 2013.12.31
1,728,222.22 Interest payable on short loan
Total
1,728,222.22 6.22 Other payables
(1) Other payables
Item 2014.06.30 2013.12.31
Within 1year
78,381,400.88 54,775,559.67 over 1 year
75,762,964.46 81,897,839.15 Total
154,144,365.34 136,673,398.82 (2) Other payables due to shareholders who hold more than5% (including5%) of theGroup‘s shares
Company name 2014.06.30 2013.12.31
27,510,366.87 15,513,083.10 Wazhou Group
Total
27,510,366.87 15,513,083.10 6.22 Non-current liabilities due within one year
(1)Non-current liabilities due within one year
Item Closing Balance Opening Balance
Long-term loan due within one year 150,000,000.00 150,000,000.00 Total 150,000,000.00 150,000,000.00 (2) Long-term loan within one year
Category Closing Balance Opening Balance
Credit loan 150,000,000.00 150,000,000.00 Total 150,000,000.00 150,000,000.00 6.23 Other non-current liabilities
Item Closing Balance Opening Balance
Government subsidy within 1 year
4,011,103.83 4,011,103.83 Total
4,011,103.83 4,011,103.83
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 6.24 Long-term loan
(1) Category of long-term loan
Category 2014.06.30 2013.12.31
Credit loan
90,000,000.00 90,000,000.00 Total
90,000,000.00 90,000,000.00 (2) Details of long-term loan
||||||||
|-|-|-|-|-|-|-|
|Creditor|Starting date|Maturity|Currency|Interest rate (%)|2014.06.30|2013.12.31|
|Import and ExportBank of China|2013-07-23|2015-07-22|RMB||90,000,000.00|—|

6.24 Long-term payables
Items Loan 2013.12.31 Interest Interest 2014.06.30 Loan conditions period rate(%) payable
Liaoyang Bureau
— 100,000.00 — — 100,000.00 —
of Environment
Total — 100,000.00 — — 100,000.00 —
This is the loan for the improvement of forging from Liaoyang Bureau of Environment in 1999. The loandidn‘t repay after the project accomplished.
6.25 Special payables
Items 2013.12.31 Increase Decrease 2014.06.30
Special pollution treatment
221,698.98 221,698.98 100,000.00 100,000.00 Informatization Construction
Total
321,698.98 321,698.98* Special pollution treatment is the environmental protection subsidy granted by Wafangdian Bureau of Finance and Wafangdian Bureau of Environment Protection for the treatment of waste water pursuant to the circularNo.[2004]217. The balance of informatization construction comes fromNo.[2012]917 andNo.[2012]199 Dalian Financial Bureau and Municipal Office of Economic and Information Technology Committee
6.26 Other non-current liabilities
Item 2014.06.30 2013.12.31
Improvement subsidy 1,842,499.97 2,210,999.97
Compensation for plants moving 36,507,183.61 37,859,301.55
Development of intelligent manufacturing equipment subsidies 4,000,000.00 4,000,000.00
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 3,542,400.00 3,778,560.00 Improvement of high-end bearing production subsidies
Support fund due to Liao Yang Company move into Liao Yang
4,584,756.00 4,584,756.00 development zones
Total
50,476,839.58 52,433,617.52 (1) Note: The improvement subsidy is the railway transportation bearing technologic improvement subsidy with total amount of RMB 7,370,000.00 granted by Bureau of Finance Liaoning province. The subsidy should be deferred over the useful life of related asset (i.e. 10 years). the revenue should be recognized at RMB368,500.00 in the period.
The compensation for plants moving is RMB 59,820,000.00. And the amount of making up for the removal loss of the current period is RMB11,143,755.05；The rest of 48,676,244.95 is recognized as the removal compensation related with assets, which is amortized 18 years, according to the new fixed assets formed after the Dalian branch removal. The income confirmed in the report peirod is RMB1,352,117.94
The RMB 4,000,000.00 of development of intelligent manufacturing equipment subsidies is distributed by Dalian City Finance Bureau in 2012.The subsidies are used in the project‖Grinding vehicle integration and processingdigitalization‖. Up to Dec 31, 2012, this project is still construction in process, and no revenue has been recognized in current period.
The RMB 4,723,200 Yuan interest subsidy of―Improvement of bearing base in high-end equipmentsector‖ is distributed by Wafangdian Finance Bureau in 2013 for the year of 2011. The subsidy is specially used to improve the project of improvement of bearing base in high-end equipment sector. The item is amortized within 10 years and 236,160.00RMB is recognized in the current year.
The 4,877,400.00 Yuan,in the other un-flow debt,the―Support fund due to Liao Yang Company move into Liao Yang developmentzones‖ is distributed by the Liaoyang Economic and Development district Bureau of Finance in 2013. no revenue has been recognized in current period..
(2) Government subsidy
Amounts Other
Reason for Government subsidy
Opening Balance
recognized into change Closing
Increase reimburseme category current profit Balance
nt or loss
Improvement subsidy 2,210,999.97 368,500.00 1,842,499.97
Investment Compensation for
37,859,301.55 1,352,117.94 36,507,183.61
Investment plants moving
Development of
intelligent
4,000,000.00 4,000,000.00
Investment manufacturing
equipment subsidies
Improvement of
high-end bearing 3,778,560.00 236,160.00 3,542,400.00
Investment production subsidies
Support fund due to
Liao Yang Company
4,584,756.00 4,584,756.00
Investment move into Liao Yang
development zones
Total 52,433,617.52 1,956,777.94 50,476,839.58
—
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 6.27 Share capital
2011.12.31 Change for current period 2013.12.31 Issui Transferrin
Shareholders ng Distributi g capital
name/category Amounts % new ng reserves Others Subtotal Amounts % share shares to share
s capital
402,600,000. 100.0
Total shares — — — — — 402,600,000.00 100.00 00 0
6.28 Capital reserves
Items 2013.12.31 Increase Decrease 2014.06.30 201,956,446.52 201,956,446.52 Share premium
286,849,101.84 286,849,101.84 Other capital reserves
488,805,548.36 488,805,548.36 Total
6.29 Surplus reserves
Items 2013.12.31 Increase Decrease 2014.06.30
110,852,290.20 110,852,290.20 Statutory surplus reserve
20,590,618.91 20,590,618.91 Discretionary surplus reserve
131,442,909.11 131,442,909.11 Total
6.30 Undistributed profit
Items Amount Provision or distribution% 482,117,978.03
Ending balance of 2013
Closing balance of June 2014 464,668,791.95
6.31 Operating revenue& cost
(1) Operating revenue& cost
Items This period Last period 1,446,138,957.62 1,287,811,506.03 Revenue from main operation
Revenue from other operation
194,874,251.09 259,591,987.34 Cost of main operation
1,490,487,024.71 1,375,879,876.97（2）Main operation - classified according to operation
Unit: Yuan
||||||
|-|-|-|-|-|
|Items|This period||Last period||
||Sales revenue|Cost of sales|Sales revenue|Cost of sales|
|Export|140,992,686.32|134,917,023.46|136,810,764.89|131,410,972.37|
|Transportation|||||
||578,284,516.64|511,593,649.12|472,567,440.34|420,559,469.61|
|vehicle bearings|||||

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report
||||||
|-|-|-|-|-|
|Special use bearings|312,384,405.97|299,963,874.67|259,475,453.06|230,375,981.41|
|General use bearings|361,832,862.04|314,640,313.02|373,504,645.60|328,113,952.07|
|Industrial Operations|52,644,486.65|58,789,239.75|45,453,202.14|51,961,915.61|
|Total|1,446,138,957.62|1,319,904,100.02|1,287,811,506.03|1,162,422,291.07|

（3）Main operation - classified according to products
Unit: Yuan
||||||
|-|-|-|-|-|
|Items|This period||Last period||
||Sales revenue|Cost of sales|Sales revenue|Cost of sales|
|Bearings|1,393,494,470.97|1,261,114,860.27|1,242,358,303.89|1,110,460,375.46|
|Components|52,644,486.65|58,789,239.75|45,453,202.14|51,961,915.61|
|Total|1,446,138,957.62|1,319,904,100.02|1,287,811,506.03|1,162,422,291.07|

（4）Main operation - classified according to region
Unit : Yuan
||||||
|-|-|-|-|-|
|Items|This period||Last period||
||Sales revenue|Cost of sales|Sales revenue|Cost of sales|
|Export|1,305,146,271.30|1,184,987,076.56|1,151,000,741.14|1,031,011,318.70|
|Domestic|140,992,686.32|134,917,023.46|136,810,764.89|131,410,972.37|
|Total|1,446,138,957.62|1,319,904,100.02|1,287,811,506.03|1,162,422,291.07|

 (5) Sales revenue from top 5 customers
Items Sales revenue Accounting for proportion of total Client 1 179,230,758.96 10.92
Client 2 69,191,111.13 4.22
Client 3
55,660,908.66 3.39
Client 4
54,197,059.66 3.30
Client 5
45,635,864.72 2.78
Total 403,915,703.13 24.61
6.32 Operating taxes and surcharges
Items This period Last period Base of calculation Business tax
276,220.06 543,237.27
5% of rental revenue City construction tax
3,438,828.25 3,022,854.34
7% of turnover tax Education surcharge
2,456,305.91 2,140,588.90
5% of turnover tax
Total
6,171,354.22 5,706,680.51
6.33 Selling expenses
Items This period Last period
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 118,732,526.35 102,660,427.82 Selling expenses
Total
118,732,526.35 102,660,427.82 6.34 Administrative expenses
Items This period Last period
35,930,304.10 34,739,784.53 Administrative expenses
Total
35,930,304.10 34,739,784.53 6.35 Financial expenses
Items This period Last period 19,435,381.54 16,880,617.03 Interest expenses
Less: interest income
-6,090,557.66 -6,426,372.50 Add: Exchange losses
307,956.76 1,505,814.08 Less: Exchange income
-2,069,590.92 -262,917.45 352,444.77 508,931.62 Add: Others expenditure
Total
11,935,634.49 12,206,072.78 6.36 Investment income
(1) Sources of investment income
Items This period Last period 680,000.00 Long-term equity investment income under cost method
Long-term equity investment income under equity method
2,261,215.59 5,031,527.35 Total
2,261,215.59 5,711,527.35 (2) Long-term equity investment income under equity method
Items This period Last period Reason for change
Total
2,261,215.59 5,031,527.35
—
Including: —
The associates profits increased
Dalian SKF Wazhou Bearings Co., Ltd.
2,261,215.59 5,031,527.35
compared with last year
6.37 Assets impairment losses
Items This period Last period
Loss of bad debts
1,032,932.36 476,002.39 Total
1,032,932.36 476,002.39 6.38 Non-operating income
(1) Non-operating income list
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report This period Last period
Amounts recognized into Items current non-recurring profit or loss
Gains on disposal of non-current assets 27,802.77 448,926.05
Income from debt restructuring 27,802.77 448,926.05
Government grants 645,467.57 436,592.70
Penalty income 2,376,811.94 2,156,909.17
Others 25,923.28 56,763.03
Total 1,292,533.99 450,373.69
(2) Government grants list
This period Last period Related with Non-recurring Item
asset/income gain/loss Allowance for upgrade 368,500.00 368,500.02 Related with asset
Yes Yes Compensate for Dalian factory relocation 1,352,117.94 1,352,117.94 Related with asset
Yes High-end equipment manufacturing Related with asset
200,000.06
bearing technology upgrade projects
Yes High-end equipment manufacturing
236,160.00 Related with asset
bearing technology upgrade projects
Total
1,956,777.94 1,920,618.02
6.39 Non-operating expenses
This period Last period Amounts recognized into current Items
non-recurring profit or loss
35,866.08
Loss on disposal of non-current assets
Loss from debt restructuring
791,703.96 1,206,652.18
Others
10,669.74 78,603.46
Total
802,373.70 1,321,121.72
6.40 Income tax expenses
(1) Income tax expenses
Items This period Last period
Current income tax expenses
842,546.41 Total
842,546.41 6.41 Calculation of basic earnings per share and diluted earnings per share
Items No. This period Last period
Net profit attributable to shareholders of parent
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 1 -17,449,186.08 22,832,072.23 company
2
Non-operating profit and loss attributable to
3,031,240.97 2,228,442.92 shareholders of parent company
Net profit after deducting non-operating profit and
3=1-2 -20,480,427.05 20,937,895.75 loss attributable to shareholders of parent company
4 402,600,000.00 402,600,000.00 Total number of shares at the period begin
5 - - The number of shares increased due to
transferring capital reserve into share capital or
dividend distribution of shares during report period
(Ⅰ)
6 - - The number of shares increased due to issuance
of new shares or debt for equity swap during the
report period(Ⅱ)
7 - - the number of shares(Ⅱ)from the next month to
the end of the report period for increase of shares
8 - - The number of months decreased due to stock
repurchase or draw back stock during the report
period
9 - - The number of months from the next month to the
end of the report period for decrease of shares
10 - - The number of shares for decrease of shares
11 - - Duration of the period in terms of month
12=4+5+6×7÷ 11
Weighted average number of ordinary shares
402,600,000.00 402,600,000.00 issued out
-8×9÷ 11-10
EPS– basis(Ⅰ)
13=1÷ 12 -0.04 0.06 EPS– basis(Ⅱ)
14=3÷ 12 -0.05 0.05 Potential diluted interests of ordinary shares
recognized as expense
15 - - Transfer fee
16 - - EIT rate
17 - - Weighted average amount of ordinary shares
increased due to warrant, share options
18 - - EPS– diluted(Ⅰ)
19=[1+(15-16)×(1-17)] -0.04 0.06 EPS– diluted(Ⅱ)
÷(12+18)
6.42 Notes to cash flow statement
(1) Cash receipt/payment of other operating/investing/financing activities
1) Other cash received relating to operating activities
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Items amount
Interest income
160,754.26
Allowance for exhibition place
20,034.00
Waste material income
768,913.10
5,907,014.36
Return of reserve fund, deposit etc.
Total
6,856,715.72
2) Other cash paid relating to operating activities
Items amount
Travel expenses 12,375,169.88
Rent expense 16,938,756.96
Freight service expense 10,718,256.31
Conference expense 8,359,293.55
Collection and payment for others 9,780,040.50
Office expense 4,157,457.04
Market development expense 1,744,933.96
Guard and fire fighting expense 1,650,000.00
Business promotion expense 3,649,883.73
Total 19,867,301.34
6.4.3 Supplementary information of consolidated cash flow statement
Items This period Last period
1. Adjusting net profit into cash flows of operating activities:
Net profit
-17,449,186.08 22,832,072.23
Add: Provision for impairment of assets
1,032,932.36 476,002.39
38,102,595.42 38,647,366.84
Depreciation of fixed assets
Amortization of intangible assets
2,303,934.16 2,281,399.02
Amortization of long-term deferred expenses
70,860.18 33,915.18
Losses on disposal of fixed assets, intangible assets, and
-27,802.77 -413,059.97
long-term assets (income listedwith‖-‖)
11,935,634.49 12,206,072.78
Financial expense (income listedwith‖-‖)
Investment loss (income listedwith‖-‖)
-2,261,215.59 -5,711,527.35
Decrease of inventory (increase listedwith‖-‖)
70,086,476.63 -35,392,230.32
Decrease of operating receivables (increase listedwith‖-‖)
-190,068,176.59 -221,007,090.03
142,437,198.09 165,753,664.30
Increase of operating payables (decrease listedwith‖-‖)
Net cash flows arising from operating activities
56,163,250.30 -20,293,414.93
2. Significant investment and financing activities unrelated to
cash income and expenses
3. Net increase (decrease) of cash and cash equivalent
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 106,900,170.43 77,158,499.73
Ending balance of cash
Less: Opening balance of cash
60,616,759.13 60,004,306.25
Add: Ending balance of cash equivalent
Less: Opening balance of cash equivalent
46,283,411.30 17,154,193.48
Net increase of cash and cash equivalent
(3) Cash and cash equivalents
Items This period Last period
Cash
106,900,170.43 60,616,759.13
144,752.65
Including: Cash on hand
Bank deposit used for paying at any moment
106,755,417.78
Other cash used for paying at any moment
Cash equivalents
Including: Bond investment due within 3 months
Closing balance of cash and cash equivalents
106,900,170.43 60,616,759.13
The difference between cash and cash equivalent and cash at the end of this year refers to notes 6.1.
7. Related parties relationship and transactions
7.1 Related parties relationship
(1) Parent company and ultimate controller
1) Parent company and ultimate controller
Parent Enterprise Registered address Business nature Legal Organization company nature representative code No. 1 North Gongji Manufacture and sales
State-owned
Wazhou Group Street, Wafangdian of bearing and Cong Hong 24238666-3 Limited
City, Dalian other equipments
2) Registered capital and its movement of parent company
Parent company 2013.12.31 Increase Decrease 2014.06.30
Wazhou Group 413,793,100.00 — — 413,793,100.00 3) Share held and its movement of parent company
Parent company Amount Shareholding(%)
2014.06.30 2013.12.31 2014.06.30 2013.12.31
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Wazhou Group 244,000,000.00 244,000,000.00 60.61 60.61 (2) Subsidiaries
Subsidiaries Enterprise Registered address Legal representative Business nature Registered nature
Manufacture and
No.61, Weiguo road,
Liaoyang sales of bearing
Limited Baita district Liaoyang Shao Yang
Bearing and machine
city
manufacture 19,350,000.00 No.12, Shisanli Manufacture and
Dalian Electrical yongsheng street, sales of bearing
Limited Shao Yang
10,000,000.00 Equipment free trade zone Dalian and machine
city manufacture
(Continue )
Subsidiary Organization code Stock holding percentage
Voting percentage 12199127-7
Liaoyang Bearing 100.00 100.00 Dalian Electrical Equipment
55980608-0
100.00 100.00 (3) Associates
1) Associates
Associates Enterprise Registered address Legal representative Business nature nature
Chinese-forei No.1, Phrase 1, Gongji
Dalian SKF Wazhou Manufacture and sales of gn equity Street, Wafangdian Cong Hong
Bearings Co., Ltd. ball-surface rolling bearing joint venture North
(Continued)
Associates Registered capital Share holding% Voting% Organization code Dalian SKF Wazhou
Bearings Co., Ltd. 194 million 49.00 49.00 70218806-0 (4) Other related parties
Related party Organization code Name of related party
relationship
Other companies Dalian Wazhou Manufacturing Equipment Co., Ltd 24239291-6 controlled by the same
Wazhou Steel Ball Company 76078283-4 parent company and
Wazhou Exact Forge Ltd., 76079407-7 ultimate controlling party
Wazhou Group Turnplate Bearing Ltd 66112524-9 Wazhou Group Exact Transmission Bearing Co., Ltd 66582213-x Wazhou Group Equipment Technology engineering Co., Ltd 59443405-9
Wazhou Group Special Precision Bearing Co., Ltd. 56552248X
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Wazhou Group American Bearing Co., Ltd
Others Dalian Wazhou Jinzhou Machinery Co., Ltd 57605032-6 Dalian Wazhou Fengyuan Machinery Co., Ltd 57605568-8 7.2 Related party transactions
(1) Purchase of goods
Related party type and name This period Last period
Amount % Amounts %
Associates: — — — — Including: Dalian SKF Wazhou Bearings Co., Ltd.
91,479,064.505.29% 112,310,394.31 6.69% Other companies controlled by the same parent
company
Including: Wazhou Steel Ball Company
3,096,656.300.18% 3,389,924.16 0.20% Wazhou Exact Forge Ltd.,
136,587,261.897.89% 119,126,487.11 7.09% Dalian Wazhou Manufacturing
11,307,415.150.65% 11,489,432.22 0.68% Equipment Co., Ltd
112,108,498.006.48% 53,622,175.28 3.19% Wazhou Group Turnplate Bearing Ltd
Wazhou Group Exact Transmission
53,168,501.143.07% 64,541,260.21 3.84% Bearing Co., Ltd
Wazhou Group Special Precision
313,525.57 0.02% Bearing Co., Ltd.
Wazhou Group Equipment Technology
15,432,733.330.89% 6,973,184.18 0.42% engineering Co., Ltd
Dalian Wazhou Fengyuan Machinery
71,125,192.004.11% 52,435,533.52 3.12% Co., Ltd
Dalian Wazhou Jinzhou Machinery
68,905,658.173.98% 79,578,698.23 4.74% Co., Ltd
Total
TheCompany‘s purchase price from Dalian SKF Wazhou Bearings Co., Ltd was the contract price determined in 2002; others related party purchase price was market price.
(2) Sales of goods
Related party type and company This period Last period
Amount % Amount % Parent company:
622,270.14 0.04% 336,292.250.02% Including: Wazhou Group
Associates:
Including: Dalian SKF Wazhou Bearings Co., Ltd.
34,129,174.94 2.08% 24,494,835.471.58%
Other companies controlled by the same parent
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report company
Including: Wazhou Steel Ball Company
3,886,120.88 0.24% 2,859,622.430.18% Wazhou Exact Forge Ltd.
179,230,758.96 10.92% 210,280,229.1713.59% Dalian Wazhou Manufacturing Equipment
661,955.32 0.04% 1,048,483.890.07% Co., Ltd
386,515.20 0.02% 10,719,178.300.69% Wazhou Group Turnplate Bearing Ltd
Wazhou Group Exact Transmission
13,147,922.82 0.80% 15,061,881.250.97% Bearing Co., Ltd
Wazhou Group Special Precision Bearing
1,973,843.00 0.12% 1,912,565.790.12% Co., Ltd
Wazhou Group American Bearing Co., Ltd
11,957,485.95 0.73%
Other Related parties
Dalian Wazhou Fengyuan Machinery Co.,
152,612.23 0.01% 3,055,438.890.20% Ltd
TheCompany‘s sales price of working in progress and raw materials to Dalian SKF Wazhou Bearings Co., Ltd was the contract price determined in 2002; the sales price of raw materials to Wazhou Steel Ball Company and Wazhou Exact Forge Ltd was the contract plus the expense occurred in the purchase on behalf of the customers; others related party sales price was market price.
(3) Provideing service
Related party type and company This period Last period
Amount % Amount % Associates:
Including: Dalian SKF Wazhou Bearings Co., Ltd.
1,925,926.98 0.12% 2,092,088.470.13% Other companies controlled by the same parent
company
Including: Wazhou Steel Ball Company
501,943.65 0.03% 367,343.500.02% Wazhou Exact Forge Ltd.
97,256.600.01% Wazhou Group Exact Transmission
1,349,653.11 0.08% 1,469,308.790.09% Bearing Co., Ltd
Wazhou Group Special Precision Bearing
249,363.99 0.02% 76,417.670.00% Co., Ltd
Other Related parties
Dalian Wazhou Jin Zhou Machinery Co.,
202,486.37 0.01% 1,583,618.900.10% Ltd
7.3 Related parties rent
7.4 Balances with related parties
(1) Accounts receivable due from related parties
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Related party
End of June 2014 Beginning of the year 6,903,361.6 6,903,361.6 Parent company
Including: Wazhou Group
Other companies controlled by the same parent company
Wazhou Group Special Precision Bearing Co., Ltd
7,627,664.68 7,627,664.68 Wazhou Group American Bearing Co., Ltd
7,733,293.77 7,733,293.77 (2)Accounts payable due to related parties
Related party
This period Last period
Associates
Including: Dalian SKF Wazhou Bearings Co., Ltd.
81,721,462.87 70,617,717.03 Other companies controlled by the same parent company
Including: Wazhou Exact Forge Ltd.
19,899,619.78 41,757,360.03 125,779,899.15 61,781,330.93 Wazhou Group Turn plate Bearing Ltd
Wazhou Steel Ball Company
4,081,797.37 1,498,795.06 Wazhou Group Exact Transmission Bearing Co., Ltd
102,208,085.78 94,934,478.93 Dalian Wazhou Manufacturing Equipment Co., Ltd
8,271,090.75 4,923,156.28 Wafangdian Bearing Group Equipment Technology
9,480,662.96 24,955,761.96 Engineer Co., Ltd
37,952,755.32 12,911,691.20 Dalian Wazhou Jinzhou Machinery Co., Ltd
29,534,525.26 3,731,824.50 Dalian Wazhou Fengyuan Machinery Co., Ltd
8. Contingency
As at June 30,2014, the Group does not have any other contingencies.
9. Commitment
As at June 30,2014, the Group does not have any other significant commitments.
10. Events after the balance sheet date
11. Other significant events
11.1 Debt restructuring
11.2 Assets rent out under operating lease
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report 12. Notes to the main items of the financial statements of parent company
12.1 Accounts receivable
(1) Accounts receivable category
2014.06.30
Items Booking balance Provision Amount % Amount % Accounts receivable with individual significant amount and
3,910,007.43 0.29% 3,910,007.43 100.00% identification separately bad debt provision
Accounts receivable accrued bad debt provision by portfolio
Accounting aging portfolio
1,295,267,075.59 96.88% 41,977,100.39 3.24% Related parties portfolio
25,994,538.42 1.95%
Risk-free portfolio
1,321,261,614.01 98.83% 41,977,100.39 3.18% Subtotal of portfolio
Accounts receivable with individual insignificant amount and
11,796,099.81 0.88% 11,796,099.81 100.00% identification separately bad debt provision
Total
1,336,967,721.25 -- 57,683,207.63 -- (Continued)
2013.12.31
Items Booking balance Provision Amount % Amount % Accounts receivable with individual significant amount
3,910,007.43 0.33% 3,910,007.43 100.00% and identification separately bad debt provision
Accounts receivable accrued bad debt provision by
portfolio
Accounting aging portfolio
1,156,136,444.2396.55% 41,988,314.44 3.63% Related parties portfolio
25,628,530.42 2.13%
Risk-free portfolio
1,181,764,974.6598.68% 41,988,314.44 3.55% Subtotal of portfolio
Accounts receivable with individual insignificant
amount and identification separately bad debt 11,796,099.81 0.99% 11,796,099.81 100.00% provision
Total
1,197,471,081.89 -- 57,694,421.68 --
1) Individually significant amounts of accounts receivable accrued the bad debt provision separately at the end of June 30,2014
Provision for Proportion
Debtors name Booking balance Reasons for provision
bad debts (%)
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Baoding North China Machine& A/R with over 5 years aging, 3,910,007.43 3,910,007.43 100.00%
Electronic Equipment Co., Ltd unlikely to be collected Total
3,910,007.43 3,910,007.43 —
2) Accounts receivable accrued the bad debt provisions in the portfolio as accounting aging analysis method
2014.06.30 2013.12.31
Items
Amount % Provision Amount % Provision Within 1 year
1,130,694,339.88 84.57% 11,306,943.40 984,412,200.17 82.21% 9,844,122.00 1-2 years
88,557,885.45 6.62% 4,427,894.27 92,785,902.07 7.75% 4,639,295.10 2-3 years
39,217,208.03 2.93% 7,843,441.61 39,880,912.19 3.33% 7,976,182.44 Over 3
36,797,642.23 2.75% 18,398,821.12 39,057,429.80 3.26% 19,528,714.90 years
3) Individually insignificant amount accounts receivable but accrued bad debt provision separately at the end of June 30,2014 Provision for Proportion
Company name Booking balance Reasons for provision
bad debts (%)
Shenyang Sewerage A/R with over 5 years aging,
2,706,703.13 2,706,703.13 100.00%
Equipment Co., Ltd unlikely to be collected
Shen Yang General A/R with over 3 years aging,
2,452,138.58 2,452,138.58 100.00%
unlikely to be collected
Bearing Co., Ltd
Tiefa coal sector A/R with over 3 years aging,
2,352,760.15 2,352,760.15 100.00%
unlikely to be collected
Group Company
Shuangyashan Mining
A/R with over 3 years aging,
industry Group
1,368,257.55 1,368,257.55 100.00%
unlikely to be collected
Company
Chongqing Sailimeng A/R with over 3 years aging,
650,758.88 650,758.88 100.00%
unlikely to be collected
electrical machine LLC
Qingdao Qingte A/R with over 3 years aging,
590,898.99 590,898.99 100.00%
unlikely to be collected
Zhongli axle Co., Ltd
Other sporadic A/R with over 5 years aging,
1,674,582.53 1,674,582.53 100.00%
accounts receivable unlikely to be collected
Total
11,796,099.81 11,796,099.81 -- —
(2) Write-off of accounts receivable during the reporting period
|||||||
|-|-|-|-|-|-|
||||||Related business or|
|Name|Properties||Amount|Reason||
|||Time|||not|
|China Heavy Automobile Ji||||Account difference||
||Goods selling||920,469.22|||
|Nan Bridge-box Co.,Ltd||||over 8 years|No|
|Nan Jing High Speed Gear||||||
||Goods selling||41,938.02|Quality problem|No|
|Manufactory Co.,Ltd||||||
|Nan Jing high-extractive Gear||||||
||Goods selling||80,958.78|Quality problem|No|
|Group Company||||||

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report
|||||||
|-|-|-|-|-|-|
|Tong Hua Oil Chemical||||Account difference||
||Goods selling||780.39||No|
|industry Machinery||||over 8 years||
|合计|--|--|1,044,146.41|--|--|

 (3) Accounts receivable due from shareholders holding over5% (including5%) of theCompany‘s shares
This period Last period
Debtor name
Amount Provision for bad debt Amount Provision for bad debt Wazhou Group
6,903,361.61 6,903,361.61
Total
6,903,361.61 6,903,361.61
(4)Accounts receivable for the top 5 companies
Relationship with
Percentage Company name Amount Aging
the Company
in the totalAR(%) TOP 1
Unrelated party
45,853,594.65
Within 1 year
3.43% Within 1 year
TOP 2 42,696,266.67 3.19% Unrelated party
1-2years
TOP 3
Unrelated party
30,633,004.16
Within 1 year
2.29% TOP 4
Unrelated party
29,979,922.68
Within 1 year
2.24% 28,630,199.97 2.14% TOP 5 Unrelated party Within 1 year;1-2years
Total —
177,792,988.13
—
13.29% (5)Accounts receivable due from related parties
Relationship with the
Company name Amounts % in the total AR
Company
Wazhou Group Parent company
6,903,361.61 0.52% Wazhou Group Special Precision Other companies controlled by
7,627,664.68 0.57% Bearing Co., Ltd
the same parent company
Other companies controlled by
Wazhou Group American Co., Ltd 7,733,293.77 0.58% the same parent company
Liao Zhou
Subsidiary
3,730,218.36 0.28% Total —
25,994,538.42 1.95% 12.2 Other receivables
(1) The category of other receivable
2014.06.30
Items Booking balance Provision
Amount % Amount %
Other receivables with individual
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report significant amount and identification
separately bad debt provision
Other receivables accrued bad debt
provision by portfolio
Accounting aging portfolio
11,972,879.14 57.89% 1,347,121.11 11.25%
Related parties portfolio
8,708,936.70 42.11%
Risk-free portfolio
Subtotal of portfolio
20,681,815.84 100.00% 1,347,121.11 6.51%
Other receivables with individual
insignificant amount and
identification separately bad debt
provision
Total
20,681,815.84 -- 1,347,121.11 --
（Continued）
2013.12.31
Items Booking balance Provision
Amount % Amount %
Other receivables with individual
significant amount and identification
separately bad debt provision
Other receivables accrued bad debt
provision by portfolio
Accounting aging portfolio
11,844,521.56 44.01% 1,347,121.11 11.37%
Related parties portfolio
15,066,804.72 55.99%
Risk-free portfolio
Subtotal of portfolio
26,911,326.28 100.00% 1,347,121.11 5.01%
Other receivables with individual
insignificant amount and identification
separately bad debt provision
26,911,32
Total 26,911,326.28 -- 1,347,121.11
6.28
1) Other receivable accrued the bad debt provisions in the portfolio as accounting aging analysis method
2014.06.30 2013.12.31
Items
Amount % Provision Amount % Provision
37.82
Within 1 year
7,821,512.86
%
78,215.13 7,875,751.87 29.27% 78,757.52 1-2 years
1,570,443.29 7.59% 78,522.16 1,373,068.49 5.10% 68,653.42
2-3 years
333,592.25 1.61% 66,718.45 327,134.79 1.22% 65,426.96
2,247,330.74 10.87 1,123,665.37 2,268,566.41 8.42% 1,134,283.21
Over 3 years
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report%
11,972,879.14 -- 1,347,121.11 11,844,521.56 -- 1,347,121.11 Total
No other receivable is due from shareholders holding over5% (including5%) of theCompany‘s shares at the end of period. 2) Other receivables from the top 5 debtors
Relationship with the
Percentage Company name Amount Aging
Company
in the totalAR(%) Top 1
Unrelated party
5,843,915.27
Within 1 year
28.30% Within 1 year
Top 2
Unrelated party
370,000.00 1.80% Top 3
Unrelated party
150,000.00
Within 1 year
0.70% Top 4 100,000.00
Within 1 year
0.50% Unrelated party
Within 1 year
Top 5
Unrelated party
100,000.00 0.50% Total —
6,563,915.27
—
31.80% 3) Other receivables includes the following foreign currency balance
12.3 Long-term equity investments
(1) Long-term equity investments under cost and equity method
Investee Share Voting% Original
holding% Amounts
Cost method — — — Shanghai ME machine-electrical equipment chain
4.76 4.76 2,000,000.00 Ltd.
Liaoyang Bearing 100.00 100.00 17,337,259.95 Dalian Wazhou Precision Motor Car Bearing
100.00 100.00 10,478,956.37 Company Limited
Equity method — — — Dalian SKF Wazhou Bearings Co., Ltd. 49.00 49.00 95,060,000.00 Total — — 124,876,216.32 (Continued)
Investee 2013.12.31 Increase Decrease 2014.06.30 Cash dividends in report period Cost method — — — — — Shanghai ME
machine-electrical 2,000,000.00 — — 2,000,000.00 —
equipment chain Ltd.
Liaoyang Bearing 17,337,259.95 — — 17,337,259.95 —
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Dalian Wazhou Precision
Motor Car Bearing 45,478,956.37 — — 45,478,956.37 — Company Limited
Equity method — — — — — Dalian SKF Wazhou
99,734,229.12 2,261,215.59
—
101,995,444.71 — Bearings Co., Ltd.
Total 164,550,445.44 2,261,215.59 166,811,661.03 — 12.4 Operating revenue and cost
Items This period Last period
Revenue from main operation
1,445,719,557.96 1,284,660,133.07 Revenue from other operation
197,741,808.32 262,567,202.47 1,643,461,366.28 1,547,227,335.54 Cost of operation
Total
1,494,654,881.09 1,376,283,798.47 (1)Main operation - classified according to Industries
This period Last period
Industries
Sales revenue Cost of sales Sales revenue Cost of sales Export
140,992,686.32 135,561,738.21 136,810,764.89 132,713,666.62 Domestic
Including: Transportation
578,284,516.64 511,593,649.12 472,567,440.34 420,559,469.61 vehicle bearings
Special use bearings
312,384,405.97 299,963,874.67 259,475,453.06 230,375,981.41 General use bearings
360,675,310.32 314,570,263.39 370,065,951.11 324,731,071.28 Industrial Operations
53,382,638.71 59,483,712.85 45,740,523.67 52,242,943.03 1,445,719,557.96 1,321,173,238.24 1,284,660,133.07 1,160,623,131.95 Total
(2) Main operation - classified according to product
This period Last period
Industries
Sales revenue Cost of sales Sales revenue Cost of sales 1,392,336,919.25 1,261,689,525.39 1,238,919,609.40 1,108,380,188.92 Bearing
Component
53,382,638.71 59,483,712.85 45,740,523.67 52,242,943.03 Total
1,445,719,557.96 1,321,173,238.24 1,284,660,133.07 1,160,623,131.95 (3 Main operation - classified according to area
This period Last period
Industries
Sales revenue Cost of sales Sales revenue Cost of sales Export
140,992,686.32 135,561,738.21 136,810,764.89 132,713,666.62 Civil
1,304,726,871.64 1,185,611,500.03 1,147,849,368.18 1,027,909,465.33 1,445,719,557.96 1,321,173,238.24 1,284,660,133.07 1,160,623,131.95 Total
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report (4)Sales revenue from top 5 customers
Items Sales revenue Accounting for proportion of total
Client 1
179,230,758.96 10.91% Client 2
69,191,111.13 4.21% Client 3 55,660,908.66 3.39% Client 4 54,197,059.66 3.30% Client 5 45,635,864.72 2.78% Total
403,915,703.13 24.59% 12.5 Investment income
(1) Source of investment income
Items This period Last period
Income from long-term equity investments under
680,000.00
cost method
Income from long-term equity investments under
2,261,215.59 5,031,527.35
equity method
Total
2,261,215.59 5,711,527.35
(2) Long-term equity investment income under equity method
Items This period Last period Reason for change
Total —
The associates
Including: Dalian SKF Wazhou profits decreased
2,261,215.59 5,031,527.35
Bearings Co., Ltd. compared with last
year
12.6 Supplementary information of consolidated cash flow statement of parent company
Items This period Last period
1. Adjusting net profit into cash flows of operating
— —
activities:
Net profit
-10,621,631.63 32,164,155.52
1,032,932.36 476,002.39
Add: Provision for impairment of assets
Depreciation of fixed assets
33,030,705.74 33,779,270.91
Amortization of intangible assets
2,137,554.12 2,115,032.69
Amortization of long-term deferred expenses
70,860.18 33,915.18
Losses on disposal of fixed assets, intangible assets, and
-253,987.77
long-term assets (income listedwith‖-‖)
Financial expense (income listedwith‖-‖)
12,175,479.92 12,170,694.57
Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report -2,261,215.59 -5,711,527.35
Investment loss (income listedwith‖-‖)
Decrease of inventories (increase listedwith‖-‖)
58,967,776.59 -45,669,907.24
Decrease of operating receivables (increase listedwith‖-‖)
-195,520,364.02 -198,479,075.80
Increase of operating payables (decrease listedwith‖-‖)
158,523,624.37 148,985,566.98
57,535,722.04 -20,389,859.92
Net cash flows arising from operating activities
2. Significant investment and financing activities unrelated
to cash income and expenses
3. Net increase (decrease) of cash and cash equivalent
Ending balance of cash
104,313,968.24 74,651,596.06
56,478,876.74 57,459,164.76
Less: Opening balance of cash
Net increase of cash and cash equivalent
47,835,091.50 17,192,431.30
Supplementary information to the financial statements
1. Non-operating profit or loss
Items This period Last period
27,802.77
Gain or loss from disposal of non-current assets
Government grants recorded into profit or loss during
2,376,811.94
current period
Profit or loss from debts restructuring
-146,236.39
Others non-operating revenue and expense besides
1,307,787.53
the above items
Subtotal
Effect from income tax
534,924.88
Effect of minority interests (after tax)
Total
3,031,240.97 --
2
(1). Differences in net profit and net asset under domestic and international accounting standards In RMB Yuan
||||||
|-|-|-|-|-|
||Net profit attributable to the shareholders of the||Net asset attributable to the shareholders of||
||listed company||the listed company||
||Current term|Amount of last term|End of term|Beginning of term|
|On Chinese Accounting|-17,449,186.08|22,832,072.23|1,487,517,249.42|1,504,966,435.50|
|Standard|||||
|Items and amounts adjusted on IAS|||||
|Under International|||||
||-17,449,186.08|22,832,072.23|1,487,517,249.42|1,504,966,435.50|
|Accounting Standard|||||

(2). Differences in net profit and net asset under domestic and overseas accounting standards
In RMB Yuan
|||||
|-|-|-|-|
|Net profit attributable to the shareholders of the||Net asset attributable to the shareholders of||
|listed company||the listed company||
|Current term|Amount of last term|End of term|Beginning of term|

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report
||||||
|-|-|-|-|-|
|On Chinese Accounting|-17,449,186.08|22,832,072.23|1,487,517,249.42|1,504,966,435.50|
|Standard|||||
|Accounts and amounts adjusted according to overseas accounting standard|||||
|On IAS|-17,449,186.08|22,832,072.23|1,487,517,249.42|1,504,966,435.50|

 2. Return on equity and earnings per share
Weighted average Earnings per share (EPS) Profit of report period return on net assets(%) Basic Diluted EPS EPS
Net profit attributable to shareholders of parent company
-1.17% -0.04 -0.04 Net profit after deducting non-recurring gains and losses
-1.37% -0.05 -0.05 attributable to shareholders of parent company
3. Explanation for the abnormity and change of main items of financial statements
|||||||
|-|-|-|-|-|-|
|No.|Project|OpeningBalance|ClosingBalance|Percentage|Reason|
|1|Monetary fund|14,671.9|8,068.7|81.8%|Mainly customer receivable increased and at the same timecompression currency payment to supplier.|
|2|Notesreceivable|15,222.2|10,033.0|51.7%|In this term we increased long note for suppliers, reduce sightbill payment, receivable increased at the same time, causinglarger notes receivable year growth.|
|3|Accountsreceivable|130,138.16|113,860.6|14.3%|Mainly the risk-free host customers increase goods, from theindustry analysis, accounts receivable rise is mainlyconcentrated in the railway industry, cars and wind power.|
|4|Otherreceivables|2,259.83|2,972.7|-24.0%|Mainly company carried out unauthorized to offset the input tax9.21 million Yuan of the end of 2013|
|5|inventory|112,664.8|119,673.4|-5.9%|Mainly company strengthens to manage contracts, reducethe finished products 80.24 million that is less than at the start ，the company strengthen production management, cut theproduction, reduce production fund for the year 7.51 million, andreserves increase from a year earlier|
|6|Projects underconstruction|35,355.4|30,317.2|16.6%|Unfinished project including: precision rolling body transform anincrease of 23.18 million Yuan, a finished product transform anincrease of 8.09 million, seven product transformation, anincrease of 7.87 million medium-sized deep groove ball bearingproduction line an increase of 7.19 million.|
|7|Notes payable|24,979.7|9,324.7|167.9%|Mainly this increase for long note when payment to supplier,lead to growth larger notes payable .|
|8|Accountspayable|126,193.6|116,646.6|8.2%|Compression for the customer payment, annual growth is inaccounts payable|
|9|Operatingincome|164,101.3|154,740.3|6.0%|company adjusts structure, increases the orders , adjusts thestructure of the market, expands customers and channels,makes this bearing revenue grew by 12.3% year on year.|
|10|Operating cost|149,048.7|137,588.0|8.3%|prices of company product is fall 4.5%, the reduce profit is34.1 million Yuan. The costs is 82.5 Yuan, fell to 1.4 Yuan,including: one hundred Yuan output value is expected to cost is48.7 Yuan, fell to 1.6 Yuan.|
|11|Cost of sales|11,873.3|10,266.0|15.7%|Salary is an increase of 4.08 million Yuan, the freight is anincrease of 7.85 million Yuan, the sea freight is an increase of1.85 million Yuan, use of trademark is an increase of 1 millionYuan.|

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report
|||||||
|-|-|-|-|-|-|
|||103.3|47.6|117.0%||
|13|Return oninvestment|226.1|571.2|-60.4%|Mainly because the SKF Wazhou profit ability decreasesharply,which make the investment income decrease.Besides, inlast period, the company received the 2008 to 2011 dividendfrom ME with amount of 0.68 million Yuan.|
|14|Non-operatingincome|436.9|355.0|23.1%|Mainly because Liao Zhou write-off account payable increasewith amount of 1.21 million Yuan.|
|15|Non-businessexpenses|80.2|132.1|-39.3%|The loss from debt recombined decrease with 0.41 million Yuancompared with last period.|
|16|Income taxexpenses|0.0|84.3|-100.0%|Mainly because the company is loss, the income tax is notwithdrawn.|
|17|Net profit|(1,744.9)|2,283.2|-176.4%|Mainly because the main business gross rate decreases, profitspace compressed. In the last half year, the main businessgross rate is 8.7%, which decrease 1% compared with lastperiod.|
|18|The cash byselling goods,providing laborservicesreceived|69,901.1|63,744.7|9.7%|Mainly because the cash from the clients increase.|
|19|Paid to theworker and thecash to pay forthe worker|17,129.2|14,974.4|14.4%|1,pay the benefit award with amount of 5.78 millionYuan;2,salary increase with amount of 10 million Yuan;3,pay thesalesperson Q1 performance salary with amount of 0.84 millionYuan;4,the sale subsidiary pay the performance salary withamount of 2 million Yuan.|
|20|Obtaininvestmentincome receivedin cash|24.0|68.0|-64.7%|Last period the company received the 2008 to 2011 dividendfrom ME with amount of 0.68 million Yuan, in the report periodreceive 2012 dividend with amount of 0.24 million Yuan(this isaccounted in 2013).|
|21|Construction offixed assets,intangibleassets andother long-termassets and paycash|3,234.9|107.6|2907.5%|Mainly because pay the Germany import machines with amountof 19.51 million Yuan, and the note payable expire with amountof 8.67 million Yuan.|
|22|Borrow moneyreceived in cash|33,800.0|51,600.0|-34.5%|Mainly affected by loan transferred, which make the cashreceived in the period decrese.|
|23|Other related tothe financingactivities ofcash received|0.0|472.3|-100.0%|In last period, the company received the financial subsidytransferred from WBGC with amount of 4.7232 million Yuan.|
|24|Repayment ofthe debtpayment bycash|29,932.3|46,685.0|-35.9%|Mainly affected by loan transferred, which make the cash shallpaid for loan in the period decrease.|
|25|The impact ofexchange ratemovements ofcash and cashequivalents|116.4|-48.07|-342.1%|Mainly because the change rate in the report period increase,which make CNY devalue, the change income increase.|

Wafangdian Bearing Co.,Ltd（WazhouB） 2014 Mid-year Report Chapter X. List of reference documents
||
|-|
|List of reference documents|
|1. The Accounting statements which is with the signatures and seals of the legal representative, finance controller and thedirector of accounting department of the Company.|
|2. Original documents and notices of the Company disclosed in newspapers designated by the Security SupervisoryCommittee of China in report period.|