Auditors' Report (English Translation for Reference Only) XYZH
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Wafangdian Bearing Co., Ltd(Wazhou B) 2012 Annual Report Auditors’ Report (English Translation for Reference Only) XYZH/2012DLA1044-1 To the Shareholders of Wa Fang Dian Bearing Company Limited We have audited the accompanying financial statements (consolidated and parent company) of Wa Fang Dian Bearing Company Limited (―the Company‖), which comprise the balance sheet as at 31 Dec. 2012, and the income statement, and the cash flow statement, and the statement of changes in shareholders‘ equity for the year then ended, and notes to the financial statements. Management's Responsibility for the Financial Statements The Company‘s management is responsible for the preparation and fair presentation of these financial statements. This responsibility includes: (1) preparing these financial statements in accordance with Accounting Standards for Business Enterprises issued by the Ministry of Finance of the People‗s Republic of China, and fairly presenting them; (2) designing, implementing and maintaining internal control which is necessary to enable that the financial statements are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with China Standards on Auditing for Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements comply with the requirements of the Accounting Standards for Business Enterprises issued by the Ministry of Finance of the People‘s Republic of China and present fairly, in all material respects, the financial position of the Company as at 31 Dec.2012, and financial performance and cash flows of the Company for the year then ended. ShineWing Certified Public Accountants Chinese CPA: Linli Chinese CPA: Wangdong Beijing. China 19 April 2013 43 Wafangdian Bearing Co., Ltd(Wazhou B) 2012 Annual Report II. Financial Statement 1. Consolidated Balance Sheet. Unit: RMB Yuan Item Opening Balance Closing Balance Current assets : Monetary fund 101,233,214.04 102,268,754.34 Financial assets held-for-trading Bills receivable 113,253,584.93 134,514,385.38 Account receivable 1,077,510,354.13 948,225,066.12 Account paid in advance 33,883,731.60 52,716,821.34 Interest receivable Other receivables 19,891,810.30 15,528,274.87 Inventory 1,156,565,201.60 1,196,538,970.43 Non-current assets due within 1 year Other current assets 2,672,185.24 5,729,224.48 Total current assets 2,505,010,081.84 2,455,521,496.96 Non-current assets Financial assets available-for-sale Investments held-to-maturity Long-term receivable Long-term equity investment 97,194,641.13 92,489,891.01 Investment property Fixed assets 620,008,753.04 581,464,704.26 Construction in progress 240,524,680.98 261,981,026.05 Construction materials Fixed assets disposal Biological assets Gas and petrol assets Intangible assets 143,996,714.42 131,979,409.06 Development expenditure Goodwill Long-term prepaid expense 792,683.11 869,505.00 Deferred tax assets 10,832,623.03 9,489,483.24 Other non-current assets Total non-current assets 1,113,350,095.71 1,078,274,018.62 Total assets 3,618,360,177.55 3,533,795,515.58 Current liabilities Short-term loan 588,000,000.00 523,590,235.14 Note payable 221,485,454.42 94,100,000.00 Accounts payable 968,244,826.46 1,039,300,493.29 Accounts received in advance 47,450,550.80 50,407,895.65 Commission charge payable Accrued payroll 21,960,176.22 29,508,584.94 Tax payable -411,670.20 1,923,642.12 Interest payable Dividends payable Other payables 143,928,598.47 116,242,681.68 Non-current liabilities due within I year 138,000,000.00 Other current liabilities Total current liabilities 1,990,657,936.17 1,993,073,532.82 Non-current liabilities Long-term loan 60,000,000.00 Debenture payable Long-term payables 100,000.00 100,000.00 Special payables 321,698.98 221,698.98 Contingent liabilities 44 Wafangdian Bearing Co., Ltd(Wazhou B) 2012 Annual Report Deferred tax liabilities 393,621.42 246,635.79 Other non-current liabilities 50,952,773.24 50,394,009.12 Total non-current liabilities 111,768,093.64 50,962,343.89 Total liabilities 129,292,318.86 2,044,035,876.71 Owner’s equity (shareholders’ equity) Capital stock 402,600,000.00 402,600,000.00 Capital public reserves 485,691,050.47 485,691,050.47 Less: treasury share Surplus reserve 129,292,318.86 123,972,268.17 Undistributed profit 498,309,498.06 477,496,320.23 Difference of foreign currency translation Equity attributable to parent company 1,515,934,147.74 1,489,759,638.87 Minority interest Total owner’s equity 1,515,934,147.74 1,489,759,638.87 Total owner’s equity and liabilities 3,618,360,177.55 3,533,795,515.58 Chairman: Wang Lushun General Accountant : Sun Najuan Accounting charger: Yao Chunjuan 2. Balance Sheet Of Parent Company Unit: RMB Yuan Item Opening Balance Closing Balance Current assets : Monetary fund 98,688,072.55 99,822,886.26 Financial assets held-for-trading Bills receivable 109,923,584.93 133,080,700.75 Account receivable 1,082,311,050.10 986,005,682.37 Account paid in advance 32,587,830.67 42,733,044.64 Interest receivable Other receivables 15,125,784.55 10,024,049.56 Inventory 1,080,300,720.82 1,113,765,356.87 Non-current assets due within 1 year Other current assets 2,672,185.24 5,729,224.48 Total current assets 2,421,609,228.86 2,391,160,944.93 Non-current assets Financial assets available-for-sale Investments held-to-maturity Long-term receivable Long-term equity investment 154,297,703.96 149,684,692.58 Investment property Fixed assets 506,327,706.02 462,781,080.04 Construction in progress 240,524,680.98 261,978,608.05 Construction materials Fixed assets disposal Biological assets Gas and petrol assets Intangible assets 127,689,514.42 131,979,409.06 Development expenditure Goodwill Long-term prepaid expense 792,683.11 869,505.00 Deferred tax assets 10,832,623.03 9,489,483.24 Other non-current assets Total non-current assets 1,040,464,911.52 1,016,782,777.97 Total assets 3,462,074,140.38 3,407,943,722.90 Current liabilities Short-term loan 588,000,000.00 510,000,000.00 Note payable 221,485,454.42 94,100,000.00 Accounts payable 842,791,947.56 955,695,514.30 Accounts received in advance 46,597,401.40 49,634,480.69 Commission charge payable 45 Wafangdian Bearing Co., Ltd(Wazhou B) 2012 Annual Report Accrued payroll 12,967,151.76 20,368,041.18 Tax payable -3,619,755.25 4,172,462.78 Interest payable Dividends payable Other payables 88,997,888.85 68,874,443.35 Non-current liabilities due within I year Other current liabilities Total current liabilities 1,797,220,088.74 1,840,844,942.30 Non-current liabilities Long-term loan 60,000,000.00 Debenture payable Long-term payables Special payables 321,698.98 221,698.98 Contingent liabilities Deferred tax liabilities Other non-current liabilities 50,952,773.24 50,394,009.12 Total non-current liabilities 111,274,472.22 50,615,708.10 Total liabilities 1,908,494,560.96 1,891,460,650.40 Owner’s equity (shareholders’ equity) Capital stock 402,600,000.00 402,600,000.00 Capital public reserves 482,563,945.37 482,563,945.37 Less: treasury share Surplus reserve 129,292,318.86 123,972,268.17 Undistributed profit 539,123,315.19 507,346,858.96 Difference of foreign currency translation Equity attributable to parent company Minority interest Total owner’s equity 1,553,579,579.42 1,516,483,072.50 Total owner’s equity and liabilities 3,462,074,140.38 3,407,943,722.90 Chairman: Wang Lushun 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 3,092,563,172.35 3,246,031,112.92 Including: Operating revenue 3,092,563,172.35 3,246,031,112.92 Interest income Handling charge and commission income 2.Total operating cost 3,081,698,636.84 3,211,704,588.33 Including: Operating cost 2,752,495,588.08 2,902,225,871.79 Interest expenses Handling charge and commission income Tax & surcharges for main operations 12,318,416.99 13,128,664.88 Selling expenses 212,371,985.56 198,350,885.22 Administrative expense 69,945,827.17 66,304,908.58 Financial expense 24,669,585.10 26,458,822.56 Loss of impairment of assets 9,897,233.94 5,235,435.30 Add: Gains of change of fair value of assets(loss with"-") Investment income(loss with "-") 4,916,516.10 8,760,823.99 Including: Income form investment on associated 5,592,911.41 10,845,945.14 enterprise and jointly enterprise 3.Operating profit (loss with"-") 15,781,051.61 43,087,348.58 Add: Non-operating revenue 31,916,918.18 34,498,128.94 Less: Non-operating cost 2,839,346.19 5,160,829.15 Including: loss on disposal of non-current assets 49,086.47 2,066,898.36 4.Total profit(loss with"-") 44,858,623.60 72,424,648.37 Less: Income tax expenses 2,580,114.73 11,898,319.22 46 Wafangdian Bearing Co., Ltd(Wazhou B) 2012 Annual Report 5.