Wafangdian Bearing Company Limited
Auditor's Report and Financial Statements
For the Year Ended 31 December 2025
ENGLISH TRANSLATION OF
AUDITOR’S REPORT AND FINANCIAL
STATEMENTS FOR THE YEAR ENDED
31 DECEMBER 2025
IF THERE IS ANY CONFLICT
BETWEEN THE CHINESE VERSION
AND ITS ENGLISH TRANSLATION
THE CHINESE VERSION WILL
PREVAILWafangdian Bearing Company Limited
Auditor's Report and Financial Statements
(From 1 January 2025 to 31 December 2025)
Table of Contents Page
I. Auditor's Report 1-5
II. Financial Statements
Consolidated and Company's Balance Sheets 1-4
Consolidated and Company's Income Statements 5-7
Consolidated and Company's Statements of Cash Flows 8-9
Consolidated and Company's Statements of Changes in Owners' 10-13
Equity
Notes to the Financial Statements 14-145Auditor's Report
No. 3200047 Zhonghuan Audit Character (2026)
To the Shareholders of Wafangdian Bearing Company Limited:
Opinion
We have audited the accompanying financial statements of Wafangdian Bearing Company
Limited (“Wafangdian Bearing Company”) which comprise the consolidated and company's
balance sheets as at 31 December 2025 the consolidated and company's income statements
the consolidated and company's statements of cash flows and the consolidated and company's
statements of changes in owners' equity for the year then ended and notes to the financial
statements.In our opinion the accompanying financial statements present fairly in all material respects
the consolidated and company's financial position as at 31 December 2025 and the
consolidated and company's financial performance and cash flows for the year then ended in
accordance with the requirements of Accounting Standards for Business Enterprises.Basis for Opinion
We conducted our audit in accordance with Chinese Standards on Auditing (“CSAs”). Our
responsibilities under those standards are further described in the Auditor's Responsibilities
for the Audit of the Financial Statements section of our report. We are independent of
Wafangdian Bearing Company in accordance with the Code of Ethics for Professional
Accountants of the Chinese Institute of Certified Public Accountants (“CICPA Code”) and we
have fulfilled our other ethical responsibilities in accordance with the CICPA Code. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.Key Audit Matters
Key audit matters are those matters that in our professional judgment were of most
significance in our audit of the financial statements of the current period. These matters were
addressed in the context of our audit of the financial statements as a whole and in forming
our opinion thereon and we do not provide a separate opinion on these matters.We identified the following key audit matters in our audit:
1. [Revenue recognition]
2. [Recoverability of accounts receivable]
Key Audit Matters How these matters were addressed in theaudit process
1. [Revenue recognition]
For details of the accounting policy for The audit procedures we performed on
revenue recognition and analysis of revenue revenue recognition consisted primarily of:
please refer to the accounting policy 1. Understanding evaluating and testing the
described in Note (22) of the Notes to effectiveness of the design and
Consolidated Financial Statements "III. implementation of management's key
Audit repot 1Key Audit Matters How these matters were addressed in theaudit process
Significant Accounting Policies and internal controls related to revenue
Accounting Estimates" and Note (39) of the recognition;
Notes to Consolidated Financial Statements. 2. Performing analytical review procedures
to analyze the reasonableness of changes in
Revenue from sales of various types of revenue and gross profit margin;
bearings in the consolidated statements of 3. Select a sample to examine sales contracts
operations of Wafangdian Bearing Company identify contractual provisions related to the
for fiscal 2025 amounted to CNY transfer of control of goods and evaluate
2204681358.79. whether the revenue recognition point of
Wafangdian Bearing Company Corporation
Since revenues and profits from bearing sales meets the requirements of the Enterprise
have a significant impact on The Group's Accounting Standards;
results the recognition of revenues depends 4. Selecting samples of revenue transactions
on the ability to properly assess whether the recorded during the year verifying whether
product sales satisfy the agreement on the the book revenue sales invoices and
conditions for the transfer of control in the customer confirmation sheets are consistent
sales contract. The complexity of the and evaluating whether the relevant revenue
commercial agreements however requires recognition is in accordance with the revenue
separate judgment. For this reason we recognition accounting policy of Wafangdian
identified revenue as a key audit matter. Bearing Company;
5. Implementing correspondence to
customers. The correspondence procedure
includes correspondence on the balance of
accounts receivable at the end of the
customer's period as well as sales during the
reporting period;
6. For shipment records around the balance
sheet date select samples and check the
supporting documents such as shipment
records and customer acknowledgement slips
to evaluate whether revenues are included in
the appropriate period.
2. [Recoverability of accounts receivable]
For details of the accounting policies and The audit procedures we performed on the
analysis of accounts receivable please refer to collectability of accounts receivable
the accounting policies described in Note (ix) consisted primarily of:
to the consolidated financial statements under 1. understanding evaluating and testing the
"III. Significant Accounting Policies and effectiveness of management's design and
Estimates" and Note (iv) to the consolidated implementation of internal controls related to
financial statements under "V. Notes to the aging analysis of accounts receivable and
Consolidated Financial Statements". the determination of the allowance for bad
debts on accounts receivable;
The balance of accounts receivable in the 2. reviewing management's consideration
consolidated financial statements as of and objective evidence related to the
December 31 2025 was CNY impairment testing of accounts receivable
1034757449.31 and the allowance for bad and focusing on whether management has
debts was CNY 162642804.00 net of adequately identified items that have been
CNY 872114645.31.The balance of impaired;
contractual assets was CNY7119828.52 3. for accounts receivable for which
Audit repot 2Key Audit Matters How these matters were addressed in theaudit process
provision for impairment of contract assets management has provided for bad debts
was CNY1861067.28 net of contractual according to a combination of credit risk
assets was CNY 5258761.24. characteristics evaluating whether the
percentage of provision for bad debts
We identified the collectability of accounts determined by management is reasonable;
receivable as a key audit matter because 4. Implemented the correspondence
estimating the collectability of accounts procedure and reconciled the results of the
receivable and testing for impairment correspondence with the amounts recorded
involves significant accounting estimates and by management;
judgments by management and the impact on 5. Evaluating the reasonableness of the
the financial statements if the accounts provision for bad debts reserves by
receivable are not collected on time or are management in conjunction with the
uncollectible is more significant. post-period payback examination.Other Information
Management of Wafangdian Bearing Company (“Management”) is responsible for the other
information. The other information comprises all of the information included in the 2025
annual report of Wafangdian Bearing Company other than the financial statements and our
auditor's report thereon.Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other
information and in doing so consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated.If based on the work we have performed we conclude that there is a material misstatement of
the other information we are required to report that fact. We have nothing to report in this
regard.Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with the requirements of Accounting Standards for Business
Enterprises and for such internal control as management determines is necessary to enable
the preparation of financial statements that are free from material misstatement whether due
to fraud or error.Audit repot 3In preparing the financial statements management is responsible for assessing Wafangdian
Bearing Company's ability to continue as a going concern disclosing if applicable matters
related to going concern and using the going concern basis of accounting unless management
either intends to liquidate Wafangdian Bearing Company or to cease operations or has no
realistic alternative but to do so.Those charged with governance are responsible for overseeing Wafangdian Bearing
Company’s financial reporting process.Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement whether due to fraud or error and to issue an
auditor's report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with CSAs will always detect a
material misstatement when it exists. Misstatements arising from fraud or error are material
Chartered reserveif individually or in aggregate they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with CSAs we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements
whether due to fraud or error design and perform audit procedures responsive to those
risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error as fraud may involve collusion forgery intentional
omissions misrepresentations or the override of internal control.
(2) Obtain an understand of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
(4) Conclude on the appropriateness of management's use of the going concern basis of
accounting and based on the audit evidence obtained whether a material uncertainty
exists related to events or conditions that may cast significant doubt on Wafangdian
Bearing Company's ability to continue as a going concern. If we conclude that a material
uncertainty exists we are required to draw attention in our auditor’s report to the related
disclosures in the financial statements or if such disclosures are inadequate to modify our
Audit repot 4opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor's report. However future events or conditions may cause Wafangdian Bearing
Company to cease to continue as a going concern.
(5) Evaluate the overall presentation (including the disclosures) structure and contents
of the financial statements and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of
the entities or business activities within Wafangdian Bearing Company to express an
opinion on the consolidated financial statements. We are responsible for the direction
supervision and performance of the group audit. We remain solely responsible for our
audit opinion.We communicate with those charged with governance regarding among other matters the
planned scope and timing of the audit and significant audit findings including any significant
deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence
and where applicable related safeguards.From the matters communicated with those charged with governance we determine those
matters that were of most significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure about the matter or when in
extremely rare circumstances we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.Zhongshenzhonghuan Certified Public Accountant of China:
Certified Public Accountants LLP (Engagement Partner)
Certified Public Accountant of China:
Wuhan China April 24 2026
Audit repot 5Wafangdian Bearing Company Limited
Consolidated Balance Sheets
（CNY）
ITEMS No 2025- 12-31 2024- 12-31
Current Assets:
Monetary funds V. 1 65287519.84 239398923.10
Settlement fund
Outgoing call loan
Tradable financial assets V. 2 246536.22 221882.59
Derivative Financial instrument
Notes receivable V.3 500110673.70 597196581.19
Accounts receivable V.4 872114645.31 1026226986.45
Financing receivable V.5 64928833.08 48925906.07
Prepayments V.6 9287712.68 10948524.83
Insurance receivables
Reinsurance Receivable
Provision of reinsurance contract reserve receivable
Other receivables V.7 10631908.31 7962213.75
including: interest receivable
dividend receivable
Financial instrument purchased under agreement to resell
Inventories V.8 636325993.85 688440738.43
Contractual assets V.9 5258761.24 11498470.21
Held for sale assets
Non-current assets due within 1-year
Other current assets V. 10 50298808.19 53298611.95
Total Current Assets 2214491392.42 2684118838.57
Non-Current Assets
Loan and payment on other's behalf disbursed
Debt investment
Other debt investment
Long-term receivables
Long-term equity investment
Other equity instrument investment V. 11 8705393.14 11906928.35
Other non-current Financial instrument
Investments properties V. 12 73919295.42 71679927.05
Fixed assets V. 13 406111493.56 437398315.29
Construction in process V. 14 10513430.99 34740635.71
Production biological assets
Oil-gas assets
Use-right assets
Intangible assets VI. 15 66301236.59 70121059.58
Development cost
Goodwill
Long-term unamortized expenses V. 16 6949581.27 6602412.97
Deferred tax asset V. 17
Other non-current assets V. 18 282900.00
Total Non-current Assets 572783330.97 632449278.95
Total Assets 2787274723.39 3316568117.52
legal representative ： head of the accounting work： the person in charge of the accounting office ：
Financial statements 1Consolidated Balance Sheet ( continued)
December 31 2025
Name of Enterprise ： Wafangdian Bearing Co. Ltd Amount Unit: CNY
ITEMS No 2025- 12-31 2024- 12-31
Current Liabilities:
Short- term borrowings V.20 82053118.00 570000000.00
Loans from central bank
Loans from other banks
Tradable financial liability
Derivative financial liabilities
Notes payable V.21 370597.50 401129901.60
Accounts payable V.22 1261731806.69 1663816039.46
Received in advance
Contractual liability V.23 31776246.33 34098145.99
Financial instrument sold under agreements to repurchase
Deposits received and hold for others
Entrusted trading of securities
Entrusted underwriting of securities
Employee payables V.24 49061641.96 42089354.01
Taxes and duties payable V.25 8932707.47 12064219.60
Other payables V.26 587079378.98 135258184.75
including: interest payable
dividend payable
Fees and commissions payable
Amount due to reinsurance
Held for sale liabilities
Non- current liabilities due within 1 - year V.27 98350000.00
Other current liabilities V.28 469016692.21 4417479.62
Total Current Liabilities 2490022189.14 2961223325.03
Non- current Liabilities:
Insurance contract provision
Long- term borrowings
Bonds Payable
including: preference share
perpetual debt
Leasing liability
Long- term payables V.29 344974.84 344974.84
Long- term employee payables
Provision V.30 62247622.41 55771671.86
Deferred income V.31 34847189.82 37719857.35
Deferred Tax liabilities V. 17 788788.84 524485.21
Other non- current liabilities
Total Non - current Liabilities 98228575.91 94360989.26
Total Liabilities 2588250765.05 3055584314.29
Owners Equity( or Shareholders Equity) :
Paid- in capital (Share capital) V.32 402600000.00 402600000.00
Other equity instrument
Including: preference share
perpetual capital securities
Capital reserve V.33 485691050.47 485691050.47
Less: Treasury stock
Other comprehensive income V.34 -3201535.21
Chartered reserve V.35 1639850.97 2305094.24
Surplus reserves V.36 136770391.01 136770391.01
△ Provision for general risk
Undistributed profit V.37 -824475798.90 -766382732.49
Equity attributable to equity holders of The Group 199023958.34 260983803.23
* Minority interest
Total Equity 199023958.34 260983803.23
Total Liabilities and Equity 2787274723.39 3316568117.52
The accompanying notes to the financial statements are an integral part of the financial statements.legal representative ： head of the accounting work ： the person in charge of the accounting office ：
Financial statements 2Balance Sheet of Parent Company
December 31 2025
Name of Enterprise：Wafangdian Bearing Co. Ltd Amount Unit: CNY
ITEMS No 2025-12-31 2024-12-31
Current Assets:
Monetary funds 62726188.11 237603355.24
Tradable financial assets 246536.22 221882.59
Derivative Financial instrument
Notes receivable 497182824.72 598162807.95
Accounts receivable XIV. 1 867794392.68 990716081.66
Financing receivable 64457568.41 44303611.96
Prepayments 8815214.66 10125500.59
Other receivables XIV. 2 245164992.88 265704686.03
Inventories 525147258.82 437173417.69
Contractual assets 5258761.24 11498470.21
Held for sale assets
Non-current assets due within 1-year
Other current assets 49955969.26 53254761.44
Total Current Assets 2326749707.00 2648764575.36
Non-Current Assets
Debt investment
Available- for- sale Financial instrument
Other debt investment
Long- term receivables
Long- term equity investment XIV. 3 226488897.67 226488897.67
Other equity instrument investment 8705393.14 11906928.35
Other non-current Financial instrument
Investments properties 68679455.19 66151054.38
Fixed assets 271405080.88 289356808.71
Construction in process 10050847.29 31415493.14
Production biological assets
Oil-gas assets
Use-right assets
Intangible assets 53357540.82 56459406.17
Development cost
Goodwill
Long- term unamortized expenses 6949581.27 6602412.97
Deferred tax asset
Other non-current assets 282900.00
Total Non-current Assets 645919696.26 688381001.39
Total Assets 2972669403.26 3337145576.75
legal representative ： head of the accounting work ： the person in charge of the accounting office ：
Financial statements 3Balance Sheet of Parent Company (continued)
December 31 2025
Name of Enterprise：Wafangdian Bearing Co. Ltd Amount Unit: CNY
ITEMS No 2025-12-31 2024-12-31
Current Liabilities:
Short-term borrowings 82053118.00 570000000.00
Tradable financial liability
Derivative financial liabilities
Notes payable 370597.50 401129901.60
Accounts payable 1231268246.54 1465053380.82
Received in advance
Contractual liability 31755996.33 34060441.72
Employee payables 39804727.20 34267209.57
Taxes and duties payable 5817395.80 10016846.15
Other payables 574587108.18 122802562.47
Held for sale liabilities
Non-current liabilities due within 1-year 98350000.00
Other current liabilities 466718720.38 4417323.65
Total Current Liabilities 2432375909.93 2740097665.98
Non-current Liabilities:
Long-term borrowings
Bonds Payable
including: preference share
perpetual debt
Leasing liability
Long-term payables 244974.84 244974.84
Long-term employee payables
Provision for liabilities 61798365.54 55730460.81
Deferred income 8229767.64 11203199.32
Deferred Tax liabilities
Other non-current liabilities
Total Non-current Liabilities 70273108.02 67178634.97
Total Liabilities 2502649017.95 2807276300.95
Owners Equity(or Shareholders Equity):
Paid-in capital (Share capital) 402600000.00 402600000.00
Other equity instrument
Including: preference share
perpetual capital securities
Capital reserve 485678443.26 485678443.26
Less: Treasury stock
Other comprehensive income -3201535.21
Chartered reserve 2607.15
Surplus reserves 136770391.01 136770391.01
Undistributed profit -551829520.90 -495179558.47
Total Equity 470020385.31 529869275.80
Total Liabilities and Equity 2972669403.26 3337145576.75
The accompanying notes to the financial statements are an integral part of the financial statements.legal representative： head of the accounting work： the person in charge of the accounting office ：
Financial statements 4Consolidated Income Statement
For the year of 2025
Name of Enterprise ：Wafangdian Bearing Co. Lt.d Amount Unit: CNY
Item No Current year Last year
Total operating revenue 2351123992.31 2053626920.80
Including: Operating revenue V.39 2351123992.31 2053626920.80
Interest income
Earned premiums
Fees and commission income
Total cost of operation 2385929003.78 2166982902.74
Including: Cost of operation V.39 1948741941.06 1725976671.44
Interest expenses
Fees and commission expenses
Payments to surrenders of insurance contracts
Net amount of insurance claims expenses
Net charges of provision for insurance contracts
Dividends policy expenses
Reinsurance expenses
Taxes and surcharges V.40 17413689.15 13031682.18
Selling and distribution expenses V.41 132802981.57 160646188.33
Administrative expenses V.42 131424173.68 125074518.31
R&D V.43 143367714.53 113321379.95
Financial expenses V.44 12178503.79 28932462.53
Including: Interest expenses 13220559.41 33560937.47
Interest income 857113.68 2209880.01
add: other income V.45 13756342.64 28480421.16
investment income (Loss listed with "-") V.46 20520044.53 18100303.03
Including: income from investments in associates and joint ventures
Gain arising from derecognition of financial assets measured at amortized cost
Exchange gain (Loss listed with "-")
Gain on hedging of net exposure (Loss listed with "-")
Gain on FV change (Loss listed with "-") V.47 24653.63 7704.26
Loss on impairment of credit(Loss listed with "-") V.48 -17419600.21 -23901979.00
Loss on impairment of assets(Loss listed with "-") V.49 -41776370.87 -25973978.91
Gain on asset disposal(Loss listed with "-") V.50 760241.48 892931.71
Operating profit (Loss listed with "-") -58939700.27 -115750579.69
Add: Non-operating income V.51 1670266.87 6391353.58
Less: Non-operating expenses V.52 559329.38 901627.76
Total profit (Loss listed with "-") -57828762.78 -110260853.87
Less: Income tax expenses V.53 264303.63 -48372.34
Net profit (Net loss listed with "-") -58093066.41 -110212481.53
(I) Classification by continuity
1 、Net profit from continuing operation -58093066.41 -110212481.53
2 、Net profit from discontinuing operation
(II) Classification by ownership
1、 Net profit attributable to equity holders(shareholders) of The Group -58093066.41 -110212481.53
2、Minority interest
Other comprehensive income net off tax -3201535.21
Net other comprehensive income net off tax attributable to equity holders( shareholders) of the paren company
(Ⅰ)Items that may not be reclassified subsequently to the income
1.Change in net asset/ liability from remeasurment on defined benefit plan
2 .Under equity method proportionate share of other comprehensive income in invested company
3.FV change of other equity instrutment investment -3201535.21
4.FV change of own credit risk
5.Others
(Ⅱ ) Items that may be reclassified subsequently to the income statement
1 . Under equity method proportionate share of other comprehensive income invested company
2. FV change of other debt investment
3 . Financial instrument reclassified into other comprehensive income
4 .Credit impairment provision of other debt investment
5 .Cash flow hedges effective portion
Financial statements 56 . Foreign currency translation difference
7.Others
Net other comprehensive income net of tax attributable to Minority interest
Total comprehensive income -61294601.62 -110212481.53
Total comprehensive income attributable to parent Company -61294601.62 -110212481.53
Total comprehensive income attributable to minority interest
Earnings per share
( Ⅰ)Basic earnings per share -0.1443 -0.2738
(Ⅱ)Diluted earnings per share -0.1443 -0.2738
legal representative ： head of the accounting work： the person in charge of the accounting office ：
Financial statements 6Income Statement of Parent Company
For the year of 2025
Name of Enterprise：Wafangdian Bearing Co. Ltd Amount Unit: CNY
Item No Current year Last year
perating revenue XIV.4 2318556077.65 2086835411.85
Less: Cost of operation XIV.4 1976004065.36 1781586806.99
Taxes and surcharges 12256333.35 10134670.34
Selling and distribution expenses 132175203.41 150288974.22
Administrative expenses 105840750.24 96859925.78
Research &Development 103805185.57 94235738.46
Financial expenses 12068895.78 28979772.05
Including: Interest expenses 11086150.49 20931843.91
Interest income 3244.09 28320.12
Add: Other income 11258488.77 26337091.91
Investment income (Loss listed with "-") XIV.5 12357574.87 13308581.11
Including: income from investments in associates and joint ventures
Gain arising from derecognition of financial assets measured at amortized cost
Gain on hedging of net exposure (Loss listed with "-")
Gain on FV change (Loss listed with "-") 24653.63 7704.26
Loss on impairment of credit(Loss listed with "-") -17232989.76 -24126616.19
Loss on impairment of assets(Loss listed with "-") -41210346.26 -18939937.86
Gain on asset disposal(Loss listed with "-") 756856.52 609426.05
Operating profit (Loss listed with "-") -57640118.29 -78054226.71
Add: Non-operating income 1445803.44 5692303.60
Less: Non-operating expenses 455647.58 840700.60
Total profit (Loss listed with "-") -56649962.43 -73202623.71
Less: Income tax expenses
Net profit (Net loss listed with "-") -56649962.4 -73202623.71
1、Net profit from continuing operation -56649962.4 -73202623.71
2、Net profit from discontinuing operation
Other comprehensive income net off tax -3201535.21
( Ⅰ)Items that may not be reclassified subsequently to the income statement
1.Change in net asset/liability from remeasurment on defined benefit plan
2.Under equity method proportionate share of other comprehensive income in
invested company that may not be reclassified subsequently to the income statement
3.FV change of other equity instrument investment -3201535.21
4.FV change of own credit risk
5.Others
(Ⅱ)Items that may be reclassified subsequently to the income statement
1.Under equity method proportionate share of other comprehensive income invested
company that may be reclassified subsequently to the income statement
2.FV change of other debt investment
4.Financial instrument reclassfied into other comprehensive income
6.Credit impairment provision of other debt investment
7.Cash flow hedges effective portion
8.Foreign currency translation difference
9.Others
Total comprehensive income -59851497.61 -73202623.71
Earnings per share
( Ⅰ)Basic earnings per share
(Ⅱ)Diluted earnings per share -59851497.61 2086835411.85
legal representative： head of the accounting work： the person in charge of the accounting office ：
Financial statements 7Consolidated Cash Flow Statement
For the Year of 2025
Name of Enterprise：Wafangdian Bearing Co. Ltd Amount Unit: CNY
Item No Current year Last year
1.Cash flow from operating activities
Cash receipts from sale of goods or rendering of services 1050075409.91 1219026500.82
Refunds of taxes 10600282.59 19803922.16
Other cash receipts in operating activities V.55 32763176.46 36527104.69
Sub-total of cash inflows from operating activities 1093438868.96 1275357527.67
Cash payments for goods and services acquired 160704366.19 591448981.33
Cash payments to and on behalf of employees 370233440.01 388636266.43
Tax and duties payments 82545566.67 49043695.10
Other cash payments for operating activities V.55 94774051.23 140509591.55
Sub-total of cash outflows from operating activities 708257424.1 1169638534.41
Net cash flows from operating activities V.56 385181444.86 105718993.26
2.Cash flows from investing activities
Cash receipts from return of investments
Cash receipts from investments income 1002352.64 1000000.00
Net cash receipts from disposal of fixed assets intangible assets and other long-term assets 1471704.09 704614.05
Net cash receipts from disposal of subsidiaries and other businesses
Other cash receipts in investing activities
Sub-total of cash inflows from investing activities 2474056.73 1704614.05
Cash payments for acquired fixed assets intangible assets and other long-term assets 1892244.21 5996953.69
Cash payments for investment
Net increase of pledged loan
Net cash payments for acquisition of subsidiaries and other businesses
Other cash payments in investing activities
Sub-total of cash outflows from investing activities 1892244.21 5996953.69
Net cash flows from investment activities 581812.52 -4292339.64
3.Cash flows from financing activities
Cash received from capital injection
Including: Cash received by subsidiaries from investment absorpotion of minority interest
Cash receipts from borrowings 162000000.00 708000000.00
Cash received from issue of bonds
Other cash receipts in financing activities V.55 582988414.20 603690323.73
Sub-total of cash inflows from financing activities 744988414.20 1311690323.73
Cash paid for settlement of borrowings 748350000.00 737100000.00
Cash paid for dividends profits appropriation or payments of interest 16466942.52 30782037.07
Including: Dividens and profits paid to minority interest
Other cash payments in financing activities V.55 463579253.82 597417026.60
Sub-total of cash outflows from financing activities 1228396196.34 1365299063.67
Net cash flows from financing activities -483407782.14 -53608739.94
4.Effect of changes in foreign exchange rates on cash and cash equivalents 382546.06 2424823.93
5.Net increases in cash and cash equivalents -97261978.70 50242737.61
Add: the beginning balance of cash and cash equivalent 160907298.24 110664560.63
6.The ending balance of cash and cash equivalent 63645319.54 160907298.24
legal representative： head of the accounting work： the person in charge of the accounting office
Financial statements 8Cash Flow Statement of Parent Company
For the Year of 2025
Name of Enterprise：Wafangdian Bearing Co. Ltd Amount Unit: CNY
Item No Current year Last year
1 . Cash flow from operating activities
Cash receipts from sale of goods or rendering of services 1031973351.26 1183896172.53
Refunds of taxes 10597748.36 19803922.16
Other cash receipts in operating activities 29373398.35 34114009.77
Sub- total of cash inflows from operating activities 1071944497.97 1237814104.46
Cash payments for goods and services acquired 263140602.60 680302711.04
Cash payments to and on behalf of employees 295109312.76 316404978.59
Tax and duties payments 51478056.59 34004251.18
Other cash payments for operating activities 77797628.19 97245640.59
Sub- total of cash outflows from operating activities 687525600.14 1127957581.40
Net cash flows from operating activities 384418897.83 109856523.06
2 . Cash flows from investing activities
Cash receipts from return of investments
Cash receipts from investments income 1002352.64 1000000.00
Net cash receipts from disposal of fixed assets intangible assets and other long-term assets 1468904.09 342614.05
Net cash receipts from disposal of subsidiaries and other businesses
Other cash receipts in investing activities
Sub- total of cash inflows from investing activities 2471256.73 1342614.05
Cash payments for acquired fixed assets intangible assets and other long-term assets 1892244.21 3707420.59
Cash payments for investment
Net cash payments for acquisition of subsidiaries and other businesses
Other cash payments in investing activities
Sub- total of cash outflows from investing activities 3707420.59
1892244.21
Net cash flows from investment activities -2364806.54
579012.52
3 . Cash flows from financing activities
Cash received from capital injection
Cash receipts from borrowings 162000000.00 708000000.00
Cash received from issue of bonds
Other cash receipts in financing activities 582988414.20 603690323.73
Sub- total of cash inflows from financing activities 744988414.2 1311690323.73
Cash paid for settlement of borrowings 748350000.00 737100000.00
Cash paid for dividends profits appropriation or payments of interest 16466942.52 30782037.07
Other cash payments in financing activities 463579253.82 597417026.60
Sub- total of cash outflows from financing activities 1228396196.34 1365299063.67
Net cash flows from financing activities -483407782.14 -53608739.94
4 .Effect of changes in foreign exchange rates on cash and cash equivalents 382546.06 2424823.93
5 . Net increases in cash and cash equivalents -98027325.73 56307800.51
Add: the beginning balance of cash and cash equivalent 159111730.38 102803929.87
6 . The ending balance of cash and cash equivalent 61084404.65 159111730.38
legal representative： head of the accounting work： the person in charge of the accounting office
Financial statements 9Consolidated Statement of Changes in Shareholders’ Equity
For the Year of 2025
Name of Enterprise：Wafangdian Bearing Co. Ltd Amount Unit:RMB
Current year
Equity attributable to the equity holders of The Group
Item Other equity instrument Other △ General Minority
Paid-up capital Special Total equity
preference perpetual Capital reserves
Less: Treasury comprehensive Surplus reserves Undistributedrisk Others Sub-total interests
(share capital) others shares reserves profits
share bond income provision
1. Balance at end of last year 402600000.00 485691050.47 2305094.24 136770391.01 -766382732.49 260983803.23 260983803.23
Add: Changes in accounting policies
Correction of prior periods errors
Business combination within the same control
Others
2. Balance at beginning of current year 402600000.00 485691050.47 2305094.24 136770391.01 -766382732.49 260983803.23 260983803.23
3. Increase/ Decrease for current year (Decrease
-3201535.21-58093066.41-61294601.62-61294601.62
listed with "-")
(Ⅰ ) Total of comprehensive income
(Ⅱ ) Capital contribution and reduction
1.Ordinary share
2.Capital contributed by other equity instrument
holders
3.Share-based payments charged to equity
4.Others
( III) Profit appropriations
1.Appropriation to surplus reserves
2.Appropriation to general risks provision
3.Appropriation to equity holders (or shareholders)
4.Others
(IV) Transfer within equity
1.Transfer of capital reserve to capital (share
capital)
2.Transfer of surplus reserves to capital (share
capital)
3.Surplus reserves making up of losses
4.Carried over the change in net asset/liability from
remeasurements on defined benefit plan
5.Transfer of other comprehensive to retained
earnings
6.Others
(V) Special reserves -665243.27 -665243.27 -665243.27
1.Provision for special reserve 8348163.57 8348163.57 8348163.57
2.Utilization of special reserve 9013406.84 9013406.84 9013406.84
(VI) Others
4 Balance at end of current year 402600000.00 485691050.47 -3201535.21 1639850.97 136770391.01 -824475798.90 199023958.34 199023958.34
legal representative： head of the accounting work： the person in charge of the accounting office ：
Financial statements 10Consolidated Statement of Changes in Shareholder s’ Equity( continued)
For the Year of 2025
Name of Enterprise ： Wafangdian Bearing Co. Ltd Amount Unit: RMB
Last year
Equity attributable to the equity holders of The Group
Other equity instrument Other
Item △ General Minority
Paid- up capital comprehensiv Total equity
preference perpetual Capital reserves
Less: Treasury Special reserves Surplus reserves Undistributedrisk Others Sub- total interests
(share capital) others shares e profits
share bond provision
income
1. Balance at end of last year 402600000.00 485691050.47 2414877.63 136770391.01 -656170250.96 371306068.15 371306068.15
Add: Changes in accounting policies
Correction of prior periods errors
Business combination within the same control
Others
2 . Balance at beginning of current year 402600000.00 485691050.47 2414877.63 136770391.01 -656170250.96 371306068.15 371306068.15
3 . Increase/ Decrease for current year (Decrease listed
-109783.39-110212481.53-110322264.92-110322264.92
with "-")
( Ⅰ ) Total of comprehensive income -110212481.53 -110212481.53 -110212481.53
( Ⅱ ) Capital contribution and reduction
1 .Ordinary share
2 . Capital contributed by other equity instrument
holders
3 . Share- based payments charged to equity
4 .Others
( III) Profit appropriations
1 . Appropriation to surplus reserves
2 . Appropriation to general risks provision
3 .Appropriation to equity holders ( or shareholders)
4 .Others
( IV) Transfer within equity
1 .Transfer of capital reserve to capital ( share capital)
2 . Transfer of surplus reserves to capital ( share capital)
3 . Surplus reserves making up of losses
4 . Carried over the change in net asset/ liability from
remeasurment on defined benefit plan
5 . Transfer of other comprehensive to retained earnings
6.Others
( V) Special reserves -109783.39 -109783.39 -109783.39
1 . Provision for special reserve 12261400.52 12261400.52 12261400.52
2 . Utilization of special reserve 12371183.91 12371183.91 12371183.91
( VI) Others
4 Balance at end of current year 402600000.00 485691050.47 2305094.24 136770391.01 -766382732.49 260983803.23 260983803.23
legal representative ： head of the accounting work ： the person in charge of the accounting office ：
Financial statements 11Statement of Changes in Shareholders’ Equity of Parent Company
For the Year of 2025
Name of Enterprise：Wafangdian Bearing Co. Ltd
Current year
Other equity instrument Other
Item Paid-up capital Capital reserves Less: Treasury comprehensive Special reserves Surplus reserves Undistributed Others Total equity
(share capital) preference share perpetual bond others shares profits
income
1. Balance at end of last year 402600000.00 485678443.26 136770391.01 -495179558.47 - 529869275.80
Add: Changes in accounting policies
Correction of prior periods errors
Others
2. Balance at beginning of current year 402600000.00 485678443.26 136770391.01 -495179558.47 - 529869275.80
3. Increase/ Decrease for current year (Decrease listed
-3201535.21-56649962.43-59851497.64
with "-")
(Ⅰ ) Total of comprehensive income
(Ⅱ ) Capital contribution and reduction
1.Ordinary share
2.Capital contributed by other equity instrument holders
3.Share-based payments charged to equity
4.Others
( III) Profit appropriations
1.Appropriation to surplus reserves
2.Appropriation to equity holders (or shareholders)
3.Others
( IV) Transfer within equity
1.Transfer of capital reserve to capital (share capital)
2.Transfer of surplus reserves to capital (share capital)
3.Surplus reserves making up of losses
4.Carried over the change in net asset/liability from
remeasurment on defined benefit plan
5.Transfer of other comprehensive to retained earnings
6.Others
(V) Special reserves 2607.15 2607.15
1.Provision for special reserve 3519569.91 3519569.91
2.Utilization of special reserve 3516962.76 3516962.76
(VI) Others
4 Balance at end of current year 402600000.00 485678443.26 -3201535.21 2607.15 136770391.01 -551829520.90 470020385.31
legal representative： head of the accounting work： the person in charge of the accounting office ：
Financial statements 12Statement of Changes in Shareholders’ Equity of Parent Company(continued)
For the Year of 2025
Name of Enterprise：Wafangdian Bearing Co. Ltd
Last year
Other equity instrument Other
Item Paid-up capital Special
preference Capital reserves
Less: Treasury comprehensive Surplus reserves Undistributed profits Others Total equity
(share capital) perpetual bond others shares reserves
share income
1. Balance at end of last year 402600000.00 485678443.26 136770391.01 -421976934.76 - 603071899.51
Add: Changes in accounting policies
Correction of prior periods errors
Others
2. Balance at beginning of current year 402600000.00 485678443.26 136770391.01 -421976934.76 - 603071899.51
3. Increase/ Decrease for current year (Decrease listed
-73202623.71-73202623.71
with "-")
(Ⅰ ) Total of comprehensive income -73202623.71 -73202623.71
(Ⅱ ) Capital contribution and reduction
1.Ordinary share
2.Capital contributed by other equity instrument holders
3.Share-based payments charged to equity
4.Others
( III) Profit appropriations
1.Appropriation to surplus reserves
2.Appropriation to equity holders (or shareholders)
3.Others
(IV) Transfer within equity
1.Transfer of capital reserve to capital (share capital)
2.Transfer of surplus reserves to capital (share capital)
3.Surplus reserves making up of losses
4.Carried over the change in net asset/liability from
remeasurment on defined benefit plan
5.Transfer of other comprehensive to retained earnings
6.Others
(V) Special reserves
1.Provision for special reserve
2.Utilization of special reserve
(VI) Others
4 Balance at end of current year 402600000.00 485678443.26 136770391.01 -495179558.47 - 529869275.80
legal representative： head of the accounting work： the person in charge of the accounting office ：
Financial statements 13Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31
2025
(The currency is in RMB Yuan except otherwise indicated)
I.The basic information of company
Wafangdian Bearing Company Limited (the “Company” the “Group” is referred to
“Company” together with its subsidiaries) is a joint stock limited company established in
the People’s Republic of China (the “PRC”) on 16 July 1996. In the opinion of the
directors its parent and ultimate holding company is Wafangdian Bearing Group
Company Limited (“Wazhou Group”).The Company’s B shares have been listed on the Shenzhen Stock Exchange since 19
February 1997.The Company’s founding meeting and the first meeting of the first board of directors
decided that the effective date of the shareholding system reorganization in the
accounting of The Company (that is the date of the establishment of The Company's
accounts) was determined as April 1 1997 on March 19 1997.The Company obtained its business license as an enterprise legal person on March 20
1997 with registration number DaGongShangQiFaZi24239971-2. The business scope
includes the manufacture and sale of bearings mechanical equipment auto parts and
related products.The Company's B shares were officially listed on the Shenzhen Stock Exchange on March
25 1997 raising funds of CNY 406.58 million. After the issuance The Company's
registered capital was CNY 330 million.In accordance with the Supplementary Notice on Issues Concerning the Equity
Distribution of Listed Companies under the Rules Governing the Listing of Stocks of the
Shenzhen Stock Exchange (hereinafter referred to as the “Supplementary Notice” )
issued by the Shenzhen Stock Exchange on August 30 2006 based on the audited
financial report on September 30 2006 The Company implemented the conversion of
capital reserve into share capital giving 2.2 shares for every 10 shares and the total share
capital increased from 330 million shares to 402.6 million shares of which Wazhou
Group owned the legal person shares increased from 200 million shares to 244 million
shares accounting for 60.6% of the total share capital; the Swedish SKF Company
increased from 65 million shares to 79.3 million shares accounting for 19.7% of the
total share capital; public shares increased from 65 million shares to 79.3 million shares
Notes to the Financial Statements 14Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
accounting for 19.7% of the total share capital. After the implementation of this plan
The Company's shareholding structure meets the requirements of the "Supplementary
Notice" of the Shenzhen Stock Exchange.The parent company is Wazhou Group. General shareholders meeting is The
Company’s authority and have the resolution power over company’s business policy
financing investment and profit appropriation etc. significant events in accordance with
relevant law. Board of directors is responsible for general meeting and has the power
over The Company’s decision making. Management is in charge of implementation of
resolution made by general meeting and board meeting and is responsible for operation
management.The Company belongs to the bearing manufacturing industry mainly engaged in the
production and sales of various types of bearings. The addresses of the registered office
and principal place of business of The Company are No. 1 Phrase 1 North Gongji Street
Wafangdian Liaoning Province and the PRC Legal representative is Liu Jun.Registered according to law the business scope of The Company is as follows: Licensed
items: inspection and testing services import and export of goods import and export of
technologies (for items subject to approval according to law business activities can only be
carried out after approval by relevant departments and the specific business items shall
be subject to the approval result)Bearing manufacturing bearings gears and transmission
components manufacturing high speed precision heavy-duty bearing sales sales bearings
gears and transmission parts bearing sales general equipment manufacturing (excluding
special equipment manufacturing) high-speed rail equipment parts manufacturing
machinery and equipment sales rail transportation equipment key system and parts sales
sales of lubricating oil high-speed rail equipment and accessories sales Wind generators
and spare parts sales machinery parts spare parts sales railway locomotive vehicle
accessories manufacturing railway locomotive vehicle accessories sales auto parts and
accessories manufacturing auto parts wholesale and retail auto parts metal products
repair sales metal materials metal products sales metal surface treatment and heat
treatment processing quenching process machinery parts and spare parts processing
land use right leasing housing leasing non- residential real estate leasing mechanical
equipment leasing computer and communication equipment leasing transportation
equipment leasing service office equipment leasing service storage equipment leasing
service special equipment leasing labor services (excluding labor dispatch) Technology
service technology development technology consultation technology exchange
technology transfer technology popularization (with the exception of the projects subject
to approval according to law independently carry out business activities according to law
with the business license).Notes to the Financial Statements 15Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
These financial statements were approved by The Company's Board of Directors on April
242026.
II.The basis for the preparation of financial statements
(1) Basis of preparation
The financial statements have been prepared in accordance with the "Accounting
Standards for Business Enterprises - Basic Standards" and various specific accounting
standards guidelines for the application of accounting standards for business enterprises
interpretations of accounting standards for business enterprises and other related
regulations (hereinafter collectively referred to as "Accounting Standards for Business
Enterprises") issued by the Ministry of Finance as well as the relevant provisions of the
"General Provisions on Financial Reporting No. 15 of the Rules Governing the
Preparation of Information Disclosures by Companies Issuing Public Securities" of the
China Securities Regulatory Commission.
(2) Going concern
This financial statements are prepared on the assumption of going concern.III. Significant Accounting Policies and Accounting Estimates
The group established the accounting policy and estimate such as operation cycle bad
debt recognition and measurement dispatched inventories measurement and classification
of fixed assets and FA’s depreciation intangible asset’s amortization capitalization
condition of research and development expenses revenue recognition and measurement
based on the actual characters of business operation.
（1）Declaration for compliance with Accounting Standards for Business Enterprises
The financial statements are prepared by the Group according to the requirements of
Accounting Standards for Business Enterprises and reflect the relative information for
the financial position operating performance cash flow of the Group truly and fully.
（2）Accounting period
The Group adopts the Gregorian calendar year as accounting period i.e. from Jan 1 to Dec
31.
（3）Operating cycle
Notes to the Financial Statements 16Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Normal operating cycle refers to the duration starting from purchasing the assets for
manufacturing up to cash or realization of cash equivalents. The Group sets twelve months
as one operating cycle and as the liquidity criterion for assets and liabilities.
（4）Functional currency
The Group adopts CNY as functional currency.
（5）Accounting for business combination under same control and not under same
control
Business combinations under common control: Assets and liabilities acquired by the
consolidating party in a business combination (including goodwill resulting from the
acquisition of the consolidated party by the ultimate controlling party) are measured at the
carrying value of the consolidated party's assets and liabilities in the consolidated financial
statements of the ultimate controlling party at the date of the combination. The difference
between the book value of the net assets acquired in the merger and the book value of the
merger consideration paid (or the total nominal value of shares issued) is adjusted against
the equity premium in capital surplus and if the equity premium in capital surplus is not
sufficient for elimination retained earnings are adjusted.Business combinations not under common control: The cost of the combination is the fair
value of the assets paid liabilities incurred or assumed and equity securities issued by the
purchaser to obtain control of the acquiree at the date of acquisition. The difference
between the cost of the combination and the share of the fair value of the acquiree's
identifiable net assets acquired in the combination is recognized as goodwill; the difference
between the cost of the combination and the share of the fair value of the acquiree's
identifiable net assets acquired in the combination is recognized in profit or loss for the
period. Each identifiable asset liability and contingent liability of the acquiree acquired in
a merger that meets the recognition criteria is measured at fair value at the date of
acquisition.Directly related costs incurred for a business combination are recognized in profit or loss
as incurred; transaction costs for issuing equity securities or debt securities for a business
combination are included in the initial recognition amount of the equity securities or debt
securities.
（6）Criteria for determining control and Method of preparation of consolidated
financial statements
1. Criteria for determining control
Notes to the Financial Statements 17Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
The scope of consolidation in the consolidated financial statements is determined on the
basis of control and the scope of consolidation includes The company and all of its
subsidiaries. Control means that The company has power over the investee has rights to
variable returns through its participation in the investee's related activities and has the
ability to use its power over the investee to influence the amount of its returns.
2. Consolidation procedures
The company considers the entire enterprise group as one accounting entity and prepares
consolidated financial statements in accordance with uniform accounting policies to reflect
the financial position results of operations and cash flows of the enterprise group as a
whole. The effects of internal transactions that occur between The company and its
subsidiaries and between subsidiaries are eliminated. If an internal transaction indicates an
impairment loss on the related asset the full amount of such loss is recognized. If the
accounting policies and accounting periods adopted by a subsidiary are not consistent with
those of The company the necessary adjustments are made in accordance with The
company's accounting policies and accounting periods when preparing the consolidated
financial statements.The share of ownership equity net profit or loss for the period and comprehensive income
for the period attributable to minority shareholders of the subsidiaries are presented
separately in the consolidated balance sheet under the item of ownership equity in the
consolidated income statement under the item of net profit and in the consolidated
statement of total comprehensive income respectively. The balance resulting from the
subsidiary's minority share of current loss exceeding the minority's share of the subsidiary's
opening ownership interest is eliminated to reduce shareholders' equity.
(1) Increase number of subsidiaries or operations
During the reporting period if a subsidiary or business is added as a result of a business
combination under the same control the operating results and cash flows of the subsidiary
or business from the beginning of the period in which the subsidiary or business is
combined to the end of the reporting period are included in the consolidated financial
statements while the opening balance of the consolidated financial statements and the
relevant items in the comparative statements are adjusted as if the consolidated reporting
entity had existed since the point when the ultimate controlling party began to control it.If control over an investee under the same control can be exercised due to additional
investment equity investments held prior to the acquisition of control over the investee are
Notes to the Financial Statements 18Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
eliminated from the opening retained earnings or current profit or loss for the comparative
statement period respectively for the relevant gains or losses other comprehensive income
and other changes in net assets recognized between the later of the date of acquisition of
the original equity interest and the date when the consolidated party and the investee are
under the same control and the date of consolidation.During the reporting period the addition of subsidiaries or operations as a result of a
business combination not under common control is included in the consolidated financial
statements from the date of acquisition based on the fair value of each identifiable asset
liability and contingent liability determined at the date of acquisition.If for example additional investments enable the exercise of control over an investee not
under common control the equity interest in the investee held prior to the date of
acquisition is remeasured at the fair value of that equity interest at the date of acquisition
and the difference between the fair value and its carrying amount is recognized as
investment income for the current period. The difference between the fair value and its
carrying amount is recognized as investment income for the period. The equity interest in
the investee held prior to the date of acquisition is transferred to investment income for the
period to which the equity interest is transferred under the equity method.
(2) Disposal of subsidiaries
* General treatment
When control over an investee is lost due to disposal of part of the equity investment or
other reasons the remaining equity investment after disposal is remeasured at its fair value
at the date of loss of control. The difference between the sum of the consideration received
for the disposal of the equity interest and the fair value of the remaining equity interest
less the sum of the share of the net assets of the original subsidiary calculated on a
continuing basis from the date of acquisition or the date of consolidation in proportion to
the original shareholding and goodwill is recognized as investment income in the period in
which control is lost. Other comprehensive income and other changes in owners' equity
under the equity method of accounting related to the equity investment in the original
subsidiary that can be reclassified to profit or loss in the future are transferred to
investment income in the current period when control is lost.* Step-by-step disposal of subsidiaries
Notes to the Financial Statements 19Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Disposal of equity investments in subsidiaries through multiple transactions in steps until
the loss of control the terms and conditions of the disposal of equity investments in
subsidiaries and the economic impact of each transaction is consistent with one or more of
the following usually indicating that the multiple transactions are a package deal:
i. The transactions are entered into simultaneously or after taking into account their mutual
effects;
ⅱ. These transactions as a whole to achieve a complete business result;
ⅲ. The occurrence of one transaction depends on the occurrence of at least one other
transaction;
ⅳ. A transaction is not economical when viewed alone but is economical when considered
together with other transactions.If each transaction is a package transaction each transaction is accounted for as a disposal
of a subsidiary and loss of control; the difference between the disposal price and the share
of the net assets of the subsidiary corresponding to the disposal of the investment before
the loss of control is recognized in the consolidated financial statements as other
comprehensive income and is transferred to profit or loss in the period is lost when control
is lost.If each transaction is not a package transaction the accounting treatment is based on partial
disposal of the equity investment in the subsidiary without loss of control before the loss of
control; upon the loss of control the accounting treatment is based on the general treatment
of disposal of subsidiaries.
(3) Purchase of minority interests in subsidiaries
The difference between the newly acquired long-term equity investment due to the
purchase of minority interest and the share of net assets of the subsidiary calculated in
proportion to the newly acquired shareholding on an ongoing basis from the date of
acquisition or the date of consolidation is adjusted to the equity premium in capital surplus
in the consolidated balance sheet; if the equity premium in capital surplus is not sufficient
for elimination it is adjusted to retained earnings.
(4) Partial disposal of equity investments in subsidiaries without loss of control
Notes to the Financial Statements 20Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
The difference between the disposal price and the share of net assets of the subsidiary
calculated on a continuing basis from the date of acquisition or the date of consolidation
corresponding to the disposal of the long-term equity investment is adjusted to the equity
premium in capital surplus in the consolidated balance sheet and if the equity premium in
capital surplus is not sufficient to offset it retained earnings are adjusted.
（7）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.
（8）Translation of foreign currency
1.Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued by People’s
Bank of China (“PBOC”) when the transaction incurs. Monetary assets and liabilities in
foreign currencies are translated into RMB at the exchange rate prevailing at the balance
sheet day. Exchange differences arising from the settlement of monetary items are charged
as in profit or loss for the period. Exchange differences of specific borrowings related to
the acquisition or construction of a fixed asset should be capitalized as occurred before the
relevant fixed asset being acquired or constructed is ready for its intended uses.
2.Translation of foreign currency financial statements
Assets and liabilities in the balance sheet are translated using the spot rate of exchange at
the balance sheet date; items in owners' equity except for "undistributed earnings" are
translated using the spot rate of exchange at the time of occurrence. Income and expense
items in the income statement are translated using the spot exchange rate at the date of the
transaction.Upon disposal of a foreign operation the difference in translation of the foreign currency
financial statements relating to the foreign operation is transferred from owners' equity to
profit or loss in the period of disposal.
（9）Financial instrument
The Group recognizes a financial assets a financial liability or an equity instrument when
it becomes a party to a financial instrument contract.Notes to the Financial Statements 21Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
1. Classification of financial instruments
Based on The Group's business model for managing financial assets and the contractual
cash flow characteristics of financial assets financial assets are classified at initial
recognition as financial assets carried at amortized cost financial assets at fair value
through other comprehensive income and financial assets at fair value through profit or
loss.The Group classifies financial assets at amortized cost that are not designated as financial
assets at fair value through profit or loss if they both meet the following criteria:
- (a) The business model is to collect the contractual cash flows;
- The contractual cash flows are only payments of principal and interest based on the
outstanding principal amount.The Group classifies financial assets as financial assets at fair value through other
comprehensive income (debt instruments) that are not designated as at fair value through
profit or loss if they also meet the following criteria:
- Operating model with the objective of both collecting the contractual cash flows and
selling the financial assets;
- The contractual cash flows are only payments on the principal and interest based on the
outstanding principal amount.For investments in non-trading equity instruments The Group may irrevocably designate
them at initial recognition as financial assets at fair value through other comprehensive
income (equity instruments). This designation is made on an individual investment basis
and the related investment meets the definition of an equity instrument from the
perspective of the issuer.Except for the above-mentioned financial assets measured at amortized cost and financial
assets at fair value through other comprehensive income The Group classifies all
remaining financial assets as financial assets at fair value through profit or loss. On initial
recognition The Group may irrevocably designate financial assets that would otherwise be
classified as financial assets at amortized cost or at fair value through other comprehensive
income as financial assets at fair value through profit or loss if it can eliminate or
significantly reduce the accounting mismatch.Notes to the Financial Statements 22Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Financial liabilities are classified at initial recognition as financial liabilities at fair value
through profit or loss and financial liabilities at amortized cost.A financial liability may be designated as a financial liability at fair value through profit or
loss at initial measurement if one of the following conditions is met:
(1) The designation eliminates or significantly reduces an accounting mismatch.
2) The management and performance evaluation of a portfolio of financial liabilities or a
portfolio of financial assets and financial liabilities is performed on a fair value basis in
accordance with the enterprise's risk management or investment strategy as set out in
formal written documentation and reported to key management personnel on this basis
within the enterprise.
(3) The financial liability contains embedded derivatives that are subject to separate
splitting.
2. Recognition basis and measurement method of financial instruments
(1) Financial assets measured at amortized cost
Financial assets measured at amortized cost including notes receivable accounts
receivable other receivables long-term receivables and debt investments are initially
measured at fair value with related transaction costs included in the initial recognition
amount; accounts receivable that do not contain significant financing components and
those that The Group has decided not to consider financing components that do not exceed
one year are initially measured at contractual transaction prices.Interest calculated using the effective interest rate method during the holding period is
recognized in profit or loss.On recovery or disposal the difference between the acquisition price and the carrying
amount of the financial assets is recognized in profit or loss for the current period.
(2) Financial assets at fair value through other comprehensive income (debt instruments)
Financial assets (debt instruments) at fair value through other comprehensive income
include receivables financing and other debt investments which are initially measured at
fair value with related transaction costs recognized in the initial recognition amount. The
financial assets are subsequently measured at fair value and changes in fair value are
Notes to the Financial Statements 23Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
recognized in other comprehensive income except for interest impairment loss or gain and
exchange gain or loss calculated using the effective interest rate method.Upon derecognition the cumulative gain or loss previously recognized in other
comprehensive income is transferred from other comprehensive income and recognized in
profit or loss for the current period.
(3) Financial assets at fair value through other comprehensive income (equity instruments)
Financial assets (equity instruments) at fair value through other comprehensive income
including investments in other equity instruments are initially measured at fair value with
related transaction costs recognized in the initial recognition amount. The financial assets
are subsequently measured at fair value with changes in fair value recognized in other
comprehensive income. Dividends received are recognized in current profit or loss.Upon derecognition the cumulative gain or loss previously recognized in other
comprehensive income is transferred from other comprehensive income and recognized in
retained earnings.
(4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading
derivative financial assets and other non-current financial assets which are initially
measured at fair value with related transaction costs recognized in profit or loss. The
financial assets are subsequently measured at fair value with changes in fair value
recognized in profit or loss for the period.
(5) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and derivative financial liabilities which are initially measured at fair value with
related transaction costs recognized in profit or loss. The financial liabilities are
subsequently measured at fair value with changes in fair value recognized in profit or loss
for the period.Upon derecognition the difference between the carrying amount and the consideration paid
is recognized in profit or loss for the current period.
(6) Financial liabilities measured at amortized cost
Notes to the Financial Statements 24Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Financial liabilities measured at amortized cost include short-term borrowings notes
payable accounts payable other payables long-term borrowings bonds payable and
long-term payables which are initially measured at fair value with related transaction
costs included in the initial recognition amount.Interest calculated using the effective interest rate method during the holding period is
recognized in profit or loss.Upon derecognition the difference between the consideration paid and the carrying amount
of the financial liability is recognized in profit or loss for the current period.
3. Basis of recognition and measurement of financial assets derecognition and financial
assets transfers
The Group derecognizes a financial assets when one of the following conditions is met:
- The contractual rights to receive cash flows from the financial assets are terminated;
- The financial assets has been transferred and substantially all the risks and rewards of
ownership of the financial assets have been transferred to the transferring party;
- A financial assets has been transferred and control over the financial assets is not retained
although The Group neither transfers nor retains substantially all the risks and rewards of
ownership of the financial assets.When The Group modifies or renegotiates a contract with a counterparty and the
modification constitutes a material change the original financial assets is derecognized and
a new financial assets is recognized in accordance with the modified terms.A financial assets is not derecognized if substantially all the risks and rewards of
ownership of the financial assets are retained when a transfer of the financial assets occurs.In determining whether a transfer of financial assets meets the above conditions for
derecognition of financial assets the principle of substance over form is applied.The Group distinguishes between transfers of financial assets as a whole and partial
transfers of financial assets. If the transfer of a financial assets as a whole meets the
derecognition condition the difference between the following two amounts is recognized
in profit or loss for the current period:
Notes to the Financial Statements 25Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(1) The carrying amount of the financial assets transferred;
(2) The sum of the consideration received for the transfer and the cumulative amount of
changes in fair value previously recognized directly in owners' equity (in the case where
the transferred financial assets is a financial assets (debt instrument) measured at fair value
through other comprehensive income).If a partial transfer of a financial assets satisfies the derecognition condition the carrying
amount of the financial assets transferred as a whole is apportioned between the
derecognized portion and the unrecognized portion according to their respective relative
fair values and the difference between the following two amounts is recognized in profit or
loss:
(1) The carrying amount of the derecognized portion;
(2) The sum of the consideration for the derecognized portion and the amount
corresponding to the derecognized portion of the cumulative amount of changes in fair
value previously recognized directly in owners' equity (in the case where the financial
assets involved in the transfer is a financial assets (debt instrument) measured at fair value
through other comprehensive income).If the transfer of a financial assets does not meet the derecognition condition the financial
assets continues to be recognized and the consideration received is recognized as a
financial liability.
4. Derecognition of financial liabilities
A financial liability or a portion thereof is derecognized when the present obligation of the
financial liability is discharged in whole or in part. If The Group enters into an agreement
with a creditor to replace an existing financial liability by assuming a new financial liability
and the contractual terms of the new financial liability are materially different from those
of the existing financial liability the existing financial liability is derecognized and a new
financial liability is recognized at the same time.If all or part of the contractual terms of an existing financial liability are substantially
modified the existing financial liability or part of it is derecognized and the modified
financial liability is recognized as a new financial liability at the same time.Notes to the Financial Statements 26Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
When a financial liability is derecognized in whole or in part the difference between the
carrying amount of the derecognized financial liability and the consideration paid
(including non-cash assets transferred or new financial liabilities assumed) is recognized in
profit or loss for the period.If The Group repurchases a portion of a financial liability the carrying amount of the
financial liability as a whole is allocated on the repurchase date based on the relative fair
values of the portion that continues to be recognized and the portion that is derecognized.The difference between the carrying amount allocated to the derecognized portion and the
consideration paid (including non-cash assets transferred or new financial liabilities
assumed) is recognized in profit or loss for the period.
5. Methods to determine the fair value of financial assets and financial liabilities
The fair value of financial instruments for which there is an active market is determined by
quoted prices in an active market. The fair value of financial instruments for which no
active market exists is determined using valuation techniques. In valuation The Group uses
valuation techniques that are applicable in the current circumstances and supported by
sufficient available data and other information selects inputs that are consistent with the
characteristics of the asset or liability considered by market participants in transactions for
the relevant asset or liability and gives preference to the use of relevant observable inputs.Unobservable inputs are used only if the relevant observable inputs are not available or not
practicable to obtain.
6. Methods of testing and accounting for impairment of financial instrument
The Group estimates the expected credit losses on financial assets measured at amortized
cost financial assets at fair value through other comprehensive income (debt instruments)
and financial guarantee contracts etc.The Group recognizes expected credit losses by calculating the probability-weighted
amount of the present value of the difference between the cash flows receivable under the
contract and the cash flows expected to be received taking into account reasonable and
substantiated information about past events current conditions and forecasts of future
economic conditions weighted by the risk of default.For receivables and contract assets resulting from transactions governed by ASBE No. 14
Revenue The Group always measures its allowance for losses at an amount equal to the
Notes to the Financial Statements 27Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
expected credit losses over the entire duration regardless of whether or not there is a
significant financing component.For lease receivables resulting from transactions regulated by ASBE No. 21 "Leases" The
Group has elected to always measure its allowance for losses at an amount equal to the
expected credit losses over the entire duration.For other financial instruments The Group assesses at each balance sheet date the change
in credit risk of the related financial instruments since initial recognition.The Group assesses whether the credit risk of a financial instrument has increased
significantly since initial recognition by comparing the risk of default of the financial
instrument at the balance sheet date with the risk of default at the date of initial recognition
to determine the relative change in the risk of default over the expected life of the financial
instrument. The Group generally considers that the credit risk of a financial instrument has
increased significantly if it is more than 30 days past due unless there is conclusive
evidence that the credit risk of the financial instrument has not increased significantly since
initial recognition.If the credit risk of a financial instrument is low at the balance sheet date The Group
considers that the credit risk of the financial instrument has not increased significantly
since initial recognition.If the credit risk of a financial instrument has increased significantly since initial
recognition The Group measures the allowance for losses at an amount equal to the
expected credit losses over the entire life of the financial instrument; if the credit risk of a
financial instrument has not increased significantly since initial recognition The Group
measures the allowance for losses at an amount equal to the expected credit losses of the
financial instrument in the next 12 months. The resulting increase or reversal amount of the
loss allowance is recognized as an impairment loss or gain in profit or loss. For financial
assets (debt instruments) that are measured at fair value through other comprehensive
income the allowance for losses is recognized in other comprehensive income and the
impairment loss or gain is recognized in profit or loss for the current period and does not
reduce the carrying amount of the financial assets as stated in the balance sheet.If there is objective evidence that a accounts receivable is credit impaired The Group
provides for impairment of that accounts receivable on a stand-alone basis.Notes to the Financial Statements 28Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
For receivables and contract assets resulting from transactions governed by ASBE No. 14 -
Revenue (2017) The Group consistently measures its allowance for losses at an amount
equal to the expected credit loss over the entire life of the asset regardless of whether it
contains a significant financing component.For lease receivables The Group has elected to always measure the allowance for losses at
an amount equal to the expected credit loss over the entire life of the receivables.In addition to certain financial assets that are assessed for past due credit losses on an
individual basis the Group also assesses expected credit losses on financial assets
measured at amortized cost on the basis of an aging portfolio.In addition to the above receivables that are individually provided for bad debts The
Group classifies the remaining financial instruments into portfolios based on credit risk
characteristics and determines expected credit losses on a portfolio basis. The categories of
portfolio and the basis for determining expected credit losses for notes receivable accounts
receivable accounts receivable financing and other receivables are described below:
（1）Notes Receivable
Portfolio Name Basis for Determining the Portfolio
Portfolio 1 Bank acceptance notes
Portfolio 2 Finance company acceptance notes
Portfolio 3 Trade acceptance notes
（2）Accounts Receivable and Contract Assets
Portfolio Name Basis for Determining the Portfolio
Amounts receivable from related parties within the
Related party portfolio consolidation scope of Dalian Heavy Industry
Equipment Group Co. Ltd.Account receivable aging portfolio Receivables other than the above related partyPortfolio
（3）Financing receivable
Portfolio Name Basis for Determining the Portfolio
Notes receivable Notes receivable that are held both for collectingcontractual cash flows and for sale
Notes to the Financial Statements 29Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Supply Chain E-Credential Supply chain certificates that are held both forcollecting contractual cash flows and for sale
（4）Other Receivables
Portfolio Name Basis for Determining the Portfolio
Amounts receivable from related parties within the
Related party portfolio consolidation scope of Dalian Heavy Industry
Equipment Group Co. Ltd.Reserve fund portfolio Reserve fund
Account receivable aging portfolio Other receivables other than the Related partyportfolio and the reserve fund portfolio.If The Group no longer has a reasonable expectation that the contractual cash flows from a
financial assets will be fully or partially recovered the carrying amount of the financial
assets is written down directly.
(10) Inventories
1.Category and cost of inventories
Inventories are classified as: raw materials packaging low-value consumables work in
process and finished goods.Inventories is initially measured at cost and the cost of inventories includes the cost of
purchase processing costs and other expenses incurred in bringing the inventories to its
current location and condition.
2.Valuation method of issued inventories
Inventories are valued on a real-time moving weighted-average basis when they are issued.
3. inventories system
Adoption of perpetual inventories system
4.Amortization method of low-value consumables and packaging
(1) Low-value consumables are amortized using the one-time reversal method;
(2) The one-time reversal method is used for packaging.
Notes to the Financial Statements 30Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
5. Recognition criteria and accrual method for provision for decline in value of inventories
At the balance sheet date inventories should be measured at the lower of cost or net
realizable value. When the cost of inventories is higher than their net realizable value a
provision for the impairment of inventories should be made. Net realizable value is the
estimated selling price of inventories in the ordinary course of activities less the estimated
costs to be incurred to completion estimated selling expenses and related taxes.The net realizable value of finished goods inventories and materials for sale which are
directly used for sale is determined in the normal course of production and operation as the
estimated selling price of the inventories less estimated selling expenses and related taxes;
the net realizable value of materials subject to processing is determined in the normal
course of production and operation as the estimated selling price of the finished goods
produced less estimated costs to be incurred to completion estimated selling expenses and
related taxes The net realizable value of inventories held for the execution of sales
contracts or labor contracts is calculated on the basis of the contract price and if the
quantity of inventories held exceeds the quantity ordered in the sales contract the net
realizable value of the excess inventories is calculated on the basis of the general sales
price.After the provision for the impairment of inventories if the factors affecting the previous
write-down of inventories value have disappeared resulting in the net realizable value of
inventories higher than its book value the amount of the provision for the impairment of
inventories is reversed within the original provision and the reversed amount is included in
the current profit and loss.
(11) Contract assets
1. Methods and criteria for recognition of contract assets
The Group presents contract assets or contract liabilities in the balance sheet based on the
relationship between the performance obligations and payments from customers. The right
to receive consideration for goods transferred or services provided by The Group to the
customer (and which is dependent on factors other than the passage of time) is presented as
a contract assets. Contract assets and contract liabilities under the same contract are shown
on a net basis. The Group's unconditional (depending only on the passage of time) right to
receive consideration from customers is shown separately as receivables.
2. Method of determining expected credit losses on contract assets and accounting
treatment
Notes to the Financial Statements 31Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
The methods of determining expected credit losses on contract assets and the accounting
treatment are described in detail in Note "(ix) 6. Methods of testing and accounting
treatment for impairment of Financial instrument" in this Note.
(12) Long-term equity investments
1. Criteria for determining joint control and significant influence
Joint control refers to the control shared by an arrangement in accordance with the relevant
agreement and the relevant activities of the arrangement can only be decided with the
unanimous consent of the participants sharing the control. If The Group exercises joint
control over an investee together with other joint venture parties and has rights to the
investee's net assets the investee is a joint venture of The Group.Significant influence means having the power to participate in the financial and operating
decisions of the investee but not being able to control or exercise joint control with other
parties over the formulation of those policies. Where The Group is able to exercise
significant influence over an investee the investee is an associate of The Group.
2. Determination of initial investment
(1) Long-term equity investments resulting from business combinations
For long-term equity investments in subsidiaries formed by business combinations under
common control the initial investment of long-term equity investments is determined at
the date of consolidation based on the acquisition of the share of the ownership interest of
the consolidated party in the book value of the consolidated financial statements of the
ultimate controlling party. The difference between the initial investment cost of the
long-term equity investment and the carrying value of the consideration paid is adjusted
against the equity premium in capital surplus; if the equity premium in capital surplus is
not sufficient for elimination retained earnings are adjusted. If The Group is able to
exercise control over an investee under the same control due to additional investment the
difference between the initial investment cost of the long-term equity investment
recognized in accordance with the above principle and the sum of the book value of the
long-term equity investment before reaching the consolidation plus the book value of the
consideration paid for further acquisition of shares at the date of consolidation is adjusted
against equity premium and if the equity premium is not sufficient for elimination it is
reduced against retained earnings.Notes to the Financial Statements 32Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
For long-term equity investments in subsidiaries formed through business combinations
not under common control the initial investment cost of the long-term equity investment is
based on the cost of the combination determined at the date of acquisition. If it is possible
to exercise control over the investee under non-same control due to additional investment
the sum of the book value of the equity investment originally held plus the cost of the
additional investment is used as the initial investment cost.
(2) Long-term equity investments acquired through other means instead of business
combination
Long-term equity investments acquired by cash payment are recorded at initial investment
cost based on the actual purchase price paid.Long-term equity investments acquired by issuing equity securities are recorded at the
initial investment cost based on the fair value of the equity securities issued.
3. Subsequent measurement and profit or loss recognition methods
(1) Long-term equity investments accounted for under the cost method
The Group accounts for its long-term equity investments in subsidiaries using the cost
method unless the investments meet the conditions of being held for sale. Except for the
declared but unpaid cash dividends or profits included in the actual price or consideration
paid for the investment The Group recognizes investment income for the current period
based on The Group's entitlement to the declared cash dividends or profits of the investee.
(2) Long-term equity investments accounted for under the equity method
Long-term equity investments in associates and joint ventures are accounted for using the
equity method. The difference between the initial investment cost and the share of the fair
value of the identifiable net assets of the investee at the time of investment is not adjusted
to the initial investment cost of the long-term equity investment; the difference between the
initial investment cost and the share of the fair value of the identifiable net assets of the
investee at the time of investment is recognized in profit or loss for the current period and
the cost of the long-term equity investment is also adjusted.The Group recognizes investment income and other comprehensive income according to
the share of net profit or loss and other comprehensive income realized by the investee
respectively and adjusts the carrying value of the long-term equity investment at the same
Notes to the Financial Statements 33Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
time; the portion to which The Group is entitled according to the profit or cash dividends
declared by the investee is calculated and the carrying value of the long-term equity
investment is reduced accordingly; for the investee's ownership interest other than net
profit or loss other comprehensive income and profit distribution For changes in the equity
of the investee other than net profit or loss other comprehensive income and profit
distribution ("changes in other owners' equity") the carrying amount of the long-term
equity investment is adjusted and recognized in owners' equity.In recognizing the share of the investee's net profit or loss other comprehensive income
and other changes in owners' equity the fair value of the investee's identifiable net assets at
the time of acquisition is used as the basis for recognition and the net profit and other
comprehensive income of the investee are adjusted in accordance with The Group's
accounting policies and accounting periods.Unrealized gains or losses on internal transactions between The Group and associate and
joint ventures that are attributable to The Group on the basis of their proportionate share
are offset and investment income is recognized on this basis except when the assets
invested or sold constitute a business. Unrealized losses on internal transactions with
investees are recognized in full if there are impairment losses on assets.The net loss incurred by The Group in a joint venture or an associate except for the
obligation to assume additional losses is limited to a write-down to zero of the carrying
amount of the long-term equity investment and other long-term interests that substantially
constitute the net investment in the joint venture or associate. If the joint venture or
associate subsequently realizes net profit The Group resumes recognition of revenue
sharing after the revenue sharing amount makes up for the unrecognized loss sharing
amount.
(3) Disposal of long-term equity investments
The difference between the carrying amount and the actual acquisition price of a long-term
equity investment is recognized in profit or loss for the current period.If a long-term equity investment accounted for under the equity method is partially
disposed of and the remaining equity interest is still accounted for under the equity method
the other comprehensive income recognized under the former equity method is carried
forward in proportion to the corresponding percentage using the same basis as the direct
disposal of the related assets or liabilities by the investee and other changes in owners'
equity are carried forward in proportion to the current profit or loss.Notes to the Financial Statements 34Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
If the common control or significant influence over the investee is lost due to the disposal
of equity investments etc. other comprehensive income recognized as a result of the
adoption of the equity method of accounting for the original equity investment is accounted
for on the same basis as the direct disposal of the related assets or liabilities of the investee
upon the termination of the adoption of the equity method of accounting and all changes in
other owners' equity are transferred to current profit or loss upon the termination of the
adoption of the equity method of accounting.If control over the investee is lost due to disposal of part of the equity investment the
remaining equity interest that can exercise joint control or significant influence over the
investee is accounted for under the equity method in the preparation of individual financial
statements and the remaining equity interest is adjusted as if it had been accounted for
under the equity method from the time of acquisition and other comprehensive income
recognized prior to the acquisition of control over the investee is accounted for on the same
basis as if the investee had directly disposed of the related assets or liabilities. If the
remaining equity interest cannot exercise joint control or significant influence over the
investee it is recognized as a financial assets and the difference between its fair value and
its carrying amount at the date of loss of control is recognized in profit or loss for the
current period and for other comprehensive income and other owner's equity recognized
prior to the acquisition of control of the investee the remaining equity interest is
recognized in profit or loss for the current period. All other comprehensive income and
other changes in owners' equity recognized prior to the acquisition of control of the
investee are carried forward.If the disposal of an equity investment in a subsidiary through multiple transactions until
the loss of control is a package transaction each transaction is accounted for as a disposal
of an equity investment in a subsidiary and the loss of control; the difference between the
disposal price and the carrying value of the long-term equity investment corresponding to
the equity interest disposed of before the loss of control is recognized as other
comprehensive income in the individual financial statements and then recognized as other
comprehensive income when control is lost. The difference between the disposal price and
the carrying amount of the long-term equity investment before the loss of control is
recognized as other comprehensive income in the individual financial statements and then
transferred to profit or loss in the period in which control is lost. If it is not a package
transaction each transaction is accounted for separately.
(13) Investment properties
Notes to the Financial Statements 35Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Investment properties are real estate held to earn rentals or for capital appreciation or both
and include land use rights that have been leased out land use rights that are held and
intended to be transferred after appreciation and buildings that have been leased out
(including buildings that are used for leasing after completion of self-construction or
development activities and buildings that are under construction or development that will
be used for leasing in the future).Subsequent expenditures related to investment properties are included in the cost of
investment properties when the inflow of related economic benefits is probable and their
costs can be measured reliably; otherwise they are recognized in current profit or loss
when incurred.The Group uses the cost model to measure existing investment properties. The same
depreciation policy as that for The Group's fixed assets is applied to investment properties -
buildings for lease that are measured under the cost model and land use rights for lease are
subject to the same amortization policy as that for intangible assets.
(14) Fixed assets
1. Recognition and initial measurement of fixed assets
Fixed assets are tangible assets held for the production of goods provision of services
rental or management and with a useful life of more than one fiscal year and a unit value
of more than CNY2000. A fixed asset is recognized when both of the following conditions
are met:
(1) It is probable that the economic benefits associated with the fixed asset will flow to the
enterprise;
(2) The cost of the fixed asset can be measured reliably.
Fixed assets are initially measured at cost (taking into account the effect of expected
disposal costs).Subsequent expenditures related to fixed assets are included in the cost of fixed assets
when it is probable that the economic benefits associated with them will flow to the
enterprise and their cost can be measured reliably; for the replaced part the carrying
amount is derecognized; all other subsequent expenditures are charged to current profit or
loss when incurred.Notes to the Financial Statements 36Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
2.Depreciation Method
Depreciation of fixed assets is provided using the average annual method and the
depreciation rate is determined based on the category of fixed assets estimated useful life
and estimated net residual value rate. For fixed assets with provision for impairment the
depreciation amount is determined in future periods based on the carrying amount after
deducting the provision for impairment and based on the remaining useful life. If each
component of fixed assets has different useful lives or provides economic benefits to the
enterprise in different ways different depreciation rates or depreciation methods are
selected and depreciated separately.The depreciation methods useful life residual value rate and annual depreciation rates of
various types of fixed assets are as follows:
Estimated net Annual
Category Useful life (years) residual depreciation
value rate (%) rate (%)
Housing and Buildings
Including: Houses factories
3033.23
cubicles pipelines roads
Waste storage 20 3 4.85
Machinery equipment 10 3 9.7
Transportation equipment 5 3 19.4
Electronic equipment
Including: Computer 5 3 19.4
Instrumentation 10 3 9.7
Others equipment
Including：Transmission equipment 10 3 9.7
Specialized equipment 10 3 9.7
Office equipment 5 3 19.4
Other Fixed assets 5 3 19.4
3. Disposal of fixed assets
Fixed assets are derecognized when they are disposed of or when no economic benefits are
expected to arise from their use or disposal. The disposal proceeds from the sale transfer
Notes to the Financial Statements 37Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
scrapping or destruction of fixed assets net of their book value and related taxes and fees
are recognized in profit or loss for the current period.
(15) Construction in progress
Construction in progress is measured at the actual cost incurred. Actual costs include
construction costs installation costs borrowings costs eligible for capitalization and other
necessary expenditures incurred to bring the construction in progress to its intended
useable condition. Construction in progress is transferred to fixed assets and depreciated
from the following month when it reaches its intended useable state.
(16) Intangible assets
1.Valuation method of intangible assets
(1) The Group initially measures intangible assets at cost when they are acquired;
The cost of an externally acquired intangible asset includes the purchase price related
taxes and other expenses directly attributable to bringing the asset to its intended use.
(2)Subsequent measurement
The useful life of an intangible asset is analyzed and determined at the time of acquisition.For intangible assets with finite useful lives they are amortized over the period in which
they bring economic benefits to the enterprise; if the period in which the intangible assets
bring economic benefits to the enterprise cannot be foreseen they are considered to be
intangible assets with indefinite useful lives and are not amortized.
2.Estimation of useful lives of intangible assets with finite useful lives
For intangible assets with finite useful lives they are amortized over the period that they
will bring economic benefits to the enterprise; if it is not possible to foresee the period that
the intangible assets will bring economic benefits to the enterprise they are regarded as
intangible assets with indefinite useful lives and are not amortized.Land use rights are amortized equally over their useful lives from the date of grant; ERP
software and other intangible assets are amortized equally over the shortest of their
estimated useful lives contractual beneficial lives and effective lives as prescribed by law.The amortization amount is charged to the cost of the related assets and to current profit or
loss according to the target beneficiary. The estimated useful lives and amortization
Notes to the Financial Statements 38Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
methods for intangible assets with finite useful lives are reviewed at the end of each year
and any changes are treated as changes in accounting estimates.
3.Scope of Research and Development Expenditures
The Group's expenses incurred in the process of conducting research and development
include related staff salaries materials consumed related depreciation and amortization
expenses and other related expenses of the personnel engaged in research and development
activities and are summarized as follows:
The relevant employee compensation of the personnel engaged in R&D activities mainly
refers to the relevant employee compensation of the personnel directly engaged in R&D
activities the management personnel closely related to R&D activities and the direct
service personnel.Depreciation expense refers to the expense of depreciation of instruments equipment and
buildings in use for research and development activities. Long-term deferred expenses refer
to long-term deferred expenses incurred in the course of alteration modification
renovation and repair of research and development facilities.Direct input expense refers to the related expenditure actually incurred by enterprises for
the implementation of research and development activities. Including direct consumption
of materials fuel and power costs; Expenses for the operation maintenance adjustment
inspection inspection and repair of instruments and equipment used in research and
development activities as well as lease fees for fixed assets rented through business leasing
for research and development activities.
4.Specific criteria for classifying research and development phases
Expenditures on in-house research and development projects are categorized into research
stage expenditures and development stage expenditures.Research stage: the stage of original and planned investigation and research activities for
the purpose of acquiring and understanding new scientific or technological knowledge.Development phase: the stage of applying research results or other knowledge to a plan or
design to produce new or substantially improved materials devices products and other
activities before commercial production or use.
5.The specific conditions for capitalization of development stage expenditures
Notes to the Financial Statements 39Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Expenditures in the research stage are recognized in profit or loss when they are incurred.Expenditures in the development phase are recognized as intangible assets if the following
conditions are met. Expenditures in the development phase that do not meet the following
conditions are recognized in the current period's profit or loss:
(1) It is technically feasible to complete the intangible asset so that it can be used or sold;
(2) There is an intention to complete the intangible asset for use or sale;
(3) The manner in which the intangible asset will generate economic benefits including the
ability to demonstrate the existence of a market for the products produced by applying the
intangible asset or the existence of a market for the intangible asset itself and the
usefulness of the intangible asset if it will be used internally;
(4) The availability of sufficient technical financial and other resources to support the
completion of the development of the intangible asset and the ability to use or sell the
intangible asset;
(5) Expenditures attributable to the development phase of the intangible asset can be
measured reliably.If it is not possible to distinguish between research-phase expenditures and
development-phase expenditures all research and development expenditures incurred are
recognized in the current period's profit or loss.
(17) Impairment of long term assets
Long-term equity investments investment properties measured using the cost model fixed
assets construction in progress right-of-use assets intangible assets with finite useful life
oil and gas assets and other long-term assets are tested for impairment if there is an
indication of impairment at the balance sheet date. If the result of the impairment test
indicates that the recoverable amount of an asset is less than its carrying amount a
provision for impairment is made for the difference and an impairment loss is recorded.The recoverable amount is the higher of the asset's fair value less costs of disposal and the
present value of estimated future cash flows of the asset. The provision for asset
impairment is calculated and recognized on an individual asset basis. If it is difficult to
estimate the recoverable amount of an individual asset the recoverable amount of the asset
group is determined using the asset group to which the asset belongs. An asset group is the
smallest combination of assets that can generate cash inflows independently.Notes to the Financial Statements 40Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
For goodwill resulting from business combinations intangible assets with indefinite useful
lives and intangible assets that have not yet reached a serviceable status impairment tests
are performed once a year at the end of each year regardless of whether there is an
indication of impairment.The Group conducts goodwill impairment tests and apportions the carrying value of
goodwill formed as a result of a business combination to the relevant asset group from the
date of purchase in accordance with a reasonable method; if it is difficult to apportion to
the relevant asset group it is apportioned to the relevant asset group combination. A
relevant asset group or a combination of asset groups is an asset group or a combination of
asset groups that can benefit from the synergistic effect of a business combination.When impairment test of the relevant asset group or combination of asset groups that
contain goodwill if there is an indication of impairment of the asset group or combination
of asset groups related to goodwill the asset group or combination of asset groups that do
not contain goodwill is first tested for impairment the recoverable amount is calculated
and compared with the relevant carrying amount and a corresponding impairment loss is
recognized. If the recoverable amount is less than the carrying amount the impairment loss
is first reduced by the carrying amount of goodwill apportioned to the asset group or group
of assets and then reduced by the carrying amount of each asset group or group of assets
other than goodwill in proportion to its proportionate share of the carrying amount of the
other assets. The carrying value of each asset is then reduced by the carrying value of each
asset other than goodwill.Once the above impairment loss is recognized it will not be reversed in subsequent
accounting periods.
(18) Long-term amortization
Long-term amortization is an expense that has been incurred but should be borne by the
current and future periods and is apportioned over a period of more than one year. These
costs are amortized evenly over the period of benefit. If an item of long-term amortization
does not benefit subsequent accounting periods the unamortized amortized value of the
item is transferred to current profit or loss.
(19) Contract liability
An entity’s obligation to transfer goods or services to a customer for which the entity has
received consideration (or the amount is due) from the customer. Contract assets and
contract liability originate from same contact shall be listed at net amount.Notes to the Financial Statements 41Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(20) Employee compensation
1.Accounting for short-term compensation
The Group recognizes actual short-term compensation incurred by employees as a liability
in the accounting period in which the employees provide services to The Group and
recognizes it in the current profit or loss or the cost of related assets.The social insurance premiums and housing fund paid by The Group for its employees as
well as the labor union funds and employee education funds withdrawn in accordance with
regulations are used to determine the corresponding amount of employee compensation in
accordance with the prescribed accrual basis and accrual ratio during the accounting period
in which the employees provide services to The Group.Employee benefit expenses incurred by The Group are charged to current profit or loss or
the cost of related assets based on the actual amount incurred when incurred of which
non-monetary benefits are measured at fair value.
2.Accounting for post-employment benefits
(1) Defined contribution plan
The Group contributes to basic pension and unemployment insurance for employees in
accordance with the relevant local government regulations. During the accounting period in
which the employees provide services to The Group the amount payable is calculated
based on the contribution base and ratio set by the local regulations recognized as a
liability and charged to current profit or loss or cost of related assets. In addition The
Group participates in an enterprise annuity plan/supplemental pension fund approved by
the relevant state authorities. The Group contributes a certain percentage of the employees'
total salaries to the annuity plans/local social insurance agencies and the corresponding
expenses are recognized in the current profit or loss or cost of related assets.
(2) Defined benefit plans
The Group attributes the benefit obligations arising from the defined benefit plans to the
period in which the employees render services in accordance with the formula determined
by the expected accumulated benefit unit method and recognizes them in current profit or
loss or cost of related assets.The deficit or surplus resulting from the present value of the defined benefit plan
obligation less the fair value of the defined benefit plan assets is recognized as a net
Notes to the Financial Statements 42Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
defined benefit plan liability or net asset. If a defined benefit plan has a surplus The Group
measures the net defined benefit plan asset at the lower of the surplus or asset limit of the
defined benefit plan.All defined benefit plan obligations including those expected to be paid within twelve
months after the end of the annual reporting period in which employees render services are
discounted based on market yields on treasury bonds or high-quality corporate bonds in
active markets that match the maturity and currency of the defined benefit plan obligations
as of the balance sheet date.The service cost incurred by the defined benefit plan and the net interest on the net
liabilities or net assets of the defined benefit plan are recognized in profit or loss or the cost
of the related assets; changes resulting from the remeasurement of the net liabilities or net
assets of the defined benefit plan are recognized in other comprehensive income and are
not reversed to profit or loss in subsequent accounting periods and the entire portion
previously recognized in other comprehensive income is carried forward to unrecognized
earnings to the extent of equity upon termination of the original defined benefit plan. The
portion of other comprehensive income within equity is transferred to unappropriated
earnings upon termination of the defined benefit plan.Upon settlement of a defined benefit plan a gain or loss on settlement is recognized as the
difference between the present value of the defined benefit plan obligation and the
settlement price determined at the settlement date.
3.Accounting for termination benefits
If The Group provides termination benefits to employees it recognizes employee
compensation liabilities arising from termination benefits and recognizes them in profit or
loss at the earlier of: when The Group cannot unilaterally withdraw termination benefits
provided as a result of a termination plan or a proposed reduction in force; and when The
Group recognizes costs or expenses related to a restructuring involving the payment of
termination benefits.
(21) Accrued liabilities
The Group recognizes an obligation related to a contingent event as an accrued liabilities
when the following conditions are simultaneously met:
(1) The obligation is a present obligation assumed by The Group;
Notes to the Financial Statements 43Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(2) It is probable that the performance of the obligation will result in an outflow of
economic benefits to The Group;
(3) The amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle
the related present obligation.In determining the best estimate the risks associated with the contingency uncertainty and
the time value of money are considered. Where the effect of the time value of money is
material the best estimate is determined by discounting the related future cash outflows.Where a continuous range of expenditures required exists and it is equally probable that
various outcomes will occur within that range the best estimate is determined at the
mid-point of the range; in other cases the best estimate is treated separately as follows:
- Where the contingency relates to a single item the best estimate is determined in
accordance with the most probable occurrence amount.- If the contingency involves multiple items it is determined on the basis of various
possible outcomes and related probabilities.If all or part of the expenditure required to settle the estimated liability is expected to be
reimbursed by a third party the amount of reimbursement is recognized separately as an
asset when it is substantially certain that it will be received and the amount of
reimbursement recognized does not exceed the carrying amount of the estimated liability.The Group reviews the carrying amount of the estimated liability at the balance sheet date
and if there is conclusive evidence that the carrying amount does not reflect the current
best estimate the carrying amount is adjusted in accordance with the current best estimate.
(22) Revenue
1.Accounting policies used for revenue recognition and measurement
The Group recognizes revenue when it has fulfilled its performance obligations under a
contract i.e. when the customer obtains control of the relevant goods or services. The
acquisition of control of the relevant goods or services is defined as the ability to dominate
the use of the goods or services and derive substantially all of the economic benefits
therefrom.Notes to the Financial Statements 44Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
If a contract contains two or more performance obligations The Group apportions the
transaction price to each individual performance obligation on the contract commencement
date in proportion to the relative share of the individual selling price of the goods or
services promised by each individual performance obligation. The Group measures
revenue based on the transaction price apportioned to each individual performance
obligation.The transaction price is the amount of consideration to which The Group expects to be
entitled as a result of the transfer of goods or services to the customer excluding amounts
collected on behalf of third parties and amounts expected to be refunded to the customer.The Group determines the transaction price in accordance with the terms of the contract
taking into account its past customary practices and considers the impact of variable
consideration the existence of significant financing components in the contract non-cash
consideration and consideration payable to the customer in determining the transaction
price. The Group determines the transaction price that includes variable consideration by
an amount that does not exceed the amount for which it is highly probable that there will
be no material reversal of the cumulative recognized revenue at the time the relevant
uncertainty is removed. If there is a significant financing component in the contract The
Group determines the transaction price based on the amount payable in cash assuming that
the customer will pay for the goods or services as soon as control is obtained and
amortizes the difference between this transaction price and the contract consideration using
the effective interest rate method over the term of the contract. Performance obligations are
fulfilled within a certain period of time if one of the following conditions is met otherwise
performance obligations are fulfilled at a certain point in time:
- The customer obtains and consumes the economic benefits resulting from The Group's
performance at the same time as The Group's performance.- The customer is able to control the goods under construction in the course of The Group's
performance.- The goods produced in the course of The Group's performance have irreplaceable use and
The Group is entitled to receive payment for the portion of the performance that has been
completed to date in the aggregate throughout the term of the contract.For performance obligations performed within a certain period of time The Group
recognizes revenue in accordance with the progress of performance during that period
except when the progress of performance cannot be reasonably determined. The Group
uses the output method or input method to determine the progress of performance taking
Notes to the Financial Statements 45Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
into account the nature of the goods or services. When the progress of performance cannot
be reasonably determined The Group recognizes revenue in the amount of costs already
incurred until the progress of performance can be reasonably determined if the costs
already incurred are expected to be reimbursed.For performance obligations performed at a point in time The Group recognizes revenue at
the point in time when the customer obtains control of the related goods or services. In
determining whether the customer has acquired control of the goods or services The Group
considers the following indications:
- The Group has a present right to receive payment for the goods or services i.e. the
customer has a present obligation to pay for the goods or services.- The Group has transferred legal title to the goods to the customer i.e. the customer has
legal title to the goods.- The Group has transferred physical possession of the goods to the customer i.e. the
customer has taken physical possession of the goods.- The Group has transferred the principal risks and rewards of ownership of the goods to
the customer i.e. the customer has acquired the principal risks and rewards of ownership
of the goods.- The customer has accepted the goods or services etc.The Group determines whether its status is that of a principally liable person or an agent at
the time of engaging in a transaction based on whether it has control over the goods or
services prior to transferring them to the customer. If The Group is able to control the
goods or services prior to transferring them to the customer The Group is the principal and
recognizes revenue based on the total consideration received or receivable; otherwise The
Group is the agent and recognizes revenue based on the amount of commissions or fees it
expects to be entitled to receive.
2.Disclosure of specific revenue recognition and measurement methods by business type
The Group primarily sells bearing products. The performance obligations are satisfied at a
point in time. Based on the characteristics of the business the specific methods for revenue
recognition are as follows:
Domestic sales:
Notes to the Financial Statements 46Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
For products subject to customer drawdown (consumption) revenue is recognised when
the customer draws down and accepts the products in accordance with the terms of the
sales contract.For products subject to customer signature upon delivery revenue is recognised upon
customer acceptance and receipt of the signed delivery note.Export sales:
Revenue is recognised at the time of obtaining the bill of lading (after customs clearance
and departure of goods) or at the time of customer signature upon delivery as specified in
the sales contract.
(23) Contract Costs
Contract costs include contract performance costs and contract acquisition costs.Costs incurred by The Group to perform a contract that are not regulated by the relevant
standards such as inventories fixed assets or intangible assets are recognized as contract
performance costs as an asset when the following conditions are met:
- The cost is directly related to a contract that is currently or expected to be acquired.- The cost increases The Group's resources available to meet future performance
obligations.- The cost is expected to be recovered.Incremental costs incurred by The Group to acquire a contract that are expected to be
recovered are recognized as a contract acquisition cost as an asset.Assets related to contract costs are amortized using the same basis as revenue recognition
for the goods or services to which the asset relates; however for contract acquisition costs
that are amortized over a period of less than one year The Group recognizes them in profit
or loss as incurred. If the carrying value of an asset related to the contract cost is higher
than the difference between the following two items The Group provides for impairment
of the excess and recognizes an impairment loss on the asset:
1. the remaining consideration expected to be received for the transfer of the goods or
services related to the asset
Notes to the Financial Statements 47Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
2. the estimated costs to be incurred for the transfer of such related goods or services.
If there is a subsequent change in the factors impaired in prior periods that causes the
aforementioned difference to be higher than the carrying amount of the asset The Group
reverses the original provision for impairment and recognizes it in profit or loss provided
that the carrying amount of the asset after the reversal does not exceed the carrying amount
of the asset at the date of reversal assuming no provision for impairment was made.
(24) Government grants
1. Types
Government grants which are monetary or non-monetary assets acquired by The Group
from the government without compensation are classified as asset-related government
grants and revenue-related government grants.Government grants related to assets are obtained by The Group for the acquisition and
construction or otherwise forming long-term assets. Revenue-related government grants
refer to government grants other than asset-related government grants.The specific criteria for The Group to classify government grants as asset-related are:
government grants obtained by the Group and used for the acquisition and construction or
otherwise forming long-term assets
The Group's specific criteria for classifying government grants as revenue-related are:
government grants other than those related to assets
For those government grants for which the government documents do not specify the
objects of the grants The Group classifies the government grants as asset-related or
revenue-related based on the following judgment: the Group makes judgment in
accordance with the above-mentioned principles of differentiation and if it is difficult to
differentiate the whole is classified as revenue-related government grants.
2. Recognition point
Government grants are recognized when The Group is able to meet the conditions attached
to them and when they can be received.
3、Accounting treatment
Notes to the Financial Statements 48Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Government grants related to assets are reduced to the carrying amount of the relevant
assets or recognized as deferred income. If recognized as deferred income it is recognized
in profit or loss in accordance with a reasonable and systematic method in installments
over the useful life of the relevant assets (if it is related to The Group's daily activities it is
recognized in other income; if it is not related to The Group's daily activities it is
recognized in non-operating income);
Government grants related to revenue which are used to compensate The Group for
relevant costs and expenses or losses in subsequent periods are recognized as deferred
revenue and charged to current profit or loss (to other income if they are related to The
Group's ordinary activities; to non-operating income if they are not related to The Group's
ordinary activities) or offset against relevant costs and expenses or losses in the period in
which the relevant costs and expenses or losses are recognized; to compensate The Group
for If it is used to compensate The Group for the related costs or losses incurred it is
directly recognized in profit or loss (other income if it is related to The Group's daily
activities; non-operating income if it is not related to The Group's daily activities) or
reduced by the related costs or losses.
(25) Deferred income tax assets and deferred income tax liabilities
Income taxes consist of current income taxes and deferred income taxes. The Group
recognizes current income tax and deferred income tax in profit or loss except for income
tax arising from business combinations and transactions or events directly recognized in
owners' equity (including other comprehensive income).Deferred income tax assets and deferred income tax liabilities are recognized based on the
difference between the tax basis of assets and liabilities and their carrying amounts
(temporary differences).Deferred tax assets are recognized for deductible temporary differences to the extent that it
is probable that taxable income will be available in future periods against which the
deductible temporary differences can be utilized. For deductible losses and tax credits that
can be carried forward to future years deferred tax assets are recognized to the extent that
it is probable that future taxable income will be available against which the deductible
losses and tax credits can be utilized.Deferred income tax liabilities are recognized for taxable temporary differences except
under special circumstances.Notes to the Financial Statements 49Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
The special circumstances under which deferred tax assets or deferred tax liabilities are not
recognized include
- Initial recognition of goodwill;
- Transactions or events that are neither business combinations nor at the time of their
occurrence affect accounting profit and taxable income (or deductible losses) and for
which the initial recognition of assets and liabilities does not result in taxable temporary
differences and deductible temporary differences of an equivalent amount.Deferred income tax liabilities are recognized for taxable temporary differences associated
with investments in subsidiaries associates and joint ventures unless The Group is able to
control the timing of the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred income tax assets
are recognized for deductible temporary differences associated with investments in
subsidiaries associates and joint ventures when it is probable that the temporary
differences will reverse in the foreseeable future and it is probable that future taxable
income will be available against which the deductible temporary differences can be
utilized.At the balance sheet date deferred income tax assets and deferred income tax liabilities are
measured at the tax rates applicable to the periods when the related assets are expected to
be recovered or the related liabilities settled in accordance with the tax laws.At the balance sheet date The Group reviews the carrying amount of deferred tax assets.The carrying amount of deferred tax assets is written down if it is more likely than not that
sufficient taxable income will not be available in future periods to offset the benefit of the
deferred tax assets. To the extent that it is probable that sufficient taxable income will be
available the written down amount is reversed.When there is a legal right to settle on a net basis and the intention is to settle on a net basis
or to acquire assets and settle liabilities simultaneously current income tax assets and
current income tax liabilities are stated at the net amount after offsetting.At the balance sheet date deferred income tax assets and deferred income tax liabilities are
presented on a net basis after offsetting when both of the following conditions are met:
- The taxable entity has the legal right to settle current income tax assets and current
income tax liabilities on a net basis;
Notes to the Financial Statements 50Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
- Deferred income tax assets and deferred income tax liabilities relate to income taxes
levied by the same tax authority on the same taxable entity or to different taxable entities
but in each future period in which it is significant that the deferred income tax assets and
liabilities reverse the taxable entities involved intend to settle the current income tax assets
and liabilities on a net basis or to acquire the assets and The reversal of deferred income
tax assets and liabilities is a significant transaction.
(26) Lease
A lease is a contract in which the lessor cedes the right to use an asset to the lessee for a
certain period of time for consideration. At the inception date of the contract The Group
assesses whether the contract is a lease or contains a lease. A contract is a lease or contains
a lease if one party to the contract cedes the right to control the use of one or more
identified assets for a certain period of time in exchange for consideration.If a contract contains several separate leases The Group splits the contract and accounts
for each separate lease separately. If a contract contains both lease and non-lease
components the lessee and the lessor split the lease and non-lease components.
1. The Group as lessee
(1) Right-of-use assets
At the commencement date of the lease term The Group recognizes right-of-use assets for
leases other than short-term leases and leases of low-value assets. Right-of-use assets are
initially measured at cost. This cost includes:
- the initial measurement amount of the lease liability;
- the amount of lease payments made on or before the commencement date of the lease
term net of amounts related to lease incentives taken if lease incentives exist;
- the initial direct costs incurred by The Group;
- costs that The Group expects to incur to disassemble and remove the leased asset restore
the site where the leased asset is located or restore the leased asset to the condition agreed
upon under the terms of the lease excluding costs that are part of the costs incurred to
produce the inventories.Notes to the Financial Statements 51Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
The Group subsequently depreciates right-of-use assets using the straight-line method. If it
is reasonably certain that ownership of the leased asset will be obtained at the end of the
lease term The Group depreciates the leased asset over its remaining useful life; otherwise
the leased asset is depreciated over the shorter of the lease term or the remaining useful life
of the leased asset.The Group determines whether a right-of-use asset is impaired and accounts for the
identified impairment loss in accordance with the principles described in Note 3(17)
"Impairment of Long-lived Assets".
(2) Lease liabilities
The Group recognizes a lease liability for leases other than short-term leases and leases of
low-value assets at the commencement date of the lease term. Lease liabilities are initially
measured at the present value of the outstanding lease payments. Lease payments consist of
- fixed payments (including material fixed payments) net of amounts related to lease
incentives if lease incentives exist;
- variable lease payments that are dependent on an index or rate;
- payments expected to be payable based on the residual value of the guarantee provided by
The Group;
- the exercise price of the purchase option provided that The Group reasonably determines
that it will exercise the option;
- the amount to be paid upon exercise of the option to terminate the lease provided that the
lease term reflects that The Group will exercise the option to terminate the lease.The Group uses the interest rate embedded in the lease as the discount rate but if the
interest rate embedded in the lease cannot be reasonably determined The Group's
incremental borrowings rate is used as the discount rate.The Group calculates the interest expense on the lease liability for each period of the lease
term based on a fixed periodic interest rate which is included in the current profit or loss or
the cost of the related asset.Notes to the Financial Statements 52Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Variable lease payments that are not included in the measurement of the lease liability are
charged to current profit or loss or the cost of the related assets when they are actually
incurred.After the commencement date of the lease term The Group remeasures the lease liability
and adjusts the corresponding right-of-use asset if the carrying value of the right-of-use
asset has been reduced to zero but the lease liability still needs to be further reduced the
difference is recognized in profit or loss for the current period:
- When there is a change in the valuation of the purchase option lease renewal option or
termination option or when the actual exercise of the aforementioned options is not
consistent with the original valuation The Group remeasures the lease liability at the
present value calculated by the changed lease payments and the revised discount rate;
- When there is a change in the substantive fixed payment amount a change in the amount
expected to be payable for the guaranteed residual value or a change in the index or rate
used to determine the lease payment amount The Group remeasures the lease liability at
the present value calculated from the changed lease payment amount and the original
discount rate. However if the change in the lease payment amount results from a change in
the floating interest rate the present value is calculated using the revised discount rate.
(3) Short-term leases and leases of low-value assets
The Group has elected not to recognize right-of-use assets and lease liabilities for
short-term leases and leases of low-value assets and to recognize the related lease
payments in current profit or loss or the cost of the related assets on a straight-line basis
over each period of the lease term. Short-term leases which are leases with a lease term of
not more than 12 months at the commencement date of the lease term and do not include a
purchase option. Low-value asset leases which are leases with a lower value when the
single leased asset is a brand-new asset. If The Group subleases or expects to sublease the
leased assets the original lease is not a low-value asset lease.
(4) Change of lease
If a lease is changed and the following conditions are met at the same time The Group will
account for the lease change as a separate lease:
- the lease modification expands the scope of the lease by adding the right to use one or
more leased assets;
Notes to the Financial Statements 53Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
- The increased consideration is equivalent to the separate price of the expanded portion of
the lease adjusted for the circumstances of that contract.If a lease modification is not accounted for as a separate lease at the effective date of the
lease modification The Group reapportioned the consideration of the modified contract
redetermined the lease term and remeasured the lease liability based on the present value
of the modified lease payments and the revised discount rate.If a lease change results in a reduction in the scope of the lease or a shortening of the lease
term The Group reduces the carrying value of the right-of-use asset accordingly and
recognizes the gain or loss related to partial termination or complete termination of the
lease in profit or loss for the current period. If other lease changes result in the
remeasurement of the lease liability The Group adjusts the carrying value of the
right-of-use asset accordingly.
2. The Group as lessor
At the commencement date of the lease The Group classifies leases into finance leases and
operating leases. A finance lease is a lease that transfers substantially all the risks and
rewards associated with ownership of the leased asset regardless of whether ownership is
ultimately transferred. Operating leases refer to leases other than finance leases. When The
Group acts as a sublease lessor it classifies the sublease based on the right-to-use assets
arising from the original lease.
(1) Accounting for operating leases
Lease receipts under operating leases are recognized as rental income on a straight-line
basis over each period of the lease term. The Group capitalizes the initial direct costs
incurred in connection with operating leases and apportions them to current profit or loss
over the lease term on the same basis as rental income is recognized. Variable lease
payments that are not included in the lease receipts are recognized in current profit or loss
when they are actually incurred. If a change in an operating lease occurs The Group
accounts for it as a new lease from the effective date of the change and the amount of lease
payments received in advance or receivable in connection with the lease before the change
is regarded as the amount of payments received under the new lease.
(2) Accounting for finance leases
Notes to the Financial Statements 54Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
On the commencement date of the lease The Group recognizes finance lease receivables
for finance leases and derecognizes finance lease assets. When The Group makes initial
measurement of the finance lease receivable the net lease investment is used as the
recorded value of the finance lease receivable. The net lease investment is the sum of the
unguaranteed residual value and the present value of the lease receipts not yet received at
the commencement date of the lease term discounted at the interest rate embedded in the
lease.The Group calculates and recognizes interest income for each period of the lease term
based on a fixed periodic interest rate. Derecognition and impairment of finance lease
receivables are accounted for in accordance with Note 3 (ix) "Financial Instruments" of
this note.Variable lease payments that are not included in the net lease investment measurement are
recognized in profit or loss when they are actually incurred.If a change in a finance lease occurs and the following conditions are met The Group
accounts for the change as a separate lease:
- the change expands the scope of the lease by adding the right to use one or more leased
assets;
- the increased consideration is equivalent to the separate price of the expanded portion of
the lease adjusted for the circumstances of that contract.If a change in a finance lease is not accounted for as a separate lease The Group treats the
changed lease separately in the following circumstances:
- If the change becomes effective on the lease commencement date and the lease would be
classified as an operating lease The Group accounts for it as a new lease from the effective
date of the lease change and uses the net investment in the lease prior to the effective date
of the lease change as the carrying amount of the leased asset;
- If the change becomes effective on the lease commencement date and the lease is
classified as a finance lease The Group accounts for the lease in accordance with the
policy on modification or renegotiation of contracts as described in Note 3 (ix) Financial
Instruments.
3. Sale and leaseback transactions
Notes to the Financial Statements 55Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
The Group assesses whether the transfer of assets in sale-and-leaseback transactions is a
sale in accordance with the principles described in Note 3(22) "Revenue".
(1) As a lessee
If the transfer of assets in a sale-and-leaseback transaction is a sale The Group as the
lessee measures the right-of-use asset resulting from the sale-and-leaseback at the portion
of the carrying value of the original asset that relates to the right-of-use acquired by the
leaseback and recognizes a gain or loss only for the right transferred to the lessor; if the
transfer of assets in a sale-and-leaseback transaction is not a sale The Group as the lessee
continues to recognize the transferred asset and at the same time recognizes a financial
liability equal to the transfer proceeds. The Group continues to recognize the transferred
asset as a lessee and at the same time recognizes a financial liability equal to the transferred
revenue. For details of the accounting treatment of financial liabilities please refer to Note
3 (9) "Financial Instruments".
(2) As lessor
If the transfer of assets in a sale-and-leaseback transaction is a sale The Group accounts
for the purchase of the assets as a lessor and accounts for the lease of the assets in
accordance with the aforementioned policy "2. If the transfer of assets in a leaseback
transaction is not a sale The Group as the lessor does not recognize the transferred asset
but recognizes a financial assets equal to the transferred revenue. For details of the
accounting treatment of financial assets please refer to Note 3 (9) "Financial Instruments".
(27) Debt restructuring
1. The Group as a creditor
The Group derecognizes a claim when the contractual right to receive cash flows from the
claim is terminated. If a debt restructuring is carried out by settling the debt with assets or
converting the debt into an equity instrument The Group recognizes the related assets
when they meet the definition and recognition criteria.For debt restructuring by means of settlement of debts with assets The Group initially
recognizes the transferred non-financial assets at cost. The cost of inventories includes the
fair value of the relinquished claims and other costs directly attributable to bringing the
asset to its present location and condition such as taxes transportation handling and
insurance. The cost of an investment in an associate or joint venture includes the fair value
of the relinquished claim and other costs such as taxes directly attributable to the asset. The
Notes to the Financial Statements 56Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
cost of investment property including the fair value of the relinquished claims and other
costs such as taxes directly attributable to the asset. The cost of property plant and
equipment includes the fair value of the relinquished claim and other costs directly
attributable to the asset such as taxes transportation loading and unloading installation
and professional services incurred before the asset is brought to its intended useable
condition. The cost of biological assets including the fair value of the relinquished claim
and other costs directly attributable to the asset such as taxes transportation and insurance.The cost of intangible assets including the fair value of the relinquished claims and other
costs directly attributable to taxes incurred in bringing the asset to its intended use. If a
debt restructuring by way of conversion of debt into an equity instrument results in the
creditor converting the claim to an equity investment in an associate or a joint venture The
Group measures the initial investment cost of the claim at the fair value of the relinquished
claim and other costs such as taxes that are directly attributable to the asset. The
difference between the fair value of the relinquished claim and its carrying amount is
recognized in profit or loss.If debt restructuring is carried out by modifying other terms The Group recognizes and
measures the restructured claims in accordance with "III. (IX) Financial Instruments" in
this note.For debt restructuring using multiple assets or a combination of assets The Group first
recognizes and measures the transferred financial assets and restructuring claims in
accordance with "III. (IX) Financial instruments" in this note and then in proportion to the
fair value of each asset other than the transferred financial assets recognizes a net gain or
loss on the fair value of the claims net of the amount recognized for the transferred
financial assets and restructuring claims. The fair value of each asset other than the
transferred financial assets is then allocated to the net amount after deducting the
recognized amount of the transferred financial assets and the restructuring claim in
proportion to the fair value of each asset and the cost of each asset is determined
separately on this basis in accordance with the aforementioned method. The difference
between the fair value and the carrying amount of the abandoned claims shall be
recognized in profit or loss for the current period.
2. The Group as debtor
The Group derecognizes a debt when the present obligation of the debt is discharged.For debt restructuring by way of settlement of debts with assets The Group derecognizes
the relevant assets and debts settled when the conditions for derecognition are met and the
Notes to the Financial Statements 57Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
difference between the carrying amount of the debts settled and the carrying amount of the
assets transferred is recognized in profit or loss for the current period.For debt restructuring by converting debt to equity instruments The Group derecognizes
the debt when the debt settled meets the conditions for derecognition. The Group initially
recognizes an equity instrument at the fair value of the equity instrument. If the fair value
of the equity instrument cannot be reliably measured it is measured at the fair value of the
debt settled. The difference between the carrying amount of the debt settled and the amount
recognized for the equity instrument shall be recognized in profit or loss for the current
period.If debt restructuring is carried out by modifying other terms The Group recognizes and
measures the restructured debt in accordance with "III (IX) Financial Instruments" in this
note.When debt restructuring is carried out by using multiple assets to settle debts or by
combining them The Group recognizes and measures equity instruments and restructured
debts in accordance with the aforementioned method and the difference between the
carrying amount of the debt settled and the sum of the carrying amount of the transferred
assets and the amounts recognized for equity instruments and restructured debts is
recognized in profit or loss for the current period.
(28) Methodology for determining materiality criteria and basis for selection
Items Materiality criterion
Accounts receivable for which a significant
Individual provision amount ≥ 3% of the total bad debt
provision for bad debts is made on an
provision for accounts receivable and ≥ RMB 1 million
individual basis
Significant amount of recovery or reversal of Amount recovered or reversed ≥ 3% of the total bad
bad debt provision for accounts receivable debt provision for accounts receivable and ≥ RMB 1
during the period million
Significant write- off of accounts receivable Write- off amount ≥ 3% of the total bad debt provision
during the period for accounts receivable and ≥ RMB 1 million
(29) Changes in significant accounting policies and accounting estimates
1. Changes in significant accounting policies
Notes to the Financial Statements 58Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
There were no changes in The Group's significant accounting policies during the reporting
period.
2. Changes in significant accounting estimates
There were no changes in The Group's significant accounting estimates during the
reporting period.IV.Taxation
1. The main applicable tax and rate to the Group as follows:
Tax Tax base Tax rate
The output tax is calculated on the basis of the
income from the sale of goods and taxable services
calculated in accordance with the provisions of the
Value-added tax (VAT) 13%9%6%5%
tax law and after deducting the input tax allowed
to be deducted in the current period the difference
is the value-added tax payable
City construction tax Value-added tax payables 7%
Enterprise income tax (EIT) Current period taxable profit 15% or 25%
Notes: EIT rate for different tax payer
Tax principles EIT rate
Wafangdian Bearing Co. Ltd 15%
Wazhou Liaoyang Bearing construction Co. Ltd 15%
Dalian Wazhou Precision Motor Car Bearing Company Limited 25%
Wazhou Precision of Spherical Roller Bearings (Wafangdian) Co. Ltd 25%
2.Tax preference
On December 12 2023 The Company obtained the qualification of high-tech enterprise
certification high-tech enterprise certification certificate number is GR202321200183
valid for 3 years according to the tax law can enjoy the preferential tax policy of
enterprise income tax levied at a tax rate of 15% within 3 years.The subsidiary Waxiang Liaoyang Bearing Manufacturing Co. Ltd. obtained the
qualification of high-tech enterprise identification on December 20 2023 and the
high-tech enterprise identification certificate number is GR202321002020 valid for 3
Notes to the Financial Statements 59Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
years and can enjoy the preferential tax policy of levying enterprise income tax at a tax
rate of 15% within 3 years according to the tax law.V. Notes to Consolidated Financial Statements
i. Monetary Funds
Items Closing balance Opening balance
Cash on hand
Cash in bank 63915454.70 160907298.24
Other cash and cash equivalents 1372065.14 78491624.86
Total 65287519.84 239398923.10
Note 1: As at 31 December 2025 the Group's bank deposits with restricted ownership
amounted to RMB 270135.16 (31 December 2024: RMB nil) which consisted of RMB
269718.32 frozen due to the "SDN List" issued by the U.S. Department of the Treasury
and RMB 416.84 frozen due to litigation；
Note 1: As at 31 December 2025 the Group's bank deposits with restricted ownership
amounted to RMB 270135.16 (31 December 2024: RMB nil) which consisted of RMB
269718.32 frozen due to the "SDN List" issued by the U.S. Department of the Treasury
and RMB 416.84 frozen due to litigation.ii. Transactional financial assets
Items Closing balance Opening balance
1. Financial assets measured at fair value
246536.22221882.59
through P&L
Among them: Debt instrument investment
Equity instrument investment 246536.22 221882.59
Total 246536.22 221882.59
iii. Note receivable
1. Types of notes
Items Closing balance Opening balance
Bank acceptance 293562783.24 402220507.99
Finance company acceptance 11266224.46 7832575.73
Trade acceptance 203435408.83 196993155.22
Notes to the Financial Statements 60Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Total 508264416.53 607046238.94
Less: Provision for impairment 8153742.83 9849657.75
Total 500110673.70 597196581.19
2. Category of note receivable
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Notes receivable with bad debt
provision based on the
characters of credit risk
portfolio 508264416.53 100.00 8153742.83 1.60 500110673.70
including:
Bank acceptance 293562783.24 57.76 293562783.24
Finance company acceptance 11266224.46 40.02 11266224.46
Trade acceptance 203435408.83 2.22 8153742.83 4.01 195281666.00
Total 508264416.53 —— 8153742.83 —— 500110673.70
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Notes receivable with bad debt
provision based on the
607046238.94100.009849657.751.62597196581.19
characters of credit risk
portfolio
including:
Bank acceptance 402220507.99 66.26 402220507.99
Finance company acceptance 7832575.73 1.29
Trade acceptance 196993155.22 32.45 9849657.75 5.00 187143497.47
Total 607046238.94 100.00 9849657.75 1.62 597196581.19
Notes receivable with bad debt provision based on the characters of credit risk portfolio:
Closing Balance
Items
Booking balance Amount %
Notes to the Financial Statements 61Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Bank acceptance 293562783.24
Finance company acceptance 11266224.46
Trade acceptance 203435408.83 8153742.83 4.01
Total 508264416.53 8153742.83 ——
3. Provision for bad debts charged off reversed or recovered during the period：
Change during the year
Closing
Category Opening balance Collect/carry
Accrued Written-off Balance
over
Provision for bad debt 9849657.75 -1695914.92 8153742.83
Total 9849657.75 -1695914.92 8153742.83
4. Notes receivable endorsed or discounted but not mature at the end of year
Closing amount no more Closing amount still
Items
recognized recognized
Bank acceptance 227644005.26
Finance company acceptance 3112995.33
Trade acceptance 174581559.89
Total 405338560.48
iv. Accounts receivable
1. Category of accounts receivable listed by age
Aging Closing Balance Opening balance
Within1 year 840257060.95 957607035.33
1-2 years 101777156.90 110054134.18
2-3 years 32261906.68 28806314.47
3-4years 9099385.71 17819751.52
4-5years 5093807.93 20453597.77
Over 5 years 46268131.14 36635851.02
Total 1034757449.31 1171376684.29
Less: Provision for bad debt 162642804.00 145149697.84
Total 872114645.31 1026226986.45
2. Category of accounts receivable
Closing Balance
Items
Notes to the Financial Statements 62Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Booking balance Provision
Amount % Amount % Booking value
Accounts receivable with
individual bad debt provision 104032877.62 10.05 103843410.02 99.82 189467.60
Accounts receivable with bad
debt provision based on the
characters of credit risk portfolio 930724571.69 89.95 58799393.98 6.32 871925177.71
Including:
-Aging portfolio 869316475.54 84.02 57635348.32 6.63 811681127.22
-Related party portfolio 61408096.15 5.93 1164045.66 1.90 60244050.49
Total 1034757449.31 — 162642804.00 — 872114645.31
(Continued)
Opening Balance
Items Booking balance Provision
Amount % Amount % Booking value
Accounts receivable with
74975375.606.4074975375.60100.00
individual bad debt provision
Accounts receivable with bad
debt provision based on the 1096401308.69 93.60 70174322.24 6.40 1026226986.45
characters of credit risk portfolio
Including:
-Aging portfolio 894281761.39 76.34 64984479.65 7.27 829297281.74
-Related party portfolio 202119547.30 17.25 5189842.59 2.57 196929704.71
Total 1171376684.29 — 145149697.84 — 1026226986.45
Notes to the Financial Statements 63Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Bad debt provision for significant accounts receivable at the end of year based on individual：
Closing Balance Opening balance
Debtors name Accounts Provision for bad Reasons for Accounts Provision for
%
receivable debts provision receivable bad debts
An Gang steel Co.Ltd 1595050.69 1595050.69 100.00 uncollectable 1595050.69 1595050.69
Bazhou Tianli Tube Co. Ltd 1319586.71 1319586.71 100.00 uncollectable 1319586.71 1319586.71
HBIS Company Limited Handan Branch 1608611.42 1608611.42 100.00 uncollectable 1608611.42 1608611.42
Heilongjiang Longmei Logistics Co. Ltd 8366227.79 8366227.79 100.00 uncollectable 10656227.79 10656227.79
Liaoning Wazhou Bearing Sales Co.Ltd 1611795.99 1611795.99 100.00 uncollectable 1611795.99 1611795.99
Liaoning Yinheng Galvanized Colored Coated Steel Sheet Co. Ltd 3213308.67 3213308.67 100.00 uncollectable 3213308.67 3213308.67
Shandong Yuanda Board Technology Co. Ltd 1804722.77 1804722.77 100.00 uncollectable 1804722.77 1804722.77
Xuzhou Xugong Material Supply Co. Ltd 2826234.67 2826234.67 100.00 uncollectable 373237.55 373237.55
Yingkou Iron & Steel Co. Ltd 1696318.44 1696318.44 100.00 uncollectable 1696318.44 1696318.44
Zhejiang Yesheng New Material Co. Ltd 1301760.00 1301760.00 100.00 uncollectable 1301760.00 1301760.00
CITIC Heavy Industries Co.Ltd 1128791.54 1128791.54 100.00 uncollectable 1126828.28 1126828.28
ZHUZHOU GEAR CO.LTD. 1055392.12 1055392.12 100.00 uncollectable 290587.00 290587.00
Pakistan Eastern Commercial Enterprise 1871195.21 1871195.21 100.00 uncollectable 2459996.98 2459996.98
Northern Heavy Industries Group Co. Ltd. 1101255.06 1101255.06 100.00 uncollectable
Hebei Jinxi Section Steel Co. Ltd. 1895386.00 1895386.00 100.00 uncollectable
Notes to the Financial Statements 64Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Jilin Xinda Steel Co. Ltd. 4544255.52 4544255.52 100.00 uncollectable
Shandong Taishan Steel Group Co. Ltd. 2430247.71 2430247.71 100.00 uncollectable
Shanxi Taiyuan Heavy Industry New Energy Technology Co. Ltd. 1548954.08 1548954.08 100.00 uncollectable
Wu’an Yuhua Steel Co. Ltd. 5425620.03 5425620.03 100.00 uncollectable
AG Company India 1568656.74 1568656.74 100.00 uncollectable
GOD Company India 1805222.55 1805222.55 100.00 uncollectable
Total 49718593.71 49718593.71 29058032.29 29058032.29
Notes to the Financial Statements 65Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Notes receivable with bad debt provision based on the characters of credit risk portfolio:
Combined accrual items:
Closing Balance
Aging
Accounts receivable Provision for bad debts Proportion (%)
Within 1 year 741167982.75 37003252.87 5.00
1-2 years 89695459.92 8977222.90 10.00
2-3 years 28430897.83 5686179.57 20.00
3-4years 7652209.84 3826104.92 50.00
4-5years 1136685.69 909348.55 80.00
Over 5 years 1233239.51 1233239.51 100.00
Related Party Portfolio 61408096.15 1164045.66 1.90
Total 930724571.69 58799393.98 —
3. Provision for bad debts charged off reversed or recovered during the period：
Change during the year
Category Opening balance Collect/carry Others Closing Balance
Accrued Written-off
over
Provision for
bad debt 145149697.84 30311417.16 12255059.49 565215.51 -1964.00 162642804.00
Total 145149697.84 30311417.16 12255059.49 565215.51 -1964.00 162642804.00
4. Accounts receivable written off in current period:
Item Written-off Amount
Accounts receivable written off 565215.51
Significant amount written off:
Procedure to be
Company name Amount Reason Related party
performed
Qinghai Lufeng New Materials Co. Unable to
Ltd. 198987.78 recover Internal approval N
Datong Risheng Jingrui Bearing Unable to
Co. Ltd. 100520.79 recover Internal approval N
Nanyang Explosion-proof Group Unable to
Xinpu Motor Co. Ltd. 77075.26 recover Internal approval N
Notes to the Financial Statements 66Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Zibo Shenying Economic & Trade Unable to
Co. Ltd. 33074.89 recover Internal approval N
Wafangdian Bearing Factory
Beijing Distribution Office Tianjin Unable to
Operation Department 22927.20 recover Internal approval N
Jiangyin Huayi Fluid Transmission Unable to
Control Co. Ltd. 14771.10 recover Internal approval N
Benxi Precision Wazhou Bearing Unable to
Sales Co. Ltd. 12543.97 recover Internal approval N
Dandong Luozhou Bearing Sales Unable to
Co. Ltd. 12024.61 recover Internal approval N
Jinan Sennuo Mechanical & Unable to
Electrical Co. Ltd. 11599.40 recover Internal approval N
Unable to
Fuxin Hongsheng Bearing Co. Ltd. 10983.86 recover Internal approval N
Total 494508.86
5、The top five significant accounts receivable categorized by debtors:
Closing Balance Proportion Receivable bad
of total debts &
Debtors name Contractual closing contractual
Receivable Total
assets balance assets
(%) impairment
China National
Railway Group
Corporation and
subsidiaries 186841512.74 118996.41 186960509.15 17.94 9504415.75
Wafangdian Bearing
Group Corporation
and subsidiaries 60400328.53 60400328.53 5.80 1300236.23
China Railway Group
Corporation
(CRGC)and 19707278.02 281230.48 19988508.50 1.92 1914272.93
Notes to the Financial Statements 67Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
subsidiaries
Shanghai Ouyeel
Purchasing
Information
Technology Co. Ltd 17163102.48 17163102.48 1.65 858155.12
Chongqing Gearbox
Co. Ltd 15663340.96 1017614.72 16680955.68 1.60 1291974.41
Total 299775562.73 1417841.61 301193404.34 28.91 14869054.44
v. Financing receivable
1. Receivables financing
Items Closing Balance Opening Balance
Bank acceptance 45079733.86 48925906.07
Supply Chain E-Credential 20893788.65
Total 65973522.51 48925906.07
Less: Provision for bad debt 1044689.43
Total 64928833.08 48925906.07
2. Category of financing receivable
Closing Balance
Items Booking balance Provision
Amount % Amount % Booking value
Financing receivable with
individual bad debt provision
Financing receivable with bad
debt provision based on the
characters of credit risk portfolio 65973522.51 100.00 1044689.43 1.58 64928833.08
Including:
- Bank acceptance 45079733.86 68.33 45079733.86
- Supply Chain E-Credential 20893788.65 31.67 1044689.43 5.00 19849099.22
Total 65973522.51 — 1044689.43 — 64928833.08
(Continued)
Notes to the Financial Statements 68Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Opening Balance
Items Booking balance Provision
Amount % Amount % Booking value
Financing receivable with
individual bad debt provision
Financing receivable with bad
debt provision based on the
characters of credit risk portfolio 48925906.07 100.00 48925906.07
Including:
- Bank acceptance 48925906.07 100.00 48925906.07
- Supply Chain E-Credential
Total 48925906.07 — — 48925906.07
3. Changes in receivables financing during the period and changes in fair value
Items Opening Balance New in this Derecognition Closingperiod during the period Balance
Bank acceptance 48925906.07 683633467.64 687479639.85 45079733.86
Supply Chain
E-Credential 61823908.71 40930120.06 20893788.65
Total 48925906.07 745457376.35 728409759.91 65973522.51
4. Receivable financing endorsed or discounted but not mature at the end of year
Amount derecognized at end Amounts not derecognized at
Items
of period the end of the period
Bank acceptance 250185902.66
Supply Chain E-Credential 32373101.50
Total 282559004.16
vi. Prepayment
1. Aging of advances to suppliers
Closing Balance Opening Balance
Items
Amount Percentage (%) Amount Percentage (%)
Within 1 year 8574276.95 92.32 9059242.73 82.75
1 to 2 years 691092.65 6.31
2 to 3 years 630831.99 6.79 1142161.71 10.43
More than 3 years 82603.74 0.89 56027.74 0.51
Notes to the Financial Statements 69Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Total 9287712.68 100.00 10948524.83 100.00
2. The top five significant advances to suppliers categorized by debtors
Company name Closing Balance Proportion of receivable (%)
Daye Special Steel co.Ltd 3871984.69 41.69
Wafangdian Bearing Power Co. Ltd 1822624.54 19.62
Northeast Special Steel Group Co. Ltd 1152613.45 12.41
Bengang Steel Plates Co.Ltd. 597229.38 6.43
Dalian Wazhou Group Bearing Equipment
Manufacturing Co. Ltd 478000.00 5.15
Total 7922452.06 85.30
vii. Other receivables
Items Closing Balance Opening Balance
Interest receivable
Dividend receivable
Other receivables 10631908.31 7962213.75
Total 10631908.31 7962213.75
1. Other receivables
(1) Disclosure by aging：
Aging Closing Balance Opening Balance
Within 1 year (including 1year) 7778270.21 5424106.94
1-2 years 2306549.30 889646.99
2-3 years 447630.99 2409108.18
3-4years 1781018.27 1203245.68
4-5years 1127576.79 196403.88
Over 5 years 5504440.80 6289261.93
Total 18945486.36 16411773.60
Less:Provision for bad debt 8313578.05 8449559.85
Total 10631908.31 7962213.75
(2) Categories of other receivables
Notes to the Financial Statements 70Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Closing Balance
Items Booking balance Provision Booking
Amount % Amount % balance
Provision for bad debts is
made on an individual basis 5206086.42 27.48 5206086.42 100.00
Provision for bad debts by 13739399.94 72.52 3107491.63 22.62 10631908.31
portfolio
Including:
Accounts receivable 12422514.57 65.57 3107491.63 25.01 9315022.94
aging portfolio
Reserve fund portfolio 1291885.37 6.82 1291885.37
Related party portfolio 25000.00 0.13 25000.00
Total 18945486.36 — 8313578.05 — 10631908.31
(Continued)
Opening Balance
Items Booking balance Provision Booking
Amount % Amount % balance
Provision for bad debts is
made on an individual basis 6079333.51 37.04 6079333.51 100.00
Provision for bad debts by
portfolio 10332440.09 62.96 2370226.34 22.94 7962213.75
Including:
Accounts receivable
aging portfolio 10173479.37 61.99 2370226.34 25.25 10173479.37
Risk-free portfolio 123960.72 0.76 123960.72
Related party portfolio 35000.00 0.21 35000.00
Total 16411773.60 — 8449559.85 — 7962213.75
Bad debt provision for significant other receivables at the end of year based on
individual:
Closing Balance Opening Balance
Items Booking Accrual Reason for Booking
Bad debts bad debts
balance rate(%) accrual balance
Bengang
Steel Plates
Co.Ltd. 1065185.03 1065185.03 100.00 1065185.03 1065185.03 100.00
Total 1065185.03 1065185.03 100.00 1065185.03 1065185.03 100.00
Notes to the Financial Statements 71Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Provision for bad debts by portfolio:
Combined accrual items:
Closing BalanceItems Other receivables Bad debts Accrual rate(%）
Accounts receivable
aging portfolio 25000.00
Risk-free portfolio 1291885.37
Related party portfolio 12422514.57 3107491.63 25.01
Total 13739399.94 3107491.63 ——
（3） Categories of other receivables：
1st stage 2nd stage 3 rd stage
Expected Expected Expected
credit loss credit loss credit loss
Provision for bad debt Total
within within life within life
following time time
12 months (unimpaired) (impaired)
Balance on January 1 2025 2370226.34 6079333.51 8449559.85
On January 1 2025
Other receivables carrying
amount on the book
--transfer to 2nd stage
-- transfer to 3rd stage
--reverse to 2nd stage
--reverse to 1st stage
Accrued 737541.29 -723073.26 14468.03
Reversed
Recollected
Written off 276.00 150173.83 150449.83
Others
Closing Balance 3107491.63 5206086.42 8313578.05
（4） Provision for bad debts charged off reversed or recovered during the period
Change during the year
Opening Closing
Category Collected/
balance Accrued Written-off Balance
reversed
Bad debts 8449559.85 14468.03 150449.83 8313578.05
Notes to the Financial Statements 72Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Change during the year
Opening Closing
Category Collected/
balance Accrued Written-off Balance
reversed
Total 8449559.85 14468.03 150449.83 8313578.05
（5） Other receivables written off in current period
Items written off
Other receivables written off in current period 150449.83
（6） The categories of other receivables by nature
Nature Closing Balance Opening Balance
Security deposit 9440995.28 6973511.88
Personal petty cash 3714719.01 1365292.16
Others 5789772.07 8072969.56
Total 18945486.36 16411773.60
（7) Other receivables from the top 5 debtorsclosing Rate of other
Company name Category Ageing Bad debts
balance receivables
Bengang Steel Plates Co.Ltd. others 1065185.03 Over 5 years 5.62 1065185.03
Anhui Conch Cement Co Guarantee 1300000.00 Within 4 years 6.86 650000.00
National Railway Materials
Co. Ltd Guarantee 1424095.25 Within 4 years 7.52 86684.76
CRRC Logistics Co. Ltd Guarantee 1174508.00 Within 2 years 6.20 117450.80
China Railway Shenyang
Bureau Group Co. Ltd.Shenyang Rail Bus Factory Guarantee 1216300.00 Within 1 years 6.42 60815.00
Total 6180088.28 32.62 1980135.59
viii. Inventories
1、Categories of inventories
Closing Balance
Items Provision for decline in
Book value Net book value
value of inventories
Notes to the Financial Statements 73Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Closing Balance
Items Provision for decline in
Book value Net book value
value of inventories
Raw materials 60710575.37 12558592.95 48151982.42
Low-value 1248011.18 602878.58 645132.60
consumable
Finished goods 511318017.16 79973033.99 431344983.17
Goods on transit 48199265.32 48199265.32
Semi-finished goods 119338500.26 11353869.92 107984630.34
Total 740814369.29 104488375.44 636325993.85
(Continued)
Closing Balance
Items Provision for decline in
Book value Net book value
value of inventories
Raw materials 71827818.05 10373535.37 61454282.68
Low-value
consumable 458772.00 185271.20 273500.80
Finished goods 544114655.33 66049055.70 478065599.63
Goods on transit 10491357.08 10491357.08
Semi-finished goods 149656639.78 11500641.54 138155998.24
Total 776549242.24 88108503.81 688440738.43
2、Provision for decline in value of inventories and provision for impairment of contract
performance costs
Increase Decrease
Items OpeningBalance Accrual Other Reverse/Writt Others
Closing
en-off transferred Balance
Raw materials
10373535.372185057.5812558592.95
Low-value
consumable 185271.20 417607.38 602878.58
Finished goods
66049055.7035286104.6861122.273467501.3517955747.3179973033.99
Semi-finished
goods 11500641.54 5884743.44 767772.42 5263742.64 11353869.92
Total
88108503.8143773513.0861122.274235273.7723219489.95104488375.44
ix. Contract assets
1. Contract assets detail
Notes to the Financial Statements 74Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Closing Balance Opening balance
Items Book value Provision Net book
Provision Net book
for decline value Book value fordecline value
contract to
be 7119828.52 1861067.28 5258761.24
performed 12103652.85 605182.64 11498470.21
Total 7119828.52 1861067.28 5258761.24 12103652.85 605182.64 11498470.21
2. Disclosure of contract assets categorized by impairment methodology
Closing Balance
Booking balance bad debts
Items
Amount Rate (%) Amount Rate( Booking value
%)
Provision for bad debts is made
on an individual basis 3026953.42 42.51 1656423.52 54.72 1370529.90
Notes receivable with bad debt
provision based on the characters
of credit risk portfolio 4092875.10 57.49 204643.76 5.00 3888231.34
including:
Contract performance payments 4092875.10 57.49 204643.76 5.00 3888231.34
Total 7119828.52 — 1861067.28 — 5258761.24
(Continued)
Opening Balance
Booking balance bad debts
Items
Amount Rate (%) Amount Rate Booking value
(%)
Provision for bad debts is made
on an individual basis
Notes receivable with bad debt
provision based on the characters 12103652.85 100.00 605182.64 5.00 11498470.21
of credit risk portfolio
including:
Contract performance payments 12103652.85 100.00 605182.64 5.00 11498470.21
Total 12103652.85 — 605182.64 — 11498470.21
Contract assets with bad debt provision based on the characters of credit risk portfolio:
Notes to the Financial Statements 75Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Closing balance
Items
Contract assets Provision for decline Rate (%)
Contract performance payments 4092875.10 204643.76 5.00
Total 4092875.10 204643.76 5.00
3. Provision for decline of contract assets of current period
Items Opening Accrual Reverse Written-off Closingbalance Balance
contract to be performed 605182.64 1656423.52 400538.88 1861067.28
Total 605182.64 1656423.52 400538.88 1861067.28
x. Other current assets
Items Closing Balance Opening Balance
VAT to be verified
VAT to be deducted 50294287.94 53298611.95
Advance income tax
Others 4520.25
Total 50298808.19 53298611.95
xi. Other equity instrument investment
Investments in other equity instruments
Items Closing Balance Opening Balance
Shanghai ME Mechanical & Electrical Equipment
Chain Co. Ltd 8705393.14 2000000.00
Tianjin Bogang No.12 Enterprise Management
Partnership Enterprise (Limited Partnership) 1301958.80（Qian’an Zhayi Iron & Steel Group Co. Ltd）
Trust beneficiary rights of CCB Trust - Caide 1stProperty Rights Trust Plan（Qian’an Zhayi Iron & 1181879.86Steel Group Co. Ltd）
（ Dalian Huilong Industry& Trade Company’sshare） 7423089.69
Total 8705393.14 11906928.35
xii. Investment property
Investment property measured as cost method
Item Property Land use Total
right
1．Initial Cost
Notes to the Financial Statements 76Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Item Property Land use Total
right
（1）Opening Balance 112228925.54 52861118.81 165090044.35
（2） Increase
—Purchase
—Transferred from FA 13049355.22 13049355.22
—Increase in business combinations
（3）Decrease
—Disposal
—Transfer to others
（4）Closing Balance 125278280.77 52861118.81 178139399.57
2．Accumulated Depreciation
（1）Opening Balance 69524288.87 23885828.43 93410117.30
（2）Opening Balance
—Accrued 1162200.28 1321512.00 2483712.28
—Transferred from FA 8326274.57 8326274.57
（3）Decrease
—Disposal
—Transfer to others
（4）Closing Balance 79012763.72 25207340.44 104220104.16
3．Impairment Reserve
（1）Opening Balance
（2） Increase
—Accrued
（3）Decrease
—Decrease
（4）Closing Balance
4．Book Value
（1）Closing book value 46265517.05 27653778.37 73919295.42
（2）Opening book value 42704636.67 28975290.38 71679927.05
xiii. Fixed assets
1. 1.Fixed assets and fixed assets liquidation
Notes to the Financial Statements 77Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Item Closing Balance Opening Balance
Fixed assets 406111493.56 437398315.29
Total 406111493.56 437398315.29
2. Fixed assets detail
Notes to the Financial Statements 78Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Item Property Machinery Transportation Electronic Device Other Equipment Total
Equipment Equipment
1．Initial Cost
（1）Opening Balance 289536784.35 1071033507.85 17231477.41 57054270.50 234130132.63 1668986172.74
（2）Increase
—Purchase 8813777.80 128318.58 94905.99 100240.58 9137242.95
—Transferred from
construction- in-progress 4465509.78 23207136.49 79646.02 4285020.79 163716.81 32201029.89
（3）Decrease
—Disposal 1108084.41 47471053.29 1136560.38 1735500.16 346666.17 51797864.41
—Transfer out to
investment property 13049355.22 13049355.22
—Transferred out
construction- in-progress 2314603.14 2314603.14
—Transfer-out by
gratuitous allocation 68273.85 68273.85
（4）Closing Balance 279844854.50 1053268765.71 16302881.63 59630423.27 234047423.85 1643094348.96
2.Accumulated
Depreciation
（1）Opening Balance 196133491.93 811729768.80 13267876.92 41526684.15 137615929.88 1200273751.68
（2）Increase
—Accrued 12003634.09 47058169.32 911086.97 3826360.69 2631412.41 66430663.48
—Transferred from
construction- in-progress
Notes to the Financial Statements 79Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
— Changes in fixed asset
classes
（3）Decrease
—Disposal 2307896.78 39791665.22 1087896.54 1553774.76 337047.73 45078281.03
—Transfer out to
investment property 9199442.41 9199442.41
—Transfer-out by
gratuitous allocation 54670.60 54670.60
（4）Closing Balance 196629786.83 818996272.90 13091067.35 43744599.48 139910294.56 1212372021.12
3．Impairment Reserve
（1） Opening Balance 1166765.45 29341973.65 25027.00 643458.07 136881.60 31314105.77
（2） Increase
—Accrued 257104.31 2546.70 87727.74 347378.75
（3）Decrease
—Disposal 91769.25 6941779.81 17101.18 7050650.24
（4）Closing Balance 1074996.20 22657298.15 7925.82 646004.77 224609.34 24610834.28
4．Book value
（1）Closing book value 82140071.47 211615194.66 3203888.46 15239819.02 93912519.95 406111493.56
（2）Opening book value 92236526.97 229961765.40 3938573.49 14884128.28 96377321.15 437398315.29
Notes to the Financial Statements 80Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
3. Temporary idle fixed assets
Items Initial Cost Accumulated Provision Book Value
Deprecation
Property
38094078.8234536936.983557141.84
Machinery equipment
73618543.1262812202.668161563.032644777.43
Transportation equipment
234048.57227027.117021.46
Electronic device others
equipment 2791094.54 2271709.29 223335.68 296049.57
Total 114737765.05 99847876.04 8384898.71 6504990.30
4. Fixed assets as pending certificate of ownership
Items Book value Reason
Dalian Industrial Park Ball Bearing Plant 21830743.26 In process
Dalian Ball Bearing Factory Outdoor Warehouse 395069.56 In process
Cone and Cylinder Flaw Detection and Packing Room 85407.83 In process
others 1036678.11 In process
Total 23347898.76
xiv. Construction-in-progress
1. Construction in progress and construction materials
Closing Balance Opening Balance
Items provision for Booking provision for
Booking balance Net book value Net book value
impairment balance impairment
Construction
in progress 17944798.33 7431367.34 10513430.99 41831957.96 7091322.25 34740635.71
Engineering
materials
Total 17944798.33 7431367.34 10513430.99 41831957.96 7091322.25 34740635.71
2. Construction in progress details
Item Closing BalanceBook Balance Provision Book Value
Super Precision Machine Installation Project 456878.68 456878.68
Workshop plant renovation project
Dalian Industrial Park Project 5590.45 5590.45
Equipment to be installed 7337976.83 987470.88 6350505.95
Notes to the Financial Statements 81Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Item Closing BalanceBook Balance Provision Book Value
Dynamic Bearing Project
Share Overhaul
Share Works Remodeling 955350.36 955350.36
Share Ball Base Program 1087964.58 1087964.58
Computer engineering 18000.00 18000.00
Precision Roller Modification 13091.45 13091.45
Precision Bearing Factory Renovation
Mill Processing Line 38957.26 38957.26
Maintenance and modification of mill processing lines 741000.00 741000.00
Seven finished product modifications 3555799.28 3453144.41 102654.87
Spherical Roller Bearing Assembly Line 1198862.55 1169162.55 29700.00
Overhaul of very large equipment 853657.69 80870.09 772787.60
Railroad upgrading 665647.85 27254.40 638393.45
Channel 2 construction project 256249.27 234157.39 22091.88
Medium and Large Branch Component CNC
Production Line Renewal and Reconstruction Project 759772.08 205789.78 553982.30
Total 17944798.33 7431367.34 10513430.99
(continued)
Item Opening BalanceBook Balance Provision Book Value
Precision Bearing Factory Renovation 794690.25 794690.25
Seven finished product modifications 3555799.28 3453144.41 102654.87
Spherical Roller Bearing Assembly Line 1703287.33 1110842.55 592444.78
Maintenance and modification of mill processing lines 741000.00 741000.00 0.00
Railroad upgrading 665647.85 24854.40 640793.45
Super Precision Machine Installation Project 456878.68 456878.68 0.00
Channel 2 construction project 256249.27 222849.70 33399.57
Precision Roller Modification 13091.45 13091.45
Mill Processing Line 38957.26 38957.26
Computer engineering 18000.00 18000.00
Dalian Industrial Park Project 5590.45 5590.45
Equipment to be installed 18257773.90 1081752.51 17176021.39
Notes to the Financial Statements 82Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Item Opening BalanceBook Balance Provision Book Value
Workshop plant renovation project 80188.68 80188.68
Overhaul of very large equipment 5498470.80 5498470.80
Railroad Bearing Overhaul Branch Railway Bearing
Automatic Assembly Line and Supporting Projects
Medium and Large Branch Component CNC
1628318.591628318.59
Production Line Renewal and Reconstruction Project
Dynamic Bearing Project 530973.45 530973.45
Share Overhaul 1550000.00 1550000.00
Share Works Remodeling 5707837.18 5707837.18
Share Ball Base Program 329203.54 329203.54
Total 41831957.96 7091322.25 34740635.71
3、Significant construction in progress
Opening Closing
Items Increase Transfer to Other
Balance fixed assets decrease Balance
Equipment to be installed 18257773.90 2165736.30 13085533.37 7337976.83
Dynamic Bearing Project 530973.45 1905254.45 2436227.90
Share Works Remodeling 5707837.18 -367165.72 4385321.10 955350.36
Share Ball Base Program 329203.54 1307433.61 548672.57 1087964.58
Precision Bearing Factory
Renovation 794690.25 346902.65 1141592.90
Spherical Roller Bearing
Assembly Line 1703287.33 336283.19 840707.97 1198862.55
Overhaul of very large
equipment 5498470.80 687433.07 5233970.63 98275.55 853657.69
Overhaul of Equipment for
Full Complement Roller
Bearings without Outer Ring 1472566.36 1472566.36
Cleaning and Oiling Line for
Medium and Large Spherical
Bearings 557522.13 557522.13
Medium and Large Branch
Component CNC Production
Line Renewal and
Reconstruction Project 1628318.59 139690.16 819557.52 188679.15 759772.08
Total 34450555.04 8551656.20 30521672.45 286954.70 12193584.09
Notes to the Financial Statements 83Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
4、Provision for impairment of construction in progress during the period
Opening Change during the year Closing
Items
Balance Accrued transfer out Others Balance
Provision for impairment of
7091322.25634868.17294823.087431367.34
construction in progress
Total 7091322.25 634868.17 294823.08 7431367.34
xv. Intangible assets
Items Land use right ERP software Total
1．Initial cost
（1）Opening balance
124575250.3512055595.99136630846.34
（2）Increase
—Transferred from
construction- in-progress 188679.15 188679.15
（3） Decrease
—Disposal
（4） Closing balance
124575250.3512244275.14136819525.49
2．Amortization
（1）Opening balance
57154037.249355749.5266509786.76
（2）Increase
—Accrual
3168267.76840234.384008502.14
（3）Decrease
—Disposal
（4）Closing balance
60322305.0010195983.9070518288.90
3．Provision for impairment
（1）Opening balance
（2）Increase
—Accrual
（3）Decrease
—Disposal
（4）Closing balance
4．Book value
（1） Closing Book value
64252945.352048291.2466301236.59
Notes to the Financial Statements 84Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Land use right ERP software Total
（2）Opening Book value
67421213.112699846.4770121059.58
xvi. Long-term unamortized expense
Opening Other Closing
Items Increase Amortization
Balance Decrease Balance
Fixed asset improvement
expenses 3932858.79 1946609.56 1053544.46 4825923.89
Building maintenance
expenses 2669554.18 545896.80 2123657.38
Total 6602412.97 1946609.56 1599441.26 6949581.27
xvii. Deferred tax assets and deferred tax liabilities
1、Deferred tax assets before offsetting
Closing Balance Opening Balance
Items
Taxable temporary Deferred income Taxable temporary Deferred
differences tax liabilities differences income taxliabilities
Asset evaluation increment in
business combination without
the same control 3155155.37 788788.84 3496568.07 524485.21
Total
3155155.37788788.843496568.07524485.21
2、Unrecognized deferred tax assets details
Items Closing Balance Opening Balance
Deductible temporary difference 318546458.65 290568029.91
Deductible loss 790821313.82 856258144.28
Total 1109367772.47 1146826174.19
3、Unrecognized deductible loss of deferred tax assets expired next period
Year Closing Balance Opening Balance Memo
202582495762.79—
202614116432.6314116432.63—
202775136503.7975136503.79—
2028103469846.02103469846.02—
202982648926.0782648926.07
2030150374473.29150374473.29
Notes to the Financial Statements 85Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
2031127716833.64127716833.64
203292212084.5492212084.54
203362574905.5662574905.56
203465512375.9565512375.95
203517058932.33
Total 790821313.82 856258144.28
xviii. Other non-current assets
Items Closing Balance Opening Balance
Prepaid construction cost 282900.00
Total 282900.00
Notes to the Financial Statements 86Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
xix. Assets with restricted ownership or use
Closing Balance Opening Balance
Items Book Restricted
Book Balance Book Value Restricted assets Restrictions Book Value Restrictions
Balance assets
Other monetary Bank acceptance
Monetary funds 45920930.03 45920930.03 funds deposit
Other monetary Letter of Credit Other monetary Letter of Credit
Monetary funds 370597.99 370597.99 funds Deposit 28240000.00 28240000.00 funds Deposit
Letter of
Other monetary Letter of Other monetary Guarantee
Monetary funds 1001467.15 1001467.15 funds Guarantee Deposit 4330694.83 4330694.83 funds Deposit
Monetary funds 269718.32 269718.32 Cash in bank "SDN List"
Monetary funds 416.84 416.84 Cash in bank litigation
Finance
company
Note receivable 16503410.77 16503410.77 acceptance Pledge of notes
Note receivable 20888325.70 20888325.70 Trade Pledge of notes
Notes to the Financial Statements 87Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
acceptance
Bank
Note receivable 1177401.62 1177401.62 acceptance Pledge of notes
endorsed but not
mature at the end
Note receivable 405338560.48 405338560.48 of year
endorsed but not
Supply Chain mature at the end
Accounts receivable 59547219.71 59547219.71 E-Credential of year
Total 466527980.49 466527980.49 117060762.95 117060762.95
Notes to the Financial Statements 88Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
xx. Short-term loan
1. Short-term borrowings situation:
Classification Closing balance Opening balance
Credit loan 82053118.00 570000000.00
Total 82053118.00 570000000.00
xxi. Note payable
Classification Closing balance Opening balance
Bank acceptance notes 175309107.43
Bank letter of credit 370597.50 205348156.00
Trade acceptance notes 20472638.17
Total 370597.50 401129901.60
xxii. Accounts payable
1. Accounts payable
Items Closing balance Opening balance
Within1 year 919158607.52 1127827193.29
1-2 years 228473959.18 378919041.56
2-3 years 36112904.20 71691892.13
Over 3 years 77986335.79 85377912.48
Total 1261731806.69 1663816039.46
2. Significant accounts payable with aging exceeding one year
Items Closing balance Reasons
Wafangdian Bearing Group Co. Ltd. and its subsidiaries 214672446.65 Settlement not yet due
Anshan City Grinding Wheel Co. Ltd. 4579300.99 Settlement not yet due
Beijing Longxuan Rubber & Plastic Co. Ltd. 6946148.88 Settlement not yet due
Beijing Rongsheng Runde Trading Co. Ltd. 13539152.66 Settlement not yet due
Dalian Binhai Grinding Wheel Co. Ltd. 4328517.25 Settlement not yet due
Liaoning Huan Bohai Industrial Co. Ltd. 7172159.01 Settlement not yet due
Shijiazhuang Iron and Steel Co. Ltd. 4140401.80 Settlement not yet due
Wafangdian Jinguanda Bearing Manufacturing Co. Ltd. 4445922.29 Settlement not yet due
Zibo Yijia Power Machinery Co. Ltd. 6829338.66 Settlement not yet due
Anhui Liyuan Transmission Technology Co. Ltd. 3919752.91 Settlement not yet due
Beijing Waye Metallurgical Technology Co. Ltd. 3782032.13 Settlement not yet due
Notes to the Financial Statements 89Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Closing balance Reasons
Total 274355173.23
xxiii. Contract liability
1. Details
Items Closing balance Opening balance
Contract obligation to be fulfilled 31776246.33 34098145.99
Total 31776246.33 34098145.99
xxiv. Employee’s payable
1. Category of employee’s payables
Opening
Items Increase Decrease Closing balance
balance
1. Short-term employee’s
payable 37348348.42 341011716.84 334050887.18 44309178.08
2.Post-employment benefit
–defined contribution plan 4705119.59 35772709.47 35824651.18 4653177.88
3. Redundancy pay 35886.00 1269969.75 1206569.75 99286.00
Total 42089354.01 378054396.06 371082108.11 49061641.96
2. Short-term employee’s payables
Opening
Items Increase Decrease Closing balance
balance
1.Salariesbonus allowance and
subsidy 32245070.77 225771881.82 220744149.31 37272803.28
2. Welfare 1750136.60 22879340.99 21610756.19 3018721.40
3. Social insurance 17037.30 22649261.97 22663969.27 2330.00
Include: Medical insurance 16542.64 18814708.14 18829000.78 2250.00
On-duty injury insurance 494.66 2398004.63 2398419.29 80.00
Maternity insurance 1436549.20 1436549.20
4. Housing funds 2506210.43 25410542.32 25413752.72 2503000.03
5. Labour union and training
expense 127597.22 3113771.92 2734474.66 506894.48
6.Other short-term employee
benefits 702296.10 41186917.82 40883785.03 1005428.89
Total 37348348.42 341011716.84 334050887.18 44309178.08
Notes to the Financial Statements 90Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
3. Defined contribution plan
Opening Closing
Items Increase Decrease
balance balance
1. Pension 4634392.14 34688620.98 34739819.06 4583194.06
2. Unemployment insurance 70727.45 1084088.49 1084832.12 69983.82
Total 4705119.59 35772709.47 35824651.18 4653177.88
xxv. Tax payables
Item Closing balance Opening balance
Value-added tax 6281267.42 9626068.98
Vehicle and vessel tax 523.35 523.35
Individual income tax 148637.64 168808.45
City maintenance and construction tax 336765.59 120272.26
Real estate tax 769261.38 758803.28
Resource tax 5258.80
Education surcharge 138331.21 45825.66
Land use tax 613163.82 613163.82
local education surcharge 92220.79 30088.25
Stamp duty 547277.47 700665.55
Total 8932707.47 12064219.60
xxvi. Other payables
Items Closing balance Opening balance
Other payables 587079378.98 135258184.75
Total 587079378.98 135258184.75
1. Other accounts payable
（1）Other payables categorized by payments nature
Payments nature Closing balance Opening balance
Deposits and pledges 82966684.78 87659998.50
borrowings and interest 460329726.03
Others 43782968.17 47598186.25
Total 587079378.98 135258184.75
xxvii. Non-current liabilities due within one year
Items Closing balance Opening balance
Notes to the Financial Statements 91Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Long-term loans due within one year 98350000.00
Total 98350000.00
xxviii. Other current liabilities
Items Closing balance Opening balance
Supply chain vouchers endorsed but not
yet matured at the balance sheet date 59547219.71
Commercial acceptance bills endorsed
but not yet matured at the balance sheet
date 174581559.89
Bank acceptance bills endorsed but not
yet matured at the balance sheet date 227644005.26
Finance company acceptance bills
endorsed but not yet matured at the
balance sheet date 3112995.33
Output VAT to be transferred 4130912.02 4417479.62
Total 469016692.21 4417479.62
xxix. Long-term Borrowings
Items Closing balance Opening balance
Credit borrowings
Total
xxx. Long-term payables
Type Closing balance Opening balance
Long-term payables 100000.00 100000.00
Special payables 244974.84 244974.84
Total 344974.84 344974.84
1. Long-term payables
Payments nature Closing balance Opening balance
Equipment payments 100000.00 100000.00
Total 100000.00 100000.00
2. Special payables
Opening Closing
Items Increase Decrease Formation Basis
Balance Balance
Notes to the Financial Statements 92Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Granted by Wafangdian Bureau of
Special pollution Finance and Wafangdian Bureau of
169974.84169974.84
treatment Environment Protection with approval
with “WaCaiZhiQi No.[2004]217”
Dalian Financial Bureau and
Municipal Office of Economic and
Informatization Information Technology Committee
75000.0075000.00construction with approval with “Da CaiZhiQi No.[2012]917” and “DaJing XinFa No.[2012]199”
Total 244974.84 244974.84
xxxi. Projected liability
Opening
Items Closing balance Reason
balance
Accrual for wind power
Accrued warranty 7651644.80 16472767.59
product quality claim
Customer claimed
Wind power product quality claim 32761252.54 30476133.03 compensation for quality
problem
Bearing Overhaul
Railroad Bearing Overhaul Business
15358774.52 15298721.79 Compensates Customers
Compensates Customers for Losses
for Losses
Total 55771671.86 62247622.41
xxxii. Deferred income
Opening Closing
Items Increase Decrease Formation Basis
balance balance
Government
15074718.66 1260000.00 3434822.91 12899895.75 Grant from government
subsidy
Old factory removal and
new factory and land
Compensation for
22645138.69 697844.62 21947294.07 compensation for Liaoyang
land removal
Bearing Construction
Co.Ltd
Total 37719857.350 1260000.00 4132667.53 34847189.82
Notes to the Financial Statements 93Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
xxxiii. Share capital
Change for current period
Transferring
Shareholders’ Opening Issuing Closing
Distributing capital
name/category Balance new Others Subtotal Balance
shares reserves to
shares
share capital
Shares under
restriction for
sale
Domestically
legal person 244000000.00 244000000.00
shares
Total shares
under
244000000.00244000000.00
restriction for
sale
Shares without
restriction for
sale
Domestically
listed foreign 158600000.00 158600000.00
shares
Total shares
without
158600000.00158600000.00
restriction for
sale
Total shares 402600000.00 402600000.00
xxxiv. Capital Reserve
Items Opening balance Increase Decrease Closing balance
Share premium
201956446.52201956446.52
Other capital reserves
283734603.95283734603.95
Total
485691050.47485691050.47
xxxv. Other comprehensive income
Change for current period
Less: Less:
Pre-tax Reclassificatio Reclassificatio
Openin amoun n of previously n of previously After-tax
Items g t recognized recognized
Less: amount After-tax ClosinIncome
balance arising other other tax attributabl
amount g
comprehensive comprehensive e to the attributable to balancein the
current income to income to
expens
e parent
non-controllin
g interests
year profit or loss in retained companythe current earnings in the
period current period
Notes to the Financial Statements 94Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Change for current period
Less: Less:
Pre-tax Reclassificatio Reclassificatio
Openin amoun n of previously n of previously After-tax
Items g t recognized recognized
Less: amount After-tax ClosinIncome amount g
balance arising other other attributabl
in the comprehensive comprehensive
tax e to the attributable to balance
current income to income to
expens non-controllin
profit or loss in retained e
parent
year company
g interests
the current earnings in the
period current period
1.Items
that will
not be
reclassified
to profit or
loss
Including:
Fair value
changes of
other -3201535.2
equity 1 -3201535.21 -3201535.21
instrument
investment
s
Total -3201535.2
1-3201535.21-3201535.21
xxxvi. Special reserve
Items Opening balance Increase Decrease Closing balance
Safety production fee
2305094.248348163.579013406.841639850.97
Total
2305094.248348163.579013406.841639850.97
xxxvii. Surplus reserves
Items Opening balance Increase Decrease Closing balance
Statutory surplus
116179772.10116179772.10
reserve
Discretionary surplus
20590618.9120590618.91
reserve
Total 136770391.01 136770391.01
xxxviii. Undistributed profits
Item Current year Prior year
Closing balance of prior year -766382732.49 -656170250.96
Add:Adjustments to the opening balance of
undistributed profits
Notes to the Financial Statements 95Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Including: additional retrospective adjustments according
to the new accounting standards
Change on accounting policy
Correction of prior period significant errors
Change on combination scope under same control
Other factors
Opening balance of current year -766382732.49 -656170250.96
Add: net profit attributable to shareholders of parent
company in the year -58093066.41 -110212481.53
Less: Provision for statutory surplus reserves
Provision for any surplus reserves
Provision of general risk
Dividends payable for common shares
Share dividends
Closing balance of current year -824475798.90 -766382732.49
xxxix. Operating revenue and cost
1. Operating revenue and cost
Current year Prior year
Items
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from principle
operation 2283081877.43 1907517703.90 1936910671.86 1671937183.99
Revenue from other
operation 68042114.88 41224237.16 116716248.94 54039487.45
Total 2351123992.31 1948741941.06 2053626920.80 1725976671.44
2. Revenue from principle operation details
Current year Prior year
Items Sales revenue Cost of sales Sales revenue Cost of sales
Notes to the Financial Statements 96Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Business Type：
Export 57171157.03 44226168.02 127671159.01 112561290.79
Domestic
2147510201.761813429979.761728418471.121509216026.53
Including:
Transportation vehicle 416239084.61 372966069.17
428677399.77381703666.85
bearings
Special use bearings
834385530.16629970512.15637224088.58522524934.45
General use bearings
896885586.99810493398.44662516982.77604987425.23
Industrial Operations 78400518.64 49861556.12 80821041.73 50159866.67
Total
2283081877.431907517703.901936910671.861671937183.99
xl. Taxes and surcharges
Items Current year Prior year
City construction tax
4972867.922311829.75
Education surcharge
2130865.771031280.53
Local Education surcharge
1420577.23627028.31
Stamp duty
2590990.742919761.63
Property tax
3500321.413376259.16
Tax on land use
2764863.282764863.28
Others
33202.80659.52
Total
17413689.1513031682.18
xli. Selling expenses
Items Current period Previous period
Employee benefit 66688836.25 71386376.16
Compensation for quality default 1213648.16 7254597.04
Transportation expense 128474.97 4198782.58
Travel expense 16383442.29 14904363.52
Trademark use fee 20883296.81 20192279.28
Business activity 16216200.75 22432551.85
Leasing 726015.00 711842.90
Conference expense 1120399.12 349075.96
Others 9442668.22 19216319.04
Notes to the Financial Statements 97Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Current period Previous period
Total 132802981.57 160646188.33
xlii. Administrative expenses
Items Current year Prior year
Employee benefit
101601243.63101772079.43
Intangible assets amortization
4330612.354616232.78
Guide and fire fighting expense
3218136.172893099.67
Depreciation expense
4291345.494189181.66
Travel expense
2457391.413475584.30
Business entertaining expense
423400.88372232.50
Consulting expense
4109663.36250137.33
Other expense
10992380.397505970.64
Total
131424173.68125074518.31
xliii. R&D expenses
Items Current year Prior year
Materials input
76228379.2244262226.19
Design new process development fee
18083846.3120380830.48
Labor cost
17634000.1023302368.71
Depreciation and amortization of long term expense
4158228.775108258.00
Fuel power
9005810.336541139.75
R&D equipment repair and leasing fee
215783.60116391.24
Processing fee
14190164.992024648.09
Others fee
3851501.2111585517.49
Total
143367714.53113321379.95
xliv. Financial expenses
Items Current year Prior year
Interest expenses
13220559.4133560937.47
Less: Interest income
857113.682209880.01
Exchange gain
-1361118.21-2897876.15
Add: Others expenditure
1176176.27479281.22
Total
12178503.7928932462.53
xlv. Other income
Notes to the Financial Statements 98Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Current year Prior year
Government grant
8186389.0511521588.35
Input tax credits
5495125.8816820223.37
Withholding of personal income tax handling fee
74827.7175961.53
Direct VAT relief
62647.91
Total
13756342.6428480421.16
xlvi. Investment income
Items Current year Prior year
Dividend income from other equity instrument
investments during the holding period 1002352.64 1000000.00
Debt restructuring
19517691.8917100303.03
Total
20520044.5318100303.03
xlvii. Gain on FV movement
Source of Gain on FV change Current year Prior year
Tradable financial assets
24653.637704.26
Total
24653.637704.26
xlviii. Loss on credit impairment (loss listed as “-”)
Items Current year Prior year
Bad debt loss of notes receivable
1695914.92-5691196.56
Bad debt loss of receivable
-18056357.67-17297182.03
Bad debt loss of other receivables
-14468.03-913600.41
Bad debt loss on receivables financing
-1044689.43
Total
-17419600.21-23901979.00
xlix. Loss on asset impairment (loss listed as “-”)
Items Current year Prior year
Inventories impairment loss & Impairment loss on
contract performance costs -39538239.31 -25587485.55
Contract assets impairment loss
-1255884.64-312280.35
Fixed asset impairment loss
-347378.75-74213.01
Construction in progress loss
-634868.17
Total
-41776370.87-25973978.91
l. Gain on assets disposal
Notes to the Financial Statements 99Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Amounts recognized into current
Item Current year Prior year
non-recurring profit or loss
Gain on non-current assets disposal 760241.48 892931.71 760241.48
Total 760241.48 892931.71 760241.48
li. Non-operating income
1. Non-operating income list
Amounts recognized into current
Item Current year Prior year
non-recurring profit or loss
Penalty income 191517.24 2503519.88 191517.24
Written off unsettled payable 301491.19 3887833.70 301491.19
Gains on destruction and retirement
282757.70282757.70
of non-current assets
Others 894500.74 894500.74
Total 1670266.87 6391353.58 1670266.87
lii. Non-operating expenses
Amounts recognized into current
Item Current year Prior year non-recurring profit or loss
Public beneficial donation
Loss on disposal of non-
251256.60539208.59251256.60
current asset scrapped
Penalty loss 139052.84 193084.67 139052.84
Others 169019.94 169334.50 169019.94
Total 559329.38 901627.76 559329.38
liii. Income tax expense
1. Income tax expense breakdown
Items Current year Prior year
Current income tax expenses
Deferred income tax expenses 264303.63 -48372.34
Total 264303.63 -48372.34
2.Accounting profit and income tax expense adjustment process
Notes to the Financial Statements 100Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Current year
Total profit -57828762.78
Income tax expense at the statutory [or applicable] tax rate -8674314.42
Effect of different tax rates applied to subsidiaries 235809.82
Effect of adjustments to income taxes of prior periods
Impact of non-taxable income
Effect of non-deductible costs expenses and losses 1997549.66
Effect of deductible losses on the use of deferred income tax assets not recognized
in prior periods
Effect of deductible temporary differences or deductible losses on deferred income
9445369.87
tax assets not recognized in the period
Other (additive deductions) -2740111.30
Income tax expense 264303.63
liv. Earnings per share
1.Basic earnings per share
Basic earnings per share is calculated by dividing consolidated net income attributable to
ordinary shareholders of the parent by the weighted average number of ordinary shares of
The Group in issue:
Items Current period Previous period
Consolidated net income attributable to
-58093066.41-110212481.53
ordinary shareholders of the parent
Weighted average number of common shares of
402600000.00402600000.00
The Group issued and outstanding
Basic earnings per share -0.1443 -0.2738
Include: Basic earnings per share from
-0.1443-0.2738
continuing operations
Basic earnings per share from
discontinued operations
2.Diluted earnings per share
Notes to the Financial Statements 101Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Diluted earnings per share is calculated by dividing the consolidated net income
attributable to ordinary shareholders of the parent (diluted) by the weighted average
number of ordinary shares of The Group in issue (diluted)
Current Previous
Items
period period
Consolidated net income attributable to ordinary shareholders of the
-58093066.41-110212481.53
parent (diluted)
Weighted average number of common shares of The Group issued and
402600000.00402600000.00
outstanding (diluted)
Diluted earnings per share -0.1443 -0.2738
Include: Diluted earnings per share from continuing operations -0.1443 -0.2738
Diluted earnings per share from discontinued operations
lv. Notes on Cash Flow
1. Cash related to operating activities
(1) . Other cash received in connection with operating activities
Items Current period Previous period
Interest income 857113.68 2288003.82
Government Grants 7090879.95 2186663.30
Refund of deposits and reserve funds 17780935.89 20500.00
Current payments and others 7034246.94 32031937.57
Total 32763176.46 36527104.69
(2) Other cash paid in connection with operating activities
Items Current period Previous period
Selling expenses 37354376.36 50545781.88
Administrative costs 16320250.63 39658453.58
Financial expenses 1176176.27 5091454.23
Others 39923247.97 45213901.86
Total 94774051.23 140509591.55
2. Cash related to financing activities
(1) Other cash received in connection with financing activities
Items Current period Previous period
Notes to the Financial Statements 102Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Note Discounting 108215931.00 554037639.98
Recovery of deposits due 14772483.20 49652683.75
Proceeds from borrowings from non-financial
460000000.00
institutions
Total 582988414.20 603690323.73
(2) Other cash paid in connection with financing activities
Items Current period Previous period
Notes due for payment 432699820.36 357096368.00
Deposit 30879433.46 240320658.60
Total 463579253.82 597417026.60
(3) Changes in liabilities arising from financing activities
Increase Decrease
Items Opening balance Non-cash Non-cash Closing balance
Cash movements Cash movements
movements movements
Short term
loan 570000000.00 162000000.00 53118.00 650000000.00 82053118.00
Long term
loan 98350000.00 98350000.00
Total 668350000.00 162000000.00 53118.00 748350000.00 82053118.00
lvi. Notes on Cash Flow Statement Items
1. Supplementary Information on Cash Flow Statement
additional materials Current period Previous period
1. Adjust net profit to cash flow from operating
activities:
Net profit -58093066.41 -110212481.53
Add: Provision for asset impairment 41776370.87 23901979.00
Credit asset impairment loss 17419600.21 25973978.91
Depreciation of fixed assets 68914375.76 64470904.93
Amortization of intangible assets 4008502.14 4377251.51
Amortization of long-term deferred expenses 1599441.26 1357613.92
Losses on disposal of fixed assets intangible assets and -760241.48 -892931.71
Notes to the Financial Statements 103Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
additional materials Current period Previous period
other long-term assets
Loss on scrapping of fixed assets -31501.10 539208.59
Loss from changes in fair value -24653.63 -7704.26
Financial expenses 12838013.35 33560937.47
Investment loss -20520044.53 -18100303.03
Decrease in deferred income tax assets
Increase in deferred income tax liabilities 264303.63 -51211.90
Inventories reduction 35734872.95 -62534134.99
Decrease in operating receivables 225464168.43 -41221086.90
Increase in operating payables 56591303.41 184556973.25
Other
Net cash flow from operating activities 385181444.86 105718993.26
2. Major investment and financing activities that do
not involve cash receipts and expenditures:
Conversion of debt into capital
Convertible corporate bonds due within one year
Financing lease of fixed assets
3. Net changes in cash and cash equivalents:
Year-end balance of cash 63645319.54 160907298.24
Less: cash balance at the beginning of the year 160907298.24 110664560.63
Plus: the year-end balance of cash equivalents
Less: the beginning balance of cash equivalents
Net increase in cash and cash equivalents -97261978.70 50242737.61
2.Cash and cash equivalents
Items Closing balance Opening balance
1. Cash 63645319.54 160907298.24
Including: cash on hand
Bank deposits that can be used for payment at any time 63645319.54 160907298.24
Other currency funds that can be used for payment at any time
2. Cash equivalents
Of which: bond investments due within three months
3. Balance of cash and cash equivalents at the end of the year 63645319.54 160907298.24
Notes to the Financial Statements 104Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Closing balance Opening balance
Among them: the restricted use of cash and cash equivalents
by the parent company or subsidiary within the group
lvii. Foreign currency monetary items
Converted Closing balance
Items Closing balance
exchange rate converted CNY
Money funds 470924.79
Include：USD 79.95 7.0288 561.95
Euro 57114.06 8.2355 470362.84
Accounts Receivable 9223854.84
Include：USD 1154193.58 7.0288 8112595.84
Euro 134935.22 8.2355 1111259.00
lviii. Leases
1. As lessee
Items Current period Previous period
Simplified treatment of short-term lease charges
recognized in the cost of the related asset or in current 18941324.02 18753486.47
profit or loss
2. As lessor
(1) Operating lease
Items Current period Previous period
Operating lease income 20482013.45 19296263.38
VI. Research and development expenditure
Items Current period Previous period
Material inputs 76228379.22 44262226.19
Technical service fee design fee new process protocol
development fee (equipment commissioning fee and
new product tooling) 18083846.31 20380830.48
Labor costs 17634000.10 23302368.71
Depreciation and amortization of long-term expenses 4158228.77 5108258.00
Fuel and power 9005810.33 6541139.75
Notes to the Financial Statements 105Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Current period Previous period
R&D equipment repair and rental fees 215783.60 116391.24
Processing costs 2024648.09
Testing costs
Other expenses 3851501.21 11585517.49
Total 143367714.53 113321379.95
Of which: Expensed R&D expenditures 143367714.53 113321379.95
Capitalized R&D expenses
Notes to the Financial Statements 106Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
VII. Interest in other entity
1. Equity of subsidiaries
(1) Organization structure of group company
Principal place of Shareholding (%)
Name of Subsidiary Registered capital Place of Registration Business Nature Acquisition method
business
Direct Indirect
Wangshuitai Street Manufacture and sale
Wazhou Liaoyang Bearing 19.35 million Liaoyang City
Taizihe District of bearings and 100 Business Merger
Manufacturing Co. dollars Liaoning Province
Liaoyang City China machinery
No.12 Yongsheng
Manufacture and sale
Dalian Wazhou Precision Dalian Liaoning Street Thirteen Mile Investment and
10 million dollars of bearings and 100
Motor Bearing Co. Province Dalian Free Trade establishment
machinery
Zone
Wazhou Precision Spherical No.1 Section 1 North Manufacture and sale
Wafangdian Liaoning
Roller Bearing (Wafangdian) 194 million dollars Gongji Street of bearings and 100 Business combination
Province
Co. Wafangdian machinery
Notes to the Financial Statements 107Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
VIII. Government Grants
i. Liability items involving government grants
Recognized
in
Liability Opening non-operating Transferred to Charged Other Closing
items Balance New grants income other gains to costs changes Balance Asset-related/revenue-related
Deferred
income 37719857.35 1260000.00 4129661.53 3006.00 34847189.82 Asset-related
ii. Revenue-related government grants
Items Current period Previous period
Compensation for demolition of Dalian
Branch Plant 2704235.88 2704235.88
Special subsidy fund for the development of
intelligent manufacturing equipment 101599.89 1288889.09
Interest subsidy for large axle load project 220000.00 240000.00
Subsidy for the construction of skill master
studio 46189.80 89562.18
Industrial development fund of Liaozhou
Bearing Company 97548.00 3431.15
Compensation for relocation of old plant
area 960087.96 1054204.75
Social security subsidy for college graduates
in Dalian City 1487041.49
Support and development fund 98800.00
Special fund for digital transformation of
small and medium-sized enterprises 75600.00
Subsidies for stabilizing jobs 3000.00 745640.00
Digital Liaoning Intelligent Manufacturing
Province Special Funds 300000.00
CITIC 2022 Short-Term Credit Insurance
Grant 237933.00
Dalian Business Council disburses funds for 940144.73 243070.78
Notes to the Financial Statements 108Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
full provincial openness in 2022
National and Provincial Specialized R&D
Funds 1341141.30 4218252.44
Science and technology prize 196666.00
Dalian Bureau of Industry and Information
Technology typed Digital Liaoning
Manufacturing Province 150000.00
Subsidy for job expansion 51000.00 25500.00
Others 60000.00 24203.08
Total 8186389.05 11521588.35
IX. Risk Related to Financial Instruments
i. Types of risks arising from financial instruments
The Group is exposed to a variety of financial risks in the course of its operations: credit
risk liquidity risk and market risk (including exchange rate risk interest rate risk and other
price risks).
1. Credit risk
Credit risk is the risk that the counterparty will fail to fulfill its contractual obligations and
cause The Group to incur a financial loss.The carrying amount of recognized financial assets in the consolidated balance sheet; for
financial instruments measured at fair value the carrying amount reflects the risk exposure
but not the maximum risk exposure which will change with future changes in fair value.In order to reduce credit risk the Group has set up a special department to determine credit
limits conduct credit approvals and perform other
The Group has established a special department to determine credit limits conduct credit
approvals and implement other monitoring procedures to ensure that necessary measures
are taken to recover overdue claims. In addition the Group reviews the collection status of
each individual receivable at each balance sheet date to ensure that adequate provision for
bad debts is made for uncollectible amounts. As a result the management of the Group
considers that the Group's exposure to credit risk is significantly reduced.The Group's liquidity is placed with banks with high credit ratings therefore the credit risk
of liquidity is low.Notes to the Financial Statements 109Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
The Group has adopted necessary policies to ensure that all sales customers have good
credit history. Except for the accounts receivable amount
The Group has no other significant credit concentration risk except for the top five
amounts of accounts receivable.The total amount of the top five accounts receivable: RMB314 million.IX. Fair value
disclosures.
2. Liquidity risk
Liquidity risk is the risk that an enterprise will experience a shortage of funds to meet its
obligations that are settled by delivery of cash or other financial assets.The Group manages liquidity risk by ensuring that there is sufficient liquidity to meet
obligations as they fall due without incurring unacceptable losses or causing damage to the
enterprise's reputation. The Group regularly analyzes the structure and maturity of its
liabilities to ensure adequate funding. The management of the Group monitors the
utilization of bank borrowings and ensures compliance with the borrowings agreements. It
also negotiates with financial institutions for financing in order to maintain a certain credit
line and minimize liquidity risk.The undiscounted contractual cash flows of each of The Group's financial liabilities by
maturity date are set out below:
Closing Balance
Total
Over
items Immediate 1-2 2-5 undiscounted
Within1 year 5 Book value
reimbursement years years contract
years
amount
Short-term 82053118.00 82053118.00 82053118.00
loans
Notes payable 370597.50 370597.50 370597.50
Other payables 460329726.03 460329726.03 460329726.03
Total 542753441.53 542753441.53 542753441.53
3. Market risk
Notes to the Financial Statements 110Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Market risk of a financial instrument is the risk that the fair value or future cash flows of
the financial instrument will fluctuate because of changes in market prices including
exchange rate risk interest rate risk and other price risks.
(1) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates.The Group's risk of changes in cash flows from financial instruments due to changes in
interest rates relates mainly to variable-rate bank borrowings. The Group's policy is to
maintain floating interest rates on these borrowings.Current year
items Impact on profit Impact on shareholders'equity
RMB benchmark interest rate
-1355000.00-1355000.00
increases by 25 basis points
RMB benchmark interest rate
1355000.001355000.00
decreases by 25 basis points
(2) Exchange rate risk
Exchange rate risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in foreign exchange rates.The Group's exposure to foreign exchange risk relates primarily to the U.S. dollar and the
Group's major export operations are settled in U.S. dollars. As at December 31 2025
except for the balances of monetary items in foreign currencies in this Note V. (54) the
Group's assets and liabilities were in RMB. The foreign exchange risk arising from these
assets and liabilities with foreign currency balances may have an impact on the Group's
results of operations.The Group's exposure to exchange rate risk mainly arises from financial assets and
financial liabilities denominated in U.S. dollars and the amounts of foreign-currency
financial assets and foreign-currency financial liabilities translated into Renminbi are set
out below:
items Current year
Notes to the Financial Statements 111Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Impact on profit Impact on shareholders'equity
CNY appreciates by 1% against the
US dollar -81131.58 -81131.58
CNY depreciates by 1% against the
US dollar 81131.58 81131.58
CNY appreciates by 1% against the
euro -15816.22 -15816.22
CNY depreciates by 1% against the
euro 15816.22 15816.22
(3) Other price risks
As of December 31 2025 the Group's purchased bearing components may be subject to
price fluctuations.Other price risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market prices other than exchange
rate risk and interest rate risk.ii. Transfer of financial assets
1.ransfers of financial assets
Method of transferring Transferred financial assets Basis of
Status
financial assets Nature Amount judgment
Notes endorsed and outstanding Bank acceptance 227644005.26 Non-derecognition
Finance company
Notes endorsed and outstanding 3112995.33 Non-derecognition
acceptance
Notes endorsed and outstanding Trade acceptance 174581559.89 Non-derecognition
Supply Chain
Notes endorsed and outstanding 59547219.71
E-Credential
Total 464885780.19
2.Financial assets derecognized due to transfers
Modalities for the transfer Associated gains or
items Amount
of financial assets losses
Receivables financing 282559004.16
Total 282559004.16
Notes to the Financial Statements 112Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
X. Fair value disclosures
The inputs used in fair value measurements are divided into three levels:
Level 1 inputs are unadjusted quoted prices in active markets for identical assets or
liabilities that are available at the measurement date.Level 2 inputs are inputs other than Level 1 inputs that are directly or indirectly observable
for the related asset or liability.Level 3 inputs are unobservable inputs for the relevant asset or liability.The level to which the fair value measurement results belong is determined by the lowest
level to which the inputs that are significant to the fair value measurement as a whole
belong.i. Closing fair value of assets and liabilities measured at fair value
F V at the year end
items 1st Level FV 2nd Level FV 3rd Level FV
Total
Measurement Measurement Measurement
I. Continuously measured at FV
◆Tradable financial assets 246536.22 246536.22
1.Financial assets at fair value through
246536.22246536.22
profit or loss
（1）Equity instrument investment 246536.22 246536.22
◆Receivables financing 64928833.08 64928833.08
◆Other equity instrument investment 8705393.14 8705393.14
Total assets measured at fair value on an
246536.2273634226.2273880762.44
ongoing basis
ii. Basis for determining the market value of continuing and discontinued Level 1 fair
value measurement items
The Group obtains the unadjusted closing price on the public stock exchange at December
31 2023 for its investment in certain equity instruments included in financial assets held
for trading.XI .Related Parties Relationship and Transactions
Notes to the Financial Statements 113Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
i. Status of the Wafangdian Bearing Company Limited's parent company
Parent Registered RegisteredBusiness nature Shareholding Voting power
company address
capital percentage percentage
No. 1 North Manufacture and
Wazhou Gongji Street sales of bearing
Wafangdian 519869400. 60.61 60.61Group and other 00
City Dalian
equipment
Ultimate controlling party：State-owned Assets Supervision and Administration Commission of Dalian Municipal
People's Government.ii. Status of The Group's subsidiaries
For details of The Group's subsidiaries please refer to "VIII. Interests in other entities" in
this note.iii. Other related parties
Name of related party Related party relationship
Dalian Wazhou Bearing Manufacturing Equipment Co. Ltd Other entity controlled by the same parent
company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Exact Forge Co. Ltd
company and ultimate controlling party
Wazhou Group Precision Turnplate Bearing Co. Ltd Other entity controlled by the same parent
company and ultimate controlling party
Wazhou Group Exact Transmission Bearing Co. Ltd Other entity controlled by the same parent
company and ultimate controlling party
Wazhou Group Special Precision Bearing Co. Ltd. Other entity controlled by the same parent
company and ultimate controlling party
Liaoning North Metal Materials Supply Chain Co. Ltd Other entity controlled by the same parent
company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Group (USA) Bearing Co. Ltd.company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Group High-End Auto Bearing Co.Ltd
company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Group Precision Roller Co.Ltd
company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Group Precision Retainer Co.Ltd
company and ultimate controlling party
Other entity controlled by the same parent
Kugel- und Rollenlagerwerk Leipzig GmbH
Notes to the Financial Statements 114Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
company and ultimate controlling party
Wafangdian Bearing Power Co.Ltd Other entity controlled by the same parent
Wazhou Group National Bearing Engineering Other entity controlled by the same parent
Technology Research Centre Co.Ltd
Wafangdian Bearing Group Dalian Wind Power Spindle Other entity controlled by the same parent
Bearing Co.Wafangdian Bearing Group Shanghai R&D Center Co. Other entity controlled by the same parent
Waxaxhaft Group (Europe) Bearing Co. Other entity controlled by the same parent
Wafangdian Tongda Bearing Manufacturing Co.Other related party
Ltd
ZWZ Bearing Europe GmbH Other related party
Dalian koyo Wazhou shaft auto bearing co. Ltd
Other related party
Wafangdian Bearing Education and Training Center
Other related party
Dalian Diye Gikai Wax Shaft Industry Co. Ltd
Other related party
Dalian Heavy Industries Crane Group Co.Ultimate controlling party
iv. Related party transactions
1. Purchase and sale of goods provision and acceptance of labor related transactions
(1) Purchase of goods provide and receive labour services
Contents of related
Related Party current year prior year
transactions
Purchase of goods and
equipment and lease of
tangible assets;
Wafangdian Bearing Group Co. Acceptance of labor 510357070.64 392149666.35
Wafangdian Bearing Precision Forging Purchase of goods and
Co. equipment 204441561.17 281289010.82
Wafangdian Bearing Group Precision
Rolling Body Co. Purchase of goods 9387786.06
Wafangdian Bearing Group High-end
Automobile Bearing Co. Purchase of goods 72356346.63 296601.78
Wafangdian Bearing Group High-end
Automobile Bearing Co. Acceptance of labor 6340.00
Wafangdian Bearing Group Precision Purchase of goods 107168247.67 144626560.11
Notes to the Financial Statements 115Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Retainer Co.Wafangdian Tongda Bearing
Manufacturing Co. Acceptance of labor 92748683.99 2988120.82
Purchase of goods;
Dalian Wazhou Group Bearing Purchase of equipment;
Equipment Manufacturing Co. Acceptance of labor 13663839.38 16124998.73
Wazhou Group Precision Transmission
Bearings Co. Purchase of goods 469590.56 249459.51
Purchase of power
acceptance of labor;
Wafangdian Bearing Power Co. Acceptance of labor 57872617.19 74361234.05
Wafangdian Bearing Group National
Bearing Engineering Technology
Research Center Co. Acceptance of labor 23617259.26 22771578.60
Wafangdian Bearing Group Wind Power Purchase of
Bearing Co. goods/equipment 50896361.47 474998.01
Wafangdian Bearing Group Special
Precision Bearing Co. Purchase of goods 3880596.92 62406.68
Dalian Heavy Industry Crane Group Co. Acceptance of labor 78897.95 771982.40
Wafangdian Bearing Group Dalian Wind Purchase of
Turbine Spindle Bearing Co. commodities/energy 72140296.08 700443.09
Wafangdian Bearing Group National
Bearing Engineering Technology
Research Center Co. Purchase of equipment 1408.50
Wafangdian Bearing Group Shanghai
R&D Center Co. Purchase of equipment 445648.68 5591.11
Dalian Zhixin Machinery Trading Co.Ltd 5038458.05
Total 1215175475.64 946268186.62
(2) Sales of goods/provide labor services
Contents of
Related Party related current year prior year
transactions
Wafangdian Bearing Precision Forging Co. Sales of goods 11794128.80 79930.30
Notes to the Financial Statements 116Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Wazhou Group (USA) Bearing Co. Sales of goods
Wafangdian Bearing Group Precision
Sales of goods 6420.00
Rolling Body Co.Wafangdian Bearing Group Wind Power
Sales of goods 91193280.76 130113742.84
Bearing Co.Wafangdian Bearing Group Co. Products for sale 47255334.03 40540297.95
Wafangdian Bearing Group High-end
Products for sale 28226023.30 1883238.73
Automobile Bearing Co.Leipzig Roller Ball Bearing Co. Products for sale 430940.41 4988691.99
Wafangdian Bearing Group Precision
Products for sale 815262.15 1098535.63
Transmission Bearing Co.Dalian Wazhou Jinzhou Machinery Co.Products for sale
Ltd
Wafangdian Bearing Group Special
Products for sale 1023715.65 706322.55
Precision Bearing Co.Wafangdian Tongda Bearing
Products for sale 44192.84 17827.60
Manufacturing Co.Dalian Waxial Group Bearing Equipment
Products for sale 11305547.01 10286024.34
Manufacturing Co.Wafangdian Bearing Group Precision
Products for sale 254810.08 169507.24
Retainer Co.Wafangdian Bearing Group Dalian Wind
Products for sale 20959.36 1342741.76
Power Spindle Bearing Co.Wafangdian Bearing Group National
Bearing Engineering Technology Research Products for sale 1258097.23 142198.58
Center Co.Dalian Heavy Industry Crane Group Co. Sales of goods 32043968.86 26276398.10
Wafangdian Bearing Group Precision
Provision of labor 1814119.28
Rolling Bodies Co.Wafangdian Bearing Group High-end
Provide labor 4128910.22 7346126.23
Automobile Bearing Co.Notes to the Financial Statements 117Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Wafangdian Bearing Group Precision
Provision of labor 25515079.97 44130641.68
Transmission Bearing Co.Wafangdian Bearing Group Special
Provision of labor 119299.71 967887.36
Precision Bearing Co.Dalian Waxial Group Bearing Equipment
Selling equipment 89700.00
Manufacturing Co.Wafangdian Bearing Precision Forging Co. Provision of labor 848486.44 2823358.25
Dalian Waxial Group Bearing Equipment
Provide labor 191549.83 1022022.26
Manufacturing Co.Wafangdian Tongda Bearing
Provide labor 4933941.30
Manufacturing Co.Wafangdian Bearing Group Precision
Provide labor 223027.67 470035.46
Retainer Co.Wafangdian Bearing Group Co. Provide labor 30157084.86 32919993.99
Wafangdian Bearing Group Wind Power
Provide labor 457792.74 3932506.00
Bearing Co.Wafangdian Bearing Group National
Bearing Engineering Technology Research Provide labor 120410.68 319337.59
Center Co.Wafangdian Bearing Group Dalian Wind
Provision of labor 24622.03 10859179.28
Power Spindle Bearing Co.Wafangdian Bearing Group Co. Sales of equipment 7973.14
Wafangdian Bearing Group Precision
Selling equipment
Retainer Co.Wafangdian Bearing Group High-end
Selling equipment
Automobile Bearing Co.Dalian Zhixin Machinery Trading Co. Ltd 117634367.77
Total 405086892.40 329288699.43
2. Related Leases
1) As a lessor
Notes to the Financial Statements 118Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Contents of
Related Party related current year prior year
transactions
Wafangdian Bearing Precision Forging Co. Factory for rent 1645507.12 1310603.00
Waxaxial Group High-end Automobile Bearing Co. Factory for rent 1019845.20 1019845.20
Wafangdian Bearing Group Precision Retainer Co. Factory for rent 1636375.75 1234762.99
Dalian Wazhou Fengyuan Machinery Co. Factory for rent
Wafangdian Bearing Group Precision Transmission
Factory for rent 277764.00 277764.00
Bearings Co.Wafangdian Bearing Group Co. Rental equipment 2528608.87 2912280.07
Waxaxial Group High-end Automobile Bearing Co. Rental equipment 2508640.03 3326444.03
Wafangdian Bearing Group Precision Retainer Co. Rental equipment 376000.64 475488.04
Wafangdian Bearing Precision Forging Limited
Rental equipment 1136884.18 852805.09
Liability Company
Wafangdian Bearing Group Co. Rental equipment 6345184.88 5377917.75
Wafangdian Bearing Group Precision Rolling Body
Rental equipment 154222.80
Co.Wafangdian Bearing Precision Steel Ball
Land for rent 87442.50
Manufacturing Co.Wafangdian Bearing Group Limited Liability
Company Precision Roller Manufacturing Branch Land for rent 661860.00 483037.50
Company
Wafangdian Bearing Precision Forging Co. Land for rent 1328730.00 1328730.00
Wafangdian Bearing Group Co. Land for rent
Wafangdian Bearing Group Precision Retainer Co. Land for rent 400455.00 310455.00
Wafangdian Bearing Group Precision Transmission
Land for rent 58677.65 58677.65
Bearings Co.Dalian Waxial Group Bearing Equipment
Land for rent 8750.00
Manufacturing Co.Wafangdian Bearing Group Wind Power Bearing Co. Land for rent 15000.00 7500.00
Dalian Waxial Group Bearing Equipment
Factory for rent 46167.00 39537.76
Manufacturing Co.Notes to the Financial Statements 119Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Wafangdian Bearing Group Wind Power Bearing Co. Factory for rent 60000.00 30000.00
Wafangdian Bearing Group Precision Transmission
Factory for rent 5815.53
Bearings Co.Total 20051515.85 19296263.38
Notes to the Financial Statements 120Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
2) Assets under lease
current year prior year
Rental costs Variable Rental costs Variable
for short-term lease for short-term lease
Category of leases and payments not Interest leases and payments not Interest
Increased Increased
Lessor assets rent low-value included in expense on low-value included in expense on
Rent paid right-to-use Rent paid right-to-use
in asset leases the lease liabilities asset leases the lease liabilities
assets assets
with measurement assumed with measurement assumed
simplified of lease simplified of lease
processing liabilities processing liabilities
Wafangdian
Bearing Group Houses
Co.Ltd 13403472.00 13403472.00 13228071.75 13228071.75
Wafangdian
Bearing Group Factory
Co.Ltd 2257002.49 2257002.49 2316263.45 2316263.45
Wafangdian
Bearing Group Land
Co.Ltd 3163105.03 3163105.03 3209151.27 3209151.27
Dalian Waxial
Group Bearing
Equipment Land
Manufacturing
Co. 117744.50 117744.50
Notes to the Financial Statements 121Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Total 18941324.02 18941324.02 18753486.47 18753486.47
Notes to the Financial Statements 122Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
3. Related party assets transfer and debt structure reconstruction
Related party Type of transaction current year prior year
Dalian Wazhou Group Bearing
Gain on debt restructuring 37410.27
Equipment Manufacturing Co.Wafangdian Bearing Group High-end
Debt restructuring losses 132572.19
Automobile Bearing Co.Wafangdian Bearing Group National
Bearing Engineering Technology Gain on debt restructuring 154484.67
Research Center Co. 75501.75
Wafangdian Bearing Group Precision
Gain on debt restructuring 996260.34
Retainer Co. 160529.24
Wafangdian Bearing Group Precision
Debt restructuring losses 92783.51
Transmission Bearings Co. 102564.12
Wafangdian Bearing Group Precision
Gain on debt restructuring 304683.51
Rolling Body Co.Wafangdian Bearing Group Co. Gain on debt restructuring 1333933.48 1499522.53
Wafangdian Bearing Group Co. Debt restructuring losses 12172.66 316437.26
Wafangdian Bearing Group Equipment
Gain on debt restructuring
Technology Engineering Co.Wafangdian Bearing Group Wind
Debt restructuring losses 1300000.00
Power Bearing Co.Wafangdian Bearing Power Co. Gain on debt restructuring 47800.00
Wafangdian Bearing Precision Forging
Gain on debt restructuring 1799309.23 2302558.02
Co.Total 3653992.94 7014529.84
4. Management remuneration
Item current year prior year
Management remuneration 2386374.00 2094544.81
v. Unsettled receivables and payables from related parties
1) Items receivable
Notes to the Financial Statements 123Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Closing Balance Opening balance
Items Related party Book
Provision Book balance Provision
balance
Receivable
Wafangdian Bearing Group
High-end Automobile Bearing 3930178.86
Co.Wafangdian Bearing Group
Wind Power Bearing Co. 549479.30
Wafangdian Bearing Group
Precision Rolling Bodies Co.Wazhou Group (USA) Bearing
Co. 10320032.49
Dalian Waxial Group Bearing
Equipment Manufacturing Co. 47236.74
Wafangdian Bearing Group
Precision Transmission Bearing 9557749.30
7161607.14
Co.Wafangdian Bearing Group
Special Precision Bearing Co.Leipzig Roller Ball Bearing
210519.5621051.96
Manufacturing Co. 1480632.66
Wafangdian Bearing Group
Dalian Wind Power Spindle
Bearing Co.Wafangdian Bearing Precision
Forging & Pressing Co. 33136359.29
Dalian Zhixin Machinery
46701880.811279184.27
Trading Co. Ltd
Dalian Rubber & Plastic
33721.98
Machinery Co. 674439.52
Dalian Huarui Special
229641.94
Transmission Equipment Co. 4592838.82
Dalian Dazhong Mechanical
and Electrical Installation 33559.16
50.00627086.69
Engineering Co.Dalian Great Oak Machinery
172183.23
Manufacturing Co. 1267342.70 3443664.58
Dalian Huarui Heavy Industry
Coke Oven Vehicle Equipment 50878.14
1017562.72
Co.Notes to the Financial Statements 124Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Dalian Huarui Heavy Industry
Special Spare Parts 11806.70
143518.83
Manufacturing Co.Dalian Huarui Heavy Industry
84479.81
Crane Co. 1689596.19
Dalian Huarui Heavy Industry
623.94
Casting Co. 3119.72
Dalian Ruifeng Heavy Duty
3.95
Machinery & Materials Co. 79.00
Dalian Heavy Industry
Mechanical & Electrical 7128.00
35640.00
Equipment Sets Co.Dalian Dazhong Inspection
4381.73
Technology Service Co. 87634.52
Shanxi Huarui Heavy Industry
Mechanical & Electrical 7961.93
159238.64
Equipment Co.Dalian Jinzhou Heavy
33.54
Machinery Group Co. 670.73
Dalian Huarui Heavy Industry
4553438.55
Group Co. 66033.09 91068770.97
Total 61733754.32 1300236.23 156239208.55 5189842.60
Note Dalian Rubber & Plastic
receivable Machinery Co. 150000.00 7500.00
Wafangdian Bearing Precision
Forging & Pressing Co. 20000000.00
Wafangdian Bearing Group
Wind Power Bearing Co. 10000000.00
Dalian Zhixin Machinery
Trading Co. Ltd 17990983.77 899549.19
Total 48140983.77 907049.19
Financing Dalian Rubber & Plastic
2256.05
receivable Machinery Co. Ltd
Dalian Zhixin Machinery
66777.59
Trading Co. Ltd
Total 69033.64
Prepayments
Wafangdian Bearing Precision
Forging Limited Liability
Company
Wafangdian Bearing Power Co.
1822624.541773006.38
Notes to the Financial Statements 125Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Dalian Waxial Group Bearing
Equipment Manufacturing Co. 478000.00
Total
2300624.541773006.38
Other
receivables
Wafangdian Bearing Group Co.
25000.00310000.00290000.00
Total
25000.00310000.00290000.00
2) Items payable
Closing Opening
Item Related party
Balance balance
Accounts
payable
Wafangdian Bearing Group Co. 167490157.46 102774587.92
Dalian Wazhou Group Bearing Equipment
5216717.18
Manufacturing Co.Dalian Zhixin Machinery Trading Co. Ltd 18428.32
Wafangdian Tongda Bearing Manufacturing Co. 53989932.83 2198500.98
Dalian Wazhou Fengyuan Machinery Co. 14559366.11 114394739.17
Wafangdian Bearing Group National Bearing
Engineering Technology Research Center 14193114.46 9340519.15
Wafangdian Bearing Group
Wafangdian Bearing Group Precision Retainer
37799372.5836824560.83
Co.Wafangdian Bearing Power Co. 11451887.88 7725587.00
Wafangdian Bearing Group Wind Power Bearing
21454613.09
Co. Ltd
Wafangdian Bearing Group High-end Automobile
17683523.8339393639.64
Bearing Co.Wafangdian Bearing Group Special Precision
4078223.033340802.84
Bearing Co.Wafangdian Bearing Group Shanghai R&D
6317.95
Center Co. Ltd.Dalian Dazhong Electrical and Mechanical 161491.71
Notes to the Financial Statements 126Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Installation Engineering Co. Ltd.Dalian Dahui Testing Technology Service Co.
1108.0035974.00
Ltd.Dalian Huarui Heavy Industry Group Co. Ltd. 257968.68
Wafangdian Bearing Precision Forging Co. Ltd 154569781.59
Total 502506226.36 316454689.87
Contractual
liabilities
Wazhou Bearing Group (USA) Bearing Co.Leipzig Roller Ball Bearing Production Co.Wafangdian Bearing Precision Forging Co.Other accounts
payable
Dalian Dazhong Electrical and Mechanical
32502.00
Installation Engineering Co. Ltd.Wafangdian Bearing Group Co. 14586506.71 200.00
Wafangdian Bearing Power Co. 2287498.33 2415150.75
Dalian Zhixin Machinery Trading Co. Ltd 460329726.03
Total 477203731.07 2447852.75
XII. Commitments and contingencies
As of December 31 2025 the Group has significant commitments or material
contingencies that do not require disclosure.XIII. Events after the Balance Sheet Date and Other important matters
i. Events after the Balance Sheet Date
Until the financial report date there is no significant post balance sheet event for
disclosure.ii. Other important matters
On November 17 2025 the Party Committee of Wazhou Group resolved to initiate the
voluntary delisting procedures of The Company and the application submitted by Dalian
Notes to the Financial Statements 127Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Heavy Industry Equipment Group Co. Ltd. to the Dalian Municipal State-owned Assets
Supervision and Administration Commission (SASAC) received approval on November
25.
As disclosed in the Takeover Offer Report of Wafangdian Bearing Co. Ltd. commencing
from January 20 2026 for the purpose of terminating the listing status of The Company a
general offer was made to all shareholders of The Company other than Wazhou Group.Following the delisting Wazhou Group may take lawful and effective measures in
accordance with applicable laws to possibly achieve the cancellation of The Company's
status as an independent legal entity. Relevant subsequent arrangements will be announced
separately based on actual circumstances after The Company's delisting.As of February 27 2026 the total number of unrestricted tradable public shares tendered in
acceptance of the offer was 54524555 shares. Wazhou Group held 74.15% of The
Company's shares and the public shareholding percentage fell below 10%. As The
Company's equity distribution no longer meets the listing conditions The Company will
proceed with the delisting procedures for its shares in accordance with relevant regulations
and issue corresponding announcements.XIV.Notes to the Main Items of the Financial Statements of Parent Company
i. Accounts receivable
(1). Accounts receivable with the bad debt provisions under accounting aging analysis
method
Aging Closing Balance Opening balance
Within1 year
838847662.72923943439.94
1-2 years
98842640.03108743236.61
2-3 years
32261906.6828591618.31
3-4years
9099385.7117461725.43
4-5years
5093807.9320435133.89
Over 5 years
42704202.3332676415.23
Total
1026849605.401131851569.41
Less: Provision for bad debt
159055212.72141135487.75
Total
867794392.68990716081.66
Notes to the Financial Statements 128Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(1) .Category of accounts receivable
Closing Balance
Items Booking balance Provision Booking value
Amount % Amount %
Accounts receivable
with individual bad
debt provision
71334371.536.3071334371.53100.00
Accounts receivable
with bad debt
provision based on
the characters of
credit risk portfolio
926380656.5993.7058775731.516.58867604925.08
-Aging portfolio 867049226.23 84.44 57611685.85 6.64 809437540.38
-Related party
portfolio 59331430.36 5.78 1164045.66 1.96 58167384.70
Total 1026849605.40 — 159055212.72 — 867794392.68
(continued)
Opening Balance
Items Booking balance Provision Booking value
Amount % Amount %
Accounts receivable
with individual bad
debt provision 71334371.53 6.30 71334371.53 100.00
Accounts receivable
with bad debt
provision based on
the characters of 1060517197.88 93.70 69801116.22 6.58 990716081.66
credit risk portfolio
-Aging portfolio 893147194.64 78.91 64611273.63 7.23 828535921.01
-Related party
portfolio 167370003.24 14.79 5189842.59 3.10 162180160.65
Total 1131851569.41 — 141135487.75 — 990716081.66
Notes to the Financial Statements 129Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Bad debt provision for accounts receivable at the end of year based on individual
Closing Balance Opening balance
Debtors name Accounts Provision for bad Reasons for Accounts Provision for
%
receivable debts provision receivable bad debts
An Gang steel Co.Ltd 1595050.69 1595050.69 100.00 uncollectable 1595050.69 1595050.69
Bazhou Tianli Tube Co. Ltd 1319586.71 1319586.71 100.00 uncollectable 1319586.71 1319586.71
HBIS Company Limited Handan Branch 1608611.42 1608611.42 100.00 uncollectable 1608611.42 1608611.42
Heilongjiang Longmei Logistics Co. Ltd 8366227.79 8366227.79 100.00 uncollectable 10656227.79 10656227.79
Liaoning Wazhou Bearing Sales Co.Ltd 1611795.99 1611795.99 100.00 uncollectable 1611795.99 1611795.99
Liaoning Yinheng Galvanized Colored Coated Steel Sheet Co. Ltd 3213308.67 3213308.67 100.00 uncollectable 3213308.67 3213308.67
Shandong Yuanda Board Technology Co. Ltd 1804722.77 1804722.77 100.00 uncollectable 1804722.77 1804722.77
Xuzhou Xugong Material Supply Co. Ltd 2826234.67 2826234.67 100.00 uncollectable 373237.55 373237.55
Yingkou Iron & Steel Co. Ltd 1696318.44 1696318.44 100.00 uncollectable 1696318.44 1696318.44
Zhejiang Yesheng New Material Co. Ltd 1301760.00 1301760.00 100.00 uncollectable 1301760.00 1301760.00
CITIC Heavy Industries Co.Ltd 1128791.54 1128791.54 100.00 uncollectable 1126828.28 1126828.28
ZHUZHOU GEAR CO.LTD. 1055392.12 1055392.12 100.00 uncollectable 290587.00 290587.00
Pakistan Eastern Commercial Enterprise 1871195.21 1871195.21 100.00 uncollectable 2459996.98 2459996.98
Northern Heavy Industries Group Co. Ltd. 1101255.06 1101255.06 100.00 uncollectable
Notes to the Financial Statements 130Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Hebei Jinxi Section Steel Co. Ltd. 1895386.00 1895386.00 100.00 uncollectable
Jilin Xinda Steel Co. Ltd. 4544255.52 4544255.52 100.00 uncollectable
Shandong Taishan Steel Group Co. Ltd. 2430247.71 2430247.71 100.00 uncollectable
Shanxi Taiyuan Heavy Industry New Energy Technology Co. Ltd. 1548954.08 1548954.08 100.00 uncollectable
Wu’an Yuhua Steel Co. Ltd. 5425620.03 5425620.03 100.00 uncollectable
AG Company India 1568656.74 1568656.74 100.00 uncollectable
GOD Company India 1805222.55 1805222.55 100.00 uncollectable
Total 49718593.71 49718593.71 29058032.29 29058032.29
Notes to the Financial Statements 131Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Provision for bad debts by portfolio
Portfolio accruals items
Closing Balance
Name
Accounts Receivable Provision for bad debts Proportion (%)
Within 1 year 738900733.44 36979590.40 5.00
1-2 years 89695459.92 8977222.90 10.00
2-3 years 28430897.83 5686179.57 20.00
3-4years 7652209.84 3826104.92 50.00
4-5years 1136685.69 909348.55 80.00
Over 5 years 1233239.51 1233239.51 100.00
Related Party
Portfolio 59331430.36 1164045.66 1.96
Total 926380656.59 58775731.51
(2) Provision for bad debts charged off reversed or recovered during the period
Related party portfolio
Amount during the period
Opening Charge Closing
Category Balance Accrued Received off Others balance
Provision
for bad
debts 141135487.75 30372813.11 12255059.49 199992.65 -1964.00 159055212.72
Total 141135487.75 30372813.11 12255059.49 199992.65 -1964.00 159055212.72
Significant amount Received
Debtors name Amount Reasons of received Method of recovery
Shenzhen Jiyang Intelligent Technology Co.Ltd. 2296400.00 Collection received Cash
Heilongjiang Longmei Logistics Co. Ltd. 2290000.00 Collection received Cash
Germany Leipzig Roller Ball Bearing
Production Co. Ltd. 1480632.66 Collection received Cash
GKNDrivelineJapan.Ltd 1251441.84 Collection received Cash
Total 7318474.50
(3) Accounts receivable written off in current period
Notes to the Financial Statements 132Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Item Written-off Amount
Accounts receivable written off 199992.65
Notes to the Financial Statements 133Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Significant amount written off
Whether arising from
Debtors name Nature Amounts Reasons Write-off procedures connected
transactions
Qinghai Yinhe New Energy Materials Co. Ltd payment for goods 198987.78 uncollectable Internal approvals N
Total 198987.78
Notes to the Financial Statements 134Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(4) The top five significant accounts receivable categorized by debtors
Closing Balance Proportion Receivable bad
of total debts &
Debtors name Contractual closing contractual
Receivable Total
assets balance assets
(%) impairment
China National
Railway Group
Corporation and
subsidiaries 186841512.74 118996.41 186960509.15 18.08 9504415.75
Wafangdian Bearing
Group Corporation
and subsidiaries 58323662.74 58323662.74 5.64 1300236.23
China Railway Group
Corporation
(CRGC)and
subsidiaries 19707278.02 281230.48 19988508.50 1.93 1914272.93
Shanghai Ouyeel
Purchasing
Information
Technology Co. Ltd 17163102.48 17163102.48 1.66 858155.12
Chongqing Gearbox
Co. Ltd 15663340.96 1017614.72 16680955.68 1.61 1291974.41
Total 297698896.94 1417841.61 299116738.55 28.93 14869054.44
ii. Other receivables
Items Closing Balance Opening Balance
Interest receivable
Dividends receivable
Other receivables 245164992.88 265704686.03
Total 245164992.88 265704686.03
(1) Other receivables
Notes to the Financial Statements 135Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
1) Other receivables based on aging
Aging Closing Balance Opening Balance
Within 1 year 6510728.91 263191579.22
1-2 years 2271158.73 889646.99
2-3 years 236273647.43 2399108.18
3-4years 1781018.27 1203245.68
4-5years 1132081.15 186403.88
Over 5 years 4395509.22 5169834.71
Subtotal 252364143.71 273039818.66
Related Party Portfolio 7199150.83 7335132.63
Total 245164992.88 265704686.03
2) The categories of other receivables
Closing Balance
Items
Booking balance Provision
Booking balance
Amount % Amount %
Other receivables with
individual bad debt
provision 5206086.42 2.06 5206086.42 100.00
Other receivables identified
bad debt provision based
on the characters of credit
risk portfolio 247158057.29 97.94 1993064.41 0.81 245164992.88
-Aging combination 11308087.35 4.48 1993064.41 17.63 9315022.94
-Risk-free portfolio 13953.50 0.01 13953.50
-Related party portfolio
235836016.4493.45235836016.44
Total 252364143.71 — 7199150.83 — 245164992.88
(Continued)
Opening Balance
Items
Booking balance Provision
Booking balance
Amount % Amount %
Notes to the Financial Statements 136Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Other receivables with
individual bad debt 5144066.29 1.88 5144066.29 100.00
provision
Other receivables identified
bad debt provision based
on the characters of credit 267895752.37 98.12 2191066.34 0.82 265704686.03
risk portfolio
-Aging combination 9994319.37 3.67 2191066.34 21.92 7803253.03
-Risk-free portfolio 20000.00 20000.00
-Related party portfolio
257881433.0094.45257881433.00
Total 273039818.66 — 7335132.63 265704686.03
Other receivables with individual bad debt provision
Closing Balance Opening Balance
Items Book Rate Book
bad debts Reasons bad debts
balance (%) balance
Other
receivables
with
5206086.42 5206086.42 100.00 uncollectable 5144066.29 5144066.29
individual
bad debt
provision
Total 5206086.42 5206086.42 5144066.29 5144066.29
3) Bad debt provision of other receivables
1st stage 2nd stage 3rd stage
Expected
Provision for bad credit loss Expected credit Expected credit
Total
debt within loss within life loss within life
following 12 time(unimpaired) time(impaired)
months
Balance on January 1st
20232191066.345144066.297335132.63
On January 1 2023 Other
receivables carrying
Notes to the Financial Statements 137Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
amount on the book
--get into 2nd stage
--get into 3rd stage
nd
--reverse into 2 stage
-reverse into 1st stage
Accrual for the period -197725.93 212193.96 14468.03
Reversal
Write-offs during the
period
Write-offs during the
period 276.00 150173.83 150449.83
Other changes
Closing balance 1993064.41 5206086.42 7199150.83
4) Provision for bad debts charged off reversed or recovered during the period
Opening Amount during the period Closing
Category
Balance Accrued Received Charge off Balance
bad debt 7335132.63 14468.03 150449.83 7199150.83
Total 7335132.63 14468.03 150449.83 7199150.83
5) Other receivables written off in current period
Items written off
Other receivables written off in current period 150449.83
6) The categories of other receivables by nature
Nature Closing Balance Opening Balance
Loans from related parties
236702647.05257881433.00
Secured fund & Deposit 8199052.15 6063769.89
Petty cash
3714719.011365292.16
Others 3747725.50 7729323.61
Total 252364143.71 273039818.66
7) The top significant other receivables categorized by debtors
Company name Category closing Ageing Rate of Bad debts
Notes to the Financial Statements 138Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
balance other
receivables
Wazhou Liaoyang Bearing Related Within 3
101611156.5840.27
Manufacturing Co. Party Loans years
Dalian Wazhou Precision
Related Within 3
Motorized Automotive 114575829.47 45.40
Party Loans years
Bearing Co.Wazhou Precision Spherical
Related Within 3
Roller Bearing (Wafangdian) 19639030.39 7.78
Party Loans years
Co.Within 4
Anhui Conch Cement Co. Margin 1300000.00 0.52 650000.00
years
National Railway Materials Within 4
Margin 1424095.25 0.56 86684.76
Co. Ltd years
Total 238550111.69 94.53 736684.76
iii. Long-term equity investments
Closing Balance Opening Balance
Item
Book Provision Book Value Book Provision Book Value
balance balance
Investment in
subsidiaries 226488897.67 226488897.67 226488897.67 226488897.67
Investment in JV
associates
Total
226488897.67226488897.67226488897.67226488897.67
Notes to the Financial Statements 139Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
1) Investment in subsidiaries
Changes during the period
Provision for Closing
Investee Opening Balance Provision Provision
Additional Reduced impairment for the Others Balance
period
Wazhou Liaoyang Bearing
32242259.9532242259.95
Manufacturing Co.Dalian Wazhou Precision Motorized
45478956.3745478956.37
Automotive Bearing Co.Wazhou Precision Spherical Roller
148767681.35148767681.35
Bearing (Wafangdian) Co.Total 226488897.67 226488897.67
Notes to the Financial Statements 140Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
iv. Operating revenue and cost
1. Situation of operating revenue and cost
current year prior year
Item
Revenue Cost Revenue Cost
Revenue from main operation
2255675365.401938672450.641929445852.151730799735.87
Revenue from other operation
62880712.2537331614.72157389559.7050787071.12
Total
2318556077.651976004065.362086835411.851781586806.99
Principle operation - classified according to Industries
current year prior year
Industries Sales revenue Cost of sales Sales revenue Cost of sales
Export 57170837.03 44226168.02 127671159.01 120312728.38
Domestic 2107069255.12 1830314035.19 1700340843.31 1539714332.72
Including:
Transportation
vehicle bearings 377933278.06 346971768.14 401974392.80 377161064.61
Special use
bearings 833382877.03 663750257.29 636375687.63 541235976.42
General use
bearings 895753100.03 819592009.76 661990762.88 621317291.69
Industrial
Operations 91435273.25 64132247.43 101433849.83 70772674.77
Other operating
income 62880712.25 37331614.72 157389559.70 50787071.12
Total 2318556077.65 1976004065.36 2086835411.85 1781586806.99
2. Breakdown information of operating revenues and operating costs
Revenues generated from customer contracts during the period were as follows:
Current year
Items Sales revenue Cost of sales
Business Type：
Export
57170837.0344226168.02
Notes to the Financial Statements 141Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Domestic
2107069255.121830314035.19
Including:
Transportation vehicle bearings 377933278.06 346971768.14
Special use bearings
833382877.03663750257.29
General use bearings
895753100.03819592009.76
Industrial Operations
91435273.2564132247.43
Total
2255675365.401938672450.64
v. Investment income
Items Current year Prior year
Dividend income earned during the holding period of investments
in other equity instruments 1002352.64 1000000.00
Investment income from debt restructuring 11355222.23 12308581.11
Total 12357574.87 13308581.11
XV. Supplementary Information
i. Non-operating profit or loss in current year
Items Amounts Instruction
Gains and losses on disposal of non-current assets including the
791742.58
offsetting portion of the provision for asset impairment already made
Government grants recognized in profit or loss for the current period
except for government grants that are closely related to The Group's
normal business operations in compliance with national policies and in 8186389.05
accordance with defined criteria and that have a sustainable impact on
The Group's profit or loss
Gains and losses arising from changes in fair value of financial assets and
financial liabilities held by non-financial enterprises and gains and losses
arising from the disposal of financial assets and financial liabilities 24653.63
except for effective hedging business related to The Group's normal
business operations
Reversal of provision for impairment of receivables individually tested
11970539.82
for impairment
Gains and losses on debt restructuring 19517691.89
Notes to the Financial Statements 142Wafangdian Bearing Co. Ltd
Notes to financial statements for the year ended as at December 31 2025
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Non-operating income and expenses other than those listed above 1079436.39
Others
Subtotal 41570453.36
Income tax effect
Minority interests impact amount (after tax)
Total 41570453.36
ii. Return on equity and earnings per share
Weighted Earnings per share (EPS)
Profit of report period average return
on net assets
Basic EPS Diluted EPS
(%)
Net profit attributable to shareholders of parent -25.26 -0.1443 -0.1443
company
Net profit after deducting non-recurring gains and -43.33 -0.2475 -0.2475
losses attributable to shareholders of parent
company
Wafangdian Bearing Co. Ltd
April 24 2026
Notes to the Financial Statements 143
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